Nevada: An Emerging Warehouse Center for the Far Western States

Abstract

Glen D. Weaver· Mackay School of Mines University of Nevada NEVADA: An Emerging Warehouse Center for the Far Western States As a recent newcomer to the State of Nevada and having just -t\ traveled by highway from Wisconsin to Reno, I promptly dashed off a letter to a geography colleague in the humid Midwest extolling the productive and scenic virtues of those lands through which I had passed. But in commenting on the last leg of the trip, that along U. S. 40 from the Utah-Nevada border to Reno, I distinctly recall saying that the best Nevada seemed to offer was to supplant grass with slot machines, trees with roulette wheels, and towns with empty beer cans. My short residence in Nevada has afforded ample reason to recant these frivolous observations. Contributing to this change in viewpoint has been an increasing appreciation of Nevada's favorable spatial relationships with neighboring areas, and particularly the extent to which the state has capitalized on this resource through promotion of certain legislative laws. At this point I hasten to emphasize that Nevada's spatial relationship with the orographic barrier of the Sierras is not one of the favorable ones I have in mind, nor has the legislative body at Carson City been able to promote a law requiring Pacific air masses to rain on the leeward rather than windward side of the mountains. But Carson City lawmakers have certainly been successful in inducing clouds of Californians to ascend the Sierra barrier into the Great ß Currently a National Science Foundation Science Faculty Fellow at The Johns Hopkins University. 17 18ASSOCIATION OF PACIFIC COAST GEOGRAPHERS Basin where they, along with their brethren from elsewhere in the nation, annually precipitate a very substantial amount of wealth in Nevada's gaming rooms, casinos, and associated establishments. Gaming and other tourist-oriented industries overwhelmingly dominate Nevada's present economy. The estimated 22 million visitors in 1964, a number representing over 44 times the local resident population, spent about $632 million and provided direct employment for perhaps 23 percent of the state's active labor force.1 Spatial proximity to the great population nodes of neighboring California is undoubtedly the most important single factor explaining such a huge transient trade. Rather than focusing attention on this wellknown aspect, however, this paper is devoted to a discussion of Nevada 's freeport law, its impact on growth of warehousing in the state, and Nevada's geographical vantages which will determine continued existence and future expansion of this emerging industry. Freeport Status Nevada's freeport law is a legislative "fringe benefit" for warehousing businessmen whereby interstate-commerce merchandise is exempt from personal property taxation.2 Currently no less than 27 other states have some form of freeport legislation designed to encourage location of new businesses within their jurisdictions; only California among the seven Western states has failed to adopt a freeport law (Figure l).s Although one of the first to formulate such legislation, Nevada is clearly not unique in terms of this aspect of its industrial tax climate. However, it must not be assumed that competitive equality exists among all states extending taxation priv1 State of Nevada Newsletter (Carson City, Nevada: Department of Economic Development, Spring 1965); Albin J. DaM, Nevada's Economic Resources (Bureau of Business and Economic Research, University of Nevada, Research Report No. 3, 1964). A recent newspaper release indicates that gambling and tourism may account directly and indirectly for more than half of Nevada's total economic activity, including employment. ' Freeport is a general term applied to legislative measures taken by various states to exempt goods over and above the dictum of the U.S. Supreme Court in the Coe vs. Errol Case (1886, 116 U. S. 517, 6S. Ct. 475), which declared interstate-commerce merchandise should be exempt from taxation until such goods "come to rest for a substantial period of time and the delay is not unavoidable or from natural causes." ' New York, Pennsylvania, Delaware, and Hawaii are not properly considered freeport states, since taxation exemptions apply equally well to intrastate merchandise. Figure 1 was compiled from data given by Frank K. Stuart, Utah Freeport for Western Distribution (Bureau of Economic and Business Research...