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rather, been in two directions: first, for each of these areas a shift has taken place from the central city to the surrounding region; secondly, there have been shifts in the relative position of one or another of these industrial areas as the rate of growth of older areas or areas characterized by relatively stable or declining industries has become slower while newer areas and newer industries have leaped ahead.

The tendency for industry to leave the central cities. and seek the industrial suburbs and adjoining counties is apparent in each of the major areas and in the industrial counties taken together. In each of the 13 large metropolitan areas included in chart I, the proportion of the manufacturing wage earners located in the central city of the area dropped steadily, or almost steadily, from 1870 to 1935. This was true of cities such as Cleveland which in 1870 contained 91.6 percent of the manufacturing wage earners in the Cleveland area but only 81.5 by 1930, and of cities such as Boston which contained only 29.7 percent of the wage earners in its area in 1870 and only 22.7 percent in 1930. For the 13 areas taken together, the proportion of wage earners located

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in the central cities dropped from 69 percent in 1870 to 59 percent in 1935. Within the 200 industrial counties, similarly, 54 percent of manufacturing wage jobs were located in the principal cities in 1899 and 44.6 percent in 1935.

Examination of the trends within the 200 industrial counties from 1899 to 1935 (using the industrial counties as bounded in 1930 as a basis) reveals that counties in certain parts of the area have been losing their proportion of wage earners steadily while others have been increasing their proportion. As one would expect, the counties lying within Massachusetts and Rhode Island and in New York, Pennsylvania, and Delaware declined in relative importance. On the other hand the counties which have consistently shown an increase in the proportion of industrial-county wage earners within their borders fall in three distinct areas, the State of Michigan, the Southern States of West Virginia, North Carolina, Tennessee, and Texas and the State of California. The trend within the area is even more clearly to be seen from the times at which counties within each State contained the largest proportion of industrial-county wage earners that they did at any time. States whose industrial counties were at their highest relative position in 1899 include not only the New England and Middle Atlantic States but those containing industrial counties located along the line of the Ohio-Mississippi River traffic, Louisville, St. Louis, New Orleans, Minneapolis, and St. Paul, and also the mining area around Denver, Colorado.

In contrast to these are the counties in the Middle Western States whose proportionate peak was reached in 1929, namely counties in Ohio, Indiana, Illinois, and Wisconsin. The relative position of the counties in all the Southern States was strongest at the bottom of the depression in 1933. In 1935 Michigan and California occupied the highest relative position which they had at any time. TABLE II.-Percentage distribution of manufacturing wage jobs within 200 industrial counties, 1899, 1929, 1935

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INCLUDES HAND BUILDING AND NEIGHBORHOOD INDUSTRIES EXCLUDES HAND BUILDING AND NEIGHBORHOOD INDUSTRIES 33 AREAS CONTAIN 100 OF 200 COUNTIES AND II COUNTIES NOT INCLUDED IN 200

Indust ial cou ties in

New England.

Middle Atlantic.

East North Central.

Northeast.

South Atlantic.

East South Central. West South Central.

South....

West North Central.

Mountain. Pacific..

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Source: Is Industry Decentralizing? Daniel B. Creamer, Philadelphia, 1935; and Growth of American Manufacturing Areas, Glenn E. McLaughlin, Philadelphia, 1938, p. 100.

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Source: Is Industry Decentralizing? Daniel B. Creamer, Philadelphia, 1935; and Growth of American Manufacturing Areas, Glenn E. McLaughlin, Philadelphia, 1938, p. 100.

Although the older areas have declined in relative importance they remain the main centers of manufacturing. Table II shows the regional distribution of wage earners within industrial counties in 1899, 1929, and in 1935. New England, the Middle Atlantic, and the East North Central regions combined, i. e., the northeast industrial area, accounted for 86 percent of industrial area jobs in 1899 and still accounted for 82 percent in 1935. Although the proportion of the South increased markedly it still accounted for only 10 percent of industrial area employment in 1935.

The migration of industry has been a contributing factor affecting the relative industrial importance of different regions and localities. For the most part, such "migration" does not involve the physical transfer of machinery and workers, or even, often, of business management from one place to another, but rather the tendency for new plants in an industry to seek the more rather than the less favorable location until the center of the industry's activity has shifted.

The major industries which have shifted their location have been lumber, cotton textiles and industries subsidiary thereto, the shoe industry, hosiery, iron and steel, rubber tires, and, to a lesser extent, furniture and clothing. Although very marked shifts have characterized some of these industries, only lumber and cotton textiles involved a significant decline in the volume of employment in the older centers prior to the drop in all employment after 1929.9

The lumber industry's successive jumps from Maine to Michigan to Wisconsin, to the South and to the Pacific Northwest have reflected the search for virgin timber stimulated by the wasteful technology which has characterized the industry. Cut-over areas and stranded populations have been left behind at each stage.

The cotton textile industry moved south primarily in search of cheap labor and cheap power, just as it had originally located in New England when labor and power supplies were most available there. Though the growth of the cotton industry in the South was well under way before the end of the nineteenth century, 50 percent of cotton textile workers were still to be found in the New England area in 1909. By 1935 the proportion had dropped to 22 percent, while the southern area had risen from 35 percent in 1909 to 63 percent in 1935. Dyeing and finishing followed the movement of textile mills somewhat later. In 1909, less than 2 percent of dyeing and finishing was done in the South, although 35 percent of cotton goods were already being made in that area. By 1935, 22 percent of the dyeing and finishing employees were located in the South, while the proportion in New England had dropped from 49 percent to 31 percent.

Pata on migration from Census of Manufactures.

The hosiery industry is now following textiles into the Piedmont area. Though the center of the industry is still in Pennsylvania, the proportion in North Carolina and Tennessee has increased from 6.4 percent in 1909 to 23 percent in 1935.

In both of these industries the portion of the industry calling for least skill moved first, followed by the finer processes, as the latter became more mechanized and as skill was developed in the new location. Fine textiles have followed coarse from Massachusetts to the Carolinas; full-fashioned hosiery is following seamless hosiery from Philadelphia to North Carolina and Tennessee. To these industries which have been attracted by a cheap and plentiful labor supply, the possibility of further migration to other industrially undeveloped areas constantly presents itself. The textile manufacturers of the Piedmont are now concerned lest their region suffer the fate of New England and they lose their mills to the deeper South. As yet, however, such migration to Alabama and Mississippi has not amounted to significant proportions.

The furniture industry, too, has shown a tendency to grow in the southern area. The proportion of the industry in North Carolina has increased from 4.5 percent in 1909 to 10.4 percent in 1935. In spite of this tendency, however, the factor of skill still keeps the industry centered in its northeastern location and its custom branches remain in centers of population.

Although the industrial shifts that have attracted most attention have been these movements to the South, the movement westward has been more general and at least equally significant. Agricultural activity has, of course, moved westward with the opening up of new lands and the withdrawal of old lands from cultivation in the eastern areas. The cultivation of specific crops, such as cotton, in particular, has moved west to take advantage of rich and fresh soil, reducing older cotton areas to a competitive disadvantage. Industries serving the consumer have followed the population westward. The shoe industry moved from Massachusetts to New York, Illinois, and Missouri to gain the combined advantage of nearness to markets and nearness to raw material. Originally almost wholly localized in Massachusetts, the proportion of the shoe workers in that State had already dropped to 40.3 percent by 1909 and was down to 21.7 percent in 1935. The shift of iron and steel westward from Pennsylvania into Ohio and the Chicago area has reflected a combination of factors, the declining proportion of the industry controlled by the United States Steel Corporation and the relative growth of the companies operating in Ohio and Indiana, and also the shift by the United States Steel Corporation of its operations from its Pittsburgh plants to its newer Lake Michigan

units, favorably situated to utilize the Lake Superior

ores.

The concentration of the rubber tire industry in Ohio reflects the absorption of the industry by a few large companies and the geographical consolidation of their operations. In 1909, the manufacture of rubber tires was scattered through New Jersey, Pennsylvania, Connecticut, New York, and Indiana, as well as Ohio which then accounted for only 39 percent of employment. In 1935, 68 percent of rubber tire employees were located in Ohio. The process of concentration is particularly striking in this industry in view of the fact that the raw material is imported and that the location in Ohio has no relation to the sources of raw material. This is a characteristically foot-loose industry, able to locate virtually anywhere. At the present time there are signs that the industry may again become more dispersed as certain of the large rubber concerns have erected plants in the South and in California.

Women's clothing, also a foot-loose industry, has shown the opposite tendency. In 1909, two-thirds of the women's and children's clothing was produced in New York State and 62 percent in New York City itself. In 1935 only half was produced in New York State, and still less in New York City. This movement out of New York has meant a shift of the industry westward with population, the beginning of a challenge by Hollywood to the style supremacy of Broadway, and dispersion out from the metropolitan center to the peripheral regions of New Jersey and Connecticut in search of lower rents and freedom from labor organization.

It is difficult to appraise the net results of these industrial shifts beyond the rough picture of the regional distribution of employment within the industrial counties given in table II and the evidence of stability in chart I. There is no doubt that the Great Lakes, Southern Piedmont, and Pacific areas have grown in proportion to the older regions of New England and the Middle Atlantic States. But the gross pattern of industrial location was already established 50 years

ago. The developments of these years have modified. but in no substantial way reshaped this pattern.

In this chapter only the bare outlines of the geographical structure of production have been sketched. Almost no attention has been given to the more detailed characteristics of the geographical structure, to the multitude of factors which combine to determine geographical location in particular cases, to the degree of balance in the use of resources between regions or the influences of transportation and freight rates on geographical location. Each of these would constitute a special study in itself. Instead, the chapter has been almost wholly concerned with indicating in a very rough fashion the extent to which the geographical structure of production is conditioned by the necessity of carrying on some activities close to particular resources and other activities in close proximity to the consumers; the influence of historical factors in determining the location of the activity not directly controlled by the location of resources or consumers; the geographical flow of goods through the successive steps of production; and the relative stability in the location. of industry, particularly its continued concentration in the leading industrial counties.

This sketch of the geographical structure of production should serve to make more concrete the manifold activity of the millions of persons who compose the American economy. It indicates the regional specialization and the geographical flow of goods which are involved in the highly organized use of resources. It is partly because of the variety of resources making possible specialization of production, one region providing cotton, another wheat, another cattle, each concentrating on the activity appropriate to its natural resources, that a high level of living could be developed in all parts of the country. In the face of the complexity of organization involved in the interchange of goods between regions, and the failure to deal with the problems it introduces, the actual level of living falls short of the potential. Only as this geographical complexity is kept constantly in mind can the structure of production be envisaged in all its main aspects.

CHAPTER V.-THE STRUCTURE OF PRODUCTION-FUNCTIONAL

The geographical structure discussed in the preceding chapter gives only one dimension of the structure of production. The functions performed and the interrelationships among them are central to the structure of physical production.

National productive activity in 1935 was carried on by the equivalent of 41 million full-time persons and made use of nearly 365 billion dollars' worth of land, buildings, equipment and inventory and resulted in production with a value of approximately 55 billions of 1935 dollars. Measured in 1935 prices, national production has grown from less than 5 billion dollars annually in the 1860's to 66 billion dollars in 1929. This is shown in chart I, all figures being stated in 1935 dollars. The long-time growth is broken at intervals by depressions of which that in 1921 and that beginning in 1929 are of greatest magnitude. The 1935 figures, falling in

1 See Appendix 18, section 5.

BILLIONS OF 1935 DOLLARS

80

the latter depression, represent very much less than full employment of the available resources, though a considerable increase over the 1932 low. It is the structural characteristics of this production, analyzed in terms of function, with which this chapter is concerned.

In this analysis of the structure of production the main objective will be to set forth (1) the proportionality of different activities, (2) the post-war trends of change, (3) the sensitivity of different types of activity to depression, and (4) an indication of the relation of actual production to potential production. For purposes of analysis, total production will be broken down along two lines; first, according to the major types of activity such as agriculture, manufacturing, and trade and their subdivisions, and secondly according to durability of product. For the first set of categories, the manpower employed and, where possible, the capital employed will be shown. For the varying degrees of

CHART I

TOTAL PRODUCTION IN THE UNITED STATES 1863-1937

BILLIONS OF 1935 DOLLARS 80

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durability, no statistical basis has yet been laid for showing manpower and capital employed and this analysis will consequently have to be in terms of output. Major Types of Productive Activity

The proportionality of different types of activity is clearly indicated in chart II. This chart shows the total manpower employed in 1935 divided into nine main segments. The black areas on the chart represent the amount of manpower employed in each. segment, stated in terms of equivalent full-time employment, part-time employment being reduced to the equivalent full-time. The chart is not aimed to distinguish between Government activity and corporate or private activity but rather to indicate the magnitude of different functions of production regardless of who carries them on. For this reason Government

and finance are grouped together, both being to a considerable extent concerned with the facilitating of production, while the Postal Service has been grouped among the utilities with other forms of communication, and public education has been grouped with private education as a service to the consumer. Undoubtedly, some further regrouping of government data would be desirable, such as combining road building with other transportation service and municipal power plants with other utilities, but data are not available to make a complete allocation of governmental activities to the functions performed, and such allocations would not alter the general picture significantly.

The material in chart II is so arranged as to place at the top the activities which are, on the whole, furthest from the ultimate consumer and at the bottom those closest to ultimate consumption. At the right of the chart is a vertical bar reflecting the magnitude of unemployment in 1935. A study of this chart corrects the impression, so frequently held, that the bulk of CHART II

The exact meaning of "full-time" used in these estimates varies somewhat, but as nearly as the statistical data allow it is the total number of man-hours worked in an industry divided by the number of hours which would be worked by a person working full-time for a year at the hours prevailing in the particular industry.

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Source: Employment from Patterns of Resource Use, National Resources Committee, table I.

Deportment of Commerce, Bureau of Foreign Commerce, values in dollars.

Simon Kunznets, Community Flow and Capital Formation, table vii-2; includes producers' durable, business and public construction and repairs and servicing, the last being derived from Census of Manufactures, 1935: values in dollars.

* Consumer Expenditures in the United States, National Resources Committee, preliminary; figures in dollars.

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