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Railroads were built to reach more areas in the 1870-1890s and Port Townsend was the northwest extension of the rail lines. Its port was large and frequented by overseas vessels, so
shipping of goods and timber from the area was a major part of the economy. Much of the buildings were built on the speculation that Port Townsend would become a booming
shipping port and major city. When the depression hit, those plans lost the capital to continue and rail lines ended on the east side of Puget Sound. By the late 1890s the boom was over. Without the railroad to spur economic growth, the town shrank and investors looked elsewhere to make a good return.

	Originally named 'Port Townshend' by Captain George Vancouver. In 1792, Port Townsend was immediately recognized as a good, safe harbor, which it remains to this day. The official settlement of the city took place on the 24th of April, 1851. American Indian tribes located in what is now Jefferson County in the mid-19th century included the Chemakum (or Chimacum). Port Townsend is also called the "City of Dreams" because of the early speculation that the city would be the largest harbor on the west coast of the United States. By the late 1800s Port Townsend was a well-known seaport, very active and banking on the future. Many homes and buildings were built during that time, with most of the architecture ornate Victorian.

Railroads were built to reach more areas in the 1870-1890s and Port Townsend was the northwest extension of the rail lines. Its port was large and frequented by overseas vessels, so shipping of goods and timber from the area was a major part of the economy. Much of the buildings were built on the speculation that Port Townsend would become a booming shipping port and major city. When the depression hit, those plans lost the capital to continue and rail lines ended on the east side of Puget Sound. By the late 1890s the boom was over. Without the railroad to spur economic growth, the town shrank and investors looked elsewhere to make a good return.

	Many people left the area and many buildings were abandoned. Port Townsend's economy was very weak until the 1920s when a paper mill was built on the edge of the town. The town experienced a renaissance beginning in the 1970s as new residents, including many retirees, moved to town. Because of the speed at which the economy fell in the 1890s and the non-existence of any industry or economy to replace it, none of the Victorian buildings were torn down or built over in the intervening period. They were in essence preserved as time capsules for the next 100 years when the value of keeping them intact was appreciated and fostered.

Railroads were built to reach more areas in the 1870-1890s and Port Townsend was the northwest extension of the rail lines. Its port was large and frequented by overseas vessels, so shipping of goods and timber from the area was a major part of the economy. Much of the buildings were built on the speculation that Port Townsend would become a booming shipping port and major city. When the depression hit, those plans lost the capital to continue and rail lines ended on the east side of Puget Sound. By the late 1890s the boom was over. Without the railroad to spur economic growth, the town shrank and investors looked elsewhere to make a good return.

	Over the decades that followed, Port Townsend maintained its economic stability in a variety of ways, including the development of artillery fortifications at Fort Worden. Currently, it is most famous economically for the enormously successful Jazz Workshop that is held there every Summer. As part of the workshop, famous Jazz musicians play all week in the Port Townsend clubs and bars, drawing many tourists to the area. Miraculously, despite playing to tourism, the buildings and homes of the city's first boom remained largely intact.