A Foot In The Door (February 1964 | Volume: 15, Issue: 2)

A Foot In The Door

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Authors: C. Peter Magrath

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February 1964 | Volume 15, Issue 2

One fine November day in 1848 a railroad locomotive christened the Pioneer chugged westward out of Chicago a distance of eight miles. It pulled only a single coach, a baggage car temporarily outfitted to carry a handful of prominent Chicagoans being treated to one of the first runs of the Galena & Chicago Union Railroad. Spotting a farmer driving an ox wagon filled with wheat and hides toward Chicago, two of the passengers purchased the goods and transferred them to the baggage car. The train then returned to its home city. This simple event foreshadowed the future course of Chicago’s development: within twenty years the modest railroad comprising ten miles of track became the giant Chicago & North Western, one of the roads that made Illinois the nation’s leader in railroad mileage; while the city itself grew tenfold to a population of 300,000. The inflow of wheat, which had begun when a group of men on a one-car train hauled a few bushels, amounted to tens of millions of bushels annually.

“Let the golden grain come, we can take care of it all,” cried a Chicago newspaper of the 1850’s. And come it did. Illinois was a major grain producer, and Chicago—“the New York of the West”—enjoyed a strategic location that made it the key transfer point for transcontinental trade. Systems like the Chicago & North Western and the Illinois Central funnelled in wheat, corn, and barley from the immense cereal carpet that lay to the city’s west and northwest. During the sixties it became one of the world’s primary grain markets; through the wonder of the telegraph, price fluctuations in the Chicago market were quickly communicated to the world and affected prices in New York and faraway Liverpool. At the center of these transactions stood the Chicago Board of Trade, the focal point for the buying and selling of grains, flour, and other foodstuffs. A contemporary called the Board “the Altar of Ceres,” and the label was apt. Grain, and the money it might bring, was indeed a goddess to be worshipped by the restless merchants of the Board of Trade.

To accommodate the huge quantities which flowed in and out of Chicago there developed a most lucrative business, that of storing the grain in warehouses until it was sold and shipped east. (Railroad connections were such that direct shipments to eastern centers were difficult or impossible.) Known as grain elevators, the warehouses were skyscrapers able to hold 500,000 to 1,000,000 bushels in elongated, perpendicular bins that were mechanically loaded by the lifting up of dump buckets fastened to conveyor belts. Once the grain was deposited there, the warehousemen facilitated sales to merchants and speculators by issuing them receipts to represent the amount in storage. These receipts were regarded as stable tokens of value comparable to bank bills; and presumably a warehouseman, like a banker, held a position of public trust demanding a high level of integrity. The