PENNSYLVANIA

In Charles Andrews' The Colonial Period of American History, Pennsylvania's founder, William Penn (1644–1718), is quoted as saying, "I abhor contention, niceties, doubtful disputation, divisions, etc., and am for patience, forbearance, long suffering and all true moderation." While Pennsylvania did not fulfill all of William Penn's high ideals as a "holy experiment" in tolerance and diversity, it certainly developed in very diverse ways. Its urban areas soon became some of the most influential in the nation, while its rural areas and vast forests remained unspoiled. Its unmatched transportation network and abundant natural resources helped the state to become an industrial powerhouse in the late nineteenth century. Nonetheless, Pennsylvania retained its agricultural base. It weathered declines in manufacturing after World War II (1939–1945) but managed to retain much of its economic health in the 1990s by diversifying its economic base.

In 1614 Cornelis Jacobssen, sailing for the Dutch fur trade, was probably the first European to reach Pennsylvania. Swedes also settled there, surrendering to the English in 1664. The colony was granted by King Charles II in 1681 as a proprietorship to William Penn.

Penn, a Quaker who espoused pacifism, tolerance, and equality, was given broad powers to make laws and run the colony as he saw fit. Penn however gave up his lawmaking powers and set up a form of representative government. Many immigrants came to this tolerant colony. The Declaration of Independence was declared from Philadelphia, the state house in 1776, and the new Congress continued to meet there. Philadelphia would serve as the U.S. capital following the American Revolution (1775–1783) until 1783, and again from 1790 to 1800. Pennsylvania was the second state to join the Union, in 1780.

Pennsylvania's destiny as an industrial powerhouse was sealed when iron was discovered there. The first iron furnace was built in 1792, and coal began to be exploited as an energy resource. The early nineteenth century also saw the completion of the Main Line of Public Works, a canal and railroad system, which connected Philadelphia with Pittsburgh. Another aid to economic development was the stock company, which Pennsylvania encouraged to promote local enterprise. Pennsylvania chartered the Insurance Company of North America (INA) and the Insurance Company of the State of Pennsylvania in 1794, both of which profited mostly from marine and fire casualty policies. The Philadelphia and Lancaster Turnpike was also chartered and was completed in 1794, cutting the cost of moving goods from Lancaster to Philadelphia by about two-thirds.

Meanwhile Philadelphia was becoming the commercial center of the state. According to historian Thomas C. Cochran, political and economic business could be conducted there very conveniently: "Such compactness, possible for a city of less than 75,000 people, meant that business could be conducted reasonably expeditiously without telephone, telegraph, or a clearing house for the four banks." By the time President Thomas Jefferson (1801–1809) declared an embargo on foreign imports in 1807, Pennsylvania's financial institutions and insurance companies were ready to meet the challenge, as were local industries, including Philadelphia's many shipbuilders.

By the early 1800s Philadelphia had become the nation's financial center. It was the home of the nation's first stock exchange (1790), the First Bank of the United States (1791), the Second Bank of the United States (1816), and a number of other financial institutions. Under its powerful director Nicholas Biddle (1786–1844), the Second Bank became the only important rival to New York's financial institutions. Philadelphia, however, lost its preeminence as a financial center when President Andrew Jackson (1829–1837) vetoed the Second Bank's re-charter in 1831.

In the mid-nineteenth century Pennsylvania continued to tap its abundant natural resources, creating a center for the iron industry and other manufacturers and developing a transportation network which was matched by no other state by 1840. Both Philadelphia and Pittsburgh became major commercial centers. Several more roads were built, and Pennsylvania also benefited from a section of the old National Road, which passed south of Pittsburgh. By the 1840s the improvements to canals and other waterways in the state also exceeded anything which had been done elsewhere.

It was in railroad building however, that Pennsylvania really excelled. By the 1850s lines connected Philadelphia with Germantown; Trenton, New Jersey; the Lehigh Valley; and New York City. In 1852 the Pennsylvania Central connected Philadelphia and Pittsburgh, solidifying these two cities as transportation meccas. In 1857 the powerful Pennsylvania Railroad purchased the State Works, virtually eliminating state competition and tolls. Following the American Civil War (1861–1865), the Pennsylvania Railroad dominated economic life in the state and held sway over most Republican Party politicians. By 1880 it was the world's largest corporation, with more than 30,000 employees and $400 million in capital.

For the next two decades Pennsylvania was the chief producer of coal, iron, and steel and a major supplier of petroleum and lumber. Immigrants from other states and from abroad came in droves to the coal regions and urban centers to find work in mines, mills, and factories.

No story of the development of Pennsylvania industries would be complete without mention of Andrew Carnegie (1835–1919). A Scottish immigrant, he worked various jobs before being employed by the Pennsylvania Railroad. There he advanced rapidly, laying the foundations for his future fortune by investing wisely. After serving in the Civil War, he formed a company that produced iron railroad bridges and then founded a steel mill. One of the first to use the Bessemer process, Carnegie succeeded quickly, buying up several other steel companies and soon controlling a quarter of the steel production in the United States. In 1901 he sold his Carnegie Steel Company to United States Steel Corporation for $250 million. After his retirement Carnegie was well-known for his philanthropy, endowing many educational and cultural institutions. He is best known to the general public for his gifts to nearly 1,700 public libraries across the nation and in Great Britain.

With Carnegie Steel, and with the financial expertise of banker Andrew Mellon (1855–1937), Pittsburgh retained its position as the preeminent industrial city in the region. The city and the state, however, were not without labor problems. Over a period of years many violent strikes occurred in both the coal and the steel industries. In 1892 a lockout at the Carnegie-owned Homestead Steel plant caused a bloody clash between workers and the Pinkerton guards hired to keep them out. Another strike in 1919, involving 50 percent of U.S. steelworkers, shut down the industry for more than three months.

During the 1920s Pennsylvania barely held its own economically, with a low growth rate and industrial products selling below normal levels. The Great Depression (1929–1939) brought even more economic grief to the state. Democratic Governor George H. Earle, breaking the longtime hold of the Republican party over the state, initiated a "Little New Deal," following the policies of President Franklin D. Roosevelt (1933–1945) in supporting labor and farmers, regulating utilities, and building public works. Industrial workers came out of this period with a renewed ability to challenge industry. During World War II (1939–1945) Pennsylvania returned to a high level of prosperity as it turned out large volumes of munitions, ships, steel, and other materials for the war effort.

Republican and Democratic governors following the war continued efforts to support and encourage industry in the state. Not until the governorship of William W. Scranton (1963–1967), however, did Pennsylvania return to full economic health. Through increased taxes for state services, more federal aid for economic programs, and steady increases in support for economic development, the state was able to bring its high unemployment rate to below the national average by 1966.

By the mid-1980s, Pennsylvania found itself in the throes of converting from an industrial to a service economy. Pittsburgh, long known for its iron and steel (not to mention its dirty air), became a prototype of a city which made the transition successfully, even converting the sites of its former steel plants and railroad yards to parkland, retail shopping, hotels, and other service-oriented industries. Areas such as Wilkes-Barre which remained depressed were helped in the late 1980s by Governor Robert Casey's attempts to assist ailing industries. In the 1990s steel had been replaced as a major industry by food processing and chemicals, particularly pharmaceuticals. Pittsburgh became a center for corporate headquarters, and Philadelphia, a Mecca for high-technology industries.

By 1996 Pennsylvania ranked eighteenth in per capita personal income in the nation. Nearly 27 percent of the state's workers belonged to labor unions, the sixth highest percentage in the United States. Though primarily known for its industries, Pennsylvania also remains an important agricultural state, producing large quantities of staple crops in addition to livestock. Another important economic sector is forestry. Pennsylvania's numerous historic sites and natural recreation areas have also made tourism the second-largest employer in the state.

PENNSYLVANIA

FURTHER READING