Real Estate: Where And When


When the Erie Canal was finally completed in 1825, after eight years of digging, a huge statewide ceremony was held. A barrel of water from Lake Erie was transported by canal barge from Buffalo to Sandy Hook at the entrance to New York Harbor. There Clinton poured most of it into the Atlantic, signifying the wedding of the waters that lay at opposite ends of the state. Along with the water from Lake Erie, waters from the Rhine, the Ganges, the Nile, and twelve other great rivers of the world also were poured into the Atlantic. New York City, in its characteristically imaginative and unsubtle way, was boasting of its coming greatness as a center of world trade.

The boast was soon fulfilled. Before the canal, a ton of flour worth $40 could be shipped, overland, from Buffalo to New York in about three weeks for $120, quadrupling its cost. On the canal the same ton could be transported in eight days at a cost of $6. With such changes in the economic equations, it is no wonder that New York soon became, in the words of Oliver Wendell Holmes, Sr., a “tongue that is licking up the cream of commerce and finance of a continent” and the greatest boom town the world has ever known.

Between the opening of the canal in 1825 and the beginning of the Civil War thirty-six years later, New York grew so fast that it built on average some ten miles of newly developed streetfront per year. By 1860 the city handled fully two-thirds of the nation’s imports and one-third of its exports. In other words, more than half of all American international commerce passed through New York, largely thanks to its location 150 miles downriver from a gap in the mountains.

With the Erie Canal, the cost of shipping a ton of flour dropped from $120 to $6. New York became the greatest boom town ever.

Now, it must be admitted that in history, if not real estate, location is not quite everything. From its earliest days New York was the most commercialminded of American cities. The Puritans of Boston, the Quakers of Philadelphia, and the Catholics of Baltimore founded their cities first of all as religious havens. But the Dutch founded New Amsterdam solely to make a buck. So busy were they buying beaver pelts that they didn’t get around to building a church for fourteen years.

This commercial drive greatly contributed to New York’s climb to the top and continues to characterize the city to this day. As Robert Greenhalgh Albion points out in his magnificent The Rise of New York Port, 1815-1860 , published in 1939, the successful push by New York merchants to broker the trade between Southern cotton growers and European and New England textile manufacturers played no small part in the growth of the port, regardless of its location.

The Southerners saw themselves as gentlemen farmers and didn’t want to appear to dirty their fingers with anything so vulgar as money. The New Yorkers were only too glad to dirty theirs. By the time the Southern states began to secede, the cotton trade had become so important to New York’s economy that the mayor, Fernando Wood, went before the city council and proposed that New York become a “free city” apart from the Union.

By the 1920s New York was the greatest port not only in the country but in the world as well, eclipsing London, and it maintained this hegemony for decades. But just as the tides of history and technology first brought Venice to greatness and then left it behind, so they continue to shift today. New York’s near monopoly of transatlantic passenger travel, for instance, disappeared with the coming of the jet plane.

Far more important have been the shifting patterns of world trade. Trade across the Pacific has been growing by leaps and bounds while Atlantic trade has merely been steadily increasing. Today the West Coast’s traffic with East Asian countries and in Alaskan oil far outstrips East Coast trade with Europe and Africa.

The result: in 1989 Los Angeles-Long Beach became the country’s busiest port. There is a considerable irony here. You see, New York was founded on account of its great harbor, but Los Angeles was founded twenty miles inland and didn’t have a harbor at all until an artificial breakwater was completed in 1914. Regardless, Los Angeles is located on the right ocean for the late twentieth century, and New York is not. As they say, it’s location, location, and location.