Economic History of St. Louis

Davey Oetting

12/1/06

History of St. Louis

St. Louis was acquired from France by the United States under President Thomas Jefferson in 1803, as part of the Louisiana Purchase. It was founded by the French in 1764 when Auguste Chouteau established a fur-trading post and Pierre LaclÐ"Ёde Liguest, a New Orleans merchant, founded a town at the present site. They named it after King Louis XV of France and his patron saint, Louis IX. From 1770 to 1803, St. Louis was a Spanish possession, but it was ceded back to France in 1803 in accordance with the Treaty of San Ildefonso (1800), only to be acquired by the U.S. as part of the Louisiana Purchase later that year. The town was incorporated in 1809. From 1812 to 1821, St. Louis was the capital of the Missouri Territory, and it was incorporated as a city in 1822. John Jacob Astor opened the Western branch of the American Fur Company in 1819, and the city prospered during the early part of the 19th century as a commercial center for the fur trade. St. Louis continued to grow as a major transportation hub with the development of steamboat traffic and the later expansion of the railroads in the 1850s. This transportation boom led to the immigrant influx in the mid 1800s. The world-famous Louisiana Purchase Exposition was held here in 1904 which brought high demand for many products, making St. Louis turn into a manufacturing city. It is important to the city's economy, and its highly developed industries include, aircraft and space technology, beer, and food processing. All of these events led to the creation and the progress of the city of St. Louis.

St. Louis was quickly a prominent city in the Midwest sharing its power with Chicago for most productive city. St. Louis leaders were passively conservative and depended upon St. Louis' superior location, whereas Chicago leaders were more astute and aggressively developed the potential of the railroads. Rail provided year-round transport while river travel was impossible five months of the year. St. Louis aligned itself with New Orleans for the competition with Chicago, but New Orleans began to focus on cotton and the South rather than the river trade of the Midwest. The Civil War closed the lower Mississippi. This hindered the growth of St. Louis, but still because of the location, the different events, the influx of immigrants, and some major manufacturing companies, the city was able to grow.

St. Louis was the start of the movement westward because of its proximity to the Mississippi and Missouri Rivers. This location also issued in another era as well as "manifest destiny." The steamboat era began in St. Louis on July 27, 1817, with the arrival of the Zebulon M. Pike. Rapids north of the city made St. Louis the northernmost navigable port for many large boats, and Pike and her sisters soon transformed St. Louis into a bustling boom town, commercial center, and inland port. By the 1850s, St. Louis had become the largest U.S. city west of Pittsburgh, and the second-largest port in the country, with a commercial tonnage exceeded only by New York. With the astronomical new growth in water transport, the connection that St. Louis has with the not only the north and south with the Mississippi, but also the east and west with connecting rivers, St. Louis's economy boomed. St. Louis continues to be a major port connecting all points in the United States.

The city has several common nicknames in addition to "River City" (as explained above), including the "Gateway City". It is called "Gateway to the West" because of the many people who moved west starting near St. Louis; first, because the lower Missouri River was the first leg of the Oregon Trail, and later, because of wagon trails. The nationalistic idea, conceived in the 1840s, was the "manifest destiny" of the United States to expand westward to the Pacific. This pushed the demand curve for supplies and housing way to the right, creating jobs and boosting the economy for the city. St. Louis thrived off of the prospectors and those looking for more land in the west. They demanded crops for food, which boosted the farmer's economy in the nearby farmsteads, oxen for transportation, which also helped the farmers. Also wagon supplies for troubles on the road, which helped all of the local wood workers, clothing for warmth which helped the cloth and cotton industry in the St. Louis area. "Manifest Destiny" and the convenient location of the city helped boosted St. Louis during the 1840s and 1850s.

Along with the commercial flow through the city, the flow of immigrants also helped boost the economy in St. Louis. Immigrants flooded into St. Louis after 1840, particularly from Germany, Bohemia, Italy and Ireland, the latter driven by an Old World potato famine. The population of St. Louis grew from fewer than 20,000 in 1840, to 77,860 in 1850, to just over 160,000 by 1860. It is important to realize that immigrants do not cause native unemployment, even among low-paid or minority groups. A spate of respected recent studies, using a variety of methods, agrees that "there is no empirical evidence documenting that the displacement effect [of natives from jobs] is numerically important" (Borjas 19). The explanation is that new entrants not only take jobs, they make jobs. The jobs they create with their purchasing power, and with the new businesses which they start, are at least as numerous as the jobs which immigrants fill. Between 1840 and 1850, St. Louis continued rapid growth, both in area and population. An important factor in the population increase was the influx of large numbers of immigrants, particularly from Germany and Ireland.

The Germans, who fled the revolution in their homeland, settled here in such numbers that by the early fifties, the City ordinances had to be translated into German for their benefit. The City's growth was primarily toward the north between 1840 and 1850, but about 1850 a rapid advance took place to the south and southwest. On the north side, the land in Lowell was first offered for sale in 1849 and in 1850 the town of Bremen was organized. This was where my family began in St. Louis. The Oetting or as it was called the "Oettingen" family began one of the firsts banks in the town of Bremen and from that it has merged or changed its name into the Boatmen's, Nation's, Bank of America Family. This has been the cornerstone to my family's success in the St. Louis area.

The St. Louis World's Fair (1904), which was held in Forest Park, captured global attention as it displayed various technological developments. The fair celebrated the centennial of the Louisiana Purchase and transformed Forest Park into