The earliest canal building was undertaken as a local enterprise, usually by a merchant, manufacturer or mine owner needing to ship goods, such as the Duke of Bridgewater's canal built to ship his coal from Worsley to Manchester.
Despite the high cost of construction, the price of coal in Manchester fell by 50% shortly after it opened, and the financial success was attractive to investors.[clarification needed]
The American War of Independence ended in 1783. A long run of good harvests resulted in an increase in disposable income and an increase in the number of people looking to invest capital for profit with little personal interest in the business.[clarification needed] This resulted in an increase in less cautious speculation.[clarification needed]
There was a dramatic rise in the number of schemes promoted. Only one canal was authorised by Act of Parliament in 1790, but by 1793 it was twenty.[clarification needed][cumulatively or not?] The capital authorised[of what?] in 1790 was £90,000 (£9.7 million in 2015), but this had risen to £2,824,700 (£299 million in 2015) by 1793.
Some of the canals authorised during this period went on to be profitable. However, there were a number, including the Herefordshire and Gloucestershire Canal, which never paid a dividend. Others, such as the Grand Western Canal, were never completed.
- British Canals. The Standard History. Joseph Boughey and Charles Hadfield. ISBN 9780752446677
- UK Retail Price Index inflation figures are based on data from Clark, Gregory (2017). "The Annual RPI and Average Earnings for Britain, 1209 to Present (New Series)". MeasuringWorth. Retrieved 6 November 2017.