Section #9 - Growth Of Our Cities and Economy

Growth of Our Cities and Economy

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America’s town and cities create the concentrated marketplaces needed for a booming national economy. 

When the British colonists arrive, their first challenge lies in locating a viable place to settle – and they are naturally drawn for water, supplies and transportation to sites along rivers, lakes or bays. 

By 1630, many of the nation’s original towns and cities have taken root, including Boston and New York.  

Some Of The Very Earliest Cities In America

YearNameStateClaimantBody of Water
1565St. Augustine  Fla  SpainMatanzas River
1607Jamestown  Va  BritainJames River
1607Santa Fe  NM  SpainSanta Fe River
1610Hampton  Va  BritainChesapeake Bay
1613Newport News  Va  BritainJames River
1614Albany  NY  BritainHudson River
1617Jersey City  NJ  BritainHudson River
1620Plymouth  MA  BritainEel River
1622Weymouth  MA  BritainBack River
1623Dover  NH  BritainPisquataqua River
1623Gloucester  MA  BritainAnnisquam River
1625New York  NY  BritainHudson River
1626Salem  MA  BritainForest River
1630Boston  MA  BritainBack Bay

They are joined by others as the 17th century plays out, notably Charlestown and Philadelphia.

Again they are adjacent to waterways and two are even to the west: Green Bay and El Paso  

Other Early American Cities 

YearNameStateClaimantBody of Water
1630BiddefieldMe  BritainSaco River
1632WilliamsburgVa  BritainJames River
1634Green BayWI  BritainFox River
1635 ConcordMA  BritainConcord River
1636ProvidenceRI  BritainProvidence River
1636SpringfieldMA  BritainSangamon River
1636New HavenCT  BritainWest River
1637HartfordCT  BritainConnecticut River
1638CambridgeMA  BritainCharles River
1638WilmingtonDel  BritainChristina River
1639NewportRI  BritainNarragansett Bay
1639GuilfordCT  BritainCoginchaug River
1639BridgeportCT  BritainPequonnock River
1639St. MarksFla  SpainSt. Marks River
1642WarwickRI  BritainPawtuxet River
1642LexingtonMA  BritainCharles River
1646New LondonCT  BritainThames River
1649AnnapolisMd  BritainSevern River
1649MarbleheadMA  BritainMassachusetts Bay
1651NorwalkCT  BritainNorwalk River
1659El PasoTX  SpainRio Grande River
1660RyeNY  BritainHudson River
1666NewarkNJ  BritainPassaic River
1668Sault Ste. MarieMI  BritainSt. Marys River
1670CharlestonSC  BritainCooper River
1673WorchesterMA  BritainBlackstone River
1674WaterburyCT  BritainNaugatuck River
1680So. OrangeNJ  BritainRahway River
1681PhiladelphiaPa  BritainSchuylkill River
1682NorfolkVa  BritainChesapeake bay

Building these settlements is an onerous task. It begins from scratch by cutting trees, clearing ground and putting up stockade fencing to protect against any and all external threats. Some early enclaves fail to survive, such as the Roanoke Colony in North Carolina and the Popham Colony in Maine. They are unable to find enough food, clothing and shelter to live through the harsh winters. Or they fall victim to disease, especially outbreaks of smallpox and scurvy.

But once the survivors gain a territorial foothold, they are anxious to realize their dreams of owning and farming their own land. Support comes in the Congressional Land Ordinance in 1785 which peg the price at an affordable $1 per acre. 

Thus the first Census in 1790 finds 93% of the population residing on farms and only 7% in urban centers.  Even future mega-cities like New York and Philadelphia boast only 30,000 or so residents, with most of them engaged in shipping traffic between American and European ports of call.

Urban Centers in 1790 Census

New York  33,131
Philadelphia  28,522
Boston  18,320
Charleston  16,345
Baltimore  13,503
No. Philadelphia    9,913
Salem    7,921
Newport    6,716
Providence    6,380
Marblehead    5,661
  Average  14,641

However, from 1800 forward the urban centers grow rapidly, as America’s market economy takes off.  

The transition begins with “demand,” the wish among farmers for more material goods to improve their daily lives. Included here are household goods like shoes, clothes, furniture, cookware and tableware; occupational necessities such as shovels and plows, horseshoes and saddles; rifles and traps; even “luxuries” like books, musical instruments, clocks, paper and pencils. 

Rather than the often impossible task of trying to make these things on their own, the chance of buying or bartering for them in a central marketplace becomes attractive.

But on top of demand, three other things are required for this market to materialize.

First there must be manufacturers to produce the supply of the goods in demand.

For much of America’s first two centuries these “finished goods” are manufactured in Europe and shipped across the Atlantic. This pattern changes, however, when leaders like Alexander Hamilton and Henry Clay push for increases in domestic production. 

A breakthrough occurs in 1813 when Francis Lowell opens his Boston Manufacturing Company and follows it with two new textile mills converting fiber into yarn and yarn into cloth. Lowell memorizes the production systems he has seen in a prior visit to Britain and duplicates them in his own plants. He preaches “specialization,” setting up factories with one end product in mind. Then carefully “mapping” the steps required and optimizing the processes used at each stage to insure high throughput and uniform quality. 

To keep the prices of his textiles competitive, Congress imposes “protective tariffs” on foreign imports. Some of these tariffs cover clothing made in Britain with raw cotton from southern plantations – which in turn depresses their profits and adds to regional tensions already brewing over slavery.

While Lowell leads the way on manufacturing textiles, other capitalists are busy launching some of America’s earliest and most famous “branded” products. 

Earliest Manufacturer Brands In The U.S.

YearBrand NameIndustry
1795Dixon TiconderogaPencils
1796Jim BeamDistillery
1798Pratt ReadTools
1801Crane & Co.Papermaking
1806ColgateConsumer Goods
1807Sterling SugarsSugar
1812Waterbury ButtonButtons
1813Conti GroupMeat Products
1815Loane BrothersTents
1818Brooks BrothersClothing

Once there is an adequate “supply” of goods to meet “demand,” the next hurdle lies in having the infrastructure in place to transport them across the nation.

By 1800 America’s road systems have developed to the point where they are capable of handling most commercial traffic. Some are short postal routes connecting two nearby towns; others cover long-distances like the King’s Highway (1650) the Fall Line Road (1735), the Great Wagon Road (1744). Even the west coast will soon be reachable via the Oregon Trail (1811), the Santa Fe Trail (1822) and the California Trail (1847). 

From 1825 onward these once dirt trails are also being “macadamized,” covered over with crushed stone and properly beveled to minimize closures due to rain and winter conditions. 

The final part of the “marketplace creation model” lies in a concentrated location where the manufacturer’s goods meet up with the farmer’s demand to complete the “money for products” exchange.

The marketplace takes shape in America’s urban centers — and they are perfectly designed for this purpose.

Unlike most European cities, America’s urban centers eschew concrete walls and moats in favor of open-ended “main streets” that invite people in rather than keeping them out. Their purpose is to promote commerce rather than visits to approved religious or government edifices. The reason to come to town is to visit the general store or tavern, not to worship or pay taxes. 

Finally, they are typically laid out in a grid pattern with easily followed streets rather than the confusing axial patterns and circuses familiar to the old world. 

The author of America’s city grid system is William Penn, who is deeded 4500 square miles of land by King Charles II in 1681 to pay off a prior debt. The 37 year old Quaker decides to found a city at the confluence of the Delaware and Schuylkill Rivers which he names Philadelphia, from the Greek for love (phileo) and brother (adelphos). He envisions his city devoted to commerce and divides it into surveyor “plats,” striving for functionality and aesthetics. 

Penn’s American grid streets are straight; avenues are 100 feet wide while lesser streets are a generous 50 feet across; four large public squares are set aside for green space; detached homes are encouraged and uniform frontage includes space for gardens; an area is designated for a public school; and streets are named for trees to reinforce the association with nature.  

The Land Ordinance of 1785 recognizes Penn’s achievements and establishes a blueprint for surveying public domain property into townships comprising 36 designated “plats.”  

By around 1815 all four components of a viable industrial economy have come together in America: demand + supply + transportation + urban center marketplaces. 

And the results are already apparent in the nation’s “gross domestic product” results, which grows from $189 million in 1790 to $925 million in 1815.

Gross Domestic Product For The United States*

Year1790  17951800  180518101815
GDP (MM)$189  $383$480   $561$706$925
% Change+103%  +25%    +17%  +26%+31%
* GDP = dollar value of all final goods and services bought by final users

Consistent with the growth of the economy are population gains in the cities as more residents move in to fill a host of new opportunities to “work for wages.” The prior Main Streets confined to a general store, a hostelry and a tavern now add new commercial outlets: banks, restaurants, clothiers, household goods emporiums and even theaters. New York City emerges as the model of success as a marketplace, as evident in its dramatic population gains from 1790 to 1820. 

Growth Of Top Ten Urban Centers

New York33,131New York123,706
Baltimore13,503New Orleans21,176
No. Philadelphia  9,913Charleston24,780
Salem  7,921No Philadelphia19,678
Newport  6,716So Philadelphia14,713
Providence  6,380Washington DC13,247
Marblehead  5,661Salem12,731

But then comes a sudden economic downturn that begins in 1816 and lasts for roughly seven years. The cause is a boom-bust cycle that will be repeated again in 1837 and 1858. It is marked here by rapid speculative investments (the “boom”) to prepare for the War of 1812, followed by the sudden downturn in demand (“the bust”) after the conflict ends. 

America’s First Sustained Recession

GDP (MM)$925$710$822$1,022
% Change+31%(23%)+16%+24%

Fortunately recovery follows, spurred on by four technological innovations that revolutionize the marketplace: 

           * Robert Fulton’s Clermont steamboat (1807)

           * DeWitt Clinton’s Erie Canal (1825)

           * Peter Cooper’s Tom Thumb locomotive (1830)

           * Samuel Morse’s Telegraph (1838)

The combination of these innovations have a profound effect on linking supply to demand and developing vibrant urban centers across America. 

By 1850, New York City continues to lead the way with over 800,000 in-town residents. But others follow, including new marketplaces along rivers to the west like Cincinnati, St. Louis and Chicago.  

Growth In America’s Top Ten Urban Center Marketplaces

City  1840City  1850City  1860
New York312,710New York515,547New York813,669
New Orleans102,193Boston136,881Brooklyn266,661
Philadelphia  93,665Philadelphia121,376Baltimore212,418
Boston  93,383New Orleans116,375Boston177,840
Cincinnati  46,338Cincinnati115,435New Orleans168,675
Brooklyn  36,233Brooklyn96,838Cincinnati161,044
No Philadelphia  34,474St. Louis77,860St. Louis160,773
Albany  33,721So Philadelphia58,894Chicago112,172
Charleston SC  29,261Albany50,763Buffalo81,129
Average  88,429145,902271,991

By 1860, the benefits of the diversified industrialized economy envisioned by Hamilton and Clay are realized in major increases in the Gross Domestic Product. It stands at nearly $4.4 Billion in 1860, second only to Britain among the leading global powers.

Gross Domestic Product For The United States*

GDP (MM)$1,022$1,340$1,574$1,859$2,581$3,975$4,387
% Change+24%+31%+17%+39%+39%+54%+10%

At the same time, the 1860 Census shows that 4 in every 5 Americans still cling to the original American Dream as the Jamestown settlers of 1607: to live and work on their own farms

% Of Population Living In Urban Centers

YearTotal U.S.NortheastNorthwestSouthFar West
1820    7%    11%      2%    5%    —
1830    9    14      3    5
1840  11    19      4    7
1850  15    27      9    8    6
1860  20    36    14  10  16

But “going into towns and cities” to shop for goods and services has become the norm – and this traffic will change forever the ways that many Americans will make their livings. 

City of Savannah Georgia
Overview of the city of Savannah Georgia
Bank of Savannah
Savannah Bank & Custom House
Church of Savannah Georgia
Savannah Church
Town of Leominster Mass
Town of Leominster, Massachusetts
Memorial Day Parade at Annapolis
Annapolis, Maryland
Needham, Massachusetts Town Square
Town Square in Needham, Massachusetts
Town of Galena, Illinois
The town of Galena, Illinois
Main Street in Small Town
Beloit, Wisconsin
Hay Wagon in Town
A town square with hay wagons
Idaho Springs, Colorado
The western mining town of Idaho Springs, Colorado
U.S. Capitol, Capitol from Pennsylvania Avenue
The nation’s capital, Washington, D.C.
Tenement Building in New York City
Brooklyn, New York
New York City Hall
City Hall, Manhattan, New York
Montgomery Cotton Market
Marketplace for cotton in Montgomery, Alabama
Oberlin College 1
Market Exchange in Nashville, Tennessee
Storefront -- Fond du Lac, WI
Grocery store in Fond du Lac, WI
Main Street in Small Town
Storefront in Morris, IL
Grocery Store
Two dry goods stores with horse
H. F. Winters Book & Shoemaker
wagon waiting to drive home
H. F. Winters Book & Shoemaker
H. F. Winter’s Shoe and Book store
Bakery with Couple in Front
A bakery and lunchroom with proprietors in front
Chase and Comstock Hatters Shop
Chase and Comstock Hatters Shop
Fur Store in Philadelphia
Stambach’s Fancy Furs