Read the excerpt from William Seward’s The Building of the Erie Canal. The public debt for canals in 1825 amounted to seven and a half million dollars—all of which, it must be recorded to the honor of the State and the country, had been borrowed of American capitalists—and the annual interest thereon, to three hundred seventy-six thousand dollars. The Governor estimated that the tolls for the year would exceed three hundred ten thousand dollars; that the duties on salt would amount to one hundred thousand dollars, and that these, with the other income of the canal fund, would produce a revenue exceeding, by three hundred thousand dollars, the interest on the canal debt. He stated also that ten thousand boats had passed the junction of the canals near tide-water during the previous season. Remarking that the creative power of internal improvement was manifested in the flourishing villages which had sprung up or been extended; in the increase of towns; and, above all, in the prosperity of the city of New York. And noticing the fact that three thousand buildings had been erected in that city during the preceding year, Clinton predicted that in fifteen years its population would be doubled, and that in thirty years that metropolis would be the third city in the civilized world, and the second, if not the first, in commerce.

How were large public works such as canals paid for in the early 1800s?
through public funding
by wealthy individual investors
through private banks
by trust shareholders