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Chesapeake and Ohio Canal Company records

 Collection 0072-MDHC
This collection consists of legal and financial records, correspondence, and maps documenting the construction and operation of the Chesapeake and Ohio Canal. Many of the materials concern land transactions and there is also a significant amount of documentation of court cases involving the company.

Dates

  • 1880-1945
  • Majority of material found within 1889-1945

Use and Access to Collection

This collection is open for research.

Duplication and Copyright Information

Photocopies of original materials may be provided for a fee and at the discretion of the curator. Please see our Duplication of Materials policy for more information. Queries regarding publication rights and copyright status of materials within this collection should be directed to the appropriate curator.

Extent

3.75 Linear Feet

Scope and Content of Collection

This collection consists of portions of the records of several lawsuits filed against the Chesapeake and Ohio Canal Company between 1880 and 1939; many of the legal issues raised were not entirely resolved until the early 1940s. The documents in this collection date from 1880 to 1945 with the bulk of the material dating from 1920 to 1943.

Financial problems resulting from poor trade conditions, competition, and natural disasters characterized the history of the Chesapeake and Ohio Canal from 1878 to 1938. The legal documents in the collection record some of these financial problems and the canal's receivers attempts to resolve the debts of the company.

The legal representative and advisor to the trustees and receivers of the Chesapeake and Ohio Canal Company between 1920 and 1945 was William Preston Lane, Jr. Lane simultaneously served as the Hagerstown area general counsel for the Baltimore and Ohio Railroad and as a partner in several law firms during the course of this work. When Lane was admitted to the Maryland Bar in 1916, he immediately entered into partnership with the firm of Keedy and Lane. He was associated with Lane, Bushong, and Byron of Hagerstown, Maryland, from 1919 until 1922 and was a senior partner in the firm of Lane and Mish in the 1930s. The nineteenth-century documents in the collection do not appear to have originated in his offices but may have been transferred there by the receivers of the canal company to provide background information. All documents in the collection created after 1920 appear to have originated in Lane's, the trustees,' or the receivers' offices.

Part of this collection is composed of records generated during the case of Daniel K. Stewart vs. the Chesapeake and Ohio Canal Company. These records consist solely of transcripts of testimony and are not a record of the entire case either from the complainant's or the defendant's side. Much of the testimony consists of discussions of the political maneuvers of the canal company officials in local elections in the 1870s.

Records generated by the resolution of claims issues and the disposal of the canal property through actions ordered as a result of George S. Brown et al. vs. the Chesapeake and Ohio Canal Company form the bulk of the collection. The documents do not fully explain Brown's identity, but he was probably a representative of the Baltimore and Ohio Railroad Company who filed the original suit in 1889. This portion of the collection is comprised of correspondence, records of testimony, appeals, petitions, claims filed as a result of these cases, handwritten research notes, maps, and deeds. The case was originally filed in 1889, but the majority of the documents in this collection date from 1938 and 1943 when the canal and its assets were being liquidated and dispersed by the receivers. All issues relating to the disposal of canal lands were apparently resolved by 1945, and the receivers were discharged late that year.

Records of an appeal filed in 1939 against the receivers of the canal by Rinehart S. Cohill comprise the third series in the collection. These materials consist of court briefs, a trans- script of court records, petitions, and related correspondence.

The final series in this collection is comprised of a variety of records that were generated through correspondence between the trustee who acted as general manager of the canal company in the period between approximately 1920 and the late 1930s and the law firm of Keedy and Lane. These records pertain to legal issues that were not related to the case of Brown et al. but were generated as a result of the day-to-day operations of the canal. Many of these records pertain to trespassing and other disputes relating to the boundaries of the canal's right-of-way. Portions of the records of several possibly associated law suits are also included in this series, as well as some miscellaneous correspondence.

Administrative History

Now a national park, the Chesapeake and Ohio Canal was once a major transportation artery that ran parallel to the Potomac River from Cumberland, Maryland, to Georgetown in the District of Columbia. The canal operated from the mid-nineteenth century into the 1930s and was used primarily for the transportation of coal and bulk agricultural products. These products, produced in the inland regions of the developing nation, were vital to the continuing prosperity of Tidewater cities and towns such as Baltimore and Washington.

The need for an accessible and dependable transportation corridor connecting inland regions with the Tidewater was recognized as early as 1750. George Washington called for construction of a series of short canals and locks to circumvent unnavigable stretches of the Potomac River and helped to organize the Pawtomack Company to achieve that end in 1785. The Pawtomack Company failed after Washington resigned to become President of the United States. That company was succeeded by the Potomac Canal Company, which functioned between 1819 and 1823. In 1823, this company was reorganized to form the Chesapeake and Ohio Canal Company.

The goal of the Chesapeake and Ohio Canal Company was to build a canal that would join the Ohio River with the Chesapeake Bay as a part of the development of a water transportation system throughout the United States. At the height of enthusiasm for the project, a possible connection with the Erie Canal and the Great Lakes was also considered. Between 1823 and 1828, the company developed a finance plan that depended on contributions from private citizens, the federal government, and the governments of Maryland, Virginia, and the District of Columbia. After the canal was planned for the Maryland side of the Potomac between 1823 and 1825, Virginia withdrew financial support from the corporation, thus precipitating the first of many financial crises that characterized the history of the canal.

By 1827, enough funds had been raised, largely through greater emphasis on private subscriptions, to plan for construction, and on July 4, 1828, construction was begun. Somewhat ironically, construction of the Baltimore and Ohio Railroad was initiated on the same day. Bitter competition persisted between these two firms throughout the history of the canal. Development and modernization of railroad technology eventually had a significant impact on canal transportation throughout the United States, and the Chesapeake and Ohio Canal was no exception.

Partially as a result of the developing political influence of the railroad, the federal government withdrew financial support for the construction effort in 1834. As a result, the pace of canal construction slowed; eventually an issue of bonds to complete construction was approved by the Maryland state legislature in 1844. These bonds were mainly purchased by private speculators, and funds raised enabled completion of the canal as far as Cumberland, Maryland, in October 1850.

The population of the inland Potomac River valley grew sharply following completion of the canal. The economy also greatly expanded and diversified during the period preceding the Civil War as enhanced transportation allowed greater access to Tidewater markets such as Baltimore and Washington.

The Civil War had a direct impact on the operation of the canal. Many of the battles were fought in close proximity to the it. The earliest of these was John Brown's raid on Harpers Ferry in 1859. The canal lay near the border between the North and the South, and throughout the war Confederate troops made repeated attempts to destroy aqueducts and feeder dams along the canal. Although trade resumed shortly following the end of the war in 1865, the rapid development of railroad technology during the conflict had a lasting negative impact on canal transportation of building materials, agricultural products, and coal.

A. P. Gorman assumed the presidency of the Chesapeake and Ohio Canal Company in June 1872. As a result of his administration, the political influence of the Democratic Party became a powerful force in the operation of the canal, and the company eventually became a patronage tool for the party. The period of 1870 to 1875 was one of unprecedented prosperity for the canal, partially as a result of this political favoritism.

The profitability of the canal was deeply affected by the great nationwide depression that gripped the country in the latter half of the 1870s. In addition, the canal was nearly destroyed by massive flooding in 1877. Following this flood, the Maryland legislature approved the sale of bonds to finance repair work aimed at partially restoring profitability of the canal. A measure of profitability was accomplished by means of the political connections established by those operating the canal at the time of the bond issue.

The operators of the company, led by A. P. Gorman, developed a plan to sell the authorized repair bonds to make capital improvements and enhance competitiveness. This scheme was challenged in court in 1880 by Daniel K. Stewart, a holder of bonds issued in 1844 for the original construction. The company achieved a partial victory enabling them to sell the bonds, but the capital improvements plan was effectively scuttled following public criticism of it by the Governor of Maryland and other public figures who were political rivals of Gorman.

The canal was again nearly destroyed by flooding in 1887, and another large scale sale of bonds authorized by the 1878 legislation was initiated. These bonds, unlike the bonds issued in 1844, mortgaged the physical property of the canal rather than its future earnings. Most of these were purchased by the Baltimore and Ohio Railroad Company through several holding corporations. The railroad, which had also been buying bonds from the earlier issue of 1844 through other holding companies, eventually held the majority of canal bonds from both 1844 and 1878.

The canal was virtually destroyed by a flood of unprecedented proportions on June 1, 1889, and, in December of that year, the Baltimore and Ohio Railroad Company petitioned the Washington County Circuit Court for the appointment of trustees for purposes of foreclosing on its bonds. The petitions were consolidated as George S. Brown et al. vs. the Chesapeake and Ohio Canal Company and were assigned case numbers 4191 and 4198 equity.

These two cases were, in essence, bankruptcy proceedings ostensibly intended to pay off the canal company's debts through the sale of its assets. However, the Baltimore and Ohio Railroad Company wanted to protect its interest in the right-of-way to thwart competition from other railroads. This was accomplished in two ways. The railroad purchased the canal interest of the state of Maryland in small increments between 1904 and 1908. At the same time, the trustees operated the canal company at a loss, while railroad backers founded the Chesapeake and Ohio Transportation Company. This transportation firm utilized the canal to realize a small profit, thus preventing a court-ordered sale by creating the illusion that the company would eventually be able to pay off its debts. This strategy remained effective until 1938.

In 1938, as a result of the Great Depression, the Baltimore and Ohio Railroad Company was itself in difficult financial straits. When the last of the canal trustees died, a board of receivers was appointed on May 4, 1938, by the Washington County Circuit Court at the request of the railroad. The close ties between the receivers and the Baltimore and Ohio Railroad, revelations that the majority of the bond issues of 1844 and 1878 were also held by the railroad, and public disclosure that the railroad had purchased Maryland's interest in the canal made it evident to the public that the receivers intended to dissolve the canal's property and assets solely to profit the railroad company. A part of this strategy was the development of a court-approved plan for disposal of debt in which the bonds of 1877 would be honored before all other debts, allowing the profits from sale of canal property to go directly to the railroad; minority bond holders and contractors who had performed work on the canal would be forced to sustain losses. This plan precipitated a flood of claims against the canal company ranging from charges of non-payment of wages and materials costs to illegal transfer of leases.

The canal and its associated lands and structures were sold to the federal government through the Reconstruction Finance Corporation in 1938. As a precondition of this sale, lands that the Baltimore and Ohio Railroad Company wished to acquire were excluded from the sale and directly transferred as payment for outstanding bond debts. The proceeds from the sale to the federal government were approximately two million dollars, the vast majority of which also went to the Baltimore and Ohio Railroad Company.

Most of the claims filed as a result of the dissolution plan were subsumed under Brown et al. vs. the Chesapeake and Ohio Canal Company. However, an independent appeal of the dissolution plan was filed by Rinehart S. Cohill in October 1939. Cohill was a minority holder, through inheritance, of a series of bonds issued under the authority of 1844. Cohill filed an appeal to block disbursement of the federal funds directly to the Baltimore and Ohio Railroad Company. This suit was also settled to the advantage of the railroad.

Following the sale to the federal government, the canal right-of-way was initially considered for construction of a multi-lane federal highway. Public opposition to this plan was immediate and widespread. The leader of the opponents of the highway plan was Supreme Court Justice William O. Douglas, who in 1954 led a hike of the length of the canal to publicize its scenic beauty. The media attention given the hike and growing opposition to the planned highway led the federal government to reconsider, and the highway plan was scrapped. By the end of 1954, the Department of the Interior decided to create the Chesapeake and Ohio Canal National Historic Park.

Arrangement

The collection has been divided into four series.
Series 1
Daniel K. Stewart vs. the Chesapeake and Ohio Canal Company
Series 2
George S. Brown et al. vs. the Chesapeake and Ohio Canal Company
Series 3
Rinehart S. Cohill vs. the Chesapeake and Ohio Canal Company
Series 4
Miscellaneous Records

Custodial History and Acquisition Information

The Chesapeake and Ohio Canal Company records were purchased from Spring Mount Collectibles in March 1992.

Related Material

The library of the Baltimore and Ohio Railroad Company Museum, located in Baltimore, has an attached library that holds some material related to the Chesapeake and Ohio Canal. The Maryland Historical Society holds several manuscript collections that contain primary material relating to the canal, including the papers of John Thomas Scharf and George Corbin Washingon. The Society also has two stock-holder letters relating to the completion of construction of the canal. The National Archives was the source of several of the documents used to support court petitions present in this collection and holds other related materials as well. The Archives and Manuscripts Department of the University of Maryland at College Park Libraries also holds the papers of William Preston Lane, Jr.

University of Maryland at College Park Libraries also hold numerous secondary materials on both the Chesapeake and Ohio Canal and the Baltimore and Ohio Railroad Companies.

Processing Information

Initially housed in three cardboard boxes, the collection contained some evidence of its original arrangement, although there was some mixing of file types. In addition, several files had been emptied, and their contents evidently intermingled with documents from other files.

Following initial assessment, the collection was divided into series. The original order of the collection, where discernible, was restored.

Most of the collection is comprised of multiple-page documents, and many of these have correspondence or notes attached. These groupings were kept intact as the collection was processed. Documents with clearly associated correspondence were fastened together with padded, non-reactive fasteners. Items filed together but not clearly originally associated were placed individually in their original order within file folders. Individual folders containing a large volume of items were separated into two or more folders for preservation and ease of access.

The collection also contained numerous claims documents that had been folded into solander boxes. Many of these documents had become separated from their file boxes, and any original order was lost. These documents were flattened, smoothed, and interfiled in chronological order within the lawsuit series with which they were associated.

There were also several sets of records of court testimony in the collection. Ribbons holding these sheets in bundles were removed, as were staples and other metal fasteners. These testimony records were then placed into individual, acid-free file folders, maintaining their original order.

In addition, the collection contained several maps that were attached as evidence to court petitions. The majority of these are oversize and were folded to fit into the legal-size folders that originally contained the files. These maps were separated, flattened, and placed in oversize storage. The locations of these maps in the files has been marked by separation sheets.

The original file folder headings were utilized when they accurately reflected the contents of the files. Artificial headings were created for loose materials and for records removed from mixed files. These headings are indicated by square brackets on the folders and in the attached box inventory.

Following arrangement, all items were placed in acid free folders and acid-free storage boxes.
Title
Guide to the Chesapeake and Ohio Canal Company records
Status
Completed
Author
Processed by James M. Harmon.
Date
1995-07-01
Description rules
Describing Archives: A Content Standard
Language of description
English
Script of description
Code for undetermined script
Language of description note
Finding aid written in English.

Library Details

Part of the Special Collections and University Archives

Contact:
University of Maryland Libraries
Hornbake Library
4130 Campus Drive
College Park Maryland 20742
301-405-9212