5.2.3. The Midwest, 1820-1865: The Midwest's Economic Revolution


  • New York’s completion of the Erie Canal in 1825 prompted Midwestern states to undertake transportation projects of their own.  State and local governments subsidized canal and railroad construction; most suffered heavy losses in the depressions of 1837 and 1857. 
  • Many Midwestern legislatures enacted “mill dam” laws, which overturned the common-law rule that water-mill operators could not use dams that flooded the lands of upstream neighbors even if such a dam was essential in order to operate the mill.  The new laws allowed flooding but required the mill owner to compensate owners of flooded lands.  Midwestern courts upheld the laws, but only reluctantly. 
  • Midwestern courts and legislatures became increasingly “instrumentalist”:  they supported entrepreneurs who would develop resources and promote the industrial revolution. 

 

Ohio

Indiana

Illinois

Michigan

Wisconsin

Iowa

Minnesota

1825-1837

1825:  Canal construction begins

 

1837:  “Plunder Law”: state subsidies to private canal companies authorized

 

1827:  Canal construction begins

 

1836:  “Mammoth Bill”: state construction program authorized

 

 

 

 

 

1836:  State construction program authorized

 

 

 

 

Statehood, 1837 -

State construction program authorized

 

 

 

 

1837 -  DEPRESSION

1837-1857

1840:  “Plunder Law” repealed

 

1846:  Local aid to railroads authorized
1851:  Constitution prohibits state and local aid

1842:  State canal construction halted; existing canals privatized

 

 

 

1851:  Constitution prohibits state aid; municipal aid continues

1848-49:  Constitution prohibits state aid; municipal aid authorized

1840:  State construction halted

1850:  Constitution prohibits state aid; municipal aid continues

1855:  Soo Canal is built with federal land grant proceeds

Statehood, 1848 - Constitution prohibits state aid

 

Statehood, 1846 – Constitution prohibits state aid

1853 – Supreme court upholds municipal aid

1859 – Court prohibits municipal aid

 

1857 – DEPRESSION

1857-1880

1870:  Constitution amended to limit municipal aid

Municipal aid continues

1870:  Constitution prohibits state and municipal aid

1870:  Supreme court declares local aid unconstitutional

1871:  Supreme court limits  municipal aid

1874:  Constitution amended to limit municipal debt

1862-1875:  Battle between state and federal courts as to whether municipalities must levy taxes to pay pre-1859 bond obligations

1870:  Supreme court refuses to overturn new law authorizing municipal aid

 

 

Legal instrumentalism:  Mill dam laws

Newcomb v. Smith – Wisconsin, 1849 (2 Pin.___); Miller v. Troost – Minnesota, 1869 (14 Minn. 365); Ryerson v. Brown – Michigan, 1877 (35 Mich. 333)

  • “Mill dam laws” allowed mill owners to build Water mill dams provided power to run the mills but often flooded upstream lands; mill dam laws prevented landholders from stopping the mill owners as long as the owners paid for damage caused by the flooding.  Many Midwest states passed such laws, which were essential in order to enable local farmers to grind their grain, but from the earliest days the laws greatly troubled Midwestern judges.
  • The earliest Midwestern debate took place in Newcomb when Wisconsin’s supreme court narrowly upheld its state’s law.  All the judges agreed that the mill dam laws deprived upstream landowners of property, and that mill owners could take the property only for a “public” purpose.  The majority interpreted public purposes broadly; the dissenters argued that even though mills served an important purpose, that did not make it a “public” purpose:  they were still private companies. 
  • In 1860, Minnesota’s supreme court followed Wisconsin’s lead with little hesitation in Troost, but in 1877 Michigan’s Thomas Cooley – a nationally influential judge about whom more will be said later – applied the brakes to this trend.  Cooley commented that although water mills may truly have been indispensable to development in a frontier Midwest which had no other means of grinding grain, that time had passed:  water mills were now purely private concerns and were not entitled to take others’ property without their consent.  Other courts soon agreed with Cooley, and mill dam laws soon became obsolete. 



Legal instrumentalism:  Taking private property for canals and railroads

Willyard v. Hamilton – Ohio, 1836 (7 Ohio 2:112); Rubottom v. McClure- Indiana, 1838 (4 Blackford 505)

  • When Midwestern states started to build canals and railroads, the question arose:  could railroad and canal companies force landowners to sell them land against their will?  Traditionally, eminent domain powers could only be used for public projects – but if the powers were not delegated to private companies, most construction projects would quickly die.  In Willyard and Rubottom, the Ohio and Indiana supreme courts held that canals and railroads were public projects even when built by private companies, and that they could build first and sort out payment disputes later. 


Legal instrumentalism:  Building and controlling bridges

Mills v. County of St. Clair – Illinois, 1845 (7 Ill. 197); Illinois River Packet Co. v. Peoria Bridge Association – Illinois, 1865 (38 Ill. 467)

  • Before the industrial revolution, states usually granted exclusive charters to transportation companies:  only one railroad, canal, or bridge could operate in a particular area.  As America grew and more transport was needed, established franchise owners fought to prevent new charters from being issued.  
  • In Mills, Illinois’ supreme court voted in favor of growth.  In  1819 the legislature had awarded Samuel Wiggins a ferry franchise across the Mississippi River between St. Louis and the Illinois shore; 20 years later, it authorized St. Clair County to operate a second ferry downstream of Wiggins’s ferry.   The court made clear that Wiggins had no exclusive ferry rights and that the old monopoly model was gone forever.
  • In Peoria Bridge, the court faced another dilemma of the industrial age:  how to balance the interests of rail and water traffic when their paths collided?   When an Illinois river steamer collided with a bridge at Peoria, its owner sued the bridge proprietors, claiming the bridge interfered with the right of free river access guaranteed by the Northwest Ordinance.  Justice Sidney Breese explained that the Ordinance guaranteed only a general right of access to rivers.  Bridges should “interfere as little as possible” with river traffic, but if “sufficient way [was] left for the passage of boats in ordinary conditions of the wind and stages of water” with use of “proper care and caution,” then river users had no cause for complaint.   

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Courtesy Wikimedia Commons

“The constitutionality of the right has never been measured by the precise amount or degree of the public benefit to be conferred.  Is there any good reason why  water-mills should not be regarded as public improvements?  Why the legislature should not favor their construction, especially in a new country, among a scattered population and where capital is limited?”       -Judge Charles Larrabee, in Newcomb

“[W]hatever necessity might have been supposed to exist for [mill dam] legislation in very early days, had wholly passed away in a very brief period … Indeed, the tendency of improvement has been in the direction of a steady diminution in the demand for water as a motive power for machinery … What seems conclusive … is the fact that the questions involved are [now] questions not of necessity, but of profit and relative convenience.” -Justice Thomas Cooley, in Ryerson




Mississippi River Bridge - Keithsburg, Illinois

Courtesy Wikimedia Commons           

“[I]f such laws be not valid, … the spirit of the social compact, that individual interest must bow to public good, in many instances, would be of little service to the community.  In the construction and preservation of canals, locks, dams, levees, and other improvements, … instant exertion is necessary.  If … nothing could be done until a bargain could be made for materials, or their value ascertained by the slow process of appraisement, the right of the public to promote the general welfare by the use of private property, would be, indeed, but a crippled and feeble prerogative.” -Justice __ Dewey, in Rubottom

“Shall[the Northwest Ordinance’s guarantee of public access to rivers] … thus fetter forever the commercial energies of that region?  [Small boat  traffic is now] so dwarfed by the growth and progress of the country as not to stand in the way of the canal-boat, the steamboat and the railroad car … [the law] must be made practical by the necessities of our existence as a great commercial people.”                     -Justice Sidney Breese, in Illinois River Packet Co.