Economy of Chicago
Chicago and its suburbs which together comprise the Chicago Metropolitan Area is home to twenty nine Fortune 500 companies and is a transportation and distribution center. Manufacturing, printing, publishing, insurance and food processing also play major roles in the city's economy.
Real estate and corporate location
The central downtown area has experienced a resurgence in recent years with construction of major new condominium and Class A office buildings. These include the 92-story Trump Tower Chicago, Lakeshore East development, and the 300 North Lasalle office building. Since the recession, other projects, like the planned 150-story 2000 foot Chicago Spire by architect Santiago Calatrava, are now in limbo. Many city neighborhoods are gentrifying at a rapid pace as well, including Logan Square, Pilsen, Uptown, Near Southside, and Rogers Park. The massive expansion of O'Hare International Airport and reconstruction of the Dan Ryan Expressway are also underway and will shape development patterns for years to come.
Changes in house prices for the Chicago metropolitan area are publicly tracked on a regular basis using the Case–Shiller index; the statistic is published by Standard & Poor's and is also a component of S&P's 10-city composite index of the value of the residential real estate market. Home prices in Chicago advanced 7.8% in March 2013 over March of 2012
|Top publicly traded
companies in metro Chicago
according to revenues
with metro and U.S. rankings
|11||IL Tool Works||149|
|22||W. W. Grainger||318|
|28||Telephone & Data Systems||469|
Companies in the Chicago area
Source: Fortune 2012
The city houses one of the Federal Reserve Banks, established in 1914. There is also the Federal Home Loan Bank of Chicago. The largest banks in the Chicago region (by % of deposits) are: JPMorgan Chase, Bank of America (through its acquisition of LaSalle Bank), BMO Harris Bank (a BMO subsidiary), and Northern Trust. The largest banks headquartered in Chicago are: Northern Trust, BMO Harris Bank, Corus Bank, Wintrust Financial, and First Midwest Bank. Many financial institutions are in the Loop.
Chicago has five major financial exchanges, including the Chicago Stock Exchange (CHX), the Chicago Board Options Exchange (CBOE), the Chicago Mercantile Exchange (CME), the Chicago Board of Trade (CBOT), and NYSE Arca. While the city of Chicago houses most of the major brokerage firms, many insurance companies are in the city or suburbs, such as Allstate Corporation.
Before it was incorporated as a town in 1833, the primary industry was fur trading. In the 1770s, Jean Baptiste Pointe du Sable, the area's first resident and Haitian-born fur trader, established a fur trading post in the area which later became known as Fort Dearborn, along the bank of the Chicago River, where he traded until relocating again in 1800.
The American Fur Company, established in 1808 by John Jacob Astor to compete with the powerful Canadian North West and Hudson Bay companies, practically took control of the fur trade in the United States following the War of 1812. It quickly became known for its ruthless practice of buying out or destroying the competition, as most private traders in Chicago soon found out. It appointed John Kinzie and Antoine Deschamps as its first agents in northern Illinois, and they reported to the company's headquarters on Mackinac Island. Their field of operations covered North northeastern Illinois and the Illinois River. In 1819, Charles H. Beaubien was brought in to assist Kinzie and eventually became head of the outfit. Gurdon S. Hubbard replaced Deschamps in 1823 but soon went on his own by purchasing all interests of the company in Illinois.
Astor formed an alliance with the Chouteau family in St. Louis in 1822. By extending the trade of his company to the Missouri River region and eventually all the way into the Rocky Mountains, he consolidated commercial connections between St. Louis, Chicago, and Mackinac. By the mid-1820s, Astor's American Fur Company dominated the economy of Chicago and, in consequence, its social life as well.
The opening of the Erie Canal in 1825 enabled Easterners to migrate in increasingly large numbers to the lands west of Lake Michigan. White settlements limited the supply of game for the Indian, who could no longer afford to pay their debts to the American Fur Company. By 1828, when Hubbard took over the business of the company in Illinois, the fur trade at Chicago was measured in hundreds instead of thousands of dollars. The Treaty of 1833, which extinguished all Indian land claims in Illinois, marked the end of the fur trade as a significant part of the Chicago economy. Diminishing profits convinced Astor in 1834 to sell his interest in the American Fur Company, which reorganized under Ramsay Crooks and moved its operations to the Far West. Fur trading disappeared from Chicago as the population boomed and land speculation became the rage.
During the 1850s and 1860s, Chicago's pork and beef industry expanded. Entrepreneurs such as Gustavus Swift and Philip Armour helped the area to become the largest producer of meat products in the world. By 1862 Chicago had displaced Cincinnati, Ohio, as "Porkopolis".
Two major influences for the growth of Chicago's meat industries during the 1860s were: the Civil War increased the demand for food products and Chicago's vast transportation system ensured that goods could be delivered to soldiers quickly all over the northern United States. The second factor was the utilization of ice in meat packing plants. Beforehand, meat production and distribution facilities, known as disassembly plants, had to shut down in the hot summer months. Increased operating months created new man-hours in which people could work. The efficiency of Chicago's meat packing industry and its disassembly plants inspired others like Henry Ford when he developed Model-Ts assembly lines.
In the 1860s, Chicago's pork and beef industry represented the first global industry. As the major meat companies grew in Chicago many, like Armour, created global companies and communicated with divisions spread across the globe via telegraph. Chicago industries became highly diversified during the nineteenth century.
Chicago has produced many of the foremost industrialists, corporate lawyers, merchants, and financiers in United States history. Among the foremost of the Chicago industrialists, lawyers, financiers, and merchants were John Villiers Farwell, Edmund Dick Taylor, Potter Palmer, George Pullman, Charles Gray, Marshall Field, Richard Teller Crane, Martin Ryerson, John Jacob Glessner, Jacob Bunn, John Whitfield Bunn, John Graves Shedd, Cyrus Hall McCormick, Edward Avery Shedd, Charles Banks Shedd, Leander McCormick, Stanley Field, Charles Deering, James Deering, Robert Law, Francis Peabody, Leonard Richardson, Milo Barnum Richardson, Joseph Edward Otis, Frank Hatch Jones, Arthur Jerome Eddy, Arthur J. Caton, Nathaniel Kellogg Fairbank, Ezra Butler McCagg, Julius Rosenwald, Morris Selz, Harry Selz, William McCormick Blair, William Douglas Richardson, Charles Farwell, James Monroe Stryker and John Stryker of the Bunn-Richardson-Stryker-Taylor family (See: John Whitfield Bunn and Jacob Bunn), Samuel Insull, Max Adler, Lucius Fisher, Lucius Teeter, John Peter Altgeld, Walter Gurnee, Philip Danforth Armour, Gustavus Franklin Swift, Michael Morris[disambiguation needed], Jacob Best, Jonathan Y. Scammon, and many others.
Late in the 19th Century, Chicago was part of the bicycle craze, as home to Western Wheel Company, which introduced stamping to the production process and significantly reduced costs, while early in the 20th Century, the city was part of the automobile revolution, hosting the brass era car builder Bugmobile, which was founded there in 1907.
It was also home to Grigsby-Grunow, which manufactured radios under the Majestic brand until the company failed in 1934. (Majestic Radio and Television Corporation preserved the Majestic name, while General Household Utilities kept Grunow alive.) Chicago also hosted E. H. Scott's Scott Transformer Company, which introduced a high-grade radio in 1928, and grew into Scott Radio Laboratories; this was located at 4450 Ravenswood Avenue in 1946, and produced "very expensive, beautifully-designed, chrome-plated chassis". It added "a line of high-quality television sets in 1949". Other entrants in this business were Zenith, which started life there in 1918, entering auto radios in the 1930s, and Galvin Manufacturing Corporation, which started manufacturing power supplies in 1928 and went on to automobile radios under the Motorola marque in 1930, as well as Walkie-talkie and Handie-Talkie and for the Army.
Modern-day futures and commodity trading markets were pioneered in Chicago. A number of events led to this, along with Chicago's transportation systems and geographic proximity to the rest of the country. Massive amounts of goods passed through Chicago from places in the Mississippi Valley such as St. Louis, Missouri. Grain was stored in Chicago, and people began buying contracts on it. Later, people as far away as New York City began buying contracts by telegraph on the goods that would be stored in Chicago in the future. From this were established the Chicago Board of Trade (CBOT), the Chicago Mercantile Exchange (CME), and the modern systems in use today for futures and commodity trading.
|Chicago Economy|
|2000 Census Data||Chicago||Illinois||US|
|Manufacturers shipments, 1997 ($1000)||26,745,880||200,019,991||3,842,061,405|
|Wholesale trade sales, 1997 ($1000)||31,971,060||275,968,383||N/A|
|Retail sales, 1997 ($1000)||13,882,143||108,002,177||2,460,886,012|
|Retail sales per capita, 1997||$4,944||$8,992||$9,190|
|Accommodation and foodservices sales, 1997 ($1000)||4,481,917||14,826,805||N/A|
|Total number of firms, 1997||176,605||882,053||N/A|
|Minority-owned firms, percent of total, 1997||26.7%||12.5%||14.6%|
|Women-owned firms, percent of total, 1997||27.0%||27.2%||26.0%|
- Tourism in Chicago
- List of companies in the Chicago metropolitan area
- Economy of Illinois
- Great Lakes Megalopolis
- "Death knell for Chicago Spire as receiver appointed". The Boston Irish Emigrant. 2010. Retrieved January 15, 2011.
- Fortune companies - Illinois. CNN Money, May 21, 2012.
- DuSable Heritage Association
- Encyclopedia of Chicago
- American Experience | Chicago: City of the Century
- Norcliffe, Glen. The Ride to Modernity: The Bicycle in Canada, 1869-1900 (Toronto: University of Toronto Press, 2001), p.107.
- Clymer, Floyd. Treasury of Early American Automobiles, 1877-1925 (New York: Bonanza Books, 1950), p.178.
- Mahon, Morgan E. A Flick of the Switch 1930–1950 (Antiques Electronics Supply, 1990), p.107.
- Mahon, p.107.
- Mahon, p.167.
- Mahon, p.169.
- Scott himself quit in 1945. Mahon, p.167.
- Mahon, p.189.
- Mahon, p.110.