OHIO STATEWIDE FILES - Know your Ohio: Ohio's Early Railroads (Part 1)
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File contributed for use in USGenWeb Archives by
Darlene E. Kelley
http://www.genrecords.net/emailregistry/vols/00026.html#0006374
September 25, 2001
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Historical Collections of Ohio
The Kelley Family Collections
Newspaper article, Plains Dealer
compiled by S.J. Kelley-- 1925
And Then They Went West
by Darlene E. Kelley  1998
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Ohio's Early Railroads -- Part 1

Demise of the Canals and the Railroads Beginnings--

It was in January of 1832, history had been made in the Ohio
Legislature. On the table lay Ohio's first effective railroad charter,
that of the Mad River and Lake Erie Railroad. The legislators on that
day launched the era of railroad building in Ohio and in so doing, they
rang up the curtain on a stage where thousands of dramas were to be
played. The actors were Ohio's foremost citizens. One of these men was
Alfred Kelley, the banker-lawyer-statesmen from Cleveland and Columbus,
who had been called the 
" Financier and builder of the Ohio Canals." This brilliat man had the
touch of greatness in that he could peer, even briefly, into the future.
In this future, he saw, the railroads, weaving a network of
transportation across the state, and he and his associates put their
hands to the added building of that future.

The early thirties, however, were an era of many false starts and day
dreams in Ohio. Between 1830 and 1837 sixty nine charters were issued by
the state legislature. The vast majority of the railroads to which these
charters were granted never broke ground. and some of those started
never finished. Most of them withered for lack of capital. Some lacked
the leadership of strong men, which was vital in the opening rounds of
construction. Others were crushed by the great panic of 1837, which
turned off the faucet of enthusiasim and money supply of many canal
companies as well of the young railroads. Although it became
increasingly evident that there was a future in the Ohio empire. The
railroad became that future. The vision of Alfred Kelley and others,
were about to be realized.

After that day on the fourth of July of 1825, and Newark was bursting
with people and pride, when Governor Dewitt Clinton of New York bowed to
Governor Jeremiah Morrow of Ohio and presented his orientation amongst
the cheers of the people, and turned the first spadeful of earth for the
Ohio Canal, that was to unite Lake Erie with the Ohio River, did
Sandusky realize that they had just lost out to Cleveland in a grim
legislative battle over the location of the northern terminus of the
canal. Sanduskians were filled with gloom.

One of the citizens replied to others " Let them celebrate. One of these
days Sandusky will build something that will put their noses out of
joint... maybe one of those railroads like they are starting over in
England, with a steam engine on wheels to pull it. The papers say it
even goes 12 miles an hour. That would be at least three times as fast
as these canal boats."

At the end of his Senatorial term, Alfred Kelley was elected President
of the Columbus and Xenia Railroad Company, which enterprise he was
actively engaged upon until it was finished. In 1837, he also
accepted the presidency of the Cleveland, Columbus and Cincinnati
Railroad, and carried on that work with his usual energy and ability,
his labors in the construction of these railroads being only surpassed
by those upon the Ohio Canal. With his own hands, he dug the first
shovelful of earth and laid the last rail.

In 1850, he was chosen President of the Cleveland, Painsville and
Ashtabula Railroad Company [ afterward absorbed in the Lake Shore and
Michigan Southern]
and was soon actively engaged in the construction of that road.  During
this period of time, occurred the famous riots of Erie and Harbor Creek,
in opposition to the construction of the road through Pennsylvannia. The
success of the company in this contest was largely due to Alfred
Kelley's efforts. After the completion of these roads, he resigned the
Presidency of their respective companies, but continued an active
director in them to the time of his death.
It was this hardy kind, who carved the State of Ohio out of the
wilderness that was the Northwest Territory.

Canal Tolls increased steadily until 1840, when they were $532,688 and
set an all time high of $ 799,029 in 1861. However competition for the
canals developed with construction of roads like the National Road, and
particularly from the now efficient, cheap railroads. Even though tolls
were lowered to encourage use, the steady decline continued in good part
because of an agressive campaign by privately owned railroads to take
business from the canal system. Railroads had several advantages. They
were even cheaper than canal transport, more direct, faster, and had no
interuption for weather, being a year around service. The first railroad
from Lake Erie to the Ohio River began operating in 1848, just three
years after the completion of the Miami and Erie canal, and the
Cleveland-Coumbus-Cincinnati  line began service in 1851.

By 1849, Ohio's debt from Internal Improvements [ this included canals,
railroads, and roadways ] was  $16,880,982. This debt was labeled the
" Irreducible Debt." The canals were profitable in that they raised
enough revenue from tolls to pay the interest on these loans. Therefore,
in 1851, the Assembly passed a sinking fund [ a tax ], to pay the debt.
By 1856, canal expenditures were more than revenues coming in. Debts
began to rise. Throughout the eastern U.S., states began to default on
their interest payments and to repudiate their debts. However, Ohio was
the only State to fully pay her entire Canal debt although it took until
1903 to do so, mostly through this tax and because of a loan made by the
Canal builder, Alfred Kelley, who in turn acquired at loan, in New York,
against his own assets, and loaned them to Ohio.

Although the canals were not truly profitable in the financial sense,
they were immensely profitable to the people of Ohio and the economic
growth and wealth of the State. It was not till that time that Ohioans
functioned on a cash rather than on a barter system. It was probably the
single influence to the expansion and growth of Ohio, between 1840 1nd
1850. It was thought at first that railroads would only join areas that
were inaccessible by canal. The railroads however, went out of their way
to attack the canals instead of bidding their time and letting
experience prove their superiority. They began rate wars, undercutting
wherever possible the rates of the slower canal system. These wars led
to an act in 1852 that required railroads adjacent to or in the vicinity
of a canal to charge a uniform rate. The railroads refused to adhere to
the law and the canals' fate seemed inevitable. 

In 1861, the state leased the canals to private enterprise, but by 1878
the leasees returned the canals to the state in a much deteriorated
condition. Eventually the unprofitable systems were sold off, mostly to
the railroads who acquired the rights-of-way and the terminals, or were
abandoned. In some cases the cities took them over for streets and
sewers and etc.  

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To be continued in part 2.