Merchants in Cincinnati felt that the canal on the Whitewater River in Indiana would take trade away from Cincinnati since it terminated on the Ohio at Lawrenceburgh. Therefore, they proposed a canal from Cincinnati to a point on the Whitewater. This branch of the Ohio Canal system called the Cincinnati & Whitewater would extend from Cincinnati up the Whitewater Creek into Wayne County Indiana. It was built by a private company with the State of Ohio contributing 1/3 of the cost. Starting in 1834 the original survey was completed by Darius Lapham in December 1836 while he was still employed as the resident engineer on the Miami Canal.
His proposal was for the Canal to join the Whitewater Canal in Indiana in the pool of the dam 3/4 mile south of Harrison, a little into Indiana for a safer connection.
The Cincinnati and Whitewater Canal Company was formed in 1837, a little over $90,000 was raised in stock subscriptions and the State was required by the "Plunder Law" to contribute $45,000 (1/3 the total cost). the "Plunder Law" required the state to pay 1/3 of the cost if the company raised the first 2/3. Cincinnati pledged $40,000. Actual costs would be in the range of $542,928.
Construction began in 1839 or 1840 and the first boat to travel the canal went through in November 1843. The locks on this canal were composite locks being built of both limestone and wood planking. This seems to have been the predominant form of lock construction throughout Ohio.

Route

The canal would run through irregular terrain for two miles to the State line from a point on the Whitewater Canal a mile south of Harrison, Indiana, where a guard lock was placed to protect it from flooding of the Whitewater River. The canal continued then on a 300 foot aqueduct with another lock at its end. From this lock it continued and crossed the Miami River on a 700 foot aqueduct. To traverse the next stage Lapham proposed the building of a tunnel to reduce the number of locks and the cost. At this time only four canal tunnels had been built in the U.S. Lapham's survey estimated that the tunnel would be $30,000 cheaper than an open cut. It would be 15 chains long (994 feet) with an arch that extended another 12 chains (792 feet) in an open cut to protect it from filling by the wash from the banks. The complete length would be almost 1,800 feet.
Whether with a tunnel or an open cut the arch was considered necessary. By digging the tunnel the canal was brought to a level with the Ohio River. The 13 1/2 foot drop was accomplished with only two locks, one a Dry Fork with an 8 foot lift and one of 5 foot at the end of the Miami aqueduct. The tunnel was built, one of only three tunnels on the whole Ohio Canal system (the other two were on the Sandy & Beaver Canal). From the South end of the tunnel the canal ran along the north bank of the Ohio, crossing Mill Creek on a masonry culvert and terminating near 5th street in Cincinnati.
Running 90 miles it was abandoned in 1863.

Problems

There were few problems on the Cincinnati & Whitewater Canal. Problems did however arise on the Whitewater Canal in Indiana and had a direct effect on the Cincinnati & Whitewater. The Whitewater Canal was prone to frequent flooding which left the canal often impassable in the areas of severest floods. For six years this would be a common occurrence.
The Whitewater Canal went into receivership in 1855. Deprived of its primary source of business the Cincinnati & Whitewater faded away. In 1862 it was sold to the Indianapolis & Cincinnati Rail Road which laid its line along the Canal towpath.