Top 50: In 1758, it was all about the land
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Before the great buildings, boulevards and busy sidewalks that define this city, and long before our contemporary struggles with business and personal finance, the economic landscape here and around the world was based on the ownership of land.
When the city of Pittsburgh was established in 1758 it was, in the words of Charles Dickens, the best and worst of times for those early settlers who started with nothing but pushed their way across the country in a mad rush to acquire cheap land and great wealth.
"One could easily argue that things were better then because you were your job security," said Paul Brahim, executive vice president of BPU Investment Management, Downtown. "You can't lose a job when you're a farmer and when you own land. Where you got into trouble is if you borrowed too much money to manage that land and you didn't have a good year."
So much has changed and so much has stayed the same.
In the year Pittsburgh was formed out of the smoldering ruins of Fort Duquesne, there was little organized government, no organized religion and no taxes. Most trade was done through a barter system. Gold and silver were the hard currencies of the day and credit was already well-established.
But the consequences of not repaying debt were far greater 250 years ago because bankruptcy often would result in people either being sentenced to do hard time in debtors' prison or be forced to work as slaves until a debt was repaid.
While the homes in this region at that time were hardly more than log cabins, other areas of this British colony that would ultimately be known as America already had fully developed mercantile systems.
Philadelphia was not only the capital of the colony of Pennsylvania, but very much the commercial and financial center of all the American colonies. At that time, Philadelphia was a far more important city than Boston, New York or Charleston, S.C. New York eventually would supersede the City of Brotherly Love, but not until the United States had been a country for 40 or 50 years.
During the early years of commerce in Western Pennsylvania, traders swapped cooking utensils, clothing and guns with American Indians who in turn gave the traders deer buckskins that would be sent back to England. Farmers grew produce they would sell to settlers passing through on their way to find land on the western frontier.
"When you look at the evolution of this region from farming to steel to health care to technology, this region has done a tremendous job of constantly reinventing itself to keep pace with the economy of the world," Mr. Brahim said.
Daniel Barr, a professor of history at Robert Morris University, has written a book about the early formation of Pittsburgh called "A Colony Sprung From Hell: War and Society on the Pittsburgh Frontier," which will be published early next year.
He said many of this city's early settlers were involved in land speculation, which today would be called real estate development. One of the most aggressive of them all was George Croghan, who at one time had certificates either signed by Indians or issued by the British government for about 200,000 acres.
"He lost it all because of debt," Dr. Barr said. "But if he had been able to hold onto it, he would have been the sole owner of pretty much all of Allegheny County. His deed covered everything that became Pittsburgh and most of the metro area."
By the end of his life, Dr. Barr said, Mr. Croghan was hiding in Pittsburgh in a log cabin afraid to go back to Philadelphia because he would have been sent to debtors' prison.
"He hid here because he knew nobody would come out here to get him," Dr. Barr said. "There's nothing out here in Pittsburgh that we would even consider a city or even a functional town until the 1770s. Pittsburgh was still a wilderness frontier largely populated by Indians, deer and traveling salesmen.
"Agriculture was the dream of all these guys like George Croghan. They wanted to come out here and either make enough money through trade or through real estate ventures to be able to sit back and have amassed enough land to basically become a gentleman farmer."
Although the early settlers left England because they didn't like the European system where a select few owned all the land and controlled everything and everyone on it, they tried to replicate that system here.
Citizens here were at the mercy of landowners. There was a grand canyon of separation between the rich and the poor.
Carrie Coghill-Kuntz, president of DB Root & Co., a Downtown investment manager, believes that our economy could be headed full circle.
"Now that we've seen a decrease in labor unions and a decrease in pensions, we are in a sense back in the same place we were 250 years ago in terms of taking care of ourselves and [extreme] executive compensation."
At the time of Pittsburgh's founding, Social Security and 401(k) plans didn't exist. People worked until they couldn't work anymore, and then the family supported them until they died.
"It makes me wonder if 30 years from now we'll revert back to that type of extended family culture," Mrs. Coghill-Kuntz said. "People will not be in a position to retire, but also not healthy enough to work."
She said the issue of corporate domination and high executive pay is significant because 250 years ago one thing people could do to improve their circumstances was go into business for themselves as blacksmiths, mill owners and grocers. Today, small businesses struggle to compete against corporate giants such as Wal-Mart.
But Mr. Brahim said it is important to remember this city and this country were built on the idea that success is won by those who are self-sufficient, and who understand the concept of survival of the fittest.
"To me, this is one of the most exciting things about the way this country evolved economically -- the legacy of self-sufficiency that it created," Mr. Brahim said.
"It's all about opportunity and what you do with it. I think that legacy still sticks today. People try all kinds of crazy things to build a business, to make a life, and a lot of it works. You can still pull it off in America, and I don't know if that's the case everywhere else in the world."
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First Published March 18, 2008 12:00 am