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The town of Coalisland evolved from the settlement which grew up around the terminus of the Coalisland Canal. Work on the canal began in 1733, but progress 
was slow and it wasn't officially opened until 1787. The push to build a waterway had come from the desire to cheapen the cost of transporting coal from the Tyrone coalfields to Dublin. The canal linked the coalfields with Lough Neagh, via the River Blackwater.
The canal did not thrive in its early years and in fact came dangerously  close to being abandoned. However, the export of agricultural produce and import  of farm and mine equipment kept the waterway open. In the 19th century serious  repairs had to be carried out to save the canal. A rejuvenation programme was  carried out. Dredging, digging, rebuilding locks, establishing a proper  lock-keeping system, creating proper towpaths - all this
work transformed the  "old navigation" into the Coalisland Canal whose terminus rapidly became the  focal point of a unique village and inland port. 

As the 19th century progressed traffic on the canal increased but never reached the volume hoped for. During this period the Basin (terminus) became a nucleus trading depot for the surrounding towns and villages. The ease of 
communication afforded by the waterway encouraged the rise of several small local industries. It was now possible to transport large quantities of general merchandise to Belfast in three days by horse-drawn lighters. Newry was a two day journey. Tolls, however, remained low leaving the canal breaking even most of the time.
Towards the end of the 19th century trade and profits began to improve, but sadly a major threat began to loom on the horizon. Although trade increased officially with each passing year, competition with the railways soon evolved into a struggle. Coalisland was by then really Ireland's only trans-shipment centre. Exports included sand, bricks, tiles, pottery, fireclay and agricultural  goods. Products being imported in were grocery provisions,
hardware, grain and -  ironically - coal.

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Overall tonnage was rising at the beginning of
the 20th century, but motorised transport was on its way. Speed of delivery became more important and lorries could transport produce directly to its final destination. In the 1930s the major grain merchant in the area, whose mill
was in the actual Basin, began to invest in a fleet of lorries. However, some local businesses continued to support the canal and the timber and hardware importer, John Stephenson and Son Ltd, still operated its own lighters on the waterway.

The Second World War brought rationing of goods and even
requisitioning of lighters by the government to be used as military transports. Wartime traffic was sparse and, despite passing a stringent inspection in 1943, the waterway was  already earmarked for closure by the Stormont government. The last commercial  lighter sailed in 1946.


In 1954 the Tyrone Navigation, or Coalisland Canal, was officially abandoned and relegated to the status of a drainage ditch. In 1961 the Basin was drained and filled in. One lighter, the Eliza, was buried where she lay - just where the car park of the Coalisland Heritage Centre (formally Stewart's Mill) is situated.  The remains of the entire canal are now the property of the Department of  Agriculture and the local council.


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