Lumber powered the Augusta economy during its days as part of Massachusetts, so much so that Continental soldiers were paid in pine boards for their service in the Revolution. After Maine entered the Union as the 23rd state in 1820 Portland was the state capital. But the legislature began meeting at the more centrally located Augusta in 1827 and the government moved in for good in 1832. An amendment to the Maine Constitution in 1909 ended any grumblings about capital relocation by affirming Augusta as the capital city forever.
Unlike many small American capital cities Augusta did not become a government town. The Kennebec River was dammed and its water power supported 11 lumber mills, a cotton factory and grist mills. A United States Arsenal was built in 1827 and the state hospital founded in the 1830s. In the winter tons of ice was harvested from the river to bolster a thriving ice industry. By the end of the 19th century there were paper mills and a boom in magazine publishers. Millions of Americans knew the town of Augusta as the postmark where their folksy home and garden magazines were produced.
As if to stay out of the way from Augusta commerce the government section is located several blocks south of the downtown core that is centered on Water Street. Augusta has endured its share of floods and fires but none so damaging as “the most destructive fire that ever occurred in Maine,” as the New York Times called it, on Sunday, September 17, 1865. The fire broke out in a new building on Water Street, to which its occupant had moved in only the previous day, and burned out the entire business district.