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The History of the Economy of Detroit
How the American Automobile Industry Came To Be Founded in Detroit
1. Detroit was founded as Fort Detroit on the Detroit River north of Lake Erie as a
2. Detroit's initial growth, in the 1820's and 1830's, came from its
economic base in flour milling. There also developed there, in addition
to the establishments serving the local consumer market, workshops for
repairing and supplying goods and equipment used in the flour industry.
These included shipyards.
3. By the 1840's Detroit shipyards were not only building and
repairing ships for the Great Lakes trade but also building ocean-going cargo ships.
Detroit shipyards were among the first in the world to build steam ships.
4. The building of steam ships led to the development of an industry
for the manufacture of marine steam engines. There were supporting
industries in machining fittings for ships.
5. By the 1860's marine steam engines were a major export from Detroit.
This industry supported suppliers, such as specialized engine parts and
tool makers. It also supported businesses supplying metal.
6. The most important parts of the metal trade for Detroit were the
refiners and smelters for local copper ores. This industry grew beyond
supplying the Detroit market and became an export industry. Between 1860
and 1880 copper and copper alloys were Detroit's largest export industry.
Around 1880 the local deposits of copper ore were used up.
7. Detroit at the end of the nineteenth century had a very
sophisticated machine industry that made it a fertile place for the
automobile industry to develop.
8. The internal combustion engine was first developed for boats and since
the Great Lakes area was a major market for such smaller vessels an industry
for manufacturing boat engines emerged in Detroit. This was probably the
key factor in the automobile industry growing up in the Detroit area.
9. Another crucial factor in that development of the automobile industry
in the Detroit area
was the existence of an industry there for manufacturing
coaches and carriages. Will Durant, the founder of General Motors, had
previously made a fortune manufacturing carriages.
10. The rich offering
of Detroit industry enabled Henry Ford, Ransom E. Olds and other
entrepreneurial auto makers to put
together their first models from off-the-shelf parts.