Business, Commerce, & Industry

Business priorities and activities have shaped the growth and development of St. Louis since its founding. Created as a commercial outpost, the city's transportation systems, economic base, and social structure reflect its business interests. As those mercantile priorities change over time, so too has the St. Louis in which they operate. Still, the city has remained a hinge between regions, connected to markets far beyond its boundaries, or even American shores.

LINKING EAST AND WEST

Fur trading became big business in St. Louis. When Lewis and Clark left St. Louis on their trek in 1804, pelts had generated an average of $203,000 a year since 1789. Almost one dollar in three generated by local business by 1821 came from the fur trade. Many of the wealthiest St. Louisans made their fortunes dealing in pelts.

Trappers sold pelts from Rocky Mountains animals on the levee in St. Louis to shippers who then sent them down river to end up as hats in New York, London, or Paris. Those chapeaux might end up upon the heads of St. Louis merchants months later, or purchased for resale in Keokuk, St. Joseph, or Des Moines. Fortunes were made-and lost-trading goods from and to distant sellers and buyers.

After the first steamer, the Zebulon M. Pike, arrived in St. Louis in late July of 1817, more goods could move faster on the Ohio-Mississippi-Missouri rivers system. With as many as fifty steamboats docked at a time overlooking streets crowded with people, goods, and animals, the levee area was the heart and soul of commercial activity in St. Louis. Through that activity, the riverfront became the crossroads between east and west. By the early 1840s, only New Orleans was a busier river port than St. Louis.

Such economic activity encouraged other mercantile interests as well. A growing number of farmers in the west needed supplies, equipment, and seed shipped to them, and a way to deliver harvests to market. As the United States Army established more posts on the upper Missouri, traffic in troops and supplies increased as well. When Native American tribes on the high plains became part of the American economic system, goods traded to and from them arrived in St. Louis. Animals, foodstuffs, hardware, and tools were the main vehicles of trade.

The annual Agricultural and Mechanical Fair, first held in 1856 at Fairgrounds Park, reflected St. Louis's role as economic highway. Farmers, shippers, and merchants came to see the latest manufactured products, livestock, and foodstuffs. The Fair offered an opportunity for farmers to see the latest technology, and for manufacturers to hawk them to potential buyers. Over time, the Fair erected some 300 different buildings, including an amphitheater seating 12,000. The last showing appeared at Fairgrounds Park in 1902, but use had been declining since 1884, when the Exposition Hall opened downtown. City government purchased the site in 1908 to create Fairgrounds Park.

LOOKING SOUTHWARD

The War affected the development of local business in at least two ways. First, it allowed Chicago to capitalize on its advantages. The battles and sieges for control of the lower Mississippi River cut off all trade between St. Louis and southern cotton plantations, shippers, and wholesalers. With the river blockaded by the Union forces, shipping came to a halt until the Union under one-time St. Louisan U. S. Grant secured the Mississippi River corridor. Location proved a disadvantage for St. Louis. As the northern plains opened to more farms and ranches, St. Louis was too far south to still be a natural hub for trade with the Union. War threatened St. Louis commerce during the period, too, compelling trade to flee to the safer confines of Chicago. The result was that the Chicago mercantile machine was up and running in 1865 with newly expanded rail lines, while St. Louis was rebuilding from the War.

Immediately after the War, St. Louis business leaders tried to restart the shipping and wholesaling activities. They formed the Union Merchants' Exchange in 1866 out of the old Board of Trade (with which it merged a few years later) to reclaim the city's "rightful" place as a commercial center through a program of lobbying, marketing, and research. The Exchange also developed a "commercial traveler system" of men visiting other cities to extol the city's virtues for partners in both business relocation and trade. Some 1,200 of these "drummers" were taking orders for St. Louis goods by 1880, especially from the South. Southwestern America became the primary economic domain of St. Louis business in the final third of the nineteenth century. The region roughly between the Mississippi River and New Mexico, and the Colorado River and the Rio Grande looked east to St. Louis much as the city had looked to New Orleans and Pittsburgh in earlier generations. River and rail carried raw materials from the South and West for processing in St. Louis or farther east, and transferred finished products headed westwardly. It could boast of being among the nation's largest makers or shippers of cotton, foodstuffs, tobacco, clothing, shoes, beer, and fire brick.

St. Louis was a major outlet for southern cotton before the Civil War, but business unraveled during the conflict. When the Cotton Exchange (which orchestrated buying, selling, and grading cotton in the same way other exchanges handled grain) offered a $5,000 prize in 1870 for the best grade product at the Mississippi Valley Fair, St. Louis was back in business as the largest inland cotton market in the world. Once shipped by riverboat, cotton became a rail commodity during the 1870s. At the end of the decade, traincars carried some 464,000 bales to the city annually-about 94 percent of all local cotton trade. The locally based Cotton Belt Line, a railroad formed in 1879, created connections to Dallas, Laredo, and western territories.

Transportation connections made St. Louis a center for warehousing and wholesaling goods by the turn of the century. The steady number of people moving west to western farms and newly formed towns also needed farm equipment, supplies, materials, and manufactured goods in exchange for the crops and raw materials they produced. Hardware, groceries, cans, coffee, dry goods, shoes, clothing, lumber, and furniture either started or passed through the St. Louis economic gateway.

St. Louis ranked among the largest cities producing a range of different products at various times during the Gilded Age: first in production of lead paint pigments, plug chewing tobacco, and flour milling; the largest west of the Mississippi in coffee distribution, with substantial operations in groceries, lumber, and meat processing. It lost its top national ranking in flour milling to Minneapolis in 1890, and dropped from fifth to sixth in meat packing in the next decade. Furs returned as a major commercial product by the 1920s, with local dealers trading in pelts from Alaska and northern Canada.

THE HINGE CITY ECONOMY

Garment companies developed on Washington Avenue to meet growing markets in the clothing industry spurred by the new mail-order retail business in the 1880s. Some produced ready-made clothing; N & J Friedman's, for example, employed some 500 workers at its 8th and Lucas factory at the start of the new century. Others supplied large mail-order houses such as J C Penney.

Garment manufacturer Hargadine & McKittrick opened its own retail operation, purchasing the William Barr Company. Its store occupied the first eight floors of its new Railway Exchange Building, with the rest to house railroad companies' offices. When the building opened in 1908, its twenty stories made it the tallest building in the city. Problem was, though, that the railroads didn't occupy office space. Construction cost overruns and doing without this rental income forced Hargadine & McKittrick to sell its department store to the May Company in 1911.

BANKING

The state took over the job five years later, forming the Bank of the State of Missouri in 1837. It served virtually the entire country west of the Mississippi, strengthening the role of the city as an economic gateway. Boatmen's Savings Institution opened ten years later, but did not issue bank notes. Six more banks organized under an 1857 state law governing currency: the Merchants', Mechanics', Southern, Exchange, Union, and Bank of St. Louis. State notes disappeared in 1862, when Congress instituted a national banking system again. Local banks became national banks over the next few years. Boatmen's became a Boatmen's Savings Bank in 1873, and Boatmen's Bank in 1890; it grew from a small house at 16 Locust to the largest bank in town at the turn of the century.

Businesses received funds to operate businesses from private interests too. Banking houses in the 1840s served such a function, such as Page, Bacon and Company at Main and Vine, Lucas, Turner and Company, and L. A. Benoist and Company. Evidence of the unusual stability of St. Louis banking houses stands in the low rate of attrition during the runs on banks in 1855 and 1873.

Businesses also turned to companies dealing in stocks. Albert Gallatin Edwards formed his A. G. Edwards and Son in 1887 to trade stocks, mostly for companies. It participated in forming the St. Louis Stock Exchange in 1899, to encourage trade in stocks of local companies. Wealthy individuals, speculators, and corporations were primary customers for firms such as Edwards until after World War I, when they shifted focus toward individuals of more moderate means.

VICES AS VIRTUES

Location and resources also spurred the growth of brewing in St. Louis. A large German population, plenty of water, rail connections, limestone caves, and entrepreneurial spirit provided the foundation for the city's beer business. As early as the 1850s, brewers used the caves south of Benton Park for beer storage. Cool, constant subterranean temperatures provided the best circumstances for brewing and storing suds. English & McHose started using the caves for beer storage, and operated a biergarten nearby at Mammoth Cave and Park. German-born brewer Adam Lemp moved his Western Brewery to the corner of Cherokee and DeMenil Place in 1864 to take advantage of the caverns. When the Civil War started in 1861, Lemp had some forty local competitors such as Charles Stifel's City Brewery. There were just nineteen at the end of the century. Although still a large-scale producer, Lemp lost top billing to Anheuser-Busch.

Four years after marrying the owner's daughter, Lily, Adolphus Busch rose to the presidency of the Anheuser company in 1865. A masterful marketer with an eye toward profit and new technology, Busch's company grew quickly to dominate the local beer market. Pioneering refrigerated railroad cars which extended the shelf-life of unpasteurized lager so it could be shipped farther, Anheuser-Busch capitalized on this new technology to nurture a national market for its products. It was the first step in making Budweiser, introduced in 1876, the most popular beer in America.

UPS & DOWNS: THE 1920s & 1930s

Manufacturing declined in St. Louis during the Great Depression, which hit St. Louis harder than many areas. When 15.9 percent of all Americans were out of work in 1931, almost one in four St. Louisans were unemployed; two in five African-Americans were jobless. Two years later, eighty percent of black St. Louisans were either unemployed or underemployed. Local production declined even more than the national average during the Depression, and never felt the slight recovery precipitated by the National Recovery Administration in 1935. Some industries never recovered.

As with most industrial cities, St. Louis surfaced anew during World War II, retooling factories and workers for wartime production. U S. Cartridge (St. Louis Ordnance) was the largest ammunition manufacturer in the world, producing more than one billion cartridges for the Allies. But the boom was short-lived. Between 1967 and 1980 the city lost 50,000 jobs.

During that boom, commercial areas outside the city limits flourished. They provided retailers, groceries, pharmacies, restaurants, and other consumer services. These commercial areas were heirs to the public markets of former generations. Union Market downtown and Soulard Market on South Broadway housed greengrocers, butchers, and other food merchants. They were an ancestor to modern-day supermarkets. Ironically, it was large-scale supermarkets in suburbs that led to the final demise of Union Market and loss of prominence of Soulard Market.

BUSINESS & COMMUNITY LEADERSHIP

Civic Progress - orchestrating new community improvements in the spirit of the Solar Walkers - facilitated the 1904 Fair, new parks, and improvements to roads, sewers, and city services. Mayor Joseph Darst created Civic Progress in 1952 to give such leadership official status. Darst created the body to better organize key business leaders and rekindle the local economy. Unlike the "Big Cinch," members of Civic Progress were specified by position: chief operating officers at St. Louis Union Trust, Union Electric, General American Life Insurance, Washington University, Stix Baer & Fuller, Bank of St. Louis, along with attorney James Douglas and former mayor Alois Kaufmann. Darst's successor, Raymond Tucker, added ten more corporate representatives the following year from Anheuser-Busch, Southwestern Bell, Ralston-Purina, May Company, Monsanto, Mercantile Trust, McDonnell Aircraft, and Boatmen's Bank along with Edgar Rand and real estate developer Clarence Turley. The group joined forces with local churches and the League of Women Voters to pass a 1955 bond issue for $110 million to construct three highways (US 40, I-70, and US 66, now I-44) to add to the federal and state grants totaling another $75 million.

DOWNTOWN'S RESURGENCE: 1970s-1980s

At the core of the concept was declaring as blighted the zone bound by US 40, 3rd, Delmar, and 12th, excepting public property and new buildings. In the 1970s, businesses poured more than $300 million into new construction in downtown. Major projects under the plan received up to 25-year tax abatements. No fewer than fifteen major structures appeared in downtown as a result, fundamentally changing the skyline and economic make-up of the district. Boatmen's Tower, Mercantile Bank Tower, 500 Broadway, Stouffer's Hotel (now the Regal), the Spanish Pavilion and tower, First National Bank, Pet, Equitable Building, General American Life, and St. Louis Centre joined the recently completed Busch Stadium as buildings downtown benefiting from the 353 laws.

While it is easiest to see the large businesses and industries, much of a city's economic activity centers in smaller, local businesses. Commercial areas along streetcar lines thrived by the 1920s along South Grand, Gravois, St. Louis Avenue, and North and South Kingshighway.