From the WSJ Real Estate Archives

Can New Orleans
Bounce Back?

by Michael M. Phillips and Cynthia Crossen
From The Wall Street Journal Online
September 02, 2006

At the close of World War II, American bombers incinerated the cities of Hiroshima and Nagasaki with atomic weapons. Within two decades, both cities had been rebuilt, and their populations had surpassed prewar levels.

The lesson, according to economists who have studied the question, is that, while it may take years, cities are resilient and usually bounce back from the worst natural or man-made devastation. "Even nuclear bombs and fire bombing of cities was not enough to change the level and nature of economic activity," says Columbia University economist Donald R. Davis, who studied Japanese reconstruction. "People don't abandon their cities, and indeed industries don't abandon the cities they're in."

Such large-scale disasters are rare, of course, but a look back at four of them in the U.S. -- as New Orleans copes with the aftermath of Hurricane Katrina -- reinforces that conclusion: Americans are loath to surrender their cities despite the threat of an array of biblical plagues.

1871 Chicago Fire

Whether Mrs. O'Leary's cow really kicked over the lamp that started the whole thing or not is still a matter of debate. But the fact is that somewhere near the O'Leary barn on the evening of Oct. 8, 1871, a small fire became a big fire that became an out-of-control conflagration. It had been a dry fall, and Chicago firefighters were already stretched thin. By the end of the next day, the city's "burnt district," as it became known, covered a swath four miles long and about three-quarters of a mile wide.

The fire killed perhaps 300 people, destroyed 18,000 buildings, left 100,000 Chicagoans without homes and caused some $3.2 billion in damages, at today's prices. Half of the city had insurance, but only half of those actually got paid from their policies.

Smallpox and cholera spread in an atmosphere of poor sanitation, close living and filthy water. "The city is infested with a horde of thieves, burglars and cut-throats, bent on plunder, and who will not hesitate to burn, pillage and even murder, as opportunity may seem to offer them to do so with safety," the Chicago Evening Journal advised the day after the fire, according to an essay published by the Chicago Historical Society.

[An artist's rendition of the Chicago fire of 1871 as people flee downtown.]
An artist's rendition of the Chicago fire of 1871 as people flee downtown.

The authorities declared martial law, and Lt. Gen. Philip Sheridan, the Civil War hero and a Chicago resident, led troops in to help preserve "the good order and peace of the city," in the words of Mayor Roswell B. Mason.

Yet almost as soon as the embers had cooled, Chicago business leaders deployed to New York to persuade investors that this was the time to put more of their money into Chicago, not less. Peter Alter, curator of the Chicago Historical Society, recounts the story of William D. Kerfoot, a real-estate speculator whose offices had burned. The day after the fire was extinguished, Mr. Kerfoot erected a crudely made painted sign: "All Gone But Wife, Children and Energy."

The stockyards had been spared the flames, as had much of the city's heavy industry. "Five years will give Chicago more men, more money, more business, than she would have had without this fire," John Stephen Wright, one of the city's most vocal boosters, said at the time, according to the Chicago Historical Society.

He proved prophetic. Chicago, on the shores of Lake Michigan, was a crucial crossroads of agriculture and industry, too valuable to give up. By the end of the decade Chicago was bigger and better than before. The city had a population of roughly 300,000 before the fire. In 1880 it was home to half a million.

"Chicago was both built and rebuilt so quickly because the rest of the national and international economy needed it so badly," says Carl Smith, a professor of English, American Studies and History at Northwestern University in Evanston, Ill. The rebuilding accelerated the division of the city into commercial and residential districts, and hurried the adoption of fire-resistant building materials. The city grew so quickly that many of the buildings put up after the fire were torn down within a couple of decades to make way for the new skyscrapers.

1906 San Francisco Earthquake

When the last fire was extinguished after the San Francisco earthquake of April 1906, survivors emerged from their makeshift shelters to find three-quarters of their city in ruins. All telephone and telegraph communications had ceased. There was little water for drinking.

[A man photographs the ruins of a building following the 1906 San Francisco earthquake.]
A man photographs the ruins of a building following the 1906 San Francisco earthquake.

The railroads had been destroyed; the port was completely blocked by debris. Few, if any, hotels, restaurants or cafés survived, and 300,000 people were homeless. Banks were closed, and would remain so for a month. Despite martial law, looters roamed the streets, and the mayor ordered them to be shot on sight.

"As regards industrial and commercial losses, the conditions are appalling," wrote Victor H. Metcalf, secretary of labor and commerce, in a report to President Roosevelt. "Not only have the business and industrial houses and establishments of one-half million people disappeared, leaving them destitute financially and their means of livelihood temporarily gone, but the complicated system of transportation indispensable to them has been almost totally destroyed."

Yet there was never any doubt, among either the survivors or their elected officials, that San Francisco would be rebuilt. Indeed, just five days after the earthquake, California's governor, George Pardee, told a reporter, "The work of rebuilding San Francisco has commenced, and I expect to see the great metropolis replaced on a much grander scale than ever before."

San Francisco's mayor, Eugene E. Schmitz, quickly appointed a group of local businessmen, lawyers and journalists, known as the Citizens' Committee of Fifty, to organize the recovery. In the first days and weeks after the disaster, that meant trying to feed, clothe and shelter survivors while raising money to repair the city's infrastructure. Private citizens from across America pledged $10 million, as well as train cars full of goods. The federal government voted to give the city $2.5 million, and Japan and Canada contributed to the relief fund. New bond issues were authorized, and Eastern financiers were encouraged to buy about $14 million of previously authorized but unsold municipal bonds.

Engineers, contractors and draftsmen were recruited from other parts of the country, and the city began trying to buy all the lumber, cement and glass it could find. Temporary structures were erected in several centrally located squares for use by architects, transportation and insurance officials and lawyers.

Labor unions quickly convened to mourn their lost members -- and set rules for the coming boom. The painters' union, for example, suspended many of its trade rules: "No overtime will be allowed; straight time for night or Sunday work. The brothers are requested to be satisfied with eight hours' work and give unemployed brothers a chance." Members of the Plumbers, Gas and Steam Fitters' Union, 80% of whom said they had lost their tools, voted to volunteer their services; about 500 plumbers worked around the clock for more than a week repairing broken pipes.

Obviously, all did not go smoothly in the three years it took to rebuild San Francisco. There were complaints of red tape and poor coordination among relief agencies. Unscrupulous building contractors installed new foundations made of mud rather than cement.

Some public officials, including some from the citizens committee, or "boodle board," as it was nicknamed, funneled donations into their own pockets. Yet just three months later, in July 1906, the St. Francis Hotel Annex re-opened, and hundreds of buildings were under construction.

Charles B. Sedgwick, editor of a newspaper called the British-Californian, described the resilience of the people of San Francisco the day after the earthquake. "Men and women came to see what was going on, gazed about in blank astonishment for a few moments, then went their way as though nothing extraordinary was transpiring," he wrote. "It was this indifference, or philosophical resignation to the inevitable, that struck me as the most marvelous thing in connection with the great tragedy. This, and the ease and quickness with which people grew accustomed to the changed conditions."

1889 Johnstown Flood

It could be argued that the Johnstown flood of 1889 wasn't a natural disaster at all, but the inevitable consequence of humans thinking they could control nature. Whatever the cause, the day after a dam burst, unleashing 20 million tons of water on the residents of Johnstown, Pa., and its neighboring boroughs, the area looked like "a vast sea of muck and rubble and filthy water," in the words of David McCullough, author of "The Johnstown Flood."

[A house sits on its side with a tree sticking out a window in the aftermath of the Johnstown flood of 1889.]
A house sits on its side with a tree sticking out a window in the aftermath of the Johnstown flood of 1889.

A survivor, a Presbyterian minister named David Beale, realized that words couldn't describe what he was seeing. "It were vain to undertake to tell the world how or what we felt, when shoeless, hatless and many of us almost naked, some bruised and broken, we stood there and looked upon that scene of death and desolation."

Like Dr. Beale, some 25,000 survivors of the steel town needed food and shelter. Among the first workers who came to help Johnstown were 55 undertakers, who would work in nine temporary morgues. Recovery of the dead continued for months; almost a third of the 2,200 bodies were never identified. Five days after the flood, Clara Barton and five Red Cross workers arrived from Washington, D.C. It was the organization's first major peacetime relief effort.

Articles about Johnstown's calamity were widely published in the country's burgeoning national press, and relief poured in. The New York Stock Exchange pledged $20,000. The United States Brewers Association sent $10,000. Cincinnati donated 20,000 pounds of ham; prisoners of a Pittsburgh penitentiary baked 1,000 loaves of bread.

"Men in light skiffs are poling about the streets all day taking passengers from place to place," wrote a witness, Willis Fletcher Johnson. "Their services are free." Tents served as dining halls, coffee was ladled from buckets. With the arrival of tools and dynamite, some of the biggest piles of debris could be loosened.

Pennsylvania's governor, James Beaver, created the Pennsylvania Relief Committee to coordinate cleanup and restoration, while the state militia kept order. With thousands of men working, the Pennsylvania Railroad rebuilt 20 miles of track in two weeks. One gang of workers, Mr. McCullough writes, did nothing but sprinkle disinfectants over the entire area. Hundreds of cellars, flooded with "every kind of filth," had to be dug out by hand.

But there was no hope the area would survive unless its biggest employer, the Cambria Iron Works, re-opened. On June 9, company officials announced that it would. In July, a little more than a month after the flood, you could buy ice cream for the Independence Day celebration on the streets of Johnstown.

1900 Galveston Hurricane

During the afternoon of Saturday, Sept. 8, 1900, the town of Galveston, Texas, became part of the ocean floor.

Broadway, the main East-West street through town, stood at 8.7 feet above normal sea level, the highest land on the island on which Galveston sits. But that day a hurricane with 84 mile-per-hour winds hit Galveston, and, as the ocean surged ashore, sea level was soon seven feet above Broadway. "Every part of the island was covered in water," says Christy Carl, director of the Galveston County Historical Museum.

[Debris litters a street after the 1900 Galveston hurricane that killed 8,000 people.]
Debris litters a street after the 1900 Galveston hurricane that killed 8,000 people.

The row of wooden houses nearest the shore crumpled with the impact of the waves, and the debris slammed into the next block. And the next. And the next, until the detritus itself formed a wall to stop the advancing waters. All told, some 3,600 buildings were destroyed.

The federal government had just completed the 1900 census, and Galveston, a prosperous island of cotton merchants, bankers and shippers, boasted a population of 37,500 on Saturday morning. By day's end, as many as 8,000 residents were dead, along with 2,000 or so more on the mainland, making the Galveston hurricane the deadliest natural disaster in the history of the U.S.

Thousands of survivors fled, never to return, according to Casey Greene, head of special collections at the Rosenberg Library in Galveston. Some, perhaps, had in mind the experience of Indianola, Texas, just west of Galveston. The residents of Indianola had decided to rebuild their lives after being hit by a hurricane in 1875, a storm that killed between 150 and 300 people. They were still rebuilding when a second hurricane flattened the town in 1886. This time they gave up and abandoned Indianola for good.

But in Galveston a large number of business and civic leaders elected to stay and rebuild after the catastrophe of 1900. The city divided itself into wards to provide relief to the homeless and injured. And town leaders and Army engineers launched an extraordinary effort to insulate the exposed barrier island from the fury of nature. Between 1902 and 1904, the Army Corps of Engineers built a seawall that now stretches more than 10 miles and stands 17 feet high.

And in case the seawall didn't deflect the cresting waters, the engineers raised the city. They put each home on the Gulf side of the island up on stilts and pumped wet sand underneath to elevate it. Brick homes couldn't be raised, so the owners had to fill in their basements instead. The island's terrain was graded to slope gradually down toward Galveston Bay. The project took eight years to complete.

Another hurricane -- thought to be as strong or stronger than the big storm -- hit the island in 1915, killing about 275 people. It was a disaster, but the seawall and the elevated ground level apparently kept the toll from approaching the grim tally from 1900.

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