Called the "Golden Link," it provided a critical early transportation route for shipping anthracite coal and lumber eastward to Philadelphia.

[3] The canal scheme was first proposed by the Society for the Improvement of Roads and Inland Navigation[2] organized in 1789 with preeminent, wartime financier Robert Morris[4] as president, David Rittenhouse, William Smith and John Nicolson.

This would have required a four-mile summit crossing between Tulpehocken and the Quitipahilla with an artificial waterway connecting two separate river valleys; namely the Susquehanna and the Schuylkill watersheds.

The result was that with the onset of the Erie canal still some thirty years into the future, Philadelphia lost the early initiative in water transportation.

In 1807, Charles Gottfried Paleske (1758-1816) was elected to the Board of Directors of the company and working with James Milnor, Robert Brooke, Isaac Roberdeau, and John Scott walked "... the line of the Schuylkill & Susquehanna Navigation Company from Kruitzer's plantation where the canal ends to the end of the summit near Kucher's mill, about 9 miles; find the work in good condition including the five locks at Ley's, and the bridges decayed or collapsed ..."[11] In 1808, Paleske was elected president and Joseph S. Lewis as treasurer.

[11] In 1810, William John Duane, writing as "Franklin" advocates for reviving the Schuylkill and Susquehanna Navigation company as part of a scheme for a canal route to Lake Erie instead of the Ohio Valley [12] in a series of letters in his Aurora and in his published letters, "To the People of Pennsylvania Respecting the Internal Improvement of the Commonwealth by Means of Roads and Canals.

[14] Until the passage of the act for the "entire abolition of lotteries" by the State of Pennsylvania in 1833, "(F)oreign advertisements were to be found in nearly every issue of the county and city newspapers.

[14] The Union canal's incorporation permitted it to raise by means of a lottery $340,000, the exact amount that was left uncompleted by the predecessor companies in 1795.

Between 1811 and 1821, even with this lottery effort, the company was unable to attract sufficient capital to complete the proposed canals and to keep them in repairs.

[15] Throughout the entire period it was authorized, the lotteries were to be found in nearly every issue of the city and county papers of Pennsylvania as well as throughout the United States.

Cities were beginning to import smoky, sooty bituminous coal from England and Virginia and a new source of energy was needed.

Large deposits of anthracite were found within 100 miles of Philadelphia over a decade earlier, but overland transportation by mule train of bulk commodities was extremely costly.

White and others pushed for canal funding, applied for rights to improve navigations on the Schuylkill, and eventually split off when he disagreed with other investors as the best way to proceed.

Construction resumed in 1821, probably in response to the successful improvements along the Lehigh Canal designed by White and the Lehigh Coal & Navigation Company, which was founded in 1818 to regularly deliver growing amounts of anthracite coal from Summit Hill, Pennsylvania to the fuel starved coastal cities.

The drilling of the tunnel was by hand, using gunpowder to blast though argillaceous slate with veins of hard flinty limestone 80 feet (24 m) below the summit of the ridge.

Another engineering difficulty was the lack of a sufficient continual supply of water at the summit level, a task that was compounded by leakage and required an elaborate pumping mechanism.

It built a 3.5-mile (5.6 km) line from the end of the branch canal to Lorberry Junction in 1830, which was operated by horse power.

[17][18] By the 1840s, the narrow size of the canal locks prevented the passage of the larger barges that were adopted for use on the Pennsylvania Main Line and Schuylkill Navigation.

[17] The completion of the Lebanon Valley Railroad in 1857 from Reading to Harrisburg cut into the canal revenues, forcing its closure in 1881.