CHARLES YERKES--FATHER OF CHICAGO'S LOOP, LEAVING THE CHILD SUPPORT TO ILLINOIS TAXPAYERS
Chicago's famed Loop was created by the lovable scoundrel, Charles Tyson Yerkes, who was described by historians as a robber baron. That was one of the nicer things said about him. But like most movers and shakers, he gets mixed reviews.
Born into an old Philadelphia Quaker family in 1837, Yerkes is believed to have practiced non-violence. His forte, instead, was white collar crime. Yerkes started out using his bank president father's connections, but soon established a strong reputation of his own in local financial and social circles. He opened a brokerage firm at age 22 and joined the Philadelphia Stock Exchange. Within a few years, he specialized in selling municipal, state and government bonds. He invested money for a major client, the City of Philadelphia, but got carried away with unauthorized speculation which collapsed when the Chicago Fire of 1871 sparked a financial panic. When he couldn't cover the losses, Yerkes was arrested and sentenced to 33 months in the pen, the notorious Eastern State Penitentiary which was known and feared for its system of solitary confinement. Remember, prisons didn't have cable TV, golf and air conditioning in those days, and prisoners didn't sue for better food.
The clever Yerkes, attempting to forestall his prison sentence, attempted to blackmail two influential politicians, but the scheme didn't work. However, President U.S. Grant, no choirboy himself, feared that Yerkes' disclosures might hurt the party's chances in the next election, and agreed to pardon him if he would deny those accusations. Yerkes did so and was released after 7 months in jail.
He then returned to banking and rebuilt his fortune over the next few years. In 1880 he took a trip to Chicago where he became interested in the Northwest Land Company, headquartered in Fargo, (North) Dakota. He moved on to Fargo where he posed as a colonel and was able to obtain a quickie divorce from his wife of 22 years so that he could marry his 24 year old girl friend. After doing so, he relocated to Chicago where he planned to open a bank. To build up his bankroll, he assembled syndicates of investors for highly leveraged, high risk ventures which by and large collapsed with adverse results for the investors though not generally for Yerkes.
Eventually, he became attracted to the lure of street railways as profit making ventures. People didn't have cars in those days, and most traveled by public transportation or on foot. His first acquisition was the North Chicago City Reilway Company in 1886. With two business partners, he concocted a scheme to buy a bare majority of the stock for $1.503 million; then form a holding company called the North Chicago Street Railway Company which issued $1.5 million in bonds to pay for the stock purchase and then lease all the property of the former to the holding company for 999 years. Without going into too much detail, the net effect was to acquire a street railway producing $250,000 per year in dividends without investing any money. He found a formula that worked so well that he would repeat it the following year on Chicago's West Side. Because the businesses were highly leveraged, they were unprofitable from an accounting standpoint, although they gave Yerkes a fine living.
Before too long, he came to own more than half the private elevated railway companies in Chicago as well as most of the streetcar system. He built a downtown terminal connecting the elevated lines, which circle the main business district, Chicago's Loop. Through his direction and perhaps self serving vision, he modernized and expanded Chicago's transportation systems and helped make Chicago the world class city that it is today.
To many, the problem was in the details. To keep the competition at bay, Yerkes routinely bribed aldermen to obtain franchises from the City Council. If that didn't work, he hired working girls to seduce and then blackmail the lawmakers. As a last resort, he would buy out his competitors and either dismantle them or integrate them into his syndicate. Yerkes' companies were a maze of frontmen which included business associates, his wife and even his clerical staff so that his name didn't appear on anything--nothing could be attributed to him. But everyone knew who was really in charge, and Yerkes made many powerful enemies in the City Council, especially Mayor Carter Harrison Jr. who, in published articles, essentially called him a crook.
According to his biographer, John Franch, Yerkes didn't invent corruption in Chicago. He merely perfected it, "bringing order to what had been a chaotic system of bribery....After Yerkes' emergence on the scene, corruption in Chicago moved to another level."
Ultimately, in 1899, when his political capital ran out and the City Council defeated the renewal of his franchise, he sold out and moved to New York. Ironically, the swing votes to defeat Yerkes' interests were cast by that unholy aldermanic duo--the notorious Bathhouse John Coughlin and Hinky Dink Kenna. (See kensuskinreport,Dec. 25, 2007)
Unlike some of the so-called Robber Barons of the era like John D. Rockefeller and J.P. Morgan, who tried to justify their sometimes ruthless actions, Yerkes freely admitted his dishonesty and admitted that self-satisfaction was his primary aim in life. He lived a lavish life style, building a fabulous mansion on New York's Fifth Avenue, complete with a marble staircase, a conservatory with live birds and decorated with fine art by old master painters like the three R's, Rembrandt, Rubens and Raphael. He then built a comparable mansion nearby on Park Avenue for his mistress, the much younger but sophisticated Emilie Grigsby, the daughter of a Kentucky slaveholding father and a Cincinnati brothel-running mother.
Everybody wants to be liked, and to bolster his image and leave a favorable legacy, Yerkes allowed himself to be talked into building the world's largest telescope. In 1892, the 24 year old astronomer George Ellery Hale accepted a professorship at the new University of Chicago with the condition that it build a new observatory costing at least $250,000. Hale and U of C President William Rainey Harper visited Yerkes at his office on Clark Street and cleverly appealed to his considerable ego to obtain his financial support for the project. Since Yerkes wanted the biggest and best of everything, this was right up his alley. While Yerkes had no objection to financing a telescope, he didn't realize he was bankrolling the entire observatory and had some second thoughts. However, Hale leaked the story to the press about Yerkes great generosity, which made it very difficult to back out. The project was dedicated in 1897 with Yerkes delivering the widely acclaimed address presenting the observatory to the University of Chicago.
His other claim to fame was as the inspiration for Theodore Dreiser's novels, The Financier, The Titan and The Stoic (the Cowperwood trilogy) which were based on the life of Charles Yerkes.
Yerkes died in New York in 1905 at age 68, leaving a $4 million estate. The will left $100,000 to the observatory provided that it be officially designated the Yerkes Observatory. It still stands proudly today in Williams Bay, Wisconsin, on the shores of Lake Geneva. Its 40 inch telescope is today dwarfed by modern telescopes around the world and in space, but it still serves a purpose in research and training for the University. And, of course, Yerkes' other legacy, Chicago's Loop has expanded far beyond the boundaries of the elevated lines which gave the Loop its name.
Postscript: The successor to Yerkes' empire eventually consolidated all the elevated railway and other transportation companies to create the system which later became the Chicago Transit Authority (the CTA). His name was Samuel Insull, another colorful character who will probably be the subject of a later article.
KENNETH SUSKIN
1/30/08
Born into an old Philadelphia Quaker family in 1837, Yerkes is believed to have practiced non-violence. His forte, instead, was white collar crime. Yerkes started out using his bank president father's connections, but soon established a strong reputation of his own in local financial and social circles. He opened a brokerage firm at age 22 and joined the Philadelphia Stock Exchange. Within a few years, he specialized in selling municipal, state and government bonds. He invested money for a major client, the City of Philadelphia, but got carried away with unauthorized speculation which collapsed when the Chicago Fire of 1871 sparked a financial panic. When he couldn't cover the losses, Yerkes was arrested and sentenced to 33 months in the pen, the notorious Eastern State Penitentiary which was known and feared for its system of solitary confinement. Remember, prisons didn't have cable TV, golf and air conditioning in those days, and prisoners didn't sue for better food.
The clever Yerkes, attempting to forestall his prison sentence, attempted to blackmail two influential politicians, but the scheme didn't work. However, President U.S. Grant, no choirboy himself, feared that Yerkes' disclosures might hurt the party's chances in the next election, and agreed to pardon him if he would deny those accusations. Yerkes did so and was released after 7 months in jail.
He then returned to banking and rebuilt his fortune over the next few years. In 1880 he took a trip to Chicago where he became interested in the Northwest Land Company, headquartered in Fargo, (North) Dakota. He moved on to Fargo where he posed as a colonel and was able to obtain a quickie divorce from his wife of 22 years so that he could marry his 24 year old girl friend. After doing so, he relocated to Chicago where he planned to open a bank. To build up his bankroll, he assembled syndicates of investors for highly leveraged, high risk ventures which by and large collapsed with adverse results for the investors though not generally for Yerkes.
Eventually, he became attracted to the lure of street railways as profit making ventures. People didn't have cars in those days, and most traveled by public transportation or on foot. His first acquisition was the North Chicago City Reilway Company in 1886. With two business partners, he concocted a scheme to buy a bare majority of the stock for $1.503 million; then form a holding company called the North Chicago Street Railway Company which issued $1.5 million in bonds to pay for the stock purchase and then lease all the property of the former to the holding company for 999 years. Without going into too much detail, the net effect was to acquire a street railway producing $250,000 per year in dividends without investing any money. He found a formula that worked so well that he would repeat it the following year on Chicago's West Side. Because the businesses were highly leveraged, they were unprofitable from an accounting standpoint, although they gave Yerkes a fine living.
Before too long, he came to own more than half the private elevated railway companies in Chicago as well as most of the streetcar system. He built a downtown terminal connecting the elevated lines, which circle the main business district, Chicago's Loop. Through his direction and perhaps self serving vision, he modernized and expanded Chicago's transportation systems and helped make Chicago the world class city that it is today.
To many, the problem was in the details. To keep the competition at bay, Yerkes routinely bribed aldermen to obtain franchises from the City Council. If that didn't work, he hired working girls to seduce and then blackmail the lawmakers. As a last resort, he would buy out his competitors and either dismantle them or integrate them into his syndicate. Yerkes' companies were a maze of frontmen which included business associates, his wife and even his clerical staff so that his name didn't appear on anything--nothing could be attributed to him. But everyone knew who was really in charge, and Yerkes made many powerful enemies in the City Council, especially Mayor Carter Harrison Jr. who, in published articles, essentially called him a crook.
According to his biographer, John Franch, Yerkes didn't invent corruption in Chicago. He merely perfected it, "bringing order to what had been a chaotic system of bribery....After Yerkes' emergence on the scene, corruption in Chicago moved to another level."
Ultimately, in 1899, when his political capital ran out and the City Council defeated the renewal of his franchise, he sold out and moved to New York. Ironically, the swing votes to defeat Yerkes' interests were cast by that unholy aldermanic duo--the notorious Bathhouse John Coughlin and Hinky Dink Kenna. (See kensuskinreport,Dec. 25, 2007)
Unlike some of the so-called Robber Barons of the era like John D. Rockefeller and J.P. Morgan, who tried to justify their sometimes ruthless actions, Yerkes freely admitted his dishonesty and admitted that self-satisfaction was his primary aim in life. He lived a lavish life style, building a fabulous mansion on New York's Fifth Avenue, complete with a marble staircase, a conservatory with live birds and decorated with fine art by old master painters like the three R's, Rembrandt, Rubens and Raphael. He then built a comparable mansion nearby on Park Avenue for his mistress, the much younger but sophisticated Emilie Grigsby, the daughter of a Kentucky slaveholding father and a Cincinnati brothel-running mother.
Everybody wants to be liked, and to bolster his image and leave a favorable legacy, Yerkes allowed himself to be talked into building the world's largest telescope. In 1892, the 24 year old astronomer George Ellery Hale accepted a professorship at the new University of Chicago with the condition that it build a new observatory costing at least $250,000. Hale and U of C President William Rainey Harper visited Yerkes at his office on Clark Street and cleverly appealed to his considerable ego to obtain his financial support for the project. Since Yerkes wanted the biggest and best of everything, this was right up his alley. While Yerkes had no objection to financing a telescope, he didn't realize he was bankrolling the entire observatory and had some second thoughts. However, Hale leaked the story to the press about Yerkes great generosity, which made it very difficult to back out. The project was dedicated in 1897 with Yerkes delivering the widely acclaimed address presenting the observatory to the University of Chicago.
His other claim to fame was as the inspiration for Theodore Dreiser's novels, The Financier, The Titan and The Stoic (the Cowperwood trilogy) which were based on the life of Charles Yerkes.
Yerkes died in New York in 1905 at age 68, leaving a $4 million estate. The will left $100,000 to the observatory provided that it be officially designated the Yerkes Observatory. It still stands proudly today in Williams Bay, Wisconsin, on the shores of Lake Geneva. Its 40 inch telescope is today dwarfed by modern telescopes around the world and in space, but it still serves a purpose in research and training for the University. And, of course, Yerkes' other legacy, Chicago's Loop has expanded far beyond the boundaries of the elevated lines which gave the Loop its name.
Postscript: The successor to Yerkes' empire eventually consolidated all the elevated railway and other transportation companies to create the system which later became the Chicago Transit Authority (the CTA). His name was Samuel Insull, another colorful character who will probably be the subject of a later article.
KENNETH SUSKIN
1/30/08
Labels: Chicago History
posted by kensuskinreport at
8:48 PM
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home