Seattle: Booms and Busts

History of Seattle - Emmett Shear - Yale University

Climate and Geography
The Emerald City is located along the Puget Sound, in between two large mountain ranges, the Olympics and the Cascades. The climate is mild, with the temperature moderated by the sea and protected from winds and storms by the mountains. The area is hilly, though it flattens out as one moves out from the center of the city. The rain the city is famous for is actually unremarkable; at 35 inches of precipitation a year, it’s less than most major eastern seaboard cities.

What makes it seem so wet in Seattle is the cloudiness, which besides the summer lasts most of the year, and that most that precipitation falls as light rain, not snow or heavy storms. There are two large lakes, Lake Washington and Lake Union, and many smaller ones. The rivers, forests, lakes, and fields were once rich enough to support one of the worlds few sedentary hunter-gatherer societies. Opportunities for sailing, skiing, bicycling, camping, and hiking are close by and accessible almost all of the year.

Traveling through Seattle, it’s hard to find an area that has nothing to recommend it. At the top of every hill there is a view of a lake or the ocean, and at the bottom of every hill is a shore. There is no definable nice part of town; though there are certainly relatively wealthy neighborhoods, they are small and interspersed with less well off ones. Though there are poor neighborhoods, there are few slums. The predominate building material is wood, and has been since Native Americans lived in long houses.

Cycles of Seattle


Seattle has had two essential types of periods throughout its history: booms as a company town, followed by quiescence as the industry subsides and infrastructure is rebuilt. Seattle has been successful when the period as a company town has been weakest and when the quiet period has seen thoughtful investment for the future. Seattle has almost been sent into permanent decline by its worst periods as a company town. There have been four such cycles: Lumber industry followed by an Olmstead built park system, Ship building followed by the unused Bogues Plan, Boeing followed by infrastructure building, and most recently a boom with Microsoft and other software companies, which Seattle is just leaving now.

Early History: 1850-1900
Seattle’s history starts with Arthur Denny, the entrepreneur who with a few other characters would come to define the nature of Seattle until they passed away around the turn of the century. Arthur Denny came west seeking his fortune, and he wasn’t going to let anything or anyone get in his way. When he first arrived in Washington, he found that the spot he felt was the best land to start a city, Alki Point, on was already staked out by another group of enterprising entrepreneurs, led by Charlie Terry. Arthur stayed at Alki for about a year, while he looked to find somewhere else to settle. The industry that they ran at Alki was a timber industry, for rebuilding San Francisco which kept burning down every year or so. After about a year, Arthur wound up in the second best spot on the sound, Seattle, where there would be plenty of trees to build San Francisco and plenty of hills to slide them down to the water with.

At first, Alki was larger than Seattle. “It was platted into six blocks of eight lots…and most of them had buildings on them that were in use. There weren’t eight level, usable blocks in all of Seattle.” But when Henry Yesler brought his steam sawmill to Washington, the mill that would let whichever town got it dominate the lumber industry, he brought it to Seattle. He brought it there because there was a critical flaw with Alki as a port: “During the winter, the north wind, building up the tides in front of it, comes sweeping down the Sound out of Canada, piling might waves on Alki Point. Beginning with Terry…nobody has been able to build anything out in the water at Alki that will withstand those waves.” Terry sold out Alki, Yesler put his mill in Seattle, and that was the end of Alki and the beginning of Seattle’s dominance of the Pacific Northwest.

After Terry sold out in Alki, he immediately moved in on Seattle and began acquiring land. He either owned or partially owned the first ships that moved the lumber and allowed Seattle’s main industry to exist. He gave a land grant for the University of Washington that today supplies more than $1 million a year. He worked in politics to establish street grades, a water system, and a host of other services (that incidentally benefited him as one of the city’s largest landholders).

Henry Yesler brought with him “financial backing from a Massillon capitalist, John E. McLain, to start a steam sawmill once he had isolated the perfect location for such a structure.” Yesler settled on Seattle because it had a good port, plenty of accessible timber, and there was plenty of available land for a growing city. Via the bargaining power of his mill, he wrangled about 20,220 square feet of prime land from some of the original settlers. Then he built the mill and made Seattle the premier city of the northwest. But what really made Yesler rich was his cookhouse. “It did more to ‘set’ the heart of the city in the middle of Yesler’s property holdings than anything else Henry did. Henry never did make a lot of money out o his mill. It was the strategic location of his land that made him a millionaire.” Incidentally, Henry Yesler was a very good developer, at least when it came to making money; he borrowed $30,000 at 8% interest to build the mill, and only repaid McLain after he took Yesler to court three times.

Arthur Denny had not been quiescent this whole time either. He was the second richest man in town, after Yesler, and got himself elected to territorial legislature. From that position, he attempted to get the state capital moved to Seattle from its then temporary location in Olympia. The other potential federal money prizes were the state penitentiary or the University of Washington. When the politics all played out, Vancouver wound up with the capital, Port Townsend with the penitentiary, and Seattle with the University. The legislature had tacked on the requirement that a grant of 10 acres of land would be required for the university to be built, which they thought would be sufficient to prevent its construction. However, Denny wanted his town to grow and donated the land, creating what would be “one of the biggest and most effective central core properties in the United States.” The University of Washington was built, although there were only barely enough students to run it as a high school, let alone as a university.

The population relative to the largest competing city, Tacoma, clearly shows the nature of Seattle’s growth. Though both Seattle and Tacoma grew at a rapid rate from 1880 to 1890, Seattle’s growth continued for another two decades while Tacoma’s dropped to almost zero. The reason for this lies in Tacoma’s nature as a company town and Seattle’s successful avoidance of that condition.

Both Seattle and Tacoma were essentially lumber towns, built on the resulting export income. All over the Puget Sound there are communities with the same assets Seattle started with, lumber and a port. However, Seattle’s early lead with Yesler’s mill meant that its economy was based on manufacturing as well as lumber, and was thus far more diversified than Tacoma’s. Though Tacoma got the Northern Pacific Railroad terminus, the terminus only increased the lumber trade instead of diversifying the economy. Seattle built it’s own railroad to Walla Walla which would come to reinforce Seattle’s place as a hub for the region. While both Seattle and Tacoma experienced huge booms from 1880 to 1890 based on the strength of their timber industries, only Seattle could continue growing as an exporter of services and manufacturing into the 1900s.

Leader of the Northwest: 1900 – 1915
When the gold rush of 1897 happened, Seattle was well positioned to take advantage of it. As the largest city and port in the area, it was natural that prospectors would head to Seattle to get outfitted. The downtown of Seattle was bustling with activity; as quickly as previous inhabitants moved out to newly created neighborhoods, new immigrants came in to take their place in the city core. The first influxes of immigrants after the Chinese who built the railroads began to enter: Japanese, Filipinos, and Jews, as well as more whites from back east.

Most of Seattle’s neighborhoods got their start around this time. “The most densely populated neighborhoods were on either side, to the north or the south, because it was easier to build parallel to the water, on grades less steep than those facing any development to the east.” However, the new rich soon developed the land on First Hill that overlooks downtown “because it was close to downtown without being a part of it, and because it occupied a commanding position.” Downtown, the easily developed properties along the water, and First Hill formed the nucleus for the city.

After the obvious geographical expansion from downtown, “all the other neighborhoods coming into existence…were the result of streetcar lines moving north and east from downtown and providing opportunities for settling that were obviously attractive to all but the poorest.” Several lines, running to most of central Seattle’s modern neighborhoods, created the communities of Capital Hill, Queen Anne, Madrona Beach, Madison Park, and Leschi. All of the expansion was happening without zoning, leading to “different land uses and economic classes everywhere [being] mixed.”

At the same time as the city was expanding dramatically, the city planners put began to put in parks. “Four million dollars worth of bonds were sold between 1905 and 1912 to develop the parks and build the boulevards designed by the Olmsteads to connect them.” Almost all of Seattle’s current parks were constructed during this period: Woodland Park (now the zoo), Volunteer Park, Green Lake, Washington Park (now the University of Washington Arboretum), Ravenna Park, Leschi Park, Baily Peninsula (now Seward Park). The Olmstead plan for boulevards was carried out in full, excepting a few minor pieces that were built in some substitute form or another. The form of the plan was “a winding parkway of about twenty miles which would link most of the existing and planned parks and greenbelts within the city limits”.

There was and still is no main park or particular area of Seattle that stands out above the rest. The whole of the city is filled with small parks, hills, and lakes, and this makes Seattle a very pleasant place to live in and visit.

World War One and the Bogue Plan: 1914 - 1920
In 1910, Seattle voters approved a referendum to create a plan for developing the whole city. The result was the Bogue plan. Virgil Bogue had worked for Olmstead, and was intimately familiar with the land in Seattle. The Bogue plan had at its heart a grand civil center, connected to the rest of the city by a rapid transit rail system, with a huge expansion of the park system crowned by the total conversion of 4000 acre Mercer Island into parkland. Striking in Bogue’s plan is his grasp of the consequences of growth; he foresaw that the city’s residents would eventually number in the millions and that such a grand park or efficient transit system could emplaced early in the development at much lower cost.

Unfortunately, the nature of politics of the time had the conservatives in the majority, and the money to fund this grand scheme was never appropriated. The Bogue plan sat on the shelf, never to be used. Ultimately a large number of the sites proposed for parks were developed as such, either by the public sector or the private as golf courses and such. The rail system was never emplaced, and Mercer Island is now full of pricey houses.

At the same time the government stopped investing for the future, private enterprise also began to stiffen. The war hid this, because it “boomed and expanded Seattle’s economy phenomenally, but in false ways.” The growth in GDP was unmatched, nearly increasing tenfold. However, it was almost all in wartime shipbuilding and lumber, and there was very little growth in “new industries”, the ones that were previously unestablished.

The Wait from Boats to Airplanes: 1919 - 1939
When the war ended, so did Seattle’s prosperity. Economic output crashed as the government stopped buying boats, and there were no new industries to pick up the slack. Seattle stopped being a place of explosive growth and opportunity. Of course, this was during the great depression, so times were rough all over the country, but Seattle was hit particularly hard because the manufacturing value-added industries had been crowded out by the war.

The Seattle between the wars was probably a pretty nice place to live, especially to grow up in. The city was still full of single-family wood houses and parks from the Olmstead development, but because of the crash they were affordable – at least to those who still had jobs. “[Seattle between the wars] is what suburbs try to be, but never achieve because they cannot stand things so jammed together, all for a family whose income could be well under two thousand dollars a year.” Seattle settled down into a kind of stasis between the wars, as growth subsided while those who lived in the city stayed.

WWII and the Boeing Era: 1945 - 1971
Growing out of the fortune of William Boeing’s boat company, the airplane company was the outgrowth of his fascination with airplanes and flying. In 1917, before WWI, Boeing employed only 28 people. But when the orders started coming in for WWI, Boeing grew to “an enterprising firm with the one customer airplane builders had in those days, the federal government. Employing about four thousand people, with sales just under ten million dollars a year, it was a good if unspectacular business for Seattle.”.

Though the company struggled throughout the period between the wars, and “began to build dressers, counters and furniture for a corset company and a confectioner's shop, as well as flat-bottomed boats called sea sleds”, when WWII started, the government suddenly desired tens of thousands of planes a year, and Boeing was in a place to provide them. Working under fixed-fee contract, Boeing churned out airplanes and became by far the largest employer in Seattle. ibid. 182

Unfortunately, Boeing did not spawn spin-off industries; only 5% of the subcontracted work was in the Puget Sound. Boeing was by intention a place where engineers designed the planes and line workers assembled parts that were imported from all over the world. Ostensibly, this would reduce the dependency of Seattle’s economy on the fortunes of the airline business. The problem was that Seattle was still dependent on the airline business, without enjoying any of the spin-off industries that might have diversified the economy. When the war ended, “The military canceled its bomber orders; Boeing factories shut down and 70,000 people lost their jobs.” So during this whole period, there was not much new development in the city. While the war was on, almost all production went towards producing either Boeing factories or Boeing planes. After the war, the crash ensured that no one would have the money for much new development.

This period of stasis soon ended with the rise of the jet airplane and Boeing’s reincarnation as the world's leading producer of commercial passenger planes. With the 707-120, Seattle became Boeing’s company town; “in 1947 Boeing employed about one out of every five of King County’s manufacturing workers, in 1957 about every other one.” As Boeing boomed, so did Seattle. During the war, from 1940 to 1950, the population increased 99,289 or 27% from 368,302 to 467,591. From 1950 to 1960, the population increased 89,496 or 20% to 557,087. All of those people had to live somewhere, and the fifties saw a huge boom in housing development. Population density all over Seattle exploded as people filled the boundaries of settlement in the city and began to move north. Most of the development was in single-family houses, since land was plentiful.

At the same time, the freeways were being built to compensate for all this new growth. The communities of “Mercer Island, Bryn Mawr, Newport, Bellevue, Clyde Hill, Hunt’s Point, Medina, Juanita, Kenmore, Lake Forest Park, Lake Hills” had all come into being during the Boeing boom. I-5 cut the city in half on a north-south axis, while I-90 crossed east-west. I-5 in Seattle went straight through the downtown, neatly cutting it off from the rest of the city. I-90 is less disruptive, since it tends to skirt the water and avoid slicing the city into a north half and south half. The Freeway park over I-5 was eventually built in 1976, which to some degree bridged the gap between the east and west sides, but generally did not have enough people on it to really do much good.<

With all this postwar growth, there was growing pollution of the lakes and rivers that made Seattle the beautiful place it is. Also, despite the freeways the sprawl constantly demanded more roads, since the ones already built had terrible traffic. A group of Seattle natives, anxious to preserve the city they grew up in, got a committee called the Metropolitan Problems Committee, or Metro, created to manage and plan the metropolitan area. The driving force behind this movement was a man named Jim Ellis, who headed the committee after repeatedly bringing the issue to the voters and city governments. The logic was that a regional transit system would require a regional political body; the same held for regional sewage and pollution control or planning. Unfortunately for Seattle, Ellis was defeated in a vote by suburbanites whose train of logic was, essentially: there are no problems with pollution or transit or sprawl, regional planning won’t solve the problems anyway, and if Seattle would just build a few more bridges the traffic would get better.

Metro came back, after it was scaled back in size and reduced its plans to only a sewage treatment and transport organization, and prevailed with an overwhelming majority in Seattle and a decent showing in the suburbs. Metro never did manage to get authority for planning, and to this day there is no body responsible for planning the Seattle metropolitan area, or its transportation systems, despite repeated attempts by Jim Ellis and plenty of money that was used to build stadiums and a host of other public works. Even with an entrepreneur, time, a market, locations clearly suited for action, financing from the municipal governments, and fairly good designs for the public work, if no one wants to practice city planning then it will by definition be unsuccessful. There is never a positive widespread sustained reaction to nothing.

During this period, Seattle’s downtown was in decline along with many other downtowns across the nation, and for much the same reason: people shopped in the suburbs, not in the city. The market for goods in the city center was drying up. Seattle’s solution was to host the 1962 World’s Fair. The area directly north of downtown was slumping very badly, and the city owned a lot of property there. The fair, given a futuristic science theme, was based around a city center, what is now called the Seattle Center. The United States Science Pavilion (now the Science Center) was one of the central attractions. Boeing performed one of the only pieces of public action it has in Seattle history, as they “created and installed in the United States Science Pavilion a space age Spacearium, a permanent addition to the center and one of the most attractive features of the fair.”

A monorail was also constructed, running from the center of downtown to the fair, a distance of 0.9 miles; it was constructed at no cost to the city and was paid for out of ticket sales, and then turned over to the city for $600,000. It is currently the only monorail in the United States to turn a profit. It is now used almost exclusively as a tourist attraction, as the distance covered is too small to be of much practical use unless you are living in a hotel downtown and visiting the Seattle Center. The World’s Fair also granted Seattle its trademark landmark, The Space Needle, also a continuing tourist attraction. Seattle also received the Opera House, the Coliseum, a refurbished Arena, and a great location for future carnivals and fairs. Today the Seattle Center is host to Bumbershoot, a music festival jam-packed with people every weekend before Labor Day, and Folklife, a folk music festival that somehow manages to stay in the black. The Science Center to this day draws crowds, along with an amusement park that operates all summer. The world’s fair reenergized the downtown of Seattle, and was generally a smashing success, even finishing with a profit.

After the war, the University of Washington also took a step forward, finally fulfilling the promise of its name after about half a century from its founding. Charles Odegaard was the president of the University, and used the office to press for the creation of community colleges and other four-year colleges in Washington, so that the University of Washington could concentrate on research. By the time Odegaard retired, the UW was second only to MIT in the size of its federal grants, and the number of students attending had swelled. Because the University of Washington campus is open, its impact on the University District as well as the rest of the city was quite significant; “In remaining a largely commuter school, the university has diminished its ability to withdraw as a community in itself and has maintained thereby its ability to the larger and more amorphous community.” In short, after the war, Boeing was hiring, the economy was booming, and while there had been no successful regional planning Seattle was doing quite well for itself, at least internally. In 1970, this all changed.

The Quiet Years: 1970 - 1985
Due to changing external demand, “the Boeing workforce was cut from 80,400 to 37,200 between early 1970 and October 1971” Once again, Seattle was in good company for its recession, since the rest of the country was also experiencing the oil shocks. However, Seattle was hit perhaps harder than most cities due to its over reliance on Boeing as an employer – it had the worst post-Great-Depression unemployment for any major city ever at nearly 12%. As with most periods of downturn, there was not a huge amount of private investment and construction during the 1970s in Seattle. However, there despite the crushing unemployment there was no massive outflux of people; it was “never more than 15% of those laid off.”

Because of this, Seattle did not wind up like Detroit, a ghost of its former self, unable to resume growth and prosperity. In a capitalist state, where there is a surplus of relatively educated unemployed workers along with easy access to a port, jobs will come. Seattle industry did slightly better than the national average during the rest of the 1970s, but nonetheless the boom decades of the 1950s and 1960s were brought to a decisive end.

The Pike Place Market, arguably Seattle’s most important tourist attraction and a very nice market in its own right, was created in its modern form during the aftermath of the Boeing crash. The market had been founded in 1907 with good success, but like most public markets in America had suffered a decline as corporations took over food distribution. The deportation of the Japanese from Seattle during WWII hit the market particularly hard, since 80% of its “wet stall” vendors had been Japanese. The city council wanted to make a “Pike Place Plaza” by demolishing the mostly derelict market and replacing it with “a new hotel, a 32-story apartment building, four 28-story office buildings, a hockey arena, and a 4,000-car parking garage.” A “Keep the Market” initiative was passed in 1971, pushing for adaptive reuse. A promotional committee was created, historical district status attained, and vendors convinced to move in and sell wares. The project was wildly successful, and today the Pike Place Market pulls nine million visitors each year.

A similar story occurred with Pioneer Square. An old, old neighborhood, it had fallen into derelict status after the war. However, with a reenergized downtown, businesses started to look for buildings that could be acquired cheaply. When two offices moved into renovated buildings, suddenly there was a market for facilities to service them, leading to a “flood of other restaurants, galleries, boutiques.” Seattle was definitely recovering from the blow dealt by the Boeing recession, refilling in areas that had threatened to become slums.

Microsoft and the World-Class City: 1985-2002
Bill Gates and Paul Allen, founders of Microsoft, Inc., attended Lakeside, a private middle and high school, on the northern border of Seattle. This turned out to have rather fortunate consequences for the entire Seattle area. Microsoft’s first product, BASIC, came out in 1976. It was incorporated in New Mexico the same year. By 1978 sales exceeded one million dollars a year. In 1979, Microsoft moved its offices back to Bellevue from Albuquerque – apparently, it was easier to entice quality programmers to the Seattle area than the deserts of New Mexico. By 1985, sales were over $140 million. By 1990, $1.18 billion. By 1995 it was the world's most profitable corporation. Microsoft has grown from a two-man operation with Bill Gates and Paul Allen to an 11,000 in 1992 to 48,030 in 2001. And Microsoft employees are not just any employees – they tend to be millionaires on a quite disproportionate basis.

Microsoft has also spawned a whole host of other related software companies in the Seattle area: RealNetworks, Itron, Attachmate Corp, Infospace, and a whole host of smaller companies. Quite unlike the Boeing boom which tied Seattle’s fortunes to one company, Microsoft has served as a catalyst for the creation of a whole realm of industry. It has also taken a much more active hand in public works in the area, donating software to many schools (including the University of Washington). Seattle has also been experiencing quite good growth in the biotech and coffee sectors.

Paul Allen, whose fortune was made through Microsoft though he has long since ceased to be an active participant in it, has been a major force in Seattle politics, for better or for worse. He attempted to pass an initiative to build The Commons, a huge park winding through the city and over the freeway, and even put up some of his own money, but it failed to pass. He did get a football stadium built by the same technique. He also has built the Experience Music Project, a Jimmy [sic - JM] Hendrix Rock n’ Roll museum, right outside the grounds of the Seattle Center.

The other piece of urban design that stands is the Washington State Convention and Trade Center completed 1988, which stands over the freeway, connecting First Hill and Capital Hill to downtown. Not only has the convention center also helped fuel further downtown growth, but it has finally successfully reconnected both sides of the freeway by hiding the effects of the highway. Along with the Microsoft boom, the downtown has been doing very well; prices for office space have increased from mediocre in the seventies to “Number four or five on the national hit parade [of real estate prices], and climbing”

The Seattle of today is really not so different from the Seattle of the 1960s. It is still filled with single family households, still mostly white with as many Asians as blacks, still liberal, still with about half a million people, still almost entirely without a centralized method of planning. The suburbs have grown, but they are also in essentially the same state as before, if a little more independent. Seattle’s economy is more vibrant now, with Microsoft, and richer, but the largest employer is still Boeing. The Commons was defeated, just as Jim Ellis was in the sixties. There’s still terrible traffic on the freeways. It’s still a beautiful place to live. We’re even facing the same downturn faced at the end of the 60s, albeit reduced, as many software and biotech companies crash and burn in the recent slowdown.

There is hope that, in the future, some sort of regional planning may actually proceed. Sound Transit has money for a light-rail system; a bond issue was finally passed after three tries in referendum for a monorail system to link the parts of the city together. Seattle will survive, and most probably even prosper, without any sort of central planning at all – it has for the past 150 years. But as more and more land is swallowed by the sprawl of the suburbs, and more and more rivers and aquifers are tapped for the water needed for all those lawns, and the solution to traffic is that we build more and more roads, the Seattle of tomorrow will be a city with a lot more gray and a lot less green.