STRUCTURAL REFORMERS AND THE CITY EFFICIENT
The most impactful policy system that emerged from the Progressive Era was the “businessman” structural reformer and the City Efficient. Structural reformers, supported by chambers and the National Municipal League, dramatically restructured nineteenth-century urban governance; launched the City Efficient; “grew” the urban Policy World; and, for many cities, dominated municipal governance and ED policymaking through the 1960s. Structural reform impact was most pronounced in secondand third-tier policy systems; structural reformer impact on Big Cities, however, was uneven. The almost inevitable consequence of capacity-building (budgeting, accounting, purchasing and planning, accompanied by the employment of experts and neutral professionals) in the Big City mayor–council system was to convert a weak mayor into a stronger mayor system. Minneapolis, however, is an exception in that, to the present day, it retains a weak, low-voltage mayor-council. The Progressive structural reform policy system essentially “turns the page” by establishing the foundation of a modern, municipal government with sufficient “capacity” to be autonomous from its supportive business class—or any socio-economic class or electoral majority for that matter.
The structural reform policy system reflected the values, organizational management practices and techniques of business. Its chief private supporter was the chamber, municipal research bureaus. Real estate exchanges—loosely linked to chambers but focused upon CBD, neighborhood and subdivision development—were serious policy actors in real estate matters. Structural reform municipal policy systems usually, but not always, coexisted with machines and social reformers if need be. A new-style mayor-dominated semi-ward, semi-municipal bureaucracy machine emerged as well in Big Cities, and would have been the “default” policy system of most municipalities, especially non-Big Cities, until the Great Society Era. In short, structural reformed municipal systems continued to exhibit substantial variability, although most cities talked and walked to the tune of the City Efficient.
It’s called many names—the City Practical, the City Functional or the City Efficient—but the core of each was that municipalities should operate from sound business, scientific management or efficiency principles. Typically, that translated into increased government capacity, budgeting, planning, audit, a tendency toward at large rather than ward districts and the electoral reforms associated with the city manager form of government. In Big Cities that meant a much greater role for the mayor as he/she presided over a considerably more formidable bureaucratic apparatus. The unicameral legislature still retained a serious role in policy approval, however. As years went by, the mayor was drawn increasingly from the “political” class and less frequently the “businessman.” The incrementally increasing role of the federal government (and state) and the already felt need for additional municipal fiscal resources made political skills more useful. ED, still searching for an identity, was dispersed throughout several conglomerate departments, especially planning and public works. The chambers remained the lead agency for jurisdictional ED, and port authorities exploded in importance—taking over much of the non-automobile transportation infrastructure. This story will be more fully described in future chapters.
Planning was in its heyday; how could an urban area be efficient without a plan? Zoning and building codes became institutionalized, and movement was toward something called a “comprehensive plan”—a plan that planned for virtually everything in the urban area and logically prompted initiatives calling for some form of regional planning. The general policy thrust was low-tax, low-cost, public referendums for bond-issuance and for “efficient” modernization of urban infrastructure—making sense of the tangle of hanging wires that delivered electricity and telephones, pipes for energy and water/sewerage to reduce flooding and accommodate new paved streets. More than anything, as time went on, the City Efficient had to cope with the automobile— consolidating streetcar (now bus) franchises into municipal or port/authority-like agencies.
SELLING FROZEN WATER: ED COPES WITH DILLON’S LAW
Lest the reader think that Dillon’s Law was thrown out with all this home rule, we conclude the chapter with a policy reminder of its persistence throughout the period. Think of your life without a refrigerator. How do you keep stuff cold? Ice. Ice cut from frozen bodies of water and stored below ground in very cold caves or ice houses. Affordable ice was a public necessity, and that is what encouraged municipalities of all stripes and persuasions to enter into and compete with private firms in the ice market. Enter “the saga of municipal ice.” In most cases when municipalities entered into the ice industry, no legal challenge followed. That was not the case when the newly elected socialist mayor of Schenectady New York started that city’s ice business (1911), fulfilling his election pledge to “save the babies of the working class.”
The city attorney reasoned that existing legislation empowered the city to store and transport water (water lines and so forth) and ice was, after all, only frozen water. So hiring workers striking from General Electric, he started cutting and storing ice. In the summer he gave it away free to needy families—that was before a state court, on July 4, decided it was not legal. That night the city set up a nonprofit and continued its ice business. Private ice companies struck back and harassed their new competitor. The nonprofit acquired operating funds by selling “ice at cost” buttons and finished the summer. Next winter the river didn’t freeze. But the damage was done—in the future, when asked, state courts throughout the nation blocked municipalities from the ice business. Dillon’s Law had survived home rule and the municipal league movement— now it included state judicial review in addition to approvals from the state legislature.
In 1915 Harvard University’s Municipal Research Bureau reported that many municipalities had entered the ice business and that it resulted in lower-cost ice to the consumer. By 1919 Cleveland owned and managed a cold storage plant, and many municipalities in the Privatist but hot and humid South did so as well. In 1919, however, one state supreme court, Missouri, in Kansas City v. Orear, overturned an approved municipal bond referendum to build and construct a municipal ice plant. It was not, the court held, a legitimate public purpose, “and not even the sovereign Legislature, much less a municipal corporation, can, by fiat, make that public which is in fact private.” The year after, the state of Missouri approved a constitutional referendum/amendment permitting municipalities to engage in the ice business. Ten years later (1929) the owners of the Denton Texas Home Ice Company thought they could stop Denton Texas from starting its own municipal ice business; that state court, however, said the city could do it—and the Texas Supreme Court upheld the lower court decision allowing the municipality to proceed with its ice business (Radford, 2013, pp. 78–82). Dillon’s Law and state judicial review had become the de facto process by which nearly every major economic development innovation or change went through—and goes through to the present day.
The bias was that courts followed a strict construction, and enforced older interpretations and statutes (including gift clauses) of state constitutions—continuing the traditions and values of the first settlers and preserving the values of the founding fathers. On a state by state basis the court would review whether or not the action was constitutional, making determinations that shaped the content and the process of economic development innovations. Over time, the court might reverse early decisions, but usually did so preserving as much of the judicial precedent as possible. So a litany of future ED tools and programs—tax-exempt bond issuance, tax increment financing, eminent domain, urban renewal, municipal ability to lend to private firms, to own property to benefit private firms (industrial parks); economic development zones, annexation and so forth—went through this maze and obstacle course. In this manner, the 50-state SSS, described in our opening chapter, came into being. The state court system had become a player in urban economic development. The reader, no doubt, might sense that Mistoffelees and political culture have entered the premises.
Ron W. Coan 