An early dependence on water characterized the developing cities of the Great Lakes. "The major settlement period of the Great Lakes region coincided with the rapid development of industrial technologies and processes. Proximity to productive agricultural land and access to important raw materials, coupled with a growing labor force, gave the region an unparalleled advantage in domestic and overseas markets. Direct application of water power had a more limited role in the Great Lakes cities compared with places inland; rather, water transportation was the foundation of shore-based manufacturing and related activities. Water-intensive industrial operations, whether located on the waterfront or nearby, were a natural result of water availability."¹

In the Upper Great Lakes, massive movements of iron ore from northern Minnesota and Michigan to Indiana and neighboring states helped make "the Great Lakes transportation system the busiest in the world for many years. The shipping ‘backbone' of Great Lakes commercial navigation was made possible with the construction of a ship canal and lock system, opened in 1855 at Sault St. Marie, Michigan."

One unfortunate consequence of "the pall-mell industrial era" was environmental degradation. "The binational region's bountiful resources which helped sustain economic growth also were depleted, in some cases recklessly."²

The pattern generally applicable to the Upper Great Lakes also applied to Northwest Indiana. Agriculture and fishing were important early commercial ventures, uses still important in the region, but access to raw materials and ready transportation led to rapid industrialization.

Interest in a harbor on Trail Creek in Michigan City dated from the early 19th century, owing in part to the construction of the Michigan Road north from Indianapolis. In 1836, Congress appropriated $20,000 for harbor improvements, and additional appropriations followed in the next two years. Early efforts were generally unsuccessful, however, and the port declined. "The whole story is one of inefficiency, government red tape, and bad politics."³ Following the Civil War, there was renewed interest in the harbor, and roughly $1 million was expended through 1897 to improve and manage its facilities. In the 1890s, there were sailing vessels and steam freighters. Small schooners were "so thick that they had to be parked double until they could get to the dock and unload."⁴

Also in Michigan City, the Haskell and Barker Car Company developed a business manufacturing train cars for the Union Army during the Civil War. In 1869, the company produced 600 cars a year; production increased to 1,000 cars annually by 1879 and 6,000 annually by 1894. In that year, the company employed 3,500 men. "They were using 150,000 tons of iron, 75,000 tons of coal, and 100,000,000 feet of lumber annually."⁵

Standard Oil Company built a refinery in present-day Whiting in 1889 and opened production the following year. The company was attracted by the proximity to a major pipeline, access to railway service, an inexhaustible supply of water, and sparse human populations unlikely to claim sulfur emissions during refining were a nuisance.⁶

Inland Steel found its origins in open hearth furnaces and mills begun in present-day East Chicago in 1901. United States Steel chose what would become Gary for a new "ground up" plant, attracted to "the southern extremity of Lake Michigan" where "the greatest tide of transportation in the world" could be found; the first boat from Minnesota bearing steel entered its Indiana Harbor in 1908, and production began the following year.⁷ Other growth occurred in the area, including the Hubbard Steel Foundry Company (1910), the Sinclair Refining Company (1915), Youngstown Sheet and Tube Company (1923), and the Roxana Petroleum Corporation--later Shell Oil (1928). The Indiana Harbor enjoyed an active trade, with principle receipts in the early 20th century including iron ore, coal, limestone, gypsum, wood pulp, and palm oil.⁸

Today, Indiana and the seven other Great Lakes states, together with Ontario, comprise a "major industrial and agricultural region of North America." The substantial economic activity in the Great Lakes region has had much to do with making U.S. and Canadian trade the largest bilateral relationship in the world.⁹

The transportation network in the Lake Michigan region is vital to the economic sectors of the region. Harbors in the Lake Michigan region link Indiana to other ports in the Great Lakes and the works. Cargo shipped through the ports in the Lake Michigan region includes coal, coke, iron ore, steel and steel related products, fertilizer, grain, salt, limestone, and petroleum. Burns International Harbor handled more than 8.6 million tons of cargo in 1989, which accounted for more than $46 million in sales and purchases. Counties in northern, central and even southern Indiana benefit directly and indirectly from Burns International Harbor.¹⁰

The major industries and communities within the Lake Michigan region are linked together by the Chicago South Shore and South Bend Railroad, Interstates 80/90 and 94, and US Highways 12, 20, and 30. Studies by the Northern Indiana Commuter Transportation District show that the South Shore trains helped Indiana residents bring in $120 million a year in wages and salaries (in 1987 dollars) from jobs in Chicago.

Today, large industry contributes a dominant share to the local economy, including the payment of property taxes. The ten largest industries will pay approximately $175 million in property taxes to Lake County in 1996. These companies are Bethlehem Steel, Burns Harbor Division; LTV; Cerestar (formerly American Maize); Inland Steel; National Steel, Midwest Division; Lever Brothers; USX; Proxair; NIPSCO; and Amoco. The steel industry employs nearly 30,000 area residents, contributing nearly $20 million daily into the Indiana economy.¹¹

Significant contributions to the regional and state economy are also provided by agribusiness, as well as commercial and service sectors. Recreation serves a major roll. The Indiana Dunes National Lakeshore alone receives approximately 1.6 million visitors each year. This activity generates approximately $26 million annually.¹² "[I]n 1988, Indiana fishermen brought in 1.3 million pounds of fish which generated close to $1.7 million dollars for the state's economy." ¹³

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