1940s America – The Start of Small Town Decline?

imageAll across the country, small towns are suffering. Once the heart of the American experience, these places have been losing their populations to larger urban and metropolitan centers for the past several decades. I never consciously chose to be a part of this great migration, but as it turns out I find myself as a case-in-point. I grew up in a small town in Connecticut and I did well in school which meant opportunities to go away to college. Specialized degrees led to specialized jobs located in larger metropolitan areas, until following the natural path of this economy landed me in Austin, Texas, one of the fastest growing cities in the nation and a leading beneficiary of the small town-to-big-city movement.

Yet it hasn’t always been this way. At some point in American history, small towns were the heart and soul of this country and people tended to stay in place. So what precipitated this economic and migratory trend? What could turn an economy based on several smaller self-sufficient local economies into a centralized, more urban, and more global system?  Unexpectedly, I found some clues in Doris Kearns Goodwin’s No Ordinary Time: Franklin and Eleanor Roosevelt: The Home Front in World War II, which pinpoints the early 1940s as a major economic turning point.

Goodwin describes America at the dawn of the 1940s as “…predominantly a small-town nation, with the majority of citizens living in towns of fewer than twenty-five thousand people.”  As the military crisis in Europe brought war to America’s doorstep, several of the policies implemented to mobilize the American economy for war-time production had profound effects on the structure of the economy. The first was as simple as an amortization tax law which allowed businesses to write off expanded plants and equipment, enabling them to report lower taxable income. Goodwin describes how this policy, important to the mobilization process, concentrated government spending to a few major players:

“But liberals were correct in suggesting that small business would be hurt by the way the tax legislation was structured. As the defense program got under way, military-procurement agencies turned more and more to big business. A study indicated that in the first year of the mobilization fifty-six large corporations accounted for three-fourths of the dollar value of all prime contracts. ‘We had to take industrial America as we found it,’ War Department Undersecretary Robert Patterson explained. ‘For steel we went to the established steel mills. For autos we went to Detroit.’ Large firms had the facilities and experience to handle large orders.”

The second policy change came in the form of incentives for Americans to work in war production factories, including “giving draft deferment to skilled labor in war plants, giving the war industry first call on workers registered with the Employment Service, providing carrots and sticks for peacetime plants to convert to war production.” The result of these policies coupled with heavy government investment led to a population shift:

“Indeed, the great voluntary migration that would irrevocably alter the face of American society had already begun. Since 1940, more than seven million Americans had moved across county and state lines in search of employment in the burgeoning war-production centers. By the end of the war, more than fifteen million civilians would have moved to different counties. The population patterns of the country would be permanently changed.”

The greatest shifts were from the east to the west, from the south to the north, and from the country to the city as people followed the manufacturing jobs.

“…millions of people, drawn by the shipyards and the aircraft plants on the West Coast, flocked to California, Oregon, and Washington. More than half the wartime shipbuilding and almost half the manufacture of airplanes were centered in these three coastal states, whose population would increase by over 34 percent during the war.”

These passages paint a fascinating picture of the extent to which government policy and spending transformed a decentralized land-based economy into the more centralized, production-based economy we are familiar with today. Even now, we can draw parallels between government spending and policy and those communities who are winning and losing in this economy.  College towns have a built-in advantage in the form of access to government research grants and student loan funding. In other communities the difference between boom or bust depends on military spending decisions or government contracts.  Subsidies for crops such as corn and soy beans greatly influence the economics of farming. Unless these communities are able to build their own internal economic productive capacity, each of them is susceptible to the politics of Washington.

The thing I took away from these passages of Doris Kearns Goodwin’s book is that the decline of the small town is not an economic eventuality. Rather, it’s the result of particular political and economic policy choices. This means that, if the political will is there, the economic trajectory of the small town can be reversed and momentum can swing in its favor. Such a shift would resurrect a debate begun by Thomas Jefferson and Alexander Hamilton at the founding of our nation: What kind of country do we want to be?

10 thoughts on “1940s America – The Start of Small Town Decline?

  1. Pingback: 1940s America – The Start of Small Town Decline « Economics Info

  2. This is a fascinating review of the impact of the war on population, but does it answer the question about the start of small town decline?

    I do not doubt that it played its part but I have questions. For example, looking at the migration to large manufacturing centres; this was undertaken by men, for sure, but also by huge numbers of women. At the end of the war, many of these women were to be ejected from ‘men’s work’ and had few economic options but to return to their hometowns, perhaps marriage. Men in the forces at demobilisation were returning to the places that they left. The manufacturing plants were turned over to new products, which often meant shrinking the workforce to reduce the substantial legacy overhead of the war. Profit was essential for a recovery.

    The article does not reflect sufficiently on the growth of the largest cities prior to World War II. Given the suggestion that the war was the prompt for the commencement of the decline of small how does that square with the rise of the largest cities from a far earlier period? How does the influx of immigrants impact on the small town after the Civil war? My own family arrived from Britain in the 1880s and settled in and around the mining districts of Illinois, but the trade from Chicago along the Rock Island Line and the Mississippi were to lure the first generation Americans in the family out of the mines and into railway engineering – they settled in consequence in Chicago and at Silvis and abandoned the much smaller settlements they had originally settled. These processes were in my opinion, a part of a continuing development that had already started decades before.

    There is always likely to be an economic gravitational effect with large cities. The consume the most, therefore they demand the greatest production. The production means the creation or work opportunities and that demands a labor force. Migration is likely to be the only means of obtaining that labor.

    In England the picture of the war period was different but very similar, but their history is of one long migration from village to cities, and had been since the thirteenth century. The global population movements show migrations to places where life can be more easily sustained. A common enough scheme in the animal world – the Wildebeest in southern and eastern Africa understand that, as did the Bison of North America (and we’d best not mention the Passenger Pigeon!). It was in the past decade that the global picture arrived at the point where more people lived in urban settings rather than rural. The places measured did not all have the same specific history discussed in this interesting piece, but they have increasingly shared in the experience.

    It is my belief that this article is accurate and it is interesting, but that it is also just a small portion of the whole story. The title is inaccurate as must be the thesis based upon it, for all the reasons I have put forward, and many more.


    • John – Great points, and I couldn’t agree with you more that this is just one piece of a bigger, more complex picture which I hope I can dive in deeper in future posts. It’s funny because as Paula and I were discussing this very point in trying to choose what to name this post. For better or worse, we decided to be bold in the title and not qualify it – with the likes of “one reason for the decline” or “one part of the story”. But because of that I admit that your criticism of the title is more than fair.

      As to your historical comments – it seems like you’ve got a great historical perspective. Do you have any reading recommendations for me to dive deeper into this topic?

      Much appreciated – Justin


      • Justin

        I would ordinarily be happy to respond with a reading list, but it is not my key area of interest and I do not have any to hand. Sadly, I have this week lost my access to the academic library that I have had for the past couple of decades, otherwise I might have conducted a trawl.

        My knowledge and understanding is drawn from specific works dealing with related matters, for example the work carried out in the 1920s and 1930s by various geographers looking at the problems faced by towns in marketing themselves in a period of economic decline. Of these the most famous were the studies on the gravitational effect of competing towns and cities in determining the likely shopping trip choices to be made by potential customers’ living away from those towns and cities. There are many reasons why I consider Reilly’s Law of Retail Gravitation to be flawed (not least the claim that it is some sort of natural law), but I freely acknowledge that the underlying basic concept is a good one. I have more than once used the idea and found that it is demonstrable and testable, especially in areas not well served by public transit systems or other public transportation facilities. Others have put forward variants and alternatives over the decades since.

        Your reading list, I think, needs to be broad, and it is unlikely that a single volume is going to do the subject justice across a longer historical timeline and a wider economic brief. Any social history with an economic bent, written by a respected academic with form in such studies, is likely to give you a context in which to understand the more narrowly focussed specialist works such as that which started this conversation.


  3. Pingback: Small Town Decline: 1920s & the Rise of Chain Stores | The New Localization

  4. 1. Many other countries, capitalist and socialist and “mixed” have seen (and are seeing) dramatic migrations from towns to cities as they go through economic development. They may be following the American model, but I rather doubt it.
    2. I think there is a strong tendency to over value the benefits of small town living, forget about the downsides. With help from Disney (think Lady and the Tramp) and others they have become our edens while cities, especially the cities that were expanding as immigrants moved in from small towns and other countries are depicted as hell, or at least purgatory to be escaped from to the suburbs.
    Spending your life with people you have known since birth sounds great unless you were horrible, or considered horrible during high-school, went bankrupt, left your spouse, etc. etc.


    • The precept is true, but the general migration to urban rather than rural includes migration into small towns. Having said that the migration to mega cities is also clearly a trend with their continued growth.

      What is also true though is the manner in which we interface with each other as social animals. An anthropologist of the 19760s and 70s wrote that we may live in increasingly populous towns, but we still can only really interact with about 2,000 other individuals effectively. The consequence is that within huge urban sprawls there is not a single homogenous mass of humanity, but rather countless numbers of smaller groups, rather like villages and small towns. The small town ethos can be applied to even the largest city at a district level.


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