St. Louis figured it was holding all the cards. It was the Queen City on the Mississippi, a depot for grain shipment that drew commerce from all over the fast-growing Midwest. And it was considered the early gateway to the West.
But in the end, Chicago won the title as the Midwest’s metropolis. So how did the muddy, swampy village by the lake take first honors?
As it turns out, the Achilles’ heel that did St. Louis in was a combination of factors starting with the Mississippi River’s tendency to flood and the elimination of shipping grain by sacks.
In the 1820s and 1830s, as Midwestern farming began producing large annual surpluses, the grain was shipped both to the Chicago market and to the St. Louis market. In those days, grain was transported in sacks. Each sack had to be loaded on the farm, then transported to a place it could be shipped either east on the lakes or south on the Midwest’s river system. When the sacks reached a port, they had to be manhandled onto boats for shipment. When they reached their destination, those sacks each had to be unloaded by hand.
Early on, St. Louis and Chicago were about even in grain handling. Even with Mississippi River flooding, flatboats and steamboats could be easily loaded by stevedores carrying grain sacks.
But then an innovated grain dealer in Buffalo, New York, devised a new way of handling grain, and it didn’t involve sacks at all. Joseph Dart created a device consisting of an endless belt with small buckets attached to it that could be lowered into the hold of a canal boat or steamboat. Using steam power, the endless belt could move the grain up out of the boat into an elevated bin that soon became known as a grain elevator.
Before long improvements were coming fast in the grain handling industry. Ira Munn, a Chicago grain dealer, came up with some big improvements in elevator design and use, primarily the idea of emptying wagonloads of loose grain into upside-down pyramid-shaped pits in the ground that were lined with either concrete or wood. Then one of Dart’s endless elevator belts could move the grain into an elevator, where it could easily be reloaded into rail cars, canal boats, or steamboats for transshipment.
Munn also devised a grain grading system, which became the heart of his system, which became the system underlying the whole Chicago Board of Trade (of course, he was also a thief, but that’s a story for another day). Because with grain graded as it arrived at the elevator, it could be mechanically directed into different bins inside the elevator. While the grain of many farmers would be intermixed, the chit the elevator operator gave each farmer entitled him to drawing the same number of bushels of the same grade grain out of the elevator whenever he wished—less storage and handling costs, of course.
The whole grain-by-the-sack system was dead by then, killed by Dart’s elevator and Munn’s new improvements. Grain was being handled by machinery, and that meant lots of trouble for St. Louis. At Chicago, the lake level was essentially static. Grain elevators could be built right along the Chicago River where streamboats could enter from the lake via the new channel through the sandbar at the mouth of the river. Elevators could load and unload them mechanically.
Meanwhile down in St. Louis, the Mississippi’s periodic floods prevented the same kind of handy grain-handling infrastructure from being built handy to the steamboats and flatboats that carried grain down to the New Orleans market.
By the time large amounts of grain began being shipped by rail, St. Louis had lost the contest of becoming the chief grain exporting city of the Midwest. And Chicago, that swampy little village by the lake had grown to become the hub of not only the grain trade, but also the lumber and meat packing trades.
Guess those real estate agents know what they’re talking about. What really counts is location, location, location.