A turning basin in the nearby waterway became an economic outlet for local farms, leading to the growth of the hamlet around it.

In the late 19th and early 20th centuries, the closure of the canal and the relocation of the railway led to economic decline in Port Mercer.

[2][3] In 1777, George Washington marched through the area with his troops prior to the Battle of Princeton, during the Ten Crucial Days.

[4] The growing commercial traffic from the canal, as well as the construction of the Camden and Amboy Railroad along the canal, led to locals settling around a small turning basin, which served as an economic outlet for local farms, and provided residents of the "Clarksville Basin" community with outside amenities such as coal.

[2] As railroad commerce increased and aligned itself to the present-day route of the Northeast Corridor in 1863, the canal declined in commercial use, ceasing to be profitable in 1892.

[2][4] Economic activity in Port Mercer declined during this period, although John F. Schanck bred racehorses on a farm in the community in the late 19th century.

[4] A number of drownings and car crashes into the canal occurred in the early 20th century, and on two separate occasions murder victims were dumped into the water.

[2] However, a sense of "neighborhood" persisted in the community, which had been less economically harmed by the canal's decline than neighboring Princeton Basin.

[2] The Port Mercer Inn was likely still functioning in 1871,[10] but was eventually turned into a residence by Richard Cook, who rented it out to the family of future bridge-tender John Arrowsmith.

Mather became a prominent resident of the town, operating the general store, where he sold farm machinery, and an adjacent coal yard until 1915.

[14] Widespread farming in the Port Mercer area continued until the construction of residential and commercial projects in the late 20th century.