Can bottom-up relief efforts lead to recovery after disasters? Conventional wisdom and contemporary public policy suggest that major crises require centralized authority to provide disaster relief goods. Using a novel set of comprehensive donation and expenditure data collected from archival records, this paper examines a bottom-up relief effort following one of the most devastating natural disasters of the nineteenth century: the Chicago Fire of 1871. Findings show that while there was no central government relief agency present, individuals, businesses, corporate entities and municipal governments were able to finance the relief effort though donations. The Chicago Relief and Aid Society, a voluntary association of agents with a stake in relief outcomes, leveraged organizational assets and constitutional rules to administer aid.
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I use the terms “disaster relief” and “disaster aid” interchangeably to mean the immediate efforts to supply the victims with necessities and to re-establish the status quo prior to the disaster. This paper focuses on these short-run relief efforts. When discussing implications for long-term recovery and reconstruction, I will use those terms accordingly.
Balancing political demands and special interests after a crisis can work to the benefit of particular groups. After Hurricanes Frances and Katrina, Florida politicians reduced licensing restrictions on construction work they otherwise would enforce under non-crisis conditions (see Skarbek 2008).
Although a wartime income tax was levied in 1861, the first peacetime federal income tax was not introduced until 1894.
Cermak et al. (1994) find that tax incentives are the primary, egoistic motivators for donating to charity. For the donor, the extent of tax deductibility has a major impact on the personal cost of making a contribution. When the tax deductibility of donations changes, so does the cost of the contributing to charitable causes. See Smith (1980) and Peloza and Steel (2005) for a meta-analysis of the incentive effects of changes in taxes on charitable contributions. While agents respond to relative price changes, field experiments highlight the variance of agent responses to changes in institutions and mechanism design (see, for example, List and Lucking-Reiley 2002; Karlan and List 2007). In addition, experimental studies by de Oliveira et al. (2011) find evidence for the existence of a “donor type” agent—suggesting that giving decisions are driven by a single factor and individuals who give to one organization, give significantly more to other organizations than do non-donors.
A separate, but related literature concerns the role of public–private partnerships in disaster relief (see Abou-bakr 2013).
Quoting D.H. Robertson, in a famous line, Coase (1937, p. 388) explains that firms are like, “Islands of conscious power in this ocean of unconscious co-operation like lumps of butter coagulating in a pail of buttermilk.”
As the Chicago Tribune reported the same day, “A fire in a barn on the West Side was the insignificant cause of a conflagration which has swept out of existence hundreds of millions of property, has reduced to poverty thousands who, the day before, were in a state of opulence, has covered the prairies with thousands of homeless unfortunates, which has stripped 3,600 acres of buildings, which has destroyed public improvements that is has taken years of patient labor to build up, and which has set back for years the progress of the city, diminished her population, and crushed her resources” (ProQuest Historical Newspapers 1849–1986, p. 1).
Fraternal societies such as the Knights of Pythias, Ancient Order of Good Fellows, the Independent Order of Sons of Malta, and B’nai B’rith supplied mutual aid to their members. The latter organization, for example, had 584 members living in Chicago when the fire destroyed the city, and they could draw on a national network exceeding 25,000 members, 2,500 of whom lived in the tri-state area (Andreas 1884a). Some associations were selective based on ethnicity, such the Society for the Protection and Aid of German Immigrants, and most mutual aid societies were composed generally of members of the working class population (Andreas 1884b).
There is no evidence to suggest that the Chicago Relief and Aid Society ever had black members; however, no provisions banned black, Indian, or any other race outright. This is exceptional given that, as Beito (2002) reports, most fraternal organizations did not permit non-Caucasian members. For example, of the 386 organizations in Connecticut in 1891, 97.6 % barred blacks from membership (Beito 2002, p. 45).
General Sheridan had troops present in Chicago from October 11th through the 23th. Before the arrival of Sheridan’s 600 troops, public safety and policing were provided by 1,479 police officers, volunteers, and reserve troops from neighboring militias and 450 “merchant police”—private guards and watchmen employed by railroads, hotels, and banks. Police commissioners Thomas Brown and Mark Sheridan argued that the mayor should leave public safety to those “thoroughly acquainted with the character of the people” (Thomas Brown testimony quoted in Sawislak 1995, p. 55). The mayor however, chose to delegated authority to General Sheridan, while ordering him to refrain from “interfering with the functions of city government” (Colbert and Chamberlin 1871, p. 498). Sheridan then exercised martial law, extended his powers arbitrarily to enforce price controls, and issued a strict curfew to take effect at sundown. Sheridan ordered his men to fire on any person who disobeyed an order (Sawislak 1995, p. 57). Martial law quickly unraveled after Sheridan’s troops killed a local prosecuting attorney, Thomas Grosvenor, who walking home after dark on October 20th, 1871 (Sawislak 1995, p. 59).
Self-governance systems are those where the individuals holding power are constrained to act in accordance with the rules adopted by and preferences of the individuals they govern (Ostrom et al. 1961). See (Lemke 2012) for a similar description of the jurisdictional landscape of nineteenth century America as polycentric.
According to Brown (1941, p. ix), “an inventory of the country archives of Illinois made in 1915 listed a few volumes of Cook County records which survived the fire, but these have now disappeared from the county commissioner’s vaults”.
As mentioned previously, many of the donations were raised in conjunction with mutual aid payments for the members of networked organizations. For example, on October 11th, the San Francisco Chronicle published letters received the previous day from the Fraternal Order of the Odd Fellows of Chicago. Alongside the correspondence were statements describing their fundraising efforts, such as “Lodge 124 took the initiative step at its meeting last night, and appropriated five hundred dollars to their relief fund for the Chicago Odd Fellows” (San Francisco Chronicle, Oct. 11, , p. 3). These records are consistent with Olson’s (1965) byproduct theory of collective action, whereby groups organized for some other purpose (mutual aid, here) can be redirected to supply other public goods at relatively low cost.
“The continued donations since our last report, together with the twenty days of mild weather in January, enable us to say that the resources of the Chicago Relief and Aid Society will meet the wants of the present winter. By resources we mean not only what we have actually received, but various sums of which we have been advised….We regard it as a duty to make this announcement the earliest day that it could be made with reasonable assurance of its correctness. We can also say that there will be enough to make temporary provision for our charitable institutions whose resources were cut off by the fire” (CRAS 1874, p. 140; Chicago Tribune 1872).
The panic of 1873 led to demands from unemployed workers for the Society to distribute the remaining balance for work relief. The Society responded by extending their operations to aid 9,710 families, some of who were listed in the records as fire victims (see Brown 1941, p. 119).
Estimates published in Andreas (1884b) suggest that about 15,000–20,000 people evacuated Chicago in the first few days after the fire.
Three pounds of pork, six pounds of beef, 14 pounds of flour, 1¼ peck of potatoes, ¼ pound of tea, 1½ pounds of sugar, 1¼ pounds of rice, 1¼ pounds of soap, 1½ pounds of dried apples, and three pounds of fresh beef (CRAS 1874, p. 160).
Evidence from historian Christopher Reed, a specialist in African American experience in twentieth century Chicago, seems to confirm the fact that the Chicago Relief and Aid Society did not discriminate against blacks when making aid distributions. On July 14th, 1874, another fire broke out in Chicago, this time destroying many houses in the African American community. Reed (2005, p. 190) reports that, “With alacrity, assistance was forthcoming, with the Chicago Relief and Aid Society providing cash and other help.”
The annual figures for the almshouse and the insane asylum are from 1871. The amount spent on outdoor relief in 1873 was $170,000, but there are no data available for 1871. See Brown (1941, pp. 81, 120).
For example, historian Reed (2005, p. 189) reports that African Americans in Chicago “demonstrated a high sense of civic awareness and commitment during the fire. Their efforts persisted in the aftermath of the conflagration and their concern for their fellow citizens and public and private property moved their recognized level of citizenship to a higher level than just being disinterested, self-absorbed citizens…. African Americans now proposed to more fully participate in civic affairs as part of their civic duty.”
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Email: EmilySkarbek@kcl.ac.uk. Address: King’s College London, Department of Political Economy, Strand Campus, WC2R 2LS London, United Kingdom. The author thanks Paul Dragos Aligica, Bruce Caldwell, John Meadowcroft, Daniel Sutter, David Skarbek, two anonymous referees, and the editors for helpful comments. Much of the research for this paper was conducted while at the Center for the History of Political Economy at Duke University. Earlier versions of this paper were presented at meetings of the Public Choice Society and the Southern Economics Association.
Appendix: Constitutional rules of the Chicago Relief and Aid Society
Appendix: Constitutional rules of the Chicago Relief and Aid Society
The object of this Society is to aid such of the poor as through sickness or other misfortune require temporary assistance. The permanently dependent are not regarded as proper subjects, because if they should be relieved, the entire funds of the association would soon be exhausted in the support of a permanent list.
Each applicant for relief is regarded as entitled to charity until a careful examination proves the contrary.
Relief is only to be given after a personal investigation of each case by visitation and inquiry by the Superintendent or authorized visitor.
Necessary articles in small quantities to be given, and only in proportion to immediate need.
Relief to be discontinued to those who manifest a purpose to depend on alms rather than their own exertions for support.
Destitute persona sent from other cities should be referred to the County Agent, to be sent to their former residence. Should we undertake the support of such persons it would be offering a premium to other cities to send their poor to us to be supported.
Able-bodied men are not regarded as proper subjects for relief, but will be furnished employment directly by the Superintendent, or sent to reliable employment agents, which whom the Society cooperates.
Applicants having claims on other charities are to furnished with a card directing them to the same.
It is an absolute condition of relief by this Society that all persons receiving aid are not to ask alms or assistance of the pubic, either on the street, at residences, or places of business.
No loans shall be made from the funds of the Society.
As a rule, relief to be administered in supplies rather than money.
Subscribers to the funds of the Society are entitled to send persons applying to them for relief to the rooms of the Society, and will be furnished with cards for that purpose.
In all cases where families or personal have been aided by this Society through a winter, on account of want of employment, and are by us offered situation either in the city or country, adapted to their condition in life, with aid to reach such situations, which they refuse to accept, no further relief shall be extended to them.
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Skarbek, E.C. The Chicago Fire of 1871: a bottom-up approach to disaster relief. Public Choice 160, 155–180 (2014). https://doi.org/10.1007/s11127-014-0175-1
- Disaster relief
- Charitable giving
- Natural disaster
- Chicago Fire 1871