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Cotton was one of the few crops produced locally for export and a cotton gin engine was located downtown near the trains for "ginning" cotton of its seeds and turning the product into bales for shipment.

In addition, the areas east of Austin took over cattle and cotton production from Austin, especially in towns like Hutto and Taylor that sit over the blackland prairie, with its deep, rich soils for producing cotton and hay.

Texas thus became an independent country with its own president, congress, and monetary system. Lamar visited the area during a buffalo-hunting expedition between 18, he proposed that the republic's capital, then in Houston, be relocated to the area situated on the north bank of the Colorado River near the present-day Congress Avenue Bridge. Lamar, second president of the newly formed Republic of Texas, advised the commissioners to investigate the area named Waterloo, noting the area's hills, waterways, and pleasant surroundings.

In 1839, the Texas Congress formed a commission to seek a site for a new capital to be named for Stephen F. The original site was narrowed to 640 acres (260 ha) that fronted the Colorado River between two creeks, Shoal Creek and Waller Creek, which was later named in his honor.

A number of Fortune 500 companies have headquarters or regional offices in Austin, including Amazon.com, Apple Inc., Cisco, e Bay, General Motors, Google, IBM, Intel, Oracle Corporation, Paypal, Texas Instruments, 3M, and Whole Foods Market.

The city's official slogan promotes Austin as "The Live Music Capital of the World," a reference to the city's many musicians and live music venues, as well as the long-running PBS TV concert series Austin City Limits.

In 1840, a series of conflicts between the Texas Rangers and the Comanches, known as the Council House Fight and the Battle of Plum Creek, finally pushed the Comanches westward, mostly ending conflicts in Central Texas. But Lamar's political enemy, Sam Houston, used two Mexican army incursions to San Antonio as an excuse to move the government.

Sam Houston fought bitterly against Lamar's decision to establish the capital in such a remote wilderness.

Black communities such as Wheatville, Pleasant Hill, and Clarksville were established with Clarksville being the oldest surviving freedomtown ‒ the original post-Civil War settlements founded by former African-American slaves ‒ west of the Mississippi River.The fear of Austin's proximity to the Indians and Mexico, which still considered Texas a part of their land, created an immense motive for Sam Houston, the first and third President of the Republic of Texas, to relocate the capital once again in 1841.Upon threats of Mexican troops in Texas, Houston raided the Land Office to transfer all official documents to Houston for safe keeping in what was later known as the Archive War, but the people of Austin would not allow this unaccompanied decision to be executed.In 1839, the site was chosen to replace Houston as the capital of the Republic of Texas and was incorporated under the name Waterloo.Shortly afterward, the name was changed to Austin in honor of Stephen F.

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