In the years following the Civil War, the South seemed unwilling or unable to deal with the realities of an economy that couldn't depend on the free labor of slaves. Continued institutional racism, Jim Crow Laws, the Black Codes and the deprivations of indentured servitude meant that many blacks in the South were really no better off than they had been prior to the Emancipation Proclamation and the passage of the 13th Amendment. One lesser known approach that the southern states took in the decades after the War was the leasing of convicts for hard labor. Business owners, including the plantation owners further to the south, could acquire very cheap labor from the states prison systems, with almost no oversight into how they treated (or mistreated) the laborers. Keeping in mind that many laws unfairly targeted blacks and created harsh penalties for virtually any perceived crime (including walking outside after dusk, for example) and it's easy to see how this system became a nightmare for incarcerated blacks.
One salient example that leads us to our story: As the railroads began to push further and further into the mountains of western North Carolina, they started to encounter very treacherous terrain. Wide, fast, strong rivers flowed beneath steep and rocky peaks; deep gorges and isolated construction sites impeded and slowed the work. As the railroads found it harder and harder to entice workers to join the teams in the mountains, they turned to the state for a solution. In return, the state of North Carolina leased teams of convicts to the railroad to continue the dangerous work. These teams laid track and dug tunnels through some of the most inhospitable terrain in the eastern United States.
One of these chain gangs was tasked with digging the 700' long Cowee Railroad Tunnel, just outside Dillsboro, NC. They worked with pick axes and shovels throughout the winter of 1882 to clear the forest and tunnel through the rocky mountain. Every morning the team, one of whom was only 15 years old, would be shackled together, ankle to ankle, and make the long march to the site. They would be loaded into a raft and pulled across the frigid Tuckaseegee River. On the morning of December 30, 1882, 30 convicts were loaded in shackles into the boat. The river was especially rough that day, and the icy water crashed over the low sides of the raft. Panicking at the raging water spilling into the boat, the convicts rushed forward to the stern, causing the raft to tip and dump the passengers into the icy water. Nineteen convicts died, chained together at the bottom of the river. The bodies were dredged from the water two days later, on New Years Day, 1883, and buried in an unmarked mass grave near the mouth of the tunnel.
Other people have covered the history better and more thoroughly than I (specifically Gary Carden, although many others have written on the tragedy). Efforts have been mounted over the years to have the bodies exhumed and reinterred in a proper fashion, to give these men the respect they deserve.
Over the years, numerous people have reported noises emanating from the tunnel; the sounds of pick axes on stone, of voices echoing from inside the earthworks. On occasion, loud moans and screams and unexplained splashing sounds have been reported. Cave-ins and train derailments in the tunnel have led some to speculate about a curse directed at the place by the poor souls who worked on, and in some cases, perished at the tunnel.
Today, the easiest way to see the tunnel is to take a ride on the Great Smoky Railroad. Listen carefully as the train passes through the mountain, and you may just hear the cries of the men who died to cut this treacherous tunnel.
Sources and Additional Info
Gary Carden theliarsbenchgazette.blogspot.com
The Ghost Writer https://spiritedwriter.wordpress.com/tag/cowee-tunnel/
Smoky Mountain News Article http://www.smokymountainnews.com/news/item/10992-1882-cowee-tunnel-disaster-comes-into-21st-century-spotlight