Construction of the Goshen Dam and Millrace Canal began in March of 1867 and was completed on April 18, 1868, the same day Goshen was incorporated as a city. The project was built by a 40 man crew using horses and plows to excavate the canal bed. The west bank was formed with the dirt from the excavation. The project cost a total of $100,000.
The building on the canal ushered in a new era of industrialization in Goshen and a number of firms sprang up along the canal's banks to take advantage of the inexpensive source of power. Over the years the use of the canal has evolved from the generation of electricity to a recreational waterway. Ownership of the canal was transferred to the city by NIPSCO in 1968, and is now under the control of the Park and Recreation Department. In 1992 the dam was replaced at a cost of $2 million.
