From the May/June 2012 Issue of Inside Business
Waterway to Growth
Long before there was any effort to settle Cleveland, visionaries from afar marked its location as a future center of trade and business. The juncture of Lake Erie and the Cuyahoga River invited the kind of development that even today sparks entrepreneurial consideration.
By the turn of the 19th century, when Ohio became a state, the location of the newly founded City of Cleveland indeed offered prospects of enormous commercial potential. Early arrivals, however, were struck by economic hardships in a region thick with forests and narrow Indian trails, inimical to any real trade and commerce.
Before any commerce could flourish, a transportation system to the east and south had to be established. Few roads existed, and those that did were poor and rutted, unfit for extensive travel. It could take up to three months to reach Cleveland from the East Coast. Establishing any regular form of trade was nearly impossible.
Meanwhile, the Industrial Revolution in England was transforming that nation into a modern society. The world was watching as canal after canal snaked across the English landscape, bringing cheap transportation to the most remote areas. The success of that system, begun in the 18th century, had not gone unnoticed by America’s leaders.
As early as 1749, East Coast map makers routinely emphasized the commercial potential of Lake Erie and the Cuyahoga River. Interestingly, George Washington and Thomas Jefferson not only recognized the promise of a port at the river’s mouth, but also the need for a canal that would link the future city with the Ohio River as part of a national system. Such a waterway would open the heart of the wilderness for migration and mercantilism.
But before the future could be contemplated, there would be anguish, toil and travail for those hardy souls who sought their fortune in the untamed Western Reserve, where hardship was as regular as the day was long.
While settlers seeking their fortune moved to the Western Reserve in increasing numbers, the ability to import the goods needed to build the community proved difficult. Even simple necessities such as shoes were hard to come by, much less the heavy building equipment needed to raise a city.
The main product of the area was grain, which was difficult to transport to the east and not very profitable. Consequently, the first real industry to develop in the area was liquor production. Whiskey was easier to ship than grain and was a more valuable commodity. The only items produced in quantity that had a real market value in the east were large quarried stones used for grinding grain and sharpening tools, and these were cumbersome to transport.
Ohio’s first U.S. Senator, Thomas Worthington, recognized that if Ohio were to progress, it needed to be able to move goods and settlers from the east quickly and more efficiently. Worthington authored a congressional resolution that called for a federally funded canal that would reach from the Hudson River to Lake Erie.
The U.S. Congress established the Erie Canal Commission to study the project and picked DeWitt Clinton, a well-known New York politician, to head the effort. His main task was to raise the funds, but his lobbying of President James Madison proved fruitless. Later, when Clinton approached President Thomas Jefferson, well known as tightfisted with federal money, he was told to come back in 100 years because the cost of the canal would bankrupt the nation.
The Ohio Legislature was quick to support Clinton’s proposal, but the War of 1812 intervened and the project was sidetracked.
The idea was revived in 1816 when Clinton, by then the governor of New York, contacted the Ohio Legislature and announced that his state was prepared to build the Erie Canal without the aid of Washington. He asked if Ohio was willing to construct a part of the canal that would link Lake Erie with the Ohio River. The Ohio government readily agreed, but the legislation funding the canal took three years to pass.
Finally, in 1822 the legislature created a canal commission and hired an engineer. Some $6,000 was budgeted for the survey and design of the waterway. A state legislator from Cleveland, Alfred Kelly, was appointed to the commission.
No man in the history of Cleveland business is owed more and known less than Alfred Kelly, an attorney and leader of the first order. He was among the first lawyers here, the first chief executive elected by the village, and the first representative sent to the legislature.
In one of those moments in which destiny imposes itself, Alfred Kelly found himself in a position to lay the foundation for the kind of commerce that would carry Cleveland to greatness.
Once the idea of a canal was adopted, the question of where it would be built became paramount. Two locations, Painesville to the east and a settlement to the west on the Black River, were vying to become the northern entrance to the canal.
In 1820, Painesville had a population of 1,257 while Cleveland proper had only 606. Cincinnati had 9,642 people and to the west Detroit had 1,422. Cleveland was in trouble in more ways than one.
To grasp the significance of the proposed canal, one has to understand the sadly deficient economic conditions that prevailed in the Western Reserve. A depression, abetted by the War of 1812, lingered. Farming was the most common occupation, but there was no market for excess production. Only taverns enjoyed marginal prosperity. There was plenty of whiskey about but little real money, and trading was common. Leather also was a key commodity. But other than the grindstones, there was little to export to the east.
As the depression settled over the area, real estate prices fell and alarm began to spread among land holders as their property values dropped. For example, a series of transactions involving a tavern on the present site of the Renaissance Cleveland Hotel on Public Square saw its price drop from $4,500 to $810 in a short time.
No money flowed east since there was little to spend, and the solid currency that settlers brought west found its way back east through the purchase of necessities needed for survival on the frontier.
Hard money was scarce. Silver dollars were cut into 10 wedges to make dimes. Paper money issued by banks was said to drop in value by a penny a mile as it ventured farther from its origin.
The city by the lake was desperate for the creation of businesses that would provide an economic means for the community to survive. Ironically, the city advertised in eastern newspapers that iron ore was available in the area. But in truth, there was only a small amount in what is now Westlake.
But ships to transport any iron ore had difficulty navigating Cleveland’s harbor which, in places, was only three feet deep. It was not dredged and deepened until later. Even so, the first lighthouse to beckon ships to the city’s shores was constructed in 1818.
Amid these dire days, it was Alfred Kelly’s foresight, tenacity and persuasiveness that convinced the legislature that the entrance to the canal from Lake Erie should be at the mouth of the Cuyahoga River. With this single masterstroke, Kelly assured Cleveland of generations of entrepreneurs and businessmen who would seek their fortunes and generate unimagined wealth in a city that had yet to be defined from the wilderness.
The digging and construction of the Erie Canal had been heralded as one of the great engineering feats of its time. The Ohio Canal, which would stretch some 363 miles and contain 146 lift locks, was no mean effort either.
Ohio had a population of 580,000 at the time. Most of the state’s population lived along a path from Cleveland to Cincinnati. Thanks to Kelly, the canal was cut in this direction. Ground was broken on July 4, 1825, near Newark, Ohio, at a place called Licking Summit, in the center of the state.
The Ohio Canal was designed to be 40 feet wide and four feet deep, but these dimensions were not always followed. The construction, at first, was chaotic. Because paid work was scarce, the state received dozens of bids for the various tasks involved in building the canal. Workers were paid 30 cents and a jigger of whiskey a day. With work so much in demand, contractors underbid jobs, and upon realizing that they could not pay their workers, abandoned the work site.
Soon word spread that many workers were left unpaid by the vagabond contractors, driving the price of labor up to $15 a month. Eventually, the selection of contractors was done more carefully and the process became more regimented, which improved the work and the morale of the workers.
The canal had a fascination and romantic draw for workers, many of whom were farmers who enjoyed the change from the tedium of their fields. Most who labored over the waterway could not have foreseen what their work was about to open.
Construction began on the Cleveland portion of the canal in 1825, and two years later, the section of the waterway linking Cleveland to Akron was completed. The first boat through 41 locks along those 37 miles arrived in Cleveland on July 4, 1827.
In 1832, the canal was completed to Portsmouth, linking it to the Ohio River. The total length of the canal was 308 miles. The financial records are ambiguous, but the total cost for the canal seems to have been somewhere between $4 million and $7 million.
The average speed of a canal boat was only three miles an hour, but it could carry ten tons of cargo, far exceeding the capability of wagons hobbling over poor roads in dense forests.
The realization that Cleveland was no longer an isolated wilderness settlement but a global port would come in a frightening fashion from a far distance.
A French ship sailing from China in 1831 disembarked some of its crew in Bordeaux, where they became ill. Soon a deadly plague spread across the countryside, killing many as it raged through the famous wine country.
Another ship, sailing for Quebec City, boarded passengers anxious to avoid the disease from Bordeaux. But it was too late. Some of the passengers had brought the plague with them, and when the ship reached its destination it discharged its sickly travelers into the city, spreading the disease that killed hundreds.Asiatic cholera was unknown in North America in 1832 and it spread at will.
Shipping traffic was heavy that year and the cholera quickly made its way to Montreal. A contemporary account noted that the same ship that brought the warning of the disease to Buffalo delivered the plague as well.
Officials in Cleveland, upon learning of the deadly infestation, took action at once and quarantined arriving vessels and passengers. A cholera hospital was set up on Whiskey Island, but despite the best efforts the sickness spread to the city.
People began to evacuate the town and return east. In a few weeks 50 were dead as the disease trailed off. Then it recurred and 14 men died in three days. Eventually, the plague subsided, but for the city it was a deadly initiation as a world port.
Still, the economic impact of the canal on Cleveland was staggering. In 1838 alone, some 2,400 ships had stopped in Cleveland’s harbor, handling $20 million worth of goods. Four years later the first shipment of iron ore arrived, setting the stage for the city to become a steel manufacturing hub.
With the canal completed and Cleveland linked to the east coast, the city’s population swelled to 6,000 in 1840 and continued to grow. The canal and the port slowly made Cleveland one of the most important cities in America.
By 1850, Cleveland’s population had grown to 17,034, largely because of the canal and the development of the port. The next year — just before the railroads began to take business from the canal — some 2.5 million bushels of wheat, 600,000 barrels of flour, a million bushels of corn and three million bushels of coal came through Cleveland via the canal. Some 11 million pounds of various merchandise was exported south from the city.
The canal’s most prosperous period was between 1852 and 1855, before the railroads began to eclipse it. The canal began a long decline following the Civil War as the rails began to expand the country westward. It finally ceased commercial operation in 1913 when disastrous flooding destroyed much of it.
At the height of operation, the waterway made Ohio the third most prosperous state in the union and ensured the future of Cleveland.
The canal was the economic engine that prepared the city for the industrial boom created by the Civil War and spurred Cleveland’s ascendency as a manufacturing center. This in turn poised business and entrepreneurial efforts for the golden age of industrialization that would create the wealth that would make Cleveland a center of commerce and culture.
Today some of the remains of the canal have been declared a National Historic Landmark. One of the more prominent sites is in Valley View, where a four-mile section containing three locks still exists and is managed by Cleveland Metroparks.
At the canal, one can pause and reflect that had it not been for the foresight and vigorous dedication of Alfred Kelly, Cleveland would have remained a sleepy township on the banks of Lake Erie instead of the mighty industrial center it became.