The Fall and Rise of Portsmouth Economy

Whether you vote red or blue, you are probably thinking green. The sagging economy in 2008, pollsters say, weighs heavily on all our minds. History will clump this year’s fiscal crisis with the Wall Street Crash of 1929 and the Bank Panic of 1873. Both events happened in the fall and led to years of economic depression nationwide. 

Portsmouth weathered the earlier disasters largely because the region was already in the doldrums. Our local economy peaked around 1800. It went bust a few years later and, by my reckoning, is finally reaching its second heyday now – 200 years later. 

I’m no financial wizard. In fact, asking a history writer about money is like asking a homeless person about the current mortgage meltdown. At least that’s what I told Jesse Devitte, founder of Borealis Ventures when he asked me to speak about the Portsmouth economy to a group of entrepreneurs and venture capitalists. Devitte sees the Seacoast as ripe for the creation of a host of hot new high-tech companies. We’ve got a beautiful environment, rich heritage, smart people, great quality of life, low taxes. And I know how we got this way. 

On second thought, maybe the homeless know best about real estate disasters, and we historians can track economic trends. So, following a sumptuous fish dinner at Café Pesche, here, in a nutshell, is what I said to Devitte and his band of business optimists.

The first investors

People wince when I say that the first European entrepreneur who “discovered” the Piscataqua River in 1603 was seeking a cure for venereal disease. The textbooks put it more delicately. Explorer Martin Pring, they say, was looking for sassafras, a homeopathic cure for “the French Pox”, better known as syphilis. He did not find it here and sailed on to what became Massachusetts. 

I wince in return when people say that pilgrims seeking religious freedom founded America. Some were, but most early settlers were seeking their fortunes. Or they were employed, indentured or enslaved by investors back in England. And even the Puritans, once they got their bearings, were ruthless capitalists. 

Billionaire Warren Buffett advises modern investors not to buy anything they don’t already understand. Capt. John Mason, founder of New Hampshire, could have used that advice in 1630. He got some very bad intel. I am convinced, after studying early documents, that Mason believed the Piscataqua River was the fabled Northwest Passage to China–or at least to the fur trading hotspot at Lake Champlain. It wasn’t. Mason also hoped to find gold or other precious metals, raise livestock here, and start a profitable winery. The great Portsmouth investment lasted five years. By 1635 Mason was dead, and his venture capitalists had turned out the lights and split.  

What can we sell?

To create an economy, the orphaned Portsmouth settlers had to find something to sell. They bartered with the local Indians for animal pelts. But the fur trade was limited, and as many as 90% of Indigenous People had died in a great pandemic that swept the Atlantic coastline due to the arrival of European diseases. A few prominent families got rich in the fishing industry. Great cod, reportedly weighing hundreds of pounds were easily caught, dried, salted, and shipped back to Europe. The Isles of Shoals served as a great fish-processing factory for decades, possibly even before those famous pilgrims settled at Plymouth. But we fished out the giant cod, drove off the Natives, and needed more stuff to sell. 

While the southern colonies discovered tobacco, the money up north grew on trees. Think of the tall white pines that once dominated this region as oil, and you will get the picture. English investors felled the great forests, colonizing as they went. Provincial New Hampshire, a huge slice of land stretching all the way to New York, had only one port city. A sawmill economy quickly evolved along the river. 

As the British market gobbled up the raw lumber and ship masts, the wealth of the entire colony funneled through Portsmouth. The city quickly evolved a maritime economy and an aristocratic social capital. Portsmouth developed its own shipbuilding industry, created a merchant fleet, and blossomed into a world trade center. The King gave New Hampshire its own royal governor whose wealthy relatives built the elite Georgian mansions that survive today. Raw goods went to England and manufactured stuff came back. White merchants dabbled in the slave trade or kept African servants as status symbols. The waterfront was thick with tall ships, wharves and warehouses. 

From boom to bust

In 1775, America went to war with England, its best customer. Wealthy patriots like Gov. John Langdon drove out wealthy Loyalists like Gov. John Wentworth, building mansions of their own. For two decades, Piscataqua shipping flourished. Then our best customer struck back. President Thomas Jefferson enacted a trade embargo in 1807 to protect American shipping, but ended up strangling trade. A second war with England followed in 1812. By the time it was over, Portsmouth’s maritime economy was on the skids, never to reach such heights again. Three massive fires devastated the once bustling downtown and generations of young people abandoned the decaying “Old Town By the Sea” for the pulsing new industrial cities and the Western territories. 

Portsmouth continued to build sleek clipper ships and experimented with whaling. But with the exception of Frank Jones Brewery, a button factory, a hosiery and a paper mill, the faded colonial capital never really got the hang of manufacturing. Only the Portsmouth Navy Yard flourished, and then only when a series of American conflicts called for ships of war. The downtown struggled and the waterfront decayed as waves of immigrants settled into a blue-collar economy.

Remember when we were great?

But a funny thing happened on the way to Skid Row. Amateur historians created the Portsmouth Athenaeum in 1817. They smoked cigars and read books and talked about the good old days when Portsmouth was important. In 1823, they celebrated the city’s 200^th anniversary (the landing of David Thompson at Rye). They spruced up the city, threw a series of big homecoming parties, and invited their prodigal sons and daughters to visit. 

In future decades, people came in droves to a series of nostalgic celebrations. They arrived on an efficient new network of trains, trolleys and ferries. They left their work-a-day jobs in the hot, crowded, polluted cities and escaped to the fresh sea air. They stayed in tents and guest homes and in the huge new luxury hotels that sprang up along the shoreline and out at the Isles of Shoals. And they were drawn to the ramshackle wooden mansions – once home to wealthy colonial merchants – that were still standing all along the Piscataqua. Portsmouth branded itself as “The Old Town by the Sea.” Our tourism industry was born. 

The second Golden Age

Portsmouth almost killed the golden goose. Scores of architectural treasures were torn down to make way for bank parking lots, shopping malls, and bowling alleys. By the mid-1950s benefactors living outside the city had preserved half a dozen historic homes, restoring them one by one, and opening public history museums. But Portsmouth residents, still looking to modernize and find something to sell, invested little in their shared heritage.

Following World War II, with the economy again failing, the destruction continued until preservationists turned the tide. Strawbery Banke created a 10-acre museum. Theatre by the Sea opened on Ceres Street. The city launched a campaign to renovate Market Square. Prescott Park launched a summer arts festival along the river. The Music Hall, destined to become condos, was saved as a popular theater. A flood of young artists and artisans were drawn into the action, kicking off a cultural renaissance. 

The rest, as they say, is history. Over the next few decades, a rough and tumble seaport morphed into a heritage destination. Shops and restaurants thrived. Hotels appeared. Parks revived, festivals were born, sidewalks widened, and the waterfront revived. A convention center is planned.  

Portsmouth did not forget its maritime past, nor is it stuck there. The city has learned through trial and error that culture and business work together. Economic success and preservation are not enemies. We must welcome tourists eager to share our extraordinary quality of life, not dis them for stealing our parking spots. 

But this is still a fragile economic system. One oil spill, another devastating fire, the loss of more historic structures, the departure of the artistic community – each shift in the investment formula impacts the bottom line. And the bottom line is this – rich or poor, we all love this place and we all need to carve out a living. How we make that happen together, especially in these rocky economic times, will define the success or failure of Portsmouth’s second Golden Age.  

Copyright © 2008 by J. Dennis Robinson. All rights reserved.  ing.