From the famous 1889 conflagration that first boosted Seattle’s economy, this had been a place of extreme booms and busts. Has a more diverse economy ended the wild ride?
June 6 marked the anniversary of the Great Seattle Fire, which leveled the business district and waterfront in 1889.
Yet the catastrophe led to a rebuilding boom. By the next year’s census, Seattle’s population reached nearly 43,000, an astounding leap from the 3,533 of 1880. At the time, the city was based on an extraction economy, especially timber. But investors, entrepreneurs and average people saw big potential for more.
The Great Northern Railway reached Seattle in 1893. Although Tacoma scored the first transcontinental railroad to the Puget Sound area, the Northern Pacific, Seattle was already leaving the City of Destiny behind.
The good times didn’t last, though.
Most Read Business Stories
- COVID vaccine: CDC expands booster rollout, OKs mixing shots
- Alaska Air turns its first unaided profit since 2019, but pilot unrest builds
- ‘People are hoarding’: Food shortages are the next supply chain crunch
- PPP is gone, but government help for small businesses isn't
- Trump plan for new media venture gets investors' thumbs up
The Panic of 1893 was one of the worst downturns in U.S. history, a disastrous end to the prosperity of the Gilded Age. Without a Federal Reserve, the government’s tools were limited and the nation suffered for the rest of the decade. It was Seattle’s “first Great Depression.”
As J. Kingston Pierce wrote on the website HistoryLink, “It ended Peter Kirk’s dream of building the ‘Pittsburgh of the West’ in Kirkland, ruined Seattle pioneer and developer David Denny, led 1,500 local laborers to join Coxey’s Army in a march of the unemployed on Washington, D.C., and prompted Seattle City Treasurer Adolph Krug to abscond with $125,000 in municipal funds.”
I offer this remarkable three-year snapshot as a reminder that Seattle has a well-deserved reputation as a boom-and-bust town.
Last Sunday, writing about the recovery from the Great Recession, I speculated that Seattle would fare better than most in the next downturn (provided it’s not centered in tech and is mild-to-normal in intensity). The economy here is much more diversified now.
But we ignore the past at our peril, and this is especially important for the many newcomers to the Puget Sound region.
Also, whether you are prospering, suffering displacement or just grumpy because of all the change, we are living through a remarkable boom here. Perhaps it’s the most significant one in Seattle’s history.
Still, the Klondike Gold Rush offers some interesting comparisons.
In 1897, a steamship from Alaska docked in Seattle carrying 68 prospectors and, according to press reports, “a ton of gold.”
The Seattle Chamber of Commerce acted quickly to promote the city as the leading outfitter for miners and jumping-off place for the Klondike, pre-empting Tacoma, Portland, San Francisco and Vancouver, B.C.
Thousands came through Seattle, buying gear and food, and thousands more stayed here to take part in the outfitter economy. News of the gold strike was tonic to a nation with high unemployment and a currency based on gold. For Seattle, the gold rush meant money for equipment makers and sellers, hotels for miners passing through, more port traffic and upgraded railroads.
Historian Kathryn Morse estimated, “The amount of money passing through Seattle banks went from $36 million in 1897 to $68 million in 1898 to over $100 million in 1899.” That’s more than $2.7 billion in today’s dollars.
The commerce and confidence allowed the city to begin the Denny Regrade, expanding the developable land for the central business district. The population nearly doubled by 1900 and reached more than 237,000 a decade later.
Suddenly, Seattle was the 21st largest city in the nation and the third largest west of the Mississippi. It celebrated its success with the 1909 Alaska-Yukon-Pacific Exposition, its first world’s fair.
By 1910, Seattle was served by four transcontinental railroads and was the business capital of the Northwest, with manufacturing, fishing, canneries, shipping and banking supplementing the timber-centric economy that existed before the fire.
That same year, William Boeing bought a shipyard on the Duwamish River. It would become his first airplane factory.
Seattle boomed again in World War I. Even before the U.S. entered the conflict, prices rose sharply for almost all commodities, including Washington wheat, lumber and salmon. Much of it went through the Port of Seattle, founded in 1911, or on railroads.
The Smith Tower was completed in 1914 as Europe descended into darkness. The tallest skyscraper west of the Mississippi River then, it was an exclamation point of the city’s fortunes.
After 1917, when the U.S. declared war, Seattle became a shipbuilding center.
The region crashed again, along with much of the nation, after the war ended in November 1918 and demand dried up. The recovery here was slow, although the city’s population continued growing. The Jazz Age was busy for the Boeing Airplane Co., which won contracts from the Army and Navy to build a variety of aircraft. In 1927, Boeing Air Transport was founded for mail and passenger service, forebear of United Airlines.
The Great Depression was the city’s biggest test yet. As banks failed, businesses closed and workers were laid off, a notorious Hooverville was erected south of downtown. While New Deal stimulus and work programs helped, the economy faltered again in 1937 when FDR cut back the assistance.
World War II lifted Seattle yet again, especially with aircraft from Boeing and naval vessels built by local shipyards. Seattle became synonymous with Boeing and its iconic aircraft during the war and in the prosperous decades that followed. Again, this hot city put on a world’s fair, the Century 21 Exposition in 1962.
Then came the Boeing bust of the late 1960s and much of the 1970s. Federal aid for the supersonic transport (SST) was pulled, dooming the airliner. The new 747 hadn’t found its market yet. This was when two real-estate agents paid for a billboard saying, “Will the last person leaving Seattle — turn out the lights.”
This time the comeback was slower. Until, that is, Microsoft arrived in the 1980s, followed by the dot-com boom of the 1990s and the birth of Amazon.
Which brings us close to today. Seattle came out of the Great Recession in very good shape compared to most American metros, although it suffers from ills of inequality and displacement seen nationwide.
With such prosperity and diversification in the economy as we have now, has there been a great decoupling? Has Seattle left its wild boom-and-bust past behind?
I wouldn’t take that bet.