The Erie Canal was built in segments between 1817 and 1825. It connected the towns of Albany and Buffalo. Albany and New York were already connected by the Hudson River, while Buffalo afforded access to the Great Lakes.
One of the effects of the Erie Canal was to stimulate the economic growth of New York City, resulting in its becoming larger and more important than Boston and Philadelphia.
The Erie Canal was enlarged several times and became part of a large system of canals. In 1918, it was absorbed into the New York State Barge Canal, an enormous project which involved moving more earth than the Panama Canal. The New York State Barge Canal was operated through 1951 and was of great economic importance, but became displaced by the Saint Lawrence Seaway.
It was funded entirely without federal funds. When President Thomas Jefferson was petitioned to approve funding, he refused.