Liquid Capital

In the nineteenth century, politicians transformed a disease-infested bog on the shore of Lake Michigan into an intensely managed waterscape supporting the life and economy of Chicago. Liquid Capital shows how Chicago's waterfront became both an economic hub and the site of many precedent-setting decisions about public land use.

Liquid Capital
Making the Chicago Waterfront

Joshua A. T. Salzmann

2017 | 240 pages | Cloth $49.95
American History | Public Policy
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Table of Contents

Introduction. State Power and the Rise of Chicago
Chapter 1. Making a River Run Through It
Chapter 2. The Legal Construction of Free Marketplaces
Chapter 3. The Creative Destruction of the Chicago River Harbor
Chapter 4. Beauty and the Crisis of Commercial Civilization
Chapter 5. A Public Pier for Pleasure and Profit
Epilogue. A Waterscape for the New Millennium

Notes
Index
Acknowledgments


Excerpt [uncorrected, not for citation]

Introduction
State Power and the Rise of Chicago

In 1818, an employee of the American Fur Company, Gurdon S. Hubbard, described a journey that traders had been making for centuries via a land route, or portage, between the Great Lakes and Mississippi River watersheds. It spanned a patch of marshland that remains a crucial crossroads today—the site of Chicago's Midway Airport. The men in Hubbard's party paddled their barks from the open waters of Lake Michigan into the shallow, sand-clogged mouth of the Chicago River. From there, they ascended the main stem and south branch of the Chicago until reaching the river's source in a bog at the base of a very low ridge about half a dozen miles from Lake Michigan.

That unassuming ridge was a continental divide, formed more than thirteen thousand years ago when melting glaciers deposited heaps of debris onto the landscape. East of the ridge, water flowed into the Chicago River, Lake Michigan, and, eventually, the Atlantic Ocean. West of the ridge, water flowed into Mud Lake, a murky appendage of the Des Plaines River whose waters ran southwest toward the Mississippi and the Gulf of Mexico. When Hubbard's party got to the divide, the river ran dry, and their boats had to be "placed on short rollers . . . until the [Mud] lake was reached." For three days, the men slogged through Mud Lake. Hubbard recalled the grueling trek: "Four men only remained in a boat and pushed with . . . poles, while six or eight others waded in the mud alongside . . . [and still] others busied themselves in transporting our goods on their backs to the [Des Plaines] [R]iver." All the while, the men were beset by leeches that "stuck so tight to the skin that they broke in pieces if force was used to remove them."

The area surrounding that vital and miserable passageway between the Great Lakes and Mississippi River watersheds soon became the site of phenomenal urban growth. That growth was the product of collaboration between public policymakers and private businessmen. Over the course of a century, they constructed crucial water and railroad infrastructure, transforming Chicago into a massive metropolis.

Established as a town in 1833, Chicago was, at the time, a wilderness outpost of just 350 residents clumped around a small military fort on soggy land where the Chicago River trickled into Lake Michigan. The site was known to local natives as Chigagou, or the "wild garlic place." It flooded frequently and stank. Mud abounded. Summers brought blistering heat. The bitterly cold winters were made worse by bracing winds, from which the flat, monotonous landscape offered little protection.

Yet, in the course of a century, Chicagoans radically transformed the site from a desolate swamp into a vast canvas for urban experimentation, construction, and commerce. By 1933, it was a sprawling industrial metropolis of more than three million souls. The city's denizens had built canals, bridges, and docks; laid railroads connecting the coasts; siphoned the nation's grain harvest into towering storage elevators; cut the tall pine forests of Michigan and Wisconsin from the earth, stacking and selling them in magnificent lumber yards; and erected cruelly efficient slaughterhouses where, as the writer Norman Mailer later observed, "they cut the animals right out of their hearts." Chicagoans had built massive factories with giant blast furnaces to transform the iron ore of Minnesota's Mesabi Range into iron and steel, and they had constructed spectacular office towers filled with white collar workers who kept tabs on the rapid flow of money in and out of the city.

The point of Chicago's existence has always been to wring profit from nature. But how did the bog that Hubbard traversed in 1818 become a global metropolis? Did the natural advantages of the place call Chicago into being, or did humans build the city in spite of its sandbars, swamps, and pestilence?

Chicago's geography has always been fundamental to its story. The immense obstacles and advantages it presents have often existed in a productive tension—the natural advantages inspiring ever-greater human efforts to tame the environment and tap it for economic gain. Consequently, Chicago's chroniclers have long been ambivalent about whether nature or human agency played a greater role in the city's growth.

Many of the people who witnessed firsthand Chicago's astounding rise concluded that God must have predestined it. In 1880, the former lieutenant governor of Illinois, William Bross, delivered an address to the Chicago Historical Society in which he claimed: "He who is the Author of Nature selected the site of this great city." In 1923, in an address to the Geographical Society of Chicago, a University of Chicago geographer, J. Paul Goode, argued that the city's location made its rise inevitable. It was titled "Chicago: A City of Destiny." Likewise, in a landmark 1991 book, the environmental historian William Cronon acknowledged the role of human decision-making in Chicago's rise, but he ultimately attributed its rapid growth to a combination of easy access to natural resources—tall timber stands, rich farm lands—and its pivotal position on the shipping lanes of the Great Lakes and the Chicago and Mississippi river systems. Cronon concluded that Chicago was, in the words of his book's title, Nature's Metropolis.

Undoubtedly, Chicago's waterways and proximity to natural resources made the city's growth possible, but it did not make it natural, much less inevitable. In 1955, University of Chicago geographer Harold Mayer underscored this point—and pointedly took issue with Goode—in his address to the city's geographical society. It was titled "Chicago: A City of Decisions." Scholars such as Harold Platt and Robert Lewis have likewise emphasized that, at every stage, Chicago's development was contingent on human actions. People devised remarkable technologies, crafted new laws, and created innovative political and economic institutions to harvest the timber, cattle, hogs, coal, iron ore, and grain produced in the city's hinterland. At the same time, Chicago's development demanded that humans transform the urban landscape, or the metropolis's nature. Above all, they had to radically alter the waterfront and waterways—especially Lake Michigan, the Chicago River, and the Calumet River—to make the wretched landscape habitable and to make the continent's resources exploitable by the city's enterprising businessmen.

The power to command water often resides with the elite. In this regard, Chicago was not exceptional. The people and institutions that changed the flow of Chicago's watercourses and constructed its waterfront included the arch-conservative Supreme Court Justices Melville Fuller and Stephen Field, the idealistic urban planner Daniel Burnham and his colleagues in the Chicago Commercial Club, the pioneering landscape architect Frederick Law Olmsted, the expansive Illinois Central Railroad, the resourceful Army Corps of Engineers, the enterprising Chicago Board of Trade, Chicago's crafty Common Council, and the creative, cash-strapped state of Illinois.

Their achievements were monumental. They fused the Great Lakes and Mississippi watersheds with a canal; piped in drinking water from the depths of Lake Michigan; constructed sewers, docks, piers, and bridges; blasted through sandbars at the mouths of the two rivers; dredged, straightened, and widened the rivers; reversed the flow of the Chicago River; built railroad tracks, depots, and grain elevators along the city's watercourses; and decorated the lakefront with verdant parks and splendid civic spaces.

Even more remarkably, Chicagoans used the same resources for seemingly incompatible purposes, thereby serving stakeholders with divergent agendas. The city's inhabitants drank from the very watershed fouled by their sewers and by the animal blood and guts from their meatpackers. Even as the city and industry clogged the river channel with waste, large boats dragged their hulls through the slop, shuttling cargoes to and from businesses. Chicagoans, moreover, demanded that the river banks and lakeshore serve as sites for factories, grain elevators, and railroad depots—as well as civic monuments and "natural" beauty. Thus, the city's waterways and waterfront simultaneously facilitated mass production, commodity circulation, public health, tourism, and social harmony. Chicagoans engineered a waterscape to reconcile the environmental contradictions of the urban economy. They created a new ecology for a new urban industrial capitalism. The waterscape, in turn, became a resource for moneymaking, a form of liquid capital.

The story of Chicago's growth, then, is largely about the contentious politics of creating and managing the urban environment. And, it presents something of a paradox. Chicago's waterfront, the hub of economic activity in a city renowned as an archetype of crass industrial capitalism, was also the site of several of the nation's precedent-making decisions about public land use, economic regulation, and environmental protection. A dispute over storage rates at the grain elevators along the banks of the Chicago River, for instance, led to the Supreme Court's 1877 ruling in Munn v. Illinois, which dramatically expanded state legislatures' ability to regulate any businesses deemed "affected with a public interest." Another dispute over the ownership of the lakeshore resulted in a Supreme Court ruling in Illinois Central v. Illinois (1892), which mandated that states hold vital natural resources "in trust" for the public. Contemporary environmentalists have, in turn, used this ruling to argue for protection of air, water, and forests. Meantime, Chicago's waterfront—developed in accord with the recommendations of Burnham's monumental 1909 Plan of Chicago—has become a model civic landscape for urban planners throughout the world.

Chicago's waterfront, in sum, was both a critical moneymaking enterprise and the site of several precedents for economic regulation and environmental stewardship. That fact is difficult to square with master narratives about American history and economic policy, which draw sharp—and ultimately misleading—distinctions between the public realm of government and the private sphere of the market.

Historians often tell the story of the growth of the state as a reaction to private market excess. During the nineteenth century, the narrative goes, America had a "weak" state, and public officials seldom intervened in the private marketplace. Unbridled industrial capitalism, in turn, produced class conflict, pollution, workplace accidents, and consumer exploitation. In the early twentieth century, though, well-educated middle-class political reformers came to the rescue, leveraging the power of state and federal governments to enact regulations that mitigated the effects of the industrial revolution. Progressive reforms were a public, state-centered response to the vagaries of the private marketplace.

This narrative is inscribed in the very terms historians use to describe the late nineteenth and early twentieth centuries. In the 1920s, liberal, "progressive" historians disparaged the late nineteenth century as "the Gilded Age," after the title of Mark Twain and Charles Dudley Warner's 1873 satire of the era's greed and corruption. Meanwhile, they celebrated the early twentieth century as "the Progressive Era." These terms continue to shape how many Americans think about the rise of the state: as a reaction to industrial capitalism, with the state-centered reforms of the early twentieth century correcting the excesses of the late-nineteenth-century free market. It would indeed be ironic, within the framework of this narrative, that Chicago's waterfront was simultaneously a site of economic dynamism and muscular assertions of state power.

The irony, though, is not in what transpired on the shores of Lake Michigan and along the Chicago and Calumet Rivers. It lies in the space between what that master narrative of history and economic policy reveals—and hides. The "Gilded Age and Progressive Era" framing is powerful because it is partly true. The state did grow larger after the industrial revolution, and state-imposed economic regulations have often served as checks on market excesses. Historians of progressivism have thus rightly described the growth of the regulatory state as the critical development of the era. Yet these facts too often obscure another key part of the story of American political economy. Namely, the state played a crucial role in promoting economic development long before the Progressive Era, and industrial capitalism thrived because of—not in spite of—public policy, which was as crucial to its emergence as the initiatives of private business leaders.

Over the last three decades, scholars have become increasingly focused on the state's role in promoting industrialization. For much of the twentieth century, though, state power figured little in the works of business historians who trained their attention on individual capitalists, big firms, and corporate middle managers. Beginning in the 1980s, historians and political scientists began to, in the words of Theda Skocpol, "bring the state back in" to studies of economic development. Since then, scholars of American political development and historians of capitalism have shown that the market economy was not just a wild creature to be tamed by the state; rather, it was largely a product of monetary policies, infrastructure, and laws crafted by the state well before the Progressive Era.

The recognition of a large, powerful state prior to the early twentieth century suggests that progressivism was not so sharp a break with the past, as some scholars have suggested, and that social and economic engineering were hardly new. Chicago's waterfront is an example of what might be termed earthy pragmatism—that is, experimentation with the landscape as an instrument of social and economic change. The city's existence depended on it.

For Chicago to function as a site of production and exchange, several threats to economic development had to be eliminated: sandbars and swamps that blocked travel to and from Chicago; railroad and grain elevator monopolies over crucial waterfront spaces; and the virulent class conflict that threatened the socioeconomic order. From the start of the city's history in the 1830s, Chicago's brand of buccaneering industrial capitalism depended on Chicagoans' success at making the city's waterways and its waterfront into ports, points of railroad connection, sewers, sources of drinking water, and grounds for pleasure and public life. Yet, the elemental relationship between Chicago and its waterways is often overshadowed by the city's storied past of soaring skyscrapers, mass production, and deadly confrontations between workers and capitalists at sites such as Haymarket Square and Pullman.

How did the desolate swamplands that Hubbard slogged through in 1818 become, long before his death in 1886, an intensely managed waterscape supporting the life and economy of a massive metropolis? The history of Chicago and its relationship to water suggests that—contrary to claims made by some of Chicago's chroniclers and the historians' master narrative of the era—markets and cities do not sprout up in the absence of strong government. Instead, Chicago and the markets that constituted it were creatures of the state, in large part because they required significant environmental engineering and regulation to flourish.

The history of Chicago's waterfront suggests that the conventional dualisms—private versus public and free enterprise versus state regulation—do little to explain the rise of nineteenth-century industrial cities. Chicago was created by a state that blended public and private institutions, personnel, and agendas.

In Chicago, governmental power was often an extension of the interests, agendas, and efforts of a small number of business leaders. The sandbars, monopolies, and class violence that might have thwarted Chicago's economic growth were largely contained through creative collaborations between government officials and business leaders. Together, they fashioned public infrastructure to make Chicago accessible, established economic regulations to facilitate trade, and created public spaces on the waterfront to spur tourism and ease class tensions. In so doing, they transformed a muddy, desolate bog into a waterscape conducive to exchange, accumulation, leisure tourism, and class harmony—a means for profit making, a form of liquid capital.

Liquid Capital: Making the Chicago Waterfront travels through time across one of North America's most pivotal economic spaces: from the canal construction boom of the 1830s; to the great legal and economic battles over monopoly in the late nineteenth century; to the grittiest, smoke-filled days of the Industrial Revolution; and to the dawning of a prettier, leisure-centered capitalism at the start of the twentieth century. It tells the story of a waterscape continually transformed, of poet Carl Sandburg's Chicago: "Building, breaking, rebuilding."