USA > Illinois > Cook County > Chicago > History of Chicago : historical and commercial statistics, sketches, facts and figures, republished from the "Daily Democratic press" ; What I remember of early Chicago, a lecture, delivered in McCormick's hall, January 23, 1876 (Tribune, January 24th) > Part 18
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1874.
1875.
Chicago
843.966
920,843
St. Louis
360.925
336,934
Difference
.483,041
583,909
These comparisons are drawn not for the purpose of belittling the importance of St. Louis as a live stock market, but to demonstrate the supreme ridiculousness of her claims to rival Chicago. The developments of the past season would seem to have forever set at rest the ques- tion of the continued supremacy of Chi- cago as the chief live stock distributing point of the world. Although the aggre- gate of our receipts was less than for 1874, the value of the same was some $10,000,000 greater.
THE GRAND TOTAL.
The following is an approximation to the total value of our trade in 1875. It includes only the first selling price, second sales not being counted, though made by jobbers :
Produce trade. $232.328,000
Wholesale (as above) 293,900,000
Manufactures (product). 177,000,000
Total $703,228,000
Deduct from this for manufactures in-
cluded in wholesale (about). 46,228,000
Total business $657,000,000
Total in 1874 639,000,000
These figures give a decrease of 6.9 per cent. in the sales of produce, and an in- crease of 7 per cent. in wholesale trade and manufactures. The increase of the whole over 1874 is 2.8 per cent.
These totals would be materially in- creased if we included the sales of prod- uce to shippers after it had once been sold in open market, to say nothing of the manifold sales of grain and provisions under which one lot may be delivered to a dozen or more traders in succession. We have also omitted sales of such arti- cles as ice, milk, vegetables, dressed liogs, oats, etc., made in the street, from wagons, and not placed in public storehouses. The sales of real estate are not included, as they do not belong to the wholesale trade.
Wheat, bu. 24,450,390
29,764,622
Corn, bu.
26,990,557
35,799,638
Oats, bu.
.11,511,554
13,901,235
1873. 2,303,490 24.455,657 36,754,943 15,694,133 960,613
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HISTORY OF CHICAGO.
We have dealt only with what Mr. Wen- mick would designate as "portable prop- erty,"
The following were the totals for pre- vious years, estimated on the same basis :
1873.
$596,000.000
Oct. 11, 1871, to Oct. 11, 1872 490,000,000
1870
439,000,000
1860
450,000,000
1868
434,000,000
1860
97,000,000
1850
20,000,000
EXTENT OF TRADE OF CHICAGO.
At the close of one of my articles in 1854, I expressed the hope that I might be here seventeen years from that date to post up the business of, the city. This duty has been committed to younger hands. The nearest I have approached it was last fall during the sickness of the financial editor of the Tribune. I quote the following paragraphs from the finan- cial articles which I wrote in his absence, bearing upon the growth and extent of the business of the city.
From the Tribune, October 15, 1875.
These heavy drafts upon our capital, and the cheerful response of our banks, correspond with the concentration of the wholesale trade of the Northwest in Chi- cago. The frantic warnings of the New York commercial papers to their jobbers to lessen their expenses, and to do all things needed to retain that trade, have not been heeded. It is surely leaving them, and is rapidly concentrating in Chicago. It is worth while again to note the causes that are contributing to this
inevitable result. Take the dry goods trade as an example. Our leading houses have ample capital, and buy at the lowest figures their goods for cash. They have agents in Europe and this country right alongside of those of the New York job- bers, and get their goods at precisely the same figures. Goods come directly through to this city; custom duties are paid here, and hence they are free from the exactions of the New York sharpers. The difference in the price of rents and the modes of doing business here more than balance the cost of freights from the seaboard, and hence goods are sold as cheap here, and even cheaper, than they are in New York. No country merchant in the North, nor in fact in the Southwest, needs now to go to 'New York, and com- paratively few of them do so.
What is true of dry goods is equally true of other lines of the wholesale trade.
The business in all departments is rapidly concentrating here. The same is true also of manufactures. Only a day or two ago we were assured that a house that manu- factures agricultural implements in Ster- ling, 110 miles west of Chicago, was sending its machines even to Philadelphia and other cities of Pennsylvania. Ohio is a large and most valuable customer. Large quantities of leather (the best pro- duced in the whole Union), of furniture, and other articles, are shipped to the sea- board, and all the country this side, from the warerooms of Chicago. The large calls upon our bankers, therefore, for cap- ital, are but a reflex of other leading interests, and prove that Chicago is already the financial as well as the commercial and manufacturing centre of the North- west.
From the Tribune of October 16, 1875.
One of our leading merchants yesterday, commenting on our last article in relation to the vast wholesale trade that is concen- trating in this city, took us to task for using the term Northwest-while the trade of the Southwest was rapidly falling within the grasp of Chicago. This we knew full well; but the habit, coming down from the time when very little, if any, business came to this city from below the southern line of Iowa, is still apt to show itself from the point of our pencil, and it will get out in print, to our regret and confusion. The fact is, the jobbing trade of the city reaches all the way from Texas to Manitoba.
Before our railways were opened down to the Gulf of Mexico through Texas, representatives of Chicago merchants had been all through that country, and found what kinds of goods the people wanted. Manufacturers of clothing, for instance, had carefully taken the dimensions of the average Texan-no matter what his occu- pation might be-had found with what styles he was pleased, and of what mate- rials they should be made, and, while jealous rivals of our city were snoozing over an exalted opinion of themselves and blessing their stars that they were not afflicted with the restless energy of Chi- cago, our manufacturers had already made the goods and occupied the markets of the "Lone Star" State. The same may be said of other lines of manufac- tured articles and of staple merchandise. Since the opening of our railways to the Southwest, in spite of the competition of St. Louis, that broad field has been largely gleaned by Chicago enterprise. Our trade from that section is already very heavy and lucrative, and it is steadily and rap- idly increasing. In speaking of the West- ern trade of the city, therefore, unless for special reasons, let the term "North "
110
HISTORY OF CHICAGO.
-
.
be dropped. We agree with our friend that simply " West" is better.
As to our foreign direct trade the more we talk with our bankers and merchants the more are we surprised at the variety of the articles shipped and at the rapidly- increasing values they represent. Five years ago we had one or two houses that drew drafts and issued letters of credit upon correspondents in England and upon the Continent. The money to meet these drafts was ordered placed to the credit of Chicago houses from New York. Now all this is changed. Dealers in grain, beef, pork, and provisions, cheese, and other farm products, in most of the leading cities of England, and several upon the Conti- nent, purchase direct of our packers and commission houses. Several large orders for wheat have just been filled on English account. The bills drawn against these purchases are taken by our banks, and in the short space of five years the balance of trade is largely in favor of this city. Though some of our importers often buy $50,000 in a single draft, week after week a balance of foreign exchange remains over, and is sold in the New York market. For the first six months of the year a sin- gle National Bank took $4,000,000 of these bills, and in the last half the amount will doubtless be larger still. These facts show why New York jobbers are in the dumps at the rapid extension of our direct export and import trade. Their disease is chron- ic. Growling at Chicago enterprise can do them no good. If the last five years have shown the results already achieved, before the century closes New York will retain very little, if any, interest in the wholesale trade of the West.
From the Tribune, Monday, Oct. 18, 1875.
On Friday and Saturday of last week, in explaining the amazing increase of the banking business of the city, we had some- thing to say of its foreign and domestic jobbing trade. Those brief articles mere- ly embraced what might be regarded as the headings for a dozen column articles on the same subjects. They did not men- tion the distant regions to which our people trade, as the following hints will show:
To the Editor of the Chicago Tribune:
CHICAGO, Oct. 16 .- In your article of to-day you say: "The jobbing trade of the city reaches all the way from. Texas to Manitoba." This is true, and all very well, but how about the Eastern States, Canada, and the States and Territories west of the Rocky Mountains? Is the subject too extensive for even two articles? Very truly yours,
MERCHANT.
Exactly so. It is too broad and too im- portant to be exhaustively treated in a dozen articles. For breadstuffs, provis- ions, and all farm products, Chicago has laid all the New England States under trib-
ute for a quarter of a century. Within the last ten years the Middle and Southern States have also become large purchasers, and the trade with them is constantly in- creasing. It is true that some of these States purchase sparingly of some kinds. of produce, but all of them are our cus- tomers. As to manufactured articles, leather, boots, furniture, and many other articles, are sent from this city all over the Eastern and Southern States. Agricultu- ral implements are shipped in large quan- tities eastward, and in fact in all directions. McCormick's reaper has laid the entire nation, and even several in Europe, under contribution, as witness the immense blocks on Dearborn, Clark, and other streets. That implement alone has gath- ered from the wide world several large fortunes, and planted them down in Chi- cago.
Of course our wholesale and retail deal- ers have nearly as strong a hold on Micli- igan, Indiana, and Western Ohio as they have on the country immediately west of the city. They cannot afford to get their goods elsewhere.
Our trade for many years has been very large with Canada, and an enlightened policy on the part of both Governments will swell it into immense proportions. Connected intimately with her 4,000,000 of people, both by lake navigation and railways, and producing much that she can buy in this market cheaper than any- where else, she is one of our largest and best customers. This fact is attested by the branches of two of her largest banks doing the business between Chicago and the cities of-Canada.
Turning our eyes westward, to say that "the jobbing trade of the city reaches from Texas to Manitoba" in some lines does not tell more than half the truth. All the States and Territories beyond the Rocky Mountains are trading largely in Chicago. They have found that they can buy goods as cheaply here as on the Atlan- tic seaboard, and the disposition to do so is growing every year. Sitting in the office of Peter Schuttler, early last spring, we asked where a large lot of wagons, just passing, were going. "We are loading two cars to-day for Chico, California," was the reply. There is no timber in Califor- nia from which agricultural implements can be made, and if the managers of the Union and Central Pacific Railways do not put an embargo upon us by high freights, there is scarcely any limit to the orders our manufacturers will receive for these and like articles from the Pacific coast. In fact, very considerable orders have been filled from our warerooms for Aus- tralia.
We take in everything. Orders for dry goods, books, boots and shoes, clothing,
111
HISTORY OF CHICAGO.
hardware,-in fact, almost every kind of merchandise and manufactured articles, -come from Montana, Idaho, Wyoming, Colorado, Utah, and even from Nevada, and if Gen. Rosecrans will hurry up his railroad between Denver, or rather Pue- blo, and Mexico, there will be no longer any need of specifying any particular lo- calities. The trade of Chicago in North America will be limited only by the boun- daries of the continent, while most of the nations of Europe will pay her large and constantly-increasing tribute. Such is her " manifest destiny," and the New York jobbers may as well stop their growling. If Stewart, Claflin, and the rest want to sell their goods, let them transplant their establishments to the head of the market. Chicago is the place to do it, and if not convinced of it now, they will in a very few years find it out to their cost.
- As a specimen of the extent of our im- ports, we mention that one of our whole- sale grocery houses received on Saturday 33 car loads of coffee, 10 of pepper, nut- megs, and other spices, and 13 of new raisins. They expect another ship to un- load on the cars next week, and another is now loading for them in a foreign port. Whole trains of tea often pass through this city on their way to New York, and, of course, all that is wanted for distribution in the Mississippi Valley stops here.
It may be asked what propriety there is in stating all these facts in the financial col imn. They show how wide a circuit is embraced in the business done at our banks, and by inference how large and how active a capital is required to do it. The wants of that business for several weeks past, have been immense; but our bankers have backed the enterprise of our merchants and manufacturers cheerfully and promptly, and the vast current of our commerce has moved along so quietly and so smoothly that it gave scarcely any sign of its magnitude.
From the Tribune, Oct. 19, 1875.
A committee of the Board of Trade have recently been collecting some statis- tics in relation to the trade of the city. Among other things they found that ten of our principal banks drew during the last year exchange to the amount of $418,000,000. At first sight these figures do not appear to correspond with the val- ues of the shipments eastward of farm products during the same period. Taking the amounts of grain, cattle, hogs, provis- ions, and other animal products, and the average prices ruling for the year, the actual value of the shipments to the sea- board was found to be $249,500,000. Whence, then, did the banks derive the $168,500,000 over and above the value of the shipments from this city? From all
the surrounding country. Some half a doz- en railways cross the Illinois Central south of Chicago, and in one way or another the collections for shipments for all the towns and cities for from 200 to 500 miles in all directions, and for even 1,000 miles west- ward, find their way largely to the hands of our bankers. Chicago is the financial, as well as the commercial centre of all the vast, fertile country by which she is sur- rounded. And besides, it should be re- membered that the figures for the entire trade of the city-merchandise and man- ufactures included -for the year 1874, footed up to the round sum of at least $638,500,000. Hence the results reached by the committee, in view of the above facts, and of what has been said in this column for the past few days, will be read- ily believed.
That the West and Chicago are living upon the good old maxim "Pay as you go," is proved by the fact that for a long period in the past, exchange has for nearly half the time, perhaps more, ruled at or below par. This, as much as anything else, shows how rapidly our people are becoming independent. It shows, also, that the balance of trade is often in favor of the West. It is in the memory of our business men that the price of exchange on New York has been from 2 to 25 per cent. premium, and at times it could not be had even at that.
NEW YORK AND CHICAGO BANKS.
At first sight it may seem ridiculous to compare the New York and the Chicago banks; but when it is considered that New York dates her origin way back to the earliest history of the nation, and claims to have the control of its commerce, and to have held it in all the past, and that it is only thirty-eight years since Chicago became a city, with only 4,000 inhabitants, the comparison does not seem to tell so very strongly against us after all. By the last bank statements of the two cities, it appears that there are forty-eight Na- tional Banks in New York and sixteen in Chicago,-one-third as many ; capital of the New York banks, in round numbers, $68,500,000; those of Chicago, $12,000,000, -a little more than one-sixth; loans and discounts, New York, $202,000,000; Chi- cago, $26,000,000-about one-eighth of the figures of the New York banks. As these are the main items, it is not neces- sary to make any further comparisons. That the Chicago banks will gain rapidly .on their metropolitan neighbors there can not be a particle of doubt.
PORTLAND, ME., TO SACRAMENTO.
As confirmatory of what has appeared in this column for the past few days, one of our manufacturers told the writer yes- terday that, among others, he had just
112
HISTORY OF CHICAGO.
filled two large orders-one for Sacramen- to, Cal., and the other for Portland, Me. Thus in scores of cases daily do both extremes of the continent pay tribute to our city.
From the Tribune of Nov. 15, 1875.
Business at the banks during the past week has moved along smoothly, to the satisfaction alike of cashiers and custom- ers. If anything, it is very quiet for the season, more so than it should be, consid- ering the immense amounts of farm pro- ducts still to go forward. Holders seem unwilling to operate to any very consider- able extent, certainly not up to the means they have to do it. The packers have fairly commenced operations, but they have thus far drawn mainly on their de- posits and loans on call or due when their business commences. As a class, their capital has steadily accumulated for sev- eral years past, and the abundance of money in this market for several months during the summer, and the cheap rates at which it could be had on approved collaterals, are due largely to the surplus capital for the time being, in the hands of the packers. Of course, they will be heavy borrowers before the season closes; but bankers will be only too happy to accommodate them with all the money they care to use. The time of their activ- ity comes after most of the other depart- ments of the fall trade have become quiet, and hence the employment they give to the capital of our banks is a great and mutual benefit.
The provision trade of Chicago has grown within the last few years far beyond the expectations of our most sanguine packers. Purchases are made almost en- tirely by wholesale dealers in the seaboard
cities and in those of Europe. Shipments are made direct to Liverpool and other cities on the other side on bills of lading, ocean freights included, made in this city. Nobody here now thinks of shipping pro- visions for sale to commission houses in New York. Buyers have learned to come directly to the head of the market. The stuff is paid for generally by drafts on London or other European cities, and these are promptly cashed by our bankers.
The large amount of this business done in Chicago was referred to in this column two or three weeks ago. A single bank in the first six months of the present year discounted foreign drafts against direct shipments of grain and provisions, to the amount of $4,000,000. As might be ex- pected, it sells foreign exchange to our importers in large amounts; but as yet a balance remains, which is disposed of in New York. Another fact worthy of no- tice is, that none of our citizens, or the people of the West, need go to New York for letters of credit to travel or buy goods anywhere on the face of the earth. Such letters are issued right here, available in any city in South America, in Northern or Southern Africa, or on the long trip all the way round the world. When Duncan, Sherman & Co. failed, two of the sons of one of our citizens were just starting from Italy eastward through Egypt, India, Chi- na, Japan, and home by California. Stat- ing the fact to one of our bankers, the father said: "Duncan, Sherman & Co. have failed, and Brown Brothers & Co. may go next; give me a couple of letters of credit which I know will bring my boys home without any possible contingency that may occur in New York." The thing was done, and the young men are somewhere in Asia, traveling there and elsewhere on the letters issued by one of our leading banks.
.
113
HISTORY OF CHICAGO.
COMMERCIAL CRISES.
The following article was published in the Tribune July 31, 1873. I insert it here, for the reason that, possibly, it may be of service to some one into whose hands it may fall.
There is an old-time maxim that " His- tory repeats itself." Without inquiring as to the truth of the sentiment, or at- tempting to give examples to confirm or to disprove it, we propose to inquire whether the supposed law can be applied to commercial crises. Of course each reader should apply the test of his own knowledge and experience to the subject, and act upon the suggestions herein sub- mitted according to his best judgment.
The history of this country seems to have developed a law that a general com- mercial crash may be expected every twenty years. The first occurred in 1797, the second in 1817, the third in 1837- many of our readers can remember that- and the fourth in 1857, whose lessons few of our business men have forgotten. The causes which produced the first two can be found in the condition of the country at the time they occurred. After the close of the Revolutionary War, and up to the time of the adoption of the Federal Con- stitution, the business affairs of the nation were at sea. Each State adopted trade regulations with its neighbors or with foreign nations according to its own no- tions of what duty or interest might dic- tate. There was no confidence among the business men of the period. The value of the currency issued by the States and by the old Continental Congress was virtually regulated by the peck, and not by the denominations printed on the face of the bills, and confusion worse con- founded reigned everywhere. This state of things could not be endured. The Constitution of the United States, adopted in 1787, in which it was provided that Congress should have power "to regulate commerce with foreign nations and among the several States," gradually in- spired confidence. Commercial treaties were made with foreign nations ; all re- strictions upon traffic between the States were abolished, and the country began to prosper. As time rolled on and that pros- perity increased, it turned the heads of the old Revolutionary patriots. They began to speculate ; prices of everything appreciated ; importations of foreign luxuries were made far beyond the value of the exports the country could make to
pay for them; and, at the end of ten years, 'the whole business public was forced into liquidation. There was no money to be had ; no confidence anywhere, and very little business could be done till the "hard pan" had been reached.
After the close of the speculative period, and the people found themselves standing upon the common plane of poverty, ne- cessity forced all to work and to practice economy. Wealth again began slowly to accumulate, and the demand for our pro- ducts was stimulated by the wars of Na- poleon. England was hard pressed ; the old hatreds of the Revolution had not passed away. A quarrel arose, and the War of 1812-'15 was the result. During the war the country was prosperous to an unhealthy extent, and struggled along after it closed till 1817, when a terrible financial crash again involved the country in utter and general ruin. As before, money seemed to have entirely forsaken the channels of trade. What little there was in the country was hid away in old stocking-legs, to reappear only when con- fidence was in some measure restored. Gradually liquidation did its work. ยท Care- ful, persevering toil and close economy began to develop the resources of the country and prosperity to bless the land. By 1826, DeWitt Clinton and his far- seeing compeers had completed the Erie Canal ; the vast teeming West was opened to the enterprise of the country, and for the next ten years the progress in the population and the wealth of the nation was truly amazing. The rapid rise in the nominal value of lands everywhere, and especially at the West, enticed thousands even of the most prudent business men to invest in them. Wild-cat banks, almost without number, were established in Michigan and almost everywhere west of the Allegheny Mountains. Everybody's pockets were full of bank-bills ; and so generally did people take to speculation to get rich, instead of attending to the duties of the farm and the workshop, that pota- toes were imported into New York from Ireland in 1836, and wheat from the Baltic. Importations of liquors, gew-gaws, and foreign luxuries rose to frightful figures. Of course this state of things could not last, and the crash of 1837-'8 was the bitter remedy for the moral and commer- cial insanity that had preceded it.
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