Chapter 6: Appendix
Developing the Little Economies: The Pre-Great Society Economic Development Landscape
The Narrative and Findings
State Planning and Development Agencies
Municipal and County Development Agencies
Local Planning Organizations
Port Authorities
Local Chambers of Commerce
Local Redevelopment and Renewal Agencies
Local Industrial ‘Groups’ and Community Development Corporations
Developing the Little Economies: Concluding Thoughts
Chapter 6: Appendix Developing the Little Economies
Developing the Little Economies: The Pre-Great Society Economic Development Landscape
The Narrative and Findings
In 1957-1958 the Area Development Committee of the Committee for Economic Development (CED)[1] conducted a survey of “area development programs” in the United States. This is almost certainly the earliest survey of American EDOs. As such it offers a fascinating, interesting, overview of how the profession had evolved to that point in time. Despite its potential centrality to our study, we do approach its findings somewhat cautiously. There are some definitional issues which affect its interpretation, question wording is frequently open-ended and response categorization is uncertain. In short, we do have interpretative and methodological issues. The list was aggregated from a large number of corporate/institutional lists (14000+ entries) and the mailed questionnaire was sent to 10,900 “organizations which were believed to be operating some form of an economic development program”. The report acknowledges that at that time, the conventional wisdom was that there were between 4000-5000 EDOs. Replies were received from approximately 4500 organizations, but “a large number of replies were eliminated” A total of 955 replies were retained and it appears that, for the most part, this is the appropriate “n”. It does appear, however, that partial replies were included for various questions asked.[2]
In the subsequent chapters of this book, we will be drawing from our own database of nearly 8500 EDOs. We will also be presenting our own categorization/typology of EDOs. Obviously, our methodology is vastly different from that employed by CED in 1958 and the readers, unless advised to do so, should not try to compare the two. In our present analysis, we have tried to isolate those findings which we can relate to our database, typology and the book’s purposes. Not all of the material in the 1957-58 survey will be presented in this book. We will not present overall findings nor will we focus on the raw numbers of replies attached to each organizational type.
Since our purposes are primarily structural (i.e. related to the EDO) and less programmatic, we will concentrate upon those organizational types which correspond to present day EDOs. We shall, for instance, not include railroads, but will include chambers, state, municipal and county planning and development agencies, port authorities, local industrial “groups”, state and local development councils, area development associations and regional development groups. Of the 955 estimated EDOs replying, 532 are chambers of commerce. The survey does break down the findings in terms of organizational types and although “n” can be quite small, the narrative can be very helpful.[3]
State Planning and Development Agencies (48 respondents): The CED report states that previous to World War II these entities were primarily “serving as a storehouse and an agency to collect and disseminate current state and local economic data” often to firms “in connection to plant location decisions” (p.31). The New Deal-World War II years were marked by a federal initiative to create planning agencies, but “when the parent agency, the National Resources Planning Board, was disbanded in 1943, the state planning era was virtually complete” (p.31). After the War, these agencies were likely to switch from agricultural and transportation concerns to industrial development. This is, for us, a page-turner, as these state planning and development agencies are the forerunner for most present day state EDOs.
While planning and development were linked organizationally, there was a tendency to spin off a separate “development commission” or department or division. It appears the federal involvement in planning actually created a backlash against planning at the state level, and an upgrade in the function of industrial development in its place. The CED itself in the postwar period worked with several states (Louisiana and Wisconsin were specifically mentioned) to facilitate the transition from planning to development. By 1947 “half of the states had shifted the title of their agencies from “planning” … to …”development, industrial or economic”. In the period between 1947-1957, “there is still a wide variation in the titles of these state units, with the recent tendency being to call them Departments of Commerce or Economic Development” (p.32).
Only three states at the time of the survey did not have a planning and development agency: California, Arizona and Texas. Other states also had a Tourism Department in addition to the planning and development entity. New Hampshire in 1955 was the first state to create an Industrial Park Authority (develop, buy, borrow, bond, sell, improve, lease) (p. 50). The authority worked through municipalities and had one project in 1957. Maine (1957) and Rhode Island created Industrial Building Authorities which apparently could guarantee mortgages for industrial facilities purchased by private firms. Kentucky in 1958 created an Industrial Finance Authority but allocated no funds for it. (pp. 54-55)
Eight states (Alabama, Illinois, Kentucky, Louisiana, Mississippi, New Mexico, Tennessee and Wisconsin) authorized municipalities to issue revenue or general obligation bonds to finance and purchase sites and the construction of plants for lease or sale to private industry. (p. 57) Wisconsin and Illinois had not issued any bonds by 1957, New Mexico one, but the six other states had issued bonds to 269 firms (167 to Mississippi alone). Mississippi, Louisiana, and Tennessee were the only states that allowed the issue of full faith and credit bonds for these purposes. The Mississippi model is described in some detail and in 1957 eighty-eight municipalities had issued BAWI bonds totally some $43mm. Louisiana had copied the Mississippi program in 1952 and by 1957, fourteen municipalities had participated for a total of $2.7mm. (p.58). The CED declined to produce numbers for the IDB program “because the practice is viewed with considerable misgiving in several quarters” p. 61).
The report provides some detail as to personnel and expenditure. Interestingly, Florida ($.77), Wyoming ($,65), Nevada ($.35) and Washington ($.28) spent the most cents per capita. All New England states plus New York and Pennsylvania spent in excess of ($.20) cents per capita. All of the Great Lakes states spent less than ($.05) cents per capita–the lowest. Most states spent between ($.05-$.18) cents per capita (p. 34). “Over half of earmarked appropriations were devoted to advertising, mainly industrial and tourist advertising” (p. 35). Urban renewal was the next ranked expenditure purpose, but it is not clear to us what specifically urban renewal at the state level was? Eighty one percent of the state EDOs spent at least 27% of their expenditures toward newspaper and magazine advertising, fifty two percent of states spent 7% expenditures on direct mail, and 52% of states spent 8% on “field solicitation”–presumably raiding other states (if so, the South was by 1957 not the only region sending agents to recruit firms in other states).
Other specific activities performed at the state level are in order of rank mentioned: assisting local development groups, cooperation with railroads and utilities, research, advertising, personal contact with firms, and coordination with other state agencies. (p.38). The most common success cited by thirty seven states was “obtained new industry” or “aided existing industry to expand” (p.39). The most effective technique was “personal contact with industrial prospects”, followed by “furnishing prompt and accurate data”, “cooperation with development groups”, and “advertising”. Direct mail was deemed more effective than magazines and newspapers. (p.39)
Municipal and County Development Agencies (299 organizations identified, 52 respondents)
These agencies “appeared on the American scene rather recently” (p.63). These agencies are governmental in nature and are found in all types of communities, including suburban “faced with mounting tax rates”. “The city or county development agency seeks to ‘merchandise’ its area, but this promotion is seldom designed to attract new enterprise indiscriminately” P.64) Targeting and seeking out firms which match labor force of defined community need or advantage is apparent even in this time period. “A total of twenty-three states are known to have municipal or county development agencies pursuant to legislation post 1950. CED surveyed all identified agencies in these twenty-three states (which were never listed). Ninety per cent of these organizations were created in the 1956-1957 period (p. 64). Only three organizations were created before 1950. As we reported earlier, this is the period in which the IDB controversy became national in scope. If we are correct in linking this controversy to the bulk creation of county and municipal development agencies in over twenty states in a two year period, it is safe to say the IDB issue was key in the nation-wide spread of sub-state governmental EDOs. If CED is correct (and we assume it is reasonably accurate) by 1958 more than half of the states had not yet set up/empowered municipal or county governmental EDOs.
“The attraction of new industry is the most important objective named by the agencies”. Stress on industrial is indicated in that 70% of the organizations had “industrial” in their name. These agencies have virtually “no” funds, i.e. “nominal funds in that the combined funds of twenty-seven agencies was less than $340,000 in 1957 and four other agencies had $0–out of 52 agencies. The median budget was $5,000. Given their relative new comer status, we seem to have captured the “birth” of governmental (county/municipal) departments as a meaningful EDO type. The “founding” strategy was attraction. “It should be noted that many of these agencies have not yet made use of the powers that they do possess.” (pp. 66-68).
Local Planning Organizations: (3108 organizations identified, 801 respondents):
These entities appear to be planning and zoning boards. They are not included in the previously cited “Methods and Procedures” appendix and hence are in excess of the earlier mentioned “n” of 955. We include them in this discussion (1) to further characterize the relationship of planning and economic development, and (2) to isolate those planning departments with identifiable economic development activities in the 1957-1958.
Most (75%) of these entities had no employees in 1950; by 1957 58% had retained at least one staff member. Financially, there were worse off than the municipal and county development agencies. Eleven per cent worked with more than one governmental jurisdiction. A majority were county, metropolitan or regional planning organizations. Twenty-five per cent indicated they coordinated public works programs among independent government units. Seventeen per cent replied in the affirmative that they “related the industrial and commercial zoning to the needs of their area” (which seems to us to be what they were supposed to be doing, but whatever!). Forty one percent admitted to using an “economic base” study in their planning–but overwhelmingly they administered subdivision regulations and zoning ordinances (pp. 74-75). Interestingly, very, very few cited either urban renewal or economic development programs as a success of their organizations.
In any case, they were a whiney lot in that they were not happy with almost everything–from budgets, to deficiencies in government structure, to lack of cooperation among government officials, and just lack of interest and participation by the public or business leaders (p.75-76). About forty per cent acknowledged frequent contact and participation by business leaders, but sixty per cent said never or seldom. Still when asked what future problems they anticipated in the next five years “almost half mentioned the importance of attracting new industries and of broadening the economic base of the community” yet, next to last was urban renewal and last was master planning” (p.79).
Local Redevelopment and Renewal Agencies (312 organizations identified, 150 respondents in 36 states):
“During the past decade, cities and towns in all parts of the country have inaugurated programs to arrest blight and restore declining neighborhoods…. Nearly all the recognized local programs are based on Federal capital grants set aside to cover two-thirds of the net cost of approved projects. (p.80). Of the 130 agencies, forty per cent were considered as departments/divisions of city government and the remainder were independent agencies. A majority of the independent agencies also handled housing as well as urban renewal (p. 81). In 1950 these agencies employed 108 and by 1957 the number had risen to 819–a 700% increase (50% were considered professional employees). Two thirds of the reporting agencies retained consultants as well with the smaller agencies using consultants more (p.82).
At the time of the survey (1958) 335 localities had urban renewal programs and over 560 federally funded projects totaling roughly $1.2 billion. They estimated a one dollar public leverage to three dollars private leverage in these projects. One third of the projects were commercial and industrial and twenty-five per cent were public. The remainder was housing and residential reuse.
Eighty-one percent of respondents indicated that strong business involvement, i.e. public-private partnership (our words) and three-fourths indicated chambers of commerce were their closest partner. (p. 83). Next in importance were real estate groups and then citizen councils. Fifty per cent indicated “that an objective was providing space for relocation of industry already in the community and twenty per cent to allow existing firms to expand. Nearly sixty per cent worked closely with either chambers or business/industrial groups to identify firms for their projects. (p. 83). These agencies identified their most serious problem was securing funds for the federal match. Second and third ranked problems was relocating persons and securing “public acceptance and acceptance”. One third said the most important problem in the next five to ten years was improving the process for urban renewal.
Port Authorities (141 organizations identified, 42 useful respondents)
Over sixty per cent operated economic development programs totaling $6.5 mm. Nine of the programs had operated since 1917 and twelve since 1955. Promotion and solicitation are the most important activities and sites for lease and sale, second (p. 89). Closest working partners were chambers and state planning and development agencies were second (p. 90).
Local Chambers of Commerce (4842 organizations identified, 858 respondents-671 qualified)
Chambers are a vital instrument of American economic development, if only because of their pervasiveness. The creation of a chamber in a community is almost instinctive. Nevertheless, their role in our economic development professional history thus far has been substantial and pivotal. The issue for us as economic developers is when they become an EDO. A social organization although it may serve important economic development functions such as business networking and informal mentoring is not yet an EDO. An interest group supporting a segment of the community and advocating for its interests and defending its distinctive perspective is an important member of the political and public policy process–but it is not an EDO. A chamber is an EDO when it offers at least one formal economic development program, a tourist program, an industrial recruitment program a program for which staff are hired and held responsible for program outputs and effectiveness. The Area Development Committee’s report is particularly valuable to us because, in its way, focuses on only the economic development activities of chamber respondents. They eliminated 22% of their respondents because they did not offer programs CED deemed as sufficiently economic development. It would appear that of the 4800 plus chambers identified by CED in 1957-58, about 14% or less one out of seven were active EDOs. However, 25% of those chambers reporting were less than two years old at the time of the survey. This should be kept in mind as one reads the below paragraphs reporting chamber activities and expenditures.
“Most local chambers of commerce have only recently considered or established formal programs in their own organizations to encourage local economic growth. Over one-fourth of those responding to the CED survey had organized a program since the beginning of 1956 and only 18% of the divisions charged with development responsibilities were organized before the end of World War II (p. 114). Industrial development is the most common program of the chambers–one half of the chamber divisions have industrial in their names (retail is second, interestingly, and also community development).
Almost all chambers had as their goals (1) industrial growth, (2) bring new industry into their community, and (3) assist existing industry. (p. 114). As late as 1960, then, chambers are the most common form of American EDO and manufacturing recruitment, retention and expansion are the core of their economic development goals and programs. “In every region except New England industrial development accounted for the largest portion of expenditures, ranging from 73% in the Mideast (NY, NJ, PA, DE,MD) to 28% in the Great Lakes region (MI,OH,IN, IL, WS), Chambers in New England spend only 22% for industrial development, placing more emphasis on recreation and tourist trade development (pp. 115-116). New England “was the only region not having chambers which made gifts to industry” compared to 20% of all chambers in the other regions. “No chambers in the Far West (WA,OR, NV, CA,HI, AK) or Rocky Mountain (MT,ID, WY, CO,UT) regions reported making loans to industry (p. 117). “Chambers in the Far West spent a higher proportion than those in any other region for community development and improvement programs…. Southwest and Far West [chambers] accounted for more than two-thirds [spent by chambers for] water resources (p. 116). “Purchase of stock was most prevalent among chambers in the Plains (MN,IA, MO, ND, SD,NE, and KS) and Southwest regions (OK, TX, NM, and AZ) (p. 117). Amazingly, at this early period, there is considerable chamber variation among states and regions. Chamber programs and economic development focus was not nationally uniform; “a rose was not a rose was not a rose”. This awkward expression will be repeated at critical points throughout this book and will be the subject of its fifth section.
About 20% of the 671 qualifying respondents had formed community development corporations “to carry out the development phase of their programs” (p.115). Of those chambers reporting personnel numbers, staffing since 1950 had increased by 50%. Clearly, chambers had/were undergoing a significant expansion in the post 1950 period. In addition, the formation of subsidiary community development corporations was widespread and to some degree the active role of chambers was being masked by their delegation of economic development programs to subsidiaries.
Chambers reported on their involvement with local governments in economic development. Local government’s most common action was industrial rezoning and nearly 50% of chambers reported local governments built roads and sewers for new plants. Eighteen percent of local governments provided tax abatement and 12% offered “gifts”[grants]. Nearly one-third of the local governments offered tax abatements, gifts of land, or special assessments. Eighteen per cent of local governments provided funds for chamber economic development activities. Only 4% of local governments offered IDBs for construction of factories (p. 118). IDB diffusion had yet to occur previous to 1958. Surprisingly, at this time about 9% of local governments appropriated funds for industrial job-training programs. No regional breakdowns were noted nor implied.
About 20% of local chambers “indicated they had acquired and sold land for industrial use, this probably understated activity in this field since many chambers have organized separate corporations…. Chambers in every region indicated they had acquired and sold land and provided factory space for sale or lease” (p. 117). Still two observations seem reasonable. First, active local government economic development involvement with chambers seems widespread (although likely with regional variation in intensity) and infrastructure and some form of tax abatement were also prevalent in the 1950’s. Second, the BAWI model had not been copied extensively, but had either prompted or been used as a rationale/backdrop for a national diffusion in local economic development.
When asked to assess significant future problems, New England chambers responded to a need to cope with rising tax burdens and needs for better planning and zoning (indicating a planning orientation). Midwestern states emphasize transportation and parking facilities (local infrastructure) and diversification of industrial base. Southeast chambers were mainly concerned about generating a sufficient number of industrial jobs to accommodate displaced farmers, better municipal facilities, and diversifying local economy. Planning and zoning issues were identified by Great Lakes chambers (another planning orientation). Coping with unemployment was cited by Plains chambers, and Far West, Southwest and Rocky Mountain chambers wanted to create new industrial job opportunities, diversify their economic base and create new municipal facilities/infrastructure (water, sewage disposal, and schools) (pp. 120-121).
It is very much worth note that urban renewal or urban renewal activities were not a significant program or issue for chambers of commerce–although a small number did cite urban renewal as a serious future problem.
Local Industrial ‘Groups’ and Community Development Corporations: (2819 organizations identified, 1942 respondent)
This category is critically relevant to our purposes, yet the CED methodology has combined a mixture, almost a mishmash of organizational types, many not even formal incorporated organizations but rather committees. On top of all this, the survey appears, despite the incredible number of respondents, to have generated comparable insights to that discussed with other categories. Moreover, there is every reason to believe that many of these corporations are, in fact, the subsidiary corporations of the earlier discussed chambers–inviting considerable redundancy and a bit of a head fake.
First, there are a number of committees, bureaus, boards, and even clubs and civic associations (867 entities and 141 respondents) that are probably not formally incorporated. CED acknowledges that many of these groups “start in a burst of enthusiasm which is never translated into solid, sustained action. Many others are formed for a single purpose and disband when they accomplish their mission” (pp. 122-123).
We do not consider these groups as formal EDOs but we do sense that many are entities set up by government, citizens, and possibly even chambers as either supplemental-supportive to ongoing efforts by EDOs or a mechanism by which EDO programs are guided, evaluated or even coordinated. More than 50% of these entities are one to two years old and this suggests a rather “soft” layer of coordination-support to what seems to most communities to be an explosion of economic development related programs, EDOs and activities in the relatively short time since 1950. Certainly, these types of entities should make us more sensitive to entities which often escape notice to this very day– a soft underlay of task forces, coordinating committees, work groups et al, EDO-embryonic groups etc that will always be with us and part of our local economic process and policy-system.
Community Development Corporations are another matter. They are incorporated, and there were 1801 respondents out of 1952 organizations identified–yet no results whatever were reported concerning these EDOs. CED seems to believe that many of these organizations are essentially offshoots, subsidiaries of other organizations, especially chambers. It is our sense, however, that CED has captured in this mélange of organizations an interesting, important turning point in the evolution of EDOs in American economic development. We sense the decline of one “style” or type of EDO (the community development corporation) and the beginning rise of another type which is still prevalent today: the economic development corporation.
A community development corporation in the late 1950’s is not the community development corporation which would emerge from the future War on Poverty/Great Society and that we can still see in some of our communities. Today’s CDC is usually neighborhood-based or at least focused on low-moderate income folk, their needs housing, social, and economic. That form of CDC did not exist in 1958.
Instead, pre-1965 CDC’s were incorporated under special state statute which permitted the EDO to issue bonds to finance private industrial firm plant construction/ownership (and industrial parks as well) and were financed by private investment and/or stock issuance (frequently in a publicly announced community involved campaign) and subsequent bank commercial mortgages and loans. In the parlance of the day, this private finance was labeled “venture capital” but it also bears no resemblance to the venture capital of the present day. Many CDCs were structured around one firm and the financing required to site or land that firm. When financing expired, the CDC would expire as well. In other cases, the CDC could issue financing and hold land for multiple firms. Which form was used was a function of community decision or state statute. CED asserts “it is impossible to estimate the number of community development corporations that have been formed … (p. 131)
Pre-1965 CDC’s are private EDOs and the penultimate expression of privatism (as in Sam Bass Warner). Local governments may interact and work with the CDC in a public-private partnership, but the CDC is privately controlled and privately financed. The CED report asserts the state authorization for this EDO-type existed (in 1958) for all states except New Jersey and Delaware. Seven states, in addition, authorized their political subdivisions to issue bonds instead of CDCs (this is the BAWI-type IDB legislation discussed in our history). Rather than copy the BAWI approach, almost all other states created CDCs and therefore empowered the private sector to compete/finance for industrial development, not government.CED estimates about 1952 CDCs in existence in 1958 and they had raised, what CED unequivocally asserts, is a low-ball $125 million dollars in venture capital for known and 1958 existing CDCs.
Pre-1965 CDC’s were privatism personified; they were the core unit of the so-called southern recruitment strategy. An excellent example of this type of CDC is the well-known Louisville Industrial Foundation, created in 1916. As reported by the Brookings Institution, in 1916, Louisville business leaders created the “million dollar fund factory fund” to recruit firms from outside the region in an effort to reverse serious decline in the local economy. This fund was turned over to a newly incorporated entity, the Louisville Industrial Foundation. The Louisville Industrial Foundation had a long and distinguished existence dedicated to community revival through the often infamous “branch recruitment strategy” also expressed in BAWI. Indeed the two are linked pretty closely.[4]
The CED report, however, probably unwittingly stumbles upon a significant trend in its discerning that its CDC responses strongly suggested that a new type of CDC was emerging in the fifties.[5]
Community development corporations are not new. They have been used in considerable number at the local level at least since the early 1900’s… but it is apparent from existing records that use of this device has increased greatly in the last few years. [For instance), Only seven of 129 corporations in Wisconsin were formed before 1944m, whereas 100 were organized between 1952 and 1957. Studies conducted by the Federal Reserve Bank in Boston indicate that at least 75 development corporations were formed in the six New England states between 1912 and 1956, of which 34 were established between 1952 and 1956. In Texas, only 18 community development corporations are known to have existed before 1953. Between the end of 1952 and 1955, however, at least 27 more were established.[6]
CED observed that these newly formed corporations “differed from those established in earlier periods in several respects” (p.132)
- They were formed before distress developed in their communities. Previous era were created to counteract factory shutdowns and develop replacement jobs “in a hurry”
- Intended to diversify economic base and increase growth of manufacturing payrolls. Some post 1950 some, but far from all, CDCs had conducted surveys and analysis to determine best way to advance local economy. Previous era recruitment, since an element of desperation was salient, was more indiscriminate and less thoughtful.
- Post 1950 CDCs tended toward more regional (several communities-not today’s definition of regional) solutions compared to the pre-1950 municipal and single city/town focus.
- A larger proportion of post-1950 CDCs were financed by contributions and donations than the issuance of stock or bonds (debt). This takes advantage of income tax deductions. Also there was a greater use of professional fund-raisers in post-1950 CDCs.
- Post 1950 CDCs tend to make more loans, develop more sites (including industrial parks) and a more likely to build “spec” facilities compared to pre-1950 CDCs which build only for specific firms for which relocation deals have been consummated and facilities/workforce custom built for its specific needs.
In its section on “Planned Industrial Parks”, the CED report asserts that approximately 30% of industrial parks created in the 1952-1957 period were CDC sponsored (p. 135). While providing no data, CED also strongly hints this feature is closely associated with suburbanization. Interestingly, regional variation in planned industrial parks is suggested in that the Great Lakes region “accounts for the largest proportion of land devoted to industrial parks, about 21% of the national total.
Our sense of this evolution is that the CDC, the catalyst (if not the inspiration) for which was BAWI and the long simmering controversy regarding aggressive southern recruitment, had prompted yet another post-1950 national diffusion of economic development strategies and EDOs. Along with earlier mentioned TIF (California 1952) CDCs, the IDB, discussed on page 48ff of this history, and urban renewal diffusion discussed on page ??, the CDC model also spread nation-wide during this little-noticed period of time. In 1958 the Office of Area Development of U.S. Department of Commerce published a list (used by CED) of CDCs and found that “every state except Delaware and New Jersey had at least one community development corporation” (p. 131)
As it was adopted, this model, along with all the other diffusions departed noticeably from its southern forms and practices and was reconciled to needs, traditions, and administrative structural patterns prevalent in the adopting state. Equally non obvious is that each state had to empower and authorize their version of the CDC by appropriate legislation. In so doing states were being more willingly drawn into a broader conception of economic development, while somewhat of two minds in their response to the practice of urban renewal by their large, electorally powerful, morally ambiguous rivals, the central cities. States, it might be suggested, were more open to First Stream privatist approaches to economic development.
The CDC model and EDO-structure is still, in limited form, in evidence at the time of this writing. Its evolution and its durability as an EDO-type and economic development strategy, has seemingly varied considerably by geographic region. During the 1950’s, however, and probably until the Great Society days, the CDC model prospered–but it didn’t seem to catch the imagination of county and municipal governments. Still. Its private foundations meant limited governmental involvement (and financial support) and required private financing which proved hard to sustain over longer time periods. CDC’s finance and real estate bias and its very close association to the recruitment strategy clearly mark CDCs as a so-called First Wave approach
Developing the Little Economies: Concluding Thoughts
It is hard to know what to make of the CED survey and its interpretation. The gaps in our understanding of its methodology, the interesting non-pattern in reporting its findings, and the inconsistent “n” which floats up and down without clarification suggest a measure of caution and a dose of subjectivity/bias.
Nevertheless, the CED report is, without doubt, our best insight into the number and character of EDOs and their activities around 1960. Its treatment of CDCs reveals an EDO-type, hitherto below our radar screen, that achieved a short-lived day in the sun, and may constitute a sort of culmination of the old-style privatist, First Stream approach to economic development before it was hit head on the new Democratic administrations soon to win victory in Washington DC. Its data and analysis on chambers is very helpful in our understanding of their pivotal role in the first sixty years of our profession. Its attempt to capture governmental EDO efforts previous to the Great Society is also helpful, although it is hard to assess how diligent CED was to identify and understand non private EDOs. We suspect, indeed suspect strongly, that CED was accurate enough in this regard; local and county governments had not before the 1960’s become strong players in the economic development policy area–aside, of course, from urban renewal which was not over assessed by the CED report. On balance, this report does ground our observations and provide both substance and support for the overall argument we have made in these chapters thus far.
[1] The CED is a non partisan think tank, based in Washington DC. Founded in 1942 by the President of Studebaker Corporation, the CED was critical in the transition back to a private economy following the end of World War II. The CED was instrumental in securing business support for the Breton Woods Agreement and the Marshall Plan. The survey and its findings was published and has since been recently republished, It is not readily available to our knowledge. The survey and publication authors are Donald R. Gilmore and Jervis J. Babb. It may be available through www.literarylicensing.com and its ISBN is 9781258212872.
[2] IBID, p. 173ff. Methods and Procedures Appendix.
[3] We regret being unable to deal with all aspects of pre-1960 economic development, as defined by CED. In particular, several topics are both interesting and relevant to our purposes, but have not been included in this discussion. “Planned Industrial Parks” (p. 134ff) is one. The CED discussion raises the issue of the role these parks played in the 1950’s suburbanization process. Their definition of planned industrial parks includes private industrial parks which is the hugely dominant component. Industrial parks “sponsored” by government and community organizations were estimated at about 13% of those private parks in existence by 1958 (based on a Stanford University study (James R. Lee and Gilbert K. H. Wong). The CED survey, however, asserts post-1950 industrial parks shifted from railroad-based parks to private industrial developers (40%) and community development organizations (considered in this section) 30% of all parks created between 1952-1957.
[4] “Louisville Kentucky: A Restoring Prosperity Case Study” by Edward Bennett & Carolyn Gatz, Brookings Institute, Metropolitan Policy Program, September, 2008, p.7.
[5] Developing the Little Economies, op. cit., p. 132.
[6] Developing the Little Economies, op. cit., p. 130. Also cited were: “Industrial Development Corporations in Wisconsin” by Isadore Fine, University of Wisconsin, 1958; Monthly Reviews of the Federal Reserve Bank of Boston of January 1956, June 1952, and June 1950; and “Recent Developments in Industrial Foundation Activity in Texas” by John W, Tippit, December, 1955 and “The Organization and Operation of Industrial Foundations in Texas”, April 1953, Texas Engineering Experiment Station, College Station, Texas.
Ron W. Coan 