The gay and lesbian counterculture thrived throughout the 1930s and up to the war years. Drag balls at the Coliseum had begun as far back as the days of the legendary 1st Ward Balls of the scandalous aldermen “Bathhouse” John Coughlin and Michael “Hinky Dink” Kenna. Levee district madams and all their charges stomped and sweated at command performances. By the 1930s there were two established gay balls, at New Year's and Halloween.
A report on a dance held by “The Goblins” at the Coliseum Annex on Oct. 30, 1932, noted 1,000 people in attendance, about 100 in feminine costume. The writer noted that 600 or 700 did not dance, 25 lesbians were present as were “15 colored, 10 [in] drag costume, one in Turkish,” and most participants were over the age of 25. When Chicago gay liberation groups held their post-Stonewall celebration dance at the Coliseum in 1970, many didn't realize the 2,000 participants were merely following a long established tradition.
A University of Chicago observer reported on a visit to the Bally Hoo Cafe at 1942 N. Halsted St. on Sept. 24, 1933. He noted “100 queer people in the cafe.” Again 25 is given as the number of lesbians present—whether that included the “hostess dressed in masculine attire” who, with the emcee, was billed as “Mack and Marge,” the writer didn't say. Along with laughter and falsetto voices, there was dancing and lots of drinking: “Beer was served at 15 cents the glass, no cover charge.” The lesbians at the next table apparently were a little more flush as they “had a large bottle of gin.”
One lesbian told him “queer people dislike jam people.” Studs Terkel, who had a gay roommate at one time, was called “jam”; he explained that this meant “straight,” but did not necessarily have a negative connotation.
Other reports of the period note that Henrici's Restaurant attracted “high-class-type” queers and a few musicians, but all types could be found at La Masque at East Delaware Place and North Rush Street. The poorer classes hung around Bughouse Square (officially, Washington Square Park, adjacent to the Newberry Library). Jack's Turkish Baths, at 829 N. Dearborn St., and the Oak Street Beach along the Gold Coast were good for cruising. The tearoom trade were said to frequent restrooms at Berghoff's Grill, the LaSalle Street Station and the Illinois Central stations at East Randolph and at East Van Buren streets. Sally's Shoppe was another popular bar for “high-class queers.” One odd entry is Madam Black's Spiritualist, at 5519 S. Drexel Blvd.: “A place for queer[s] to go and carry on quite gay.”
Two excellent essays on the early years of Chicago's gay movement can be found in Creating a Place for Ourselves: Lesbian, Gay, and Bisexual Community Histories (Routledge, 1997), edited by Brett Beemyn. David K. Johnson writes about “The Kids of Fairytown” in his chapter about gay male culture on Chicago's Near North Side in the 1930s. In “Before Paris Burned,” Allen Drexel writes about race, class, and male homosexuality on the South Side from 1936 to 1960.
“It is unclear precisely when the first drag balls took place in Chicago or who sponsored them,” Drexel writes. “But like those in New York and other major cities, the balls in Chicago by 1930 had begun attracting considerable public attention and crowds of several hundred attendees. … The first Chicago balls, like those in subsequent years, were racially integrated. … Chicago's balls during the thirties and forties generally took place in rented rooms or halls adjoining taverns or clubs on the city's predominantly black, poor South Side, or at the Coliseum Annex, a large convention hall located in a commercial district on the Near South Side. … The first Finnie's Ball, staged in 1935 by a black gay street hustler and gambler named Alfred Finnie, was held in the basement of a tavern on the corner of 38th Street and Michigan Avenue. … Until 1943—the year that Finnie was killed in a gambling brawl—the ball was held up to five times annually at a number of different venues. … [N]ews accounts of Finnie's Balls typically drew attention to the most ‘extravagant' aspects of the events. Ebony's story on the 1953 ball, for example, reported that ‘More than 1,500 spectators milled around outside Chicago's Pershing Ballroom to get a glimpse of the bejeweled impersonators who arrived in limousines, taxis, Fords, and even by streetcar.' … In The Chicago Defender's extensive coverage of the 1955 ball, for example, John Earl Lewis, the honorary ‘Mayor of Bronzeville,' was depicted on stage flanked by ‘the finery bedecked winners' of that year's extravaganza,” Drexel writes.
From Out and Proud in Chicago: An Overview of the City's Gay Community, edited by Tracy Baim, Surrey Books, 2008.