In 1743, Richard and Thomas Penn (sons of William Penn the founder of Pennsylvania, and grandsons of Sir William Penn for whom Pennsylvania is named) planned this city. In honor of their home, it was established in 1748. Upon the creation of Berks County in 1752 the town became the county seat.
During the French and Indian War, there was a military base for a chain of forts along the Blue Mountains. Meanwhile the region was being settled by emigrants from southern and western Germany. The Pennsylvanian German dialect was spoken in this city well into the 1950's and later.
By the time of the American Revolution, the area's iron industry had a total production which exceeded England's, an output that would help supply George Washington's troops with cannons, rifles, and ammunition in the Revolutionary War. During the early period of the conflict, this city was a depot again for military supply. Hessian prisoners from the Battle of Trenton were also detained here.
The Philadelphia and Reading Railroad (P&R) was incorporated in 1833. During the Depression of 1877, a statewide railroad strike over delayed wages led to a violent protest and clash with the National Guard in which six men were killed. After over a century of prosperity, the Reading Company was forced to file for bankruptcy protection in 1971. The bankruptcy was a result of dwindling coal shipping revenues and strict government regulations that denied railroads the ability to set competitive prices, required high taxes, and forced the railroads to continue to operate money-losing lines. On April 1, 1976, it was sold its current railroad interests to the newly formed Consolidated Railroad Corporation (Conrail).
Early in the 20th century, the city participated in the burgeoning automobile industry, hosting the pioneer brass era company, Daniels.
In 1927, the city elected J. Henry Stump as its first and only Socialist mayor. Stump was re-elected on two other occasions, and during his first term, the entire city government was Socialist. Many tangible improvements were made during his tenure.
The city experienced continuous growth until the 1930s, when its population reached nearly 120,000. From the 1940s to the 1970s, however, the city saw a sharp downturn in prosperity, largely owing to the decline of the heavy industry and railroads, on which the city was built, and a general flight to the suburbs.