As part of the Indiana system the Whitewater Canal was completed from Lawrenceburg to Brookville, the first boat between those points arriving at Brookville June 8, 1839 (James M. Miller). In 1842 it was sold to Henry S. Vallette, a capitalist of Cincinnati. It reached Laurel in 1843, Connersville in 1845 and boats were running to Cambridge City by 1846. For the Whitewater valley and for each of its towns as they became, in turn, heads of navigation, the canal made an era of prosperity. Cambridge City, we are told, became a shipping port for Henry, Randolph and Delaware counties as well as for Wayne and northern Rush, and Brookville and Laurel drew wheat, hogs and other agricultural exports for many miles to the west, north and east. In 1847 a Hagerstown company continued the canal to that town, but not much profit was derived from the extension (Young's Wayne County).

The beginning of the decadence of the Whitewater Canal was the damage done by two disastrous floods in 1847, which damage, it was estimated, amounted to not less than $180,000. Other disasters followed, and the final one, so far as the canal was concerned, was its sale in 1865 to the Whitewater Valley Railroad Company, which paralleled the ditch with a railroad.