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Further population growth came in the following century, resulting during the 1860s in a staged transfer of the High Courts, the Lieutenant Governor's residence, and finally the seat of the legislature, Tynwald, to Douglas from the ancient capital, Castletown.The town is the Island's main hub for business, finance, legal services, shipping, transport, shopping, and entertainment.The rise of Douglas as the social and economic stronghold was recognised in 1869, when it became the home of the island's parliament, Tynwald, and therefore the capital, an honour previously held by Castletown, a smaller town in the south of the island.Douglas's political landscape also changed significantly in the 19th century, in spite of the conservatism of some townsfolk: in 1844, for example, at a public meeting, the idea of a town council was rejected in favour of retaining the system of Town High Bailiffs; when the Town Bill Act was passed at Tynwald in 1852, the people of Douglas again rejected the idea.(unoccupied, unheated, single-celled structures) for which rent was paid by non-residents including clergy, officials and landowners from elsewhere on the island.This suggests that the town's nucleus originated as a non-urban port.

Oil and gas lamps first appeared in the late 1820s and 1830s, the first hospital to join the Dispensary was built in 1850, and in 1832 the scenic Tower of Refuge was built in Douglas Bay to offer shelter and provisions for sailors awaiting rescue.However, an Act passed later that decade, which did not include opt-out clauses, was accepted, and in 1860, Douglas elected its first town council, which was predominantly middle class in its makeup.The Town Commissioners could tackle the town's problems with greater efficiency, and by 1869 the sewage problem had been largely resolved.The Victorian and later modernisation of the town was achieved at the expense of the original maze-like layout of the oldest streets.These were cleared away in the new street schemes and slum clearances of the 1870s to 1920s.Over the 18th century, the town's population rose from about 800 in 1710 to nearly 2,500 in 1784.

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