During the early 1800s, Archibald Murphey promoted internal improvements as a means to eliminate poverty. He wanted a transportation network that connected the state with the rest of the country. In the state legislature, Murphey led the way in this effort and helped convince legislators to buy stock in some companies. One such company was the Cape Fear Navigation Company (CFNC), assumed the work of the Cross Creek Canal Company.
The CFNC was, according to historian Alan. D. Watson, the “first internal improvement project funded by the state to return a dividend.” The CFNC was incorporated in 1811 to “work Cape Fear River from Wilmington to Fayetteville. Its purpose, especially during the 1820s and 1830s, was to “clear the [Cape Fear] river of logs and shoals” so that steamboats could pass by in the 100 miles between Fayetteville and Wilmington. In time, the company made a 27-foot canal that, along with continual maintenance to ensure the river’s navigability, allowed for an increase in traffic during the 1840s and 1850s. The amount of traffic in 1859, for instance, enabled the CFNC to pay $1,950 in dividends to the state.
Many contemporaries believed the company had a checkered record, however. Critics alleged that many advocated for internal improvements only as a means to ensure election. Because the state was a stockholder in CFNC, the company issued financial reports to the public treasurer. Although this ensured accountability, critics disliked government involvement in business decisions. The governor also appointed a director to the company to look after the state’s interest. The governors many times used such appointments as patronage (appointments given by a politicians to loyal supporters).
Although the CFNC paid dividends back to the state, critics still asserted that company administrators mismanaged finances. During the company’s earliest years, critics argued the company should put more energy in making the river navigable than profiting a few stockholders, who benefited from a government-private sector partnership. In particular, the Cain Creek Agricultural Society of Orange County in 1828 criticized CFNC for not making the confluence of the Haw and Deep Rivers more navigable (at this confluence is where the Cape Fear River begins). As a result of its failure, the CFNC in 1830 abandoned work above Fayetteville, and The Cape Fear and Deep River Company took over. After 1830, the CFNC managed the stretch between Fayetteville and Wilmington—the most profitable part of the state’s inland waterways. Even though the company made dividends, some questioned why the river needed to be cleared more during the 1840s and 1850s than it did during the company’s first two decades. They also questioned why the company did not offer more dividends. Records show, however, that toll costs and shipping costs doubled since the CFNC’s beginning. Yet such costs increased during a deflationary period in United States history.