Before the Internet, There Was the Middlesex Canal

Middlesex Canal crossing Shawsheen River in Wilmington, MA via Aqueduct

You wouldn’t think that technology was changing at a breakneck pace back in the days of lazy canal boats moving at two miles per hour on a trip from Boston to Lowell, MA. And you wouldn’t think that our Founding Fathers, including John Hancock and John Adams were “venture capitalists” in their day. But when you take a look at the history of the Middlesex Canal, built from 1794 to 1802, you’ll find a surprising similarity between the issues facing technology investors today, with those over 200 years ago.

The remains of the Middlesex Canal’s Shawsheen Aqueduct in Wilmington, MA. Photo 2005 by Daderot

Unlike our electronic technologies of today, the Middlesex Canal was truly “brick and mortar.” Actually stone and mortar. So parts of it survive today, quietly marking the path of a canal that ceased operation in the 1860’s but would begin a series of transportation innovations that continues until this day.

This Google Map of the Middlesex Canal has handy waypoints on it so you can find the canal. It is often hidden in plain view…if you know where to look. Click here on your phone to load this map for navigation.

The First American Canal

The Middlesex Canal was the first example of what became a canal-building craze in the United States. It was just 22 miles long, and had 20 locks to raise boats up and down as the water level changed. It had eight aqueducts that were essentially water bridges that carried the canal over roads and rivers.

Portrait of John Hancock by John Singleton Copley (Wikipedia) Besides being Governor and investing in the Middlesex Canal, he declared the official holiday of Thanksgiving on October 5, 1791

In the 1790’s our country was newly formed. The Constitution had only been signed 13 years prior. The Revolutionary War itself had ended only 17 years prior, in 1783. Our leaders in Massachusetts were acutely aware of the need to grow our industrial base in order to compete on a global scale.

American men of influence had always kept an eye on news from Europe, especially that from Great Britain, so when in the four years 1790–1794 the British Parliament passed no less than eighty-one canal and navigation acts, American leaders were paying attention. The Middlesex Canal 1793–1860. by Christopher Roberts 1938

On June 22, 1793, Gov. John Hancock signed the charter of the Middlesex Canal Corporation. Hancock invested in the venture, along with John Adams and John Quincy Adams.

Eight hundred shares, at a cost of two dollars a share, were quickly purchased by Bostonians and other local capitalists such as John Hancock, John Derby, Aaron Dexter, James Sullivan, Joseph Barrell, Christopher Gore, Andrew Craigie, and Charles Storer. Between 1793 and 1817, shareholders were called on for some 100 assessments totaling $740 per share. No dividends were paid until 1819. Dividends paid between 1819 and 1853 equaled a total repayment of only $559.50 per share. Thomas C. Proctor 1984 Review of Middlesex Canal Records

The canal itself was only 30 feet wide, and 3 1/2 feet deep. One side was a towpath for the horse that would pull the barge along the canal.

The canal was the Internet of its day. It was faster, cheaper, and bigger than any competition. It could carry a large boat of goods down from Lowell in 12 hours, and 18 hours from Boston to Lowell. The alternative route down the Merrimack River and then to Boston would take four days. And the unfortunate folks in Newburyport, MA found that their unassailable position at the entrance of the Merrimack was suddenly “disrupted” by the new technology of the Middlesex Canal, since virtually all of the freight traffic was now going directly to Boston via the Canal.

The path of the Middlesex Canal from Boston to Lowell. This map overlay shows the current conditions in block-by-block detail. To view the map, shift-click here. Source: The Middlesex Canal Commission

The canal went from the Merrimack River in Lowell to an ending point near “Building H” at what is now Bunker Hill Community College. The map above is a screenshot from www.mapjunction.com. If you click on the link in the caption, you’ll be able to zoom in and see the exact path of the canal, as well as the current condition of the canal and whether it is still visible or has been buried.

A Detailed Map of the Middlesex Canal As It Stands Today

The Middlesex Canal Commission was created in 1978 by an Act of the Massachusetts Legislature pursuant to the efforts of the Middlesex Canal Association. In 2008, the commission hired The Waterfield Design Group to create a detailed, multi-page map of the conditions of the Canal.

Mapjunction undertook to “de-page” the multi-page map, and turn it into a single mosiac that combines all the pages together so details of the current state of the canal can be compared with a range of other maps, including street maps and aerial photos.

Shift-click here to explore the Canal in detail. After opening Mapjunction, move the green 4-way slider up/down and left/right

The Middlesex Canal Association

See the Middlesex Canal Association’s location in the new Google Earth

Today, the health and promotion of the Canal is the project of the Middlesex Canal Association. Most of the content from this post came from their highly detailed website. The Association runs a beautiful and free museum in the Faulkner Mill Building in North Billerica, MA.

The Canal crossed the Mill Pond just south of the Faulkner Mill and used an innovative floating towpath so the horses could pull the barges across the pond. (Map)

The Association is located at one of the most complex parts of the Canal, where the path crossed a Mill Pond. Remember, these barges had no power of their own, and were pulled the length of the canal by horses. So the towpath for the horses had to be extended across the pond using an arrangement of floating docks. After some experimentation, they figured out how to convince the horses to continue across this rocky but workable arrangement.

Creating a Canal Network Taxes Investors

The Middlesex Canal expanded north of the Merrimack, creating a network of canals. This added to the cost of the project, and created capital demands on the original investors.

Quincy Market (left) and the Charles Street Jail (right) used Chelmsford Granite that was delivered via the Middlesex Canal.

The Canal gave Chelmsford Granite a new market in the buildings of Boston. Without the Canal and its low cost ability to carry heavy commodities, these two buildings might look much different today.

Yet, valuable, useful, and productive as the canal had proved itself, it had lost the confidence of the public, and, with a few exceptions, of the proprietors themselves. … The general depression of business on account of the embargo and the war of 1812 had its effect upon the canal.
The aqueducts and most of the locks, being built of wood, required large sums for annual repairs; …The Middlesex Canal Corporation contributed to the building of the Wiccasee locks and canals, $12,000; Union locks and canals, $49,932; Hookset canal, $6,750; Bow canal and locks, $14,115, making a sum total of $82,797 to be paid from the income of the Middlesex canal.
The constant demand for money in excess of the incomes had proved demoralizing. …Appeals to capitalists, lotteries, and State aid proved insufficient; the main burden fell upon the stockholders. In accordance with the provisions of the charter, assessments had been levied, as occasion required, up to 1816, 99 in number, amounting to $670 per share; and the corporation was still staggering under a debt of $64,000. Of course, during all this time, no dividends could be declared.
Under these unpromising conditions a committee, consisting of Josiah Quincy, Joseph Hall, and Joseph Coolidge, Jr., …They accordingly recommended a final assessment of $80 per share, completely to extinguish all liabilities. This assessment, the 100th since the commencement, was levied in 1817, making a sum total of $600,000, extorted from the long-suffering stockholders. If to this sum the interest of the various assessments be added, computed to Feb. 1, 1819, the date of the first dividend, the actual cost of each share is found to have been $1,455.25.
THE MIDDLESEX CANAL by Lorin L. Dame A. M. 1884

This state of affairs isn’t so much different from early investors in high tech companies. Often investors are called upon to keep increasing their investment, even before profitability is in sight, and knowing full well that a new technology could come along and change everything.

Steam Flattens the Canals, and Investors Too

Just when the Middlesex Canal was fully funded and was ready to bask in profits for the shareholders, the Boston and Lowell Railroad began service on the same route in 1835. In fact, the very same survey had been used to locate the tracks, which were parallel to the Canal in many locations. Now, the Middlesex Canal — the “latest” technology — would become obsolete virtually overnight.

The disastrous competition of the Lowell Railroad was now beginning to be felt. In 1835 the Lowell goods conveyed by canal paid tonnage dues of $11,975.51; in 1836 the income from this source had dwindled to $6,195.77. … The year the Lowell road went into full operation the receipts of the canal were reduced one-third; and when the Nashua & Lowell road went into full operation, in 1840, they were reduced another third. The board of directors waged a plucky warfare with the railroads, reducing the tariff on all articles, and almost abolishing it on some, till the expenditures of the canal outran its income; but steam came out triumphant. Even sanguine Caleb Eddy became satisfied that longer competition was vain, and set himself to the difficult task of saving fragments from the inevitable wreck.
THE MIDDLESEX CANAL by Lorin L. Dame A. M. 1884

Multiple Canal Investment Bubbles Bankrupt States

The middle spike starts just as railroads take hold in the 1830's. Amazingly, a third spike in canal investment occurs in the 1850’s, well after railroads have clearly become the dominant new technology. The Roots of American Industrialization by David R. Meyer

While the investors in the very first American “Internet” were beginning to see the disastrous effects of the railroads, the success of other canals such as the Erie Canal, built in 1825, were about to fuel a second wave of canal building. (Note: the Erie Canal was cash flow positive after one year and the original loan was retired by 1837).

David R. Meyer’s 2008 book The Roots of American Industrialization proposes that the first wave funded all the canals that were really needed. He further states that the real competition to the canals (before the railroads) was the lowly wagon. He says that the cost of getting goods to the canal, and from the canal were significant. And once loaded on a wagon, there was a choice to just continue down to Boston by road.

Canal management recognized its enemy; in 1819 a company report lamented: “a great proportion of the trade between Town and Country is still done on wheels. In 1822, James Baldwin, a canal superintendent, analyzed the competition that wagons posed; he stressed that wagon teams took goods directly between origins and destinations, without the expense of transshipment between the wagon and the the canal at both ends. The Roots of American Industrialization by David R. Meyer
The Middlesex Canal faced stiff competition from its original competition: The wagon. Then, in a few short years, the steam locomotive literally buried the Middlesex Canal.

Here we are in the early 1800’s, and this technology story plays out much like our technology stories do today. A promising new approach attracts capital and becomes a successful business. (The Middlesex Canal). Just when that technology is near it's time to reap great profits, a new technology comes along that again disrupts the market.

Pennsylvania was spurred by the success of the Erie Canal in New York. By 1840, Pennsylvania had completed most of its canals. By 1850, the steam engine had begun to dominate. By 1859, the State had sold all of its canals to the railroad.

And yet, the investment markets react too slowly. The old technology still garners large new investments before it is totally clear that times have changed. Pennsylvania built 1,243 miles of canals long after they were fading. The enormous cost caused the state go bankrupt in the early 1840’s. Their impressive network of canals were ill-conceived, often overbuilt, and then quickly replaced by railroads.

Containerization Is Today’s Solution

“I do not have ships, I have seagoing trucks.” Malcom Maclean

The technology of moving goods at great scale and at low cost started with the Middlesex Canal. Then the railroads took over. Now containerization essentially lets a container go seamlessly by truck or rail from a factory on one continent to a distribution warehouse on another.

It all began in April 1956, when Malcom Maclean, inventor of containerized shipping, sailed the SS Ideal-X from Port Newark to Houston Texas, carrying 58 35-foot “trailer vans”. He had solved the problem of how goods go from “wagons” to ship and back. Containerized shipping would become the method that powered international trade from that time forward.

Freddy Fields, a top official of the International Longshoremen’s Association, was asked what he thought of the newly fitted container ship. Fields replied, “I’d like to sink that son of a bitch.”[8] Wikipedia

Like all technology change, those in control of the current technology fight hard to hold on, as Freddy Fields says above. But the march of technology is relentless when new approaches cut costs and increase speed. Who knew that the Middlesex Canal — this very first example of the US canal craze — lies buried along the roads and fields that stretch from Boston to Lowell.