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The Calumet Region: Indiana's Last Frontier
Indiana Historical Collections 39. [Indianapolis], Indiana Historical Bureau, 1959. 257-267, 274-276.

by Powell Moore

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(pages 257-267, 274-276)

GARY IS THE YOUNGEST of the region's industrial cities. Its history began with the construction of the huge steel mills and various subsidiary plants by the United States Steel Corporation at the southern tip of Lake Michigan in the Calumet Township of Lake County. Because the building of the municipality was included in the plans of the steel company for the area, Gary was truly a "city by decree." In 1915 it was reported to be the greatest single calculated achievement of the nation's steel industry. Ten years later it was described as the most interesting and ambitious industrial community ever undertaken in any country.1 From its very inception Gary was primarily a steel town and the prosperity of its citizens was determined by the great mills that were responsible for its existence. All was well with its inhabitants when the mills operated at full capacity, but when production declined or strikes occurred the specter of unemployment and unpaid bills rose to haunt them.

Selection and Purchase of the Site

In 1905 the United States Steel Corporation decided to construct new steel mills in the Middle West. Officials were not satisfied with the position held by the corporation's plants in the steel trade. They were barely holding their own in the production of pig iron, making 43.2 per cent of the nation's total in 1901 and 44.2 per cent in 1905. What was more alarming was their decline in production of steel ingots from about 66.2 per cent of total production in 1901 to 60.2 per cent in 1905. The capacity of the corporation's mills in the Chicago area was inadequate to satisfy its customers, which necessitated the shipping of steel at great expense from its eastern plants to the western markets. Space for expansion was not available at its Illinois Steel Company's mills in South Chicago, and the plant at Joliet was not economical because iron ore had to be transshipped from lake boats by rail.2 A site had to be found large enough for the future expansion of new mills and one that would also provide space for the erection of the corporation's subsidiary manufacturing plants. There must also be adequate room for the housing of workers in the vicinity of the plants.

The steel company's officials laid down certain minimum requirements regarding the choice of a site. Its agents were instructed to seek a moderately priced and compact tract of land adjacent to Lake Michigan. The depth of the water must be sufficient to accommodate the largest lake vessels, and adequate railway facilities must be available. The Gary site not only satisfied these requirements but was also near Chicago, where an abundance of labor could be obtained. Steel officials were familiar with the area because it lay just east of the Buffington Plant of the Universal Portland Cement Company, a subsidiary of the United States Steel Corporation. This cement plant, construction of which was started in 1903, utilized steel slag from the Illinois Steel Company's Mills in South Chicago for the manufacture of its product. In 1906 Buffington had an annual capacity of 2,000,000 barrels of cement.3

The site selected for the new steel mills and for the city was almost devoid of inhabitants, the population of the township being only 1,408 in 1900.4 The nearest settlements were the village of Miller and the community around the Aetna Powder Plant to the east, the small village of Clark to the west, and the town of Tolleston about three miles from the lake front to the south. The cottages and clubhouse of the Calumet Gun Club, founded by Chicago sportsmen in 1885 and discussed earlier, occupied a site just east of the present inner harbor of the steel plant. Sand ridges, low dunes, and lakelike sloughs characterized the area, which was covered by a heavy growth of scrub oak, marsh grass, and tangled vines. The sluggish Grand Calumet, more like a bayou than a river, lay half a mile from the lake front across the proposed plant site.

The huge area acquired by the steel company was originally a part of George W. Clark's estate. In 1858 Clark sold a tract of more than four thousand acres to George T. Cline and to Allen Dorsey and his wife, Ann, of Chicago. This tract, which included most of the area upon which the steel mills were built, was bounded on the south by the Grand Calumet. In 1862 Cline and Dorsey sold one eighth of their holdings to Henry Holt, a Baltimore publisher.5 The Holt purchase of about five hundred acres was in the vicinity of Pine Station. At the time of the packing-house boom in the region in 1890, Philip D. Armour, Gustavus Swift, and Edward Morris bought about four thousand acres where the city of Gary now stands. The greater part of this purchase was made in the names of Albert H. Veeder, attorney for Swift, and Edward Martyn of Chicago. Among their most important acquisition was a tract, acreage not specified in the deed, from Henry Holt and the Dorseys for $275,000.00.6 P. Anderson Valentine, of Chicago, was later associated with Veeder and the packers' tract was identified on the maps as the Veeder-Valentine Tract. Gustavus Swift obtained in his own name a section of 640 acres which lay north of the Indian Boundary Line and east of the southern tip of Lake Michigan.7 When the steel company bought its land, it had to bargain with shrewd businessmen who had held on to their land against such an eventuality.

In 1905 the purchase of the sites for the mills and the town began quietly, every effort being made to conceal the identity of the buyer. The corporation engaged Armanis F. Knotts, a former mayor of Hammond and the steel company's attorney for several years, to undertake the negotiations. In many instances, Knotts acted as the agent for both the seller and the buyer. Most transactions were settled in cash, which in one instance, according to reports, involved the carrying of $1,300,000 through the streets of New York in a handbag.8 The deeds were made out to persons in different parts of the country and at the suitable moment transferred to the steel company.9 According to Knotts, the most difficult transaction was the purchase of 1,500 acres from J. Ogden Armour. This tract, which lay just east of the present Broadway Street, was obtained only after numerous conferences with the packer.10 The price paid, according to statements made by the steel company's representatives, varied from $500.00 to $2,000.00 an acre, or an average of $800.00. Information from individuals who were concerned in the purchase but not connected with the steel company placed the price at amounts ranging from $350.00 to $1,500.00 an acre, the average being $814.00. The steel company's officials reportedly estimated the cost of the entire nine thousand acres acquired at about $7,200,000.11 This huge area extended over seven miles along the shore of Lake Michigan and south to the Wabash Railroad tracks.

Policies of the Gary Land Company

The Indiana Steel Company was organized in 1906 as a subsidiary of the United States Steel Corporation to build and operate the steel mills. Eugene J. Buffington, president of the Illinois Steel Company, was chosen to head the new corporation. About the same time the Gary Land Company, a subsidiary of Indiana Steel, was organized to lay out and build the town. Buffington was also president of this company and Armanis F. Knotts was its manager. The mills and the town were to be separated by the Grand Calumet River.

A name for the projected town was one of the first concerns of the officials. The name "Corey," in honor of William Ellis Corey, at that time president of the United States Steel Corporation, was considered for a time. At a meeting in the Chicago offices of the Illinois Steel Company, Buffington, Knotts, and William Duff Haynie, a company attorney, named the future town "Gary," for Judge Elbert H. Gary, chairman of the board of directors of the United States Steel Corporation. The Post Office Department was reluctant at first to permit the use of the name, there already being a Gary in Maryland. Fears were expressed that the similarity of "Ind." and "Md." in script would lead to congressmen.12 A short time after the town government was formed, its board of trustees asked Judge Gary's permission to place his likeness on the municipal seal. The Judge not only gave his approval but presented the town with a handsome seal prepared by Tiffany of New York.13

The steel company, in working out its plans for Gary, was guided by previous experiences with other industrial towns. Steel officials were well acquainted with the sad experiences of the Krupps in Essen, Germany, and the Pullman Company at Pullman, Illinois. These were paternalistic communities in which the companies had owned the houses, stores, schools, and in general had sought to regulate the private lives of their employees. Several years after Gary was founded, Eugene J. Buffington stated that "the most successful attempts at industrial social betterment in our country are those farthest removed from the suspicion of domination or control by the employer." "Gary is nothing more than the product of effort along practical lines to secure right living conditions around a steel-manufacturing plant." The steel company was influenced by its success at Ambridge and Vandergrift, Pennsylvania, where the company's subsidiaries provided their employees with streets, proper water and sewerage facilities, and an opportunity to own their own homes. At Gary, with the exception of the Land Company's regulation of the sale of intoxicating liquors, no attempt was made to influence the private lives of the employees.14 While Judge Gary hoped that this would be a model town, he was strongly against the use of "fads."15

Officials intended for the municipality to be confined to the area purchased by the steel company, which lay between the mill site along the lake front and the Wabash tracks on the south. Strict regulations were prepared to assure that certain standards would be observed in the construction of business houses and residences. The erection of wooden business structures or buildings less than two stories was forbidden on Broadway, the principal commercial street. The officials of the land company wished to discourage speculation in the sale of lots and made every effort to prevent the steel company's employees from being exploited by unscrupulous real estate operators. Their plans called for providing homes for workers, rather than making money by selling lots and houses. 16 Under the contract, an individual could purchase only one lot at a time, and if he did not erect a building of specified quality within eighteen months the company recovered the deed. If the business house or residence was constructed within the allotted time, the owner was free to sell it and purchase another lot.17

The land company arranged for private contractors to erect homes for sale or rent to the employees of the steel works. The sale price included the cost of the lot, streets, sidewalks, sewers, and the cost of the house plus 5 per cent interest on the unpaid balance. The total cost could be paid in ten annual installments and the houses were priced so moderately the payments amounted to little more than rent. If the householder was discharged from his job in the mills, or voluntarily quit, or for any other reason wanted to anticipate his payments, he could do so. Or if he wanted to turn his house back to the company, the amount he had paid in would be refunded, minus 9 per cent as rent. In case of death similar terms were open to his heirs.18

Intoxicating liquor was to be sold at only four designated places in the area owned by the land company, and these places were to be operated by the company or leased to carefully chosen individuals. Actually, only two bars were ever established in the company's part of the town. The restriction on the sale of liquor was the major departure from the steel company's rules at Ambridge and Vandergrift where prohibition was complete. Officials explained that Gary's nearness to other cities in the region and to Chicago would make it impossible for intoxicants to be kept from the workers. By operating a few places under the supervision of the land company it hoped the liquor traffic could be made less harmful and objectionable to the community. If it should get out of hand, the company could always suppress the business in the area north of the Wabash tracks.19

Laying Out the Mills and Town

In the fall of 1905 the steel company's engineers began work on the plans for the mills. John Kirk, superintendent of the South Chicago Works of the Illinois Steel Company, and Ralph E. Rowley, a young engineer at the same plant, made preliminary drawings for the great railroad switching and storage yards to be located in the Gary plant site. The plans for the construction of the steel mills were so cloaked in secrecy that Rowley did not know when or where the railroad yards were to be built. Kirk later became superintendent of these yards which were named in his honor. On March 8, 1906, Rowley, who had been chosen chief construction engineer of the proposed mills, made a preliminary survey of the Gary site. Four days later he and his corps of engineers, which included his assistant, Thomas H. Cutler, found living quarters in the cottages of the old Calumet Gun Club on the lake front. The work of laying out the site for the plant and the harbor was started in a snow storm the following day. Grading began a few days later.20 Armanis F. Knotts, manager of the Gary Land Company, located the places where tents were to be erected for the use of company officials and supervisors, and arranged for the digging of wells to provide pure water for those who were to construct the mills and to build the town.

The latter part of April, 1906, Arthur P. Melton, engaged by the Gary Land Company to plan and lay out the town, joined the group of engineers, many of whom were old friends, at the gun club.21 Melton, Rowley, and Cutler, because of the important roles they played in the development of the mills and of the town, were popularly known in the early years as the "Three Industrial Musketeers."22 Before Melton began his task of laying out the town, he undertook the construction of a temporary bridge across the Grand Calumet River just west of the present Broadway Street Bridge. The river, which lay across the center of the plant site at that time, was about one hundred feet wide with a marsh on its north side about five hundred feet in width.23 Until this bridge was built, the only way that part of the plant site could be reached was by crossing the river at Clark Road, several miles to the west, and then proceeding eastward along the Baltimore and Ohio Railroad tracks.24 Grading of the plant site north of the river began when the bridge was completed.

In laying out the town, engineers found it difficult to mark the line of Broadway Street, which was to be the principal commercial thoroughfare, because of the series of sand hills and sloughs over which it passed, the hills being covered with a thick growth of scrub oak and the sloughs supporting a dense vegetation of marsh grass and bushes. One slough, in particular, was about a mile long and lay just north of the present Sixth Avenue where the Gary Hotel now stands. This formidable obstacle was about six feet deep and at least seventy-five feet wide. Melton related their troubles at this point: "When our surveying party was measuring Broadway and came to this slough, one of the chainmen made several attempts to throw his tape line across. So he started to wade across but gave that up when he started to sink down in the soft muck bottom. One of the residents of Tolleston was around looking on as was also his dog. The chainman conceived the idea of tieing the tape to the dog's collar, throwing a stick across the slough, sending the dog after the stick and then have the man on the other side call the dog—thus was the first engineering obstacle overcome.25

The survey of Fifth Avenue, the city's principal east and west street, was made after the survey of Broadway to the Wabash tracks was completed. When the engineers arrived at what is now Monroe Street, a dense swamp jungle was encountered in the bed of a creek known as Gibson's Run. A day was required to get a line across that morass. In the course of the survey of the land company's first subdivision of about eight hundred acres, the engineering crew was bedeviled by yellow jackets and hornets in the thickets, and by snakes in the swamps. The heat of the sun's rays was at times almost unbearable.26

Construction of the Steel Works

Early in June, 1906, William P. Gleason arrived to supervise the construction of the steel mill and to be its superintendent when the work was completed.39 Gleason, whose character and personality were molded in the school of hard knocks, was to rule the huge mill with an iron hand for twenty-nine years. A rugged individualist of the old order, he was both liked and feared by the personnel of the steel plant and by the citizens of the community. Gleason's most bitter enemies could not deny his interest in Gary's welfare, and all recognized in later years his accomplishments as the "father" of the city's park system.

By July, 1906, several hundred men with teams of horses and mules were busy grading and leveling the plant site.40 No effort was made by the steel company to provide housing for the construction workers. As a result, a city of tents was erected by the laborers on the company's property along the Grand Calumet River at the plant site. Most of the workers lived through the first winter in these tents, which were made more snug against the cold winds by the banking of sand against their walls. They later abandoned the tents for shacks and huts built of tar paper, boards, tin, or anything else at hand. According to reports, as many as twenty men occupied a single shack.41 A number of bunkhouses accommodated some of the workers. The most famous of these, facetiously named "McFadden's Flats," was located on Broadway just south of the river. This structure contained sixty cots which rented for one dollar a week each. When a guest wished to "wash up," he used the wash pan at the pump outside the back door. McFadden heated the place with an old depot stove, which he purchased in Chicago. Thirty of his lodgers carried this heavy affair through the sand from the railroad station at Miller to the "Flats," a distance of about two miles.42 Numerous workers lived in boardinghouses conducted by foreign-born families. The cost of a bed and meals, the later consisting mainly of meat and potatoes, seldom amounted to more than $3.00 a week in these places. 43

The tremendous task of preparing the mill site continued for a long time after the construction of the plant began. Three railroads, which ran through the plant area, were moved a short distance to the south. Fifty one miles of new tracks, most of which were elevated to eliminate street crossings, were built for these roads. The elevations were constructed of sand from the dunes east of Miller. The relocation of the Grand Calumet River was an achievement of epic proportions. This stream, which cut the plant site in two, was a thousand feet wide in some places during flood seasons. It was moved more than a thousand feet to the south, where for two miles it was imprisoned in a new and straight bed.44

The steel plant was originally planned to consist of eight blast furnaces, fifty-six open-hearth furnaces, a rail mill, billet mill, plate mills, merchant bar mills, and a by-products coke oven plant. Such auxiliary units as machine, roll, electric, repair, and blacksmith shops were also built.45 Construction of a harbor slip to accommodate the largest ore boats, and the Kirk Yards, designed for switching and also for the storage of 15,000 freight cars, was soon a reality. The harbor was formed by the construction of two parallel piers 250 feet apart, 4,950 feet long, and projecting 2,360 feet into Lake Michigan. Between these piers the channel was excavated to a depth of twenty-three feet with a turning basin at its southern end. This harbor was built by the steel company at an estimated cost of $2,450,000. By December, 1908, when the first blast furnace was put into operation, the company's expenditures on the plant, railroads, and the town amounted to $42,797,000. Of the amount appropriated for the Gary projects, $22,500,000 remained to be spent.46

1 Taylor, Satellite Cities, 165, 174; Ida M. Tarbell, The Life of Elbert H. Gary. A Story of Steel (New York, 1925), 334. [back to text]

2 United States Steel Corporation, Fourth Annual Report, 1905, p. 25. [back to text]

3 Ibid., Fifth Annual Report, 1906, p. 29; Appleton, The Iron and Steel Industry of the Calumet District, 29; The Calumet Region Historical Guide, 91-92. Employees of the Buffington plant probably lived in East Chicago. [back to text]

4 U. S. Bureau of the Census, Thirteenth Census (1910): Population, pt. 2:531. [back to text]

5 Lake County Deed Records, X:259. [back to text]

6 Lake County Deed Records, 52:170. See above, 131-35, for an account of the packing-house boom. [back to text]

7 Lake County Deed Records, 65:243. The Indian Boundary Line was also called the Ten Mile Line. It ran eastward from the southern tip of Lake Michigan and marked the northern boundary of Indiana Territory. See above, 42-43. [back to text]

8 Robert M. Haig, "The Unearned Increment in Gary," in Political Science Quarterly, 32(1917) :82. [back to text]

9 An example of the subterfuge employed was the sale by Veeder and Valentine in January, 1906, of 892 acres to Thomas Murray of New York City for "one dollar and other valuable considerations." In July of the same year, Murray "sold" the tract to the steel company. See Lake County Deed Records, 122:435 and 123:240. [back to text]

10 Armanis F. Knotts in the Gary Post-Tribune, June 4, 1931, Historical Section, p. 4. [back to text]

11 "Haig, "The Unearned Increment in Gary," in Political Science Quarterly, 32:82. [back to text]

12 Armanis F. Knotts in the Gary Post-Tribune, June 4, 1931, Historical Section, p. 4. [back to text]

13 Hammond Lake County Times, June 14, 1907; C. Oliver Holmes, "How We Incorporated the Town," in Lake County Old Settler and Historical Association, Historical Records, 1924, p. 43. [back to text]

14 Eugene J. Buffington, "Making Cities for Workmen," in Harper's Weekly (New York), May 8, 1909, pp. 15-17; "Vandergrift, A Workman's Paradise," in Iron Age, 68:5-7 (November 21, 1901). [back to text]

15 Elbert H. Gary in Iron Age, 77:1, 417 (April 26, 1906). [back to text]

16 United States Steel Corporation, Fifth Annual Report, 1906, pp. 27-28. [back to text]

17 Buffington, "Making Cities for Workmen," in Harper's Weekly, May 8, 1909, p. 17. [back to text]

18 Taylor, Satellite Cities, 188. [back to text]

19 Buffington, "Making Cities for Workmen," loc. cit. [back to text]

20 Ralph E. Rowley, Notes on the City of Gary, Indiana, February 15, 1926 (Typed MS in Office of Bancroft Yarrington, Public Relations Director, United States Steel Corporation, Gary), 1. [back to text]

21 Melton was employed as an engineer at the Illinois Steel plant in South Chicago before coming to Gary. See Howat (ed.), A Standard History of Lake County, 2:852. [back to text]

22 Cannon, Autobiography, Chap. 47, p. 2. [back to text]

23 A. P. Melton, "Early Recollections of Gary," in Lester (ed.), Papers by Various Hands, 1:279. [back to text]

24 Rowley, Notes on the City of Gary, 3. [back to text]

25 Melton, "Early Recollections of Gary," in Lester (ed.), Papers by Various Hands, 1:279, also article by Melton in Gary Post-Tribune, June 4, 1931, Historical Section, p. 13. [back to text]

26 Melton, "Early Recollections of Gary," in loc. cit., 1:280. Gibson's Run had its source near Fifteenth Avenue and Broadway. The stream flowed in a northwesterly direction through what is now Jefferson Park and into the Grand Calumet River west of Buchanan Street. [back to text]

39 Gleason, a native of Chicago, spent his boyhood in Joliet, Illinois. He was not a university-trained engineer; instead, he went directly from the public schools to a job at the Joliet Rolling Mills, becoming in time the master mechanic of that plant. Gleason later went to Pueblo, Colorado, where he was employed by the Colorado Fuel and Iron Company. In 1900 he moved to Pittsburgh as an executive of the Crucible Steel Company of America. A short time later he supervised the construction of the Clairton Steel Company's plant at Clairton, Pennsylvania, and thereafter served as assistant general manager of that mill until it was absorbed in 1903 by the United States Steel Corporation. The corporation assigned him to its Carnegie Steel Works where he remained until sent to Gary. See Howat (ed.), A Standard History of Lake County, 2:533; Cannon, Loring, and Robb (eds.), History of the Lake and Calumet Region, 2:42-43. [back to text]

40 The Steel Company hired teams from farms as far away as Chesterton, Indiana. See Chesterton Tribune, May 17, 1906. "Gary Weekly Tribune, March 5, 1909. [back to text]

41 Gary Weekly Tribune, March 5, 1909. [back to text]

42 Douglass Wilson, "McFadden's Flats," in Gary Post-Tribune, June 4, 1931, Historical Section, p. 8. McFadden was assessor of Calumet Township from 1909 to 1931. [back to text]

43 Gary Weekly Tribune, March 5, 1909. [back to text]

44 Indiana Steel Company, Gary, Indiana (Booklet published by Indiana Steel Company, 1912), 23; Rowley, Notes on the City of Gary, Indiana, 3; William P. Gleason, "The Gary Works of the Indiana Steel Company," in Lester (ed.), Papers by Various Hands (scrapbooks in Gary Public Library), 2:315. [back to text]

45 Gleason, "The Gary Works of the Indiana Steel Company," in loc. cit. [back to text]

46 "Harbors on the Great Lakes and Elsewhere," in Letter from the Secretary of War, 1910, in U. S. House Documents, 61 Congress, 3 session, Vol. 20, No. 1067, p. 24; United States Steel Corporation, Seventh Annual Report, 1908, p. 27. [back to text]

Moore, Powell. The Calumet Region: Indiana's Last Frontier. Indiana Historical Collections 39. [Indianapolis], Indiana Historical Bureau, 1959. 257-267, 274-276.

This collection presented by:
The IU Digital Library Program and The Calumet Regional Archives
Last updated: 1 February 2002
Copyright 2002, The Trustees of Indiana University