Early speculators included Morgan L. Martin, from Green Bay, and Byron Kilbourn, assistant to the surveyor general of the Michigan territory. Town of Chicago incorporated with a population of 350. 1836 Ground was broken for the Illinois-Michigan Canal , although it had been envisioned and speculated upon since Jolliet and the Galena and Chicago Union Railroad was chartered to connect Chicago with the lead mining district of NW Illinois and SW Wisconsin, although these plans were not realized until the 1840s. Due to the high cost of maintaining two separate village governments during the Depression following the Panic of 1837, an 1839 law joined the two villages creating the town of Milwaukee. 1837 City of Chicago incorporated with a population of 4170.
Period witnesses growth of wagon and lake traffic in Chicago.
The large flow of grain and livestock to the city led to the development ofindustry such as flour mills, breweries, packing-houses, soap and tallow plants. Money was appropriated for harbor improvements in Milwaukee. As money was slow in coming, many individuals and private companies built piers extending into Lake Michigan. The Illinois and Michigan Canal was completed, after a brief hiatus in construction during the Depression of 1842, thus connecting trade of the Illinois River with Lake Michigan and Chicago. Construction of the Chicago-Galena railroad began with the financial assistance of people who lived along the proposed route.