In 1822, the Spanish sold the island for $2,000 to a Mobile businessman by the name of John Simonton; later that year Lt. Matthew Perry came down to fly the American flag over its inhabitants, who included a few West Indian and Cuban fisherman, a handful of settlers, and pirates taking a break from their plunders in the Keys and the Caribbean. A few months later, Naval Commodore David Porter arrived to take care of this last group, and with the use of small, flat-bottomed boats---with names like Gnat, Midge, Mosquito---Porter was able to follow the pirates over reefs and into mangrove coves. By 1830, Porter had routed the scourge from the Keys, but in his fury he pursued the pirates into the Spanish waters of Puerto Rico and Cuba, for which he was eventually court-martialed. The belligerent Porter never liked Key West, nor was any fondness returned, so Porter left to join the Mexican navy, and later the Turkish. The U.S. Navy, however, stayed on Key West.
Three decades later, the island's population, comprised largely of English Bahamians, Southerners, and New Englanders, had jumped from 500 to 2,700. Wrecking became a regulated industry in which millions of dollars were made, for while pirates had been driven off, reefs and hurricanes were still destroying ships. Key West became an eccentrically extravagant outpost where (waterstained) silks and velvets were worn every day, and porcelain and silver---some no doubt taken directly from vessels run aground---adorned dining room tables.
The building of the reef lighthouses in the late 1850s changed all that, and the economic focus shifted to another sea treasure: sponges. Just as the town's industry was in transition, a fire swept the community in 1859. Homes were rebuilt quickly, many of them more elegantly than before. Meanwhile, Cuban cigar manufacturers were fleeing their war-torn island, and arriving on Key West. By the 1880s, Key West was the wealthiest city, per capita, in the nation: When Flagler's railroad rolled in, the town had become an important shipping port, a cigar capital, and a Bahamian community with a feisty spirit all its own.
By the 1930s, however, the cigar trade had departed for Tampa and the sponge industry was suffering. The railroad did little for the faraway community, and the land boom that swept through Florida didn't reach this far. Then came the Depression. It took a dapper, if somewhat corrupt, New Deal Federal Relief Administrator to see that the answer for this downtrodden, dilapidated town was tourism. In 1934, Julius Stone organized the Volunteer Work Force to clean out the trash, restore the decrepit buildings and piers, open hotels, and generally rejuvenate the town. He even had a school opened for the sole purpose of training young women to work in hotels and restaurants. For six months, tourists flooded into Key West. Then came the Labor Day hurricane of 1935, and the island had to wait for World War II and the arrival of more sailors to jumpstart the town, if only into becoming the "Singapore of the West."
Since then, the island has had a history of going from rags to riches and back again. Right now it's riches. What's been consistent throughout is Key West's eccentricity, its spirit of independence. So independent is Key West, that in 1982 its residents, annoyed by traffic blockades set up to discourage drug trafficking from Latin America, decided to secede from the Union and form The Conch Republic. They informed the nation that their plan was to declare war on the United States, surrender, then ask for a foreign aid package so they could party.
Excerpted from Compass American Guides: Florida
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