Southern Chamber-Style Economic Development
The South relied upon chambers as its primary EDO. Southern chambers, however, did not mirror the post-1900 North’s Big Cities shift to the general business community. The big hitters of the northern hegemony were, by definition, not resident in southern chambers. The South did not establish many municipal research bureaus. Southern business elites and out-of-town northern corporations uneasily dominated southern large city chambers. Southern chambers were more often havens of the community’s top echelon business leaders and plantation gentry. Professionalization of chamber leadership, however, did catch on in the South. From professionalized chambers New South Redeemers pushed industrialization, and did what they could to attract investment and facilitate manufacturing.
Following the Philadelphia Centennial of 1876, several large southern cities joined in the “exposition movement”:
- Atlanta (1881) held its International Cotton Exposition
- Louisville followed in 1883 with its Southern Exposition (15 acres of floor space).
- In 1885 New Orleans held a Centennial Exposition (33 acres of exhibits).
- Atlanta again in 1887 organized the Piedmont Exposition and later (in 1895) repeated its International Cotton Exposition).
- In 1897 Nashville held its Centennial Exposition, complete with a replica of the Greek Parthenon.
Woodward describes these expositions as “modern engines of propaganda, advertising and salesmanship, geared primarily to the aims of attracting capital and immigration and selling the good” (Woodward, 1981, pp. 124–5). In the North, expositions “made a statement” announcing the coming out as a Big City on the national, if not world stage. Southern expositions competed more for regional leadership, and business investment.
Chamber-driven New South industrialization and municipal economic development, however, was uneven, as demonstrated by contrasting the Charleston and Atlanta chambers.
Charleston and its chamber
The Charleston chamber embraced the low-tax, low-service planter Redeemer model. The chamber, accordingly, was a major leader in South Carolina’s 1871 Taxpayers’ Convention—which attacked the Reconstruction-era state and local Republican governments. The Charleston chamber, however, did provide (in 1884) an opportunity for William Trenholm to advocate a New South path for Charleston.9 Trenholm distrusted relying on a traditional agricultural-based economy and a Jeffersonian farmer-planter model. He pushed instead not for industrialization but for trade (with South America), and for Charleston to take advantage of its coastal position and turn to the sea (fishing/fisheries) for economic development. Trenholm stressed transportation infrastructure; but his message fell on deaf ears and he left South Carolina, eventually settling in New York City. The chamber remained the bastion of Charleston’s Old South for the next half-century.
Charleston had its problems in the decades that followed. Unable to develop favorable railroad connections linking it to the Carolina interior, the city compounded its infrastructure weakness by failing to construct direct railroad connections to its port and harbor facilities. Cargoes had to break bulk and travel by mule from sparse railroad terminals to the docks. Then Charleston got into a multi-decade “pitch battle” with white supremacist Governor (later Senator) Benjamin “Pitchfork” Tillman, who led a hinterlands and “upcountry” populist movement that hated Charleston’s old entrenched plantation gentry. Reaching a nadir of sorts during the Panic of 1893, younger Charleston New South businessmen, infused with new German and Irish merchants, formed an informal Young Men’s Business League (1894), and for the first time New South Redeemers controlled a viable mechanism to affect economic development.
The League began with a movement to establish a Freight Bureau to speak with one voice to railroads, maritime shippers and harbor facility owners:
The Charleston Freight Bureau … became an agency of the municipal government [corresponding to NYC’s Department of Docks] … The league came to form a broad-based active force whose main purpose was to agitate for change and to confront the railroads, the city government … not the least of its roles was to embarrass the elders of the Chamber of Commerce, the Cotton Exchange, and city hall to nudge them into action. (Doyle, 1990, pp. 175–6)
By 1896 the League had grown to 250 members.
In a larger sense their success came at a time when the post-Civil War Charleston elites were literally dying out. A change of generational leadership had finally materialized—in the 189s.The League turned to tourism and convention promotion as their next economic development initiative. Their first success, a convention of South Carolina Civil War veterans (1898), fostered internal cohesiveness and confidence.
They needed it because Governor Tillman passed a liquor dispensary law that made Charleston “dry” and established a metropolitan police force to enforce it. That did wonders for South Carolina War veterans. Dogged, the League put together a bid for the 1898 national Confederate veterans’ conference and, against all odds, won. The reunion brought 30,000 veterans to a city of 56,000. Moving on, the League won bids for the League of Municipalities, the National Education Association and Fire Chiefs of the United States and Canada (Doyle, 1990, pp. 177–8). In these endeavors, and others described below, the League joined with Robert Goodwyn Rhett, newly elected mayor (1904) for two four-year terms.
From December 1901 to May 1902 Charleston, following the success of Atlanta and Nashville, held the South Carolina Interstate and West Indian Exposition. Nearly 700,000 tourists attended—although a “special Negro exhibit” generated a boycott by Charleston’s black community. Stock subscriptions, business contributions and bonds by the Expo organization financed the Expo, and the city made its “chain gang” available for Expo use. The Expo introduced “new people, new capital, new industries … and gave voice to the … New South vision of economic development and social progress” (Doyle, 1990, pp. 182–5). In the wake of the Expo, in 1902 Rhett resituated the business elite that had conducted the Expo and permanently institutionalized it by forming the Charleston Commercial Club. It informally merged with the Young Business League and set up a four-story commercial club:
as a modern alternative to the “ancient chamber” … but was a serious, self-consciously progressive organization whose mission included the economic development of the city, municipal government reform, and social uplift. It boasted special committees on advertising [business attraction], new industries, good roads, health and sanitation, and suburban development. (Doyle, 1990, p. 186)
Within a year, membership reached 500.
The 1898 Spanish–American War provided yet another opportunity. Convincing the military to use Charleston as a staging area for an invasion of Cuba, city leaders— aware the navy was dissatisfied with its existing port at Port Royal—secured now Senator Tillman’s cooperation, and the League coordinated a city campaign to attract a naval yard, dry dock and port facilities. This required, among other things, a modern water supply system and direct rail connections—which city and business cooperated to complete successfully in time to win navy approval:
The coming of the navy yard brought a huge stream of federal monies, estimated at $15 million … a payroll of $.5 million annually. By 1913 the navy yard was said to support one-tenth of the Charleston area labor force and supply one-fifth of the wages … . Beginning in 1912 … [in] an area once considered inhabitable, a new industrial park and waterfront facilities were laid out in a five thousand acre development. (Doyle, 1990, pp. 180–82)
If Charleston had missed the economic development boat in previous years, it caught up in the first decades of the twentieth century.
Atlanta and its chamber
Young, rapidly expanding Atlanta, with a distinctive political culture different from Charleston, competed with all rivals to lead the New South. Atlanta was always a railroad hub—that’s why Sherman burned it down (Stone, 1989, p. 14); and postReconstruction, Atlanta, like a magnet, attracted northern railroads and investors— enhancing its self-image as the regional metropolis of the southeast. The rebuilt Atlanta that resulted infused northern perspectives and values into its business elite. Northern elites influenced Atlanta’s politics and chamber of commerce (McKelvey, 1963, p. 28),10 setting both down a path which, about a hundred years later, would make Atlanta the capital of the New South, the model of new southern race relations, and driver of the rising Sunbelt economy.
Atlanta’s real pre-1900 distinction, an early forerunner of its future leadership during the civil rights era, was its keynote speaker at the 1895 Cotton States and International Exposition: Booker T. Washington (Mead, 2014, pp. 127–8). In that opening speech Washington proclaimed the famous “Atlanta Compromise” which described his approach for race relations and African-American economic/political evolution. The Atlanta Compromise outlined how southern blacks could urbanize (which they increasingly did in the 1890–1910 period) and participate in southern industrialization (which did occur in sawmills, railroads, and coal mining); and advocated increased “industrial education” as the path for African-American entrepreneurial capitalism—a black middle class.
Promotion/attraction has been considered a defining attribute of southern-style economic development. If so, the best example of municipal-level ED promotion is Atlanta. In 1880 it was home to only 37,000+ residents, but for the first time it surpassed Savannah (32,000) as Georgia’s largest city. Henry W. O’Grady, editor of the Atlanta Constitution, the foremost New South Redeemer, pushed Atlanta to become the “capital of the New South,” competing against Old South’s Richmond and New South’s Birmingham. Advertising and promotion seem to have been part of Atlanta’s DNA. As early as the 1880s “a spate of advertising brochures poured from Atlanta, and many other [southern] towns and cities followed suit” (Richmond Virginia for example) (Ward, 1998, p. 157).
While O’Grady died young (at 39 in 1889), the Atlanta chamber “self-consciously attempted to keep the Grady spirit [alive]. Racial moderation, overtures to the North for investment and workers, and a focus on building up industry would be themes to which it would constantly return” (Mead, 2014, p. 128). Boosterism and promotion seemed natural in its competition for the southern leadership; in 1886 a Massachusetts newspaper called Atlanta “one of the best advertised cities in the United States.” In 1890 another newspaper in its old rival, Richmond, directly equated Atlanta’s growth with its ‘determination to leave no opportunity underutilized to advertise the advantages which it has to offer’” (Ward, 1998, p. 157). This tradition continued for over 30 years; a 1920s southern commentator proclaimed; “There is no God but Advertising and Atlanta is his prophet” (Tindell, 1963).
In 1924 the Atlanta Chamber established an industrial bureau whose purpose was to bring new industry to Atlanta. Fearing competition from Florida, the following year Atlanta redoubled its commitment to advertising and attraction; in 1928 the chamber
ramped up “the most aggressive city marketing machine ever created up to that time, the Forward Atlanta Commission.”
[T]his bold initiative was fully supported locally with a major fund-raising drive. The biggest subscribers were the City itself and Georgia Power … next came the banks … [and] Fulton County … Locally based Coca-Cola (and over 10,000 smaller subscribers as well) … By the end of 1929 over $500,000 had been spent on advertising on a wide range of magazines and trade papers, together with newspapers in New York, Chicago, Detroit, Cleveland, Boston, Miami and Greenville, South Carolina. (Ward, 1998, pp. 157–8)
Atlanta became the model for southern municipal promotion campaigns. But that raises the question of piracy and whether southern chambers were especially prone to that noble activity. By the 1920s chamber-style ED attraction of manufacturing firms with incentives, industrial bureaus, industrial parks and advertising were pillars of this style of economic development—no matter the region. Chambers in the South did the same; Atlanta, of course, more so—but with one difference. A southern chamber’s neighbors had few, if any, manufacturing firms that it or the North could steal. If a southern chamber wanted manufacturing firms to diversify the jurisdiction’s local economy, it wasn’t getting them from cotton towns down the river. The North was where manufacturing was. What was different was that the public sector was a more active, and an independently aggressive, participant. Industrial attraction was a public sector priority in the South—much less so in the North.
The South pioneered an ED municipal tax tool. In 1916, the Amarillo Board of City Development was empowered to finance itself by levying a tax. As one might expect, a proper “stir” resulted, with many chambers believing the Amarillo Board had compromised chamber independence by linking its activities to a public tax. Upon further reflection though, Texas chambers suspected that Amarillo might be onto something, so more Texas chambers adopted the model on the premise that, if ED and business attraction was benefiting everyone in the community, then everyone should pay. Ultimately, the model shifted in that Texas chambers raised money from members, thus maintaining independence while simultaneously contracting with the city for economic development programs (Mead, 2014, p. 224). This tale is the forerunner of the 1979 Texas Development Corporation Act that created “a” and “b” development corporations in most every Texas jurisdiction. Present-day (post-2001) Chapter 313 allows quasi-public development corporations to finance activities through local taxation. That Texas twig was bent pretty early.
It is clear the South’s chambers and municipalities had by the 1920s embarked on a policy to build a manufacturing base, intending to close the gap with the industrial North through attraction. Southern municipalities, however, were not “creatures” of state programs; they independently established their own recruitment programs.
Southern cities entered into vigorous competition to attract industry through tax exemptions, free sites and outright bonuses … Savannah booster, Robert M. Hitch wrote in 1929 that “industrial enterprises are among the greatest builders of our cities”, and accordingly Savannah “has assiduously fostered the prosperity and expansion of the industries she has, and is pursuing an undeviating policy of encouraging the coming of others”. Savannah’s “undeviating policy” included a five-year tax exemption, free water and cheap labor. (Goldfield, 1982, p. 188)
The New Orleans Port Authority
In 1835 New Orleans was the world’s largest port; by 1900 it had fallen to the 12th largest port of the United States. The decline prompted port-related business (especially the New Orleans Steamship Association) to request the New Orleans Board of Trade to exert political pressure to secure state legislation for an empowered port authority. Authorized by Louisiana state legislation (1896), a municipal-level authority governed by commissioners appointed by the governor from local nominations “predominantly identified with the commerce or business interest of the Port of New Orleans”—in other words, the New Orleans Port Authority. Nominations were controlled by the businesses that previously owned the port and marine facilities.
Initially the Authority acquired privately owned jetties, wharves and piers—and then was stymied. It was only in 1908 that the Authority undertook projects financed by its first issuance of authority bonds. While New Orleans was taking its own sweet time, rival southeastern coastal cities (Galveston and later Houston) stole its export trade. Despite its rather dismal performance, the “lock” over the appointment process detailed in the original state authorization ensured that Privatist control of the New Orleans Port Authority was not effectively challenged for generations (Azcona, 2007). The New Orleans Port legislation was the complete opposite of the Boston Port Movement.
Ron W. Coan 