(FORTUNE Magazine) – As anthrax terrorized America in mid-October, Chicago Mayor Richard Daley met with his high command in the city's Emergency Communications Center, a technology-packed fortress two miles from the downtown Loop. The fire commissioner, the police chief, the public health czar, a National Guard general, and two dozen other officials sat cheek by jowl for four days, napping on cots and pumping iron in the "stress mitigation room." Keeping the decision-makers in the same space made for smooth crisis management. In a flash, they deployed police and paramedics to investigate sightings of brown or white powder. On a giant computer screen, black-and-red icons depicting ambulances and other emergency vehicles darted over a map of city streets. Twice a day, the James Cagney-like mayor marched his lieutenants into an amphitheater to meet the press. Says police superintendent Terry Hillard: "We calmed people because we spoke with one voice"--a far cry from the the babble in Washington.

Chicago, of course, has not been attacked by anthrax or anything else. But because it has a long tradition of dependable public services and powerful mayors--including Daley's larger-than-life father, Richard--it is better prepared than most cities to respond to terrorism. Ever since Mrs. O'Leary's cow kicked over the lantern in her shed, and, according to local legend, started the great Chicago fire of 1871, the city has had detailed plans for fighting fires, floods, and chemical spills--plans that it is now adapting to deal with anthrax or smallpox. Other urban areas could well benefit from adding some of Chicago's tools and techniques to their own emergency kits.

No city has anything to rival the $217 million Emergency Communications Center, particularly since New York's state-of-the-art facility below the World Trade Center collapsed in the rubble. Under one roof, the ECC combines the crisis command post, the 911 call center, and the technology that enables police, fire, National Guard, and other agencies to talk to one another; in most cities, a paramedic can't radio the police from an ambulance. Chicago is also able to summon 300 ambulances and 1,100 medical technicians from around the state in less than two hours.

In an emergency, the city's first goal would be to minimize panic. As fire chief James Joyce notes, the recent anthrax outbreak "isn't large scale. But the hysteria is." To discourage hysteria during a bioterror attack, Chicago would not dispense Cipro and other drugs from hospitals or other central locations. Instead it would direct people to hundreds of clinics and schools in their own communities. That would keep panicked crowds from converging on busy emergency rooms, and free hospitals to treat the very sick.

That's the theory. The problem is that Chicago's plan has never been tested. Despite their impressive blueprints for fighting anthrax, smallpox, and deadly chemicals, city officials can't think through everything. Instead they must prepare to improvise and to stay calm in the face of inevitable problems. "Even if all the elements come together, people could ignore the city's advice on where to go for treatment," says Joyce. "We think we're ready," says Dr. Richard Feldman, chief of emergency medicine at Advocate Illinois Masonic, a large teaching hospital. "But we're still afraid."

How would Chicago cope with what every city fears right now--an anthrax attack? Led by Mayor Daley, city officials recently gave FORTUNE a detailed look at their plans and their strategy for battling bioterror.

"No smoke alarm exists for anthrax," says Dr. John Lumpkin, head of the Illinois Department of Public Health. "It happens without a big bang." Chicago authorities believe that someone intent on killing thousands--as opposed to merely terrifying thousands--would not send anthrax through the mail; instead he would choose a large target, like a concert hall or a sports stadium. Let's say he released anthrax spores over Soldier Field, home of the Chicago Bears football team. Tens of thousands of spectators would be exposed, although no one would realize it until a few days later when people began getting ill.

Many would die. That's because even though people don't fall ill from anthrax right away, the disease is difficult to cure once patients move beyond flu-like symptoms and begin to have trouble breathing. The most vulnerable would be those with weak immune systems and anyone who inhaled large numbers of spores. Luckily, anthrax is not difficult to diagnose--especially now that so many doctors know exactly what to look for--so Chicago authorities would realize in short order that Soldier Field had become a hot zone. Their job--besides treating severely ill people already at hospitals--would be to get antibiotics to everyone else who had been at Soldier Field, as well as the hundreds of thousands living nearby.

To do that, they would rely on Cipro and other antibiotics kept in the National Pharmaceutical Stockpile. The Centers for Disease Control and Prevention manage the stockpile, which consists of large caches of medical equipment and drugs (including antibiotics, IV equipment, and respirators; the nation's stock of smallpox vaccine is held directly by the CDC) stored at eight secret locations around the U.S. Chicago authorities told FORTUNE that their supplies would arrive from a warehouse in Memphis, headquarters of Federal Express (most other stockpiles would be put on government aircraft and flown to stricken areas). When the alarm sounded, FedEx and other contractors would load medicine and equipment into their planes. The CDC says the cargo can be delivered to any city in distress within 12 hours. Chicago expects to have its supplies within five.

When they arrived--probably at Midway or O'Hare airport; again, the precise location is secret--National Guard troops would be waiting to load the aluminum containers, mounted on rollers, into a fleet of highway maintenance trucks. Flanked by state police, the trucks would carry the cargo to a large warehouse near the airport. Until last year, Chicago's plan called for the Guard to sort antibiotics into hundreds of thousands of individual packets. But last year, during a war game exercise for a bioterror attack in Denver, the Guard troops needed days to repackage pills. Illinois authorities realized they would have to make some changes. "It was obvious we needed to automate the repackaging, and let drug experts do it," says Mike Chamness, director of the Illinois Emergency Management Agency.

The city and state directed the National Guard to divide Chicago's supplies into at least four lots. Each would be sent to a pharmaceuticals manufacturer or wholesaler in the Chicago area. The city and state have agreements with those companies to divert or call in their personnel at any time of the day or night to run the sorting machines. Although it would take 24 hours to sort the antibiotics into 500,000 separate packets, deliveries to hundreds of distribution points across the area, including local high schools and clinics, would begin almost immediately.

The mayor, his aides, and public health authorities would exhort all people who think they've been exposed to anthrax, but who have no symptoms, to request antibiotics from the neighborhood distribution centers. They would tell victims who have developed aches and fever to enter hospitals, where doctors would put them on intravenous antibiotics. The very sick would die. But for those whose flu-like symptoms have appeared in the past 24 hours or so, the IV medicine is usually a lifesaver.

To make available the thousands of extra beds that an anthrax crisis would require, the state relies on the Illinois Emergency Medical Disaster Plan. The plan has been around since the early 1990s, used mostly to coordinate the response to weather-related problems like tornadoes or extreme heat. The idea is that in a crisis, a single city can request help from all of the state's hospitals, doctors, and nurses. The disaster plan establishes a series of "pod" hospitals around Illinois to centrally manage a crisis in their area. In Chicago, the pod is Advocate Illinois Masonic. During an anthrax attack, Masonic would quickly identify the location of Chicago's empty hospital beds, then direct the city's other 38 hospitals to call in their off-duty doctors and nurses. Additional pod hospitals around the state would do the same.

Unofficially, Illinois has 26,000 hospital beds--far too many for ordinary times but likely far too few in a bioterror crisis. Because the state does not have enough doctors, nurses, and other hospital personnel, 10,000 of the beds--an astounding 40% of the total--cannot be used and don't even appear in statewide counts; officially, Illinois has just 16,000 hospital beds. (Most other states also have many unstaffed beds.) During an anthrax crisis, the pods would free up about one-third of these 16,000 by canceling elective procedures and sending home patients waiting for heart bypass surgery or hip replacements. Then, by ordering every doctor and nurse in the state to report to work, public health authorities would be able to use several thousand of the "unofficial" beds.

To staff the rest, Illinois would require help from out-of-state medical personnel. "We would call on volunteers from the American Medical Association and the American College of Emergency Physicians," says Lumpkin. Both organizations have lists of doctors ready to assist. With the out-of-state volunteers, Illinois could treat more than 15,000 anthrax victims. The Emergency Communications Center would dispatch ambulances to deliver the very ill to hospitals as far away as Springfield and Cairo.

Chicago authorities could also turn to another organization that pools equipment and manpower: the Mutual Aid Box Alarm System. MABAS is a statewide confederation of municipal fire departments that sends trucks to any Illinois town that requests firefighting help. Illinois fire departments also control ambulances and paramedics in their jurisdictions. "As fires decrease, we've gone more and more into the medical business," says commissioner Joyce. During an anthrax assault, all of MABAS's resources would be available. Says Mayor Daley: "More than ever, we're counting on organizations like MABAS to handle crises on a regional basis." No other state has such an extensive medical cooperation pact.

Chicago has 71 ambulances and 792 paramedics. During an emergency, MABAS could have 100 more ambulances in the city within 30 minutes; within two hours, it could mobilize another 178 from around the state. MABAS could also more than double the Chicago fire department's staff of paramedics, to 1,900. Jay Reardon, a suburban fire chief who runs MABAS, has even thought about how to deliver Cipro to the sorting centers in a snowstorm. "We can put the big aluminum containers right on the back step of the pumpers," he says. Adds the irrepressible Reardon: "Stopping anthrax is just like putting out a fire. You get in front of it and stop it."

What if the weapon isn't anthrax, but something else? Chicago is even better prepared for a chemical attack than for anthrax, but less ready for smallpox. It has three specially trained teams to handle hazardous materials, about average for large U.S. cities. But in a crisis it could summon 32 more HAZMAT units from across the state, dispatched by MABAS. These teams have extremely advanced equipment, including gas masks with built-in speakers that allow the wearer to talk without removing his headgear, and inflatable tubs for decontaminating victims at a disaster site.

No American city is remotely ready for an epidemic of a highly contagious disease like smallpox. "With smallpox, it's a physical plant problem," says Dr. Dino Rumoro, chief of emergency medicine at Rush Medical Center. Victims with advanced smallpox must be isolated in rooms with special ventilation equipment that filters germs, then pumps air out without sending it into the hospital ventilation system. Advocate General Lutheran Hospital has only 25 such rooms; the University of Chicago Hospitals has less than a dozen. It would be possible to designate one hospital as the smallpox center, quarantining hundreds of victims under the same roof. But no private hospital is anxious to play that role, and Chicago, unlike New York, has few public hospitals. The city's plans here are clearly evolving.

So far, Chicago's strategy is to tell smallpox sufferers to stay home, where they can be treated by paramedics and other health-care workers making house calls. The city would reserve the first use of the CDC's smallpox vaccine to protect health-care workers. "You try to vaccinate everybody, but you take care of the health-care workers first," says Dr. James Adams, director of emergency medicine at Northwestern Memorial Hospital. Vaccinations could save many lives because they are effective even several days after a person has been exposed. Major problems would occur if smallpox sufferers swamped the ERs. Says Lumpkin: "You'd see triage like you've never seen before."

If any U.S. city can claim an advantage in fighting the new war, it's Chicago. Still, its plans for dealing with a bioterror attack are strictly theoretical. The brass who assemble in the Emergency Communications Center fervently hope they stay that way.

FEEDBACK stully@fortunemail.com