Manhattan Archive

Much of New York’s early economic competition was with the city of Philadelphia. Nevertheless, New York overtook Philadelphia as the U.S.’s leading commercial center by the end of the 18th century, and by the time the Erie Canal (1825) and the Black Ball Lines (1818) were constructed its dominance was undeniable. New York established the New York Stock and Exchange Board in 1817, which later became the NYSE. Moreover, around this time ocean shipping systems were changing to a hub-and-spoke system – in other words, shipping systems were looking to operate out of one hub and radiate out towards other locations. New York’s geography and location made it an ideal hub for ocean transport. Additionally, New York’s rise as a commercial and financial center was bolstered by its position as a hub for immigration – the constant influx of new potential laborers enriched Manhattan greatly.

By the 1850’s, American coal production had more than doubled, railroad mileage had almost tripled, and pig-iron shipments had expanded by a factor of thirteen – and New York was spearheading all of this. New York saw a 139% increase in cotton, wheat, and corn exports and a 97% increase in textiles and iron goods imports. By 1960, two-thirds of all imports and one-third of all exports in the U.S. went through New York. Such booming trade in turn supported the growth of factories and manufacturing, which grew by 60% in the 1850s alone and made New York the most important center of manufacturing in the New World. In this era, New York also became a center for information and transportation. As New York grew in grade, it also grew in its central importance for banking and capitalists began to dominate.

Capitalists, despite making up a very small percentage of the population – only 1.4% in 1856 – owned a disproportionately large amount of the wealth that the city was accumulating. By mid-century, these capitalists owned about 71% of the city’s real and personal wealth, an astounding number especially given that 84% of the city’s economically active citizens at the time had no meaningful wealth at all.

Bankers in New York faced some frustration in this time. Although New York was the main source of Federal Customs receipts, these were not deposited in New York Banks but rather at the Second Bank. Nevertheless, as a result of political pressure, Second Bank failed to renew its charter in 1836, which essentially locked in New York’s position as the center of American finance. This position was later strengthened by the National Banking Acts of 1863 and 1864, which decreed that all national banks must keep 15% of their money in New York. This put New York at the top of the hierarchical banking structure.

Manhattan also has a long history of labor organizing and activism, without which the landscape of the city’s economy would be dramatically different. In 1930, a demonstration of around 35,000 people protesting the Great Depression resulted in a number of deaths and hundreds of injuries when police responded violently. In 1882, New York hosted its first labor day parade near Union Square. The Knights of Labor led 25,000 people on a march demanding an 8-hour work day and a ban on child labor. In 1901, the aftermath of the Triangle Shirtwaist factory fire led to waves of activism that resulted in an overhaul of fire and safety codes, in addition to modifications for working hours for women and children. The Brotherhood of Sleeping Car Porters was the first African American labor organization recognized by the American Federation of Labor.

Through the 20th and early 21st centuries, Manhattan’s population continued to grow due to industrialization and immigration. In 1900, the population exceeded 1.5 million. The textile industry continued to boom, in addition to the growth of chemicals and machinery production. As the financial sector continued to grow as well and the city’s importance continued to blossom, commercial and retail expansion also saw the growth of cultural institutions such as Broadway, museums, and theaters. After World War II, however, Manhattan saw a clear shift away from manufacturing and a movement towards service-based industries. Finance continued to grow, alongside the real estate and technology sectors. The 1970s fiscal crisis led to significant financial challenges, which were reflected in 1980s unemployment rates – Manhattan was at approximately 10%, compared to the nation’s 7.5%.

The early 21st century saw some significant investment in real estate and infrastructure – most notably the redevelopment of Times Square from 2012-2016. Technology and media sectors continue to grow. In recent years, despite Manhattan’s continued dominance in multiple areas of industry, concerns have been raised around New York’s growing dependence on Wall Street and the finance sectors. Despite finance holding great power to lift the city out of great slumps, especially through the 20th century, there are now concerns that the city as a whole is overly dependent on that one sector. Moreover, the wealth gap continues to grow, with high costs of living and high income inequality. In 2020, the poverty rate in Manhattan was 20%, compared to the national average of 11.4%. Efforts towards sustainable development and addressing inequality are desperately needed.

[1] https://www.investopedia.com/articles/investing/022516/how-new-york-became-center-american-finance.asp
[2] https://www.hks.harvard.edu/sites/default/files/centers/taubman/files/Glaeser_05_Colossus.pdf
[3] https://hbswk.hbs.edu/archive/money-power-and-the-rise-of-nyc
[4] https://www.occ.gov/about/who-we-are/history/1863-1865/index-occ-history-1863-1865.html
[5] https://www.neh.gov/humanities/2008/januaryfebruary/feature/king-andrew-and-the-bank
[6] https://www.loc.gov/collections/united-states-statutes-at-large/about-this-collection/
[7] https://www.thenation.com/article/archive/capital-of-the-world/
[8] https://www.citylandnyc.org/cityland-recognizes-new-york-citys-labor-history/
[9] https://www.jstor.org/stable/40721931
[10] https://wp.nyu.edu/mappingnyclaborhistory/new-york-city-labor-history-map-background/
[11] https://exhibits.library.cornell.edu/union-made/feature/a-timeline-of-action-and-organization-1900-1995
[12] https://guides.library.cornell.edu/KheelDigitalCollections/TextileUnionCollections
[13] https://www.6sqft.com/in-1882-labor-day-originated-with-a-parade-held-in-nyc/