While Waiting for Rain

Front matter

While Waiting for Rain

Community, Economy, and Law in a Time of Change

John Henry Schlegel

Contents

Preface ix Introduction 1

PART I Law and Economic Change in America 9 Before 1865: An Archipelago of Island Agricultural/Trading Economies 11 The Eighteen Seventies and Eighties: Competition and Its Avoidance 16 The Eighteen Nineties and Teens: Trying to Tame Competition in the Real Economy 24 The Twenties and Thirties: An Associationist Ideal 34 The Forties and Fifties: Associationalism at Work 41 The Sixties and Seventies: A Troubled Economy 53 The Eighties and Nineties: Trying to Build an Economy 63 The Twenty-First Century: And Then It All Collapsed 75 Understanding Economic Change 87

PART II Community and Economic Change in America: Buffalo, Queen City of the Great Lakes 95 Buffalo’s Geographic Setting 96 The Local Geography 98 Buffalo’s Community Structure 101 Before 1865: A Small, but Growing Place on the Niagara Frontier 105 The Eighteen Seventies and Eighties: No Longer a Small Town 108 The Eighteen Nineties and Teens: A Big City 115 The Twenties and Thirties: Moving Ahead While Lagging Behind 129 The Forties and Fifties: “These Precious Days” 139 The Sixties and Seventies: The Centre Did Not Hold 152 The Eighties and Nineties: Bottoming Out 158 The Twenty-First Century: Maybe, ... Hard to Tell 163 Recap: Of Buffalo’s Economic Decline 167 Understanding Economic Change in Buffalo: A Coda 181 vii viii Contents

Preface

This book has been a long time coming. I once thought that it started back in the early nineties when I tripped over a review in the Wall Street Journal of Verlyn Klinkengborg’s book, The Last Fine Time, about Polish Buffalo, New York in the fifties. Intrigued, I bought a copy. The book taught me about a world I had never experienced in almost twenty years of living here. I began to wonder how and why the physical, economic, and social devastation that I saw all around me had happened. Research followed and eventually this manuscript came together. Except that this sequence of events is just not right.

This manuscript started way earlier, in the summer of 1949 when I was seven and my parents took me to the grand, expansive, exciting “Railroad Fair” held on Chicago’s waterfront. I was knocked out by all of the steam engines and various types of freight cars on display. A few years later, my father gave me a silver dollar. He explained that on a business trip his train to New York City, the Twentieth Century Limited, had been one minute late getting into Grand Central Station and passengers on this train always received a silver dollar for every minute the train was late, though it had never happened to him before. Right there and then I was hooked on trains. I looked forward to the times when a train blocked a road and stopped our car, or when driving along tracks a train came the other way. In either case, I watched the passing engines and freight cars for the names of the railroads emblazoned on the side, always hoping to find one from a line I had never heard of.

A few years later my family attended a Christmas party for the families of the employees of the spring company that my father worked for. It was held at the firm’s factory and included several manufacturing demonstrations. One of the company’s products was the suspension springs for railroad car trucks, the part under the car that contains the wheels. These enormous springs had to be coiled out of hot steel rod. I can still see the two men who used huge tongs to catch the heated rods as they came out of a furnace and then fed them into the coiler. But most of all I remember the man on the other side of the coiler who caught the still hot spring with tongs and threw it over his head into a tank of oil where it landed with an impressive splash and an appropriate shower of sparks. I was x Preface now also hooked on manufacturing and soon would scour the AAA guides to see if there were any factory tours in any place we were visiting. Occasionally my badgering of my parents succeeded, and we went on one of those tours.

In contrast, in the mid-fifties, maybe 1956 or 1957, the family trooped out to O'Hare Airport to meet my father, again returning from a business trip in the East. Though brand new, the place seemed tiny when compared to Chicago’s big airport, Midway Field. We could almost drive up to the terminal. At the top of the escalator, there were only two ticket counters and apparently two gates. I never became as fascinated by airplanes as I was about trains, except for the wonderful old DC-8’s whose wing tips would slowly rise as the plane gathered speed. Air travel was antiseptic. You could see trains close up; you could see manufacturing, though not quite so close. I could not get close enough to airplanes to fall in love.

Later, in 1960, I reversed the usual pattern for a college-bound student; I stayed in Chicago while my family moved away. Still, like many other kids I took the train home for Christmas. What I noticed most about this, and many following trips, was how dingy and crowded the trains were compared to those of my dreams of train travel. I spent seven years at school in Chicago, always traveling the Illinois Central to the family home. As I went back and forth, I watched passenger travel slowly get worse as first, the wonderful dining car with the white linen tablecloths and napkins and the nice china and heavy silver (surely plate) service disappeared, then the parlor car with individual swiveling seats vanished, and finally even the club car was gone.

During these years and the five when I played lawyer in Chicago, I also watched the beginning of the slow collapse of manufacturing in the Midwest and the even further decline in the fortunes of the railroads. When I got to Buffalo in the fall of 1973, I saw much evidence of the decline in manufacturing in the Northeast. I also had occasion to sample train travel again. Every other week in the spring of that academic year I went by train to visit my wife, who was finishing a degree at Yale. I left from Buffalo’s glorious 1929 railroad terminal, its enormous concourse reduced to near silence as but two of the original twenty-five tracks, one from the east and one from the west, were stillin use. The only good part of that depressing set of trips was the Oyster Bar in the basement of the Biltmore Hotel right next to Grand Central Station, a throwback from an earlier time (a tip from my father I might add). By then I should have understood that I was going to write about law and economy in the Twentieth Century. I was just too dumb to know it yet.

Preface xi

It should be reasonably obvious to anyone who has read this far that I grew up in a solid middle class American family—one of the few kids in my urban public high school who “went away” to a private school for college. From a young age it was expected that I would do so. My father, though not a college graduate, was a divisional accountant all ofhis life. And though it was said that he knew how to fix cars, I never saw him do any work that might have required getting his hands dirty, other than check the oil or change a tire, which he never did again after driving me to college the first time, as he more than once reminded me.

One grandfather, trained as a baker, worked most of his life for the postal service. He ended his career as head of the dead letter office in Chicago’s main post office because he was unwilling to stump for the Democratic Party, which was a requirement for promotion. In contrast, my other grandfather was a plumbing salesman who represented the Democratic Party as an alderman in Chicago. I doubt that the two got to know each other.

Neither grandmother ever worked outside the home. My mother, who had a bit more college education than her husband, worked for several years as the personal secretary to the president of the Benjamin Moore Paint Company. After she was married, she worked many days, but was never paid for doing so.

While by upbringing, I could be expected to be, and in fact was, interested in finance—though as was the case with all good middle-class families then, money was never discussed at the dinner table—it is important to understand that for me, manufacturing and the men who did it were an essential part of middle-class life. I never wanted to toss that hot-wound coil spring up over my head and into the oil bath and so make the sparks. That was hard, dirty, dangerous work, and I had no interest in it. But it was honest labor done by honest men.

These men were an important part of the economy; their lives and families were too. It was a triumph for the United States to make a bunch of working stiffs into members of the middle class, if only barely. Doing so stilled the fear that all of the paper pushing—of financing, of management, and of law—was not really very real. Steam engines and the boxcars full of the products of manufacturing that got put in them had a comforting tangibility. Diesels, like airliners, were incorporeal in their bloodlessness.

It did not hurt that my father was always more comfortable with the guys in the factory than with the other managers, and he made this perfectly clear to me at least as often as he told me he would never again change a tire. I, too, prefer talking with the grunts who make the work move and with the middle managers such as my father whose jobs consist of translating between the workers and xii Preface the leaders. My good friend, Tom Headrick, understood where value was to be found in organizations, though he never put it quite this way: Paint the fence; paint it very well. However, remember; it still is just a fence. Someone worked hard to put it there.

Family and class are thus among the most important values that have shaped this manuscript. Thomas Wolfe was right when he wrote, “You Can’t Go Home Again,” which is a good way of putting the historian’s deep sense of the pastness, the foreign-landness, of the past. So, I write first to explain to those who did not experience firsthand an America that I knew, and that I saw mostly disappear from the passing scene, how its economy came together and why it fell apart. Second, I write for those who, sensing that something vital in our society has been lost, are trying to bring what they call “economic development” to what were once vibrant areas dominated by steam transportation and heavy manufacturing. Both groups profess that they understand that you can’t go home again, but seem not to understand why. Hopefully, revisiting that past for insight into how economies form and are transformed will help each to advance their separate projects in present economic circumstances,

So much for my past and intentions. It is time to work for my readers.

WHILE WAITING FOR RAIN

Man lives from choice in the framework of his own making, trapped in his former achievements for generations on end.

—Fernand Braudel, Civilization and Capitalism 15th-18th Century

Economic life develops by grace of innovating; it expands by grace of import-replacing.

—Jane Jacobs, Cities and the Wealth of Nations

Introduction

On Common Misconceptions and More

N THE MIDDLE OF the no longer recent great collapse of the American | economy, Tom Toles, the wonderful Washington Post editorial cartoonist

who started his career in Buffalo, produced a cartoon occasioned by the grand reopening of the American History Museum in Washington. In the cartoon, people gather around a domed exhibit, a model of a common suburban house with mom and dad and two kids standing for a formal portrait outside the front door, their two cars in the open garage. The legend on the exhibit reads, “The Postwar Boom 1946-2007.” In the corner, a child asks her parent, “Did that really happen?”’ This is a great bit of cartooning, except for one fact. The postwar boom gave out by 1973, if not earlier. By about 1985, the American middle-class family experienced economic life significantly different from the way that their postwar forebears did.

Similar common misconceptions about our national economy abound.

1. The Fifties? economy demonstrates the unmatched ability of American manufacturers in producing quality consumer goods inexpensively.

2. The decline of the American manufacturing economy is the result of greedy unionized workers who wished to be well paid for doing little.

3. The rebirth of the American economy would be guaranteed were we simply to reduce taxes and eliminate regulations.

4, The rebirth of the American economy would be guaranteed were we to stop the financial gutting of American companies by executives, banks, hedge funds, and private equity investors.

5. The future strength of the American economy can be guaranteed by investing heavily in (fill in this blank with your favorite newness).

Many partisans of local economies similarly believe “a lot of things that just ain’t so.” Consider Buffalo. Most of the locals believe:

1. In the Fifties, the City of Buffalo had a great, sustainable economy that unfortunately went downhill when the New York State Thruway, the Saint Lawrence Seaway, the suburbs, and high labor costs sapped its vitality.

2. The Buffalo area has lost the manufacturing jobs essential to a growing economy.

3. The decline of the City of Buffalo’s downtown impeded growth in greater Buffalo because a healthy downtown is essential to any thriving community and so the recent modest revival of downtown Buffalo is evidence that growth is returning to the area.

4, The undertaking of great public works—parks, buildings, bridges, stadia— is an essential catalyst for economic growth in this or any other area.

5. The decline in the Buffalo economy that has caused young adults to leave the area must be remedied by building an economy that will motivate them to stay.

GSD

These days misconceptions are most often attacked by either scholarly apparatus or by tendentious argument. There are other possibilities. One is the essay, and this book may be best seen as a very long essay. But what kind of an essay? It is not an essay about the economic development of either the United States or Buffalo. Rather, it is simultaneously about the American economy and Buffalo’s too. To understand either, one needs to look at both. Each story illuminates the other, for it is the contrast between them that raises questions about the process of economic change and possibilities for community economic redevelopment, aided, as is always the case, by governments, and so by law. Thus, as a book that is simultaneously about community, economy, and law, it is an essay that attempts to think about what can be learned from within such disciplinary categories, but without the limits that each separately imposes on understanding.

GAD

This book is structured around two questions that have occupied Americans for thirty-five years or longer. The first is: What happened to the Fifties economy and the communities that experienced it, and why? This question is essentially historical because effective action directed toward redevelopment requires an understanding of both local economic history and that of the larger entity within which it is located.

The second is: Why have we have been unsuccessful at recreating the Fifties economy and those communities that thrived in it, despite our attempts to bring about economic redevelopment? This question is essentially a matter of political economy—a mash-up of economic, historical, legal, political, and sociological understandings of lived experience—because effective redevelopment requires an understanding of the present circumstances, both national and local, and of those economic activities that might be taken for development but are inimical to it.

The answers to these two questions are presented in five Parts of variable lengths. Each of the first two Parts present a relatively long story and accompanying commentary that attempts to answer the first question. The final three Parts attempt to answer the second question, initially by understanding how economic development takes place, and thereafter by exploring both national and local conditions since, for good or ill, most communities experience economy locally. A brief conclusion follows.

GSD

All five Parts are framed by two epigraphs. The first is from the great historian, Fernand Braudel: “Man lives from choice in the framework of his own making, trapped in his former achievements for generations on end,” which makes it clear why accurately understanding ones’ economic past is important to shaping an economic future. The second is by the great urbanist, Jane Jacobs: “Economic life develops by grace of innovating; it expands by grace of import-replacing,” which, by linking the economic concepts of innovation and import-replacement with the discordant concept of grace, clarifies that a history of growth and development is not sufficient to explain the episodic structure of economic life.