Indiana Mammoth Internal Improvement Act

Indiana Mammoth Internal Improvement Act

The Indiana Mammoth Internal Improvement Act was a law passed by the Indiana General Assembly and signed by Whig Governor Noah Noble in 1836 that greatly expanded the state's program of internal improvements. It added an additional $10 million to spending and funded several projects, including turnpikes, canals, and later, railroads. The following year the state economy was adversely affected by the Panic of 1837 and the overall project ended in a near total disaster for the state, which narrowly avoided total bankruptcy from the debt. By 1841, the government could no longer make even the interest payment, and all the projects, except the largest canal, were handed over to the state's London creditors in exchange for a 50% reduction in debt. Again in 1846, the last project was handed over for another 50% reduction in the debt. Of the eight projects in the measure, none were completed by the state. Only two were finished by the creditors who took them over.

The act is considered one of the greatest debacles in the history of the state and the public blame was placed on the Whig party who had been in control of the General Assembly and the governorship during the passage of the act and the subsequent bankruptcy, despite that fact that only nine members of both houses voted against the bill. After the scope of the financial disaster became apparent to the state, the Whig party gradually began to collapse in the state leading to a period of Democratic control of the General Assembly that lasted until the middle of the American Civil War.

Despite the dire immediate effects on the state's finances, the project ultimately fed a 400% increase in state land values, and provided numerous other direct and indirect benefits to Indiana. The Wabash and Erie Canal, which was partially funded by the act, became the longest canal in North America and remained in operation until rendered obsolete by the railroads in the 1880s.