ILLINOIS

Situated in the center of the Midwestern prairie, on the edge of Lake Michigan, the state of Illinois was always in a good position to benefit from its own natural resources. It is bounded on the west by the Mississippi River, while the Ohio runs along its southern border. Good land and water routes helped the state grow from an undeveloped territory into a powerhouse of agriculture and industry. Most notable of the land routes were the numerous railway lines running through the state. Illinois cities and farms, as well as its service industries continuously fostered a diverse economy. This eventually placed the state high in per capita income nationwide, with Chicago as its shining star.

The first white people to exploit the resources of Illinois were French fur traders who explored Illinois rivers in the seventeenth century. Although the British controlled the Illinois territory after the Treaty of Paris (1763), they made no attempt to establish permanent settlements. The state of Virginia claimed Illinois from 1778 to 1784 but gave up its claim to the area when Illinois became part of the new Northwest Territory. The Treaty of Greenville in 1795 gave the United States the tract at the mouth of the Chicago River, which later became the site of Chicago. The Illinois Territory was created in 1809, and after the British were defeated in the War of 1812 (1812–14), Illinois formally became the twenty-first state in 1818.

After the final defeat of the Indians in the Black Hawk War of 1832 the Illinois prairie became open to settlement, especially by people from Kentucky. The term "land office business" certainly applied to Illinois during this time, as settlers, who were lured by cheap land prices, flocked into the new state. Farmers and entrepreneurs from the East found possibilities in the state's good soil and convenient water routes.

In the first part of the century, schemes to promote rapid economic development in the form of roads, canals, and railroads left the state in a debt so heavy that it would persist for 50 years. Yet, Illinois continued to grow rapidly, and northern and central Illinois were helped considerably when the short-lived Illinois and Michigan Canal opened in 1848. A network of railroads was built in the 1850s and allowed the state to prosper during the American Civil War (1861–65). It fostered continued growth after the war by providing easier routes to market for both farmers and manufacturers.

The early years of the industrial revolution helped both farm and city. The John Deere plow and McCormick reaper, both made in Illinois, revolutionized agriculture during the mid-nineteenth century and added to the increased prosperity of the state

The period after the American Civil War saw substantial economic growth, particularly in the city of Chicago. In the minds of its citizens, Illinois was soon divided into two parts: Chicago and "downstate." Chicago became the central city of the Midwest; its development was spurred by its proximity to Lake Michigan and the Chicago River, and by the railroads, which brought farm products to the city. The great Chicago Fire of 1871 temporarily halted the city's growth. But it was soon brought into even greater prominence by steel mills, banks, new buildings, and transportation networks. The crown jewel in the latter part of the nineteenth century was the building of the "White City"—the Columbian International Exposition of 1893. It showcased the technological achievements of a growing United States and highlighted the importance of the nation's second largest city at the time.

Foreign immigrants, so vital to the growth of the entire state, came at first from northern Europe and after 1890 from southern and eastern Europe. They developed prairie farms, small towns, and cities and eventually provided needed labor for Chicago industries. Chicago became a cradle of the labor movement; the Knights of Labor and the Chicago Federation of Labor, two of the earliest unions were originated in Chicago. The 1886 Haymarket riot and the 1894 Pullman Strike brought the labor problems of Illinois to national attention.

Most of Illinois prospered during the first 30 years of the twentieth century. The International Harvester Company became a major Chicago manufacturer of farm equipment. The Caterpillar Company, makers of earth-moving equipment, dominated Peoria. The Chicago steel industry, centered in Gary, Indiana, became second only to that of Pittsburgh. The state led the nation in food production, agricultural implement manufacture, and agricultural finance. World War I (1914–18) spurred economic growth in the state. War production demanded more the unskilled labor, which was again provided by European immigrants and also by African Americans coming from the South.

The pursuit of wealth preoccupied Illinois during the 1920s, highlighted by the violence and corruption surrounding the Prohibition era and the organized crime wave that accompanied it. The Great Depression affected Illinois as much as it did the rest of the nation. Farmers were the first to suffer; then industries began closing around 1930. Growth slowed drastically, and the Illinois coal industry suffered. The pro-business Republicans who had run the state since the 1850s suffered great losses in the 1932 election, as African Americans, white ethnic minorities, and factory workers responded to the economic hopes brought by Franklin D. Roosevelt's New Deal. The 1933 Chicago World's Fair (named "A Century of Progress") brought attention to Chicago and optimism to its citizens, despite depressed economic conditions. During World War II (1939–45) Illinois began to recover, helped largely by military contracts.

Prosperity reigned in Illinois during the 1950s. At that time the economy began its gradual shift from a manufacturing to a service economy. The negative effects of heavy industrialization began to appear as well. By the 1960s the state faced severe problems with air and water pollution, and urban decay. The Chicago stockyards closed in 1972. The yards had been a symbol of Chicago's preeminence in the meat-packing industry since 1865. A severe recession followed during the early 1980s, as industries like steel, machine tooling, and automobiles were facing increasing foreign competition and were forced to lay off workers. Many industries fled to the South, and by 1990 the unemployment rate in Illinois was 7.2 percent, in contrast to the national average of 5.2 percent. In 1992 the city of Chicago faced additional economic losses when water tunnels under the city ruptured. In 1993 flooding of the Mississippi and Illinois rivers caused 1.5 billion dollars of damage in western Illinois.

In the 1990s Illinois regained economic strength, ranking seventh in per capita income among all the states in 1996. It prospered in the service sector, the metals industry, and food processing, as well as in the manufacture of industrial and farm equipment, electric equipment, appliances, electronic components, and printing equipment. The 1989 Technology Advancement and Development Act aided companies that develop advanced technologies for commercial use. Labor unions in Illinois declined to little more than 20 percent of workers statewide, but continued to be strong in the Chicago area. Chicago remained the Great Lakes' busiest port and the leading wholesaling center of the Midwest, as well as Illinois's industrial center. The city was followed by Rockford, the East St. Louis area, Rock Island and Moline, and Peoria. The tourism industry also became an important economic boon to the state, with Chicago as a major tourist destination.

Led by the central and northern corn-belt counties, Illinois was one of the top five producers of agricultural products in the late 1990s. The total number of farms, however, declined significantly after World War II. Mining is also an important industry in the state. Illinois continued producing significant amounts of non-fuel minerals, including industrial sand and gravel, cement, and clays. The state was the only producer in the nation of fluorspar in 1995.

ILLINOIS

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