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Various efforts were made to raise the capital necessary for this undertaking. The only assistance coming from the Federal government was land grants on either side of the proposed canal. In 1830 the second Illinois and Michigan Canal Commission laid out the towns of Chicago and Ottawa, the latter located at the junction of the Fox and Illinois rivers. They did this in an effort to sell town lots in the newly created towns to finance preliminary work for the canal. Although hardly anything was raised, interest in the canal and the harbor intensified. It will be remembered that it was in that year a plan for changing the mouth of the Chicago River and protecting it with a line of piers thrust out into the lake was first proposed. The development of the canal and the harbor continued apace, one financed by the State and the other by the Federal government. The State had much less access to capital, and sought to raise the necessary funds by selling the lands given by the State by the Federal government. In 1836 the Canal Commissioners held a successful auction of lots mostly in Chicago, and a few were in Ottawa. The total realized in Chicago was $1,522,545.13 Although this was considerably greater than the $4,362 realized in the 1830 sale, the money was not immediately forthcoming. In 1839 a depression hit and in 1840, 76 of the purchasers, including W.B. Ogden, were asking for a considerable reduction in the 1836 price. 14

The construction of the canal began on July 4, 1836, when with much ceremony, crowds went up the Chicago River’s South Branch to hail W.B. Archer as he turned over the first spade of earth. The canal would go from Bridgeport (then outside Chicago) to La Salle, where it would join the Illinois River some 96 miles south and west of Chicago. The construction was impeded by the state’s lack of capital, but it was finished finally in 1848. During the first five years of its existence, the canal’s principal business was the passenger traffic. These were mainly settlers who arrived at Chicago and wanted to move west. In 1853 the Rock Island

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    Chicago Railroad was completed, running beside the canal to LaSalle. The railroad bought out the passenger

boats.

After 1853 the major business was freight, particularly grain products, lumber, stone and coal. Until well after the Civil War, the canal brought in more corn to Chicago than any other single rail line. The Rock Island, which ran alongside the canal from Joliet to La Salle, and had access to Iowa as well as Western Illinois, never equaled the canal in bushels of corn carried despite the fact that the canal was only open from April to November. 15

The opening of the canal in 1848 soon brought a change in the status of Chicago and its older mid- western rival, St. Louis. The water connections of Chicago not only with the East via the Great Lakes, but also with the Gulf of Mexico and New Orleans, gave the City for the first time an advantage over St. Louis. The first boat to traverse the canal in 1848 carried a cargo of sugar from New Orleans destined for Buffalo, as well as some passengers. 16

Besides transportation, the other value of the canal was the impetus to settlement. Certainly the rapid growth of Chicago after 1830, as was noted by previous observers, was in large part due to the future canal and the actual canal after 1848. In addition, to further stimulate settlement and the eventual sale of canal lands, an important part of the canal’s design by its engineer, William Gooding, was the creation of hydraulic power. The water would be drawn directly from Lake Michigan and flow to Lockport 36 miles southwest, which was at the same level above seal level as the lake. This source of water on the highest level, or the summit level, of the canal gave it a unique value when compared to any other inland American canal. At Lockport the land drops 40 feet in five miles – the biggest fall on the 96-mile canal reach. Its terminus at La Salle was 150 feet below the Lake Michigan level. Gooding notes in 1839:

“The value of waterpower here [Lockport] and at other points upon the canal, by drawing a supply of water directly from Lake Michigan, can be fully appreciated after a season of such severe drought as the past. The Des Plaines River and many other considerable streams of the country have been nearly dried up, and probably three-fourths of the watermills throughout the United States have been standing still for the last three months. But had this

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