Before the 16th century the most efficient way to transport materials was by natural waterways. However, these rivers or streams were non-navigable at some points thus transport was impossible. During the 16th century, European engineers began to expand the waterway network. They started by removing obstacles and digging canal loops around rapids or the obstacles. McNown writes at the beginning of the 17th century, there were 650 miles of navigable waterways and by 1760 there were over 1,200 miles of navigable waterways.
Later in the writing McNown explains what a barge canal is like. Barge canals were trapezoidal in shape and the bottom width was from 20 to 25 feet while they were only 3 to 4 feet deep. The trapezoidal shape helped to minimize the erosion of the shore. These canals were built on relatively flat ground and the contour changed when there was a change in elevation. To get up to the higher elevations a chamber in the canal needed to be constructed. The chamber would be filled with water up to the level of the canal above or emptied down to the level of the canal below.
In America, the canals were built to tap natural resources in the interior of the country, to reduce the length of voyages along the coast. McNown states that before the War of 1812 “many men of vision recognized the advantages of connections with the interior of the new nation. The United States was relatively large compared to the nations in Europe. On July 4, 1828 a ceremony was held to inaugurate the construction of the Chesapeake and Ohio canal. This canal linked the Washington and Baltimore through the Potomac river. The canal was a total of 186 miles. By 1834, 107 of the total 186 miles had been completed. However, the state of Maryland ran into some financial trouble had had to take a $3 million loan from the federal government.
This map shows the different roads, canals, and railroads in early America.
At the same time that this canal was being constructed, railroads were starting to become increasingly popular and by 1831, 100 miles of railroad were across the United States, but by 1840 it had increased to 3,000 miles compared to 3,600 miles of canals.
Here is a short video explaining the rise of railroads and canals.
This link provides you with a comparison between railroads and canals. The article does a great job describing the differences between the two different systems of transportation as well as listing the pros and cons for each of them.