Why was the fair so important, especially given the time, to both Chicago and the United States?

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That fair, as with all world's fairs and the Olympics later, would bring renewal to Chicago - new construction, new jobs, new money coming in to the city more tourism, more publicity.  In addition, fairs at that time were a place to showcase new inventions and technologies, which was a great way to also increase world trade and open up new markets.

Over the long run, it did give us a slice of the world stage at a time our empire was being born, and served notice to the world that America's ingenuity, economy and military were to be taken seriously.

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There are a few different ways to answer this.

For the city of Chicago, the fair was very important economically.  The United States was in something of a deep recession at the time.  Because of that, the visitors who flocked to the fair from other parts of the country were very welcome.  They put a lot of money into Chicago's economy.

For the US, the fair was something of a declaration of power.  It emphasized American superiority and world prominence at a time when the US was trying hard to become an imperial power and an important player on the world stage.

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