The “Peculiar” Context of Southern Economic Development
FDR’s southern strategies were fundamental, even radical–focused on infrastructure and an agricultural “revolution”. Both threatened the traditional Redeemer policy nexus, plantation-based policy systems and low-wage cotton export economy. The South was the nation’s poorest region by far. Its export-based commodity economy created a boom or, since World War I, bust cyclicality that crushed consumer consumption, entrepreneurship and diversification of its economic base—and reduced its low-wage subsistence workers to gross economic deprivation.
… Rates of southern industrial progress were rapid by historical standards, but nested … in a large agricultural economy with high fertility rates, and isolated from national migration (immigration) flows, southern industries could not … raise the basic agricultural wage. The persistence of backward technologies in agriculture and manufacturing is primarily traceable to the low southern wage …. (T)he low incomes of American blacks had … to do with their place in the low-wage southern economy. (Wright, 1986, p. 12)
The interplay between low productivity and racial discrimination solidified a low-wage labor dualism in which whites’ desperately low wages were noticeably higher than black low wages. Despite noticeable industrial growth in the pre-depression South, the dual workforce stopped any convergence with national wage rates.–delinking the southern economy from northern prosperity. Reforms were needed to break these patterns—like transferring surplus agricultural labor to higher paying jobs through productivity improvements (mechanization) of agriculture.
The Great Migration/Southern Diaspora drained off some surplus labor, but mechanization of agricultural production was a tough slog because investment capital generated from marginal agricultural production was inadequate. Boll weevils, floods and the Depression made it evident even to plantation owners that their “peculiar” economic system was pretty much broken. But investment in machines and expanded acreage required capital. The Southern financial system, a virtual subsidiary of Wall Street, could not deliver it. FDR did!
Breaking Apart the Plantation Economy
FDR’s early New Deal southern initiatives focused chiefly on agriculture and rural areas. Farmers in the 1930 South were 21% of total employed; over 6 million farms and over 30 million farmers. Only 13% had access to electricity. A primary New Deal focus installed a modern power infrastructure and transportation access into rural areas. The Rural Electrification and Agricultural Adjustment Acts, despite their short tenure, commenced the reshaping of southern agriculture. ”In just three years, the adjustment program (AAA) revolutionized the Cotton Belt and all of southern agriculture” (Schulman, 1994, p. 17)
Desperate southern planters realized limiting production was necessary to raise the price of cotton—the Act ploughed up nearly 25% of 1933 cotton production in return for federal subsidy. AAA’s principal effect drastically reduced sharecroppers and increased agricultural wage earners (day laborers), thereby throwing out hordes of agricultural (both black and white) sharecroppers from their homes. Gunnar Myrdal labeled the AAA as “America’s enclosure movement” (Wright, 1986, p. 238). Unable to find work, dispossessed agricultural workers hit the roads and joined the Southern Diaspora or moved to southern cities looking for industrial jobs.
Between 1933 and 1939, three New Deal programs—the Federal Emergency Relief Administration, the Public Works Administration, and the Works Progress Administration—sent nearly $2 billion dollars into the South, most of it to the region’s cities. Temporary jobs were created, but urban public infrastructure was vastly improved. Sewers, parks, playgrounds and all sorts of public buildings dotted southern cities of all sizes. For example, $361 million was poured into Birmingham. The city’s first street improvement program was funded with federal funds. Tampa built its municipal airport, and improved its major thoroughfare (Bayshore Boulevard); Richmond got a bridge over the James River, as well as a library, high school and a hospital (Goldfield, 1982, pp. 181-3).
The National Industrial Recovery Act (NIRA) directly attacked the root southern problem by requiring increases in hourly wage rates. NIRA was emergency legislation without any regional strategy, but it didn’t take long to realize increases in manufacturing pay rates directly assaulted the South’s low-wage economy. Southern manufacturers resisted, NIRA wages increases were developed incrementally, sector-by-sector, through semi-negotiated agreements. Unfortunately, one of the first sectors (July, 1933) negotiated was the cotton-textile manufacturing sector.
NIRA increased average southern textile-mill wages over seventy percent. Almost twice as many southern mill employees were affected than northern workers (Schulman, 1994, p. 22). Southern textile manufacturers thought the North had restarted the textile war—and they reacted accordingly. Southern industrialists reasoned NIRA “threatened a crusade against the region’s labor system, and southern industrialists determined to resist it”. The Southern States Industrial Council quickly formed; its “purpose to “protect the South against discrimination”:
Southern leaders saw low wages as their region’s ticket to prosperity. Low wages would attract industrial plants … [and] free the region from the shackles of a colonial extractive economy … [In the North NIRA provided] the opportunity … to reform the South and to lift it to a higher economical level, and incidentally destroy its competitive power. (Schulman, 1994, pp. 22-3)
Southern industrialists negotiated regional differentials to only sixty per cent of national wage rates. The North was outraged. In 1936, however, the Supreme Court declared AAA and NIRA unconstitutional. By that time the federal government, as the instigator, of change, had become the enemy. NIRA, unintentionally, crystallized what had been a pervasive, but informal low-wage business attraction strategy into a formal economic development strategy–a regional business climate strategy. NIRA functioned as the starting block for an economic development regional war.
Tennessee Valley Authority
While NIRA stumbled into a direct regional confrontation, another first term New Deal initiative matured into an economic development victory. The Tennessee Valley Authority (TVA), legacy of Republican Nebraska Progressive George Norris (a key supporter of rural electrification), was approved in 1933. TVA included most of Tennessee, large portions of Alabama, Mississippi and Kentucky, with small sections of Georgia, North Carolina and Virginia. These states, among the hardest-hit Depression geographies and the very poorest regions of the South. Similar to the Rural Electrification Act, TVA provided an electrical infrastructure to poor underserved rural southern geographies. TVA was intended to be a regional ED agency from its outset—not just a provider of power and electrical infrastructure. Its roots lay deep in the regional planning movement and carried with it the Trojan horse “socialist” image. The early years of TVA were a disappointment.
TVA’s initial inability to live up to optimistic expectations was embedded in a distinctive—and ultimately effective– approach to regional economic development. Upon its creation a choice had to be made between a federal agency inducing Washington-determined change from above, or, involving jurisdictions in consensual local decision-making. To secure votes necessary for its passage, the latter was chosen. TVA’s board of directors, composed mostly of state officials, defined/pursued economic development along lines congruent with local preferences and priorities—not what FDR had in mind. So in early TVA years, southern fears manufacturing would displace agriculture, limited TVA electricity to mostly agricultural-related firms. TVA initiatives instead concentrated on improving river navigation and producing low-cost fertilizer—helpful to enhancing the agricultural economy (Schulman, 1994, p. 35). Over the long haul, however, a trusted TVA became an accepted, pro manufacturing component of southern economic development.
After the publication of FDR’s Report (below), and the ascension by David Lilienthal to Chair, TVA aggressively pressed for southern industrialization. “Under Lilienthal the TVA abandoned the so-called ‘phosphate philosophy’ of economic growth”. Taking advantage of defense war production by bringing in more manufacturing, TVA joined in promotional initiatives, identified and prepared sites, and was not adverse to using electricity as an incentive. Lilienthal and Harry Hopkins joined forces behind a “plan” to build wartime military production facilities within TVA’s boundaries. Lilienthal advocated policies directly opposed to “balance agriculture with industry” and TVA during the war years became arguably the leading advocate in southern industrialization and relocation of manufacturing to the South (Schulman, 1994, pp. 91-4).
“The Nation’s Economic Problem Number One”
FDR’s 1936 victory carried a few southern Progressives in his coattails, opening the opportunity for a second term southern ED strategy. Working with these stalwart, but isolated, southern New Deal democrats, FDR launched his “second Reconstruction”—an expression embraced by New Deal southern Democrats (Florida’s Claude Pepper) (Schulman, 1994, pp. 46-8). That the first Reconstruction did not elicit fond memories from most Southerners, FDR had “cast the die” and crossed his Rubicon. What FDR had in mind was a direct assault on southern regional low-wage economy and, in particular, the use of low-wage business climate to attract industry. He wanted the South to industrialize, but not with low-wage manufacturing. FDR, using contemporary jargon, wanted the South to focus on higher-wage, advanced manufacturing. He launched his attack with vigor saying:
In Gainesville, Georgia Roosevelt asserted that the South remained a feudal economy … ‘there is little difference between the feudal system and the Fascist system. Georgia and the lower South may just as well face facts—simple facts presented in the lower South by the President of the United States. The purchasing power of millions of Americans in this whole area is far too low. On the present scale of wages and therefore the present scale of buying power, the South cannot and will not succeed in establishing successful new industries. (Schulman, 1994, p. 48)
Compared to Roosevelt’s more lukewarm urban agenda, the southern economic development strategy constituted a genuine Roosevelt commitment. FDR was perfectly clear this second Reconstruction would be carried out by the federal government, through federal legislation: “Nationwide thinking, nationwide planning, and nationwide action are the three great essentials to prevent nationwide crises for future generations to struggle through” (Schulman, 1994, p. 48). As with “Our Cities”, Roosevelt formed a committee, composed of southerners, to produce a report outlining the South’s conditions. In a personal appeal, FDR asserted his “feeling that the South presents right now, the nation’s No. 1 economic problem—the nation’s problem, not merely the South’s. Southern underdevelopment had created an economic ‘unbalance’ in the nation, an unbalance that can and must be righted for the sake of the South and of the Nation” (Schulman, 1994, p. 50).
The final report, the Report on Economic Conditions of the South, set forth the New Deal southern “progressive” ED strategy. That strategy encouraged the industrialization of the South, by improving the condition of its human resources, and above all by abandoning its reliance on low-wage jobs and improving education and the quality of public services—all of which involved active federal government involvement. (Schulman, 1994, pp. 50-1).
Southern liberal Democrats, however, were too few in number to pass this bold legislation. So FDR turned to Northern Democrats for support. Northern votes, however, were not motivated by an altruistic hope to improve lives and prosperity of southerners through economic development. Two groups leaped on board FDR’s southern ED initiative: unions and New England/New York Democrats. The former wanted to build up its non-existent southern membership, and the latter saw a helpful weapon in its textile war against the Carolinas and Georgia. The strategy chosen by the coalition was a national manufacturing minimum wage. There were other solutions –most poverty victims were unemployed, and not benefit from a minimum wage increase. The choice of minimum wage reflected the diverse motivations of FDR’s legislative coalition.
FDR’s Second Reconstruction: National Minimum Wage and Unions
The legislation on which FDR’s strategy rested was the Fair Labor Standards Act (FLSA), which, among other things, established a national minimum wage in manufacturing. In 1937, to many Southerners the Act seemed little more than “…a device to restructure southern industry … that Walter Lippmann would tag the final version ‘a sectional (regional) bill thinly disguised as a humanitarian reform’” (Schulman, 1994, p. 54). Schulman concluded that “It is tempting to view the FLSA as a kind of regional tariff, a ploy by northern businesses to eliminate low wage competition and by northern politicians to stop runaway plants…. The FSLA, after all, covered only manufacturing workers engaged in interstate commerce, that is, those competing with northern firms” (Schulman, 1994, pp. 59-60).
As an added delight, FLSA also empowered union efforts to achieve collective bargaining in the South. FDR won a hotly-contested legislative battle; the Act was passed in late 1938. Thus began a fifteen year regional struggle against FSLA minimum wage. Surprisingly, FSLA did not apply to the iron, steel and cement industries (mostly northern-owned), but the $.25 cent minimum wage, no child labor, 44 hour work week did apply to low-wage manufacturing associated with food-processing, sawmills, lumber, apparel and, of course, textiles. Nearly 15% of textile workers were below the 1938 minimum. Employment at southern plants dropped nearly 6% by 1940 and southern payrolls rose ten times the rate of northern. In these low-wage labor sectors, a noticeable mechanization (productivity) followed quickly (Schulman, 1994, pp. 66-8).
The law was implemented through a tri-partite “Industry Committee” (management, labor and public). Through these committees unions were able to exert influence in non-union sectors and firms. The first three Industry Committee (textiles, tobacco and hosiery) struck at the heart of the alleged southern low-wage business climate advantage—confirming to many southern manufacturers the not-so-hidden agenda behind the legislation. Whatever doubt was removed when the FSLA administrator commented that “one of the declared objectives of the act was to bring to an end this migration of plants solely to obtain a source of cheap labor” (Schulman, 1994, p. 70). Roosevelt himself in 1939 commenting on a particular southern textile mill with cheap labor an obsolete equipment said “that type of factor ought not to be in existence” (Schulman, 1994, p. 72). The industry committees turned into battlefields as southern industries resisted.
War production obsoleted FSLA. Inflation and thirty percent growth in southern manufacturing raised wages by 40% between 1939 and 1942. Worker shortages were not uncommon as soldiers headed off to war. The Industry Committees shifted gears to manage war production quotas. The National War Labor Board (NWLB) established by executive order to settle disputes between labor and industry acquired responsibility for the implementation of FLSA. The NWSB established southern regional Wage Stabilization Boards which prosecuted a great number of cases to reverse southern company wage practices and standards. NWLB continued the Second Reconstruction goals in the new environment. Southern unionization fought tooth and nail gathered some momentum.
By war’s end union membership had doubled from 1939 levels. But anti-union feeling was pervasive (Schulman, 1994, pp. 76-81). Wages in the controversial textile and garment industries were raised to $.65 (Schulman, 1994, p. 86). –and it became the lightning rod of Southern industry minimum wage opposition particularly in the textile, furniture, fertilizer and lumber industries. “The FLSA arrived to ‘perpetuate the punitive program of the carpetbaggers under the guise of equalizing conditions‘ (Schulman, 1994, p. 68). During the war five southern states enacted anti-labor laws. Florida and Arkansas approved state constitutional provisions inhibiting labor union activities–but NWLB countermanded these actions using war-time powers.
The Republican victory in 1946 Congressional elections, however, stripped momentum from further minimum wage increases. Republican conservatives became committee chairs and southern democrats joined with them to put the brakes on the Truman administration’s minimum wage policy, defeating any changes to it over the next two years. However, minimum wage and collective bargaining actions of the NWLB kept the issue alive, fueling post 1947 flood of state ‘right to work’ legislation.
Times did change, however. During the fifties many southern manufacturers adjusted to the national minimum wage–even the textile industry endorsed it by 1955. Newer manufacturing plants introduced by war year industry relocations neither required cheap labor, nor particularly wanted it because production was based on machinery operated by skilled workers (Schulman, 1994, pp. 86-7). By the end of the forties, the struggle between the regions over minimum wage was tapering off, in large measure because the war years injected high wage industrialization in many parts of the South. Wage disparity between North and South diminished considerably during the war years.
FDR’s southern economic development strategy was perceived and received with downright opposition by most southerners. In the minds of many, FDR’s reforms were imposed from above, by federal rule, regulated by a federal bureaucracy, and approved by northern, Midwestern and southern progressive-carpetbagger votes. The FDR’s Second Reconstruction generated deep resentment and in the Second Reconstruction, however successful in its goals, one sees seeds of distinctive southern identity in economic development. If one wishes to see the power of non-rational factors such as culture, participative decision-making and identity in economic development the Second Reconstruction is an excellent example.
War Production and Industrial Decentralization
By mid-1938, events in Europe, Japan and China grabbed the attention of the leaders of western democracies, including Roosevelt. Despite what he said publically, he was well-aware the planet was on the threshold of a world war. FDR wanted no part of it for America, but, after WWI the American military establishment had been reduced to being a “virtual”, not real, military force. When the War started, we hoped France and England would stop Axis expansion, but it was equally clear they could do so only if we supplied them with military sustenance and equipment—sustenance and equipment we did not have for our own army, never mind theirs.
The Big Picture
As early as 1936, with the expiration of the Washington Naval Treaty, Roosevelt launched the nation’s first post-WWI ship-building program. “In 1938, the Army Air Corps got the biggest authorization for buying planes in its history ….[yet] by 1939 the Army Air Corps … consisted of some seventeen hundred planes, all fighters and trainers, and fewer than 20,000 officers and enlisted men …. From the fourth-biggest military force in the world in 1918, the United States Army shrank to number eighteen, just ahead of tiny Holland” (Herman, 2012, p. 7). WWII began in September 1939 (Europe) and still Roosevelt dithered; trying behind the scenes to somehow increase military production by ten times in one year. Little came of it. On May 28, 1940, Belgium surrendered and the British army thrown into the sea at Dunkirk by German panzers. On the same day FDR met for the first time General Motors’ chief production executive, William Knudsen, whom he had picked to organize, plan and lead not only America’s war production effort, but for all practical purposes the British and later the Russian military production as well.
Corporate leaders were drafted to plan/reconvert/operate American privately-owned factories to produce tanks, ships, and the material needed to wage war. The volumes required were badly underestimated in these early days—but were staggering relative to existing industrial capacity. Certain industrial sectors were “platform” sectors in that other sector’s future outputs were reliant upon their outputs. Steel, machine tools, and composites (basic materials (rubber) and energy) were especially critical to war production. An increase in production required constructing new facilities because existing facilities could not contain new machine tools, multiple assembly lines and new assembly line designs and physical layout.
Much of the nation’s war-related industrial facilities were located on vulnerable coastlines (Japan invaded the Aleutians and German subs positioned outside Atlantic ports). Policy-makers/generals knew quite well that, most aircraft and naval facilities were lodged in Seattle, Los Angeles, and San Diego on the West coast and in Baltimore, Charleston and suburban Long Island/Connecticut on the East Coast. Starting virtually from scratch, the South and non-Pacific Coast West would necessarily be winners as industrial decentralization was implemented. Not only was vulnerability a concern, but the reasonable fear concentration of industry in a few centers would intensify worker shortages, housing and overtax logistical systems.
The most serious dislocation, anticipated at the time, was housing for new workers. New logistics (rail and truck) had to follow if new centers were to be integrated into the national logistical system. Staging facilities for overseas transshipment of millions of soldiers and tons of material required new facilities built from scratch. There was never any possibility existing facilities, however expanded, could produce the scale needed to supply the Allies war needs. This was not the time for entrepreneurial startups; go with big firms, proven capacity, management, and experience. Accordingly, the famous “six companies” that built the Hoover (and subsequent) dams were drafted to construct shipyards across the nation. In the process, Henry Kaiser (one of the six), founded a worker health company (Kaiser-Permanente), built worker housing, and designed the merchant marine liberty ship. He also dramatically altered the local economic base of most Atlantic, Gulf of Mexico, Great Lakes and Pacific seaports.
Industrial Decentralization:
The existence of several independent federal wartime production agencies[i] and the astounding sums tossed into federal World War II budgets elevated federal investment into an unintended federal economic development strategy—which degenerated into a competitive, self-serving municipal/state “urban hierarchical” Hobbesian war “of all, against all”. Economic developers across the nation usually chamber-based programs, embraced an aggressive ED strategy to capture war production facilities and attract almost any kid of federal investment.
Production efficiency, cost, and established infrastructure, however, initially favored locations where industrial facilities already existed (North, Pacific Coast, and Midwest). So, Northern and Midwestern cities were as intensely involved in intergovernmental economic development as their Sun Belt counterparts. Eastern municipal competitors fought for federal offices, highway spending, ports of embarkation status, contracts of every size, and representation on federal boards and panels that dispensed these assets. Each party sought to curry favor with the armed services by praising the military and identifying their own cities with service branches. Cities advertised and lobbied through their congressional delegations and media, and even persuaded the navy to name ships they built and paid for.
New facilities generated higher industrial wages, increased urbanization and augmented the South’s purchasing power. Facilities and military bases increased local employment and multiplier effects created an increased capacity for consumption which attracted investment from corporations. Both Ford and General Motors located facilities in the South for distribution and assembly in accordance with a new, decentralized “hub” business plan. Increased mechanization of southern agriculture (cause by FDR’s revolution from above) through the war years encouraged investment-new facilities by International Harvester and Allis-Chalmers. Southern industrial decentralization got its fair share and more; the B-24 manufactured in Dallas, B-29 in Marietta Georgia, Ellington Air Force Base in Houston eventually became the NASA’ Johnson Space Center.
Florida got over $1.5 billion (the largest sum any one state received), one-half of which went to shipbuilding operations in Jacksonville, Miami, Tampa and Panama City. Charleston’s population increased by one-third, Norfolk by two-thirds, Hattiesburg Mississippi doubled. Mobile was reduced to chaos as its population doubled in two years—crushing inadequate infrastructure, housing, and public services (Goldfield, 1982, pp. 182-3). The South built cutting-edge manufacturing facilities and moved into the twentieth century. Backwater municipalities became thriving military centers. Nearly every major city acquired an airport and was connected to rail and truck transport. The South captured more than its fair share of military bases. Industrial capacity in the South was increased by 40% and over $5 billion was invested in southern war-related plants. Per capita income tripled during the 1940’s and urban population expanded by 30% (Cobb, the Selling of the South, 1993, p. 31)
Accounting for just 11.8 percent of the nation’s capital expenditures in manufacturing before the war, the region acquired 17.6 percent of the value of wartime manufacturing facilities expansions…. housed 23 percent of new plants built for the war … bulldozers ploughing military bases out of the ‘Old Plantation’. The region received 36.5 percent of the total on-continent military facility awards … almost two-thirds of the domestic Army and Navy bases … war had closed the economic gap between regions. Southern per capita income improved from a pitiful 59% of the national average in 1940 to 69% at the close of hostilities… a new mechanized industrial economy was displacing the old labor-intensive South (Schulman, 1994, pp. 85-7, 95).
Population Migration
People followed the jobs. “Between 1940 and 1945, three times as many people flooded out of the South each year as had during the previous decade. From Pearl Harbor to V-E Day, 1.6 million southern civilians left the land of Dixie, while another 4.8 million migrated within the region … Sharecroppers and wage laborers … departed for the cities of the North[ii] Schulman (Schulman, 1994, p. 82) observed southern migration, although a largely an increasingly black phenomenon during the 1940’s, also exhibited a bias toward migration of its “most downtrodden” whites. Latinos in Texas also moved out [to California mostly] for the first time (Gregory, 2005, p. 34). Jobs were the attraction.
War-year southern exodus came from different parts of the South than pre-war Diaspora. Instead of Georgia and Carolinas, mostly black southerners from Mississippi and Alabama went north. The South, no longer was under the control of King Cotton, its plantation-based economy lay in shatters. Farm laborers replaced sharecroppers. Nearly a half million African-Americans served in the military. Black emigration was more varied. Chicago, Detroit and the Great Lakes cities was still the principal destination for Mississippi Delta sharecroppers, but Black Texans moved west to California. Future founder of the Black Panther Party, nine year old Bobby Seale moved to the San Francisco Bay area (Gregory, 2005, p. 34).
Southern industrial development was very uneven. Arkansas, Georgia, Mississippi, North and South Carolina, and Virginia had fewer manufacturing wage earners in 1945 than in 1939 (Schulman, 1994, pp. 106, Table 4-5). In some instances, southern states/municipalities resisted industrial decentralization, particularly if it tasted of unionism. North Carolina, for example, perceived industrial decentralization as a threat to its low-wage business climate strategy: “North Carolina’s heritage of catering to the low-paying, nonunion textile industry encouraged its publically funded development organizations to accept the paradoxical mission of promoting progress by discouraging high-wage industries, particularly those that might bring unions with them. For a time the Raleigh Chamber of Commerce adhered to a rigid, written policy of non-recruitment of industries that would not promise to resist unionization” (Cobb, the Sunbelt South, 1993, p. 33). North Carolina enjoyed the fourth lowest ratio of war facilities to prewar manufacturing of all states (Schulman, 1994, p. 99).
Increased urbanization brought new populations to cities that had long been dominated by an entrenched “old guard” who had determinedly maintained “progress and tradition”. “Wartime expansion of southern … cities and continued employment opportunities … brought to these areas many new voters who were not steeped in the traditions of deference. The sheer numbers of the in-migrants made difficult their enlistment in local political parties and organizations … Two types of newcomers demonstrate this growing independence from the old politics:” (Bernard, 1993, p. 70) young native professionals and nonwhites. The seeds of future change in southern municipal policy systems were sown by the opportunities created by industrial decentralization.
A short outline of Miami’s growth in this period is illustrative. Florida occupied a geography which was doomed to capture a good deal of military facilities. Clear weather meant it was prime grounds for training, particularly air and naval training. Early in 1942 the Army Air Corp practically took over Miami Beach, leasing more than 100 tourist hotels for fliers’ barracks. Facilities were built in Miami itself and surrounding communities (Opa-locka, Homestead, and Coral Gables). The navy assumed control of Miami’s port. A major airport, Homestead Field was located in Dade County. The war dampened tourism for sure, but troops, contractors and facilities provided year-round prosperity.
Dade County population increased to 450,000 by 1950—an 85% increase from 1940. The remarkable feature of this population boom was where folks lived. “The greatest growth during the forties took place in the suburban fringe [152% increase] and unincorporated areas [164%]”. The suburbs by 1945 were reported to be on the verge of “widespread new development”. Hialeah, Opa-locka and North Miami, reflecting real estate development and housing construction … rocketed upward” (Mohl, 1983, pp. 61-62). Miami grew by increasing population, not by relocating or developing its economic base. New residents moved directly into suburbs and unincorporated areas—never having ever lived in the central city. Miami’s share of the Dade County population declined from 1930 onward.
Sketches of Southern Cities War Production
Shipyards were built in Panama City, Savannah, New Orleans and Houston. Who would have guessed, however, an entrepreneur from the South would build the most ships and be WWII most famous entrepreneur. Andrew Jackson Higgins, dubbed the “Henry Kaiser of the South”, started a pre-WWI business in Natchez building low draft boats to haul lumber out of swamps. Calling it the “Higgins Boat” (or Eureka Boat), Higgins pitched it to the federal government, without success, at the start of WWII. The British saw potential, however, issuing a contract, prompting Higgins to construct a facility in New Orleans. Higgins Eureka Boat designs were quickly modified to create the famous P.T. Boat and the LST (landing ship tank). Starting out with 400 workers in 1939 and a $1m in annual sales, by war’s end he had 8 plans, 20000 workers and annual sales of $100m (Schulman, 1994, p. 97). Higgins constructed more boats than any other American shipbuilder. Most were produced on the Great Lakes, but the New Orleans facility built more LSTs than all other factories combined. Eisenhower proclaimed Higgins “the man who won the war for us”.
Birmingham’s Steve McCone and Bechtel won a federal contract in 1943 that required building a two million square foot, 285 acres factory that introduced a new assembly process for aircraft construction, revolutionizing the aircraft industry. More than half its employees were women. The bomber they constructed (B-24’s) won in May 1943 the “war of the Atlantic”. Frank Ix’s mill in Charlottesville Virginia made parachute cloth for every airborne division from 1942 to D-Day (Herman, 2012, pp. 242-4, 252).
The Dallas Chamber of Commerce and Citizens Council campaigned in Washington offices and corporate headquarters for a naval reserve aviation squadron base and a North American Aviation Company plant. By 1943, employment in the federally financed plant topped 40,000, and the Chamber of Commerce boasted Dallas was the ‘War Capital of the Southwest (Abbott, 1998, p. 7). In 1940 the Dallas Chamber and City Council granted thirty acres of municipal-owned Hensley Field and extended runways for the Navy. Several years later the U.S. Eighth Service Command moved from San Antonio to Dallas, By September of 1943 the federal government had built over $115 million in defense facilities in Dallas. Lockheed, Southern Aircraft and the gigantic North American Aviation complex (courted by the chamber since 1940) relocated facilities to Dallas By 1944’s end, thirteen thousand worked at the North American complex alone. More than 25,000 families were moved into Dallas by the War Manpower Commission between January 1940 and September 1943 (Fairbanks, 1990, pp. 145-7).
Such growth necessitated a complete rebuilding of transportation infrastructure and new housing, outlined in its 1945 Master Plan. At war’s end, however, the huge North American complex was closed, terminating seventeen thousand workers. Other aircraft plants were reconverted to other uses and downsized. The Dallas Chamber responded with an intensive attraction campaign. Once again the city expanded the Hensley Field runways on its own dime. Two major aircraft firms responded in 1947: TEMCO and Chance Vought Aircraft moved from Stratford Connecticut bringing over 4,500 jobs and 1,500 supervisory personnel to Dallas (Fairbanks, 1990, p. 150).
If Dallas landed the aircraft industry, Houston, through efforts of its native son Jesse Jones (chief of FDR’s Reconstruction Finance Corporation) convinced the federal government to build two pipelines allowing Texas gas and oil to reach into the Northeast. Other federal contracts established Humble Oil (Exxon today), Shell Oil, and relocated General Tire, Goodyear Tire, and Sinclair Oil plants in the Houston metropolitan area. “Investment in the Houston chemical industry totaled $600 million during the war and $300 million immediately afterward. Houston’s Harris County led the United States in the value of industrial construction for 1945-1948 and emerged as … a great complex of petrochemical plants and pipelines stretching from Freeport to Port Arthur” (Abbott, 1998, p. 11).
Texas garnered one-third of the entire South’s facility expansion awards (steel, petroleum, and aircraft equaling $1 billion dollars). By 1945 Texas (temporarily) replaced North Carolina as the South’s leading industrial state.
Finally, entirely new cities were built for war production. The Atomic Energy Commission, starting in 1942, developed Oak Ridge to manufacture key elements of Project Manhattan. Home to about 3000 residents in 1942, Oak Ridge housed nearly 75,000 by 1945. As of 2010, it was home to 29,000 plus residents. The Oak Ridge National Laboratory, originally the X-10 site where plutonium was made, followed and the Corps of Engineers built its own “planned community”—complete with a symphony hall. Most Oak Ridge residents were women (Kiernan, 2013). TVA facilitated construction of Oak Ridge, developing new processes for aluminum manufacturing research.
Planning and State-EDO Formation
War production was closely associated with expansion of state, regional and municipal planning. The National Planning Board (issuer of “Our Cities”), always controversial, never penetrated day-to-day New Deal decision-making, yet “hung around” under a variety of different names (National Resources Board, National Resources Committee) during the 1930’s. To coordinate war production, FDR in 1939 Executive Reorganization Act lodged the now-called National Resources Planning Board (NRPB) in the Office of the Presidency. The intention was NRPB would play a valuable role in making America the “arsenal of democracy”. It didn’t. Instead, as an unintended by-product, it established the nucleus of a goodly number of State/regional economic development organizations at War’s end.
War production was pretty much dictated by the service branches, the Treasury, and, of course, the National Defense Advisory Commission (and successor agencies). NRPB ran eleven regional field divisions that worked with the various state-level planning organizations set up to satisfy federal legislation that such entities develop plans around which federal aid and projects could serve. In 1933 there were fourteen state-level planning entities–by 1938, forty-seven[iii]. State-level planning entities served as a magnet to attract economic development/agriculture-related functions, research, programs, and staff—a 1938 annual report commented that state planning entities “engaged in a bewildering variety of activities”, and in many geographies, the Mississippi Delta being one, states had set up corresponding regional entities to deal with Cotton Belt decline—the TVA also fostered a number of regional “planning” entities as well. From hindsight, it is apparent these planning entities were not perfectly integrated into the politics and budgets of state governors and legislators. Such agencies were semi-regarded as agents or facilitators of the federal government; as one might suspect, southern states had their own ideas about these entities. Apparently, it was not popular in Congress either.
Congress abruptly terminated NRPB in August 1943—specifying that its “functions exercised … shall not be transferred” (Scott, 1969, p. 409). “It was a “don’t let the door hit you in the butt” kind of legislation. Planners and Progressives in general were less than thrilled, nor was Mel Scott. In any case, our story concerns what happened with the state-level entities after NRPB’s termination. “Alabama, California, Georgia, Illinois, Indiana, Missouri abolished their state planning agencies and replaced them with postwar planning agencies specifically concerned with problems of employment and economic expansion … Arkansas, South Carolina and Washington ….[created] economic organizations and abolishing their state planning boards … [and] in 1944 Nebraska, Kentucky and New Jersey established development commissions or departments … By the end of 1945 … there were forty-five or more of the newer agencies with titles denoting their legislative mandate to improve the state economy (Scott, 1969, pp. 411-15).” State-level EDOs had arrived, in some form, on the national landscape.
The South had its own ideas regarding state-level development agencies. Several states in the Twenties had already established state-level EDOs (Alabama, Florida, South and North Carolina, and Virginia) (Lepawsky, 1949, p. 8). When NRPB was dissolved, only Virginia, Tennessee and Alabama retained planning agencies—two, of which already had state-level EDOs. Georgia, Mississippi, Kentucky, Oklahoma, Louisiana, Florida, Arkansas, South Carolina and Texas had by 1945 scrapped the state-level planning entirely or combined it with an EDO. Each southern state by war’s end had a multi-function state-level EDOs (Cobb, the Selling of the South, 1993, pp. 65-70, Table 2). Most southern state-level EDOs were led by gubernatorial appointees, many included boards or commissions with private sector membership reflective of regional constituencies, were staff-driven (some more professional, others political). Emerging from the war, these new agencies played a crucial role in retaining war-time employment/relocation gains—and provided incentives to assist their conversion to peacetime production. (Cobb, the Selling of the South, 1993, pp. 67-9).
In 1946, the Southern Economic Development Council (SEDC) led by W. Porter Grace Memphis Chamber Industrial Department, organized informally, as the Southern Industrial Development Council. Meeting each year, the organization grew in size and ambition. At Fort Worth in 1951, an invitation was “extended to all practitioners of industrial development in the southern region” and the Council officially incorporated with W. Porter Grace its first elected president. By 1958 the Council had nearly 200 members. In 1961, the University of Oklahoma at Norman was approved as its “Institute” and a three week course of “instruction in industrial development” commenced. AEDC later assumed responsibility for its operation. In 1981 SEDC headquartered in Atlanta (where it remains today–with a short digression to Austin, Texas). SEDC in 2013 claimed 1000+ members from 30 states.
[i] The War Production Board, Defense Plant Corporation, Industrial Mobilization Plan, Lend Lease Act, National Defense Advisory Commission, Office of Price Administration and Civilian Supply, Office of Production Management, Reconstruction Finance Corporation, Supplies Priorities and Allocation Board, War Industries Board, War Resources Board and numerous subsidiaries to implement specific ventures .
[ii] Bureau of Labor Statistics, Bulletin No. 898, pp. 16-26. Donald B. Dodd and Wynelle S. Dodd, Historical Statistics of the South 1780-1970 (University of Alabama Press, 1973); Jack Temple Kirby, “The Southern Exodus 1910-1960,” Journal of Southern History, Vol. 49, November, 1983, pp. 585-600.
[iii] https://www.planning.org/growingsmart/guidebook/four01.htm
Ron W. Coan 