Early years

Indianapolis was founded as the state capital in 1821 by an act of the Indiana General Assembly. Prior to its official founding, Indianapolis was a swampy area called the Fall Creek Settlement sparsely settled by fur traders. The first European American settler is generally believed to be George Pogue, who on March 2, 1819, settled in a double log cabin along the White River in what is now White River State Park in downtown Indianapolis. The state commissioned Alexander Ralston to design the new capital city. Ralston was an apprentice to the French architect Pierre L'Enfant, and he helped L'Enfant plan Washington, DC. Ralston's original plan for Indianapolis called for a city of only 1 square mile. Under Ralston's plan, at the center of the city was placed the Governor's Circle, a large circular commons, which was to be the site of the Governor's mansion. It was used as a market commons for over six years. Although an expensive Governor's mansion was finally constructed in 1827, no Governor ever lived in the house at Governor's Circle, as the site in the city center lacked any privacy. The Governor's mansion was finally demolished in 1857. (See History of Indianapolis and Marion County Indiana by B.R. Sulgrove, 1884). Later, Governor's Circle became Monument Circle after the impressive 284-foot-tall (86.5-meter-tall) neoclassical limestone and bronze State Soldiers' and Sailors' Monument, designed by German architect Bruno Schmitz, was completed on the site in 1901.

The Industrial Era

While the city lies on the old east-west National Road, the portion of that road that crosses Indiana was not completed until a decade after the city's founding. Indianapolis was founded on the White River under the incorrect assumption that the river would serve as a major transportation artery; however, the waterway was too sandy for trade. Through the mid-1800s, a horse-drawn barge canal by-passed the river bringing goods into the city. The Central Canal was one of eight major infrastructure projects authorized by the state's Mammoth Improvement Bill of 1835. The Central Canal was intended to run 296 miles (476 km) from near Logansport, through Indianapolis, and to Evansville. The Central Canal was planned to connect the Wabash and Erie Canal to the Ohio River, completing a link between Lake Erie in the State of Ohio with the portion of the Ohio River flowing through southern Indiana in order to promote trade and commerce along its length. Construction of the Central Canal commenced in 1836, but Indiana went bankrupt in 1839 from the loans taken out under the aforementioned bill and all work on the project ceased. At the time, the 24 mile (39 km) portion of the Indianapolis section of the canal was dug and filled, but only an 8.29 mile (13 km) portion connecting downtown Indianapolis with the village of Broad Ripple to the north was ever operational. The portion of the completed Central Canal and adjoining White River have been turned into the White River State Park.

The first railroad to service Indianapolis, the Madison & Indianapolis, began operation on October 1, 1847, and subsequent railroad connections enlarged the town. The population soared from just over 8,000 in 1850 to more than 169,000 by 1900. Later, the automobile, as in most American cities, caused a suburban explosion. With automobile companies as Duesenberg, Marmon, National, and Stutz, Indianapolis was a center of production rivaling Detroit, at least for a few years. The internationally renowned automobile races that take place at the Indianapolis Motor Speedway every year are a notable residual from that booming industry at the beginning of the 20th century. With roads as the spokes of a wheel, Indianapolis was on its way to becoming a major "hub" of regional transport connecting to Chicago, Louisville, Cincinnati, Columbus and St. Louis, as is befitting the capital of a state whose motto is "The Crossroads of America." Today, four interstate roads intersect in Indianapolis: routes 65, 69, 70, and 74. The city is a major trucking center, and the extensive network of highways has allowed Indianapolis to enjoy a relatively low amount of traffic congestion for a city its size.

Economic and political development

Indianapolis entered a period of great prosperity at the beginning of the 20th century, and during this time the city witnessed great economic, social, and cultural progress. Much of this was due to the discovery in 1886 of a huge natural gas deposit in east-central Indiana, the celebrated Trenton Field. A few years later, the discovery of oil in the area would follow. The Trenton Field formed the western portion of what was at the time the world's largest oil field and natural gas deposit, the Lima-Indiana Field (stretching from northwestern Ohio to east-central Indiana). The state government offered a free supply of natural gas to factories that were built there. This led to a sharp increase in industries such as glass and automobile manufacturing. However, the natural gas deposits were largely depleted by 1912 and completely gone by 1920, and the end of the gas boom along with the coinciding rapid decline of oil production (which continued on a greatly diminished scale until 1930) contributed to an abrupt end of the golden era.

Racial relations

A darker period of Indianapolis history began with the rise of the second Ku Klux Klan movement in the United States. The Indiana chapter of the Klan was founded in 1920 and quickly became the most powerful Klan organization in the United States. In 1922, D. C. Stephenson was appointed the Klan Grand Dragon of Indiana and 22 other states; he promptly moved the Indiana Klan's headquarters to Indianapolis, which was already coming under the Klan's influence. The Klan became the most powerful political and social organization in the city during the period from 1921 through 1928. The Klan continued to solidify its stronghold on the state, taking over the Indiana Republican Party and using its new political might to establish a Klan-backed slate of candidates which swept state elections in 1924. The elections allowed the Klan to seize control of the Indiana General Assembly and place the corrupt Governor Edward Jackson in office. By then, more than 40% of the native-born white males in Indianapolis claimed membership in the Klan. Klan-backed candidates took over the City Council, the Board of School Commissioners, and the Board of County Commissioners. Through the Klan, Stephenson ruled over the State of Indiana, leading a powerful national movement set on gaining control of the United States Congress and the White House. However, the power of the Klan would quickly begin to crumble after Stephenson was convicted at the end of 1925 for the rape and murder of a young Indianapolis woman, Madge Oberholtzer. Following Stephenson's conviction, the Klan suffered a tremendous blow and quickly lost influence. When Governor Jackson refused to pardon Stephenson, he retaliated by going public with information of corruption which brought down several politicians throughout Indiana. The Mayor of Indianapolis and several local officials were convicted of bribery and jailed. Governor Jackson was indicted on charges of bribery, but he was acquitted in 1928 because the statute of limitations had run out; he completed his term in disgrace. The Klan continued to dwindle in popularity in Indiana and nationwide, and the national organization officially disbanded in 1944.

Years later, Indianapolis would witness an historic moment in the Civil Rights Movement. On April 4, 1968, while on route to a presidential campaign rally in Indianapolis, Robert F. Kennedy would learn of the assassination of Martin Luther King Jr. which occurred earlier that day. Kennedy would later deliver an impromptu speech on race reconciliation to a mostly African-American crowd in a poor inner-city Indianapolis neighborhood. While rioting broke out in cities across the United States following the news of King's assassination, Indianapolis was the only major city where rioting did not occur.

Unigov
 
As the result of a 1970 consolidation between city and county government (known as "Unigov"), the city of Indianapolis merged most government services with those of the county. For the most part, this resulted in a unification of Indianapolis with its immediate suburbs. Four communities within Marion County (Beech Grove, Lawrence, Southport and Speedway) are partially outside of the Unigov arrangement. Also, 11 other communities (called "included towns") are legally included in the Consolidated City of Indianapolis under Unigov, per Indiana Code 36-3-1-4 sec. 4(a)(2), which states that the Consolidated City of Indianapolis includes the entire area of Marion County, except the four previously mentioned "excluded" communities. The 11 "included towns" elected to retain their "town status" under Unigov as defined according to the Indiana Constitution (there were originally 14, but 3 later dissolved), but the Indiana Constitution does not define "town status."

These "included towns" are fully subject to the laws and control of the Consolidated City of Indianapolis, but some still impose a separate property tax and provide police and other services under contract with township or county government or the City of Indianapolis. Additionally, throughout Marion County certain local services such as schools, fire and police remain unconsolidated. However, the mayor of Indianapolis is also the mayor of all of Marion County, and the City-County Council sits as the legislative body for all of Marion County. Currently, Indianapolis is undergoing serious internal debate over how much, or whether, more of local taxation, government, and services should be further integrated. Further consolidation of city and county services and functions would require passage of new legislation by the Indiana General Assembly.

A bill, dubbed Indianapolis Works, was proposed by the current mayor, Bart Peterson, and introduced in the 2005 legislative session of the state General Assembly, which would have further consolidated local government in the City of Indianapolis and Marion County. After a very contentious and partisan debate, the Assembly passed an extremely watered-down version of the original bill; the final enacted legislation consolidates budgetary functions of the City and County, permits the Indianapolis City-County Council to vote to consolidate the Indianapolis Police Department and the Marion County Sheriff's Department, and also permits consolidation of the Indianapolis Fire Department with township fire departments based upon approval of all affected parties. On June 14, 2006, it was announced by city leaders that the Washington Township Fire Department would be the first township to merge with the Indianapolis Fire Department, effective January 1, 2007.

Police consolidation was defeated at the Council level in November 2005, but the bill was revived and passed by the City-County Council on December 19, 2005 after slight revision. Indianapolis will now have a combined metropolitan police force starting January 1, 2007. However, this "metropolitan" police force will still not be the sole police agency within Marion county or even pre-Unigov Indianapolis. The four excluded cities of Beech Grove, Lawrence, Southport, and Speedway will still maintain separate police forces, as will eight metropolitan school districts. In addition to these well-defined exceptions, no less than seven "legacy" police organizations, pre-dating Unigov, will still be maintained by various "included towns" or townships within Marion County.