Indiana

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INDIANA

The stereotypical picture of Indiana is one of rolling farm fields, open space, and small towns with picturesque courthouse squares. The state of Indiana is much more than this, however. It is as urban as it is rural, and has a highly diversified economy. The state's economy has a high proportion of agriculture, but the state also houses a large heavy industrial and high technology sector. The urban-industrial lifestyle in some parts of Indiana coexists well with the rural small-town ways of life in other parts of the state.

Europeans first ventured into Indiana in the 1670s. It was the Frenchmen Father Jacques Marquette (1637–75) and Robert Cavelier (1643–87) who first explored the region. Another Frenchman named Jean Baptiste Bissot lived in a Native American village at the present site of Fort Wayne. The French erected Fort Miami in 1720. Vincennes' son constructed another fort at the site of the town that later bore his name. The British vied with the French for control of the territory during this period, and the land was ceded to the British after the French and Indian War (1754–1763). During the American Revolution (1775–1783) George Rogers Clark (1752–1818) captured Fort Vincennes from a British garrison.

Future development in what would become Indiana was regulated by the Ordinance of 1785 and the Northwest Ordinance of 1787. The Northwest Territory was the area between eastern Pennsylvania and the Mississippi River. It was bounded on the south by the Ohio River and on the north by Canada. This region included the present-day states of Indiana, Ohio, Illinois, Michigan, Wisconsin, and parts of Minnesota. In 1794 General Anthony Wayne (1745–96) defeated the Native Americans in Ohio at the Battle of Fallen Timbers. The resulting Treaty of Greenville pushed many Native American tribes out of the territory. This encouraged the rapid settlement of the region by white Americans.

The first state to form out of the Northwest Territory was Ohio in 1803. By that time the rest of the Northwest Territory was called the Indiana Territory. The Michigan and Illinois territories soon separated from the Indiana Territory, and Indiana took on its present boundaries. In 1816 it became the nineteenth state of the union.

Indiana developed from south to north, largely because of the commerce made possible by the Ohio River. An increasing number of settlers established farms in the area as Native American tribes were driven out of the state. Trade in corn, hogs, whiskey, and timber flourished along the river. Indianapolis was a centrally located and planned city, being the capital of the state. It grew slowly, however. The major transportation arteries were located far away from it early on.

In the 1830s the state embarked on a massive internal improvements program that left it in severe debt. The Wabash Canal was built, largely using the labor of Irish immigrants. The National Road (now U.S. 40) reached Indiana in 1827, and the Michigan Road (now U.S. 421) was completed in the late 1830s. The first railroad in Indiana was completed in 1847. It ran from Madison to Indianapolis. Railroad building increased rapidly in the 1850s and continued to do so after the American Civil War (1861–1865).

Indiana was staunchly pro-Union during the Civil War. Primarily an agricultural economy when the war began, Indiana began to industrialize during the war. The industries included such enterprises as gristmills, sawmills, meat packing plants, breweries, furniture factories, and carriage makers. The Studebaker Company became well known for its wagon manufacture during the Civil War. The Van Camp Company was also important during the war for its canned pork and beans.

Industrialization and growth continued after the war. In 1867 the famous Eli Lilly drug company was established in Indianapolis. Glass factories proliferated in the 1880s in northeastern Indiana after the discovery of natural gas. New manufacturing towns like Terre Haute, Muncie, Fort Wayne, and South Bend began to grow. Steel manufacture became the lifeblood of Gary and an oil refining industry was centered in nearby Calumet. By the beginning of the twentieth century, Indiana had become a center for the developing automobile industry, with 375 manufacturers were turning out "horseless carriages." The popularity of cars in the state made possible the construction of a speedway at Indianapolis; the first Indianapolis 500 race was held in 1911.

Indiana industries were benefited by the onset of World War I (1914–1918). But things changed once the war was over. By 1920 the number of automobile manufacturers had declined to around a dozen. The only one to compete successfully with the "big three" automakers in Detroit was Studebaker. It grew to around 23,000 employees during World War II (1939–1945). Studebaker ceased manufacturing in 1965, but auto parts remained a large segment of Indiana's industrial base. By 1920 the urban population was beginning to outnumber the rural population.

World War II gave a strong boost to Indiana's economy. Most factories converted to production of war materials, and unemployment virtually disappeared in the state. DuPont and Goodyear built large powder plants near Charlestown. That virtually made the sleepy small town of just under 900 "explode" overnight. According to historian John Bartlow Martin, 45,000 were employed in the plants' operations and 15,000 managed to stay in Charlestown. Martin wrote: "The single liquor store reportedly earned more than one hundred thousand dollars net." The town was again virtually deserted after the war: "[T]housands of war workers hadn't even waited to be laid off; they just piled their mattresses, stepladders, and pots and pans onto their cars and put the kids in the back seat and went back across the river to the hills to stay."

The economy of Indiana remained strong even after wartime production ceased. The number of wage earners in Indiana nearly doubled between 1940 and 1950. Workers came in from other states. Labor unions grew despite Indiana's reputation as an anti-union state. National corporations like General Motors and Inland Steel were absorbing smaller companies. In 1984 General Motors was the state's largest employer, followed by Inland and U.S. Steel. The availability of natural resources such as coal, natural gas, and stone encouraged industrial development; good transportation networks also enabled industrial success. This was especially true in the northwestern part of the state.

The early 1980s were difficult economic times for Indiana. The state suffered a recession like many of the other "Rust Belt" states. In addition Indiana had been losing population since the 1960s as many workers migrated south. The state's economy began to improve as high-technology industries were brought in and the service sector expanded. That brought a net gain in population between 1990 and 1996. In 1995 Indiana's per capita income was over $21,000, ranked 28th in the nation. In 1997 there were six Fortune 500 companies with headquarters in Indiana. The state continued to rank among the top ten states in agricultural production, with cash receipts for all crops and livestock reaching $5 billion by 1995.

See also: Northwest Ordinance, Rust Belt