Potter Palmer is responsible for Chicago's State Street as a business district.

Potter Palmer (1826-1902)

Potter Palmer was born on May 20, 1826, in Albany County, New York. Palmer began his interest in retail while working as a manager in a dry-goods store in Durham, New York. While employed, Potter paid close attention to the ethics of business. By 1848, 22-year-old Palmer opened his own dry-goods store in Lockport, New York. However, Palmer had his eye set on the west.

In 1852, Palmer's ambition directed him to Chicago. With the small amount of money he raised from his business in New York, along with a small family loan,  totaling $5,000 in gold and banknotes, he opened a retail dry goods store, P. Palmer & Company, at 137 Lake Street, and he soon expanded into an adjoining store. In 1857, Palmer added a wholesale department to 112, 114, and 116 Lake Street, the establishment just vacated by his long-time friend, Marshall Field, and his company, Field, Leiter & Co. 

Here, with increased room and added facilities, his business rapidly increased until within twelve years after beginning here with a capital of $5,000, the energy, perseverance, and fair dealing of Potter Palmer had made him the largest dry goods house in Chicago.

Palmer, at 38, was a millionaire many times over, not just from his dry goods business but also from well-thought-out investments in real estate. Unfortunately, his hard-driven lifestyle had taken a toll on his health, and his doctor urged him to slow down. Instead, he'd been buying up real estate at a fast pace.

He envisioned a new retail district, convenient to the railroad depots and farther removed from the foul-smelling Chicago River. The perfect location, he believed, was along State Street. State Street was an unlikely spot to build new businesses in most people's eyes, and many of his contemporaries openly mocked his grand plan. Although it was a main north-south thoroughfare, it was a slum district lined with cheap boardinghouses, butcher shops, saloons, and assorted shanties. The narrow street was muddy and rutted, and the only streetcar line was a "bobtail" car pulled by horses along a single rail. It frequently jumped the track in the mud, leaving passengers to wade through the muck to their destination.

Chicago's first one-horse-drawn streetcar ran along State Street from Randolph Street to 12th Street (today's Roosevelt Road) in 1859. The streetcar was called a Bobtail because it had no rear platform.

While property on Lak Street, the "street of merchants," was selling for up to $2,000 a linear foot for frontage, State Street land could be had for a song. The most expensive, at the corner of State and Madison, ran about $500 a front foot in 1867, but farther south on State Street, some properties sold for as little as $60 per front foot.

Palmer was not swayed by his critics. He was convinced that Lake Street was doomed to fail. Wedged in between the railroad and the sewage-filled river, it had no room to grow. The new Illinois Central Railroad and streetcar lines all converged at State Street, making it a convenient place to reach from any metropolis area. It only needed someone with a vision to make it happen, and Potter Palmer was nothing less than a visionary. 

Great Central Station (aka Great Central Depot) was an intercity train station in downtown Chicago, owned by the Illinois Central Railroad. It opened in 1856 at South Water Street (now Wacker Drive) and Michigan Avenue.

So Palmer bought every lot he could until he held title to most of the frontage property on State Street between Lake Street on the north and Quincy Avenue to the south, a distance of three-quarters of a mile. His first move was to tear down or set back each building he owned and persuade his remaining neighbors to do the same so that the once-narrow street was now over 100 feet wide. State Street now had aspirations to become a magnificent boulevard instead of a cramped and grimy country lane.

Next, Palmer tore down all the shacks on the south end of his properties and began construction on a majestic hotel, at the corner of State and Quincy, as a wedding gift to his new bride, Bertha Honore. The hotel opened its doors to the public on September 26, 1871, only to burn to the ground thirteen days later in the Great Chicago Fire on October 8, 1871. Palmer, undeterred, immediately started construction on a new and even grander hotel, this time built of brick and iron and later advertised as "The World's Only Fireproof Hotel."

While his first hotel was still being built to the south, Palmer began construction on a huge new retail palace on the north end of his property holdings, at the northeast corner of State and Washington Streets. The limestone and marble building towered six stories above the street, and the facade featured dramatic white Corinthian columns reaching toward the sky.

"Palmer's Place" first tenant, Field, Leiter & Company's, opened in 1868. This store burned in the Great Chicago Fire of 1871. Note the "Vault Lights" in the sidewalks around the building.

By this point, Palmer had spent over $2 million ($38,113,000 today) funding his dream of a new business district on State Street. All he needed were the proper tenants, and he knew exactly where to look for them.

When Palmer approached Field and Leiter about the grand store he was building, they were more than willing to listen. Palmer never steered them wrong, and besides, the store on Lake Street was uncomfortably cramped and confining. Worse yet, despite their best efforts to maintain high standards, Lake Street itself was growing more crowded and dirty by the day. Although Palmer was asking a veritable fortune for rent -- $50,000 per year ($953,000 today) -- the chance to escape the ailing business district and forge new ground held an undeniable appeal. After a short deliberation, Field, Leiter & Co. agreed to lead the pack and move to "Palmer's Place." The State Street store grand opening was scheduled for Monday, October 12, 1868. Field, Leiter & Co. decided to keep their Lake Street store open until the last possible moment.

Additional Reading:
Raising Chicago Streets Out of the Mud in 1858.

Marshall "Field, Leiter & Company" Department Store Fire of November 14, 1877.

Lake Shore Drive's origins date back to Potter Palmer, who coerced the City of Chicago to build the street adjacent to his lakefront property in 1882.

Compiled by Dr. Neil Gale, Ph.D.

Illinois Central Railroad Company vs. the State of Illinois. (1892)

The Supreme Court decision in Illinois Central Railroad v. Illinois, 146 U.S. 387 (1892), reaffirmed that each state in its sovereign capacity holds permanent title to all submerged lands within its borders and holds these lands in public trust. This is a foundational case for the public trust doctrine. The Supreme Court held a four to three split decision that the State of Illinois did not possess the authority to grant fee title to submerged lands held in the public trust as navigable waters.

President Abraham Lincoln's funeral train seen as it slowly moves along Chicago's lakefront train trestle in 1865.

Background
In the mid-19th century, Chicago was growing rapidly and was becoming increasingly interested in creating an outer harbor at the junction of Lake Michigan and the Chicago River because local currents often resulted in either the formation of sandbars or areas of erosion, increasing congestion and complicating navigation.

Then, in 1851, the Illinois Central Railroad Company made an offer to the City of Chicago that in exchange for allowing tracks to be laid along the lakefront, the railroad company would pay for and build a breakwater to protect the harbor. Illinois then officially granted 3 million acres of shoreline along Lake Michigan to create a north-south railroad under the state charter titled "An Act to Incorporate the Illinois Central Railroad Company." This charter gave Illinois Central the authority to "enter upon and take possession of, and use all and singular any lands, streams, and materials of every kind."

Looking southwest at the Chicago lakefront in the late 1850s as seen from the Illinois Central Railroad Station near Randolph Street. Note the railroad trestle is between Lake Michigan and the basin which is lined with railcars on its west side. Further west is Michigan Boulevard.

To further confirm their rights to this area, the railroad lobbied the state, and in 1869, the State of Illinois passed the Lake Front Act, granting Illinois Central "appropriation, occupancy, use and control" of a large portion of the harbor. The legislature’s goal in passing the act was to bring a new train depot, an outer harbor, and better parks to the residents of Chicago. The portion of land stretched from West Randolph Street south to Twelfth Street (Roosevelt Road), and from South Michigan Avenue east into Lake Michigan.

However, due to political controversy and poor public opinion of the railroad company, the legislature repealed the Lake Front Act in 1873. Both before and after the repeal, Illinois Central continued to construct tracks, piers, and other facilities along the lakefront. This construction also included filling in several hundred feet into Lake Michigan to provide land for these new facilities.

On the morning of May 1st, 1865, the Lincoln Funeral Train arrived in Chicago across the Lake Michigan trestle. It was operated as a Michigan Central train, originating in Michigan City and using Illinois Central trackage rights between Kensington Junction and downtown Chicago.

On March 1, 1883, the Illinois Attorney General filed suit against Illinois Central in order to stop construction on the land known as Lake Park.

Procedural history
In 1883, Illinois filed suit in state court against the Illinois Central Railroad Company, asking the court to determine who possessed title to submerged lands under Lake Michigan adjacent to the Chicago shoreline. Illinois also sought a court order to remove structures the railroad company had constructed over the lakebed, as well as an injunction against Illinois Central continuing this construction. Upon motion, the case was removed to the Federal Circuit Court for the Northern District of Illinois. Justice Harlan, then a circuit court judge, ruled that the state held title to the submerged lands, and therefore had the right to revoke the license granted to Illinois Central in the Act, which Illinois Central had contested. This decision also established that the City of Chicago held title to the land of Lake Park (present-day Grant Park & Millennium Park). Illinois Central appealed to the Supreme Court.

Parties
The petitioners were Illinois Central Railroad Company, a corporation created by an act of the Illinois State legislature and the city of Chicago, which was added as a party at trial because of its interest in the case. The respondent was the state of Illinois.

Issues

1. Whether the state of Illinois possessed the authority to grant title to its lands submerged by navigable waters.
2. Whether Illinois Central Railroad Company acquired riparian rights to the lake bed immediately adjacent to the lakefront property to which it possessed title.

Arguments
Illinois Central’s arguments
Illinois Central Railroad asserted three arguments in support of their claim on a portion of the lakebed under Lake Michigan. First, Illinois Central argued it had been granted by the state and by city ordinance a 200-foot wide corridor into the lake to construct a raised railway track, pier, and warehouses. Second, Illinois Central argued that they had acquired riparian rights by virtue of their ownership of lands surrounding the lake. Third, the railroad company argued they had received title to a bounded parcel of submerged lakebed from the State of Illinois in 1869.

State of Illinois’s argument
In seeking to enjoin the railroad, the state claimed "title to the bed of Lake Michigan, and exclusive right to develop and improve the harbor of Chicago by the construction of docks, wharves, piers, and other improvements..."

Decision
Majority Opinion of the Court
Writing for the majority, Justice Field affirmed the lower court’s holding that the state held title to the lakebed. Field found that Illinois lacked the authority to grant title to submerged lands held in the public trust with two exceptions – for grants not impairing the public interest and grants that actually improved the public trust. But neither exception was found to apply in this case and therefore the railroad did not possess title.

Justice Field expressed the doctrine of public trust as follows:

"It is the settled law of this country that the ownership of and dominion and sovereignty over lands covered by tidewaters, within the limits of the several states, belong to the respective states within which they are found, with the consequent right to use or dispose of any portion thereof, when that can be done without substantial impairment of the interest of the public in the waters, and subject always to the paramount right of congress to control their navigation so far as may be necessary for the regulation of commerce with foreign nations and among the states"

Justice Field determined that the public trust doctrine applies to the Great Lakes, despite the fact that they are not subject to the ebb and flow of the tides. Initially, the United States adopted English Common law which limited the definition of navigable waters to those that were subject to the ebb and flow of the tides. In the United States, the tidal requirement was removed because many rivers can be navigated for great distances by large commercial vessels. Great Lakes, while not subject to the tides, are the conduit of a great deal of transnational and interstate commerce, and it was this value the common law sought to protect in the public trust doctrine. The public trust doctrine limits private property rights to lands submerged by navigable waters. The Great Lakes are owned in common to be preserved for the common good, and no private encroachment is allowed.

Justice Field argued that the 1869 grant Illinois made to Illinois Central Railroad was merely a grant of the right to lay track, not a transfer of title to a portion of the lakebed. The grant was expressly limited to this purpose and is particularly limited the transfer of a right of way across the lake so as not to interrupt the navigation of streams.

Justice Field agreed with Illinois Central that title to land bordering navigable waters carries with it the right to access these waters and to develop a pier for personal or public use. However, this right extends only to the "navigable point" of the water. Since no evidence had been presented indicating that the railroad’s pier and docks extended that far, Justice Field remanded this particular issue back to the lower court.

The 1869 act establishing the Illinois Central Railroad Company, granted the company title to a section of the submerged lakebed of Lake Michigan. The state legislature later repealed this piece of legislation. Justice Field posed the question of whether the legislature was authorized to transfer title to the submerged lake bed in the first place. It is up to courts to determine on a case-by-case basis whether a state legislature’s transfer of rights to submerged lands sufficiently protects the public interest.

In this case, Illinois Central was granted unrestricted rights to an enormous, 1,000-acre section of submerged land, which occupied the entire aquatic area bordering the Chicago harbor. Justice Field found the state can never permanently transfer authority over these submerged lands, but only grant revocable permissions to them. Therefore, the Illinois state legislature’s original grant had no effect on the state of Illinois’s ultimate authority over the submerged land.

Justice Shiras' Dissenting Opinion
Justice Shiras agreed that ownership of state lands extends to those lands submerged under its navigable waters; however, Shiras argued that the grant of the submerged lands by the state legislature functioned like any land transfer contract and effectively transferred title to Illinois Central. Shiras pointed out that the act granting the submerged lands expressly denied Illinois Central the rights to resell or transfer the lands or to impair the public right to navigation. Shiras makes it clear that this dissenting opinion does not contradict the point that states cannot transfer control of the public’s rights to navigable waters, however, these rights are only violated once Illinois Central acts to obstruct them. To otherwise empower the legislature to revoke legislative acts granting property rights would offend "the right of the citizens to the free enjoyment of their property legally acquired."

Compiled by Dr. Neil Gale, Ph.D.

1910 Postcard of the Baseball Grounds at Lincoln Park in Chicago, Illinois.

One may enjoy almost any kind of sport in Lincoln Park. In addition to the two golf courses, there are 70 grass and clay tennis courts, 33 baseball diamonds, 7 football gridirons, and 12 horseshoe courts. There are roquet courts for followers of that gentle sport.

The equestrian will find the five and a half miles of bridle path greatly to his/her liking. In one of the sequestered lagoons, the fly-caster may prove his skill. Ample lawns provide space for archery ranges. The Lincoln Park Trap Shooting Club has its headquarters on one of the new extensions on the lakefront, and the traps are open to the public. 

The two main lagoons are loaded with boating parties in the summer and with skaters in the winter. The sailing of toy yachts is a sport that has become increasingly popular among the younger set. The Lincoln Park Boat Club is provided with a fine course for its racing shells.

Compiled by Neil Gale, Ph.D.