Datus Kelley guided Kelley's Island to financial success in the 1840's when he opened the limestone quarry there. His Italian immigrant workers, who were usually Catholics, often clashed with the Protestant foremen from Sandusky, who ordered them to tunnel dangerously far beneath Lake Erie. One of the foremen made the mistake of ordering a blast at the wrong place, which brought the roof crashing down on them. Most of the bodies were never found.
After that rumors began to circulate that the workers at Kelley's Island still roamed the remaining tunnels, and would drag ships under the waters of Lake Erie. On October 19, 1936 the Sand Merchant went down off the coast of Kelley's Island. The five survivors of the crew of 24 claimed to have felt hands pulling them down from beneath the waves. To this day Kelley's island is rumored to be haunted.