These businesses considered the requirements of the miners and then set out to meet those needs. The merchants could charge practically whatever price they wanted because there were so few items, so many people, and so much gold. Inflation was the result.
What is the history of boomtown?
The original research for the project “Maximizing the Gains of Old and New Energy Development for America’s Rural Communities” was used to create this information sheet series. This series breaks down the findings into six chronological fact sheets to help readers understand the economic implications of energy development.
IntroductionWhat is a Boomtown?
A boomtown is a community that has seen fast expansion as a result of a sudden economic shock. Since the 1849 gold rush, which triggered a major population migration to California, there has been a long history of boomtowns in the United States tied to natural resource development. As a result of the increased population, mining towns sprang up all over the region to aid in the development of the gold rush. San Francisco became the principal supply base for the new industry, and it swiftly grew to become the largest metropolis west of the Mississippi until the 1920s. Today, the energy sector, which includes coal, oil, and natural gas, is linked to many modern boomtowns in the United States.
Characteristics of a Boomtown
Researchers have identified numerous traits that indicate a community’s economic boom. They include, but are not limited to, a growth in population, an increase in community and family wealth, and improved community economic performance. They are often tied to a natural resource such as coal, oil, and natural gas.
Cummings and Schulze (1978) claim that “Boomtowns have a huge population spike over a 5 to 12 year construction period, following which the population settles to a lower level linked with the completed activities” (p. 374). The impact on communal wealth creation is clearly proven as well. For example, it is believed that more than 600 Ohioans have become millionaires as a result of recent oil and gas production (Downing, 2013). In terms of the local economy, “Several studies have found that natural resource extraction boosts economic performance” (Tsvetkova and Partridge, 2015). Sudden economic shocks connected with oil and gas development affect many of the traits that form boomtowns.
Stages of Oil and Gas Development
To describe the oil and gas development process, researchers proposed four stages (see image 1 below). “(1) initial exploration/land acquisition; (2) drilling and development of supporting infrastructure; (3) drilling and filling in supporting supply chain; (4) mature stage of production,” according to Kelsey, Partridge, and White (2016). (p. 14).
Conclusion
A boomtown scenario for communities can result from a quick growth in population, wealth, and economic activity as a result of a shock. While various economic shocks (e.g. gold, silver, copper, technology) have triggered boomtowns in the past, many modern-day boomtowns are linked to oil and gas production. While economic shocks are well-documented contributors to boomtowns, each community will react differently. According to historical evidence, a community’s economic boom has a beginning and an end. 3rd fact sheet “Characteristics that influence the length of the boomtown cycle will be discussed in “Contributing Factors to a Boomtown Bust.”
This information is based on research funded by the United States Department of Agriculture’s National Institute of Food and Agriculture’s Agriculture and Food Research Initiative, under grant #11400612 titled “For America’s rural communities, Maximizing the Benefits of Old and New Energy Development.” Both the USDA AFRI funding and the project team from The Ohio State University’s College of Food, Agricultural, and Environmental Sciences and Department of Agricultural, Environmental, and Development Economics are acknowledged and appreciated by the authors. Any opinions, results, conclusions, or recommendations stated in this article are solely those of the author(s) and do not necessarily reflect the views of the USDA.
- T.L. Brundage, J. Jacquet, T.W. Kelsey, J.R. Ladlee, J. Lobdell, J.F. Lorson, L.L. Michael, and T.B. Murphy. Brundage, T.L., J. Jacquet, T.W. Kelsey, J.R. Ladlee, J.R. Ladlee, J.R. Ladlee, J. 2011. Marcellus Shale Workforce Needs in Pennsylvania. Marcellus Shale Education and Training Center, Williamsport, PA.
- Optimal Investment Strategy for Boomtowns: a Theoretical Analysis, American Economic Review, 68(3): 374-385, R.G. Cummings and W. Schulze, 1978. June is an economics professor at the University of New Mexico.
- T. Kelsey, M. Partridge, and N. White (June, 2016). Economic Experience and Policy Issues in the Development of Unconventional Gas and Oil in the United States. 191-214 in Applied Economic Perspectives and Policy, vol. 38, no. 2.
- A. Tsvetkova and M. Partridge (2015). Do oil and gas shocks differ from shocks in the rest of the economy in terms of economics in modern energy boomtowns? (Working Paper No. 65754 at MPRA). https://mpra.ub.uni-muenchen.de/65754/ retrieved from the Munich Personal RePEc Archive website.
In the gold rush, what is a boomtown?
A boomtown is defined as a place with rapid population and economic growth. Boomtowns are mainly mining towns where a valuable mineral resource has been discovered, such as gold, silver, or petroleum. It can happen in a gold rush, for example. After the gold is mined out, gold rush settlements usually diminish and vanish. They deteriorate into ghost towns.
The term can also refer to areas that are growing for various causes. This could be due to the town’s proximity to a major metropolis, its pleasant climate, or its proximity to a prominent attraction.
What did boomtowns have?
A boomtown is defined as a place with rapid population and economic growth. Boomtowns are mainly mining towns where a valuable mineral resource has been discovered, such as gold, silver, or petroleum. It can happen in a gold rush, for example.
What caused the West’s boomtowns to sprout up so quickly in the late 1800s?
During the Industrial Revolution at the turn of the nineteenth century, early boomtowns like Leeds, Liverpool, and Manchester saw a rapid increase in population and economic activity. These towns were relatively backwaters in pre-modern England, compared to the more prominent market towns of Bristol, Norwich, and York, but they quickly grew into major urban and industrial centers. Although the industries were built to take use of the strong Midlands infrastructure and the availability of enormous seams of inexpensive coal for fuel, the boomtowns did not immediately attribute their fast rise to the discovery of a local natural resource.
Trieste, Italy, is another classic boom town. The opening of the Suez Canal and the establishment of a free port in the 19th century ushered in a period of rapid economic growth. The old fishing community with a deep-water port, which used to be modest but geographically strategically positioned, was the Habsburg monarchy’s third largest city at the start of the First World War. For a long period, the city was utterly isolated, abandoned, and shrunk as a result of various new borders, World War II, and the Cold War. The port’s cargo handling and property prices both plummeted. Trieste only became the economic center of Europe once the surrounding countries joined the EU.
As firms and individuals uncovered new mining potential around the world in the mid-nineteenth century, boomtowns based on natural resources began to emerge. The California Gold Rush sparked multiple boomtowns in the Western United States during that time, when villages appeared out of nowhere in river valleys, mountains, and deserts around what was supposed to be valuable gold mining land. Mill towns arose in the late 19th and early 20th centuries as a result of unexpected growth in the wood industry; they tended to endure the decade or so it took to clearcut neighboring forests. Fort McMurray in Canada, where the exploitation of local oilsands necessitates a large number of workers, and Johannesburg in South Africa, which is built on the gold and diamond trade, are modern instances of resource-generated boomtowns.
Why have so many boomtowns become ghost towns?
Why have so many boomtowns become ghost towns? As prospectors moved on to more promising grounds or returned home, many boomtowns became ghost towns. Some ghost towns can still be found in the West, serving as memories of the mining frontier’s glory days.
Why were vigilantes used in boomtowns?
Because law and order were so hard to come by in the rapidly expanding mining towns, boomtowns used vigilante justice. Because there were not enough workers to enforce the law and because bandits were getting away with stealing and other crimes, vigilantes had to appoint themselves.
What became of the majority of boomtowns?
In 1850, Chicago was a muddy frontier town with a population of only 30,000 people. It had grown to ten times its original size in just two decades. In the next two decades, that number would have treble. Chicago, the world’s hog butcher, the headquarters of Montgomery Ward, and the nerve center of the nation’s rail network, had a population of more than two million people by 1910.
However, while other cities have performed similar function in the past, allowing people who were geographically mobile to also become economically mobile, movement patterns like the one that fed Chicago have broken down in modern-day America. Over the last 30 years, interstate travel has slowed across the country. But, more importantly, migration has slowed in the locations where there are the most opportunities.
Why have some boomtowns managed to survive?
After the mining boom, some boom towns thrived, while others became ghost towns. Why do you believe some towns managed to survive while others did not? Some people died because the chances of finding gold had dwindled. As a result, the miners relocated to new locations in search of more gold.