Traffic Expands
Construction of the Illinois and Michigan Canal linking the Chicago River with the Illinois River at LaSalle began in 1836, with the canal opening in 1862. This opened up the upper Illinois River above Peoria to regular river traffic and trade. The same year E.W. Gould established the Maples Packet Company with two boats running three times a week between St. Louis and Naples, Illinois that connected to the Sangamon and Morgan Railroad. The canal toll income reached $300,000 in the mid-1860s.

The Illinois Packet Company ran 16 boats and many barges from 1852. Fifteen years later it sold out and became the St. Louis and Illinois River Packet Company. Trade on the lower Illinois River changed after the opening of the Illinois and Michigan Canal because Chicago became a port from which to sell annually 300,000 bushels of corn and 237,000 bushels of buckwheat that previously would have been shipped downstream to St. Louis.

In 1865 Chicagoans began planning the Sanitary and Shipping Canal. The Illinois legislature passed an enabling act to use the Illinois and Michigan Canal to divert Chicago's sewage away from Lake Michigan.

Illinois River Survey
Lieutenant Colonel James H. Wilson superintended the survey of the Illinois River to determine what improvements were needed for navigation, although there were no federal funds available for repairs. In the summer of 1867, Wilson's job was to "prepare plans for a system of navigation by way of the Illinois River, between the Mississippi River and Lake Michigan, adapted to military, naval, and commercial purposes," according to the chief engineers' annual report. Specifications called for a seven-foot-deep channel through a system of locks and dams. There were no federal funds available, but Illinois state funds were allocated in 1871 to build locks at LaGrange and Kampsville.

By 1880, river traffic on the Illinois had begun to have economic problems. Because canal boats could not be used on the Illinois River, cargo had to be unloaded and reloaded onto steamboats at LaSalle. Each packet company had its own time schedules, fares, and terminals that varied in quality and size. Cargo could get delayed when these conflicted. The four-foot channels in the Illinois were expensive to maintain because of the shifting sandbars. By 1893 the state no longer wanted to build locks and dams to control river depth. It was decided to divert Lake Michigan water into the river.

Chicago Sanitary and Shipping Canal
The Chicago Sanitary and Shipping Canal was built from 1892 to 1900. The canal permitted up to 5,000 cubic feet per second of water to be diverted into the Illinois River. These levels were not enough to significantly improve navigation downstream, but it did end the need for dams at LaGrange and Kampsville. Barge traffic on the upper Illinois increased. A long-term negative impact on the central Illinois River would be the pollution from raw sewage this water carried with it.

The Twentieth Century
The low point in river traffic was reached in the 1920s, with only 100,000 to 200,000 tons of cargo hauled. By 1935 the traffic consisted of short-haul cargo of sand and gravel. Havana coal was shipped north to Chicago's electric plants. Louisiana and Texas sulfur and oil went to the Great Lakes area as well. Much of the agricultural commodities could be shipped by rail cheaper than by water.