ECONOMICHISTORY Story of a Port Town The Evolving y American standards, is Baltimore’s founders saw the poten- an ancient city. Its storied history tial for a port. The harbor could access Economic Role Bstretches back to colonial days, when Atlantic trade routes via the Chesapeake its port began to ship farm goods from the Bay, yet it was better protected than of Baltimore’s mid-Atlantic to people around the globe. Norfolk, Va., and other Bay ports During the Revolutionary War, for because it was farther inland. Although Wa t erfront and instance, American soldiers “were fed by the harbor was shallower and harder to the grain and flour delivered from Bal- navigate than Fells Point, the problem Location timore,” describes Geoffrey Footner, a was dealt with by constructing piers that Baltimore-based author and maritime reached into friendlier waters. historian. Goods also were shipped from At the same time, Baltimore’s harbor BY CHARLES GERENA the city to France, where they were was close to sources of food production. transported to the Dutch Islands and Down the were com- traded for weapons and gunpowder munities where the land was fertile and needed by the Continental Army. the water teemed with seafood. Farmers This is just one of many instances of in , Delaware, and western how Baltimore’s economic life has been were nearby as well. The ’s harbor, shown shaped by armed conflict. More impor- Finally, Baltimore was on the “fall here in 1910, stretches back to colonial days. tantly, it illustrates how the city’s water- line,” a geological transition between front and location the hard rock of the Piedmont and the have been central softer soil of the Coastal Plains. When to its growth and the Patapsco or any river or stream prosperity — a fact flows over this ridge, it creates falls and that continues to rapids that impede water travel. As a this day. result, Baltimore’s harbor was a good The city was place to offload goods from ships and founded as Balti- transport them inland using other more Town in 1729. means of transportation. Its 60 acres sur- All Baltimore needed were markets rounded one of the to serve. During the 17th and early 18th harbors formed by centuries, Maryland had no pressing need the , for a major trade center. “The initial which flows east- trade…was in tobacco, and it was con- ward into the trolled in London,” says John McCusker, Chesapeake Bay. professor of American history and eco- Towns emerged at nomics at Trinity University. Also, histo- other harbors as rians note that tobacco plantations well, including Jones mostly used their own docks or utilized Town in 1732 and ports that were close to the mouth of Fells Point in 1763. the Bay, such as Norfolk or St. Marys in (By 1773, the three southern Maryland. towns had merged Baltimore found its market niche to form the city of when tobacco prices collapsed and it Baltimore.) became more expensive to cultivate the VANE BROTHERS COMPANY

36 Region Focus • Spring 2003 golden leaf in the early 18th century. Tobacco farmers began seeking more profitable crops to grow. “They discov- ered that their land better produced grains than tobacco, and a market grew for the former,” says McCusker. “That gave rise to local merchants who organ- ized the grain trade and the exchange of other goods to farmers.” Demand for corn and wheat came AIRLAND-INDUSTRIAL PHOTO CO. from Europe and Caribbean nations where French, British, and Swedish plan- tations operated. “Sugar was such a prof- itable crop that it was economically disadvantageous for the plantations...to The Maryland Port Administration has geared the to serve certain grow their own food. They bought food niches in container transport, including automobiles. Today, the Port is the top East Coast from someplace else,” explains Matthew exporter of vehicles. Crenson, a political science professor at who has istance and wind currents became ment of a variety of support industries studied Baltimore’s social and economic irrelevant when the American in Baltimore. Shipbuilding at Fells progress for three decades. DRevolution erupted in 1775. While Point expanded, while ironworks Baltimore took advantage of the the British shut down the Bay’s outer ports cranked out fittings for ships and parts growing grain trade. Not only did it and occupied centers of commerce like for mills. offer access to local grain farmers, but , Baltimore managed to stay Additionally, goods started coming it had streams like and out of the clutches of the redcoats and from Caribbean plantations back to that flowed downhill into keep the goods flowing, partly by using Baltimore. They included sugar, coffee, the harbor. This provided plenty of homegrown, locally owned clipper ships. and a distinctive commodity called waterpower for grinding wheat and Food and supplies reached revolutionaries guano — dried bird and bat excrement corn into flour, which traveled better to the north and south of Baltimore, while that tobacco and cotton plantations than raw grains. flour and other goods continued into used as fertilizer. The need to store “Wheat came in wagons from Caribbean markets. these commodities spurred the con- western Maryland and Pennsylvania “The War of Independence...proved struction of more warehouses. into Baltimore where the mills ground to be a boon for Baltimore merchants, Baltimore was an established port it into flour,” describes Crenson. Other not only because rival ports were more town by the turn of the 19th century, accounts describe shipments of effectively blockaded by the British but often benefiting from turmoil abroad produce coming into Baltimore, pro- because Spanish ports in the according to historical geographer duced by farmers who were settling and Caribbean, normally closed to Ameri- Sherry Olson. “Of great importance to developing Maryland’s “backcountry” can shipping and flour, were opened for Baltimore were the perennial naval in the northern and western part of the the war’s duration,” wrote economist warfare between and France, state. Wharves, warehouses, and ship- Geoffrey Gilbert in a 1977 journal which drove up flour prices, and the yards arose along the waterfront of Bal- article. “In the post-war period, Balti- frequent changes in management in the timore Town and Fells Point to handle more’s flour trade to Europe and the sugar islands of the West Indies, major these commodities. West Indies showed rapid gains.” By importers of wheat,” Olson noted in Despite this growth, other colonial the 1790s, the city commanded 26 her 1997 book on the city’s history. ports matured faster than Baltimore did. percent of America’s flour exports to “Baltimore merchants profited from “You didn’t have to sail the whole way the West Indies, where the major ports the interruption of European shipping into the Chesapeake Bay like you do to of entry for the Caribbean were based. and exploited the ups and downs in the get to Baltimore,” notes John Kellett, As more flour moved out of Balti- price of flour.” director of the Baltimore Maritime more, more capital flowed into the city. Museum. The distance between Balti- “Much of the early commercial devel- ew York merchants viewed the more and the mouth of the Bay in opment [in Baltimore] was underwrit- progress of their Southern Norfolk is about 150 miles, “and back in ten by Philadelphia merchants,” says Ncompetitor with envy. Baltimore the days of sailing that was pretty long.” McCusker. Then Maryland business- had a strong grain trade with overseas Also, Kellett says the wind currents men jumped on the bandwagon. markets and was in a good position to could be “fluky,” adding days to a voyage. This capital financed the develop- increase its domestic trade because it was

Spring 2003 • Region Focus 37 Baltimore’s Waterfront Continues to Change

The was where Baltimore began to redevelop its waterfront in the 1970s and 1980s. Since then, developers have seen value 5 in the harbor views and unique structures of Canton, Fells Point, and other waterfront Inner Harbor 4 communities. Here is a sample of the many 9 7 6 industrial buildings that have found new life 8 Canton 10 or have been razed to make way for new Fells Point retail, office, and residential development. 12 11 3 Locust Point 1. Tide Point—Proctor & Gamble soap factory 1 turned into an office complex for technology and service firms 2. Phillips Foods Inc.—Coca-Cola plant 2 redeveloped into office and production space for the seafood manufacturer 6. Bond Street Wharf—Class-A office complex 10. The Anchorage —Luxury condominiums built 3. HarborView—Luxury condominiums and built on site of warehouse near waterfront for marina access apartment homes 7. Brown’s Wharf—Renovation of coffee 11. Canton Cove —Redevelopment of factory 4. Inner Harbor East—20-acre, mixed-use warehouse to house offices and specialty retail into luxury condominiums development includes two Marriott hotels, 8. Henderson’s Wharf—Renovation of tobacco 12. Lighthouse Point—Licorice factory renovated Sylvan Learning Centers headquarters, a luxury warehouse into a residential complex, inn, and into a 16-acre development with apartments, apartment building, and a planned entertain- marina retail and office space, and a marina ment complex 9. The Can Company—American Can Co. plant —CHARLES GERENA 5. Bagby Furniture Building—Conversion of converted into a retail and office center warehouse into Class-A office space

geographically closer to Ohio and other demand for grains and produce from pack seafood and produce for shipping, Midwestern markets than . In Chesapeake Bay farmers, which were while container manufacturers such as addition, the city stood to gain a major major users of Baltimore’s port. the American Can Co. were established transportation advantage from the After several failed attempts to build to support this activity. Bakeries opened National Road, a federal project begun in a canal system, a group of Baltimore to take advantage of the plentiful supply 1815 to link Cumberland in northwestern merchants and bankers formed a com- of flour. Coal could be delivered to Bal- Maryland to St. Louis. Maryland officials mittee to find a way for the city to boost timore cheaply, supporting the growth promised to link Baltimore to Cumberland its Midwest trade. They boldly deter- of industrial production. by expanding several state roads. mined that a railroad would be the best “Baltimore evolved from being the New York countered Baltimore’s geo- way to compete with the , link between the agrarian world and the graphic advantage by completing the since it would be faster and cheaper to markets of Europe, to being a manufac- Erie Canal between the Empire State maintain than the National Road. turing town,” notes Kellett of the Mar- and Lake Erie in 1825. The 360-mile The Baltimore and Ohio Railroad itime Museum. canal transported East Coast goods to was chartered in 1827 and took about Midwest customers more quickly than 30 years to finish, creating the country’s y 1860, Baltimore was the nation’s Baltimore could by using the National first public railroad that linked Balti- fourth-largest city and a commercial Road, which only reached Wheeling, more to St. Louis. Others developed Bhub for the South. But the city W. Va., at the time. That meant ship- rail links to Baltimore, including the would soon taste the bitter side of war. ments from Baltimore had to be off- state’s and A month after a mob attacked a loaded onto ships to finish their journey countless small enterprises. Massachusetts regiment headed to on the . Even when the Although the railroads ultimately Wa shington, D.C., to protect it from National Road was finished in 1833, the brought more competition for Chesa- invasion, federal troops entered Balti- older portion was in poor condition. peake farmers, it enabled Baltimore to more in 1861 and declared . The Erie Canal threatened Balti- reap the benefits of its port and location Their occupation persisted until the end more’s dominance in another way. It throughout the 19th century. Ware- of the Civil War four years later. enabled Midwest agricultural goods to houses in Canton, Fells Point, and other The war severely damaged Balti- reach East Coast markets. This eroded waterfront neighborhoods were built to more’s economy. “Suspension of com-

38 Region Focus • Spring 2003 munication with Southern customers, locate close to the source of production. brought retail projects and museums to and the liability of capture and repeated These operations gradually relocated the Inner Harbor, while commercial and interruptions in Western trade, almost from Baltimore, moving wherever truck- residential developers recognized the value paralyzed Baltimore’s commerce … and ing was available and other economic of other sites along Baltimore’s waterfront resulted in its diversion to other cities,” conditions were more favorable. in the 1990s (see sidebar on p. 38). wrote Pearle Blood in a 1937 journal The city began losing general cargo Today, the city’s water-based economy article. “South American imports, which traffic to New York after World War II, continues to evolve from shipping and had been carried chiefly in Baltimore- mainly because its port facilities weren’t factories to services and recreation. “The owned sailing vessels, were transferred up to date. “…The railroads were unwill- success of the Inner Harbor has begun to to foreign ships” to avoid plundering by ing to make room for the developing spread, particularly to the east towards Confederate troops. truck traffic that was changing the face Fells Point,” describes Walter Sondheim While Pittsburgh and other cities of American transportation,” noted Jr., a Baltimorean who has been involved farther away from the fighting developed Robert Keith in his 1982 chronicle of in waterfront redevelopment since 1970. their industrial muscle, Baltimore indus- Baltimore. Moreover, the thin peninsu- “The waterfront has become a center for try atrophied. Its only growth sectors las protruding into the harbor were great commercial activity, particularly for office were tied to the railroad or the port, for offloading cargo onto trains, but space and hotels.” both of which served as strategic transit created bottlenecks for trucks. Finally, However, Baltimore’s historic harbor lines for Union supplies and troops. “piers were reaching a state of decay, and may only be succeeding in refocusing Baltimore’s economy continued to the railroads were neither willing nor economic activity in the city. Develop- feel the effects of the Civil War long able to maintain them.” ment of a services sector along the water- after the conflict had ended. Plantations Government officials have tried to front “has created vacancies in the lost the economic efficiencies of slave adapt Baltimore’s waterfront to chang- financial district downtown,” admits labor, increasing the cost of farming and ing times. As ships grew larger to carry Sondheim. Some of this space is begin- reducing the flow of agricultural goods more cargo and accommodate vessel- ning to be redeveloped, however, bene- through the city. Worse, local investors sharing agreements among carriers, city fiting from downtown’s proximity to the were less willing to bet their capital on and federal funds were deployed several waterfront. Also, income levels are higher the city’s industrial sector, discouraged times to deepen and widen the port’s for residents who live by the water com- by the loss of the city’s comparative harbors and channels. The state’s Mary- pared to other neighborhoods. advantage in manufacturing. land Port Administration (MPA) took Sondheim argues that there are ways “Firms in Baltimore couldn’t raise over operation of most of Baltimore’s to spread around that growth. “Some of money through the sale of stock [so] maritime facilities in 1956 to make the tax revenues produced by the Inner they had smaller work forces,” describes much-needed improvements. Three Harbor finds its way into neighborhood Johns Hopkins’ Crenson. “The per- years later, the MPA started building development,” he notes. As new water- worker investment in machinery was Dundalk Marine Terminal on the south- front development increases the prop- lower than it was in other cities, which ern edge of the city’s waterfront to erty tax base and attracts tourism indicated that Baltimore wasn’t keeping accommodate truck-borne cargoes. dollars, the economic role of Baltimore’s up technologically. The result was that Across from Dundalk, it devoted $30 harbor will continue to evolve. RF Baltimore industry didn’t grow as million to upgrade the railroad piers in rapidly as it did elsewhere in the post- Locust Point in 1964. Civil War period.” In subsequent years, the MPA geared the Port of Baltimore to serve certain R EADINGS altimore entered a prolonged niches in container transport, including Blood, Pearle. “Factors in the Economic Devel- period of redeveloping the value of forest products and rolling cargo such as opment of Baltimore, Maryland.” Economic Bits water access and geography that automobiles and farm equipment. Balti- Geography, April 1937, vol. 13, no. 2, pp. 187-208. lasted throughout the 20th century. more has become the top East Coast Gilbert, Geoffrey N. “Baltimore’s Flour Trade to Broader changes in the transporta- exporter of vehicles and third in the the Caribbean, 1750-1815.” Journal of Economic tion industry added to the challenge. nation for total car trade. In the past 10 History, March 1977, vol. 37, no. 1, pp. 249-251. The construction of the interstate years, more than 3.5 million vehicles have Keith, Robert C. Baltimore Harbor: A Picture History. highway system provided a better way rolled through Baltimore. Baltimore: Ocean World Publishing Co., 1982. of moving goods and people than the Meanwhile, port activity gradually Olson, Sherry H. Baltimore: The Building of an railroad, undermining the advantages migrated from the shallower Inner Harbor American City. Baltimore: Johns Hopkins University that Baltimore’s rail links had once to Canton and points farther south where Press, 1997 (revised edition). afforded. The development of refriger- the water is deeper, leaving behind empty Visit www.rich.frb.org/pubs/regionfocus for ated trucks meant that warehouses and warehouses and industrial sites. Urban links to relevant Web sites. packaging facilities no longer had to renewal efforts in the 1970s and 1980s

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