Canemah is also important in Oregon history from the perspective of white settlement. Canemah is just south of the much larger (and still thriving) Oregon City (Canemah reached its peak in 1861 and was eventually subsumed into Oregon City). Absalom F. Hedges came to Canemah over the Oregon Trail after finding Oregon City already too crowded. He used the Donation Land Act to stake a claim (presumably at the expense of Native Americans) and essentially founded the "town" of Canemah (he called it "Falls City"). It was later connected to Oregon City by boardwalk. Hedges opened a tannery, general store, and constructed a steamboat, the "Canemah."