The privileged location of Kōbe, a narrow stretch of land sheltered by the sea on one side and Mount Rokkō on the other, has made it a place of choice for settlement since prehistory. The Jōmon-era fishermen have left tools in the area. The earliest written mention of the place dates back to 201 CE, when Empress Jingū founded the Ikuta-jinja Shrine, one of Japan's oldest place of worship.
From the 8th century, a port developed to serve Nara and Heian-kyō (Kyōto), notably to dispatch emissaries to China. It was then known as the Ōwada Anchorage (大輪田泊 "Ōwada-no-tomari") and occupied the area around Wadamisaki Point. The Arima Onsen, situated on the northern slope of Mount Rokkō, was first mentioned during the Nara period. It is possibly the oldest hot springs in Honshū, and Japan's second oldest after Dōgo Onsen in Matsuyama.
In 1180, the great general Taira no Kiyomori, grand-father of Emperor Antoku, moved the Imperial court to Fukuhara, in present-day Kōbe. The Emperor returned to Kyōto five months later. The famous Genpei War (1180-1185), opposing the Minamoto and Taira clans (a.k.a. Genji vs Heike), saw the seizing of the Taira fortress in Kōbe at the Battle of Ichi-no-Tani. The war culminated one year later with the Battle of Dan-no-ura in Shimonoseki and the anihilation of the Taira clan.
The port gained in importance during the Kamakura period, and was renamed Hyōgo-tsu (兵庫津 or Hyōgo Port) in the 13th century, an appellation that survives in the name of the modern prefecture (corresponding to the former Settsu Province) and one of the city wards.
Hyōgo Port became a treaty port after Commodore Perry forced the Tokugawa shogunate to abandon its isolationist policy. Western traders established banks and warehouses in the city, and handsome mansions in the hilly neighbourhoods of Kitano-chō and James Yama. Japan's first game of football was played here in 1871, and the first cinematic projection took place in 1896. By that time Hyōgo Port had been renamed Kōbe (in 1889), based on archaic name for the supporters of the Ikuta Shrine (神戸 literally means "gods' door").
Kōbe suffered heavy bombings during WWII, razing one fifth of the urban area and causing 8,841 deaths (more than the 1995 earthquake). The B-29 bombers's incendiary bombs used by the Americans inspired the well-known Studio Ghibli film Grave of the Fireflies and the book by Akiyuki Nosaka on which it was based.
From the 1960's land was recclaimed from the sea by digging into the hills and dumping the earth into the bay, thus creating Port Island (1966-1981) and Rokkō Island (1973-1992). From 1973 to 1978 Kōbe Port became the largest in the world in terms of containers handled. It remained Japan's busiest port until the Great Hanshin Earthquake. It now ranks 4th, after Tokyo, Yokohama and Nagoya, although technically the ports of Ōsaka, Kōbe and Sakai-Senboku Amagasaki-Nishinomiya-Ashiya merged in December 2007 to form the Super Hub Hanshin Port (阪神港), once again Japan's busiest and largest box port.
Starting in 1999, another artificial island was shaped to host the Kōbe Airport, which opened in February 2006 among much controversy regarding its exorbitant cost. Kōbe is now the most indebted municipality in Japan, owing to the post-quake reconstruction and money-consuming development projects on the bay.
Kōbe suffered a disastrous earthquake at 5:46am on 17 January 1995. The Great Hanshin Earthquake, Hanshin-Awaji Earthquake or Hyōgo-ken Nambu Earthquake, as it is variously known, reached a magnitude of 6.9, and was the second worst in the 20th century after the Great Kanto Earthquake of 1923.
The epicenter was 20 km south-west of the city, and the most badly affected areas were in the center, along the docks and port area (out of the 150 quays, only 30 withstood the quake).
The quake killed over 6,000 people and destroyed about 100,000 houses, leaving 300,000 residents homeless. The local government estimated the cost to restore the basic infrastructure (roads, public buildings...) to US$150 billion.
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