In 1724 the colonial Province of New York’s surveyor, Cadwallader Colden—father of the future Erie Canal memoirist—proposed linking the Great Lakes to the Hudson River. As Colden observed, the vast, unsettled, and undeveloped Southern and Northern tiers of New York were served by waterways that were neither navigable nor oriented to boost commercial interests. Looking at a modern-day map of New York’s rivers tells the same story: the Susquehanna River basin leads to the center of Pennsylvania, the Delaware and Neversink Rivers hastily leave the state to bisect Pennsylvania from New Jersey, the St. Lawrence basin carries travelers northward to Quebec, and the Finger Lakes feed the Oswego’s drainage into Lake Ontario. Colden’s written tour of the province envisioned joining the Atlantic Ocean to Lake Erie via the Hudson and Mohawk Rivers, followed by traveling on the Oneida, Oswego, and Seneca Rivers, which eventually leads to the fierce maw of Niagara Falls. There, a fifth of the fresh water in the world makes a 90-degree turn before falling 170 feet from Lake Erie into a churning spiral of Lake Ontario. In the eighteenth century, only the Hudson River could carry goods from the interior of New York to another in-state port or marketplace. Connecting the state’s interior to the Hudson promised to direct trade inward, developing a western market within New York that could be integrated with the state’s eastern portions. Without such improvements—large, sustained, and coordinated investments in the construction of artificial roads and routes—the potential for economic development and agricultural improvement in New York would remain strangled by nature. With the exception of the Hudson River, the state’s rivers all seem to flow the wrong way.7
Drawing inspiration from Colden’s vision, an Irish-born engineer named Christopher Colles in 1784 presented the New York legislature with a proposal to begin “removing the obstructions” on the Mohawk River as part of a larger plan to “promote” both the “settlement of the interior country” and “inland navigation.” Submitted alongside petitions for the incorporation of banks and a Chamber of Commerce in New York City, Colles described a plan to “let a number of Gentlemen subscribe the sum of 13,000£ and let application be made to the Legislature to embody them into a Company, vested with powers to carry on the said work.” In short, Colles was asking for a corporate charter. If the legislature would grant him this wish, along with 250,000 acres of “waste and unappropriated lands” from the state, Colles’s new company would find “sober, honest, industrious farmers or workmen” to labor on the new water route, after which they would each take charge of 150-acre parcels of that land, turning unimproved and unused territory into “a settled neighbourhood.” “Internal trade will be increased,” Colles predicted, “foreign trade will be promoted … the country will be settled … the frontiers will be secured.” Moreover, he continued, “in time of peace, all the necessaries conveniences, and if we please the luxuries of life may be distributed to the remotest parts of the Great Lakes which so beautifully diversify the face of this extensive continent.” Urging legislators to look to British policy as a model, Colles called his proposal one “of considerable public as well as private advantage … to direct the stimulus of private interest to public purposes.”8
New York lawmakers lauded Colles’s proposal, but they had another idea about how to implement his planned work. A state assembly committee recommended that “if Mr. Colles, with a number of adventurers”—their term for investors—decided to undertake the planned improvements, “they ought to be encouraged by a law giving and securing to them, their heirs and assigns for ever, the profits that may arise.” Thus, although Christopher Colles had asked legislators for a corporate charter to structure public and private investments on behalf of a project that would serve “both the public and individuals,” legislators suggested giving him a legal privilege that looked more like a monopoly grant instead. Colles’s plan “merit[ed] encouragement,” but lawmakers simply had no appetite “to cause that business to be undertaken at public expense” by giving him access to public lands.9 Without a corporate charter or those 250,000 acres, however, it was unlikely that Colles would ever be able to attract sufficient investments to complete his proposed work. The corporate form, after all, was an attractive way to organize a business because, when ideally executed, it offered a way to legally structure a coalition of financiers, lobbyists, and promoters who could capitalize a firm, allowing the company’s board of directors to then hire managers who could competently run the enterprise. Without such a charter, Colles would have to instead recruit a wealthy patron or scramble to assemble less durable partnerships by promising them percentages of a monopoly privilege.
But even this less-than-ideal possibility never came to fruition. Despite a positive recommendation from one of their own committees, New York’s state assembly hesitated to act on Colles’s petition in 1784. He applied again to the legislature in 1785; instead of recommending a monopoly grant, lawmakers appropriated $125 for Colles to research and write “an essay toward removing certain obstacles in the Mohawk River” for their consideration. In 1786 Colles again sought aid from the legislature, this time petitioning the state senate, but he was once again rebuffed. Colles made no further petitions to the legislature with plans to finance inland navigation between the Hudson River and the Great Lakes, nor did anyone else for the remainder of the 1780s—a period one canal promoter later called a “profound silence.”10
The idea of building a canal persisted, however. In 1791 a more state-centered vision of commercial development was outlined by New York governor George Clinton in his annual legislative address. “[O]ur frontier settlements … are rapidly increasing,” wrote the governor, “and must soon yield extensive resources for profitable commerce.” Therefore, he recommended a “policy of continuing to facilitate the means of communication with them, as well to strengthen the bands of society, as to prevent the produce of those fertile districts passing to other markets,” meaning Quebec. Legislators responded by vowing to investigate “the most eligible move of effecting and defraying the expense” of improving the Hudson and Mohawk Rivers, and later adopted a bill that funded a survey to “estimate … the probable expense that would attend the making of canals sufficient for loaded boats to pass.”
By 1792 that report was complete, and Governor Clinton again touted an Albany-to-Lake Ontario canal as a “measure, so interesting to the community” that it would “command the attention due to its importance” in part because of its “very moderate expense.” His call mobilized two associations of investors to begin lobbying state lawmakers for corporate privileges to build two canals, one to link portions of the Mohawk River near Little Falls, New York, and another to join Lake Champlain to the Hudson River. Each canal was seen as a rapidly achievable project, and because the investors assured lawmakers that they would rely entirely on private capital for construction they claimed they would need the state to bear only the expense of land surveys, for which lawmakers appropriated £100 in March 1791.11
Undertaking an ambitious project—or a pair of them—by handing it to a corporation was less controversial in the 1790s than it had been in the 1780s. By the 1790s, such a project seemed feasible because of a greater availability of capital and credit. In New York City, Alexander Hamilton’s plans for a national bank, with the national government’s assumption of state debts, was helping to make the city a center for financial transactions and exchanges: money could be borrowed or repaid, stocks and U.S. bonds could be traded, and insurance policies could be taken out on recently placed shipping orders.12 With more brokers and bankers handling more financial instruments—stocks, bonds, banknotes, checks, and bills of exchange, to name a few—New York’s microeconomy was becoming more financialized, offering political entrepreneurs more opportunities to participate in a growing economy of influence.
Yet to one New Yorker, the plans being proposed in the spring of 1792 were too modest. Elkanah Watson had personally surveyed a westward canal route in late 1791 and thought Governor Clinton’s wished-for canal would—and should—be far more ambitious (and expensive). He quickly sought to convince state senator Philip Schuyler of the same. In Albany, both Watson and Schuyler had reputations for being political entrepreneurs involved with development projects that blended private capital with public authority. Schuyler, however, was a far wealthier man than Watson, and he preferred