6.10. THE FOUNDING OF THE BOARD OF TRADE

From the first shipment of seventy-eight bushels of surplus wheat that Charles Walker had shipped to Buffalo in 1838 (see chap. 4.3), the harvest ten years later saw an increase to a total of 1.97 million bushels appear along the wharves of Chicago in the fall of 1847. Business was becoming so large that even Walker in 1845 decided to relocate from New York State to Chicago, partnering with his brother-in-law Cyrus Clark to form Walker & Clark, one of the city’s larger grain forwarding companies. Chicago’s leading grain broker at the time, however, was William L. Whiting, who met with Thomas Richmond, a grain warehouse owner, in Whiting’s office in early 1848, in anticipation of an even larger surplus that the completion of the canal, slated for April, would bring, as well as the corresponding chaos between the “warehousers” and the “brokers” that would result during the coming fall from the selling, trading, storing, and shipping this bulging cornucopia, agreeing that a voluntary Board of Trade was needed to attempt to bring a resemblance of order to Chicago’s grain trade. A further impetus that encouraged these businessmen was the coming of the telegraph. Although Chicago had been in communication with Milwaukee via the telegraph since Jan. 15, 1848, the telegraph from the East was quickly making its way westward. These men inherently understood what instantaneous communication with the New York markets meant, and it behooved their business interests to anticipate this coming change to their business before it arrived.

They invited the city’s leading businessmen to a meeting in Whiting’s office on March 13, 1848:

“…to maintain a Commercial Exchange; to promote uniformity and equity in trade; to facilitate the speedy adjustment of business suits, to acquire and to disseminate valuable economic information; and generally to secure to its members the benfit of cooperation in the furtherance of their legitimate pursuits.”

The meeting produced a resolution demading the formation of a Board of Trade and a committee was appointed to draw up a constitution and bylaws, that were adopted at a meeting on Monday, April 3, 1848. George Smith, reflecting the high degree of trust in which his bank was held, was elected to be its first president, but he declined the honor and subsequently, Thomas Dyer, of the firm Wadsworth, Dyer & Chapin was duly elected to lead the new organization and Charles Walker was chosen as its Vice-President. Dyer had come to Chicago in 1835 from Canton, CT, in search of his fortune. The following year he had befriended Elisha Strong Wadsworth, a dry goods merchant from Charleston, SC, who together with his brother Julius, had moved their business to Chicago with the hope of improved prospects. The three became partners in a firm that ran the gamut of early Chicago interests that included drygoods, real estate, grain warehousing, and meat packing. Julius became ill in 1843 and was forced to retire from the business, being replaced by John Putnam Chapin. By the time of the organization of the Board of Trade in 1848, Wadsworth, Dyer, and Chapin had become one of Chicago’s larger firms. The first telegraphic communication from the East arrived three days later on April 6, 1848. Although, the Board of Trade had a slow start, it would eventually become the leading mouthpiece of the city’s business interests.

6.11. THE GRAND OPENING OF THE CANAL

Grand Opening of the Illinois & Michigan Canal, April 16, 1848. (Online)

The export of grain became extremely profitable in 1847 with the concurrent crop failures that had occurred in Ireland and Scotland in 1845 and 1846. The price of grain had also begun to increase as a result of the corresponding repeal of the British Corn Laws on June 25, 1846, Parliament’s attempt to increase the importation of food in light of these crop failures. In fact, the ensuing famine also helped Ogden complete the canal. While many Irish workers who had initially dug the Erie Canal had simply moved West to work on the Chicago canal, the demand for laborers had aided the Irish escape from the disaster of the crop failures by immigrating to Chicago where they found work with Ogden on the canal and shelter in the housing Bronson had erected in Bridgeport. By April 1848, the ninety-six miles of canal from Bridgeport on the Chicago River to La Salle on the Illinois River were completed, and the first canal boat from La Salle, the General Fry, arrived in Chicago on April 10, the event being celebrated appropriately with a grand oration by Charles Walker, who only the week before had been elected as the Vice-President of the city’s new Board of Trade. The formal opening occurred on April 16, with boats starting from both terminals of the canal at the same time. On April 24, the General Thornton from La Salle dropped anchor in the Chicago River, loaded with sugar from New Orleans destined for Buffalo. Her cargo was transferred to the lake steamer Louisiana for the ten-day trip. The isthmus in the NorthWest had finally been breached and Chicago was in business.

Having accomplished the first half of their task, the canal’s Board of Trustees representing the canal’s investors now turned their attention to repaying the $1.6 million loan and interest. In control of 224,965 acres and 5,927 town lots with an appraised value of $2,126,355, and aided by the 2% state tax, the Trustees took less than five years to discharge the loan. The first large sale of canal lots occurred in Chicago during the fall of 1848. Many of these were purchased by canal laborers who were now starting to till the land they had helped to make accessible. During the first season of navigation, the canal tolls at Chicago amounted to over $50,000 and lot sales totaled over $400,000. This money, in addition to the newly generated business, finally restored financial prosperity to Chicago after an eleven-year drought.