The establishment of the city's historical center was basically completed by the 1860s with the construction of the Nikolayevsky Palace (architect Shtackenschneider) and Blagoveschenskaya Church (architect Ton) on the square in front of the Nikolayevsky bridge, the demolition of the old foundry, the extension of Liteiny Avenue (thenceforth one of the city's main roads) towards the Neva, and the development of the area between the Tauride Palace and the Neva river. The Moskow and Warsaw railroad terminals were built. A number of monuments were erected, among them the monuments to the writer Krylov in the Summer Gardens (designed by Klodt) and to Nicholas I in St. Isaac's Square (architect Monferrand, sculptor Klodt).
The apartment house became the most widespread type of construction during this period. Houses varied, depending on the area, financial capacities and tastes of the owner, but all of them had one common feature - large echoing courtyards. Such blocks occupied all the remaining space within the city center, e.g. the end of Nevsky Prospect, and whole streets in more remote areas. Smoke pouring from high stone chimneys of industrial enterprises in the outskirts became an integral aspect of the city panorama.
In the mid-19th century the population of Petersburg was rapidly growing, especially after the peasant reform of 1861. During eleven years (from 1858 to 1869) the population increased by 30%. Administratively, the city was divided into 12 sections. The city also included the Lesnoe, Polustrovo, Schliesselburg and Peterhof suburban areas. While the center of the city was densely populated, many gardens and pastures could be still found in the outskirts.
Government officials, army officers and courtiers still accounted for a large percentage of the population, but the number of businessmen, hired workers, and craftsmen was increasing. By 1869 the intellectual professions accounted for as much as 22.1% of the city's adult male population.
By the mid-19th century St. Petersburg had become one of Russia's largest industrial centers. Among new large enterprises the most important were boiler plants, steel and cast iron mills, the Obukhov steel mill, the "Phoenix" machine works, and the Putilov plant. Industrial enterprises of the city specialized in the manufacture of textile, metal products, food, paper, and chemicals. Large mechanized enterprises predominated.
At the same time, St. Petersburg remained the largest port and one of the most important trade and financial centers of the country. The first joint stock commercial bank (St. Petersburg Private Commercial Bank) was established in Petersburg in 1864.
In the 1850s-1860s St. Petersburg became the arena of dramatic political events. In addition to the "Sovremennik" ("Contemporary"), the magazine "Russkoye Slovo" ("Russian Word") became the mouthpiece of the democratic movement. After the "Sovremennik" was shut down in 1868, Nekrasov and his supporters acquired the magazine "Otechestvennye Zapiski" ("Patriotic Notes") which continued the line of the "Sovremennik". In the fall of 1861 the attention of all St. Petersburgers was focused on political disturbances among the students of St. Petersburg University, which led to its temporary closure. Also characteristic of the social atmosphere of 1861-62 was the distribution of underground leaflets ("The Great Russian", "Young Russia" etc.). This social movement tragically culminated in the well-known fires in St. Petersburg of May 1862, in which, as rumor had it, revolutionary students and Poles were involved. The arrests of 1862 and reaction to Karakozov's attempt upon the life of Alexander II weakened but did not eradicate revolutionary spirit in the capital.