The land now known as Oregon has been inhabited for at least 10,000 years, the age assigned to woven brush sandals found in caves along what was once the shore of a large inland lake. Later, a variety of Indian cultures evolved. Along the coast and lower Columbia River lived peoples of the Northern Coast Culture, who ate salmon and other marine life, built large dugout canoes and cedar plank houses, and possessed a complex social structure, including slavery, that emphasized status and wealth. East of the Cascade Range were hunter-gatherers who migrated from place to place as the food supply dictated.
The first European to see Oregon was probably Sir Francis Drake. In 1578, while on a raiding expedition against the Spanish, Drake reported sighting what is believed to be the Oregon coast before being forced to return southward by "vile, thicke and stinking fogges." For most of the next 200 years, European contact was limited to occasional sightings by mariners, who considered the coast too dangerous for landing. In 1778, however, British Captain James Cook, on his third voyage of discovery, visited the Northwest and named several Oregon capes. Soon afterward, American ships arrived in search of sea otter and other furs. A Yankee merchant captain, Robert Gray, discovered the Columbia River (which he named for his ship) in 1792, contributing to the US claim to the Northwest.
The first overland trek to Oregon was the Lewis and Clark Expedition, which traveled from St. Louis to the mouth of the Columbia, where it spent the winter of 1805–06. In 1811, a party of fur traders employed by New York merchant John Jacob Astor arrived by ship at the mouth of the Columbia and built a trading post named Astoria. The venture was not a success and was sold three years later to British interests, but some of the Astor party stayed, becoming Oregon's first permanent white residents. For the next 20 years, European and US interest in Oregon focused on the quest for beaver pelts. Agents of the British North West Company (which merged in 1821 with the Hudson's Bay Company) and some rival American parties explored the region, mapped trails, and established trading posts. Although Britain and the US had agreed to a treaty of joint occupation in 1818, the de facto governor from 1824 to the early 1840s was Dr. John McLoughlin, the Hudson's Bay Company chief factor at Ft. Vancouver in Washington.
Another major influence on the region was Protestant missionary activity, which began with the arrival of Jason Lee, a Methodist missionary, in 1834. Lee started his mission in the Willamette Valley, near present-day Salem. After a lecture tour of the East, he returned to Oregon in 1840 with 50 settlers and assistants. While Lee's mission was of little help to the local Indians, most of whom had been killed off by white men's diseases, it served as a base for subsequent American settlement and as a counterbalance to the Hudson's Bay Company.
The first major wagon trains arrived by way of the Oregon Trail in the early 1840s. On 2 May 1843, as a "great migration" of 875 men, women, and children was crossing the plains, about 100 settlers met at the Willamette Valley community of Champoeg and voted to form a provisional government. That government remained in power until 1849, when Oregon became a territory, three years after the Oregon Treaty between Great Britain and the US established the present US-Canadian boundary. As originally constituted, Oregon Territory included present-day Washington and much of Montana, Idaho, and Wyoming. A constitution prepared by an elected convention was approved in November 1857, and after a delay caused by North-South rivalries, on 14 February 1859, Congress voted to make Oregon, reduced to its present borders, the 33rd state.
Oregon remained relatively isolated until the completion of the first transcontinental railroad link in 1883. State politics, which had followed a pattern of venality and influence buying, underwent an upheaval in the early 1900s. Reformers led by William S. U'Ren instituted what became known as the "Oregon System" of initiative, referendum, and recall, by which voters could legislate directly and removed corrupt elected officials.
Oregon's population grew steadily in the 20th century as migration into the state continued. (By 1999, its population topped 3.3 million.) Improved transportation helped make the state the nation's leading lumber producer and a major exporter of agricultural products. Development was also aided by hydroelectric projects, many undertaken by the federal government. The principal economic changes after World War II were the growth of the aluminum industry, a rapid expansion of the tourist trade, and the creation of a growing electronics industry. The dominant industries in the Oregon economy, however, remained those centered on its abundant natural resources—agriculture, timber, and coal. These industries suffered in the late 1970s and 1980s when interest rates skyrocketed, reducing demand for houses and therefore for wood. Employment in the lumber and wood industry dropped from 81,000 jobs in 1979 to 64,000 in 1985. High interest rates, by boosting the value of the dollar, also lowered foreign demand for lumber and produce.
It was hoped that the construction of high-technology plants in the mid-1980s would help immunize Oregon from the fluctuating fortunes of the extractive (mining and timber) and agricultural industries. However, a slump in the computer industry delayed the building of planned facilities in the state. By the early 1990s, Oregon did boast a burgeoning electronics industry, but the greatest job growth had occurred in the service sector. Agricultural industries also helped boost the state's economy. By 1994, unemployment stood at a 25-year low of 5%. Nevertheless, by 1999 it had increased to 5.7%, well above the national average (it was the 3rd-highest jobless rate in the nation). Other statistics pointed out problems in Oregon. Poverty was on the rise during the decade—climbing from 9.2% in 1990 to 15% in 1998. The dramatic increase came as levels in most other states were on the decline, so that Oregon began the decade as the 43rd poorest (one of the best-off states) in the nation and was set to close the decade as the 10th-poorest state. Children were a large part of these statistics: Oregon's child poverty rate shot up 25% between 1993 and 1998 alone, so that in 1998 one in five children in the state was living in poverty.
By 1990, the struggle between environmentalists and the timber industry over logging in Oregon's forests had become a major public policy debate. Federal legislation passed in 1993 set limits on commercial exploitation of older forests that were home to the spotted owl. With the shift in focus from timber production to protecting habitat, timber harvests in national forests declined 70% during the 1990s. The decline of logging resulted in severe economic downturns in rural areas and a loss of school funding, which the National Education Association called a "crisis for many forest county education systems" in western states, including Oregon. To assist communities affected by the downturn, Congress was considering disparate proposals—from requiring the US Forest Service to generate more income (a portion of which, by a 1908 law, funds schools) from logging on public lands to issuing US Treasury payments to afflicted counties as they transition from logging-based economies. Conservationists were being backed by analysts who forecasted the state's greatest job growth would come from the environmentally friendly high-tech sector and the environmentally dependent tourism industry.
In 2003, Oregon faced a $2.5 billion budget deficit. Upon being elected in 2002, Democratic Governor Ted Kulongoski supported a temporary income tax increase, which voters rejected in a January 2003 referendum. The state then had to face cuts of over $300 million in education, health care, and other programs in order to balance the $11.6 billion budget for 2003–05.