Armour’s Augmented Ambitions
It is a known fact amongst history aficionados that before Gary Works was constructed, Armour’s Chicago Union Stock Yards (USY) threatened to move to its current location first. This occurred nearly a decade before Gary Works was announced. A portion of USY’s plans was merged into the plans for Gary Works, most notably Gary Harbor.
Many land speculators, real estate moguls, investors, business minds, and ordinary people planning to strike rich were left in the dust when it was determined that Armour was bluffing. The fiasco was a ploy to entice the State of Illinois and the City of Chicago to cut their taxes. As a result, we’re talking about thousands of people suddenly left with worthless, nearly uninhabitable, and forsaken land.
Without much evidence, I have long charged that the construction of Gary Works was more than Illinois Steel just wanting to expand. However, Gary Works was a game, a manufactured strategy to recoup the losses of those who sunk their fortunes into the Northwest Indiana region with hopes of stockyards, railyards, and related industries that were never built.
Alternative Intentions
A brand new 63.78-mile belt railroad was planned by the Chicago Union Transfer Company (CUTC). CUTC was owned and operated by USY and later would become a part of the Indiana Harbor Belt Railroad in 1907.
The rumors excited the original stock yard speculators. They hoped the belt line would run through or close to the 4,000 acres of worthless north Lake County parcels bought by the Armour investors.
But instead, a map showed CUTC considered building their belt line through the Calumet/Tolleston/Millers Junction area, crossing every railroad that entered Chicago in a gigantic crescent shape.
As the plans were just that — dreams — it was hoped that CUTC could be convinced to swing their Indiana terminus a mile east or west in either direction to help whichever speculators had the most to benefit.
The Grand Calumet River area where Gary Works sits today is where original plans placed CUTC’s Indiana terminus. The Indiana portion of the belt railroad plans from 1893 looked similar to the layout built in 1905. We’ll get to that later.
It was also hoped that this belt railroad would induce the construction of a harbor, which, along with the railroad, would boost property values and afford landowners the chance to profit.
“The harbor on the Tolleston property, easily to be formed, will enhance the value of the site, although not this but the new belt line will be the most important cause of the hoped-for developments.” — The Inner Ocean, 9/4/1892
It is clear from this passage that though the Armour deal did not go through, the fact that so many essential people held stock in the worthless property south of Lake Michigan nearly predetermined that area’s success in the future. All that was needed was for the right ingredients to come together.
“Everything comes to him who waits. During the three years that Lake County, Indiana, has been before the public as a region for which much had been promised and practically nothing outside of the old established industries performed, those who faith was proved by purchase have passed through a weary probationary period. One after another, projects for the improvement of the district have been announced, only, in most instances, to be dropped later on. Still the natural advantages of the location remained to tempt hope and keep distrust remote.” The Inner Ocean, 9/4/1892
This article is the first one I’ve found that shows Armour’s USY investors were looking for ways to recoup their losses. They weren’t just from Chicago. They were from all over the country, especially on the east coast. CUTC was a way to fulfill that goal. However, though Armour owned CUTC, it was not obligated to any land owner in the Calumet/Tolleston/Miller region.
This is where the Knickerbocker Ice Company enters the picture.
The Trojan Horse
The Dune Park Branch’s construction was funded by Knickerbocker Ice Company, which had sand mining and ice carving operations in Dune Park, Indiana. It was stated in the press that Knickerbocker wanted its own private railroad to deliver its goods to the local railroad yards faster.
So, in 1905, the same year Elbert Gary announced the construction of his new mill in Lake County, Knickerbocker laid out the Dune Park Branch from CP-502 in East Chicago to Dune Park.
However, it could be possible that those in charge of its construction were involved with or inspired by the 1893 plans drawn up for CUTC’s Indiana terminus. Unfortunately, I have no evidence to support this.
The thing about it is this. The branch ran through the property it knew was owned by the Armour speculators.
Additionally, Knickerbocker planned to build a harbor at Wolf Lake in 1905 to rival the planned Indiana Harbor and Ship Canal being created in East Chicago. A. F. Knotts was on the committee to inspect Wolf Lake for this purpose way back in 1895. We’ll come back to Knotts.
It was also rumored Knickerbocker wanted to corner the entire sand market from Dune Park to Michigan City.
At this point, I’m not entirely sure who was involved with Knickerbocker’s business. It was a New York-based company with a lot of moving parts. They certainly had offices in Chicago. Perhaps they had investors who were also involved with the busted Armour deal. Yet, whoever they were, they placed themselves in a position to profit from the new steel mill built in Gary.
Chess Not Checkers
A year ago, I wrote a column about Elbert H. Gary. Inside it, I detail how Milwaukee and Duluth were the first cities chosen for Elbert’s steel expansion. However, some essential players involved led to the City of Gary coming to be.
Industrious former Hammond Mayor Armanis F. Knotts worked as a lawyer for Illinois Steel. He, his brother Thomas, and others secretly got Gary’s ear and convinced him to augment his ambitions in Minnesota in exchange for Lake County, Indiana. Elbert had to be significantly convinced.
In 1918, his remarks leaked from a private speech given in Duluth.
“As the Region focused on the trial of Alonzo Sargent, the sleepy engineer who caused the famous Hagenbeck-Wallace Circus wreck, an article slipped by that detailed Judge Gary’s disparagement for the city of Gary and Indiana generally.
“Why did the Steel Corporation build a plant on a sandy desert along the southern shores of Lake Michigan,” Judge Gary asked. “Because of a love for Indiana? Oh no, none of us have any particular interest in that state. It was purely a business proposition. We would much rather have spent the money expended in Gary right here in Duluth. Our friends are here.” — The Northwest Indiana Times.
The influence of Knotts on Gary’s decision to build in Indiana is a remarkable feat. Yet there are some things to think about.
Firstly, Knotts was in the Region when Armour executed its relocation ploy in 1893. He would have personally witnessed these events and undoubtedly had the ears of many influential people who sank money into property in what would later become Gary, Indiana.
These people were rich, and Knotts undoubtedly committed to taking advantage of the money bomb sitting next door to Hammond. If nothing else, A. F. Knotts was a bonified hustler.
According to The Journal of the Illinois State Historical Society, Knotts secretly bought up most of the initial Armour property needed to construct the mill and Gary’s first subdivision (with $7.2 million cash).
How was this accomplished? He had to be in league with the most wealthy and influential. Informing them that he convinced Elbert Gary to expand on their property undoubtedly helped. They kept it secret, and it paid off a hundredfold.
Some were members of the Calumet Heights Gun Club, which had a private hunting lodge encampment on property that would later become Gary Works’ coke plant. The lodge became the first headquarters for surveyors, engineers, and architects.
Next, Knickerbocker’s Dune Park Branch also ran through the Club property. Again, this would not have happened unless it had explicit permission.
Finally, Knotts was involved with Knickerbocker’s failed Wolk Lake harbor plan, as mentioned previously. He earned the nickname “Harbor Knotts” due to his efforts. Knickerbocker was still trying to do this harbor thing in 1905. Simultaneously, it initiated a railroad construction project (the Dune Park Branch) they knew was doomed to be relocated due to Gary Works.
Arguably, Armour relocating to Indiana would have been a more significant economic development than we ended up with. This is not to discount the history made with Gary Works and its municipal child. Undoubtedly, the new company town was prosperous, with nearly everyone recouping their 1893 investments and more. Indiana would have benefitted either way.
It’s daunting and exciting trying to tie each of these pieces together.