Business in Chicagoland
See Illinois (unpublished)
Chicago history been told and retold in terms of mayoral administrations and social movements, of immigrant arrivals and ethnic rises. But business was why Chicago was founded, why it grew, and why it became famous. Its great names—Wrigley, Armour, Swift, Ward, Sears—are names of businesspeople. Dozens of now-famous firms—Oscar Mayer, Spalding, Nabisco, Keebler, Sara Lee, Quaker Oats, Kraft, and a department-storeful of others—originated in Chicago, and Chicago for a time was the headquarters for some of the biggest and the best-known firms in the U.S. Read a hundred memoirs of visits to Chicago made through the 1950s, and all will recall a city defined by the spectacle of its businesses—the steel mills on the South Side at night, the pall of factory fumes above the city, the stink of the stockyards, the majesty of Loop skyscrapers.
What follows is taken from the draft of my never-published guide to the history and culture of Illinois. (Reviewing my files, I see that the chapters in my section on Chicago business alone came to 87,000 words.) The work is by now outdated but it contains things still worth reading, or rather, knowing. I think.
It is impossible to overstate how central business was to Chicago in its golden age. Chicago was founded by businessmen, and in its early years was run by businessmen. It was by doing business that Chicago and the rest of Illinois got to know each other—and why relations between the two were strained from the start. The grand historic houses to which the brochures direct today’s tourists were paid for and lived in by businesspeople. Businesspeople also were the agents of uncounted social improvements. Most of the city’s cultural leaders—a species distinct from cultured leaders—were (and are) businesspeople, as only they have the means to buy the art, the buildings, the orchestras and opera houses that any city of pretension needs. YMCAs, settlement houses, the city’s museums and libraries and universities were largely gifts of the rich, and the rich got their money from business.
Chicago even owes a good bit of its fame as an architectural laboratory to its businesspeople. Chicago’s particular approach to skyscraper design derived only in part from its cultural situation as a new city. The building form itself was an artifact of economics. Land was scarce in the Loop, hemmed in as it was by the river branches and the lake and rail yards. The pricier the lot, the more pressure to multiply the rents that could be earned on it; the 15-story skyscraper was merely three five-story buildings stacked onto one lot; as Donald Miller noted in a nice phrase, the skyscraper was a machine for turning land into money.
Business on a Continental Scale: Industry in Chicago
The story of Chicagoland is in large part the story of the rise and fall of its great industries—food processing, retailing, steel-making, publishing and printing, even, for a time, high-tech consumer electronics. While Chicago began its business career as a trading post, it was making and moving things—many of them on a scale never seen before in the U.S.—that its wealth and its reputation was earned. For a century, it supplied half a continent with what it needed to grow, until the West eventually outgrew its need for Chicago.
Luck and timing explain much of the success of Chicago’s fabled capitalists. The same can be said about the city itself. While it attracted men of drive and talent, it was nature that made Chicago rich. Chicago was founded and prospered largely because of Lake Michigan. In an age of water-borne commerce, the location made it a good place to be for any business to which production and shipping efficiencies mattered. And proximity to the northern pine forests, the corn and wheat fields of the Midwest, and the grazing lands of the west made it a natural place for such industries as lumber and the trading and processing of grain and meat.
The lake made Chicago a prosperous city, but the railroads made it, for a time, a great city. At first the trains mainly delivered goods to Chicago for processing; the grain elevators, the flour mills, the meat-packing plants were the first skyscrapers, the first “oh wow” sights in the new city. But the prosperity brought by this trade made customers of the people who lived at the other end of the lines, and soon the trains that carried grain and cattle into Chicago were carrying everything else out of it.
When freight came to be moved by truck as well as rail, Chicago adapted and became the nation’s largest center for trucking; as people opted to fly rather than train, Chicago again reaped the advantage of its location to become a continental airline hub. Chicago’s location and superb transportation links to the rest of the continent meant that Chicago was the logical place for massive centralized industries, and to the grain trade and meat packing were added printing and publishing, mail-order retail, and steel-making. But its advantage as a manufacturing center was based on more than location. It also offered cheap, compliant (and mostly immigrant) labor and a near-monopoly on continental markets.
The city owed it early eminence to its location at the threshold of the continent’s great agricultural midsection, which is why the Roman goddess of agriculture stands atop the Board of Trade. The first tourist attractions were the stockyards and the grain elevators that towered over the lakefront. The august journal, Prairie Farmer, was founded in Chicago in 1841 and was based here until the 1970s. The city's transport advantages translated into higher prices paid by local agents for buyers in the East. Historian Theodore Pease reported that in 1841 when places in southern, central, and northern Illinois offered but fifty cents for wheat, Chicago paid an average of eighty-seven cents; on the day that the Peoria market bought wheat at forty cents, Chicago paid one dollar. No wonder that wagons lined up to bring wheat into the city and ships lined up along the river to haul it out.
Chicago at first made its living buying and selling the things made on farms—the farms of Illinois region at first, and eventually the farms of the entire continent. The city's financial markets then as now, focused on grain contracts in agricultural commodities. As William Cronon put it in his masterwork about the relation between the city and the agricultural Midwest, Nature’s Metropolis, Chicago was not separate from the country life, merely the expression of its industrial aspects.
Later, the city specialized in making the things used on farms, from reapers and tractors to furniture, even barns, and in converting raw foodstuffs into forms more palatable to eat and more convenient to ship. Sears made itself the nation’s largest retailer by catering to the farmers and small towns. For years, the biggest factories in Chicago were devoted to making the machines that farmers used to produce. In 1847, Cyrus McCormick decided to consolidate manufacture of his reaper in Chicago. The city’s canal and rail access to the West attracted other makers of the exotic paraphernalia of the farmer, such as grain headers and binders, and by the 1870 Census the city had nearly 4,000 people working in agricultural machinery establishments; by 1880, area employment reached nearly 7,000, a fifth of the national total.
In 1902, McCormick, which was already the city’s larger farm machinery maker, joined with two other big reaper makers to form the International Harvester Company, which would quickly control more than 80 percent of world production in grain harvesting equipment. Thanks mainly to this behemoth, nearly 23,000 workers in Chicago's agricultural machinery sector in the 1930 census. It would never be higher; the Great Depression began a twenty-year decline that left Chicago’s farm machinery factories rotting in the fields, so to speak.
City of blood
In no part of Chicago was the industrialization of food processing more vividly apparent than the Union Stock Yard. The yard and its associated packing plants were to 19th century Chicago what Wrigley Field is today—the place that nearly everyone outside Chicago has heard of, and the place that most want to visit when they come. “Tourists . . . knew that something special, something never before seen in the history of the world, was taking place on the south side of the city,” wrote Cronon. “Many saw in it the pinnacle of Chicago’s social and economic achievement, the site, above all others, that made the city an icon of nineteenth-century progress."
Meat packing had been part of the Chicago economy from the start. Chicago's first frame building used for business was a packing house. In 1829, Archibald Clybourne began meat packing on the North Branch of the Chicago River. All packing operations were on the river in those days because freight moved by river craft. These businesses served the local market only, feeding Chicagoans’ apparently infinite (and still unsated) appetite for beefsteak. It was not until lake, then canal, and finally rail transport systems were in place that a sizable export trade became feasible, and meatpacking grew from a prosperous regional business into a national industry.
In the early days, packers shipped products in barrels by water, but the raw material had to be marched to the plants by land from local rail termini. Driving herds of cattle and hogs along Chicago streets was a fine spectacle, apparently, but also a nuisance. The city eventually banished the drives, and in effect banished packing to the city's outskirts. Each rail line built its own stockyards to quarter animals until the plants were ready to accept them, but that made buying and moving animals inconvenient for the meatpackers, who bought from many sources.
The solution to both problems lay in a new stockyards complex a few miles southwest of the city, on land bounded by 39th and 47th streets, Halsted Street and Ashland Avenue, that would be linked to all the rail lines entering the city. The new Union Stock Yard and Transit Company opened the Union Stock Yard in 1865. The nearly 500-acre stockyard was built to effectuate the transfer of live cattle, but packers—following the same commercial logic that persuades power companies to build generating plants atop coal mines—were not long in realizing the obvious advantages of putting a factory next to the biggest captive herd of beef in the world.
One of those packers was Phillip Armour. He and his brothers had formed Armour & Co. in 1867 and started packing hogs in a rented plant on the South Branch of the Chicago River. Armour purchased land west of the stockyards in 1872 and built a large pork plant there. Others soon followed. Thus did the stockyards become Packingtown. Out-of-towners like Armour and Gustavus Swift beat local packers such as Gurdon Hubbard and Benjamin P. Hutchinson at their own game. (One of these firms, Hutchinson's Chicago Packing & Provision Co., was then the leading meat processor in the United States in the 1870s. They did so by being more aggressive, more clever, and more ruthless—against each other, against their shippers, and against unions. (It was not until the end of the 1930s that the large packing companies signed their first labor contracts.)
Packing Town would have been more accurately known as Unpacking Town, recalling the point made by a London Times correspondent in 1887 that the process involved recovering bacon and hams and chops from the package nature had put them in. The packers perfected the approach of reducing what had been work of skilled craftsmen—in this case butchers—to a sequence of very much simpler steps that that any semi-trained worker could quickly learn to do—any worker, that is, who could stand the smell and the blood and the screams.
A steam-driven conveyor belt moved animal carcasses from worker to worker via an overhead dis-assembly line. Such efficiencies allowed workers to break down a hog from animal to product in about 15 minutes, thanks to more than 100 persons along the way. On an average day, such contrivances made possible the killing and processing of 5,000 hogs per plant, and on a very busy day, Packingtown as a whole would dispose of more than 150,000.
The packers came up with innovations that turned what had been a seasonal sideline into round-the-clock, round-the-year industry. Tn the days before mechanic refrigeration, packing had always had to be done during the winter months to forestall spoilage; pork packers such as Armour installed ice-cooled rooms that enabled meat to be handled safely even in summer. (They later used similar techniques to chill rail cars so they could ship fresh beef.) The packers did this by—in William Cronon’s evocative phrase— “storing the winter” in the form of ice harvested from ponds and lakes in and around Chicagoland that was kept frozen by packing it in crude insulators such as sawdust, Harvesting ice for the plants quickly became an industry in itself; it was shipped in by lake schooner as well as by rail from across Wisconsin and Indiana and rest of northern Illinois until the 1920s, when mechanical refrigeration equipment melted the ice business.
It was not only the slaughter and butchering of animals that bought out the wizards of Chicago’s meat packers. The slaughter of thousands of animals a day piled up blood, skins, hair, and bones in such prodigious quantities that merely disposing of them would have been another industry by itself. The Chicago packers, led by Armour & Co., pioneered in turning the byproducts of animal slaughter into commercial products—bones and hooves into fertilizers and gelatins, buttons and knife handles, and glues, fats into soaps and the new-fangled oleomargarine, hides into leather, hair into brushes—hence the boast—credited variously to Armour and to Swift, but probably original to neither—that the plants used everything but the squeal.
So lucrative were these sidelines that the larger packers began buying the wastes generated by the district’s smaller packers—an early instance of industrial recycling. Sometimes the packers used more than pigs in their products, as Upton Sinclair reported, to the city’s shame, in his 1906 novel, The Jungle; if watching sausage being made was nauseating, reading about it was scarcely less so.
These days people who try to imagine the stink of the Packingtown err in thinking that its famous odors owed to manure and urine in the holding pens, but barnyard smells were the least part of the miasma that hung over the yards. It was the stench of blood and rotting offal, the boiling down of bones and other sinister transformations, the smell of death itself that impressed not only the nose but the mind. Historian Dominic Pacyga, recalled in a 2003 TV documentary, “My mother used to say that she'd never die of pneumonia because no germs could live in your lungs if you grew up in Back of the Yards.”
Writer Stuart Dybek recalled how Chicago school kids used to go to the stockyards, like Downstate kids go to Lincoln’s Home, stopping at the Armour packing plant, “the source of what in the neighborhood was called “the brown wind” or “the glue pee-ew factory.” “Up to then, my idea of the worst job one could have was bus driver,” wrote Dybek. “I didn’t think I could drive through rush-hour traffic down the same street over and over while making change, as bus drivers had to do in those days. But watching the man kill hogs, I began to think that driving a bus might not be so bad.” These days, kids’ experience of Chicago is the Art Institute or Water Tower Place on field trips—no wonder they form different sense of the place.
Chicago’s dis-assembly line was famous, and nearly as many tourists as hogs and cattle moved through the facility to see it in action. Thousands sought Packingtown out just to look at it. After a visit, Rudyard Kipling famously wrote, “They were so excessively alive, these pigs. And then they were so excessively dead.”
George Ade, in a 1890 newspaper column, noted that a typical Chicago guide-book program of the day sent visitors to the Art Institute in the morning, to a meeting of the Pacific Garden mission in the evening, and to the stockyards in the afternoon. More than a few were appalled once they got there. “Dante would have recognized this world,” intoned Waldo Frank in 1919. “A sunken city of blood.”
The stockyards was not only a symbol of the new Chicago, but less visibly a symbol of the new industrial city. The area was the physical expression of new ideas about how to organize business. “On condition of having your nerves wrung once for all,” wrote Paul Bourget, “these are among the places where you shall best see how American ingenuity solves the problems of a prodigiously complicated organization.” Henry Ford is said to have been inspired by his visit the plants; the same one-simple,operation-at-a-time technique that packers used to take animals apart piece by piece he used to put cars together.
Meat packed in Chicago could be shipped all over the world; Donald Miller, author of City of the Century, calls pork packing Chicago-style the first of the great global industries. Meeting that demand created a behemoth. At peak operations (Its busiest year was 1924) the stockyards housed more animals than there were people living in Chicago and at the turn of the 20th century employed 45,000 workers—astonishing in a city whose total workforce was then but 360,000.
It didn't last. Trucks allowed meatpacking to be decentralized just as railroads had allowed the industry to centralize. Trucks and better highways allowed companies to build plants wherever the animals were, saving shipping and labor costs. Business in Chicago declined sharply in the 1960s and the Union Stock Yard closed in 1970. It had seen some one billion creatures slaughtered.
Not all of Chicago’s food walked on four legs. The city’s original produce and poultry markets were on Water Street along the south bank of the Chicago River because it was convenient to transport. They moved in 1925 because that site no longer was, and because it was deemed incompatible with the gleaming new Beaux Arts-style Wacker Drive planned for the riverbanks. The city’s vegetable and fruit mongers found new land a few miles to the southwest, where some 13 acres of the Valley District slum was bought and cleared for the new South Water Street Market. This newer market sprawled over the eight square blocks bounded by Racine Avenue, Morgan Street, 14th Street, and the Baltimore and Ohio Railroad tracks. Business was done there for some 80 years, but that site too became too crowded, and the market moved again in 2002, to an even bigger (26 acres) specially-built facility.
Even after the demise of meatpacking, food processing remains the single largest category of manufacturing activity in Chicagoland. Many of Chicagoland’s more than 20,000 food processing employees work in towns like Summit Argo. That part of the south suburbs had been known since the start of the Euro-American era for its truck gardens, but several rail lines (including the Indiana Harbor Belt Railroad) and the Sanitary and Ship Canal made it a place to process as well as grow foodstuffs. 1907 the Corn Products Refining Company (now owned by BestFoods) opened a company town and named it Argo, after its famous cornstarch; there it built what became the world’s largest corn-milling plant in the world. Now a part of Summit, the plant attracted kindred food plants to the area. (The firm itself is now headquartered in nearby Westchester.)
Among the better-known names that still maintain sizable manufacturing or headquarters operations in Chicagoland is Sara Lee Corp. and cookie-making Keebler Co.—the latter the corporate heir to the United Biscuit Co. of America, headquartered successively since the 1920s in Chicago, Melrose Park, and now Elmhurst. Nabisco was at home in Chicago under various names since the 1890s; it has maintained factories here ever since, and after several changes of owners is today part of Kraft Foods.
Kraft, which turned processed cheese into a household name, grew from a Chicago delivery company that opened in 1903; like most Chicago big food processors, Kraft—a global giant with sales exceeding $30 billion a year—has seen several owners name changes, but is still based in Chicagoland. (Northfield these days, after years in Glenview.) Dean Milk Co. grew from an Evaporated Milk Co. founded in Pecatonica in 1925. No one processes more milk in the U.S. than Dean, which name now attaches to the larger more diversified firm that bought Dean; based in west suburban Franklin Park since the 1950s, the company removed it headquarters operations from Chicagoland in 2001.
Sport is a business too, and Chicagoans excelled at equipping, organizing, and marketing them. Billiard table maker Brunswick Corporation moved to Chicago in 1848 and by the 1880s was making bowling pins and bowling balls (which in those days were made of wood). Now headquartered in Lake Forest, Brunswick has morphed into a multi-billion-dollar marine recreation company that calls itself the world leader in pleasure boats, marine engines, fitness equipment, bowling equipment and billiards tables—although around Chicago, “Brunswick” still means bowling balls.
Albert Goodwill Spalding took advantage of the fact that Chicago in the latter 1800s was a city with a lot of leather and a lot of trains to build itself into a national maker of baseballs and gloves, A star athlete, Spalding stopped pitching baseballs just after the start of the 1877 season and started pitching the Spalding Co. His company, eventually named A. G. Spalding & Brothers, emerged as the era's dominant sporting-goods firm.
Another sporting goods manufacturer that profited from the proximity of the byproducts of Chicago's stockyards was the Ashland Manufacturing Company, founded in 1913, a subsidiary of a meatpacker. It was soon renamed after its new president and since 1931 known as the Wilson Sporting Goods Company. The company pioneered in the use of sports stars to hawk their goods. It worked, and still works; today the firm has annual sales over $600 million, and makes about anything one might need for sport, from uniforms to equipment. Wilson was bought and sold by a succession of conglomerates beginning in the 1960s, and moved its headquarters from Chicago to River Grove and back again, but remains a Chicagoland company.
The printed word
Celebrated as the city of big shoulders, Chicago would also have been described by a different poet as the city of smudged fingers. City and region have long made a good living putting words and images on paper in (literally) industrial qualities via the writing editing and printing of newspapers, trade books, textbooks and reference works, and magazines.
The biggest if not always the best of Chicago’s many newspapers is the Chicago Tribune. Founded in 1847 as the Chicago Daily Tribune, the paper was just another rag until it was transformed by editor and co-owner Joseph Medill, a Canadian who arrived in Chicago in 1855. Medill set about helping to found Lincoln’s GOP and the Chicago public library, served as mayor of Chicago and, in his spare time built the Trib into a great paper. Medill died March 16, 1899; his heirs endowed the Medill School of Journalism at Northwestern University in his honor.
Medill sired a dynasty; three of his grandchildren became important newspaper publishers, one of whom was Robert McCormick, who took over at the Chicago Tribune. If Joe Medill made the Trib into a great newspaper, “Colonel” Robert McCormick, turned it into a great company. Under the colonel it became not only a national but an international phenomenon—at least that what his masthead insisted on when it described the Trib as the “World's Greatest Newspaper.” That was about the only positive thing the Colonel had to say about the world. Beginning in the 1930s, he turned the Trib into a soapbox for some of the most backward-looking views, from isolationism and anti-immigrant rants to an almost paranoid anti-Communism. Backward in politics he may have been, but the colonel was a forward-looking businessman. McCormick built the Tribune Co. into a diversified media company through such purchases as the radio station that he renamed WGN after the World’s Greatest Newspaper.
After McCormick’s death in 1955, the Trib ceased to be the creation of strong personality and became the corporatized, diversified giant it is today. In 2005 the Tribune Co. owned and operated 26 television stations that together reach 40 percent of the nation’s television households. It owns major newspapers in cities such as New York, Los Angeles, Baltimore, and Orlando, which in recent years put it among the top three U.S. newspaper publishers in terms of revenue and total circulation (although by 2006, sagging revenues brought pressures to sell off some assets such as the Los Angeles Times.) It also is the owner of the Chicago Cubs, which may lose games on the field but makes money everywhere else.
Arkansan John H. Johnson was a child of the post-war civil rights revolution. In 1942 the former Arkansan published Negro Digest, a sort of African American Reader's Digest which was followed in 1945 by a black version of Life he called Ebony, which became the flagship of a fleet of magazines. Little read by white people, the magazines offered a portrait of African Americans that was undistorted by the condescension of most white mainstream white media of their day, and together Johnson magazines were read by an estimated half of all black adults in the U.S. in recent years.
Johnson parleyed his magazine profits into a publishing—TV-cosmetics conglomerate that was one of the largest black-owned companies in the country, with revenues of some half a billion by the time he died in 2005. (“A titan dies” was the headline in the Defender.) Among the attendees at his funeral service was a former U.S. president, the mayor of Chicago, the governor of Illinois, past and present members of Congress, and a five-person delegation from Ghana.
Specialty publishing has long been a specialty in Chicago. Map giant Rand McNally got its start started in 1856 printing railroads timetables. Encyclopedias grew here like skyscrapers for a time, thanks to the city’s shipping and printing preeminence. The World Book Encyclopedia and Compton's both appeared in the years just after World War I. The already venerable Encyclopaedia Britannica, which Sears, Roebuck had long sold through its catalogs, was bought by that firm in the 1930s and moved to Chicago from New York.
Children’s needs for elucidation were served by textbook publishers such as Scott, Foresman and Company, which originated the Dick and Jane readers. Children's needs of a different sort were satisfied by Chicago publishers too. Edgar Rice Burroughs’ Tarzan was the proud son of the Chicago firm of A. C. McClurg. Reilly & Lee published L. Frank Baum's Oz books, and the P. F. Volland Company brought out the first of the Raggedy Ann and Andy series.
Chicago was uniquely placed to make books magazines and catalogs as efficiently as it made anything else. The South Loop near the Dearborn Street railroad station was a perfect place to set up industrial-scale print shops after the Great Fire. Printing House Row emerged when printing and publishing firms began to be done not in shops but in factories in the late-19th and early-20th centuries built at the south end of Dearborn Street and Plymouth Court near Polk Street for the Donohue (1883), the Donnelley (1897), and the Franklin Printing (1914) companies. Exuberant architecture was not here thought by the owners to be an unseemly insult to the bottom line; these firms were proud to be printers, and decorated their building with bas-reliefs and mosaics that portray the history of their craft.
In the process they gave Chicago some of its handsomer industrial buildings.
The Calumet plant of the R. R. Donnelley & Sons Co at 350 E. Cermak Road, was designed by Howard Van Doren Shaw. The AIA Guide to Chicago reports that Shaw used the commission from what was by then North America's largest commercial printer “to create one of the city’s—perhaps the nation’s— finest essays in Industrial Gothic.” (To look at this industrial building and then look at the new ones being built at the other end of the Stevenson Expressway in Bolingbrook—warehouses devoid of inefficiencies and character—is to weep.)
The buildings of that era tended to be narrow in order that every craftsmen on the floor might be near enough to a window and natural light. Inevitably, these early buildings could not accommodate the trend toward ever-larger presses. In 1960 there were some 3,600 printing establishments in Chicagoland, including the world's three largest at the time.
As all industries did, printing firms had long since dispersed from the city center, first leaving Printers Row for more spacious sites to the southwest and north (mostly along the river branches). Later they moved from the city to suburbs in search of cheap land near interstates needed to accommodate modern single-story plants. Paul F. Gehl, the Newberry Library’s historian of things printed, notes that almost all the more than 30,000 workers employed by the region’s printing industry in the late 1920s worked in city firms; by 1960, the industry’s nearly 100,000 workers were spread across Chicagoland.
Beginning in the 1980s, the city's great printing works that survived in the central city were reborn as loft apartments and restaurants. Their environs became a trendy location for architects, commercial artists, and the like. Printers Row in fact was the first of the near-Loop districts to undergo the kind of gentrification that later transformed River North and is now working similar miracles in the once-tatty areas west of the Loop. While it’s been long time since there was much printing done on Printers Row, the area has been the site since 1984 of the annual Printers Row Book Fair, which in 2005 attracted 80,000 people—proof that the last product of every industry is nostalgia.
Publishing remains a sizable part of the Chicagoland economy, but the region is no longer a national leader in any one phase of publishing, It does however still boast national leaders in certain categories of the trade. Crain Communications, Inc calls itself North America's largest, privately-held business publisher; the firm put out more than 30 business-related newspapers and magazines. The University of Chicago Press is generally reckoned to be the nation's largest university press as well as one of its most distinguished.
A work as familiar in the nation’s Christian community is The Living Bible, which since 1962 has been published by the suburban Tyndale House. The region indeed is to evangelical publishing what Chicago used to be to meat packing. Tyndale, based in Carol Stream, has sold more than 64 million books and other products from the "Left Behind" series of apocalyptic Christian novels, one of whose coauthors graduated from Chicago's Moody Bible Institute. As the home base of many national church associations, metropolitan Chicago also is home to their magazines and journals, ranging from Christian Century and Christianity Today to U.S. Catholic and the Nation of Islam's Final Call.
High-tech then and now
Chicagoland was for some time a national center of what was then high-tech assembly plants. The descendant of a telegraph supply company that opened shop in Chicago in 1868, Western Electric later became the manufacturing arm of American Bell Telephone Co. Its Hawthorne Works in Cicero was a huge operation, as befits a monopoly supplier of phone services. But the Hawthorne Works was not only big. The world’s first high-vacuum tube was manufactured at the plant (in 1913), as was the first desktop telephone (1919), among many other, lesser known wonders.
Western Electric was also famous for its contributions to the new science of industrial management. In 1924 researchers from Harvard University undertook a series of experiments at the plant to test the efficiency of female coil winders, relay assemblers and small parts inspectors. These "Illumination Experiments" were intended to discern the relationship between lighting levels and output in the workplace but they ended up teaching researchers about the relationship between employees and management instead. The output of teams of workers were found to rise as light levels rose, as expected, but so did the output of a “control” group whose lighting was not increased.
That unexpected result inspired a second phase of tests, called the Relay Assembly Test Room Experiments, between 1927 and 1932. Six veteran workers were removed to a special test room so their output could be measured against changes in length and frequency of rest periods and hours worked. Again, the results raised eyebrows. Output increased no matter how physical conditions were varied; in fact, even when conditions were returned to what they had been before, productivity remained significantly higher (at least for a time) and absenteeism was dramatically lower. Merely by asking their cooperation in the test, it appeared, the researchers had stimulated a new attitude among the employees, who now felt themselves part of an important group whose help and advice were being sought by the company—a phenomenon known ever since as the Hawthorne Effect.
What is today the Zenith Electronics Corporation began life as the Zenith Radio Corporation in 1923, an outgrowth of a local maker of radio gear founded by a couple of ham radio operators. The company quickly put on the market a number of innovative products and systems in the rapidly developed radio technology—the computers of their day—the first portable radios in 1924, in 1926 the first radio receiver that operated on alternating current for use in the home, in 1927 the first radios with automatic push-button tuning.
That tradition of firsts resumed after World War II. In 1956 Zenith invented the first wireless television remote control device, and in 1961 its stereophonic FM broadcasting system was adopted by the FCC as the national standard. During the 1950s and 1960s, it was the number one maker of black-and-white sets in the U.S., and by the mid-1960s was grossing a half billion in sales per year and employed thousands in factories in Chicagoland.
After years on Chicago south side, the firm relocated its corporate headquarters to Glenview. As recently as 1972, Zenith was number-one in production of television sets, but international competition meant a series of shifts into new products, none of which sustained the firm. Zenith went bankrupt and had to be reorganized in the late 1990s. It survives and operates out of modest quarters in Lincolnshire.
No Chicagoland electronics firm today dominates its industry the way that Western Electric did, but the region still boasts important companies. Motorola in 2006 boasted annual revenues of $41.2 billion and employed 69,000 people around the world. It began in Chicago as a car radio maker in in 1928 but over the years ventured successfully into such fields as walkie-talkies (they made the first in the world), cellular phone technology including handsets, microprocessors, satellite systems, digital cable boxes and modems. It suffers the usual ups and downs of firms that rely on fickle consumers, but its “RAZR” cell phones were a hit, and it looks likely to remain a corporate citizen of Schaumburg for some time yet. [Editor's note: In 2015, Motorola moved its headquarters from Schaumburg to downtown Chicago.]
Chicago business leaders of every generation are explorers of a sort, always seeking locations that might confer a business advantage in the form of convenient transportation and enough cheap land to accommodate what they are certain will be ever-bigger plants and warehouses. One such distant haven was the Calumet area—Lake Calumet and its adjacent wetland, rivers, and lake shore from roughly at 79th Street to the southern city limits.
Mostly treeless and boggy, the Calumet by the latter 1800s appeared suddenly the comeliest spot in Chicagoland to industrialists whose eyes were peeled for places to build new factories. Downtown Chicago was cramped and costly and anything but a convenient place for a factory. Industry at first headed upstream along the Chicago River branches away from the city center, because the river was needed for shipping and waste disposal. By the 1870s it was the railroads that carried Chicago industry, and a lot of them ran through the Calumet. Between 1850 and 1900, at least nine railroad companies laid track through the area. Lake shipping was still important for the movement of bulk goods such as ore or grain, and that too became possible in the area after 1870, when engineers dug a Calumet “harbor” in the form of a deepened river mouth.
Calumet was that most wondrous of places to the expansion-minded tycoon—a place where land and rivers could made as needed. Lowlands there were drained, then filled, streams rerouted, channels deepened, the lake shore extended with slag from the mills. The remodeled Calumet was as engineered an environment as any steel mill. With room to build and rail and water shipping close to hand, the logic of relocating there was inescapable for many firms, and by 1906 more traffic was bustling in and out of Calumet Harbor than the Chicago River.
Thus was achieved the Calumet’s transformation in the late 1800s from marsh to manufactory. By 1884, George Pullman had completed his railroad car plant and model town along the Illinois Central on the western edge of Lake Calumet. The Pullman works was joined by brick and tile works, grain elevators, oil refineries. (The Standard Oil refinery in Whiting that opened in 1889 would become the world's largest.) General Mills built a plant in South Deering in 1902 that transformed grains into Cheerios, Kix, Cocoa Puffs, Total, and Bisquick among other products. (It closed in 1995.) The Sherwin Williams Co. opened a paint factory, and the Ford Motor Co. opened an assembly plant there in 1924.
However, it was steel that would put the Calumet on the map. Easy water access to coal and Great Lakes iron ore and to nearby markets as the U.S. industrial economy matured—had Chicago and Chicagoland not developed some kind of steel industry, PhD candidates in economics would still be staying up late trying to figure out why.
Iron and steel manufacture was a major Chicago industry since the 1850s, and Chicago a major national producer for nearly a century beginning in the 1880s. The American West ate up train rail and cars and fence wire as fast as Chicago could feed them, and Chicago factories themselves ate steel and shat out machines of all kinds. The area had access to coal and Lake Superior iron ore by train and lake steamer, and enough land to build the massive plants that the economics of the business demanded.
The very first steel mill in the Calumet area opened in 1875 as Brown Iron and Steel; it later became more widely known as Wisconsin Steel, which was the captive mill of what was by then International Harvester. (The first cargo boat to push up the newly improved Calumet River bore ore for the plant.) Such early mills dotted the Chicago river and its branches. According to the inexorable logic of industry, steel-making firms got bigger over the decades, as did their plants, and the only place with enough room to build them was the Calumet.
The region’s largest, Illinois Steel Company, was also the world's largest, and was a comprehensive enterprise that owned not only mills to make steel but the mines that supplied its ore and coal and the railroads needed to deliver them. Illinois Steel later was swallowed up by the new U.S. Steel; its South Works in the Cal employed about 11,000 people in 1910, but even that Brobdingian enterprise was dwarfed after 1906 by the firm’s new mill just across the state line in what would become Gary, Indiana, which at its busiest employed more than 16,000 workers, which made it the nation’s largest. Inland Steel had been doing business in Chicago Heights for less than a decade when it decided to build a large new plant at Indiana Harbor. The United States Rolling Stock Company relocated at Hegewisch from its works near Blue Island.
By the 1920s, the Calumet rivaled Pittsburgh as the nation’s blast furnace. The mill names loom in the recollections of South Siders like the old country does in the lore of immigrant clans—Inland, Republic, Youngstown, Wisconsin. The sight of the mills afire at night moved some observes to poetry, others to bombast, but it moved them in any event. It certainly loomed large as the new hearth of Chicago heavy industry. At one point, companies in the Calumet supplied nearly all Chicagoland’s jobs in primary metal processing and from a fifth to three-fourths of the region’s jobs in basic industries such as oil refining, chemicals processing, and transportation equipment manufacture.
One of those constituents of U.S. Steel was the South Works plant of Eber B. Ward’s North Chicago Rolling Mill Company which opened a new plant in 1881 on the Calumet River in East Chicago. In 1865, this firm turned out what might have been the first steel rails made in the U.S. at its mill on the North Branch of the Chicago River. As the South Works of U.S. Steel, the plant was the biggest rail-maker in the nation’s biggest railroad town. Apart from wartime, it employed some 10,000 for years, but its markets shifted—it stopped making rails in the 1950s—its workforce shrank until, in 1984, it was for all practical purposes shut down.
Through the 1970s the sight of the Calumet moved writers of all kinds to reach for their keyboards, the way the Grand Tetons compelled artists to reach for their pencils. It has been described many times, in accounts that began as journalism and are today the prose version of period photo. Here is one of the better ones, from Alex Kotlowitz:
And yet the scenery, so to speak, is awe—inspiring, the man-made equivalent of the Rockies. Dark, low-to-the-ground muscular structures, some three times the size of a football field, sprawl across the landscape, sprouting chimneys so tall that they’re equipped with blinking lights to alert wayward aircraft. These chimneys shoot full-bodied flames thirty feet into the sky; at night they appear almost magical, like giant torches heating the moon. Billows of smoke linger in the air like phantom dirges . . . . The noise is crushing, the stench of sulfur so powerful that not even a closed car window can keep it at bay. Had Rube Goldberg lost his sense of humor, this is, I imagine, what he would have produced.
Work in the mills was hard but the pay was good; the only fly in life’s ointment was the owners—obdurate and greedy. In some cases the workers knew how to make steel but the owners did not always know how to sell it; in other cases, mills were closed for reasons that had to do with tax laws and merger dynamics—anything but steel. Historians will be arguing for years whether closings were caused by pollution rules and cheap foreign competition, as companies claimed, or by management incompetence. All of Chicago's mills, however, were lumbered with old, backward plant, and faced ruinous competition from newer, more efficient mills abroad.
The glory days of Big Steel lasted until the 1970s. Wisconsin Steel, South Works, Inland Steel, Republic Steel and its corporate successor LTV Steel—all either shut down or dramatically slashed jobs. By the mid-1980s about 16,000 Chicago-area steelworkers alone lost their jobs. These days steelmaking consists of small plants making specialty steel products out of scrap metal—a bit like replacing Packingtown with a hog dog stand.
Walgreen Drug Stores were to retail pharmacy in the U.S. what Starbucks has been to coffee drinking. Charles Walgreen was a pharmacist from Dixon who moved to Chicago in hope of better things. He opened a small pharmacy of the South Side in 1901; by 1929 it had grown into a chain of nearly 400 drugstores and Walgreens was on its way to becoming the biggest drug retailer in the U.S.
Walgreens the chain—run by a succession of Walgreens the family—pioneered in several aspects of the retail pharmaceutical arts. In the 1920s the chain introduced the malted milkshake, in the 1950s it refined the art of self-service retailing, in the 1960s became the first major drug chain to put its prescriptions into child-resistant containers, in the 1980s the first drugstore chain to connect all its pharmacy departments via satellite, and in the 2000s became the first drugstore chain to offer prescription labels in any of 14 languages chain-wide to suit the needs of newly diverse America. By 2006 the company was collecting nearly $50 billion a year in sales from nearly 5500 stores nationwide that employ 196,000 people. Headquartered in Deerfield, Walgreens is still a Chicagoland institution, being one of the region’s largest employers.
Sears, Roebuck & Co. built itself into the nation’s largest retailer, and it was fitting that its Merchandise Building, the centerpiece of its West Side headquarters complex at 900–930 S. Homan Avenue, was the largest commercial building in the world when it was opened in 1906. It boasted a 14-story tower—the original “Sears Tower”—complete with an observation room from which visitors might enjoy the view of the faraway Loop. A neighborhood landmark, the Merchandise Building also has some significance in the history of national retailing, as it here that the company opened its first Sears retail store when the firm branched out from mail order in 1925.
At its peak in the early 1920s, more than 20,000 people beavered away on what became a 55-acre complex spread across 12 city blocks that also included an administration building, printing building, and power plant. In the decades that followed, the West Side went from wholesomely suburban, a small town in the city, to something that was not. Sears moved its administrative operations downtown to a new Sears Tower in 1974. It proved an ill-fated venture; the company, or at least the men who ran it, were never comfortable downtown. And they dawdled there a mere ten years before moving into new quarters in 1992. In Hoffman Estates in the far northwestern suburbs of Cook County, Sears built a new version of the old West Side complex, a largely self-contained city within the city for its white-collar headquarters staff.
The West Side Sears complex was placed on the National Register in 1978. Parts of complex that survive at Homan Avenue and Arthington Street include the tower. The parts that did not survive live on in the form of the 23 million bricks and 12 million feet of lumber salvaged from the old Sears buildings and reused in the Homan Square urban reclamation project, six city blocks with more than 300 units of mixed-income housing supported by a commercial district and a community center and health clinic. The project has won awards from land use planners for excellence—an endorsement of product quality that the original Sears men would be proud of.
In one of the ironies that enlivens history, the City of Chicago in 1998 consolidated its gang crimes, gambling, organized crime, prostitution, and narcotics unit, and other divisions in offices in the former Sears Roebuck building, making it a kind of crime-fighting department store. Indeed, officials cannot resist using retail terms when describing the Homan Square Community Center, whose swimming pool, a gym and fitness center, meeting rooms, health clinic and pharmacy, and computer laboratory provides residents with “one-stop shopping.”
Some of the city’s best commercial buildings housed goods rather than offices. In the days when goods had to be moved entirely by horse-drawn wagon, warehouses supplying the downtown stores had to be located nearby, in such areas as the West Loop near the South Branch of the Chicago River. The balance and proportion of several of these ostensibly utilitarian structures shamed many a more pretentious building.
A few still stand but the best have been lost to time or the tax man. Among the latter is Henry Hobson Richardson’s Marshall Field Wholesale Building (1887). This forerunner of the Merchandise Mart was a Romanesque masterpiece that had graced the block bounded by Wells, Quincy, Franklin, and Adams until it was wrecked in 1930; Donald Miller in City of the Century called it “the Brancacci Chapel of Chicago architecture.” Another ghost that haunts the dreams of local building buffs is that of the striking Ryerson Building (later known as the Walker Warehouse) on South Market at Wacker, which was designed by Louis Sullivan. Carson Pirie Scott’s landmark State Street store (the old Schlesigner & Mayer store at state and Madison adapted skyscraper technology to the large retail store. The result was a modern building whose modernity is disguised by its florid, anything-but-Modern cast iron ornament over the corner entrance; the AIA Guide likens entering it to taking to a tree-lined forest walk.
Chicagoland also hosts eminent firms of many other sectors. Allstate—2006 was the 75th anniversary of the founding of Allstate Insurance Company, by some measures by nation’s largest. It began in 1931 as an offshoot of Sears Roebuck—it was named for one of Sears’ auto tires—and initially was sold, like everything else from Sears, by mail. When agents began selling through the Sears ubiquitous stores, however, it really took off. Now independent of Sears—the initial public offering of Allstate stock in 1993 was then was the largest in U.S. history—the company does business out of suburban Northbrook.
“Pirates like Potter Palmer, Philip Armour, George Pullman, Charles T. Yerkes and Samuel Insull fed the city with one hand and bled it dry with the other.” That observation, by Albert Harper in his 1967 book about crime in Chicago, is only slightly less valid as history than as polemic. The businessman-as-pirate is however only one of the many incarnations of the Chicago businessman. The type first appears as the swashbuckling fur trader of Chicago the village—Gurdon Hubbard, who could outwalk the Indians and out-deal most whites, is the model here—through the entrepreneur and proto-industrialists of the early city such as “Long John” Wentworth. (The story is told that in the 1860s, the then-Cook County courthouse in the Loop was the only really tall object in sight, except when "Long John" was out for walk.) The ruthless captains of capitalism who turned businesses into industries in the later 1800s—the Insulls and the McCormicks—were followed by the earnest, rather bland civic improvers of the early 20th century and the anonymous managers of today.
Chicago has of late made heroes of its politicians, its media stars, and the sports figures, but in its formative years the city’s hero was the businessman. This owes partly to the fact that Chicago was a trading center rather than a religious or political capital, partly to the fact that the city produced neither generals (the sole military event to occur here, the Fort Dearborn massacre, was ignoble) nor Presidents.
Writers need their heroes, too, and it is thanks to Chicago’s scribblers that we know as much as we do about the early ones. The first “Chicago book,” Wau-Bun, is about a businessman-trader, John Kinzie, head of a commercial clan that presaged such successors as the Pritzkers. As the city-builder gradually became the fortune-builders, the Chicago businessman was usually portrayed in novels wearing a black hat. The novels that put Chicago on the literary map in the 1890s were about business, or rather money and the will to power as expressed by businessmen, as were later classics such as The Jungle, Titan, The Pit. So are many of its lesser ones, if you count as a business theme the workers’ lives wrecked by business as recounted in socialist tracts disguised novels.
Writers and the reading public had many reasons for their disenchantment. The city for a time believed its go-getters would lift the village out of the mud, and they did, but after a half century of heedless development it threatened to bury it again in things that were worse. Many began to ask whether starving workers and poisoning the air and water for profit was nature’s order or merely the businessman’s. When, during Prohibition, the gangster came to represent Chicago-style entrepreneurialism to the world, it was noted that the differences between these ruthless and ambitious men and the industrial captains of the day was mainly one of operating style. The most representative Chicago businessman of the sort, and certainly the most famous, is Alphonse Capone, CEO and chairman of the board of the dominant local firm in 1920s vice industry.
Businessmen are the familiar cast in any version of popular Chicago histories, indeed many such accounts tell the city’s larger story in terms of the rise of its business giants. They occupy a place in center stage that in Europe might be occupied by popes or generals or kings. There is a tendency to assume that the people who make history are as big as their deeds, that the massive fortunes of the giants of business who built Chicagoland can be attributed to their exceptional energy, intelligence, guile, or ruthlessness. In fact, the success of most of them owed much to luck and timing, but Chicagoland’s men of business were an exceptional bunch nevertheless. (That they were all men owes to the prejudices of the times. Their women, relegated to unpaid careers in charities and the arts, often showed enough diligence, enough shrewdness, enough ambition, and certainly enough ruthlessness to best their husbands in a fair test.)
They did not see themselves as lucky except in sense of being born into a class favored by god's will. They were convinced that their success was explainable by their talent, their judgment, and their hard work. In some cases, Chicago’s titans deserved their own praise, but while some were highly skilled and all worked hard, at least as young men, most were also the proverbial right men in the right place at the right time. If they did what other businesspeople only dreamed of, it wasn’t because they were better businessmen but because Chicago was for a time a better place to in which to be a businessman.
Graham Hutton pointed out that business in Chicago in the 1800s bloomed like Illinois farms had done. It is an apt simile, since Chicago’s hustlers were tilling virgin soils too. The newly industrialized economy presented them with an untouched continent’s worth of customers who were hungry for all kinds of goods. If, during Chicago’s later years, it took an exceptional businessperson to succeed, in the half-century after the Civil War it took an exceptional one to fail. (War might be hell for those who fight but it is heaven for those who sell things to the Army.) As Edna Ferber observed in So Big, “In Chicago the distance from butcher of 1885 to packer of 1890 was only a five-year leap.”
This generation has been spared the test of building a city—predecessors like Ogden and Wentworth had already accomplished that—and thus could devote their energies not to city-building but to building great industrial enterprises in lumber, meat, retailing, and railroads. They had their differences, but what is striking is the many traits they had in common. The men whose names we know today because their names are chiseled into the museums and schools they left behind shared a common background. Most descended from long-established families in the Northeast. Many were sons of small merchants, craftsmen, mechanics of one sort or another who left home at an early age to become clerks in stores or small businesses. Marshall Field, his partner Barlow Higinbotham, furniture manufacturer Peter E. Kroehler, drug store king Charles Walgreen—all were sons of farmers.
In general, Chicago’s merchant and manufacturing princes were practical sorts, not men of advanced learning. Cyrus McCormick did not advance his studies beyond the rural schools of his native Virginia, and fast-food impresario Ray Kroc dropped out of high school in his sophomore year. However, most had decent basic educations by the standards of their day. Marshall Field’s lieutenant Higinbotham studied at Galesburg’s Lombard College, James Chalmers was educated in public elementary and high schools in Chicago. James A. Patten, the grain dealer extraordinaire, managed two years at the preparatory department of Northwestern University at Evanston. However, only a few saw the inside of a college classroom until they started paying to build them—the younger Joseph Leiter was a Harvard man and U.S. Steel’s Elbert Gary was a lawyer. Educated at first in blacks-only schools of Arkansas that were poor in every way, publisher John H. Johnson graduated from Chicago’s DuSable High School with honors and was elected senior class president.
Such formal training as most of these men received was in the skills peculiar to business. Peter Kroehler got a practical education in bookkeeping, shorthand, mathematics, and commercial law at the Commercial Academy of the North Western College in Naperville. That was same sort of education as the young Charles Walgreen got in Dixon and sporting goods magnate A. G. Spalding got in the Rockford Commercial College.
While poverty has never been a prerequisite to commercial success in Chicago, near-poverty, or perhaps the risk of poverty, seems to have been. Jewish immigrants would build some of the region’s best-known firms—retailers such as Spiegel, Florsheim, and Alden's, manufacturers such as Brunswick and Inland Steel, garment makers such as Kuppenheimer, and Hart, Schaffner & Marx. No doubt their energy owed something to the memories of having started in Chicago as street peddlers. John H. Johnson started Johnson Publishing in 1942 with $500 borrowed against his mother's furniture; with it, he eventually published Ebony, the nation's top-selling African American magazine.
The majority of Chicago business elite before World War II would have to be described as half-made men. They were the sons of manufacturers or merchants—heavy equipment-maker James Chalmers, meat packer Oscar Mayer, Julius Rosenwald got his start as an apprentice at his uncles’ clothing business in New York; later, he and a cousin ran a clothing firm in Chicago before Rosenwald’s fateful decision in 1896 to acquire a major interest in the fledgling Sears, Roebuck. One or two men were born as the Chicago equivalent of royalty. Coal king Joseph Leiter was born in 1868 in Chicago to one of the city’s early business leaders, was educated In posh private schools in the East, and for a graduation gift was given a world tour and a million bucks by his father. Elbert Gary of U.S. Steel was born in Wheaton to local nabobs.
Ambition and ruthlessness are expected in an industrial giant. What surprises one about the princes of Chicago’s golden age was their piety. A surprising number of Chicagoland’s business giants were religious men who were quick to explain their commercial success in terms of their virtue. Cyrus McCormick was reared on his father’s farm according to the uncompromising moral tenets of the Presbyterian faith. Gary taught a young ladies’ Bible class in the Wheaton Methodist Episcopal church.
Such leaders were unsettled by the speed, the violence, and the impermanence of the city they were building. Downtown real estate was too pricey for new churches and newer commercial structures overshadowed the established ones physically as well as symbolically. (No church spire out-soared office towers, save one—the Chicago Temple/First United Methodist Church—which is incongruously perched atop a 22-story skyscraper. Nearer my God to thee, indeed.)
Buildings of business quickly outreached church spires in downtown Chicago, and the authors of the former became uneasy about the symbolic dominance of commerce over churches. To preserve the sanctity of religion, they began removing religion from the sphere of mammon by banishing churches to new residential quarters, where churches could be the biggest building on the blocks as they never could downtown, and thus embody the proper relation of God to man. The commercial class rebuilt their churches (usually after selling their original downtown sites for a nice profit) in residential neighborhoods safe from the unholy influence of commerce. This may have saved their souls, but it left the city safe from the improving influence of religion as well.
The resulting physical city, in which commerce had banished God to the periphery of Chicago, literally and symbolically, reflected a hierarchy of value but not one of values. The result, say historians such as Daniel Bluestone, was that these men who had been so successful in this world were unusually troubled by their prospects in the next. He notes that the iconic Chicago skyscrapers that many of them built were far from being mere vertical factories erected with cost and convenience in mind. They were in fact attempts to dignify commerce by housing it in buildings made to look like temples of old. Whether the ruse fooled God we will never know. (Certainly, it fooled a lot of architecture critics who have been largely blind to this dimension of design.)
The problem, of course, was that by restoring religion to its place in domestic life, businessmen banished it altogether from commerce. What is usually considered Christianity charity for example had no place in boss-worker relations; to indulge the workers was seen by most bosses in the heyday of Chicago industrialization as surrendering not only a commercial advantage but a moral one. God after all had installed their class at the top of what had become a very smelly heap, and who were they to challenge His judgment?
The businessman as citizen
In the city’s early years, Chicago's business class and its political class were largely the same people. Civic and business advancement were largely one project; development was not just on the agenda but was the agenda. The conditions needed to do business—law courts to adjudicate commercial disputes, a sound transport system, basic public services such as law enforcement—were also what a young city needs to grow; what was good for the city—improving drainage water supply, transportation—was also good for business.
In its early decades as a city, Chicago’s mayors were businessmen. This was not surprising—everyone was a businessman in old Chicago. The impulse was custodial, one suspects, but businesspeople enjoyed the leisure and the means to tend to the public's business, thanks to their success in private business. But one suspects that more than a few simply were drawn to politics. The virtues required by entrepreneurial business and by politics are much the same—energy, personableness, aggressiveness, canniness. Indeed, Some of the city’s businessman-pols were good, some bad but collectively their contributions as city builders were considerable,
In the old days, there was no regulation to speak of, beyond prohibitions against throwing dead horses into the drinking supply. Because it offered minimal services, the city government was not a major customer of local business either. As the 20th century neared, all that changed. The explosion of manufacturing demanded regulations. Decisions about rail and streetcars, from how would build them and where to how they would operate. City Hall was not only a regulator; as the array of services it offered widened, it became a valuable customer too. To get that business, businessmen who no longer held power catered to those who did. David Lowe describes the transition is less-than-flattering terms. “In sharp contrast to the era when the oligarchy took a hand in running Chicago and put up mayors like William Ogden, John Wentworth, and Joseph Medill, the new style was to turn over the city’s political life to the machine hacks.”
The growth of the city—more specifically, the addition to the city of thousands of newcomers like the Germans and the Irish, who were aliens in political terms as well as cultural ones—meant that the largely native-born business class could no longer command events at the polls. Businesspeople gradually left politics to the new professional political class and contented themselves with influencing events from behind the scenes.
The nefarious influence of businessmen on politics is perhaps most perfectly embodied in the Chicago career of Samuel Insull. In fact, in the Chicago of a century ago it was sometimes hard to tell the difference between mobster and businessman, apart from the cut of their suits. The ward boss, the developer, the gangster—the Chicago versions of these famous types are more alike than not. The professional, mostly ethnic pols who have been running the city since the 1890s or so undertook politics as if it was a business, and many became businessmen themselves, by trading on the contacts and the contacts they made in their public roles. William Lorimer, who was to be booted out of the U.S. Senate on bribery charges, engaged in the real estate business and later was a builder and brick manufacturer; Oscar DePriest was a real estate dealer, as was, in the 1930s, the Czech property developer and building speculator Anton Cermak. There were many other examples.
The shenanigans should have discredited businessmen as much as it did politicians, but just as it is the drug dealer who is decried more than the customer or the prostitute more than her john, the bribe-taker was damned while the bribe-giver’s behavior was justified as just another cost of business. Business still offers a sympathetic ear (and sometimes much more) to City Hall types who wish to place someone in a job in the expectation that City Hall will reciprocate with kindness in regulatory and tax matters.
Big business usually is listed as crucial part of Richard J. Daley’s governing coalition. Hardly was he sworn in for the first time as mayor than he announced a building program that won support of—and lined the pockets of—banks, developers, and big downtown retailers. Daley ran a wide-open city of the kind infamous from the days of Big Bill Thompson, only instead of gangs of bookleggers he turned over the city to gangs of cutthroat predators who carried briefcases instead of guns. They stole city land and vandalized its most beautiful buildings and took tax money under false pretenses. In giving sway to the Loop money men, Daley essentially re-established the ancient relationship of the Irish peasant to what Milton Rakove described as the city’s “Anglo-Saxon-Protestant overlords.” In his subservience to Chicago’s manorial capitalists, Daley was a true son of Erin.
It might be more accurate to describe Daley as part of business’s ruling coalition. The propertied elite owed Daley for his help in keeping alive the fiction that the people ran Chicago. Daley played Boss, the king of the garbage pickup, prince of parking tickets, leaving people to believe that real power was invested in the man they elected. While he fixed tickets, the city’s private government fixed the economy.
This not to say that the business class abandoned public life. Businessmen, and later women, remained on the public stage, but only as bit players. Occasionally, when the smells coming from City Hall were foul enough to wrinkle nostrils in the penthouse offices of Loop skyscrapers, businesspeople mobilized public opinion on behalf of reforms. By such means they pursued their old agendas in new ways. Helen Leftkowitz Horowitz, in her history of culture in Chicago, notes that the ultimate purpose of such reforms was to return control of the city to businessmen who wanted government to be run as efficiently and as predictably as business.
A few businesspeople actually ran and were elected to City Hall, but as aldermen, not mayors like in the old days. They usually represented those few wards to which the city’s educated elites—the remnants of the old progressive good-government forces—had retreated. The area’s successful businessman-politician usually lived in the suburbs and sought statewide office. The U.S. Senate in particular has attracted successful Chicagoland businessmen like Charles Percy (Kenilworth) and Peter Fitzgerald (Inverness).
In the 19th century, nearly every successful man of business arrived as an immigrant to Chicago. The scent of profit on the winds blowing from the west brought the most energetic and ambitious, if not always the best and the brightest. In recent decades, the winds of fortune are blowing Chicago’s ambitious young toward other places. James M. Roche, an Elgin high school grad and gas pump jockey, who went off to New York City and rose from accountant for General Motors to company president, in 1965. William Paley, the long-time owner and president of the Columbia Broadcasting System (CBS), was born in 1901 in Chicago and studied at the University of Chicago.
George Pullman named several of the north-south avenues in his model town after such inventors as Morse, Watt, Whitney, Bessemer, Stevenson, and Fulton. He might have named them after his fellow Chicago industrialists. A new world such as the one being created by industrialism in the mid-1800s needed lots of new things in it, and Chicago’s men of business were propitiously placed to feed this appetite for the store-bought and the factory-made.
Any large city will have clever people in it, and in Chicagoland were a fair share of tinkerers who were heirs to John Deere and other northern Illinois inventors. Of course, Chicago had its share of actual inventors—although not as many as some popular accounts would suggest. One must be careful to distinguish between things that were invented in Chicago, things that were manufactured, here, things that were introduced here, and things that were most perfectly exploited here.
For example, many popular accounts list Cyrus McCormick’s reaper as a Chicago invention; while McCormick eventually made them here, and in doing so built one of the world’s biggest industrial companies, the machine was not invented in Chicago. Nor indeed, did Cyrus McCormick invent it; rather he improved earlier versions of other men's machines until he had a viable commercial product. McCormick did with the simple reaper what Bill Gates would do with Microsoft Windows computer software; he incorporated several other machines into one system, with the result that one man could not only cut grain but automatically gather it, bind it, and deposit it in bundles on the ground.
Any list of gadgets and gizmos that were invented in the city will be neither comprehensive nor—given the haze that still hangs over the history of many of these things—universally considered accurate.
Gadgets and gizmos
—In 1869, William E. Hale Hale patented the "Hale Water Balance Elevator." It replaced steam-powered passenger lifts with reliable water hydraulics. Hale's inventions were a key part of the success of the Otis Elevator Co. (of which Hale was a manager), whose machines helped make possible the modern tall office building.
—In 1891, Whitcomb Judson of Chicago created what can be called the first “zipper,” a clumsy contraption using hooks and eyes to secure clothing. Judson’s real contribution to the problem of getting dressed was hiring Gideon Sundback, a man employed in Judson’s factory who, perfecting Judson’s clumsy device, made the first of what we know as the zipper.
—Smoked, salted, or canned pork was fine but few Americans had taste for anything but fresh beef; that why cattle were shipped live from ranch to butcher, at great cost to all, including the animals. Packers dressed fresh beef only in winter when nature retarded spoilage. Gustavus F. Swift designed and built his own insulated refrigerator cars (using ice at first, later mechanical refrigeration) that enabled fresh-killed beef to be shipped cross-country from his Chicago plant. The new cars revolutionized the meat business.
—The firefighters of Chicago Fire Department Engine Company 21 invented the fire pole when they took to sliding down to the fire wagon from their firehouse’s third-floor hayloft down a hay-binding pole. Department seniors made improvements including the famous hole-in-the-floor; firemen had a new tool, and movie comedy writers had a new gag.
—The business window envelope was invented by Chicagoan Americus F. Callahan, who patented it in 1902. The original design used rice paper for the see-through bit.
—In 1909 Naperville’s Peter Kroehler invented and obtained a patent on what is today familiar as “hide-a-bed” folding sofa bed. Kroehler then in effect cornered the market in hide-a-beds by buying up majority shares in other hide-a-bed makers. Such tactics helped Kroehler’s firm expand by selling "middle market" furniture to an ever-expanding middle class, and by 1940 Kroehler Manufacturing Company was calling itself the "World's Largest Furniture Manufacturer."
—John Hertz's company, which was incorporated December 1, 1915, devised a manual windshield wiper for its cabs; these were soon replaced with the first automatic windshield wipers.
—Spray paint was invented in Chicago in the late 1940s by Edward Seymour. His new bride reportedly was freshening a room using an aerosol spray when she observed that using such a contraption to apply paint would be a good idea—which it proved to be for her husband’s firm, Seymour of Sycamore, Inc. which in 1949 became the nation’s first manufacturer of spray paint. In time Chicagoland would become the world’s spray paint capital.
—In 1951 the kettle-shaped Weber Grill, as familiar a presence in American backyards as dandelions, was invented by George Stephen at the Weber Brothers Metal Works. Its successor firm, Weber-Stephen Products Co. of Palatine, estimates there are nearly 13 million of its charcoal and gas-fired grills in use today.
—Chicago was for a time a world center not only of electronics manufacture but of design too. A pioneer in the field was Paul Galvin, who in the 1920s founded the Galvin Manufacturing Corporation which, as Motorola, became one of the earliest makers car radios in the 1940s. The firm later pioneered in the invention and productions of walkie-talkies, which made the firm an early leader in cellular telephony. By the end of the 1980s, Motorola had become the premier worldwide supplier of cellular telephones and was collecting patents by the drawerful for electronics products and parts from pagers to computers chips such as the 68000 series of microprocessors used by Apple computers.
—Galvin and reaper-maker Cyrus McCormick are usually held up as the models of the inventor who strikes it rich. More typical was Ulises Sanabria, the second-generation Spanish immigrant born raised, and schooled in the Chicago area who in the 1920 and ‘30s did pioneer experiments in television in a laboratory in downtown Chicago. Sanabria later co-founded the Western Television Corp., whose Visionette model is credited as the first commercial television receiver. Like so many inventors, Sanabria was not a practical man in any endeavor other than television engineering, and his many attempts to capitalize on his inventions failed.
— Scientists at Universal Oil Products' Riverside Laboratory in McCook patented nearly almost 9,000 commercial applications of petroleum between its founding in 1921 and 1955, prompting the American Chemical Society to name it a National Historic Chemical Landmark.
—In 1900 Dr. Lee De Forest, an employee of Western Electric, invented the audion tube, giving Chicago claim to being the birthplace of the electronics industry. In 1899 he had gone to work in the labs of Hawthorne Works of Western Electric, the manufacturing unit of Bell Telephone in Cicero/Berwyn, but spent his off hours pursuing his own work on radio, which he pursued while doing a series of jobs here and in Milwaukee.
—That staple of the traditional soda fountain, the malted milkshake, was invented by Ivar "Pop" Coulson in a South Side Walgreen’s in 1922.
—The Hostess Twinkie snack cake was invented in Shiller Park in 1930 by James Dewar, the Chicago-area regional manager of Continental Banking Company.
—The deep-dish or Chicago style pizza (in fact a cheese pie) was invented in 1943 by Ike Sewell, a transplanted Texan, as the centerpiece dish of the restaurant Pizzeria Uno.
—Oscar Meyer graduated from Robert Wailer High School in Chicago in 1905. Trained at Harvard as an engineer, he worked at his father’s Oscar Mayer & Company, where he showed a knack for engineering meat at into various forms such as sliced “lunch meat” packaged in vacuum-sealed plastic. He made a fortune by doing what his dad had done, only at an industrial scale, by reassuring customer with a trusted brand to replace the personal attentions of the neighborhood butcher of yore.
— The successful commercial version of the “skinless” wiener is credited to Chicagoan Erwin O. Freund.
—German-born candy maker Charles Frederick Gunther, invented the caramel.
—Skokie's Knechtel Laboratories, described as the country's largest independent candy laboratory (the firm prefers the term “confectionery consultant”) is the kitchen in which such treats as Marshall Field’s Frango Mint and the Granola bar have been cooked up for such candy- and snack-makers’ as General Mills, Pillsbury, Quaker Oats, and Brach's Confections.
Toys and Games
—Chicagoan Levant M. Richardson patented a design for the ball-bearing roller skate in 1884.
—Tinkertoys were the creation of Evanstonian Charles H. Pajeau, in 1914; his Toy Tinkers Company was based in Evanston until 1952.
—Frank Lloyd Wright, the famous architect, had learned how to design buildings using the Froebel wooden blocks; his son John in 1918 devised wooden toys with which one could make buildings—Lincoln Logs, which he made in 1918 and sold through his firm, Red Square Toy Company, until 1943.
—The first pinball machine was marketed by Chicago-based Lion Manufacturing Corporation in 1932 and its pawned a craze, and a small industry. A spin-off firm, Bally Manufacturing Company (still in Chicago), remains the world’s pre-eminent maker of mechanical games of this type. Bally went on to build the first electric slot machine in the 1960s.
—Beanie Babies, the pose-able and collectible stuffed toys that were a fad hit of the 1990s, were invented by Ty Warner of La Grange.
—Abbot Laboratories of North Chicago was born in 1888 when Wallace C. Abbott began producing pills with measured doses in a room above his Ravenswood pharmacy. Among the clever chemicals devised by his wizards in the labs are the sedative Nembutal and the intravenous anesthetic Pentothal.
—Baxter Laboratories began in a converted automobile showroom in Glenview in the 1930s; beginning in the 1950s, the firm had a hand in making or marketing such key innovations as human blood plasma, the artificial kidney, and the heart-lung oxygenator used in open-heart surgery—products that carried the company into the Fortune 500 by the 1970s.
Using old machines in new ways
The particular genius of most of Chicago’s business giants was their knack for seeing new ways to use things that others had invented, or how to combine old machines in new ways to get work done. A good example is Sears, Roebuck. Sears did not invent the post office or the printed catalog or the assembly line, but it combined the two into a new system of mail-order retailing that brought the department store into the remotest farm kitchen. The Sears catalog in its heyday was the Amazon web site on paper and it made Sears the largest mail-order company in the world by 1910, supplying much of America with what its people needed to become American.
in the same way, George Pullman did not invent the railroad sleeping car; however, he was a genius at selling his cars as the way to travel. Charles Walgreen did not invent open merchandise shelves or in-store lunch counters, but by using them in a new context, and then cloning them in the every store in his chain, he may be said to have invented the modern drugstore. Movie theater mogul Barney Balaban built the first movie house with air-cooling system. He got the idea from his youthful days working in a cold storage warehouse, and eventually perfected a system of circulating air over cakes of ice. People began to go to the movies to escape the heat during the summer months, making motion picture exhibition a year-round business.
A paragon of the type was Samuel Insull, whose firms once controlled Chicago electricity (through Commonwealth Edison) and its natural gas supplies (through Peoples Gas Company). The Englishman recognized that the Parsons steam turbine was a better machine to drive electricity generators than the reciprocating steam engine then in use. Insull in 1903 installed one of the new turbines at his firm’s Fisk Street Station on Cermak Road (now National Historical Mechanical Engineering Landmark) to drive a generator producing 5,000 kilowatts—a monster for the time.
Insull adopted alternating current (AC) transformers that enabled power to be sent farther (and thus made possible huge, centralized generating plants that realized huge, and profitable, economies of scale. By 1924, Insull power plants were putting out as many as 75,000 kilowatts, as was done at the Crawford Avenue station at 3501 S. Pulaski Road, which thus became a landmark in the history of power generation.
Sam Insull’s real genius was as a marketer. Other businesses tailored their output to meet demand; Insull tailored demand to match his output. He bought or developed the things that needed the power his generating stations had to sell—streetcars, interurban trains, and the land that each ran through. At the peak of his power, Insull controlled the elevated railways in Chicago (which had merged into the Chicago Rapid Transit Company, and three interurban lines to suburban areas (North Shore Line, South Shore Line, and the Chicago, Aurora, and Elgin).
Samuel Insull was not the first or the last Chicagoan to get rich by having the wit to recognize and exploit the possibilities in someone else’s good idea. For Chicagoans, the big news of 1955 was the election of Richard J. Daley as mayor for the first time. The event of that year that would come to matter to the rest of the country, however, happened in Des Plaines. Ray Kroc— restaurateur, philanthropist, and author—was born in 1902 in Oak Park. He dropped out of high school in his sophomore year, and at the age of fifteen served with the Red Cross ambulance corps during World War I. After jobs as a jazz pianist, among other things, Kroc went to work as a salesman of a new machine that could mix several milkshakes at once. His route took him to California and the burger-only restaurant of the McDonald brothers. The restaurant applied industrial methods applied to the production of fresh-cooked food—few items, mass-produced on the spot using assembly lines methods to keep costs low. The McDonalds agreed to let Kroc open a chain of them, in return for a small percentage. (He would later buy them out.) In 1955, Kroc opened the very first McDonald’s franchise in Des Plaines; the rest is cultural if not gastronomic history.
The essence of the industrial method is reducing complex products or services into standardized inputs that can be easily processed—hogs and cattle, mail orders, paperwork, grain. Take for example the grain-grading system gradually perfected by Chicago dealers. They bought not a particular grain from Farmer A, but grain of a guaranteed quality, as guaranteed by an inspection and grading system they set up. Grain of a given quality from any farm was interchangeable with that from others and could be mixed without qualm, and thus loaded and unloaded in common bins rather than moved in individual bags. Same-quality grain that flowed like droplets of water in ever-growing streams from field to rail car to elevator, made possible efficiencies in the handling and sale of grain that revolutionized agriculture.
Historians have pointed out that it was not the packing houses but their central offices in the Loop, where paper was processed, that the mechanized future of work reached its acme. All the innovations essential to the modern corporate bureaucracy—the elevator (which made possible concentrating lot of people in small space), the telegraph and phone (which made it possible to communicate with the plant at distance), electric lights and typewriters (which made it possible to work in ever-larger offices removed from windows—were not invented in Chicago. In it was in Chicago however that they were put to first use in what was itself a technological innovation—the tall office building, a machine superbly suited to the administrative tasks of large organizations.
As noted, Sears, Roebuck was the Amazon of its day. Its success lay not only in its ability to sell things through its famous catalog, but its ability to fill them efficiently and ship them quickly. This was done at the company’s massive Merchandise Building on the West Side. When it opened in 1906, Sears was processing an average of 20,000 orders a day, and five times that many at Christmas. Conveyor belts and gravity chutes, moving sidewalks and pneumatic tubes—all powered by extensive network of transmission belts driven ultimately by the firm’s own powerhouse—saw merchandise move from the shelf to a waiting rail car within twenty-four hours after the order was received.
Factories fueled by steam engines and supplied by railroads quickly solved the problem of making things at affordable prices and selling them to a national market. (Marshall Field for instance was an early practitioner of global capitalism, as he manufactured his own merchandise in factories in Europe, Australia, and—augury of the future—China.) The challenge to business was how to sell and distribute them. And here’s Chicago men of business proved especially adept.
Chicago was famous as for selling mid-range merchandise of all kinds to middle -class Middle Americans. In the 1870s Montgomery Ward—then a traveling salesman for Marshall Field’s—came up with the notion of selling and delivering goods by mail to isolated rural customers isolated by bad roads and the demands of their trade. Ray Kroc, contrary to many careless accounts, did not invent the fast food restaurant, but he was a genius at packaging them in a way that made Americans want to buy mediocre hamburgers.
Advertising is the alchemy of the mass retailer. A good copy writer can turn the meanest product into gold. Chicago mail-order pioneers Montgomery Ward and Richard Warren Sears, says Quentin J. Schultze in the Encyclopedia of Chicago, were “the first great catalog copywriters.” In time, retailers hired specialists to do the come-ons. and Chicago produced some doozies. By the turn of the 20th century, when mass marketing as we know it came into being, Chicago was home to several advertising agencies of national note such as Leo Burnett, founded in 1935; Burnett’s firm populated the world with such iconic figures as the Jolly Green Giant, the Pillsbury Dough Boy, Charlie Tuna, Tony the Tiger, and the Marlboro Man.
It was the era in which mass marketing moved from the cheap to the meretricious, and Chicago gave it a hearty push in that direction. Marketing’s Gustavus Swift was Albert Lasker, who built Lord & Thomas into the largest advertising agency in the world. Lasker was a prince of mendacity. He hired opera stars to peddle cigarettes who claimed to smoke to protect their voices and insisted his client’s brand of beer was superior because it was package in sterilized bottles, not mentioning that all beer is thus processed.
The American National Business Hall of Fame called Lasker “the founder of the modern advertising industry.” one of the reasons is that Lasker had the sense to hire people such as Claude Hopkins. It was Hopkins who dubbed Schlitz the “beer that made Milwaukee famous,” convinced American women to "reach for a Lucky instead of a Sweet," shot Quaker Oats from guns, and turned Sunkist orange juice and Van Camps canned pork and beans into staples of the American kitchen. Lasker’s agency is also credited with inventing the soap opera, and he pioneered in the development of radio and TV shows such as Pepsodent’s Amos and Andy as ad vehicles; Lord & Thomas’s successor agency gave the world “Hallmark Hall of Fame,” Clairol's “Does she or doesn't she?” and Dial Soap's “Aren't you glad you use Dial?”
Efficient a factory or warehouse might be, but inefficiencies abounded that goods and materials were moved in and out of a factory or warehouse located on a crowded city street. The solution was to put one’s factory in a district intended exclusively for industrial use. Chicago entrepreneurs were among the first in the United States to plan and service what marketers ingenuously call an industrial park. In most ways the Union Stock Yard was the model—it was equipped with infrastructure appropriate to its industrial purpose on a spacious rural site that attracted related firms. The packing district itself became an efficient meat-packing machine.
However, what some have called the nation's first industrial park as such dates from 1905. That’s when the Central Manufacturing District was created by an investor group in the area bounded by 35th and 39th streets, Ashland to Morgan. The CMD was supplied with new utilities and rail links and built-to-order factories and warehouses and proved so successful it was expanded beyond the Kenwood district, established at Kedzie and 47th Street. (When the stockyards closed in 1971, the CMD began development of a kindred facility for light industry on that property, the Donovan Industrial Park.)
Outside the western city limits was another manufacturing district at Clearing, where the Chicago Union Transfer Company located its railroad yards in 1901. A steady stream of factories moved into that 3,000-acre tract after 1909. Small and moderate-sized companies welcomed the convenience of being near other plants, many of which were suppliers or buyers.
Chicago’s industrial heyday is proof that necessity really is the mother of invention. The idea of putting boxes of ice in a freight car is not what made Gustavus Swift a gazillionaire. Making the idea work in the real world did. Swift faced rail manufacturers who refused to make the new cars for him lest they lose their market for cars made to carry live cattle, and railroad companies that refused to haul chilled beef lest they lose the live cattle business. Swift therefor undertook to make his new cars himself, and then found a railroad stuck with lots of empty cars after unloading in Chicago that needed cargo to haul back east.
Iced rail cars made it possible for Chicago meat packers to ship fresh meat to New York City, but they eventually also made it possible to ship fresh meat from anywhere else to New York City. What happened to meat packing has since happened to dozens of Chicago industries. The railroads had given Chicago, the first railroad city, an advantage in concentrating an entire nation’s packing industry on its southwest side, but as railroads spread mini-Chicagos rose across America. New factories in other places using new processes or cheaper workers began to do to Chicago what Chicago had done to other, older cities. Indeed, it is hard to think of an industry in which the city pioneered that it still leads, or even a pioneering company that still dominates the segment it dominated.
Nonetheless, there still are clever people doing business in Chicagoland. The ATT labs in Naperville, high tech incubators on the West Side—where new industries (the city hopes) will rise from the ashes old ones—and the city’s fine medical schools are busy trying to turn faculty innovations into products.
What today’s Chicago needs most is people who are inventive about inventiveness. Such people need educations just to understand what the problems are, much less the solutions. Technical and scientific educations are essential, and while Chicagoland has good schools—the Illinois Institute of Technology comes to mind—the region boasts no Stanford, no MIT. Illinois’s business city and its premier university lie 140 miles apart. To pick just one example of a larger trend, the Mosaic graphical browser on which Microsoft's Internet Explorer is based, was developed at the University of Illinois’s Urbana campus, but turned into industries in California, not Chicago.
Chicago has always been a plaything of larger economic currents. In its trading days, its profited from its location along trails that linked the town and Green Bay. But as Bessie Louise Piece has explained, wars among the Fox made the old trade routes by way of Chicago dangerous, so trade shifted south to the Wabash-Maumee valleys. It was not until the close of the Revolutionary War, when new markets had opened up for trade goods among Spanish traders on the Mississippi and the interfering Fox had moved on, that the spot by the big lake again assumed commercial importance. It was a foretaste of what would happen to the city during the Rust Belt era, when the region again became a victim of events outside itself.
With few exceptions, its great firms were not only built by men who were not from Chicago—that is inevitable in a new city—but they were also financed by bankers and investors in cities other than Chicago. As William Cronon points out, the early city was a creation of eastern U.S. and British capitalists, and Chicago’s fabled capitalists little more than their agents. Chicago remains an outpost of capitalists from foreign places. More than a thousand foreign-owned firms have found their American home in and around Chicago, and many Chicago firms have been purchased by foreign firms. (The takeover by British Petroleum of Chicago-based Amoco is only one of the bigger of many such deals.)
Subject to the whims of foreign capital, Chicago also is vulnerable to the times. Chicago’s prosperity comes and goes in waves. The short-term up and down of the business cycle—the cycle of inflationary boom and recessionary bust—plays out over months or a few years. The city’s real estate market in particular has always been wracked by speculative binges followed by protracted economic hangovers. Speculation in land was widespread in Illinois in the 1830s, as new canals and railroads promised new fortunes. But as usual, it was in Chicago that the one saw the gaudiest and nosiest show. Historian Theodore Pease notes that lots, that in the spring of 1835 sold for nine thousand dollars, by the end of the year were held at twenty-five thousand dollars. There was a wave of exuberant building in the 1880s, of course, after the Great Fire. Another one was fueled by the financial frenzies of the 1920s.
As usual, developers were over-optimistic about demand, and overbuilt. As Condit was to summarize, “The skyscraper boom of the twenties turned into an epidemic of receiverships in the thirties.” Such was the collapse of demand for downtown office space, and such the oversupply in even a healthy leasing market, much less one vitiated by the Great Depression. Empty buildings became too costly to maintain, and owners razed block after block of them, converting the land to parking lots, which were cheap to run and less onerously taxed. After the Depression came World War II. The result was that it was not until ten years after the post-World War II recovery began before a large new commercial building went up in the central business district, and twelve years before one opened within the Loop. (There was a boom in high-rise apartment towers, since that sector, unlike office buildings, had not been ruinously overbuilt in the 20s.)
It was busts not of the city’s own doing, however, that really hurt. National economic depressions in the 1880s and ‘90s triggered Chicago’s industrial unrest, for example, and led eventually to rewriting the basic contract between labor and capital. However, the Great Depression was the worst. Carl Condit recalled it this way.
[The Great Depression was] an absolute and unmitigated calamity for Chicago. It was not only the collapse of the public and private economy; it was also the Sophoclean reversal of fortune, from the expansive forces of the twenties that seemed to have no limit to the impotence and hopelessness of the thirties. The building industry, which had always been characterized by extreme swings of the business pendulum, was nearly struck dead by the depression, [housing construction fell to a low point of 137 units in 1933] with the further consequence that real estate values in Chicago and the return on real estate investments both experienced an appalling attrition. By February 1932 Chicago had suffered the worst drop in property values of any major city in the United States, a decline of 50 percent from the high point of 1926 that was accompanied by a record number of defaults, foreclosures, and tax arrears.
Geographer Richard C. Wade has noted the now-astounding fact that the City of Chicago had paid for the Sanitary and Ship Canal, its massive parks, rebuilt the lakeshore without aid from either Springfield or Washington. “The Great Depression marked the end of this urban self-sufficiency,” he writes. An enfeebled economy was returning scant taxes to City Hall, and it could not longer borrow against a brighter future that no one was certain it had. Ever since, the fate of its public improvements has been largely in the hands of decision-makers outside the city, mainly in Springfield and Washington.
Pent-up demand in that brief period after World War II, when the world’s sole functioning industrial economy was American, proved to be a false spring for Chicago business. The catch-up kept alive many a firm that was doomed once manufacturing economies elsewhere recovered. By the 1960s and ‘70s, Chicago was no longer a good place to do business, or at least the kind of business that Chicago was accustomed to doing. Its manufacturing plants, once the first and the best, were by then among the oldest and dumbest. The technologies on which new economy based were being invented by the kind of men and women who didn’t like to live in places like Chicago, the kind of city that it very success as an industrial center had turned it into. Various light manufacturing industries (pharmaceuticals, electronics, mainly) were the steel mills and stockyards of the 20th century.
It took a while for the new economic realities to have their effect. Chicago’s largest enterprises like battleships, sailed on some time even after their hulls had been holed. By the 1960s, they started sinking. Swift quit slaughtering livestock in Chicago in the 1950s, was bought out in the 1970s, and in the 1980s left the city for good. In 1969, the International Harvester Company closed with a loss of 3,400 jobs, in the 1970s the steel mills on the South Side, the stockyards in 1971, the Pullman Works in 1981, Western Electric’s Hawthorne Works in 1984.
Again and again, Chicago firms were undone by imports that were cheaper or better elsewhere. The clothing industry used to be huge in Chicago. West Side lofts buzzed with clack of needles. The nation’s biggest union of needle trade workers, the Amalgamated Clothing Workers of America, was born in Chicago, and some of the nation’s largest ready-to-wear clothing makers, such as Hart, Schaffner & Marx, were based in the city. In the 1920 those firms began to abandon Chicago, first for the nonunion South, more recently for such places as the Philipines and Malaysia.
In the 1990s alone, Ameritech, Amoco, Continental Bank, the Illinois Central Railroad, Inland Steel, Morton International and most recently, Montgomery Ward closed or were taken over and (usually) operated under new names. The world's two biggest futures markets, the Chicago Board of Trade and the Chicago Mercantile Exchange—the very epitome of the brash, grab it and run Chicago style of capitalism—were overtaken in 1999 by Frankfurt's Eurex.
Typical was the upheaval in the local candy industry. Chicagoland was long known for mass-produced candies of what is politely known as “mid-range” quality; as recently as 2000 Chicagoland made more candy (more than two billion dollars worth a year) and employed more workers (13,000) than any other place in the country. Since then, big local firms such as Brach closed and others such as Forest Park’s Ferrara Pan and Fannie May shifted sweets production overseas. Control of the Curtiss Company, makers of “Baby Ruth” candy bars; among its other popular bars made were “Butterfinger” left the Chicago area in 1964, when Curtiss was purchased by Standard Brands, a large national food conglomerate. By the end of the century, the most popular of the old Curtiss brands were owned by Nestle, the Swiss food giant. One of the few of the great local candy firms that remains a Chicago company is every way is Tootsie Roll Industries Inc. which since 1966 has based all its operations in Chicagoland, including large factory in the Ford City industrial park in southwest Chicago. it still does nearly a half-billion dollars in sales each year and employs 2,200 people under the leadership of the founder’s son-in-law.
On it went. Ameritech Corp.—the old Illinois Bell—was bought by SBC. The iconic department store Marshall Field's was sold to Target from Minneapolis, then to Macy’s from New York. The venerable First National Bank of Chicago was bought by Bank One, then by New York-based J. P. Morgan-Chase.
For decades, the number of Fortune 500 firms that were headquartered in Chicago—most of which were born and grew up with the city—were proof of the city's eminence in trade. (Boosters kept score, comparing Chicagoland’s corporate HQs as a city might count the number of its sports championships.) It was realized early on that Chicago would never catch New York as a business center, but it seemed secure as the nation’s second city for corporate HQs.
But when Amoco Corporation began to be run out of London after it was bought by British Petroleum. Montgomery Ward went out of business. Waste Management Inc. was bought by a smaller Houston firm and run from of that city. PepsiCo purchased local hero Quaker Oats. In 2003, auto-parts maker Borg-Warner announced it was moving to suburban Detroit. Household International Inc. was merged out of existence with a British bank. Chicago’s chewing gum icon, the Wm. Wrigley Jr. Co., was sold in 2008 to candy giant Mars, whise headquarters is in suburban Washington, DC.
These lost headquarters were replaced not by up-and-coming Chicago companies but by established firms that moved to the city, such as aircraft-maker Boeing, which moved to Chicago in the 1990s. Such moves were not enough to keep Chicago from slipping to the No. 4 among hosts of top business headquarters, with eleven—a tiny fraction of New York City’s 40 and only a handful more than—gulp—Charlotte, North Carolina.
As jobs left, people followed them, just as their grandparents and great-grandparents had followed jobs to Chicagoland. Almost without exception, the big firms that remain have kept only their headquarters operations in the city, with manufacturing now done in the Chicagos of this generation, meaning those far-off places that offer transport or labor cost advantages. Parts of central Texas are as Midwestern as Illinois, in the same way that parts of Chicago were like Poland. The exodus has slowed since the 1970s and ‘80s, but it still goes on. In 2002, Cook and the eight surrounding counties lost more than 57,000 jobs, which was more than any other major U.S. metropolitan area, and failed to create nearly as many.
But it is not only its continental hinterland that Chicago must compete with economically. Its own suburbs always offered cheaper land and lower taxes; once the problem of access was solved by trains and trucks, the rush of business to the hinterland was on. Experts pretty much agree that the growth of the economy of the suburbs, where today more than half of all Chicagoland’s jobs are to be found, may well be the single most significant fact in the recent economic history of Illinois.
The firms that carry the flag of Chicagoland industry these days are creatures of the suburbs and tend to be in retailing or financial services rather than manufacturing. Of the 26 Chicagoland-based firms on Fortune's 500 list in 2006, only eight are in Chicago proper. Several of the suburbanites—Brunswick Corporation, Navistar International Corporation, Sears, Motorola—used to be based in the city. Motorola was founded on the west side of Chicago in 1928 and moved to new headquarters in Schaumburg in 1976; Household International, the finance firm, went to Prospect Heights about the same time, and Sears moved to Hoffman Estates in 1993.
But cheaper-than-Chicago is scant distinction when you are competing with China. Beginning in the 1980s, when the rust began to creep up the sides even of Loop skyscrapers, the roster of local firms began to shrink as the great Chicagoland companies went bust or merged or were bought out by firms in other places. Typical was drug maker G. D. Searle & Company which began in Chicago in 1908 and, needing room to expand, in 1941 moved its HQ to Skokie. In 1985 Monsanto acquired Searle and then sold it to Pharmacia which then merged with Pfizer, which in 2003 consolidated its global research and development operations and closed the remaining company operation in Skokie. Over in Naperville, the P. E. Kroehler Mfg. Co., which by some measures was the nation’s largest furniture maker during the 1960s (it employed close to 8,000 people around the country, including enough in Naperville to make it the town’s top employer for decades) struggled during the 1970s. In 1978 it closed its historic Naperville factory, and in 1981 the firm was acquired by the ATR Group of Northbrook, which put the company up for sale. By the early 2000s, furniture was still manufactured under the Kroehler name by two unrelated companies, one in North Carolina and the other in Ontario, Canada.
Places of business
The most famous of Chicago’s specialized business districts was Packing Town, but the city ended up with several other specialized business districts in which like firms clustered near each other. Jewelers Row cropped up in the 1870s Loop when jewelry, silver, and watch makers and dealers and repairers opened up shops near each other along Wabash Avenue, predominantly between Washington and Monroe Streets. The wholesale floral trade in the 1920s was concentrated in the Randolph Street Market; the severe Art Deco lines of the Chicago Florists’ Center, built in 1928 at 1313 W. Randolph Strett, are softened by stone posies.
Film Row along Wabash and Michigan avenues from Roosevelt Road to W. 16th Street offered one-stop shopping for motion picture exhibitors from the start of the movie era until the neighborhood went bad in the 1960s. Everything film was to be had here, from popcorn to posters. A few of the film exchanges where exhibitors obtained feature films, cartoons, short subjects, and coming-attractions trailers are still standing: the old Universal Pictures Film Exchange at 1234 S. Michigan Avenue; the Twentieth Century-Fox Film Exchange (now the Graphic Arts Equipment Co.) at 1260 S. Wabash Avenue; Warner Brothers Film Exchange (Midland Career Institute) at 1307 S. Wabash Avenue; Famous Players-Lasky Corporation Film Exchange (now Filmack Studios) at 1327 S. Wabash Avenue; Paramount Pictures Film Exchange (now a City of Chicago Environmental Health Clinic) at 1306 S. Michigan Avenue.
Automobile Row (also known as Motor Row) took shape on the near South Side on adjacent blocks of Michigan, Indian and Wabash avenues between 1400 and 2200 South in the thirty years after 1905. Here was car-buyer’s heaven, whose showrooms offered as many as 116 different makes. The names on buildings attest to the popularity of makes already forgotten except by car buffs— Hudson, Locomobile, Marmon, Pierce-Arrow, and Premier. These former showrooms and garages are considered to be the largest, intact early automobile row in the U.S., and the district was designated an official city landmark in 2000.
Several buildings from the heyday of Printers Row survive, including the Second Franklin Building (720 5. Dearborn Street, 1912), the 1883 Donohue Building and its 1913 annex (711 and 727 S. Dearborn Street), and Printers Square (also known as the Borland Manufacturing Buildings) in the 700 block of S. Federal Street. Best were those of R. R. Donnelley & Sons Co., which commissioned Howard Van Doren Shaw to design its Lakeside Press Building at 731 S. Plymouth Court. (The building is now used as a residence center by nearby Columbia College.) Buildings in the later, second Printers’ Row to the southwest also survive. One is the American Book Company building at 321–330 E. Cermak Road; nearby, at 350 E. Cermak Road., is Donnelly’s Calumet plant, also by Shaw.
In additions to the famous you-must-see-this-while-you’re-in-Chicago buildings are many smaller, many of them more evocative of Chicago’s commercial heyday. The intersection of Lake and Franklin streets is a kind of wormhole through which visitors can travel to the Chicago just after the Great Fire. There are the wholesale buildings known as the Lake-Franklin Group 227–235 W. Lake Street. and 173–191 N. Franklin Street built for the most part in the early 1870s; this official city landmark district comprises the oldest remaining buildings in the Loop, and still bear the distinctive features of their vanished brothers of that era, such as cast-iron columns, incised stonework, decorative window hoods, and arched window openings. They are a reminder of business in the pre-zoning era too; their occupants of these buildings included a leather dealer, a manufacturer of iron and woodworking machinery, a sandstone company, a steam heating company, mitten and hat manufacturers, and a corner saloon.
Chicago businesses took pride in their facilities—cost-effective bottom-line architecture was not yet demanded of firms, and several that survive are notable for their architectural as well as their historical interest. The Administration Building (northwest corner of W. 18th Street at S. Normal Avenue) and Powerhouse-Warehouse (1770 S. Canalport Avenue) of the Peter Schoenhofen Brewing Co. The AIA guide to Chicago architecture offers these buildings as a lesson in the evolution of the Chicago style; the administration building, from 1886, is a bit fussy, the 1902 powerhouse a simple yet elegant masonry in the Chicago style.
Among the buildings and districts on the city of Chicago list of official historic landmarks are a dozen that recall the various eras in the city’s business history. The Loop and immediate environs of course are crammed with them, such as Chicago Board of Trade Building at the foot of LaSalle (the third one on that site) and that temple of wholesaling, the Merchandise Mart. That so many of these noble relics—Sears Tower, Sante Fe Center, the old Wards and Britannica buildings on Michigan Avenue, to name only a few—no longer host the firms that built them is a lesson in how business has changed.
The main factory building of the Pullman Palace Car Co. is sort of industrial Mrs. O’Leary’s cowshed, the spot at which a spark—in this case the 1894 strike that ignited a nationwide rail shutdown—set off a fire that changed the city. The works closed in 1981. Few sites industrial sites are considered more important to the history of that fractious era; the president of the Landmarks Preservation Council of Illinois described the 200,000-square-foot factory in 2005 as one of the top 10 sites for 19th Century history in the U.S. The factory was gutted by a fire in 1998, after which plans were drawn up to rebuild it into a transportation and labor museum with restaurants and shopping, at a cost of as much as $100 million. The building secured against the elements thanks to a new roof and windows but only after many delays, and the rebuilt clock tower was finally finished in 2005, but the redevelopment of the 200,000 square foot structure is a long way off.
To a generation of Chicagoans who grew up after they’d gone cold, for example, the steel mills of the Calumet seem rather like the pyramids of Giza must seem to a modern Egyptian. What mighty men must they have been, to have built such behemoths! Sadly, of that city of mills that clustered along the Calumet, little remains. A campaign was mounted to save some of what little is left of Chicago’s brief interregnum as America’s industrial Vulcan. In 2004 the Calumet Heritage Project, an association of more than a dozen area landmarks, union, academic, enviros, and neighborhood business groups, began to work toward building a museum dedicated to the region's steel industry.
The project bought the remains of the Acme Coke Plant, closed in 2001, where coal was processed into the hot-burning coke used in the furnaces. The place is an outdoor museum of archaic industrial technology. The blast furnace at the plant was demolished, but pieces of it were set aside by the owner in the hope that they might be displayed in the future. Still standing at the site are two batteries of coke ovens, massive metal mantises used to empty the ore ships, and steam-driven gas powered exhauster fans. The Acme coke ovens and the ore unloaders were designated among Illinois’ 2004 Ten Most Endangered Historic Sites by the Landmarks Preservation Council of Illinois and judged eligible for nomination to the National Register of Historic Places by the Illinois Historic Preservation Agency.
The South Works, the venerable steel last owned by U.S. Steel’s corporate successor, the USX Corp., closed in 1992. The site boasts two miles of Lake Michigan shoreline. In 2004, 105,000 tons of sediment from the bottom of Peoria Lake was barged in to cover 17 acres of the grounds spoiled by slag, part of a 107-acre lakefront park—an act of regeneration that borders on an expiation, considering the past insults to what was, not much more than a century ago, one of the most fecund environments in Chicagoland. 300 acres or so of the South Works site will be devoted to energy-efficient, affordable housing—updated versions of the classic Chicago frame house.
Reminders of Chicago and Chicagoland business life are everywhere, although a great many are no longer used for the businesses for which they were built, if they are used for business at all. It often takes a keep eye to discern their former identities. Across Chicagoland, factory sites are now used for shopping centers, housing tracts, office parks, and the like as the city has grown and the economy has changed. The Loop once was the city’s entertainment, wholesale, and lodging center as well as its office center, but through the 1970 through the 1990s business uses predominated, to the detriment of the social life in the heart of the city’s heart; interestingly, the debarking of many firms to the suburbs, or to newer office towers better fitted for business in a computer age, left the district with dozens of skyscrapers ready to plucked by savvy redevelopers and converted into residences, with the result that the Loop and environs has a nighttime population that is beginning to rival its workaday one.
Only bits and pieces of the old industrial Chicago survive, like shards of pottery on the ground that betrays the long-ago presence of Pottawatomi. In River North, the remnants of its past as a industrial and warehouse center are everywhere, but invisible to the uninformed eye. They exist in the building facades and in the names atop the buildings. The right-of-way of the city’s first rail line, which ran down Kinzie Street to the river docks and grain elevators and implement factories, still exists, if now unused. Some of the warehouses that once lined the river harbor survive. The Reid, Murdoch and Co. building (1914) on the north side between Clark and LaSalle now houses City of Chicago offices. The Pugh Warehouses on Ogden Slip (later known as North Pier Terminal) were built in 1905 and converted in the 1980s and ‘90s into shops, restaurants, and offices. Chicago Varnish Company Building at 33 W. Kinzie Street was built in 1895 to a design by Henry Ives Cobb as the headquarters of one of the leading varnish manufacturers in the nation. (Since 1987 this City of Chicago landmark has housed Harry Caray's Restaurant.)
The Montgomery Ward and Co. Catalog House that hugs the North Branch at 600–618 W. Chicago Avenue was built in 1907–08 and was the equivalent of Sears’s massive Merchandize Building on the West Side. An early reinforced-concrete building, it encloses 1.25-million square feet of warehouse and office space. The building, listed as a National Historic Landmark due to its significance in the history of American retailing, has since been converted to high-tech boutique and upscale condos. (The building that Ward’s vacated to move to the riverside location still stands on Michigan Avenue.)
Much more has been lost than has been saved. The city is forever knocking itself down and building itself according to new plans. What was sight-seeing are now more like archeology, so thoroughly has the great industrial city of the 19th and 20th centuries been buried or built over. Once, all manner of business was conducted with block or two of the Chicago River—retail, banking, and wholesale along Lake Street on the south bank, railroads, factories and mills and elevators on the north. Time has obliterated most of the physical reminders of these earlier industrial and trading city, as office buildings condos and townhouses line the river and its branches on land once used for lumber yards and warehouses, tanneries and factories. The visitors who has heard of Chicago as a great rail center, for instance, will be mystified by today’s downtown. The railroads—whose presence made the fortunes and shaped the development of the city—are all but invisible in the city center today.
Just as farmland was eaten up to feed the manufacturing economy, older factory sites were eaten up to feed the appetite for new service and residential facilities. A good example is the transformation since the 1990s of the old industrial West Side near downtown, which has become a high-end residential district. The dining, hotel, shopping, and condo area lately known as River North—lately a desirable address for dining, hotels, galleries, and upscale residences—was Chicago’s first factory district, a part of town that the posh set wished to have no connection with, apart from the money they could take from its gas works, brick works, tanneries, rail yards, distilleries, and Cyrus McCormick’s first reaper works.
Factories for decades were dreaded as the ruin of a good neighborhood; beginning in the 1980s, good neighborhoods were threatening factories. The decline of the value of land occupied by aging or defunct factories attracted developers with lists of condo-buyers in hand to places such as Goose Island. In 1990, however, Mayor Richard M. Daley declared Goose Island the city's first Protected Manufacturing District, lest the city’s industrial tax base be loft-ed out of existence.
The visitors who has heard of Chicago as a great rail center, for instance, will be mystified by today’s downtown. The railroads—whose presence made the fortunes and shaped the development of the city—are all but invisible in the city center today.
The Dearborn Street Station at Polk and Dearborn Streets is one of the oldest railroad stations in the U.S. and the last remaining of Chicago's early downtown stations. It was the terminal of the Wabash Santa Fe and Grand Trunk and other prominent railroads. Built in 1885, its last train pulled out in 1971. In the 1980s the building was converted to retail and commercial use as a community center for the new Dearborn Park residential development that was installed on the yard behind it.
Illinois Center, a clutter of undistinguished skyscraper at the river and Michigan Avenue, was erected on platform atop the Illinois Central’s freight and commuter yard. (The Metra commuter line which inherited the railroad, survives beneath the Prudential Tower.) Central Station, a massive residential project, was built in the yards of the company’s main truck line station on the lakefront at 12th which was demolished in 1974. Nearby, River City, Bertrand Goldberg’s sinuous apartment complex, went up on the site of the Grand Central Railway Depot at South Wells and Harrison Streets. The LaSalle Street station, constructed in 1903 as a station for the Rock Island, New York Central and Michigan Central Railroads, was made to disappear in the mid-1980s and was replaced with an office building that contains the Chicago Commodities Exchange trading center. (Metra commuters still ride on the former Rock Island trackage.) The Beaux Arts Northwestern station at Canal and Madison which was the terminus of the C&NW was replaced in 1987 by the massive Citicorp Center skyscraper, purportedly the only skyscraper with a full-sized train station in its lobby.
Among the more remarkable transformations was achieved along Lake Calumet. Harborside International Golf Complex in 1994 opened two 18-hole courses, a 58-acre practice facility, and a golf academy on 450 acres of former landfill. Bulldozers were again making the landscape fit for its new future, only this time the dumps were capped and wetlands built instead of drained. The resulting transformation is roughly the equivalent of Chicago being turned into Florence.
Some wartime factories were converted relatively quickly to other uses, such as the recycling of Albert Kahn’s famous Amertorp Naval Ordinance Plant into the Forest Park Mall. O’Hare Airport was grafted onto the stump of the World War II plant where the Douglas Aircraft Company made C-54 “Skymaster” cargo planes. Ford City, the city’s largest mall, opened in 1965 on the site of an abandoned factory on Cicero Avenue once used to make bomber engines and, briefly, automobiles.
The old Kroehler furniture factory at 200–300 E. 5th Avenue is today part of the Naperville Historic District. The company’s Main Plant has been restored as Fifth Avenue Station and today houses offices, shops and restaurants, and a School of Performing Arts. Next to the Naperville Train Station & the Naperville Historic District.
In the suburbs, however, many a giant factory was simply erased from the landscape so their land could be used for malls, parks, and new houses. the massive Hawthorne Works in Cicero, which was to telephone-making what Packingtown was to bacon, is now a shopping center; The corporate predecessor of the Jewel-Osco Co. had relocated its Chicago operations in 1930 to one of the early suburban headquarters complex—low-rise office building set in park-like grounds on Lake Zurich Road in Barrington. The old Jewel Tea property was acquired in 2002 by the Barrington Park District and the building demolished (after the usual ineffectual protests by preservationists) so the site could become the new Citizens Park.
Retail structures have especially brief lives. They are either abandoned or remodeled into new versions every decade or so. Few such structures survive intact. One is 1 Riverside Road in Riverside, one of the nation’s earliest (1871) examples of a multi-shop, commercial building—a form that been imitated, usually badly, thousands of times in Chicagoland in the 130 years since it opened.
Of statues and other formal commemorations, there are few. A few firms maintain monuments to their own pasts. The Walgreens Co is unusually conscious of its historical heritage. It set up Walgreen Drug Stores Historical Foundation in the 1980s to set up a formal process for collecting and documenting the company's history as the corner drugstore recedes past memory into myth. In 1986, the Historical Foundation unveiled a reproduction of the first Walgreens drugstore on the corner of Cottage Grove and Bowen avenues in Chicago, complete with replicas of turn-of-the-20th-century products and packaging, at the Museum of Science and Industry’s "Yesterday's Main Street" exhibit. The first McDonald's Restaurant opened at 400 N. Lee Street in Des Plaines in 1955. That structure was razed in 1984; a replica built to original blueprints—McDonald's #1 Store Museum—now stands on the spot.
Chicago as a city has always been too busy doing business to remember it. Among the few remains of the Union Stock Yard for example is the stone gate to the animal pens at 850 W. Exchange Avenue. The AIA Guide dismisses the gate as “a sanitized relic of a pungent past.” (A carved head of a bull atop the arch is thought to depict a prize bull of one of the founders, who presumably escaped the fate of so many of his fellow creatures to die, exhausted, of old age.) A doorway at Schaller’s Pump, the venerable tavern at 37th and Halsted, are framed by bullwhips used in the nearby yards. The only other relic of note is the Stock Yards Bank Building at Exchange Avenue and Halsted Street, oddly modeled on Philadelphia’s Independence Hall. The packing houses themselves are long gone, although people who grew up there swear they can still smell them, even if they are now living thousand miles away.
The rise of the service city
Sensible observers note that the lust to host Fortune 500 HQs is like the lust to have the tallest building—great for civic vanity but not significant economically. Still, the slippage in the headquarters count was widely offered a evidence that Chicagoland’s economy was dying. In fact, it was merely the old Chicagoland economy that was dying. The fabled factory city has become (without quite meaning to) a service city. The really big employers in Chicagoland today are in service industries—insurance, aviation, medicine, finance. Since 1990, the city has added 255,000 new jobs in software development and applications, engineering, marketing, consulting, and management services. Distribution is a huge employer, and tourism figures mightily.
The same factors that led to centralization of processing of cattle and hogs in the mid 1800s led to the processing of money to be concentrated in the Loop via the city’s banking, financial services, insurance, real estate, government, and legal services industries. In 2007, for instance, the Chicago Board of Trade merged with the Chicago Mercantile Exchange to create the world’s largest derivatives market. The city also has made itself a leader in the new knowledge economy—before that name was used—thanks to its major universities, especially major medical education and research.
The Chicago Federal Reserve Board reported that between 1990 and 2000 the number of companies with more than 2,500 employees that were based in Chicago rose from 81 in 1990 to 98 in 2000. “Chicago may no longer boast a money-center bank. It may never boast a World Series champion. But economically speaking, there's no need for Chicagoans to walk around as if they live in a City of Stooped Shoulders.”
The demise of Chicago’s 19th century industries opened up new economic opportunities for the city in the 21st. Rail yards south of the Loop became sites of upscale housing, the warehouses of River North were turned into pricey lofts and galleries, old “brownfield” were sites cleared and cleaned and redeveloped. Buildings abandoned because they were not efficient for 20th century business now house 21st century businesses such as software and telecoms. The warehouses of the west Loop that once stored goods now store bright young things from the suburbs doing product design and media. R. R. Donnelly’s majestic Calumet Printing Plant on East Cermak was converted into the Lakeside Technology Center; bigs chunk of the former Montgomery Ward Warehouse on West Chicago Avenue became an e-port.
Deserted by the mills, Lake Calumet in effect reverted to something like what it had been a century before, a vast tract of underdeveloped land in the midst of an urban agglomeration in which buildable land was rare. (At the turn of the 21st century the area had nearly 60 percent of the land available in the city for industrial development.) The area remains badly polluted, but otherwise the Calumet’s advantages as a factory site are little diminished. It is served by expressways, is still near the lake, is linked by canal to the Illinois Waterway. The old U.S. Steel South Works is dead and buried but Solo Cup is one of the firms that built (a one million square-foot manufacturing and distribution facility) on its grave.
The Calumet Area Land Use Plan, adopted in 2001, identified 3,000 acres in the area with potential for industrial redevelopment and 4,800 acres to be set aside as the Calumet Open Space Reserve; a Tax Increment Financing (TIF) District covering 20 square miles is expected to generate some $200 million by 2030 or so for development, job training, and infrastructure; another $200 million has been committed to upgrade roads.. The Ford Motor Co. is building a new campus for four new car models that will be manufactured there, and Solo Cup and Keebler/Kellogg have expanded their plants there.
Old news, all of it. The city and region have endured several such wrenching transitions. The first industry to give way to changes in the larger economy was its first one. As scholar Jacqueline Peterson has noted, fur-trading had been the chief activity that had brought the young Chicago into being. That industry “organized its social relations and provided the only livelihood most old settlers knew well how to pursue or to pass on to their sons.” But by the latter 1820s, wildlife in the larger Chicago region had become so scarce that trading was hardly worth the effort, and a new generation of traders dealt instead in grain, wood, and meat, and set the town on a new economic path.
By such reinventions Chicagoland remains a regional economic powerhouse. The statistics regarding the Chicagoland economy are impressive—4.15 million jobs and more 205,000 businesses that compose a $350 billion regional economy that at the start of the third millennium was larger than that of Russia. Even so, if that founding generation of go-getters faced and surmounted the challenge of building a great business city on a swampy lake shore, their successors face an even more daunting one—how to keep it great, because Chicago’s history as a great city will stop if and when it ceases to be a good place to do business. ●