After 1855 the impact of the railroads began to be felt, and by 1903 water sales income from selling canal water to businesses and industries exceeded the income from freight carried on the canal. After a winter of record snowfall, storms dumped an abnormally heavy amount of rain on the state. The flood caused the reservoirs to spill over into the canals, destroying aqueducts, washing out banks, and devastating most of the locks. In the ensuing years most of the canal lands were sold to private individuals or transferred to other public agencies for recreation, roads, and other public uses. Many structures have been transferred to historic groups for protection.
Today there are less that twenty percent of the original canal lands still owned by the state.
Except for the contiguous watered sections discussed in this presentation, the remaining land is in small parcels, most of which are under one acre. In 1989 management and operation of the remaining canal system was transferred from the Department of Administrative Services to the Department of Natural Resources. Responsibility for operations of the hydraulics maintenance and water sales was assigned to the Division of Water. The real estate sales and leasing became the responsibility of the Division of Real Estate and Land Management. The hydraulics in this section are maintained by a staff of four Division of Water employees working out of the St. Marys field office.