In 1805, Augustus & Peter Porter of Buffalo, New York came to Niagara Falls. The Porter brothers purchased the American Falls from the State of New York at a public auction. This purchase also provided them with the acquisition of the water rights to the eastern rapids both above and below the falls. The Porter’s built a water powered gristmill and tannery along Joncairs’ old ditch. The Porter’s were forced out of business when the Erie Canal opened 20 years later.
Even after their business folded the Porter brothers held on to the American Falls and their water rights. Augustus’ initial plan was to use the power generated in the 50 foot (15m) drop of the rapids above the falls, however he could not find any interested financiers. Augustus Porter was a dreamer as witnessed through his envision of bypassing the falls. This would be done through a hydraulic canal leading to a large reservoir on the cliff above the gorge. From that point the water would flow to the base of the gorge to turbines connected by belts to industrial machinery above.
Augustus and Peter Porter both died before construction of this canal had even begun. A series of companies that followed his idea also failed as they went bankrupt while attempting to build this canal.
In 1853, the Niagara Falls Hydraulic Power & Manufacturing Company was first chartered. In 1860, this company purchased the water rights and began construction of this canal, which was an 11 metres wide and 2.4 metre deep canal. It transported water from the Niagara River above the Falls to the mill sites below the Falls. The canal construction was completed in 1861 and Augustus Porter’s vision became a reality in 1875. This is when the first wheels began turning in the new powerhouse.
Entrepreneur Horace Day took over the Porter’s water property after they died. For the next 17 years he worked sporadically on the canal. He had only one customer, Charles Gaskill’s flour mill. By 1877, Day had completed one mile of the canal and became bankrupt.
By 1881, the power company had built a small generating station and began providing small amounts of electricity to light the village of Niagara Falls and to provide power to several of the mills along the river. This power plant became a tourist attraction. It operated a flour mill for 2 years before the company went bankrupt and all its assets were sold at public auction.