The greatest developing factor in Indiana during this period was the Wabash and Erie Canal. It not only gave access to the fertile Wabash Valley, the choicest portion of Indiana, but by opening up a new and direct water route to the East by way of Lake Erie and the Erie Canal of New York, but it brought into Indiana a new and distinct tide of immigration that gave its character to the population of the northern counties. These counties that bordered on the canal increased in population much more rapidly than counties off the line that, in some cases, offered far better natural advantages (Benton), and land values, of course, were enhanced accordingly. It gave a vast impetus to agriculture, which heretofore had virtually no market. Large farms, we are told, began to take the place of small clearings; improved farm machinery began to be introduced, and the corps to pay for it all found their was eastward in large quantities. In 1844, says Benton, 5,262 bushels of corn passed through Toledo, increasing in 1846 to 555,250 bushels and in 1851 to 2,775,149 bushels. This is but a conspicuous example of various agricultural exports, the shipments of wheat and flour being also very heavy. A broad belt of country extending up and down the rive and extending over "thirty-eight counties in Indiana and nearly nine counties in Illinois" was tributary to the canal, and not only farm stuffs but stone from the quarry, lumber from the forest and other bulky raw material in large quantities sought cheap transportation to the market that was now made possible. Of the magnitude of the trade we get some idea from the statement that in a single day in 1844 four hundred wagons unloaded at Lafayette and that "it was a common occurrence to see as many as four or five hundred teams in that place . . . unloading grain to the canal." This export business begat a trade in imports and the returning boats bore westward, besides the immigrants and their possessions, merchandise of all kinds, the shipments of salt alone amounting in 1851 to 88,191 barrels.

The increase of population and wealth gave rise to new towns all along the route, and created new industries. The renting of water power from the canal was one of the sources of revenue, and numerous mills of various kinds sprang up, as did also grain elevators, shops, warehouses and other establishments resulting from increasing trade and seeking shipping facilities. This business prosperity in turn developed social features that would furnish peculiarly quaint and literatesque material for the storywriter. People began to travel, not only because there was a growing class who could afford to, but because the new passenger transportation by boat was a luxury compared with travel by coach over rough wilderness roads. Passenger packets, less bulky and more speedy than the freight boats, appeared, and these, hauled at a sharp trot, could make, under favorable conditions, about eight miles an hour. Of pleasant summer weather the travelers, lolling about the roomy decks of the smoothly gliding packet, played games, conversed, sang in chorus or otherwise cultivated the social amenities as it fitted their holiday mood. At the locks where the boats were delayed romantic couples could stroll on ahead, if they wanted to, gathering wild flowers as they went. The approach to a town was heralded by a great blowing of the boat's horn that brought out the townsmen, and at dock the two crowds, mingling, fraternized genially and exchanged information till the boat's horn again gave warning of departure.

This, however, was not the only side of the picture, for we have other accounts of stuffy cabins, wretched food, millions of mosquitoes that had to be fought all night, and pestilential, miasmatic vapors. Notwithstanding these drawbacks, however, people in the Wabash Valley moved about as they never had since their residence there. This brought the isolated rural life much nearer to the social life of the town, and that it had its educative effects is a safe surmise.

This canal era, while it was most conspicuous in the eighteen forties by reason of its having no competitor north of the Ohio River, as a great highway, continued to increase in its freight transportation till 1856, when it reached its maximum with 308,667 tons. After that it waned year by year, unable to hold its own against the competing railroads, especially the Toledo & Wabash, which paralleled it as far down as Lafayette. Of this the State's creditors, who had taken over the canal, bitterly complained, the granting of franchises to competitive utilities, they maintained, being a breach of honor, since they, the creditors, had accepted thee canal in good faith as a property of value and as an earnest of the State's desire to make good its debt.

With all the seeming prosperity of the Wabash and Erie during the score or so years in which it flourished, its great value was as an incidental developing factor. As a paying investment it was a failure, because during the winter season its traffic was suspended and because of the heavy expenses for repairs. In many places through the lowlands the canal was built up instead of being excavated. That is, it ran between stretches of levees or dikes and the springing of a leak through these not infrequently resulted in a washout which would empty the ditch, leaving boats, freight and passengers stranded in the mud until the breach was repaired and the canal re0filled. Floods had their dangers, and in 1844 the liberated contents of a mill0dam broke through adjacent levees so swiftly that a packet boat, the "Kentucky," was carried bodily through the gap into the river bottom and broken to pieces among the trees, three passengers being drowned.