In the state of North Carolina, canal building started soon after the U.S. Revolution. The Dismal Swamp Canal first connected the Chesapeake Bay of Virginia with the Albemarle Sound in North Carolina in 1805, but it was not fully useful until 1829. By 1859, a second major canal - the Albemarle & Chesapeake Canal - was completed to connect Virginia and North Carolina more effectively, almost putting the Dismal Canal out of business. After the U.S. Civil War and most of Reconstruction was behind them, North Carolinians launched several new canal projects, including the rework of some existing canals plus the dredging of several new ones.

In 1912, the U.S. Army Corps of Engineers submitted a report to Congress on their survey of the long-considered Intracoastal Waterway from Boston, MA to Beaufort, NC

. They recommended that the existing Albemarle & Chesapeake Canal be redredged to a depth of twelve (12) feet and that it be considered as the primary route for the waterway. Congress approved, and on April 30, 1913 the U.S. government purchased the Albemarle & Chesapeake Canal for $500,000 and construction began soon thereafter.

Known officially as the "Inland Waterway from Norfolk, VA to Beaufort Inlet, NC" this segment of the overall project was completed in 1932. Congress modified the project in 1917 and 1918 to permit changes to the route, and in 1930 to provide for the construction of a new tidal guard lock (600' x 75') at the Elizabeth River entrance to the Albemarle & Chesapeake Canal.

Covering roughly 120 miles from Norfolk to Beaufort

, the waterway varied in bottom width from ninety (90) feet in land cuts to one hundred (100) feet in open waters. Upon leaving the Albemarle Sound, it avoided the broad Pamlico Sound and followed a succession of rivers, creeks, bays, and land cuts from the Alligator River to the Newport River, which leads to the Beaufort Inlet. Prior to the adoption of the project by Congress, the Corps had already improved some of these watercourses, and beginning in 1837, had made seven (7) previous surveys for the total route.

With traffic again falling, the Dismal Canal Company finally convinced the U.S. government to take over the canal. In 1925, Congress finally agreed to purchase it as an "adjunct" (alternate) to the currently-proposed Albemarle & Chesapeake route. Tranfer of title happened in 1929. The Corps then set about to upgrading the Dismal Swamp Canal, including replacing the old timber locks with steel and concrete chambers (300' x 50').

In 1913, the U.S. Army Corps of Engineers submitted its next report to Congress on the next phase of the Intracoastal Waterway - from Beaufort, North Carolina

to Key West, Florida. Those making and presenting the survey recommended a ten-foot deep waterway for the entire distance of 925 miles, to be completed in six (6) years at an estimated cost of $31 million. Brigadier General William H. Bixby, the Chief of Engineers, concurred with the need, but saw no urgency for one ten feet deep or, in view of the sparse population of Florida at that time, for construction as far south as Key West.

He recommended a seven-foot canal as far south as the St. John's River, which was estimated to cost about $14.4 million. The Board of Engineers for Rivers and Harbors declined to endorse either recommendation. Congress took no action either. Ultimately, this "phase" was developed, not as a single project, but in several sections improved by stages in response to expectations of commercial benefit. The entire Intracoastal Waterway remained a string of variously-named projects until 1947, when all but the last two of the southern reaches were collectively designated the "Atlantic Intracoastal Waterway between Norfolk, VA and St. John's River, FL."

From Beaufort

to Cape Fear the waterway included the rebuilt Harlowe Canal (replacing the old Clubfoot Creek to Harlow Creek Canal) to connect the Pamlico Sound with the Bogue Sound, then followed barrier islands to Swansboro. Navigation improvements between Beaufort

and Swansboro begain in 1886 and between Swansboro and the New River in 1890. In 1917, Congress consolidated the three works under the designation "Inland Waterway, Beaufort

to Jacksonville, NC, which provided for a channel 100 feet wide and three (3) feet deep at mean low water between Beaufort

and Swansboro, thence forty (40) feet wide and three (3) to four (4) feet deep at mean high water to New River, thence forty (40 feet wid and three (3) feet deep at mean low water to Jacksonville.

In 1927, Congress authorized a twelve (12) foot channel through Federal Point peninsula to the Cape Fear River, and the Corps completed this segment in five (5) years.

Begun in 1930, the project then passed down the Cape Fear River to Southport, near the river's mouth, the Intracoastal Waterway then followed the Elizabeth River (Brunswick County) to its headwaters, cut 2.6 miles through high ground to the head of Davis Creek, descended this creek, and continued through coastal sounds and marshes to the Little River in South Carolina. The waterway ascended the Little River to its headwaters, cut nearly twenty-two (22) miles through land to the head of Socastee Creek, thence followed the creek and the Waccamaw River to Winyah Bay - a complete distance of 94.5 miles, ending at Georgetown, South Carolina.

This last segment in North Carolina (which extended well into South Carolina) provided for a waterway eight (8) feet deep and seventy-five (75) feet wide, and was completed in 1936. The next year, Congress approved a channel twelve (12) feet deep with a bottom width of not less than ninety (90) feet. In 1938, provision was made for the construction of a yacht basin in Southport, North Carolina - completed in 1940.