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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 $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 the interest payments, 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 and only two were finished by the creditors who took them over.
The act is considered one of the greatest debacles in the history of Indiana. 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, though 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 Indiana, 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.
When the state of Indiana was formed in 1816, it was still a virtual wilderness, and settlement was limited to the southern periphery where easy access to the Ohio River provided a convenient means to export produce. The only significant road in the region was the Buffalo Trace, an old, dirt bison trail that crossed the southern part of the state. After statehood several plans had been made to improve the transportation situation, like the creation of small local roads, the larger Michigan Road, and a failed attempted by the Indiana Canal Company to build a canal around the Falls of the Ohio. The national economy entered a recession following the Panic of 1819, and the state's only two banks collapsed in the immediate years that followed, ending the state's early improvement programs without having achieved much success and leaving the state with a modest debt.
The 1820s were spent repairing the state's finances and paying down the debt. A request was sent to Congress asking for the federal government to assist the young state in improving the transportation situation. Canals were at that time being constructed in several of the eastern states and New York and Pennsylvania hoped to link to the Mississippi River System by building canals through Indiana. With their support, on May 26, 1824, Congress granted Indiana a stretch of land 320 feet (98 m) wide on any route a commission would map out, but the state had to promise to begin construction of a canal on the land within twelve years.
Many in the Indiana General Assembly considered the grant insufficient, and requested the grant be expanded to a one-mile (1.6 km) wide strip, but Congress did not act. Most of the population at the time lived along the Ohio River, and the canal would be little benefit to them, but they would bear the burden of paying for it, so their representatives opposed the idea altogether. They successfully barred the creation of a canal.
On March 2, 1827, Congress made a new offer to the state, granting a half mile wide strip and to assist in the funding of construction. This time the General Assembly accepted the offer, passing legislation on January 5, 1828, to create a canal commission to lay out the path of the canal, but no state funding was approved. The commission laid out a short six-mile (9.7 km) canal that would become the starting point of the Wabash and Erie Canal. Funding immediately became an issue in the legislature where the lowest cost estimate was $991,000.
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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 $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 the interest payments, 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 and only two were finished by the creditors who took them over.
The act is considered one of the greatest debacles in the history of Indiana. 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, though 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 Indiana, 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.
When the state of Indiana was formed in 1816, it was still a virtual wilderness, and settlement was limited to the southern periphery where easy access to the Ohio River provided a convenient means to export produce. The only significant road in the region was the Buffalo Trace, an old, dirt bison trail that crossed the southern part of the state. After statehood several plans had been made to improve the transportation situation, like the creation of small local roads, the larger Michigan Road, and a failed attempted by the Indiana Canal Company to build a canal around the Falls of the Ohio. The national economy entered a recession following the Panic of 1819, and the state's only two banks collapsed in the immediate years that followed, ending the state's early improvement programs without having achieved much success and leaving the state with a modest debt.
The 1820s were spent repairing the state's finances and paying down the debt. A request was sent to Congress asking for the federal government to assist the young state in improving the transportation situation. Canals were at that time being constructed in several of the eastern states and New York and Pennsylvania hoped to link to the Mississippi River System by building canals through Indiana. With their support, on May 26, 1824, Congress granted Indiana a stretch of land 320 feet (98 m) wide on any route a commission would map out, but the state had to promise to begin construction of a canal on the land within twelve years.
Many in the Indiana General Assembly considered the grant insufficient, and requested the grant be expanded to a one-mile (1.6 km) wide strip, but Congress did not act. Most of the population at the time lived along the Ohio River, and the canal would be little benefit to them, but they would bear the burden of paying for it, so their representatives opposed the idea altogether. They successfully barred the creation of a canal.
On March 2, 1827, Congress made a new offer to the state, granting a half mile wide strip and to assist in the funding of construction. This time the General Assembly accepted the offer, passing legislation on January 5, 1828, to create a canal commission to lay out the path of the canal, but no state funding was approved. The commission laid out a short six-mile (9.7 km) canal that would become the starting point of the Wabash and Erie Canal. Funding immediately became an issue in the legislature where the lowest cost estimate was $991,000.