The Illinois & Michigan Canal: How it Shaped and Grew Chicago, Illinois

Chicago, Illinois is strategically located in North America on the western tip of Lake Michigan and has utilized its geography to become a hub of transportation and trade throughout the Midwestern United States. Chicago was organized and founded as a town in 1833 and incorporated as a city on March 4, 1837. Due to the city’s proximity to Lake Michigan, its economy relied on the ease and frequency of transportation and trade through the use of waterways. The Illinois & Michigan Canal (hereafter referred to as the I&M Canal) took advantage of the various waterways surrounding and flowing through Chicago to further expand trade and transportation. The I&M Canal’s expansion and connection of the Chicago Portage and other bodies of water established a new means of economic gain, national importance, and a new center of trade in the Midwest.

The Development of the Illinois & Michigan Canal

The transition from a town to a city was influenced by the prospect of the I&M Canal. The town’s “geographical relationship with various waterways: The Des Plaines River, Mud Lake, Chicago River and Lake Michigan, [also known as the Chicago Portage]” established an interest in further development of the area (The Chicago Portage – Historical Portage). The thought of a canal was first introduced in 1637 by French explorer Louis Jolliet and Father Jacques Marquette.

In the 17th century the French were searching for trade routes along North America. Jolliet and Father Marquette were “commissioned … to search for what the Indians referred to as the Great River, [the Chicago Portage] that lay in west”; the search for the Great River was not only vital for trade routes but also for the expansion of the French Empire in North America (The Chicago Portage – Historical Portage). Once Jolliet and Marquette found the Chicago Portage, Jolliet recognized the possibility of making travel easier via the construction of a canal which would cut “through a half a league of prairie from the foot of Lake Michigan to the Des Plainer River” (Belden, 9). As an explorer, Jolliet understood the importance of reducing traveling time and creating new networks for involvement with different markets. The French were not the only ones to concern themselves with the notion of constructing a canal, however; the earliest American proposals for a canal were publicized in 1810, almost two centuries after the Jolliet’s idea.

Whereas Jolliet and the French were concerned with the expansion of the French empire, Secretary Gallatin was concerned with making transportation easier and cheaper. Gallatin proposed his plan “for an improved means of communication between the western waters and the Atlantic seaboard” as a means to make transportation less costly (Putnam, pp. 4). However, Gallatin did not take into account the use of a canal in Chicago which would connect various markets. The idea for the construction of a canal was finally proposed by Peter B. Porter in 1810. Like the French in 1637, Porter realized the importance of a canal; he wanted to connect “the Great Lakes and the Mississippi” to bolster trade and influence economic growth (Putnam, pp.4). Despite his plan, Porter could not garner any support from the government.

Finally, in 1822 Congress formalized a plan for a canal. Congress’ support for a canal stemmed from concerns involving transportation. Congress wanted “adequate facilities and cheap transportation between the interior and seaboard markets” to strengthen economic gain throughout the Midwestern market and allow for a stronger travel route (Putnam, pp.1). Congress’ decision to construct the I&M Canal was also influenced by various canal projects like the Eerie Canal in 1817.

Support and The Lack of Public Demand for the I&M Canal

            For nearly two centuries there were various plans for a canal that could not garner enough support for construction. In 1822, Congress enacted a plan to ensure the construction of the I&M Canal after they realized how vital canals were to the economic stability of the nation. The military also had interest in the construction of the I&M Canal after the War of 1812: a canal would make it easier to transport and procure goods in the Northern frontier. Economically and militarily, the I&M Canal seemed like a great infrastructure project; however, there was no public demand for it.

Unlike the Eerie Canal, which began construction in 1817, there was no public demand for the I&M Canal. The public deemed investment in infrastructure unnecessary. Instead, support for the canal came primarily from government and military officials. The lack of demand was also due to the fact that there were many canals already built throughout the 19th century. Despite the lack of public demand, Congress understood the tremendous advantages associated with building “the first complete water route from the east coast to the Gulf of Mexico” and could not wait on the public’s interest to begin construction (Illinois Department of Natural Resources, Illinois and Michigan Canal).

The Outcome

            Although Congress authorized the I&M Canal in 1822, construction did not begin until 1836. The fourteen-year delay occurred because of difficulties with raising capital for the construction. In order to solve the financial issue, “the canal commissioners…[raised] sufficient money by selling land from a second land grant”, which included lands north of the current boundaries of the town (Illinois and Michigan Canal). However, the construction had to be ended because of a national depression known as the Panic of 1837.

The Panic of 1837 was instigated by President Andrew Jackson when he enacted “Specie Circular of 1846 [mandating] payment for government land in gold or silver”, which depreciated the value of paper money and halted commerce (1837: The Hard Times). The Panic of 1837 affected the construction of numerous infrastructure projects and domestic and international trade. Because of the halts in construction, the I&M Canal was not completed until 1848.  Overall, the project cost 6.5 million dollars, but once the I&M Canal was open it shifted the dynamic of the Midwest.

Between 1822 and 1848, the development of the I&M Canal attracted many businesses and people. With new investments, a greater population, and larger physical boundaries, Chicago became the most important trade hub of the Midwestern United States. Prior to the I&M Canal, St. Louis was the center of trade in the Midwest, but within a year of the I&M Canal’s completion “trade in St. Louis declined by 316,625 bushels of corn and 237, 000 bushels of wheat” (The Illinois and Michigan Canal Link Great Lakes, Mississippi River).


In his essay “Evolution and Transformation: The American Industrial Metropolis, 1840-1940”, Sam Bass Warner argues that the transformation of American cities was possible because of the Industrial Revolution. Warner identified 1840 as the beginning of a new phase of “the American industrial metropolis”, one in which machinery helped advance people’s activities and routines” (56). What Warner failed to recognize within the century between 1840 and 1940 was the impact of previous technologies that were still active in the early stages of the Industrial Revolution.

Although the opening of the I&M Canal coincided with the implementation of newer technologies such as railroads, the canal remained vital to Chicago. Chicago “owes its origins as a commercial center to its advantageous location on maritime trade lanes” (K. Ascher, 68) because it was founded via the Chicago Portage. With “the introduction and spread of several new technologies”, investment associated with the construction of the I&M Canal aided in the economic growth of Chicago (Wyly et. al, 11).

Chicago’s development was very much tied to the geographical advantages associated with its various waterways. In an article by William Cronon, a resident of Chicago made the assertion that “without the [country] the [city] could not exist”; the resident implying that the countryside and its involvement in the grain business made it feasible for the city to thrive (17). However, the country was a product of the city in the endeavor to create the I&M Canal, the land which eventually became country was part of the land grant. Cronon goes on to evaluate the importance of railroads in the grain business yet fails to focus on the advances made in trade because of the canal.

The I&M Canal achieved Congress’ plan from 1822 by increasing the ease and frequency of trade and transportation. However, the canals potential was not fully realized because of the shift in focus from canals to railroads. The railroad competed within the same markets and attracted financial investments away from the canal. Chicago’s growth as a national and international city relied heavily on the construction and presence of the I&M Canal. The city’s shift in the Midwest economy, its physical and political growth were all influenced by the investment in infrastructure.



Works Referenced

“1837: The Hard Times.” Bubbles, Panics & Crashes – Historical Collections – Harvard     Business School. Web. 16 Oct. 2016.

“Illinois and Michigan Canal.” Illinois Department of Natural Resources. Web. 11 Sept.     2016

“Illinois and Michigan Canal.” Encyclopedia of Chicago: Illinois and Michigan Canal. Web. 16       Oct. 2016.

“The Chicago Portage – Historical Synopsis | Chicago Portage.” The Chicago Portage – Historical   Synopsis | Chicago Portage. Web. 16 Oct. 2016.

Young, David. “The Illinois and Michigan Canal Link Great Lakes, Mississippi River.”, 2008. Web. 16 Oct. 2016

Belden, David A. Illinois and Michigan Canal. Charleston: Arcadia, 2012. Print.

Bridge and Watson, The Blackwell City Reader (2d edition, Wiley-Blackwell, 2010), Cronon, “Nature’s Metropolis,” pp 17-31

  1. Ascher, The Works – Anatomy of A City (Penguin Books, 2007), p68

LeGates and Stout, The City Reader (5th edition, Routledge, 2011), Warner, “… The            American Industrial Metropolis, 1840-1940,” pp. 55-64

Putnam, James William. The Illinois and Michigan Canal: A Study in Economic History.    Chicago: U of Chicago, 1918. Print.

Strom and Mollenkopf, The Urban Politics Reader (1st edition, Routledge, 2007), Wylt et. al.,

“A Top 10 List of Things to Know About American Cities,” pp. ­­­­­9-18.


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