DeWitt Clinton (1769-1828) was an early American politician who transformed the country in far-reaching ways — physically, economically and financially. He was the driving force in building the Erie Canal, a massive engineering achievement that helped make Wall Street into a major financial center and the United States into an economically dynamic nation where investors would want to put their money.
Clinton served at various times as governor of New York state, mayor of New York City, U.S. senator and member of the Erie Canal commission. He ran for president in 1812, losing a fairly close contest to James Madison. He was an intellectual with interests ranging from rattlesnake biology to the history of Native Americans. He also was imperious and abrasive. A couple of years before the infamous Hamilton-Burr duel, Clinton went up against Burr supporter John Swartwout and irritably shot him in the leg.
Among Clinton’s accomplishments were improvements in public education, sanitation and city planning, reforms of criminal laws and helping found and promote cultural institutions such as the New York Historical Society. But his lasting place in history comes primarily from his role in spearheading development of the Erie Canal, notwithstanding the skeptics who called it “Clinton’s folly” or “Clinton’s ditch.”
In 1810, Clinton, who had served intermittently as mayor, was picked by the State Legislature to be one of the first members of the Commission to Explore a Route for a Canal to Lake Erie and Report, which would go through various unwieldy names and become known as the Erie Canal commission.
The idea of opening America’s interior through a canal linking upstate New York to the Great Lakes region had been floating around for decades. Early thoughts focused on a relatively short route to Lake Ontario, but this would go only so far in gaining access to the Midwest and would require a burdensome portage around Niagara Falls. A more ambitious plan would be to connect Lake Erie to the Hudson River.
That, however, would mean crossing hundreds of miles of often difficult terrain, passing through swamplands and cutting through rock ridges. Gouverneur Morris, an influential politician who served as commission chair, favored the idea but worried that “our minds are not yet enlarged to the size of so great an object.”
The War of 1812 put canal considerations on the back burner, and prospects for federal funding were dim anyway. A few years earlier, Thomas Jefferson as president had called the whole idea “little short of madness,” noting that a much more modest plan for a canal in the Washington, D.C. area had stalled for lack of resources.
Clinton spent the next few years campaigning for an Erie Canal, arguing that New York state should build the thing without federal help if necessary. In 1817, a veto by President Madison showed that this was indeed necessary. But that same year, the State Legislature passed a Canal Act, and Clinton, his career increasingly connected to the issue, became governor. Overturning some soil with a shovel, he promised that the huge undertaking would be done in 10 years. It ended up taking just eight.
Buy Canal Bonds
The canal’s projected cost was $7 million, a stupendous sum. New York state issued bonds on an unprecedented scale, while also taxing land, salt and other items in the canal area so as to have ready cash to service the debt. Relatively small investors provided a substantial portion of the initial capital. An 1818 bond issue attracted 69 subscribers, with 51 investing less than $2,000 and 27 investing less than $1,000. The Bank for Savings, an institution set up with Clinton’s encouragement to serve small depositors, became a major buyer of canal bonds as well.