Economic history of the United States
The 325-mile Erie Canal, which connected Albany, New York, on the Hudson River with Buffalo, New York, on Lake Erie, began operation in 1825. Wagon cost from Buffalo to New York City in 1817 was 19.2 cents per ton-mile. By Erie Canal c. 1857 to 1860 the cost was 0.81 cents. The Erie Canal was a great commercial success and had a large regional economic impact.
Erie Canal
Other competition was more direct. The Mohawk and Hudson Railroad opened in 1837, providing a bypass to the slowest part of the canal between Albany and Schenectady. Other railroads were soon chartered and built to continue the line west to Buffalo, and in 1842 a continuous line (which later became the New York Central Railroad and its Auburn Road in 1853) was open the whole way to Buffalo. As the railroad served the same general route as the canal, but provided for faster travel, passengers soon switched to it. However, as late as 1852, the canal carried thirteen times more freight tonnage than all the railroads in New York State combined; it continued to compete well with the railroads through 1902, when tolls were abolished.