As Harold M. Mayer and Richard C. Wade explain in Chicago: Growth of a Metropolis, until the mid-1860s Lake Street was the retail center of Chicago. In 1867, Potter Palmer, who had made his first fortune in wholesale and retail goods, including wartime speculation in cotton, turned his attention mainly to real estate. Palmer purchased three-quarters of a mile of property along State Street south of Lake with the intention of developing it into the city’s primary retail area. He progressed toward his goal with remarkable speed. Among Palmer’s key steps was to persuade Marshall Field and Levi Leiter, his former partners in the dry goods business (Palmer retired from the partnership in 1867), to abandon Lake Street for a magnificent new store at State and Washington streets. Another was to build a grand hotel, named after himself, on the southeast corner of State and Monroe.
The two-story frame dwelling pictured here, on Monroe Street just east of State Street, was one of the properties that made way for the Palmer House hotel. Note the blurry figure of a woman in the doorway.