Grain Trade
Get-rich-quick schemes were a regular part of the grain trade in Chicago during the closing decades of the nineteenth century. "Cornering" the grain trade, one of the riskiest schemes, involved purchasing all available wheat for a certain purchase date in order to force up the price. One of the challenges of a successful "corner" was the need to store purchased grain. Philip D. Armour, owner of one of the largest packinghouses in Chicago, hoped to control the grain trade for immediate profit, as well as to control the cost of feed for livestock for his packing houses. During July and August of 1878, Armour led a successful corner on the grain trade, which made a profit that may have been as high as $500,000. On August 1, 1878, the Chicago Tribune ran a satirical article entitled "King Philip the First, Another Drama in Several Corners," modeled on Shakespeare's Hamlet.
In 1887, Armour sought to lessen his risk in wheat speculation by building his own elevator on Goose Island, alongside the Chicago, Milwaukee, and St. Paul Railroad of which he was a director and large stockholder. Goose Island was a good location for grain elevators, with ready water and rail access. However, Armour found his storage inadequate in 1893 when he sold 3 million bushels more of wheat than he had or had room for May delivery. To fill the order, Armour purchased more property just north of the Division Street Bridge on the North Branch Channel. He commissioned the construction of the two large elevators in one month. As one resident remembered "The place fairly swarmed with men at that time. Anybody who could drive a nail could get a job there. In three shifts they worked day and night." Armour went on to break the corner attempt of Joseph Leiter in 1897-98 by storing grain in his Goose Island warehouse.
Armour Builds Grain Elevators on Goose Island
Philip Armour sought to control all aspects of the grain trade, from purchase to transport to storage to ultimate sale in order to control costs at his packinghouses and as a means of controlling the lucrative grain trade. To that end, the first grain elevators on Goose Island were built in 1887 by the Chicago, Milwaukee, and St. Paul Railroad (of which Armour was an major investor) to hold grain brought into Chicago from its north/northwest hinterland.
See also: Commodities Markets; Railroads; Goose Island
Armour Elevator "B" Goose Island
In 1893, Armour commissioned the largest grain elevator ever built on Goose Island. He used the extra grain storage facility to break the speculative hold of his competitors and would do so again in 1897-98.
See also: Economic Geography; Commodities Markets
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