San José State University
Department of Economics
& Tornado Alley
The History of the Economy of Chicago
- 1. There was a focus of Indian trails at the mouth of a small river
which emptied into Lake Michigan. It was then called She-kag-ong (the
wild onion place) and is now called Chicago. Pere Marquette and Louis
Jolliet in 1673 recognized its strategic importance and it became the
key portage route for linking the Mississippi Valley with the Great
Lakes and the St. Lawrence River of French Canada.
- 2. The first permanent settlement was established in the 1770's by
Jean Baptiste Point du Sable. Fort Dearborn was built on the site in
1803 but its garrison was massacred in 1812. In 1816 it was reestablished.
- 3. In 1829 the street system of Chicago was platted but it was a
very raw frontier town. A canal linking Chicago to the Mississippi
River was started in 1836. By 1846 Chicago had a population of fifteen
thousand. Chicago was noted for its architectural innovation. The
standard form of steel frame construction was first known as "Chicago
- 4. By 1850 Chicago had become a major focus or hub of the
transportation lines linking the east and west of the U.S. By 1856 it was the chief
rail center of the U.S. Lumber, grain, and livestock from the Mid-west
and West passed through Chicago on their way to markets in the East.
Stockyards of Chicago, 1861
- 5. In 1871, four square miles of Chicago, including the central
business district burned down. This was one third of Chicago but it
was quickly replaced.
- 6. Chicago grew to be the second largest city in the U.S. but now
is the third largest, having been surpassed by Los Angeles.
- 7. The spatial structure of Chicago has been much studied and a schematic map
developed, as shown below.
Mayor Richard J. Daley of Chicago.