The building of the Erie Canal had several concrete benefits for the entire East Coast, but it gave New York a particularly large upper hand. Planning had originated there, so the Canal favored New York distributors. Their working classes were the ones to find jobs building the Canal, and the city’s industry got a boost. Naturally, this spurred competition in other parts of the country.
Pennsylvania and Baltimore stood to lose a lot as business moved away from those cities into New York. Pennsylvania responded by building the Main Line of Public Works, which was a combination of canal and railroad that was completed in 1834. Those canal systems reduced travel time from Philadelphia to Pittsburgh by 19 days, which was fairly staggering for the time.
Other competition was both beneficial and detrimental to the Erie Canal system because that competition took the form of railroad lines based around the Canal. Some of those lines, like Auburn Road, helped extend the line and provide service to parts of the country the Canal hadn’t been planned to serve. In a way, it could be argued that the Canal boosted business and spurred entrepreneurship. However, the Canal was able to trounce these competitors handily.
The Buffalo railway, also called West Shore, went bankrupt because it failed to offer a solution that could compete with the several tons worth of equipment that boats could move across the Erie Canal. That railroad went bankrupt a year later, when it was acquired by New York Central.
About the Author: Barry K. Rothman runs a boutique law firm with an emphasis on business and entertainment law. Based in Los Angeles, Barry K. Rothman offers a global practice for the benefit of individual and corporate clients.