As the construction of the canal wove through the foothills of the Allegheny Mountains alongside the Potomac, adequate space to achieve the canal's required dimensions became an issue. This challenge was compounded by competition for already meager space on the valley bottom with the rival B&O Railroad, with a number of ensuing disputes.
As a solution, and as a means of saving money, the canal's engineers proposed digging a tunnel through the mountains near the town of Paw Paw, bypassing nearly five miles of tortuous route alongside the winding river. Construction was done by a Methodist parson and contractor named Lee Montgomery and his handpicked crew of trusted miners, who worked from both ends and sunk shafts from the mountains above as necessary.