This Week in Business History- Episode 20

“But the Erie Canal would also benefit the rest of the country – – as it drove transportation prices down tremendously – – while also cutting shipping times in half in many cases. By 1853, the Erie Canal carried 62 percent of all American trade.”

-Scott Luton, Host, This Week in Business History


In this episode, Scott W. Luton dives into the story of the Erie Canal – – the parts that you might remember AND some of the aspects that you may have forgotten. Not only did the Erie Canal pave the way for the rise of New York City, but it was a powerful cog in the engine of American growth in the 19th & 20th Centuries.

Scott Luton (00:12):

Good morning, Scott Luton here with you on this edition of this week in business history. Welcome to today’s show on this program, which is part of the supply chain. Now family of programming. We’ll take a look back at the upcoming week, and then we share some of the most relevant events and milestones from years past, of course, mostly business focused with a little dab of global supply chain. And occasionally we might just throw in a good story outside of our primary realm. So I invite you to join me on this. Look back in history to identify some of the most significant leaders, companies, innovations, and perhaps lessons learned in our collective business journey. Now let’s dive in to this week in business history.

Scott Luton (01:11):

Hello, and thanks for joining us. I’m your host Scott Luton. And today on this edition of this week in business history, we are focused on the week of October 26th. Thanks so much for listening to the show. In today’s episode, we’re diving into the story of the Erie canal. We’ll be sharing some of the things that you never knew about this critical accomplishment of its time, or maybe some of the things you have forgotten stay tuned. It’s a fascinating story. And thanks for joining us here today. On this week in business history, powered by our team here at supply chain. Now we’ll not Tober 26th, 1865. The Erie canal opened for business travel nursing, some 363 miles between Albany New York, all the way to Buffalo, which sits on Lake Erie in the Western part of New York state. It essentially connected the Atlantic ocean with the great lakes via the Hudson river.

Scott Luton (02:05):

Originally it was four feet deep by 40 feet wide, and it was all dug by hand. But let’s back up a few years and set the table a bit. Let’s talk about Jessie, Holly, who was a flower merchant. He would mill wheat in Sinica falls, New York, and shipped to a variety of other cities on the Atlantic coast. Back in the early 19th century, before railroads shipping, anything was incredibly difficult and expensive by 1807. Jesse Holly went broke largely due to being unable to find and afford transportation of his flour to his customers. He was thrown into debtor’s prison where Holly had plenty of time to dwell on the challenges to his business model. He did just that and would take two compiling essay after essay advocating for a canal system that would transform business in the area. Now the, for canals in New York state. Well, that idea was not new.

Scott Luton (03:03):

In fact, several companies had been formed in the late 18th century to explore the canal concepts in a couple of miles of dams and locks had been built indeed, but the companies and the efforts largely folded when one of the owners had passed away. Holly’s essays 14 in total were picked up by the local media and published, and they caught the eye of local business people and politicians, namely one Dewitt Clinton, who at the time was serving as mayor of New York city in 1807. New York city was far from the behemoth. It is today. In fact, at the time Philadelphia was the young nations shining city on a Hill. At the time, the city of brotherly love was the largest and most prosperous city in the States. It was also the busiest and most successful port in the country. As Philadelphia sat on the Delaware river, which was a fond thoroughfare to the Atlantic ocean and mayor Clinton saw a tremendous economic development opportunity at hand with a canal one that would transform the city and beyond the New York state legislature would form a canal commission in 1810, because nothing seems to get done politically without a commission be informed, right?

Scott Luton (04:19):

But the first challenge facing the canal proponents was of course money who would fund the project. The federal government was not sold on the idea. In fact, Thomas Jefferson thought it was a crazy idea that would never work neighboring state governments also balked at the idea and the potential regional impact of a canal. So early struggles to fund the canal would be challenging. Then came the war of 1812 while the conflict was an impediment for progress. It did help in one particular way. It highlighted the lack of transportation infrastructure in the region. So in 1817, after the war wrapped up, the us Congress indeed passed a bill that provided funding of a canal in New York state. However, us president James Madison, wasn’t feeling it and he vetoed the bill, undeterred Dewitt Clinton would soldier own things got a little bit easier in 18, 17 as Clinton was now governor of New York state.

Scott Luton (05:16):

In that same year, governor Clinton would convince the New York legislature to approve $7 million in funding for canals while the project got the dollars, it was far from being largely approved by the public. In fact, the canal project became known as Clinton’s folly or Dewitt ditch in many circles. Nevertheless, the funding approved by the state legislature called for the construction of two canals, the Western canal, which would later be named the Erie canal. Well that would connect Lake Erie with the Hudson river. And the Northern canal was a connect Lake Champlain with the Hudson river. Now that the canal projects had overcome the challenge of finding financial support, other problems, reared their heads. There was a dearth of canal building technical expertise in the country at the time. In fact, there were no civil engineers in the States. And secondly, just who was going to do all the digging as to the design of the canals, will that largely fell to a few individuals.

Scott Luton (06:15):

Namely two judges whose only experience in surveying was unbelievably settling boundary disputes in their respective courtrooms. Judge James GEDs and judge Benjamin Wright would largely plot the path for the canals. The harder part was finding laborers to do the digging and the excavation. Thousands of hardworking laborers. Many Irish immigrants would deliver eight years of excruciating construction, mostly by hand. And with some animal power mile by mile was built. Problem solving was critical as a path would encounter trees, stumps, rock, you name it every day. But the laborers using tools like hand drills and gunpowder would prevail. Now it’s important to note that unfortunately many native Americans were removed from their ancestral Homeland to make room for the canal system by 1823, the first boats from Erie canal and the Champlain canal would hit the Hudson river. Governor Clinton could begin to see the finish line in sight.

Scott Luton (07:20):

A byproduct of the construction would be the canal towns that spring up across the path. This would have a large impact on the country. David G Hackett, a historian who wrote the rude hand of innovation would say, quote, the completion of the Erie canal accelerated the collapse of the old social order. After the completion of the canal, the integration of social classes and of economic and domestic activities broke down dramatically in quote, Joseph Smith was born in Paul Myra, a canal town and would go on to found the church of Jesus Christ of latter day saints, Seneca falls. Another canal town would host a women’s convention in 1848 that would spur the suffragist movement. The entire canal system would officially open on October 26, 1825 and celebrations indeed would ensue. Governor Dewitt. Clinton would lead a fleet of boats to sail from Buffalo to New York city in just 10 days time, a record breaking trip in its day and the economic development for New York city and the region would be record breaking as well.

Scott Luton (08:28):

The Erie canal would transform New York city into the nation’s economic epicenter. The canal gave the city direct water access to the great lakes and the Midwest New York city’s population would quadruple between 1820 and 1850, but the Erie canal would also benefit the rest of the country as it drove transportation prices down tremendously while also cutting shipping times in half in many cases by 1853, the Erie canal was carrying 62% of all American trade bulk shipping of goods, such as furniture and clothing was made possible. Midwest farmers could now ship wheat, corn, and other crops to big East coast markets and do so much more inexpensively, simple pleasures like fresh oysters would now be available East and West of New York city. Now you can see just how transformational the Erie canal was to be. Yes, the wits ditch would truly become a vital investment, would trigger economic expansion and growth across the young country.

Scott Luton (09:34):

And it paved the way for New York. City’s emergence as the global capital for eCommerce that it’s become in the decades that followed the Erie canal would be enlarged several times to accommodate wider and deeper boats. But eventually much of the commercial and shipping traffic would fall off after the Saint Lawrence, the way opened in 1959 today, Erie canal is still an operation, mostly used by tourists and recreational boaters. In many cases, the locks are powered by motors and gears that are over a hundred years old. Nevertheless, the Erie canal will remain as one of the most significant and successful in American history. One that would leap the young nation forward in no shortage of ways. Two other items to note on this week in business history for the week of October 26th, on October 31st, 1860 Juliet McGill Kinsey Gordon was born in Savannah, Georgia. A meeting in 1912 with the founder of the boy Scouts would have a big impact on Gordon.

Scott Luton (10:37):

She would go on to found the girl Scouts of the USA that same year, Juliette Gordon low would be pushed seamlessly awarded the presidential medal of freedom by president Barack Obama in 2012 on October 28th, 1919, the age of prohibition would begin in the United States, which made it illegal to sell drinks with more than one half of 1% of alcohol called a noble experiment by president Herbert Hoover prohibition would fortunately only last 14 years cheers to that. When October 30th, 1945, the one and only Jackie Robinson would sign a contract to play for the Brooklyn Dodgers officially breaking the color line that existed in professional baseball. At the time on November 1st, 1945, John H. Johnson would publish the first edition of Ebony magazine. So 25,000 copies would sell out completely. In 2016, Johnson publishing company would sell both Ebony magazine and jet to private equity firm Clearview group. When October 28th, 1955, bill Gates was born in Seattle, Washington. [inaudible]

Scott Luton (11:48):

go on to co-found Microsoft and would become a billionaire by age 31. When October 28th, 1958, Mary Roebling would become the first female governor of the American stock exchange. Just 21 years prior Roebling had become the first female president of a major American commercial bank. She was a true half finance dynamo as Forbes magazine would state quote Mary G Roebling didn’t wait for women’s lib. She was ahead of it. Way ahead in quote, in on October 31st, 2002, former Enron CFO, Andrew fast towel was indicted on 78 counts of wire fraud, money laundering, conspiracy in obstruction of justice, all related to the infamous collapse of the a hundred billion dollar company. Wait that wraps up this edition of this week in business history. Those were some of the stories that stood out to us, but what do you think? What stands out to you? Tell us, shoot us a note to or you can find us on LinkedIn, Twitter, Facebook, Instagram, share your comments there.

Scott Luton (12:55):

We’re here to listen. Thanks so much for listening to our podcast. I hope you’ve enjoyed our latest edition of this week in business history. Hey, be sure to check out a wide variety of industry thought friendly reminder. You can now find this week in business history, wherever you get your podcasts from be sure to tell us what you think too. We’d love to have your review. Hey, be sure to check out the entire family of supply chain. Now programming we’ve got tequila sunrise with Greg white supply chain is boring with Chris Barnes tech talk digital supply chain podcast with Kerryn bursa, veteran voices, digital transformers, lot more search for them wherever you get your podcasts on behalf of the entire team here at this week in business history and supply chain. Now this is Scott Luton wishing all of our listeners, nothing but the best. Thanks so much. We’re grateful for your support. Hey, do good give forward and be the change that’s needed. And on that note, we’ll see you next time here on this week in business history,


Scott W. Luton is the founder & CEO of Supply Chain Now. He has worked extensively in the end-to-end Supply Chain industry for more than 15 years, appearing in publications such as The Wall Street Journal, Dice and Quality Progress Magazine. Scott was named a 2019 Pro to Know in Supply Chain by Supply & Demand Executive and a 2019 “Top 15 Supply Chain & Logistics Experts to Follow” by RateLinx. He founded the 2019 Atlanta Supply Chain Awards and also served on the 2018 Georgia Logistics Summit Executive Committee. He is a certified Lean Six Sigma Green Belt and holds the APICS Certified Supply Chain Professional (CSCP) credential. A Veteran of the United States Air Force, Scott volunteers on the Business Pillar for VETLANTA and has served on the boards for APICS Atlanta and the Georgia Manufacturing Alliance. Follow Scott Luton on Twitter at @ScottWLuton and learn more about Supply Chain Now here:


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