Municipal Subsidies to Industries in Tennessee

Abstract

Tennessee, like its sister states in the South, is liberally sprinkled with towns of between 2,00ooo and Io,ooo inhabitants, and nearly all are actively seeking factories. Hitherto, their business had been chiefly derived from the surrounding rural territory, but in the 192o's came an expansion of employment opportunities in large cities, a decline in rural buying power, and a growing tendency of rural people to drive over good highways to larger and more satisfactory trade centers. All of these struck heavy blows at the small town economy. Something seemed urgently needed to slow down the centrifugal attraction of large urban centers. The smaller towns in Tennessee are commonly county seats, built around a courthouse square. The buildings that line the square provide the most desirable business locations in town, and the owners and occupants of these properties are extremely sensitive to fluctuations in community prosperity. The natural compactness of the business district, and the attendant concentration of benefits from upturns in general business, tend to make quite active promoters out of the local merchants and businessmen. To these people, a decade or so ago, factory employment and pay rolls began to appeal with a new intensity as the most direct way out of business stagnation. Industrial promotion became the small town shibboleth; thousands of dollars were raised by private subscription and poured into development companies which built factory buildings for the casual occupancy of any operator that could be induced to come in. Later, although the economic depression cut sharply into the business capital available for