Table Of ContentFrom Cotton Belt to Sunbelt
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FROM COTTON BELT
TO SUNBELT
Federal Policy, Economic Development,
and the Transformation
of the South, 1938-1980
BRUCE J. SCHULMAN
New York Oxford
OXFORD UNIVERSITY PRESS
1991
Oxford University Press
Oxford New York Toronto
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Copyright © 1991 by Bruce J. Schulman
Published by Oxford University Press, Inc.,
200 Madison Avenue, New York, New York 10016
Oxford is a registered trademark of Oxford University Press
All rights reserved. No part of this publication may be reproduced,
stored in a retrieval system, or transmitted, in any form or by any means,
electronic, mechanical, photocopying, recording, or otherwise,
without the prior permission of Oxford University Press.
Library of Congress Cataloging-in-Publication Data
Schulman, Bruce J.
From Cotton Belt to Sunbelt : federal policy, economic development,
and the transformation of the South, 1938-1980 /
Bruce J. Schulman.
p. cm. Includes bibliographical references.
ISBN 0-19-505703-1
1. Southern States—Economic policy.
2. Southern States—Economic conditions—1918-
3. Economic assistance, Domestic—United States—Southern States.
4. Southern States—Politics and government—1865-
5. Southern States—Race relations. I. Title.
HC107.A13S38 1991 338.975'009'04—dc20 90-6836
9 8 76 5 4 3 21
Printed in the United Stales of America
on acid-free paper
For Angie Arvidson, and for Hoppa
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Preface
This study had its genesis in the coincidence of two news items in the win-
ter of 1983. A magazine article applauded the South's new high-technol-
ogy centers—research parks that received billions of dollars in defense
contracts and attracted scientists and engineers from across the nation.
Meanwhile, a friend read to me the Labor Department's latest figures on
black teenage unemployment. The appalling statistics made me wonder if
black youths had always faced such circumstances. Juxtaposed, the two sto-
ries suggested some connection between the South's sunbelt boom and the
economic distress of the unemployed teenagers, many of whose parents
had migrated from the South to the industrial North in the 1940s and
1950s.
Pursuing these questions reignited my longstanding interest in the role
of the federal government in American life. It also suggested the need for
understanding the neglected history of federal economic policy between
1940 and 1962. The transformation of the southern economy did not pro-
ceed from unguided market forces alone. My preliminary investigations
revealed that the federal government often sponsored those developments
and always channeled them. Government policy not only regulated private
economic decision-making, but also shaped the local political environ-
ments in which those decisions were taken. State action, as the British his-
torian John Brewer has noted with regard to another time and place,
formed "the hidden sinews" that animated the body politic and often
restrained the invisible hand of the market.1
What follows, then, is an analysis of the South's remarkable odyssey
from the economic catastrophe of the 1930s to the Sunbelt of the 1970s,
and of the excruciating limits of that emerging prosperity. It is also a study
of federal action—of its successes and its failures. By linking the history of
the southern people with the history of national public policy, this study
seeks to unite two issues which dominate the domestic political economy
of postwar America—the emergence of the Sunbelt and the expansion of
federal power over the nation's economic life.
viii Preface
This is not a story of "place over time"—of the South's persistent resis-
tance to national norms and the perseverance of America's traditional anti-
statism in national policy. It is rather a study of "place over people"—of
policies designed not so much to uplift poor people as to enrich poor
places. That much of the sunbelt South shivers still in the dark cold of
poverty was no oversight, but rather the consequence—sometimes inten-
tional, often unintentional—of a set of policies.
Moreover, these policies delineated a pattern of white over black, of
what some historians have termed "Herrenvolk development." The federal
government consistently adopted programs, be they aid to development,
agricultural subsidies, or military spending, which benefited white citizens
more than black citizens, which favored predominately white areas and
institutions over their black counterparts.2
Finally, From Cotton Belt to Sunbelt focuses attention on the extent and
the intensity of federal action in the United States. Historians and social
scientists have long underrated the size and power of the American state.
It is supposedly underdeveloped, like the ninety-eight-pound weakling of
the Charles Atlas ads. But, after 1945 the federal government was neither
puny nor weak. The "arm of the federal government," as William E.
Leuchtenburg (quoting Alben Barkley) has recently noted, "reached into
eveiy home and into every city and into every town in the United States."3
The study, after an introduction, begins with the year 1938, a date often
associated with the waning of the New Deal. Historians have long agreed
on the limits of New Deal reform; they have asserted that the Roosevelt
administration lacked both the will and the means to reorder the nation's
fundamental socio-economic conditions during the 1930s. And after 1938,
any commitment to domestic economic reform was overshadowed by for-
eign concerns. In President Roosevelt's own words, "Dr. New Deal" gave
way to "Dr. Win-the-War." At the same time, conservative advisers like
Henry Stimson and James F. Byrnes displaced New Dealers like Rexford
Tugwell at FDR's side.4
The early New Deal experience of the South confirmed this conven-
tional interpretation. While many New Dealers in Washington desired a
federal assault on the southern economy—a desire shared by President
Roosevelt—national policymakers were reluctant to challenge the South's
existing economic and political arrangements. New Deal programs either
made compromises with the region's elite, or, as in the case of the agri-
cultural program, were dominated and administered by southern leaders.
But zeal to reform the South, rather than dissipating, emerged in earnest
during Roosevelt's second term. It was not so much that the New Deal
withered after 1938 as that it headed south. Decrying the South's eco-
nomic backwardness and political conservatism, the Roosevelt administra-
tion launched a series of aggressive programs to reorder the southern
economy. A generation of young liberal southerners entered the national
government to preside over these policies during the Roosevelt and Tru-
man administrations.
After 1950, however, the federal government's efforts to remold the
Preface ix
southern economy appeared to flag. Even during the War on Poverty of
the 1960s, the South—still the nation's poorest region—participated only
sporadically in national welfare programs. Nonetheless, during this period,
the South's dependency on the federal government increased. The
region's ability to lure industry and research installations flowed from the
largesse of the national defense establishment. Dr. Win-the-War did not
displace Dr. New Deal in 1938, or even during World War II. But he
assuredly overshadowed his reformist colleague after 1945. Defense-
related programs played a large role in shaping southern economic devel-
opment, while the influence of the federal welfare state waned.
Changes in federal policy wrought a critical transformation in the char-
acter of southern political leadership. As Keynesian fiscal policy replaced
New Deal reform as the mainstay of national economic policy, and as the
national security state supplanted the social welfare state as the South's
principal benefactor, young southern liberals fled national service or lost
their seats in the elections of the early 1950s. Meanwhile, a group of pol-
iticians dedicated to business development came to the fore. These new
"Whigs" or "business progressives" eventually dominated the South.
Their ability to win military spending, research contracts, and highway and
airport funds proved essential both to their political success and to their
region's development.
The rise of this new leadership recalled longstanding questions about
the nature of the modern South's ruling classes. Southern historians have
long disputed the character of the region's post-Civil War elite. But for all
the debate on the character of the nineteenth-century southern elite,
scholars agree that by the beginning of this century, an alliance of planters
and low-wage industrialists maintained a firm grip on the region's eco-
nomic and political institutions. By 1933, that alliance had consolidated its
power. It seemed so impregnable that many scholars assumed that south-
ern opposition to the New Deal in the 1930s, and to desegregation in the
1950s, indicated its continuing reign. My investigation of federal policy in
the South questions that view. It suggests instead that federal policy, some-
times deliberately and often unintentionally, rent the planter-mill owner
alliance during the 1930s and 1940s and encouraged the emergence of the
new Whigs after 1950.5
The study's first two chapters investigate the economic, political, and
intellectual background of the federal government's assault on the south-
ern economy. They consider the origins of the 1938 Report on Economic
Conditions and establish the importance of raising wages to the Roosevelt
administration's program for a reformed South. The next three chapters
analyze federal intervention in the South. Chapter 3 pursues the history
of national wage and labor policy in the decade and a half after 1938 and
examines its effects on the southern workforce. Chapter 4 considers the
role of TVA, wartime, and reconversion policy in the emergence of capital-
intensive southern industry. Chapter 5 analyzes the economic and, espe-
cially, the political implications of the federal grant system.
The final section carries the study to 1980. Chapters 6 and 7 contrast
