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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open the street (Michigan Avenue) and remove the obstructions therefrom.”68 So ordered, Street Commissioner Phillip Dean would have to extend the city’s street grid through the Fort Dearborn reservation. In order to carry out this order, Dean needed to destroy up to eight Fort Dearborn buildings—a feat that had not been repeated since Pottawatomie warriors burned the fort in 1812. Perhaps not coincidentally, one of the buildings Dean would have to wreck to execute the Common Council’s order was the Office of Public Works, which housed the army engineers.

Year Federal Appropriation
1833 $25,000
1834 $30,000
1835 $30,000
1836 $25,000
1837 $30,000
1838 $40,000
1839 $0
1840 $0
1841 $0
1842 $30,000
1843 $10,000

      Sources: The data from 1833 to 1842 are from Jesse B. Thomas, Statistical Report, in Chicago River-and-Harbor Convention, ed. Robert Fergus (Chicago: Fergus Printing Co., 1882), 192; the data from 1843 is from Mendelsohn, “The Federal Hand in Urban Development,” 259.

      Before city workers began wielding their axes and sledge hammers, however, U.S. government agent Charles Schlatter secured an injunction from the district court judge to halt the destruction of federal property. Four years later, the Supreme Court ruled, in United States v. Chicago, that the city’s right to build streets did not endow it with the power to seize federal lands.69 In the meantime, Schlatter voluntarily removed several federal buildings in 1845 and 1846 so the city could extend River Street along the main stem of the Chicago River.70

      Schlatter’s actions eased tensions between the federal government and the Chicago Common Council over waterfront policies, but the détente was short lived. In 1846, President James Polk, a Democrat from Tennessee, vetoed a bill that would have allocated $1,378,450 to over forty different river improvement projects throughout the American north and west, including dredging the sandbar that choked the mouth of the Chicago River Harbor.71 The veto placed Chicago at the center of a virulent partisan debate over federal power, slavery, and the physical dimensions of the American economy. It centered on the question of who should pay for government services: all taxpayers, or just those who directly benefitted?

      The National Politics of Internal Improvement

      Polk’s veto was just the latest episode in a larger debate over internal improvements that centered, in part, on distinctive conceptions of political and economic space. Inspired by Thomas Jefferson’s ideals of limited federal power and local self-governance, Polk believed that congressional authority to improve rivers and harbors depended on a geographic assessment of the shape of the market. If a river or harbor carried interstate or foreign commerce, it possessed a “national” character, and Congress could allocate money for improvements. If, on the other hand, a river or harbor carried primarily intrastate commerce, improvements were merely a “local” matter, and Congress could not fund them without breeching the constitutional limits of its power. Thus, Polk’s 1846 veto hinged on his determination that “Some of the objects of appropriation contained in this bill are local in their character, and lie within the limits of a single State.”72

      Polk’s language parroted that of Andrew Jackson’s famous veto of the Maysville Road Bill. In 1830, Jackson had denied federal funding to build a road between Maysville and Lexington, Kentucky, the home of political rival Henry Clay, on the basis that the project was of a “purely local character.” Jackson’s veto rejected the integrated approach to internal improvements championed by Whigs such as Clay. Rooted in a Hamiltonian vision of centralized government and economic institutions, Clay’s “American System” advocated funding internal improvements that, even if confined within one state, would function as parts of an integrated, national transportation network.73

      Polk and Jackson’s positions on internal improvements proved geographically problematic, but politically astute. It was difficult to distinguish between improvements of a local versus national character as rivers, harbors, or roads in one state might nonetheless handle national commerce.74 Polk, moreover, linked his critique of federal support for local improvements to yet another muddy geographic distinction. He suggested that the federal government could improve “natural,” but not “artificial” waterways.75

      A key problem with the 1846 Rivers and Harbors Bill, Polk noted, was that it made harbors out of some waterways “at the expense of the local natural advantages of another in its vicinity.”76 Polk’s position begged the question: How was a statesman to draw the distinction between a natural harbor and an artificial one if both needed improvement? These geographic distinctions, local versus national and natural versus artificial, made little environmental or economic sense, but their malleability made them politically potent. Democrats could claim to stand for limited government and justify spending federal dollars on improvements projects by pointing to, either cynically or earnestly, the national or natural characteristics of the waterway.

      Even under Democratic presidents in the 1830s and 1840s, the federal government had poured money into improvement projects. Jackson, for instance, authorized more than sixteen million dollars of federal expenditures between 1830 and 1837 on roads, canals, rivers, and harbors.77 Democrats’ previous willingness to fund internal improvements raised doubts as to whether several of Polk’s stated objections to the 1846 bill—the local character of the improvements, the artificiality of some of the waterways, and a desire to limit federal power—could be taken entirely at face value.

      Polk’s critics were also deeply skeptical of the president’s claim that he sought to discourage sectional rivalry with his veto. Polk maintained that limiting appropriations for improvements would discourage “combinations of local and sectional interests” from forming in Congress to compete in a “disreputable scramble for public money.”78 Without federal spoils to fight over, there could not be sectional rivalries. But, the president’s critics could not accept that logic at the same time he was leading a war against Mexico to acquire the proslavery Republic of Texas. The Whig Chicago Daily Journal, for instance, chaffed at Polk’s exhortations of fiscal restraint, asking: “Are not the treasury doors unbarred whenever the ‘open sesame’ is whispered by the slave-driver?” The president’s “real hostility to the Bill,” charged the paper, owed to the fact that “the objects of improvement lie north of Mason and Dixon’s line.” Polk, the paper concluded, had denied Chicago an effective harbor for commerce not out of political principle, but “because he wants the money for the Mexican War!”79 The veto had enflamed the very sectional tensions Polk wished to avoid.

      Polk’s veto also drove a wedge between the northern and southern wings of the Democratic Party. Jackson’s views on Indian removal, public lands, and the virtue of the common man had helped the party consistently carry Illinois in presidential elections from 1824 to the 1844 run of Polk.80 Polk’s 1846 veto created tensions between the party’s southern leaders and Illinois Democrats like congressmen John Wentworth and Stephen Douglas.

      Illinoisans

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