The Port of Port Townsend is located on the northeast corner of Washington's Olympic Peninsula, one of the nation's best maritime destinations.
In 1792, Captain George Vancouver sailed his ship, the HMS Discovery inland from Cape Flattery, putting into Discovery Bay for repairs. While in the area, he observed what his log describes as a "very safe and capacious harbour," which he named Port Townsend in honor of his friend, the first Marquis of Townshend.
Almost sixty years later the first settlers, Alfred Plummer and Charles Bachelder arrived and built a log cabin at what is now the corner of Water and Tyler Streets. On April 24, 1851, Port Townsend filed as the Puget Sound's second city, after Olympia and six months before Seattle. From its beginnings as a logging and farming town, Port Townsend quickly entered the seafaring world as its first major commercial enterprise. Only three years after its founding, the town became the headquarters of the Puget Sound Customs District. From its small beginnings, Port Townsend became a thriving international seaport with a reputation as notorious as San Francisco's Barbary Coast.
For a time, about half the ships that came into the Puget Sound picked up their crews in Port Townsend. Since there were not enough men in town willing to go to sea for extended periods, shanghaiing became a business staple. Saloons, brothels, and gambling halls were accepted as a necessary, if regrettable, feature of the thriving maritime economy. To insulate their families from the rough-and-tumble downtown, the wealthier citizens developed a commercial "uptown" district on the bluff above Water Street...away from the sailors, gamblers, "fancy ladies" and other "lower" elements down on the bay's shores.
As the non-seafaring population increased, Port Townsend reached a tentative agreement with the Oregon Improvement Company, a subsidiary of the Union Pacific Railroad, to route its line from the Columbia River to Port Townsend. The speculation boom was on and population quickly doubled in anticipation of a golden future. Property values skyrocketed and business flourished. At the end of 1890, however, the railroad announced that it would terminate in Seattle, and the City of Dreams very quickly went into an economic tailspin.
The construction of a pulp and paper mill in 1927 helped Port Townsend recover and remain viable through the Great Depression. Today the Port Townsend Paper remains the largest single employer in Jefferson County.