First Board of Public Works and Internal Improvements: 1825-1850 13

prescribed by this act," for which the board was to account to the treasurer and the
General Assembly.

This act establishing the Board of Public Works was apparently the product of a
delicate compromise finally developed among regional interests in the General As-
sembly, under which each major area of the state would have a share of proposed
internal improvements. As noted, the new board was to develop plans for (1) a canal
connecting the Potomac River to Baltimore, (2) draining the marshlands, (3) a canal
between the Potomac and Annapolis, and (4) improving the navigability of the major
rivers on the Eastern Shore. This compromise was even more clearly reflected in the
second of the two acts passed at the 1825 session—the one that, without question,
committed the state to a network of internal improvements.²

The first part of this internal improvement act provided for the incorporation of
the Maryland Canal Company, "so soon as the board of public works of this state shall
by actual survey have ascertained and reported to the governor and council, the prac-
ticability of excavating a canal as hereafter described, from some convenient point on
the Potomac River intersecting or continuing the Chesapeake and Ohio Canal, to the
city of Baltimore." This, presumably, had reference to the first duty of the board under
section 3 of chapter 166, to explore a route for the canal.

The stock of the company was to consist of an amount "which may as aforesaid,
by the board of public works be estimated to be necessary for the execution of the
works hereafter mentioned," divided into shares of $100 each. The authorized capital
could be increased by the stockholders if it proved insufficient. Actual incorporation
depended upon subscription to at least half the authorized shares. The company was
authorized, upon incorporation, "to cut canals, erect dams, open feeders, construct
locks, and perform such other works as they [the directors] shall judge necessary and
expedient, for completing a canal from the termination or other point on the Chesa-
peake and Ohio Canal, to be determined as aforesaid by the board of public works, to
the city of Baltimore."

The General Assembly obviously expected the canal to be a financial success.
Section 11 of the act required at least annual dividends of the net profits, "until the
annual dividend [on the shares] shall have reached twenty per cent beyond which it
shall never extend." If the net profits exceeded that amount for two successive years,
the excess was to be applied to "strengthening, improving and extending the works
of the canal"; and, if dividends continued to exceed the 20 percent limit, tolls were to
be reduced. As a product of this optimism the act "instructed and required" the treas-
urer of the Western Shore to subscribe to 5,000 shares ($500,000) of the company's
stock. Having thus provided for this lateral canal to Baltimore, the act then provided
for financing the primary canal—the Chesapeake and Ohio.

At this point a historical digression is in order. As noted earlier, the Potomac
Company had been chartered by Maryland and Virginia in 1784 in order to make the
Potomac navigable. By 1799, according to Sanderlin, "company affairs seemed to have
come to a standstill and the company itself was on the verge of failure." Then the
Maryland General Assembly "breathed new life into the enterprise" by subscribing
to an additional 100 shares of stock at £130 per share. This infusion allowed the work
to continue, and by 1802 the river was navigable for 220 miles, from the mouth of the
Savage River to tidewater.³