Indiana Mammoth Internal Improvement Act - Passage of The Law

Passage of The Law

In 1836, legislation was created by the Indiana General Assembly to dramatically expand the scope of the internal improvements. At first, members only intended to continue funding the Wabash and Erie, but many representatives opposed the spending because it would have little benefit for their own constituents as the canal bypassed most of the major settlements in the state. As a compromise, additional projects were agreed on so that all the cities in the state would be connected by either canal, railroad, or turnpike. To appease the majority of the population that lived along the Ohio River, the bill called for the Vincennes Trace to be paved, making it usable year round. A Lafayette Turnpike was also approved, and to gain support of the representatives from the population centers in the far northern part of the state, the Michigan Road was also paved. To appease the railroad faction, two lines were approved connecting Lawrenceburg to Indianapolis, and Madison to Lafayette. The Whitewater Valley was the most populous part of the state, and to win over their representatives, funding was added for a canal to be built in their valley. To also get support from the central part of the state, and to connect Indianapolis to the new canals, a Central Canal was also funded. Over $2 million had already been borrowed, and the new bill proposed borrowing another $10 million. This was added to the $3 million already procured through land sales. Seeing the success of canals in the eastern United States, it was believed that the projects would be very profitable for the state and that their revenue would quickly pay back the loans, and provide the funds to complete the projects. The state's regular revenue, primarily from property taxes, were at that time less than $65,000 annually, and the amount of the debt was greater than the tax receipts of the entire history of the state. The sum borrowed was equal to one-sixth of all the wealth in the state. Despite the scale of the project, the representatives from the counties on the Ohio River still largely opposed the project.

For canals, the project called for the creation of a canal from Indianapolis to Ohio River at Evansville, called the Indiana Central Canal. Funding was included for another canal to connect the Wabash River in Peru to the Ohio River in Lawrenceburg known as the Whitewater Canal. Additional funding was granted to the Wabash and Erie Canal for expansion to Terre Haute. The canals received the majority of the funds from the bill, because it was believed that the canals could be constructed from local materials which would help boost the local economy. A later invesitgation showed that parts of the state were entirely unsuited for the canals, and the project were doomed from the start. However, the state had not conducted surveys of the land before passing the bill to ensure their suitability.

The bill also funded, but to a much lesser degree, a railroad connecting Madison to Indianapolis, another railroad from Shelbyville to Indianapolis, the paving of the Buffalo Trace and renaming it the Vincennes Trace, and the paving of the remainder of the Michigan Road. Most of the money from the project was gathered by mortgaging nine million acres (36,000 km²) of state owned land through agents of the Bank of Indiana to creditors in London and New York.

Governor Noah Noble was a major supporter of the bill and it passed by the overwhelmingly Whig controlled General Assembly, although it was opposed by several prominent legislators including Dennis Pennington, James Whitcomb, Calvin Fletcher and John Durmont. Pennington believed the canals were a waste of money and would soon be made obsolete by the railroads. Whitcomb outright rejected the idea of spending such a large sum of money, saying it would be impossible to pay back. The bill's passage met with statewide celebrations. Citizens saw it as a critical modernization of the state. Governor Noble considered the act his crowning achievement. Noble was concerned however that the assembly had not passed the 50% tax increase he had told them was necessary to take care of the debt the state was expecting to take.

The bill created a Board of Improvement and a Board of Funds Commissioners to oversee the projects. Two thirds of the funds were spent on the canals, with the Central Canal getting the most money. Jesse L. Williams was named chief engineer.