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Made in Chicago: The Chicago Board of Trade and the Grain Elevator System previous 3 of 18 next

The Chicago Board of Trade and the Grain Elevator System Although the grain elevator was invented in Buffalo, the grain elevator system came into being in Chicago. As the railroads expanded, farmers were able to get their crops from the prairies to the marketplace more quickly and efficiently. More and more sacks of grain piled up in Chicago.

The business clearly needed streamlining; the casualty would be the inefficient, labor-causing sack. In 1857, the Chicago Board of Trade introduced a wheat grading system, so that one farmer's crop could be combined and stored in bulk with another farmer's crop of the same grade. All the loose grain could be mechanically transferred from railroad cars to grain elevators, eliminating the need for laborers to load and unload sacks. The seller would walk off with a warehouse receipt, which he could trade, sell or use as currency in the marketplace. From the grain elevator, a buyer could have his grain transferred directly into a boat to be carried anywhere around the globe. By 1861, Chicago's grain trade had increased to 50 million bushels annually -- a rise of over 48 million bushels in a decade -- supporting the city's boast that it fed the world.

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