The IndianaMammoth Internal Improvement Act was a law passed by the Indiana General Assembly and signed by WhigGovernorNoah Noble in 1836 that greatly expanded the state's program of internal improvements. It added $10 million to spending and funded several projects, including turnpikes, canals, and later, railroads. The following year the state economy was adversely affected by the Panic of 1837 and the overall project ended in a near total disaster for the state, which narrowly avoided total bankruptcy from the debt.
By 1841, the government could no longer make the interest payments, and all the projects, except the largest canal, were handed over to the state's London creditors in exchange for a 50% reduction in debt. Again in 1846, the last project was handed over for another 50% reduction in the debt. Of the eight projects in the measure, none were completed by the state and only two were finished by the creditors who took them over.
The act is considered one of the greatest debacles in the history of Indiana. Public blame was placed on the Whig party who had been in control of the General Assembly and the governorship during the passage of the act and the subsequent bankruptcy, though only nine members of both houses voted against the bill. After the scope of the financial disaster became apparent to the state, the Whig party gradually began to collapse in Indiana, leading to a period of Democratic control of the General Assembly that lasted until the middle of the American Civil War.
Despite the dire immediate effects on the state's finances, the project ultimately fed a 400% increase in state land values, and provided numerous other direct and indirect benefits to Indiana. The Wabash and Erie Canal, which was partially funded by the act, became the longest canal in North America and remained in operation until rendered obsolete by the railroads in the 1880s.
Background
When the state of Indiana was formed in 1816, it was still a virtual wilderness, and settlement was limited to the southern periphery where easy access to the Ohio River provided a convenient means to export produce. The only significant road in the region was the Buffalo Trace, an old, dirt bison trail that crossed the southern part of the state. After statehood several plans had been made to improve the transportation situation, like the creation of small local roads, the larger Michigan Road, and a failed attempted by the Indiana Canal Company to build a canal around the Falls of the Ohio.[1][2] The national economy entered a recession following the Panic of 1819, and the state's only two banks collapsed in the immediate years that followed, ending the state's early improvement programs without having achieved much success and leaving the state with a modest debt.[3]
The 1820s were spent repairing the state's finances and paying down the debt. A request was sent to Congress asking for the federal government to assist the young state in improving the transportation situation. Canals were at that time being constructed in several of the eastern states and New York and Pennsylvania hoped to link to the Mississippi River System by building canals through Indiana. With their support, on May 26, 1824, Congress granted Indiana a stretch of land 320 feet (98m) wide on any route a commission would map out, but the state had to promise to begin construction of a canal on the land within twelve years.[4]
Many in the Indiana General Assembly considered the grant insufficient, and requested the grant be expanded to a one-mile (1.6km) wide strip, but Congress did not act. Most of the population at the time lived along the Ohio River, and the canal would be little benefit to them, but they would bear the burden of paying for it, so their representatives opposed the idea altogether. They successfully barred the creation of a canal.[5][6]
On March 2, 1827, Congress made a new offer to the state, granting a half mile wide strip and to assist in the funding of construction. This time the General Assembly accepted the offer, passing legislation on January 5, 1828, to create a canal commission to lay out the path of the canal, but no state funding was approved. The commission laid out a short six-mile (9.7km) canal that would become the starting point of the Wabash and Erie Canal. Funding immediately became an issue in the legislature where the lowest cost estimate was $991,000.[7]
Again the southern part of the state objected, instead favoring a canal in the Whitewater Valley, then the most populated part of the state. Governor James B. Ray objected to canals as a total waste of money, and insisted on the creation of railroads instead; he threatened a veto of any canal project.[7] Because the state refused to help fund the project, it had to rely on the federal funds and the income the commission collected from selling lands adjacent to the proposed canal route. Slowly enough funds were collected and construction began on the route in 1831.[8][9]
In 1829 the National Road entered Indiana. Funded by the federal government, the project laid a large highway across the central part of the state. By 1834 the opposition to the canal had disappeared and the project was being constructed at little cost to the state and was proving to be profitable, so the General Assembly granted funds to the project to connect it to Lafayette. To fund the project, and in response to the closure of the Second Bank of the United States, the state established the Bank of Indiana. Bonds were issued through the bank who then sold them to creditors in London to fund the early stages of the project, but it soon became apparent that it would take far more funds than could be obtained by the bank bonds alone.[10]
Passage of the law
Governor Noah Noble, primary backer of the law.
In 1836, legislation was created by the Indiana General Assembly to dramatically expand the scope of the internal improvements. At first, members only intended to continue funding the Wabash and Erie, but many representatives opposed the spending because it would have little benefit for their own constituents as the canal bypassed most of the major settlements in the state. As a compromise, additional projects were agreed on so that all the cities in the state would be connected by either canal, railroad, or turnpike. To appease the majority of the population that lived along the Ohio River, the bill called for the Vincennes Trace to be paved, making it usable year round.[11]
A Lafayette Turnpike was also approved, and to gain support of the representatives from the population centers in the far northern part of the state, the Michigan Road was also paved. To appease the railroad faction, two lines were approved connecting Lawrenceburg to Indianapolis, and Madison to Lafayette. The Whitewater Valley was the most populous part of the state, and to win over their representatives, funding was added for a canal to be built in their valley. To also get support from the central part of the state, and to connect Indianapolis to the new canals, a Central Canal was also funded.[11]
Over $2 million had already been borrowed, and the new bill proposed borrowing another $10 million. This was added to the $3 million already procured through land sales. Seeing the success of canals in the eastern United States, it was believed that the projects would be very profitable for the state and that their revenue would quickly pay back the loans, and provide the funds to complete the projects. The state's regular revenue, primarily from property taxes, were at that time less than $65,000 annually, and the amount of the debt was greater than the tax receipts of the entire history of the state.[12] The sum borrowed was equal to one-sixth of all the wealth in the state. Despite the scale of the project, the representatives from the counties on the Ohio River still largely opposed the project.[11]
For canals, the project called for the creation of a canal from Indianapolis to Ohio River at Evansville, called the Indiana Central Canal. Funding was included for another canal to connect the Wabash River in Peru to the Ohio River in Lawrenceburg known as the Whitewater Canal. Additional funding was granted to the Wabash and Erie Canal for expansion to Terre Haute. The canals received the majority of the funds from the bill, because it was believed that the canals could be constructed from local materials which would help boost the local economy.[12][13] A later investigation showed that parts of the state were entirely unsuited for the canals, and the project were doomed from the start. However, the state had not conducted surveys of the land before passing the bill to ensure their suitability.
The bill also funded, but to a much lesser degree, a railroad connecting Madison to Indianapolis, another railroad from Shelbyville to Indianapolis, the paving of the Buffalo Trace and renaming it the Vincennes Trace, and the paving of the remainder of the Michigan Road. Most of the money from the project was gathered by mortgaging nine million acres (36,000km2) of state owned land through agents of the Bank of Indiana to creditors in London and New York.[12]
GovernorNoah Noble was a major supporter of the bill and it passed by the overwhelmingly Whig controlled General Assembly, although it was opposed by several prominent legislators including Dennis Pennington, James Whitcomb, Calvin Fletcher and John Durmont. Pennington believed the canals were a waste of money and would soon be made obsolete by the railroads.[14] Whitcomb outright rejected the idea of spending such a large sum of money, saying it would be impossible to pay back. The bill's passage met with statewide celebrations. Citizens saw it as a critical modernization of the state. Governor Noble considered the act his crowning achievement. Noble was concerned however that the assembly had not passed the 50% tax increase he had told them was necessary to take care of the debt the state was expecting to take.[15]
The bill created a Board of Improvement and a Board of Funds Commissioners to oversee the projects. Two thirds of the funds were spent on the canals, with the Central Canal getting the most money.[16] Jesse L. Williams was named chief engineer.[17]
From the early onset it was noted that the different projects did not work together, but instead competed with each other for funds and land. By trying to construct all the project at once, there was also a labor shortage and the projects began competing with each other for workers, significantly raising the originally projected labor costs. This posed a problem for the government, because they did not provide enough funds to complete each of the projects at the rates being paid, instead expecting them to start making money on their own, and funding their own completion.[16] There was a brief by Governor David Wallace to attempt to force the commission to only build one route at a time to conserve funds and avoid what was becoming seen as an impending financial disaster, but the different factions in the General Assembly could not agree on which line should be completed first.[18]
The Wabash and Erie Canal was the most successful of the canal projects, and was profitable early on, but never to the extent expected. The Central Canal was a major failure, with only a few miles of canal dug near Indianapolis before the project was out of money. The Whitewater Canal was proceeding along well until its earthen walls and feeder dams were the victims of muskrats who burrowed through the walls, causing hundreds of thousands of dollars in damages for which there was no money to repair.[19] At the height of the operation, over ten thousand workers were employed on the canal projects.[17]
The rail line from Madison to Indianapolis was built much more cheaply than the canals; $1.3 million was appropriated. It was however, considerably over budget due to the increased costs of having to build a grade out of the low lying Ohio Valley onto the Indiana table land, so the project could not be finished. Had the project instead started in Indianapolis, it would have been able to earn income on freight and passengers along the relatively flat central Indiana portion, and been able to fund itself to construct the grade into Madison. The Vincennes Trace was paved from New Albany to Paoli at a cost of $1,150,000, with another 75 miles (121km) still requiring pavement when the project ran out of money.
The Panic of 1837, caused primarily by western land speculation, left the state in dire straits financially. Income shrank, and in 1838 the state's taxation revenue was $45,000, but the interest on the state's growing debt was $193,350. Governor Wallace made the startling report to the General Assembly who began to wrangle over what action should be taken. Provisions were made to make debt payments with more borrowed money, in the hope that the projects could be finished before the state's credit was maxed out.[20]
The gamble proved to be a bad decision and by 1839 there was no money left for the projects and work was halted. Work only continued on the Wabash and Erie where workers were paid with stock in the canal, and not cash, and supplies were purchased using the federal funding. At that time 140 miles (230km) of canal had been built for $8 million, and $1.5 million spent on 70 miles (110km) of railroad and turnpike. The state was left with a $15 million debt, and only a trickle of tax revenue.[20]
In hope to increase revenues, the state reformed property tax assessment to be based on property values, as opposed to a set amount per acre. The modest reform boosted revenues by 25% in the following year, but was still nowhere near enough to cover the gap. Governor Wallace announced to the General Assembly in his last year as governor that the state would be insolvent within a year. The 1841 budget had over $500,000 in debt payments, plus regular spending, but revenues that year were only $72,000. The state was unofficially bankrupt.[21] The proponents of the system had promised their constituents that taxes would not need to be increased, and that once the projects were finished taxes could perhaps be abolished because tolls would pay all the state's needs. Because of this, no provisions had been made to pay interest on the massive debt.[17]
In 1841 Governor Samuel Bigger proposed the creation of county boards to set property values. The result of the new system led to as much as a 400% tax increase in some parts of the state. Citizens decried the draconian tax hikes, and many refused to pay. The General Assembly was forced to repeal the system the following year.[17]
James Lanier, president of the Bank of Indiana, was sent by Governor Bigger to negotiate with the state's London creditors in a hope to avoid total bankruptcy in 1841. He negotiated the transfer of all of the projects, except the Wabash and Erie, to the creditors in exchange for a 50% reduction in the debt they held, lowering the total state debt to $9 million.[17]
Although the debt decrease lessened the strain on the state, the debt payment was still far more than the state could afford. On January 13, 1845, the General Assembly passed a resolution issuing an official apology to the state's creditors and the state and federal governments of the United States for the repudiation of large parts of their debt. The resolution stated "We regard the slightest breach of plighted faith, public or private, as an evidence of a want of that moral principle upon which all obligations depend: That when any state in this Union refuses to recognize her great seal as the sufficient evidence of her obligation she will have forfeit her station in the sisterhood of States, and will no longer be worthy of their respect and confidence." The governor was directed to forward copies of the apology to each of the states. The result of the repudiation ruined Indiana's credit for nearly twenty years.[22]
The Whigs suffered from the failure of the project and Democrat James Whitcomb, an opponent of the projects from the beginning, was elected governor. A Democratic majority had already came to power in the statehouse the year before. With their support he began negotiations to end the crisis. Charles Butler arrived from New York to negotiate on behalf of the state's creditors in 1846. The proposed deal was for the state to trade majority ownership of the Wabash and Erie for another 50% reduction in the debt, leaving the state owing $4.5 million and ending the financial crisis. Although the debt was significantly reduced, payment on it was still over half of the state budget, but the growing population of the state was quickly raising tax revenues.[23][24]
Aftermath
Governor James Whitcomb, opponent of the law, and man who sold off the last of the public works.
The creditors had taken the public works expecting that they could be quickly completed and become profitable, but were disappointed to discover that not to be the case for all the projects. The Vincennes Trace was renamed the Paoli Pike, and operated for several years as a private toll road until repurchased by the state thirty years later. Its tolls covered its operating costs, but it was never profitable. The Central Canal was abandoned as a total loss, the expense to finish it was considered to be too great for any possible profitability, and the area was found to be unsuited for canals.[25]
The Whitewater Canal had about one fifth of the line completed, and although it was not finished, the existing portion remained in use until 1847 when a portion of the canal collapsed and rendered the northern section unusable. The southern section continued in use until 1865 when it was closed after losing traffic to a railroad built adjacent to the canal. The Wabash and Erie was finally completed in 1848 and continued to operate for thirty-two years, but the high-rise portions of the canal in the central part of the state were found to be high maintenance and the frequent victim of muskrats.[25]
The cost of upkeep, and competition from the railroad eventually led to the collapse of the canal and its company in the 1870.[25] The rail line from Madison to Indianapolis was also abandoned by the creditors and sold to a group entrepreneurs, who were able to raise funds to complete the line. The Madison & Indianapolis Railroad was instantly profitable and went on to expand and connect to several other cities.
In 2008, all that remains of the Wabash and Erie is a restored fifteen-mile (24km) stretch and a few ponds. Much of the canal lands were sold to railroad companies and were excellent land for constructing rail lines. The turnpikes and railroads turned out to be the most successful projects, and some parts of them have remained in use until modern times.
Although the government lost millions, there were significant benefits for the areas of the state where the projects succeeded. On average, land value in the state rose 400%, and the cost of shipping goods for farmers was drastically decreased, and increasing the profit on their goods. The investors in the Bank of Indiana also made substantial profits, and the investments served as the start of a modern economy for the state.[26] The act is often considered the greatest legislative debacle in the history of the state.
The Wabash and Erie Canal was a shipping canal that linked the Great Lakes to the Ohio River via an artificial waterway. The canal provided traders with access from the Great Lakes all the way to the Gulf of Mexico. Over 460 miles long, it was the longest canal ever built in North America.
The Indiana General Assembly is the state legislature, or legislative branch, of the state of Indiana. It is a bicameral legislature that consists of a lower house, the Indiana House of Representatives, and an upper house, the Indiana Senate. The General Assembly meets annually at the Indiana Statehouse in Indianapolis.
The Indiana Territory, officially the Territory of Indiana, was created by a congressional act that President John Adams signed into law on May 7, 1800, to form an organized incorporated territory of the United States that existed from July 4, 1800, to December 11, 1816, when the remaining southeastern portion of the territory was admitted to the Union as the state of Indiana. The territory originally contained approximately 259,824 square miles (672,940 km2) of land, but its size was decreased when it was subdivided to create the Michigan Territory (1805) and the Illinois Territory (1809). The Indiana Territory was the first new territory created from lands of the Northwest Territory, which had been organized under the terms of the Northwest Ordinance of 1787. The territorial capital was the settlement around the old French fort of Vincennes on the Wabash River, until transferred to Corydon near the Ohio River in 1813.
James Brown Ray was an Indiana politician and the only Indiana Senate president pro tempore to be elevated to governor of the state of Indiana. Ray served during a time when the state transitioned from personal politics to political parties, but never joined a party himself. Taking office one week before his 31st birthday, he became the state's youngest governor and served from 1825 to 1831, the longest period for an Indiana governor under the state constitution of 1816. During Ray's term as governor the state experienced a period of economic prosperity and a 45 percent population increase. He supported projects that encouraged the continued growth and development of the young state, most notably internal improvements, Native American removal, codification of Indiana's laws, improved county and local government, and expanded educational opportunities. Ray was known for his eccentricity and early promotion of a large-scale railroad system in the state. His support for new railroad construction and alleged involvement in several scandals caused him to lose popularity among voters. Ray's opponents who favored the creation of canals considered railroads to be an impractical, utopian idea. Following Ray's departure from political office, he continued to advocate for a statewide railroad system until his death in 1848.
Jonathan Jennings was the first governor of the State of Indiana and a nine-term congressman from Indiana. Born in either Hunterdon County, New Jersey, or Rockbridge County, Virginia, he studied law before migrating to the Indiana Territory in 1806. Jennings initially intended to practice law, but took jobs as an assistant at the federal land office at Vincennes and assistant to the clerk of the territorial legislature to support himself and pursued interests in land speculation and politics. Jennings became involved in a dispute with the territorial governor, William Henry Harrison, that soon led him to enter politics and set the tone for his early political career. In 1808 Jennings moved to the eastern part of the Indiana Territory and settled near Charlestown, in Clark County. He was elected as the Indiana Territory's delegate to the U.S. Congress by dividing the pro-Harrison supporters and running as an anti-Harrison candidate. By 1812 he was the leader of the anti-slavery and pro-statehood faction of the territorial government. Jennings and his political allies took control of the territorial assembly and dominated governmental affairs after the resignation of Governor Harrison in 1812. As a congressional delegate Jennings aided passage of the Enabling Act in 1816, which authorized the organization of Indiana's state government and state constitution. He was elected president of the Indiana constitutional convention, held in Corydon in June 1816, where he helped draft the state's first constitution. Jennings supported the effort to ban slavery in the state and favored a strong legislative branch of government.
William Hendricks was a Democratic-Republican member of the House of Representatives from 1816 to 1822, the third governor of Indiana from 1822 to 1825, and an Anti-Jacksonian member of the U.S. Senate from 1825 to 1837. He led much of his family into politics and founded one of the largest political families in Indiana. He was the uncle of Thomas Andrews Hendricks, who was also Governor of Indiana and Vice President of the United States. Hendricks County was named in his honor. His term as governor was spent repairing the state's finances to later enable large scale internal improvements. The establishment of the basic framework of the state's public school system and the transfer of the capital from Corydon to Indianapolis also occurred during his term.
Noah Noble was the fifth governor of the U.S. state of Indiana from 1831 to 1837. His two terms focused largely on internal improvements, culminating in the passage of the Mammoth Internal Improvement Act, which was viewed at the time as his crowning achievement. His taxing recommendations to pay for the improvements were not fully enacted, and the project ultimately led the state to negotiate a partial bankruptcy only a few years later. The debacle led to a gradual collapse of the state Whig party, which never regained control of the government, and led to a period of Democratic control that lasted until the middle of the American Civil War. After his term as governor he was appointed to the Board of Internal Improvement where he unsuccessfully advocated a reorganization of the projects in an attempt to gain some benefit from them.
Samuel Bigger was the seventh governor of the U.S. state of Indiana from December 9, 1840 to December 6, 1843. Bigger was nominated to run for governor because he had no connection to the failed public works program. The state had entered a severe financial crisis in his predecessor's term and the government became insolvent during his first year in office. He oversaw the state's bankruptcy negotiations, but the bankruptcy he negotiated was only able to return the state to solvency briefly. By the time of his reelection campaign, the Whig Party had become the target of public blame for the debacle, and Bigger was defeated.
James Whitcomb was a Democratic United States senator and the eighth governor of Indiana. As governor during the Mexican–American War, he oversaw the formation and deployment of the state's levies. He led the movement to replace the state constitution and played an important role at the convention to institute a law that prevented the government from taking loans in response the current fiscal crisis in Indiana. By skillfully guiding the state through its bankruptcy, Whitcomb is usually credited as being one of the most successful of Indiana's governors. He was elected to the United States Senate after his term as governor but died of kidney disease only three years later.
Matthew Empson Welsh was an American politician who was the 41st governor of Indiana and a member of the Democratic Party, serving from 1961 to 1965. His term as governor saw a major increase in statewide taxation, including the first state sales tax, and the passage of several important civil rights bills, making Indiana one of the most friendly states to ethnic and religious minorities at that time. His tax hikes led to a near-tax revolt in the state, and people began writing "Indiana—Land of Taxes" on their license plates, at entry points into the state, in stores, and other public places. The situation killed any chance he had seeking higher office and earned him the moniker "Sales Tax Matt". Despite numerous reforms and his popularity within the Democratic Party, he was defeated when he ran for governor again in 1972. After leaving office, he served as chairman of the Indiana Democratic Party, as a member of the Democratic National Committee from 1964 until 1968, and as a federal commissioner on the International Joint Commission from 1966 until 1970. Throughout his life, Welsh was known for his personal motto, "It doesn't cost you anything to be a gentleman." After his retirement in 1972, he returned to Indianapolis, where he remained until his death in 1995.
Chauncey Rose was a successful American businessman of the 19th century.
The Whitewater Canal, which was built between 1836 and 1847, spanned a distance of 76 miles (122 km) and stretched from Lawrenceburg, Indiana on the Ohio River to Hagerstown, Indiana near the West Fork of the White River.
The history of human activity in Indiana, a U.S. state in the Midwest, stems back to the migratory tribes of Native Americans who inhabited Indiana as early as 8000 BC. Tribes succeeded one another in dominance for several thousand years and reached their peak of development during the period of Mississippian culture. The region entered recorded history in the 1670s, when the first Europeans came to Indiana and claimed the territory for the Kingdom of France. After France ruled for a century, it was defeated by Great Britain in the French and Indian War and ceded its territory east of the Mississippi River. Britain held the land for more than twenty years, until after its defeat in the American Revolutionary War, then ceded the entire trans-Allegheny region, including what is now Indiana, to the newly formed United States.
The Indiana Central Canal was a canal intended to connect the Wabash and Erie Canal to the Ohio River. It was funded by the Mammoth Internal Improvement Act, Indiana's attempt to take part in the canal-building craze started by the Erie Canal. $3.5 million was allocated for the project, the largest piece of the entire $10 million Act. However, due to the Panic of 1837, Indiana suffered financial difficulties and had to turn the canal over to the state's creditors, and building of the canal was stopped in 1839. The canal was supposed to extend 296 miles (476 km), from Peru, Indiana, to Evansville, Indiana, where it would reach the Ohio River. It was originally divided into two sections, North and South. Later, a third section was designated, called the Indianapolis section. Only eight miles (13 km) were completed, with an additional 80 miles (130 km) between Anderson, Indiana, and Martinsville, Indiana, having been partially built.
Dennis Pennington was a farmer and a stonemason who became known for his many years in public office as an early legislator in the Indiana Territory and in Indiana's General Assembly as a representative of Harrison County, Indiana. Pennington, a member of the Whig Party, became the first speaker of the Indiana territorial legislature's lower house in 1810, served as the territory's census enumerator in 1815, and represented Harrison County as one of its five delegates to the constitutional convention of 1816. Pennington was the first speaker of the Indiana Senate, and served in the state legislature for eighteen years, which included five years in the Indiana House of Representatives and thirteen years in the Indiana Senate. His major political contributions relate to his strong opposition to slavery. Pennington ran unsuccessfully for Indiana's Lieutenant Governor in 1825. In addition to his service in the state legislature, Penning was a Harrison County sheriff and a justice of the peace, a trustee of Indiana University, and a member of the Grand Lodge of Indiana. He also supervised construction of the limestone courthouse that served as Indiana's first state capitol building in Corydon, Indiana. The historic Old Capitol, the seat of state government from 1816 to 1825, is one of his most enduring legacies. Fondly remembered as "Old Uncle Dennis" or "Father Pennington," he was known for his common sense and strong character and became one of Harrison County's most influential citizens.
The Indiana Canal Company was a corporation first established in 1805 for the purpose of building a canal around the Falls of the Ohio on the Indiana side of the Ohio River. After several attempts, and possible sabotage by a supporter of the Louisville and Portland Canal, the project was ended.
The state Bank of Indiana was a government chartered banking institution established in 1833 in response to the state's shortage of capital caused by the closure of the Second Bank of the United States by the administration of President Andrew Jackson. The bank operated for twenty-six years and allowed the state to finance its internal improvements, stabilized the state's currency problems, and encouraged greater private economic growth. The bank closed in 1859. The profits were then split between the shareholders, allowing depositors to exchange their bank notes for federal notes, and the bank's buildings and infrastructure were sold and reincorporated as the privately owned Second Bank of Indiana.
Indiana is a U.S. state in the Midwestern United States. It is the 38th-largest by area and the 17th-most populous of the 50 States. Its capital and largest city is Indianapolis. Indiana was admitted to the United States as the 19th state on December 11, 1816. It is bordered by Lake Michigan to the northwest, Michigan to the north and northeast, Ohio to the east, the Ohio River and Kentucky to the south and southeast, and the Wabash River and Illinois to the west.
State defaults in the 1840s were defaults by U.S. states that took place in Arkansas, Illinois, Indiana, Louisiana, Maryland, Michigan, Mississippi, Pennsylvania, and the territory of Florida. The end of an inflationary period from 1834 to 1839 and the Panic of 1837 led to a tightening of credit lending from the Bank of England. By 1841, nineteen of the twenty-six U.S. states and two of the three territories had issued bonds and incurred state debt. Of these, the aforementioned states and territory were forced to default on payments. Four states ultimately repudiated all or part of their debts, and three went through substantial renegotiations.
Alfred Kelley was a banker, canal builder, lawyer, railroad executive, and state legislator in the state of Ohio in the United States. He is considered by historians to be one of the most prominent commercial, financial, and political Ohioans of the first half of the 19th century.
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