Baltimore became the third-largest city in the United States during the era of the early Republic. Founded in 1729 as a port for Baltimore County's growing iron and tobacco trade, Baltimore Town began to flourish during the 1740s, when farmers and millers from western Maryland and southern Pennsylvania began sending grain and flour there for shipment. Baltimore Town prospered during the 1760s when the demand for food in the Atlantic world rose dramatically. By the time of the Revolution, Baltimore was a bustling grain and flour port of nearly six thousand people.
The Scots-Irish merchants of Baltimore played a vital role during the struggle for independence, first as leaders of the resistance to British authority and later as suppliers of food for the French and American armies. These merchants profited handsomely from Baltimore's good fortune during the war. By war's end, Baltimore was the leading port town of the Chesapeake.
Baltimore's fortunes continued to rise during the early years of the Republic as merchants and mechanics flocked to town to take advantage of opportunities offered by its booming commercial economy. Baltimore merchants shipped grain, flour, corn, iron, and lumber to other American seaports, Mediterranean Europe, and the West Indies. They also sent Maryland and Virginia tobacco to continental Europe, chiefly France and the Netherlands. In return, Baltimore's merchants handled the extensive trade in European imports for the entire Chesapeake region. A growing community of commerce-related craftsmen operated shipyards, ropewalks, sailmaking lofts, flour mills, breweries, and bakeries to meet the needs of the booming shipping trade. Luxury craftsmen—clockmakers and watchmakers, silversmiths and jewelers, and cabinetmakers and chair-makers—began arriving in Baltimore during this period, testifying by their presence to the town's new wealth and sophistication.
The last decade of the eighteenth century was pivotal for Baltimore. The town population nearly doubled during this period from 13,503 residents in 1790 to 26,514 by 1800, making Baltimore the third-largest urban center in the United States. Economic growth and international turmoil fed this expansion. Baltimore's lucrative trade with the West Indies thrived as town merchants took advantage of commercial opportunities created by the wars of the French Revolution. Revolutions in France and the French island colony of Saint Domingue sent hundreds of French refugees to Baltimore, where both Catholics and slave owners could feel welcome. Hundreds of free people of color fled to Baltimore from Saint Domingue, joining the town's rapidly growing free black community. Slaves and free blacks lived and worked together in Baltimore, but freedom, not enslavement, was on the rise as the young port town entered the nineteenth century. By 1820 the free black population of 10,326 outnumbered the slave population of 4,357.
Town merchants and mechanics played influential roles in early national politics. In 1788 they strongly supported ratification of the Constitution. In 1797 they gained substantial control of town governance when they won approval from the Maryland General Assembly for a charter of incorporation for the city of Baltimore. With the emergence of the first party system in national politics, Baltimore's leadership embraced the anti-British politics of the Democratic-Republican Party. They helped elect Thomas Jefferson to the presidency in 1800 in the hope that a Democratic-Republican administration would more forcefully address the problem of British interference with American shipping.
Baltimore remained a Democratic-Republican stronghold throughout the years of the Jefferson and Madison administrations (1801-1817). At the start of the War of 1812 (1812-1815), Republican partisanship reached a fevered pitch. In July 1812 a Republican mob brutally attacked Federalist editor Alexander Contee Hanson and his Federalist supporters for Hanson's denunciation in his newspaper, the Federal Republican, of Congress's declaration of war. This mob assault, which resulted in the death of a Revolutionary War veteran and the maiming of several others, shocked the nation and led to universal condemnation of the city. The people of Baltimore, however, soon redeemed themselves. Between 12 and 14 September 1814, they successfully withstood the bombardment of Fort McHenry and repelled British troops attempting to invade the city. The successful defense of Baltimore halted the northward advance of British troops following the burning of the nation's capital and won the gratitude of the American people.
After the War of 1812, Baltimore's fortunes shifted. With the arrival of peace in the United States and Europe, city merchants lost important markets and opportunities. And as the center of American trade moved from the West Indies to the industrializing economy of England, Baltimore merchants lost their competitive advantage to the better-situated ports of New York and Philadelphia. Adding further to the city's woes, the Panic of 1819 led to the bankruptcy of many leading city merchants.
During the 1820s city merchants began to look westward to establish connections with the trade of the newly settled western states and territories. Baltimore's leaders had always believed that the city's geographic position as the westernmost port among the major eastern cities had given it a unique advantage for capturing western commerce. The success of the Erie Canal, which opened in 1825, quickly dispelled that illusion and sent Baltimore merchants searching for an alternative means of transportation. They found one in the primitive railroad technology developed in England to haul coal out of mines. In a bold and visionary step, they committed their funds and the city's future to the development of a new form of freight and passenger transportation. In April 1827 city merchants organized the Baltimore and Ohio Railroad. In so doing, they gave birth to a new form of transportation and, ultimately, a second American Revolution.