The first canal agitation in Indiana was for a waterway around the falls of the Ohio River, which were a serious impediment to navigation. This concerned Kentucky and Ohio quite as much as Indiana, and one of the propositions n he twenties was a join work by Ohio and Indiana but nothing came of it.

As early as 1805 a company was formed in Indiana, composed largely of Clark County citizens, and $120,000 subscribed for the canal in question (Esarey). Soon after the admission of the State of Indiana the Legislature charted "The Ohio Canal Company," which aimed to raise a capital of $1,000,000, but failed to do so. A reorganized company with a new charter was authorized in 1818 to raise money by lottery, Indiana itself to be a stockholder, and the following year work was begun. Like much of the subsequent canal work, however, the capital and labor expended were a sheer loss. Support was inadequate and progress slow. In 1825 Kentucky took up the work on its side. The cut could be made much cheaper there. The Kentucky enterprise had the backing of the Federal government, and the Indiana effort that had persisted stubbornly for twenty years or more received its deathblow. That Louisville became a metropolis and Jeffersonville and New Albany sank into desuetude was no large doubt largely determined by the canal as a commercial factor. The Indiana scheme seems to have died hard, for as late and 1836 there was a flicker of revival when a company obtained another charter for the renewal of work on our side. This, however, never got farther than the first movement.