From Ohio History Central
East portal of the Whitewater Canal Tunnel
In 1836, the state of Indiana began construction on the Whitewater Canal in the southeastern part of the state. Cincinnati businessmen, concerned that the Whitewater Canal might reduce their business once it was completed, decided that it was necessary to build a canal that would connect the city to the Whitewater Canal. Since the canal would cross state boundaries, most of its funding came from private sources. The Ohio legislature only provided about one-third of the construction money, as required by the "Plunder Law".
The Cincinnati and Whitewater Canal was built between 1839 and 1843. When completed, the canal extended approximately ninety miles. Like most canals, things never went as smoothly as the builders had intended. Although the Cincinnati and Whitewater Canal did not have significant problems, the Whitewater Canal in Indiana experienced frequent flooding. This flooding meant that the Cincinnati and Whitewater was not fully utilized as well. Ultimately, the Whitewater Canal Company in Indiana went bankrupt in the 1850s. It was only a matter of time until the Cincinnati and Whitewater closed as well. In 1862, the Indianapolis and Cincinnati Railroad purchased the canal, choosing to lay its tracks on the old canal path.