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BEFORE THE GREAT SOCIETY: LIBERALISM, DEINDUSTRIALIZATION AND AREA REDEVELOPMENT IN THE UNITED STATES, 1933 - 1965

DISSERTATION

Presented in Partial Fulfillment of the Requirements for

the Degree Doctor of Philosophy in the Graduate School of The Ohio State University

By

Gregory S. Wilson, M.A. *****

The Ohio State University 2001

Dissertation Committee: Approved by Professor William R. Childs, Advisex

Professor Susan M. Hartmann C£SJÙJU. Adviser Professor David Steigerwald Department of History UMI Number: 3011161

UMI

UMI Microform 3011161 Copyright 2001 by Bell & Howell Information and Learning Company. All rights reserved. This microform edition is protected against unauthorized copying under Title 17, United States Code.

Bell & Howell Information and Learning Company 300 North Zeeb Road P.O. Box 1346 Ann Arbor, Ml 48106-1346 ABSTRACT

This dissertation explores the intersection between American liberalism,

deindustrialization, and public policy through an analytical narrative of the Area

Redevelopment Administration (ARA). Lasting from 1961 to 1965, the ARA provided

federal assistance to community development groups in labor markets affected by

deindustrialization and those in rural areas and Native American reservations. The

dissertation examines the political context in which federal redevelopment policy

emerged, particuakly the New Deal and post Second World War efforts at creating a

full-employment economy. This work also explores the economic and social changes

resulting from deindustrialization and underemployment at the local and state levels,

and how federal pohcy developed out of these efforts. It accomplishes these two tasks

by connecting the national policy narrative to the subnational narratives of four areas the

ARA sought to help: smaller urban areas of Pennsylvania, the inner city of Cleveland,

rural areas in the South, and Native American communities.

While the ARA did not solve the crises of unemployment caused by

deindustrialization or rural poverty, the ideas and policies of the ARA embodied portions of the three major eras of reform in the history of the modem United States: the Progressive era, the New Deal and the Great Society. The story of the ARA shows the continuation of reform liberalism in the Untied States, which sought to reconstruct the

American political economy in order to limit the inequities of capitalism. This wing of liberalism emerged during the Progressive era and reached its height during the 1940s.

In addition, the history of the ARA also revises the common understanding o f the process of deindustrialization. Most studies address one industry or community, or focus on the 1970s and 1980s. This dissertation broadens our understanding of the process by pushing the chronology back to the 1930s and integrating the local, state, and national responses to industrial transformation.

Ill For Laura

IV ACKNOWLEDGMENTS

A product such as this is the result o f many hands. I thank first my adviser,

William Childs, for his support and encouragement throughout my career at Ohio State.

I also thank the other members of my dissertation committee, Susan Hartmann and

David Steigerwald, for their valuable help and thoughtful comments.

I am grateful for the stimulating discussions, feedback, and necessary diversions

provided by many of my graduate school colleagues. Their insights and friendship

beyond the classroom are appreciated.

Valuable assistance came from the staffs at the archives and libraries I visited. I

am particularly grateful to those institutions that provided necessary research grants,

including the Truman, Eisenhower, Kennedy, and Johnson Presidential Libraries. The

Graduate School at Ohio State provided a research award, as did the Department of

History, which also funded me as a teaching assistant. I also thank Saul Cornell and

John Tully for hiring me as Director of the History Teaching Institute at Ohio State.

I thank the staff at the Ohio State Arts and Sciences Career Services Office for the privilege of working there as a counselor for two years. Their support and encouragement aided me in ways impossible to measure.

I thank my family for their help and support. Finally, and most important, I thank my wife, Laura, for her continual love and encouragement. VITA

17 December 1966 ...... Bom — Kearny, New Jersey

199 3 ...... M.A. History, George Mason University

1994 — present ...... Graduate Teaching Assistant, The Ohio State University

2000 — present ...... Director, The History Teaching Institute at Ohio State

FIELDS OF STUDY

Major Field: History

VI TABLE OF CONTENTS

Page

Abstract ...... ii

Dedication ...... iv

Acknowledgments ...... v

Vita...... vi

List of Figures ...... viii

Chapters:

1. Introduction ...... 1

2. The Genesis of Redevelopment ...... 20

3. Pennsylvania and the Emergence of Redevelopment Policy, 1933 - 1961 ...... 56

4. Creating the Area Redevelopment Administration, 1953 — 1961 ...... 106

5. Getting Started: The Structure of the ARA and a. Return to Pennsylvania ...... 154

6. The ARA and Cleveland, Ohio ...... 190

7. Rural Economic Development: The South, Native Americans and the ARA... 239

8. Transition and Conclusions ...... 287

List of References ...... 308

V ll LIST OF FIGURES

Figure Page

2.1 BES Classification of Major Labor Market Areas ...... 46

3.1 Pennsylvania Anthracite Region ...... 59

3.2 PIDA Loan Information, 1955 - 1965 ...... 95

3.3 PIDA Loans to Counties with. Redevelopment Areas, 1956 — 1961 ...... 96

3.4 National and Redevelopment Area Unemployment Rates, 1950 — 1960... 96

3.5 Products Supported Through PIDA Loans ...... 97

5.1 ARA Organization Chart ...... 158

5.2 Approved ARA Section 6 Industrial/Commercial Loans ...... 160

5.3 Approved ARA Sections 7/8 Public Facility Loans/Grants ...... 161

5.4 ARA Approved Projects by State and Territory ...... 162

5.5 ARA Support by Region: Northeast and Great Lakes States ...... 163

5.6 ARA Support by Region: Southeast and Appalachia ...... 163

5.7 ARA Support by Region: Southwest and West ...... 164

5.8 ARA Support by region: American Samoa, Guam, Puerto Rico ...... 164

5.9 Labor Market Trends for Scranton, Pennsylvania ...... 171

5.10 Labor Market Trends for Wilkes-Barre/Hazleton ...... 172

5.11 Labor Market Trends in Altoona ...... 180

vm 5.12 Labor Market Trends in Johnstown ...... 180

6.1 Cleveland’s Neighborhoods ...... 194

6.2 Cuyahoga County ...... 195

6.3 Employment by Sector in Cleveland, 1948 — 1977 ...... 200

6.4 Population for Cleveland and Cuyahoga County, 1940-1990 ...... 202

6.5 ARA Projects in Cleveland ...... 230

IX CHAPTER 1

INTRODUCTION

This dissertation provides an analytical narrative of the federal Area Redevelopment

Administration (ARA), which lasted from 1961 to 1965. When first proposed by liberal

Democratic Senator Paul Douglas of Illinois in 1956, the original legislation was to provide federal assistance to community development groups in labor markets facing high unemployment caused by deindustrialization. Political pressure from Southern,

Western, and urban interests broadened its scope to include aid for rural areas. Native

American communities, and inner cities. Thus, this story explores how the effort to address directly the effects of deindustrialization became a general program to address poverty. It examines the political context in which it emerged, the economic and social changes resulting from industrial transformation, and the local and state efforts upon which it drew. It does so by connecting the national policy narrative to the sub-national narratives of four areas the ARA sought to help: urban areas of Pennsylvania, the inner city of Cleveland, rural areas in the South, and Native American communities.

Only one major work covers the development of the ARA, Sar Levitan's Federal

Aid to Depressed Areas, written in 1963 while the ARA operated.' Other works also lack sufiBcient historical perspective, since they focused only on certain aspects of the

ARA and were published so close the events. Two case studies center on the creation of the ARA: Conley Dillon's The Area Redevelopment Administration (1964) and Roger

Davidson's Coalition-Building for Depressed Areas Bills (1966)." Davidson’s work grew out of his 1963 dissertation, "The Depressed Areas Controversy: A Study in the

Politics of American Business."^ Another 1963 dissertation also covers the creation of the ARA, Rose Jochnowitz's "The Federal Area Redevelopment Administration.

Building on these works and expanding the scope of the ARA’s history, this dissertation presents two main arguments and several sub-themes. The first major point is that both the timing and definition of deindustrialization need to be revised. The most common understanding of deindustrialization comes from The Deindustrialization o f

America, written by Barry Bluestone and Bennett Harrison in 1982. Very much a product of the economic and political situation o f the early 1980s, Bluestone and

Harrison define deindustrialization as the “widespread, systematic disinvestment in the nation’s basic productive capacity,” which involves the diversion of capital from productive investment in basic industries to “unproductive speculation, mergers and acquisitions, and foreign investment.”^ The authors include four examples of capital movement among American firms as evidence of deindustrialization. The first is the practice of redirecting profits from one branch to another facility or department. This weakens the branch’s chance for survival in the long run. The second method is the decision to run down a plant by refusing to invest in new equipment, resulting in the eventual closure of that plant. Third, firms can subcontract or “outsource” work from one plant to other companies, resulting in job loss or shut downs. Finally, firms can simply close a plant and move operations elsewhere, whether to different cities, regions or countries.®

Valid as far as it goes, Bluestone’s and Harrison’s definition is weak in three respects. First, it focuses solely on business mangers as the major source of this transformation. The process of industrial change is more complex than this, involving many factors. As more recent scholars such as Thomas Sugrue and Judith Stein have suggested, the role of labor unions, racial issues, foreign competition, and government policy are also important.^ Second, it does not address specifically the role technology plays in this transformation. Although they discuss technology in their work, Bluestone and Harrison do not integrate it into their definition. Often, industries remain in one community and invest in new technology that increases productivity, reducing the number o f workers needed for a particular job. Though they may divert capital into mergers, acquisitions, or foreign investments, these actions do not necessarily reduce the number of blue-collar jobs at one particular location. Finally, the word

“deindustrialization” suggests a complete loss of all industry in America. There has undoubtedly been both a relative and absolute decline in manufacturing jobs in the

United States and a shift of many existing jobs from the urban Northeast and Midwest to the South, West, and other countries. But this has been true of extractive industries such as lumber, coal, and iron ore. In addition, many other industries have grown, and millions of manufacturing jobs in the United States remain. This dissertation uses the term “deindustrialization” to mean a more broadly

conceived transformation. Though commonly perceived to be an issue of the 1970s and

1980s, the processes have roots much earlier in the twentieth century and involve other

industries besides basic manufacturing. In the case of coal and textiles, for example, the

aspects of plant closings and lost jobs began in the 1920s and the response to it began at

the local and state level prior to becoming a federal issue in the form of area

redevelopment. As John Cumbler has written in his study of Trenton, New Jersey: “The

problems of deindustrialization are linked to developments within the national political

economy, yet they are also intimately linked to the histories of the communities that

have experienced loss of jobs and declining property values. Deindustrialization occurs

in complex interrelated stages, which can best be understood through historical study.”®

Seemingly a normative, economic event, deindustrialization contains significant

political, social, and cultural changes as well. For example, the industrial transformations of the last 60 years have played a significant role in shifting political

influence away from liberal elements in the Democratic Party and organized labor and towards the current, more conservative political culture. This transformation also altered living patterns across the country and transformed social and cultural understandings of issues such as work, family, and citizenship. Plant closings and technological changes have increased unemployment and poverty rates in many labor markets, with perhaps the most deleterious effects on the poorest residents of a community, who are also often minorities. Thus, deindustrialization can be conceived as a process of job loss and community restmcturing caused by a complex interaction of factors, including the introduction of new technology to the work process, capital

movement out of the local economy, declining markets, public policy, and racial and

gender bias. The process is not limited to certain decades, political boundaries, or

industries, but rather develops across these frontiers to involve individuals and

communities across the United States and worldwide.

Second, exam ining the history of the Area Redevelopment Administration

reveals aspects of American liberalism and shows important continuities between the

Progressive era, the New Deal and the Great Society. As an idea, policy, and program,

area redevelopment fit well within the context of liberal reform in the 'twentieth century and owed much to the New Deal (and some to the Progressive era), both in terms of the assumptions that underlay the policy of redevelopment and the importance of federalism to the structure and operation of the ARA. This is not to say there were no discontinuities between the Progressives, the New Dealers, and liberals under the

Kennedy and Johnson administrations. However, much like earlier reformers, those promoting area redevelopment believed in the power of the federal government to bring together experts, government ofGcials, and interest group leaders to construct and carry out public policy for the benefit of those less fortunate. Events at the local and state levels were critical to understanding the nature of progressivism, and New Deal programs often remained under the control of states and localities. For example, reform in both eras, including items such as m inim um wages, maximum hours, and workmen’s compensation, moved from local to state to the national level. In the case of Social

Security, its program built on various elements already tried at the state and local levels. In addition, once enacted into law in 1935, states administered unemployment

compensation while both states and localities administered welfare payments.® With

area redevelopment, the idea germinated at the local and state levels before becoming a

federal program, and the ARA operated through local and state governments, as well as

local, state, and regional organizations.

The individuals and groups who came together to support the ARA served as the

core of American liberalism in the years after the New Deal. These included liberal politicians, intellectuals, and business leaders, as well as members of organized labor, and leaders of various interest groups involved in causes such as civil rights, women’s issues, public housing, and education. Area redevelopment became part of their effort to solidify and extend the New Deal coalition. How did their actions relate to the question of liberalism’s decline during these years? This story of the ARA avoids the issue of whether the 1940s or the 1960s was a lost opportunity for greater liberal or social democratic reform, and instead explores one way liberals tried to use the state to shape local and regional economies.

Alan Brinkley has identified three different concepts o f American liberalism in the twentieth century. The first was laissez-faire liberalism, which today is usually called consers'^atism and entails the belief in small government and free markets. The second Brinkley calls reform liberalism, and this was central for progressives. This group was skeptical of laissez-faire political economy and sought to use the state to protect individuals and communities from the inequities of capitalism. The third concept is rights-based liberalism, which emphasizes the rights and freedoms of individuals and social groups and shows less concern for “the broad needs of the nation

and the modem economy.”" According to Brinkley, these liberals want to expand the

notion of personal liberty, and leave “little room” for the “broad efforts to reshape the

capitalist economy that concerned previous generations of reformers.’" ' For Brinkley

the late New Deal is the moment of transition between reform and rights-based

liberalism.

Brinkley ends the story of post-war liberalism before it begins, and dismisses the

possibility of a continued thread of federal policy emphasizing reform liberalism. He

also sees the 1940s as a lost opportunity to make the United States more social

democratic. Although the ARA began to focus on aiding minorities, the methods the

agency used placed it within the reform tradition. To soften the inequities within

capitalism, the ARA offered incentives to businesses and tried to make people and communities better competitors in the market through loans and grants for new facilities, training, and infirastmcture improvements. Thus, liberal concerns over structural issues within the political economy continued to play out after World War II.

There was one brief moment during the first draft of what became the Depressed Areas

Act when the wording granted the federal government power to designate local development councils. This may have provided an opening for greater federal control over local and regional development. However, resistance from moderate and conservative Democrats led Senator Douglas and his staff to change this so that the federal government would approve local groups. This signaled that overly-statist solutions to labor market problems, which some historians have argued were only possible during the New Deal and W W Il'\ would not be among the alternatives

policymakers in the United States chose in the decades after 1945.

What resembled more the New Deal than the Progressive era was that ARA

officials also worked through interest groups (in addition to local and state

governments) to promote economic planning and implement policy; those not so

organized were unwelcome in the policymaking circle.This meant that the poor and

working class members of communities hurt by industrial transformation did not have a

direct part in the deliberations, but that those representing them sometimes did. For

example, in Cleveland and the rural South, groups such as the Urban League, the

NAACP, and the National Sharecroppers Fund worked with ARA officials to bring

industries to the inner city and rural communities respectively. In the anthracite region

of Pennsylvania, unemployed miners staged protests and rallied to convince firms to

remain open and allow workers to cooperate in management decisions. Although this alternative to the problems of structural unemployment failed, their protests and the actions of local business and civic leaders did create pressure for a political solution at both the state and federal levels.

As liberal ARA officials responded to this pressure, these policymakers brought to their battle against unemployment assumptions about the poor, minorities, and gender roles. As liberals during the Cold War, ARA administrators did not attempt a complete restructuring of American political economy along social democratic lines. Rather, they hoped to restructure communities and individuals so each could compete more effectively in the market for businesses. Poor and unemployed citizens required training and education for success in the job market. At the same time, community

leaders needed assistance in creating economic development plans that would make

their towns, cities, and regions more attractive to industry. Together, ARA leaders

hoped these two approaches would both create jobs and train workers for those new

jobs. With regard to minorities, the ARA fought off attempts to apply polices of

afSrmative action and quotas to the hiring of minorities in the agency. ARA officials

also debated how strenuously they should demand that companies receiving loans and

agencies running training programs should hire or recruit minorities. In 1963, the ARA

did decide to create a special program to aid inner cities in large urban areas. As to

gender, the issue of unemployment began at the local level as a concern with male

unemployment. In the coal mining areas of Pennsylvania, for example, the local leaders became concerned that unemployed miners could not find jobs and that women, who often worked in area textile mills, were becoming the breadwinners for the family.

Similar fears influenced those in urban areas like Cleveland and on Native American reservations. The industrial development programs begun at the local level started as male-dominated industries declined. Those at the state level echoed this concern and the ARA followed. Although the ARA supported industries that hired women, ARA

Administrator William L. Batt, Jr. remained concerned that the agency was not doing enough to provide jobs for men.

In these ways, the ARA fit well within the description of the War on Poverty provided by Michael Katz. In his work. In the Shadow o f the Poorhouse, Katz notes that the W ar on Poverty's sponsors did not mount an "attack on the distribution of economic power or resources/' but instead focused their attention on the opportunity to

compete by the removal of barriers. Katz also connects this to the programs to deter

juvenile delinquency, which stressed education and training, and to theories about the

cultural deprivation of the poor that argued for changing poor peoples’ values.

Furthermore, Katz places the War’s programs under four categories: to promote

opportunities, to stimulate community action, to introduce new services, and to expand

transfer payments.*^ Although he does not mention it since it predated the announced

War on Poverty, the ARA fits into the first two. The ARA existed to create jobs, which

would open opportunities for residents of communities experiencing high

unemployment. The ARA was also a form of community action, though the agency

usually stimulated interest groups in communities rather than the unorganized poor or

working class. Still, officials in the agency realized that all individuals in the

community needed to participate in redevelopment programs.

Interestingly, the ARA resembled in another way the liberal heritage of the New

Deal and Progressive era. Just as earlier reformers had done, ARA officials looked to

contemporary developments in Europe regarding the issues of distressed areas. During

the 1950s and 1960s, supporters of redevelopment gathered information about similar programs in Belgium, France, Great Britain, Italy, the Netherlands, and West Germany.

The history of the ARA provides some evidence o f greater continuity between the

United States and Western Europe regarding government programs to aid distressed areas. OfGcials in the ARA learned that European programs offered similar proposals

10 for retraining and financial incentives to businesses, but there was greater state

involvement in directing industrial growth into certain labor markets.’®

Besides these two major arguments, this dissertation examines the process of

policymaking in the context of the post-WWH years. Here, the story of the ARA brings

together intellectuals, politicians, labor leaders, interest groups, business owners, city

officials, and average citizens to show how all of these groups contributed to the

creation of the ARA. In addition to liberal tendencies outlined above, the nature o f

national politics did much to shape area redevelopment legislation and in turn influence

the direction of the program. Most importantly. Southern congressmen used their

influence to make sure legislation included rural areas. In addition. Western

congressmen secured inclusion of Native Americans as well. The result was that the

ARA stretched its resources too thin and spent the majority o f its funds fighting rural

poverty through development of infrastructure. Thus, what began as a federal response

to industrial transformation in the traditional manufacturing belt became a general

program to fight poverty and provide funds for economic development nationwide.

Related to this, examining the history of the ARA provides greater insight into the emergence of the federal War on Poverty during the 1960s. The current emphasis begins with a suggestion for a federal attack on poverty by Walter Heller, Chair o f the

Council of Economic Advisors, to President John F. Kennedy just before the assassination in November 1963. In turn, Heller suggested the idea to Lyndon Johnson who told Heller to develop a federal program. While Heller certainly did make such suggestions, the story of the ARA shows that the problems, concerns, and policies

II related to poverty emerged earlier and at the local levels first. In addition, as imperfect

as it may have been, the ARA had been engaged in fighting poverty and had legislators

looked more closely at the agency, it could have served as a vehicle for increasing the

federal attack on poverty. Instead, Lyndon Johnson wanted new programs and new

agencies. The Office of Economic Opportunity led the fight against poverty, while in

1965 the ARA became transformed into the Economic Development Administration,

which focused its attention on public works and regional planning. But even had the story gone in this direction, the structural transformation underway in the American economy was simply not central to those who would fight the War on Poverty. The issues of fair employment, adequate health care, education, welfare, and community action had little connection to addressing economic questions. Furthermore, after 1965, strong aggregate economic growth and a greater concern with the war in Vietnam meant that attempts to address continued difficulties in labor markets became minimized.

Given this, and the fact that the ARA received relatively limited funds, it is surprising what the ARA did accomplish.

These themes are presented in the chapters that follow. Chapter Two examines the intellectual roots of redevelopment in late New Deal Ke^mesian economics and post-

World War Two full employment policies. Chapter Three analyzes local and state developments in Pennsylvania that led to a federal program. In particular, it examines trends in the anthracite region that first brought national attention to the problem of deindustrialization. It ends with a discussion of efforts by local and state actors in

Pennsylvania to address these trends. Chapter Four examines the national legislative

12 battles over area redevelopment jfrom 1953 to 1961. It highlights the interactions

between and among the executive branch and Congress, and key interest groups such as

organized labor. Political pressure increased as the problems of deindustrialization

spread from industries such as coal and textiles to steel and automobiles and as

Americans became more conscious of chronic unemployment and poverty. These

developments prompted further action at the federal level, culrninating in 1961 with the passage of the Area Redevelopment Act. Chapter Five provides a statistical summary of the ARA’s operations and sets dovm its structure. It also begins to highlight ARA programs in communities receiving loans and grants by returning to several communities in Pennsylvania, including a Philadelphia project designed to help inner city residents become small business owners. This latter project forms a transition to

Chapter Six, which explores in more detail ARA efforts to promote business development in the central city of Cleveland. Cleveland was first to submit a proposal for aid from the ARA when the agency made inner cities eligible in 1963 and here ARA officials first tried to grapple with the growing racial crisis in urban America.

Following this. Chapter Seven explores operations in the South and on Native American reservations, which brought ARA officials into rural development and into further involvement with racial aspects of unemployment and poverty. Finally, the conclusion highlights the political battle over continued funding for the ARA and pulls together the issues introduced throughout. In 1965, after passage of the Public Works and Economic

Development Administration, the ARA became the Economic Development

Administration, which focused on public works and regional development, particularly in Appalachia. In addition, programs once under the ARA such as job training and

inner city development became parts of Lyndon Johnson's Great Society.

The story of the ARA suggests that efforts at developing a national response to

deindustrialization reflected rather than challenged historical American beliefs concerning political economy and social policy, especially ideas of federalism. When

Southern and Western legislators demanded and received programs for their regions, this diluted efforts for communities in America's traditional manufacturing belt. This simultaneously broadened and weakened the agency’s mandate, since Congress controlled the ARA's funding and refused to expand its budget even as the agency expanded its focus. With nearly $400 million in funding for over four years, the agency did not have the resources to accomplish its mission. Communities in the traditional manufacturing belt had to compete with other regions for assistance. For Native

Americans, participation in the ARA enhanced their transition into individualist societies, at the expense of promoting communal societal organization. For rural areas in the South and West, rewarding local programs for economic development meant that federal aid usually preserved local power structures. Growing pressure and a desire to create a larger federal program to fight poverty led Lyndon Johnson and the 89*

Congress to transform the ARA. It became the Economic Development Administration and focused upon regional economic development, while its programs for job training, urban aid, and other ideas became part o f the Great Society.

In terms of political economy and social policy, a study of the ARA offers two contributions. First, historians have tended to concentrate on what Louis Galambos has

14 called the “pulses” of reform: the progressive era, the New Deal, and the Great Society.

Thus, there has been less historical work on the years between these eras.'^ The history

of the ARA provides an important link between the New Deal and the Great Society.

The dominant trend in historical writing is to simplify the period from 1945 to 1960 as

an age of affluence and consumption, or to see it as one of moderation or conservatism.

This work offers a more complicated assessment of these years, suggesting that at the

local and state levels, political leaders, business owners, and labor leaders addressed

poverty and unemployment through private and public action. National political leaders

addressed these issues as well, although their solutions often contradicted other federal

policies and did not receive the attention those during the 1960s did. For example,

federal subsidized highway construction often led to population loss in many large

central cities of the traditional manufacturing belt. Also, urban renewal programs

exacerbated overcrowding in central city neighborhoods and adding to other urban problems such as job loss and housing discrimination. In addition, examining these trends shows well the transition between New Deal class-based policies and those of the

1960s that exposed more directly the connections between class and race. As first proposed in the 1950s, area redevelopment sought to aid union-dominated industrial communities in the traditional manufacturing belt, which stretched from the Northeast through the Upper Midwest. These tended to be mostly white since the legislation used entire labor markets for eligible areas, masking inner-city, minority unemployment in otherwise prosperous metropolitan regions. By 1965 the ARA included programs for

Native Americans, low-income rural communities, and inner-city minorities. While

15 these groups certainly were poor, making them eligible brought race more thoroughly

under the ARA umbrella and invited tensions over that issue into the agency’s

operations.

Second, the ARA’s story illuminates two related methodologies that provide a

framework for integrating politics, economics, and social change in historical analysis.

The first is what political scientist Theda Skocpol has called the “structured polity” approach to studying social policy. In Protecting Soldiers and Mothers, Skocpol places the changing nature of state institutions at the center of her analysis and weighs equally the actions of various politically active groups, including political parties, business and labor leaders, interest groups and officials in state agencies, courts, and legislatures. Her theory proposes that institutions affect the success of social groups who, in turn, shape the nature of the state. In developing her theory, Skocpol is attempting to move beyond single-cause explanations of the history of social policy that have relied solely upon cultural values, patriarchal domination, or business hegemony in their explanations of both the creation and the operation of various program s that embody the welfare state.”

Her work on institutions, social groups, and the state places her within a similar methodology in history called the organizational synthesis. In two influential articles,

Louis Galambos noted the development of this methodology in the historiography of modem America. Writing in the early 1980s, Galambos noted that scholars in this tradition had tended to emphasize technology, the administrative state, and the professionalization of society. They also focused their attention on the late nineteenth century and early twentieth, years when these three issues emerged as influential trends

16 in the history of the United States.'* In his recent work, historian Brian Balogh has

summarized many of the weaknesses inherent in the organizational synthesis and sought

to overcome these. The focus on political parties and leaders, and large-scale

organizations left this method open to criticism from historians emphasizing history

from the “bottom-up.” Also, the years during and after WWII have yet to receive the attention devoted to the years between the 1860s and 1920s. But as Balogh notes, the organizational synthesis still offers much as an explanatory device for modem American history — as long as it can incorporate the contingency, flexibility, and emphasis on social groups apparent in much of cultural and social history. His work on the history of atomic energy shows how interest groups and grass-roots activists helped shape the nature of the state policy. Balogh urges historians to situate the older issues of technology, administration, and professionalization in a cultural context that mediates between the individual and the state.'®

This dissertation attempts to do so by emphasizing the interplay between historical actors at the local, state, and federal levels as they sought to shape redevelopment policy. Workers, local business and union leaders, experts, national government leaders, and others responded to deindustrialization with various proposals to assist communities hurt by the process. The outcomes at the local, state, and federal levels reflected the involvement of these groups and individuals. Thus, studying the

ARA deepens our understanding of the two decades after WWII, and shows these years as an important, but frequently overlooked, period in the history of American liberalism and public policy.

17 NOTES

’ Sar Levitan, Federal Aid to Depressed Areas: An Evaluation of the Area Redevelopment Administration (Baltimore: Johns Hopkins Press, 1964).

* Conley Dillon, The Area Redevelopment Administration: New Patterns in Developmental Administration (College Park: Bureau o f Governmental Research University o f Maryland, 1964). Roger H. Davidson, Coalition-Building for Depressed Areas Bills: 1955 — 1965 (Indianapolis: Bobbs-Merrill, 1966).

’ Roger H. Davidson, “The Depressed Areas Controversy: A Study in the Politics o f American Business,” Ph.D. diss., Columbia University, 1963.

“ Rose Jochnowitz, “The Federal Area Redevelopment Administration,” Ph.D. diss.. New York University, 1963.

* Barry Bluestone and Bennett Harrison, The Deindustrialization of America: Plant Closings, Community Abandonment, and the Dismantling of Basic Industry (New York: Basic Books, 1982), 6.

® Ibid, 7-8.

’ For example see Thomas Sugrue, The Origins of the Urban Crisis: Race and Inequality in Postwar Detroit (Princeton: Princeton University Press, 1996) and Judith Stein,Running Steel, Running America: Race, Economic Policy, and the Decline ofLiberalism (Chapel Hill: The University o f North Carolina Press, 1998).

* John T. Cumbler, A Social History of Economic Decline: Business, Politics, and Work in Trenton (New Brunswick: Rutgers University Press, 1989), 1.

’ See Edward Berkowitz and Kim McQuaid, Creating the Welfare State: The Political Economy o f Twentieth-Century Reform, 2d ed. (New York: Praeger, 1988), 125-7.

On this issue see Alan Brinkley, The End o f Reform: New Deal Liberalism in Recession and War (New York: Vintage Books, 1995); Judith Stein, Running Steel, as well as Nelson Lichtenstein, “From Corporatism to Collective Bargaining: Organized Labor and the Eclipse o f Social Democracy in the Postwar Era,” 122-52; and Ira Katznelson, “Was the Great Society a Lost Opportunity?”, 185-211, both in Steve Fraser and Gary Gerstle, eds.. The Rise and Fall o f the New D eal Order (Princeton: Princeton University Press, 1989).

“ Brinkley,End o f Reform, 9-10; 10 (quotation).

■- Ibid, 10.

" For this issue, see note 9 above.

This represents the emergence o f “interest group liberalism” during the New Deal identified by Theodore Lowi in his work The End o f Liberalism 2d. ed. (New York: Norton, 1979). Lowi argued that the rise o f interest groups weakened political parties. For a discussion o f this in the context o f twentieth

18 century American liberalism see James P. Young,Reconsidering American Liberalism: The Troubled Ocfyssey o f the Liberal Idea (New York: Westview Press, 1996).

Michael Katz, In the Shadow o f the Poorhouse: A Social History o f Welfare in America. Tenth Anniversary Edition (New York: Basic Books, 1996), 263-6. Quote from page 263.

See the Area Redevelopment Administration’s study prepared through the Institute o f Industrial Relations at UCLA, Area Redevelopment Polices in Britain end the Countries of the Common Market, U.S. Department o f Commerce, 1965.

See Louis Galambos, ed.. The New American State: Burecrucracies and Policies Since World War II (Baltimore: The Johns Hopkins University Press, 1987).

'* See Theda Skocpol, Protecting Soldiers and Mothers: The Political Origins of Social Policy in the States (Cambridge: Harvard University Press, 1992), 41.

‘®On this see two pieces by Louis Galambos, “The Emerging Organizational Synthesis in Modem American History,”Business History Review 44 (Autumn 1970): 279-90; and “Technology, Political Economy, and Professionalization: Central Themes o f the Organizational Synthesis,”Business History Review 57 (Winter 1983): 471-93.

See Balogh’s Chain Reaction: Elxpert Debate and Public Participation in American Commercial Nuclear Power, 1945 — 1975 (Cambridge: Cambridge University Press, 1991) as well as his introduction to Integrating the 1960s: The Origins, Structures, and Legitimacy o f Public Policy in a Turbulent Decade (University Park, PA: The Peimsylvania University Press, 1996).

19 CHAPTER 2

THE GENESIS OF REDEVELOPMENT:

KEYNES, FULL EMPLOYMENT AND "DEPRESSED AREAS”: 1933 - 1953

Introduction

Area redevelopment policy entailed the government stimulating economic growth in

urban and rural areas that had experienced persistently high levels of unemployment and

underemployment. Within the United States, a variety of sources fueled the movement for area redevelopment. First, and most important, it was a response to deindustrialization. The ideas and policies of British economist John Maynard Keynes were a second major influence on area redevelopment. Among his ideas, Keynes offered a theoretical justification for increased government intervention to end the Great

Depression and promote full employment and economic growth during and after WWn.

While these ideas initially supported greater study of unemployment, by the 1960s, a division occurred between those economic policymakers who emphasized aggregate growth and those advocating programs to address directly what became known as

20 “structural” unemployment. This chapter discusses the Keynesian base from which

both these disagreements and later area redevelopment programs emerged.

Foreign policy developments served as a third source influencing the creation of

redevelopment policy. Mobilization for both WWII and Korea generated federal studies

o f manpower and resources, which helped promote programs aimed at alleviating areas

of chronic unemployment. Enveloping these specific conflicts, of course, was the Cold

War, which influenced redevelopment policy in several ways. First, it offered a means

to either defend or attack programs aimed to address industrial transformation. For

many Americans, economic growth and full employment were essential goals in the

postwar fight against communism. Opponents argued that redevelopment was akin to

socialism, while supporters promoted it as an essential tool for maintaining democracy

and a free market. As security concerns and defense expenditures grew, those favoring redevelopment often urged the Department of Defense to place government contracts in areas suffering from chronic unemployment. These efforts grew during the Korean War and after, but met with limited success in reducing unemployment. Second, while some could use Cold War rhetoric to either promote or attack area redevelopment, others used the Cold War to create policies which ran counter to what area redevelopment tried to alleviate. For example, to promote its foreign policy and assist certain sectors of the economy, the United States maintained low tariffs and rebuilt the economies of nations who opposed communism, but were also America’s economic competitors. This damaged the ability of certain industries to compete and added to the already high levels of unemployment in many communities. Furthermore, Defense expenditures in the

21 postwar years helped stimulate economic growth in the South and West, drawing

industries away from the Northeast and Midwest. In addition, postwar programs such

as the GI Bill and the Federal Highways Act encouraged millions of Americans to move

out of the inner cities and into the suburbs. Many industries did the same, generating

problems for urban areas in the manufacturing belt. In the end, area redevelopment was

a federal program made necessary by other federal programs.

All of these threads intertwined with political developments at the national level.

Democrats in the late 1930s struggled to stretch the New Deal’s liberal agenda as war

approached. While WWII allowed for greater exercises in government planning,

conservative forces managed to contain the more social democratic forces infused

within the New Deal. In 1946, Republicans captured both Houses of congress and

worked with conservative Democrats to halt President Truman’s efforts to extend New

Deal reforms. Though Truman won the 1948 election, he and other liberals found it

difficult to extend the liberal state beyond its New Deal base. Contributing to this was

conservative opposition in congress and the growing specter of McCarthyism. It is

within this larger context that the first proposals related to area redevelopment emerged

and this chapter covers these developments between 1933 and 1952.

The Keynesian Paradigm

In the United States, the decades of the 1930s and 1940s marked the establishment of what some have labeled the "New Deal Order."* In essence, this refers to the ascendance of a set of ideas on political economy that stressed the active use of the state

22 to promote economic growth and construct the basis of the American welfare state. The

influence of these ideas grew in the wake of worldwide depression during the 1930s.

Between 1933 and 1945, the Roosevelt administration and Congressional supporters

shaped these ideas into federal policies. The result was legislation designed to protect

organized labor, expand social welfare, regulate business, and maintain economic

stability. One example of this change was both the absolute and relative growth of

union membership. By 1945, there were 14.8 million union members, comprising 35.5

percent of the non-agricultural workforce. Both figures were all-time highs." WWII

helped solidify much of the New Deal industrial relations agenda. Indeed, the war also

pushed many business leaders to accept the increased power of labor and government.

The Business Advisory Council, the Committee for Economic Development, and some

leaders in the Chamber of Commerce urged cooperation between business, government,

and labor. Some commentators have characterized the social contract forged between

these groups as the defining element in the American political economy firom WWII

until the mid-1960s.^

This New Deal political economy moved away firom the older, neoclassical

system of the nineteenth century, in which the state provided few social welfare benefits

and limited its involvement in the economy and internal business decisions. The New

Deal also avoided more statist solutions to the Great Depression. Some liberals in the

1930s believed that European-style social democracy, in which the government took an

active role in providing social welfare benefits, supporting labor unions, and planning economic development, should be the model for the United States. These liberals

23 supported deeper structural reform of the American political economy. What emerged

under the New Deal auspices, however, was a new paradigm that involved the active

use of federal monetary and fiscal powers to stimulate demand, while at the same time

regulating business practices.

The ideas of British economist John Maynard Keynes formed the intellectual

basis for this emerging social and economic order. In 1936 he published his most

influential work. The General Theory o f Employment, Interest and Money, wherein

Keynes sought to explain the worldwide depression of the 1930s.“ The portions of his

ideas that most attracted influential policy makers in the United States were those that

advocated using the fiscal powers of the state to promote economic growth and create

full employment. Briefly, Keynes dismissed the classical assumptions that

unemployment was frictional or voluntary, and that markets, if left alone, would clear.

Instead, he argued that insufficient demand led to unemployment, and that markets are essentially unstable. This called for an increased role for the state in managing economic affairs. Although he did not dismiss monetary policy as a useful tool, Keynes believed it would not suffice and emphasized fiscal policies to stimulate demand. These policies included government spending on public works, housing, schools, parks, and hospitals. Presaging the WWII years, Keynes noted the possibility of large military' spending to alleviate economic stagnation. Tax reduction was another tool, as long as other government expenditures remained steady.^

A series of interconnected developments transformed these ideas into public policy in the United States between 1937 and 1945.® First, the lingering depression

24 increased pressure in the late 1930s for greater and more effective government

programs. This was especially true of the coalition Roosevelt assembled under the

Democratic banner, including farmers, workers, and some business leaders. Second, a

sharp recession in 1937-38 saw the largest decline in industrial production in American

history, a downturn caused in part by Roosevelt's efforts to produce a balanced budget.

Third, Keynes' popularity among younger instructors and graduate students in economics grew steadily during the 1930s. Many of them studied and taught at major universities such as Harvard and Columbia, and served in goverrunent positions during the New Deal and after. Keynes' work aided an already growing sophistication in quantitative measurement of economic phenomena, such as the production and consumption of consumer goods, unemployment, prices, and wages. This became even more pronounced during WWII, when government enlisted economists to assist in state efforts to regulate industrial production and procurement.

Government spending during WWII provided a powerful fourth influence on the creation of redevelopment policy. Deficit spending generated economic growth, ended the depression and virtually eliminated unemployment. Many in the United States were confident that the Allies would win the war and bring their model of democratic capitalism to the world. A new optimism emerged concerning the possibilities for

American economic expansion. Unemployment dropped to 1.2% by 1944. National income rose firom $81.1 billion in 1940 to $181.5 billion by 1945. GNP increased firom

$99.7 billion to $211.9 billion over the same period.’ This growth continued after the

25 war. Indeed, the war experience gave Keynesians within the Roosevelt administration

the political leverage to promote their ideas as part of their model for postwar America.

A fifth element was international (especially British) pressure on the United

States to stabilize the world economy. By the end of World War II, several nations had

produced reports recommending full employment, and the pledge found its way into the

UN Charter. The major impetus, though, w as the Bretton Woods agreement, which

among other things established a fixed international exchange rate system based on the

American dollar and created a firamework for lowering trade barriers. Full employment

and economic growth were essential if the United States was to be the linchpin in the

postwar international economy. This would require an expanded role for the federal

government in promoting these interconnected goals in the postwar years.®

A well-planned, prosperous American domestic economy, then, was essential to

mitigate against postwar unrest and to avoid a return to worldwide economic depression. All of these developments broughit the Keynesian paradigm to the United

States. This, in turn helped make possible the creation of the Employment Act of 1946, the statutory basis of subsequent attempts to promote area redevelopment.

However, the focus on aggregates and macroeconomic features led Keynesians, as well as liberal and conservative policymakers, to overlook or dismiss structural issues that would return in the formation of area redewelopment policy. These included declining industries, persistent poverty, capital mobility, the negative effects of trade policies, and increased competition from foreign firms. Liberals pinned their hopes for prosperity on the social contract between business and labor and passage of a powerful

26 employment bill, while conservatives looked to faith in markets, local control, and

American business, fighting attempts to broaden government intervention in social

welfare and the economy.

The Full Employment Mandate

The New Deal had been awash in ideas for planning and development. The National

Resources Planning Board (NRPB) was most active in these areas. As WWU progressed, and Allied victory seemed likely, members of the NRPB began to develop plans for the postwar world; their most crucial concern became maintaining full employment. Economists and other influential policy makers — many of whom promoted the new Keynesian paradigm — also urged the development of a full- employment postwar economy. In his 1944 State of the Union speech, FDR spoke of economic security and issued a call for America to enact an “Economic Bill of Rights.”

The 1944 Democratic Platform called for full employment, and moderate Republicans such as 1944 presidential candidate Thomas Dewey cautiously endorsed the concept as well.

Congress took up the cause on January 22, 1945, when Senator James E. Murray

(D-MT) introduced the Full Employment Bill. Murray entered the Senate in 1935 as part of the Democratic landslide in the 1934 elections. Until his retirement firom the

Senate in 1960, Murray remained loyal to these roots as a New Deal Uberal. He avidly supported New Deal programs such as the Works Progress Administration (WPA) and the Agricultural Adjustment Administration, as well as pro-labor legislation such as the

27 Wagner Act and the Fair Labor Standards Act. He also promoted the interests of small

business. Like many Western legislators, Murray championed policies to promote land

and water development, tr>^ing unsuccessfully to create a Missouri River project similar

to the Tennessee Valley Authority. As the end of the war approached, efforts were

underway to shape reconversion policies. Murray and other liberals pushed for greater

federal control over issues such as worker retraining, unemplojTnent compensation, and public works projects to handle the influx of veterans and the possible postwar economic decline.®

Although the Full Employment Bill was Keynesian in its goals, it also reflected the ambivalence and limited nature common to economic and unemployment policies in the postwar years. Though full employment was the goal, the bill gave no precise definition.*® Murray's bill called on industry, labor, and agriculture to cooperate with all levels o f government to ensure hill emplojTnent. To dispel likely opposition to perceived government planning, the bill emphasized cooperation "in a free competitive economy." The bill also required the president to produce a yearly "National

Production and Employment Budget," estimating the number of jobs needed to reach full employment, and the GNP needed to create such jobs. If the private sector could not provide such levels of activity, then the government should step in with investments, loans, and spending programs to bring the economy to the required level. The bill also called for the creation of a "Joint Committee on the National Budget" in Congress to study the president's proposal and make recommendations concerning these economic policies."

28 Although FDR spoke of economic security and dramatized the need for millions

of jobs after WWII, the President never formally endorsed the Murray bill. Though

Executive agencies such as the Bureau of the Budget worked with Murray to create the

legislation, FDR remained publicly aloof. According to Stephen Bailey, FDR wanted

Congressional unity in supporting the United Nations, and thus declined to advocate for

the Murray bill. To achieve the UN, FDR left the full employment bill to Congress.

Although moderates and liberals endorsed the idea, conservative opposition

from both parties delayed action. The bill crept along in Congress until August 1945,

when the war in the Pacific came to an abrupt end. The United States now faced the

challenge of reconverting wartime industry to peacetime production and re-employing

millions of returning soldiers. To ensure a smooth transition and push the Full

Employment Bill through Congress, President Harry Truman issued a special message

on September 6, 1945, outlining a 21-point program for the reconversion period. Point

five dealt with full employment. The issue had been part of FDR's Economic Bill of

Rights, and Truman urged Congress to "make the attainment of those rights the essence

of postwar American economic life." Truman urged the continuation of full production

and full employment into the postwar period. He added that fuU employment meant a

number of things. "In human terms," he stated, it "means full opportunity for all under the American economic system." He also argued that full employment would "reduce the ratio of public spending to private investment without sacrificing essential services."

Finally, connecting the domestic economy to the fulfillment of America’s postwar

29 international goals, Truman stated that full employment would mean "greater economic

security and more opportunity for lasting peace throughout the world."

Truman’s message highlights several key forces acting upon postwar

developments in unemployment policy in particular, and the American welfare state in

general, and they presaged the debates over area redevelopment following the Korean

War. First, liberals such as Truman hoped to expand the social welfare achievements of

the New Deal. For the President, this would be the essence of the Fair Deal. How to

expand government services without budget deficits continued to plague liberal policy

makers, however. In this they shared the misgivings of American conservatives who

continued to press for a balanced budget. Deficit spending was one area of public

policy where the triumph of Keynes would not be so easy. Although there was a

growing acceptance of some federal involvement in economic matters, the Truman

administration emphasized balanced budgets and fighting inflation. The emphasis on

growth continued, but the active use of Keynesian proscriptions such as fiscal policies

and budget deficits to stimulate demand received little attention until the early 1960s.

Finally, Truman continued FDR's insistence on a strong, postwar international presence

for the United States. Among other things, this would soon lead the United States into the Cold War, helping to generate constant political pressure to increase military

spending. Though the Left became divided over the Cold War and the nature of

American international involvement, many liberals used national defense as an argument to support economic growth and increased social welfare spending. This would exacerbate tensions within postwar American liberalism over budgetary priorities

30 and over the nature of the American state itself. This struggle continued through

unemployment and area redevelopment policy initiatives of the 1940s and 1950s and

reached its apex over the Vietnam War and the Great Society programs during the

1960s.

Conservative policymakers experienced tension over budgetary issues as well.

As a group they were much more at ease with either reducing or limiting social welfare

spending. Old Guard Republicans led by Ohio Senator Robert Taft, for example,

worked consistently to lower social welfare and military expenditures, while moderates

such as Dwight Eisenhower worked for balanced budgets while limiting social welfare

spending. While fighting communism at home and abroad initially divided hberals in

the decade after WWII, it was one issue upon which conservatives could agree.

Conservatives used the threat of communism to argue against expanding the welfare

state, continuing to do so after the full employment issue had been decided.

Pressure fi-om the White House and reconversion fears pushed Congress to act

on Murray’s but only after conservatives managed to amend substantially the original

proposal, foreshadowing their involvement with area redevelopment in the 1950s. As

approved in February 1946, the now re-named Employment Act o f 1946 pledged the

federal government to take some role in maintaining economic growth. Compromises

weakened the original proposal, however. Rather than full employment, the government was to promote "maximum employment," and instead of proposing a full employment budget, the Act required the president to provide a yearly report on the nation's economy.'"

31 To review the report, the Act kept something of the original by establishing the

congressional Joint Committee on the Economic Report (which later became the Joint

Economic Committee or JEC). The Act also created the Council of Economic Advisers

(CEA), which advised the president on economic policy but lacked direct control over

the economy or budget. The advent of the JEC and the CEA signaled the

institutionalization of economists as policy makers, and reflected the grovring

cooperation of intellectuals, or "experts" and the state. Certainly the state in America

has had a long interest in promoting economic growth, from the earliest colonial

enterprises through the industrial growth of late-nineteenth century. What marks the

1930s and beyond as a significant era is not so much the awakening of interest in promoting economic growth, but the extent and sophistication of its development. For the first time, the American state made continuous and detailed efforts at studying economic trends, including investment, production, spending, trade, and employment.

This occurred along with, and in some cases ahead of research developments by economists and others in the private sector. These developments provided the basis for unemployment policies in the postwar years, including area redevelopment.

Overview: The Federal Response to Industrial Change, 1940 — 1952

The debates and political battles over Keynesianism and hill employment interacted with the federal government's incremental understanding of unemployment.

Ke>mesianism and war prompted greater federal interest in labor markets and unused resources in the form of people classified as unemployed. Fearing a return to the Great

32 Depression, policymakers used the experience of W'WII to promote full employment.

These broad efforts led government ofBcials, legislators, academics, and various interest

groups to probe the issue of unemplo>mient. Educating themselves on the issue drew

policymakers closer to documenting and then trying to solve problems associated with

industrial transformation. Beginning in 1940 with research by the WPA, through efforts to channel defense contracts to areas of high unemployment during Korea, the federal government established a policy framework from which area redevelopment emerged.

Though the mandate now existed in law for the federal government to promote something approaching full employment, the government took no immediate steps to implement directly the Employment Act. Overall economic growth remained strong and the aggregate jobless rate remained low enough in the immediate postwar years to dissuade more aggressive efforts. However, a series of economic and social developments during the 1950s brought unemployment into the national spotlight.

WWTI only temporarily increased demand for industries in long-term decline, such as coal and textiles. In addition, the use of new technologies eliminated jobs in these industries and others, including railroad repair and auto production. Other firms moved out of urban areas into the suburbs or other regions, e;specially the South and Far West.

Between 1940 and 1952, the federal government first documented the effects of industrial transformation and then developed programs to alleviate them. As discussed below, these policies were secondary to other concerns, most notably WW/fl, the 1949 recession, and Korea. As such, they were reactive and faded with the end o f the primary crisis. Conversely, several federal policies during these years abetted industrial

33 transformation. Highway construction and lower transportation costs encouraged

companies to expand outside the urban core and gave workers, who were mostly white,

greater incentive to move to the suburbs. Trade agreements and foreign aid increased

competition for American firms in certain industries, while tax policies gave firms greater incentive to sell aging plants rather than modernize. This was especially true of textile firms in New England. Finally, urban renewal policies generated commercial building in inner cities at the expense of new residencies for the inner city poor.'®

Locating and Fixing “Distressed Areas”, 1940-45

The combination of the Great Depression and WWII catalyzed federal involvement with unemployment and poverty. With the approach of WWTI, policymakers concerned themselves with manpower and collected data on unemployment. Though national unemployment dropped during the war, it remained higher than average in some labor markets, especially mining and textile communities. Federal experts and academics did not yet have the tools to measure underemployment and so did not focus on rural areas.

Furthermore, since they adopted a labor market approach, this masked inner-city unemployment. Often, the unemployment rate for a large labor market reflected an average of the lower levels in the surrounding suburbs and higher levels in the central city. Both decisions left large numbers of minorities out of these early considerations of unemployment.

In 1940, the Division of Research of the Works Progress Administration CWPA) conducted the first general survey of areas with long-term unemployment. They noted

34 50 areas, containing one-tenth of American population, one-sixth of all unemployed,

and one-fifth of all those receiving public assistance. These included areas dependent

on a declining industry, a depleted natural resource, or one for which demand had

dropped, and low-income agricultural areas.’’ Many o f these would later become

eligible under the Area Redevelopment Administration.

Another significant trend emerged as well. In the summer of 1941, the Labor

Division and the Division of Contract Distribution within the Office of Production

Management (OPM) initiated a certification system for what they called “distressed

areas.” It grew from federal efforts to manage resources and materials. OPM classified

a distressed area as one in which unemplojTnent threatened to reach one-fifth the

community’s total manufacturing labor force. Initially OPM based its findings on

reports filed by state employment services and businesses volunteering information on

potential lay-offs. The Bureau of Labor Statistics also provided OPM with information

on local labor markets. To remedy the situation, OPM authorized the Army and Navy

to allow priority bidding to industries in these distressed areas.

The choice of the term “distressed” is enlightening, establishing a medical

metaphor pervasive in the area redevelopment discourse and connecting to the notion of

postwar American social policy as “therapeutic.” The term “distressed” implies a state

of mental and physical strain, suffering, or being troubled. This state is imposed by

something — m this case a weak economic base. Policjmakers used similar terms to

discuss these communities, including “pathological” (related to “pathology,” the branch o f medicine dealing with structural and functional changes caused by disease) and

35 “chronic” (often used in medical terminology to discuss the severity of a disease or

condition). The question became how these policy “doctors” would treat the “patient.”

Between 1940 and 1945, they focused first on recording what they perceived as the

symptom: a high level of unemployment. Next, they fashioned a cure compatible with

Keynesian ideas: to allow the military (and after 1948 the Defense Department) to

authorize priority bids. Beginning a sad pattern that characterized redevelopment and

employment policy in the years that followed, this indirect method did not relieve the

distress. It required communities to have Defense related industries, which they often did not. If they did, the law did not require procurement officers to award contracts in these communities; these officers often preferred to work with established (and usually large) firms. Moreover, Army and Navy officials remained convinced of the need to disperse industry, preferring to award contracts in the South and West, away from the majority of the “distressed” areas in the manufacturing belt. As such, this method did not effectively address the need to restructure the economic base of these communities.

Defining them as “distressed” placed these communities outside the norm, and this minority of communities became the “other” to a materially prosperous America. Such a bifurcation is inherent in most public policies, complicating efforts to bring together both economic and social policy. These issues surrounded area redevelopment as it became part of the effort to address reconversion and maintain full employment after wwn.'®

The Employment Act of 1946 charged the federal government with the responsibility for maintaining “high levels” of employment. To carry out this mandate,

36 President Truman called on Congress to develop additiconal programs to aid distressed

areas. Meanwhile, the Office of War Mobilization and Reconversion (OWMR) formed

an interagency group to investigate unemployment in thuese communities. The informal

group recommended developing a pilot program for one: area before launching a

national program. They selected Pennsylvania’s anthraccite region and gave

responsibility to the Department of Commerce to implerment a plan of action.

Unfortunately, Commerce had little interest in this idea sand the agency did not follow

through. 20

Industrial Problems: Reconversion and Declining Incdustries, 1946 — 1949

In the immediate postwar years, federal concern over unaemployment centered on two major issues. The first was the possibility of large-scale unemployment associated with reconversion. Emerging during the war years, unemployvment peaked as the war ended and then faded by 1947. Overall economic growth and r»elatively low unemployment helped dissipate reconversion as an important policy issuae. The second was growing concern over communities dependent on declining industries. This issue — the heart of later redevelopment efforts — initially was of minor interest to federal leaders. The recession of 1949 changed this. As unemployment rose and business activity declined, political leaders attempted to address this problem. Howrever, just as policies began to emerge, the Korean conflict drove national unemploymemt down and stifled more aggressive efforts. The federal government implemented! some programs but they were mild and of limited effectiveness.

37 As the war wound down, many Americans became concerned with the possibility of postwar unemployment. Moreover, the passage of the Employment Act of 1946 added to the growing necessity of accurate employment information."' For the first year after the war, it seemed reconversion might provide the means toward establishing a planned, full-employment economy. It was the main economic issue for national leaders during the first several months after the war. Layoffs and plant closing mounted after VJ-Day (August 14, 1945). In Buffalo, New York, 35,000 workers lost their jobs overnight as the Curtiss-Wright aircraft plant had its war contract canceled.

By the end of the week the total reached 50,000. The collapse in Buffalo and other cities caused New York's state unemployment insurance rods to double within the week.

Canceled aircraft contracts also plagued Dallas, Texas, where 17,000 people lost their jobs at North American Aviation's plants. In Tacoma, Washington, the war’s end pushed 19,000 workers out of the Todd-Pacific shipyard. During the first ten days of peace, nationally 1.8 million people lost their jobs. Overall, national unemployment climbed fiom 1.9% in 1945 to 3.9% by the end of 1946. Strikes as much as reconversion played a role in this, as workers sought guarantees of job security and protection against inflation. Some 4.6 million workers walked out in 4,985 work stoppages during 1946, making that year the most contentious for labor-management relations in American history.” During the war, estimates of immediate postwar unemployment ranged between 4 and 12 million. As strikes gripped the nation's basic industries, including steel, coal, railroads, autos, and electrical equipment, it seemed

38 these predictions were coming true. Though national unemployment doubled, it leveled

off and remained steady until the 1949 recession, when it climbed to 5.9%.^

Through 1949, no coherent plan for industrial decline emerged from the Truman

administration. Overall growth remaining strong and Truman focused attention on

labor-management relations. In addition, in 1947, foreign policy became a major area o f

concern as the Administration focused on rebuilding Europe and Japan and became

embroiled in the emerging Cold War. The result was that the Truman administration

took only limited steps to address chronic unemployment. The CEA drafted the first

Economic Report of the President in January 1947, which reiterated federal responsibility for areas of chronic unemployment and urged congressional action to alleviate the problem. Not surprisingly, the Republican Congress failed to heed the

Truman administration’s advice. That left the Administration to act. Truman chose not to create a separate, cabinet-level agency to address chronic unemployment but instead utilized existing mechanisms or chose to create new offices within departments, decisions in keeping with his emphasis on balanced budgets and economy in government. For example, the administration created the Office of Area Development

(GAD) in 1947. Originally a division of the Business and Defense Services

Administration within the Commerce Department, the OAD assisted communities and development agencies by supplying technical advice and serving as a clearinghouse for additional information on all government programs designed to alleviate localized unemployment. Led by two industrial developers, William Davlin and Victor Roterus, the OAD staff believed the best way to alleviate unemplojunent was to assist

39 communities in promoting business development. While it was the first executive

action specifically in the field of area redevelopment, in keeping with the pattern the

agency had limited effectiveness. With a small ofGce and initial budget of only

$120,000, it served primarily as a Uaison between business, government, and

developers."'*

Connected to aid to the unemployed were postwar urban renewal policies. In

this case, policies had consequences tragically at odds with their intentions. The Great

Depression devastated many large cities, particularly those in the Upper Midwest.

Suburban growth and deindustrialization after WWU weakened further the urban core of

many metropohtan areas. To remedy this, many Midwestern states created urban

renewal programs for their large cities, empowering private groups to condemn property

or allowing municipalities to do so on behalf of private organizations. Congress responded to the housing problem, passing the Housing Act in July 1949, which authorized the Housing and Home Finance Agency (HHFA) to coordinate federal assistance to urban communities. These policies had detrimental effects upon poor inner-city residents, with developers sacrificing housing for commercial development.

By 1960, urban redevelopment groups had destroyed over 400,000 homes. Only 10,760 low-rent buildings had taken their place. In contrast to an initial goal of 810,000 new units, only 156,000 existed by 1952, and 325,203 by 1965. The ARA would later assist these efforts by offering cities within redevelopment areas grants for urban planning and urban renewal.^

40 Housing had been one part o f Truman's "Fair Deal," and his desire to pursue this

reform agenda, combined with the recession of 1949, prompted new efforts to aid

distressed areas. Unemployment had risen to 6.4% in July 1949 and reached 7.6% by

February 1950.'® In his mid-year economic message, issued 11 July 1949, Trum an

again called for quick congressional action to aid areas experiencing chronic unemployment. The president proposed no new spending, only investigation, research, and the dissemination of information to relevant federal agencies. To this end, the

President created the Economic Policy Committee (EPC) within the Department of

Labor. Although an expansion of state capacity and evidence of the strengthening connections between state administrators and experts, like the OAD, the EPC offered advice and research rather than monetary aid to communities suffering from chronic unemployment."’

Four days after Truman's message, on 15 July 1949, Senator James Murray introduced S. 281, the "Economic Expansion Act." Created by William L. Batt, Jr., and

David Bell in the Department of Labor, as well as Bertram Gross of the Senate Banking and Currency Committee staff, it was co-sponsored by seventeen other Senators, both

Democrats and Republicans, and echoed much of prevailing wisdom concerning chronic unemployment.’® The bill proposed channeling government contracts to labor surplus areas, as well as business loans through the Reconstruction Finance Corporation (RFC).

In addition, the bill contained an aid package for area unemployment, including a $2.2 billion reserve fund, and $100 million annually for retraining and relocation assistance.

The timing for the Murray bill was less then perfect. Murray introduced the bill while

41 the Senate was absorbed with the North Atlantic Treaty, blunting the Expansion Act's

impact. On a broader level, in the midst of a recession. Congress hesitated to pass new

spending measures - traditional views of deficit spending remained strong. In addition,

during mid-1949, labor difSculties developed in the coal, railroad, and steel industries, which doomed support for communities based on these industries. Although drafted by members of the Truman administration, the President did not speak out in the bill’s favor. Not surprisingly, the Murray bill died in committee. Other congressional leaders introduced further measures, but the issue made no headway until the 1954 recession following the end of the Korean War.^

Despite the failure of the Murray bill, the EPC would soon investigate chronic unemployment, laying the groundwork for both area redevelopment and later Great

Society efforts. Searching for a director, the Truman administration looked to William

L. Batt, Jr., who had served in a variety of positions under the Roosevelt administration.

Possessing a Bachelor’s degree firom Harvard, Batt worked in the Labor Department's

Bureau of Labor Statistics in 1938, on the TNEC staff in 1939, and for the Office of

Production Management in 1940. He then entered the Army as an infantry private in

1942, and was discharged as a major in 1946. While in the Army, Batt supervised economics, supply, and labor for the U.S. Military Government in Italy, and directed

American Military Government supply operations in France, West Germany, and North

Africa. After an unsuccessful bid for Congress in 1946, he became involved with

Truman's reelection campaign in 1948, serving as Director of the Research Division for the Democratic National Committee. Batt would leave the federal government with the

42 change of administrations in 1953, moving on to head industrial development in Toledo,

Ohio and then to serv^e as Secretary of Labor in Pennsylvania. He returned to the

federal government in 1961 when Kennedy picked him to head the ARA.^°

To then White House aide Clark Clifford, Batt offered his ideas on a variety of

government actions both to prevent and alleviate unemployment. Overall, he wanted

"all the Fair Deal Welfare Measures...pressed upon Congress on the additional grounds

that they will act as brakes against depression." He recommended increasing

unemployment insurance, and more federal involvement with, and the removal of

eligibility restrictions on, public assistance. For younger workers, Batt suggested more

substantial job training and the recreation of the New Deal's Civilian Conservation

Corps and the National Youth Adininistration. Batt's fiscal ideas reflected the influence

of Keynesian thought. He advocated the expansion of public works projects, tax cuts

for the low- and middle-income brackets, and tax incentives for business and industry.

Batt suggested deficit spending "to finance this program...just as we financed the war."

To push the program, he advocated strong leadership by the President, the involvement

of local and state governments, and a federal committee to coordinate these activities.^'

Batt's ideas represented much of the prevailing wisdom among those pushing for

more state management of the economy. Having served during the New Deal and

through WWn, Batt sought to continue the legacy of state management generated by those crises. But the state management he envisioned preserved the federalism inherent

in the American governmental structure and offered carrots — not sticks — to business and industry. For example, though he pushed for greater social welfare spending, Batt

43 also sought to increase overall btusiness activity, including tax incentives and

inducements for small business. While be pushed for greater federal involvement in

economic management, be also uirged local and state governments to initiate their own

proposals. Like memy policymaBcers and political leaders at this time, Batt emphasized

macroeconomic tools while leavring internal business decisions to managers. However,

he did not emphasize the gender and racial dimensions to unemployment. Although the issue of civil rights was importaot for white liberals both outside and in the Democratic party, many did not yet focus on the racial dimensions to unemployment and poverty.

Ideas and policies were geared tooward aggregate unemployment, which in 1949 meant exclusively male and predominamtly white. In these years, the rising tide of economic growth was to lift all boats.

These ideas epitomized vwhat became known as the “vital center,” a loose philosophical space for postwar Liberalism somewhere between fascism and communism. The name came frmm the 1949 book The Vital Center by Arthur M.

Schlesinger, Jr. Schlesinger was not alone in generating political ideas for a postwar liberalism, but he was one of the rmost influential among policymakers. He essentially popularized the philosophy of his: mentor and friend theologian Reinhold Niebuhr.

Drawing on the experience of the WWII years, Schlesinger urged liberals to reject the statism of both the right and the leeft. He argued that this new liberalism consisted of a

“belief in the integrity of the indiwidual, in the limited state, in the due process of law, in empiricism and gradualism.” Doatnestically, he advocated a mixed economy with adequate social welfare provisions. In foreign affairs, Schlesinger called for vigilance

44 against communism and the Soviet Union and support for democracy through economic

aid. Reflecting the emergence of a dichotomy between “hard” and “soft” in the political

discourse of the early Cold War, Schlesinger equated liberalism with being “hard” and

masculine, as opposed to “soft” and communist. This became a first intellectual step in refashioning Democrats and liberals as ardent cold warriors and helped restrict the political space in which policymakers could operate. Later chapters discuss further the ways in which gender permeated the creation of redevelopment policy, both in the local and federal arenas.^*

Batt’s ideas fit well the Truman administration’s goals, and he became the

EPC’s Director. The EPC's actions on unemployment reflected further the trend in these years of working within the American system of federalism. True to its mandate, much of the Committee's work consisted o f collecting information on local, state, and regional responses to high unemployment. The staff surveyed state — and through them, local — employment agencies to determine their responses to areas of high unemployment. By this time, the Department of Labor had devised a six-level system based upon data collected at the state level, and issued reports through the Bureau of

Employment Security (BES). Areas labeled "D" or "E" were the focus of the EPC's efforts. Figure 1.1 highlights some important aspects of this system. These studies emphasized a labor market approach to the problem, which masked important areas such as race and gender. In addition, many large cities were part o f a labor market and their unemployment levels were usually higher than outlying regions. This approach had the effect of concealing inner city problems. Federal interest in promoting

45 unemployment policies in these specific areas would come in the 1960s. What the EPC

did find were members of local communities already trying to alleviate high

unemployment.

Classification Description Unemployment Rate A Critical labor shortage <1.5% B Job opportunities slightly in excess of job seekers 1.5 to 2.9% C Job seekers slightly in excess of job openings 3 to 5.9% D Job seekers in excess o f job openings 6 to 8.9% E Job seekers considerably in excess of job openings 9 to 11.9% F Job seekers substantially in excess of job openings >12%

Figure 2.1: Bureau of Employment Security Classification of Major Labor Market Areas. Source: Lowell Gallaway, "Depressed Industrial Areas: A National Problem," Ph.D. diss., The Ohio State University, 1959, p.8.

The Korean War: Respite for Some, Problems for Others

As the Truman administration and Congress seemed poised to push further in area

redevelopment, the Korean War began, pushing national unemployment levels down

and diluting interest in distressed areas. When the war began in June 1950, Truman

moved quickly to mobilize the economy, asking Congress for a series of war-related pieces of legislation that culminated in the Defense Production Act in September 1950.

Like legislation during WWII, the Act provided business incentives to produce war goods, mandated reduced production of civilian goods (especially autos), increased taxes, and granted federal authority to stabilize prices and wages. In addition, increased

46 Defense spending boosted the national economy. Unemployment dropped from 5.3% in

1950 to a postwar low of 2.9% in 1953, while the GNP climbed from $284.8 billion to

$364.6. Autos suffered an initial loss as production restrictions on passenger cars and

trucks took effect, but defense orders after 1951 helped offset these losses. Other

industries added workers as well, including rubber, chemicals, and the service sectors.^^

It is no surprise that during the war unemployment became even more of a national security issue. As previously noted, Truman and other liberals were already justifying federal policies to curb unemployment as necessary to combat communism.

Now in a war situation, the state moved to utilize all its resources, including labor. The

BES established the "E Area Program" to persuade the military and other government agencies to increase contract placement in surplus areas. Though 36 of 62 eligible areas benefited, the program was not great enough to offset chronic unemployment.^'*

Truman's Secretary of Defense, George C. Marshall, issued a series o f directives on the use of surplus manpower. The most significant of these was Defense Manpower Order

No. 4: "Placement of Procurement and Facilities in Areas of Current or Imminent Labor

Surplus." Issued February 7, 1952, its goal was the promotion of strong economic growth to carry out national defense policy. The directive authorized Defense procurement from firms located in labor surplus areas, and created a Surplus Manpower

Committee to prepare studies and make recommendations to coordinate these activities.^^

When the Korean War ended in the summer of 1953, the economic boom began to subside. The Defense Department revised its policy in November 1953. It

47 authorized "set asides" for firms in labor surplus areas, allowed tie bids for contracts to

go to firms in these areas, and continued to encourage prime contractors to award

subcontracts to firms in labor surplus communities. The revision also called upon the

Departments of Commerce and Labor, as well as the newly created Small Business

Administration (SEA) to assist these areas in developing training programs, and providing technical help to attract new industries. It also modified tax amortization procedures to give firms establishing new or expanding existing plants greater incentive to build in surplus areas.In addition, in 1954 Congress revised the Buy American Act.

Originally passed in the 1930s, it gave firms in surplus areas preference when competing with foreign bidders for government contracts.^’

Despite the overall growth, chronic unemployment still plagued several areas.

In the communities experiencing long-term decline, Korea either had no impact, or offered only a brief respite. For example, in the anthracite m ining communities of

Scranton, Wilkes-Barre, and Hazleton, Pennsylvania, the war offered little in the way of improvement. In Scranton, between May of 1950 and May 1953, non-agricultural employment declined firom 85,300 to 84,100. By the end of 1955, it had dropped to

80,400. The Wilkes-Barre — Hazleton labor market showed a similar decline. From

May 1950 to May 1953, employment fell fi-om 127,300 to 120,000, and to 111,300 by the end o f 1955.^®

The post-Korea recession deepened the problem. When the Korean armistice took effect in July 1953, it created severe cutbacks on m ilitary orders. In addition, the

Federal Reserve raised interest rates in anticipation of postwar inflation. National

48 unemployment reached 6% by January 1954. Unemployment in already distressed areas grew worse. What is more, in some steel communities the process of deindustrialization increased. Overall growth and the expansion of military orders during Korea kept employment levels in the steel industry high into 1953. In the fall of

1953, though, they began to drop. From 572,400 employed in steel works in August of

1953, the number fell to 490,300 by July 1954. There were longer-term problems, however, besides the post-Korea recession, which became more pronounced after 1953.

America's position as world leader in steel began to erode, slowly at first in the early

1950s, but accelerating in the late 1950s and early 1960s. Exports as a percentage o f world production began to fall, and foreign imports increased. Unemployment began to increase in Pennsylvania steel areas such as Allentown and Bethlehem.”

Conclusions

Several trends emerge from these developments between 1937 and 1954. First, deindustrialization continued and began to spread. What many had seen as a local problem was, by 1954, a national issue. Second, the intellectual and policy heritage associated with Keynesian ideas and full employment provided the basis for emerging redevelopment programs. This tied into a growing sense of optimism, expectation, and perhaps arrogance among many postwar leaders concerning the possibilities of the

American economy to provide a better life for all — and not just within the United

States. Essential to an active international presence was continued economic growth.

49 ^^thin the midst of growth and expansion, there were areas of the countr>'^ that did not share in this prosperity. In the immediate postwar years, the problem of chronic unemployment characterized communities based on declining industries, such as mining, textiles, and railroads. Slowly and in a limited fashion, federal policymakers began to take notice. As early as WWII plans were underway to address the problems of declining industries. But overall levels of growth and employment, and increasing attention to foreign affairs, relegated these concerns to a Limited place in postwar federal policies. The end of the Korean War marked a new phase in the process of area redevelopment policy. The recession worsened in 1954, and by the end of that year the

Department of Labor had classified 48 major labor market areas and over 100 smaller ones as having substantial labor surplus. This was part of an overall trend in the rising number of labor surplus areas. From 1952 to 1959 the number of such areas grew &om

40 to 264.“*° This growth in unemployment reflected both temporary effects from the recession, and, more importantly, structural changes connected to industrial transformation. These trends sparked renewed interest in the United States for aid to the unemployed, leading to the first area redevelopment proposal in Congress during 1955.

As federal officials began to take notice, community leaders in areas hurt by declining industries also recognized the problems and sought measures to alleviate these conditions. One region that played a key role in the story of area redevelopment was the anthracite mining area in eastern Pennsylvania. The efforts by local residents there drew the attention of the media, as well as both state leaders and those at the federal level. The story of these developments in Pennsylvania follows in the next chapter.

50 NOTES

' This framework for understanding the post-1930 American political structure co m es from Steve Fraser and Gary Gerstle, eds.. The Rise and Fall o f the New Deal Order. See especially- Steve Fraser, "The 'Labor Question',” 55-84, Alan Brinkley, "The New Deal and the Idea o f the Statte,” 85-121, and Nelson Lichtenstein, "From Corporatism to Collective Bargaining: Organized Labor a n d the Eclipse o f Social Democracy in the Postwar Era,” 122-152.

- James T. Patterson, Grand Expectations: The United States, 1945 - 1974 (New "York: Oxford University Press, 1996), 40.

^ There are a number o f sources outlining the creation o f this social contract. Annong them are: Alan Brinkley, The End o f Reform-, Robert M. Collins, The Business Response to Keynzes, 1929 - 1964 (New York: Columbia University Press, 1981); David L. Stebenne,Arthur J. Goldberg:.- New Deal Liberal (New York: Oxford University Press, 1996); Robert Zeiger, American Workers, Mmerican Unions, 1920 - 1985 (Baltimore: The Johns Hopkins Press, 1986).

“ The concept o f government spending to alleviate economic downturns was not mew in the 1930s. As Bradford Lee as written, "in Britain and the United States, there was an efflorescence o f proto-Keynesian notions among economists before 1936," Quote from Bradford A. Lee, "The Miscarriage o f Necessity and Invention: Proto-Keynesianism and Democratic States in the 1930s," 141, im Peter A. Hall, ed..The Political Power o f Economic Ideas: Keynesianism Across Nations (Princeton: Prdnceton University Press, 1989). See John Maynard Keynes,The General Theory of Employment, Imterest and Money (London: Macmillan, 1936).

* In addition to Keynes, see Robert Lekachman, The Age o f Keynes (New York: Random House, 1966), 78-111.

^ I have relied upon several important sources that outline the growing influence o f Keynesian ideas at this time. In addition to Lekachman and Hall, see Alan Brinkley,The End o f Reform and Collins, The Business Response to Keynes, as well as Collins' essay, "Growth Liberalism in thee Sixties," in David Farber, ed.. The Sixties: From Memory to History (Chapel Hill: The University ofN o rth Carolina Press, 1994), 11-44. In addition to Bradford A. Lee's essay, I have relied upon the follow ing in Hall, Keynesianism Across Nations: Walter S. Salant, "The Spread o f Keynesian DoctriLnes and Practices in the United States," 27-52; Margaret Weir, "Ideas and Politics: The Acceptance o f Keynesianism in Britain and the United States," 53-86; and Peter A. Gourevitch, "Keynesian Politics: The Political Sources of Economic Policy Choices," 87-106. This is not to say that all economic policy after 1938 was Keynesian. As; will be seen below, balanced budgets, reduced government spending, and fighting inflation remained .goals for many federal policy makers and presidential administrations. Also, as Lee points out, deficit f in ancing is not necessarily Keynesian. The case o f interwar Germany is an example, a point elaborated upon by Harold James, "What is Keynesian About Deficit Financing? The Case o f Interwar Germ-any," 231-262, in Hall, Keynesianism Across Nations. I adhere to Lekachman and Salanfs views on the emergence of Keynesiam ideas in the United States. In a strict sense of the term. Keynesianism entered American economic po»licy in 1938, and not again until the tax policies o f the Kennedy and Johnson Administrations. But, as Salant and Lekachman argue, the emphasis on full or maximum employment and output — rather than on stability o f the business cycle — reflects the absorption o f Keynesian thought. This concept underlay the Eanployment Act of 1946, and subsequent attempts to create an area redevelopment program. Also, K eyn es’ ideas led to the movement among economists and the government (often together) to increase statistical measurement o f 51 employment, interest rates, and various other economic indicators. WWTI enhanced this. Emerging from this in the postwar years was what Robert Collins has called "economic growthmanship." This belief entailed a rejection o f the stagnation, or mature economy thesis that dominated economic thinking during the early New Deal, and an acceptance o f the promotion o f continued economic expansion using the powers of the federal govemmenL See "The Emergence of Economic Growthmanship in the United States: Federal Policy and Economic Knowledge in the Truman Years," 1.38-70, in Mary O. Fumer and Barry Supple, eds.. The State and Economic Knowledge: The American and British Experiences (New York: Cambridge University Press, 1990).

^ U.S. Department of Commerce, Historical Statistics o f the United States, Colonial Times to 1970, Part 1, pp.228, 235.

* Kenneth Weflier, America's Search for Economic Stability: Monetary and Fiscal Policy Since 1913 (New York: Twayne, 1992), 107-8.

® Donald E. Spritzer, Senator James E. Murray and the Limits of Postwar Liberalism (New York: Garland Publishing, Inc., 1985). See also Weiher,America's Search, 108-9, and Brinkley,End o f Reform, 260-62. For a complete discussion o f the political history o f the Employment Act, see Stephen Kemp Bailey, Congress Makes a Law: The Story Behind the Employment Act o f 1946 (New York: Columbia University Press, 1950).

Dropped from an earlier version was a vague definition o f full employment. It stated that full employment was "a condition in which the number o f persons able to work, lacking work, and seeking work, shall be no greater than the number o f unfilled opportunities to work, at locally prevailing wages and working conditions for the type o f work available, and not below minimum standards required by law, and in which the amount o f frictional unemployment, including seasonal and technological unemployment, and other transitional and temporary unemployment is no greater ±an the minimum needed to preserve adequate flexibility in the economy." Quoted in Bailey,Congress Makes a Law, 50.

“ The full text o f the original is found in Bailey,Congress Makes a Law, 243-48.

'-Ibid, 160-1.

Special Message to the Congress Presenting a 21-Point Program for the Reconversion Period, September 6, 1945, in Harry S. Truman, Public Papers o f the Presidents o f the United States: Harry S. Truman. 1945 (Washington: U.S. Government Printing Office, 1961), 279-81.

The following excerpt highlights the ambiguous nature o f the Act: "The Congress declares that it is the continuing policy and responsibility of the federal Government to use all practicable means consistent with its needs and obligations and other essential considerations of national policy, with the assistance and cooperation o f industry, agricultiu-e, labor and state and local governments to coordinate and utilize all its plans, functions, and resources for the purposes o f creating and maintaining, in a maimer calculated to foster and promote free competitive enterprise and the general welfare, conditions under which there will be afforded useful employment opportunities, including self-employment, for those able, willing, and seeking to work, and to promote maximum employment, production and purchasing power." See U.S. Statues at Large, LX, Part 1, p. 23.

On the nature o f the relationship between economists and the state, see the essays in Fiumer and Supple, cited above, as well as Michael A. Bernstein, "American Economics and the American Economy in the American Century: Doctrinal Legacies and Contemporary Policy Problems," 361-93, in Michael A. Bernstein and David E. Adler, eds.. Understanding American Economic Decline (New York: Cambridge 52 University Press, 1994), Edward S. Flash, Jr.,Economic Advice and Presidential Leadership: The Council o f Economic Advisers (New York: Columbia University Press, 1965).

For a summary o f these events see William F. Hartford,Where is Our Responsibility? Unions and Economic Change in the New Englad Textile Industry, 1870 —1960 (Amherst: University o f Massachusetts Press, 1996), 180-1; and Sugrue, Origins o f the Urban Crisis, 5-7. For more on urban renewal see note 25 below.

Memo, Alfred C. W olf to J. Donald Kingsley, 8 January 1947, ‘Trevious Programs” folder. Papers of Harry S. Truman, John R. Steelman Files, Harry S. Truman Library (hereafter Steelman Files-HSTL).

'* Memo, “Procedure Used by OPM for Handling Priority Unemployment in Distress Areas,” “Previous Programs” folder, Steelman Files-HSTL.

” Memo, “Procedure Used by OPM for Handling Priority Unemployment in Distress Areas,” Papers of Harry S. Truman, John R. Steelman Files, “Previous Programs” folder, Steelman Files - HSTL. The notion o f bifurcated policies draws on Margaret Weir, Politics and Jobs: The Boundaries o f Employment Policy in the United States (Princeton: Princeton University Press, 1992).

Memo, Alfred C. W olf to J. Donald Kingsley, 8 January 1947, “Previous Programs” folder, Steelman Files - HSTL.

■' Wayne David Lammie, "Unemployment in the Truman Administration: Political, Economic and Social Aspects," Ph.D. diss.. The Ohio State University, 1973, p.l39.

“ Donald R- McCoy,The Presidency o f Harry S. Truman (Lawrence, KS: University Press o f Kansas, 1984), 49; Patterson, Grand Expectations, 43; "Buffalo Reconversion Contrasts Dallas," Business Week, September 1, 1945, 17-21; "Reconversion Experiences o f Northwest Shipyard Workers," Monthly Labor Review, April 1947, 627-35. National statistics from Historical Statistics of the United States, PL 1, p.l35.

^ During the strike wave o f 1946, Truman had called for the power to seize industries, and secured an injunction against a strike by the United Mine Workers. Congress pushed for greater control over organized labor, and passed the Taft-Hartley Act o f 1947. Truman recouped some labor support with a veto o f Taft-Hartley, which Congress overrode. On this and other issues in the Truman administration see William H. Chafe, The Unfinished Journey: America Since World War II,2d. ed., (New York: Oxford University Press, 1991), 91-97; Susan M. Hartmann, Truman and the 80th Congress (Columbia: University o f Missouri Press, 1971), Ch.4; McCoy,Presidency o f Harry S. Truman, Ch. 3; Lammie, "UnemploymenL" 32-33.

Roger H. Davidson, "The Depressed Areas Controversy: A Study in the Politics o f American Business" (Ph.D. diss., Columbia University, 1963), 65-8. Roterus would later serve in the ARA.

^ On the MidwesL see Jon C. Teaford, Cities o f the Heartland: The Rise and Fall o f the Industrial Midwest (Bloomington, EN: Indiana University Press, 1993), 213-17. For a detailed study o f DetroiL see Sugrue, The Origins of the Urban Crisis. On developments in urban housing and urban renewal, see Marc Weiss, "The Origins and Legacy o f Urban Renewal," in J. Paul Mitchell, ed..Federal Housing Policy and Programs: Past and Present (New Brunswick, NJ: Center for Urban Policy Research, 1985), pp.253-276; Jill Quadagno, The Color o f Welfare: How Racism Undermined the War on Poverty (New York: Oxford University. Press, 1994), especially chapter 4; Patterson,Grand Expectations, 335-36, NlcCoy, Presidency o f Harry S. Truman, 172. 53 There were two major causes o f the 1948-49 recession. One w a s the Federal Reserve's decision to raise reserve limits during 1948 in an effort to fight inflation. The other* was connected to the fight against inflation: balancing the budget. The Truman administration balanced the budget in 1947, and retained an S8 billion surplus in 1948. This reflects the continued conflicts anmong policy makers in the early Cold War years as to the wisdom o f Keynesian policies. Although WWTI and Korea showed the possibilities o f government spending on the economy, both Truman and Eisenhiower insisted that balancing the budget and fighting inflation were the best means to ensure econormic growth and low unemployment. See McCoy, Presidency of Harry S. Truman^ 179-80; and Weiher, America's Search, 102-3.

*^ Davidson, "Depressed Areas Controversy," 70-1. Davidson notes incorrectly that this marked the first involvement o f the executive in the depressed areas issue.

** These men were not alone in developing these ideas. For exampTe, James G. Patton o f the National Farmers Union was influential in proposing the S2.2 billion reserve: fund. Patton's concern was for rural areas, especially those dominated by cotton. See Davidson, "Depressed Areas Controversy," 71-3. The bill was a substitute measure for an earlier bill Murray, Senator Jolan Sparkman (D-AL) and Representative Wright Patman (D-TX) had introduced on January HO, 1949. The Committee on Labor and Public Welfare examined the earlier measure, and the bill was still lingering there by the time Miuray offered his substitute in July. See Congress, Senate,Congressional Record (July 15, 1949), Vol. 95, pt. 7, 9537-52, and Congress, House, Congressional Record (July 18, 19^9), Vol.95, pt. 7, 9726-31.

^ McCoy, Presidency o f Harry S. Truman, 172-80.

News release, "Batt Named to Help Distressed Areas Effort," U .S . Dept, o f Labor, July 26, 1949, in Papers o f William L. Batt, Jr., box 1, "Tobin, 1949" folder, John F. Keimedy Library (hereafter cited as Batt Papers); transcript, William L. Batt, Jr., Oral History Interview^, July 26, 1966, p. 1-4, Harry S. Truman Library (hereafter cited as Batt Interview, HSTL).

Letter, Batt to Clark Clifford, June 27, 1949, in Batt Papers, box 3 , "Community and State Unemployment Programs, 1949" folder.

Arthur M. Schlesinger, Jr., The Vital Center (Boston: Houghton-Wifflin, 1949), 223-4. On Schlesinger and Cold War masculinity, see K.A. Cuordileone, “Politics in an A g e o f Anxiety”: Cold War Political Culture and the Crisis in American Masculinity, 1949 — 1960,”Journal o f American History 87 No. 2 (September 2000), 515-45. On liberalism’s developments during thiese years, see Alonzo L. Hamby, Beyond the New Deal: Harry S. Truman and American Liberalism ([New York: Columbia University Press, 1973) and Young, Reconsidering American Liberalism.

Paul G. Pierpaoli, Truman and Korea: The Political Culture o f th s Early Cold War (Columbia: University o f Missouri Press, 1999); McCoy,Presidency of Harry Vniman, 230-31. Statistics from Historical Statistics of the United States, Part 1, 135.

^ Davidson, "Depressed Areas Controversy," 62-3.

Dillon, Area Redevelopment Administration, 2-3.

News release, “Office of Defense Mobilization,” 4 November 19S3, "Defense Manpower Policy, 1953" folder, box 1, Batt Papers.

Davidson, "Depressed Areas Controversy," 65. 54 U.S. Department o f Labor, Area Manpower Guidebook, 263-66.

Statistics from Monthly Labor Review, various issues 1953 - 1954. For detailed stories on the steel industry see Stein, Running Steel, and Stebenne, Arthur J. Goldberg. See also John P. Hoerr, And the Wolf Finally Came: The Decline of the American Steel Industry (Pittsburgh: The University of Pittsburgh Press, 1988), and Paul Tiffany,The Decline o f American Steel: How Management, Labor, and Government Went Wrong QAev/ York: Oxford University Press, 1988).

James L. Sundquist, Politics and Policy: The Eisenhower, Kennedy, and Johnson Years (Washington, D.C.: The Brookings Institution, 1968), 62.

55 CHAPTER

PENNSYLVANIA AND THE EMERGENCE OF AREA REDEVELOPMENT POLICY, 1933-1961

We are today declaring war against the shameful waste of human energy and human ability and human capacity to produce, which comes about when men and women find no work when they seek work; when marvelous energy sources like our Pennsylvania coals lie unmined in the ground; when whole communities and regions are seemingly condemned to chronic unemployment, deterioration, and hopelessly prolonged distress. -George Leader, Governor of Pennsylvania, 1955*

[M]any of the women work in the garment factories only because the men in their homes...are unemployed and are at home doing the housework, the shopping and tending to the children — a complete reversal of the normal course of family life. -Min Lurye Matheson, ILGWU District Manager, 1956"

On 3 May 1954, Lehigh Coal and Navigation Company announced that it would close

its anthracite mining operations in Pennsylvania's Panther Valley. Company officials had hoped to keep some mines open but net losses in 1953 amounted to $1.4 million and the trend continued into early 1954. The company stated they would reopen the mines only if miners would work harder and produce more. All UMW locals in the area voted to go along with the program except one: Tamaqua Local 1571. Arguing the new rules violated existing wage agreements, workers fi-om the local picketed the mines and

56 called on miners across the anthracite region to join them. Tamaqua miners offered an

alternative plan that called for workers to share control over management and

production decisions. Lehigh managers refused and closed permanently the mines

effective 30 June. Although area citizens and others made efforts to open mines,

unemployment remained a difBcult problem for the Panther Valley and for the entire

anthracite region. Difficult times remained despite the effort of thousands of female

garment workers who supported their husbands and families and union leaders like Min

Matheson who pushed for greater public and private responses. The economic depression continued despite local attempts to create industrial development organizations to attract new industries. By the mid-1950s, what had seemed an isolated event in coal towns had begun to occur in other industries key to Pennsylvania’s economy, including railroads, textiles, and steel. The changes wrought by deindustrialization prompted calls for greater action at the state level. In 1954, this helped George Leader become Pennsylvania’s first Democratic governor since George

Earle’s election twenty years earlier. In many ways. Leader’s rhetoric and policies formed a bridge between the New Deal and the New Frontier. His administration also formed a link between local and later federal efforts to attack unemployment and poverty through area redevelopment.

This chapter examines local and state developments in Pennsylvania regarding deindustrialization, unemployment, and poverty. It focuses on the anthracite mining region where the earliest and most sustained local responses to industrial change emerged and, at the state level, the creation of the Pennsylvania Industrial Development

57 Authority (PIDA). Pennsylvania dominated the attention of national elites involved in

redevelopment as it represented most clearly the efifects of industrial transformation.

PEDA served as a model for the Area Redevelopment Administration (ARA) and

Pennsylvania contained the largest number of projects and jobs created by the ARA.

The postwar conditions that Leader emphasized in 1955 contrasted with a national,

postwar narrative characterized by growth and material affluence. In Pennsylvania,

workers, business leaders, union representatives, and political leaders all sought to

address the effects of industrial transformation. Developments in this region also reflect the framework outlined by Theda Skocpol and Brian Balogh concerning the importance of understanding the role of non-elites in the making of public policy. Beginning first with the economy and culture of the anthracite region, this chapter analyzes the solutions these groups debated and chose, and how these decisions influenced federal developments leading to the ARA.

Pennsylvania Anthracite Communities: Background

Pennsylvania is home to almost 75% of the world’s hard coal, or anthracite, and almost all the American supply. The region is bounded on the north and west by portions of the Susquehanna River, on the east by the Lehigh River, and on the south by the

Appalachian Mountains. As shown in Figure 3.1, Pennsylvania’s anthracite lies in four separate fields. The northern field runs underneath the Wyoming Valley in Lackawarma and Luzeme counties and includes the area’s two largest cities, Scranton and Wilkes-

Barre. The eastern middle field encompasses part of southern Luzeme county and

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59 portions of Carbon and Schuylkill counties; Hazleton is the commercial center. The western middle field runs through Schuylkill, Columbiana, and Northumberland counties, while the southern field the longest, stretches through four counties with

Pottsville in Schuylkill County at its center.^

By the 1850s, anthracite was the primary fuel for the manufacturing industries that characterized America's first industrial revolution. Linkages developed between coal, railroad, and iron firms such that these industries and those who owned them dominated the economic and political life in the anthracite region. Financial interests outside the area owned several large companies, including the Lehigh Coal and

Navigation Company, the Lehigh Valley Railroad, and the Glendon Iron Company. In the Wyoming Valley, however, local financiers maintained control of the area’s major industries. Whether outside or within the area. Episcopalian or Presbyterian families of mostly English descent either controlled or held dominant positions within the companies. Besides culture, kinship connections also made this a tight-knit community of elites.'*

Underneath the towns, collieries, and factories, miners worked the coal veins.

Unlike bituminous — or “soft” — coal, which runs parallel and relatively close to the surface, anthracite — or “hard” coal — veins are usually steeply pitched, reaching down

2,000 feet or more below the surface and rising htmdreds of feet inside mountains. This made mining anthracite more difficult and dangerous than bituminous coal. It also meant that companies could not easily use coal-cutting machinery, relying instead on the skilled and unskilled labor of men and boys. Beginning in the 1840s, large numbers

60 of immigrants provided the necessary labor to allow these firms to expand and move

industrialization forward. Before the Civil War, Irish, German, English, Welsh, and

Scottish immigrants dominated work gangs in the mines. Protestant groups held the

more powerful and skilled positions, while Irish Catholics took on the more dangerous,

unskilled jobs. Then in 1880s, waves of new immigrants firom Southern and Eastern

Europe moved to the mining towns and changed the face of the workforce and the

communities. By 1900, English-speaking residents no longer represented the

overwhelmingly majority, but rather shared the work and land with Poles, Czechs,

Lithuanians, Hungarians, and Italians. This established a multiethnic patchwork in the

anthracite region that still exists today, with different groups occupying different forms

of work and often living in distinct communities.^

By the 1900s a distinct pattern had emerged which would dominate the social and cultural world o f the anthracite region until the 1950s. Sons usually followed their fathers into the mines. Miner Stanley Salva noted: “As a young man it was a practice that as soon as you were old enough and strong enough you went into the mines.”

These young men usually worked to support the family economy. Ziggie Whitecavage had a similar story. “I went to school in the ninth grade. As I finished my freshmen year, my parents made me go to work in the mines because they needed the additional revenue.” Mothers and daughters usually worked at home. Some worked outside the home as domestics, or increasingly after 1900 in the textile or apparel firms that utilized the cheap female labor in the mining areas. Women handled the domestic economy, with each family member’s income usually going to the mother who coordinated family

61 finances. Helen Hosey’s comment was typical in this regard: “My mother always

handled the money; my father never even opened his pay envelope.” Theresa Pavlocak

noted: “Payday, you’d come in cash a check, come home and give it to your mom.” In

addition to these duties, wives often initiated small family businesses or arranged the

purchase or rental of a home.®

Among the newest immigrants to work the mines, East Europeans or Slavic groups dominated. Analysis of these miners has been dedicated to either explaining collective action towards social transformation of the 1930s or to showing the pragmatic, job-conscious nature of these (and by extension most American) workers.

According to John Bodnar, leading historian of the anthracite region, these miners sought to reestablish traditional cultural patterns as they settled in their new communities. Slavic families valued continuity and security, seeing work as a means to these ends. With diligence and hard work, first and second-generation Slavic workers stayed with the mines and their communities. According to Bodnar, they did not necessarily mirror Protestant values of economic mobility and advancement. Instead, they sought to maintain close kinship and community ties and emphasized paternalistic family organization. Community and a concern for survival trumped notions of class and social transformation. Others, such as sociologist Michael Kozura, acknowledge the importance of family and kinship to anthracite miners but show that these values formed the basis for social movements that challenged capitalism. Kozura argues that anthracite miners in the 1930s responded to the depression by seizing mines and operating them independently of established mining companies. Though police arrested

62 many, Kozura emphasizes how these actions opened opportunities for equality between

men and women and moved toward transforming the social landscape of the region/

This chapter carries the analysis of worker responses into anthracite's last days

after WWII and examines how both interpretations inform our understanding of postwar

developments. Worker responses in the 1950s exhibited both traditional and

transformative elements. As the 1954 case o f the Tamaqua m in er?; outlined below

suggests, workers challenged managerial prerogatives and union leadership. But these

efforts did not attract large numbers of miners as they did in the 1930s. As for women

in the 1950s, they often used their voices to demand jobs for men. Moving beyond

Bodnar and Kozura, this chapter also shows how these various responses intersected

with political developments at the local and state level. Not only workers, but also

business, union, and political leaders offered their own proposals for addressing anthracite’s decline and the relative stagnation of Pennsylvania’s economy in the postwar era. In the end, the solution chosen by local and state leaders became the model for the Area Redevelopment Act and influenced the future course of national industrial and social policy.

Decline, Depression, and War: The 1920s to the 1940s

When decline came, a number of groups proposed and acted upon solutions to the problem. The case of Lehigh Coal and the Panther Valley during these years emphasizes the actions of business, government, and labor as they sought to maintain the anthracite industry. More so than other northeast Pennsylvania regions, the Panther

63 Valley relied upon anthracite mining. The twelve-mile long, two-mile wide vaUey sits

between the Nesquehoning and Locust Mountains in the north and Pisgah and Sharp

Mountains in the south. Flowing through it are the Nesquehoning and Panther Creeks.

The area is rich in anthracite coal, and this geological fact has shaped the history of the

major towns in the area: Coaldale, Jim Thorpe, Lansford, Nesquehoning, Summit Hill,

and Tamaqua.®

In 1822, Philadelphia men of the Lehigh Coal and Navigation Company

(LC&N) secured ownership of approximately 8,000 acres of coal land in the Valley and

dominated mining there for next 150 years. Besides its mines, LC&N also owned

railroads serving the Valley as well as the Panther Valley Water Company and the

Summit Hill Water Company. These water companies provided both the industrial and

domestic water supplies for the Valley. LC&N also owned stock in National Power and

Light, which became Permsylvania Power and Light and supplied the electricity for

homes and industries in these towns. In short, anthracite mining became the dominant

industry in the Valley, and LC&N the dominant company. Through its subsidiary, the

Lehigh Navigation Coal Company (LNC), LC&N sought to be a good “corporate

citizen.” It paid most of the taxes in the Valley and assisted various churches, schools,

and civic organizations through monetary contributions. LNC donated as well to the construction of a youth center in Lansford and a com m unity pool and park to serve

Lansford, Summit Hül, and Coaldale. Such pervasive community involvement gave

64 company ofiBcials influence in local affairs. With such influence, any dip in anthracite's

fortunes could mean economic disaster for the Valley and the region and threaten to

upset the social and political structure.’

Such a dip first became evident in the 1920s. Unlike the national economy,

economic troubles in anthracite began before the stock market crash of 1929. The

industry as a whole reached a post-WWI production peak of 77,603,000 tons in 1923.

By this time, anthracite’s main use was to heat homes and businesses and after 1923,

competition firom oil and gas increased as customers began to switch to those cleaner

fuels. Furthermore, strikes in the 1920s made consumers question coal’s rehabilit)\

The Depression only made matters worse. LNC failed to turn a profit between 1927 and

1940 and its parent company, LC&N, lent its subsidiary money to keep it afloat. By

1940, this debt amounted to $5.5 million.*’

While LNC and other anthracite companies fought to stay solvent, miners in the

region also sought solutions to social and economic transformation. Actions in the

1930s presaged those of the 1950s and helped build support for state and federal

redevelopment programs. With unemployment in the Panther Valley at 50 percent,

thousands of miners appropriated corporate property by digging and distributing coal

independently of LNC and other companies. Miners, their wives, and children also

stood in the way of stripping machines, battled with security forces and state police, and

set fire to several shovels. Company and union officials tried to stop bootlegging while miners defended it as necessary for survival. Bootlegging operations continued in the

65 southern field until the 1940s, by which time they had generated an estimated $40

million in income and rivaled the operations of the large legitimate operators. “

Besides bootlegging, miners also proposed a work equalization plan to address

anthracite’s decline. The intent was to employ more miners by forcing coal companies

to spread work among aU collieries rather than concentrate production at only a few. In

July 1933, UMW locals sent their proposals to Hugh Johnson, head of the newly created

National Recovery Administration (NRA), Secretary of Labor Frances Perkins, and

United Mine Workers (UMW) leader John L. Lewis. In addition, miners created an

Equalization Committee to promote the idea and pressure LNC to concede. When neither UMW nor federal officials acted on their request, some 10,000 miners marched on LNC’s Lansford headquarters in August to demand that the company adopt its proposals. They established pickets around LNC collieries and stripping operations. A major supporter o f the idea was James H. Gildea, editor of the Coaldale Observer and later Congressman. He published articles and played a visible role in various parades and rallies designed to promote equalization. Gildea would propose similar ideas in the

1950s. As expected, Lewis and the UMW leadership did not authorize these moves, which violated the contract and challenged the authority of UMW leaders. For his part,

LNC president J.B Warriner demanded that this “flagrant violation of contract relations and unwarranted interference with operations should cease immediately.” UMW officials and company managers could not force the miners to listen, however. Faced with mass strikes, LNC managers conceded to equalization demands. Although Lewis

66 and LNC officials resisted at first, equalization became part of the 1936 agreement between UMW and anthracite operators, which also provided a check-off system for dues, and reduced the work day to seven hours without loss of pay.'^

This collective response was part of a broader movement against the UMW and the coal companies occurring throughout the anthracite region in the 1930s. Miners in the Wyoming Valley (located in the northern anthracite field) had formed a new union to challenge John L. Lewis’ hold on the UMW. In 1933, they created the United

Anthracite Miners of Pennsylvania (UAMP) and fought for recognition against the operators, the UMW, and federal authorities. Lewis ousted UAMP members jfiom the

UMW and the operators fired those that were working. The National Labor Relations

Board declared the UMW as the only legitimate union in the region. Undaunted, the

UAMP, with the support of some 45 percent of miners in District 1, called for the 1933 walkout. It lasted on and off until 1935 and contributed to the chaotic, violent nature of affairs in the region during these years.

While workers pushed for equalization, ran bootlegging operations and created an alternative union, mine owners also sought methods to arrest economic decline.

Above all, owners of the major companies in the area sought a system that preserved their right to manage and provided a stable source of profits. Yet at times their actions were contradictory and helped to create instability in the anthracite region. In the

1920s, larger, unionized companies began selling at excessively low prices. To compete, non-union companies did the same, resulting in what business and union leaders called “cut-throat competition.” Then, hoping to achieve stability, company

67 owners agreed to attempt a solution that reflected the associative approach of forging a

cooperative state between business, government, and labor. In 1933, owners supported

federal attempts to stabilize the industry with passage of the National Industrial

Recovery Act (NIRA). Under the National Recovery Administration (NRA), businesses

were to work with unions and government ofGcials to establish codes of conduct.

Though temporarily successful in soft coal, the attempt failed in hard coal. Labor,

business, and government officials could reach no agreement in anthracite before a 1935

Supreme Court decision declared unconstitutional the price-fixing portion of the

NIRA."

After this, business and government action centered at the state level. In 1937,

Pennsylvania’s Democratic Governor George H. Earle created the Anthracite Coal

Industry Commission, headed by Lewis comfidant and economist W. Jett Lauck. The

Commission conducted lengthy investigations and published substantive reports detailing the economic and social situation associated with anthracite’s decline. In keeping with Lauck’s beliefs, the Commission noted “that the ultimate solution of the anthracite problem may and should be either Federal or State ownership and operation of the industry.” In addition to redeveloping the anthracite industry, Lauck also recommended “the development of machinery to find other occupations for the unemployed within and without the anthracite region.”" State and federal legislators ignored Lauck’s latter comment and introduced bills to authorize greater state or federal control. These died in committees, however. In 1939, Pennsylvania’s new Republican governor, Arthur James, threatened state action if the operators and unions could not

68 stabilize the industry themselves. By March 1939 industry leaders and UMW ofBcials

had devised a plan to stabilize competition and resuscitate demand. It involved a

cooperative arrangement among operators to assign market share based on historic

production rates and establish minimum prices for anthracite coal. It also called for the

closing of bootleg breakers. Administering the plan was the Anthracite Committee,

composed of state, union, and company officials. The committee would research and

maintain information on the anthracite market and monitor prices and market share.

This arrangement avoided direct control of the industry by state or federal institutions; it also avoided state involvement in assisting these communities to develop long-term economic redevelopment strategies. Virtually all but the largest producer, Glen Alden

Coal Company, agreed to work on a plan. But after pressure from Governor James, other firms, and the UMW, Glen Alden agreed and the arrangement became effective in

1939. Pennsylvania’s representatives amended the state Commerce Act to approve the arrangement in 1943.'^

After the great upheaval of the 1930s and early 1940s, the WWII years emerged as anthracite’s and LNC’s Indian Summer. Demand and profits increased, enabling

LNC to institute a six-day week. The company made a profit of $ 1.25 million in 1944 and company managers announced the mines had increased output by 93 percent since

1939. As a result, LNC expanded operations in Tamaqua and Lansford and installed the largest motor-driven hoist in the region at Coaldale. An air of confidence surrounded

LNC and the anthracite industry. Many miners left for service in the military, while those who stayed enjoyed steady work and wages.

69 However, profits and steady work did not come without tension. Safety declined

and mining in the war years became even more dangerous than normal. Moreover,

wage restrictions in the face of rising prices added to the difBculty. Anthracite miners

walked out in December 1942 over a $0.50 dues increase in the face of stagnant wages

and more dangerous conditions. Lewis repressed the strike, but as he did in the 1930s,

he adopted the strikers’ proposals when he asked for increased wages and authorized

several bituminous strikes in 1943. Exhibiting again their independent streak, most

anthracite miners continued working during 1943. Still, the strike call prompted the

Solid Fuels Administration to take ownership of the mines until 1944.‘* What do these

actions say about class-consciousness and revolutionary social change on the part of

these workers? Striking over dues and wages in 1942 and avoiding the 1943 strike says

much about the job-conscious nature of this group of anthracite miners. Moreover, the fact that the union divided over the issue also speaks to limited nature of mass action; when faced with the choice of higher wages and steady work versus standing with their working-class brothers, these men went into the mines.

By the end of the war, stability seemed to have returned to the anthracite region.

In the chaos of the 1920s and 1930s, the first signs of deindustrialization emerged and so did various responses. Ideas of community property ownership and moral economy became reality for a few years in one area of the anthracite region. Similarly, work equalization schemes existed for a time. But more powerful, organized interests, including the UMW, anthracite operators, and government officials worked to halt more radical approaches and channel solutions into controllable areas. During the war,

70 miners acted more to secure practical benefits than to restructure industrial relations.

Yet these debates and violent clashes occurred largely over short-term issues and

blinded the participants to long-term strategies designed to address the effects of

industrial transformation. These strategies came to light only after further decline.

The Postwar Collapse

Although many Americans feared immediate economic collapse after WWII, consumer

demand remained strong and the national economy boomed. Even anthracite operators

grew confident that their wartime success would continue. In 1946, for example, the

annual report of the Lehigh Navigation Coal Company (LNC) promised: “The coming

year should be good for ‘Old Company Lehigh’ anthracite.” LNC “is looking to the

future with confidence.” Such confidence fed into LNC’s and other producers’

intensive postwar marketing campaign to maintain and even increase anthracite demand

in the face of growing competition from natural gas and oil.^® Targeting the Northeast, which consumed the majority of anthracite coal, LNC developed a five-minute radio program to broadcast weather reports and inform the audience about anthracite’s qualities. The 1946 annual report noted that keeping customers and prospects informed about anthracite “should result in an increased consumer demand.” That same year, anthracite operators created and funded the Anthracite Institute to conduct marketing, sales and lobbying efforts.^

Though profits appeared sustainable, unemployment remained a serious problem in many Pennsylvania communities, prompting a new campaign by the state

71 government that connected to the nationalism sweeping the country after VJ-day.

Beginning in October 1945, the Pennsylvania Department of Commerce sponsored an

armual "Pennsylvania Week." The event celebrated Pennsylvania's role in the shaping

of American history by highlighting famous Pennsylvanians and the state's industrial

might. Since that industrial power now seemed threatened, an important part of the

program became the stimulation of community efforts to attract industries to the state.

Actions included buying newspaper and radio advertisements, and holding school

programs and community rallies to promote Pennsylvania's resources and economic

potential. The state's major railroad companies subsidized a railroad caravan that toured

the state and carried promotional speakers, state officials, and exhibits. While

entertaining and perhaps uplifting, these efforts to alleviate unemployment had a

negligible impact on the process of deindustrialization.^'

The call-to-arms spilled over into community responses to continued

unemployment. Mining firms adopted a confident tone and marched into the market

intent on securing victory against oil and natural gas companies. Community leaders

independent of these firms also adopted a confident air as they worked to attract new

industries to their towns and cities. Yet such confidence developed in the face of

economic data that belied ideas of growth and optimism. First, in distressed areas,

unemployment remained higher than the national average, ranging between 11 and 20

percent throughout the 1950s. A second prominent trend was outmigration. For

example, between 1940 and 1960, the population in Scranton declined from 301,200 to

234,531, a 22% drop. Over the same period, Wilkes-Barre — Hazleton witnessed a

72 21.4% drop, from 441,500 to 346,972. Housing construction also remained below

average in these communities. In 1950, housing built after 1945 averaged 10.23% in the major Eastern labor markets, but this figure was only 1.1% in Scranton and 2.6% in

Wilkes-Barre — Hazleton. Furthermore, these latter figures were below even the 1950 average of 7.91% for other major areas with chronic unemployment. As a result, housing conditions remained worse than the rest of the state. In the area surrounding

Hazleton, for example, as of 1950, 20% of the homes lacked private baths. The Bureau of the Census considered 80% dilapidated.”

As expected, city business leaders commonly responded to these trends by trying to attract new industries and sustain existing ones by organizing business development groups. Here, it seemed, was an important piece of a long-term solution. These

Pennsylvania communities began competing for new businesses and became part of a national postwar trend that saw cities and states create public and private organizations that offered incentives to attract new industries. One of the first in Pennsylvania was the Scranton-Lackawanna Industrial Building Company (SLIBCO), formed in 1946.

Another major group in the area formed in 1950, the Lackawanna Industrial Fund

Enterprise (LIFE). Both groups sought to diversify the local economy by raising capital to build new facilities or refurbish old ones. Together, by 1951 these business organizations had raised $3.8 million, building 18 new plants themselves and attracting

22 companies to build their own. These new plants created 5,000 jobs with annual payrolls of about $18 million. New manufacturing industries included heating, cooling, and air conditioning equipment, metal cabinets, electrical equipment, textiles, and

73 cigars. The gains did not offset the losses, however, and Scranton remained an area of

chronic unemployment. Unfortunately, setbacks continued throughout the 1950s as

firms in the coal and textile industries either laid off workers or shut down.^

Hadeton moved in a similar direction. Like Scranton, an emphasis on saving

male employment characterized developments after WWII. In 1947, the local Chamber

of Commerce created the Hazleton Industrial Development Corporation (HIDC).

Acquiring $650,000 from banks, insurance companies, and local donations, HIDC

agreed to build a plant for Electric Autolite, with the promise of creating over 2,000

new jobs. After construction, the company moved its plant from Dayton, OH. Only

about 300 jobs materialized, however. A new group, CAN DO, Inc., formed in 1956

and conducted two bond drives, which raised a total of $1.6 million and attracted eight

new companies. But unemployment remained high and local financiers had reached

their capacity on loans.*'’

In addition to local groups, business and civic leaders also created regional

development groups. One major group was the Northeast Pennsylvania Industrial

Development Commission (NPEDC), representing Carbon, Lackawanna, Luzerne,

Northumberland, and Schuylkill counties. In March and April 1954, the group met with

Pennsylvania Governor John S. Fine to urge the state to develop means to attract industry. Fine and the group organized a meeting in March 1954 with Pennsylvania's

Republican congressional leaders. Believing that the best use of federal aid would be for public works, such as highway construction. Fine suggested the task force “urge the

President to determine there is an emergency and see if you can't get the federal

74 government to allocate a few million dollars on highways for manual labor.” Charles

Weisman, NPIDC’s Task Force Chairman, believed the emphasis should be on new

industries to diversify the economy. Such a scheme would require “careful, long range

planning.” This group then met witdi President Eisenhower in May, who promised to

refer their ideas to the appropriate federal authorities.^

Fine's role bears further mentioning. With most of Pennsylvania affected by the

recession, demands for political action increased. For the anthracite region. Fine

continued to fund highway development and programs to seal abandoned mines and

clean streams of mine drainage. In April 1954, he also organized a conference of

business, government, and labor leaders to discuss the ailing coal industry. Their major

recommendation was a national fuels policy to counter the increased demand for oil and

natural gas. Fine had little control o*ver a national fuels policy, but he ignored more direct measures suggested below by the Pennsylvania Department of Labor and

Industry.’®

The Department solicited a study of the anthracite region firom Temple

University, which it published in 1952. The study recommended aggressive marketing of the region’s economic potential, srpecial programs for housing and transportation, new industrial buildings, vocational education, and programs to redevelop region’s economic base. It also called for a state planning commission to oversee the redevelopment of the area. As a promotional device. Fine did declare Anthracite Week beginning in 1953 and he continued to fund highway development. He did not move to involve the state in more direct means to aid the unemployed. Instead, he relied upon

75 the indirect means of a fuels policy, the Anthracite Commission, and the market to bring

prosperity to not only the anthracite region but also Pennsylvania in general. As

discussed later, such a limited response helped elect Democrat George Leader, which in

turn fed into national efforts to enact area redevelopment legislation."'

While business and political leaders tried to find a solution in the postwar years,

workers did as well. It was not only male miners who fought against the effects of

deindustrialization. In the postwar years, female wage earners and union leaders played

a visible role in efforts to address industrial transformation. As male unemployment

increased, apparel firms, long a presence in the area, became an even greater necessity

for families as more and more women became the chief breadwinners. Firms in the

garment industry began moving fi'om New York City in greater numbers during the

1930s and 1940s to avoid rising labor costs as garment workers unionized. The anthracite region offered lower labor costs because of the surplus of women. But unionization soon followed, coming just as male mining jobs began to erode. These women also played an important role in promoting industrial development as a solution to unemployment.

Min Lurye Matheson and the ELGWU

In 1944, the International Ladies Garment Workers Union (ILGWU) began a campaign to unionize the garment industry in the anthracite region. Leading the campaign was

Min Lurye Matheson, ELGWU District Manager of the W yom in g Valley, who came with her husband Bill to the anthracite region at the request o f ILGWU president David

76 Dubinsky. Bom in Chicago in 1909, Min Lurye was a Russian-Jew whose father was a

Socialist labor organizer. Min drew on her father’s experience as she became active in

the labor movement. During the 1930s, she organized workers in the New York City

garment industry and her success there prompted Dubinsky to select her to “clean up the

mess in the Wyoming Valley.” Matheson’s tenure there lasted from 1944 to 1963,

during which she successfully organized the largely female workforce in the garment

industry and contributed to the creation of state and national redevelopment policies.'*

Though raised in a socialist milieu, Matheson did not seek to overthrow

capitalism in the Wyoming Valley. She challenged the power of employers through

union activities, efforts to improve workers’ wages and benefits, and by working to

expand the welfare state. To further combat unemployment in the anthracite region, she

sought to diversify the economy by supporting local, state, and federal initiatives

designed to create jobs there. Politically, she used her power and that of the ILGWU to

support the Democratic Party and urged garment workers and others in the Wyoming

Valley to do the same. Her work had both economic and social ends. Increasing women’s wages and providing social welfare benefits grew more important as the mines closed, but Matheson also hoped to empower women socially and spiritually through involvement in union activities.^

Although Matheson hoped to empower women in the Wyoming Valley, she did not want improvements in women’s lives to threaten traditional roles within the family, including the male role as primary wage earner. As Matheson noted in congressional hearings during the late 1950s, “many of the women work in the garment factories only

77 because the men in their homes.. .are unemployed and are at home doing the

housework, the shopping and tending to the children — a complete reversal of the normal

course of family life.’'^° Female garment workers echoed these concerns. A female

ELGWU shop steward noted: “It’s one thing to have an independent income if your

husband is working, but it is no fun being the breadwinner.” Wives of unemployed coal

miners traveled to state and federal hearings in support of redevelopment legislation and

to emphasize the need for “men’s jobs.” Indeed, Matheson argued the same point:

“What we need here are industries that are primarily industries for men and schools that

will train men for the tasks of those industries.” To be expected, male workers in the

area, as well as state and federal leaders, expressed similar concerns. As worker Stanley

Chapel noted: “It is a shame for the woman of the house to be working and the man

doing the housework. It is not right.” Former garment worker Peter McMahana, then

employed as a door-to-door canvasser, expressed his horror when men answered the

door wearing aprons or carrying dirty diapers. “What we need,” he urged, “are

industries in this valley that will put the father to work and leave the mother [to] stay

home and raise the children.”"' Male national policy makers also highlighted the preservation of gender norms as one reason to support area redevelopment. Daniel

Flood, Democratic Representative from Pennsylvania’s 11"* district, centered in Wilkes-

Barre, echoed similar concerns in 1959 hearings. “My men are in the kitchen. Do not tell me that is where they belong.” He went on to connect traditional gender roles to the

78 ethnie heritage of the miners, and then to the community itself. "And what that does to the heart and mind of Poles and Slovaks and Russians and Ukrainians and Irish and

German and Welsh miners I leave to you. It is destroying us.’”"

These examples suggest that gender, like politics and economics, was important to the history of both area redevelopment and state building in the years after WWII.

These trends are significant for three major reasons. First, it is important to understand the social aspects of industrial transformation. These changes were not merely academic questions regarding economic data. Structural shifts in the economy challenged established social and cultural patterns in the communities most affected.

This was especially true of gender roles. What occurred was a crisis of masculinity that affected men’s traditional status as providers and diminished the pride coming from a lifetime of paid work. For women, the crisis meant that their new status as breadwinners, which provided a sense of independence, came amidst unemployment for their husbands, sons, and brothers. In this case, women acted not to challenge gender roles, but to lobby for redevelopment policies as a way to preserve jobs for men.

Women in the anthracite region had few alternatives to area redevelopment, since the jobs available to women were in relatively low-paying, less secure sectors such as retail, or in textile or garment manufacturing. Given this, women lacked the relative security men possessed through either private or public welfare. Thus, strategies that offered possible employment for men, which Min Matheson combined with organizing workplaces, presented themselves as the best option for security. Second, as detailed below and throughout the story of redevelopment, these changes created further

79 pressure for a political solution to economic and social change. Those favoring

redevelopment programs argued that industrial transformation challenged traditional

notions of gender and used this to gamer support for their cause. In doing so,

individuals such as Daniel Flood and Min Matheson were part of a larger trend in the post-WWn United States that wimessed strong public rhetoric and intellectual support for maintaining traditional gender roles.^^ Finally, the debates and actions relative to gender roles demonstrate that the processes of policy making and state building are not only the provenance of elites at the national level, but also involve leaders and at the state and local level as well as workers and their families.

LNC, Workers, and the UMW in the Postwar World

The business response to the postwar decline initially followed the tradition of corporate involvement outlined earlier. Recent LNC President Evan Evans helped found the

Panther Valley Industrial Development Commission in 1952, following similar organizations already operating in communities like Scranton and Hazleton. When the

1953-54 recession began, the Commission moved to create new jobs through industrial diversification. For the Panther Valley, the need became greater as LNC’s fortunes declined rapidly. The end of the Korean War led to a recession which, combined with a warm winter, devastated an already precarious anthracite industry. In 1953, anthracite miners were working an average of three days a week; LNC lost $1.4 million that year and failed to pay a dividend to its stockholders. As a result, LNC managers instituted a drastic reorganization plan. The company had produced far more coal than it could sell

80 even as productivity per miner had declined over the last ten years. In November, LNC

president Glenn O. Kidd met with Panther Valley miners and UMW leaders to discuss

the company’s plans. Kidd called for an overall reduction in coal while at the same

time asking each two-man team of miners to produce an additional carload per day.

LNC would close the Nesquehoning mine and Coaldale breaker by April 1954 and

reduce its stripping operations. Kidd told the miners: “You are the key people in

winning this fight for survival. We ask your help and active cooperation.” In

December, miners o f UMW Local 1704 in Nesquehoning protested by walking out, but

Lewis and other UMW leaders met with the men and convinced them to accept the plan and return to work. Miners in Coaldale and Lansford increased production but losses continued. As a result, on 3 May 1954, LNC owners announced they would shut down all company operations in the Panther Valley. By then, the optimism that had characterized the anthracite business community had faded. Several anthracite companies in the region closed during the spring of 1954, placing some 5,000 miners out of work and affecting thousands of others working m areas dependent on the anthracite industry. Unemployment in the region rose to over 50,000.^'*

Over the next three weeks, seven local unions in the Panther Valley met to discuss the situation and ask UMW President John L. Lewis to visit the area. Lewis referred the matter to UMW vice president Thomas Kennedy, who met at Hazleton with local and District 7 ofGcials. Kennedy and other UMW leaders also met with LNC officials. Kennedy argued that LNC had “a certain obligation to the employees of the

Lehigh Navigation Coal Company and the community interest in the Panther Creek

81 Valley, as well as obligations to our country and to our National Defense.” He urged

LNC to allow a ninet>^-day trial period for miners to achieve greater efBciency and

increased productivity. Owners of LNC’s parent company, LC&N rejected this idea.^^

In the meantime, new LNC President W. Julian Parton presented a five-point plan to

both the parent company and the Panther Valley General Mine Committee, made up of

representatives of the area locals. Parton followed this with an open letter to the

community published in the Tamaqua Evew/wg- Courier, urging miners to accept his new

proposal. He first emphasized his decision to open partially some of LNC’s deep mines

and leave the stripping operations closed. As he noted, this “is contrary to the present

trend in the entire anthracite industry. However, it will afford the opportunity of greater

employment.” He then detailed the conditions o f operation. First, “each miner will

have to produce all that he is capable of producing each day. He must work longer

hours than in the past, and can only be excused where genuinely abnormal conditions exist.” Second, he called for the end of consideration payments, which involved paying miners for fulfilling a contract even though abnormal mining conditions prevented them from doing so. Over time, the miners’ and owners’ definitions of “abnormal” had diverged greatly, resulting in increased production costs. Third, he demanded the increased use and diligent application of mechanized mining methods. Fourth, he called for double-shifting work places. Finally, Parton urged miners to adhere to this new contract strictly and avoid illegal strikes.^®

On the one hand, the offer challenged fundamental work practices, which had existed for many years. Miners had grown accustomed to a certain level of autonomy

82 and to producing according to their own schedule. This went on despite the changes in their contracts during the 1920s, in which they received payment for the number of hours worked, not for the amount of coal produced. Also, increased use of mechanization meant an overall decrease in the number of jobs. On the other hand, this seemed to be the only way that some Panther Valley miners could stay employed in their trained profession.

Divisions appeared as local union leaders held the first of several mass meetings to consider Parton’s offer. A replay of the 1930s seemed apparent, as some locals were reluctant to return. Miners again appealed to UMW leadership. Vice President Thomas

Kennedy supported Parton’s plan as did District 7 president Martin Brennan. Kennedy urged “resumption o f operations to the extent provided.”^’ John L. Lewis, hoping to avoid another challenge to his authority, followed with a blunt, tersely worded telegram to the General Committee, ordering the men to retum to work. Lewis insisted that

Parton’s plan was not in violation of existing contracts. “The time for mass meetings is gone and it is now necessary for our members to comply with the policy recommended by the Intemational District and General Mine Committee. There is no trespass upon the right of contract involved in this agreem ent.Lew is urged miners to address grievances through normal bureaucratic means. Five of the six locals agreed; miners from the Tamaqua Local 1571, however, argued that the new arrangement was confusing and that it violated the 1952 wage agreement. Nevertheless, after meeting on

Saturday, 5 June, the General Committee agreed to retum to work the next Monday under Parton’s proposal.^®

83 At 4:00 AM, Monday, 7 June, a 35-car automobile caravan of miners from Local

1571 drove through Tamaqua sounding their horns urging miners to join them in

protesting the opening of the mines under the new agreement. The caravan also toured

Coaldale before the carloads of miners established pickets around several Panther

Valley collieries and mines. The majority surrounded the breaker at the Coaldale

colliery. As the only one scheduled to operate, the company could process no coal.‘'°

At the request of the officers of Local 1571, about 1,500 miners filled the

Lansford High School athletic field the next day to discuss the situation. Local 1571

President John Miske and other officers urged miners to support their efforts to resume

work under the arrangements in effect when the mines closed on 3 May. Jack Tyler, a

1571 member, criticized the arrangement worked out between UMW officials and LNC.

Tyler attacked District 7 president Martin Brennan, stating “he had no right to connive and do business with the head of this company.” Tyler drew applause when he questioned the inaction of President Eisenhower and Governor Fine regarding the situation. He and others urged miners to remain idle until they reached a new agreement."'

An angry Lewis called the picketing a “serious mistake.” He did agree to meet with members of all the locals over the situation, however. At the UMW offices in

Washington, D.C., Lewis again reiterated his original sentiments. Local leaders returned to the Panther Valley and reported the results to the miners, whereupon they voted to keep picketing. Local president Miske then moved to involve other locals throughout the anthracite region. He requested that all miners in Districts 1, 7, and 9

84 meet in Tamaqua to discuss the situation. In the meantime, LNC ofiScials told Lewis

that they would close the mines permanently unless the pickets ended. Lewis then

traveled to Hazleton to meet with members of the General Committee and other district

leaders. At a meeting on Friday, 18 June, Lewis again urged Local 1571 to retum to

work and to avoid the mass meeting scheduled for Sunday. Local leaders again said

they would leave the decision to the rank and file and returned to Tamaqua to ready

themselves for Sunday’s meeting.'*'

This was not the 1930s, however. No general strike came and relatively few

miners fi'om other areas traveled to Tamaqua for the meeting. Indeed, miners in

Hazleton published an open letter to the Standard Sentinel stating they would not join

the miners of Tamaqua in a work stoppage. The miners of Local 1571 were alone. At

2:00pm on Sunday, 20 June, 1,500 people assembled at the Tamaqua High School

stadium to hear the latest results regarding the work stoppage. The testimony available

makes clear the miners’ desire to maintain both anthracite mining and control over their

work. Ezra Koch, a retired member of the Tamaqua local, noted that “the men are

determined to make a stand to preserve and not to destroy.” He asserted that the recent

attempts to alter work rules were evidence that LNC was “going into liquidation” and

that the area needed a new company that would preserve the mines and make a profit.

A member of the General Committee, Floyd Eveland, noted that LNC’s policies of

increasing production without new development would render the mines useless.

Revising his role firom the 1930s, local publisher and ex-Congressman James Gildea noted that when LNC first came to the valley, they promised more working time and

85 greater production. Since the 1930s, though, events had gone in the opposite direction.

Gildea recommended forming a local committee to appeal directly to President

Eisenhower and Governor Fine. Virtually aU 1,500 stood and cheered in support.''^

The next evening, LNC president W. Julian Parton delivered a radio address to

the people of the Panther Valley. Parton reiterated his original proposal and cited the

support given by UMW leaders. He noted that the “money for the maintenance of the

mines of Panther Valley is exhausted. On Thursday of this week I must make a report

to the board of mangers of the parent company. Unless something transpires in the

meantime, I will have to report to the board that I have failed.”^'*

He did. On Friday, 23 June the Board of Managers of LNC’s parent company,

the Lehigh Coal and Navigation Company, announced they would close their mines

permanently effective 30 June. This came despite a request from Governor Fine to wait

until after the miners’ meeting scheduled for that Sunday. In a statement, president of

the parent company, C.M. Dodson, noted that this “is the climax of years of heavy losses which we are no longer able to absorb.” By giving a week’s notice, it did allow time for one last chance to convince LNC ofGcials to reopen the mines.'*^

The General Committee drafted a 10-point alternative plan, which they made public and presented to LNC owners. Again, the Committee held a rally in the

Tamaqua High School stadium attended by approximately 2,500 citizens. The original ten points were: 1) no change in the working agreement between LNC and the UMW; 2) all mines were to reopen; 3) discontinuance of buying coal from other sources; 4) have only LNC process refuse from culm banks; 5) lower company overhead by selling other

86 interests including water and railroad firms; 6) no restrictions on sales of coal in the

Panther Valley; 7) all losses would be absorbed by miners and businesses in the Panther

Valley; 8) permit a committee of miners and citizens to have access to LNC financial records; 9) active assistance of all employees in making m ining profitable; 10) active involvement from all citizens to increase sale of coal. At the rally, the miners replaced point seven with a proposal that all LNC employees forgo payment for 20 days to build a reserve fund to cover potential losses. A labor-management committee would supervise the fund. The plan was social democratic in its tone and provisions, and the miners hoped that sharing control with LNC managers would save their way of work.

By a standing vote, miners authorized a committee to present their plan to Governor

Fine and ask him to intervene.''®

Fine did inform the company, but to no avail. On 30 June the LC&N Board voted to dissolve LNC, terminating 5,000 employees, 4,500 of who were miners. In a statement, the Board commented that the “request by the so-called citizens committee of

Tamaqua was too tardy, however, to expect that the situation could be changed at that late date. Nothing of a tangible nature which the company could consider came from that meeting.”^’ The company continued to maintain the mines in the hope that another company would lease them.

This led to two major proposals. First, the citizens committee that delivered the

10-point proposal to Governor Fine agreed to become part of the Panther Valley

Industrial Association. The Association then began plans to buy stock in LC&N to gain control of the company. In the meantime, W. Julian Parton left LNC and organized a

87 new company, the Panther Valley Coal Company, which leased the mines still owned

and maintained by LC&N. Parton and the three other owners met with UMW leaders

from the local, district, and national level and agreed to abide by the contract that

existed before the mines closed in May. Panther Valley Coal then began limited

operations in October 1954, bringing about 1,300 men back to the mines. This ended

the local efforts to gain control of the parent company but provided hope for some in the

Panther Valley. It did not last long, however. In 1957, Panther Valley Coal ceased

mining operations as the anthracite market continued to shrink. LC&N razed the

Tamaqua colliery in 1958 and the Coaldale colliery'- in 1962. Mining operations leased

by LC&N continued in the 1960s, but employment and profits in the industry dropped

steadily. This fed into growing state and federal efforts to aid communities

experiencing high unemployment. The next section highlights these developments.'*®

Three aspects o f these events are worth noting. First, miners in Tamaqua fought

to maintain their traditional work patterns and traditional notions o f gender roles.

Furthermore, facing job loss and population decline, they feared a loss of the overall

social and cultural traditions they had established in their communities. These events,

coupled with their testimonies and those of women in the area, reveal these desires.

Second, these workers attempted to exert their wishes in a democratic way. They advocated direct action to protest developments that would mean less control over their work. UMW officials, however, operated in a patronage system that rewarded loyalty to John L. Lewis and discouraged unauthorized action and protest. While the UMW resembled more a fiefdom than a bureaucracy, the result for miners reflected the

88 characterization of the overall labor movement in the 1950s. By this time, unions had

become bureaucratic organizations through which control and decisions generally

flowed from the top. John L. Lewis, Thomas Kennedy, and District 7 president

Brennan, tried to control the unrest in Tamaqua but the local union leaders refused.

These local leaders involved their community and attempted to mobilize the anthracite

region in a mass demonstration against not only union leadership, but also the loss of

autonomy and the social changes involved with industrial transformation. However, the

economic situation of the anthracite industry had deteriorated so much that in the long

run it is unlikely that either position could have saved the miners’ jobs. Rather, worker

protests and appeals from union leaders such as Thomas Kennedy helped draw media

and political attention to the anthracite region, creating further pressure for political

action and resulting in a number of proposals at the state and eventually federal levels

designed to alleviate unemployment. In this, they contributed to state-building efforts

in the 1950s and helped lay the groundwork for the poverty programs of the 1960s.

The State Level: George Leader and PEDA

Although the 1953-54 recession especially hurt mining communities, much of industrial

Pennsylvania suffered. This affected the 1954 gubernatorial election. The Fine

administration’s reluctance to pursue more aggressive polices intersected with a scandal

involving campaign contributions to the Republican Party. Pennsylvania had elected

Republican governors since 1938. But with the deep recession and scandal. Republican calls for austerity and limited action seemed less satisfactory to voters. The Democratic

89 challenger. George M. Leader, promised greater state involvement in social welfare and

the economy. Leader called on and received support from the growing web of state and

national Democratic resources, especially unions. Particularly active were the ILGWU

and the United Steelworkers of America (USW). In addition, African American voters in urban areas such as Pittsburgh and Philadelphia threw their support behind the

Democrats. Leader captured 54 percent of the vote and Democrats controlled the

Pennsylvania House by 14 seats. But Republicans held the Senate 26-24 and the party remained popular in the anthracite region. Lieutenant Governor Lloyd Wood did well there, even taking the distressed area o f Hazleton.'*®

Leader’s inaugural address in January 1955 established the agenda for his administration. “Our great, our over-riding concern, is the economy of Pennsylvania.”

He noted how economic competition between states had accelerated in recent years and that Pennsylvania would have to revitalize its economy. It was necessary for the state and private citizens to support new industries and new energy resources. Echoing the rhetoric of FDR, Leader noted: “We will have a sober respect for experience and tradition, but we will be unafraid of experiment, willing to take risks, ready to adopt bold measures if they promise to advance the interests of the state.” Quoting the Bible,

Leader stated: “Where there is no vision, the people perish.

After his inauguration. Leader moved to develop a plan for economic redevelopment in areas of high unemployment. He tapped a network of experts at the national, state, and local levels, including William L. Batt, Jr., now head o f the Toledo

Industrial Development Council. Batt recommended several programs based on his

90 experience in the Truman administration and in Toledo. He suggested visiting areas of

high unemployment and securing the cooperation of local leaders. This could involve a

series of “Town Meetings” on the economy, similar to those Earl Warren held while

governor of California. Next, Batt urged the creation of a state development corporation

modeled on those in New England. Fourth was the creation of a state-wide economic

development program and support to non-profit development corporations. Finally,

Batt mentioned the state full-employment committees, like those created by Michigan

and other states during the 1949 recession. His help in 1954 led to Batt’s appointment

as Pennsylvania’s Secretary of Labor in 1957.^'

Leader followed this advice almost exactly. On 28 March 1955 he outlined his

“Pennsylvania Plan,” to the General Assembly. Like his inaugural. Leader’s speech and

proposals served as a bridge between the New Deal and later developments in the

Kennedy and Johnson administrations.

We are today declaring war against the shameful waste of human energy and human ability and human capacity to produce, which comes about when men and women find no work when they seek work; when marvelous energy sources like our Pennsylvania coals lie unmined in the ground; when whole communities and regions are seemingly condemned to chronic unemployment, deterioration, and hopelessly prolonged distress.^*

The war against unemployment presaged the Johnson administration’s War on Poverty.

In addition. Leader’s other proposals served as both extensions of the New Deal and

foreshadowed liberal federal programs of the 1960s. Besides an attack on unemployment. Leader wished to promote the expansion of job opportunities, to improve public health, public welfare, and education, to create an efficient government,

91 and to provide clean water and unspoiled landscapes. As it would be for later federal

programs, fundamental to Leader’s plans for Pennsylvania was a growing state

economy. To promote this. Leader offered 10 proposals. Key to the story of area

redevelopment was his proposal for a $20 million State Industrial Development

Authority. The original proposal called for the state to purchase industrial sites, develop

them for use, and then lease them to companies with long-term employment potential.

But $20 million, combined with state power to purchase and perhaps determine

industrial location proved too much for Republicans. In addition, political energy had just been spent on a fight over Leader’s proposal to raise taxes to balance the state budget. As a result. Republicans stopped many pieces of legislation in the state Senate, including the redevelopment proposal.^^

Determined, Leader then set off on a series of town meetings in areas of chronic unemployment. He had promised aid to distressed communities and was fulfilling his pledge. Leader also wanted to gather ideas to revise the redevelopment bill and to build greater public and political support for his programs. Approximately 250 people attended the first meeting in Wilkes-Barre on 24 October. Leader highlighted the programs designed to aid the area, including area redevelopment, mine drainage, urban redevelopment, and coal research. As expected, local union leaders and workers voiced their support for the programs. More significantly, local business leaders also backed these ideas, especially redevelopment. Members of the chambers o f commerce, industrial development groups, and various city officials advocated Leader’s ideas and welcomed federal aid. They informed him about many of the local plans discussed

92 above, including SLIBCO and the Panther Valley Industrial Association. A&t the second

meeting in Johnstown on 25 October, Leader also learned of Western Pennssylvania

programs designed to promote industrial development. In that area, bitumiinous coal

and steel were mainstays of employment. Like anthracite in the East, the bittuminous

industry had been losing jobs since WWII, both because o f fluctuating dem and and the

introduction of new technology that required fewer workers. Steel employrment had

reached its peak and was beginning to decline. The recession of 1954 affectîed the

region greatly and compounded the problems already apparent in eastern Pemnsylvania.

Like such eastern cities as Scranton, Philadelphia, and Wilkes-Barre, both Johnstown

and Pittsburgh had lost population after WWII. The Johnstown Chamber of^ Commerce

had been working on advertising campaigns to attract new industries, while iin

Pittsburgh, mayor and future governor David Lawrence had begun an urban renewal and

environmental clean-up program designed to remove the black smoke that hmmg over the

area and to attract newer industries. In addition, business, financial, and lab o r leaders

began working through development groups to attract new industries.^''

Leader came away from these meetings with models for a new, state—wide program of redevelopment, which the administration offered in February 1956. This version had eight Republican and eight Democratic sponsors and was less inttrusive than the original. The new version requested $5 million for two years and called tfor the creation of the Pennsylvania Industrial Development Authority (PIDA). Meanbers of the agency included the Secretaries of Labor and Industry, Internal Affairs, BBanking, and Commerce; the latter chaired the group. The governor, with consent of tthe Senate,

93 appointed seven other members. This agency would offer loan assistance to private

industrial development groups in areas of high unemployment, defined as a rate of six

percent for the preceding three years, or nine percent for the preceding 18 months. The bill required local groups to provide 20 percent of the total cost of the project and a firm commitment from a tenant. Also, the new or upgraded facility could not be part of a company plan to relocate industry from one area to another. This compromise bill reflected the political situation in Pennsylvania. Conservatives lessened the state’s role through lower financing and increased local responsibility. Liberals made sure the state accepted some responsibility for aiding distressed areas and satisfied unions by inserting the measure against industrial relocation. In one way, the Pennsylvania bill promoted business development, while in another, it resembled a means-tested welfare program for communities. To qualify, unemployment in the labor market had to be at a certain rate, and local groups had to demonstrate their inability to find outside funding. Federal area redevelopment would possess similar characteristics. After the compromise, the bill passed unanimously in the Pennsylvania House and with only two dissenting votes in the Senate. Leader signed it into law on 17 May 1956.^^

As seen in Figure 3.2 below, in PIDA’s first ten years, the General Assembly authorized $61,940,000 in appropriations, spending most of those funds to create an estimated 61,491 jobs. This works out to approximately $1,120 per job — considerably less than comparable welfare payments. Several questions come to mind, which the data presented below, can help answer. First, was there a direct relationship between

94 these new jobs and unemployed miners, steelworkers, and textile workers? Second, did

PIDA help lower unemployment in redevelopment areas? Third, what kind of jobs did

PIDA help create?

Biennium & Appropriations Number Amount of Estimated Planned Fiscal Year o f PEDA Loans Project Cost Employment Projects 1955-57 55,000,000 24 53,904,329 511,859,086 4,047 1957-59 3,000,000 56 7,026,342 23,222,961 9,485 1959-61 11,020,000 70 7,709,423 24,601,434 11,790 1961-62 8,000,000 68 9,533,049 23,918,627 9,090 1962-63 9,000,000 60 9,822,791 24,329,427 8,085 1963-64 12,420,000 87 14,695,914 35,453,533 9,030 1964-65 13,500,000 76 16,162,443 41,628,576 9,964

Totals 561,940,000 441 568,854,291 5185,013,644 61,491

Figure 3.2: PIDA Loan Information, 1955-65. Compiled from Commonwealth of Pennsylvania, Pennsylvania Industrial Development Authority: 35 Years o f Job Creating Loans, 1991.

95 County Total Loans & Commitments Project Cost Planned Employment Projects Allegheny 246 129,267,749 333.547,000 14,063 Blair 106 32,203,529 76,018,259 9.614: Cambria 35 19,210,471 43,882,433 3,349 Erie 130 37,107,696 91,938,530 8,690 Lackawanna 125 62,900,273 167,643,437 14,149 Luzerne 339 140,869,120 388,187,920 32,596 Philadelphia 118 68,029,678 161,754,744 10,953 Schuylkill 117 39,362,938 90,819,534 11,818

Figure 3.3: PIDA Loans to Counties with Redevelopment Areas, 1956 — 1991 . Compiled from Commonwealth of Pennsylvania, Pennsylvania Industrial Development Authority: 35 Years o f Job Creating Loans, 1991.

Labor Market C ounty Labor Market Unemployment 1955 1960 Rate, 1950 (National Rate) Altoona Blair 4.8 (5.3%) 6.7 10.4 (4.4%) (5.5%) Erie Erie 4.1 7.5 9.1 Johnstown Cambria 6.7 10.1 11.9 Philadelphia Philadelphia, et 5.5 6.3 6.0 al. Pittsburgh Allegheny, et al. 6.0 5.5 9.3 Pottsville Schuylkill 11.0 18.5 18.3 Scranton Lackawanna 6.7 13.8 12.0 Wilkes- Luzerne 7.2 12.5 14.6 Barre/Hazleton

Figure 3.4: National and Redevelopment Area Unemployment Rates, 1950 — 1 960. Compiled from PIDA reports and U.S. Department of Labor reports.

96 County Product Planned Employment Blair Candy 70 Copper Tubing 200 Industrial Fasteners 30 Bearings 350 Shoes 100 Cambria Foam Products 200 • Mining Equipment 80 Lackawanna Air Diffusion Equipment 300 Cigars 100 Ordinance 500 Paper Supplies 100 Plastic Products 150 Cabinets 200 Apparel 87 Luzerne Rubber 150 Carts, Racks, Shelves 250 Aircraft Parts 250 Toys 390 Footwear 400 Wire Utensils 50 Commercial Cooking Equipment 115 Cigars 200 Foam Products 310 Paper 300 Cabinets 150 Yam 100 Baked Goods 170 Corrugated Boxes 150 Automobile Equipment 100 Direct Mail 150 Textile Printing . 130 Electronics 2,500 Apparel 600 Fiberglass 195 Pools 630

Figure 3.5: Products Supported Through PIDA Loans in Blair, Cambria, Lackawanna and Luzerne Counties, 1955 — 1961. Source: Commonwealth of Pennsylvania, Pennsylvania Industrial Development Authority: 35 Years o f Job Creating Loans, 1991.

97 Figure 3.3 cites PEDA figures for several counties containing labor markets

designated as redevelopment areas, while Figure 3.4 cites unemplojTiient rates in these

areas as compared to the nation. For most redevelopment areas, the unemployment rate

increased over the 1950s, declined in the late 1960s, and increased again in the 1970s.

In terms of PIDA’s success, despite the millions spent, unemployment in these and

other industrial areas remained higher than average. What type of jobs did PIDA

create? As shown in Figure 3.5, between 1955 and 1961, PEDA supported a variety of

products from electronics to cigars. It is difficult to tell precisely the nature of these new jobs, but most were in the service or light manufacturing sectors, which were typically lower paying and non-unionized areas of the economy. Despite some success, the new jobs could not offset the continued deindustrialization of the older, union- dominated, core industries of Pennsylvania’s economy, and unemployment in the state remained higher than the national average. For example, employment in anthracite mining dropped from 75,000 in 1950 to fewer than 15,000 in 1960. Over the same period, employment in bituminous mining dropped from 85,000 to less than 35,000; textiles from 145,000 to less than 74,000; and railroads from 132,000 to under 81,000.

Throughout the 1950s, Pennsylvania experienced higher than average unemployment.

As noted above, workers, businesses, and community groups responded in a number of ways. Despite the protests, mechanization, and the new industrial plants,

Pennsylvania’s local narratives of poverty and economic stagnation persisted.^® At the state level. Leader had moved beyond Fine’s proposals in recommending a more aggressive program to address the effects of deindustrialization. But programs like

98 PIDA were not enough. Unemployment remained high, and by the late 1950s had

spread to the steel industry towns of western Pennsylvania. As the problem grew worse,

state and local leaders turned to the federal government for assistance.

The experiences of Pennsylvaniai, and those of other states and communities

faced with industrial change, were important to the creation of the ARA. National

recognition of their efforts helped make the ARA possible. Flawed as it was, PIDA

served as a model for the Area Redevelopment Act and Pennsylvania's Secretary of

Labor, William L. Batt, Jr., would become the ARA's administrator. Congressional

representatives from these regions — both Republicans and Democrats — played key

roles in the passage of area redevelopment legislation. In addition, options arose during

these years that included democratic plans for worker involvement in company

management; the case of LNC showed this. But these plans ran aground for a variety of

reasons. By 1954, anthracite demand had dropped sharply and LNC’s parent company

had decided to close its mining operations and look for profits elsewhere. Plans for

worker-led enterprises and mass rallies held no interest for other miners, managers, or

UMW leaders. The end of anthracite mining — resisted up to 1953 — now seemed clear and citizens left the region by the thousands as mining jobs disappeared. At the local and state level, UMW leaders worked to maintain existing contracts and address grievances through bureaucratic channels. Their role in the process of enacting national redevelopment legislation is discussed in the next chapter.

If social democratic solutions failed, methods adopted for addressing deindustrialization relied on a combination of private and public initiatives that

99 resembled one another. Community elites formed private groups to lure new industries

through financial incentives. Public methods, represented by PIDA, also offered

financial incentives to businesses. Although Governor George Leader initially hoped

for a more statist solution, political resistance from Republicans forced a more moderate

creation. State capacity grew, but it did so along lines that preserved the free flow of

capital and owners' right to manage. Decisions regarding industrial location remained

largely with business owners, leaving communities and states to compete with one

another for jobs. Although men and women in Pennsylvania worked diligently in the

years after WWII, areas affected by deindustrialization remained poor relative to a

nation growing materially more prosperous. This came to the attention of national

leaders and served as a crucial element in the creation of federal redevelopment policy,

providing evidence for addressing not only elites but also workers and others at the local

and state levels. Institutions of the state matter, but as Theda Skocpol, notes, so do

social groups who influence the direction of the welfare state.*’ In many ways, the

process unfolding at the local and state levels presaged the one in the national arena, which the next chapter details.

100 NOTES

‘ Leader quote in “Speech Before the General Assembly,” 28 March 1955, “Industrial Development Plan: Releases, 1955-58” folder, box 19, George M. Leader Papers, Pennsylvania State Archives (hereafter referred to as Leader Papers).

" Matheson quote in U.S. Congress, Senate. Area Redevelopment: Hearings Before the Subcommittee on Labor on S. 2663. 84* Cong., 2d. sess., January 4,6,9,23,26 and February 3,9,10, and 24, 1956. Part I, p.71.

^ Donald Miller and Richard E. Sharpless, Kingdom o f Coal: Work, Enterprise, and Ethnic Communities in the Mine Fields (Philadelphia: University o f Pennsylvania Press, 1985), 3-5.

■* See Miller and Sharpless, Kingdom of Coal, Chapters Two and Three.

* William Gudelimas, “The Ethno-Religious Factor Reaches Fruition: The Politics o f Hard Coal, 1945 - 1972,” in David L. Salay, ed..Hard Coal, Hard Times: Ethnicity and Labor in the Anthracite Region (Scranton: The Anthracite Museum Press, 1984), 169-88; Miller and Sharpless,Kingdom o f Coal, 181.

® This paragraph uses the oral histories collected in Thomas Dublin, When the Mines Closed: Stories o f Struggles in Hard Times (Ithaca: Cornell University o f Press, 1998) and John Bodnar,Anthracite People: Families, Unions and Work, 1900 —1940 (Harrisburg: Pennsylvania Historical and Museum Commission, 1983). Salva and Hosey in Bodnar, pages 66 and 13 respectively. Whitecavage and Pavlocak in Dublin, pages 222 and 204 respectively.

’’ An overview o f this debate appears in Michael Kozura’s article “We Stood Our Ground: Anthracite Miners and the Expropriation o f Corporate Property, 1930 - 1941,” in Staughton Lynd, ed.,"We Are All Leaders": The Alternative Unionism of the Early 1930s (Urban a: University o f Illinois Press, 1996), 199- 237. Works positing a pragmatic view include John Bodnar, Anthracite People: Families, Unions and Work, 1900 - 1940 (Harrisburg: Pennsylvania Historical and Museum Commission, 1983) and Ronald M. Benson, “Commentary: The Family Economy and Labor Protest in Industrial America and the Coal and Iron Police in Anthracite Country,” in Salay,Hard Coal, Hard Times. Besides Kozura, Grace Palladino argues against the pragmatic view inAnother Civil War: Labor, Capital and the State in the Anthracite Regions o f Pennsylvania, 1840 — 68 (Urbana: University o f Illinois Press, 1990).

'Dublin, When the Mines Closed, 13.

® W. Julian Parton, The Death o f a Great Company: Reflections on the Decline and Fall o f the Lehigh Coal and Navigation Company (Easton, PA: Center for Canal History and Technology, 1986), 34-5.

Parton, Death of a Great Company, 46-7.

" Kozura, “We Stood Our Ground,” 205-24; Miller and Sharpless,Kingdom o f Coal, 303-11.

** “Resolution,” 27 July 1933, folder 5, box 39, President/District Correspondence, United Mine Workers Papers, Historical Collections and Labor Archives, Penn State University (hereafter UMW-HCLA). Quotation from telegram, J.B. Warriner to John L. Lewis, 12 August 1933, folder 5, box 39, President/District Correspondence, UMW-HCLA. See also Miller and Sharpless, Kingdom of Coal, 309- 101 11 ; Parton, Death o f a Great Company, 47-50; Dublin, When the Mines Closed, 18. Thomas Dublin, “The Equalization of Work: An Alternative Vision of Industrial Capitalism in the Anthracite Region o f Pennsylvania in the 1930s,” inCanal History and Technology Proceedings 13 (March 1994), 81-98.

" Miller and Sharpless, Kingdom o f Coal, 304-11.

'* Lewis, mine owners, and political leaders worked to stabilize the soft coal industry as well. See Melvyn Dubofsky and Warren Van Tine,John L. Lewis: A Biography (New York: Quadrangle, 1977) 187-97; 371-5.

Commonwealth o f Pennsylvania,Report of the Anthracite Coal Industry Commission, Harrisburg, 1938, 9-23. See also Douglas Monroe, “A Decade o f Turmoil: John L. Lewis and the Anthracite Miners, 1926 — 1936,” Ph.D. diss., Georgetown University, 1977, 371-72. Earle was Permsylvania’s first Democratic governor since the 1890s. Riding FDR’s coattails, his administration’s program became known as the Little New Deal. In 1937, Pennsylvania enacted a strong reform program. But allegations o f fi-aud and corruption, as well as internal fighting, resulted in retirni o f state political power to the Republicans after the 1938 elections. Most of the legislative reforms remained, however. For a brief overview, see Richard C. Keller, “Pennsylvania’s Little New Deal,” in John Braeman, Robert H. Bremner, and David Brody, eds.. The New Deal: The State and Local Levels (Columbus: Ohio State University Press, 1975), 45-76.

Newsclipping, “Rehabilitation o f Industry Through State Legislation Recommended by Operators,” 11 February 1949, “Anthracite Coal Conference” folder, carton 10, GM 1159, Papers o f Arthur H. James, PA State Archives.

Parton, Death o f a Great Company, 58-65.

'* Robert H. Zieger, John L. Lewis, Labor Leader (Boston: Twayne Publishers, 1988), 132-49; Parton, Death o f a Great Company, 58-65.

On these developments see M. Elizabeth Sanders, The Regulation of Natural Gas: Policy and Politics, 1938 — 1978 (Philadelphia: Temple University' Press, 1981), and Christopher Castaneda,Regulated Enterprise: Natural Gas Pipelines and Northeastern Markets, 1938 — 1954 (Columbus: Ohio State University Press, 1993).

“ 1946 Annual Report, box 4, Lehigh Coal and Navigation Company Records, PA State Archives (hereafter cited as LNC-PA). See also Minutes, Permsylvania Coal Company, various dates, box 1, Pennsylvania Coal Company Records, PA State Archives.

Report, “Community Programs to Combat Unemployment,” 30 November 1949, “Community and State Unemployment Programs, 1949” folder, box 1, Batt Papers. See alsoNew York Times, 18 October 1949,41.

“ On unemployment and housing, see Gallaway, "Depressed Industrial Areas," 14-15, 63-64., and Femstrom, "A Community Attack," 377. On population see U.S. Department o f Labor, Area Manpower Guidebook, 1957, pp.263-65, and U.S. Department o f Commerce, Population, Labor Force, and Unemployment in Chronically Depressed Areas, 1964, p. 13.

^ "Hard Times in the Hard Coal Coimty,"Business Week, May 22, 1952, 108-12; U.S. Department o f Labor, Area Manpower Guidebook, 265-66. Since 1914, the Scranton Industrial Development Company

1 0 2 (SIDCO) had concentrated on providing capital for local industries that wanted to expand- These efforts met with limited success, and the group reorganized in 1946.

*^"How a City Solves a Job Problem," U.S. News and World Report, D&c&mber 2%, 1951,52-4; "Hard Times in the Hard Coal County,"Business Week, May 22, 1952, 108-12; U.S. Department o f Labor,Area Manpower Guidebook, 265-66.

^ Quote in “Fine Offers to Join Area Group in Appeal to President for Federal Aid to Coal Region,” Tamaqua Evening Courier, 13 April 1954, p.l. On these developments see also “Area Group is Seeking Meet With Governor Fine,” Tamaqua Evening Courier, 8 April 1954, p. 16; “President Promises to Refer Plan to Halt Unemployment in Region to Proper Agencies,”Tamaqua Evening Courier, 12 May 1954, p.l; “Eisenhower Described as Being Sympathetic to Aid Program for Anthracite Area o f Pennsylvania,” Hazleton Standard Sentinel, 12 May 1954, p.l. Charles Weissman to Victor Diehm, President NPEDC, 3 July 1954, “Anthracite Correspondence, General, 1954” folder, box 83, President’s Office, UMW- HCLA. The complete program included: a commission to keep the president informed o f the situation in the region; tax benefits for distressed areas; transfer o f some federal agencies to the area; completion of the Lehigh Valley Flood Control project; placement of atomic energy projects; use o f the anthracite region for industrial dispersion; reforestation; use o f abandoned mines for storage o f defense items; federal help for removing water from mines; expand federal research into the uses o f coal; greater use o f coal in federal buildings; limit imports o f residual oil; and the creation o f a national fuels policy.

“ “Fuel Program is Approved,”Tamaqua Evening Courier, 27 April 1954, p.l. Report, undated, “Labor and Industry” folder. General File, box 24, John S. Fine Papers, PA State Archives.

Report, “An Economic Rehabilitation Proposal for the Northeast Industrial Area o f Pennsylvania,” “Industrial Development Plan, Northeast Industrial Area of PA” folder, box 20, Subject File, 1955 — 1959, Leader Papers.

“ Kenneth C. Wolensky, “’We Are All Equal’: Adult Education and the Transformation o f Pennsylvania’s Wyoming Valley District o f the International Ladies’ Garment Workers’ Union, 1944 — 1963,” Ph.D. diss.. The Pennsylvania State University, 1996, 69-77.

Wolensky, “’We Are All Equal’,” 104-85.

See note 1 above.

Matheson and Chapel quotes in U.S. Congress, Senate,Area Redevelopment: Hearings Before the Subcommittee on Labor on S. 2663, 84* Cong., 2d. sess., 4,6,9,23,26 January and 3,9,10,24 February 1956, Part 1,71 and 422 respectively.

Flood quote in U.S. Congress, Senate, Committee on Banking and Currency,Area Redevelopment Act, Hearings, 86* Cong., l “ sess.. Part 1, 25,26,27 February 1959, 81. On the nature of gender roles in the anthracite region see Kozura, above, as well as John Bodnar,Anthracite People: Families, Unions, and Work, 1900 —1940 (Harrisburg: Pennsylvania Historical and Museum Conunission, 1983).

On gender in 1950s America, see, among others, Elaine Tyler May,Homeward Bound: American Families in the Cold War Era (New York: Basic Books, 1988), Joarme Meyerowitz, ed..Not June Cleaver: Women and Gender in Postwar America, 1945 —1960 (Philadelphia: Temple University Press, 1994), and Michael Kimmel, Manhood in America: A Cultural History (New York: The Free Press, 1996).

103 ^ Quote in report from Kidd to Lewis, 4 November 1953, folder 24, box 41, President/District Correspondence, UMW-HCLA. On the December walkout see William J. Walton to Lewis, 9 December 1953, and Lewis to Watson, 10 December 1953, in folder 24, box 41, President/District Correspondence, UMW-HCLA. On LNC’s losses see 1953 Annual Report, box 5, LNC-PA; Parton, Death o f a Great Company, 41; and “LNCC Suspends All Panther Valley Mines Indefinitely,” 4 May 1953,Hazleton Standard-Serainel, p.l.

William Erbe, Local 1571 Secretary to Keimedy, 12 May 1953; Kennedy to Erbe, 13 May 1953; Kennedy to Millard Dodson, LC&N President, 28 May 1953. All in folder 27, box 41, President/District Correspondence, UMW-HCLA. Quote from Kennedy to Dodson letter.

“Kennedy Met Valley Men,”Tamaqua Evening Courier, p.l, 21 May 1954. Parton letter,Tamaqua Evening Courier, p. 4,29 May 1954. See also Parton,Death o f a Great Company, 86-7.

Kennedy quote in “Mine Locals Meeting Today to Discuss Return to Work,"Tamaqua Evening Courier, p. 1, 1 June 1954.

Lewis to Erbe, 2 June 1954, folder 27, box 41, President/District Correspondence, UMW-HCLA. Local newspapers followed the events closely.

” “General Mine Votes to Work Monday Under ‘General Working Agreement,’” p .l,Tamaqua Evening Courier, 5 June 1954.

“Pickets Halt Reopening o f Mines,”Tamaqua Evening Courier, p.l, 7 June 1954.

■*' “Mine Situation Discussed at Meeting in Lansford,”Tamaqua Evening Courier, p .l, 9 June 1954.

Memo, 15 June 1954, folder 27, box 41, President/District Correspondence, UMW-HCLA. See also “Valley Group Meets Lewis in Hazleton,”Tamaqua Evening Courier, p.l, 18 June 1954 and “Local Will Get Report Tonight on Conference in Hazleton,”Tamaqua Evening Courier, p.l, 19 June 1954.

“Valley Miners Will Seek Meeting With Pres. Eisenhower, Gov. Fine,” p.l,Tamaqua Evening Courier, 21 June 1954. Need to insert Hazleton papers here.

“LNC President to Make Report on Situation at Meeting,” p .l,Tamaqua Evening Courier, 22 June 1954.

“LNC Mines Closed Permanently by LC&N Board,”Tamaqua Evening Courier, p. 1, 23 June 1954.

“Miners Offer New Proposal to Open Mines in Panther Valley,”Tamaqua Evening Courier, 28 June 1954, p .l.

“LNC Board Closes Affairs,”Tamaqua Evening Courier, p .l, 1 July 1954.

“Committee o f 100 to Direct Fight to Get Valley Mines Opened,”Tamaqua Evening Courier, p .l, 21 July 1954; “New Firm Will Lease Lansford Mine District,”Tamaqua Evening Courier, p.l, 6 August 1954; “All Valley Local Unions Approve Leasing Lansford Mine District,”Tamaqua Evening Courier, p .l, 10 Augqst 1954; Parton, Death of a Great Company, 114-28; Annual Reports, 1954 — 1963, box 4, LNC-PA.

104 “Negroes Win Election for Democrats,”Philadelphia Tribune, 6 November 1954, p.l; Roy R. Glashan, ed., American Governors and Gubernatorial Elections, 1775 — 1978 (Westport, CT: Meckler Books, 1979), 262; “Summary o f Election in Greater Hazleton Area,”Hazleton StandardSentinel, 3 November 1954, p.l; Paul B. Beers, Pennsylvania Politics Today and Yesterday: The Tolerable Accommodation (University Park: The Pennsylvania State University Press, 1980), 216.

Press release, “Inaugural Address o f Governor George M. Leader,” 18 January 1955, “Inauguration Address” folder, box 19, Subject File, 1955 — 1959, Leader Papers.

Batt sent copies o f his ideas to both Leader and the newly-elected Democratic Governor o f New York, Averill Harriman. Batt to Leader, 12 November 1954, “Industrial Development Plan, Correspondence B” folder, box 19, Subject Files 1955 — 1959, Leader Papers. Batt replaced John Torquato after Leader ousted Torquato for maintaining state workers through a secret patronage fund. See Beers,Pennsylvania Politics, 209-10.

See note 1 above.

The other nine were: 1) a State Planning Agency to interpret the future, recommend steps to continue growing; non-partisan Board, reports to governor; this can be part o f the House Bill 1, Reorganization Bill; if not will submit separate bill. 2) also approval o f the Department o f Commerce plan to reorganize, to include divisions o f Industrial Development, Community Development, Travel and Vacation, Reference and Research. 3) separate Economic Development Advisory Board, industry and finance leaders. 4) proposal to aid community groups working for industrial expansion, $1,000,000. 5) promote water protection and usage through working with Great Lakes Compact and working w/ New Jersey in mutual usage o f Delaware. 6) flood control in anthracite areas; 7) coal research board to approve research on usage o f coal. 8) support for highway construction. 9) support for urban renewal.

^ “Minutes o f Conference on Governor’s Industrial Development Plan,” 25 October 1955, “Industrial Development Plan” folder, box 19, Leader Papers.

“Speech Before the General Assembly,” 28 March 1955 and press release, 7 February 1956, both in “Industrial Development Plan: Releases, 1955-58” folder, box 19, Leader Papers.

“ "Resolution: Senate o f Pennsylvania," p. 208; and PEDA report, "Summary o f Loan Activities," p. 749, in U.S. Congress, Senate, Banking and Currency Committee. Area Redevelopment — 1961: Hearings Before the Committee on Banking and Currency, 87th Cong., 1st sess., 18,19,26 January and 20 February 1961.

” See Theda Skocpol,Protecting Soldiers and Mothers, 41.

105 CHAPTER 4

CREATING THE AREA REDEVELOPMENT ADMINISTRATION, 1953 - 1961

“Senator, we are now in a sense trying to revitalize the broad visionary vision of economic growth on a regional and area basis such as was being developed during the mid-193 Os when the concept of regional planning flourished.” Solomon Barkin, 1956*

“Here we have an attempt to substitute the judgment of the Federal Government for the judgment of our flree enterprise system, regardless of the economic consequences.” J. William Fulbright, 1958^

Introduction

The local and state responses to economic difEculties outlined in Pennsylvania occurred concurrently with those at the federal level. In the years after WWII, local and state activists, such as Min Matheson and William L. Batt, Jr., exposed both national policymakers and the media to alternative narratives of progress and prosperity.

National elites and organizations also began their own discovery of poverty and unemployment. As on the local and state levels, national redevelopment was part of this and brought together various individuals, political parties, and interest groups. Brought on by the recession following the Korean War, events associated with redevelopment

106 accelerated as unemployment increased pressure for a political response. Between 1954

and 1961, members of Congress revived legislative efforts to alleviate structural

unemployment, while the Eisenhower administration put forth its own plan to promote

economic growth in areas of chronic unemployment. Eventually, a bill sponsored by

liberal Senate Democrat Paul Douglas of Illinois became the centerpiece of efforts to

create federal redevelopment legislation.

This chapter provides an examination of the policymaking process at the

national level, highlighting debates among intellectuals, interest groups, the media, and

government ofBcials over unemployment, poverty, and economic transformation.

Michael Harrington’s 1962 work The Other America serves as a metaphor for how many postwar Americans viewed the people and the regions affected by these issues.^

These debates were not only over redevelopment and the issues surrounding it, but also over the meaning o f American progress and prosperity and the proper role of the state in addressing what many saw as the “other America.” National leaders both created and reacted to an increasing awareness of poverty and unemployment and their responses serve as documentation of state building in the period between the New Deal and Great

Society. Examining area redevelopment highlights how national elites developed both the intellectual and administrative capacity to attack poverty and expand the welfare state in these decades.

The chapter is in two sections. The first examines the initial federal legislative offerings that established the political and intellectual differences around which debates over area redevelopment would revolve. Senator Paul Douglas introduced the major

107 Democratic version of redevelopment policy in 1955, a manifestation of the connections

between efforts in the 1930s to promote economic planning and development those

under the Great Society. Some scholars have argued that after WWII liberals retreated

from issues of national planning and instead focused on overall growth, benefits for

workers, and (later) rights for minorities and women. But many continued to move

along both fronts, and their efforts related to area redevelopment served to create those

links between earlier and later federal programs. Besides Douglas, one of the more

significant was Solomon Barkin, Research Director for the Textile Workers Union. An

active New Dealer, Barkin maintained his original interest in aggressive federal action

in areas of political economy. Also drawing him into area redevelopment legislation

was his position as advocate for textile workers, an industry experiencing

deindustriahzation in the northeast. As he said to Paul Douglas during hearings on the first Area Redevelopment Act: “Senator, we are now in a sense trying to revitalize the broad visionary vision of economic growth on a regional and area basis such as was being developed during the mid-1930s when the concept of regional planning flourished.” Barkin serves as a reminder that ideas of economic planning, carried out by close interaction of public and private leadership, continued into postwar America at the local, state, and federal levels. These efforts at regional planning and coordination flowed into proposals for area redevelopment, which in turn became part of the Great

Society."

Though liberals led the way in promoting continued interest in area redevelopment, in the 1950s, moderates in the Republican party also lent their support,

108 which indicates the degree to which New Deal-style policies had become politically

acceptable. While Republicans in Congress and the Eisenhower administration

developed more moderate proposals, they also built on earlier state and local efforts. As

such, the differences between their proposal and those of Paul Douglas proved to be ones of degree, not of kind. They offered loans and grants to businesses and community groups and were sensitive to the issue of federalism by requiring local groups to first develop programs and secure a portion of the funding before federal assistance became available. Nonetheless, debates were vigorous and two firontlines became established.

The second section of the chapter follows the legislative battles that culminated in passage of the Area Redevelopment Act in 1961, the first major piece of legislation in

John F. Kennedy’s New Frontier.

Establishing the Frontlines: Democratic and Republican Versions of Area

Redevelop ment, 1954-56

As the post-Korea recession continued into 1954, congressional leaders renewed their legislative efforts to promote area redevelopment. By the end of the year, the

Department of Labor had classified 48 major labor market areas and over 100 smaller ones has having substantial labor surplus. This was part of a longer-term trend that saw the number of recorded areas with labor surplus rise firom 40 to 264 between 1952 and

1959. Congressional efforts began in the House when representatives firom two distressed communities introduced redevelopment legislation. A measure introduced in

May 1954 by Democrat Thomas J. Lane, of Lawrence, Massachusetts, proposed a $50

109 million federal loan fund to assist local nonprofit corporations to construct new factory buildings. Lawrence had suffered firom changes in the textile industry, as many firms reduced or closed operations, or moved them out of New England. In June, Republican

James A. Van Zandt of Altoona, Pennsylvania, proposed public works spending for industrial areas experiencing unemployment over 12 percent. Altoona was a center for railroad manufacture and repair and had sufiered in the postwar years as locomotives moved firom steam power to diesel. Changes in the coal and apparel industry also weakened the city’s economic base. But neither the White House nor the Republican majority in both houses of Congress showed interest in pursuing federal redevelopment programs, and neither bill passed.^

Democrats used the economic slowdown as a campaign issue in that year’s elections. They portrayed the Republicans as the party of big business, unconcerned with the plight of the unemployed. Eisenhower’s Defense Secretary Charles Wilson did not help the Republican cause. When asked at a Detroit news conference about aid for distressed areas, Wilson urged people to move to where jobs were available. He added:

“I’ve always liked bird dogs better than kennel-fed dogs myself. You know, one who’ll get out and hunt for food rather than sit on his fanny and yell.”® These words helped

Democrat Pat McNamara win the Senate race in Michigan.

In Illinois, 63 year-old Senator Paul Douglas was running for reelection against conservative Republican Joseph T. Meek. Elected to the Senate in 1948, Douglas was an economist and past president of the American Economic Association. Until 1954, he had shown no particular interest in depressed areas. For example, in his 1952 book

1 10 Economy in the National Government, Douglas argued for a balanced budget and

against running a federal deficit until national unemployment had reached eight

percent/ However, he connected his drive for economy with his belief in the necessity

of the state and in doing so provided an interesting intellectual connection between post-

WWn liberals and Progressivism, and presaged his later support for area

redevelopment. True liberalism, Douglas argued, “believes that men and women should

be given a full opportunity to grow and to develop and that it is a proper function o f the

state to help provide some of the means for obtaining a good life.”® He went on to note that “we have come to realize that people, particularly children need protection against overwork, ill-health, hunger, and slum housing. While the primary responsibility for choice should always be placed upon the individual, the community can help to provide better and better opportunities for exercising these choices.”® Such ideas were reminiscent of “social progressivism,” the notion that the state and community held a responsibility for issues such as improving the quality of life for children and families, for providing safer working conditions, assimilating immigrants, and for mitigating against the inequities of market capitalism.Aside firom assimilating immigrants, these concerns lay at the heart o f New Deal reforms and those that surfaced during the Fair

Deal, the New Frontier, and the Great Society. Douglas’s thoughts epitomized the connection between these reforms and after 1954 they infused his support for area redevelopment. During his campaign swing through the coal communities of southern

Illinois, Douglas witnessed first-hand the efiects of deindustrialization. Like coal communities in the eastern United States, those in southern Illinois experienced similar

111 economic and social changes as fluctuating demand and technological changes

increased unemployment. The 1954 recession devastated this area, with unemployment

reaching nearly 20 percent. After witnessing the devastation, Douglas vowed to secure federal aid for the region and he did so upon his return to the Senate."

Contrary to his original intentions, during 1954 Eisenhower used his personal popularity and campaigned actively for Republican candidates. Emphasizing overall economic growth and prosperity, he also signed legislation that broadened Social

Security and unemployment compensation and aided highway construction. But he angered many labor leaders by authorizing the continuation of the reciprocal trade agreement for another year, which unions saw as abetting deindustrialization. Despite

Eisenhower’s personal popularity, the 1954 elections renewed Democratic control of

Congress. They held a majority in the Senate (48-47 with one independent) and the

House (232 to 203). Democrats also held a majority of govemorships, 27 to 21.’^

Although slim. Democratic control of Congress provided new energy for research in areas of unemployment and poverty, which served to identify further the problems of deindustrialization and publicize them to a wider audience. The Joint

Economic Committee (JEC) became a springboard for federal activity as Paul Douglas became its leader. As noted earlier, the JEC was an outgrowth of the Employment Act of 1946 and along with the Council of Economic Advisors (CEA), the JEC served to bring social science closer to federal policymaking. In the hands of Democrats for most of the 1950s, the JEC served as a liberal legislative voice in contrast to the executive conservatism of Eisenhower. In January 1955, the JEC issued a unanimous statement

112 urging greater federal involvement in aiding distressed communities and in October,

Wright Patman (D-TX), chair of the JEC Subcommittee on Economic Stabilization, held hearings on automation and technological change. That same year Senator

Matthew Neely (D-WV) chaired hearings on the economic difficulties of several declining industries, including coal, textiles, and railroads, while Alabama Senator John

Sparkman, the 1952 Democratic Vice-Presidential candidate, chaired a set of hearings on low-income rural families. All three would later support area redevelopment legislation.*^

These congressional initiatives regarding unemployment and area redevelopment were part of a widening concern in the 1950s with poverty. While attention may not have been as widespread as it would be in the 1960s, these issues occupied an increasingly significant amount of attention firom national leaders. Citizens and leaders at the local and state level were already engaged in battles against poverty and unemployment. What prompted this development? As shown in Pennsylvania, declining industries, outmigration, and feminization of the workforce contributed to efforts to combat these trends through local and state development agencies. In large cities like Cleveland, increasing unemployment and poverty within the inner city generated similar efforts to combat the growing crisis. In the South, attention to civil rights also highlighted poverty and employment problems just as community and state leaders in the region continued their efforts to create economic development programs.

Present in all these efforts was a growing realization that the prosperity that seemed so common to Americans in the 1950s was not reaching the people of these communities.

113 As Michael Harrington wrote, they were becoming the “other America” who “remained

impoverished in spite of increasing productivity and the creation of the welfare state.”*'*

Within this widening concern for poverty and possessimg confidence fi-om

electoral victory, Douglas and his staff prepared legislation. Frank McCulloch,

Douglas’ staff assistant, organized a task force headed by Solomon Barkin, Research

Director for the Textile Workers Union of America (TWUA) and William L. Batt, Jr.,

who had resigned firom the Labor Department and gone on to lead the Toledo Industrial

Development Council. Batt had organized a community response to the recession of

1953-54, which modeled on a local level what would happen in Permsylvania and

through the ARA. Working with these three were Prentiss Brown, head of Detroit

Edison and onetime Senator and Governor of Michigan, and Sar Levitan, an economist for the Legislative Reference Service of the Library of Congress, who would go on to write the major study of the depressed areas issue.

Of all labor leaders, Barkin was the only one directly involved in creating area redevelopment legislation and was most active in seeing it through to passage in 1961.

Like Batt, Barkin began his public career in the Roosevelt administration. While working on his dissertation at Columbia (which he never finished) he became a researcher for the New York State Commission on Old Age Security. In 1933, he became an analyst in the New Deal’s National Recovery Administration (NRA), where he worked with NRA board member Sidney Hillman, head of the Amalgamated

Clothing Workers Union. In 1937, Hillman offered Barkin a job as research director for the Textile Workers Organizing Committee (TWOC) (which Hillman had just created).

114 Barkin continued in the post after 1939 when TWOC merged with the United Textile

Workers to become the TWUA. He later served in the Organization for Economic

Cooperation and Development and then as professor of economics at the University of

Massachusetts at Amherst.'^

Barkin's interest in redevelopment grew from two main intellectual sources.

First, while in college in the 1920s he was introduced to socialist ideas, although he

never joined the Socialist or Communist Party. Second, he studied institutional

economics at Columbia, whose faculty provided a critical approach to the free market

and emphasized the importance of unions to industrial democracy. While a New Dealer

and TWUA official, Barkin came to believe in planning and pushed for closer

interaction between business, government, and labor to develop national economic

policies. These beliefs shaped his approach to the decline in the New England textile

industry and area redevelopment.

In the early 1940s, Barkin proposed a regional plan for New England’s

economic growth coupled with an aggressive program of Southern industrialization.

While Barkin worried about the flight of textile firms from the unionized northeast to

the non-union South, he also hoped to restructure both regions and thereby create a

viable, high-wage, unionized national market. This formed the basis o f efforts to

organize the South by the Congress of Industrial Organizations (CIO) after WWII.

Dubbed “Operation Dixie”, the 1946 drive largely failed, but Barkin went ahead with programs for regional planning. Though he maintained a hope for nationally coordinated programs, in the next few years he concentrated on New England. In 1947

115 he proposed a plan to address the downfall of the textile industry and tried to convince

state and national CIO leaders to take the lead in developing proposals. But state CIO

leaders moved slowly toward action and it was not until 1950 that the New England

state CIO councils adopted Barkin’s idea, urging legislators from the region to work

together to promote economic development. These ideas went nowhere, however, as

legislators failed to cooperate and business owners in the New England textile industry

resisted proposals generated by unions. Barkin did persuade the Council of Economic

Advisors and the National Planning Association to conduct studies of the New England textile industry, though they were not published until 1953 and 1954.’’

As unemployment grew in the New England mill towns, Barkin continued to offer ways to connect textile industry problems with those in other communities across the nation. At a TWUA staff meeting in October 1952, Barkin proposed a national redevelopment program built on federal assistance to these distressed areas. As with his earlier proposals, he encountered difficulty in persuading legislators and the CIO leadership of the soundness of his ideas. CIO leaders interpreted Barkin’s plan as special pleading for one industry, while New England legislators doubted the national viability of such a proposal. Indeed, as early as the 1930s, CIO leaders had decided not to pursue aggressive challenges to technological change.’® Barkin continued meeting with congressional leaders representing distressed areas and by 1954 the political winds were shifting. Following his victory, Paul Douglas, his staff, Batt, and Barkin studied state and local level plans to attack chronic unemployment. The legislation they created merged the early legislative efforts in Pennsylvania with those in New England and

116 Douglas submitted the Depressed Areas Act in the Senate on 28 July. This bill was the

first version of what would soon become the Area Redevelopment Act.’®

S. 2663, co-sponsored by key Democratic Senators including John F. Kennedy,

Estes Kefauver of Tennessee, and Hubert Humphrey o f Minnesota, expanded executive

authority at the expense of the legislative branch and bypassed state governments by

connecting local groups directly to the federal government. It did so through a

Depressed Areas Administration within the executive, headed by an administrator

appointed by the president. The administrator would have the power to appoint a local

industrial development committee to plan industrial and commercial construction.

Funding for the agency would come direct from the Treasury Department rather than

through yearly congressional appropriation hearings. The heart of the proposal was a

series o f programs designed to aid distressed communities, which included: 1) a $100

million loan fund to finance the construction of industrial facilities; 2) a $100 million

fund for grants and loans to construct community facilities; 3) preference to distressed

areas for government procurement; 4) dissemination o f technical information to assist in

community redevelopment; 5) accelerated tax amortization for plant construction in

distressed areas; 6) vocational training; 7) unemployment compensation for workers in

training programs; and, 8) surplus food distribution. The original Douglas bill defined

depressed regions as urban areas with average unemployment of six percent for three

years, or nine percent for eighteen months. These were high criteria relative to the unemployment rate at that time, which hovered near three percent.^”

117 The bill emerged within a national political context o f bi-partisanship. With

Democratic control o f Congress, Lyndon Johnson became majority leader in the Senate.

As he had done as minority leader, he sought to keep the Democrats united by steering a

middle course between liberals (or “bomb throwers” as he called them) and Southern

conservatives. He saw this as especially necessary with such a slim control of the

Senate and with Eisenhower in the White House. Indeed, Eisenhower seemed willing to

leave most New Deal and Fair Deal measures in place, while moderates like Johnson and most liberals shared the Republican’s commitment to anti-communism and national security. Such a political context in 1955 meant that liberal proposals like Douglas’s original area redevelopment bill would be pared back in the first of several compromises that would alter the federal response to industrial transformation.^*

The Eisenhower Administration Responds, 1953 —1956

In his first State of the Union address, Eisenhower characterized his agenda as the

“middle way between untrammeled freedom of the individual and the demands for the welfare of the whole Nation.” He hoped his administration would “avoid government by bureaucracy as carefully as it avoids neglect of the helpless.” Occupying the middle groimd was Eisenhower’s way of both keeping the Republican Party united and maintaining popular support. Focusing on the New Deal before it and the Great Society after, many have characterized the 1950s as a decade of complacency, when Americans ignored domestic problems and pursued material gains. In this view, Eisenhower and the Republicans were to blame for the lack of policy initiatives that extended the

118 welfare state or addressed growing racial tension. On the other side, some scholars have

contrasted the 1950s with the turbulence of the 1960s and early 1970s and chosen to

emphasize the apparent optimism and confidence of Americans after WWII, made possible through economic prosperity and social stability. In this light, Eisenhower emerges as the right person for the times, moderate, even-handed, and able to deal effectively with foreign affairs. Such scholars see Eisenhower’s moderation in addressing social issues as evidence of his wisdom and use it to offer negative interpretations of the social protest and liberalism of the 1960s."

Given his personality and his mandate, it is unreasonable to assume Eisenhower would do more or less than he did regarding domestic issues. Eisenhower did not pursue an activist domestic agenda as many liberals had hoped; nor did he wipe away the federal welfare state developed in the 1930s and 1940s as many conservatives had hoped. Initially, Eisenhower’s domestic policy agenda centered on the economic goals of price stability and high productivity; in turn, he believed these would bring greater prosperity and assuage social conflicts. There was no formula for activism in redistributing power, let alone wealth, since for Eisenhower, federal domestic intervention was a last resort should voluntarism fail.^

Interestingly, in many ways Eisenhower’s philosophy on political economy differed little firom Truman's. While Truman emphasized social welfare and economic groAvth, he also insisted on a balanced budget, which he achieved three times during his presidency. Unlike many liberals, Truman had mixed relations with organized labor.

Eisenhower's rhetoric emphasized firee enterprise but he resisted dismantling the New

119 Deal system. Like Truman, he also worked to balance the budget and fight inflation

while promoting economic growth. In 1953, Eisenhower fought to preserve the CEA

amidst conservative attempts to dismantle the agency and he reconstituted it under

economist Arthur Bums. With Eisenhower’s support. Bums carried the legacy of the

Employment Act forward by creating the Advisory Board on Economic Growth and

Stability (ABEGS), a cabinet group dedicated to discussing and coordinating policies to

promote economic growth without inflation. To highlight further his concem with

economic growth, Eisenhower made the Treasury Secretary part of the National

Security Council."'* Regarding unions, Eisenhower did little to advance the goals of

organized labor and he supported efforts by business leaders in the 1950s to resist the

power of unions.^

While business worked to erode labor’s gains in the 1950s, on the broad

question of state involvement with the economy, moderates and liberals had grown

closer in their approach, their rhetoric highlighting differences of degree not kind. The

debates between Republican and Democratic versions of area redevelopment highlighted below showed this. But neither version of redevelopment substantially attacked the problems of industrial transformation. Thus, regarding area redevelopment and the industrial transformations underway in the 1950s, both Eisenhower and congressional leaders shoulder responsibility for the limited nature of the policies and programs developed and the consequences that followed.

It was in the context of this moderation that the Eisenhower administration approached the issue of distressed areas. While willing to accede to some liberal goals,

120 Eisenhower would not compromise on the issue of redevelopment. In August 1953 he

authorized the creation of the Commission on Foreign Economic Policy to review the

effects of imports and exports on American workers and industries. Known popularly

as the Randall Commission (after its Chair, Charles Randall of Inland Steel), the group

of senators, representatives, business executives, and labor leaders held hearings and in

January 1954 issued the majority’s conservative recommendations as well as those of the liberal minority. Written by WilHam L. Batt, Jr., who had resigned from the

Department of Labor, and submitted by USW President David J. McDonald, the minority opinion recommended stronger government aid for workers, industries, and communities hurt by tariff changes. “Unemployment caused by Government action, as in the lowering of tariffs, should be of particular concem to the Government.” For businesses, Batt and McDonald argued for technical assistance and financing to expand, diversify, or create new firms, accelerated tax amiortization for new plant and equipment, and special consideration for government contracts. For workers, they urged counseling and placement assistance, training and moving allowances, extension of unemployment compensation, and early eligib ility of retirement benefits for unemployable older workers displaced by imports. Finally, they encouraged the expansion of fast-growing industries into areas o f high unemployment.'®

The conservative majority dismissed such, actions. “The Commission.. .could not recommend the proposal to the Government for the reason that no matter how great our sympathy may be for the problems of a displaced worker, or those o f a business with a shrinking volume, this is but one phase of a much broader problem.” “In a free

121 economy, some displacement of workers and some injury to institutions is unavoidable.” The majority called sufficient the existing federal programs in areas of unemployment, training, and technical assistance. Overall, the Commission recommended continuation of lowering tariff barriers as a means to promote economic expansion."’

Despite the conservative majority report from the Randall Commission, beginning in January 1954, the cabinet group ABEGS began considering the issue of depressed areas at its regular meetings. Between 1954 and 1955, their thoughts and those of the CEA began to resemble the liberal view that sought more federal action for distressed areas. Originally, ABEGS did not recommend new programs, only consolidating information for all government programs within the Department of

Commerce.^® But pressure built throughout the year. Workers, business owners, and political leaders from Pennsylvania demanded federal assistance for communities struggling with high imemployment. The media exposed Pennsylvania’s efforts as well as those in other states in promoting development. Labor leaders also continued to pressure the Eisenhower administration for federal assistance. In response, during the summer o f 1954, Bums established a CEA task force on distressed areas and in January

1955, Eisenhower recommended increasing the budget of Commerce’s Area

Development Division from $120,000 to $340,000 per year. Congressional Democrats rejected the offer as inadequate."®

Beginning in May 1955, both the task force and Bums developed several drafts for a specific bill to aid distressed areas. Using similar methods undertaken at the local

122 and state levels, the original plan called for the creation of a federal agency that would

offer grants, loans and technical assistance to either local, state, or regional agencies

devoted to developing distressed areas. The money could be used for items such as

planning, constructing new factories or infrastructure, and worker training. Local

committees would have to raise forty percent o f the project cost, with ten percent from

the state and fifty percent from the federal government. The new agency would approve

all projects before providing assistance.^" In ensuing discussions, various administration

officials weighed in on the proposal. As expected, conservatives urged a limited

program. Gabriel Hauge, economist and Eisenhower’s Administrative Assistant for

economic affairs, wrote to Bums: “I doubt the wisdom of establishing a Federal

Development Agency. We might rather consider upgrading what we have.”^'

Commerce officials concurred, suggesting that existing agencies should be drafted into

providing more to aid distressed areas. Moreover, the Eisenhower administration

should avoid competing with state development committees, or at a minimum require

greater participation on their part.^^ Meanwhile, moderates, mostly from the Labor

Department, argued for a separate office within an existing Department and greater

funds. Arthur Larson, Under Secretary of Labor, believed the original $25 million was

“far too small” and that “ a fund of something like $250 million would be required to achieve substantial results.” In addition, Larson lobbied for a greater federal contribution, upwards of seventy-five percent if necessary. Such ideas placed the proposed plan closer to the one introduced by Senator Douglas in July.^^

123 On 24 October 1955, from Eisenhower's bedside (as the President recuperated from a September heart attack) Bums announced the "Point Four Program" for the domestic economy, part of which became S. 2892, the Area Assistance Act introduced in January 1956 by H. Alexander Smith (R-NJ) and nineteen other Republicans. The

Eisenhower bill incorporated the various viewpoints expressed by administration officials, though it reflected more the conservative outlook. Overall, it provided less money than the Douglas bill ($50 million as opposed to $390 million), and offered less federal participation in loans and higher interest rates. Heeding the conservative advice, the bill placed administration of the program in the Commerce Department, rather than with an independent agency. It did recommend the creation of local and state agencies to promote industrial development, though it expected these groups to furnish most of the financing for proposed projects.^'*

Though fiscally and administratively more conservative than the Douglas plan, the Administration’s proposal adopted the language and imagery already prevalent in redevelopment discourse. Discussing the bül with the Cabinet in October 1955, Bums noted that “communities suffering from chronic depression often lack the initiative, the imagination, the technical knowledge for devising workable plans to attract new industry.” These were more important than the shortage of capital and that to “meet this lack, moral leadership and technical assistance must come from the outside.” Bums envisioned a person from “within the business world” who could “inspire local enthusiasm and mobilize civic-minded business people on a local level.” As it had become with liberals. Republican redevelopment was both an economic and a spiritual

124 issue, imbued with medical metaphors and necessitating a regeneration of community

morals and health guided by experts culled from business and govemment.^^

Thus by 1956, both the liberals and the moderates had presented national

legislative plans to aid distressed areas. While there were differences in the

recommendations, both sides held much in. common. They agreed on the need for

federal involvement in structural issues regarding local and regional labor markets and

used similar language in describing these communities that made up the “other

America” Michael Harrington would examine. However, battles over this piece of

seemingly mild legislation continued over the next five years, and although Congress managed to pass two versions of Paul Douglas’ Area Redevelopment Act, Eisenhower vetoed both. It was not until John F. Kennedy became president in 1961 that the Area

Redevelopment Act became law. Along th.e way, the debates highlighted key issues in post-WWII American political culture and revealed further continuities with earlier episodes of reform.

The Political Battle for Area Redevelopment, Part 2: 1956 — 1961

The Eisenhower administration introduced its measure just as the Democrats began hearings on the revised Douglas bill. To dramatize the situation and build public support for the Democratic program, the Senate Labor subcommittee held hearings in

Washington, D.C. and in states with distressed areas, including Pennsylvania, West

Virginia, Illinois, and Massachusetts. Testimony from workers, political leaders, and business owners revealed the many local and state-level threads woven into this story of

1 2 5 economic and social transformation. These hearings also reveal the political battles

over social policy and offer insight into the minds o f national elites as they grappled

with persistent unemployment.

The interest groups, political leaders, and intellectuals which came together to

support area redevelopment served as the liberal core for developments in national

social and economic policy between the New Deal and the Great Society. These groups

were also the heart of the Democratic Party and defined American liberalism firom the

1930s onward. As they involved themselves in social and economic issues they met

with activists and other elites at the local and state levels. Together, these leaders tried

to extend and solidify the New Deal order. In addition to issues such as civil rights,

education, and housing, these liberal elites sought aid to the unemployed through area

redevelopment proposals. The debates fought over area redevelopment were a key part

in the opening skirmishes of America's latest War on Poverty.

Organized labor was key to this coalition and in addition to representatives firom

the TWUA and the United Mine Workers (UMW), those firom the recently merged

AFL-CIO, United Autoworkers (UAW) and the United Steelworkers (USW) played a

prominent role. While Barkin was involved in drafting legislation, those fi-om other

labor organizations donated resources, publicized the need for the ARA, and testified in

favor of the legislation. Chapter 3 analyzed the role of the UMW and showed the

contradictory nature of their actions regarding deindustrialization. During the process o f making area redevelopment law, UMW leaders joined those fi-om other unions to support the legislation.

126 One of the most active was the CIO. After its inception in 1935 the CIO led the

reinvigoration of the labor movement by achieving union recognition in key industries

such as automobiles and steel. Federal legislation in the 1930s helped solidify these

gains and establish organized labor as a political force. During WWII, the CIO

advocated more corporatist ideas, which meant giving organized labor a voice in

production goals and investment decisions, as well as greater national economic

planning by business, government, and labor leaders. In 1943 the CIO’s Executive

Board created a political action committee (PAC) to pursue both practical benefits for

workers and these larger social democratic goals.^®

After WWH, however, the political and social situation changed, making more radical approaches impossible. Business leaders became more confident and resisted efforts to control their pricing and production decisions. Public political preferences as measured by elections became more conservative, giving Congress to the Republicans in 1946 and the presidency to Dwight D. Eisenhower in 1952 and 1956. Many

Republicans sought to roll back New Deal programs and orchestrated passage o f Taft-

Hartley in 1947, which became law over Truman’s veto. The Act made it more difficult for unions to organize workers by allowing states to pass “right to work” laws banning the union shop, imposing restrictions on the right to strike, requiring union leaders to swear they were not communists, and requiring unions to publish annual financial reports. The Cold War and the wave of anti-communism that came with it squelched more leftist political ideas and most of organized labor retreated firom social democratic positions established during WWII. Beginning in the late 1940s, the CIO purged itself

127 of communist influences and worked mostly within the liberal mainstream. With

radicalism now marginalized, the CIO joined with the AFL as both sought to extend the

social contract hammered out during the New Deal and WWII. As historian Robert

Zieger has noted, after 1948 “the labor movement committed itself to unprecedented political action that supported Democratic liberalism and carried forth the uncompleted

New Deal agenda into the 1950s.”^^ A key component of this was area redevelopment.

In terms of American political economy, labor had reached its zenith. But in many ways it was a Pyrrhic victory. Though successfiil in organizing key industries and achieving gains in terms of income and benefits, the economic ground was shifting beneath workers’ feet. Area redevelopment began as a liberal attempt to promote state involvement in addressing the effect o f this shift. As noted in earlier chapters, at the local and state levels, significant portions of the unionized workforce had been losing ground since at least the 1920s, and one important reason was the introduction of new technology. At the CIO’s first constitutional convention in November 1938, its

Legislative Committee warned about technological unemployment in the auto and steel industries. The committee promised to “secure legislation empowering and authorizing the Federal Government to make an immediate and thorough survey of the effect of technological improvements and present management policies upon the security of employment and the length of the work week and the number of hours.” Referring to the ongoing investigation by the Temporary National Economic Committee over the issue of business monopolies, the Legislative Committee hoped to direct the investigation “to the undesirable social control over technological improvements and

128 production policies exercised by bankers and industrialists through patents and other

legal devices which protect monopolies.” The Legislative Committee reported the same

trend at the second convention in 1939, but neither convention called for specific

proposals and the issue of technological unemployment remained quiet until after wwn.'*

Dubbed “automation,” technological change continued and grew more pronounced in the 1950s. Those backing area redevelopment cited the loss of jobs fi’om new technology as a reason for their support. The process of using new technology in industry led labor organizations and their liberal allies to pressure congress for federal hearings on the effects of technological change. In October 1955, these hearings brought together labor leaders, business executives, engineers, workers, and government officials in a public debate over technology in industry and its effects on workers and communities.

Business leaders defended automation and saw it as evidence of a continued, upward trend toward a better society. D.J. Davis, Vice President of manufacturing for

Ford, stated the conservative business position. “We believe that instead of adversely affecting employment at our company, automation has created better jobs, while at the same time making them safer and easier.” He went on to connect automation with nationalism and progress, stating that “all of us recognize that our supremacy as a world power today is due not alone to our natural resources; it is due in major part to our technological progress.” When asked if Ford used automation to gain greater control over its workforce, Davis denied it and claimed that automation displaced only a

129 relatively few workers and that they had found other jobs in the company. In addition,

Davis opposed any new federal legislation designed to aid displaced workers.^’

As expected, labor leaders countered Davis's optimism. Walter Reuther, president of the UAW and head of the AFL-CIO Industrial Union Department, stated that the labor movement was not against new technology. Indeed, Reuther and other labor leaders who accepted the postwar social contract agreed to a link between wages and productivity. However, Reuther argued that “industry must begin to realize that it has an overall economic and social and moral responsibility to plan the location of new automated factories in terms of the impact of those new factories upon existing industrial communities.” In addition to area redevelopment, the solutions Reuther offered were what many liberals and others in the labor movement had been pushing for, including greater unemployment compensation, more job training, lower retirement ages, higher minimum wages, and a reduction of the workweek."" James Carey, secretary treasurer of the CIO and President of the International Union of Electrical

Workers (lUE) concurred. “The introduction of the new technology will mean countless problems for individual workers whose skills are outdated, for older workers who are displaced and cannot find jobs, for entire comm unities whose plants move to new areas, for small business concerns that cannot compete against automated giants.”

In addition to government aid to distressed areas, business needed to bear the costs of retraining workers or assisting families to move to new areas when plants had been shut down. Also criticizing the movement of industry to the South and the federal government’s role in fostering that shift, Carey called for changes in the tax law to

130 restrict depreciation allowances for new plants and stricter enforcement of the Fair

Labor Standards Act.'*' Such views typified the postwar labor-management accord,

where the liberal coalition avoided direct conflict over corporate decisions, including

capital movement and the introduction of new technology, and instead fought with

management over issues such as wages, hours, and conditions. In turn, they looked to

the state to provide social welfare benefits and other legislation such as area

redevelopment to mitigate against the inequities in the market system.'*'

To develop greater support for area redevelopment, Barkin joined with Batt and

John Edelman of the TWUA to create the Area Employment Expansion Committee

(AEEC) in May 1956, an organization designed to coordinate lobbying efforts for

federal legislation."^ At first, the three planned a 75-day, $5,000 campaign to gather

support for the Douglas bill, whose passage seemed likely, since Congress and

Eisenhower supported some type of legislation. Events unfolded quite differently,

however, and the group lasted until congress passed the bill in 1961. To chair the

Committee, Batt and Barkin succeeded in drafting Prentiss Brown, former Michigan

Senator and head of Detroit Edison firom 1934 to 1954. Given the Douglas bill involved attracting industries to poor areas, the Committee hoped to gamer support fi-om both labor and business leaders. At this point, they solicited financial help firom the United

Steelworkers and Arthur Goldberg, chief counsel for the USW, secured some money firom the union. Even more critical was the Industrial Union Division (lUD) of the recently merged AFL-CIO, which provided nearly $15,000 of the $20,000 the AEEC spent in over six years.""

131 Besides unions, the AEEC also made contacts with Democratic leaders and key

interest groups. In letters, pamphlets, and phone calls, the AEEC contacted members of

the “urban lobby,” which included the Conference of Mayors, the American Municipal

Association, and the National Housing Conference, and urged their support of the

legislation. Furthermore, once rural areas became part of the Douglas bill (a process

discussed below), the National Farmers Union and the National Grange also lent

support by testifying in hearings, contacting legislators, and publicizing the need for

redevelopment. Within the Democratic Party, Charles S. Murphy signed on as the

AEEC's agent in Washington, D.C. Murphy had been one of Truman's White House

aides and maintained excellent contacts with the Democratic National Committee and

party leaders on Capitol Hill. He managed to place a statement of support on area

redevelopment in the Democratic platform in 1956 and worked closely with James

Rowe, an influential Washington lawyer and adviser to Lyndon Johnson. Through

Rowe, Murphy secured LBJ's personal intervention on Douglas’ bill in mid-1956.‘*^

As these groups began to gather in support, others actively opposed the legislation. Two of the most active were the National Association of Manufacturers

(NAM) and the Chamber of Commerce (COC). During hearings, Daniel Cannon, head of NAM’s Industrial Problems Committee, presented three major arguments against a federal program. First, he called such a program “unjustifiable” because it “would involve the “Federal Government in taking sides in the highly competitive field of industrial development.” Cannon preferred to allow localities, states, and industries to continue competing. Second, the act o f channeling government assistance into certain

132 areas “could not help but have the effect of pirating industry away from other areas.”

Ironically agreeing with many labor advocates. Cannon argued that the language in the

bill to prevent this was too vague. Third, he saw the program as one that would both

overlap existing federal programs related to redevelopment carried out by Commerce,

Labor, Agriculture, and the Department of Defense, and create “conflicts of national

policy.” In addition, he argued that the firms most likely to be induced by industrial

financing would be those least likely to succeed, since well-established firms would not

necessarily need federal help.'*® Members representing the national COC echoed these

concerns. Speaking for the Chamber during the 1956 hearings. Perry Shoemaker,

president of the Delaware, Lackawanna, and Western Railroad, argued that state and

local resources were adequate to revive their areas. Any federal assistance for

development would “invite permanent subsidies of uneconomic activity.”^’

Many local business leaders also opposed area redevelopment. Harold Kramer of the Illinois State COC agreed with the national leadership, arguing that “lack of financing” was not the problem, but rather “ a poor environment for job creation.”

Pointing to the area of southern Illinois from where Paul Douglas drew his legislative inspiration, Kramer insisted that the major factor for their distress was “their history of unfavorable labor-management relations.”^* Some local business leaders opposed the legislation because it targeted their communities as “distressed areas.” “Roanoke businessmen deplore the “distressed area” tag which has been given national publicity,” wrote Jack Goodykoontz of the Roanoke, Virginia COC.'*’ In essence, these leaders believed the label wounded local pride and would make attracting businesses more

133 difficult. This argument would surface again during the ARA's operations when the agency, using data from the Department of Agriculture, began listing eligible counties in the South.

It is important to note, however, that these did not represent the views of all business leaders. Many in Pennsylvania joined workers in calling for federal aid as did those from other areas who would likely benefit. Undeterred by the label “distressed area," Eugene Halker of the Ashland, Wisconsin COC summed up the views of many who supported the legislation. “With 15 percent or more of our labor force unemployed, we are in urgent need of assistance.”^®

Countering the arguments made by members of NAM and the COC at the national level, the Committee for Economic Development (CED) supported redevelopment legislation that resembled the Eisenhower plan. Formed in 1942, the

CED was a voluntary organization of the leaders of America’s largest businesses whose purpose and programs reflected the corporatism found in both in the Progressive and

New Deal eras. As Eisenhower was doing, the CED sought a middle ground between statist solutions to the organization of society and laissez-faire approaches of conservatives. Through expert research and planning and cooperative actions of organized interest groups, the American economy could provide greater prosperity for its citizens without overt government intervention. Providing further evidence of the planning ideal moving into the postwar era, the CED brought expert advice to bear on

134 social and economic policy, which, included area redevelopment. Members of the CED

began studying the issue in the L 950s and would issue a report in 1961 that essentially

concurred with the recommendations offered in the Douglas proposal.®^

As the Douglas bill begarni its pathway through Congress, the power of

conservative southerners, and pressure from interest groups and their legislative allies

led Douglas to amend his original bill. This both broadened its scope and weakened its

effectiveness. Because of their power on committees in Congress and within the

Democratic Party, southerners smcceeded in either forcing amendments to the bill or

blocking legislation. Those who desired federal assistance with local economic

development, including representatives Brooks Hays (D-AR), Paul Brown (D-GA), and

Albert Rains (D-AL), indicated to Douglas that they would block the bill unless it

included rural areas. As written, it favored only industrial communities, most of which

were in the Northeast and M idw est.P ressure also came from a series of hearings on

rural poverty conducted in November 1955 by Alabama Senator John Sparkman. Rural

citizens, as well as local and state leaders testified in favor of including aid for their

communities. While southern leaders usually opposed federal intervention in social

areas, some Like Sparkman worked hard to obtain federal support for industrial development. Indeed, since the 1 930s and especially after 1945, southern communities and states actively promoted busiaiess development just as many northern communities struggled with loss of industry This came as federal spending in the South and West increased, making it more difficult for communities in the traditional manufacturing belt to combat deindustrialization. Semator J. William Fulbright of Arkansas, Chair of the

135 Senate Banking and Currency Committee, obtained the bill for his committee, and for

his support demanded: 1) that rural and urban areas receive $100 m illion each for

industrial loans, 2) that Douglas delete proposed language that would limit the number

of eligible rural areas to 300, and 3) that Douglas eliminate preferences for labor surplus

areas in federal procurement/'* In the meantime, Douglas had resigned from the Labor

and Public Welfare Committee to take a long-coveted seat on the Finance Committee.

In his place, John F. Kennedy became ranking member. Agreeing to the amendments,

he shepherded the bill through the Senate where it passed easily, 60-30.”

Stronger opposition existed in the House. The House Committee on Banking and Currency had approved a companion biU introduced by Democrat Daniel J. Flood of Luzerne County, Pennsylvania. Using a strategy that had become common practice, the Chair of the Rules Committee, Democrat “Judge” Howard W. Smith of Virginia, refused to schedule a hearing. In addition, there was a legislative backlog at the close of session. To clear the logjam before adjournment, the House then moved to operate under a suspension of the rules. This allowed Speaker of the House Sam Rayburn (D-

TX) to recognize members to move passage of bills. Majority Leader John McCormack agreed to call up the Douglas biU, but Minority Leader Joseph Martin, Jr., of

Pennsylvania refused unless the Eisenhower administration consented. Republicans in favor of the bill appealed to the President, but to no avail. Sending a signal that he did not value the issue enough to compromise, Eisenhower left congressional relations on this bill in the hands of Commerce Secretary Sinclair Weeks and Assistant Secretary

136 Frederick H. Mueller. These conservatives opposed compromising with Douglas and

Flood. After the Eisenhower administration refused to allow substitution of its own

proposed legislation, the first attempt to pass the Douglas bill failed.^^

From Stalemate to Passage, 1957-60

Although the bill had been defeated, the significant amount of bi-partisan support for

area redevelopment led Douglas to try again as the 85* Congress opened in 1957. The

Eisenhower administration also submitted its own proposal. Democratic supporters had

additional hope since they increased their control in Congress following the 1956 elections.^’ Three major proposals came out in January. The Republicans offered two,

S. 104 by Everett Dirksen of Illinois and S. 1433, the Eisenhower administration’s bill introduced by Martin of Pennsylvania. Both Republican plans resembled the earlier version, differing slightly in the amount of financing provided by the federal government.

On 29 January, Douglas, in response to appeals fi-om both Native American and

Western liberals in Congress, submitted another revised bill. Congressional leaders such as Senators Dennis Chavez (D-NM) and Mike Mansfield (D-MT), and

Representative Lee Metcalf (D-MT) had been fighting against the austerity of the

Eisenhower administration in regard to Native Americans. Federal policy shifted following New Deal efforts to promote tribal sovereignty and cultural pluralism under

Bureau of Indian Affairs (BIA) Commissioner John Collier.From 1945 through 1961, federal officials sought to accelerate assimilation by terminating aid to Native

137 Americans and relocating individuals to urban areas. During WWII, many Native

Americans moved to urban areas to work or served the government. As it did for

African Americans, this experience of fighting against the racist doctrines of Nazi

Germany and the interaction with the dominant white culture led to Indians to become more active in politics. One result was the creation of the National Congress of

American Indians (NCAI) in 1944 to promote civil rights and tribal sovereignty.

Following the war, the apparent success of this interaction and the expanding population in the West led federal policymakers to advocate assimilation and termination of aid.

Western growth meant whites wanted new support for development, while fiscal conservatives saw assimilation as means to cut the federal budget. Although several termination bills came up in the House in 1954, Native Americans did not support such policies. Leaders of the NCAI spoke out against it as did John Collier and the new

Association of American Indian Affairs (AAIA). Undaunted, Congress terminated assistance to 12 tribes under the Eisenhower administration. Ironically, as part of termination, delivery of health services improved under the direction of the HEW.

Also, the BIA began a program to relocate industries near or on reservations. Such efforts offered only limited success, since most businesses saw no need to relocate to isolated reservations and the recessions of 1958-9 and 1960 hurt even more.^®

But opposition to these policies grew during the 1950s. Newspaper and magazine coverage of Native Americans increased. In February 1957 the Montana legislature passed a memorial calling on Montana’s national representatives to support federal aid to Native Americans. Later that year the Fund for the Republic established a

138 Commission on the Rights and Responsibditiers of the American Indian, chaired by

former Indian commissioner William Brophy, to recommend new federal policies.

Other hearings and bills also emerged in Congress designed to offer financial assistance

for Native Americans.®”

It was at this juncture in federal policy and shifting attitudes that Paul Douglas

introduced his revised Area Redevelopment A ct, and during hearings. Native

Americans, with help from liberal allies, souglnt to make themselves eligible for aid. In

addition to their testimony in hearings, on 10 F- ebruary 1956 James Murray, Lee

Metcalf, and Mike Mansfield sent Douglas a lertter urging him to alter the bill, which he

did by authorizing loans to Native Americans, a s well as rural and urban communities.

During hearings on area redevelopment, Indian leaders who testified favored the

legislation with the new provision. Many Indiains criticized the BIA. Robert Goombi, a

Kiowa council member stated during 1957 hearrings, “I believe today. Senator that the

living conditions among our Indian people are tihe worst in the history of the Indian

Service.” He and others accused the BIA of for-cing Indians to sell their land, a point

BIA Commissioner Glenn L. Emmons denied. Though critical, these leaders did not

want to end federal help. They wanted eSective aid to bring jobs to the reservation, not

necessarily complete assimilation. Rather than zrelocate, or fund most of the development themselves, as the BIA had been e=ncouraging, most Indians wanted to remain on their land and saw greater federal assnstance with business development as a way both to keep their land and raise their stancLard of living. Like those in

Pennsylvania and Cleveland, these men hoped federal aid would increase their chances

139 of success and, interestingly, seemed to be moving closer to accepting some elements of

competitive capitalism. Speaking for the Delaware of Oklahoma, Chairman Henry

Chisolm claimed his people “feel that some day in the future if this bill goes through

that they would be able to stand and manage their own affairs and not have outside

assistance and they would feel more freedom in their way o f life.”®'

Although Douglas had broadened the bill even further to include Native

Americans, he lacked a majority of supporters in his committee, since Fulbright now

opposed the measure and filled the subcommittee with Douglas’ opponents.®' Besides

this, overall congressional interest in area redevelopment waned in 1957. Since the

1954 recession, national unemployment had dropped from 5.5 percent to 4.1 percent in

1956 and both Eisenhower and Senate Majority leader Lyndon Johnson agreed on

cutting the federal budget. In light of these developments, and without Republican

support, Douglas’ bill had no chance. While Douglas held another set of hearings, the

House did not.®"

But the political and economic winds shifted yet again. The combination of a

recession that began in the summer o f 1957 and lasted into 1958 and election year

politics revived interest in aid to the imemployed. In Maine, a state hit hard by the

decline in the textile industry, Republican Senator Frederick Payne fought a tough

reelection battle with popular Democratic Governor Edmund S. Muskie. To help the textile regions in Maine, Payne let it be known that he would be open to compromise on the Douglas bill. Payne conceived a plan whereby he would introduce his bill (very close to the Douglas version) and then substitute it for the Douglas bill in full

140 committee. After this, both staffs could negotiate a compromise. Despite Eisenhower’s earlier veto, the compromise held the promise of passage, since it seemed likely that

Eisenhower would sign a version of area redevelopment worked out with Republicans.^

Fulbright had intended to introduce his own plan to combat the recession, a $2 billion community facilities bül (S.3497). As he opened committee hearings on this in

March 1958, Pajme ordered that the committee go into executive session. Fulbright’s refusal sparked a heated verbal exchange, especially between himself and Douglas.

After this, Payne's bül was adopted as the pending order of business. The full committee reported the bill by an 8-7 majority.®^ The Douglas-Payne bül provided a

$379.5 miUion program to be administered by the Housing and Home Finance Agency

(HHFA). Douglas still wanted an independent agency, but acquiesced in allowing the

HHFA rather than the more conservative Commerce Department to administer the program.®® The Senate eventually approved the compromise bill by a vote o f46 - 36, far firom the overwhelming support the legislation received in 1956. The close vote reflected declining support firom conservative southern Democrats. For example, during the 1958 debate, Fulbright argued that the biU was “an attempt to substitute the judgment of the Federal Government for the judgment of our firee enterprise system.”®’

A. WiUis Robertson of Virginia went further. He argued it was unconstitutional and compared it to efforts to desegregate schools under the Brown v. Board o f Education decision of 1954.®* Still, there was bi-partisan support: 29 Democrats and 17

Republicans voted for it; 12 Democrats and 24 Republicans voted against it.®’

141 In the House, where several movements were afoot to combat the continuing

recession, the bill moved to the House Banking and Currency Committee and

subsequently to the House Rules Committee. Now in a mood to pass legislation to fight

the recession, both committees passed the Douglas-Payne bill, but not without

amendments. Since the Senate rejected Fulbright's community facilities proposal.

Smith had the Rules Committee pare down the $100 million public facilities loan

program. The Committee also eliminated the ceiling of 300 eligible rural counties,

direct Treasury fimding, and the section providing subsistence payments for workers

undergoing training. After this, the House passed a final version 216-159, with 159

Democrats and 57 Republicans for, and 46 Democrats and 113 Republicans against.’®

Although Congress approved the measure, Eisenhower again stymied federal efforts at redevelopment with a pocket veto in September. Ignoring pleas from such

Republican moderates as Payne and his Labor Secretary James P. Mitchell, the

President refused to move beyond the Administration program. In his veto message,

Eisenhower listed five reasons for opposition: 1) the bill allowed 100 percent grants for public facilities, 2) the criteria for eligibility to qualify for assistance were loosely drawn, 3) it made rural areas eligible, 4) the bill failed to require adequate local participation in industrial and commercial loans, and 5) the program went to KDHFA rather than the Department of Commerce.’'

The veto gave Democrats a potent weapon for the 1958 campaign season, held at the height of a recession when unemployment reached seven percent. It declined slightly later in the year, but by then the elections were over and Democrats had scored

142 a significant victor}^ For the upcoming 86“’ Congress, Democrats would control 64

seats in the Senate and 283 in the House. Unemployment was the strongest single factor

in the Democratic landslide, and districts that would have been eligible for federal

assistance under the vetoed Douglas-Payne bill accounted for the bulk of Democratic

victories.’"

Soon after the Democratic sweep, Lyndon Johnson announced that depressed

areas would form part o f his 12-point program for the coming Senate session.

Recognizing a winning issue, at the opening of the 86th Congress in January 1959,

members of the Senate introduced several bills to aid distressed areas, including those

by Douglas (S. 722), the Eisenhower administration (S. 1064), and a new compromise

effort by Republican Senator Hugh Scott of Pennsylvania (S. 268). House members

also introduced several proposals and passage in both houses seemed likely. The Senate

Banking and Currency Committee now had a 9-6 majority in favor of the Douglas bill, and as expected in March the new Douglas bill passed easily in Committee.

Once again, economic events affected the pathway of legislation. By spring of

1959, the economy had begun to recover and the energy behind passing redevelopment legislation faded. Unemployment declined to 4.9 percent in the spring of 1959, and the

Adrninistration continued to attack the Douglas bill as fiscally irresponsible. The federal deficit had reached $12.4 billion, the highest peacetime deficit to that time in

U.S. history. Though the vote was close, the bül passed the Senate 49-46, with five

Republicans voting for the bill and 11 Southern Democrats opposing it.’^ In the House, a subcommittee chaired by supporter Wright Patman of Texas passed the bill 13-6.

143 Again, as with so many liberal measures during these years, Howard Smith's Rules committee delayed sending it along. In addition, the Speaker of the House, Sam

Rayburn, also recommended delaying the bill until at least January 1960.^'’

The 1960 Election

Area redevelopment seemed dead in the water until the confluence of rising unemployment and election year politics brought the issue once again to the forefront of congressional interest. With unemployment surpassing 5 percent, in the fall of 1959

Democrats began criticizing the Eisenhower administration for its economic policies. In

September, the Senate approved Lyndon Johnson's call for a committee to investigate the problem of unemployment and issue recommendations. The Special Committee on

Unemployment Problems, chaired by Eugene McCarthy (D-MN) issued its report on 30

March 1960 and included among its recommendations aid to distressed areas.’^

Democrats managed to revive the Douglas bill from the Rules Committee and both the

Senate and House approved it in May. However, the bill met another Eisenhower veto in September. During the 1960 presidential campaign, Kennedy stressed rising unemployment and the veto of area redevelopment as evidence that Eisenhower had not done enough to move America forward. Kermedy had supported area redevelopment in during his years in Congress and during the campaign, the poverty he wimessed in West

Virginia strengthened his commitment to the legislation. These issues contributed to

144 Kennedy’s slim, 120,000-vote margin of victory in November 1960. However,

Republicans gained 21 seats in the House and two in the Senate, giving conservatives

control of 285 out of437 members in the House, and 59 of 96 in the Senate.’®

Clearly Kennedy lacked a liberal mandate, but he him se lf was pragmatic and

cautious in his support for domestic liberal legislation. Area redevelopment had enough

bipartisan support and typified this cautious approach that characterized the Kennedy

presidency. Democrats still controlled the House and Senate, and now with Kennedy as

president, it seemed likely that despite conservative opposition, area redevelopment

would become law in 1961. Showing his support for Douglas, on 4 December,

Kennedy asked the senator to chair a presidential task force on economic growth.

Redevelopment was to be one of Kennedy's top domestic priorities, the others being

federal assistance to public schools, hospital insurance for the aged, housing legislation,

and increasing the minimum wage.” On New Year's Day, Douglas presented the

group's report to Kennedy and, in January 1961, Douglas’ latest bill became the first

considered by the Senate. Douglas again lobbied for a separate Area Redevelopment

Agency. However, sensing the need to placate Southern Democrats and show he was

not against big business, Kennedy bowed to pressure J&om newly appointed Commerce

Secretary Luther Hodges of North Carolina and supported placing the ARA in

Commerce. In addition, the Administration also introduced its own version of the bill with this stipulation in it. Kennedy also stressed economy in government, and at this stage Douglas agreed to sacrifice an independent agency for passage of his bill. Other amendments to which Douglas agreed included a four-year limit (proposed by

145 Republican Prescott Bush of Connecticut), congressional as oppossed to Treasury

funding, and language reminiscent of the Randall Commission thait provided support to

areas hurt by tariff changes. The Area Redevelopment Act passed the Senate in March

by a vote of 63-27 and the following month the House approved it 223-193. In a public

ceremony at the White House, Kennedy signed the measure on 1 W ay 1961.^®

In its final form, the Area Redevelopment Act created the /Area Redevelopment

Administration (ARA), an agency housed in the Commerce Department and funded

initially with $389.5 million. In a federal budget of nearly $100 bLlIion, this amounted to approximately .39 percent. The Act provided $300 million in reevolving loan funds, divided as follows: $100 million for Section 5(a), urban areas, $10(0 million for Section

5(b), rural areas and Native American reservations, and $100 millicon for public facility projects in both areas. It also provided $75 million in grants for pumbUc facilities. The

Act made available an additional $4.5 million for technical assistamce projects and authorized $ 10 million to allow the Department of Labor to offer payments for workers undergoing retraining in eligible areas. Besides targeting Native Aimerican reservations, eligibility under the Act depended upon levels of unemployment fo»r urban areas, defined as follows: currently six percent, or 50 percent above the national average for three of the preceding four years, or 75 percent above for two of th e three preceding years, or 100 percent above for one of the preceding two years. Thee formula for rural areas was more complicated, instructing the Secretary o f Commercee to take into consideration factors such as the percentage of low-income families, rates of migration out of the area, the numbers of previous development projects sponsored by the

146 Department of Agriculture, and proportion of residents receiving public assistance.

Besides limited funding, two provisions would further weaken the ARA's effectiveness.

First, the Act required the Secretary o f Commerce to “distribute the projects widely

among the several States” when considering rural areas. Furthermore, no project was

eligible unless financing was “not otherwise available from private lenders or other

Federal agencies on reasonable terms.”^^ This meant that well developed, “blue chip”

companies would be less likely to participate, since they did not usually need federal

assistance and could obtain private funding. Thus, the ARA would tend to attract riskier

firms with less established track records of success.

Conclusions

After nearly thirty years of federal, state, and local interest in the issue, a national program to address structural unemployment was in place. Rather than solely address industrial decline. Congress granted the ARA $394 million to begin a four-year trial of fighting poverty through industrial loans and grants, technical assistance, public works, and job training. A combination of political, economic, cultural, and social forces shaped the legislation. When he first proposed his bill, Paul Douglas envisioned aid for industrial areas in the traditional manufacturing belt. Pressure from within the liberal coalition, coupled with the power of southerners in Congress, led Douglas to broaden the bill in order to gain greater support. Doing this would provide needed help to communities outside the manufacturing belt and would give a national presence for the emerging war on poverty. The ARA’s creation and subsequent operation also

147 stimulated research and investigation into several issues surrounding it, including the

causes and nature of unemployment and poverty^ economic development, and other

local, state, and foreign solutions to industrial development. There were drawbacks,

however. The political decision to broaden the legislation compromised its power to

alter the nature of industrial transformation and lower rates of poverty and

unemployment. It also meant the South would play a larger role in the implementation

of the ARA than originally desired. The effects rising from such a decision would have

lasting consequences both for the issue of industrial development and the power of

liberalism in postwar America.

But the historical actors involved in promoting the legislation could not predict

the future and given the institutional and structural realities in which they worked, the

ARA was the best they could do. As they uncovered and fought against poverty and

deindustrialization, they remained confident that they could solve these problems.

Much as it had been in the Progressive era and during the New Deal, such confidence

was a significant leitmotif of postwar American culture and it shaped both the creation

and the operation of the ARA. With the agency now in place, its energetic and

optimistic staff focused on the immediate issues surrounding procedures and carrying

out programs. How the answers to these and other questions developed is the subject of the following chapters.

148 NOTES

' Congress, Senate, Committee on Labor and Public Welfare,Area Redevelopment: Hearings Before the Subcommittee on Labor on S.2663, 84’’’ Cong., 2d sess., 4, 6, 9, 23,26 January and 3, 9, 10, 24 Februaiy 1956, 790. (Hereafter referred to as Senate, Area Redevelopment, 1956).

* Congressional Record, 13 May 1958, Volume 104, Part 7, 8526.

^ Michael Harrington, The Other America: Poverty in the United States (N ew York: Touchstone, 1962).

On Barkin see Donald Stabile, Activist Unionism: The Institutional Economics o f Solomon Barkin (Armonk, NY: M. E. Sharpe, 1993) and William F. Hartford, Where is Our Responsibility? Unions and Economic Change in the New England Textile Industry, 1870 — I960 (Amherst: University of Massachusetts Press, 1996). For quote, see note 1 above.

* Simdquist, Politics and Policy. 62.

® Quoted in Robert J. Donovan, Eisenho wer: The Inside Story (New York: Harper & Brothers, 1956), 277.

’’ Davidson, Coalition Building, 4. Paul H. Douglas, Economy in the National Government (Chicago: The University o f Chicago Press, 1952), 254.

* Douglas, Economy in the National Government, 19.

’ Ibid, 20.

See Skocpol, Protecting Soldiers and Mothers, 265-66.

“ Paul H. Douglas,In the Fullness of Time: The Memoirs o f Paul H. Douglas (New York: Harcourt Brace Jovanovich, Inc., 1972), 512-13; Donovan, Inside Story, 275.

'* Republican Wayne Morse o f Oregon declared himself an independent in 1953. He promised to vote with the Democrats in exchange for a seat on the Foreign Relations Committee, which Lyndon Johnson did. This gave the Democrats a slim 49-47 edge in ± e Senate. On Morse, Johnson, and the elections see Robert Dallek, Lone Star Rising: Lyndon Johnson and His Times, 1908 — I960 (New York: Oxford University Press, 1991), 462-3. See also Charles A.H. Thomson and Frances M. Shattuck,The 1956 Presidential Campaign (Washington, D.C.: The Brookings Institution, 1960), 10-13; Donovan, Inside Story, 270-78.

"Davidson, Coalition Building, 3; Sundquist, Politics and Policy, 62-3.

Harrington, The Other America, 13. On awareness o f poverty in the 1950s see James T. Patterson, America’s Struggle Against Poverty, 1900—1994 (Cambridge: Harvard University Press, 1994), 94-96.

"Sar Levitan, Federal Aid to Depressed Areas, 3; Douglas, Fullness of Time, 513.

Hartford, Where is Our Responsibility?, 183-7 and Stabile, Activist Unionism, 1-7.

" Ibid.

149 " See a discussion o f this in the next section o f this chapter.

” See Hartford, Where is Our Responsibility?, 187-9 and Davidson, Coalition Building, 1966.

“ In Senate,A rea Redevelopment, 1956. See also Davidson, Coalition Building, 4, and Levitan, Federal Aid, 4, 55. Douglas' criteria changed from his 1952 pronouncement inEconomy in the National Government. See note 6 above.

*' Dallek, Lone Star Rising, 458, 462-4.

“ A fairly favorable view of Eisenhower is found in William L. O’Neill,American High: The Years o f Confidence. 1945 — I960 (New York: Free Press, 1986). Balanced appraisals include Chester J. Pach, Jr., and Elmo Richardson, The Presidency o f Dwight D. Eisenhower, rev. ed. (Lawrence: University Press o f Kansas, 1991) and James Patterson,Grand Expectations. More critical is William Chafe, The Unfinished Journey.

“ Pach,Presidency o f Dwight D. Eisenhower, 30-34, Patterson, Grand Expectations, 273.

“ Pach,Eisenhower, 32-38. The 82"“* Congress had tried to eliminate the CEA in 1952 by allowing its appropriations to expire. However, Eisenhower argued for its renewal and succeeded in persuading Congress to agree. On the link between the economy and national security under Eisenhower, see Morgan, Eisenhower versus the Spenders.

“ See Elizabeth Pones-Wolf,Selling Free Enterprise: The Business Assault on Labor and Liberalism, 1945 -1 9 6 0 (Urbana: University o f Illinois Press, 1994).

“ Batt wrote reports on aid for workers, communities, and businesses affected by increased imports. The final report submitted by McDonald summarized them. See Staff Reports Nos. 2,4, and 7 in “Drafts o f Report” folder, box 48, Commission on Foreign Economic Policy (Randall Commission) Records, 1953- 1954, Dwight D . Eisenhower Library (herafter DDEL). McDonald quote inReport to the President and the Congress. Commission on Foreign Economic Policy, 23 January 1954, 55.

Quotes in Report to the President and the Congress, 54.

“ “Minutes o f the Advisory Board on Economic Growth and Stability,” 18 February 1954, “Advisory Board on Economic Growth and Stability” folder, box 318, OF, WHCF, DDEL.

“ “Report to the President by the Council o f Economic Advisers for Calendar Year 1954,” 23 December 1954, “1955” folder, box 316, OF, WHCF, DDEL. Bums’ notes on talk to Cabinet, 14 October 1955, “Depressed Localities” folder, box 75, Arthur Bums Papers, DDEL (hereafter Bums Papers).

“Minutes o f Task Force on Local unemployment,” 23 May 1955, “1955 (5)” folder, box 112, Bums Papers.

Gabriel Hauge to Bums, 5 July 1955, “Labor-Unemployment Task Force” folder, box 112, Bums Papers.

Lothair Teetor, Domestic Affairs Office, Commerce Department, to Bums, 21 July 1955, “ 1955 (3)” folder, box 112, Bums Papers.

Larson to Bum s, 23 September 1955, “1955 (1)” folder, box 112, Bums Papers. 150 ^ Davidson, Coalition Building, 5.

See Bums notes on talk, 14 October 1955, in note 27 above.

On the CIO and WWU see, among others. Nelson Lichtenstein, L abor’s War at Home: The CIO in World War II (New York: Cambridge University Press, 1982) and Robert Zieger,American Workers, American Unions..

See Lichtenstein, “The Eclipse o f Social Democracy.” Quote in Zieger,American Workers, 100.

“Proceedings o f the First Constitutional Convention of the Congress o f Industrial Organizations,” 14 November 1938, reel 1, frame 0612, John L. Lewis Papers, microfilm edition (hereafter referred to as JLLM). “Report o f John L. Lewis to the Second Constitutional Convention,” 10 October 1939, reel 1, fr-ame 0668, JLLM.

Davis’ statements in U.S. Congress, Joint Economic Committee, Automation and Technological Change, 79* cong., 1" sess., 14, 15, 17, 18, 2 4 - 2 8 October 1955, 56, 58, 64-5.

Ibid, 104-5, 127. In fact, it was Barkin who convinced Reuther to work towards redevelopment legislation. See Hartford, Where is Our Responsibility?, 183-7.

41 Ibid, 222-34.

For a good summary o f this, see David L. Stebenne, “The Postwar ‘New Deal’,”International Labor and Working Class History 50 (Fall 1996), 140-1.

Davidson, Coalition Building, 9.

^ Batt to Charles S. Murphy, 16 May 1956, “Batt” folder. Box 38, Charles S. Murphy papers, HSTL. Davidson, Coalition Building, 9-11.

■’* Davidson, Coalition Building, 9.

Quotes from Cannon’s testimony in Senate,Area Redevelopment — 1961, 323-51. On this last point he proved correct and when head o f the ARA, William L. Batt used the same argument in a failed attempt to get rapid tax amortization for plants in redevelopment areas. The next three chapters develop this issue.

Shoemaker quote in Senate, Area Redevelopment, 1956, 862.

BCramer quote in Senate, Area Redevelopment — 1961, 358.

Letter, Goodykoontz to A. Willis Robertson, inArea Redevelopment — 1961, 823.

Letter, Eugene Halkerto A. Willis Robertson, m Area Redevelopment — 1961, 825.

** On the CED, see Collins, The Business Response to Keynes, 81-87. Committee for Economic Development, Distressed Areas in a Growing Economy, June 1961.

Davidson, Coalition Building, 6.

151 " See U.S. Congress, Joint Committee on the Economic Report, Subcommittee on Low-Income Families, Hearings: Low-income Families, 84* Cong., 2d. sess., 18, 19, 21,22,23 November 1955. On the South see Cobb, Selling o f the South.

^Davidson, Coalition Building, 7.

"Davidson, Coalition Building, 7; Levitan, Federal Aid, 7; Congressional Record, 26 July 1956, Volume 102, Part 11, 14640.

"Davidson, Coalition Building, 7-8; Levitan, Federal Aid, 7-8.

” While Eisenhower defeated Adlai Stevenson, Democrats held the Senate 49 to 47 and the House 234 to 201 .

On New Deal Indian policy see Graham D. Taylor,The New Deal and American Indian Tribalism: The Administration o f the Indian Reorganization Act, 1934-45 (Lincoln; University o f Nebraska Press, 1980); Larry W. Burt, Tribalism in Crisis: Federal Indian Policy, 1953 — 1961 (Albuquerque: University of New Mexico Press, 1982); Robert Fay Schrader, The Indian Arts & Crafts Board: An Aspect of New Deal Indian Policy (Albuquerque: University o f New Mexico Press, 1983), and Gerald Nash, The Crucial Era: The Great Depression and World War II, I929-I945 2d. ed. (New York: St. Martin’s Press, 1992).

For an overview o f development policies related to Native Americans in the post-WWII decades, see Larry Burt, Tribalism in Crisis: Federal Indian Policy. 1953 — 1961 (Albuquerque: University of New Mexico Press, 1982), Burt, “Western Tribes and Balance Sheets: Business Development Programs in the 1960s and 1970s,” The Western Historical Quarterly 23 (November 1992), 475-95 and Thomas Francis Clarkin, “The N ew Trail and the Great Society: Federal Indian Policy During the Kennedy-Johnson Administrations,” Ph.D. dissertation. University o f Texas, 1998.

“ Burt, Tribalism in Crisis, 84-92.

On the legislation see Douglas, Fullness o f Time, 517 and Senate, ARA Hearings, 1956. Goombi quote in U.S. Congress, Senate, Committee on Banking and Currency,Area Redevelopment, 6, 8, 11, 13, 14 March, 9, 10, 12, 15 April, and 8, 14, 15 May 1957, 811. (Hereafter Senate,/ire<3/Jecfeve/qp/wewr, 1957). Chisolm quote in Senate, Area Redevelopment, 1957, 815.

“ The reason for this is not clear. As with the obstruction in the House noted below, it may be related to the emergence o f civil rights legislation in 1957 as well as the controversy over Eisenhower’s decision to uphold the court order desegregating Arkansas schools that year. Fulbright voted for the Area Redevelopment A ct in 1956 and 1961. In the Subcommittee only Douglas and John Sparkman (D-AL) supported the bill. Opponents included Democrat J.Allen Frear (DE), and Republicans Capehart (IN), Bricker (OH), and Bush (CT). Those opposed on the full committee were Democrats Fulbright and Willis Robertson (D-VA) and Republicans Frederick G. Payne (ME), Beall (MD), Case (NJ), Bermet (UT). Democratic supporters were Monroney (OK), Joseph Clark (PA), and William Proxmire (WI).

“Davidson, Coalition Building, 11-12; Levitan, Federal Aid, 9-11; Douglas, Fullness o f Time, 516-17.

“ Douglas,Fullness o f Time, 517; Davidson, Coalition Building, 12.

“ The minority votes were: Fulbright, Robertson, Frear, Bush, Bricker, Capehart, and Bennett. See Davidson, Coalition Building, 13.

152 “ Davidson, Coalition Building, 13; Levitan, Federal Aid, 12.

" Congressional Record, Volume 104 Part 7, SS* Congress, 8526. Such an argument on Fulbright’s’ part seems purely political, given his own S2 billion commimity facilities bill was so close to what the ARA would do and that Fulbright would vote for the ARA in 1961.

“ Ibid., 8532.

‘^Davidson, Coalition Building, 13-14; Douglas, Fullness o f Time, 517; Levitan, Federal Aid, 12.

^Davidson, Coalition Building, 14-15; Levitan, Federal Aid, 12.

Levitan, Federal Aid, 12-13.

^ Levitan, Federal Aid, 13; Davidson, Coalition Building, 15.

^ The Republicans were Cooper, Smith (ME), Case, Javits, and Scott.

Davidson, Coalition Building, 16.

U.S. Congress, Senate, Special Committee on Unemployment Problems,Readings in Unemployment (Washington, 1960).

The Senate approved S.722 45-32, the House 202-184. See Congressional Record, Volume 106 Part 7, 4 May 1960, 9472, and Volume 106 Part 8, 6 May 1960, 9704. On Kennedy see James Giglio, Presidency o f John F.Ae/z«e<^ (Lawrence: University Press o f Kansas, 1991), 37, 104.

^Giglio, Presidency o f John F. Kennedy, 97.

’*Davidson, Coalition Building, 22-7, and Levitan, Federal Aid, 18-20.

79 Congressional Record, 26 April 1961, Volume 107, Part 5, 6710-15. Quotes on page 6711.

153 CHAPTERS

GETTING STARTED: THE STRUCUTRE OF THE ARA AND A RETURN TO PENNSYLVANIA

“[TJhere’s still a shortage of jobs for men [in Luzerne County] and that should be ever before us as we work into the future on this never-ending job of development.” William L. Batt, Jr., ARA Administrator, 1964^

“ARA believes in solving the unemployment problem by the free, private enterprise system. Everything we do is pointed toward making it possible for businessmen to create more jobs by taking advantage of opportunities to make more legitimate profits.” Harold Williams, ARA Assistant Administrator, Wilkes-Barre Rotary Club, 1964^

Once the Area Redevelopment Act passed, William Batt and federal policymakers were left with the task of creating a new agency and beginning to promote economic development. This chapter provides an overview of the ARA's organization, its method of operations, and a statistical summary of its projects. It also begins examining these operations in detail with a return to Pennsylvania. Doing so reveals how the structure of the agency contributed to the nature of the programs implemented between 1961 and

1965 and measures the nature of redevelopment in the communities of Pennsylvania.

Two of the most important aspects regarding ARA methods were the agency’s relationship with local and state agencies and the use of the “delegate agency” concept.

154 As written, ARA legislation demanded a respect for federalism. Using Department of

Labor statistics, the ARA designated labor markets as eligible for aid. If interested,

communities had to form a development organization, have it sanctioned by the state

development agency, and then submit an Overall Economic Development Plan (OEDP)

to the ARA for approval. While this method tried to extend the Progressive and New

Deal economic planning ideal to the local and state levels, the program required local

initiative and operated within the system of federalism characteristic of political

economy in the United States. Hence, it was a mixture of both federal planning and

localism. These OEDPs required local groups to describe the area’s economy,

including causes and extent of imemployment, to provide a statement of community

goals, and to provide evidence that the group was representative of key interest groups such as business, labor, and farmer organizations. In addition, the OEDPs needed to prioritize projects, provide data on likely numbers of jobs created, and establish the roles of various groups in implementing the development plan. ARA officials did not limit the proposed plan to one community; in fact, they encouraged regional planning, especially in the anthracite region, in the timber areas of the upper Great Lakes, in

Appalachia, and in the Ozark moimtain area.^

Adding to the complexity, the ARA used the “delegate agency” concept to review proposals. Essentially, loan and grant applications went first to the appropriate federal agency: community facilities to Housing and Home Finance Administration

(HHFA), industrial loans to the SmaU Business Administration (SBA), rural areas to

Department of Agriculture (USD A), Native American applications to the Bureau of

Indian Affairs (BIA), training to the Departments of Labor (DOL) and Health,

155 Education, and Welfare (HEW). If approved, the money came from ARA

appropriations and the ARA could override an agency recommendation. In addition,

the SBA had its own loan program for industrial development corporations and the

Department of Agriculture continued its Rural Development program begun in 1955.

Such an approach presented problems that would plague the ARA during its lifetime.

Technicians in each delegate agency did not always give priority to ARA projects,

maintaining loyalty to their own agency. Since the ARA was part of the Commerce

Department, this added to jurisdictional tensions with members of other agencies,

especially in the Department of Labor. Finally, complaints and tension arose over the

time taken to process ARA applications. Not surprisingly, at times local groups became

confused as to which agency they should apply

The decision to rely on the delegate agency concept stemmed from the

legislative history of area redevelopment and the decision made by Secretary of

Commerce Luther Hodges and agreed to by William Batt. In their arguments against

making the ARA a separate agency, conservatives succeeded in adding the language

that would make the agency a coordinating one. Section 24 of the 1961 Area

Redevelopment Act stated that to “the fullest extent practicable in carrying out the

provisions of this Act the Secretary shall use the available services and facilities of

other agencies” of the Federal Government.”^ Meanwhile, Secretary Hodges had

pressured Kennedy into placing the ARA into Commerce and Hodges also favored

keeping the ARA as a coordinating agency. Batt agreed to this decision, since the ARA would be crossing bureaucratic boundaries in promoting economic development.^

156 Two additional policies added to the sense of confusion and organizational

overload. The ARA cooperated with the DOL and HEW under the Manpower and

Development Training Act (MDTA), which began operations in the summer of 1962, and Congress designated the ARA as the agency to administer the Accelerated Public

Works Act, (APW) which passed Congress in September 1962.^ The MDTA provided longer-term training than the ARA (up to 52 weeks as opposed to 16) and made its program eligible in all communities o f the United States, not just redevelopment areas.

The APW granted the president authority to expedite public works projects already approved by Congress but lacking funds to begin or continue. These projects had to be in areas designated under the ARA or in other areas that experienced substantial unemployment in nine of the preceding twelve months. Again showing the power of

Southerners in Congress, the APW required that at least one third of all expenditures be in rural development counties. Figure 5.1 shows the overall organization of the ARA with the APW included. While these two programs provided additional tools to those individuals and organizations working to create jobs and lower unemplo}ment rates in redevelopment areas, they also added to the bureaucratic confusion and the hodge­ podge nature of the growing fight against poverty. In this, they presaged later problems with the programs of the Great Society.

In addition, the legislation creating the ARA provided for a National Public

Advisory Group (NPAC) to provide guidance and recommendations for policy. Just as local and state organizations involved in redevelopment consisted of various experts representing various interests, NPAC consisted of leaders from business, government, labor, and academia organized into committees to offer advice on further programs

157 ADMINISTRATOR OFAici or fUtUC AFfAfft

ICDN6WC AOVIUN D E P U T Y AOWIHIHRATOR FORNORM PUBLIC

OFFICE OFFICE OFFICE OPERATION*

iifORrtir««r

u% oo

ACCOUHÎMO

REGIONAL

Figure 5.1 ; ARA Organization Chart. Source: U.S. Department of Commerce. for the ARA. Leading the group for the first three years was LeRoy Collins, who had just finished two terms as a politically moderate Governor of Florida. When Collins left

to head the Community Relations Service created under the Civil Rights Act of 1964,

Frank Porter Graham, a liberal former Governor and Senator firom North Carolina, took his place. Both Collins and Graham sought to use the NPAC to not only advertise

support for the ARA, but also to extend its reach and provide further links between government, experts, universities, and interest groups.®

With the tools provided and structure in place, ARA administrators worked as best they could to combat deindustrialization and poverty, and to fulfill the mandate of the Employment Act of 1946, which had charged the federal government with securing high levels of production and employment. The following section highlights the industrial and geographic distribution of ARA resources, the numbers and types of jobs and training programs, and the regional distribution of aid.

What type of jobs did the ARA help create? Exam ining Figure 5.2 above shows that the top five categories in which the ARA created jobs were Lumber and Wood

Products (5,195), Food and Kindred Products (4,945), Apparel (3,315) Rubber and

Plastics (3,185), and Hotels and Motels (3,095). Figure 5.3 shows that the agency’s

Public Facility loans and grants went overwhelmingly to Recreational Services in terms of investments (some $48 million) and to Sanitary Systems (which were mostly sewer and water systems) in terms of projects (78). This reflected the ARA’s substantial

159 Industry Investment Projects Employment Potential Investment Per Job Lumber & Wood Products $25,875,994 52 5,195 4,495 Hotels & Motels 21,759,200 28 3,095 6,820 Food & Kindred Products 20,715,256 42 4,945 3,466 Stone, Clay and Glass 14,534,128 25 1,915 7,563 Rubber & Miscellaneous 14,204,154 27 3,185 4,433 Plastics Paper & Allied Products 12,423,410 12 12265 9,821 Primary Metal Industries 8,030,417 15 1,455 5,208 Textile Mill Products 7,020,403 13 1,830 3,826 Retail Trades, Miscellaneous 6,432,180 4 1,300 4,948 Recreational Services 6,350,267 21 1,305 4,866 Furniture & Fixtures 5,159,209 17 1,525 2,109 Chemicals & Allied Products 5,134,136 12 1,270 4,026 Electrical Machinery, 4,184,162 15 1,345 3,111 Equipment and Supplies Apparel & Finished Goods 3,555,785 24 3.315 1,065 Fabricated Metal Products 3,291,123 21 815 3,886 Miscellaneous Manufacturing 3,006,650 5 440 6,561 Machinery (except Electrical) 2,849,572 10 1,145 3,489 Transportation Equipment 2,355,216 14 1,330 1,297 Medical & Other Health 1,791,531 6 275 6,515 Services Professional, Scientific, and 1,377,250 6 1,040 1,324 Controlling Instruments Motor Freight Transportation 903,357 7 520 1.653 and Warehousing Petroleum Refining and 832,000 2 130 6,400 Related Industry Printing & Publishing 789,685 5 190 4,156 Wholesale Trades 721,575 3 165 4,373 Miscellaneous Business 576,450 3 160 3,603 Services (Research and Development Commercial) Leather & Leather Products 529,353 2 415 1,276 Bituminous Mining 406,360 2 35 9,286 Agriculture Services 376,870 3 160 2,355 Tobacco Manufactiwers 225,000 1 375 600 Ordnance & Accessories 195,000 1 60 3,250 Mining & Quarrying o f Non- 182,730 3 90 2,030 Metallic Metals Services, Personal 139.614 1 30 4,653 Miscellaneous Repair Service 87,750 1 10 8,775 Commercial Farms 81,250 1 10 8,125 (Horticulture) Retail Trades 46,000 1 15 3,067 TOTALS $176,143,037 405 40,355 $4,109

Figure 5.2: Approved ARA Section 6 Industrial/Commercial Loans by Industry. Complied from ARA Reports.

160 Type Investment Number of Projects Employment Potential Recreational $48,449,102 19 3,545 Services Electric, Gas, and 15,068,503 78 14,795 Sanitary Services Medical & Other 12,017,000 4 2,610 Health Services Industrial Parks 11,295,280 37 7,265 Port Facilities 8,796,000 8 1,310 Research & 4,933,000 2 Development/Non­ profit Miscellaneous 3,280,203 5 960 Services Airport Facilities 233,624 3 585 Museums 25,580 1 15 TOTALS $104,098,292 157 31,085

Figure 5.3 : Approved ARA Sections 7/8 Public Facility Loans/Grants. Compiled from ARA Reports.

161 ARA. Approved P rojceu. by Type of Proieet a# of A n c u t 32. 1965

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Figure 5.4: ARA Approved Projects by State and Territory. Source: U.S. Department of Commerce.

162 CT, DE, IL, Industrial Public Technical Training Totals IN, ME, Loans Facility Assistance MD, MA, Loans & MI, MN, Grants NH,NJ, NY, OH, PA, RI, VT, WI Number 171 49 195 479 894 Investment $75,499 $22,913 8961 $13,976 $121,349 (in thousands) Jobs(or 19,715 10,460 23,027 30,175 T rainees) (trainees) Gobs) Note: Job numbers are expected after facility ful y operational.

Figure 5.5: ARA Support by Region: Northe, ast and Lake States. Complied from ARA Reports.

AL, AR FL, Industrial Public Technical Training Totals GA, KY, Loans Facility Assistance LA, MS, Loans & NO, OK, Grants SC, TN, TX, VA, WV Number 160 94 144 390 788

Investment $65,843 $75,796 (WV: $3,776 $7,729 $153,144 (in $31,946) thousands) Jobs (or 15,600 18,735 14,806 34,335 Trainees) (trainees) Gobs)

Figure 5.6: ARA Support by Region: Southeast and Appalachia (Includes Texas and Oklahoma). Complied from ARA Reports.

163 AK, AZ, Industrial Public Technical Training Totals CA, CO, HI, Loans Facility Assistance ED, lA, KS, Loans & MO, MT, Grants NB, NV, NM,ND, OR, SD, UT, WA, WY Number 55 17 114 183 369

Investment $20,707 $5,390 $2,536 $3,579 $32,212 (in thousands) Jobs (or 3,335 1,890 6,646 5,225 Trainees) (trainees) O'obs)

Figure 5.7: ARA Support by Region: Southwest and West. Complied from ARA Reports.

American Industrial Public Technical Training Totals Samoa, Loans Facility Assistance Guam, Loans & Puerto Rico Grants Number 12 5 11 28

Investment $10,562 $57 $313 $10,932 (in thousands) Jobs (or 1,705 610 (trainees) 1,705 Trainees) O'obs)

Figure 5.8: ARA Support by Region: American Samoa, Guam, and Puerto Rico. Complied from ARA Reports.

164 investment in rural and smaller urban areas, whose local planners exploited natural

resources for tourism and recreation, or demanded infrastructure improvements prior to

attracting industries.

Which states and regions received the most aid? Regionally, the ARA spent

more in the South, which includes Appalachia and the states o f Texas and Oklahoma. It

is clear that Southern activism and the provisions of the Area Redevelopment Act that

made rural areas eligible for aid meant that the ARA would do more to develop regions

outside the traditional manufacturing belt.^ This also meant that both in terms of

mission and implementation, the ARA focused more on eliminating poverty than on

addressing directly the eSects of urban industrial change and presaged the efforts made

after 1964 under the War on Poverty.

In terms of individual states, Pennsylvania had the highest number of projects

and potential jobs with the second largest amount of investment. West Virginia

obtained the largest amount of investment (almost double the next two states) for the

second highest total potential jobs. In all, six states received forty-nine percent of all

ARA funds: West Virginia, Pennsylvania, Kentucky, Michigan, Oklahoma, and

Arkansas. Since projects had to begin at the local level and have job potential, this

reflected local initiative and political clout at the national level as much as it did overall

economic and social need. Again, states from the South or Appalachia held four of the

top six. In the first three, mining represented a core industry and communities there

sought funds to both attract new industries and train workers. As Figures 5.4 and 5.6

show, much of West Virginia’s and Kentucky’s funding went to public facilities, with

West Virginia receiving almost half of all these type of loans and grants in the

165 Southeast and Appalachia. Pennsylvania also contained eligible urban areas and steel

communities, both of which obtained funding as well. In Michigan, most eligible

counties were those in the upper portion of the state where lumbering and iron ore

production had declined; this was true for Minnesota and Wisconsin as well, two states

that also received relatively large amounts of assistance. Oklahoma received a high

portion of public facility loans and had fifty-five training programs centered on poor

whites and Native Americans. Among states in the Deep South, Arkansas received the

most funding firom the ARA, reflecting both local and congressional activism regarding

industrial development.

Where did the ARA invest its fiinds for training? Pennsylvania and Michigan

received the largest amount of funding for tra in in g and had the highest number of

enrollees. Overall, the Northeast and Lake States received the most funding for

training, however, several states in Appalachia and the South did well, including West

Virginia, Termessee, and North Carolina. The fact that training occurred mostly in the

traditional manufacturing belt reflected the presence of an industrial base that could

provide potential jobs for trainees. In the case of the South, the ARA concentrated in rural areas, and these required more public facilities to create an infi-astructure for

industries. Thus, these communities were not yet ready for substantial numbers of training projects. In addition, white southerners resisted creating training programs that had the potential to further disrupt the South’s social, economic, and political system.

Southern states that did have training possessed greater relative diversification of industry and agriculture, or occurred in communities less fearful of change.

166 Thus, by sending most of its funds to the South and West, ARA officials

managed to spread industrial development across regions. Along with inner cities in

larger urban areas, these were also regions with the highest rates of poverty and

unemployment. This came as a result of both local initiative and the ARA’s mandate to

aid both urban and rural areas. In particular, the ARA showed the potential for greater federal assistance in developing Appalachia, joining with previous political developments at the state level. In 1960, the governors of Appalachian states had formed the Council of Appalachian Governors (GAG), a body with no legal authority but one designed to promote solutions to the various economic and social problems in the region. In 1961, GAG members asked to meet with members of the ARA to begin forming concrete plans for a federal-state partnership in promoting economic development. The ARA assigned Harold Sheppard to work with GAG in developing regional as well as local programs and Sheppard headed the first of two federal commissions designed to study and recommend federal legislation to assist the region.

The ARA added further support by providing a $300,000 grant to the University of

Pittsburgh to create an Appalachian studies center. Assistant Secretary of Commerce

Franklin Roosevelt, Jr. became involved in the second commission, which became the.

President’s Appalachian Regional Commission (PARC), created in April 1963 to generate support for a legislative program to be put forth in 1964. After Kennedy’s death in November 1963, Roosevelt convinced President Lyndon Johnson to support the program, which he did. The result was the 1965 Appalachian Regional Commission, a key component of the War on Poverty.

167 While the ARA did not try to replace declining industries, the majority of those

supported were primarily at the lower end of the scale in terms of wages and skill.

While there may have been a market for textiles or wood products, for example, these

industries did not provide the high wages and stable employment once common to

manufacturing industries. The key reason was that the ARA was essentially a banker of

last resort, meaning that the community had to have no other funding source in order to

qualify for ARA loans. Since more stable, “blue-chip” companies were less likely to

require federal aid as an incentive to locate in a particular community, this requirement

tended to attract relatively riskier, unstable firms.

Such overall trends do not provide a full picture of ARA activities. The

remainder of this chapter and the following two highlight the stories of individuals and

communities behind the statistics. The next section returns to the traditional

manufacturing belt by examining the ARA experience in Pennsylvania. Chapter Six

explores the ARA’s attempts to attack inner-city unemployment through a case study of

Cleveland. Chapter Seven shifts the focus to the South and Native American

reservations

Pennsylvania and the ARA, 1961 - 1965

In their attempts to support local and state efforts to restructure Pennsylvania’s economy, ARA administrators faced a daunting task. As noted earlier, even with the

Pennsylvania Industrial Development Authority (PIDA) in place, the state’s population was aging, its unemployment rate remained higher than the national average, and its

168 economic base remained dependent on declining industries such as apparel, textiles,

steel, and coal. Communities relying on these industries remained dependent upon state

and federal aid. For example, in the Scranton and Wilkes-Barre areas, unemployment benefits of $28,500,000 represented the largest source of income in 1961.**

Environmental damage also plagued these areas. In the mining towns of Pennsylvania especially, years of run-off polluted streams, underground fires created toxic smoke, and strip mines and piles of slag scarred the landscape. In addition, the ARA began to invest directly in inner cities with a program to train workers and small business owners in Philadelphia. This would spread to other cities and connect with ARA efforts to recreate the inner city economy, a topic covered in greater detail in the next chapter on

Cleveland, Ohio. As they were doing in the South, in Philadelphia, Cleveland, and other large cities, ARA administrators grappled with the issue of race. However, in the urban North, AHA officials encountered directly the combination of race and deindustrialization as they tried belatedly to assist local groups with rising unemployment in the central cit)% Their efforts to solve the crisis emerging in the central cities ended just as newer, related federal approaches began under the Office of

Economic Opportunity (OEO), including job training and Community Action Programs.

And like the OEO, the case studies in Pennsylvania and Cleveland offer additional evidence of the nature of liberal policymaking in the 1960s and serve to underscore how these events cormected with earlier episodes of reform in the twentieth century, both the

Progressive era and the New Deal.

169 A Return to the Anthracite Region

As a whole, Pennsylvania contained the largest number of ARA projects (169) and

received the second highest total of funds ($23 million). There were some successes

and the ARA helped contribute to lower unemployment rates. In the anthracite region,

for example, the ARA spent some $2.1 million in loans through 1964 in the Scranton

area, creating an estimated 1,080 jobs. The first major project funded the creation of a

Trane Corporation plant for making heating and air conditioning units, including a

$322,000 public facility grant and a $ 1,349,183 loan. An estimated 650 jobs would

come of this. A second project was a $484,715 loan to construct a building for a printing firm, with an estimated 100 jobs.^“ Training projects in the anthracite region included male dominated areas such as transmission specialists, machine tool operators, and semi-automatic arc welders, as well as female areas of stenography and power sewing machine operators. In addition, funding firom the Accelerated Public Works program (APW) reached $3 million in the Scranton area.^^ In the adjacent Wilkes-

Barre-Hazleton labor market, ARA officials approved five industrial projects that involved some $1.2 million in loans and nearly $560,000 in grants to add approximately

1,800 jobs. This included funding for Sekisui Plastics, an American subsidiary of a

Japanese firm, which employed 106 mostly male workers from the area, and a $391,000 grant to Wilkes College for a science research center. Besides these, the agency also approved some $170,000 in training for 400 mostly male workers. In addition, through

AlP W, the area received nearly $2.5 million in public works grants, matched by $2 million in local funds.

170 As Figures 5.9 and 5.10 show, while overall unempIo>Tnent declined in the

Scranton and Wilkes-Barre-Hazleton labor markets during the lifetime of the ARA, the

overall assessment of employment is mixed. As Batt and other ARA ofScials noted, in

addition to ARA programs, outmigration and overall national economic growth in the years between 1961 and 1965 played significant roles in lowering unemployment and it is difficult to determine which of the three was most important. The significant drop in unemployment was a solid achievement, but at over 7% in both labor markets in 1966,

Scranton Industries Jan Jan Jan Jan Jan 1962 1963 1964 1965 1966 Durable Goods 9000 9400 9300 10600 11200 Apparel 10400 9900 10700 10300 10700 Mining 1800 1000 1100 1200 900 Wholesale & Retail Trade 14500 14100 13800 13500 14200 Service and Misc. 10500 10700 10800 10700 11200 Federal Govt. 1100 1100 1100 1100 1000 State and Local Govt. 7000 7300 7100 7500 8000 Unemployment Rate 13.8 13.9 12.6 9.9 7.6

Figure 5.9: Labor Market Trends for Scranton, Pennsylvania, 1962-66. Source: Labor Market Reports, U.S. Department of Labor.

171 Wilkes-Barre/Hazleton Jan Jan Jan Jan Jan Industries 1962 1963 1964 1965 1966 Durable Goods 8700 10400 11600 12200 12000 Apparel 15600 15000 14700 16900 18400 Mining 4500 4200 4000 3900 3800 Wholesale & Retail Trade 17900 18100 18300 19100 17800 Service and Misc. 11900 11700 12700 12600 12200 Federal Govt. 2500 2600 2600 2500 2500 State and Local Govt. 9800 10300 10600 10600 10700 Unemployment Rate 13.3 14.3 12.3 8.6 7.9

Figure 5.10: Labor Market Trends for Wilkes-Barre/Hazleton. Source: Labor Market Reports, 1962-66, U.S. Department of Labor.

it still surpassed the national rate of 4%. The Wilkes-Barre-Hazleton labor market added 6,500 jobs in key sectors listed, with just over 50% in the durable goods sector and 43% in apparel. In Scranton’s case, just over three-fourths of job creation in the key sectors came in durable goods. Meanwhile, the population in the Scranton —

Wilkes-Barre — Hazleton Metropolitan Statistical Area, which comprised most of the anthracite region, declined over nine percent from 719,863 in 1950 to 650,604 in 1970.

In Hazleton and elsewhere, Batt and ARA leaders remained especially concerned about male employment, which had been a consistent theme throughout the history of area redevelopment. In 1964, 40 percent of the nearly 43,000 manufacturing jobs in

Hazleton were in the apparel industry and these were overwhelmingly held by women.

Overall, Luzerne County had more women than men employed in manufacturing and as

William Batt noted in 1964, “there’s still a shortage of jobs for men and that should be ever before us as we work into the future on this never-ending job o f development.”^®

172 In addition to new industries, ARA administrators sought to reclaim the

landscape in the anthracite region and elsewhere as part of their support for economic

revitalization. However, tike its overall legacy, the agency’s record on this element of

deindustrialization is contradictory. This is not surprising given that the legislation

creating the ARA contained no specific mandate for environmental cleanup. In

September 1964, President Johnson established a Panel on Environmental Pollution to

which ARA Assistant Administrator Harold Williams served as liaison. Williams noted

that environmental issues were secondary to the creating jobs. “Although the primary

purpose of these projects is to stimulate local economic growth, they do have a part in

controlling or preventing environmental pollution.”^^ The only project specifically

related to pollution was a technical assistance loan to investigate the cleanup and reuse

of anthracite coal waste. For example, forty-eight percent of the public works projects

funded through the ARA went to waste treatment, water and sewer improvements, and

other public utilities.** Batt tried to promote tourism and through this preservation or

restoration of natural resources, but these did little to advance environmentally sensitive development. Some ARA-flinded tourist projects, such as the creation of Camelback

Ski Resort in Stroudsburg and Blue Knob resort in Bedford, can be seen as damaging to the environment.'^ The high investment-to-job-ratio, coupled with the relatively low- paying jobs created served to reinforce the stereotype of the ARA as wasteful.

General Electric in Scranton

As ARA administrators worked to attract industries to the anthracite region, they also became involved in efforts to keep existing ones there. The core element in

173 deindustrialization remained the loss of industries from the manufacturing belt, and the

ARA’s failure to halt it reveals the limitations of federal policy. The key effort in the

anthracite region involved the closing of the 217,000 square foot General Electric (GE)

plant in Scranton."® In early 1962, citing “inevitable economic pressures”^' in the

electronics industry, GE announced it would close its Scranton plant, where some 350

workers represented by Local 125 of the United Electrical, Radio, and Machine

Workers (UE) had manufactured radio and television tubes since 1952. Before this,

workers built dishwashers there. GE President Ralph Cordiner defended the necessity

of closing the plant and consolidating production at a site in Owensboro, Kentucky. As

soon as the annoimcement became public, Batt and Commerce Secretary Luther Hodges joined UE representatives, state, and city leaders in pressuring GE to keep the plant

open by finding alternative uses for the plant. As Batt noted in a letter he drafted for

Hodges signature, GE’s plan to set aside “$500,000 for income extension and retraining will be insufficient to sustain individual workers who will be forced to seek new employment in a community where 11.2 percent of the work force is already unemployed.”^ Hoping for a more forceful response, members of NPAC urged “that the Federal procurement agencies discourage beneficiaries of Government contracts from relocating out of economically depressed regions.”^ During March, GE leaders met with UE officials, as well as local, state, and federal government officials. After negotiating, GE leaders in April agreed to retool the plant for production of naval ordnance and hire approximately 180 workers. In addition, the contract kept the UE there and classified employees as laid off rather than fired, which kept them eligible for rehire should GE need them once the plant became operational.""^

174 Unfortunately, the honeymoon lasted only two years. As early as December

1964, GE managers had decided again to close the Scranton plant and finalized the

decision in January 1965. Citing “excess capacity” within its defense operations, GE

began its phase out by offering financial assistance to workers looking for new jobs in

the area. Following WWU, heavy ordnance procurement by the federal government had

been losing ground to electronic and missile production."^ Pennsylvania's political

leaders and representatives from the UE pressured both the Joh nson administration and

GE to reconsider its decision. Louis Kaplan, District 1 representative for the UE,

wanted the Defense Department to direct ordnance work there since GE received nearly

S11 billion in defense orders and Scranton remained a distressed area.^^ The Defense

Department and the Johnson administration refused to do more than what its

representatives had already done, which was to meet together with GE officials and

local leaders in a failed attempt to persuade GE to stay. Following GE’s departure, the

plant became a warehouse for Giant Markets, a supermarket chain.^^

Such attempts showed the one long-term weakness of ARA-style programs. As

Harold Williams argued in 1964, the “ARA believes in solving the unemployment problem by the free, private enterprise system.”^* As liberals working within the market system, Williams and other ARA leaders used the federal government to offer incentives to business leaders as a means toward ending poverty. In this way, businesses still held most of the power to determine the success or failure of labor markets. The ARA did help, but the agency could only do as well as the overall economy did. Despite conservative rhetoric to the contrary, as the GE case shows, the

ARA was not an experiment in socialism. In fact, the agency embodied many

175 conservative tendencies. Much like the New Deal, the ARA sought to preserve and

extend capitalism — not alter it — and business owners retained power over capital

mobility and production decisions. To be fair, the agency’s purpose was to attract new

industries, not prevent the closure of old ones, and the overall unemployment rate in

Scranton declined even as the GE plant closed. Still, the ARA, in partnership with local

and state leaders, could play only a limited role in trying to alleviate the effects of

unemployment. And while other programs of the Kennedy and Johnson administrations

assisted Americans in climbing out of poverty, they too allowed industrial

transformation to proceed and benefited from overall economic growth. Certainly, these

efforts helped lower rates of poverty in the United States during the 1960s and in the

case of GE, perhaps the closing did not impact the overall unemployment rate. But the

ARA and other poverty programs provided a weak cushion to the people and communities hurt by major downturns in the economy and by plant closings, as the manufacturing losses in steel and automobiles during the 1970s and 1980s would show.

Also, as the discussion of large urban areas such as Philadelphia and Cleveland highlights, while officials of the ARA realized the crisis in the central cities, they could do little to alter the racial dynamics of urban unemployment and poverty.

Meanwhile, at the end of the ARA’s life in 1965, a summary of the communities in the anthracite region reads much as it did in the 1950s. It was an area heavily dependent upon the state through unemployment benefits and characterized by families with female breadwinners, many of whom were employed in lower wage industries such as apparel manufacturing. Its population was older than the national average. It also suffered firom environmental problems fi-om a century or more of coal mining,

176 added to industrial wastes left by manufacturing industries. While the ARA, as well as local and state efforts did attract jobs, in 1965 the region remained poorer and in worse environmental shape relative to nation as a whole.

Altoona, Johnstown, and Pittsburgh

Outside the anthracite region, the ARA funded similar projects as Pennsylvanians sought to remake the state's industrial foundation. The agency became active in other key areas identified as “distressed” in the 1950s, including Altoona, Johnstown, and

Pittsburgh. While anthracite communities received the most publicity and its residents were the most active in pressuring for federal aid, those in these other areas also sought and received federal help from the ARA. Western Permsylvanians had been creating local and regional development groups and it was through these that the ARA acted to promote industrial development.

In the 1950s, Altoona had suffered from changes in the locomotive industry as diesel power replaced steam. Unemployment also increased from female job losses in textiles and male job losses in coal mining near the area. In 1960, the overall unemployment rate in Altoona was 10.4%, nearly double the national rate of 5.5%. To combat these shifts, the ARA supported three major projects. The agency disbursed a

$391,000 loan to allow Boyer Brothers, Inc. to expand and modernize its candy manufacturing plant, adding an estimated 70 new jobs. An $85,595 loan to create a fruit storage and packing complex for Cove Apple Packers Corporation created 30 jobs.

And the Blue Knob ski resort mentioned above generated 120 jobs, at an investment of

$222,155. The ARA also trained 100 women as clerk-stenographers at a cost of

177 $70,000, 54 nurses aides costing $15,000 and 16 men as welders costing $13,000.“^ As

Figure 5.11 shows, the unemplojonent rate dropped in Altoona to 8% by January 1966,

but as it was with all communities participating in the ARA program, it is difScult to

tell how much of an impact the ARA had on this trend. Interestingly, both industries

that saw declines in the 1950s, railroads and textiles, saw increases between 1963 and

1966. These were temporary, though, as the long-term trend in both was decline and

they would be hurt in the late 1960s and 1970s.

In the Johnstown region, where the unemployment rate dropped from 11.9% in

1960 to 6.3% by January 1966, the ARA funded few new jobs, but instead supported

studies for potential ones centered on tourism. The major cause of male unemployment

in the 1950s was job loss in bituminous mining, and judging from the information in

Figure 5.12, it seems likely that the ARA had little impact on lowering the unemployment rate. Here, national economic growth and outmigration helped. Projects in the Johnstown area included a $22,750 loan to the Seldom Seen Valley Coal M in in g

Company to develop a mine as a tourist attraction, and $10,000 loan to establish a

“Floodrama” exhibit centered on the Johnstown flood of 1889. In addition, the

Johnstown area received some $3.2 million in public works funds. Male training there included 50 draftsmen, 150 production workers, and 66 m in in g equipment workers. For women, the ARA provided funds to train 135 nurses aides and 40 clerk-stenographers.^°

Such categories of job training reflected rather than challenged typical work roles for men and women. Historically, trainin g for American women who do not attend college has centered on placing trainees in the “pink-collar” world, including jobs such as ofrlce clerks, nurses, bookkeepers, data entry technicians, and teachers.

178 Although Title VU of the 1964 Civil Rights Act prohibited sex discrimination in job

training, it was not until the 1970s that women began to enter traditional male areas

such as trade and manufacturing. Still, they were significant in that these programs

became part of a shifting trend in the 1960s that saw the federal government increase its

involvement with job training for both men and women.^*

As it was in the South, in smaller urban areas like Altoona and Johnstown, the

ARA supported mostly lower-wage industries, with a noticeable emphasis on tourism.

Though it was not the agency’s intention, these examples provide further evidence of the AJlA’s role in a larger transformation of the American economy from an older, industrial one, centered on manufacturing and resource exploitation, to what some have called a post-industrial economy, emphasizing service, technology, and recreation.

While it did not promote the trend, the agency did respond to it through financial assistance. In Altoona and Johnstown, while employment levels in industries such as primary metals and electrical machinery held up, the areas that gained were in the service sector and government.

Also eligible for aid was the Pittsburgh labor market, where declines in heavy machinery, primary metals, steel, and coal mining employment during the late 1950s had pushed unemployment there to over 9 percent by 1960. The Pittsburgh area received some $2 million in loans and grants for a total of approximately 828 new jobs.

Here, too, the ARA assisted in replacing higher-paying manufacturing jobs with lower- skill, lower-paying ones. However, most of these were in areas outside the central city.

For example, the ARA estimated 400 jobs coming from a $500,000 public facility grant to improve a water system in Smith Township and another 250 jobs from a similar

179 Altoona Industries Jan Jan Jan Jan Jan 1962 1963 1964 1965 1966 Fab. Metal 1,400 1,100 1,300 1300 1500 Electrical Machinery 1,300 1,300 1,200 1300 1600 Textile and Apparel 2,100 2,300 2,300 2400 2600 Railroad Shops 5,000 6,200 7,500 7200 6300 Wholesale & Retail Trade 7,400 7,000 7,000 7000 7100 Service and Misc. 4,700 5,500 5,700 5800 6100 Federal Govt. 600 700 700 700 700 State and Local Govt. 3,500 4,100 4,300 4600 4600 Unemployment Rate 10.9 14.1 10.7 8.1 8.0

Figure 5.11: Labor Market Trends in Altoona, Pennsylvania, 1962-66. Source: Labor Market Reports, U.S. Department of Labor.

Johnstown Industries Jan Jan Jan Jan Jan 1962 1963 1964 1965 1966 Primary Metals* 12200 9400 10200 11200 12400 Apparel 5000 4800 5300 5300 5300 Mining 5400 4800 4600 5000 5300 Wholesale & Retail Trade 12400 12200 11900 11600 11500 Service and Misc. 8600 9100 9400 9600 10000 Federal Govt. 700 700 700 700 700 State and Local Govt. 7800 8000 8300 9200 9500 Unemployment Rate 18 15.6 10.5 7.1 6.3 * Over 90 percent of employment in Primary Metals came from Bethlehem Steel.

Figure 5.12: Labor Market Trends for Johnstown, Pennsylvania, 1962-66. Source: Labor Market Reports, U.S. Department of Labor.

project in Charleroi. More direct job creation came in the form a $271,245 loan to create a metal fabricating plant (55 jobs) and a $1.2 million loan for a food processing and distribution plant (123 jobs). It is likely that most were non-union. Training provided lower-end employment as well, including aluminum sash and door makers, 180 maintenance workers, appliance repair, and of5ce clerks. Within the city, most funding

came from the APW program. Projects in Pittsburgh included the construction of a

nursing home, a hospital addition, two libraries, and street and sewer repairs. In total,

the Pittsburgh labor market received nearly $25 million in APW funds."" There might

have been more but community leaders refused to provide a means for raising the 10

percent local funding required by the ARA. Pittsburgh concentrated its efforts in the

Regional Industrial Development Corporation of Southwestern Pennsylvania (RIDC).

Although the agency’s leaders claimed to support the ARA, Batt stated otherwise, arguing that members of the RIDC were “fighting ARA tooth and nail.”^^ Interestingly, local African American leaders apparently tried to bypass the RIDC and develop a means of raising the ten percent funding within African American districts in the city.^"^

There is no indication it developed under the ARA, although it may have under the

OfGce of Economic Opportunity or later. In any event, it shows that racial tension often remained between white civic leaders and the minority residents who most often needed employment opportunities. Furthermore, since the ARA worked within the system of federalism, it could not bypass designated agencies — even when a greater good might have been gained by doing so. Given the difficulties Community Action Programs experienced after 1964 in efforts to organize the poor by circumventing city and state leaders, it is likely that had ARA administrators tried this, resistance would have altered such an arrangement.

181 The Small Business Opportunities Corporation and the Opportunities

Industrialization Center in Philadelphia

Besides the usual training programs and industrial loans, in April 1963 the ARA entered

new territory when it became involved in two projects begun in Philadelphia’s inner

city. This came prior to the ARA’s December 1963 announcement that the agency

would aid central cities whose unemployment rates were higher than the surrounding

labor market.^^ The Small Business Opportunities Corporation (SBOC) began as a

local idea to train inner city residents as business owners, while the Opportunities

Industrial Center (OIC) coordinated with industries in training inner city workers. Both

received ARA funding and served as models for similar programs in other cities, both

under the ARA and through the Office of Economic Opportunity, the centerpiece of the

War on Poverty. While providing a bridge to the Great Society, funding the projects

allowed the ARA to confront directly the issue of urban, black unemployment,

something they tried to expand upon in other cities such as Cleveland.

City leaders in Philadelphia had begun to rebuild the local economy and had

managed to attract a number of new industries to the area around the city. In addition to

promotional efforts, city leaders created the Philadelphia Industrial Development

Corporation in 1958, modeled to some degree on PIDA, created in 1956. As a result, the city saw employment rise in areas such as electrical machinery, chemicals, and services. Unemployment in the entire Philadelphia labor market fell to 6% in 1960.

However, the number of unskilled workers between 18 and 64 migrating to the city increased by approximately 60,000 during the 1950s. They were mostly Southern blacks, but some were Puerto Ricans and poor whites from Appalachia. There was also

182 a surge in the population under 18, which increased by over 470,000. The black

population grew from approximately 373,000 in 1950 to 529,000 in 1960. As expected,

the economic and social conditions of blacks were lower than that of whites. For

example, median income for white families in 1959 was $5,782 and for blacks $4,284.

Black unemployment in the central city was as high as twent}' percent, higher for

young, black males in some communities. All of this occurred as the overall population

of Philadelphia declined from 2,071,605 to 2,002, 512.^^

Despite the direct need for jobs, the ARA did not provide support in the form of

industrial loans to Philadelphia. With limited funds, especially after the House refused

to increase ARA funding in the summer of 1963, the ARA concentrated on job tra in in g

and business operations for mostly black entrepreneurs in the inner cities. These

projects reflected well the emerging assumption among liberal policymakers that the

poor suffered most from blocked opportunities and what they needed were new skills to

enable them to compete in the market. The ARA efforts in job training were dismal,

however. Only four programs developed, training 465 city residents for positions as

clerks, child-care attendants, keypunch operators, and food service workers. In addition,

in September 1964 the ARA provided $50,000 in technical assistance funds to the OIC,

which also had support from the governments of Philadelphia and Pennsylvania, reflecting again the partnerships formed between local, state, and federal leaders in developing programs to promote industrial development and train workers. For entrepreneurs, the ARA provided technical assistance to SBOC. At the urging of the

Philadelphia Fellowship Commission, a group of white and black civic leaders began to create a proposal for SBOC in 1962. The Commission joined with the Drexel Institute

183 of Technology and the Mayor’s Office to engage federal agencies including the Small

Business Administration, President Kennedy’s Committee on Equal Employment

Opportunity, and the ARA. In April 1963, ARA officials took the lead in proposing

some $100,000 in technical funding for one year of a three-year trial program.^® SBOC

began operations in February 1964 and in one year had provided free training to 1,000

potential male and female business owners. The staff of SBOC selected, trained, and guided these owners through the first three years of their business venture, including advice on choosing a business, finding a location, and budgeting. After the Ford

Foundation rejected a request from SBOC for a $500,000 grant, in June 1964, Batt announced a $119,000 loan to extend the program another year, which came as the

ARA approved the OEDP for Philadelphia. Batt and others in the ARA decided to extend the delegate agency concept and allow the SB A to take over monitoring the project for the ARA, after ARA administrators had convinced the SB A to help with loans. From 1964 to 1965, SB A approved 219 loans for total of $912,547, 98 for blacks, 121 to whites. Three-fourths went to existing business owners, concentrated in restaurants, groceries, contracting, dry cleaning, and variety stores."’^

In addition to the structure of the programs, the language used to describe their reasons reflected important aspects of liberal policymaking in the 1960s. According to the project’s proposal, SBOC “can serve to upgrade the economic life, the aspirations, and opportunities of various minority groups in our society, resulting in these individuals becoming more active participants in American economic life and acquiring a greater sense of social responsibility.”^® Such concerns, which hinted at paternalism, were perhaps inevitable in the attitudes behind proposals to assist minorities in the

184 emerging War on Poverty. Interestingly, since some of the organizers were black, this

raises the question of class-based paternalism being a part of liberal programs Like the

ARA. But whether race-based or class-based paternalism was a part, ARA programs

emphasized persuading minorities to embrace middle-class values and market

participation. However well intentioned, such ideas would become points of conflict

during the 1960s between liberals, radicals, and conservatives over the proper role of

federal policy in relation to minorities and the poor.

While the idea behind SBOC spread quickly to other cities including New York,

Cleveland, Pittsburgh and Milwaukee, ARA efforts to provide more intensive labor

market policies than these proved impossible for three major reasons. First, imder ARA

guidelines, cities had to raise at least ten percent of the funds for industrial development

and often city leaders could not agree on a plan to do this.'** Second, the point would

likely have been moot anyhow with the ARA’s failure to obtain additional funds in

1963. Third, a year after these projects began, federal involvement changed. Under the

Johnson administration, the ARA would be transformed into the EDA, and Community

Action Programs under the OEO began to operate in late 1964. Interestingly, the OEO

members expressed shock at learning of the ARA’s pioneering role in Philadelphia.

Officials in the SB A had not mentioned ARA to OEO members when discussing the

SBOC program and the possibility of continuing it under OEO. As was typical of the

War on Poverty, the Community Action programs continued what ARA was doing

without understanding or being aware of the ARA’s successes and failures.

The significance of the programs in Philadelphia go beyond this, for much like programs in other parts of Pennsylvania, their emergence reflected well-established

185 trends in modem American state-building and social welfare. They began at the local

level before becoming a national program during the War on Poverty, and involved the

use of experts — in conjunction with government and non-profit groups — to identify the

problems, propose solutions, and implement plans. Development was again in the

hands o f community leaders as they forged connections to administrators in the federal government in the hopes of solving poverty and unemployment. Thus, the War on

Poverty was more than a program handed down firom policymakers in Washington,

D.C. It evolved in many of the same ways the Progressive era and the New Deal had, firom local and state movements to national ones, incorporating similar patterns of administration, and embodying similar notions of reform.

The idea of aligning federal redevelopment efforts more closely on the side of minorities, especially Afiican Americans developed into a focused ARA program m

1963. Making central cities within labor markets eligible for aid was a new direction in

ARA policy. The next chapter on Cleveland, Ohio examines this in more detail. With pressure already increasing regarding ARA efforts in the South, and the growing awareness by ARA administrators that poverty hurt minorities the most, ARA officials made large cities with high unemployment rates eligible for aid in December 1963.

While Pittsburgh had already been eligible for aid, and the SBOC in Philadelphia was a special program, Cleveland’s leaders became the first to develop an overall economic development program for their city. As in the South, the connection with local leaders in the urban North brought ARA officials into direct involvement with racial tensions.

186 NOTES

‘ Transcript o f Batt speech, 25 February 1964, Reading Files, 1961 — 1965, box 1, “Speeches, Lectures, Statements — ARA,” Record Group 378, Records of the Economic Development Administration, Records o f the Office o f the Administrator, William L. Batt, Jr., Area Redevelopment Administration. The records of the ARA housed at the National Archives remain unprocessed. Hereafter, they will be abbreviated by the name o f the administrator and cited as ARA-NARA.

* Transcript o f Williams speech, 21 January 1964, Batt Reading Files, box 1, “Speeches, Lectures, Statements — ARA,” ARA-NARA.

^ “Overall Economic Development Program,” U.S. Department o f Commerce, August 1961.

“* Levitan, Federal Aid, 36-45.

^ Congressional Record, Volume 107, Part 5, 26 April 1961, 6715.

® Levitan, Federal Aid, 33, 42.

^Ibid, 34, 185.

* Ibid, 47. See also Batt Oral History, JFKL., 181-2.

^ In From Cotton Belt to Sunbelt (New York: Oxford Press, 1991), Bruce Schulman argues that the “ARA accomplished little and had almost no effect on the South.” He also asserts that most o f the ARA’s resources “found its way to New England and the Great Lakes states” (185). As this and the next chapter demonstrate, the former is too dismissive and does not disclose the full story o f the ARA and the latter is incorrect.

10Levitan, Federal Aid, 205-07.

“New Growth...New Jobs for Pennsylvania,” Shapp Foundation Report by Milton Shapp and Ernest Jurkat, Shapp report, in “Pennsylvania” folder, box 4, Williams, General Subject and Signature Files, 1962 - 1965, ARA-NARA. (“Shapp Report” hereafter.)

Press release, 5 March 1964, Batt, Subject Files, “Pennsylvania, 1965” folder, box 16, ARA-NARA. Directory o f Approved Projects as o f June 30, 1965,U.S. Department o f Commerce, Area Redevelopment Administration.

*■’ Directory of Approved Projects as o f June 30, 1965,U.S. Department of Commerce, Area Redevelopment Administration.

Transcript o f Harold Williams speech, 21 January 1964, Batt, Reading Files, 1961 — 1965, box 1, “Speeches, Lectures, Statements — ARA,”ARA-NARA; Press Release, 5 March 1964, box 16, Batt, Subject Files, 1961— 1965, ARA-NARA. Directory of Approved Projects as of June 30, 1965,U.S. Department o f Commerce, Area Redevelopment Administration.

Statistics from U.S. Bureau o f the Census and various Labor Market Reports in Record Group 16, Papers of Department o f Labor and Industry, Peimsylvania State Archives.

187 Transcript o f Batt speech, 25 February 1964, Reading Files, 1961 — 1965, box 1, “Speeches, Lectures, Statements - ARA,” ARA-NARA.

Williams to J. Herbert Holloman, 24 September 1964, “September 1964 Non-Congressional” folder, box 6, Batt, Reading Files, 1961 - 1965, ARA-NARA.

Ibid.

Report, “Pennsylvania, 1965” folder, box 16, Batt, Subject Files, 1961— 1965, ARA.-NARA.

In addition to GE in Scranton, the ARA became the lead agency in federal efforts to assist South Bend, Indiana when the Studebaker plant shutdown and moved production to Canada, a provision in the Public Works and Economic Development Act o f 1965 did allow the Secretary o f Commerce to aid communities where a major plant shutdown threatened a commimity See Chapter 9 for more details.

Ralph Cordiner to Luther Hodges, 9 February 1965, “Pennsylvania, 1961— 1962” folder, box 16, Batt Subject Files, 1961—1965.

~ Hodges to Cordiner, 14 March 1962, “March 1962, Non-Congressional” folder, box 4, Batt, Reading Files, 1961 - 1965, ARA-NARA.

^ Resolution, 9 March 1962, “March 1962, Non-Congressional” folder, box 4, Batt, Reading Files, 1961 - 1965, ARA-NARA.

Newsclipping, “Pennsylvania, 1961— 1962” folder, box 16, Batt Subject Files. 196 1— 1965; “Fight to Retain GE Here Successful,” ScrantonTribune, 4 April 1962, 1; “Changeover at GE PEant Awaits Okay,” Scranton Tribune, 12 April 1962, 3.

^ See Shapp report in ARA-NARA 119.

Press release, 15 January 1965, “Pennsylvania, 1961— 1962” folder, box 16, Batt Subject Files, 1961— 1965; Louis Kaplan to Paul Ignatius, 4 February 1965, WHCF, BE-5-5/ST38, Lyndon Baines Johnson Library (hereafter referred to as LBJL).

Ignatius to Kaplan, 30 January 1965; “GE Plant to be Used for Giant Warehouse,” ScrantonTribune, 6 June 1965, 21. The fate o f the former GE workers remains unknown.

See note 2 above.

^ Press release, 5 March 1964, “Pennsylvania, 1965” folder, box 16, Batt, Subject Files, ARA-NARA. Directory o f Approved Projects as of June 30, 1965,U.S. Department o f Commerce, Area Redevelopment Administration.

30 Ibid.

Sharon L. Harlan and Ronnie J. Steinberg, eds..Job Training fo r Women: The Prom ise and Limits o f Public Policies (Philadelphia; Temple University Press, 1989), 4-5.

Directory o f Approved Projects as of June 30, 1965,U.S. Department o f Commerce, Area Redevelopment Administration Because the unemployment rate dipped below 6 percent, Pittsburgh became ineligible for ARA assistance in May 1965.

188 Batt memo, 21 January 1964, “Chron File, 1964’’ folder, box 2, Batt, Reading Files, 1961 - 1965, ARA-NARA.

Batt memo, n.d., “Pennsylvania, 1963 — 1964” folder, box 16, Batt, Subject Files, 1961— 1965, ARA- NARA.

Between 1963 and 1965, Buffalo, Cleveland, Los Angeles, Miami, Newark, Oakland, Philadelphia, and Toledo became eligible. Detroit, Providence, and Pittsburgh were already eligible.

^ Shapp Report. U.S. Census, I960.

Press release, 29 September 1964, “September 1964, Non-Congressional” folder, box 6, Batt, Reading Files, 1961 - 1965, ARA-NARA.

Letter, George Robinson to Frank Cirillo, Technical Projects Division, ARA, 28 September 1962, “Small Business Opportunities Corp. (Phila., Pa)” folder, box 11, Batt, Subject Files, 1961— 1965, ARA- NARA. Press Release, 11 April 1963, “Small Business Opportunities Corp. (Phila., Pa)” folder, box 11, Batt, Subject Files, 1961— 1965, ARA-NARA.

George Robinson to Batt, 22 January 1964, “Small Business Opportunities Corp. (Phila., Pa)” folder, box 11, Batt, Subject Files, 1961— 1965, ARA-NARA; Sherwood Gates to Batt, 5 March 1965, “Monthly Activity Reports” folder, box 14, ARA-NARA.

“Technical Assistance Project Summary,” 10 January 1963, “Drexel Institute (Philadelphia, Pa.)” folder, box 3, Sheppard, Mixed Subject and Program Files, 1961 - 1963, ARA-NARA.

See various Monthly Division Reports in box 14, Batt, Subject Files, ARA-NARA.

189 CHAPTER 6

THE ARA AND CLEVELAND, OHIO

“Deterioration of the inner city neighborhoods, including the DowntowTL, has established islands of the unemployable. Many contend that the slum itself generated unemployment since it created an environment that destroys human initiative and the willingness to seek productive employment.” From “The Cleveland Plan for Economic Development,” March 1964’

“In our quest for civil rights, we are, all too often, putting our major emphasis on the wrong things.” Cleveland Call and Post, July 1964^

Introduction

The previous chapter showed how people across Pennsylvania struggled with industrial

decline and worked to implement grants and loans from the Area Redevelopment

Administration (ARA). It also highhghted the SBOC program that signaled a new direction in ARA policy that sought to use the agency’s programs to grapple with the connection between race and deindustrialization in larger urban areas across the manufacturing belt. This section examines in greater detail how urban leaders, workers, and activists responded to industrial transformation in Cleveland, Ohio, between 1945 and 1965 and how the ARA sought to aid some of these efforts. Like other cities in the

190 traditional manufacturing belt, Cleveland experienced a profound economic and social

transformation in the years following WWn. Manufacturing firms in the central city

either left or cut the number of employees, which reduced the opportunities for

relatively well-paying, entry-level jobs available to poorer residents in the area. These

changes affected African Americans the most, who by 1960 made up a majority of the

central city population. While middle-class blacks lived in the area, the central city

experienced an influx of unskilled, rural migrants from the South, who came just as

manufacturing jobs began to decline. Also, unskilled blacks lacked the training for

service and professional employment in the city. Discrimination played a role here as

well; for example, retail stores preferred to hire whites for sales and other positions.

Examining Cleveland is appropriate for several reasons. First, this portion of

Cleveland’s history has not been adequately addressed and this chapter adds to the

historical scholarship on urban America in the modem period/ Second, in 1963, when

ARA officials decided to create a special program to aid inner cities, Cleveland was the

first to develop an Overall Economic Development Plan (OEDP), which built on efforts

underway since the 1950s. Unfortunately, Cleveland’s failure to utilize the ARA

effectively mirrored the experiences of the other cities eligible for aid. Third, examining efforts in Cleveland adds to our historical understanding of the economic and social transformations underway in the large urban areas of the United States following

WWn and the role of activists and local, state, and federal ofBcials in these transformations. Neither set of historical actors involved in Cleveland devised effective strategies against the loss of jobs in the central city. Finally, the experience in

191 Cleveland shows further how local and federal ofBcials began to cooperate in efforts to

combat unemployment and other problems in the inner city prior to the development of

a formal, federal War on Poverty in 1964. The growing evidence of economic decline

in the iimer city and the growing influence of the civil rights movement led to increased

pressure for a response. Building on local solutions and federal programs such as urban

renewal and the Manpower and Training Development Act of 1962, ARA officials tried to lower unemployment in Cleveland through Job training and loans for urban renewal, which were then taken up by federal programs under the Great Society.

Like many large cities in postwar America, Cleveland experienced job growth in the suburbs around it while facing economic decline within the inner city. At the same time, Cleveland’s racial mix changed so that by the mid-1960s, most residents o f

Cleveland were black. Prevented from moving to the suburbs by restrictive real estate practices (such as red-lining and all-white neighborhood covenants), black Clevelanders settled mostly in the neighborhoods of Glenville, Central, and Hough. Metropolitan

Cleveland’s overall industrial base remained somewhat diverse, made up of manufacturing, service, and trade. In the inner city, however, job growth slowed or stagnated, hurting blacks — males in particular — the most. Many blacks, especially unskilled workers from the South, had come to Cleveland and other northern cities for jobs during WWII. Following WWII, new jobs in manufacturing fell as the black population continued to grow. At the same time, whites moved away from the inner city and either commuted or, in what became the dominant trend, took jobs in areas surrounding the city. Highway construction, spurred on by the federal Highway Act of

192 1956, abetted this change by making it easier for workers to live outside the central city and commute. In addition, companies who built new facilities often did so outside the inner city, citing tax-incentives and greater space to build larger, more efBcient plants.

The result was a loss of jobs in the inner city at the same time black workers needed them. Black and white community leaders, business people, and city officials confronted this reality during the two decades after WWII and responded initially through urban renewal, highway construction, job training, business development, fighting discrimination and efforts to organize the poor.

However, such responses did not solve the growing crisis. While civil rights leaders and student groups focused on issues such as discrimination and welfare rights, they failed to address the structural changes affecting Cleveland’s economy. Business leaders and city officials concentrated on urban renewal and belatedly addressed new business development in the inner city to assist Afiican Americans. Because of distrust, local labor leaders did not work with the major business development groups in the city.

Thus, an uncoordinated, and ultimately weak effort began in Cleveland after WWII.

Beginning from such a weak position, city leaders linked turned to the ARA at a time when the agency had already spread itself too thin. Further tensions continued after the

ARA ended in 1965 and other federal program s tried to address the crisis. They followed similar patterns of mistrust, inaction, and lack of coordination, all of which led to urban violence in the late 1960s and a further decline in well-paying, secure job opportunities for working-class residents in the central city.

193 Cuyahoga County, Ohio 1 9 9 0 Cleveland Neighborhoods (Statistical Planning Areas)

Figure 6.1 : Cleveland’s Neighborhoods. Source: W. Dennis Keating, ed. Cleveland: A Metropolitan Reader (Kent, OH, 1995).

194 Cuv'ahoga County, Ohio 1 9 9 0 Community Boundaries

E — 1 I

Figure 6.2: Cuyahoga Countv', Ohio. Source: W. Dennis Keating, ed. Cleveland: A Metropolitan Reader (Kent, OH, 1995).

195 A B rief History to 1950

Cleveland typified the development of many large urban areas in America’s manufacturing belt. What was a small village in 1800 had become a major industrial center by 1900. Beginning in the 1850s, city leaders used Cleveland’s geography to promote industrial expansion. Located on Lake Erie between the iron ranges and lumber of the Upper Great Lakes and the coal of southern Ohio and West Virginia,

Cleveland became a center for transportation, trade, and manufacturing.'* Immigrants from Europe came to Cleveland; in the mid-nineteenth century, they were mostly

Germans and Irish while eastern and southern Europeans dominated in the decades between 1870 and 1920. As a result, Cleveland’s population increased between 1900 and 1910, from 381,768 to 560,663. By this time, three fourths of Clevelanders were foreign bom. Afiican Americans from the South came as well, especially during WWI.

Between 1910 and 1920, Cleveland’s black population increased from 8,448 to 34,451.

Within the city, immigrants established neighborhoods according to ethnic origin or race. After 1920, the divide became more racial, with white immigrants moving to the city’s periphery and blacks remaining in the core. By 1930, approximately 90 percent of the city’s blacks lived in an area bounded by Euclid and Woodland Avenues and Eeist

14“* and East 105* streets, forming the basis o f both growing black political power in

Cleveland as well as a nucleus for the urban riots of the 1960s.^

As it did in many areas of the country, the Depression devastated much of

Cleveland’s economy and brought unemployment and poverty to many of its residents.

Relief came during WWII, when the industrial and human demands of war generated

196 economic growth and virtually eliminated unemployment. It was during these years

that local promoters dubbed Cleveland the “best location in the nation.*’ Whites from

Appalachia and Southern blacks came to Cleveland’s factories, docks, and shops to

produce tanks, planes, trucks, electronic goods, machine tools, and a host of other

products. A 1946 survey of businesses in Cuyahoga Coimty fotmd that of the nearly

560,000 workers in the county, roughly a third worked in four industries: machinery

(66,000), iron and steel (50,000), transportation equipment (34,000) and electrical

machinery (26,000). These newest immigrants pushed demand for housing such that

landlords subdivided single-family homes and apartments, beginning a trend of

overcrowding in the inner city. After the war, returning servicemen and women added

greater pressure for housing and new projects went up in Brooklyn, Lyndhurst,

Mayfield Heights, Maple Heights, and South Euclid. Whites, continuing the trend

begun in the 1920s, left the central city for suburban neighborhoods. Meanwhile, the

overwhelming majority of blacks remained in the inner city, both by choice and, more

often, because of racial barriers.®

During the 1930s and 1940s, it was black Clevelanders who first responded to the various conditions that were having a negative impact on their communities and

livelihoods. They did so by organizing their own groups or joining labor and political organizations sympathetic to their goals, including the Congress of Industrial

Organizations (CIO) and the Communist Party. Groups organized by blacks included the Future Outlook League (POL) and a local affiliate of the National Negro Congress.

All of these organizations mobilized support for unionization, legal redress of

197 discrimination, boycotts, and pickets. During WWII, the FOL successfully picketed

Standard Tool to hire blacks for various positions, especially skilled trades. Despite

some success, unions still maintained discriminatory practices. Although the CIO

helped place blacks in industrial jobs during WWII, craft unions and those in the

building trades resisted accepting blacks for membership and this trend continued into

the 1960s. Despite the local pressure, the growing civil rights movement, and calls

from national labor leaders such as Walter Reuther of the UAW and George Meany of

the AFL-CIO, many locals continued to discriminate. The inability to obtain union jobs

added to the growing unemployment crisis in Cleveland and helped make it eligible in

1963 for federal aid under area redevelopment.^

In the 1940s, in response to the growing pressure and awareness of discrimination, the city government included race relations in its postwar planning operations. In 1943, Democratic Mayor Frank J. Lausche organized a Postwar Planning

Council to address Cleveland’s future. The committee consisted o f five panels, each investigating a separate area: transportation, public works, race relations, returning servicemen, and public finance. Relative to employment and race relations, the public works panel urged construction of a highway system to both stimulate economic growth and provide jobs, while the race relations board recommended immediate action in areas of housing, recreation, health, and employment. Going further, that same year Lausche established the Committee on Democratic Practice, comprised of black and white civil leaders dedicated to developing an educational program on racial tolerance and working toward eliminating discrimination in housing, employment, and public

198 accommodations. Also in 1943, the Cleveland Welfare Federation began a two-year

study o f the black community. After the Postwar Planning Council published its

recommendations in 1945, the Committee on Democratic Practice became the

Cleveland Community Relations Board, which could hear complaints, conduct

investigations, and make recommendations relative to discrimination. In 1950 the city

continued its efforts in race relations when the cit}'^ council passed the first local Fair

Emplo\Tnent Practices Law in the United States. The law created a commission that

could receive complaints, conduct investigations, and make recommendations for

action. These achievements earned Cleveland a reputation as a city with a progressive

civil rights record; however, events after 1950 did much to undermine that reputation.

Tension increased over unemployment, education, housing, and relations between

police and the black community.*

Jobs Disappear: Industrial Transformation

Through 1953, Cleveland followed the national narrative o f material prosperity and

economic growth. However, after the Korean War, Cleveland and other older, large

cities underwent what John Kasarda called functional and demographic

transformations.’ The functional transformation was the economic shift from manufacturing and goods distribution to knowledge-based and service industries, while the demographic transformation embodied an increase in poorer, minority residents and a decrease in wealthier, white residents. Changes in the retail industry foreshadowed coming economic decline, when shopping malls sprung up in Cleveland’s suburbs,

199 including Shaker Heights, Mayfield Heights, Fairview Park, Maple Heights, and Parma.

These new malls drew investment and consumers away fi-om inner city stores. In

addition to retail, service employment grew dramatically outside Cleveland. Between

1948 and 1977, it increased 34 percent in Cleveland, but 825 percent in the suburbs.

Within these overall numbers some specific areas stand out. Business services in

Cleveland grew 228 percent, while others such as personal services and hotels/motels declined. What is more, these new business services employed mostly white-collar male professionals firom Cleveland’s suburbs who commuted to downtown. In 1970,

Cleveland residents held only 31 percent of technical and professional jobs in the city and only 25 percent of the managerial positions. City residents held only 9 percent of all jobs over $25,000; suburban commuters held the rest. Meanwhile city residents held

56 percent of jobs paying under $10,000 per year.‘°

Sector Employment (in thousands) % Change, 1948 - 1977 1948 1958 1967 1977 Manufacturing 223.6 174.6 171.3 121.4 -45.7 Wholesale Trade 36.8 38.2 32.6 25.8 -29.9 Retail Trade 68.9 1 61.9 47.2 36.1 -47.6 Selected Services 24.9 30.9 32.1 33.4 +34.1

Figure 6.3: Employment by Sector in Cleveland, 1948 — 1977. Source: Todd Swanstrom, The Crisis o f Growth Politics.

200 As Figure 6.3 shows, Cleveland lost approximately 52,000 manufacturing jobs

in between 1948 and 1967 and the same number in the decade after that. Overall,

between 1953 and 1961, Cuyahoga County lost 65,000 manufacturing jobs.” These

losses affected mostly men, although women who were employed in these firms also

saw their opportunities fall. Several major companies in Cleveland either closed plants

or reduced their workforce in these years, including the Murray Manufacturing

Company, which made bicycles and toys, and the Fisher Body Division of General

Motors. Between 1956 and 1957, Murray closed its Cleveland factories and moved

facilities to Lawrenceburg, Tennessee. Company executives cited increased foreign

competition as the reason for the move to an area with a lower tax burden and reduced

labor costs. However, the latter soon changed as the Teamsters succeeded in organizing

the Lawrenceburg plant.'" The Fisher Body Plant in Cleveland produced large stamping

dies and upholstery and trim sets and was famous for being one of the sites involved in

the first sit-down strikes of 1937 that led to recognition of the United Autoworkers

(UAW). From a high of 14,000 workers during WWU, employment there fell to 4,000

in 1946 and declined to 3,200 by 1971. GM closed the plant in 1982 and a similar one

in Euclid, Ohio northeast of the central city.'^

Such examples were part of the growing difficulty central city residents faced in finding entry-level, unskilled or semi-skilled jobs in manufacturing in the 1950s and

1960s. This occurred as Cleveland’s black population grew, while at the same time, the overall population of the city declined. As Figure 6.4 shows, between 1950 and 1970,

Cleveland’s population declined 18% from 914,808 to 750,879, while the population in

201 Year Population of Cleveland’s Population City Cleveland’s Cleveland Black of Population National Population Cuyahoga as % o f Rank County County 1950 914,808 147,850 1,389,532 66 7 1960 876,050 250,818 1,647,865 53 8 1970 750,879 287,850 1,720,835 44 17 1980 573,822 251,350 1,498,400 38 22

Figure 6.4: Population for Cleveland and Cuyahoga County, 1940 — 1990. Source: U.S. Census, Department o f Labor.

Cuyahoga County grew 19%. Meanwhile, the black population of Cleveland increased

to 38% of the city’s residents. In areas surrounding Cleveland, low-cost, federally

insured mortgages and new highway construction helped pull whites out of the city

while discrimination in housing prevented blacks from following. In addition, urban renewal contributed to the change by eliminating more housing than was built. A common perception associates Cleveland’s decline with the 1970s, which comes from both the more general assumption of deindustrialization as a phenomenon of that decade and real political and environmental disasters in Cleveland during those years. For example, in 1978, Mayor Dennis Kucinich survived a voter recall by some 200 votes, the city defaulted on its bonds, and Lake Erie was declared ecologically dead.''*

Devastating as these were, the roots of these problems first grew in the decade after

WWII, emerging from the disconnection between the poor and working class residents of the inner city and the managerial decisions of some of the area’s business owners.

202 The city’s residents did not sit idly by as the city declined. Building on efforts begun in

the 1940s, business leaders, working class residents, civic leaders, and politicians

responded to Cleveland’s growing crisis in male unemployment. City and business

leaders focused on attracting affluent suburbanites into downtown, which led them to

promote urban renewal and highway construction. They also advocated job training and

fought to lower racial barriers in those companies that remained in Cleveland. Black

Clevelanders joined in advocating for jobs and improvement in various community

issues including housing, education, and police relations. While women were active in

these efforts, the issue of job creation in Cleveland remained focused mostly on the

needs of male workers and this dovetailed with efforts by ARA officials to extend aid to

the inner city.

Training and Job Discrimination

While efforts to attract investment and suburbanites to Cleveland continued, city and business leaders made some attempts to assist tmemployed workers through training programs that included city, county, and state officials, urban organizations, and business leaders. By 1960 the Cleveland Board of Education operated nine training centers with 12,000 enrollees. However, unemployment in the city reached 9.6 percent in 1961, with black unemployment double that figure in some neighborhoods. As a result. Democratic Mayor Anthony Celebrezze pushed for newer, more effective programs and in February 1961 the city began a small pilot program to train unemployed workers. Defense contractor Thompson Ramo Woolridge (TRW) offered

203 to train twenty workers for its machine shop, while Joseph and Feiss and the Cleveland

Coat Front Company agreed to provide training in power sewing. At TRW, the Ohio

State Employment Security (OSES) referred 21 men between the ages of 19 and 41. Of

these, ten completed the program and were referred back to the OSES for placement. In

power sewing, the OSES referred 32 women. Of these, 21 completed training with

Joseph and Feiss hiring five. Other programs included training for machine shop

workers with GE and a service station attendant program with Standard Oü. Except for the five hired by Joseph and Feiss, a lack of data prevents further comment on these workers’ fate. Nonetheless, the numbers involved certainly were too small to affect major changes in the city’s labor market. Machine shop workers could possibly move into other areas but the mobility of service station attendants and power sewers seems limited at best, especially considering the conditions in the textile industry.'^

Following this, Celebrezze continued his training activism by appointing a special committee to study the potential of the program to train imskilled workers displaced by industry. The committee met first in March 1961 and included several mdividuals and organizations active in tr>ring to offset growing unemplojTnent.

Involved were community activists such as Cora Paterson, president of the Hough Area

Council, and Helen S. Randall, Director of the Occupational Planning Committee of the

Welfare Federation of Cleveland. Patrick J. O’Malley, President of the Cleveland AFL-

CIO also joined as did members of the Chamber of Commerce and the Ohio State

Employment Service. Here was a chance to build alliances across class and race to develop a response to deindustrialization. However, the group did little beyond

204 publicizing several already operating pilot programs that placed workers in “garden and

yard jobs,” “nurseries,” and on cleaning crews in hospitals and ofiSce buildings.'® These

were a far cry from the higher skilled, better paid positions in manufacturing that eluded

most black workers, male and female. Though most associated with the 1970s, this

shift away from manufacturing to service jobs in the inner city began in the 1950s and

mirrored the experiences of other large cities in the North and smaller urban

communities, such as those outlined in Pennsylvania.'’

A growing part of the discourse surrounding urban unemplojonent in Cleveland

emphasized a mixture of structural and psychological assessments of both the causes and solutions to rising joblessness. The psychological assessments of unemployment in

Cleveland resembled the choice of using the term “distressed areas” to describe communities facing structural unemployment and high rates of poverty. The Cleveland

Urban League added to the discourse in a 1961 report. Seeing the issue of unemployment in psychological terms, the Urban League noted that “the out-of-school out-of-work youth are a disgruntled, frustrated group of both high school graduates and dropouts,” whose “motivation is lacking.” To change their attitudes, the Urban League urged that “the youth should be motivated toward recognizing there is dignity in any kind of honest work done with excellence.” To generate such new attitudes, Urban

League leaders called for both an end to job discrimination and more job training.'®

Several points about the choice of language and proscribed cures for inner city poverty are worth noting. First, reports such as this that tended to focus on attitudes diminished deeper examinations of racism and the economic causes of unemployment.

205 This is particularly ironic since the report came from “the Urban League and reflects

partially the class divisions within the black communidty as well as proscriptions offered

for addressing poverty. Urban League members were: more middle and upper class and

supported a gradualist approach to reform. Over the course of the 1960s, such an

approach became the target of protests from various g^roups that supported more radical

programs, which in Cleveland included the United Fresedom Movement, and branches of

the Congress of Racial Equality and the Students for a Democratic Society. It also

reveals the concern with young men rather than women, the immediate precursor of

which was the discourse on juvenile delinquency of tine 1950s. It also fits within the

gendered nature of American social welfare programs in which the ARA was

investing. In addition to gender, these statements arc representative of another thread

in the history of the American welfare state that has mtixed moral and behavioral reform

of the poor with finding opportunities for work.^°

At one level, these programs, which the ARA supported, provide further

evidence for what Gareth Davies has argued about the War on Poverty. According to

Davies, it derived from “the authentic, if misguided, faith of New Frontier-Great

Society liberals that human ingenuity could engineer inniversally beneficent social

change through economic expansion, complemented b;«y the increasingly familiar

doctrines of rehabilitation and prevention.”"' While Dravies had in mind national elites, the evidence from Cleveland suggests that this faith exriiended beyond this group to activists at the state and local levels.

206 However, it is not clear what the alternatives were. To do nothing would have

been far worse, and more statist solutions were certainly not possible. Like the ARA

and the future programs of the Great Society, policymakers in Cleveland recognized the

structural transformation in the economy but could do little to halt the power of capital

flows and management decisions to alter the workforce through automation. Instead,

they sought simultaneously to induce new industries into the area and lower barriers to

employment by altering the behavior and education of workers. These actions embodied much of how liberals responded to the growing crisis of deindustrialization and shaped the policy process at the local and national levels. Unfortunately, neither the

Urban League’s concerns nor the lumted training proposals sponsored by various coalitions of civic leaders and city officials could stem the rising tide of unemployed inner city male workers and this added to the growing frustration w ithin the city regarding its economic and social future. This trend was nationwide and the experiences of Cleveland helped push through the Manpower Development and

Training Act of 1962. Administered by the ARA, this program provided federal funds to support state training efforts for both men and women, which essentially created more of the same programs already failing to address the effects of deindustrialization.”

Besides training efforts, programs aimed at ending discrimination became a major solution to growing male imemployment and the Cleveland Urban League worked diligently in this arena as well. Follov/ing WWII, the Urban League began a sustained program to fight racial job discrimination in specific firms, including General

Electric, Republic Steel, and General Motors, as well in the construction, electrical,

207 garment, and meat packing industries. Using personal contacts with unions and

businesses and applying public pressure. Urban League members worked to place

Afidcan American men in higher-paying jobs. They also offered counseling and referral

services, and though the emphasis was upon men, the Urban League maintained a

separate field secretary for women workers. In addition to local actions, leaders of the

Cleveland Urban League also sought federal assistance.^ For example, after five years

of private discussions, in May 1954 the Urban League reported to the President’s

Government Contract Committee that both the Cadillac Motor Car Division (Tank

Plant) and the Clevelzind Diesel Engine Division of GM were violating non­

discrimination clauses. There were no minority white-collar workers in any GM plant

in Cleveland and the Diesel Division had only three or four blacks in a force of 1,500.

Meanwhile, the Tank Plant bad 6,000 workers and hired blacks only for menial work.

As a policy, managers kept blacks out of white dominated, higher skill areas. “Some members of this plant’s management have indicated that placing Negroes in close proximity with Southern whites...would be very dangerous and explosive.”*'’

Though their gradualist approach to solving deindustrialization focused on training and job discrimination. Urban League members realized there were larger, structural problems at hand and that training would not be enough. Members of the

League’s Occupational Planning Committee began discussing unemployment and the loss of manufacturing jobs and recommended a community-wide effort to address the issues. While they focused on training, the Committee realized it would take a concerted effort on the part of all groups to create new high paying jobs for all inner-

208 city residents, especially minorities.^ Unibrtunately, well-intentioned statements and

efforts to end job discrimination could not offset the structural changes affecting

Cleveland’s economy. Nor could they persuade a reluctant city government to attempt

more aggressive efforts to address the issue of black unemployment. Occurring in other

large cities during the same time, these failures led ARA officials to intervene in 1963

and offer aid to inner cities.

Urban Renewal, Highway Construction, and Tax Policy

As noted in Chapter Two, in the 1950s, urban renewal became a popular solution for

redeveloping inner cities. Declaring that Cleveland’s “number one need is slum

clearance and housing,” Mayor Celebrezze jumped on the bandwagon and the city

received its first grant for urban renewal in 1954. Following this, in 1958, city leaders

commissioned a “Downtown Cleveland Plan” to develop the central business district

and local leaders formed the Committee for Civic Progress, headed by Upshure Evans,

president of the Cleveland Development Foundation. Committee members were middle

and upper class, consisting o f leaders of the Cleveland AFL-CIO, Cleveland Church

Federation, and Chamber of Commerce. In Cleveland, the city used eminent domain to

purchase land, raze existing structures, and resell the area to private companies for

development. The program was to be the largest in the nation, involving some 6,000

acres on the city’s Eastside. However, only Erieview succeeded in attracting private investment, which encompassed 163 acres in the city’s northeast section and involved

209 the construction, of ofiBce and high-rise apartment buildings. Planning began in 1957

and in 1960 voters approved a number o f bond initiatives worth $16.5 million in city

funds towards urban renewal.

In the long run, Erieview provided a catalyst for downtown commercial

development. But the cost during the 1950s and 1960s was the neglect of the city’s

neighborhoods and the loss of employment for many of its poorer residents — two trends

that continued into the 1990s.“’ Indeed, Erieview and other projects intended to solve

the housing crisis for inner city residents managed to displace the mostly black residents

into adjacent neighborhoods. When this happened, whites moved out and

neighborhoods such as Hough, Mount Pleasant, Glenville, and Upper Central made the

transition from white-ethnic to black neighborhoods. Alone, this transition would not

be necessarily negative. But occurring in conjunction with rising unemployment, lax

enforcement of city codes in these neighborhoods, and poor schools, it contributed to

the growing connection between race and poverty in Cleveland.’®

Increasingly, the city was unable to meet the demand for welfare. In 1953, the

city and Cuyahoga County had created a joint contract that allowed the County to act as

the local relief authority for the city. Under the agreement, the city handled the financial

burden while the county administered the program. As early as 1955, though, the city

began running deficits in its welfare spending and in its overall budget. The recessions

of 1953-4, 1957-8, and 1960 made their impact on Cleveland residents, especially those most vulnerable to downswings in the economy. Cases under Aid to Families with

Dependent Children (AFDC) increased steadily from 3,192 in 1957 to 7,512 in 1962 to

210 14,671 in 1966. Also, 1960 estimates of unemplojment rates in mostly black

neighborhoods reached 13.7 percent compared to rates between 2.4 and 3 percent for

Greater Cleveland. In 1961, the County agreed to fiind only 80 percent o f relief and

AFDC assistance; the next year, Cuyahoga County canceled its agreement with

Cleveland."’ Together with growing unemployment, poor housing and inadequate education, these developments in welfare became the basis for ARA intervention in

1963, the Great Societ}'’ programs, and urban unrest in the middle and late 1960s.

Highway construction and tax policy also contributed to increasing amounts of poverty and unemployment in the central city. While plans in Cleveland for highway expansion had begun in 1941 with the passage of a $4.5 million bond issue, the war delayed implementation until 1944. The original plan called for a $240 million system to connect the airport and growing suburbs with downtown. In addition to local support, the federal government aided construction after passage of the Highway Act of

1956. This provided 90 percent of construction costs and these new highways promoted further development of the mostly white suburbs. Low-cost, federally insured mortgages helped suburban construction as well. Industries also used the development of highways to relocate existing plants or build new ones outside the central city.

Aiding this movement of capital was federal tax policy, specifically the 1954 revision of the Internal Revenue Code that accelerated depreciation for new commercial and industrial property. This made older structures in central cities less attractive for

211 investment- The results in Cleveland included acceleration of white flight, the erosion

of the city's tax base, deficits, and increasing amounts of unemployment and poverty

within the central city.^°

Philanthropy and Industrial Development

Besides support from government in areas such as urban renewal and highway

construction, philanthropies and development groups often funded the programs for

Cleveland’s intended economic revival. Originally promoted by the city’s elite, these

organizations funded various cultural and development projects and made Cleveland

one of the top cities in the United States in the number of foundations. The first

community foundation in America was the Cleveland Foundation, created in 1914, which became a major institution supporting efforts to promote economic growth in the

inner city.^‘

After WWII, as business and neighborhood decline set in, other elite groups addressed these problems. One of the most active was the Cleveland Development

Foundation (CDF), created in 1954. Backed by local business owners and funded annually by the Cleveland Foundation and the Leonard C. Hanna, Jr. Fund, the CDF’s major contribution was the Erieview plan in 1960. The Cleveland Foundation then supphed CDF with operating expenses from a $5 million trust, but Erieview did little to provide housing for inner city residents or to stop Cleveland’s overall business decline.’"

Another attempt by the city elite to address the growing crisis came in the form of the Greater Cleveland Associated Foundation (GCAF). This organization operated

212 under the Cleveland Foundation from December 1961 to 1967 and with the help of the

Ford Foundation began efforts to promote investment in education, economic

development, housing, and other projects in the inner cit}\ In the early 1960s, the

GCAF focused on two major efforts in education, the Plan for Action by Citizens in

Education (PACE) in 1962 and the Community Action for Youth (CAY) the following

year. Through a report on the state of education in Cleveland, members of PACE

sought to pressure the Cleveland School Board and other city leaders to improve the

city’s schools, particularly those populated by minorities. Meanwhile, those in CAY

included education under a broader set of programs that focused on improving health and lowering unemployment. CAY leaders included those in the city and county government, the School Board and the juvenile courts. The group also received funds from the President’s Committee on Juvenile Delinquency and Youth Crime in 1962 and the Economic Opportunity Act of 1964. Though PACE and CAY frmneled nearly $50 million of local and federal money into Cleveland’s neighborhoods, the problems of

Cleveland’s inner city remained. Besides these efforts, through 1965 GCAF supported smaller projects related to the conservation o f Lake Erie, the reform o f local government, and the establishment of the Businessmen’s Interracial Committee on

Community Affairs (BICCA) in April 1964.^^

BICCA brought together moderate to conservative white and black leaders to devise strategies for solving the various issues facing Cleveland’s inner city. BICCA members sought voluntary cooperation from the ciiy^’s businesses to hire more blacks and offer greater training opportunities. While the emphasis on race was new, their

213 approach resembled earlier efforts undertaken during the Progressive era and the New

Deal, and later under the Great Society. As Progressives had done with immigrants, and

New Dealers had done with the generally unemployed, the goal of BICCA training and

education programs was to push inner city residents to adopt middle class values of hard

work and self-help. Devised by business leaders, BICCA solutions centered on the

belief in the fundamental soundness of Cleveland’s political economy, urging workers

to improve their education, training, and motivation. BICCA connected to Plans for

Progress, a voluntary federal program designed to open employment to blacks. By

1968, BICCA had enrolled 90 firms in the program by 1968. However, like most

efforts in Cleveland, the success was very limited, for unemployment among blacks

remained higher than whites.^"

While Cleveland’s white male business elite became more active in foundations

such as GCAF and the BICCA, their major concern remained attracting industries to the

Cleveland area. White civic leaders created the Greater Cleveland Growth Board in

1962. An outgrowth of the Cleveland Chamber of Commerce, the Growth Board eventually absorbed the Chamber of Commerce and the two became the Greater

Cleveland Growth Association in 1968. It was not until 1965, after the creation of

BICCA, that the Growth Board created a Downtown Division.^^ Leaders of the major banks, retail stores, utility companies, manufacturing firms and newspapers had large capital investments in the inner city, and growing poverty and unemployment threatened those investments. Decaying houses and other structures made it difficult for city officials and business groups to attract new industries.^®

214 In the meantime, leaders of the GCGB devoted their time to finding solutions to the growing crisis. Their major effort involved creating promotional materials designed to attract new industries to the area. In these the GCGB advertised amenities such as the city’s location, its transportation networks, and cultural resources such as art museums, professional sports, and parks. Within this effort, the GCGB focused on

Cleveland’s reputation among business leaders as a city with difficult labor issues, which meant that unions often resisted company efforts to exert greater control on the shop floor. The GCGB often cited reducing labor tension as one of its key solutions to promoting new business development in the metropolitan region. For example, a press release announcing the formation of the GCGB stated that one objective for the group would be “to help remove unnecessary major irritants to existing industries by determining which aspects of the business climate are most discouraging to new investment.

Another avenue these leaders explored was following their neighbors in

Pennsylvania and working to create a state-level development organization. Here, they connected to the stated goals of James Rhodes, the Republican governor elected in

1962. During his election campaign, Rhodes’ promised to make Ohio competitive in attracting new industries through the creation of a state development organization.

Once elected, he worked with business leaders such as those in the GCGB to create the

Ohio Development Financing Commission in June 1963.^® The Ohio Supreme Court ruled it unconstitutional, arguing that Ohio’s constitution forbade placing the state’s credit behind private industrial projects. Undaunted, Rhodes and his allies changed the

215 constitution to authorize towns, cities, and the state government to issue bonds for

development. After the state government approved the amendnnent in 1964, voters

followed suit in May 1965.^’

By this time, white and black civic leaders in the city, as well as some at the

state level, recognized the need for new industries in the central city district. Prior to

1963, these efforts had developed without direct involvement o f the AlRA. Some local

and state leaders also worked to train central city residents for existing jobs. The

solutions proposed and implemented were not enough to counter the economic changes

affecting the city, and this explains both their eligibility for assistance from the ARA

and their desire to accept it. As these programs moved forward, other groups entered

the picture. These organizations represented city residents and began pressuring city

leaders for solutions to the problems of the inner city. And whil« they focused some

attention on emplo>'ment, they emphasized other important issues such as school and

housing segregation. Unfortunately, by doing so, they missed an opportunity to

generate potentially powerful alliances between organizations, poor citizens, and city

leaders in an effort to counter the effects of industrial transformation.

Alternative Solutions: UFM, CORE, and SDS

White and black political, business, and civic leaders were not th_e only ones working to

address Cleveland’s growing crisis. Male and female inner city residents and members of civil rights groups also sought solutions to the growing crisis. The three major groups were the United Freedom Movement (UFM), the Cleveland chapters of the

216 Congress of Racial Equality (CORE) and the Students for a Democratic Society (SDS).

All three worked simultaneously on various issues including housing, welfare,

education, and employment. As they were nationally, Cleveland members of CORE

and SDS were younger and tended to seek solutions that involved direct action protest

and organizing of inner city residents. Harold Williams of the Cleveland NAACP

called a meeting of various civil rights leaders in June 1963 to combat the crises of

unemployment, housing, education, and better police protection. Out of this came

United Freedom Movement (UFM), a group designed to coordinate the efforts of

various civil rights groups in the city, including CORE, the NAACP, and the Urban

League. And while UFM contained members of gradualist organizations such as the

Urban League and the NAACP, the tactics used by UFM members centered on non­

violent, direct action protest. Although they did not focus directly on industrial

development, as these protests grew, it increased pressure on city leaders to find

solutions to the growing urban crisis and led them to seek help from the ARA and other

federal programs in the emerging War on Poverty.

In the area of employment, the UFM's major action came in the summer of 1963 when the organization called for a protest in front of the construction site of a new federal building in downtown Cleveland. UFM leaders threatened to picket the site unless building trades unions hired more black workers; out of 300, only 27 construction workers were black. In an effort to difiuse the situation. Mayor Ralph

Locher organized a meeting with the UFM, union leaders, and the Community

Relations board. In exchange for UFM not picketing the site, the Plumbers agreed to

217 hire two black men who had been denied entry into the union (although union leaders

also claimed it was not discrimination but lack of qualified applicants that limited membership). Though successful with the Plumbers, the Electrical, Sheet Metal,

Steamfitters, and Structural Iron Workers refused to alter their hiring practices. UFM leaders continued to pressure unions, and when black workers were hired, white workers walked off the job in protest. In the end, although the unions hired only a few blacks, the incident gave UFM credibility in the black working class community.

Following this, UFM sponsored a Freedom March on July 14 through Downtown

Cleveland. In the rain, 15,000 people marched and joined another 10,000 in Cleveland

Stadium to protest not only hiring practices but also other major issues including housing and education.’*'

Following these actions, members of the Cleveland branch of CORE tried to elicit greater action from city leaders towards the poor and unemployed. CORE began in Chicago in 1942 and its black and white members pioneered a nonviolent approach to civil rights protest that other organizations and leaders would later adopt. CORE’S members also played a major role in the student sit-in movement that began in 1960, the voter registration drives across the South in 1962-64, and various direct action protests against discrimination in housing, employment, and education in the North."- A CORE chapter had existed in Cleveland on and off since 1946 and after a period of decline, it revived again in the wake of the student-led sit-ins that began in 1960. Starting as an all-black group it became one-third white at its height in 1964. Dominating the group were younger members between 21 and 35, who were mostly lower-level white-collar

218 workers. The major leader in this revival was Ruth Turner, who later went to the

national CORE ofSce. Turner had been a teacher, receiving her MA in Education from

Harvard before becoming Chair of the Cleveland CORE in 1962 and Executive

Secretary in August 1963. Among their various tactics, members of Cleveland CORE organized rent strikes in 1963-64, picketed downtown stores to force desegregation and the hiring of more black workers, and staged direct action protests in Columbus on fair housing legislation. CORE members also joined UFM in its efforts to end discrimination in employment."^

Unfortunately, these efforts failed to address the underlying industrial transformation underway in Cleveland. As with other CORE chapters in the North, the

Cleveland group failed to connect with the unemployed and working class blacks, since two-thirds of its black members were middle class. Furthermore, like other Northern chapters, Cleveland CORE’s radical tactics, as well as the power and reputation of the

NAACP and Urban League, dissuaded poor blacks from joining. Such frustrations led to increased tension within CORE and between the organization and the NAACP and the Urban League."" Once the OfBce o f Economic Opportunity began operations,

CORE members did work with the NAACP to get more poor people on the com m unity action board in Cleveland. But tensions continued and after 1965 the organization collapsed."^ Although the organization contributed to and existed in the hothouse political environment of the 1960s, the focus on issues such as school desegregation and rent strikes meant that CORE missed an opportunity to address the underlying structural

219 shift in Cleveland’s economy. While it may not have made a difference, the group

became part of the Cleveland pattern that saw a citywide failure to generate widespread

cooperation in restructuring the city’s economy to halt deindustrialization.

Furthering this pattern were the members of SDS who began operating in

Cleveland during the 1960s as well. SDS began in 1960 at the University of Michigan

and their vision is best summarized in the 1962 Port Huron Statement that criticized the

liberal state that had emerged in the United States after WWII. Seeing the domestic

political economy dominated by elites who perpetuated a system that kept workers and

the poor repressed and without a political voice, leaders Tom Hayden, Todd Gitlin and

others sought to recreate American society based on participatory democracy, which

would return power to ordinary citizens.'*®

In this light, SDS sponsored the Cleveland Community Project (CCP), an

initiative that sought to reduce unemployment by organizing the unemployed and

working poor in the inner city. An outgrowth of SDS’s Economic Research and Action

Project (which Walter Reuther funded through the UAW), the CCP got off the ground

in 1964 under the leadership o f Sharon Jeffrey. A veteran organizer, Jeffrey graduated

from the University of Michigan in 1963. She was the daughter of socialist parents who became active in UAW and Democratic party. Her mother, Mildred Jefirey, later served as head of National Women’s Political Caucus.'*' Jeffrey secured the help of the local

Meat Cutters Union District 427, which supplied limited funds, offrce space, and part- time ofBce jobs for some CCP members. In the smnmer of 1964, Jeffrey and a growing number of students began interviewing the unemployed and held two meetings with

220 those who showed interest in the CCP program. At these sparsely-attended meetings,

CCP members found most of the unemployed disinterested in organizing and unable to

find a common bond with one another. Moreover, neither CCP members nor the

unemployed could agree on a focus for their efforts, with the group divided between

organizing training programs or lobbying for public works projects. Meanwhile,

unemployment in the overall Cleveland labor market dropped to 2.6 percent in

September 1964, releasing some of the pressure for action.'** The CCP also became

bogged down in discussing and planning, not organizing, and Jeffirey’s philosophy and

those of other members made it difficult to achieve their goals. They wanted the

unemployed to awaken through education and awareness, which would lead to a true people’s movement. When they did not organize, Jeffiey and others were reluctant to push further."® As with CORE and the UFM, the failure of the CCP meant the erosion of Cleveland’s industrial base and limited efforts to stop it would continue, and that a

“bottom-up” approach was not a viable force in this story.

Linking W ith the ARA

As the editors of Cleveland’s major black newspaper, the Call and Post, wrote in July

1964, “In our quest for civil rights, we are, all too often, putting our major emphasis on the wrong things.” They noted the decline in job opportunities in farming and manufacturing, the two areas formerly employing the majority of blacks, and urged civil rights groups to refocus their strategy to address employment.^" While civil rights

221 groups had strayed firom this message, white civic leaders in Cleveland had at least begun to address industrial change. They continued by drafting plans for economic development that would provide the basis for their connection to the ARA.

The Ohio B ureau of Unemployment Compensation began working with City government to study skills of area workers. In addition, a non-profit research group, the

Governmental Research Institute, conducted a study called the “Unemployables

Project” to assess needs of those unemployed or deemed unemployable. Mayor Locher also created a “Technical Advisory Committee” consisting of labor, welfare, and minority groups. Following these, Locher requested that the Cleveland Development

Foundation sponsor an economic study of the problems of Downtown Cleveland that would serve to update a General Plan created in 1959 and provide a map for future growth and development. Called the “The Cleveland Plan for Economic Development,” it only listed problems and assets that the city possessed; it failed to provide specific recommendations for development and solving high rates of unemployment. Among the problems cited, the report noted the loss of population, declining job opportunities, increased immigration of unskilled workers from the South and outmigration of “skilled and more stable members of the work force.” Among the reasons for the loss of employment opportunities were automation, lack of industrial expansion and flight o f industry to lower wage regions, and the conservative lending habits of the city’s bankers, which added to the lack of expansion. In addition, increasing rates of unemployment diverted funds to welfare that otherwise may have been used for industrial expansion. There remained a need for greater understanding of the manpower

222 requirements of the area’s iradustries and for training programs to m atch/' As the report

noted, “Deterioration of the dimer city neighborhoods, including the Downtown, has

establish islands of the unemployable. Many contend that the slum itself generated

unemployment since it created an environment that destroys human initiative and the

willingness to seek productive employment.After submitting the report, the

Foundation’s Board requested that the Mayor establish a “Forum for Community

Development” to assess changes necessary. Consisting of citizens appointed by the

Mayor, the Forum would serve as the contact point for the ARA. Funding and technical assistance would come from the Greater Cleveland Growth Board through the creation o f the Greater Cleveland

Growth Corporation.

By 1963, leaders of private organizations, public officials, and ordinary citizens were engaged in efforts to address a variety of issues in Cleveland’s inner city.

However, none of these couLd halt the loss of jobs, rising black unemployment and poverty, deteriorating iimer city housing, and segregated schools. The events in

Cleveland were part of growing national pressure to address the needs of black

Americans. Media attention on the civil rights movement in the South had been increasing since the student sit-ins of 1960, and the march in Washington in August

1963 for “jobs and freedom”' added to the pressure for federal action. It was in 1963 that both the Kennedy administration and liberals in Congress introduced civil rights legislation and that ARA administrators decided to make inner cities eligible for aid.

223 Originally, in 1961 Batt and other ARA officials decided not to fund inner cities,

even though the Area Redevelopment Act gave them authority to do so. The unemployment rates used by ARA. officials and limited funding levels for the agency formed the basis for that decision. The Labor Department considered the entire labor market when publishing unemployment rates, which usually masked inner city levels.

Prior to obtaining data from the 1960 census, Batt and others lacked precise measurements of inner city unemployment. Furthermore, when passed in 1961, the

$300 million in appropriations was to cover urban and rural labor markets, as well as

Native American communities. As Batt stated in May 1963, “We have been reluctant to

[designate cities], because we believe this will expand the scope of the ARA program too much too quickly.It was only after pressure from Democrats in Congress, urban leaders, and civil rights advocates that ARA officials included inner cities. This may have been a political move as well; in 1963 several amendments to the original Area

Redevelopment Act came forward, one of which was to increase funding.

Prior to designating inner cities, ARA officials had made overtures to blacks by sending informational materials to and holding meetings with members of the black press and civil rights organizations. As outlined in Chapter 7, the agency also used some $100,000 to finance the first year of a planned three-year program to help sponsor the Small Business Opportunities Corporation in Philadelphia. Besides these efforts, in

1962 ARA officials conducted surveys of field personnel to determine the number of blacks employed on projects in the South and in 1963 held a workshop in North

Carolina to make ARA programs more effective among nonwhites.

224 Though it seemed some action was forthcoming in the spring of 1963, the

precise nature o f the assistance remained in doubt. Batt and others in the ARA realized

that with limited resources, they could not possibly aid every urban area and that the

kind of aid they could provide would not solve all inner city problems. A memo from

Office of Planning and Research noted that “ARA aids can only make a limited

contribution to a problem whose roots are mainly those arising from ethnic, educational, and other causes rather than those causes associated with most other ARA areas, i.e. unemployment arising from resource depletion and immobility, demand shifts, market isolation, agriculture, and from inadequate human and physical resources. In sum, the city problems tend to be people oriented more than area oriented." In addition, ARA policymakers agreed to aid only cities with populations over 250,000 and to focus on projects "which would employ the long term unemployed, the minority groups, and the youth, or which would retain these groups so as to improve their abilities to obtain jobs."”

These quotes provide insight into how ARA policymakers approached solving the growing crisis in Aonerican cities. Using the terms “people oriented” and blaming problems on “ethnic and educational” roots meant that the best solutions for the inner city would likely be training and education programs. This typified liberal ideas evident in the emerging War on Poverty. Prior to the official statement of this war by L>mdon

Johnson in 1964, the ARA’s policies combined forms of community action with promoting opportunities, and ARA administrators brought the formula to the inner city after using it smaller urban communities, rural areas, and Native American reservations.

225 However, unlike later community action programs sponsored by the OfBce of Economic

Opportunity, those practiced by ARA officials did not aim so much at organizing the

poor, but rather organizing interest groups to promote economic planning that would

eventually lower poverty. Emphasizing community competitiveness resembled more

the efforts to promote opportunities through training and education. Also, unlike later

community action programs that sought to supplant local authority, the ARA worked through local and state leaders.^* Still, as they were doing in other areas, ARA administrators sought to remove both the personal inadequacies o f inner city residents and community inadequacies rather than address issues of power related to capital movement and resource allocation.

By the autumn of 1963, ARA and Labor Department officials created a system that used statistics from the 1960 census and unemployment rates for the labor market to estimate inner city unemployment rates. Based on this, ARA officials decided to aid cities of 250,000 people or more whose unemployment rate reached twice the rate of the surrounding labor market. Of the 52 cities with populations of 250,000 or more, nine met the unemployment criteria: Buffalo, Cleveland, Detroit, Miami, Newark, Oakland,

Philadelphia, Pittsburgh, and Toledo. The average unemployment rate for these cities was 8.7 percent. Prior to formal designation, though, the ARA required that each city submit a proposal for eligibility, create a broadly representative c o m m unity development committee, and prepare an acceptable OEDP. This system matched the

226 operations fo*r other areas participating in ARA programs; and it fit well within the

federal structure of assisting but not superseding existing local power structures and programs/’

Just aLS Lyndon Johnson declared a war on poverty in his January 1964 State of the Union adcdress, ARA officials had their first meeting with leaders of eligible cities.

The meeting": s purpose was to inform city leaders of ARA guidelines and to encourage their creation of economic development plans. For Cleveland, those present included

Dick DeChanit, Executive Director of the GCGB, Ralph Findley, Director of Health and

Welfare, Brosis Klementowicz, Law Director, Anthony Leanza, Assistant Director of

Law, and Jack F. Weir, firom the Cleveland Federation of Labor.^® This line-up mirrored that of many cDther communities participating in ARA programs in that it represented organized interest groups firom business, government, and labor. Here again was the

New Deal liberal vision of cooperation between these three groups in efforts to plan economic dev elopment.

From A pproval to (Non) Action, 1964 - 1965

In March 1964, Batt traveled to Cleveland to create links between the city and ARA programs. Prior to this. Representative Charles Vanik (D-OH) had sent a letter to 350 firms in the aræa telling them about ARA and urging them to stay in Cleveland. Batt talked with government officials and business executives; the latter expressed their desire to stay Ln the city if they could find "more efficient space.” Batt also expressed his dismay thazt training was underutilized m the city under MDTA. Since 1962, only

227 350 workers had been retrained, and Batt sent Anne Gould to Cleveland to “break this

bottleneck.”®® As Gould and Batt began more intensive efforts to work with state and

local authorities to jump-start training. Mayor Locher delivered Cleveland’s OEDP to

the ARA oSice in Washington, the first of the eligible cities to do so. After working

through specifications, ARA administrators approved the plan in June.®'

Although city leaders like Mayor Ralph Locher seemed eager to participate in

ARA programs, a second meeting with ARA officials in July made clear the problems

inherent in the ARA plan for aid. The largest was the requirement in the ARA

legislation that communities provide 10 percent of funds for all projects, with the long

delay in processing proposed projects a close second. In addition, Ralph Findley,

Cleveland’s Health and Welfare Administrator, noted that in Ohio, the school board,

state, and federal groups had no sense of urgency for training programs. Several leaders

expressed concern about the future of the ARA and its relationship with other War on

Poverty programs. Trying to assuage their concerns, Batt bypassed discussion of the

ARA’s future and placed the ARA in the context of other War on Poverty programs. He

argued that MDTA focused on individuals, the Accelerated Public Works (APW) program and the Appalachian Regional Commission on improving the environment, and the ARA on creating jobs. Batt noted that the ARA still had money for urban loans for retraining and public facilities. Gone, however, were resources for rural loans and grants.®^

Internal difficulties within the Cleveland organizations delayed action and prevented them firom soliciting the required ten percent of local funding for ARA

228 projects. According to the Cleveland OEDP, the Cleveland Forum was to coordinate

ARA activities. However, as one ARA official noted, the “Forum is a large, rather

unwieldy organization” whose members were “not in complete sympathy with the

philosophy of the program.” In addition, in the summer of 1964, Standard Oil chose

Toledo for a $30 million expansion over its then current site in Cleveland. This resulted

in the loss of about 430 jobs. Ironically, the president of Sohio, Charles E. Spahr, was

also President of the GCGB and the announcement came just as Cleveland’s leaders

opened the “Parade of Progress” to celebrate the opening of the new downtown convention center.^

Despite these obstacles, the ARA worked to alleviate unemployment. As Figure

6.5 shows, in June 1964 ARA officials approved $72,000 for a technical study on the use of abandoned industrial properties and by the end of summer had eight other projects making their way through approval. However, they never made it to the funding stage before the ARA expired in June 1965.'^ The ARA also focused on training. The agency funded seventeen projects, enrolling 655 individuals in mostly low-wage fields, though it is not clear how many of these persons obtained jobs. In

March 1965 the ARA helped sponsor the Cleveland Small Business Opportunity and

Development Corporation (CSBODC) with a grant of $125,000. Modeled on the SBOC in Philadelphia, the Cleveland organization sought to create a training program for inner city business owners (both black and white) and provide loans for those going through the program. Also, the Cleveland group added a Business Laboratory program to use

229 Project Approval Date Funds Disbursed Jobs/Trainees (in thousands) Adalet Manufacturing Co. 4/65 $0* (30) Opportunity and Building 6/64 72 N/A Survey Small Business Survey 3/65 125 N/A Training; service station 6/64 16 25 mechanic Spray painter 6/64 16 25 Combination welder 6/64 20 20 Plane cutter operator 6/64 16 25 Office clerk 6/64 44 50 Typist 6/64 55 75 Typist 6/64 33 50 Hand burrer 6/64 16 25 Maintenanceman 6/64 23 25 Bench assembler 6/64 14 25 Custodian 6/64 23 25 Typist 6/64 18 25 Nurse aide 10/64 59 160 Short Order Cook 1/65 17 25 Electrical Appliance Repair 1/65 22 25 Sales Clerk 1/65 13 25 Cashier 3/65 12 25 TOTALS $614 655 *The ARA approved $262,000, but the project was not executed.

Figure 6.5: ARA Projects in Cleveland. Source: Area R.edevelopment Administration, Directory o f Approved Projects, 1965.

selected businesses as training labs for CSBODC clients who need intensive guidance.

The Philadelphia program had begun in February 1964 and in one year had provided free training to 1,000 potential business owners. The SEA had approved 219 loans for total of $912,547, 98 for blacks, 121 to whites.®^

230 Although the ARA leaders hoped to duplicate the apparent success in

Philadelphia, the Cleveland organization was slow to start, with members haggling over

choosing a leader. After four months, in June 1965 the group chose Armond Robinson

as Executive Director. An active leader, Robinson was Treasurer of UFM, President of

Central Areas Community Council, active in Antioch Baptist Church, past president of

Cleveland Business League and President o f Quincy Savings and Loan.“

Unfortunately, in addition to internal squabbles, like the overall Cleveland effort the

CSBODC suffered from an inability to raise the ten percent local financing.®’

Conclusions

This was as far as Cleveland traveled by the time the ARA expired in June 1965. The members of the GCGB never agreed to a plan for raising the required ten percent funds and they remained convinced that the solution to Cleveland’s economic problems lay in training and new service and entertainment buildings for downtown. By 1965, ARA ofBcials could exert little pressure since the future of the ARA was uncertain. Even if it had continued, overall economic growth meant that unemployment in Cleveland’s inner city dropped to 5.4 percent in July 1965, which would have removed them from the list o f eligible cities. Meanwhile, Cleveland had begun to receive funds through the OEO for training, community action, and other programs. Still, even as unemployment fell, racial discrimination remained, with white imemployment at 2.4 percent in 1965, and nonwhite unemployment at 8.9 percent.®* Even amidst a sea of prosperity, Cleveland’s inner city remained an island of the unemployable.

231 Thus, the expansion of ARA into Cleveland and other cities had little impact on

unemployment or deindustrialization. The expansion did support new efforts in

organizing inner cit>" entrepreneurs through organizations such as CBODC and funded

further training programs that helped some workers. Indeed, training continued and

expanded in the city after the ARA disappeared and the Great Society funded

community action and other programs in Cleveland. In addition, following hearings in

April 1966 by the U.S. Civil Rights Commission, a number of groups responded with promises of action to solve the crisis in the inner city. For example. Mayor Locher promised new housing units and improved police relations, while the Cleveland AFL-

CIO and the city’s Community Relations Board exerted greater pressure on the building trades unions to integrate their locals.®’ But riots erupted in the Plough neighborhood in

July 1966 and the further economic collapse of the 1970s showed that neither local, state, nor federal programs that emerged as part of post-WWII American liberalism could solve the problems facing Cleveland’s inner city. Besides local government, the various politically active groups in Cleveland could not or would not coordinate their efforts to halt the industrial decline of the inner city. Business leaders hoped persuasion, training, and a reduction in organized labor’s power would revive

Cleveland’s economic base. Civic groups and civil rights activists failed to address adequately the underlying economic transformation and instead focused on issues such as school desegregation, police treatment, and employment discrimination. Important as these issues were, and as noble as the stmggles became, focusing on such actions meant that the deindustrialization of Cleveland would continue and exacerbate the many

232 problems these groups hoped to solve. Known as the “best location in the nation” during the 1950s, Cleveland became the “mistake on the lake” in the 1970s. This unfortunate narrative mirrored that of other large cities in the traditional manufacturing belt and became part of the deindustrialization of America.

233 NOTES

' Forum for Community Development, “The Cleveland Plan for Economie Development,” March 1964, Western Reserve Historical Society (WRHS), 23.

- “The Changing Face of Our Work Force,” ClevelandCall and Post, 4 July 1964, 8.

^ The limited numbers of works that address the history o f Cleveland in the modem era minimize the period between 1945 and 1965. See Thomas F. Campbell, “Cleveland: The Struggle for Stability,” in Richard M. Bernard, ed., Snowbelt Cities: Metropolitan Politics in the Northeast and Midwest Since World ITar//(Indiana: Indiana University Press, 1990), 109-36, W. Dennis Keating, Norman Krumholz and David C. Perry, eds., Cleveland: A Metropolitan Reader (Kent, Ohio: The Kent State University Press, 1995), Carol Poh Miller and Robert A. Wheeler, Cleveland: A Concise History, 1796 —1996 (Bloomington: Indiana University Press, 1997), and Leonard Nathaniel Moore, “The Limits o f Black Power Carl B. Stokes and Cleveland’s African-American Community, 1945 — 1971,” Ph.D. Dissertation, The Ohio State University, 1998.

* On the economic development o f Cleveland see Edward Hill, “The Cleveland Economy: A Case Study o f Economic Restructuring,” in Keating,A Metropolitan Reader, 53-84.

^ See Keimeth L. Kusmer, A Ghetto Takes Shape: Black Cleveland, 1870-1930 (Urbana: University of Illinois Press, 1976) and Carol Poh Miller and Robert A. Wheeler, “Cleveland: The Making and Remaking o f an American City,” in Keating,A Metropolitan Reader, 31-42. See also Miller and Wheeler, /( Concise History, 134-6.

® Miller and Wheeler, A Concise History, 150.

’’ Christopher Wye, “At the Leading Edge: The Movement for Black Civil Rights in Cleveland, 1830 - 1969,” in David D. Van Tassel and John J. Grabowski, eds.,Cleveland: A Tradition o f Reform (Kent, OH: The Kent State University Press, 1986), 113-35.

* Wye, “Black Civil Rights, 128-31 ; Miller and Wheeler,A Concise History, 151.

’ John D. Kasarda, “Urban Change and Minority Opportunity,” in Paul E. Peterson, ed..The New Urban Reality (Washington: The Brookings Institute, 1985), 33-68.

Todd Swanstrom, The Crisis o f Growth Politics: Cleveland Kucinich, and the Challenge o f Urban Populism (Philadelphia: Temple University Press, 1985), 72-7.

" Miller and Wheeler, A Concise History.

Newsclipping, 1 April 1965, “Closed Murray Ohio Plant Finds Labor Problems Thrive in Dixie,” “Labor Problems and Specific Companies” folder, container 115, Greater Cleveland Growth Association Records, WRHS (hereafter cited as GCGA, WRHS).

" See “Fisher Body Division o f General Motors Corp.,”in David D. Van Tassel and John J. Grabowski, eds.. The Encyclopedia o f Cleveland History, 2d. ed. (Bloomington: Indiana University Press, 1996), 431-32.

234 Philip W. Porter, Cleveland: Confused City on a Seesaw (Columbus: Ohio State University Press, 1976), 3.

“Final Report o f the Ninety Day Pilot Project,” September 1961, folder 26, box 1, AnthonyJ. Celebrezze Papers, Series 1, WRHS (hereafter cited as AJC 1, WRHS). There was no racial data on the trainees.

Memo, Meeting o f Mayor’s Committee to Study the Training o f the Unskilled Workers Displaced by Industry, 7 March 1961, folder 26, container 1, AJC I, WRHS. What might be considered part o f this connection between employment and skills was the creation o f the Cuyahoga Commimity College in September 1964. This was the first publicly supported jimior college in Ohio, the plaiming for which had been funded by the Cleveland Foundation and Associated Foundation. See Diana Tittle,Rebuilding Cleveland: The Cleveland Foundation and its Evolving Urban Strategy (Columbus: Ohio State University Press, 1992), 121-22.

For the postwar process in Detroit see Sugrue, Origins of the Urban Crisis.

“Report on Urban Unemployed Youth”, 20 September 1961, “Occupational Planning Committee, 1961 & Undated” folder, container 14, Urban League o f Cleveland Records, WRHS (hereafter cited as CUL, WRHS).

On gender and the welfare state see, among others, essays in Linda Gordon, ed.,IVomen, the State, and Welfare (Madison: The University o f Wisconsin Press, 1990), Theda Skocpol,Protecting Soldiers and Mothers, and essays by Gordon and Skocpol in Nikki R. Keddie, ed..Debating Gender, Debating Sexuality (New York: New York University Press, 1996.

■°For discussions of this coimection see Michael B Katz, The Undeserving Poor: From the War on Poverty to the War on Welfare (New York: Pantheon Books, 1989), James T Patterson,America's Struggle Against Poverty, 1900 — 1994, 3d. ed. (Cambridge: Harvard University Press, 1994), and Gareth Davies, From Opportunity to Entitlement: The Transformation and Decline o f Great Society Liberalism (Lawrence: University Press o f Kansas, 1996).

Davies, From Opportunity to Entitlement, 31.

~ See Chapter Five for details on the MDTA.

“ Memo, “Tentative Industrial Relations for 1949,” folder 1, container 14, CUL, WRHS. The Urban League was not alone in its efforts; the Cleveland Chamber o f Commerce had created a voluntary program to encourage the hiring o f blacks.

*■' Press release, 24 May 1954, folder 4, container 14, CUL, WRHS.

^ Minutes o f OPC, 17 February 1961, and 21 April 1961, both in “Occupational Planning Committee, 1961 & Undated” folder, container 14, CUL, WRHS.

“ “Achievement Report 1955,” folder 23, container 2, Anthony J. Celebrezze Papers, Series II, Western Reserve Historical Society (hereafter cited as AJC II, WRHS). “Report o f the Planning Director,” 20 Jime 1958, and letter, Upshure Evans to Celebrezze, 10 September 1958, both in folder 51, container 3, AJC II, WRHS. “Listing o f Statement o f Action to Date o f Official Acts with Regard to Planning for Erieview,” August 1957, folder 67, container 4, AJC II, WRHS. Quote in report, “The City Administration Reports to Its Citizenry, 1957,” folder 23, container 2, AJC II, WRHS. 235 ^ For a critical assessment o f these current trends see Alvin L. Schorr, ed., Cleveland Development: A Dissenting F/ew (Cleveland: David Press, 1991).

“ Miller and Wheeler, “Making and Remaking,” 41-3.

Frank R. Hanrahan to Celebrezze, 26 July 1954, folder 34, box 2, AJC I, WRHS, “Achievement Report 1955,” folder 23, box 2, AJC II, WRHS, Board o f County Commissioners to Celebrezze, 21 June 1962, folder 30, box 1, AJC 1, WRHS, City o f Cleveland, “Overall Economic Development Program Progress Report,” 28 March 1969, WRHS.

Miller and Wheeler, A Concise History, 152, and Swanstrom, Crisis of Growth Politics, 27.

See Tittle, Rebuilding Cleveland.

Ibid, 100.

" Ibid, 98-128.

” Keimeth Wayne Rose, “The Politics of Social Reform in Cleveland, 1945 — 1967: Civil Rights, Welfare Rights, and the Response o f Civic Leaders,” Ph.D. diss.. Case Western Reserve University, 1988, 250-59.

” Greater Cleveland Growth Board, “So That Greater Cleveland Will Grow,” WRHS.

Swanstrom, Crisis in Growth Politics, 88-90.

Press release, 15 January 1962, “Executive Committee Meeting, 31 January 1962” folder, container 131, GCGA, WRHS.

Minutes, “Executive Committee Meeting, 31 January 1962” folder, container 131, GCGA, WRHS.

Minutes, “Executive Committee Meeting, 24 November 1964” folder, container 131, GCGA, WRHS. On this issue see David M. Gold, “Public Aid to Private Enterprise Under the Ohio Constitution: Sections 4, 6, and 13 o f Article VIII in Historical Perspective,” Toledo Law Review 16 (Winter 1985): 405-64. I thank Russ Coil for this reference.

On UFM’s efforts against school segregation see Tittle,Rebuilding Cleveland, 118-21.

Moore, “Limits o f Black Power,” 124-28.

The standard work on CORE’s history is August Meier and Elliot Rudwick,CORE: A Study in the Civil Rights Movement, 1942 — 1968 (New York: Oxford University Press, 1973).

Rose, 46-50.

Meier, CORE, 195-7.

Ibid, 361-3, 390.

By extension, SDS saw American foreign policy as working to extend this corrupt domestic system and this became a basis for the group’s anti-Vietnam stance. On SDS see Kirkpatrick Sale,SDS (New York: 236 Random House, 1973) and James Miller, ^‘'Democracy is in the Streets": From Port Huron to the Siege c f Chicago, 2d. ed. (Cambridge: Harvard University Press, 1994).

■’’ Miller, Democracy, 31-2; Rose, 112-23.

Ohio’s rate was 2.8 percent while nationally it was 4 percent

Miller, Democracy, 211-12; Rose, 141-47.

See note 2 above.

Forum for Community Development “The Cleveland Plan for Economic Development” March 1964, WRHS, 23.

See note 1 above.

” Batt to Franklin D. Roosevelt Jr., Undersecretary o f Commerce, 13 May 1963, “Chron File, 1963” folder, box 2, Batt Reading Files, 1961 - 1965, ARA-NARA.

^ Memo, “Special Effort to Encourage Participation o f Negroes in ARA Program,” 21 August 1963, “Assistant Administrator for Area Operations” folder, box 1, Williams, General Subject and Signature Files, 1962 - 1965, ARA-NARA.

^^"Consideration o f Cities for Area Redevelopment Eligibility,” “ARA Policy Advisory Board. Mtg. City Designation, 11/5/63” folder, box 5, Batt Mixed Administrative Records and Program Files, 1961—1965.

For evaluations o f the War on Poverty and the Great Society programs see references in notes 18 and 19 above.

^Report ARA, "Procedures Used in Developing City Unemployment Data," in “ARA Policy Advisory Board. Mtg. City Designation, 11/5/63” folder, box 5, Batt Mixed Administrative Records and Program. Files, 1961— 1965, ARA-NARA.

Minutes, Mayor’s Conference, 8 January 1964, "Big City Mayor Conference, January 8, 1964” folder, box 6, Batt Mixed Administrative Records and Program Files, 1961— 1965, ARA-NARA

” Memo, Williams to Hodges, “Weekly Briefing,” 20 March 1964, “March 1964, Non-Congressional” folder, box 6, Batt, Reading Files, 1961 - 1965, ARA-NARA.

“ Memo, Batt to Hodges, 23 March 1964, ARA-NARA 166 and Gould to Batt 25 August 1964, “Monthly Activity Reports” folder, box 14, Bad, Subject Files, ARA-NARA.

“Weekly Briefing,” 27 March 1964, “March 1964, Non-Congressional” folder, box 6, Batt, Reading Files, 1961 — 1965, ARA-NARA. In another effort that signaled ARA’s seriousness about urban problems, in April 1964 the ARA’s National Public Advisory Group (NPAC) made permanent an ad-hoc committee on urban unemployment. Serving on the committee were Dr. Eveline Bums, Social Work Professor at Columbia; Frank Ferabach of the AFL-CIO, bank executive Leland Gourley, Economists Dr_ William Haber and Dr. Seymour Harris, assistant to the governor o f Kentucky John Whisman. Mayor Jerome Cavanagh o f Detroit was the Chair. On this see Frank Graham, NPAC Chair, to Bums, 2 April 1964, “ARA Subcommittee—Urban Unemployment” folder, box 1, Batt, Mixed Administrative Records and Program Files, 1961— 1965, ARA-NARA. 237 “ Minutes o f Mayor’s Conference, 9 July 1964, “Big City Representatives Conference, July 9, 1964” folder, box 6, Batt, Mixed Administrative Records and Program Files, 1961— 1965, ARA-NARA.

“ “City to Parade Progress Today,” ClevelandPlain Dealer, 28 August 1964, 1.

^ Lake States Division Monthly Report, July 1964; Lake States Division Monthly Report, August 1964, “Monthly Activity Reports” folder, box 14, Batt, Subject Files, ARA-NARA; “ARA Project Activity,” Redevelopment, May 1964, U.S. Department o f Commerce.

Sherwood Gates to Batt, 5 March 1965, “Monthly Activity Reports” folder, box 14, Batt, Subject Files, ARA-NARA.

Minutes o f CSBODC Meeting, 16 June 1965, “Assistant Administrator for Area Operations” folder, box 1, Williams, General Subject and Signature Files, 1962 — 1965, ARA-NARA.

Lake States Division Monthly Report, February 1965, “Monthly Activity Reports” folder, box 14, Batt, Subject Files, ARA-NARA.

“ U.S. Commission on Civil Rights. Hearing held in Cleveland, Ohio, April 1-7, 1966. Washington, 1966.

® See U.S. Commission on Civil Rights, Cleveland Subcommittee, Cleveland's Unfinished Business in its Inner City, 30 June 1966.

238 CHAPTER?

RURAL ECONOMIC DEVELOPMENT: SOUTHERNERS, NATIVE AMERICANS, ANDTHE ARA

“We refuse to concur that our way of life is not compatible with the vigor of the New Frontier.” Red River County (TX) Industrial Foundation, 1961'

“The paleface businessman is beating a path to the Indian tepee.” Area Redevelopment Administration Press Release, 1964'

Introduction

AlS a result of political necessity and lobbying efforts, the ARA promoted economic development not only in the traditional manufacturing belt, but also in rural communities, and on Native American reservations. These economic redevelopment policies evolved in a complicated political and bureaucratic context. As already noted,

ARA Administrator William L. Batt, Jr., had to work quickly at the daunting task of creating a federal agency and although the legislation had been signed, the political battles and headaches were far from over. Unlike existing agencies that had developed relationships and carved out bureaucratic space, Batt and the ARA staff had to

239 continually conduct a public relations campaign to justify their existence. As with

many programs, failures loom larger in the public mind than do successes, and it

became difficult to deflect criticism as the agency matured. Moreover, the ARA

conducted its operations at the federal level according to the delegate agency concept,

which meant that aspects of ARA programs would be carried out by other agencies and

coordinated by ARA staff. This entailed creating procedures and maintaining positive

relationships with members of other agencies without fighting over funds and control of

projects. Not an easy task, this added to the aura of confusion and dissatisfaction that

seemed to surround the ARA. When appropriation hearings for the Commerce

Department began in 1963, these factors made it politically difficult to defend renewal of funds, let alone expansion, against attacks firom conservative members of congress and their allies. Failing to obtain new funds, Batt and the ARA staff survived as best they could from 1963 to 1965. But their political capital had ebbed just as Lyndon

Johnson became president, and LBJ directed a retooling of the ARA under the Public

Works and Economic Development Act of 1965. Johnson also desired his own stamp on domestic legislation and policymaking and worked to create new agencies and hire new leaders for the emerging War on Poverty. In 1965, the ARA merged into the

Economic Development Administration, which shifted its focus to large public works projects on a regional basis, and LBJ asked Batt to resign.

Within this difficult context, Batt and other ARA officials worked to bring industries to poor areas, sponsor technical studies, and train workers for new jobs. As this and the next chapter will show, they did have some success. More importantly,

240 though, exploring these policies and programs reveals the difBculties o f proomoting structural reform and highlights the tension between liberal policymakers amd conservatives, and within the liberal coalition itself. This chapter on ARA efforts in the rural South and on Native American reservations centers on race and tensioms with organized labor over development in low-wage, non-union areas. In the Sowuth, white male elites dominated the organizations working with ARA officials, and thmey often tried to balance development and the desire for federal assistance with an eqjual desire to avoid power struggles with blacks and lower class whites. Adding to the temsion were activists in the civil rights movement and others who pressured for greater imclusion of blacks in programs funded by the ARA and other government agencies. In addition to balancing racial issues, ARA officials tried to avoid the charge of working too undermine the power of unions and the traditional manufacturing belt by promoting dewelopment in the rural South. While generally successful in avoiding funding so-called- “runaway” factories, the ARA did not avoid further controversy from within the liberal ■ coalition over this issue.

Such racial and labor issues also surfaced in ARA efforts to promote economic development on Native American reservations. Exploring ARA programs heere reveals a third area of tension, which was the cultural tension embedded in promotimg liberal capitalism for Native American communities. Not only did liberal policymalkers hope to bring Euroamerican economics to Indians, in the process they were also ti-ying to change cultural habits of work, leisure, and sense of time. Significantly, worrking with liberals were Native American leaders who desired greater opportunities for smembers of

241 their communities to work for wages on or near reservations. Though its economic

results were small, such cooperation stimulated the development of later Com m unity

Action Programs under the Great Society and also provided further evidence for radical

Native Americans who would oppose further acculturation of Indians and

Euroamericans.

Developing the Rural South

The ARA spent most of its funds fighting poverty through economic development in the rural South, despite early and continued opposition by Southerners to ARA programs.

In rural areas, most projects were public works development, although the ARA supported training programs as well. In the rural South and Southwest, workers, civil rights advocates, and members of the U.S. Civil Rights Commission pressured ARA leaders to ensure these programs did not discriminate so that they reached minorities.

Initially, the ARA approved OEDPs without regard to race, meaning that many local committees were all white regardless of the minority population in the community.

Also, the ARA approved loans and grants without requiring desegregated operations.

Feeling pressure from other liberals and activists, ARA administrators began aggressive advertising campaigns in the African American press encouraging black entrepreneurs to apply for grants and loans. They also began to pressure, but not require, businesses to promise integrated facilities before receiving a loan. As covered in the next chapter, this pressure led ARA ofBcials to designate large inner cities as eligible for aid. In

242 addition, ARA administrators had begun plans to implement non-discrimination under

the Civil Rights Act of 1964, but these came as their funds were running out and the

Johnson administration was transforming the agency into the EDA/

While conceived in 1955 as a plan to aid urban communities struggling with

structural unemployment in the traditional manufacturing belt, adding rural areas and

Native American reservations had number of consequences for structural reform and the

liberal coalition. For the unionized manufacturing belt, this weakened aid to

communities hit with deindustrialization and by helping build plants in South and West,

aided business in expanding into low wage, non-union areas. Broadening the bill meant

that the ARA would address poverty nationwide rather than combat the effects of

deindustrialization. Doing so placed the ARA in position of fighting an undeclared war

on poverty with severely limited budget and, after Kennedy’s death, weaker support

from President Johnson. This section explores briefly how development activists in the

South sought to bring industries to their communities and how they then benefited from

ARA assistance.

By 1960, most states had created some agency to promote economic growth.

While states such as Pennsylvania and those in New England created agencies designed

to offer credits and grants to businesses or communities, those in the South usually

made businesses exempt from local and state taxes. Eventually, Southern states

developed organizations similar to PIDA, with North Carolina creating the first

Southern state development corporation in January 1956 and Arkansas following in

March 1957. It is no surprise that both these states received higher proportions of ARA

243 funding than other Southern states. Unlike those in the North, however. Southern

development agencies did not target distressed areas but offered loans to businesses

locating in any community.'’ There are several reasons for this. Though changing, the

South remained a rural region in the 1950s, and poor relative to the North. State leaders

saw no need to isolate distressed areas, when so much of the South was in need of

development. At the same time, given that Southern development agencies often prided

themselves in advertising cheap labor, from the legislators and developers’ points of

view, there was no need to offer special incentives to certain areas when all

communities could provide this incentive. Furthermore, tax breaks shifted the burden of

development to the community. Certainly, racial ideas played a role here, too. In the

Jim Crow South, economic development as decided by white elites would benefit elites

the most and new industries were to have a low-wage, non-union, white workforce.^ In

the context of the 1950s, it was unlikely that white leaders desired to assist mostly black

communities, especially in the wake of Brown v. Board o f Education and the rising civil

rights movement.

Political power in Congress and within the Democratic Party during the 1950s

meant that Douglas’ original proposal had to include the South if it were to pass. When

it did in 1961, local Southern political leaders lost little time in advocating for federal

assistance to promote economic development As designed, the ARA was to support

existing local efforts and these local leaders often looked for assistance from their congressional representatives at the federal level. This relationship between local, state, and federal leaders provides evidence of a region in flux, both holding to its antebellum

244 traditions, and witnessing change in the economic, social, and political structures.

When the ARA began working with Southern communities in 1961, the agency became part of this process. The following examples from Texas, Arkansas, Georgia,

Mississippi, and South Carolina draw on available ARA records to highlight the agency’s capacity to simultaneously alter and support the South’s traditions. And like previous and later reform efforts, such contradictions meant that the traditions o f local control and segregation would be more difficult to change than ARA administrators originally perceived.

East Texas

East Texas contained an active local development culture and through these mostly local efforts received ARA funds for several projects. Such local effort proved necessary since Texans were last in the South to grant public support for a state-level industrial development organization. The Texas legislature authorized funds for the

Texas Industrial Commission in 1959. In contrast to states like Pennsylvania, originally this body did not finance projects, or engage in economic or industrial planning, but merely promoted local competition and conducted public relations campaigns.®

Moreover, Texas in the 1950s and 1960s appropriated far less than other Southern states on industrial development, even though Texas ranked second in the South in absolute growth of manufacturing employment between 1954 and 1960, and first from I960 to

1967.’ Other factors also may have limited the desire on the part of Texas’ leaders to provide state assistance for industrial development in poor areas. By 1960, Texas

245 ranked third in income derived from the federal government, with defense and military-

related spending forming the basis of this. Texas led the nation in oil production,

accounting for 40 percent of the national total in the 1950s with an annual value that

varied in the decade between $2.5 and $3.5 billion.* Finally, a weak labor movement

and a state government that emphasized low taxes also contributed to the lack of

assistance. Growth in Texas centered on a triangle formed by Austin, Dallas/Fort

Worth and Houston. Within this situation, ARA ofiScials concerned themselves with

bringing industrial growth to rural areas in Texas and worked through the Texas

Agricultural Extension and the Texas Employment Commission.

Eligible for aid under the Texas Agricultural Commission, the 43 rural counties

of East Texas designated by the ARA had been part of the Rural Areas Development

program adopted by the Department of Agriculture in 1955, which had its immediate

antecedents in the agricultural programs of the New Deal. Like communities in

Pennsylvania, these East Texas counties were objects of study by planners and political

leaders concerned with poverty and unemployment and had begun to receive some

national attention during federal hearings on poverty in the 1950s. The region stood in

contrast to the booming oil and defense industries characteristic of post-WWTI Texas

and the Sunbelt in general.®

Though Texas is often placed in the Southwest region by businesses and

geographers (and ARA ofBcials), the East Texas region resembled the South in terms of

climate, topography, economy and social characteristics. In addition to rolling hills and pine trees, slavery on cotton and sugar plantations had been an integral part of the area.

246 As a consequence, a majority of Afiican Americans in Texas had called the region

home. Following the Civil War, cotton farming gave way to exploitation of lumber,

with the lands owned by absentee landlords who resided mostly in the North. Railroads

also began to cut across the region and offered cheap transportation, helping make

lumber the number one industry in Texas by 1900. In the 1930s, prospectors discovered

oil in East Texas, which added oil and natural gas production to the region’s economic

base, though it helped those counties along the Gulf Coast the most.‘° Adter WWII,

farmers in East Texas added wheat production, cattle ranching expanded, and the

average size of farms also increased. This correlated with the increased use of

machinery, creating a push factor that sent tenant farmers and other rural workers to

cities in search of employment. Beginning in 1948, the Texas Agricultural Extension

Service assisted in this by sponsoring County Program Building Committees at the local

level. The aim was to help farmers improve output.” Like local groups in

Pennsylvania, these East Texas Committees became the organizations charged with developing the OEDPs under the ARA. Those likely to serve on these Committees were rural, Anglo male elites, mostly farmers and ranchers and some businessmen.

Absent were tenants, sharecroppers, and poorer rural workers, groups that contained high percentages of Hispanics or African Americans. In addition, there remained in the region a relatively small percentage of Native Americans who would also become involved in ARA programs. As in Pennsylvania, leaders of utility companies and railroads provided a large measure of support to local development efforts, seeing increased demand for their services in possible economic expansion.'* Unlike

247 communities in the manufacturing belt, however, labor unions in Texas, already weak,

were originally ignored in early OEDPs; only after the Texas AFL-CIO protested to

local and national leaders were labor groups brought into some county efforts/^

Although the oil and lumber industries provided some measure of new

empIo>nnent and improvement in living standards. East Texas remained a largely rutral

“region of low productivity part time farmers”''* relative to the rest of Texas and much

of the United States. Information from the 1960 census and a 1959 study of rural

Northeast Texas by the Texas Agricultural Extension Service reveals the concentration

of poverty in the region, especially among African Americans. Median income in 1960

for white urban families in Texas was $5,693 and $3,201 for those on rural farms. For

African Americans, the rates were $2,915 and $1,430 respectively. Following WWII,

the concentration of blacks in East Texas declined, and no county in the region had a

black majority by the 1960 census. Younger whites also left, leaving the rural East

Texas population similar in some ways to that of the Pennsylvania anthracite region:

older, less educated, and poorer relative to other Americans.'^ With such developments occurring. East Texans began efforts to cash in on the post-WWII boom.

Among the first to do so were those in Red River County, with ARA officials approving their OEDP in October 1961. O f all East Texas counties. Red River received the most assistance from the ARA. In many ways, it fit the profile of rural counties eligible for aid and also showed some characteristics similar to those of the anthracite regions outlined earlier. The population in Red River County dropped nearly fifty percent between 1940 and 1960, from 29,760 in 1940 to 21,851 in 1950, to 15,682 in

248 I960.'® In I960, the population was mostly female, with 8,085 women and 7,597 men.

Within these figures, 1,840 were black men, 1,981 black women. Median income there

for aU families was $2,306, while for nonwhite families it was $1,440. The majority of

those men who worked were either laborers or farmers, while the majority of women

who worked outside the home did so as domestic servants or as clerical workers.”

Median age in the county was 37 years, and. approximately 84% o f high school graduates surveyed noted they were leaving the county.'*

Local leaders, consisting of businessmen, farmers, and professionals, formed the

Red River Industrial Foundation to attract new industries. These leaders had been active in the 1950s, working through the Texas A. & M. Extension service to obtain a series of soil conservation lakes and supporting Representative Wright Patman in his efforts to push redevelopment legislation through Congress. In a sense, these men represented the new business interests, which historian Bruce Schuhnan has noted became the new leadership in the post-WWII South. Rather than resist business growth and actively oppose federal assistance, the Red River leaders courted progress. And they did so neither strongly advocating integration, nor seemingly to argue strongly against it.'® As the leaders noted in a 1962 report to Patman, “We refuse to concur that our way of life is not compatible with the vigor of the New Frontier.Indeed, as they tell it, the Red River leaders educated the state government in how the ARA worked and in creating a connection between the three layers of government. As late as the end of summer 1961, no agency in Texas had been designated to administer the ARA and the

Texas Employment Commission had not heard of the ARA. This changed when Red

249 River leaders began pressuring the state government, congressional leaders, and agents

from Texas A. & M. University. As their report notes, “it would not be incorrect to

state that representatives of this County assisted materially in perfecting the ARA

procedural arrangement in this State.”*'

Typical of many smaller communities, the most popular request was for water

and sewer improvements in order to construct new industrial parks with the hope of attracting businesses. In 1960s, the two largest communities in the county were Detroit

(town population 576) and Clarksville, a city of 3,851.“ Leaders in Detroit applied for a $236,000 grant to improve the town’s water and sewer system. ARA ofBcials did not approve it since the proposal was not part of a definite plan to also create jobs, which was the ARA’s statutory purpose.^ In the meantime, leaders in Clarksville applied for a

$145,000 loan to construct water lines and pave a road to an industrial park, and the

Pats-Co Athletic Manufacturing Company applied for assistance to construct a plant for manufacturing athletic equipment.^'' Congressman Wright Patman wrote Batt, angry that the Detroit project had been declined while the ARA concentrated on Clarksville.

Patman argued that communities needed basic infrastructure-before they could get industries. Batt agreed, but argued that the prospects for new employment with the

Detroit project and ones like it were slim. In outlining his dilemma, Batt noted that if

“we approved these projects on the dim prospect of future employment we would have had to answer to the Congress for the expenditures of $40 million in grants for public facilities and only a handful of employed.” On the other hand, Batt argued “if we were too strict, we might unduly penalize the future economic growth of many areas.” Batt

250 chose a "middle course” that encouraged communities to establish planned industrial parks first, then apply for loans to improve the site; if approved, Batt could then issue a

“letter of commitment” by the ARA to the community so its leaders to then work to attract new industries.^ As he noted, on this basis he recommended focusing on the

Clarksville site. Batt tried to assure Patman as he would other congressional leaders.

“Your faith in this legislation has not been misplaced, and we shall do our best to convince you of that in the months to come.”“

Despite Batt’s attempt to avoid congressional pressure to steer projects along, he could not. Patman refused to relent, demanding Batt support all projects through a grant as opposed to a loan. Finally, Batt sent an ARA official to Red River County to negotiate a deal whereby the ARA would support funding $474,000, of which 44 percent was a loan and 56 percent was a grant. Incidentally, Batt also relented to pressure from Democratic Senator Richard Russell of Georgia. Russell, who had been

LBJ’s mentor, chaired the Armed Services Committee and exerted tremendous influence in the Senate and among Southern political leaders. Russell pressured

Kennedy and Batt to increase the federal percentage of funding for a sewer project in

Winder, even though Batt disagreed and caught the irony of his argument with a conservative Democrat that the ARA was supposed to support local initiative not replace it. However, Batt recalled Kennedy stating that “Senator Russell runs half of our party in the Senate, and this is just one of the facts of life, and we’ve got to Live with it.” Batt agreed to increase the percentage of federal funding for the project.^’

251 Other projects in Red River County included a $42,000 loan to the Red River

County Industrial Foundation for construction of a manufacturing building, and $72,000

for training 30 sewing machine operators, 15 sheet metal operators, 30 equipment

workers for Pats-Co, 10 nurses aides and 20 farm machinery operators.^ Because of a

lack of data, it is not clear whether these projects helped blacks or whites and whether or not they led directly to jobs for the trainees. Nonetheless, they indicate the degree to which some Southern business leaders actively sought connections with federal programs under the New Frontier (despite the efforts of their representatives in

Congress to stop such connections under area redevelopment.) These also demonstrate that the emerging war on poverty was not exclusively a top-down event. Whether these programs worked or not, the results depended upon local effort as much as they did federal.

However, not all East Texans supported the ARA’s efforts. As soon as designation was made of the counties in the region, members of the East Texas

Chamber of Commerce, local leaders, and some congressmen protested to Batt and others in the Kennedy adinmistration, including Vice President and Texan Lyndon

Johnson.^® The editors o f the Paris News, in Paris, Lamar County, asked “We want to know who declared Lamar depressed and on what basis? We want to know who offers us federal aid we haven’t asked for?”^° Upon hearing of the stor>% the editors of the

Washington Post publicized their sympathy with the conservatives in East Texas by recommending the ARA “quietly” approach local communities first “instead of listing them in advance as underprivileged children in the American system.”^' In August

252 1961, Batt responded to the criticism that designation was imposed from above and began a defense often made during the life of the ARA. As Batt noted in a letter to

Johnson, the “labeling of such areas as “depressed” was done by the newspapers.” He conceded that because the “Area Redevelopment Act was popularly called a “depressed- area bill” for such a long time, it was inevitable that areas designated under the Act would automatically be labeled “depressed.”^- To the vice president of the East Texas

Chamber of Commerce, Batt defended the designation, arguing that there “was no intent on the part of the Area Redevelopment Administration to libel the counties or communities in question.”^^ Such conservative sentiments prevented the ARA from establishing a working relationship with the Texas Industrial Commission. Members of the TIC, including Lone Star Steel and East Texas Chamber of Commerce President

E.B. Germany, protested against the ARA funding hotel and motel construction in the region, preferring manufacturing firms to services that they believed did not provide suSiciently stable and long-term employment. Racial and gender issues may have formed a part this resistance, since hotels and motels were more likely to attract male and female minorities and white males employed in manufacturing. Either way, as a result of ARA policies, the TIC refused to work with the ARA.^"*

Batt did de-designate some communities upon request, including Walker

County, Texas, on 15 May 1962. The pressure to de-designate came from the county’s ofiScial leaders, who were white. Earnest McCowan, President of the Walker County

Negro Chamber of Commerce, wrote Batt asking for an explanation. Since it was the official political body through which the ARA operated and that body requested the

253 action, Batt “had no alternative but to de-designate.”^^ Also, in December 1963, Batt

authorized a change in procedures for designating eligible areas. From that point

forward, area leaders had to request designation in writing and prepare an acceptable

OEDP before AEA ofiScials designated the aieaJ^ This highlights the difiSculty ABA administrators had with enforcing the provision that the organizations creating development plans had to be broadly representative. Often in the South, blacks,

Hispanics, and poor whites did not participate in the planning phase, since they were unlikely to be members o f local government or business groups.

Other conservative critics voiced their opposition as well and served to continue the public relations battle that had characterized the legislative process of creating the

ARA during the 1950s. Such publicity haunted the ARA during its lifetime and became an important reason why, when he was president, Lyndon Johnson chose to transform the agency. In another story connected to East Texas, Reader’s Digest published a scathing attack on the ARA in September 1964, “When the Bubble Burst in Crockett,

Texas.” Calling the ARA a “fi'ee-wheeling arm of government” that has been “ladling out lavish gifts and loans,” the article argued that the ARA forced an electronics firm on the city leaders, only to have the firm back out of the project, costing the city $60,000.^’

William Batt, community leaders, and liberal Texas Senator Ralph Yarborough acknowledged that the city did raise $60,000 for the land and the company did back out.

However, the ARA never approved the loan, and the city ended up attracting another company for a portion of the site and did not lose money on the project.^® As Allen

254 Rogers, President of the Crockett Community Council noted to Batt, “The bubble has not burst. We are still an active, aggressive community with a tremendous future for which we are aU working.”^®

Other forms of resistance to ARA programs developed. For example, Batt was not completely satisfied with the response from the Texas Employment Security

Commission. He noted in an April 1963 letter to the federal Bureau of Employment

Security that the Texas agency “has been conspicuously absent in stimulating training programs for either ARA or MDTA.”‘*° Similar problems existed at the local level. In many East Texas counties, large commercial farmers or ranchers tended to dominate the

County Committees charged with connecting to ARA. programs. These same people also dominated the Farm Bureau Federation, which actively opposed the creation of the

ARA."** Thus, many local leaders in East Texas blocked more active ARA expansion in the region, both through political actions in their communities and through interest group activity. To them, the ARA represented a threat to the social, economic, and political status quo.

Race and Area Redevelopment in the South

The efforts and issues in East Texas were part of the many ARA projects spreading throughout the South. Occurring just as the civil rights movement was regaining momentum in the region, the ARA crossed paths w ith those working to break the segregated South. As a result, the issue of race intertwined with redevelopment in the

ARA’s hiring procedures and in its operations in the South. In the fall of 1961, civil

255 rights groups began contacting ARA ofBcials to ensure the agency’s projects did not

reinforce segregation. For example, in November 1961, NAACP officials prepared a

memo critical of ARA leaders for not issuing guidelines more explicit in their

requirement for fully representative local committees in the South. The memo also

argued that Batt had “ample authority to withhold aid from counties unless they furnish

evidence of non-discrimination, and Negro participation in program leadership.”^^

Clarence Mitchell, Director of the NAACP’s Washington Bureau relayed these concerns to Batt, especially those regarding OEDP’s from counties in Alabama, Florida, and

Georgia that had black populations ranging from thirty-one to sixty-three percent yet whose development committees were all white. Mitchell noted that it was “well known that these areas have a notorious record of racial segregation and discrimination in use of public funds” and he wanted to ensure that ARA projects (and all federal programs) in the South operated on an integrated basis."^

These arguments touched off discussions within the ARA on how best to address the needs of minorities in the South and elsewhere. ARA leaders balked at the suggestions in Mitchell’s letter and the NAACP memo that the ARA specifically require blacks on local committees. Such arguments would form the basis of federal affirmative action policies developed under the Johnson adinmistration.'^ They also echoed earlier debates on New Deal policies in the South and for blacks in general. On the one hand, programs such as the Agricultural Adjustment Administration (AAA) proved detrimental to poor blacks in the South and did not provide them a voice in determining the policies at the local level. Also, both Henry Wallace and Rex Tugwell

256 in the Department of Agriculture resisted hiring a special black assistant. On the other

hand. New Dealers Lyndon Johnson, Aubrey Williams, and Mary McCleod Bethune

worked to bring federal benefits to blacks through the National Youth Adrninistration,

and agencies such as the Farm Security Administration and Works Progress

Administration hired black officials and worked to provide greater benefits to blacks/^

The initial response by ARA ofGcials was in a way reminiscent of the mixed record regarding New Deal programs and blacks. Hal Sheppard, Assistant

Administrator for Area Operations and contact for all civil rights issues, and Assistant

Administrator Harold WiUiams argued that the best way the ARA could help minorities was to promote projects “resulting in the employment and training of Negro unemployed and under-employed workers” and to promote the “creation and expansion of Negro-owned enterprises.” They resisted appointing blacks based solely on skin color, arguing that “the color of such representatives should be irrelevant, a concept that works in more than one direction [emphasis in original].” If someone happened to be black, “then so be it. But ARA should not be put in the position of requiring that a

“Negro” — over and above a representative of an economically functioning category in a given community — be on such a committee.”^® Rather than promote racial integration and direct inclusion of the poor and unorganized, the ARA was to work with established interest groups. Furthermore, according to ARA leaders, the only way to police racial hiring would be to require racial designation o f all persons involved in local committees, something ARA leaders did not wish to do. Their agents working in the

South (who were white. Southern men) also feared the program would grind to a halt if

257 they pushed too hard on integration. In 1962, the ARA did update its publication on

preparing OEDPs to include greater emphasis on ensuring the participation of the poor

and minorities and the language reflected the changing nature of ARA — and by

extension, liberal — policy. For example, the 1962 handbook, “Planning for New

Growth — New Jobs,” noted that the “local organization should include a cross-section of all the elements in the community...this is especially so in areas whose population consists of groups with substantial numbers and percentages o f unemployed and underemployed men and women otherwise not represented in community-wide programs of economic development.” The handbook continued to maintain the ARA’s emphasis on organized interest groups as representatives in development. “Whenever such groups exist and show promise of contributing toward such programs, their spokesmen should be encouraged to participate in the local organization.”'*’ The debate over inclusion of minorities continued throughout the life of the ARA and it was not until passage of the 1964 Civil Rights Act that the ARA required integrated facilities and training for projects receiving funds.

The ARA itself had difficulty in recruiting blacks to work in professional positions for the agency. In general, the presence of male and female minorities in professional positions in the federal government had been weak for decades. The

Kennedy administration began to change that trend, when in March 1961 the President signed Executive Order 10925 creating the President’s Committee on Equal

Employment Opportunity to promote non-discrimination in government contracts and in hiring.'*® With the creation of the ARA in May, the agency’s officials responded to the

258 increased pressure by making some effort to collect data on minorit}' employment and

trainees in its programs and in the agency. In addition, in the fall of 1961 Batt hired

George Robinson as Staff Assistant for minority affairs, the ARA’s first minority

professional. Even so, agency officials were not rigorous in collecting data on

minorities employed in funded programs, making difficult a more precise analysis of

minority involvement in the ARA. However, several cases outside of East Texas in the

South illustrates the difficult nature of promoting rural development in the region —

difficulties that show further the evolving nature of liberal thought and policymaking

that would emerge under Community Action programs and other programs of the

expanding War on Poverty.

Arkansas

Controversy surrounded the first project approved by the ARA, which included a

$17,000 community facility loan and a $133,000 grant for a water system in Gassville,

Arkansas to support the construction of a building to house a shirt-making facility. At one time, there had been an agreement between city leaders and the textile company to forbid union organizing in the town, but the Arkansas Supreme Court had rejected this stipulation just prior to ARA funding. To get the plant, the voters in Gass\dlle agreed to a $535,000 bond to construct the building, which the company leased for 35 years at

$1,500 a year with the option to extend the lease for 64 years at an additional dollar a year. With the ARA funding, the new facility was to employ 1,000 women.

Conflicting reports showed either 500 or 737 workers employed there by 1964.''® Batt

259 approved the loan in June 1961, prior to USD A designation of any eligible rural areas

and it did become a redevelopment area. At the time, Batt justified his decision in his

letter to the Community Facilities Administration. “Although the 5(b) areas have not

yet been designated, I am presenting this project as a pilot case so that we can develop

detailed procedures with a better understanding of the problems involved."^"

As expected, attacks on such a move emerged firom the political right. The

Chamber of Commerce claimed only 500 jobs had materialized and attacked the failure to create more £is evidence of a wasteful federal program. Adding to the conflict were arguments from within the labor-liberal coalition. AFL-CIO leaders met with Batt to protest the support of these efforts on two grounds: that the ARA would provide money to an area recognized as anti-union and that the agency supported industrial development measures so favorable to businesses at the expense of communities. They were also upset since this loan came at a time when the AFL-CIO had begun plans to invigorate efforts to organize textile workers in the South. Since WWII, unions had only grown about half as fast in the South as they had in the nation. Indeed, the 1950s saw no major gains for unions in the South. In addition to limited efforts on the part of major unions, another significant factor was that all Southern states except Kentucky and Oklahoma had enacted right-to-work laws between 1944 and 1956.^' Batt could say little in response to organized labor, only that the local efforts showed the high level o f participation by communities in area redevelopment and that even 500 jobs was a positive achievement.^" Furthermore, such a move did not help the reputation of the

260 Kennedy administration regarding civil rights, considering the ARA's first project came barely a month after Freedom Riders had been attacked in several Southern states in their efforts to test the law banning segregation on interstate busses and terminals/^

Further controversy in Arkansas surrounded an ARA loan to National Wire and

Fabric, manufacturers of wire weaving intent on building a plant in Star City in southeastern Arkansas about 25 miles from Pine Bluff At the time, an article in the

Wall Street Journal on 12 July 1962 noted that Star City had an ordinance requiring union organizers to pay $1,000 per day while engaged in organizing efforts, even though such ordinances had been declared unconstitutional in 1958 under Staub v. City o f Baxley. Prior to approving the loan, ARA ofticials investigated and obtained assurances from local and state leaders that the ordinance had been repealed on 2 July/'*

Also, in investigating minority employment in ARA projects, ARA officials learned that the plant began operation with only one black employee, a janitor. The company worked through the Arkansas Employment Security Division, which screened registered unemployed workers for the plant. In keeping with a pattern common to minorities, no registered blacks qualified as production employees and the company hired 29 white males.^^ As a result, few blacks benefited from this project and it is not clear whether the plant became union or not.

Mississippi

The ARA encountered the most difficult situation in Mississippi. The state possessed the worst situation for blacks in the South — it was the poorest of all states and contained

261 perhaps the highest levels of segregation. Furthermore, the ARA arrived in midst of

growing racial tensions during the civil rights movement. Indicative of this difficulty

was an effort by the ARA to begin training rural workers in the Yazoo Delta region to

become tractor operators in order to participate in the growing mechanization of

agriculture in the region. The Mississippi Employment Service estimated that half of the 50,000 males in the Yazoo Delta region between ages of 20 and 49 were unemployed. Though difficult to measure, underemployment was probably significant among the 25,000 considered employed. In January 1962, ARA administrators, in conjunction with policymakers in the Department of Labor (DOL) and the Department of Health, Education, and Welfare (HEW), announced a program to train as tractor drivers 1,200 unemployed male farm workers in the Yazoo Delta region, ninety percent of whom were black. Once again, this built on local initiative. Members of the Delta

Cotton Council and other planters from the region had created the plan, modeled on a state one operating since 1953.^®

Opposition developed, however, from local planters not privy to the creation of the plan and members of the State Farm Bureau, a division of the American Farm

Bureau Federation, an interest group of large commercial farming companies that had opposed the creation of the ARA. This group of planters feared integration, while the

Farm Bureau leaders' major objection centered on fears that this would be part of an effort to issue minimum wage protections and promote bargaining rights. In addition, these were issues contained in congressional efforts to raise living standards for migratory workers — provisions opposed by large commercial farms. The Bureau

262 elicited the support of Jamie Whitten, local politician v}ing for a new congressional seat

created under redistricting there. Under increased political pressure, officials in HEW,

who authorized funding for training, recommended that the ARA cancel the project. Fay

Bennett of the National Sharecroppers Fund protested to Batt, Abe Ribicoff of the HEW

and Labor Secretary Arthur Goldberg, arguing that canceling the project violated the

purpose of both the ARA and the New Frontier. Developers in the Yazoo region

continued to resist programs that might employ blacks, and while Batt replied he was

concerned and that he would work with the DOL and the HEW to get the program

going, he never could.^'

This example further illustrates the tension within the Kermedy admiriistration

over racial issues. Kennedy was moderate in his views on race. Furthermore, he had

been elected without a clear liberal mandate and remained sensitive of the power held in

Congress by conserv'^ative Southern Democrats. Arthur Goldberg was also aware of the

political realities he and other liberals faced in the early 1960s in their efforts to bridge the gaps in both class and race. The ARA embodied those efforts and the Yazoo training program represents a case where federal leaders sacrificed the interests of

African Americans in order to keep the entire ARA program going.^*

Other problems arose in Mississippi. During November 1963 hearings on ARA funding, Mississippi Senator John Stennis accused Batt and the ARA of not giving

Mississippi its share of public works projects, even though Stennis beheved these projects qualified for assistance. Batt denied withholding funds and the ARA did approve projects in Mississippi.^® However, the state contained only fifteen projects,

263 none of which were training programs.® The combination of local resistance and

federal reluctance to provide funds hurt the state's poorest members the most. It also

showed that in this case the alliance of planters and low-wage industrialists that had

held power in the South managed to halt a federal program for fear that such efforts would undermine their authority. While Chamber of Commerce leaders in some

Southern towns advocated using federal programs like the ARA to enrich their communities, others still feared the potential disruption of federal involvement.®'

South Carolina

In South Carolina, the ARA became involved in efforts to promote economic development and political involvement of rural residents, many of whom were Afidcan

American. The correspondence related to these projects reveals the emerging pressures on liberal policymakers to be more aggressive in including blacks in federal programs and highlights further the tensions within the liberal coalition over the issue of affirmative action.

The major loan in South Carolina was in 1962, for $19,500 to Port Royal

Industries, a sweater manufacturer in Beaufort. The U.S. Civil Rights Commission, which investigated complaints and compiled information, inquired about the loan. Berl

Bernhard of the Commission noted in October 1962 that Section 40-452 (1952) of the

Code of Laws in South Carolina stipulated that it “shall be unlawful for any person engaged in the business of cotton textile manufacturing .. .to allow or permit operatives, help, and labor of different races.. .to labor and work together within the same room.”®^

264 He asked Batt to inform him if this had been taken into account when the ARA

approved the loan. Batt responded that it “was not taken into consideration” and that

“we have no knowledge of whether or not this project will provide employment for only

white persons.” He went on to note that “We have not...required as a condition for

a...loan that a borrower execute covenants with respect to employment practices.”“

Batt and others took the position that the loan programs of the ARA should not be

singled out, but that non-discrimination should apply to all government loans. After a

November 1962 meeting, representatives of the Civil Rights Commission agreed to

omit the industrial loans from surveys designed to obtain the degree of integration in

federal programs and instead focus on federal training programs.^ However, the issue

of whether minorities benefited from development and training programs continued to

gather greater attention. Throughout 1962 and 1963, George Robinson, charged with promoting minority issues for the ARA, solicited help in increasing black involvement

in ARA projects from a number of organizations, including the Urban League, the

NAACP, CORE, and universities such as Fisk and Atlanta.®^ In January 1963, the Civil

Rights Commission began gathering data on minorities in federal training programs and in that year the ARA began to alter its policies in response to increased pressure.®®

In February 1963, the ARA sent George Robinson, Anne Gould, and regional field representatives to a two-day conference in South Carolina on job training for rural residents. Sponsored by the South Carolina Council on Human Relations (SCCHR), an integrated organization working to promote civil rights and economic development, some 200 hundred people attended, including federal representatives from the

265 Departments of Labor, Agriculture, members of the South Carolina State Extension

Service and the Employment Security ofBce, representatives from the National

Sharecroppers Fund, and experts fi*om Clemson College, South Carolina State College,

and North Carolina State CoUege.^^ Prevented from coming by the official, white State

Extension Service were the black extension agents, who acted within the segregated

system on behalf of rural black South Carolinians. In fact, most blacks in the twenty-

four South Carolina counties eligible for ARA assistance had no idea ARA programs

existed. As Leonidas James of the SCCHR reported to William Batt at the SCCHR" s

annual meeting two weeks before, black extension agents “told a representative from the

Clemson Extension Service office that they did not know anything about the A.R.A.

They did not even know what counties in South Carolina had been declared eligible.”

James went on to note that “the Negroes of these 24 counties... were most in need but

had been almost completely overlooked.”®* Blacks at the conference also demanded the

ARA hire a black field coordinator for the region. Batt still refused to do more. The

ARA had no money to make such a move and since the agency had to work with state

employment services, further pressure could have jeopardized the entire program. He did ask the Department of Agriculture to consider the issue.®®

In another South Carolina case, during March 1963, black leaders in Lee County tried to convince the all-white committee organized to work with the ARA to allow blacks on it. They refused, prompting James McCain, CORE’s Director of

Organization to write Batt, warning him that unless “some kind of pressure is used by the ARA Agency, Negroes will be excluded from the Program.”’® Meeting on June 3,

266 1963, ARA administrators debated then rejected requiring fair employment practices on

all projects; once again, given the ARA’s difficulties in acquiring congressional

funding, such a stance may have jeopardized the entire program/' Batt and others decided, however, to include special programs for inner cities, a program covered in the next chapter. As noted, it was not until passage of the Civil Rights of 1964 that ARA codified non-discrimination in its regulations. By then, the ARA was short of money and other programs in the War on Poverty had begun to operate. Not surprisingly, the

ARA enjoyed little success in employing blacks in South Carolina and kept few records of the agency's activities there. Through at least 1963, only 20 black men had gained employment and none had been trained, since South Carolina law prevented interracial classes.^’

A Few Success Stories in the South

Despite the tremendous difficulties facing the ARA, there were some bright spots. One success story came in Darien, Georgia, although for political reasons Batt refused to publicize it. In July 1963, the ARA approved a loan for the McIntosh Redevelopment

Corporation to build a new plant site for Perling Industries and to provide training for workers. According to Perling managers, originally leaders of the McIntosh

Redevelopment Corporation requested that Perling designate “certain departments for white workers and others for colored workers.” However, ARA training coordinator

Aime Gould contacted Perling and urged that they make arrangements with local leaders

267 to integrate the plant. Gould also involved Labor Department officials and the president of Perling contacted local leaders and secured a promise by all parties to hire and train blacks for all positions

The ARA also managed to help a group of black farmers in South Carolina.

During Rural Areas Development meetings sponsored by the Department of Agriculture in 1962, black cotton farmer and high social studies teacher Arthur Brewer inquired about manufacturing in Pageland, Chesterfield County, located in north-central South

Carolina. Garment manufacturers attending the meeting suggested the need for another factory and an owner offered to help Brewer establish one. Brewer organized several local farmers who as a group had black extension agents fi-om the USDA help with publicity and support for their plan. The group incorporated as the Chesterfield County

Garment Corporation, signed an option to convert an empty schoolhouse into a factory, and raised $18,000 in local funds. In the spring of 1964, they applied for and received an ARA loan of $32,150 to buy, renovate, and equip the building. The ARA provided additional funds to construct water and sewer lines for the factory. With funding firom the MDTA, the group offered training for over eighty women in sewing machine operating, which also included life skills, English lessons, mathematics, and civics.

Over 100 black farmers bought stock in the company, which employed 29 people (27 women and 2 men) to manufacture children’s clothing. While the pay was relatively low, $1.25 an hour, these jobs offered economic and social improvement to blacks in a segregated, rural community.’"’

268 In another situation, in July 1965 ARA officials investigated employment at

Robbins Floor Products of Prescott, Arkansas. By this time, the Civil Rights Act had

passed so that non-discrimination on account of race was law. In the meantime, the

ARA had created a new position — Special Assistant for Equal Opportunity, filled by

Wilfred Leland. In the case of Robbins, ARA officials found greater effort on the part

of Robbins managers, local white and black leaders, and state officials to hire an

integrated workforce at all positions. Leland and ARA Field Coordinator Lon Hardin

visited Robbins and found the site still under construction (with an integrated crew) and

managers who understood “that the purpose of the loan is to provide employment for

unemployed and underemployed people in the communityThe Prescott labor market (which included the towns of Gurdon, Hope, and Arkadelphia) had a black population of approximately thirty percent. Other major employers in the area had already integrated their workforces, including Reynolds Alum inum and Timex. Leland and Hardin also received assurances that officials firom the Hope office of the Arkansas

State Employment Service would travel to Prescott for screening and also would advertise in the Prescott newspapers. In addition, ARA officials made contact with local black leaders to ensure that blacks knew about the plant’s opening.^®

Meanwhile, back in East Texas, a 1964 survey of firms subsidized by the ARA or other local development groups showed that these businesses had hired 332 blacks out o f 2,070 workers — sixteen percent. While notable, it was still inadequate since the black population in East Texas counties reached firom fifteen to over twenty-five percent.’’ In another case, political leaders and business owners worked to integrate

269 ARA funded facilities. In Marshall, Texas, where about 45 percent of the 45,000

residents were black, Wright Patman arranged a fall 1963 meeting between Batt and

local leaders to secure funding for the Marshall Tile Company, owned by Turnbull, Inc.

In a follow-up letter in December, Cameron McElroy of Turnbull estimated hiring 144 people, of which 85 were once unemployed, unskilled blacks. McElroy noted that he would first train these workers in unskilled jobs, with the intention of moving them into skilled positions as they trained. As he noted to Batt, “This aspect of the local operation is most important to me and 1 thought you would like to know that Marshall Tile will help in precisely that area where help is most needed.”’*

The AJRA and Native Americans

As with plans for rural areas and cites, ARA operations on Native American reservations meant that they led the way in increasing federal aid towards Indians prior to the announced War on Poverty. Following the accelerated withdrawal of federal aid during the Eisenhower years, the ARA played a significant part in beginning a turnaround in policy that emphasized federal assistance with economic development, job training, health care, and education — ideas extended by the War on Poverty. Rather than bring Indians to jobs, the ARA brought new energy and greater funds to efforts to bring jobs to Indians

The liberal programs of the ARA sought to end poverty on reservations by making

Indians into industrial workers and possibly business owners through job training and business development. As they would under the Great Society programs, liberals in the

270 ARA wanted Indians to be better competitors in the market. At the same time, they also

sought to preserve certain elements of Native American culture. However, as discussed

below, the ARA model had a few successes on either goal, and those implementing the

new War on Poverty in 1964 continued these efforts while ignoring the ARA’s meager

results. Together, ARA and other 1960s measures came under attack by both

conservatives and radicals for promoting dependency on the federal government and

failing to end poverty.’®

Following the creation of the ARA in May 1961, American Indian leaders and

academics convened on 13 June the American Indian Chicago Conference (AICC) to

create a proposal for a new federal policy. In the Declaration of Indian Purpose, the

signatories called for the termination policy to be replaced with federal assistance in

economic development. The group demanded that Indians have greater control over programs and policymaking, but Interior ofGcials did not want to go this far. Under the

Kennedy administration (and independently of the ARA), the BIA began to pursue a policy of promoting economic development that relied on Indians developing plans, which came to institutional fruition as the Division of Economic Development.^ The

ARA joined in this effort by following the recommendation of the BIA and designating

51 reservations as eligible for aid. According to the 1960 census, 546,228 Native

Americans lived within the boimdaries of the United States and they were the poorest of all social and economic groups. Median yearly income for working males was $1,792, whereas it was $2,300 for non-whites and $4,300 for white males. Disease rates were higher, educational levels and life span lower.*’ Based on such data, the BIA established

271 the criteria for designating reservations. As many liberals and local tribal leaders had

hoped. Native Americans became involved in federal policy much more than before;

however, they did not own most of these new industries and thus development remained

in the hands of outsiders. In addition, cultural resistance to industrialized life, low skill

and educational levels, and the isolation of the reservations meant that businesses

generally remained uninterested in committing long term to these areas.*"

The assumption in these policies remained the same as it had been in the 1950s:

that Indians would eventually accept Euroamerican ways. The difference was that these

new proposals moved slower and offered greater assistance than did earlier programs

whose purpose had been to force rapid assimilation. As one scholar noted, the idea of

industrial development on reservations was a middle way between the two extremes rejected by federal policymakers: complete termination and direct Indian involvement in policymaking.*" Several case studies provide evidence of the nature of these ARA programs. Since the ARA relied on local communities to first develop OEDPs, this meant that local leaders needed expertise in creating and proposing economic development. Difficult enough for many local communities, this required Native

Americans to acquire expertise in community planning according to the dominant

Euroamerican way.

The lack of both expertise and existing commercial activity meant that much of the ARA activity on Native American reservations consisted of technical studies to first determine what kinds of business activities might be created. Most studies and projects involved either resource exploitation or tourism. One $75,000 project studied timber

272 resources on the Flathead Reservation in Montana. The Flathead had been harvesting

timber according to a management plan formulated in the 1940s. The new survey found

greater available timber resources, which resulted in allowing the annual cut to increase

firom 20 million board feet to 60 million board feet and creating approximately 110 new jobs.^. In Arizona, for example, on the Colorado River, Hopi, Gila River, Navajo, Salt

River, and Zuni reservations the ARA funded several technical studies to promote tourism and industrial development. In addition, the ARA conducted four training programs there that resembled others used on Indian reservations elsewhere. The

Arizona programs trained approximately 220 male Indians as farm machinery operators, carpenters, bricklayers, electricians, painters, and water and sewer line maintenance workers.*® Lack of data prevents knowing the ultimate success of those trained.

On the Alabama-Coushatta reservation near Livingston, Texas, the ARA funded both a training program and a tourist project. The two groups had come to live together after both had been pushed off their land. In 1965, there were approximately 550

Alabama-Coushatta Indians, with 360 living on the reservation and most o f those employed worked part-time in the lumber industry. The Tribal Council applied for and received a S 19,000 grant for a technical study that showed the potential for a tourist attraction on the reservation. Such an attraction would generate income as well as preserve and promote tribal culture and history. The study noted that the ‘"tribe's ability to produce Indian artifacts needed development to complement the tourism project and produce more family income.” From this, the Council received a $31,000 grant to train

33 tribal members in creating arts and crafts for sale in local stores. It is not clear if

273 those training the Alabama-Coushatta were Indians or whites. Nor is it clear if the

crafts were traditional Alabama-Coushatta creations that the tribe had forgotten how to

make, traditional ones that the tribe felt they needed more o f or if they were another

type. In addition, according to an ARA report, the “supervisory instructor had brought

in a teacher for the woodworking class, who is also an authority on Indian dances.” In

creating their dances, the tribe “included ancient Coushatta dances” to “maintain

historical authenticity.” Out of these projects, the Alabama-Coushatta received funds

from the state of Texas to create a museum, which exhibited crafts, other artifacts, and

dance performances for tourists.®^

The ARA funded similar studies to promote tourism on the Navajo and Zuni

reservations in Arizona and New Mexico as well on the Fort Belknap and Rocky Boy

reservations in Montana. Not an original idea, these efforts at saving and promoting

Indian culture resembled similar efforts under the New Deal and the Progressive era.

During these earlier eras of reform, white government officials and experts conducted concerted efforts to develop and promote Indian culture, including arts and crafts, dances, and clothing.*® Following the experience with the ARA, community action programs and other efforts during the War on Poverty would continue this trend of combining Euroamerican expertise and involvement of Native Americans in federal policymaking.

In addition to training, technical studies and tourism, the ARA tried to promote manufacturing on Indian lands as well. Like earlier and later programs, ARA officials had some short-term success, but in the long run, they could not generate sufficient

274 industrial development to promote prosperity on reservations. For example, a success

story seemed evident for a carpet mill in Anadarko, Oklahoma. Though located in

Grady County, not an Indian reservation, many of the poor residents of the rural area

were Indian and accounted for the area being eligible for aid.*® The majority of Indians

living in the Anadarko vicinity were Kiowa, of whom there were approximately 2,850

in 1963, and those males that worked usually served as farm laborers.®” In April 1963,

Sequoyah Carpet Mills received a $390,000 ARA loan and by April 1965 had employed

153 persons, about half of whom were Indians, thirty-five percent white, and fifteen

percent Afiican American. The mill operated twenty-four hours, producing 850,000

square yards each month. As with other projects, ARA officials supported events

already underway at the local level. A few years prior to receiving the loan, the

president of the mill, Donald Greve, had made a commitment to building in a poor area

in his home state of Oklahoma. Active in the Methodist church, Greve and his wife

were struck by the poverty in Anadarko and sought to hire “people who were on public

welfare rolls, people who were looking to others now for their living and not really

making a contribution to our society as a whole.”®* According to an ARA report, the

“aptitude of the Indians has surprised the townspeople, many o f whom had doubts about their abilities.”®’ It is not clear how long this plant lasted, or what percentage of Indian workers were men or women.

There were several other projects related to manufacturing.®* The ARA approved a $347,000 loan to Parker Textile Mills in April 1964 to construct a plant on the Colorado River Indian Reservation that produced cotton yam. Matched by $54,014

275 in Indian funds and employing 95 mostly Indian workers, it is not clear how long the

plant lasted. This was the only industrial loan on record in Arizona. Another project

involved a $380,000 loan to help build and equip a plant for the Product Miniature, a

firm that manufactured plastic toys. Located near the Standing Rock Sioux reservation

in South Dakota, the plant provided jobs for about 50 Sioux. The ARA also provided a

$118,000 grant to the Mesita in New Mexico for a sewer and water system so that the

Mesita could finance a small electronics plant for Burnell and Company. The ARA

provided jobs to about 300 Cherokee in North Carolina through a $765,000 loan

towards the construction of a plant to make wooden beds. Other funding included a

vegetable processing plant for the Isleta Pueblo in New Mexico, and public facility

grzints to the Fort Peck and Fort Berthold reservations for water systems to support

museums.Except for perhaps the electronics firm, these were not top-end, value- added manufacturing jobs. While they did provide work and opportunities for the poorest of Americans, in the long run the ARA simply did not have enough resources, nor did business owners see fit to locate on reservations.

Besides the difficulty of promoting economic development on Indian reservations, problems working through the BIA emerged in the early stages. In

February 1962, after reading a report by the BIA on its industrial development programs, one ARA administrator claimed that he had “seen no signs of such a program” since the ARA began operations.^® Examining the programs by Euroamerican standards, ARA officials tried to place a positive spin on their efforts. Yet ARA press releases contained elements of stereotyping and misunderstanding. “The paleface

276 businessman is beating a path to the Indian tepee” read one October 1964 press release.

Manufacturers, the ARA claimed, are finding that Indians have “the patience and

dexterity which have made them famous as artisans of blankets and jewelry.” The

ARA noted that Indians had invested $1.3 million and the ARA $2.3 million.®^

Although well intentioned, the use of such language, coupled with attempts to bring

Euroamerican culture to Native Americans, would fuel part of the radical Indian

backlash against liberalism in the late 1960s and early 1970s.

More programs followed after ARA, including community action program s

under the Office of Economic Opportunity (OEO) and development under the EDA.

Together, these efforts by Indian leaders and their liberal allies helped strengthen Indian

activism and tribal government. The ARA served as transition in policy from earlier efforts to administer programs for Indians to the self-determination pushed by community action programs under the OEO. It did so by encouraging Native

Americans to create their own plans for industrial development under the guidelines provided by ARA administrators. Evidence shows that unemployment did decline on reservations, from nearly fifty percent in 1960 to forty percent in 1970. Ironically, part of the cost was a loss of Native American culture that helped generate Native American activism of the late 1960s and early 1970s, which in turn criticized federal involvement.’®

277 Conclusions

The efforts by Batt and other ARA officials to promote development and training in the

rural South and on Native American reservations reveal the various tensions

surrounding ARA programs. In the South, white and black Southerners struggled over

how to cope with the economic and social changes affecting the region. Some tried to hang on to older, traditional systems of power, while others sought to involve whites and blacks in programs that offered some hope of economic improvement. The ARA became involved in these struggles as the agency sought to promote economic development. It did so through the system of federalism, working through local and state groups, and by involving organized interest groups. Doing so in the South meant that its programs did not always help poor blacks, since they were less likely to be members of local or state government agencies or business groups, and whites often refused to hire blacks for jobs or allow blacks entry into training programs.

Furthermore, using its resources to promote industrial development in a low-wage, non­ union region brought the ARA into conflict with its supporters in organized labor, who wanted to ARA to reinforce the industrial base in the traditional manufacturing belt.

Meanwhile, ARA officials worked to bring capitalism to Native American reservations. In many ways, their programs resembled those of earlier reform efforts in that they sought eventual integration of Native Americans into the market system. The

ARA again worked through local leaders in various tribes who also sought to bring economic development to their communities. Though these programs were not necessarily pernicious, in their implementation of redevelopment policy, ARA officials

278 revealed continued aspects of paternalism and stereotyping so prevalent in federal

actions. Moreover, while there were some small successes, the ARA did not have

enough resources nor were business leaders too interested in relocating to Native

American reservations.

Aiding Native American reservations and rural areas in the South was certainly

not what Solomon Barkin, William Batt, and Paul Douglas had in mind when they

drafted the original redevelopment bill in 1955. In what symbolized the direction

federal involvement with industrial transformation had gone since then, the ARA’s first

loan went to support the construction of a non-union, textile manufacturer in Arkansas.

The three men had hoped to assist the traditional manufacturing belt to maintain its

industrial base, but in the operations of the ARA, communities in the Northeast and

Great Lakes regions had to compete with other areas. In the end, however worthy and

in need some areas may have been, the ARA used the majority of its resources to assist

areas outside the traditional manufacturing belt. This meant that directed proposals at

structural, industrial unemployment in the Northeast and Great Lakes regions were first

diluted then lumped together in the programs of the Great Society, which in turn were

not enough to address the needs of these regions. The legacy o f these developments were the urban crisis of the 1960s, the popular image of deindustrialization associated with the wrenching changes in the steel and automobile industries of the 1970s and

1980s, and decline of liberalism as a central, political force in the United States.

279 NOTES

‘ “Capsule Description o f Red River County, Texas,” “Industrial Foundation” folder, container 39a, Wright Patman Papers, LBJ Library.

* Press Release, “ARA Aids Induârial Development on U.S. Indian Reservations to Generate N ew Job Opportunities,” 11 October 1964, “Bureau o f Indian Affairs” folder, box 9, Records o f Gordon E. Reckord, Mixed Administration and Program Files, ARA-NARA.

^ See correspondence in “Civil Rights” folder, box 5, Batt, Subject Files, ARA-NARA.

" U.S. Congress, Senate, Special Committee on Unemployment Problems, Readings in Unemployment, “State and Local Development Activities and Elements o f a Comprehensive Federal Program,” by Sar Levitan, 86“' Cong., 2nd sess., I960, p. 1577-78. On industrial promotion in the South see two works by James C. Cobb: Industrialization and Southern Society. 1877 —1984 (Lexington: The University Press o f Kentucky, 1984) andThe Selling o f the South: The Southern Crusade for Industrial Development, 1936 — 1990 (Urbana: University o f Illinois Press, 1993).

^ See Cobb, Industrialization and Southern Society, 150, and Bruce Schulman, From Cotton Belt to Sunbelt: Federal Policy, Economic Development and the Transformation o f the South, 1938 —1980 (New York: Oxford University Press, 1991).

® Carl Wilton Hale, “Local Development Planning: Local Subsidies in Texas and the East Texas Sub- Region.” Ph.D. Diss., The University of Texas, 1965, 150. Hale interviewed individuals from the ARA, Texas AFL-CIO, Texas Agricultural Extension, Texas Industrial Commission, and the Texas Employment Commission. He concludes that federal tax credits and rapid amortization would have been the two o f the best options. This was William Batt’s argument as well.

^ Newsclipping, “Nation’s Best in 1963,”Texas Parade, March 1964, 38-9, in ARA-NARA 197. Texas did suffer some losses; for example, between 1958 and 1962, Texas lost S440 million in prime Defense contracts as a result o f phasing out the B-58 bombers. See Cobb,Selling o f the South, 72, 145.

“ Robert A. Calvert and Amoldo De Leon, The History o f Texas (Arlington Heights, IL: Harlan Davidson, 1990), 330-31.

® On the economic transformation o f the South during and after WWH see Cobb and Schulman above as well as Ann Markuson, Peter Hall, Scott Campbell, and Sabina Deitrick,The Rise o f the Gunbelt: The Military Remapping of Industrial AmericaÇHew York: Oxford University Press, 1991).

See Calvert and De Leon, History o f Texas, 99-101, 186; and Julianne S. Stephens, “From Depression to Development: The Social Impact o f the Discovery o f Oil in East Texas During the Depression Era,” Master’s thesis, Baylor University, 1991, 16-39.

“ Hale, “Local Development Plarming,” 82.

>- Ibid, 142-3.

" Ibid, 153.

Ibid, 34.

280 Calvert and De Leon, History o f Texas, 333; Hale, “Local Development Planning,” 185-6.

Leon Langan, Chief, SW Division, to Batt, 18 March 1964, “January 1962, Congressional” folder, box 5, Batt, Reading Files, 1961 - 1965, ARA-NARA.

” U.S. Census, I960.

" “Capsule Description o f Red River County, Texas,” “Industrial Foundation” folder, container 39a, Wright Patman Papers, LBJ Library.

See Chapter Five in Schulman, From Cotton Belt to Sunbelt.

See note 1.

'* Undated and unsigned attachment in “January 1962, Congressional” folder, box 5, Batt, Reading Files, 1961 -1965, ARA-NARA.

“ There were residents living near the two areas but outside the central town. According to the 1960 census, including these residents gives the Detroit area a population o f 1,537 and Clarksville 6,717.

^ Batt to Wright Patman, 18 January 1962, “January 1962, Congressional” folder, box 5, Batt, Reading Files, 1961 - 1965, ARA-NARA.

Batt to John Home, Small Business Administration, 26 January 1962, “January 1962, Non- Congressional” folder, box 4, Batt, Reading Files, 1961 - 1965, ARA-NARA.

^ Batt to Patman, 24 January 1962, “January 1962, Non-Congressional” folder, box 4, Batt, Reading Files, 1961 - 1965, ARA-NARA.

“ Ibid.

Batt Oral History, 85, JFKL.

^ “Texas and the ARA: Cherokee County Rich in Ore, But Could Anyone Make it Pay?”,Houston Chronicle, 24 June 1964, cited in “Texas” folder, box 4, Reckord, Mixed Administrative and Program Files, 1963-1964, ARA-NARA.

^ Batt to Herbert Klotz, 7 August 1961, “August 1961, Non-Congressional” folder, box 3, Batt, Reading Files, 1961 - 1965, ARA-NARA.

Newsclipping, “Depressed? Not Lamar,”Paris News, 30 July 1961, “ARA-Lamar County” folder, container 1338a, Wright Patman Papers, LBJ Library.

“Psychological Error,”The Washington Post, 13 August 1961, 13.

Batt to Johnson, 21 September 1961, “September 1961, Non-Congressional” folder, box 3, Batt, Reading Files, 1961 — 1965, ARA-NARA.

” Batt to Fred Pool, 21 September 1961, “September 1961, Non-Congressional” folder, box 3, Batt, Reading Files, 1961 — 1965, ARA-NARA.

281 Hale, “Local Development Planning,” 152.

Batt to McCowan, 28 May 1962, “May 1962, Non-Congressional” folder, box 4, Batt, Reading Files, 1961 - 1965, ARA-NARA.

“Designation Procedures are Spelled Out,”Redevelopment, March 1964, U.S. Department of Commerce, ARA.

Clipping, “When the Bubble Burst in Crockett, Texas, Reader’s Digest, September 1964, in “Public Affairs Reader’s Digest” folder, box I, Batt, Subject Files, 1961 - 1965, ARA-NARA. This was the second o f two articles in 1964; the first was a general attack on the ARA in May, “Is This Any Way to Fight a War on Poverty?”

Yarborough to Batt, 29 August 1964; Batt to De Witt Wallace, Editor, Reader’s Digest, n.d; both in “Public Affairs Reader’s Digest” folder, box 1, Batt, Subject Files, 1961 - 1965, ARA-NARA.

” Rogers to Yarborough, 28 August 1964, copy in “Public Affairs Reader’s Digesf’ folder, box 1, Batt, Subject Files, 1961 — 1965, ARA-NARA.

Batt to Goodwin, 2 April 1963, “April 1963 Non-Congressional” folder, box 6, Batt, Reading Files, 1961 -1 9 6 5 , ARA-NARA.

Hale, “Local Development Planning,” 119.

Memo to Clarence Mitchell, 2 November 1961, “Civil Rights” folder, box 5, Batt, Subject Files, 1961 1965, ARA-NARA.

Mitchell to Batt, 14 November 1961,, “Civil Rights” folder, box 5, Batt, Subject Files, 1961 — 1965, ARA-NARA.

** See Hugh Davis Graham, The Civil Rights Era, 34-5. Graham notes that the NAACP did not demand quotas for blacks at this time; however, this letter seems to suggest a change in the nature o f demands.

On the relationship between New Dealers and the black community see William E. Leuchtenburg, Franklin D. Roosevelt and the New Deal, 1932 —1940 (New York: Harper, 1963), 185-7; Raymond Wo Iters, “The New Deal and the Negro,” in John Braeman, Robert H. Brerrmer, and David Brody, eds.. The New Deal: The National Level (Columbus: Ohio State University Press, 1975), 170-217; Harvard Sitkoff, A New Dealfor Blacks: The Emergence o f Civil Rights as a National Issue (New York: Oxford University Press, 1978); and Michael E. Parrish,Anxious Decades: America in Prosperity and Depression, 1920 — 1941 (New York: W.W. Norton, 1992), 395-99.

Sheppard to Batt, 4 December 1961,, “Civil Rights” folder, box 5, Batt, Subject Files, 1961 - 1965, ARA-NARA.

“Plarming for New Growth — New Jobs,” U.S. Department o f Commerce, ARA, May 1962.

■'* See Giglio, Presidency o f John F. Kennedy, 162 and Graham, Civil Rights Era, 27.

“ARA Project Pays,”Redevelopment, March 1964, U.S. Department o f Commerce, ARA.

282 “ Batt to Sidney Woolner, 22 June 1961, “Juoe 1961 Congressional” folder, box 3, Batt, Reading Files, 1961 - 1965, ARA-NARA.

Cobb, Selling o f the South, 98, 101.

Copy o f Statement by James Mooney, Finamce Committee Chairman, COC, to House Banking and Currency Committee, 15 April 1963, folder M , box 370, UAW President’s Office, Walter P. Reuther Collection, Reuther Archives. Batt to Fembaich, 11 August 1961, “August 1961 Non-Congressional” folder, box 3, Batt, Reading Files, 1961 - 196 5, ARA-NARA.

On the Freedom Riders and the Kennedy administration see Giglio,Presidency o f John F. Kennedy, 164-68, Harvard Sitkoff, The Struggle for Blaæk Equality, 1954—1992, rev. ed. (New York: Hill and Wang, 1993), 9 6 -1 0 0 .

^Staub V . City o f Baxley. 355 U.S. 313 (1958]. Batt to Wilbur Mills, 5 October 1962, “October 1962 Non-Congressional” folder, box 4, Batt, Reading Files, 1961 — 1965, ARA-NARA.

John Opitz to Sidney Jeffers, 25 April 1 9 6 3 ,, “Civil Rights” folder, box 5, Batt, Subject Files, 1961 — 1965, ARA-NARA.

Memorandum, Fay Bennett, 23 January196-2, “National Sharecroppers Fund” folder, box 5, Williams, General Subject and Signature Files, 1962 — 1965, ARA-NARA; “On 1,200 Lives,”New York Post, 24 January 1962, ARA-NARA 179; “An End to Parm Peonage,”New York Times, 28 January 1962, 8E; newsclipping. New York Times, 4 February 19*62, “Mississippi Kills Farm Pilot Plan,” box 31, Mississippi Tractor Training Progam folder. National Sharrecroppers Fund Collection, Reuther Archives.

” Fay Bennett to Daniel Goldy, ARA, 25 Janu_ary 1962; Bennet to Batt, 29 January 1962, both in “National Sharecroppers Fund” folder, box 5, 'Williams, General Subject and Signature Files, 1962 — 1965, ARA-NARA. On the Yazoo region and employment o f blacks see Cobb,Selling o f the South, 116.

On Kennedy and race see Giglio,Presidency o f John F. Kennedy, 160-4, Bernstein, Promises Kept, 49- 50, Sundquist, Politics and Policy, 256-8, and. On Goldberg see Stebenne, Arthur J. Goldberg, 242-8.

” John Stennis to Luther Hodges, 23 April 1954, “Mississippi” folder, box 15, Batt, Subject Files, 1961 - 1965, ARA-NARA.

“ ARA, Annual and Final Report, December E965.

On the tension between the old guard alliance and the new business progressives in the post-WWU South, see Schulman, From Cotton Belt to Sun-belt, especially Chapter Five.

“ Berl I. Bernhard to Batt, 29 October 1962,, “‘Civil Rights” folder, box 5, Batt, Subject Files, 1961 — 1965, ARA-NARA.

“ Batt to Bernhard, 13 November 1962,, “C ivil Rights” folder, box 5, Batt, Subject Files, 1961 - 1965, ARA-NARA.

“ Memo, 7 November 1962,, “Civil Rights” folder, box 5, Batt, Subject Files, 1961 - 1965, ARA- NARA.

283 Robinson Memo, 2 May 1963,, “Civil Rights” folder, box 5, Batt, Subject Files, 1961 - 1965, ARA- NARA.

“ Bernhard to Batt, 4 January 1963,, “Civil Rights” folder, box 5, Batt, Subject Files, 1961 — 1965, ARA-NARA.

Pamphlet, “Training Programs and Jobs for Rural South Carolinians,” , “Civil Rights” folder, box 5, Batt, Subject Files, 1961 — 1965, ARA-NARA.

James to Batt, 4 March 1963,, “Civil Rights” folder, box 5, Batt, Subject Files, 1961 - 1965, ARA- NARA.

® Batt to Fay Bennett, 8 March 1963,, “Civil Rights” folder, box 5, Batt, Subject Files, 1961 — 1965, ARA-NARA.

™ McCain to Batt, 6 March 1963,, “Civil Rights” folder, box 5, Batt, Subject Files, 1961 — 1965, ARA- NARA.

Notes o f Staff Meeting, 3 June 1963,, “Civil Rights” folder, box 5, Batt, Subject Files, 1961 — 1965, ARA-NARA.

^ Gordon Berry, Field Coordinator, to Wayne Shields, Senior Field Coordinator, 21 March 1963, “Robinson” folder, box 1, Sheppard, Mixed Subject and Program Files, 1961 - 1963, ARA-NARA.

^ David Ling, Vice President Perling Industries to Earl Redwine, Department o f Labor, 1 August 1963. Heinz Rollman, President, Perling Industies to Gould, 2 August 1963. Draft letter to Robert Keimedy, 9 August 1963. All three in “Civil Rights” folder, box 5, Batt, Subject Files, 1961 - 1965, ARA-NARA.

“Negro Farmers Establish Factory in South Carolina,”Redevelopment, December 1964, U.S. Department o f Commerce, ARA.

Leland memorandum, 2 August 1965, “Civil Rights” folder, box 5, Batt, Subject Files, 1961 — 1965, ARA-NARA.

Ibid.

” Hale, “Local Development Planning,” 188.

78 Patman to Batt, 5 December 1963, “Texas” folder, box 16, Batt Subject Files, ARA-NARA.

In Big Brother’s Indian Programs — With Reservations (New York: McGraw Hill, 1971), Sar Levtian and Barbara Hetrick noted that while the BIA “and other federal agencies have always earmarked all funds spent on reservations for programs designed in Washington, the Office o f Economic Opportunity (OEO) was the first to make grants to reservation groups for programs largely o f their own design” (89- 90). The authors go on to state that the OEO “gave self-determination and Indian community organization the initial impetus” (90). This is not entirely true, since the ARA required local groups to design programs and develop an economic develop plan before receiving funds. Also, as judged by Indian interest and involvement with passage o f ±e ARA in the 1950s, it seems that the impetus for self- determination and organization came from Indians themselves prior to the War on Poverty. It is interesting that Levitan, who worked with the ARA while writing his book about it, overlooked this. On

284 a related topic see Kathleen P. Chamberlain, Under Sacred Ground: A History o f Navajo Oil, 1922 - Î982 (Albuquerque: University of New Mexico Press, 2000).

George Pierre Castille, To Show Heart: Native American Self-Determination and Federal Indian Policy, I960 —1975 (Tucson: The University o f Arizona Press, 1998), 20-2.

Thomas Francis Clarkin, “The New Trail and the Great Society: Federal Indian Policy During the Kennedy-Johnson Administrations,” Ph.D. diss.. University o f Texas, 1998, 94-7.

Ibid, 136, 383-89.

“ Ibid, 57-75.

^ “Montana Indian Tribe to Harvest N ew Jobs,”Redevelopment, Jime 1964, U.S. Department o f Commerce, ARA.

“Technical Assistance Projects Involving Indian Reservations,” 24 July 1964,” “Technical Projects Division” folder, box 1, Williams, General Subject and Signature Files, 1962 — 1965, ARA-NARA; ARA, Annual and Final Report, 1965.

ARA, Directory o f Approved Projects as of June 30, 1965.

“A Reservation Revitalized...Indians Take the Come-Back Trail,”Redevelopment, May 1965, ARA.

On these earlier efforts see Robert Fay Schrader,The Indian Arts & Crafts Board: An Aspect o f New Deal Indian Policy (Albuquerque: University o f New Mexico Press, 1983).

ARA, Directory of Approved Projects as o f June 30, 1965.

“ U.S. Congress, Senate, Committee on Interior and Insular Affairs. Indian Unemployment Survey, July 1963,91.

” U.S. Congress, House, Comihittee on Public Works,Public Works and Economic Development Act of 1965, 89* cong., 1“ sess., 10, 11, 12, 13, 14, 18, 19, and 26 May 1965, 118.

” “Carpet Mill Flies High at Anadarko,”Redevelopment, April 1965, ARA.

” A July 1964 ARA report listed a May 1964 loan o f 5903,500 to Dickson Electronics to expand its facilities for making diodes and rectifiers. Plaimed employment was 270 jobs on the Salt River reservation in Arizona. However, the project is not listed in the ARA’s final report o f June 30, 1965. Also, historian Larry Burt argues the ARA supported the Fairchild semiconductor plant on the Navajo reservation in 1965, although this does not show in the ARA final report either. See Larry Burt, “Western Tribes and Balance Sheets: Business Development Programs in the 1960s and 1970s,”The Western Historical Quarterly 4 (November 1992): 475-95.

^ ARA, Directory o f Approved Projects as o f June 30, 1965.

” Press Release, “ARA Aids Industrial Development on U.S. Indian Reservations to Generate New Job Opportunities,” 11 October 1964, “Bureau o f Indian Affairs” folder, box 9, Reckord, Mixed Administration and Program Files, ARA-NARA.

285 ^ Letter, Daniel L. Goldy to William L. Batt, Jr., 13 February 1962, “Interior” folder, box 2, Williams, General Subject and Signature Files, 1962 — 1965, ARA-NARA.

^ See note 2 above.

Burt, “Western Tribes and Balance Sheets,” 475-95.

286 CHAPTERS

TRANSITION AND CONCLUSTONS

“These conditions of our depressed areas can and must be irighted. In this generation they will be righted.” Lyndon Johnson, Message to Congress, 25 March 1965^

‘We all tended to oversell it as a cure for everything, including fallen arches.” William L. Batt, Jr.^

From the ARA to the EDA

The future of the ARA became linked to developments in tBhe Johnson administration and in Congress regarding efforts to eradicate poverty. Johznson preferred a new, bolder program, which became the War on Poverty, announced duzring his State of the Union speech to Congress in January 1964. He followed this by introducing legislation in

March to create an Office of Economic Opportunity to coor-dinate various programs including job training, rural loans, and community action orrganizations. After passage in August 1964, the new Office of Economic Opportunity b»ecame the focal point for federal attempts to eradicate poverty, sidestepping all other agencies, including the

ARA. The ARA’s secondary status became clear when the legislation creating the OEO designated the ARA to administer Title IV, part A, which provided loans to businesses in areas with a community action program.^ Instead of coorrdinating an attack on

287 poverty, the ARA became one player among many others involved in aiding the OEO.

During 1964 and 1965, the Johnson administration decided to link the ARA with a

renewed call for public works spending. They offered a separate bill to aid Appalachia

as a model for regional economic development. In the end, Appalachia became an area

of special focus through creation of the Appalachian Regional Commission in February

1965. In August, the ARA became transformed into a new agency, the Economic

Development Administration.

In early 1964, when presenting his proposed 1965 budget to Congress, President

Johnson followed the recommendation of the Budget Bureau and requested the

extension o f the ARA for another year with a request of $205 million.'* However, the

88**' Congress refused to renew the ARA.*’ In response, the Bureau of the Budget called

a meeting in October 1964 for members of the ARA and other executive agencies to

discuss the future of the ARA. By this time, ARA loans for 5(b) rural areas and public

facility grants had been exhausted, and the agency could approve only a small amount

of public facility loans.^ During discussions, participants raised several points on how

to revamp area redevelopment. Consensus emerged to grant more attention to regional

areas as opposed to county or city designations. Many wanted to reduce the number of

areas eligible, since the agency had spread itself too thin. In addition, Batt and others wanted greater flexibility in developing “growth centers" near or in redevelopment areas. These would be towns or cities where economic development seemed most likely to occur and could then attract residents firom the surrounding region. This was a proposal utilized in French and German programs for redevelopment and also connected to the regional approach already common in Europe and created in American

288 programs such as the Appalachian Regional Commission/ House leaders also had

indicated they preferred greater attention on public works, since this would make passage of legislation more likely. In addition, some argued for simply replacing public works entirely for area redevelopment, but the majority argued against this idea. Batt and most others also recommended that the ten percent requirement for local participation be reduced to five percent.^

Discussion on area redevelopment continued following the 1964 election, in which Johnson received 61.1 percent of the popular vote and liberal Democrats gained significant power in Congress.^ For the next two years, Johnson had the liberal 89'*'

Congress with which to work and together they enacted most of the legislation under the Great Society. In December 1964, several Senators who had been active supporters of the ARA outlined a regional approach to the Johnson administration. Writing for the group. Senator Joseph Clark called on the ARA to be continued “in some amended form and related to regional development such as Appalachia.” Clark and others conceived o f such a program as a second step in the War on Poverty. The first, spearheaded by the

Economic Opportunity Act, handled people, while this new second program would handle physical resources. Clark and the group proposed a bill for a national regional commission to plan and coordinate the construction of public facilities such as roads, airports, schools, hospitals, and sewer and water lines.

After signing the Appalachian Regional Development Act on 9 March 1965, which appropriated $1.1 billion for the construction of public facilities in the region,**

Johnson and members of his administration turned their attention toward an overhaul of the ARA. In a special message to Congress on 25 March, Johnson reiterated his support

2 8 9 for the upcoming legislation on area and regional development. In keeping with other

aspects of the Great Society and War on Poverty, the message began by framing the

new legislation as a way to open opportunities for Americans- “The promise of

America is opportunity for our people.” Other key phrases oai this theme included:

“Abundance and opportunity...are not evenly spread over th e land;” “Opportunity

should not be closed to any person because of the circumstances of the area in which he

lives;” and “it is designed to extend opportunity to those now deprived of a frill chance to share in the blessings of American life.” After summing up the importance of the

ARA and the details of the legislation, Johnson utilized the idealistic language of the

Great Society to rouse Congress to action. “We will not perm it any part of this country to be a prison where hopes are crushed, human beings chained to misery, and the promise of America denied. These conditions of our depressed areas can and must be righted. In this generation they will be righted.”

Following this spirited message, on 31 March 1965, Congressman George

Fallon of Maryland, Chairman of the House Public Works Committee, introduced the

Public Works and Economic Development Act of 1965. In a fttting move. Senator Paul

Douglas of Illinois introduced the measure in the Senate the n«xt day. The new bill built upon ideas and policies established under the ARA, the A P W, and the ARC, but as the title suggests, the focus of the new biU was to be public works projects. Johnson supported such a move for political as well as economic reasoais. Politically, public works spending tends to gain approval easier in Congress.

The new proposal expanded grant-making authority to $250,000,000 annually in order to provide money more directly to local communities. O ne of the difficulties

290 ARA faced was running out o f money in grants and refusal of Congress to approve

more. Loans for public facilities increased to $170,000,000. In addition, lawmakers

lowered the local participation rate in total cost of the project from ten percent to five

percent. Businesses were also eligible for working capital. The Act provided

$20,000,000 in technical assistance. Areas eligible remained essentially the same as those under the ARA, although rural eligibility became slightly more specific, limited to those where median family income was 40 percent the national average. Native

American reservations remained eligible.

There were some new provisions, developed after the experience with ARA.

First, the administrator could aid areas where a plant or military installation had closed or was about to close, with a resulting spike in unemployment. This came from the experience with GE in Scranton and from South Bend, Indiana, when in December

1963, the Studebaker Corporation closed its automobile plant there and moved to

Canada, idling some 6,800 workers. Under pressure from Indiana congressional leaders, including Vance Hartke, Birch Bayh, and John Brademas, the Johnson administration created a task force on plant closings and sent members of the ARA and other federal officials to South Bend. They managed to help lower unemployment there by attracting new^ industries into former Studebaker buildings and creating retraining programs for the company’s former workers. Like GE, this portion of the ARA program moved the agency closer to developing a federal response to plant closures, key events in the process of deindustrialization. However, it was but one part of a broader effort to promote economic development and the task force concept never developed into a comprehensive program.

291 Second, the bill allowed the Secretary of Commerce to designate multi-county

development districts, which must include at least two eligible counties, and contain at

least one of what economists considered an economic development center. These centers were cities, towns, or potential industrial locations in the district that could serve as a foundation for economic growth. The bill provided a separate loan amount of

$50,000,000 annually for these centers and to encourage multi-county p lanning, allowed the Secretary to include a bonus grant of ten percent to projects located in these multi-county districts. In a model drawn from the recently passed Appalachian bill, the

Public Works Act also authorized the Secretary to encourage multi-state Regional

Action Planning Commissions, with members appointed by the governors of at least two contiguous states containing contiguous development districts. To aid these

Commissions, the bill provided $15,000,000 in technical assistance planning. Total authorization in the new bill was $510,000,000.^^

The new bill drew on the experience of the ARA in another way. In their efforts to promote development, ARA administrators educated themselves on similar programs in Western Europe and commissioned studies of these programs. This was not an entirely new concept; during the creation of the ARA in the 1950s, economic research on these European programs came to light during hearings and Batt, Barkin, and others on Senator Douglas’ staff were aware of these developments. After the ARA’s creation in 1961, Batt authorized continued study in this area. In Area Redevelopment Policies in Britain and the Countries o f the Common Market, the ARA published accounts of

Belgian, British, French, German, and Italian programs to combat persistent unemployment in areas hurt by industrial decline.'’ In the 1930s, the British had been

292 the first to develop plans to aid depressed regions, and other countries followed in the

decades after. The devastation o f WWn masked the regional inequities that had existed

prior to the war, but beginning in the early 1950s, these inequities reemerged in areas

similar to those in the United States: agricultural, textile and coal mining communities

mostly. Interestingly, all European countries utilized similar proposals that would be

adopted in some form under the ARA, or that had been tried at the state level.

European governments offered tax incentives, grants, loans, and subsidized worker

retraining, for example. Important differences include the fact that for most o f Western

Europe, full employment prevailed and that the overall Western European social

welfare system supported its citizens to a greater degree than did the United States. In

addition, the amounts spent in the European programs differed, firom a high of $3.4

billion per year in Italy to approximately $55 million annually in West Germany. In

terms of success, the Europeans, as the Americans, experienced mixed results in

lowering area unemployment. For example, the Netherlands and Belgium had greater

success, while distressed regions in Germany remained troublesome into the 1960s.

Thus, with respect to area redevelopment, in general the United States was not so

different firom the countries of Western Europe. In this case, the presence of an activist,

social democratic labor movement in Europe (and the presumed opposite case for the

United States) did not significantly alter the policies developed towards depressed labor markets.’^

Two specific elements firom this study and the European experience made it into the new Public Works Act. The $5 million in interest rebate contracts was a direct borrowing from the Belgian program, which had proved successful. As Secretary of

293 Commerce John T. Connor stated in hearings, the new provision womild be used to

attract “the strongest corporations of this country” that had not fully participated in the

ARA. This had been a concern of Batt's all along — that without proper incentives, the

businesses attracted to the areas would not be blue-chip companies, an d thus would

provide only short-term relief. In addition, the administrator had the option of

concentrating aid in “growth points” within regions, a concept developed most fully in

France and Germany. These designated towns or cities had the best chance to succeed

economically and attract further investment, which would in turn gemerate prosperity to

the region.

After hearings in April and May, the Senate added three ameodments that

increased authorization for grants for public works from $250 million to $400 million

annually, imposed a five-year limit, and revised the regional development program to be

similar to the Appalachian program. The House then added eligibility for areas hit with

substantial, temporary unemployment, a further increase to $500 m illion for public

facility^ grants, and a four-year limit.^° As finally signed into law on 2 6 August 1965,

the Public Works and Economic Development Act created the Economic Development

Administration. Title I granted the agency $500 million annually for four years to provide grants for public facilities, while Title H provided $170 m illion annually for five years to provide loans up to 100 percent for public works projects, 65 percent to businesses for equipment, and 90 percent for working capital. Title III provided $25 million annually for five years to provide 75 percent of the cost for technical assistance.

Titles IV and V established criteria for eligible areas, which remained as they had been under the original proposal.^’

294 Following its signing, Batt realized he would be passed over to run the new

agency in favor of Eugene Foley, then head of the Small Business Administration- Batt

then served in the Labor Department, returning to where he had begun back in the

1940s. Meanwhile, the EDA continued the programs and ideas pioneered by the ARA.

Conclusions

After August 1965, the .ARA was no more. For all the tension and limited nature of its

funding, the ARA did accomplish something during its four years of operations. As

noted in Chapter Five, the ARA spent some $320 million dollars and provided over

117,000 direct and indirect new jobs. It stimulated interest in the issue of structural

unemployment and provided important links to new, broader programs developed

during the Great Society. The agency also worked to use the state to bring together

various individuals and groups in an effort to eradicate unemployment and poverty and

to make communities more livable.

The connections built during the history of the ARA between politics,

institutions, and society brings to light the organizational synthesis, the framework

outlined earlier by Theda Skocpol and Brian Balogh. In Protecting Soldiers and

Mothers and other essays, Skocpol has explained the pathway of the American welfare

state as determined more by the structures and institutions present in the political

process than by other alternatives such as cultural values, patriarchal domination, or

business hegemony. Though they play a part, they are not individually enough to account for the historical developments of social policy. She takes seriously the actions of interest groups and posits that their success is determined by the nature of the state,

295 which in turn is influenced by those groups.^ Brian Balogh has echoed SkocpoFs

concerns in his recent works that seek to expand the organizational synthesis beyond the

New Deal. As he has noted, “organizational scholars paid close attention to group

politics, shifting organizational resources and the changing forums in which crucial

political decisions were made.”^ While the differences between liberal and

conservative values in the post-WWII decades may not have been so deep, they

nonetheless created substantial room for disagreement and shaped the nature o f area

redevelopment legislation. Indeed, political actors and the institutions in which they

operated, served to either limit or revise policy outcomes. The danger in both Balogh’s

and SkocpoFs arguments is that by emphasizing the state or institutions in histories of

public policy, they may tend toward diminishing the role o f social movements in those

histories.^'’ Balogh’s work in editing Integrating the Sixties was to attempt a careful

connection between state and society, being sensitive to both social groups and

organizational structures.

The history of the ARA reflects one possible way to bridge the gap. Interest

groups played a key role in the ARA’s story, as did those involved in the civil rights

movement. But the outcome of legislation resulted firom the interplay of equally

significant historical actors, including policymakers, business leaders, workers, and

members of interest groups. As Skocpol has argued, political and social factors have

combined in the creation of the American welfare state, and as the story of the ARA

showed, a combination of factors shaped the precise nature o f redevelopment policy

However, although equally significant, certain interest groups and political leaders did hold greater power in American political culture than others. For example, business

296 leaders in post-WWII America had recovered from their stained reputation of the 1930s

and formed an essential part of the political economy in a United States bent on

challenging Soviet-style development. And given the ARA desired the help of

business leaders, it seems natural that redevelopment channeled its aid through state and

local agencies following the federal example. Several labor organizations also gained

influence in the process of state-building through area redevelopment. Solomon Barkin

of the Textile Workers, Walter Reuther of the United Autoworkers, and Anthur

Goldberg as counsel for the United Steelworkers, all played important roles in shaping

legislation. Activist civil rights groups succeeded only partially in redirecting ARA

programs towards blacks; hesitance on the part of ARA administrators, lack of new

funding after 1963, and local intransigence, all contributed to weakening the agency’s

impact on African Americans. In Congress, conservative politicians in Congress,

mostly Southern Democrats, exerted tremendous power and succeeded in delaying or revising area redevelopment legislation in the 1950s and 1960s. Liberals succeeded in passing the Area Redevelopment Act, but it was less significant than it may have been as a result of conservative influence.

Still, by themselves, explanatory themes such as class cleavages, cultural values, or patriarchal systems are not able to explain the nature of area redevelopment. Within certain contexts, especially at the local level, workers and business owners cooperated to obtain federal assistance. For example, union leaders such as Solomon Barkin, sought to aid communities hurt by industrial decline. On the other hand, leaders of the

United Mine Workers behaved in a contradictory way, supporting area redevelopment, but also abetting the decline of mining communities in area such as Pennsylvania.

297 Business leaders as a group also settled on both sides of the issue. Some desired federal

assistance and worked to either apply for loans or to create redevelopment legislation.

Meanwhile, some business leaders, such as the leaders of the Chamber of Commerce

and the National Association of Manufacturers, fought against the legislation and

worked to weaken the ARA’s support once it began.

The relationship between gender and area redevelopment legislation was equally

contradictory. Certainly male local leaders, as well as national policymakers, saw

redevelopment as a way to either restore or maintain male employment and they

conceived deindustrialization as at least partially a threat to perceived notions of

masculinity. Male policymakers did not voice their support for redevelopment as a

program to assist women in participating more fully in the paid labor force. In this way,

the ARA served to reinforce traditional notions of gender. At the same time, women

were not excluded from ARA programs and many working-class women, especially in

places like Pennsylvania, actively supported the creation of redevelopment legislation.

Union leader Min Matheson, and the many wives of unemployed miners and industrial

workers, lobbied state and federal policymakers in support of programs to bring jobs to their communities — jobs that they understood as being for men. It may be that their

support came not from a desire to perpetuate a patriarchal system, but rather because they lacked viable alternatives. In the communities eligible for ARA assistance, the jobs available to women were in relatively low-paying, less secure sectors such as retail, or in textile or garment manufacturing. Nationally, the percentage of women in the paid labor force increased from 25.8% in 1940 to 35.1% in 1960, but the labor market remained largely segregated."’ Moreover, the weakness of women’s place in the

2 9 8 economy meant that most had not invested in the national welfare state through years of paid employment, or had acquired a pension through a job in the private sector?* They also lacked equality in political influence. Thus, when their husbands lost formerly well-paying, union jobs as miners or factory workers, women either sought or maintained their jobs while at the same time tried to restore jobs for men. They hoped that these jobs for men would provide the income and security they otherwise lacked.

Min Matheson adopted this strategy as a union leader, trying to organize the textile and garment factories to provide greater security to women and families, while at the same time lobbying for redevelopment legislation and an expansion of the welfare state.

As these brief examples show, a top-down approach to the issues of unemployment, poverty, and industrial transformation assumes the two decades after

WWn were ones of benign neglect of the poor and the problems of industrial decline.

Reversing the viewpoint shows those decades as ones of activity and movement among local and state residents as they struggled against both poverty and deindustrialization.

Their political pressure and social concerns meshed with those at the federal level as area development became national policy between the 1930s and early 1960s.

* Emerging from this, the ARA was a hybrid institution that contained elements of both eras of reform. Like the New Deal, the ARA promoted economic planning, provided funds for public works, and created jobs. Like the emerging War on Poverty, the ARA also sought to aid communities considered marginal by removing barriers to success through education, technical assistance, and job training, as well as promoting involvement of residents through the creation of Overall Economic Development Plans.

2 9 9 Like the institutional issues surrounding the ARA, the idea that the poor suffered

from blocked opportunities also had important consequences for deindustrialization and

liberal reform. One important link between deindustrialization and poverty was the

medical metaphor of distress common to area redevelopment since the 1930s. Although

area redevelopment embodied an attempt to use deindustrialization as a means towards

a structural understanding of poverty^ the tone and language used by some who

supported area redevelopment reflected the reemergence of the notion that the poor

needed primarily “psychological assistance and other forms of counseling.” In one

sense, ARA adrnmistrators used economic planning, technical assistance and job training as forms of counseling, showing residents how to become better competitors in the market. The consequence of these well-intentioned decisions buried structural reform within a renewed effort to “reinforce commitment to the work ethic by those who were economically marginal.”^^ This was not simply a case of elites imposing solutions upon local residents; as the examples highlighted throughout show, workers, union leaders, politicians, and business owners sought to escape growing poverty (and in some areas, changing gender roles) by working through the federal system to create jobs. They did rely, though, on federally proscribed cures, which the ARA then applied to communities experiencing deindustrialization, as well as rural areas and Native

Americans reservations.

These solutions embodied what Alan Brinkley has called “reform liberalism,” which first developed in the United States in response the industrialization of the late

19^ and early 20^ centuries and came to prominence under the Progressive movement.

This type of liberalism differed from earlier, laissez-faire notions of economic and

300 social relationships by emphasizing the interconnectedness of individuals and positing

the use of the state to regulate capitalism in order to reduce economic, social, and

political inequities in the United States. According to Brinkley, reform liberalism also

differed from post-WWII efforts that emphasized individual and group rights. Such

rights-based liberalism eschewed emphasis on structural issues within American

political economy and instead focused upon personal liberties and cultural recognition

within American society

Brinkley laments the emphasis on rights-based liberalism that came to the

forefront of American political culture in the years following WWII. However, as

shown by the ARA, reform liberalism did not disappear. Many liberals such as

Solomon Barkin and William Batt remained concerned about corporate power. And as

the story of Pennsylvania showed, many local leaders and workers in the anthracite

region tried to alter the power of corporations in their communities through protests and

by proposing solutions that were social democratic in tone. In addition, it is not certain

that emphasizing civil rights or feminism, for example, divorces reform from structural

issues related to discrimination. Yet, to give Brinkley credit, episodes like those in

Pennsylvania remained isolated events. Furthermore, the concerns voiced by Barkin

and Batt reflected more the tempered liberalism of Arthur Schlesinger’s The Vital

Center. As political scientist James Yoimg has noted, Schlesinger’s work built on the teachings of theologian Reinhold Neibhur and both fit “well with the chastened

hberalism of the 1950s and with the markedly anti-ideological approach to politics that emerged as a dominant force.”^* William Batt and others involved in area redevelopment sought cooperation with business, not confrontation. Given the strong

301 sentiment of anti-communism in the 1950s and early 1960s, and the tremendous economic growth of those decades, such sentiments should not be surprising. Area redevelopment did not contain the rhetoric of an assault on corporate power common among some New Dealers. Instead, redevelopment resembled the cooperative elements contained in most New Deal programs. Overall, the New Deal sought to reform, but not necessarily to restructure the American political economy. The ARA sought to aid communities by offering incentives to businesses, which essentially left the power to restructure these labor markets in the hands of corporations.^^

Given its nature as a modest program, what were alternatives available to those interested in fighting the effects of industrial decline? While some liberals such as

Solomon Barkin desired greater force on the part of the federal government, most were unwilling to move in this direction. Given the Cold War context, the strong connections developed between business and government in the military-defense arenas, and the continued power of Southern conservatives in Congress, it was unlikely that more statist solutions would have developed. Moreover, as noted above, the European versions of depressed areas legislation utilized many of the same techniques offered by both the

ARA and later under the Economic Development Adrninistration. Thus, the presumed social democratic alternative in Europe was not different from the version of redevelopment developed in the United States. Communities dependent upon declining industries in Europe (such as coal mining and textiles), and those in rural regions (such as southern Italy) remained as resistant to successful redevelopment as those in the

302 United States. Given this, it made the creation of a stronger social welfare net even

more important, and while the European welfare state was more generous than that of

the United States, redevelopment policy remained closer in approach.

What did occur in the United States was the confluence o f industrial policy with

attempts by the federal government to fight a War on Poverty. As constructed under the

ARA, linking deindustrialization and efforts to combat poverty meant that when these failed, it opened federal policies in both areas to attacks firom both the rising conservative movement and those on the left critical of liberal programs like the ARA.

To be sure, like the War on Poverty itself, those supporting the ARA raised the bar of what was possible in social policy. As William Batt noted, ‘'We all tended to oversell it as a cure for everything, including fallen arches."^^ Sar Levitan, who helped write the first Depressed Areas Act and then wrote the first major study of the ARA during 1963, echoed this criticism. “So many promises had been made concerning the potential benefits of the program that its friends were expecting rapid results.”^'* Levitan went on the argue that ARA administrators published exaggerated press releases touting their accomplishments, whereas they should have clarified the real problems they faced. The worst mistake the agency made, according to Levitan, “was its futile attempt to help too many communities.” Designating over 1,000 counties “overextended the ARA’s meager resources.”^^ Levitan did recognize the political and statutory realities faced by the ARA and he criticized the limitations placed upon the agency. But at the same time,

Batt and Levitan both recognized that the ARA was only a beginning and that more needed to be done in terms of understanding the issues of unemployment, poverty, and industrial development.

303 Conservatives agreed with leftists such as Levitan that the liberal policies of the

1960s as compounding the issue of poverty and failing to address the industrial

problems of the 1970s and 1980s. But the ARA was no radical program; indeed, the

ideas embodied in it became part of so-called conservative solutions to poverty put

forward in the 1970s and 1980s, most notably the idea of empowerment zones for inner

cities. These, too, emphasized local initiative and sought to make communities and individuals effective competitors in the market. Ultimate decisions and power still remained with business owners. Perhaps this explains the revival of redevelopment in the late 1990s. Recently, both Democrats and Republicans have expressed interest in developing programs to aid the same communities identified in the 1930s as

“distressed.” It is unknown if they will be successful. However, if the history of area redevelopment is any guide, it shows that Americans have yet to craft solutions to problems that policymakers and citizens identified as early as the 1930s. Combining the insights from Balogh, Skocpol and TraUner above, rather than the flawed psyches and lack of initiative from residents, structural issues and interest group politics explain more about the failure of these efforts. In addition, with such limited funding provided to the ARA and other Great Society programs charged with eradicating poverty, it is no wonder they failed to do more than they did. Finally, the American unwillingness or inability to exert greater control over industrial location and investment decisions, coupled with a strong reverence for private control over capital and the openness of federal system, mean the likelihood of limited success through mechanisms such as the

ARA.

304 NOTES

' Press release, 25 March 1965, “Background Budget Papers” folder, box 1, Legislative Background: Appalachia Regional Development and Public Works, LBJL.

■ Batt Oral History, JFKL, 81.

^ Memo, “Administration of Title IV,” ARA-NARA 191.

■* Charles L. Schultze to Lee White, “LE/BE 5-5” folder, WHCF, LBJ-LBJL.

* In addition, they also refused to act on the Appalachian bill and allowed the APW program to expire. See John Sweeney to Lee White, 11 February 1965, Henry Wilson to Lee White, 17 February 1965, both in “LEÆE 5-5” folder, WHCF, LBJ-LBJL.

® ARA Weekly Briefing, 4 September 1964, ARA-NARA 171; Memo, “Federal Aid to Depressed Areas,” and Otto Eckstein, Council of Economic Advisers, to Schultze, both in “Background Budget Papers” folder, box 1, Legislative Background: Appalachia Regional Development and Public Works, LBJL.

^ On the European experience with redevelopment, see Area Redevelopment Policies in Britain and the Countries o f the Common Market, U.S. Department o f Commerce, Area Redevelopment Administration, 1965.

* Schultze memo, “Background Budget Papers” folder, box 1, Legislative Background: Appalachia Regional Development and Public Works, LBJL.

® Vaughan Bomet, The Presidency o f Lyndon B. Johnson (Lawrence: University Press o f Kansas, 1983), 115.

Ralph Widner, Legislative Assistant to Joseph Clark, to Bill Moyers, 28 December 1964, “FG 155-4” folder, WHCF, LBJ-LBJL.

" Irwin Unger, The Best o f Intentions: The Triumphs and Failures o f the Great Society under Kennedy, Johnson, and Nixon (New York: Doubleday, 1996).

See note 1 above.

For example, J. William Fulbright opposed the ARA, but he favored the new Act and had in the past supported public works projects over what he deemed more intrusive federal programs such as the ARA.

U.S. Congress, Senate, Public Works Committee, Public Works and Economic Development Act o f 1965, 89* Cong, l” sess., 26-30 April and 3 May 1965, 2-16.

On Studebaker see Donald T. Critchlow, Studebaker: The Life and Death o f an American Corporation (Bloomington: Indiana University Press, 1996). On the task force, see “Report on Interdepartmental Committee on South Bend-Studebaker Shutdown,” “Studebaker Meeting” folder, box 6, Batt, Mixed Administrative Records, 1961-1965 ARA-NARA.

305 “Section-by-Section Analysis o f the Proposed Bill,”Redevelopment, April 1965, U.S. Department of Commerce. See also U.S. Congress, Senate, Public Works Committee, Public Works and Economic Development Act o f1965, 89* Cong. I“ sess., 26-30 April and 3 May 1965,2-16.

” The ARA financed the research, conducted jointly by the Institute o f Industrial Relations at UCLA and the Centre de Recherches at the Université de Paris. It is a testament to the growing connection o f experts and policymakers across political boundaries and o f the exchange o f ideas between the United States and Europe. On a related note see Daniel Rogers,Atlantic Crossings: Social Politics in a Progressive Age (Cambridge: Harvard University Press, 1998).

'* The scholarly debate on the role o f labor unions and the provision o f social welfare in Europe and the United States is large. For summaries o f the issue, see Gosta Esping Andersen, The Three Worlds o f Welfare Capitalism (Princeton: Princeton University Press, 1990); Skocpol,Protecting Soldiers and Mothers, 23-5; David Stebeime, “The Postwar ‘New Deal’”, and Charles Maier, “The Postwar Social Contract: Comment,” both inInternational Labor and Working Class History, No. 50 (Fall 1996).

U.S. Congress. Senate. Public Works Committee. Public Works and Economic Development Act o f 1965. 89* Congress, 1“ session, 26,27, 28, 29, 30 April and 3 May 1965.

“Memorandum on Legislative and Organizational History o f the Economic Development Administration,” “Background Budget Papers” folder, box 1, Legislative Background: Appalachia Regional Development and Public Works, LBJL.

“Facts About EDA,” “Pubic Works and Economic Development Act o f 1965” folder, box 3, Chinitz, ARA-NARA.

“ Theda Skocopl,Protecting Soldiers and Mothers, 1-62.

^ Brian Balogh, Integrating the Sixites, 13.

For a critique o f Skocpol’s work along these lines, see Linda Gordon, “Gender, State, and Society: A Debate with Theda Skocpol,” in Nikki R. Keddie, ed..Debating Gender, Debating Sexuality (New York: New York University Press, 1996), 129-80.

^ Skocpol, Protecting Soldiers and Mothers, 47.

On the resurgence o f business leaders in the post-WWII years, see Elizabeth Fones-Wolf,Selling Free Enterprise.

^ Figures from Claudia Goldin, Understanding the Gender Gap: An Economic History o f American Women (New York: Oxford University Press, 1990), 17.

On this see Virginia Sapiro, “The Gender Basis o f American Social Policy,” in Linda Gordon, ed.. Women, the State, and Welfare (Madison: The University o f Wisconsin Press, 1990), 36-54, as well as Gordon's’introduction.

^ Both quotes in Walter I. Tratmer, From Poor Law to Welfare State: A History o f Social Welfare in America, 5* ed. (New York: The Free Press, 1994), 322.

See Chapter One for a discussion of this finmework used by Alan Brinkley inThe End o f Reform.

James Young, Reconsidering American Liberalism, 183.

306 ■’* This discussion o f the New Deal comes from Ellis Hawley, The New Deal and the Problem o f Monopoly: A Study in Economic Ambivalence (Princeton: Princeton University Press, 1966).

See note 2 above.

34 Levitan, Federal Aid to Depressed Areas, 249.

Ibid, 250.

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