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Chicago Board Of Trade Business Information, Profile, and History
141 West Jackson Boulevard
Chicago, Illinois 60604
U.S.A.
Company Perspectives:
The CBOT's principal role is to provide contract markets for its members and customers and to oversee the integrity and cultivation of those markets. Its markets provide prices that result from trading in open auction or electronic platforms. The marketplace assimilates new information throughout the trading day, and through trading it translates this information into benchmark prices agreed upon by buyers and sellers.
History of Chicago Board Of Trade
Chicago Board of Trade (CBOT) is one of the busiest commodities exchanges in the world. The Board of Trade has more than 3,600 members, who trade almost 50 different futures and options products, including U.S. Treasury bonds, silver, soy beans, wheat, and Dow Jones Industrial Average futures. Annual trading volume is more than 200 million contracts. The CBOT operates as a not-for-profit corporation run by its members and a Board of Directors. Trades are accomplished through a so-called open outcry system, where traders meet face-to-face to make transactions in trading rooms known as pits. The CBOT adopted a computerized trading system for some trades in the late 1990s. Open outcry trading fell out of use at other leading exchanges in the 1990s, and the future of CBOT's trading pits was increasingly called into question. By the early 2000s, the future direction of the CBOT was still under consideration. The CBOT announced a decision to transform itself into a for-profit corporation with two separate trading areas, one electronic and one open outcry. This restructuring was bogged down by negotiation and litigation between the CBOT and the other Chicago exchanges, the Chicago Board Option Exchange and the Chicago Mercantile Exchange, and by indecision on the part of CBOT members and executives. As of March 2001, the CBOT planned to move ahead with restructuring and to form an alliance with the electronic German/Swiss exchange Eurex.
Early History
The Chicago Board of Trade was formed in that city in 1848 by a group of businessmen who wanted to bring order to the Midwest's chaotic grain market. Farm prices were ruled by boom and bust cycles. In the winter, when grain was scarce, the price was high. At harvest time, Chicago was inundated with grain, and farmers had to accept extremely low prices. Some farmers kept their grain back from market, preferring to burn it for fuel rather than waste money shipping it when prices were low. Other farmers found that they could not get a fair price for their corn or wheat, and they ended up dumping it into Lake Michigan rather than pay to haul or store it. The Board of Trade offered farmers a way to get a guaranteed price for their goods ahead of time by offering 'to arrive' contracts, or futures. At planting time, a farmer could negotiate the price he would get at harvest time. Big buyers of grain benefited by assuring themselves in advance a specific supply.
The Chicago Board of Trade first consisted of 25 directors who met in a space above a feed store on Water Street. The directors were not all grain merchants. The founding group also included a grocer, a tanner, a hardware merchant, a banker, a bookseller, and a druggist. The Board standardized bushel sizes and established ways of identifying different grades of grain.
Trading was not extremely active in the beginning, and the Board tried to lure business by offering free lunches. But Chicago was on its way to becoming the predominant grain market in the Midwest. Chicago's first railroad link was being laid the year the exchange began. Soon Chicago was a rail hub for ten major railroads, and more than a hundred trains came in and out of the city every day. A new canal linked the city to river traffic leading to the Mississippi. Its logistical convenience helped make the city a center for meat packing. Chicago became a national and even international center for agricultural commodities in the 1850s. In 1855 the French government abandoned its practice of buying grain in New York and came to Chicago instead. By 1856, the CBOT had about 150 members, and it moved to new quarters on the corner of South Water and LaSalle Streets. In 1859 the Illinois legislature granted the CBOT a charter, which allowed it authority to govern itself. The CBOT found itself a very popular institution by the end of the 1850s. It had established a new system of grading grain that helped the market run more smoothly. Under the old system, a farmer's lot of grain had to be inspected at many points in the selling process, to make sure it was of the quality and cleanliness it was supposed to be. If a farmer stored his grain with other farmers' lots, grains of differing qualities might get mixed, affecting the price later. The Board of Trade instituted a new system where grain was graded before storage and dumped in a bin only with grain of the same quality. The farmer received a receipt for x amount of grain of x quality. Thus the farmer did not have to retrieve his individual bags of grain for resale, or trust that his grain's quality had not been downgraded by promiscuous storage. Use of the receipts made it easier to trade large volumes of grain. Instead of buying and selling actual bags of wheat or corn, brokers could trade the receipts. Soon they began vigorously trading grain futures. For the farmer, the futures contract guaranteed a certain price in a distant month. Speculators also could buy a futures contract, gambling that they could make money off it by selling it later if the price changed.
While Chicago became an agricultural center, the Board of Trade ensured that the city also became a financial center, with a huge liquid market in agricultural commodities futures. The CBOT standardized its futures contracts in 1865, and moved to its first permanent facility, in the Chicago Chamber of Commerce Building.
In the early years of the CBOT, many disreputable traders tarnished its reputation. Some traders tried to 'corner' a market, that is, buy up most of the available corn or wheat to drive the price up. The Board acted to expel traders who cornered, but it was not successful in abolishing the practice. Another blemish on the CBOT was the existence of illegal outfits known as bucket shops. The bucket shops presented themselves as legitimate commodities brokers, but customer orders were not actually traded on the CBOT floor. In fact the bucket shops ran a numbers game using Board of Trade market figures. In the 1880s the CBOT worked hard to drive the bucket shops out of business.
The CBOT tried to keep its market information inside the building, banning telegraph employees, cutting telegraph lines, and even soaping its windows so bucket shop clerks could not see in and read the latest figures off the chalkboard. Fraud and manipulation of the market caused public outcry against futures trading. When the CBOT moved again in 1885, this time to its own building on LaSalle Street and Jackson Boulevard, protesters called the organization the 'board of thieves.' Nevertheless, the CBOT continued to grow and prosper. Spectacular attempts to corner grain markets continued. In 1897 Joseph Leiter, 28-year-old son of one of the founders of Chicago's famed Marshall Field department store, attempted to corner the wheat market, driving the price per bushel up from 67 cents in April 1897 to $1.85 a bushel a year later. Leiter's corner broke down in May 1898, reputedly at the same time his father returned to Chicago and found out what he was doing. Leiter lost an estimated $20 million on this escapade. Despite Leiter's dramatic failure, another trader, James Patten, attempted a wheat corner in 1908. Because of Patten's hoarding, the price of wheat went up, though the supply of wheat was plentiful. Chicago newspapers speculated that the rising cost of bread might spark riots. Patten's corner was successful: his personal profit was estimated at more than $1 million. But Patten was vilified in the press, and the U.S. Congress contemplated a bill to ban futures trading altogether.
During World War I, the CBOT attempted to set reasonable prices for grain so that the price would not rise and fall continuously. Then the federal government asked the Board of Trade to stop trading wheat futures. The ban lasted almost three years. At the war's end, wheat prices plummeted. It was not clear that the resumption of wheat trading had anything to do with the slump, but enraged Midwestern legislators claimed that unregulated futures trading was behind the price fluctuations. President Wilson ordered an inquiry into the grain market. Eventually, the investigation led to the Grain Futures Act of 1922, establishing the first federal control over futures trading. Even after the new law's enactment, CBOT traders tried cornering the wheat market. Arthur Cutten tried to corner wheat in 1924, driving prices up more than a dollar per bushel. The CBOT formed its own regulatory body, the Business Conduct Committee, to investigate Cutten. The committee urged Cutten to stop buying up wheat, and he did, for the time being. But Cutten returned to futures trading in the 1930s, until the Grain Futures Administration, the government regulatory body, banned him from the market. Other cornering incidents in the 1930s, which sparked great fluctuations in wheat prices, led to increasing oversight of the CBOT from Washington. The 1922 Grain Futures Act was replaced in 1936 with the Commodity Exchange Act. This placed explicit limits on the number of contracts individual traders could hold, so that speculators like Arthur Cutten could not corner, and outlawed other practices as well. The new act still left the CBOT with many self-regulatory powers.
Changes After World War II
During World War II, trading at the CBOT came to a virtual standstill. The corn and wheat crops were under government control. CBOT traders had to content themselves with trading in rye and soybeans. Soybean futures trading had come to the CBOT in 1936. Eventually, this became one of the Board's most active commodities. After the war, the CBOT continued to trade an array of agricultural commodities. The CBOT added trading in soybean oil and soy meal in the early 1950s. The Board's first nongrain commodity was added in 1968, when the meat product known as Iced Broilers began trading. Then in 1969, the CBOT added two more significant commodities: plywood and silver. Silver was the first precious metal on the Chicago exchange.
In the 1970s, the CBOT began to move out of exclusively agricultural commodities and deal in financial instruments. In 1975, the CBOT began trading in futures on Government National Mortgage Association certificates, called GNMAs, or Ginnie Maes. Like corn or wheat, the price of GNMAs fluctuated over time, and they could be bought or sold by traders speculating on future price changes. Then in 1977, CBOT began offering trading on U.S. Treasury bonds. Treasury bonds became the CBOT's most actively traded product.
Other changes came to the CBOT as well. The Board founded a sister entity in 1973, the Chicago Board Options Exchange (CBOE). This was established specifically to trade securities options. Options trading is governed by complex mathematical rules, where traders have the option, but not the obligation, to buy a futures contract at a specified price before a specified expiration time. The CBOT had been trading securities options since 1970, but by setting up a separate facility, the Board's traders were insulated from the risks of options trading. But CBOT members could exercise trading privileges at the CBOE as well. The CBOT also began to introduce more computers into its trading system in the 1970s. Financial data was tracked by computer at a separate facility starting in 1970. In other ways, though, trading at the CBOT continued as it had in the 19th century. Many traders were the sons and even grandsons of traders, keeping the skill in the family. The open outcry practice continued, where traders shouted out their orders to the entire trading pit. Traders at the CBOT had developed a complex system of hand signals, since it was often so loud in the pit that voices could not be heard across the room. Even as computers replaced Morse code and chalkboards, traders bought and sold by flashing fingers at each other. Orders were written on pocket-sized cards and conveyed here and there by a bevy of runners. The CBOT had admitted its first women traders in 1969. But the CBOT remained a mostly male world of shouting, jostling traders. No specific educational background was needed to become a trader. The CBOT was by most accounts a unique financial institution, where people with only a high school education could rise to prominence.
The CBOT did not leave cornering scandals behind in the 1970s. One of the most remarkable incidents of market manipulation came in 1979, when two wealthy Texas brothers, William Herbert Hunt and Nelson Bunker Hunt began buying up silver. The Hunts began buying and stockpiling silver in 1979, causing the price to rise. It was evident what they were up to early on, and the CBOT's president urged them to stop. By early 1980, the Hunts controlled 70 percent of the silver traded on the CBOT, and half the silver traded on the rival Commodity Exchange of New York (Comex). The regulatory Commodity Futures Trading Commission (CFTC) was empowered to act in case of a 'market emergency,' but the commission's board could not agree that the silver corner was an emergency. Finally, the CBOT and Comex put limits on how much silver could be traded in each month, and then issued orders that silver trading was for 'liquidation only,' meaning it could be sold, but not bought. Silver had climbed from under $9 an ounce to more than $50 because of the Hunt brothers' actions. Yet the collapse of the corner bankrupted the Hunts. The incident showed how vulnerable the commodities market still was to manipulation. However, the CBOT acted successfully to put a stop to the illegal activity.
Growth and Problems in the 1980s and 1990s
The CBOT had grown from a trading center for the Midwest grain market to a national financial center in the 1970s, especially because of its active market in U.S. Treasury bonds. By 1981, Treasury bonds were the most actively traded commodity contract in the United States. The growing activity of the Board led to more physical expansion. Since 1930 the CBOT had been housed in an impressive 45-story building at LaSalle and Jackson Streets, a landmark Chicago structure. The Board began a 23-story addition in 1980, to provide for more offices and more trading space. The new 32,000-square-foot trading floor opened in 1982. The CBOT introduced new options trading that year, beginning to trade options on Treasury bond futures. In 1984 it introduced options on soybean futures. The CBOT also had put together an energy complex, with trading on futures contracts in heating oil and crude oil. The cost of membership in the CBOT swung higher and higher, reaching $550,000 in 1987. Despite the stock market crash of October 1987, the CBOT remained open. It was the only major exchange in the world not shut down by the crisis. Trading volume also grew in the 1980s. By 1990, the CBOT traded 154 million contracts annually, making it the busiest exchange in the world.
Despite its increasing importance as a world financial market, the CBOT could not escape its reputation as a somewhat lawless, arcane place rife with market manipulators. In 1989 the CBOT suffered one of its worst embarrassments when dozens of traders there and at the Chicago Mercantile Exchange (CME) were arrested after an undercover FBI investigation. The FBI had put its agents into CBOT trading pits beginning in 1987. There the agents made trades while watching and recording the actions of their fellows. Many traders were charged with defrauding customers and were hauled in under federal racketeering laws. The traders were charged with illegal practices like trading ahead of a customer order. That is, when a trader knew he was going to execute a trade for a customer that might cause prices to go up or down, he would trade first on his own account, to his own advantage. Traders also were charged with completing trades after hours and with destroying evidence of losing trades. The resulting trials were long and drawn out, but in 1991 eight CBOT soybean traders were convicted and sentenced to prison terms. The Board of Trade upped its own surveillance of its members and increased the amount of fines it could levy.
The public scrutiny of the CBOT resulting from the FBI sting led to calls to update its operations. Trades made by a flash of fingers and recorded in pencil on a note card seemed to outsiders to invite confusion, if not fraud. But the CBOT was resistant to change. In the early 1990s, the CBOT began exploring different merger and joint venture options. The Board negotiated with the Chicago Mercantile Exchange to develop a new trading system, when in 1993 the CME suddenly announced it would work on its new system with the New York Mercantile Exchange instead. The CBOT also negotiated to buy the New York Commodity Exchange, but the deal fell through in mid-1993. The CBOT set a new record for number of contracts traded in 1994, and began construction of a huge new trading floor in 1995. The new floor would be for face-to-face trading, the same system that had been in place since the CBOT's founding. At the same time, the Board began an Internet-based market information service. In 1996 it introduced an electronic trading platform it called 'Project A.'
Open Outcry Versus Electronic Trading in the Late 1990s
By the mid-1990s, it was clear that the CBOT's open outcry trading system would have to make concessions to the march of technology. The Internet had opened the door to a variety of new electronic trading systems, which matched trades virtually instantaneously. Traders insisted that their face-to-face system worked well and should persist. Meanwhile, other exchanges were abandoning open outcry. In 1998, a German/Swiss all-electronic exchange called Eurex opened for business. Within a year, it had surpassed the CBOT for the title of world's busiest commodities exchange. It also put pressure on the London exchange LIFFE, which had traded currency futures using open outcry. LIFFE adopted an electronic trading platform in order to survive. The French commodities exchange, MATIF, decided to experiment. It opened side-by-side trading floors, one open outcry, one electronic. Within only weeks, the open outcry system at MATIF was dead. The CBOT moved to expand use of its Project A electronic system. It had been designed for after-hours use, but in September 1998, Project A became available for daytime trades as well. Onetime CBOT Chairman Patrick Arbor proposed another solution: an alliance with the upstart Eurex, to build a new electronic trading platform the two exchanges would share. In January 1999, CBOT members voted down the Eurex alliance. A mere six months later, the members reversed their position and voted to go ahead with the plan, which would replace Project A. Meanwhile, the Board suffered a decline in trading volume and began trimming its budget and cutting staff. Total trade volume was 254 million contracts for 1999, down from 280 million in 1998. Eurex racked up 379 million contracts traded for 1999, passing the CBOT by a wide margin.
The situation was probably not helped by much acrimonious jockeying for the chairmanship of the CBOT. While the negotiations with Eurex were playing out, the CBOT also had to work out an arrangement with the Chicago Board Options Exchange, which it had created in 1973. The two planned to merge and, together, transform into a for-profit company with both electronic and open outcry trading platforms. The CBOE objected to the form of the restructuring and threatened to cut off CBOT traders' rights at the CBOE. In December 2000, Nickolas Neubauer was elected chairman of the CBOT, upsetting the incumbent chairman by 7 votes (the fraction occurred because some members only had voting privileges). Neubauer wasted no time in hiring a CEO for the board. This crucial post had been open for months. When the new president and CEO, David Vitale, took over in March 2001, he announced that converting the CBOT to a for-profit company was his top priority. He resolved to work out a restructuring that would satisfy the fractious CBOE. As for moving to an electronic format, Vitale claimed to believe that it could co-exist with the open outcry system. 'Competition is going to drive the exchange to the most efficient format,' he told Futures, an industry journal, in April 2001. The CBOT faced declining volume, budget cuts, and an uncertain path as it entered the new millennium.
Principal Competitors: Chicago Board Options Exchange; Chicago Mercantile Exchange.
Related information about Chicago
41°53N 87°38W, pop (2000e) 2 896 000. Third
largest city in the USA; seat of Cook Co, NE Illinois, on L
Michigan; built on the site of Fort Dearborn; settled in the 1830s;
city status, 1837; developed as a result of its strategic position
linking the Great Lakes with the Mississippi R after the Illinois
and Michigan Canal was completed (1848), and after the railway to
the E was opened (1853); much of the city destroyed by fire, 1871;
notorious gangster activity in the Prohibition years (1920s),
notably by Al Capone; now the major industrial, commercial,
financial and cultural centre for the US interior; electrical
machinery, metal products, steel (one-quarter of the nation's steel
produced in and around the city), textiles, chemicals, food
products, printing and publishing; commerce and finance centred
upon ‘The Loop’ area; transport centre of the USA, with one of the
busiest airports in the world; major rail network and inland port;
seven universities; Sears Tower (1974), the world's second tallest
building in 1999 (443 m/1454 ft); professional teams,
Cubs, White Sox (baseball), Bulls (basketball), Bears (football),
Black Hawks (ice hockey); Lyric Opera, Art Institute, Museum of
Science and Industry, Shedd Aquarium, Planetarium; Chicago Film
Festival (Nov).
) is the largest city in
the U.S. state of
Illinois, as well as
the third-most populous city in the United States,
with nearly 2.9 million people. Located along the southwestern
shore of Lake
Michigan, it is the seat of Cook County.
Chicago is known as the "Second City," the "Windy City," the "City of Big Shoulders", and
"Chi-town". When combined with its suburbs and nine surrounding counties in Illinois, Wisconsin, and Indiana, the greater metropolitan area
known as Chicagoland
encompasses a population greater than 9.4 million, making it the
third largest in the United States.
Since its 1833 founding as a frontier town of the Old Northwest, Chicago has grown into one of the
ten most influential world cities.The World According to GaWC (2006).
Globalization and World Cities Study Group and Network.
Chicago today is the financial, economic, and cultural capital of
the Midwest, and is recognized as a major transportation,
business, and architectural center.
Origin of name
The indigenous Potawatomi tribe called the marshes on which Chicago was later built "Checagou
(prounounced 'She-Ka-Gan')," which translates to "wild onion" or
"garlic." Before Chicago's founding, the name of the river was
spelled several ways, such as "Chetagu" or "Shikago."
The origin of Chicago's nickname as "The Windy City" is debated
(see List of nicknames for Chicago). The most common
explanation had been that the phrase was created by New York
newspapers in the 1880s during a national debate over which city
would host the 1893 World's Fair, making reference to the long-windedness of
the city's supporters.
History
During the mid-1700s, the Chicago area was inhabited primarily
by Potawatomis, who
took the place of the Miami and Sauk and Fox people. In 1803, the United States Army
built Fort
Dearborn, which was destroyed in 1812 in the Fort Dearborn
Massacre. The Ottawa, Ojibwa, and Potawatomi later ceded the land to the
United States in the Treaty of St. Louis of 1816. On August 12, 1833, the Town of Chicago was
organized with a population of 350, and within seven years it grew
to a population of over 4,000. The City of Chicago was incorporated
on March 4, 1837.
Starting in 1848, the city became an important transportation link
between the eastern and western United States with the opening of
the Galena & Chicago Union Railroad, Chicago's first
railway, and the Illinois and Michigan Canal, which allowed
shipping from the Great Lakes through Chicago to the Mississippi River.
With a flourishing economy that brought many new residents from
rural communities and immigrants from Europe, Chicago grew from a city of 299,000 to
nearly 1.7 million between 1870 and 1900. The city's manufacturing
and retail sectors dominated the Midwest and greatly influenced the
American economy, with the Union Stock Yards' dominating the packing
trade.
After the Great
Chicago Fire of 1871, Chicago experienced rapid rebuilding and
growth.Bruegmann, Robert (2004-2005). Built Environment of the
Chicago Region. Encyclopedia of Chicago (online
version). During Chicago's rebuilding period, the first
skyscraper was
constructed in 1885 using steel-skeleton construction. In 1893, Chicago hosted the
World's Columbian Exposition on former marshland at the
present location of Jackson Park. The term "midway" for a fair or
carnival referred originally to the Midway, a strip of park land
that still runs through the University of Chicago campus.
The city was the site of labor conflicts and unrest during this
period, which included the Haymarket Riot on May 4, 1886.
Concern for social problems among Chicago's lower classes led to
the founding of Hull
House in 1889, of which Jane Addams was a co-founder. The city also invested in
many large, finely-landscaped municipal parks, which also included
public sanitation facilities.
Lake Michigan -
the primary source of fresh water for the city - was already highly
polluted from population growth and the rapidly growing industries
in and around Chicago. The city responded by embarking on several
large public works
projects, including a large excavation project which built tunnels
below Lake Michigan to newly built water cribs which were two miles (3 km) off
the lakeshore. Beginning in 1855, Chicago constructed the first
comprehensive sewer system in the U.S. In 1900, the problem of
sewage was solved by reversing the direction of the River's flow
with the construction of the Chicago
Sanitary and Ship Canal leading to the Illinois River.
The 1920s brought international notoriety to Chicago as gangsters
such as Al Capone
battled each other and the law during the Prohibition era.
Nevertheless, the 1920s also saw a large increase in Chicago
industry as well as the first arrivals of the Great
Migration that would lead thousands of mostly Southern blacks
to Chicago and other Northern cities. On December 2, 1942, the world's first controlled
nuclear
reaction was conducted at the University of
Chicago as part of the top secret Manhattan
Project.
Mayor Richard J.
Nevertheless, the city hosted the 1968
Democratic National Convention and saw the construction of the
Sears Tower (which
became the world's tallest building), McCormick Place, and
O'Hare Airport.
In 1983 Harold
Washington became the first African American to be elected to the office of
mayor; As a part of its environmentally friendly image, Chicago
declared Peregrine
Falcon, a protected species that started to build its nests in
Chicago skyscrapers, the official bird of the city in 1999.Peregrine Falcon:
Official City Bird of Chicago.
Geography and climate
Located in northeastern Illinois at the southwestern tip of
Lake Michigan,
Chicago's official geographic coordinates are . It sits on the
continental
divide at the site of the Chicago Portage, connecting the Mississippi River and
the Great Lakes
watersheds. The
city lies beside Lake Michigan and two rivers: the Chicago River in
downtown and the Calumet River in the industrial far South Side flow
entirely or partially through Chicago. The Chicago
Sanitary and Ship Canal connects the Chicago River with the
Des Plaines
River, which runs to the west of the city.
When Chicago was founded in the 1830s, most of the early building
began around the mouth of the Chicago River. According to the U.S. Census
Bureau, Chicago has a total area of 234.0 square miles
(606.1 km²), of which 227.1 square miles (588.3 km²) is
land and 6.9 square miles (17.8 km²) is water.
Since the first recorded earthquake in 1804,200th Anniversary of the First
Recorded Chicago Earthquake (9/14/2004). More recently, an
earthquake with an epicenter in Ottawa, Illinois,
registering about 4.3 on the Richter scale shook some buildings in Chicago on
June 28,
2004.
Climate
Chicago, like much of the Midwest, has a climate that is prone to extreme, often
volatile, weather conditions. Weatherbase. According to the
National
Weather Service, Chicago's highest official temperature reading
of 105 °F (40 °C) was recorded on July 24, 1934. The lowest temperature of −27 °F
(−32 °C) degrees was recorded on January 20, 1985.
Chicago's yearly precipitation averages about 38 inches (965 mm). Chicago's highest one
day precipitation total was 6.49 inches (164 mm) which fell on
August 14, 1987.
Cityscape
[[Image:DowntownChicagoILatNight.jpg|thumb|200px|right|Downtown
Chicago along the
Chicago River looking northeast]]
The city?s urban context is organized within a grid pattern. The Northwest
and Southwest sides of the city area also referenced with
frequency, though they tend to be subsumed under one of the three
aforementioned areas.
Since the first steel-framed high-rise building of the world was
constructed in the city in 1885, Chicago has been known for the
skyscraper.Chicago (2004).
Chicago Public Library. Today, many high-rise buildings are
located in the downtown area, notably in the Loop and along the
lakefront and the Chicago River. The three tallest buildings are
the Sears Tower
(also the tallest building in North America), the Aon Center, and
the John Hancock
Center. There are clusters of industrialized areas, including the lakefront near the
Indiana border, the area
south of Midway
Airport, and the banks of the Chicago
Sanitary and Ship Canal.
Future building sites that will contribute to Chicago's skyline
include Waterview
Tower, 400 North Lake Shore Drive, and the Trump International Hotel and Tower.
Along Lake Shore
Drive, parks line the lakefront. The most notable of these
parks are Grant Park and Millennium Park, which border the east end of the Loop,
Lincoln Park on the north side, and Jackson Park
in the Hyde
Park neighborhood on the south side. Interspersed within this
system of parks are 31 beaches, a zoo and several bird sanctuaries, McCormick Place
Convention Center, Navy
Pier, Soldier
Field, the Museum Campus, and a water treatment plant.
Pushed along by the national real estate boom in recent years,
Chicago has seen an unprecedented surge in skyscraper construction,
most notably in the area directly south (South Loop)
and north (River North) of the Loop. However, these homes (and
others throughout Chicago) have been all but demolished in
Chicago's recent movement to replace public housing with
mixed-income, progressive new housing developments, known as the
Plan for Transformation (see The Chicago Housing
Authority).
Regardless of this, many areas of the South Side, despite
perceptions to the otherwise, are stable, middle-class, and
diverse. U.S. Bureau of the Census (accessed April 20,
2006).
As one of the largest cities in North America, the population of
Chicago is cosmopolitan. This encompasses about one-fifth of the
entire population of the state of Illinois and 1% of the population of the United States. The
population
density was 12,750.3 people per square mile (4,923.0/km²). The racial makeup of
the city was 36.39% Black
or African American, 31.32% White, 26.02%
Hispanic or
Latino,
4.33% Asian and
Pacific Islander, 1.64% from two or more races, 0.15%
Native American, and 0.15% from other
races.Chicago Demographics
(2003). US Census Bureau The city itself makes up 23.3%
percent of the total population of Illinois, down from a high of
44.3% in 1930.
Like most large American cities, Chicago is a minority-majority city.
Of the 1,061,928 households, 28.9% have children under the age of
18 living with them, 35.1% were married couples living together, 18.9% had a female
householder with no husband present, and 40.4% were non-families.
Of the total population, 28.1% of those under the age of 18 and
15.5% of those 65 and older are living below the poverty line.
Chicago has a large Irish-American population on its South Side. The
majority of African Americans are also located on Chicago's South Side. Other European ethnic groups are the
Germans,
Italians and
Polish. Chicago
has the largest population of Swedish-Americans of any city in the U.S. with
approximately 123,000. After the Great Chicago Fire,
many Swedish carpenters helped to rebuild the city, which led to
the saying the Swedes built Chicago.Chicago Stories - Swedes in Chicago
(2006). Chicago is the home of the Evangelical
Covenant Church www.covchurch.org..
Chicago has the largest Bulgarian community in the world (outside Bulgaria) with more than
150,000 Bulgarians living in the city. The city has the largest
ethnically Polish
population outside of Poland, making it one of the most important Polonia centers.America the diverse -
Chicago's Polish neighborhoods (5/15/2005). USA Weekend
Magazine. Chicago is also the second-largest SerbianSerbian Delegation
(4/30/2004). WTCC Weekly News at www.wtcc.org. and
Lithuanian
city,Cities Guide Chicago -
A hard-knock life (2006). Economist.com. and the third
largest Greek city in the
world.Chicago Stories - The Greeks
in Chicago (2006). Accessed June 5, 2006. Chicago has a large
Romanian-American community with more than
100,000,About Us. The city is home
to the seat of the head of the Assyrian Church
of the East, Mar
Dinkha IV, the Evangelical Covenant Church www.covchurch.org.,
and the Evangelical Lutheran Church in America
headquarters.Contact Us.
ELCA.org.
The Chicago Metropolitan area is also a major center for Indian-Americans and
South Asians.
Chicago has the third-largest South Asian population in the United
States, after New York
City and the San Francisco Bay Area. The Devon Avenue
corridor on Chicago's north side is one of the largest South Asian
neighborhoods in North
America. Chicago also has the second-largest Puerto Rican
population in the United States after New York City.
Population
Chicago's 2006 population of estimate of 2,873,790 is debated by
some since there has been signifcant construction in the city in
the 6 years since the 2000 census.
Over 1/3 of the population of Chicago is concentrated in the
lakefront neighborhoods of the city (from Rogers Park in
the north to Hyde Park in the south). This makes Chicago's lakefront
the most densely populated area in the United States outside of
New York City.
www.demographia.com/db-chi-nhd2000.htm
Economy
Chicago has the third largest gross
metropolitan product in the nation - approximately $390 billion. The
city has also been rated as having the most balanced economy in the
United States due to its high level of
diversification.www.worldbusinesschicago.com/
about/upload/20ChicagoSunTimes6-23-03.pdf Moody's: Chicago's
Economy Most Balanced in US (1/23/2003). Accessed 08/22/2006 from
'Site Selection Online' at
www.siteselection.com/issues/2006/mar/p176/.
Chicago is a major financial center with the second largest central business
district in the U.S. The city is the headquarters of the
Federal Reserve Bank of Chicago (the Seventh District of
the Federal Reserve). The city is also home to four major financial
and futures exchanges, including the Chicago Stock
Exchange, the Chicago Board of Trade (CBOT), the Chicago Board
Options Exchange (CBOE), and the Chicago
Mercantile Exchange (the "Merc"). Chicago and the surrounding
areas also house many major brokerage firms and insurance
companies, such as Allstate Corporation and Zurich North America. Accessed
from 'SAGE Publications' at edq.sagepub.com/cgi/content/abstract/18/1/10?ijkey=50c44cb29d68315499a2aa3771131b328064bf28&keytype2=tf_ipsecsha.
Manufacturing (which includes chemicals, metal, machinery, and
consumer electronics), printing and publishing, and food processing
also play major roles in the city's economy. Encyclopedia of
Chicago (online edition). Several medical products and services
companies are headquartered in the Chicago area, including Baxter
International, Abbott Laboratories, and the Healthcare Financial
Services division of General Electric. Moreover, the construction of the
Illinois
and Michigan Canal, which helped move goods from the Great Lakes south on the
Mississippi
River, and the railroads in the 1800s made the city a major
transportation center in the United States. In the 1840s, Chicago
became a major grain
port, and in the 1850s and 1860s Chicago's pork and beef industry
expanded. Chicago is third in the U.S. behind Las Vegas and
Orlando as
far as the number of conventions hosted annually.Chicago falls to 3rd in U.S.
convention industry (4/26/2006). Crain's Chicago
Business. In addition, Chicago is home to eleven Fortune 500 companies, while
the metropolitan area hosts an additional 21 Fortune 500
companies.Fortune 500 2006 -
Illinois. CBRE - CB Richard Ellis, at
www.cbre.com/NR/rdonlyres/9326419A-60CC-47BC-9960-448BD4B32C52/0/MarketOutlook06FINAL.pdf.
In 2006, Chicago placed 10th on the UBS list of the world's richest
cities.
Law and government
Chicago is the county
seat of Cook County. The government of the City of Chicago is
divided into executive and legislative branches. The Mayor of Chicago is the
chief
executive, elected by general election for a term of four
years. In addition to the mayor, Chicago's two other citywide
elected officials are the clerk and the treasurer.
The City
Council is the legislative branch and is made up of 50
alderman, one elected from each ward in the city.
The council takes official action through the passage of ordinances
and resolutions.
During much of the last half of the 19th century, Chicago's
politics were dominated by a growing Democratic Party organization dominated by ethnic
ward-healers. During the 1880s and 1890s, Chicago had a powerful
radical tradition with large and highly organized socialist,
anarchist and labor organizations. For much of the 20th century,
Chicago has been among the largest and most reliable Democratic
strongholds in the United States, with Chicago's Democratic vote
totals' leading the state of Illinois to be "solid
blue" in presidential elections since 1992. The citizens of
Chicago have not elected a Republican mayor since 1927, when William Thompson
was voted into office. The strength of the party in the city is
partly a consequence of Illinois state politics, where the Republicans have come
to represent the rural and farm concerns while the Democrats
support urban issues such as Chicago's public school funding.
Former Chicago Mayor Richard J. Daley's mastery of machine politics
preserved the Chicago Democratic Machine long after the demise of
similar machines in other large American cities. During much of
that time the city administration found opposition mainly from a
liberal "independent" faction of the Democratic Party. Chicago
Tribune, found at
qrc.depaul.edu/djabon/Articles/ChicagoCrime20030101.htm. After
adopting crime-fighting techniques recommended by the New York Police
Department and the Los Angeles
Police Department in 2004,David Heinzmann and Rex W. City murder toll lowest
in decades Chicago Tribune. Chicago recorded 448
homicides, the lowest total since 1965. They have prompted some
calls of discrimination since these cameras tend to be prevalent in
Black and Latino communities with higher than average crime
rates.
The FBI often does not accept crime statistics submitted by the
Chicago
Police Department, which tallies data differently than other
cities. As a result, Chicago is often omitted from studies like
Morgan Quitno's
annual "Safest/Most Dangerous City" survey.Locy, Toni (6/7/2005).
USA Today.
Education
Public education
The Chicago Public Schools (CPS) is the school district that
controls over 600 public elementary and high schools in Chicago.
Chicago Public Schools at www.cps.k12.il.us/AtAGlance.html.
is led by CEO Arne Duncan. The CPS also
includes several selective-admission magnet schools, such as
Whitney Young Magnet High School, William
Jones College Preparatory, Walter Payton
College Prep, Lane
Tech College Prep, and Northside College Preparatory High School.
Like many urban U.S. school districts, CPS suffered many problems
throughout the latter half of the 20th century, including
overcrowding, underfunding, mismanagement and a high dropout rate.
In 1987, then U.S. Secretary of Education William Bennett named
the Chicago Public Schools as the "worst in the nation." Several
school reform
initiatives have since been undertaken to improve the system's
performance. Reforms have included a system of Local School
Councils, Charter
Schools, and efforts to end social promotion. The city is home to two of
America's top research universities: University of
Chicago in Hyde Park on the South Side and Northwestern
University in northside suburb Evanston. Several
private Catholic universities are located in Chicago, such as
DePaul
University (the largest private university in Illinois),
St. Xavier
University, and Loyola University.
The University of Illinois at Chicago is the city's largest
university and features the nation's largest medical school. The
Illinois Institute of Technology in Bronzeville has
renowned engineering and architecture programs. Dominican
University, outside Chicago in River Forest, teaches many
library courses at the Chicago Public Library's Harold Washington
Building. North Park University, a small Christian liberal arts
university affiliated with the Evangelical
Covenant Church, is located on the northwest side in the North
Park neighborhood. These accredited seminaries are joined in a
consortium known as the Association of Chicago Theological Schools
(ACTS).Association of Chicago Theological
Schools The Moody Bible Institute is near downtown. Chicago State
University and Northeastern Illinois University are other state
universities in Chicago. The city also has a large community college
system known as the City Colleges of Chicago. Additionally, there are
several smaller colleges noted for their fine arts education programs -
Roosevelt
University, Columbia College Chicago, and The
School of the Art Institute of Chicago.
Culture
Chicago has a major theater scene, and is the birthplace of modern improvisational
comedy. The city is home to two renowned comedy troupes:
The Second City
and Steppenwolf
Theatre Company (on the city's north side), the Goodman Theatre, and the
Victory Gardens Theater. Other theatres, from nearly 100 storefront
performance spaces such as the Strawdog Theatre Company in the
Lakeview
area to landmark downtown houses such as the Chicago Theatre, present
a variety of plays and
musicals. The
city is home to the Lyric Opera of Chicago, the Chicago Symphony
Orchestra, the Joffrey Ballet, and several modern and jazz dance
troupes. The city's classical music scene is also home to companies
including Music
of the Baroque, Chicago Opera Theater, the Chicago Chamber
Musicians, Chicago a cappella, and many others.
Chicago is known for its Chicago blues, Chicago soul, Jazz, and Gospel. The city is the birthplace of the House style of music, and
is the site of an influential Hip-Hop scene.
In the 1980s the city was a center for industrial, punk and new wave (spawning
the famous Wax Trax!
label); There is a flourishing independent rock scene, including
the recent explosion of Chicago emo acts, with multiple festivals featuring various acts
each year (Lollapalooza, the Intonation Music
Festival and Pitchfork Music Festival being the most
prominent).
Chicago has several signature foods which reflect the city's ethnic
and working-class
roots. These include the deep-dish pizza and the Chicago hot dog,
which is almost always made of Vienna Beef and loaded with mustard, chopped onion,
sliced tomato, pickle relish, celery salt, sport peppers, and a
dill pickle spear. Chicago is also known for Italian Beef sandwiches and
the Maxwell
Street Polish (always served topped with grilled onions and
mustard).
Sites of interest
In 1998, the city officially opened the Museum Campus, a
10-acre (4-hectare) lakefront park
surrounding three of the city's main museums: the Adler Planetarium, the
Field Museum of Natural History, and the Shedd Aquarium. Grant
Park is also home to Chicago's other major downtown museum, the
Art
Institute of Chicago, which is partnered with The School of the
Art Institute of Chicago. The Museum of Science and Industry in Chicago, located in
the Hyde
Park neighborhood, is housed in the only in-place surviving
building from the World's Columbian Exposition of 1893.
Navy Pier, a
3000-foot (900 m) pier housing restaurants, shops, museums,
exhibition halls, auditoriums, and a 150-foot-tall (45 m) Ferris wheel, is located
north of Grant Park on the lakefront.
The Chicago
Cultural Center, built in 1897 as Chicago's first permanent
public library,
now houses the city's Visitor Information Center, galleries, and
exhibit halls. The Oriental Institute, part of the University of
Chicago, has an extensive collection of ancient Egyptian and
Near Eastern
archaeological artifacts, while the Freedom
Museum is dedicated to exploring and explaining the First Amendment to the United States Constitution. Other
museums and galleries in Chicago are the Chicago History
Museum, DuSable
Museum of African-American History, Mexican Fine
Arts Center Museum, Museum
of Contemporary Art, and the Peggy
Notebaert Nature Museum.
Millennium Park
is a rebuilt section of Grant Park that was planned for unveiling
at the turn of the 21st century, though it was delayed for several
years.
Media
Chicago is the third-largest market in the U.S. (after New York City and Los Angeles).Nielsen Media - DMA Listing (September 24,
2005). All of the major American television networks have subsidiaries in
Chicago. WGN-TV, which is
owned by the Tribune
Company, is carried (with some programming differences) as
"Superstation WGN"
on cable
nation-wide. The city is also the home of the Oprah Winfrey Show,
while Chicago
Public Radio produces programs such as PRI's
This American
Life and NPR's Wait Wait...
Other television news programs include ABC 7, NBC 5, CBS 2, FOX 32,
WGN 9, and CLTV
There are two major daily newspapers published in Chicago: the Chicago Tribune and the
Chicago
Sun-Times, with the former having the larger circulation.
The Chicago Cubs of
the National
League play at Wrigley Field, which is located in the North Side
neighborhood of Lakeview, commonly referred to as "Wrigleyville." The
Chicago White
Sox of the American League play at U.S. Cellular Field,
in the city's South Side Bridgeport neighborhood.
The Chicago Bulls
of the National Basketball Association is one of the world's
most recognized basketball teams. The Bulls play at the United Center on Chicago's
Near West side. The Chicago Bears of the National Football
League play at Soldier Field. The Chicago Fire,
members of Major
League Soccer, won one league and three US Open Cups since 1997.
Other major league sports teams in Chicago include the Chicago Blackhawks of
the National
Hockey League and the Chicago Sky of the Women's National Basketball Association
The city has offered an official Olympic bid for
the 2016 Summer
Olympics, and is considered a strong contender among the three
candidate American cities.Kathy Bergen and Gary Washburn
(5/11/2006). Chicago Tribune. Chicago also hosted the
1959 Pan
American Games, and Gay Games VII in 2006.
Infrastructure
Health and medicine
Chicago is home to the Illinois Medical
District on the Near West Side. It includes Rush
University Medical Center, the University of Illinois at Chicago medical center, and
John H.
The University of Chicago operates the University
of Chicago Hospitals, which was ranked the fourteenth best
hospital in the country
by U.S. News and World Report. It is the only hospital
in Illinois ever to be
included in the magazine's "Honor Roll" of the best hospitals in
the United
States.
The University of Illinois College of Medicine at
UIC is the largest medical school in the United States
(1300 students, including those at campuses in Peoria, Rockford and
Urbana-Champaign).About the College - A Brief History of the
University of Illinois at Chicago College of Medicine (2005).
UIC College of Medicine at
www.uic.edu/depts/mcam/history.shtml. Chicago is also home to other
nationally recognized medical schools including Rush Medical
College, the Pritzker School of Medicine of the University of
Chicago, and the Feinberg School of Medicine of Northwestern
University. In addition, the Chicago Medical
School and Loyola University Chicago's Stritch School of Medicine
are located in the suburbs of North Chicago
and Maywood,
respectively. The Midwestern University Chicago College of Osteopathic
Medicine is in Downers Grove.
The leading healthcare informatics organizations are located in
Chicago, including the American Medical Informatics Association and
the Health Information Management Systems Society. These
organizations include as members many healthcare IT vendors and
the CIO/VP Technology leaders of most American healthcare
operations. The American College of Surgeons, American Dental
Association, American Hospital Association, American
Medical Association, and the American
Osteopathic Association are based in the city. It is an
important component in global distribution, as it is the third
largest inter-modal port in the world after Hong Kong and Singapore.
Madigan, p.52. Additionally, it is the only city in North America
in which all six Class I railroads meet.Appendix C: Regional
Freight Transportation Profiles. U.S. Department of
Transportation - Federal Highway Administration (April 2005).
Seven interstate
highways run through Chicago. Other named highway segments are
the Stevenson Expressway (I-55) and Eisenhower Expressway (I-290).
The Chicago Transit Authority (CTA) handles public
transportation in Chicago and a few adjacent suburbs. The CTA
operates an extensive network of buses and a rapid transit system known
locally as the 'L' (for "elevated"), which among other things provides
rail service from downtown to Midway and O'Hare airports. The
Regional Transportation Authority (RTA) provides service
in forty surrounding suburbs with some extensions into the
city.
Metra operates commuter
rail service in Chicago and its suburbs. The Metra Electric Line
shares the railway with the South Shore Line's NICTD
Northwest Indiana Commuter Rail Service, which accesses Gary/Chicago Airport. Pace operates a
primarily-suburban bus service that also offers some routes into
Chicago.
Chicago is served by Midway Airport on the south side and O'Hare
International Airport, one of the world's busiest airports, on
the far northwest. Gary/Chicago International Airport, located in nearby
Gary, Indiana,
serves as the third Chicagoland airport. Their service territory
borders Iroquois County to the south, the Wisconsin border to the north,
the Iowa border to the west
and the Indiana border
to the east. In northern Illinois, ComEd (a division of Exelon) operates the greatest number of nuclear
generating plants in any US state.
Chronology
Key Dates:
-
1848: The company is founded by 25 Chicago businessmen.
-
1859: A charter is granted by the Illinois legislature.
-
1922: Grain Futures Act of 1922 establishes first federal control over futures trading.
-
1973: Chicago Board Options Exchange is founded.
-
1977: CBOT begins trading in U.S. Treasury bonds, which become the exchange's most active item.
-
1996: Project A is launched.
-
2001: New CEO reaffirms plans to restructure CBOT as for-profit company, with electronic trading component.
Additional topics
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