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During the late 19th century, the term was gradually adopted by cities across the United States and Canada to refer to the historical core of the city, which was most often the same as the commercial heart of the city. \"Uptown\" also spread, but to a much lesser extent. In both cases, though, the directionality of both words was lost, so that a Bostonian might refer to going \"downtown\", even though it was north of where they were.
Downtown lay to the south in Detroit, but to the north in Cleveland, to the east in St. Louis, and to the west in Pittsburgh. In Boston, a resident pointed out in 1880, downtown was in the center of the city. Uptown was north of downtown in Cincinnati, but south of downtown in New Orleans and San Francisco.
Notably, \"downtown\" was not included in dictionaries as late as the 1880s. But by the early 1900s, \"downtown\" was clearly established as the proper term in American English for a city's central business district, although the word was virtually unknown in Britain and Western Europe, where expressions such as \"city centre\" (British English), \"el centro\" (Spanish), \"das Zentrum\" (German), etc are used. Even as late as the early part of the 20th century, English travel writers felt it necessary to explain to their readers what \"downtown\" meant.
Real estate interests were particularly concerned about the tendency of downtown to move because the downtown area had by far the highest land values in each city. One commentator said that if Chicago's land values were shown as height on a relief map, the Loop would be equivalent to the peaks of the Himalayas compared to the rest of the city. In 1926, Chicago's central business district, which took up less than 1% of the city, had 20% of the city's land value. The same relationship was true in St. Louis in the mid-20s (20%) and Los Angeles in the early 1930s (17%). So when a downtown area started to shift its location, some property owners were bound to lose a great deal of money, while others would stand to gain.
One way in which downtown changed from the late 19th century to the early part of the 20th century was that industrial concerns began to leave downtown and move to the periphery of the city, which meant that downtown's businesses were chiefly part of the burgeoning service sector. Brand new firms followed the older ones, and never came to downtown, settling at the edges of the city or the urban area. Industrial districts developed in these areas, which were sometimes specifically zoned for manufacturing. There, land was considerably cheaper than downtown, property taxes were lower, transportation of supplies and finished products was much easier without the constant congestion emblematic of downtown, and with the improvement of the telephone system, the industrial firms could still keep in touch with the companies they did business with elsewhere. As a result of this migration, manufacturing was no longer a significant part of the downtown mix of businesses.
Another sector which began to move away from downtown even before the turn of the 20th century were the great cultural institutions: museums, symphony halls, main libraries and so on. Not only was the high cost of land downtown a factor, but these institutions wanted larger plots of land than were available there, so that their buildings could themselves be easily perceived as works of art. Organizations such as the Metropolitan Museum of Art, the New-York Historical Society, the American Museum of Natural History and the Museum of the City of New York, all in Manhattan, moved out of downtown, as did the Museum of Fine Arts, the Boston Public Library, the Boston Symphony Orchestra, and the Massachusetts Historical Society in Boston, the Cleveland Museum of Art, the Baltimore Museum of Art, the Detroit Public Library and the Detroit Institute of Art, and most of the cultural institutions in Pittsburgh. Public reaction to these moves was mixed, with some bemoaning the loss of a counterbalance to the overall materialism of downtown, while others, particularly those involved in real estate, looked positively on the availability of the land which the cultural institutions left behind.
The loss of the major cultural institutions left downtown as a place primarily dedicated to business, but the loss of another sector, retail shopping, defined the type of business that was done there. The great retail outlets like the department stores had always had the tendency to move closer to the residential districts, to make it easier for their customers to get to them, but after 1920 they started to congregate in secondary business districts on the periphery of the city. The growth of chain stores such as J. C. Penney, F. W. Woolworth, Kresge and W. T. Grant, contributed to the increased importance of the outlying shopping districts, which began outselling those retail stores which had remained in the central business district, and provoked those stores to open branches in the secondary districts in attempt to go to where there customers were instead of having them come downtown to them.
Entertainment venues also contributed to the decentralization of commerce which affected the importance and influence of downtown and the central business district. Theaters, vaudeville houses, dance halls and night clubs had been primarily located in downtown, with nickelodeons spread throughout the city. When film became the dominant medium, and exhibitors started to build movie theaters to show them in, they at first built those venues downtown as well, but, as in retail shopping, chain exhibitors such as Loews began to construct them in locations convenient to the mass audience they were seeking; again, it was a matter of bringing their product to where the people were. By the late 1920s, movie houses outside of downtown far outnumbered those in the central district. Not all the movie theaters in the periphery were palaces, but some were, and the net effect was that downtown was no longer the entertainment center of the city.
With the loss of manufacturing, the major cultural institutions, much of the retail shopping in the city, and its loss of status as the entertainment center, the nature of downtown had changed considerably. It was still the location of banks, stocks and commodity exchanges, law and accounting firms, the headquarters of the major industrial concerns and public utilities, insurance companies, and advertising agencies, and in its confines continued to be built new and taller skyscrapers housing offices, hotels and even department stores, but it was still steadily losing ground as decentralization took its toll. Its daytime population was not keeping pace with the population growth of the city around it, and property values, while continuing to rise, were not rising as fast as those in the secondary business districts. Downtown was still the central business district, and was still the most important area for doing business and commerce, but it was no longer as dominant as it once was.
The causes of decentralization, which decreased the importance of downtown in the life of American cities, have been ascribed to many factors, including each city's normal growth patterns; advances in technology like the telephone, which made it easier for business-to-business intercourse to take place over a distance, thus lessening the need for a centralized commercial core; the rise of the private automobile, which allowed shoppers to go to peripheral business districts more easily; a strong increase in streetcar fares; and the continuing problem of congestion in the narrow streets of the downtown area.
As much as people disagreed about what caused decentralization, they were even less in agreement about how decentralization would affect the central business district, with opinions varying all the way from the belief that it would diminish downtown sufficiently that it would eventually consist of only offices and the headquarters of corporate giants, to the belief that decentralization would lead to the (perhaps deserved) death of downtown entirely as unnecessary, a victim of its untameable traffic congestion. In between were those who saw a diminishment of the area's influence, but not enough to prevent it from remaining the \"Sun\" that the outlying business districts revolved around. Others doubted whether decentralization had as strong an impact as it was credited with. Positions were taken that downtown was a natural part of the evolution of a city, or the unnatural result of a de facto conspiracy by merchants and property owners, so the question of what decentralization would do to downtown became bound up with the question about the area's legitimacy.
Decentralization also increased the incidences of rivalry between downtown and burgeoning business districts. In Los Angeles, for instance, downtown and Wilshire Boulevard battled for dominance, and in Cincinnati the rivalry was between the old downtown centered around Fountain Square and the one on Canal Street. The diminishment of downtown by decentralization caused these battles to be between areas that were now more relatively equal.
Like almost every other aspect of American life, the Great Depression had a major effect on the country's downtown area. Downtown was just coming off a major building boom, in which significant amounts of new commercial and office space, hotels, and department stores had been built. By 1931 there were 89 buildings of 30 stories or more in Manhattan, and between 1925 and 1931, office space nearly doubled; in Chicago, it increased by almost 75%, in Philadelphia by almost two-thirds, and by more than 50% in New Orleans and Denver. In the 1920s, 500,000 additional hotel rooms were built in New York, and from 1927 to 1931 there were 84 large hotels built there, an increase of hotel space by two-thirds.
Despite this recovery, the daytime population of the country's downt