While the Mason-Dixon Line being the dividing line between the North and the South, an argument could be made that the Chesapeake and Ohio Canal was the dividing line between the Union and Confederacy. Running alongside the Potomac River as it does, Virginia was directly south of the canal and Maryland was to the north. Whenever you read about an army crossing the Potomac River, it also had to cross the canal.
The unlucky location meant that the canal was vulnerable to destruction by both the Union and Confederate armies
“In some instances, battles were fought so close to the canal that the company’s property was hurriedly made into hospitals and morgues,” Elizabeth Kytle wrote in Home on the Canal.
The canal boats were considered military targets and Confederate soldiers made a habit of commandeering them at the start of the war and confiscating their cargo. One of these boats was owned by Cumberlander Thomas McKaig and held at Harpers Ferry until all the salt it was carrying in its holds was removed. Whether this was an act of piracy or not is debatable. Since McKaig was a Southern sympathizer, he might have made arrangements to deliver the salt to the Confederacy rather than the Union.
Early in the war, the Union Army seized the Alexandria Aqueduct and drained in to hinder any plans to canal boats and their cargo into Virginia and the primary cargo that everyone wanted was Allegany County coal.
“A specialized ‘super-coal,’ Maryland’s product was particularly suited for New England textile mills and for steamship bunkering, and it had been used successfully for smelting iron. Thus, with Virginia coal no longer available to the northeastern market, Maryland’s contribution became increasingly important to the Union Cause,” National Park Service Historian Harlan Unrau wrote in The Chesapeake and Ohio Canal During the Civil War: 1861-1865.
 
Built to Last
The Confederate Army attempted multiple times to destroy the canal during the war or at least damage it so it wouldn’t hold water, thereby stranding the canal boats and keeping the coal from reaching Washington.
Henry Kyd Douglas, a Marylander who served on Gen. Stonewall Jackson’s staff wrote that the general made several trips to dam no. 5 in Washington County with the intent to destroy it “thereby impairing the efficiency of the Chesapeake and Ohio Canal, over which large supplies of coal and military stores were transported to Washington…”
However, Jackson and other Confederate officers soon found out that this wasn’t as easy as it seemed. In December 1861, Jackson pounded the dam with artillery, but he couldn’t breach it. Other officers had similar experiences when trying to destroy the canal. The masons who built the canal built it to last. Jackson’s men finally resorted to digging a channel to divert water, causing the canal to dry up south of the dam. This left boats sitting in the canal and coal sitting in the warehouses in Cumberland that couldn’t be shipped out.
Most of the damage to the canal was done early in 1861 and repaired before the First Battle of Bull Run except for a except Edwards Ferry, a culvert three miles above Paw Paw Tunnel, and the Oldtown Deep Cut. According to Unrau, “it took an 80-man crew with 20 horses and carts some 25 days to restore navigation at the large breach near the aforementioned culvert and the heavy rock slide at the Oldtown Deep Cut.”  While the last repairs were underway, General Robert Patterson dispatched a company of troops to Hancock to protect the waterway from Williamsport to Cumberland.
 
Problems in Cumberland
The disruption to the canal trade, along with the uncertainty of who controlled the B&O Railroad, sent Cumberland into an economic recession. William Lowdermilk wrote in The History of Cumberland, Maryland, “Her great thoroughfare, the Baltimore and Ohio Railroad, was interrupted and her Canal closed. Trade from Virginia was withdrawn. Every industry was stopped or curtailed; stores were closed and marked ‘for rent;’ real estate sank rapidly in value. Merchants without customers slept at their counters, or sat at the doors of their places of business. Tradesmen and laborers, out of employment, lounged idly about the streets. The railroad workshops were silent and operations in the mining regions almost entirely ceased. Then commenced a deep, painful feeling of insecurity and an undefined dread of the horrors of war. Panic makers multiplied and infested society, startling rumors were constantly floating about of secret plots and dark conspiracies against the peace of the community and private invidivuals,”
 
Protecting the Canal
Because of the problemns with raiders disrupting trade on the canal, President Abraham Lincoln had also authorized Representative Francis Thomas, a former president of the canal company in 1839-41, to organize four citizen regiments to protection canal property and boaters on the canal and along boat sides of the Potomac River. The companies would be called the Potomac Home Brigade.
While the lower sections of the canal saw heavy actions taken at times to destroy it, the upper sections saw relatively few problems. There were minor skirmishes and vandalism, but noting along the lines of what was seen on the canal below Williamsport.
It is believed that one of the reason that the upper sections of the canal weren’t subject to the same attacks as the lower sections was that Canal President Alfred Spates had made an agreement with the Confederacy about military targets through an aide to General Robert E. Lee. While the agreement is known to have existed, the terms were never made public, according to Unrau.
 
Confiscation
The following spring, the ironclad Merrimac had officials in Washington fearing that their city could be bombarded. Desperate for a way to keep the dangerous, new sailing vessel out of the Potomac River, government officials commandeered more than 100 canal boats at Georgetown.
“Some were filled with rocks and taken down to the river so they could be sunk if it became necessary to block the channel. Six or eight of them actually were sunk later; the others were returned to their owners,” Secretary of the Navy Gideon Welles wrote in his diary.
Boats were confiscated two other times during the year, but in the other instances not nearly as many boats were commandeered and they weren’t kept from their work as long. When 40 boats were confiscated later in 1862, they were towed to another river to be used as bridges for Union troops to cross the river.
Cumberlander A.C. Greene, one of the canal directors, wrote to the Canal Company complaining that between the military actions against the canal and bad weather, “There has be no real navigation on the canal this year.”He added that the “very existence of the canal” was “trembling in the balance.”  It would be impossible for the boatmen to replace in 1862 the 100 boats held by the government.
He wrote the letter in August and the following month, the Battle of Antietam occurred near the canal, shutting it down further. The tolls the Canal Company collected during September and August were less than 9 percent of the amount collected in 1860, which had been far from a banner year.
Oddly enough, as Union fortunes in the war began to turn following this battle so did the outlook for the canal. Business began to pick up the following year and would continue to grow throughout the war.
In Western Maryland, though, Confederate raiders shifted their focus from damaging the canal to destroying the boats. The raiders acted like pirates, capturing the boats, taking what they wanted and burning what was left.
“Rebs are stealing the horses from the Boats clear to Cumbd.  Two boats have been robbed within ten miles of Cumbd. and last night a gang of McNeill’s men crossed at Black Oak bottom, passed over Will’s Mountain into the valley of Georges Creek and swept the coal mines of their horses.  The American Co. lost sixteen,” Greene wrote to the Canal Company.
When to war ended, the C&O Canal “emerged from the Civil War on both a depressing note and a promising one.” The canal had been abused during the war and left in deplorable condition so much so that it wouldn’t be until 1869 that all of the damage done from the Civil War was repaired. However,  trade on the canal had started rising in 1863 and would continue to grow and remain strong through the canal’s golden years of the 1870s.