OHIO CANAL ERA, A CASE STUDY OF GOVERNMENT AND THE ECONOMY,
1820-1861. By Prof. Harry N.Scheiber (History). Athens, Ohio: OhioUniversity Press, 1969. 430 pp. $10.
Ohio Canal Era may become a classic in the field of American economic history. It is a study, as the author states in the preface, of "the interesting effects of policy making, public administration, and economic development" in which the reader is offered "a set of related propositions concerning localism, political ideology, and partisan cleavages as they affected the making of public policy; the character of entrepreneurship ... in public undertakings, and the sources of strength and weakness in a functioning state bureaucracy; the impact of legal process and administration upon the economy: and the influences shaping statewide and regional economic change during four hectic decades of development." That the book successfully manages all this and at the same time provides a richly detailed chronological narrative of transportation development in Ohio, is the measure of Professor Scheiber's accomplishment.
Part I emphasizes the role of state government in creating a canal system between 1820 and 1850. The legislature and its hired agents decided where canals should be located, floated bonds to finance the program, kept tight control over the actual construction, set freight rates, and assumed responsibility for the day-to-day operation of locks and docking basins. In general the canals served their intended purpose of stimulating economic activity (the precise way in which this occurred is analyzed in Part II), but problems arose. The canals proved to be such a stimulant that communities not aided by the initial construction demanded expansion of the system, justifying their demands in egalitarian terms. The resulting "irrational public mania for internal improvements" nearly proved disastrous: the state built more canals than it could afford and became financially overextended; canal administration became increasingly inefficient and ineffective.
The "beginning of the railroad era" is discussed in the third and final part of the book. Professor Scheiber focuses his attention on two distinct but interrelated phenomena : the way in which earlier experience with canals affected the development of railroads, and the competition that grew up between the two forms of transportation. He shows how growing disillusionment with state-managed enterprise and the existing financial commitment to canals necessitated a reduced level of governmental involvement in sponsoring internal improvements; indeed, the legislature, after a brief period of loaning money to private railroad companies, limited itself to the granting of corporate charters. Soon railroads began to undermine the profitability of the canals. By the late 1850's the canals were running a deficit and most inhabitants were convinced the state should get out of the transportation business altogether. It did in 1861 by leasing the entire system to a syndicate for the nominal rental of about $20,000 a year. Thus the Ohio canal era and a lengthy experiment in public enterprise ended.
An associate professor in the History Department, Mr. Daniell has taught at Dartmouth since 1964.
