Liquid Capital. Joshua A. T. Salzmann

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Liquid Capital - Joshua A. T. Salzmann American Business, Politics, and Society

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the pumps to the horizon where it glimpsed a boat on the “ribbon like sheet of water which was stretching to the southwest.” A little after five o’clock, the propeller A. Rossiter pulled the General Fry and its cargo of leading citizens from Lockport, Illinois, into the south branch of the Chicago River. They were greeted by cheering Chicagoans and Mayor James Woodworth, a Democrat from upstate New York who had worked as a dry goods merchant as well as a contractor on the Erie and Illinois and Michigan Canals. The opening of the Illinois and Michigan Canal linked Chicago’s economy and ecology more closely than ever before to the large swath of continent between New York and New Orleans.116

      The canal was the region’s foremost commercial artery until it was eclipsed by the use of railroads, which moved goods faster and seldom shut down due to winter ice or shallow waters in dry summers. On April 24, 1848, the first cargo boat to arrive in Chicago by canal, General Thornton, hauled sugar from New Orleans through the city on the way to Buffalo, New York. While the canal handled southern goods like sugar from New Orleans, the majority of shipments consisted of products from the upper Midwest, including five and a half million bushels of wheat, twenty-six million bushels of corn, twenty-seven million pounds of pork, 563 million feet of lumber, and fifty thousand tons of coal during the first ten years of operation.117 The Illinois and Michigan Canal was Chicago’s largest feeder of wheat until 1851 (when it was surpassed by the Galena and Chicago Union Railroad) and of corn until 1868 (when the Illinois Central and the Chicago, Burlington, and Quincy Railroads eclipsed it). The canal also hauled the most timber from Chicago’s lumber market to the treeless prairie until the winter of 1863–1864.118

      The Illinois and Michigan Canal’s role in making Chicago a key commercial center highlights the tensions in the Democratic position on internal improvements. Democrats like Field and Polk supported limited government and opposed wealth redistribution. Consequently, they tried to contain the costs of internal improvements within the boundaries of neighborhoods, cities, and states. Yet, internal improvements like the Illinois and Michigan Canal facilitated movement of people, goods, and information across political boundaries. The growing interconnectedness of the nation made it increasingly difficult to determine who exactly benefitted from the improvement of a given river, harbor, or canal. Many political leaders nonetheless persisted in trying to bill the beneficiaries of government services. This goal was foremost in the mind of Chicago Mayor Woodworth after the destruction of the city’s bridges in the flood of 1849—and of Democratic Senator Douglas when he pushed for the construction of a railroad in Illinois during the 1840s and 1850s.119 Woodworth and Douglas alike would find ways to shift more of the costs of constructing new bridges and railroads onto private investors. At the same time, the mayor and the senator tried to ensure that the private parties who financed new infrastructure were held accountable to public officials.

      Billing the Beneficiaries of Internal Improvements

      On March 12, 1849, around nine o’clock in the morning, residents of the Southside of Chicago heard “loud reports as of distant artillery” out on the prairie. Soon thereafter, the sound of “crashing timbers” rang loudly through the city.120 An ice pack on the Chicago River had burst, unleashing a flood.

      It all began a few days earlier, when the winter snowpack melted after a soaking rain. The Des Plaines River and Mud Lake swelled with water, spilling onto the prairie and then filling the Illinois and Michigan Canal and the Chicago River. On March 10, a logjam of ice, wood, and other debris formed on the south branch of the Chicago River beside a packinghouse two miles from the city limits. Water welled up behind the dam for two days before bursting with a sound like cannon fire.

      The torrent swept through the river channel with “great violence,” smashing canal and lake boats to pieces and pulverizing the bridges at Randolph, Wells, Clark, and Madison. As the rushing waters toppled the bridges at Clark, Madison, and Randolph, four boys and one man perched on those structures drowned. When the current drove a schooner into the side of the Oneida, the canal boat’s captain was crushed to death. The force of water and snapping timbers hurled a spar from the river channel which struck a man dead as he stood on Clark Street. Five steamships, nineteen sail boats, and thirty canal boats were destroyed, along with the bridges of the south and main branches of the river. At the river’s mouth, a “mass of floating material was hurled together at a point near the piers, in a confused jam” of what used to be the contents of the city’s harbor.121 The death toll was unknown.

      The sudden destruction of the bridges drove city leaders to adopt more efficient, less democratic methods of decision making. In the 1830s and early 1840s, decisions about where to build infrastructure were made chiefly in the Common Council, and the debates often degenerated into intercity, sectional disputes like the one surrounding the Dearborn Street Bridge. After the 1849 flood, Mayor Woodworth and private property holders took charge of such decisions. The mayor asked owners of riverside property to pay one-third of the cost of new bridges. If they paid, the city would build the span, and the property owners would reap the transportation benefits. If they declined, Woodworth would propose building the bridge elsewhere, near property owners who were willing to pay. In the four years after the flood, the city erected eight new bridges.122

      Woodworth and the city of Chicago thus effectively blended the Whig and Democrats’ approaches to internal improvements. By paying two-thirds of the cost, the city acknowledged the Whig view that infrastructure was a public good, benefitting the whole city. At the same time, the city conceded the point championed by Polk and Field—namely, some property owners gained more from new infrastructure than others, and should pay more—by making the primary beneficiaries of new infrastructure pay a third of the cost of a bridge.

      At the state level, too, antebellum political leaders devised strategies to build infrastructure that would benefit the public without taxing those who did not stand to directly benefit. The corporation became one of their favored legal mechanisms. More than merely a private, profit-seeking institution, the corporation was an institution that received special privileges from the state, like rights of way, in exchange for providing a crucial service to the public. It therefore sought, simultaneously, to serve the public while enriching its shareholders.123

      When Senator Douglas renewed the push for an Illinois railroad in the late 1840s, he determined that a private corporation, not taxpayers, should raise the capital. To realize that vision, he orchestrated the transfer of public lands to the railroad. In 1850, Douglas and Congressman Wentworth muscled through Congress a bill that transferred a two-hundred-foot-wide strip of land running from Cairo, Illinois, to LaSalle, Illinois, the terminus of the Illinois and Michigan Canal, as well as 2,595,000 acres of land to the state of Illinois for the purposes of laying track and selling land to raise money for constructing a railroad. The state of Illinois, in turn, issued a corporate charter to the Illinois Central Railroad on February 10, 1851.124 The state granted the railroad corporation the acreage it had received from Congress, with the stipulation that it construct lines 380 miles from Cairo to Galena and 271 miles from Centralia to Chicago, where it would establish a terminal on the rapidly eroding Chicago lakefront.125

      The Illinois Central Railroad’s entrance into Chicago during the 1850s highlighted just how fast the city’s economic geography was changing. During the 1830s and 1840s, Chicago’s leaders fretted over how to build infrastructure to make the city accessible. By the 1850s, the city’s waterfront had become one of the preeminent hubs for people, goods, and information traveling across North America by water and rail alike.

      The waterfront’s centrality presented city, state, and business leaders with a new challenge: ensuring that private property owners did not monopolize this crucial site of exchange. Some policymakers and businessmen urged the state to pass laws making key waterfront spaces and infrastructure public—and therefore accessible to all who wished to use them for making money. Others countered that such laws would violate the private property rights protected by the U.S. Constitution. The disputes over private property rights and access to the Chicago waterfront

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