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Location Theory and the Cotton Industry
Published online by Cambridge University Press: 03 February 2011
Extract
The body of thought on location is composed of several contributory JL streams. The best known of these, that associated with the name of Alfred Weber, has concerned itself with the explanation of the choice of production sites by manufacturing industries, and is consequently the stream most closely related to my inquiry.1 However, the Weber school typically pays very little attention to the historical aspects of its subjects; this neglect is apparent both in the nature of the data employed and in the selection of scope, and the placing of emphasis. In the first part of this paper I shall offer an example of a Weber-like analysis or evaluation of the location factors involved in the cotton industry of this country during the past sixty years, as adapted to the purposes of historical inquiry and to the use of historical data; in the second part, I shall apply to some specific historical situations the results of the analysis presented in the first part.
- Type
- Articles
- Information
- The Journal of Economic History , Volume 2 , supplement S1: The Tasks of Economic History , December 1942 , pp. 101 - 117
- Copyright
- Copyright © The Economic History Association 1942
References
1 In fact, a competent treatment in Weberian terms exists for the topic of this paper. See Wisselink, Jan, De Vestigingsfactoren der Katoenindustrie in de Vereenigde Stoaten van Noord-Amerika, Rotterdam, 1928. 465 pagesGoogle Scholar.
2 Historians have recognized the existence and significance of low-wage areas, such as the Schwarzwald, within an international framework in the nineteenth and earlier centuries.
3 Why the cotton industry existed in that region is a question that no single reason can go far toward answering.
4 As a rough index of the concentration of location at this time (and as representative of the fifty years then ending), 73% of the country's cotton industry was in five New England states that had 7.3% of the country's population.
5 The figures represented by the solid line on the chart on page 107 are derived from the following sources: 1890 through 1912, Bureau of Labor Statistics Bulletin No. 604, simple average of a small sample of mills and occupations; 1912 through 1934, Monthly Labor Review of May, 1935, weighted average of occupations of progressively larger samples; 1936 through 1940, unweighted averages computed by the Bureau of Labor Statistics and published in miscellaneous forms.
6 For an example of the method of derivation, take the Census results for the year 1914. Southern wages were 53.5% of Southern value added; Northern wages were 63.4% of Northern value added. Assume (1) that the Northern portion of the industry was making products with a higher value per pound than those made by the Southern portion, (2) that the number of cents per pound by which the (unknown) average Northern labor-cost exceeded the (unknown) average Southern labor-cost was exactly reflected in an excess by the same number of cents per pound of average Northern value added per pound over average Southern value added per pound, and (3) that the elements (namely, cost other than labor and principal materials, and “profits”) which fill the gap between wages and value added average exactly the same cents per pound North and South, and that this may be called “c.” Then, the Northern value added per pound is the sum of Northern wages per pound (known as “N”) and “c”; similarly, the Southern value added per pound is the sum of “S” and “c.” N
Then .577N = .869S, and N = 150.6% of S. On the chart the broken line accordingly passes through the point (1914, 150.6).
7 As shown by “acountants'” labor-cost comparisons of the sort mentioned on page 106. Some of these comparisons are contained in my “Locational Experiences of the Cotton Industry,” a mimeographed release of June, 1941, by National Resources Planning Board, Industrial Location Section, No. 148,606.
8 U. S. Tariff Board, Cotton Manufactures, Report on Schedule “Eye” of the Tariff Law; 62nd Congress, 2nd Session, H. R. Doc. 643.
9 Wisselink, see footnote 1.
10 The Rise of Cotton Mills in the South (Baltimore, 1919)Google Scholar.
11 As compared with the 1840's both the size of the average annual crop and the average annual price per pound were half again as high.
12 $50,000 would not have been too low a figure in the late nineteenth century.
13 Probably $150,000 would be the lower limit for those years.
14 Localization,' which is a portion of Weber's broader concept “agglomeration,” refers to the phenomenon! of concentration within a narrow area (frequently one city) of many firms in one industry, these firms forming a large portion of that industry.
15 Bureau of Labor Statistics, Bulletin 663, “Wage-Rates in Cotton-Textile Industry,” 110.
16 A close relative of the exploitation defined by Robinson, Joan, Economics of Imperfect Competition, 289–290Google Scholar.