However, it became increasingly apparent that Indiana’s state-wide construction plan was not economically viable. Construction costs were grossly underestimated, driving the state to the verge of bankruptcy, and money was not available to maintain the canals that were operational.
Even when canal boats were operated at extremely slow speeds, the banks rapidly eroded, and the canals had to be dredged to be operable. Floods washed out dams and aqueducts. Ice in winter and the lack of rain in summer could close the canals. So, when the first railroads were built in the 1850s and 1860s, canals struggled to compete. Railroads overcame the disadvantages of canals and were proving to be far more dominant in stimulating the economy.