During the economically sluggish years of 1840-41, while agricultural production continued to steadily increase, local demand actually decreased slightly due to the population stall and the reduced labor force on the canal. The corresponding drop in local prices encouraged farmers to seek more lucrative markets in the East and Canada. Wheat exports increased to 10,000 bushels in 1840 and in the following year to 40,000, an eleven-fold increase in just two years. The only real obstacle facing the region’s farmers during a trip to the Chicago market was the area’s geography that did cause many a farmer to hesitate. Chicago was surrounded by the rich agricultural land of the prairie. Unfortunately, the same characteristics that made the adjacent prairie ideal for farming also made it a nightmare during most of the year for farmers trying to bring their crops to Chicago. The flat, soft topsoil drained poorly during wet seasons, often turning to mud that offered precious little support to the narrow rims of the heavily-loaded wheels of the farmers’ wagons. Hence, the drive to Chicago more often than not took an inordinate amount of time and effort. Therefore, it was profitable for only those farmers who lived within a radius of fifty miles or so to come to Chicago. Most of the farmers beyond this distance in the south had settled their farms prior to the incorporation of Chicago anyway, and had developed a dependence on either St. Louis and the Mississippi River or Cincinnati and the Ohio River to get their produce to market. It would take higher prices than those offered in the river cities and better transportation across the prairie mud to entice distant farmers to sever their allegiance to their current markets in the south and come north to the upstart port of Chicago.
From its founding, Chicago’s ambitious leaders had always understood the need for better transportation into the city from the surrounding hinterland. What was lacking was not the will, but the means to pay for such improvements, to which the unfinished canal bore cruel testimony. The canal as designed, however, would serve only the southwest. By 1840, the business potential of exporting the agricultural surplus from the burgeoning new farms west of the city had stirred interest in improving transportation from that direction as well. On June 13, a committee met in the Saloon Building that drew up a report recommending that a turnpike commencing at the western end of Lake Street be built to the sand ridge near the Des Plaines River at Berry’s Point, a distance of some four and a half miles. This plan was to be financed with subscriptions from private businessmen, ostensibly to prevent competing cities from taking trade “which otherwise would be naturally directed” to Chicago. While construction on the canal continued sporadically into 1842, the turnpike’s sixty-five foot width steadily pushed westward until it was completed in September 1842, providentially just in time, for:
“Without it, during a portion of the latter part of the past autumn and the commencement of the present winter, the city would have been almost inaccessible, whereas there has been no time that it could not be passed over by teams with such a load as they could travel over any portion of the country with, it has reclaimed a large quantity of valuable land that has been hitherto submerged with water, and has acquainted us with the fact, that the whole of the vast prairie lying immediately west of the city of Chicago, is susceptible of being made with but little expense dry arable land.”
The completion of the turnpike was only one of the factors, however, that caused the explosive increase in the 1842 wheat export crop from the 40,000 bushels of the preceding year to 586,907 bushels. (There is no typo. The increase was over 1400%.) Improved transportation simply aided distant farmers who were now being lured to Chicago with the promise of a profit higher than what could be obtained at the river cities. The higher price was a result of Chicago’s lower handling costs that was the direct result of Newberry & Dole’s new system of storing the wheat of all farmers in bulk in a location immediately adjacent to the ships, that further facilitated their new method of bulk loading. Hence, human hands barely touched the grain, eliminating much of the handling costs that allowed the Chicago grain merchants to offer a price to farmers higher than what they could obtain in St. Louis or Cincinnati.
Farmers within a radius of 250 miles began to line the roads into Chicago with their prairie schooners loaded with wheat for shipment to the East by the empty ships that had brought settlers and imports from Buffalo. Finally, Chicago had a locally-generated income potential that could start to offset its total reliance on Eastern capital. Until now, it had been a one-way street with Eastern immigrants using Eastern credit at very high interest rates to buy Eastern manufactured goods that were made only more expensive by the fact that the Eastern ships made the return trip home without any cargo. This had been very satisfactory to all concerned parties until the Panic hit, that significantly slowed the flow of Eastern credit and immigrants. The rise in wheat prices brought more farmers to Chicago who usually exchanged their wheat for manufactured goods and supplies (such as lumber that was not indigenous to the treeless prairie, but came from the northern forests in Wisconsin and Michigan) and brought these home in their empty wagons. A new class of “middlemen” merchants quickly emerged both to process agricultural products for shipment to the East, and to distribute Eastern manufactured goods and Northern lumber. A synergetic “backhaul” cycle was now established whereby Eastern boats would bring Eastern goods and Northern lumber and return with Western wheat, while the Western prairie schooners would bring the Western wheat to town and return home with Eastern supplies and Northern lumber.
Wheat was the ideal grain for this export cycle because not only could it easily withstand the rigors of being transported along the country roads, but it could also be stored for long periods of time. Wheat’s storage potential was paramount, for there were a limited number of ships available for the trip to Buffalo (especially in the boom year of 1842) and their availability was further manipulated by an “association” that kept freight rates profitable. In addition, due to the long distances traversed by the slow-moving wagons, much of the harvested wheat arrived at Chicago following the closing of the navigation season by the onset of winter, that was made all the shorter by the lack of safe harbors along the southern half of Lake Michigan. Hence, much of the wheat had to be stored in Chicago until the spring thaw opened the lake to traffic once again.
The 1400% increase in the 1842 wheat crop from the year before simply caught the city’s grain dealers completely by surprise, encouraging the hurried erection of several new storage warehouses on both sides of the river along S. and N. Water Streets to process the flood of incoming wheat. An even more important development in 1842, however, that permitted the successful handling of the bumper crop was the introduction of machinery to replace the bucket brigade that up until then had moved the grain within the warehouses. Architect John Van Osdel’s name is sometimes mentioned in reference to the invention of Chicago’s “grain elevators.” In 1841-42, Newberry & Dole built a new grain warehouse on the south bank of the river at the northwest corner of Clark and S. Water Streets. This building was intended to replace their former warehouse on the north bank in order to avoid the traffic problems in crossing the bridges, as well as to be more competitively located near the Fort Dearborn reservation, which was where farmers typically parked their prairie schooners.
Van Osdel, with little architectural work due to the depression, had returned to New York following the erection of Ogden’s house, where he had been hired in 1840 as an associate editor of American Mechanic (which in 1845 became Scientific American). He moved back to Chicago in 1841 to become the supervisor of Elihu Granger’s machine shop and iron foundry located on North Water Street. Granger had arrived in Chicago from New York in the winter of 1836 to build the city’s first flour mill for Lyman & Gage, located on the west bank of the South branch, across from where the Van Buren Street bridge would be built. In 1839, Granger started his foundry that would eventually fabricate the machinery for elevating grain. Granger and Van Osdel developed a horse-powered mechanical system for lifting or “elevating” the grain up to the storage bins in the upper floor of the warehouse. Wagons pulled up close to the front of the building, where the bags of wheat were unloaded and emptied into a receiving hopper, from where it proceeded into the building to a weighing hopper. A valve at the bottom of this hopper could be opened to allow the grain to flow into a pit below. This was typically a circular tub with an eight-to-nine foot diameter, which had been sunk seven-to-eight feet deep into the ground and made watertight. Here the grain collected in order to be picked up by the elevating machinery or “elevator” for short. The elevator was based on a revolving belt of buckets, a technique that had been derived from a dredging machine. The entire assembly was powered by a single horse walking on a revolving platform. The horse-powered grain elevator permitted the efficient processing of the large amount of grain that Chicago was now attracting, and remained the standard technology of the city’s grain merchants for the next six years. It would be only a short time before the entire grain warehouse was referred to in Chicago as a “grain elevator.”
Andreas, Alfred T. History of Chicago, 3 vols. Chicago, 1884-1886. Reprint, New York: Arno Press, 1975.
Ericsson, Henry L. Sixty Years a Builder: The Autobiography of Henry Ericsson. Chicago: A. Kroch, 1942.
Industrial Chicago-vol. 1: The Building Interests, Chicago: Goodspeed, 1891.
Pierce, Bessie Louis. A History of Chicago- I.. New York: Knopf, 1940.
Tallmadge, Thomas Eddy. Architecture in Old Chicago, Chicago: University of Chicago Press, 1941.
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