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Running through the heart of Indianapolis and passing by the northern side of the Indiana State Museum, the Indiana Central Canal endures as a pleasant sight throughout the city. Built between 1836 and 1839, the 8-mile, multi-million dollar central canal ultimately bankrupted the young Indiana state. Early construction plans sought to create a 296-mile canal connecting the Wabash and Erie Canal to the Ohio River, though the entire project was wrought with economic downfalls. Furthermore, the story of the canal reflects Indiana’s 1836 Mammoth Internal Improvement Act, which is known as the state’s greatest debacle. Nowadays, the Central Canal provides scenic walking paths and attracts several turtle species. Its construction story in the early years of the Indiana state displays the struggles and hardships of those times. It marked the end of the Whig Party in Indiana Government as well as the “Canal Building Fever” that swept through the Midwest until the construction of railroads. By 1971, the American Water Works Association designated the canal as an American Water Landmark.

  • The canal as it passes the Indiana Historical Society
  • Gondolas moving down the canal with the Indianapolis skyline in the background
  • Map showing the extent of the Mammoth Mammoth Internal Improvement Act, along with portions that were not completed by the state.
  • Indiana Governor, Noah Noble. The primary proponent of the 1836 Mammoth Internal Improvement Act

History of the Indiana Central Canal

The United States was still very young in the first decades of the 19th century, and although communities were popping up all over the Midwest around the 1820s, most settlements were small and cut off from the vast economic resources available in the east. 

This all changed in 1825, when the completion of the Eerie Canal opened the Midwest to commerce coming from the east. Following this success, many states in the nation adopted a so-called "Canal Fever," including Indiana.

In 1827, two years after the competition of the Eerie Canal and only seven years after the founding of Indianapolis, the Indiana government began discussing how to connect the state’s cities to major waterways. That same year, the U.S. Congress had provided substantial land grants for the construction of the Wabash and Erie Canal, which would link the Great Lakes to the Ohio River and give traders access from the Lakes to the Gulf of Mexico. Between 1828 and 1832, despite numerous legislative battles, the Indiana General Assembly approved a $200,000 loan to begin construction.

By 1836, the canal was reaching Logansport, and the Indiana General Assembly sought to dramatically expand the scope of these improvements. However, opposing representatives claimed that the canal would not serve their constituents, as the planned canal bypassed many of their settlements. 

This opposition led to the passage of the Mammoth Internal Improvement Act, a $10 million (equivalent to nearly $250,000,000 in 2015) project that would fund turnpikes, canals, and later, railroads. Specifically, the project called for the Indiana Central Canal connecting Indianapolis to Evansville along the Ohio River as well as a canal connecting the Wabash River in Peru to Lawrenceburg and an expansion of the Wabash and Erie Canal to Terre Haute.1 

The overwhelmingly Whig-controlled Indiana General Assembly passed the bill, though there were many dissidents. Out of the $10 million stated in the project, $3.5 million was allocated to the Indiana Central Canal. In total, the Indiana Central Canal was meant to cover around 296 miles. 

The Panic of 1837 put a massive halt on the entire project, and the state only dug about eight miles before the project ran out of money in 1839.2

Significance of the Canal’s History

The failure of the Indiana Central Canal is known as the one of the largest blunders in Indiana history. By 1839, after many of the projects were left uncompleted, the state was burdened with $15 million in debt (equivalent to $375 million in 2015) with only traces of tax revenue coming in. 

In addition to Indiana’s ruined reputation and credit among lenders, both in the US and England, as well as among other states, the economic devastation and bankruptcy virtually ended Whig control in the Indiana General Assembly. This led to Democratic control of the Assembly until the Civil War. 

The aftermath wasn’t completely negative. For example, an indirect effect of the project’s failing fed a 400 percent increase in state land values, and the Wabash and Erie Canal stood as the nation’s longest canal until it was made obsolete by the railroads in the 1880s. 

Nowadays, while walking along the reconstructed banks of the Indiana Central Canal where visitors can find abundant walking paths, wildlife and birds, and other pleasantries, the Indiana Central Canal exposes the complications and hopes that burdened the early state.3

From economic tribulations to the dreams conjured by Midwestern cities, the Central Canal shows not a success story, but a story of progress, of moving forward to build a lasting and prominent Indiana society flushed with resource, architecture, and engineering wonders. 

Inscription on the Canal Historical Marker

Part of a statewide canal system begun in the late 1830s. The Central was projected from Peru to Worthington via Marion and Martinsville. Twenty-four miles were completed in this region. Railroads soon replaced the canals.4

1.) "Uncovering an Indiana Treasure...The Central Canal," Indiana State Museum and Historic Sites, accessed August 20, 2015, 2.) "Central Canal," Citizens Energy Group, accessed August 20, 2015, 3.) "Central Canal 1836-1839 (8 miles / 296 planned), Canal Society of Indiana, accessed August 20, 2015, 4.) "The Central Canal," Historical Marker Database, accessed August 20, 2015,

Dunn, Jacob Piatt (1919). Indiana and Indianans. Chicago: American Historical Society. p. 415.

Tenuth, Jeffrey. Indianapolis: A Circle City History, p.43.

Eseray, Logan (1915). A History of Indiana. W.K. Stewart co.

Shaw, Ronald E. (1993). Canals for the Nation. University Press of Kentucky.