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Public Policies for Countering Deindustrialization in Postwar Massachusetts

Published online by Cambridge University Press:  27 April 2009

David Koistinen
David Koistinen
Affiliation:
American University of Beirut
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Extract

The decline of traditional industries, or “deindustrialization,” has been a topic of growing interest among American historians. Most of the existing literature illuminates the experiences of individuals, communities, and companies directly affected by plant closures. Historians have recently begun to explore public policy responses to industrial decline, although policymaking on this issue at the state level has received almost no attention. State government has nevertheless been an important locus of activity for dealing with deindustrialization. This is not surprising, considering the importance of the states in the American federal system and the fact that industrial decline often concentrates in particular areas of the country at a given time.

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Articles
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Journal of Policy History , Volume 18 , Issue 3 , July 2006 , pp. 326 - 361
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Copyright © The Pennsylvania State University, University Park, PA. 2006

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References

Notes

1. Among the numerous works on the impact of factory closures on workers, communities, and unions are Cowie, Jefferson R., Capital Moves: RCA's Seventy-Year Quest for Cheap Labor (Ithaca, 1999)Google Scholar, and Hartford, William F., Where Is Our Responsibility? Unions and Economic Change in the New England Textile Industry, 1870–1960 (Amherst, Mass., 1996)Google Scholar. Scholars have also investigated the economics of industrial decline and the experience of firms in downsizing sectors. See, for example, Gross, Lawrence F., The Course of Industrial Decline: The Boott Cotton Mills of Lowell, Massachusetts, 1835–1955 (Baltimore, 1993)Google Scholar.

2. On local public policies for countering industrial decline, see McKee, Guian, “Urban Deindustrialization and Local Public Policy: Industrial Renewal in Philadelphia, 1953–1976,” Journal of Policy History 16, no. 1 (2004): 66–98Google Scholar; Heathcott, Joseph and Murphy, Maire Agnes, “Corridors of Flight, Zones of Renewal: Industry, Planning, and Policy in the Making of Metropolitan St. Louis, 1940–1980,” Journal of Urban History 31 (01 2005): 151–189Google Scholar; and O'Mara, Margaret Pugh, Cities of Knowledge: Cold War Science and the Search for the Next Silicon Valley (Princeton, 2005)Google Scholar, chap. 4. Policymaking on the issue at the national level is explored in Wilson, Gregory S., “Deindustrialization, Poverty, and Federal Area Redevelopment in the United States, 1945–1965,” in Cowie, Jefferson and Heathcott, Joseph, eds., Beyond the Ruins: The Meanings of Deindustrialization (Ithaca, 2003), 181–198Google Scholar, and High, Steven, Industrial Sunset: The Making of North America's Rust Belt, 1969–1984 (Toronto, 2003)Google Scholar, chaps. 5 and 6. State, regional, and federal responses to deindustrialization in the period between the two world wars are explored in Koistinen, David, “Dealing with Deindustrialization: Economics, Politics, and Policy During the Decline of the New England Textile Industry, 1920–1960” (Ph.D. diss., Yale University, 1999)Google Scholar.

3. All statistics from Massachusetts Department of Labor and Industries, Census of Manufactures in Massachusetts, various years, available at the Massachusetts State Library, Boston. Other Bay State industries experiencing employment declines in the early and mid-twentieth century included boots and shoes, leather, and textile manufacturing machinery.

4. See, for example, Council of Economic Advisers, Committee on the New England Economy, The New England Economy: A Report to the President Transmitting a Study Initiated by the Council of Economic Advisers (Washington, D.C., 1951)Google Scholar; Forbes, 15 June 1953, contents page and 14–19.

5. On the pre–World War II decline of New England cotton manufacturing and its growth in the South, see Koistinen, David, “The Causes of Deindustrialization: The Migration of the Cotton Textile Industry from New England to the South,” Enterprise & Society 3 (09 2002): 482–520CrossRefGoogle Scholar. On the southward migration of cotton and wool production after World War II, see Hartford, Where, chaps. 5 and 6.

6. In deindustrializing areas where unions are weak, corporate groups might secure significant retrenchment. Retrenchment and economic development are not mutually contradictory, it should be noted: a state could implement both policies simultaneously. This is very unlikely to happen in a jurisdiction with strong unions, but it could well occur in a state where labor has little influence. Of course, in locales of the latter type, the government burden on business is likely to be light to start with, leaving somewhat restricted space for cutbacks.

7. Huthmacher, J. Joseph, Massachusetts People and Politics (Cambridge, Mass., 1959)Google Scholar; Lockard, Duane, New England State Politics (Princeton, 1959)Google Scholar, chap. 5; Mileur, Jerome M., “Party Politics in the Bay State: The Dominion of Democracy,” in Parties and Politics in the New England States, Mileur, Jerome M. ed., (Amherst, Mass., 1997), 77–94Google Scholar; Wilkie, Richard W. and Tager, Jack, eds., Historical Atlas of Massachusetts (Amherst, Mass., 1991), 68–69Google Scholar. On gerrymandering, see Mileur, 80, 86, and Lockard, 139n, 152. Beginning in the late 1950s, the Democrats moved into a dominating position in Bay State politics.

8. Abrams, Richard, Conservatism in a Progressive Era: Massachusetts Politics, 1900–1912 (Cambridge, Mass., 1964), 182–183, 231–32, 234Google Scholar; Massachusetts section of Beyer, Clara M., “History of Labor Legislation for Women in Three States,” in U.S. Department of Labor Bulletin of the Women's Bureau, no. 66 (Washington, D.C., 1929)Google Scholar; Simon, Jean-Claude G., “Textile Workers, Trade Unions, and Politics: Comparative Case Studies, France and the United States” (Ph.D. diss., Tufts University, 1980), 197–226Google Scholar. This paragraph also draws on the author's unpublished research regarding 1920s voting patterns on social reform issues in the Massachusetts legislature.

9. Juravich, Tom et al. , Commonwealth of Toil: Chapters in the History of Massachusetts Workers and Their Unions (Amherst, Mass., 1996)Google Scholar, chaps. 12 and 13; Hartford, Where, chap. 3. Statistic from Bright, Arthur A. Jr. and Ellis, George H., eds., The Economic State of New England: Report of the Committee of New England of the National Planning Association (New Haven, 1954), 370Google Scholar.

10. MA AFL DOCS [proceedings and reports of officers to the annual convention of the Massachusetts Federation of Labor in the 1930s, 40s, and 50s; exact titles of documents change from year to year and are as specified in individual notes; all are in Massachusetts AFL-CIO Records, boxes 1 and 2, Du Bois Library Special Collections and Archives, University of Massachusetts, Amherst], Proceedings of the Fiftieth Annual Convention,1935, 88–91Google Scholar; Tulloch to Lodge, 14 November 1935, box 1, “1935” folder and Swift to Culter, 26 May 1936, box 67, “1936 correspondence” folder, both in Henry Cabot Lodge Jr. collection, Massachusetts Historical Society, Boston; Lodge entry in American National Biography, vol. 22; Lockard, New England State Politics, 136–37, 143–45, 163, 165–66; Saltonstall entry in American National Biography, vol. 19.

11. Lockard, New England State Politics, 125 and chap. 6. Legislators' voting records demonstrate these patterns. State Senate roll calls were examined on ten issues of concern to organized labor during the 1951–52 legislative session. Of the twenty-two Republican Senators, thirteen had records of perfect or near-perfect opposition to union-backed bills (with at most one union-friendly vote); another six leaned strongly in an antilabor direction (with two or three pro-labor votes); and three had centrist records. Of the eighteen Democrats, thirteen had perfect or near-perfect records of support for union bills (with at most one anti-union vote); another three leaned strongly pro-union (with two anti-union votes); and two had centrist records. Voting records from Massachusetts Federation of Labor, Official Labor Record of the Massachusetts Legislature, 1951–1952 Session. This and Official Labor Record of the Massachusetts Legislature, 1953–1954 Session, cited below, are in Massachusetts AFL-CIO Records, box 24, folder 1056, Du Bois Library Special Collections and Archives, University of Massachusetts. Party membership of legislators for the 1951–52 session from the publication 1951–1952 Public Officers of the Commonwealth of Massachusetts [Boston, 1951].

12. Commonwealth of Massachusetts, Division of Employment Security, A Report on Unemployment Compensation Benefit Costs in Massachusetts (n.p. [Boston], 1950), v, 12, 13, statistics on p. 12Google Scholar.

13. A Report on Unemployment Compensation, 3–4, 13–14, 30–32, 36–37.

14. Ibid., 19; Raphaelson, Arnold H., Massachusetts Unemployment Compensation, 1948–1961: A Study in Countercyclical Finance (Boston, 1966), 25, 27–28Google Scholar; Boston Globe, 22 March 1951, 10; 8 June 1951, 40.

15. A Report on Unemployment Compensation, 3, 9; “Final Report of the Recess Commission on Employment Security,” April 1949, Massachusetts Legislative Documents 1949 (House, No. 2360), 32; “Report of the Special Commission Relative to the Textile Industry and to Prevent the Removal Thereof from the Commonwealth,” May 1950, Massachusetts Legislative Documents 1950 (House, No. 2590), 16–17. Statistics on maximum amount and maximum duration of benefits are for year-end 1948.

16. The statistics are my calculations, from figures appearing in “Report of the Special Commission Relative to the Textile Industry,” 16–17.

17. “Report of the Special Commission Relative to the Employment Security Law,” January 1948, Massachusetts Legislative Documents 1948 (House, No. 1764), 3, 5 (quotation), 6–8, 27–30; Industry (Associated Industries of Massachusetts), May 1951, 5.

18. A Report on Unemployment Compensation, 3, 19; Boston Globe, 22 March 1951, 10; 8 June 1951, 40.

19. MA AFL DOCS, Officers Reports and Proceedings, 1951, 46Google Scholar; Boston Globe, 21 March 1951, 7.

20. MA AFL DOCS, Officers Reports and Proceedings, 1951, 46Google Scholar, and Joint Report of the Executive Council and Officers, 1951, 39; Industry, March 1951, 8–9 and April 1951, 5, 29.

The six-part series on Massachusetts unemployment insurance run by a leading Boston newspaper during this period featured polemical headlines such as “Chiselers Looting Millions from State Jobless Pay Fund”; lengthy quotations from a representative of the MCES; highly favorable discussion of the bill backed by that organization; and numerous examples of purported abuses of the jobless insurance system that were short on detail and based on unidentified sources. See Boston Herald, 2 March; 1951, 23; 3 March, 8; 4 March, C1; 5 March, 8; 6 March, 14; and 11 March, G10.

21. Industry, March 1951, 7, 9 (quotations). The disposition of all bills considered by the Massachusetts state legislature can be tracked using the legislature's various annual publications, most notably Commonwealth of Massachusetts, Bulletin of Committee Work. While not explicitly cited in the account in this article, these publications were a prime source for information on the progress of the various pieces of legislation I discuss here.

22. Industry, March 1951, 9, 19; Boston Globe, 22 March 1951 (evening edition), 36 and 23 March 1951, 9; Massachusetts Legislative Documents 1951 (Senate, No. 251), 29–30.

23. Industry, March 1951, 40, 41, 43; Boston Globe, 23 March 1951, 9; Dever special message to the legislature, 7 June 1951, Massachusetts Legislative Documents 1951 (House, No. 2570), 4. The job rotation schemes are discussed in A Report on Unemployment Compensation, 38–40, 217–19.

24. Industry, March 1951, 41–43; Boston Globe, 8 June 1951, 40.

25. This paragraph is based on Industry, April 1951, photo caption on p. 29 (“largest assembly”) and p. 31 (“unless,” “welfare state”); Boston Globe, 21 March 1951 (evening edition), p. 7 (“loafers and chiselers”), 22 March 1951, p. 10, and 22 March 1951 (evening edition), pp. 1, 36; Commonwealth of Massachusetts, Division of Employment Security, Financing Unemployment Insurance in Massachusetts, 1951–1970 (Boston, 1962), 25Google Scholar.

26. Bay State unionists had multiple reasons for opposing cutbacks in unemployment insurance. The program was an important one for maintaining worker income during times of layoff, and significant political energy had been expended in earlier years to achieve the existing level of benefits. At a maximum of 2.7 percent of payroll, unemployment insurance taxes were a relatively small factor in total costs; reducing these levies would do little to help Massachusetts textile firms in competition with producers in the lower-cost South. In addition, only a fraction of the state's workers were in the troubled textile sector. Many labored in locally oriented industries, such as retail or construction, where there was no competition from out of state. Others worked for manufacturers that competed with producers in the industrial states of the Northeast and Midwest, where unemployment insurance taxes were roughly on a par with those in Massachusetts. Most of the commonwealth's non-textile-manufacturing companies were in sound condition in the early 1950s. Furthermore, the general tendency throughout the country in this period was for the level of unemployment insurance benefits to increase, and keeping pace with gains elsewhere was a priority for Massachusetts unionists. On the good condition of most commonwealth industries and the impulse to match social gains in other states, see MA AFL DOCS, Joint Report of the Executive Council and Officers, 1952, 38Google Scholar.

27. This paragraph is based on Boston Globe, 23 05 1951, 1, 3Google Scholar; 24 May 1951, 1, 4; 25 May 1951, 14; and Massachusetts Legislative Documents 1951 (Senate, No. 659), 17–18Google Scholar and (House, No. 2570), 1–8.

28. Senate Democrats cited the statement of an expert on Bay State jobless insurance, who declared that the revised proposal backed by Republicans, with its low standard for implementing merit rating, “may impair the future solvency of the [unemployment insurance] fund” (Boston Globe, 24 May 1951, 4). Weakening the fund would create downward pressure on benefits. This was probably the outcome business lobbyists sought. In a later statement, AIM forthrightly admitted that “cutting down the amount of money spent” on payments to the jobless was a key goal of the legislation. See Boston Globe, 25 June 1951, 13; the quotation is from a reporter's summary of the AIM statement.

29. Boston Globe, 25 May 1951, 14; and 8 June 1951, 1, 40; Massachusetts Legislative Documents 1951 (House, No. 2570), quotation on p. 4.

30. Boston Globe, 9 June 1951, 3; 25 June 1951 (evening edition), 1, 13; and 26 June 1951, 1, 2.

31. This and the following paragraph, including material in the notes, are based on Boston Globe, 13 July 1951, pp. 1 (“further modified”), 5, 19 October 1951, p. 7 (“months”), 23 October 1951, pp. 1, 13, and 26 October 1951, p. 6; Commonwealth of Massachusetts, Acts and Resolves 1951, chap. 763, pp. 758–60.

32. Senate Republicans had called for merit rates to take effect when the balance in the unemployment insurance fund exceeded 4 percent of total taxable payroll. Dever wanted the trigger point fixed at 8 percent. Under the plan developed in the House, merit rating would be restored when the balance in the unemployment insurance fund reached 6 percent of total taxable payroll. Rates ranging from 1.0 to 2.7 percent would then apply. Levies as low as the 0.5 percent original minimum would go into effect when the fund reached 7 percent of payroll. The lower rate scale would remain in place unless the balance in the unemployment insurance fund fell to 5.5 percent of payroll. Should that occur, merit rating would again be suspended until the fund equaled 6 percent of payroll. To further enhance fund security, the new solvency tax of up to 1 percent that appeared in the original, employer-backed proposal was retained.

33. Absent from the legislation by this time were numerous harsh provisions in the employers' original bill, including penalties for employers using job rotation systems. The formula for determining weekly benefits remained at 66.7 percent of average wages while employed. In addition, the tax rates that would apply with merit rating in effect were significantly higher than in the initial proposal, so that employers would need to establish a solid history of limited layoffs to qualify for the lower merit rates. Some of the stringent provisions in the original bill were jettisoned from the version of the legislation that passed the Senate. Others disappeared in the bill drawn up later by House Republicans.

34. Unionists opposed retaining the previously mentioned solvency tax because of its impact on certain types of employers and wanted the lowest merit rate to be 1 percent in all circumstances. They objected to new rules that encouraged employers to more closely monitor the benefits received by former workers, arguing that many disputed claims would result. The stipulation that an individual receiving benefits accept new employment in “any … occupation for which he is reasonably fitted” raised hackles, with labor preferring that a worker only be required to accept a position in his usual, or a “similar” position (quotations from Boston Globe, 23 October 1951, 13).

35. Wilkie and Tager, Historical Atlas of Massachusetts, 69.

36. “Elect Christian A. Herter,” 1952 campaign flier, in Christian A. Herter Papers, Houghton Library, Harvard University, Cambridge [hereafter CAH], folder 905; “Record of Achievement of Governor Christian A. Herter …, 1953–1954,” 31, in Sinclair Weeks papers, Dartmouth College Library Special Collections, Hanover, New Hampshire [here-after SW], box 37, “Christian A. Herter” folder; Time, 17 August 1953, 13–16; New Republic, 6 February 1956, 8–10; U.S. News & World Report, 27 January 1956, 90–93 (quotation on p. 90); Nation, 11 February 1956, 111–13; Herter entry, American National Biography, vol. 10.

Herter distinguished himself in Congress as a leading Republican internationalist at a time when isolationist sentiments remained strong in GOP ranks. He returned to Washington in 1957 as Undersecretary of State, moving up to the Secretary position in 1959. Liberal and centrist Republicans backed Herter for the White House, as an alternative to Nixon, when it appeared in early 1956 that Eisenhower might not run for reelection.

37. On the Herter campaign rhetoric discussed here, see summary of 12 May 1952 Herter address in Fall River, in CAH, folder 891a (“has failed,” “blight”); 11 March 1953 Herter address in Fall River, 1–2, CAH, folder 930; “Sees New Era Dawning for Bay State,” 25 May 1953 address by Massachusetts Republican State Committee chair Elmer Nelson, 3, CAH, folder 933 (“top priority”); 18 September 1952 Herter statement to League of Women Voters of Massachusetts, CAH, folder 895 (“make Massachusetts,” “present”).

38. In sounding these themes, Herter sounded rather like Franklin Roosevelt on the campaign trail in the 1930s. The nature of Herter's rhetoric demonstrates the centrist stance a Republican candidate had to strike to have a chance of winning statewide office in a liberal industrial state such as Massachusetts in the post-New Deal era.

39. Industry, December 1952, 5. Other principal themes in Herter's 1952 campaign were the numerous accusations of corruption that had been made against the Dever administration and traditional Republican pledges to administer state government more efficiently and hold down taxes and spending. The candidate did balance his calls for retrenchment with expressions of support for social legislation.

40. Herter inaugural address, 8 January 1953, Massachusetts Legislative Documents 1951 (Senate, No. 1), 31; Commonwealth of Massachusetts, Acts and Resolves 1951, chap. 763, p. 758 and Acts and Resolves 1953, chap. 397, p. 284.

41. See 21 May 1953 press release, 1, in CAH, folder 932; “Record of Achievement of Governor Christian A. Herter …, 1953–1954,” 6; Greater Boston Business, December 1955, 15.

42. The enormously talented Herter brought a successful first-term record and an attractive public image into the 1954 gubernatorial race, yet he prevailed against a secondstring Democratic candidate by the relatively narrow margin of 985,000 to 910,000 votes. The year 1954 was a Democratic one in the commonwealth, with the party winning back control of the Massachusetts House of Representatives and gaining seats in the state Senate. See New York Times, 9 May 1954, 61; 31 October 1954, 47; and 7 December 1954, 49; and Wilkie and Tager, Historical Atlas, 69, on electoral races and results. See sources on Herter cited above and “American Public Service Bureau,” 1 August 1953 issue, 2–4, CAH, folder 935, on his record as governor.

43. Commonwealth of Massachusetts, Acts and Resolves 1951, chap. 763, p. 760, and Acts and Resolves 1953, chap. 397, p. 286; Raphaelson, Massachusetts Unemployment Compensation, 30, 32; MA AFL DOCS, Officers Reports and Proceedings, 1953, 183, 187Google Scholar.

44. The Massachusetts unemployment insurance system was in reasonably sound financial shape for the rest of the decade and into the 1960s, both in absolute terms and in comparison to other states. Conditions were good enough to permit significant jumps in benefits in the mid-to late 1950s. While the unions pushed hard into the late 1950s to restore benefits for voluntary quits, they sponsored no legislation after 1954 to change the financing of the system, indicating a general satisfaction with that aspect of the status quo.

45. Commonwealth of Massachusetts, Acts and Resolves 1953, chap. 401, pp. 289–90; MA AFL DOCS for 1953, 1954, 1956, 1957; Massachusetts Federation of Labor, Official Labor Record of the Massachusetts Legislature, 1953–1954 Session, “Analysis of House Roll Calls,” item 4.

46. “Preliminary Report of the Special Commission on Taxation: A Tax Inquiry for Massachusetts,” March 1949, Massachusetts Legislative Documents 1949 (House, No. 2280), 10–13; Boston Business, July 1951, 24, and April 1953, 12.

47. “Report of the Special Commission on Taxation, Part V: The Taxation of Business and Manufacturing Corporations,” February 1952, Massachusetts Legislative Documents 1952 (House, No. 2114), 7, 76–80; Commonwealth of Massachusetts, Addresses and Messages to the General Court … of His Excellency Governor Christian A. Herter … (Boston, 1956), 1954 income tax cut on 17, 151–52.

48. Herter inaugural address, 8 January 1953, 30 (quotations).

49. Industry, September 1945, 29–31; Massachusetts Federation of Taxpayers Associations, Inc., Proposal for the Establishment of a Department of Commerce and Development in Massachusetts (Boston, 1945)Google Scholar; “Report of the Special Commission Relative to Establishment of a State Department of Commerce,” December 1945, Massachusetts Legislative Documents 1946 (House, No. 300); Koistinen, “Dealing,” 254–58; Industry, February 1946, 36, 72–75.

50. To get a sense of the kind of companies represented by AIM, I looked at the affiliations of the sixty-odd members of the organization's 1950 executive committee. The makeup of the committee should broadly reflect the membership of the organization. AIM executive committee members constituted a broad cross section of Massachusetts' larger manufacturing companies. Big operations with more than one thousand production workers had ample representation, including several managers from major corporations with out-of state headquarters such as General Motors. Managers at mid-sized manufacturers with between one hundred and one thousand production workers made up the largest contingent on the executive committee. Small firms with fewer than one hundred production workers had limited representation. The membership of the executive committee membership reflected a broad diversity of industries, with managers from the state's important metalworking sector particularly in evidence. Virtually all executive committee members were affiliated with companies that turned out finished goods to be sold in national and world markets in competition with producers elsewhere. An examination of the affiliations of men serving one-year terms as AIM president in the period 1942–56 produced a similar picture.

Given the makeup of its membership, there was considerable logic in AIM's focus on holding down state taxes and regulations on industry. Victories in these areas would afford Massachusetts manufacturers incremental advantages in the competition with companies in other locations. Moreover, since taxes and regulations added to costs (or in the case of income taxes, reduced after-tax earnings), gains in these areas would translate directly into higher after-tax profits.

AIM officers and executive committee members and their corporate affiliations are from the lists that regularly appeared in the first pages of the group's periodical, Industry. Firm size and product are from directories of state manufacturers, primarily Massachusetts Department of Labor and Industries, Division of Statistics, A Directory of Massachusetts Manufacturers Employing Fifty or More Production Workers, 1951 (Boston, n.d. [1951?])Google ScholarPubMed.

51. I intend to publish a paper that will further illuminate industrialists' opposition to economic development efforts in postwar Massachusetts. Included will be added information on the resistance of manufacturers to the formation of the Department of Commerce, as well as their apparent opposition to the efforts of the department, once it was set up, to bring new employers into Massachusetts from out of state. The paper will also discuss manufacturers' antagonism to an early 1950s proposal for a state entity that would finance the construction of new factory space, as well as industrialists' lukewarm support for the private organization that was eventually established (the MBDC) to provide long-term capital to small and medium-sized manufacturing companies. If the paper goes ahead, it will appear as Koistinen, David, “The Political Economy of Regional Redevelopment: Business and Area Government in the Regeneration of the New England Economy,” Business and Economic History On-Line: Papers Presented at the BHC Annual Meeting, vol. 4 (2006)Google Scholar, at the Web site of the Business History Conference.

52. Boston Globe, 12 June 1946, 1, 12; 12 June (evening edition), 18; 13 June, 16; 13 June (evening edition), 11; and 14 June 1946, 1, 12. On Gibbons's voting record, see Massachusetts Federation of Labor, Official Labor Record of the Massachusetts Legislature, 1951–1952 Session.

53. Statistics from Commonwealth of Massachusetts, Acts and Resolves 1945, chap. 404, p. 396Google Scholar, and Acts and Resolves 1951, chap. 490, p. 414. Mimeographed annual reports of the Development and Industrial Commission from this era are at the Massachusetts State Library, Boston.

54. Dever annual address, 2 January 1952, Massachusetts Legislative Documents 1952 (Senate, No. 1), 27–29.

55. Herter inaugural address, 8 January 1953, 32–35, quotation on pp. 32–33; Herter message to the state legislature and accompanying bill, 10 February 1953, Massachusetts Legislative Documents 1953 (House, No. 2274). Herter's quoted statement was exaggerated, especially given the expansion of the Development and Industrial Commission in preceding years. But he was correct in claiming that the commonwealth could create a still larger and more effective promotional agency.

56. Boston Globe, 11 March 1953 (evening edition), 4 (quotations), and 12 March 1953, 3.

57. In private correspondence years later, a Massachusetts industrialist deeply involved in the state's Republican politics wrote that when the Department of Commerce bill went before the legislature, AIM “seriously questioned the desirability” of the measure. At a meeting of the organization's executive committee, this individual “took it upon [him]self to state” that “the Department of Commerce was very necessary and desirable” and that it would be “absolutely ridiculous” for AIM to oppose its establishment. After “much discussion,” the executive committee finally agreed to a formal endorsement of the plan. See Hanson to Healey, 27 February 1957, SW, box 35, “Kurtz M. Hanson” folder. Concern for appearances doubtlessly motivated the Republican activist to seek this change of position and AIM to accede to it. For a corporate group to oppose a major economic initiative by the new Republican governor would have been highly embarrassing for the business-backed GOP, especially since AIM's motives could easily be imputed to self-interest.

58. MA AFL DOCS, Officers Reports and Proceedings,1953, 179Google Scholar.

59. Boston Globe, 5 May 1953, 1, 10; 22 May 1953, 8; 27 May 1953, 1, 3.

60. The growth of the Commerce Department came about in part from absorption of the State Planning Board, which in the 1951–52 fiscal year had received an appropriation of $66,000, with thirteen permanent positions. Once within Commerce, the work of planning personnel seems to have been redirected to more explicitly support development goals. All statistics from Commonwealth of Massachusetts, Acts and Resolves 1955, chap. 706, p. 684; Acts and Resolves 1951, chap. 490, p. 397.

61. Sources on the functioning of New England DCCs are cited in a note to the section that follows, on MBDC operations.

62. On the formation of the MBDC, see New England News Letter, January-February 1950, 15; Monthly Review (Federal Reserve Bank of Boston), January 1951, 1–3; July 1954, 1–4; August 1954, 1–6; Boston Globe, 18 May 1953 (evening edition), 9; Herter message to the state legislature and accompanying bill, 19 June 1953, Massachusetts Legislative Documents 1953 (House, No. 2827); Industry, June 1953, 5; Boston Business, June 1953, 44.

63. On the department's work, see The Massachusetts Department of Commerce: Its Mission, Its Organization, Its Operations (Boston, 1954)Google Scholar and (Boston, 1956), at Loeb Design Library, Harvard University, Cambridge, and Massachusetts Department of Commerce, Activity Report, July 1, 1957–March 1, 1959 (Boston, 1959)Google Scholar and Activity Report, January 1, 1961-July 31, 1962 (Boston, 1962)Google Scholar at the Massachusetts State Library, Boston.

64. On the MIT initiative, see documents in MIT Office of the President, 1930–59 (presidents Compton and Killian), box 144, folder 12, at Institute Archives, MIT, Cambridge. This particular effort does not seem to have had any concrete result.

65. On the work of the MBDC, see the organization's annual reports at the Massachusetts State Library, Boston; Credit Needs of Small Business, hearings before a subcommittee of the Committee on Banking and Currency, 3–20 June 1957, U.S. Senate, 85th Cong., 1st sess. (Washington, D.C., 1957–58), 97–114; materials in U.S. Senate, Committee on Banking and Currency, Development Corporations and Authorities: Reports, Statutes, and Other Materials on State and Local Development Corporations and Authorities, committee print, 85th Cong., 2d sess. (Washington, D.C., 1958)Google Scholar; and articles on New England DCCs in the following issues of the Federal Reserve Bank of Boston's Monthly Review: January 1951, 1–3; July 1954, 1–4; August 1954, 1–6; April 1958, 1–4; June 1958, 1–4.

66. Statistics from the MBDC's 1957 annual report, reprinted in Development Corporations and Authorities, 167.

67. On the Lawrence experience, see Credit Needs of Small Business, 101–2.

68. A Commerce publication from the early 1960s listed a number of out-of-state companies that its industrial development division had recently “assisted” in setting up Massachusetts plants. See the department's Activity Report, January 1, 1961-July 31, 1962, 35–36.

69. For a detailed treatment of this question in the 1920s, see Koistinen, David, “Public Relations as Redevelopment Tool: Accentuating the Positive in Deindustrializing New England,” Business and Economic History On-Line: Papers Presented at the BHC Annual Meeting, vol. 3 (2005)Google Scholar, at the Web site of the Business History Conference.

70. Massachusetts Department of Labor and Industries, Census of Manufactures in Massachusetts–1960–Summary by Industries, 1. The figure is for production workers.

71. Other historians similarly document at least some success in campaigns of this era to promote growth in deindustrializing municipalities. See Heathcott and Murphy, “Corridors”; McKee, “Urban Deindustrialization”; O'Mara, Cities, chap. 4.

72. Republican State Committee, “Rebuilding Massachusetts,” 1 (“Creating”); Herter press release, 18 November 1953, CAH, folder 937, 1 (quotations), 2.

73. “Legislators Told Rush …,” 31 July 1956 Boston Globe clipping in SW, box 35, “Kurtz M. Hanson” folder.

74. Thus, in arguing against the 1946 proposal for a state Department of Commerce, the general counsel of AIM asserted that Massachusetts could best aid its industries through retrenchment in social legislation and taxes, and that such steps must precede the establishment of an economic development agency. See Industry, February 1946, 36, 72–75.

75. In private, the AIM official took a much different position. In a Republican party fund-raising letter to industrialists of the same period, he emphasized only social programs and taxes in urging recipients to make donations. Electing Republicans to state office, the AIM president wrote, “means the difference between merit rating and a flat 2.7% contribution tax on employment security … between your present rate and a greatly increased premium for workmen's compensation … between the present [non-progressive] income tax and a graduated state income tax … it means the difference between competing on an equal basis with industries of other states or being at a competitive disadvantage.” See undated (summer or fall 1956) letter from Kurtz Hanson, SW, box 35, “Kurtz M. Hanson” folder.

76. See his voting record in Massachusetts Federation of Labor, Official Labor Record of the Massachusetts Legislature, 1951–1952 Session.

77. Rep. J. Robert Ayers, “Golden Dome: Entire Herter Program Geared to Job Security,” 7 July 1953 Waltham News-Tribune clipping, in CAH, folder 946. Later in the piece the author did discuss the accelerated return to merit rating; a reorganization of the state tax department, which brought in increased revenue and might make possible future reductions in levies; and cuts in overall state spending.

78. Bluestone and Harrison, Deindustrialization of America, 180–88.

79. On at least one occasion, Herter used that very term to describe what had been done, claiming that the establishment of the Department of Commerce and MBDC had produced “improvements to the business climate.” See “Jobs and Industry,” undated statement, probably from mid-1953, in CAH, folder 927a.

80. The point should not be overemphasized. Very limited retrenchment took place as a result of the unemployment insurance fight of 1951, yet proposals for amplifying the government role in economic development received little attention that year. Still, with the governorship and both houses of the Massachusetts legislature under GOP control in 1953, pressures for retrenchment might have been greater had Herter not instead emphasized the creation of development institutions.

81. The following account of fights over Rhode Island unemployment insurance is based on documents in the Dennis J. Roberts collection, Phillips Memorial Library Special Collections, Providence College, Providence [hereafter DJR], box 13, folders 41 and 42, and box 19, folder 94.

82. On Rhode Island politics and Roberts, see Lockard, New England State Politics, chaps. 7 and 8, and New York Times, 2 January 1957, 22.

83. A. W. Gilmore to Roberts, 29 April 1958 (quotation), DJR, box 13, folder 42. On the apportionment of the Senate, see Lockard, New England State Politics, 178, including note 14.

84. Lockard, New England State Politics, 184, 193–95. The Republican won the 1958 rematch between the two men.

85. Arthur D. Little, Inc., Strengthening Industrial Development in Rhode Island: A Report to the State of Rhode Island and the Industrial Foundation of Rhode Island (Cambridge, etc., 1960), 34 (quotation)Google Scholar.

86. Inaugural Message of the Governor 1951 (Providence, 1951), 7–9Google Scholar; Rhode Island Development Council, Annual Report, 1970–1971 (mimeograph), first page. The new agency was the Rhode Island Development Council.

87. Annual Message of the Governor to the General Assembly 1952 (Providence, 1952), 10–11Google Scholar; Inaugural Message of the Governor 1953 (Providence, 1953), 6Google Scholar; correspondence from December 1952 and January 1953 in DJR, box 14, folder 3; Inaugural Message of the Governor 1955 (Providence, 1955), 6Google Scholar.

88. See documents in DJR, box 10, folders 1–3; New York Times, 12 January 1959, 135.

89. See documents in DJR, box 10, folder 9, and box 14, folder 2.

90. See documents in DJR, box 11, folders 20–22.

91. Monthly Review, January 1951, 1–3; New York Times, 21 May 1950, F1, and 21 December 1950, 43.

92. New York Times, 5 September 1954, 31; 7 January 1955, 42; 21 August 1955, 54; Lockard, New England State Politics, 104, 105 (quotation).

93. New York Times, 4 January 1957, 12, and 7 June 1957, 33; Development Corporations and Authorities, 21–22.

94. “Report of the Special Commission Relative to Establishment of a State Department of Commerce,” December 1945, 55–61; Development Corporations and Authorities, 5.

The Massachusetts legislative commission considering the establishment of a Department of Commerce in 1945 reported the existence of economic development agencies in thirty other states (see “Report of the Special Commission,” December 1945, 54–55). Most of these bodies seem to have been promotional commissions similar to the one the Bay State established in 1929, rather than the type of full-fledged development departments that Pennsylvania, New York, Rhode Island, Massachusetts, and Maine set up during and after World War II.

95. Again with the qualification that in deindustrializing states lacking the strong union movement seen in Massachusetts, the business drive for retrenchment might secure significant cutbacks.

96. One reason that the original, mid-1940s proposal for a Massachusetts Department of Commerce fell through is that the structural weakness of commonwealth manufacturing seemed theoretical in the midst of the postwar economic boom then under way. By the early 1950s, widespread plant closures gave the issue compelling immediacy.

97. See, for example, Skowronek, Stephen, Building a New American State: The Expansion of National Administrative Capacities, 1877–1920 (New York, 1982)CrossRefGoogle Scholar.

98. Ferguson, Ronald F. and Ladd, Helen F., “Massachusetts” chapters, in Fosler, R. Scott, ed., The New Economic Role of American States: Strategies in a Competitive World Economy (New York, 1988), especially 41, 44–45, 77Google Scholar.

99. “Sell Massachusetts,” 26 August 1980 Boston Globe clipping, in “New England Economy” folder, in the on-site archives of what was at the time the Bank of Boston, Boston.