1.14. WILLIAM H. VANDERBILT’S MONOPOLY AND THE DEARBORN STREET STATION

View Down La Salle Street. The La Salle Street Station is at end of the vista. (Gilbert, Chicago and Its Makers)

The answer to the Dearborn Street question revolves around “Commodore” Vanderbilt, even though he had died two years earlier in 1877.  While on the surface, one would have thought the effects of the depression would have been negative, or at best neutral, to the development of Dearborn, the depression, however, actually allowed Dearborn to acquire the one element that, prior to the panic, La Salle Street alone had possessed and as a consequence, had maintained a natural advantage over Dearborn in the development battle.  The advantage that La Salle Street enjoyed was provided by Vanderbilt’s Lake Shore and Michigan Southern Railroad Station.  Although he had played no part in the location or erection of the pre-fire station, by the time of the 1871 fire, Vanderbilt had acquired complete control over the these railroads and the station, that also explains why it was the only station of the three destroyed by the fire (the IC and the C&NW being the other two) that was immediately rebuilt, and to which the city had recently extended La Salle Street one block farther south from Jackson through to Van Buren Street.

La Salle Street Extension to the La Salle Street Station, 1874. La Salle has been extended to the Michigan Southern Station. This is the reason for this station being named the La Salle Street Station, eventhough the Board of Trade will ask for this block to build a new building in 1881, which will divorce the station from La Salle Street once again, and will lead people today to ask why the station was not known as the Van Buren Street Station. (The Land Owner, July 1873)

The depression had also allowed Vanderbilt, through a series of clever stock manipulations, to buy the Michigan Central right out from under the noses of its Bostonian builders.  This action not only severed the eastern link (the MC) of the Bostonians’ highly profitable Chicago, Burlington and Quincy Railroad, its western link to Council Bluffs and the Union Pacific, but also had finally gained Vanderbilt a virtual monopoly of all rail traffic between Chicago and New York.  The only rail route from Chicago to the Northeast that had escaped the Commodore had been the Canadian Grand Trunk Railroad, yet even it had to rely on Vanderbilt’s good will to use the MC’s tracks to enter Chicago. (While the Pennsylvania RR avoided Vanderbilt’s reach, its tracks went farther south through Pennsylvania to Philadelphia, and then up into New York City.  It offered no alternative for the Grand Trunk.)  The Commodore had died on January 4, 1877, leaving his son, William H., a rail empire that controlled virtually all of the traffic between Chicago and the Northeast.  In one last grand attempt to complete the monopoly, William tried in early 1879 to close off the Canadian route by prohibitively increasing the Grand Trunk’s user fees for the MC’s tracks into Chicago.  This one act would have great ramifications on the development of Chicago’s Loop, for Vanderbilt’s total control of all rail traffic to the Northeast was simply intolerable for too many powerful financial interests, and the only solution was the construction of a new railroad (and station) from the Northeast into Chicago.

1.15. THE BROOKS BROTHERS AND THE DEARBORN STREET STATION

Map of the Grand Trunk Railroad’s new track to Chicago, 1879-80. (Online)

The younger Vanderbilt had quickly met his match, for he had not only crossed swords with the Bostonians and Sir Henry Tyler, the strong-willed president of the Grand Trunk, but more importantly, he came into direct conflict with the investments of one of the world’s largest financial institutions, the House of Baring in London, who were quietly financing, in league with the Bostonians, their own transcontinental route from the Pacific and the China trade to the East, in the form of the Atchison, Topeka and Santa Fe Railroad.  The younger Vanderbilt had severed the last available Eastern link in this route, which was simply unacceptable to all those financially involved with building the Santa Fe.  Responding to Vanderbilt’s challenge, Tyler announced that he would, unilaterally, build a new route from Detroit into Chicago. On June 5, 1879, the Chicago and Western Indiana Railroad was formally incorporated, destined to become the Chicago entrance for all of Vanderbilt’s embittered rivals: Tyler’s Grand Trunk Western; the Baring’s and Bostonians’ Santa Fe; and even the New York Central’s perennial enemy, the Erie.  The paramount issue faced by Tyler and the other C. & W. I. investors was where to locate the new station in Chicago’s business district.  Its location would not only directly affect the success of the new railroad, but even more importantly, would easily generate huge profits in land speculation immediately adjacent to the new station.  Entire fortunes were at stake upon this decision.

It was quite natural that the final location of the station should be influenced by Bostonians, for much of the financial support of the parent railroads came from Boston.  One of Boston’s leading railroad experts, Charles Francis Adams, Jr., an investor in both the C. B. & Q. and the Santa Fe, and destined to become president of the Union Pacific in 1889, was a grandson of the elder Peter Chardon Brooks, meaning that he was a cousin of Peter and Shepherd Brooks, owners of the Portland Block on Dearborn Street.   There can be little doubt about the fact that these three powerful cousins in Boston were intimately involved in the decision to build the new C. & W. I. station in line with Dearborn Street. The railroad battle between Boston and New York was about to spill over into a new arena: would Dearborn or La Salle Street emerge as the north/south replacement for the Washington Street office corridor?

FURTHER READING:

Stevens, George R. The Canadian National Railway. New York, Macmillan, 1973.

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