The canal began operation in the summer of 1843. It only operated for about a decade before it became apparent that the canal was not economically viable. Even when canal boats were operated at extremely slow speeds, the banks rapidly eroded, and the canal had to be constantly dredged to be operable. Terre Haute, Indiana, housed the headquarters of the canal from 1847 through 1876, when the canal lands were sold at an auction conducted by resident trustee Thomas Dowling at the Vigo County Courthouse.