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The founding of Birmingham is the best example of the development of a New South economy based upon industrialism, and it is a good example to use to show the effects of the growth of urban areas following the Civil War. The growth of cities forced the nation to deal with sociological problems, such as crowded tenements and inadequate housing, polluted water and inadequate sewage and garbage disposal, communicable diseases, epidemics, insufficient health care and hospitals, increased crime, and the need for more policewhat the British called "constables on patrol," thus "cops."
This is also the time period when "the new immigration" occurredthat is, a shift in the origin of immigrants coming to the USA. They came not from the areas of native stock American settlers (northern EuropeEngland, France, Scotland, Wales, Ireland), but from southern and eastern Europe. These new immigrants had language, food, religious, and cultural differences that caused adjustment problems and culture shock for both the immigrants and U.S. residents. These immigrants also looked different, which caused them to be discriminated against in the labor and housing markets. The Republican philosophy of aiding business through tariffs, land grants to railroads, and other policies that began with Lincoln's election in 1860, plus the federal government's subsidies to businesses to produce war materials during the Civil War, caused the industrial surge that occurred in the decades after the war. And these immigrants often furnished the labor. Thus as the Gilded Age waned in 1893, the United States had surpassed both Great Britain and Germany as the leading industrial country in the world. And Birmingham was certainly playing a role in thisespecially in the cast iron pipe market.
Birmingham was founded during the Reconstruction period in the middle of Reconstruction politics when carpetbaggers and scalawags vied for political and economic power. The site of the city in Jefferson County was to be where the Alabama & Chattanooga Railroad was to cross with the South & North Railroad. Since the Chattanooga line was already operating and/or under construction, the South & North engineers were able to control where their line crossed it. The Elyton Land Company was organized to purchase land in the valley where the crossing was planned. Everyone agreed that a city would develop at this spot. In 1871 streets were surveyed in a grid pattern in a corn field. The valley was in poor hill country in the middle of Alabama's mineral district, which had coal, red and brown iron ore, and limestoneminerals needed to make ironbut little had been done to exploit these industrial minerals because there was no navigable river in the district, thus no way to move either the minerals or pig iron to market. Railroads, therefore, were essential to the development of Birmingham.
The city was first referred to as "Iron City" and later the "Magic City" because it grew quickly from a corn field. In its early years the city grew on the foundation of a real estate boom and was more of a wild west town than a genteel city of the Old South. Auction sales of lots were advertised all over the country and peoplemostly men in the early yearspoured into the boom town from the U.S. and around the world. The population was thus the most ethnically diverse of any southern city.
The difficulties faced by Birmingham were typical of those problems of other cities in this time period. There were problems in providing the city with clean water for drinking and sewage and garbage disposal. A cholera epidemic in the summer of 1873 almost destroyed the city. Many died and sick men without families had few options for care. Many people moved away from the city. Property values fell, and buildings and houses were vacant. In September the Panic of 1873 began. It was caused initially by the failure of Jay Cooke and Co. investment house, which caused the New York Stock Exchange to fall. The panic drained capital investments from the new city and discouraged new investments.
Birmingham's industrial growth began when the iron furnaces constructed during the Civil War reopened. The two furnaces located in Shades Valley were at Irondale and Oxmoor. In 1874 the Warrior coal field began producing coal, and in 1876 a giant step was taken when pig iron was first made from coke (which comes from coal). Confederate iron in Alabama was produced with charcoal. Charcoal comes from wood, and this meant that many trees in the area of iron furnaces had been cut; coke burns hotter and makes a higher grade and stronger iron.
Investments in the New South economy of Birmingham were encouraged by Henry Fairchild DeBardeleben (who was married to industrialist Daniel Pratt's only child, Ellen). This is an example of antebellum industrial fortunes supporting industry in the period following the war. Birmingham grew rapidly during the Great Iron Boom of the 1880s. The Woodward Iron Company furnace went into blast in 1883, and the arrival of the Tennessee Coal, Iron and Railroad Co. (TCI) in 1886 boosted the industrial base of the city. In 1888 Henderson Steel produced the first steel in Birmingham and proved that good steel could be made from Alabama iron ore. This development was noticed in northern steel producing areas and Birmingham was looked upon as a potential competitor.
The large number of industrial workers meant that problems between labor and management would be common. About 20% of the Birmingham District's miners were immigrants, about 35% were native-born, and the rest were African-Americans. Many of the coal miners were convicts leased from the county or the state to mine owners. When the miners tried to organize, strikes and violence often resulted. Many miners and mill workers lived in company towns, shopped at company stores, and went to company doctors when they were sick. This welfare capitalism allowed the companies to have control over the workers' lives. However, the living conditions in the company towns were often better than the living conditions of the rural farms which many of the miners had left.