Financial History 134 (Summer 2020) | Page 19

they petitioned the federal government for financial support of the project. President Thomas Jefferson expressed some interest in using surplus federal funds for that purpose. But the man who found the constitutional authority to pay $15 million for the Louisiana Purchase did not detect that document’s permission to honor the Canal Company’s request. Several years later, the President responded to growing interest in the establishment of better roads to the west by authorizing the construction of the Cumberland Road to connect the Potomac River at Cumberland, MD with the Ohio River at Wheeling, VA (now West Virginia). To avoid an argument over his constitutional authority, Jefferson approved the project only after obtaining the consent of the states through which the road would pass. In 1807, Congress directed Secretary of the Treasury Albert Gallatin to prepare a report to guide the legislators as they considered their support of internal improvements. Gallatin’s April 1808 Report on the Subject of Public Roads and Canals detailed a comprehensive network of roads and waterways he believed the government should build to connect towns, rivers and lakes in every section of the country. The report sparked a new wave of interest in turnpikes, roads, bridges and canals. During the next two years, legislatures and private businessmen throughout the country’s 17 states and half a dozen territories financed and constructed their own internal improvement projects. All of them were important to a particular locality; some were supposed to have broader significance for a wider geographic region, but none were presented as part of a Gallatintype national system of internal improvements. President James Madison appeared sympathetic to some requests for federal funding. But even before being forced to deal with another war with Great Britain in 1812, he found it impossible to encourage or support federal financing of even the most well-intentioned internal improvement. With peace restored in 1815, Congress again took up the question of the federal role in establishing a coherent system of transportation linkages. It approved New York State’s request to provide funding for a canal connecting the Hudson River with Lake Erie; but President Madison vetoed the bill. As construction of the One share of stock in the Philadelphia and Lancaster Turnpike, dated August 24, 1792. Cumberland Road proceeded westward in 1816, Representatives John Calhoun and Henry Clay introduced a bill that purported to advance the type of plan described in the Gallatin report. It would use the anticipated bonus of $1.5 million the Bank of the United States would pay to the US Treasury to establish a fund to finance the construction of yet-to-bedetermined roads and canals. But the fourth President shared his predecessor’s concern over the lack of constitutional authority to establish the type of funding mechanism the so-called “Bonus Bill” envisioned. To the disappointment of many, Madison vetoed the bill on his last day in office. Congresses and Presidents continued to debate the issue. In 1818, President James Monroe celebrated the completion of the Cumberland Road, but four years later he vetoed a bill that would create a toll system on that road. In his veto message, however, this President suggested that Congress did indeed have the right to appropriate money for internal improvements—as long as it did not attempt to establish or control an integrated national transportation system. In 1823, President Monroe approved a bill appropriating money for muchneeded repairs to the Cumberland Road. In April 1824, he signed the General Survey Act, which authorized the Army Corps of Engineers to conduct surveys and evaluate potential routes of roads, canals and the earliest railroads. Around the same time, the President found the authority for Washington to make an investment in the reorganized Chesapeake and Delaware Canal Company. Under President Monroe’s leadership, the government also began distributing federal land grants to enable the construction of specific roads and canals. By the end of his eight years as President, the federal government had spent almost $3 million on internal improvements. That amount exceeded by almost 50% the $2.1 million spent during President Madison’s four years in office and was double the amount spent from 1789 to 1809 under Presidents Washington, Adams and Jefferson. State legislatures and private investment groups had never let the uncertainty over the federal role in financing internal improvements prevent them from enhancing their local and regional transportation networks. As noted, since 1790 many states and private companies had been building roads and canals without any federal money. After the twin shocks of the War of 1812 and the Panic of 1819, most of the Union’s 21 states experienced a new wave Collection of the Museum of American Finance www.MoAF.org | Summer 2020 | FINANCIAL HISTORY 17