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In 1925, a fantastic proposal was made by Dexter P. Cooper – a renowned hydroelectric engineer who had previously visited Eastport and Campobello on his honeymoon in 1912.  He determined that it would be possible to dam Passamaquoddy and Cobscook Bays. If these bays could be dammed, he claimed that a million megawatts of electrical power could be generated – bringing thousands of jobs to the Greater Eastport area. With a Quoddy Dam, the long-term viability of both Washington County (and Charlotte County in New Brunswick) could be assured… 

First things first: the "Quoddy Dam" was not a single dam – it was a series of four different dam attempts – and each dam design was distinctly different:

1. The first Quoddy Dam was an international design (known as the “International Dam”). This design involved sharing land and water resources between the United States and Canada. It met its demise when Canada's Parliament refused to extend the charter to build the dam.  Dexter P.Cooper spent three years attempting to gain permissions to build this dam.

2. The second attempt, known as the "All-American Dam," called for damming Cobscook Bay (placing the dam entirely within U.S. waters, thus requiring no Canadian approval). This plan failed with the collapse of the New York Stock Exchange in 1929, which choked investment funding for the project.

3. The third attempt, the "Quoddy Dam"(officially known as the “Passamaquoddy Tidal Power Project”), was a cost-reduced, modified version of the All-American Dam. President Franklin Delano Roosevelt (FDR) was able to get some of the funding for this dam effort from a War Department budget – hence, the U.S. Army Corps of Engineers (part of the War Department) was given the job of building this dam.  The Public Works Administration (PWA) planned to provide the rest of the funding for the project; and,

4. The fourth instantiation of the Quoddy Dam was based on Cooper’s third dam design but was modified by the U.S. Army Corps of Engineers. These modifications featured “improvements” over Cooper's 3rd dam design, which were to have lowered build costs. Construction for this project was begun in 1935 and terminated in 1936. (Incidentally, prices were not lowered as promised by the Corps, instead they increased).

The ultimate nail-in-the-coffin for this dam was delivered by a massive spending cut in the United States Congress.  (A Conservative Coalition in Congress was angered by FDR's "excessive" Great Depression public works projects spending -- and pulled the rug out from under the Quoddy Dam shortly after construction had begun). 

Eastport, however, had taken out loans to underwrite expansion and improvement projects to support the dam infrastructure (city services, medical, maintenance, etc.). With the sudden departure of the U.S. Army Corps of Engineers and ancillary businesses (such as food services), the City of Eastport was exposed financially. Tax revenues dried up. People moved out. Business revenue declined considerably. Unemployment and relief roles increased. And under the weight of mounting debt and lack of tax revenue, the city became insolvent and declared bankruptcy.

With the funding withdrawal, the hopes for prosperity in Eastport were dashed -- and Eastport entered a long phase of trying to find "the next big thing."