Jacob Lawrence and Gwendolyn Knight Hiram M. Chittenden Patsy Collins Gordon Hirabayashi Home William Boeing
Search Encyclopedia
Facebook
Advanced Search
Featured Eassy Sponsor of the Week Book Store Donate Now
Home About Us Contact Us Education Bookstore Tourism Advanced Search
6843 HistoryLink.org essays now available      
Donate Subscribe

Shortcuts

Libraries
Cyberpedias Cyberpedias
Timeline Essays Timeline Essays
People's Histories People's Histories

Selected Collections
Cities & Towns Cities & Towns
County Thumbnails Counties
Biographies Biographies
Interactive Cybertours Interactive Cybertours
Slide Shows Slideshows
Public Ports Public Ports
Audio & Video Audio & Video

Research Shortcuts

Map Searches
Alphabetical Search
Timeline Date Search
Topic Search

Features

Book of the Fortnight
Audio/Video Enhanced
History Bookshelf
Klondike Gold Rush Database
Duvall Newspaper Index
Wellington Scrapbook

More History

Washington FAQs
Washington Milestones
Honor Rolls
Columbia Basin
Everett
Olympia
Seattle
Spokane
Tacoma
Walla Walla
Roads & Rails

People's History Library

< Browse to Previous Essay | Browse to Next Essay >

Turning Point 7: A Bumpy Ride: Seattle's Economic Booms, Busts, and Comebacks

HistoryLink.org Essay 9301 : Printer-Friendly Format

The seventh essay in the Turning Points series for The Seattle Times traces the Seattle area's economic ups and downs starting in 1873, when the Northern Pacific Railroad's selection of Tacoma for its terminus burst Seattle's first speculative bubble. The article continues with recaps of the economic Panic of 1893, the Great Depression, and the Boeing Bust of the early 1970s, which prompted a coordinated public-private effort to diversify the metropolitan King County economy. This article was written by Walt Crowley and the HistoryLink.org staff and published on April 20, 2001.

A Bumpy Ride

The news hit Seattle like a punch to its civic solar plexus. A giant corporation was dumping it for another city. Community plans and individual hopes were crushed, and some wondered if Seattle had a future at all.

This message of doom was not Boeing's March 21, 2001, announcement that it would depart its corporate nest of 85 years, but a terse telegram from executives of the Northern Pacific Railroad to Seattle founder Arthur Denny. It arrived on July 14, 1873, and read simply, "We have located the terminus on Commencement Bay."

These eight words burst Seattle's first economic bubble. They meant that all the goods, people, and wealth anticipated from development of the nation's second transcontinental railroad, linking the Great Lakes with Puget Sound, would flow to Tacoma, then barely a village, not to its larger neighbor to the north.

Seattle felt used, abused, and betrayed. The town had treated NP surveyors and executives like visiting royalty over the previous three years, and chipped in to fund a generous inducement (bribe is such a harsh word) of cash, bonds, and land totaling more than $700,000. Seattle was already the Territory's third largest city with more than a thousand souls, and the odds seem so biased in its favor that speculation had sent local land prices soaring.

A Lesson in Economics 101

Only later did Seattle learn that while it was feting Northern Pacific agents, they were quietly buying up most of Tacoma's future downtown and harbor. Seattle's business establishment really had no right to be shocked by this lesson in applied capitalism. After all, Henry Yesler (Seattle's mayor at the time of the NP decision) had manipulated a bidding war among Puget Sound settlements for the privilege of hosting his saw mill. He chose Seattle in 1852 not out of sentiment but because its pioneers, including Arthur Denny, offered him the most land and benefits.

Our city's first economic bust also set the stage for its first comeback. If the Northern Pacific would not build Seattle a railroad, Seattle would just have to build its own. So, on May 1, 1874, hundreds of citizens of all classes literally rolled up their sleeves and headed out to Steele's Landing on the Duwamish River to start laying tracks. Thus was born the legend of an indefatigable "Seattle Spirit." The Seattle & Walla Walla Railroad never got close to its second namesake, but it did reach the new mines around Renton and established a thriving enterprise for coal exports to California. Future Northern Pacific chief Henry Villard was so impressed he bought the whole caboodle for $1 million in 1880.

By then, Seattle had shaken off its brief depression following the NP's selection of Tacoma. Indeed, work on the railroad had stalled, along with development of the self-styled "City of Destiny." Seattle's population, on the other hand, had tripled to more than 3,500 people and it boasted a vigorous local economy. Seattle was big enough even to forgive the Northern Pacific's slight, and greeted the Henry Villard with a lavish celebration when he visited in 1883 and announced construction of a spur between Tacoma and Seattle.

"The Boomingest Place on the Earth"

Seattle gained its coveted transcontinental link a year later, but the spur offered only fitful service under Villard's successors. Seattle rallied again to build a new line, the Seattle Lake Shore & Eastern, now the route of a trail named for its organizers Thomas Burke and Daniel Gilman. Again, Seattle prospered in the face of adversity -- growing by nearly 40,000 residents during the 1880s.

Not even the Great Fire of June 6, 1889, could slow the city, labeled "the boomingest place on the earth." It enticed Great Northern Railway magnate James J. Hill to locate his Western terminus in Seattle, but the line's completion in 1893 coincided with a the onset of a national depression.

Triggered by dwindling federal gold reserves and a stock market crash that idled 20 percent of the national workforce, the so-called Panic of '93 hit Seattle especially hard. It was only rescued by the arrival on July 17, 1897, of the steamship Portland bearing "more than a ton of solid gold" from the icy banks of the Yukon River.

Seattle knew that this stroke of luck did not guarantee prosperity. City booster Erastus Brainerd launched a publicity blitz to establish Seattle as "the gateway to Alaska" for the thousands of prospectors expected to race north. When the city won the nod as home of the federal assay office, its success was assured -- and merchants grew rich fleecing the pockets of "sourdoughs" on their way to and from the gold fields.

Thanks to the Klondike Gold Rush and expanding Asian trade, Seattle prospered for the next 20 years. Its population nearly doubled to 80,000 in 1900, and then tripled to 240,000 over the following decade. The town celebrated the seemingly endless boom in 1909 with its first world's fair, the Alaska-Yukon-Pacific Exposition on the UW campus.

Soaring and Sinking with Boeing

Growth continued at a somewhat cooler pace through World War I and the 1920s. Then the stock market tanked in October 1929, and Seattle followed it down the drain. Population growth stagnated at around 365,000 in the 1930s, and thousands of unemployed workers camped a shantytown called "Hooverville" on the site of an idled shipyard south of Pioneer Square. A new building would not rise in downtown Seattle for another 30 years.

World War II jumpstarted the economy but at a terrible price -- thousands of deaths and the internment of the nation's second largest Japanese American communities. Boeing was the biggest local winner, and it applied the Cold War technology of jet bombers to revolutionize airline travel. Thanks in large part to Boeing's expanding workforce, population growth resumed in the 1950s and spread into burgeoning suburbs. Seattle celebrated good times and a bright future with a second world's fair, the Century 21 Exposition, in 1962.

But nothing lasts forever. Boeing was buffeted during the mid-1960s by the loss of several crucial defense contracts, and it launched its new 747 Jumbo Jet just as the air went out of the airline industry. The company shed more than 60,000 workers during the ensuing "Boeing Bust," and when a Sea-Tac billboard teased, "Will the last person leaving Seattle please turn out the lights" in April 1971, nobody laughed.

A lot of people did leave Seattle during the bust. The city's population dropped from 565,000 in 1965 to under half a million by 1980, but the larger metropolitan area continued to grow, permanently tipping the balance of regional power. After their white-knuckle ride with Boeing, business and government leaders vowed to diversify the local economy by attracting new and different businesses. Among these, a little software firm called Micro-soft relocated from Albuquerque to the Eastside in 1978.

The region's economic strategy has in fact helped to cushion the area against the ups and downs of the past quarter of a century. Some might argue that it has worked too well, for growth is now the cause of most of our social and environmental complaints. There is an alternative, of course, but do we really want to go there again?


< Browse to Previous Essay | Browse to Next Essay >

Related Topics: Economics |

Licensing: This essay is licensed under a Creative Commons license that encourages reproduction with attribution. Credit should be given to both HistoryLink.org and to the author, and sources must be included with any reproduction. Click the icon for more info. Please note that this Creative Commons license applies to text only, and not to images. For more information regarding individual photos or images, please contact the source noted in the image credit.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License


Major Support for HistoryLink.org Provided By: The State of Washington | Patsy Bullitt Collins | Paul G. Allen Family Foundation | Museum Of History & Industry | 4Culture (King County Lodging Tax Revenue) | City of Seattle | City of Bellevue | City of Tacoma | King County | The Peach Foundation | Microsoft Corporation, Other Public and Private Sponsors and Visitors Like You


People's Histories include memoirs, reminiscences, contemporary accounts, reprints of older historical accounts, commentary on and interpretation of current and historical events, and expressions of personal opinion, many of which have been submitted by our visitors. These essays have not been verified by HistoryLink.org and do not necessarily represent its views.

We also present here HistoryLink Elementary, essays for beginning readers based on existing HistoryLink content, as well as award-winning essays about local history from regional or state History Day competitions that were written by students from Washington middle and high schools.




Arthur Denny (1822-1899), n.d.
Courtesy Clarence Bagley, History of King County


Northern Pacific promotional



Northern Pacific Depot, Jackson and Main streets, Seattle, ca. 1887
Courtesy Kurt Jackson


James J. Hill (1838-1916)
Courtesy MOHAI (Neg. 18554)


Local beneficiaries of the Klondike Gold Rush
Courtesy MOHAI


Hooverville ca. 1935
Courtesy Oregon State Historical Society and Paul Dorpat


Will the Last Person Leaving Seattle... billboard, 1971
Courtesy The Seattle Times


 
Home About Us Contact Us Education Bookstore Tourism Advanced Search

HistoryLink.org is the first online encyclopedia of local and state history created expressly for the Internet. (SM)
HistoryLink.org is a free public and educational resource produced by History Ink, a 501 (c) (3) tax-exempt corporation.
Contact us by phone at 206.447.8140, by mail at Historylink, 1411 4th Ave. Suite 803, Seattle WA 98101 or email admin@historylink.org