Rise of Birmingham: Railroads, City/Economic Base-Building, Southern Entrepreneurship and Hegemonic North

In this “Rise of Birmingham” module I delve into the role railroads played, as an industry sector, in developing the economic base of a developing urban area. Railroads are the Gilded/Redeemer Age’s driving industry sector. Think of it as internet technology today. Railroad is the cluster that beget other clusters–a function we attribute to what I call a “platform sector/technology”.

Like all “platform” technologies, a nexus of sectors and industries are created, spun off, and piggy-back alongside the driver technology. Platform technologies are themselves an infrastructure and require infrastructure. These platform technologies can form, shape/configure, or are instrumental to economic base and economic growth. They exhibit a profit life cycle as all sectors do, but like a reserve currency they often have extraordinary resilience, until they encounter a disruptive platform technology or a major change in environmental factors, war for instance.

Working with and dealing with Platform technologies are required of any economic developer–they are fundamental to MED, constant and fundamental triggers of change in the economic base. Platform technologies by definition yield externalities, inequalities, and disruption which can generate CD reaction. These Platform Technologies can affect, disrupt, bring down, and give rise to new S&L policy systems, which generate ED outputs. History is not determinative but it does, as they say, “rhyme”.

Carry-Forward from Previous Modules

The lesson to be taken from the Texas and Pacific Case Study module was that the federal government would not play the South’s industrial/railroad sugar-daddy. That meant the question turned as to whether the South could diversify into industrial-urban modernity on its own, paying  its own way and relying on southern leadership and entrepreneurial skills, OR would it need to copy northern experience by importing northern capital and expertise in southern ventures–potentially risking the North could wind up in effective control of the commanding heights of southern finance, railroads and heavy industry.

The New South contingent bet the store they could find a way to fuse the two alternatives, that they could somehow control the beast that fed them. The rise of Birmingham Alabama, from an largely unsettled, undeveloped, isolated highland geography to the “Magic City”, “Pittsburgh of the South” serves as an excellent case study as to how that New South strategy/hope actually worked out in real life. The Birmingham case study also provides an opportunity to bring in railroads, entrepreneurism, southern city/economic base-building and witness its struggle with the galloping expansion of our northern Big City industrial/finance hegemony.

In these early 1870’s the New South’s chief leader was Kentucky’s Watterson. Watterson was not just a newspaper editor as our contemporary textbooks describe him. He was a multi-state political force, and arguably one of the chief drivers of what was to become the Redeemer coalition that created the Democratic Party-led Solid South. Watterson as we have seen, was a major force in the Scott Plan and the Compromise of 1877, and indirectly, he set in motion several important players in the rise of Birmingham.

His determination that Kentucky, a highland, non-cotton border state essentially controlled by the Union for the entire Civil War (with few battles and no Reconstruction) could lead in the South’s drive to industrialize and recover. That demanded among other priorities a railroad system that connected Kentucky (and his home city of Louisville) with the rest of the South. So he “adopted” a less than twenty-year old state-chartered railroad (1850), the Louisville and Nashville (L&N) as his vehicle. L&N initially financed through local subscriptions ($3 million), was southern-led. That set up this extended case study.

Louisville and Nashville Railroad: a Cornerstone of the New South Industrialization

n the paragraphs that follow we can see three independent factors that fused over the next 30-40 years: a railroad, the development of an iron and steel economic base, and the building of a (complex of) cities, centered around what was to become “Birmingham, Alabama”. In the background was the dilemma outlined above: whether the South could industrialize and urbanize, using northern capital, but still able to preserve southern control of decision-making so that the benefits of industrialization in particular would flow to the South, not to northern coffers. Consciously or not, the hope was the Birmingham could develop into the Pittsburgh of the South.

The L&N was an 1850’s railroad startup that at the onset of the Civil War possessed a mere 250 miles of track that in 1859 linked Louisville with Nashville Tennessee. While subject to many raids and some destruction, the L&N came out of the war in fairly good shape–as Kentucky was in Union hands the L&N transported Union goods and war produce and got paid in Union dollars. Nashville fell to Union control by 1862. As the Union army drove South, so did the L&N, reaching Memphis in 1863

At War’s end the L&N had sufficient financial capacity to start an expansion program and it commenced purchase of a series of smaller railroads. L&N’s chief rival, the Alabama and Chattanooga Railroad was attempting to attract iron ore shipments  from Louisville to Chattanooga.  The two intersected in Jones Valley northern Alabama. Concentrating on Tennessee and adjoining Alabama, L&N, had taken advantage of Reconstruction policy systems, secured a great number of city and state bond issuance’s to finance much of this expansion.

As it turns out, most of these defaulted, and L&N should be considered as a major “bad guy” in the scandals and political turmoil that resulted. The two competing railroads had been profligate, between them they amassed over $17 million of Alabama state debt (of a total of $25 million). With the arrival of the Redeemers this debt was highly controversial and its legality was questioned. The two railroads turned on their powerful lobbying apparatus, and eventually secured the election of George Houston, a former railroad lawyer and a director on L&N’s board, as the first Redeemer governor. The settlement of the debt issue was favorable to the railroads [] Woodward, the Origins of the New South, pp. 9-10. Railroads and Redeemer politics often overlapped very conveniently.

But bad guy notwithstanding, by 1870 L&N extended deep into Alabama, running a line to Montgomery through the mostly undeveloped northern Alabama highland counties. In so doing, it stumbled onto a mineral-rich undeveloped natural resource horde in the Jones Valley from which the L&N sensed opportunity galore. Its Superintendent, Albert Fink “foreseeing immense potentialities of the undeveloped mineral resources of northern Alabama, began soon after the war to make large investments in that region [to subsidize] numerous developments and encouraging the building of new towns.

In 1870, financed by a Montgomery banker, L&N set up the Elyton Land Company whose ostensible purpose was to found and populate a city in Jones Valley Jefferson County. The site chosen was at the intersection of two railroads (L&N and hired as its President, James R. Powell, a former Yazoo plantation owner, just returned from living in Birmingham, England.

Powell bought 360 shares in the Corporation and started to immediately raise $200,000 capital, platted streets, hired an engineer and laid out streets, parks and squares, marketed and, established a water utility, sold lots, and by 1873 got himself elected as mayor. Did I mention he got the state legislature in December 1871 to charter a city named Birmingham. By 1876, L&N … owned about a half million acres of land in Central Alabama [] Woodward, the Origins of the New South, p. 8, pp. 126-7) (p. 126-7).

Transformation of L&N

L&N, never just another southern railroad, played an over-sized role in the New South Movement. Its pre-1868 President, James Guthrie (Scots-Irish Ascendancy) was a charismatic and powerful spokesperson for the South and a serious candidate for the 1860 Democratic presidency; he lost to Stephen Douglas. Guthrie, a plantation and slave owner, was opposed to succession. He supported McClellan in the 1864 election–i.e. he remained with the Union during the War. A U.S. Senator, Secretary of the Treasury under Buchanan and Pierce, and first President of the University of Louisville, Guthrie was a part-time President of L&N, and a major league player in southern politics.

L&N–a priority for Guthrie–borrowed from Guthrie’s charisma and leadership. Widely-reported and monitored, its post-Civil War expansion caught the eye of lots of southerners. Generally viewed as the quintessential southern railroad, an advocate for southern interests, and personification of the New South’s industrialization agenda, L&N became a key element in the emerging New South-Redeemer coalition. The physical expansion that began under Guthrie continued after his death in 1869

A new President, C.C. Baldwin, aggressively acquired/consolidated existing rail lines, transferring their debt to L&N. Three major consolidations (1872, Clarksville; Memphis and Ohio RR; Nashville, Chattanooga and St Louis, 1880), along with multiple other secondary expansions doubled L&N’s trackage from 921 miles in 1873 to 1840 in 1880 [] Russell Wigginton, Louisville and National Railroad, Tennessee Encyclopedia https://tennesseeencyclopedia.net/entries/louisville-and-nashville-railroad/  Louisville and National Railroad, . When L&N formally reenters the Birmingham case study it is not only the South’s railroad of affection, it is one of the largest, and a powerful player in many state Redeemer politics.

Expansion and associated railroad-related investments came at a considerable cost to L&N. Playing in Redeemer politics (Alabama Governor Houston, for example) and fostering city-building along its routes was also considerable. Debt levels required finding new investors, often involved seats on the board of directors. Throughout the 1870’s L&N added a number of new investors to its board; most were northern financiers and cumulatively sufficient to change the character of L&N’s decision-making. Although L&N retained the image and role as a leader in defending the downtrodden South, Woodward (and others) noted that during the decade ownership and control of L&N passed to northern and European lenders represented on its Board. By 1880 it’s Board included,Thomas Ryan, Jacob Schiff, August Belmont–and a name the reader will recognize, Jay Gould:

New investment by 1880 not only reduced “localized [i.e. southern] control, and most financial decisions came down from financiers in New York. This change to ‘big city’ control, questionable expansion decisions and perceived financial incompetence by company president C. C. Baldwin led to downward spiral in the company’s reputation … along with the overall decline in [stock] price … from $99 in 1881 to $31 in 1882” [] Woodward, the Origins of the New South, p. 7.

Its mid-1870’s financial nadir, simultaneous with Birmingham’s Eureka Experimental episode, prompted removal of Baldwin, and his replacement by a leader who in time acquired a statute almost equal to that of Guthrie, Milton Hannibal Smith–a southerner par excellence. Smith ran L&N until his 1912 retirement. His reputed dominance over L&N, and strategic management restored L&N as the leader of southern railroads and a major player in the New South coalition.

This mini-case study within a case study is important. L&N by almost any standard was northern-owned, arguably as early as 1880. But it was also “southern run”. Its leadership and management were southern. As such L&N could constitute a legitimate success story for the New South strategy to copy northern industrialization, attract northern investment, and maintain control over the operation of the underlying asset so the South could derive benefit from the exchange.

At this point, we put the L&N to the side for the moment, and turn our attention to why L&N’s Fink saw such great opportunities in isolated Jefferson County Al.

 

Red Mountain Iron & Coal Company, Elyton Land Company, Oxmoor Furnaces, and North-South Railroad

Looking at the cast of characters that came together around 1870 to found Birmingham, one wonders if it takes a village to found a village? []Robin Sterling, “the Old Reliable”, Tales of Old Blount County Alabama, Lulu.com Publishing, March 2018, pp. 162-170. At this point all the dynamics enumerated in our introductory description collide and conflate–including Reconstruction era railroad bankruptcy. There was nothing inevitable about the site that became Birmingham but events transpired that led to its choice. The Encyclopedia Alabama asserts that “Birmingham owes its 1871 founding to the “geological uniqueness of the Jones Valley, the only place on Earth where large deposits of the three raw materials needed to make iron–coal, iron ore, and limestone–existed close together” [] Encyclopedia Alabama “Birmingham Iron and Steel Companies”.

The story starts during the Civil War when the Confederate state of Alabama, working with the L&N, chartered the Alabama Central Railroad, the Alabama Arms Manufacturing Company, and several embryonic mining companies, the most successful of which being the Red Mountain Iron & Coal Company to produce iron, arms, and cannon and cannot shot for the War. The railroad was obviously intended to connect this melange and to transport their produce.

Two entrepreneurs, John Milner the railroad’s surveyor and project manager and Frank Gilmer acquired the Red Mountain Iron & Coal Company and changed its name to Oxmoor. They constructed the first of two furnaces by late 1863 and coal from the Eureka Mine fed the furnaces. Coal and iron veins were quite rich, limestone was also plentiful and in no time about twenty tons of iron, pig iron , were produced daily–shipped by rough roads to other railroads while the Alabama Central subsidiary (the North and South Railroad) laid track.

Alabama entrepreneurs Frank Gilmer and John Milner wanted the rail hub to be located in nearby central Alabama, not far-off Chattanooga. Their initial attempts to start a railroad were blocked by rivals and they ran out of dough sixty-six miles from Decatur AL. Inevitably, another railroad, the Alabama and Chattanooga entered the region intending to beat Milner’s North and South. Other mines and furnaces (the Irondale, later Ironton, being the most successful). All were destroyed by Union soldiers led by General James Wilson in 1865.

Times were tough in the years after Appomattox, and only in 1869 were Milner and Gilmer able to start laying track again. By that time northern investors (Boston-based John Stanton) had acquired (1866) the Alabama and Chattanooga, which was rechartered by the Reconstruction era state legislature after considerable bribery and the placement of Governor William Smith on its board of directors. Accordingly, the state issued $2 million in state bonds and made the proceeds available to Stanton’s railroad. The mines apparently were not the only “bottomless pit” in the area; both railroads could not attract sufficient demand to operate and both were always on the brink of bankruptcy.

To survive both railroads reached an agreement on where to locate the intersection of the two lines, which, of course, would be the location for a new urban center. That location was NOT the site of today’s Birmingham. Milner laid track to the proposed location, but in 1870 Stanton busted the deal after having taken out options on land about ten miles south. Milner, furious, seemingly ignored the new location, and kept on building to the old one. The options were good for sixty days, and Stanton believing Milner was setting up his own terminus, did not extend them.

But, behind the scenes, Milner had acquired local financing supported by a newly-funded Elyton Land Company and a local bank, and one minute after the options expired, bought the rights to the defaulted options from Stanton’s furious investors–whom he had stiffed. Milner acquired the site, redirected the North and South to it, and Elyton Land Company incorporated the city of Birmingham in 1871. North and South Railroad merged with L&N in 1872. Milner is generally thought of as the “founder” of Birmingham.

In January 1871, the A&C defaulted on interest payments to the state and by September the state acquired the A&C through auction, and placed it in receivership. Sold to a private buyer, it reentered bankruptcy in 1873 with the Panic in full fury. Sold at auction to English investors in 1877, the line was joined with the a new conglomerate, the Alabama Great Southern Railroad.

At this juncture, Powell and Elyton Land Company took over. A tireless promoter, Powell publicized in the national press to attract residents and companies. In 1873 he got the Alabama Press Association to meet in Birmingham and pressed it to hold its annual convention there. In 1874 he invited the New York Press Association to “come on down”; they didn’t.

But making a lemon out of lemonade he organized and conducted a tour of eastern media, presenting to them the areas literally “shovel-ready” mining opportunities. He gave interviews, one of which was to a European columnist in which he asserted that “the fact is plain. Alabama is to be the iron manufacturing center of the habitable globe” [] Wikipedia: James Powell]. He also marketed incentives offered by the Elyton Land Company to those companies willing to start ventures in the city and adjoining areas–guess where these funds came from?

Powell also recruited a banker and founded a local bank. In 1873, as Mayor he waged a bitter referendum that awarded Birmingham, not Elyton, the county seat. His nickname, not surprisingly, was the “Duke of Birmingham”. But the 1870’s were a tough time to found a city. When the Panic set it, it was followed by a serious cholera epidemic (which prompted his water utility), and there were few takers for the incentives offered to relocate. Depopulation of this already-minuscule city resulted. Things looked desperate, but in 1878 a new set of players appeared.

Pratt Coal & Coke, DeBardeleben, and the Tennessee Coal & Iron Railroad Company

With the Panic subsiding, the city tenuously founded, and railroad access to markets secured, enter a very affluent, powerful and successful industrialist Daniel Pratt.

Pratt, born in New Hampshire (1799), fit the mold of a hard-working, religious Yankee-Puritan. He left New England, age 20, and moved to Savannah. Sensing Cotton Belt opportunity and moved to Georgia’s cotton belt. He built plantation homes there for several years, married locally, wandered into factory management, and in 1833 established his own Daniel Pratt Cotton Gin Company, making of all things, cotton gins in an undeveloped area he called Prattville (AL). Pratt became mayor, the firm was hugely successful, Prattville became a “company town” where workers resided and lived.  Most were depressed yeoman farmers, but he also used slaves. By the 1850’s the company evolved into one of the South’s largest cotton gin manufacturers, and Pratt sold his machinery worldwide, importing Sheffield steel, and exporting final product. He has been called “Alabama’s First Industrialist”.

A powerful Whig, he established a party newspaper, he opposed succession, but served in Alabama’s Confederate legislature. He outfitted a cavalry unit and contributed to the war effort. After the War, he applied some of his considerable profits from the Pratt Cotton Gin factory into ventures in the Jones Valley. He purchased thousands of acres there, invested in a railroad venture, the North and South railroad, which by good fortune was the winner of the two intersecting railroads at Birmingham.

Working through his son-in-law Henry DeBardeleben they acquired controlling interest in the Red Mountain Iron and Coal Company (1872), and started rebuilding a furnace, destroyed in the War at Oxmoor. He died in 1873, leaving his interests and fortune to his daughter and DeBardeleben. At this juncture, DeBardeleben assumes Pratt’s mission and corporate leadership. By 1878 DeBardeleben had rebuilt operations at Oxmoor, and was ready to attempt a great experiment, an innovation in blast furnace technology that would revolutionize iron and steel production, and attract major players, and investors into the Birmingham area. That innovation requires a bit of background in iron/steel-making.

the Eureka Coal and Transportation “Experiment”

Struggling young Birmingham had ample deposits of coal, and there was never doubt it could develop as a coal-mining center. The issue was whether it could make quality, competitive iron/steel from ore extracted from its coal mines. The furnaces referenced above produced low-quality pig iron. Pig iron is an intermediate-stage end-product, not fully processed, full of carbon and other impurities, and especially brittle. Pig iron was a transportable form of iron ore which could be further processed to produce higher quality steel–sent north, usually to Pittsburgh–or produce cannon that frequently blew up.

Until the early 1870’s Birmingham’s coal mines languished, and many simply closed down. Our Oxmoor Furnace was one of them; it did not reopen until Pratt/DeBardeleben opened it in 1873. The mining sector was struggling–and that is the principal reason local railroads were going bankrupt, or barely making ends meet–they lacked the demand to transport coal. The irony, of course, obvious to all at the time, was that our economic developer Powell unsuccessful attempt’s to lure investment to the region were almost predestined to fail. His claim that Birmingham was going to be the Pittsburgh of the South lacked credibility–and frankly appeared ridiculous to outsiders. “The Birmingham District, so wildly advertised by Colonel Powell, had become the laughing stock of the whole iron world. ‘The fools down in Alabama’, it was said in Pittsburgh, ‘are shipping us ferruginous [nonferrous] sandstone and calling it iron ore’” [Ethel Armes, the Story of Coal and Iron in Alabama, University of Alabama Press, 1911, classical reprint 2011, p. 257]

The technology to “make steel” was the relatively new Bessemer process (English patent, 1856). The first American use of the Bessemer process was in Troy New York. There, a factory built in 1865 improved upon the English technique, and in an 1867 Exhibition was discovered by our old friend Pennsylvania Railroad President Scott (of the Scott Plan fame). He financed the expansion of the factory to make rails, and by 1876 there were eleven licensed factories using the process; one was Carnegie who licensed it in 1872. In 1876, William Scranton of the Lackawanna Iron & Coke Company built their first Bessemer furnace. Birmingham was developing at a time when the iron industry was transitioning to steel

Obviously, if the local furnaces could be adapted, Birmingham could make steel itself; the problem was a rather low quality charcoal which was then the principal fuel for blast furnaces in the United States. That charcoal (made from timber) could not produce a temperature sufficiently high to burn out the impurities and accordingly even using the Bessemer process, local furnaces needed to import better quality coke. So innovation was needed if Birmingham was to live up to Powell’s boosterism. It came in the form of the Eureka Coal and Transportation Company. That company was not a conventional company; the closest current example of its purpose and future activity is very similar to the MEP program funded by NIST.

Funded by local entrepreneurs, coal mining executives, and Pratt, Gilmer’s old Oxmoor Furnace (Red Mountain Coal and Iron Corp) which had been acquired by Pratt/DeBardeleben were rechartered by the state legislature in 1873 to form the Eureka Coal & Transportation Company. Granted extraordinary powers, including a perpetual board of directors, ability to issue unlimited stock, absolute exemption from stockholder personal liability, and a twenty-year tax abatement (save a slight school tax), allegedly exceeded any charter the state had ever granted. DeBardeleben resigned from plant manager and a sophisticated local iron and coal executive was placed in charge (Levin Goodrich) of the new corporation. Levin was a “process experimenter” and he then proceeded to measure, test, tinker, and  conduct chemical experiments to hopefully produce a better quality output from Birmingham furnaces.

Over the next several years, his process and chemical improvements yielded more, and improved quality from Birmingham furnaces–but at a cost. The company accumulated a $240,000 debt, and DeBardeleben read them the riot act–observing among other features that cost still exceeded profit, and only four mines were still open in the Birmingham District by 1874. Goodrich however by that point realized,the critical flaw in Birmingham’s low quality output, and the limiting factor in its ability to compete in the new world of steel was that Birmingham’s chief furnace fuel–wood-based charcoal–would never burn hot enough to make steel; another fuel was needed.

Goodrich instead believed coal could be processed to produce “coke” and that would do the job. But the Eureka Company had exhausted the good will that inspired its creation–desperation had replaced hope–and failure appeared to be a viable option if nothing bold were attempted. Goodrich’s idea seemed like a venture into the wild unknown and the new investment required to test the idea was no “sure thing”.

Those of us who had invested every dollar we possessed in Birmingham under the impression that wealth untolled that had been described to us by the promoters of the infant city [Powell] would in a few years make each one of us a millionaire saw that something must be done”. Who was the man who could lead us out of this wilderness of despair? That man came forward in the person of Colonel John t. Milner … [who] sent notices out to “all those who are interested in the success of Birmingham “to meet in the Elyton Land Company office.

[At that meeting] Colonel Milner [announced] a plan to [form] the “Cooperative Experimental Company” that would use the facilities of the Eureka Coal & Transportation Company … [and that he] would subscribe one thousand dollars and provide “a good sample of coal from three properties” to test its coking qualities”….. [The meeting then approved] “the Cooperative Experimental Coke and Iron Company [p. 258].

Worth note, L&N invested in the new experiment. Levin, after what looks like an RFP, accepted a process developed by a Belgian to design and construct a coke oven. Five ovens were built and existing furnaces converted to mimic the new coke oven. The experiment had begun. Birmingham’s fate was up for grabs.

The experiment of iron with coke seemed … the last straw. Every eye was turned to Oxmoor. The rise or fall of the Louisville and Nashville in Alabama was involved … Blast furnaces in the Birmingham District must be given up if coke pig iron could not be made … The personal fortunes [of the Coke Experimental Corporation investors] … depended on the outcome of the Oxmoor experiment. On February 28, 1876 the thing was done [p. 261].

It worked! So coal could be transformed into coke to produce steel–BUT–could it be done profitably?

DeBardeleben, James Sloss, James Aldrich and northern investors took the chance. They bought the Eureka assets/experiments of Eureka, but then after its facilities were unable to be sufficiently upgrade to make steel profitably, they founded in 1878 the Pratt Coal and Coke Company and opened a new mine, installed a rail link and built a new furnace called Alice 1 after DeBardeleben’s daughter, followed later by Alice II. Quickly, a number of local companies operating furnaces started up, produced coke and steel, and provided volume needed to maintain the railroads. The workforce for the furnace and mines was convicted prisoners. With convicted prisoners as the core of their workforce, 19th century Birmingham unionism faced strong headwinds, cheap labor evolved into a substantial component of profitability.

In 1881 the partnership split up with each investor establishing his own furnace or mine company. DeBardeleben, fearing he had tuberculosis, left Birmingham temporarily, sold his company which in short order (1886) was acquired by the Tennessee Coal, Iron and Railroad Company (TCI), a southern company which had been acquired by northern investors. TCI turned out to be a major iron and steel company, one of twelve included in the inaugural 1896 Dow Jones index. It was soon to figure prominently in the below-described manipulations of J.P. Morgan when it became part of U.S. Steel (1901). By that point TCI had become the largest of southern industrial firms, the nation’s second largest iron and steel firm, with 17 blast furnaces, 3256 coke ovens, 120 Solvay coke ovens, 15 red ore mines, and an extensive network of railroads (Wikipedia, TCI).

DeBardeleben, cured of TB, returned. Working with southern capital he consolidated a number of furnaces into the De Bardeleben Coal and Iron Company (1889) with seven coal and  seven iron mines, quarries, several railroads, and nine hundred coke ovens. In the lean 1890’s, however, De Bardeleben ran into hard times, and was eventually bought out by, guess who, J.P. Morgan. But during those twenty or so years between 1879 and mid-1890’s southern pig iron production increased by seventeen times and Carnegie was quoted as saying “the South is Pennsylvania’s most formidable industrial enemy“. Southern iron competed with northern iron in cost and quality as late as 1889. (Woodward , p. 127).

One of the consequences of post-1900 J.P. Morgan’s investment and consolidation initiatives was the establishment of Pittsburgh Plus discriminatory pricing (final price included transportation costs from Pittsburgh) which protected Carnegie’s Pittsburgh home base, and significantly limited the profitability of Birmingham iron and steel. While a subject of later themes, Pittsburgh Plus pricing in effect transformed the massive Birmingham iron and steel sectors into suppliers for final product made in Pittsburgh.

the Rise of Birmingham

The Birmingham District was on its way to establishing an economic base that, who knows, might make Birmingham the Pittsburgh of the South”. But there was a fly in that ointment–the mines and furnaces were outside the Birmingham city limits. time, As the industry took off, steel mills and factories were constructed outside the city in satellite suburbs surrounding the facility. TCI led the way incorporating the suburb of Ensley in 1886 and locating a considerable number of its assets in a jurisdiction that protected it from Birmingham’s higher taxes. Birmingham in this period is often referred to as a “satellite city”. In 1880 a mere 3800 folk resided within its city boundaries. Even with the explosive growth engendered by the growing coal, iron and steel industries, 1890 population was only 26,100 and 1900, 38,400.

Naturally, that frustrated Birmingham. So in 1904, it fabricated “the Greater Birmingham Plan“, lobbied it successfully through the Alabama legislature, and annexed the offending suburbs. In 1910, Birmingham’s population exploded to nearly 133,000. The metro area became “an instant city”. By 1920, the “Magic City’s” population grew to nearly 180,000, Alabama’s largest, the South’s third largest, almost the same size as Atlanta. In 1909 a Chamber of Commerce (actually the Birmingham Commercial Club founded in 1887) moved to a ten-story skyscraper and a Business Man’s League and a Merchants and Manufacturer’s Association were founded. Birmingham had emerged by the 1920’s as a major urban center, but as late as 1900 it had not yet “taken off”. Birmingham’s struggle to become a regional and even national urban center was not an easy one.