EH.Net Abstracts in Economic History

             EHS Abstract Submission
                    (c) 1997 EH.Net
-----------------------------------------------------------
              Name:  Sukkoo Kim
               Email:  soks at wuecona.wustl.edu
         Institution:  Washington University  

         Co-author:  None
 
             Title:  U.S. Urban Development, 1790 to 1990  

  Internet Address
of abstracted work:  Not available on the Internet  

           By mail:  
                     Sukkoo Kim
                     Dept. of Economics, Campus Box 1208
                     Washington University
                     St. Louis MO 63130-4899
                     USA
 
          Language:  English
 
          Abstract:
   The study of the long-run trends in the economies of cities
suggests that there were three distinct periods of city
development in the United States.  The colonial mercantile cities
were located near ports and navigable rivers and specialized in
providing intermediaries and market functions for an economy
based on foreign trade.  Since the export products from the
extractive industries were produced in a spatially dispersed
manner and since internal transportation was costly, market sizes
of most cities were limited.  As the United States became
industrialized during the years between the late eighteenth and
the early twentieth centuries, the number and size of cities
increased dramatically.  The growth of industrial cities occurred
in the emerging manufacturing belt and away from the coast and
navigable waters of the New England, Middle Atlantic, and South
Atlantic regions.  As the importance of manufacturing activities
in cities peaked during the first quarter of the twentieth
century, the rates of urbanization also peaked and stabilized,
and the size of the largest cities began to decrease.  These
developments were also accompanied by significant regional
redistribution of large cities from the manufacturing belt to the
Pacific, Mountain, and Southern regions.
Regional comparative advantage and the economies of scale in the
provision of local public goods, rather than external economies,
are likely to explain the patterns of city specialization and
city formation.  The city manufacturing structure was specialized
between 1880 and 1940 and, in general, reflected the overall
manufacturing structure of its region.	However, while
differences in regional comparative advantage and differences in
land qualities are likely to generate cities of different size,
these differences do not seem sufficient to explain the existence
of rank-size relationship of cities.

  Despite some stability in the rank-size relationship among
cities in the United States, the hierarchical system of cities at
any given point in time depends upon the level of interregional
and international trade, transportation and communication
technologies, and economies in market transactions.  As the scale
of economic activities increased during the mercantile-port city
era, specialized merchants who coordinated the supply and demand
of international and domestic goods emerged in cities.	The
wholesale market transactions were also facilitated by other
ancillary services, such as insurance, banking, merchant's
exchanges, and by newspapers and trade papers, which were perhaps
misclassified as manufacturing activities, which provided
information services.  City governments and the legal profession
also lowered costs of transaction in cities, as they provided
institutions that protected property rights and enforced contracts.
 
  As the United States became industrialized between the late
nineteenth and the early twentieth centuries, industrial cities
emerged.  Unlike the mercantile port-city era, cities were no
longer simply centers of wholesale markets.  However, the large
cities did not distinguish themselves as centers of
manufacturing.	In fact, manufacturing activities as a percentage
of population remained constant across city sizes.  As in the
previous era, the larger cities during the industrial era
distinguished themselves as centers of wholesale markets rather
than of manufacturing.	As the size of the domestic market
increased, and as interregional trade increased, the wholesale
market functions of large cities also became more important.  In
addition, business services such as investment banking, legal,
accounting, management consulting, and advertising also seemed to
have contributed to sustaining the economies of the largest cities.

 
      Bibliography:  Kim, Sukkoo. "U.S. Urban Development, 1790
to 1990." Paper presented at the Cliometrics Conference,
University of Toronto, May 1997.

 
                  Subject:  Z
 Geographical Area:  7
      Country/Region:  United States
           Time Period:  0