Illinois, the composite economy

The same flat and fertile landscape that welcomed pioneer settlers in the early 1800s became the foundation of a thriving and diversified state economy. Land, water, minerals, and capital were the available resources for a developing economy of workers and entrepreneurs. Illinois quickly and consistently resembled national economic trends through its distinct achievements in agriculture, manufacturing, mining, commerce, transportation, and finance. In modern times the state's diverse output has closely mimicked the national gross product. It also has experienced the familiar stresses of abundance versus poverty, management versus labor, and goods versus services.

Farming was the principal lure for most white settlers, and it has remained an economic mainstay ever since. Enthusiasts marveled at the rich topsoil, which was "ten feet deep. . . fine as buckwheat flour. . . black as gunpowder. "(Walter Havighurst, Land of Promise: The Story of the Northwest Territory, New York, 1946.) The long growing season and generous rainfall were favorable for cash crops like corn and wheat as well as livestock. Even with primitive technology farmers could support their families and also market a crop.

Rapid prairie settlement in the mid-nineteenth century was accomplished by the advent of large landholders. In eight counties of the Grand Prairie of east central Illinois sixteen landlords accumulated a total of 140,000 acres of fertile land. William Scully acquired enormous tracts in central Illinois as part of the quarter-million acres he eventually owned throughout the Middle West and Louisiana. Such concentrations of land ownership provoked some resistance and made the prototypical yeoman farmer of American history more myth than reality in Illinois. By 1880 nearly one-third of the state's farms were operated by tenants rather than owners, and the figure passed one-half early the next century. Moreover, tenancy was disproportionately widespread on the better lands of central and northern Illinois.

In modern times as in the past, Illinois farming has seen both boom and bust. The bonanza from new commodities like soybeans or advanced technology has also brought the ills of depressed prices and excess tillage. Today three-quarters of the state is still farmland, and three-quarters of that is considered prime soil. Annual production totals for hogs, corn, and soybeans invariably compete for highest among all states. Illinois commodity exports are a multibillion-dollar annual business. Yet serious problems persist, including the enormous waste from unregulated development and topsoil erosion. Man is rapidly depleting the bounty that nature and climate gave Illinois. It has been estimated that Illinois farmers send twice as much topsoil down the Mississippi River as they do corn. Every year an average 100,000 acres of farmland is paved, platted or otherwise removed from agricultural production. Farming still is vital to the Illinois economy, but its future is precarious.

Natural wealth lay beneath the Prairie State surface as well as on it. Lead mining was a major extractive industry in some portions of the young state. Of greater ultimate value were the enormous coal deposits and lesser oil fields, the former lying under nearly two-thirds of the state's area. Coal mining steadily grew in the late nineteenth century, with the principal effort gradually shifting from the relatively thin veins in northern counties to the larger and better-grade deposits in southern Illinois. By 1916 the state was second only to Pennsylvania in annual coal production but slipped thereafter despite increasing output. The pattern was similar with oil-well production, which early in the twentieth century ranked Illinois third among all states.

Coal mining proved a mixed blessing. Fluctuating prices and heightened competition made it volatile for both investment and employment purposes. Underground mining posed constant dangers; between 1900 and 1930 the average annual death toll from mine accidents was nearly two hundred. Strip mining was much simpler and safer, but it left scars on the landscape and destruction of land and surface water. Mining technology and economic forces shifted ownership from individuals to corporations, with resulting labor unrest. In recent years the major problem has been environmental, as Illinois coal's high sulphur content has weakened her competitive position. Today the state still possesses a huge bituminous coal reserve and manages to continue as a leader in production, but its future in this area is as problematic as it is in agriculture. The same is true for oil- and gas-well production, which peaked in the 1930s, plummeted after World War II, and then experienced a brief resurgence during the energy price escalation of the late 1970s.

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Manufacturing developed in Illinois much as it did in the rest of the United States. Modest activity in the first half of the nineteenth century largely consisted of mills and other facilities designed to meet local needs. After the Civil War the necessary components merged for a state industrial revolution. Swelling demand, a rail and water network, skilled and unskilled labor, and capital resources were coupled with inventive and entrepreneurial energies to nourish the boom. By 1880 the annual value of manufacturing output exceeded that for agriculture, making Illinois the industrial leader among states west of the Alleghenies. Chicago boasted nearly three-quarters of the state's total production.

Principal industries at the turn of the century included steel-making, farm machinery, meat-packing, and distilling. In each of these industries and others there were powerful organizers and promoters who built personal fortunes, corporate empires, and legendary reputations. Men like Elbert Gary, Cyrus McCormick, John Deere, Gustavus Swift, Phillip Armour, and George Pullman exemplified the era's robber baron image and rapid growth. A natural corollary to industrial progress was the rise of Chicago as a financial center. Commercial and investment banking prospered to make Chicago's LaSalle Street second only to Wall Street in the nation's financial system. In later decades new industries like printing, automotive manufacturing, and electronics helped sustain the state's ranking position.

Through the first three-quarters of the twentieth century Illinois manufacturing closely resembled national patterns in relative size, distribution by sector, and economic health. Its diversification was remarkably similar to that for the United States in general, and its changing fortunes echoed larger trends. In recent years this relationship has taken a melancholy turn, as plant closings and layoffs in Illinois and other "rust belt" states have foretold a national industrial downturn.

Chicago matched its regional hegemony in manufacturing and finance with similar leadership in wholesaling and retailing. Marshall Field took little time after arriving at midcentury to gain control of a profitable dry goods establishment. His merchandising skills and modern sales ideas helped create a new commercial institution, the department store. Following closely on Field's success were pioneering commercial ventures. Both Montgomery Ward and Richard Sears selected Chicago in the 1880s as headquarters for their respective visions of mail-order retailing. Central location and superior transportation service in all directions were decisive reasons for locating their companies in Illinois.

Shifting economic forces and rapid industrialization proved fertile ground for worker unrest. On the farms and in the factories and stores of Illinois, low earnings and hard times generated organized protest. During the latter decades of the nineteenth century the Granger, Greenback, Anti-Monopoly and Populist movements found vocal but scattered support in the Prairie State. In the early 1900s socialist groups organized and fielded electoral candidates in state and municipal contests. The Industrial Workers of the World was founded and headquartered in Chicago.

Labor upheaval became a familiar counterpoint to the state's industrial growth. Several Illinois cities experienced outbreaks of the nationwide railroad strikes of 1877. Wage reductions and a lockout at Chicago's McCormick harvester plant in 1886 led to demonstrations and the Haymarket Square bombing and trials. A few years later railway union organizer Eugene Debs and others were jailed for their abortive effort to strike and boycott the Pullman Palace Car Company. Throughout these and later years Illinois coal mines were the setting for periodic confrontations. United Mine Workers leaders John Walker and John L. Lewis both actively organized state miners. Earlier outbreaks between strikers and strikebreakers were mild compared with the protracted "mine wars" of the 1920s and 1930s, when rival unions fought each other as well as the owners.

With so many different components, the Illinois economy is practically unmatched in its diversification. Long a leader in agriculture, mining, manufacturing, finance, and commerce, it also has been conspicuous in the annals of worker unrest. Perhaps that explains why its performance so closely corresponds to national data and trends. A comparison of the Illinois and national gross products reveals close correlation in a number of key areas. The most striking parallels are in labor force occupations, the composition of gross product, and the various sectors within manufacturing. Thus there are close similarities between U.S. and Illinois occupational percentages in manufacturing, trade, finance, transportation, mining, agriculture, and government. Also comparable are related social characteristics, such as level of education, race, urban concentration, and wage-earning versus salaried employees.

Illinois therefore has not only a composite economy but also one that probably is more representative of the nation as a whole than any other state. Its historic growth and achievement are a microcosm of America's economic development. Its gross state product of approximately $100 billion makes it the wealthiest of the midwestern states. As in the United States generally, extremes of wealth and poverty coexist in Illinois. Certain Chicago suburbs like Wilmette and Northbrook are among the wealthiest cities in the country, as measured by median family income. Among congressional districts nationwide those with the lowest and second lowest poverty rates both sit in Illinois. On the other hand, the fifth and eighth poorest districts are also there. Extreme poverty exists in scattered areas of southern Illinois and in parts of Chicago and East St. Louis.

The historic correlation between the Illinois and national economies makes the Prairie State both a useful indicator and a troublesome augury. In the past decade the state has lost 200,000 industrial jobs to automation, labor strife, and foreign competition. Efforts have been only modestly successful to incubate new electronics firms and to exploit the considerable assets and expertise at the Fermi and Argonne laboratories. Similar ills in mining and agriculture have weakened the state's economic stature. Organized labor is in disarray. The economic future of Illinois — and by inference that of the nation as well — appears less dynamic and proud than her history. □

Cullom Davis is professor of history and director of the Oral History Office at Sangamon State University.

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