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Financing the Welland Canal: an Episode in the History of the St. Lawrence Waterway

Published online by Cambridge University Press:  24 July 2012

Hugh G. J. Aitken
Hugh G. J. Aitken
Affiliation:
Harvard University
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Extract

Many American historians have stressed the completion of the Erie Canal in 1825 as a turning point in the expansion of commerce across the Appalachian barrier from the seaports of the Atlantic coast. Less attention has been paid to the Erie's competitors, perhaps because they were uniformly less successful than their prototype. Yet they have a certain interest. In this article we shall be dealing with only one of these competing projects—the Welland Canal in Upper Canada, the by-pass for Niagara—and with only one aspect, namely the financial. Nevertheless, we shall perhaps be able to draw some general conclusions as to the reasons why the Erie Canal succeeded so brilliantly, while other projects, at least in a relative sense, failed.

Type
Research Article
Information
Business History Review , Volume 26 , Issue 3 , September 1952 , pp. 135 - 164
Copyright
Copyright © The President and Fellows of Harvard College 1952

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References

1 Information on the Welland Canal Company has been obtained principally from the Journals of the Upper Canada legislature, and from the Merritt Papers in the Public Archives of Canada and the Archives of the Province of Ontario. The following have also proved useful: Merritt, J. P., Biography of the Hon. William Hamilton Merritt, M. P. (St. Catharines, 1875)Google Scholar, and McDougall, J. L., “The Welland Canal to 1841” (M. A. thesis, University of Toronto, 1923).Google Scholar Readers who wish a fuller presentation are referred to the author's “W. H. Merritt and the Welland Canal Company (Ph. D. thesis, Harvard University, 1951).

2 Goods imported via the St. Lawrence and destined for consumption in Upper Canada normally paid customs duties at Montreal or Quebec in Lower Canada, rather than at the inter-provincial boundary. The proportions in which these customs revenues were to be divided between the provinces was a constant bone of contention in this period.

3 By the conventional exchange rates of the time, 1 pound Canada currency equalled 16 shillings sterling or 4 American dollars.

4 For a fuller discussion, see the author's “The Family Compact and the Welland Canal,” Canadian Journal of Economics and Political Science, vol. 18, No. 1 (Feb., 1952).

5 For shares sold in Upper Canada, see the original subscription list in Public Archives of Canada (P. A. C.), Merritt Papers, vol. 28; for shares sold in Lower Canada, see P. A. C., Series Q, 336–2, president and directors of Welland Canal Company to Lieutenant Governor Maitland, 8 Aug. 1824.

6 The possibility of selling stock in England was not considered at this time, the reason probably being that a mission to England would have entailed a delay of about six months before funds were available.

7 P. A. C., Upper Canada Sundries, Merritt to Hillier, 16 Mar. 1824.

8 P. A. C., Series Q, 336–2, president and directors to Maitland, 8 Aug. 1824.

9 The operations of this firm are more fully discussed in an article by the present author entitled “Yates and Mclntyre: Lottery Managers” which will be published shortly in the Journal of Economic History.

10 Compare the history of the Allen firm as reported in Larson, Henrietta, “S. & M. Allen—Lottery, Exchange, and Stock Brokerage,” Journal of Economic and Business History, vol. iii (1931), pp. 424–445Google Scholar, and the excellent discussion of the development of investment banking in Redlich, Fritz, The Molding of American Banking: Men and Ideas, Part II (New York, 1951), pp. 304–396.Google Scholar

11 See the author's “A New Way to Pay Old Debts,” in Miller, William (ed.), Men in Business (Cambridge, 1952)Google Scholar.

12 J. P. Merritt, op. cit., p. 74.

13 Cf. P. A. C., Series Q, 336–2, Maitland to Bathurst, 8 Nov. 1824.

14 Assembly Journals, 1825–26, appendix, report of select committee on Welland Canal petition, evidence of J. H. Dunn.

15 Assembly Journals, 1836–37, third report of select committee on Welland Canal, evidence of W. H. Merritt (letter from McGillivray to Dunn and Allan).

16 Assembly Journals, 1825–26, appendix, report of select committee on Welland Canal, evidence of J. H. Dunn.

17 Ibid.

18 Assembly Journals, 1826–27, report on Welland Canal, evidence of W. H. Merritt.

19 Minutes of board, 2 Sept. 1826.

20 P. A. C., Merritt Papers, vol. 2, Nehemiah Merritt to W. H. Merritt, 18 Sept. 1826.

21 Assembly Journals, 1826–27, report on Welland Canal.

22 P. A. C., Series Q, 371A, pp. 127–29, Bathurst to Maitland, 30 Sept. 1826.

23 J. P. Merritt, op. cit., pp. 90–92, extracts from Merritt's diary for 1828; the reference is probably to the firm of J. & L. Joseph (v. Redlich, op. cit., p. 335).

24 P. A. C., Merritt Papers, vol. 27, list of subscribers, 1829; vol. 28, Merritt's memorandum book; and vol. 29, Welland Canal ledger.

25 Assembly Journals, 1830, report on Welland and Burlington Canals, evidence of W. H. Merritt.

26 Minutes of board, 15 Dec. 1828.

27 Annual Report, 1828.

28 Assembly Journals, 1836–37, third report on Welland Canal, p. 389, evidence of W. H. Merritt.

29 P. A. C., Series Q, 354, pp. 89–96, Colborne to Murray, with enclosures, 10 Mar. 1830.

30 Ibid.; Supplementary Annual Report, 1829.

31 P. A. C., Merritt Papers, vol. 2, Yates to Merritt, 2 Jan. 1830.

32 Ibid., Yates to Merritt, 18 Jan. 1830.

33 Assembly Journals, 1836–37, third report on Welland Canal, p. 409, report of J. B. Yates to directors.

34 Assembly Journals, 1831, report of committee on Welland Canal petition.

35 Assembly Journals, 1833–34, report of Welland Canal commissioners.

36 P. A. C., Merritt Papers, vol. 3, Yates to Merritt, 3 Nov. 1834.

37 Ibid., Yates to Merritt, 28 Jan. 1835.

38 Ibid., Yates to Merritt, 22 Sept. 1835.

39 Ibid., Yates to Merritt, 10 Nov. 1835.

40 Ibid., Yates to Merritt, 27 Feb. 1836.

41 Assembly Journals, 1839–40, appendix pt. II, p. 23, memorial of New York stockholders.

42 These figures are transcribed, with slight modifications, from Merritt, W. H., Brief Review of the Origin, Progress, Present State, and Future Prospects of the Welland Canal (St. Catharines, 1852), p. 21.Google Scholar

43 Haines, C. G. (ed.), Public Documents Relating to the New York Canals (New York, 1821), p. 92.Google Scholar

44 Cost figures are taken from Assembly Journals, 1836–37, third report on Welland Canal, p. 432; they have not been checked independently of this source.

45 Trotter, Alexander, Observations on the Finances of the North American States (London, 1839), pp. 77–88.Google Scholar