The Wabash and Erie Canal. ― After much negotiation between the states of Indiana and Ohio and the Federal Government, construction of the Wabash and Erie canal began at Fort Wayne on February 22, 1832 ― the one hundredth anniversary of George Washington's birthday. This date was chosen for the reason that Washington was credited with having suggested a canal through this region. The canal was constructed as rapidly as possible in both directions, east and west from Fort Wayne. Lafayette was its immediate objective to the west, and Toledo, on Lake Erie, to the east.

These points were reached in about ten years and in 1843 boats running all the way from Toledo to Lafayette. Six years later, the canal was finished to Terre Haute and finally to Evansville on 1853. It covered a total distance of about 380 miles in Indiana, 88 in Ohio, and was the longest canal (468 miles long) ever built in America.
 
The canal was in operation about 40 years. Parts of it were gradually washed out and never repaired. There was some local use of the canal between some points for a few years after 1874 but no through traffic after that date.
 

The Whitewater Canal. ― The Whitewater Canal was built to provide an outlet for the produce of southeastern Indiana. It extended from Cambridge City, on the National Road, through Connersville and Brookville to Harrison. In 1847 an extension was built from Cambridge City to Hagerstown. From Harrison two branches were built, one going to Lawrenceburg in Indiana, the other to Cincinnati. Work on the canal was begun by the state in 1836. After state funds were exhausted, the project was taken over and carried to completion by a private company.

The cost of the portion built in Indiana (76 miles) was over a million dollars or about $15,000 per mile. The cost of construction on the Cincinnati branch averaged $35,000 per mile. During the 1840's and 1850's the canal hauled a great volume of produce and carried many passengers. It was then replaced by a railroad. That portion of the Whitewater Canal that extended from Brookville to Metamora and the dam near Laurel were later restored as a state memorial.
 

The Central Canal. ― The Central Canal, as projected in the internal improvements act of 1836, was to connect with the Wabash and Erie Canal at Peru, then go up the Mississinewa Valley to Marion, over to the valley of the West Fork of White River, thence through Anderson and Indianapolis and finally to Evansville. Work was begun on various portions of it but only twenty miles between Broad Ripple, Indianapolis and Waverly were ever completed. Several years of state operation of this section had brought no profit, only an ongoing battle between the government and the lessees. 

This fight ended with the disastrous flood of 1847, which swept away the Fall Creek aqueduct, the canal was put out of action. A section of some eight miles of it between Broad Ripple and Indianapolis was later acquired and used by the Indianapolis Water Company in 1881. The Central canal became an orderly and important part of the city's water system.