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.
Canal
Canal companies were initially chartered by individual states in the United States. These early canals were constructed, owned, and operated by private joint-stock companies. Three were completed when the War of 1812 broke out; these were the Santee Canal (opened 1800) in South Carolina, the Middlesex Canal (opened 1802) in Massachusetts and the Dismal Swamp Canal (opened 1805) in Virginia. The Erie Canal (opened 1825) was chartered and owned by the state of New York and financed by bonds bought by private investors. The Erie canal runs about from Albany, New York, on the Hudson River to Buffalo, New York, at Lake Erie. The Hudson River connects Albany to the Atlantic port of New York City and the Erie Canal completed a navigable water route from the Atlantic Ocean to the Great Lakes. The canal contains 36 locks and encompasses a total elevation differential of around 565 ft. (169 m). The Erie Canal with its easy connections to most of the U.S. mid-west and New York City soon quickly paid back all its invested capital (US$7 million) and started turning a profit. By cutting transportation costs in half or more it became a large profit center for Albany and New York City as it allowed the cheap transportation of many of the agricultural products grown in the mid west of the United States to the rest of the world. From New York City these agricultural products could easily be shipped to other U.S. states or overseas. Assured of a market for their farm products the settlement of the U.S. mid-west was greatly accelerated by the Erie Canal. The profits generated by the Erie Canal project started a canal building boom in the United States that lasted until about 1850 when railroads started becoming seriously competitive in price and convenience. The Blackstone Canal (finished in 1828) in Massachusetts and Rhode Island fulfilled a similar role in the early industrial revolution between 1828 and 1848. The Blackstone Valley was a major contributor of the American Industrial Revolution where Samuel Slater built his first textile mill.