Pensacola Florida inter-coastal sunset over the water. Since the coastline represented the national border, and commerce of the time was chiefly by water, the fledgling United States government established a degree of national control over it. Inland transportation to supply the coasting trade at the time was less known and virtually undeveloped, but when new lands and their favorable river systems were added with the Northwest Territory in 1787, the Northwest Ordinance established a radically new and free national policy for their development and transportation use.[1]

Over time, internal improvements of natural coastal and inland waterways would develop into the Great Loop, which allows for waterborne circumnavigation of the eastern continental United States, using minimal ocean travel, with the Intracoastal Waterway providing its eastern end. In 1808, the first federal government report on existing, possible, and likely avenues of transportation improvement was presented; it included much of the distance where the ICW now traverses the Atlantic coast. At the request of the Senate, Treasury Secretary Albert Gallatin presented an overall plan for future transportation developments of national importance and scope.[2] Along with inland east–west improvements, Gallatin's north–south improvements included the following:[3]

The map of the United States will show that they possess a tide water inland navigation, secure from storms and enemies, and which, from Massachusetts to the southern extremity of Georgia, is principally, if not solely, interrupted by four necks of land. These are the Isthmus of Barnstable, that part of New Jersey which extends from the Raritan to the Delaware, the peninsula between the Delaware and the Chesapeake, and that low and marshy tract which divides the Chesapeake from Albemarle Sound. ... Should this great work, the expense of which, as will hereafter be shown, is estimated at about three millions of dollars, be accomplished, a sea vessel entering the first canal in the harbor of Boston would, through the bay of Rhode Island, Long Island Sound, and the harbor of New York, reach Brunswick on the Raritan; thence pass through the second canal to Trenton on the Delaware, down that river to Christiana or Newcastle, and through the third canal to Elk River and the Chesapeake, whence, sailing down that bay and up Elizabeth River, it would, through the fourth canal, enter the Albemarle Sound, and by Pamlico, Core, and Bogue sounds, reach Beaufort and Swansboro in North Carolina. From the last-mentioned place, the inland navigation, through Stumpy and Toomer's sounds, is continued until a diminished draught of water, and by cutting two low and narrow necks, not exceeding three miles together, to Cape Fear River, and thence by an open but short and direct run along the coast is reached that chain of islands between which and the main the inland navigation is continued, to St. Marys along the coast of South Carolina and Georgia. It is unnecessary to add any comments on the utility of the work, in peace or war, for the transportation of merchandise or the conveyance of persons. While Gallatin discussed the details of engineering, construction, and costs, including the national benefits to accrue from lowered transportation costs between domestic and international markets, his full $20 million, 10-year plan was never approved. That is not to say his plan was never implemented, however, for with experience in the War of 1812 shortly thereafter and the attendant British blockade, the continued need for such facility was soon highlighted. Since Gallatin had based his proposals on the known advantageous natural geographic features of the country, many of his proposals became the locations of navigation improvements that were surveyed, authorized, and constructed starting with the 1824 General Survey Act and the first of many pieces of rivers and harbors legislation,[4] as well by individual state-built improvements.