The Industrial Bureau, a New Aid for Commercial Development Citation Askenasy, Alexander (1917) The Industrial Bureau, a New Aid for Commercial Development. Bachelor's thesis, California Institute of Technology. doi:10.7907/recd-mx17. https://resolver.caltech.edu/CaltechTHESIS:07162024-152547789 Abstract No abstract. Item Type: Thesis (Bachelor's thesis) Subject Keywords: (Engineering and Economics) Degree Grantor: California Institute of Technology Division: Engineering and Applied Science Major Option: Engineering Minor Option: Economics Thesis Availability: Public (worldwide access) Research Advisor(s): Simons, Seward C. Thesis Committee: Unknown, Unknown Defense Date: 1 January 1917 Record Number: CaltechTHESIS:07162024-152547789 Persistent URL: https://resolver.caltech.edu/CaltechTHESIS:07162024-152547789 DOI: 10.7907/recd-mx17 Default Usage Policy: No commercial reproduction, distribution, display or performance rights in this work are provided. ID Code: 16554 Collection: CaltechTHESIS Deposited By: Benjamin Perez Deposited On: 16 Jul 2024 17:45 Last Modified: 16 Jul 2024 17:45 Thesis Files PDF - Final Version See Usage Policy. 32MB Repository Staff Only: item control page

THES IS The Industrial Bureau. A New Aid for Commercial Development by Al. Askena.sy Class of Nineteen Hundred and Seventeen Department of J~ng ineerin_,g and Economics Tiil100P COLLEGE OF TECHNOLOGY Pasadena., California 191? TABLE of COlf!J:'T..tlrTS Title 1 ~ Letter 0£ Transmittal l Introduction 2 PART ONE i11JIB PROBLEM: 2 The Problem of Location from the Viewpoint of the Industry 3 8 Some Aspects of the Industrial Problem from the City Standpoint 29 PART TWO THE I NDUSTRIAL BUREAU: A S0LUTIOli 4 Work and .Methods of an Industrial Bureau 5 Organization and Policy 0£ the Industrial Bureau 36 59 APPENDIXES I Partial List of Financial and Building Plans Ado1)ted by Cotmnercia.1 Organizations II to Forward Industrial Development 67 Tabulation of Answers to Questionnaire 83 ******************** - of LIST CHA RTS Title !!2_. 1 Distances from Los Angeles to 1ioreign Ports 2 Growth in Population of Principal Cities Page 9 of the United States 11 3 Comparative Power Rates 18 4 Comparative Water Rates 23 5 Climatic Conditions in Los Angeles 26 6 Organization of Chamber o:f Commerce 62 7 Organization of the Industrial Bureau 65 ****************** 1 G-ENTLEl:IEN : '.chis investi gatio n is o:f:f:'ered. as a thesis for the degree of :::3achelor of Science in Engineering and Lconomicse Industrial Bu.re nus a re an innovation in Chamber of Commerce work; they a re as yet in an experimental stage of a.eve lopment. It is the _pur- pose of the following pages to cliscuss and analyze tho problem of industri al de v-elo1)[:1Emt and to s hovv the pl f'. ce occupied by t he Indu s trial Jureau in it □ solutiono ~he writer takes occasion ~t this po int to express his app recia tion to Professor Seward c. Stmons, whose inva lua ble ti.dvice ~.nd assist£.nce made this work pos c5-b l e . Hc s1)ectful1y submitted, tit(4/<e.r,_c-y h;;t ,</ /1;7 2 Chap·ter I I N T ll O D U C ~ I O N An investigation into t he causes for the existence o:f oi ties leads to .,G-he conclusion t hat they are built t o function in one or all of t hree diffe rent ways, po litical, cornmercial, and i nc1ustr i al. Comnmni ties exi st i ng so lely for political r easons are :few i n number; the City of m1shington is a good example o:E this type . O:f' course a ll oities :funotion politically to some extent; they mu.st look after the interests of their i nhabitants and exercise gove rnr.aental control. One majr , however, safel y say that urban growth is due in the great majori ty of cases to the demands of commerce and industry .. Even su.mrner resorts fall in this category, for they commercialize their natural ad vant ages to as great a degree as do cities of the commercia l and industria l t~--peo With the advent of machinery and t he f act ory s;y·stem. in the nineteenth century ur ban population increas ed by leaps and bm.:i....vidsa Production, whi ch had former l y been a c - complished. i n millions of homes thr oughout the l and, was concentrated into small are as by r eason of the new ind_us trial unit , the factory s Ci ties which hatl. formerly played only t he commercia l role of distribution. , were assir,ned a :new tas1..:, that of production.. It i s a t ask which every oom.,_111u- 3 nity situated advantageously from an industrial viewpoint must perform. 1'uly shirking of' thi s work means that an un- businesslike policy i s being follmved ou.t in the :use of their natural assets. Industrial payrolls are an advantage to any city; payrolls mean peo:ple, IJeople mean demand. for goods . demand for goods means i ndustries , imlustries mean pa,yrolls and every effort should be made t o acquire them on a le gitimate basis~ In actual practice i•I; is next to impossible to se-oarate oommeroe from industry. One may theorize and make definitions as to just what constitutes industrial o:r commez-cial effort but in everyclay life they a re liru'ted. so close together that hard and fast lines can not be drawn. A city 11ossessing advantages from a distributive or c ommercial standpoint is in a majority of case s a good city for the lo-~ oat ion of industries. ~rhe oonverse is also trlie ; for a lo- cality· which pos sesses natural assets from an inclu.strial viewpoint wi ll ultimately attract the means o:f transportat ion; and commerce will r esu.lt. We may safely conclude that sound urban grmr,rth depe.nd.s l a r ge ly upon the right sort of industri- al d.evelopmentQ An industr;v-, h owever , shoul d not 'be p erm;,..aded to establish itself in a certain locality r:iere l y to 1nak:0 its payrolls an asset to that community .. The advantage s which will a ccrue to the ind.ustr;y should. be the Cl"i terion~ For 4 its locs,tion will , in th.e majority of cases , materially affect :i.-ts cost of doing business. Hence i:f factories are lo- cated in a haphazard and. m1scientific manner -the nation as a whole will pay the price because of a general increase i n the cost of p:rocltwtion~ From this we see that sound inclus- trial development is not o.nly a local bu-t also a national necessity o Germany mves her wond.e:r.f'ul industrial growth and com.meroial success to the efficient and. consoientiou.s manner in which she has dealt with this problem .. In times past ind-i:1-s'trial enterprises worked on n, comparatively la:-ege ma.:-egin of profit and. t he ec onomies of location did not seriously affe ct the balance sheet one way or ·the other. Under the stress of modern competitive busi- ness, however, the ma r gin of pro f it has d.ecreased materially so that today the f'actoI' of location has an impre ssive e:f:fect. upon the financial statements of a concern~ We are coming more and mo:re to realize that this problem requires the a1)plication of sc ientific me thod; t h 1.1t industria l development is a ecienoe in every se nse of the word. Dr. F . M~ Taylor, t he father of Scientific l,.f::magemen't, often st a ted. that there is a n'best way 11 of doing a piece of work , ·th.r,it that nb est way 1' should be found by ex11eriment and scient ific ana lyf.lis , and the work should. be a.one a ccordingl;y- . In like manner there is a nbest looat ionn for every indu stria l nnit9 The finding of t h is nbest loc at ion·,, is a s cience; it is im.po rt a nt that ·[;his science be developed.. 5 T.he aim of the Ind1.u2:trial :Su.reau should be to ix1v est i ga te and experiment with this science , e.ncl appl;-T the p:rinciples evolved. ~rhis work is of the highest import a nce to the communi tJ; ancl should not be loft to the discretion of untrained. workers. It requires the g_ittention of men who have had. both 001ru,1(:1 r c i a l and technical exparience: men who hav-e acquired. the scientific ha:bi t of thou0:h t in cleo.ling v.rith problems4 A sctence must be lmndled by ncientists. ( T".a.e organizat ion ancl vo :rk of the rna.ustr i al J3u.rean will be dism;.sse,l fu11:7 in the 'body of the text. ) '.i::he feel i ng that in0.ust ri a l dev-elopmeni; is a ne- cessity g:i.ves r ise t o keen competition between commercial organizations of different cities fo r the location of new industries. In the majority of cases the economics of lo - ca tion a re entirely lost si 2;11t of in the greeu a nd. des ire to b:-cing; a.dd.i tional payrolls to their locality.. .A communi- ty In£-ty be sucecssfv.l through 1L"'lscru.pu.lous b:i.dd.in;-'3' in loca ting a :new indu.sir:v in its mi(lst. :0he factory mHy 'thr:i.ve for a. time , but if :i.t is si tuatea. at a disaclvantage economically it will ultimately be forced to close itB doors. The city will suffer the stigma of D, failure➔ and_ s ctual financial loss .. A po licy of this kind if followed will not onl;y have a di s tistrous effect upon the specific commu.ni t;v but will also he o.et:rime:ntal to the ·welfare of the nation, for i ndustrial clevelopment has not on1Jl a local but also a national influ- ence. 6 Competition between cities for nevr industries, if based upon a scientific and honest att itude, is not only permissible hut oom.rnend.ableo Every Industrial Bureau should have at heart the development of its district ind.u.s-trially; no stone should be left unturned in a ccomplishing this end.The Bv..reau should function as the salesman of the industrial advantages of that local:i.ty .. A salesman who sells something he doesnrt possess is a swindler and a pub lic enemy; so an Industrial Bureau which at tempts to sell industrial a dvantages that do not exist may be clas sed in the Bame categoryo A policy of honesty and s ·craightforvmrd.ness can not be overemphasized. Conservatism is a qu.a. li ty which ran.irn second only to honest~.r in conducting the work of a Bureau. ~~he science of industria l developmen·t i s only i n the infant stage as yet, and it will re quire many years ()f careful observation and work before it will develop -to a po int where one ma.Jr rely upo11 it with conf'iclence. Unt il that time is reached a Bureau will ,io well to adopt the nwatch your stepn policy o:f conserva- tism , --conserva,t ism not only in its upplioation of the principles of" this science , but conservat ism in the collection and public a tion of informat io n and a.a tn. The influence of sound industria l growth upon the nation has been touched. upon in some of the p:recee,ling para- graphs. The i mportance of this influence can not be overes- timated. It will be through a policy of co-operat ion rather 7 than one of antago nism that the best viork in this field will be a ccomp lis heci. . This spirit of co-operati on may be foster - ed by constant contact a nd fr i endly i.nt e:z•changes be ·tween the different Bh.reaus. l~ve r y Bureau should know what every other :Bureau is doing and how it i s a ccmnp lishing its rnrk , in er a.er ths:t it may function at its hi ghest efficiency. In conclusion: An Industrial Bureau. can a dopt no better motto than the followi ng: 11 .Better lo se The Industry, ~ehan have The Industry lose. 11 PART ONE THE PROBL EM: 8 G~'lpter 2 The Problem o:f Location :from the Viewpoint of the Industry. The success or failure of an industrial enterprise de pends to a large extent upon its selection of a location. Of course. e qui pment, organizat ion, finances, and managemen:'c a re till factors whic h will materially a ffect the ultimate profitableness of the i nvestment . is of prime importance& Good location, however, If this is neglected, or the site wrongly determined, the industry will l abor from the beginning under a t remendous disadvantage, no matter how well the plant is equipped, organized.~ fi nanced, and mana~ede While any one of the last ment i oned fa ctoi·s may be a ltered. with perhaps some , but proportiona lly small, expense; once the s ite is es tablished , a change is in the majority of cases an utter financial impossibility. It ls therefore impera- tive that a p~cospe ctive industry make its selection of local- ity only after a comprehe nsive and scientific analysis has been made of its needse It will be the purpose in the follow- ing pages to ma.ke an a nalysis of this pro1)lem, the elements of which may conveniently· be grouped Ur"1.der the following ten heads : 1. Ma rkets 2. ii/1t.1teria ls 3. Lribor 4. Power 5. Tr ansportation Facilities ~ 0::: a Q__ z ~ u...J 0:: ~ ~ U) (l_ lW -.l kJ l!) <( 2'<:( I a V) -.J ~ C) n: LL.. V) Lu l.) 2: ~ <I"} a >; 1:, '>: "' ~ '< ~ "' "'"" 10 6. ]1 inancial ]1a cili ties 7. Public Conditions and services 80 Attitude of community 9. Special Inducements 10. Climate E~ach topic will be treated in detail; Los Angeles being t aken as an example of an ind.us trial district and a n attempt being made i n a general way to give some informa tion with reference to t hat city. ( Se e Chart #1) MARKETS By far of greatest importance in considering a location for an industry is the element of nea1~ness to markets. This follows as a. nntu.ra l cons e quence from the very pur pose for vvhich factories are created. i. e., to produce a saleable pro d.net. In many case s this one element may be so preponderant that it a lone will determine the cho ice of lo~ cation. This will usually be the case ·when the fini.shed article conta ins l arge amounts of 1:ihe raw materials entering into its production. It is advantageous for an industry· to be estab- lished near to its markets , not only from a standpoint of saving in transportation char ges , but also because of the greater ease, a bility, a nd s a tisfaction with which it can handle the selling end of the business .. Proximity •will help it to keep in touch with the trend a.nd. demands o:f the 7000000 .!£. ---- -- ----- r-=7 7 I ~ ..,,.-- --- l __.-.-.--t------... - --1--- I -~ -· ---t---,~;;-,--.,.. - • / 1 ~ I -+------~ -----::::;;;,,"'"F-----~ ~ + - - -- +l- ---;,4-----k,.,..,,-i~~=:;:d:==-~ __,_, I __ w I I I ! i---1 NOTE: Doffed Lines lnd;cate F"uture Growth if the Rate o-F +he Last Decade Continu e .s ' l/-//- :, /1e n crsy I I r-- _ _ _ _ _ ---- ------- ------- ----~ ..--- '"e ~ ..,a /nl"J /ll'1 t_----" ~ DOD D 1-,na oa _4..0oco ' - ---- - - - - -- -1-----:::;;'= J - ~ - - + - - - - , t ' . . ----+--/--4---1----+-- - - - - + - - +- ~ j I z1 "'?~ I ---- _ _ _I 1' +-t I . I , ~/:J ~::~;~~~==~~~:::t,::~=::=~;z:j~==;~~~;::;~b~2_r~-=-=-i=--_-_-_-~_-_-=-~-:;t~-:=--:=-~---r--- r- 90000 i I r=-~~~;:::;::::;-==-t-------+---=':~-:~~~~?~~~r?~ -t--- r - - - r - - - - - +---1-----t-,~-.!../ , , , , -✓-l---_ 1! _ _ _ _....., I~~" .-,..: 1s:;o:; oo !__Q_9~ _Q.X 7...Q;;JQVJ '"10 : J--)(} L..;, ., ;.;.~.-- ~ - "• ,2.UC_0 ,'1/J .) ~V O O OVQ 4000N4 ,,,,~ lf'oooooo U.5. CEN5U5 1910 Logar-dhm;c Chart Showing Growth in Population of Pyinciple Cities of United ..States. CHART No. 2 ....... ~ 12 market better than ar~y other substitute such as that of a local agent; while it will also he enabled. to make deliveries with greater surety and dispatch to the satisfaction of all concerned. , especially to the customere The question of markets divides itself naturally into two branches~ local and foreign .. Local markets may be said to include those within the industrial district and those which may be reache(l by short railway hauls or motor transportation. ~he local market of an industry establishing itself i:n Los Angeles woul d incluO.e not only the city J>roper but practically all of Southern California. .. .A factory , in consideri ng the local market , will be influenced by one or all of' the following three factors: (1) Population If its proclucts are such that they command house- hold or very cormno.n usage , suc11 a.s the output of a soap factor;y· , the size of the local i ty with reference to populat ion must be seriously conside red. Not only shoul d note be taken of its present value but also o:f the possib i lities of its growth. ( See Chart :t/=2 ) (2 ) Other industries This i s a governing fa c tor in enterpri ses which have for their purpose the manufactur:tng of a p:roduot which is essential in the operation of other industries. Sinoe the majority of industrial enterprises are thus depend.il.nt. this factor has very wide application. A good example o:f 13 this type is the manu.:faeturer of brake-lining for automobiles. It will be to his advantage to looate near auto- mobile assembling plants. (3) Special oharacteristios of the district Eaoh. distriot has its speeial demands which must be eonsidered.. The producer of farming implements should not attempt to locate in a mining district but should seek an agrioultu.ral eommu.nity. Foreign markets are those which are not of a local character. San Frari.oisoo would be considere d a foreign market by a manufacturer in Los Angeles. The ohoioa of a distriot by a factory seeking foreign trade should rest upon the advantages of that loeality from the standpoint of distances and tTansportation f a cilities. (Transportation will be disouaaed in a subsequent psrt of the text.) MATERIALS / Second only in importance to proximity to markets is the facto.r of nearness to the source of the materials neoessa.ry for produ.otion. When the quantity of raw mate- rial essential in the operation is large as compared with that of the finished product, this factor must be given serious consideration. and it will in rnany cases be the determining element influenoing the selection of the site. The saving in transportation charges is quite evident. The proximity to the source of material is a.11 added advantage to the manufacturer in that he may estimate with a 14 great deal more reliance the time of shipments, and also has a strone;er ho ld upon his source. A. study of the souree of materiaJ_s niay be made under three heads, qual ity, quant ity , and emergency sources. In considering quant ity allowance mu.st be me.de :foz· the possibility o:f expansion and growth of business. Emergency sourc es i s a. verJl impo rtant detail~ for the r ·e guh1r source may give out at some time , or through unfortunat.e un.i:orseen circumstances may be made tempora.:tily or permanently unproductive~ :b'rom a very :rough consideration o:f the possibilitie s of Southern Cal i forni a in this i.-e gard the vr.riter has concluded tha t a. woolen or a oot'ton mill of considerable size could. be located there upon a profitable basis. Enor- mous deposits rich in iron ore have been found within a short distance from Los Angeles but it has been considered a s ye t unprofitable to use them because of the prohibitive aost of t r ansporting coa l from the easi; o If some !llethod we re found by which this ore could be re duced by the use of oil the iron im1.ustry would i1nmediate l y he.come a profitable venture in this loca.li t ;~,r. rhis a lso would be the ce.se if 1 the ore cle posi ts a round La.ke supe::cior became exhausted o 1ii.BOR Another fac to r v1hich demands extremely serious consideration on the ps.rt of' a prospe ctive ind.ustry is that of lab or. A satisfied, efficient, and well organized working 15 force is indispensable to an indus tria l enterprise. What a f actory desires is a sufficient quantity o:f workers o:f the ri ght quality .. In addition it would be . of potential worth t o the concern if it could have the a dvantage of a labor ma rket of great stability from which it might re plenish or a dd to its working forae. An investigation of the l s,bo r concli tions in a eerta in locality with re ferenc e to a part icular industry may be best a ccomplished along the four followi ng lines: (1) .Proximity to like industries Labor has been one of the fv.ndamental reas ons for t he localiza tion of many of our industries. Factories desiring a suppl ~r of skilled labor will fiml it in sufficient qua ntities only in districts wher.ein manufa aturing of similar na ture is being conducted . Factory operatives out o:f employment a re loath to leave the district where their work predominates. The chanc es of obtaining employ- ment are better if they rernnin. It is true that many of these workers do leave these districts and enter other lines of employment elsevd1ere ~ But any indus try which bases the pl ans of the mobilizHtion of its wor king force upon this fact will find. in the end. t hat it has made a gross mistake .. It has been re pea tedly said of southern California that it is the melting pot of all the industrial distric-'G s in the east; and t hat a n a a.vertisement in the pape r or any 16 othe r like means could be made ins trumenta l i.n obtaining a \VOrking force in almost any indus"tr y ., but it is hi ghly improbable. That may be poss i- It will be found. that even though this gre at variety of workers does exist that they have found. s a tisfactory employinent in other line s from which it will be hara. ,. if at a ll 1)ossi·b 1e, to induce ·them to lea ve o The onl :v means by which an industry hnvi11g such a re quirement could locate i n this -vici nity is t h.rough i mporta tion of its worki ng f orc es. Lab or organizat ions are n great help in a ccomp lishing this re sult. A good exam:ple of what can be done along this line is t he :i:orrance ·window Glt:iss Co. This concern "brought a l l of i ts glas s b lowers from the glass district s of Indiana and Ohio. 11he disadvunt age to a n i ndus try loca ting i n a non- specialized. loca lity consists no t only o:f the difficulty of obtaining the labor in the f'irs-t pl ace, but also in t he f a ct that the opera tives, once obtainecl , have the factory a t their me rc y , for a short time a t least. 'I'his problem de- mands extremely se rious considerat ion on the part of a prospective industry~ ( 2 ) Excess ls:bor Some i ndust ries :re qui r e a large number of women operr.-ttives. such c once r ns wi ll find tha t the y can loca te a dva ntage au.s l y in a locality whe rei n a gr eat many men are employed ina_ustria.ll y q Th ey will be ab le to mobilize a large number of women from tho worldng men 1 s families on 17 very good. terms., These people will consider it a great boon to be able to thus increase their incomeo (3) Open or closed shop Union labor organiza tions vitally affect the re- lations of employer to employee; and in the majori ty of cases a re the cause of a hi gher rate of wage being pai d. per unit of labo r. Industries n s a rule pre:fer a 11on-ru1ion working force. .An inveBtigat ion of th is factor does not onl;y- entail a Btud.~r of the ex isting l a bor organization for that particular industry but a ls o the atti.tude of the community on this question. (It is not withln the province of this work to discuss the ethic n or the pro and cons of Union Lab or Organization. ) (4) Wage s Wages mate ria lly affect the c ost of 1n:·oduction , so tha t it is of prime importance that a pr ospective industry have as complete informat ion with reference to wage co nditions a s pos s ible. The co ot of living plays an impor- tant r ole in this ques tion . ,:~ S a rule low wages will pre- Ya il in a communi ty fav orecl with a low cost of living • .POWER i'he cost of power is of vital concern to a n in- dustrial ente r pri se s And because of the great variance of this cb.arge in different localities, close and ca reful att ention shou1d be given this factor. To many industries, in v1hich power cost is a 11:1.rge percentage of the cost of I ! . . . ~.!--~~-~-i - - _ : ~1 ·:--~d(l/2?'~ ~/4: --- : --1--- lI -·-1·-: -_ _:·We~k'nJt .L I . : -,: I ! t·--·7:-·-+: : . . : c:-.4l L · : .~· _ , : ·· I ' . . :i~ .! . I ,-~:7 ·: i . .- : i •• -- t ~ ,- I ---F+ .f-U,r~~1 , I ; I l - •· J ! - 1- --~ : - : I ·:__ I ~~1cbJ .- 1· : 1 . • • :! • I - , 1---4---'- :ffl. ;;-: J :·:-- ,. _ ··1 I ~i---·::-- 1 --,r r . , :. '-:.1°:__,Cbie4~.a __ :.1 - I i~ I I ,_; ___f j__+ - ±-r-t---l l ___ : L -: ;,-: ::: I .1,.., • 1 :: ,~--r4'.L : -: , I _- I -- - ~..:-- --7 •1_,__ I : - I I EE'.-- +--~! - :___i--*1I ---j -- I · ; - -i:---i1~ ;- ----L-JI_ -; : I 11.:·_r_ :____ l _____i_ _____L___ l_i.._.::.,_ _ _ :.__ : -- - .__ .:;_ __ , - . !' • :I:' - I- .-;_~ -;-f' ' ' :, •+---m~ :_- t___J__ ,. , • ·, -1 : ',', -1----. ---::r .- _·7 __: __ :..:_L~_: ~:.'.!._:..:_ ·_'._J:h.iL ·:·_-_ :..:.r._c,.:...L.:..:..:.i~c.i...:..:.___:__J__;_r.:,111.., 18 production , power will be the governing factor in the choice of location. Most of the factories have been es- tablished in Niagara Falls because of the cheap _ power avail- able. A prospective industry should investigate and acquire all the information possibl e as to price of water power, electricity, oil, gas , wood . and coal. (See Chart #3 ) TRANS.P0RTATI0U FAGILITIEf:3 The transportation :facilities of a district must be investigated with a great deal of care. They play an extremely impo rtant role in the conduct of any enterprise . This subject lends itself to the following divisi on: (1) Water Without a doubt . water transportation is by f a r the cheapest. The most extensive use should be made of it whe never ava ilable. Los Angeles, re a lizing the value of this mode of transit for coa stwise and the Atlantic seaboard trade and its absolute necessity for forei gn trade , has since 1910, voted $5,500 , 000 for harbor improvement, - and is pledged to expend a total of $10 , 000,000 for such work before 1920 ~ This is loca ted within twenty miles of the business section . rt is entirely within the municipal boundary , the so-ca lled tTshoe-string 11 strip forming the connecting l ink. This harbor is of the most illOdern design . protected from the open sea by a brealrwf:1 ·ter built at a cost of $3,100 ,000 by the United states Government; it is deep enough to a ccomodate the largest of ships; it is amply 19 supplied vti t h wharves and docks; and has an abunda nce of level l and surrounding it which may be used. for the location of wa rehous e s , industries and rail ·terminals o The Ci ty of Los Angeles 'believes in munieipal control and development of its porte It proposes to make its f acilities the best possible , and to lower the eost of handling traffic to a minimum, so as to encourage commerce and indus.try. CCo a ccomplish this end. it has acquir ed the O\T~ership of a laTge portion of the water £rontage , which it has been , and is developing with all modern port conveniences and necessities. Ono o~ t he outstanding and commend- able fe a tures is the union te rminal facilities whi ch have been provided by a rra nge me nt w· i t h the Pa,cific Bleciiric Rail- way Coo by which the Company has oontracted -to do a l l the terminal v;ork :for a very reaso.uable cha r ge ~ Los Angeles is t he fi r st port no r th of the Panama canal having av.equate inland r a il f a cilit ies , thus malting it the logica l port o:f call for a great number of vessels plying this route. The Bu.ropean war has had a very depress- ing effec·t upon the commerce of ·this port, bees.use of the great demand for ton..viage on the Atla ntic. However , after conditions are readjusted and commerce ag"B.ill resumes its norm.a l volume on the .eaoif"ic. the Port of Los Angeles will oo-me into its own. (2 ) Transcontinental railroads Los Angeles is the terminal of three trunk lines: 20 the San•iia ] 0, the Southern Pacific, ana. the Salt Lake 1 roads. Thus , it affords ample facil i t i es f'or long distance The grades prevalent between the East rai l transportations and the we st are by far the l owest on the Los Angeles route s , thus a l lowing a more economical operation of frei ght trains o Plans are now be i ng seriously consia.ered for the format ion of a Union Terminal by segregating the terminals of all the roads along the Los Ange les River 0 thereby re- lieving the city of' a l e. r ge number of grade crossings , per- mitt i ng more efficient operation of terminal traffic, and I)roviding for the entry of futu.re rail:roads q A :prospective industry should consider 'the ~idvan-tages of a Union Terminal seriously. (3 ) Local rail transportation Los Angeles , in the Pacific Electric , is blessed with one of the best , most efficientl Jr opernted , and l a r geot inter - urban systems in the country e a system are many o :i:he advantages of such Not only d.oes it serve as an agent for the carrying of freight , but it also helps -to unify the dis - trict and promote commerce in the ctty . (4 ) Highways Motor vehicle transportat ion is coming to be used. more nnd more extensively every year by industries. Los Angeles has perhaps more advantages to offer along this line than any other localit;y- in the countryo There are over five hu.nd.red miles of paved county highway in Los J; n geles County 21 alone. This exc epts the cit y streets and t he state high- way s~tsteme Adjacent count i es a r e s i mi l a rly vrnll provided.. On -the whole one ID.f t ~? s ay that Los Angelos is very well situated f.rotl the standpoint of industrial t1"a l1spor- ts.tion. FI.tlAlfCIAL FACILITI BS This topic demands consideration. under t he f o l- lowing two hee.d.s: (1) Facility of promotion This factor is of ve 1-y material importance to many industries in a stage of financial organiza tion and a lso to old on.es which are plan..Yl.ing to expande The finan- cial ability of a locality to do this work is extreme l y hard to deJcermine from a general survey .. However , the a-tti tude and policy o:l: the local oomrne:eoia l ban...1rn and the general trend of investments may be used as a fair criterion. An investment department operated by the Industrial Bure au , could be made a great help not onl~y i n. the fu r-. nishing of inform,s.tion of a financial character but a l so in the obtaining of funds o ( The Investment Bt1.reau will be discussed fully later in the text.} ( 2) Bariking facilities Banking fac ilitie s may be sa i d to be acle qu.e.te if they a re able to serve in the efficient h8ndling of t he pay - :r.olls and if they can satisfy the needs of business loans 22 which will a rise. A careful analys is of the stat is t ic s pertaining to the transa ctions of "tihe ban..'lts v.rill be of inestima ble he l p in de te rmi n i ng ~.;he a de quac y of' the banldng facilities~ PUBL I C CO lTI) ITI ONS Atm SERVIC};. s These conditions have a very direct bearing upon the cost of doing business and should ·be studi ed thoroughly .. They are divided for the pur pose of ana lysis as follows : (l) Tax rate In investigating tax r ates the ba sis of assessment should be kept in mind and t aken i nt o a ccount when comparing the r at es of t wo or more districts. The ta:.'{ rate in the city of Los Angeles f or 1916 was $1.45 on an assessin the County the rate for the same ye ar was \tl. 47 on the same basis of assessment. There ar e a number of industria l district s in the vicinity of Los Angeles, some of them on the outskirts of the city , offering practica lly a ll the a dvant ages of the city , combined with a much lower tax r at e . (2 ) Fire protection This f actor is extremely i mportant, for i.nsurance r a tes vary inverse l y vli th the de e ree of f ire protection afforded. (3 ) Character of goverrunent The :fa ct ths.t a municipality en joys good or ba d goverruner.rb also has a bearing upon the industry o The we lfa re, \ ,_ 7 ·j I I ----· - -- ~ . ·- r ... ~-• : .:-1 -. i · · ·-1 · .;- •• rC~T .;_sL\ __; 0 - --r - - - l__ i _ _ • __ 1_ __ :-- I • ' ' • • I ' •• t • ; 1 • • i ' • · I I ·- l ;7 i • 1 • ' ' J -\--\ ,_- \ • I • 1 ' . , , • • i 1 , 7 • C ' . I : . i I ; : l • :~~c I I : : T \ 7- t:-r ; i :.; i '-• ' I : I ~ , I I : I t , j i T I I ~-~t-_ : i ' . I ' ' • • ' ,- tr: • • I - T ··. • . j . I •! . t :T •., I 1:~:~:-~~-~:t~rj ! I 1 ,. •• ;-:. 1, "! . Jr ___l__: I • , ·1 ' • ·· 1 ·· '····' ,- I t··,-·- -:---.·-:-+--~-: ~ • ! ;1 ---·- --~ __ _ . __ 1 7 .. j ' •·~1.l~ul.:r:H □ -J¥4cL 1 I T. :_---- -~- - :--·--- ·t - -·!-t---;____ : . J - --r -·- , - : - / - ! 1 1 1 BoA'Rb ·"': or Atet:1'c ·tlr1t1r1E..s: REPORT·, PAR r • - /.-916 ' __ i~ --- ~__ _• _; _____ 1___~ _ __Co.n-1i,.,1J.e. a L_fu-.hri'1_th.e. .Los.An.-?.e/es ..--+ - - --- _; __ _:. _ _ 1'- --~-- --: .:..__ _ I ~· ~..L.Lf: ✓- ,. •• • ' : T •. ~~ -.. . : ; :.~ i· -1·: --'.··- !. •• :,;:\ ..·; 1i i \·, · -+--,--{_cQMBjt.iAllV1.lI.-WAT£&_BA?:£0 ____ -+- ----------:-- -- - - --'..;..~---:_L __~ __ ....:;; ,:·- 1-- - - · : -~:. ;_ i j____:_:------: .. :___ i_j_: __ ) __ __ ! :_: - : i ·- · : · - •: ·-·, : • ; -::l :-~-i . -'·' · ·-- -- ,- - §:;;/F;~~-~4--1 i · l' : :l , I' · I : ' - o.;.,,;;;,;;::, -T-- I i . i ,1 , ! ! ! ! - ~~ I i ! : I ! .I-· - - T ., _:a o.s±on_+ --, ' ! ·.,· 24 recreation, healthfulness and education of its employees depend. to a. l arge extent upon the administration of the city. (4) water service As some indu.stries require water answering certain specifications , it is evident that qual i ty ana. quantity a s we ll as price must be considered wi th refeJ::•ence to water se rvice. ( See Chart /fa4) (5) Sewerage Thi s faotor plays a n important role not only i n the sanitation of a pl ant but a lso in the disposal of many wastes. To some industries adequat e se-werage provisions will be an absolute necessity o (6) Advertising value Many districts cont;ain objec·bs of wide interest , which serve to attract a great many tourists. They serve to advertise the industries loca ted. near them. Niagar a ]N:1lls is a g ooa. example of this type of locality. AT TI '.lUD:r; OJ? THB COMliUHn~Y It would be v ery unwise 1.1.1)on the part of an industr y to attempt a loc a ti on in a communit y v:here there i s a genera l sentiment , although no prohi bitive l aw , against such an a ction . Thus tho loca tion of a brewery or viinery in a community Yvherein the r , cl r y 11 olemen't is strong- a nd :prom- ises greater strength in the future, even t h ough le gally 25 possible , would be an extremely poor policy to follow. such a cona.i tion will very r a re l ;y occur; but when it does, it should be given very s erious cons ideration . The co - oper- a tion of the community is essential -to t :he well- being of t he industry. SPE CI.AL Ilf.DUCBII E.tifTS Sometimes cities , in their desire to a dd. to the number of smokestacks . o:ffei· ve r :y· lucrative inducements -to industries seeking locations. (Lo s Angeles , however, does not make a _p ractice of doing this. ) These may take the form of: ( 1) 1i1roe o:r very cheap l r. ncl, (2 ) Free or partly free buildings, (3) Exemption from taxes f or a certain time , ( 4) Czi sh b onus . ( 5) Su.b sc1•iption to -the st ock of the corporat ion , (6) Pree services for a given period. and (7 } l,Ioving expenses , if the i nd.ust:r;y is alre a a.y estab lished in another locality. It is well for a f actory to consider these offe r s; but they should assume onl y second.ary consider a tion in making the choice of' loca tion. j_:;conomic a clvantn ge s should. a lwa~vs be conside rea. first. (J\Io:re will be said of these pract ices l a ter in the text.) CLHJ£ATE Climat ic cond.i tions a r e of g re n.t importance to a 26 CHART No. 5 CLIMATIC CONDITIONS IN LOS ANGELES NOTE: These reprints are used with the kind permission of the local office of the u. s. Weather Bureau. MEAN TEMPERATURE Deg 80 __ ....... '"•-- 70 /:.:: 60 ~ 50 r' ............... ~---""" ? ~ r-.....___ ,,, ~ ' ~, . ..... -~ ~ 40 32 J an Feb Mm· Ap r May Jun J ul Aug Sep Oct N ov Dec Con tinuous line indicates the mean month ly temperature in degrees Fahr. for 1916; broken line, n01 m a.I. EXrREMES OF TEMPERATURE Deg 10 J 70 60 50 1---,;..-.::::::+--+---+---,q::--+----J--+..,._~::..+"'--.l----l 40t::: _ -+.,l.4--l--l-----+--1--1------+-+---l-~~ 32 1----J~-"--'---'-----'---'---'--..J.---'--..___, J an Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec In their order the Jines in the chart represent the high C'st; mean month ly maximum; mean monthly m in imum, and the lov..,est temperature fo r each month. SUNSHINE Pe r cent 100 -- 90 80 ,~ .............. ··i·· ~~-r--:-><~ - 70 ............. ........ .......... __ __ ....... ····i \ I/ 60 50 40 . -V I "' I ' 30 20 10 0 Jan Feb M2r Apr May ,Jun Jul Aug Sep Oct Nov Vee PERCENTAGE OF POSSIBLE SUNSH I NE. - Continuous li ne indicates monthly st1nsh ine f or 1916; broken li ne, normal. Reprints from tlic platL'S of tli c Annual ivlctcorologic.:al Sum1uary , 19 16, for Los Angch-s. C'a l. , Ford A. Carpenter , J\IdPorologist, U. S. \\' rath er B ureau Inches 14 .0 PRECIPITATION 12.0 10.0 8.0 6.0 4.0 ~ fS: ~ R G::18: ~ 2.0 ~ ~-~ [§ 0 Jan Feb Mar - l"' Apr May Jun Jul Aug ~~ ~ ~Ul ~ Sep Oct Nov Dec Heights of columns indicate total monthly precipitation, in inches; solid columns precipitation for 1916; shaded columns. normal for 39 years. WEATHER Days 30 25 20 ~ ~ lt 10 ,_ - '. ·, '- "f::< :::: t-.. ::: "I ~ 'I::: ~ R< I ' I - .._, ;:::I ::: :::: 0 :::: Jan Feb Mar Apr ~ '~ ' t-.. rs i::: ~ ' " ' ~ , I :::'- Jun Jul Aug '- I May ' i:::: ~ ~ Sep ~ f...., ~ 't:: Oct Nov Dec Open columns indicate monthly number of clear day!'.; shaded columns, partly cloudy days, and black columns cloudy days for 1916. Per cent RELATIVE HUMIDITY 100 ,, 80 90 -.......... / 70 ~ 60 50 "\,\" "- .. __ ........... I -~ // ---'-- -.1 \ a -r;::,........... - i-:::..., -~---.. -- \ ___ '\. \ ,__ •.............. 1.-. . , ......... ............. \""-~ ', ____ ... l7 \ ,,:.,, \,1.,,... 40 30 20 10 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec In their order the lines in the chart represent the relative humidity in percentage of saturation; the 6 a. m. the 5 p. m., and 12 noon observation~. Reprints from the plate::; of the Annual Meteorological Summary, 1Hl6, for Los Angeles, Cal., Ford A. Carpenter, l\Ieteorologist, U. S. ·weather Bureau. 27 few industries and of general impo rt ance to all . They may be discussed. under the fo l lowing heads : (1) Effect on the efficiency of employees I t is a universally acknowledged fact that people will work better under certain cli matic cond.itionso How- ever, thi s is not a -v-er:v· influential factor , a lthough desir- ab le. ( 2 ) Lffect of humi dity nnd -tempera ture u_pon the processes Some industries require certain hmnidi ty and tempera tu.re comli tions to be present a.ur ing some or all of their processes. ~'hey a ctually emplo~r mechanical means to obtain these conditions. If i-t were poss i b le t;o find a lo - cali•ty wherein nLture accomp lished these functions, for a·t least a good part of the time . a great saving would result~ (3 ) saving in f irst cost If a climate is temperate and remains so -throughout the year, a great saving will result from th.e constru.ction of less substantial buildings and from the omission of unnecessary heat ing appliances. (4 ) saving in operation L grei:it savin?;: in ope:ration will ba accomplishect i f the su.n can. be :r·elied. u.-oon to furnish heat and light a good pa:r·t of' the ye a r o Los Angeles is blessed with a wonderful climate .. The two extremes of heat and. cold are relatively unknown 28 to this part of -the country. Los An ge les n climate One rrw.y safe l y say tlmt in he l})S i:ndustri,r most . 1' CONCLUSION In a ctual practice it is pract ic o.11:v impossible f'or industries to find all of these factors nt their best in one locality·. If -t hey wish to lie ne2.r to thei r eource of material they· may find. themselves far :from the i r 1na r- kets o:r vice versa. involved.. The prob lem is very complicated and It demands the attent ion of experts, men who are able to deal with it as i t should be dealt with , scientif·ica l ly. Information should be conscientiously collected with reference to each element 0 J', ·balance sheet should then be constructed for each prospective locality with it s ad:vantages listed as assets and. its srwr-tcomings a s J.iabili ties 0 The statements so ob -'cainea. should. be stud ied with the same cnre that actual financial state r::ients of business concerns are a ccorded vrhen ·the inve::rtment of money is being considered. The ac curate and. scientific manne r in which such an i nve st i ga-!:;ion should be cond.ucted can n o·b be overemphasized.. The loca lity possessing the balance Bheet which shows up best under this close scrutiny. should. be selected fqr the establif.:Jhment of the inJ.ustry i n question. 29 Chapter 3 Some Aspects of the Industrial Problem from the City standpoint A city neglecting to develop and capitalize its industrial advantages is conducting itself in the same manner as the man who keeps his money at home or in a. sa:fedeposi t vault; not only does the rn...Etn lose the returns which his money might earn if placed upon the market, but the community at large is rnacle to suffer with him because o:f higher interest rates . So a lso is the case of the city; for not only does the eommuni ty lose ·the advantages which would accrue f1.•om the development of its industrial poten- tialities , such as increased payrolls, i ncrea sed local commerce. che ape r transportation, etc., but the entire nation is force cl to pay a higher price for its comrnoa.i ties because of this shortsighted policy and l a ck of development. The industrial problem is aa vital to a city as that of location is to a n industry. As wa s ind.icated in Chapter One, the very existence of an urban community is due il1 a l arge me2.sure to t he industrial activity within its boundari es. The necessity of basing this activity upon sound economic princiJ)les can not be overestimat ed and should a l ways be borne in mind. But u si d.e from this, there are a nuniber o:f p roblems pertaining to its industrial growth v1hich every comrm.J.ni ty ',N ill be ca lled upon at some time or otner to s olve . It will be the pur pose of this chapter to 30 discuss in a very general way a few o:f the most important questions which may arise. LOOALIZAi1ION OJP HmUSTRIES Due to the many advantnges which some districts are able to offer to cer·tain industries, there has been a tendeney on the part o f the favored iniustries to establish themselves in those localities to the exclusion of all other manufacturing enterprises. Pittsburgh is a notable example of a. city whiah has been affected by this tena.ency. Its principal and practically only output until very rec-ently has been steel productse .Many other communities throughout the country are similarly a.ff'ectedo This phenomenon is a natural one and is economical l y sound. The great danger of allowing industrial development of this chara cter to occur lies in the fact that it places the very life of the community at the mercy of one industry. Should t hat industry experience a decline or a slump over a certain period the prosperity of practically the entire community vrnuld. be similarly a ffected. Localizat ion of inclustri es v; ill a.lso have the secondary effect of stunting inclustrial growt h in other field.s for which that loc a lity is sui ted. There will be a tendency on the part of the peopl e to think that the tlovelopme r1t of their district is pro gressing normally and no effort will be !!lade to attract and. build up other manufacturing interests. 31 A city should consider this problem wi·th great care, for it is of tremendous importance. Its solution will be accomplished only by a aonst:ruotivo p olicy for a.e - veloping all the industrial resources of -that ::iistrict to thoir fulles-t; possible extent. HOUS I HG Perhaps the most i mportant civic l)l"ob l em brought about by industrial growth is that of housing the working peo:p l eo German cities. t hrough their woncle :r•ful civic unity i:?.nd muni cipal ownership of h~.nc1, have mado great strities in the satisfe.ctory solution of thir; d.ifficu.1 ty. American citie s, however, are far behincl their s is te rs in Germany in the pro gram for aclequate housing facilities. The inf'lux of factory workers into a city causes an increase in the value of la.ml totally out of pro portion to the incre ase in population. '.J:.1his high _p :i:·ice of land g ives rise to congestion and unsanitary living conditions; land is overorowded with buildings, whi ch shut out light and a ir; anc1 in some cases as many as fourteen or sixteen pe ople a re crowded together, trying to live in three or four rooms. This problem should command the best thought and effort that a city can muster, for if conditions of this character are a l lmved to prevai l, 11ot only will the eornrnun i ty stt:ffer from disease epidemics, &rnl misfortunes of' like .nature , but the very virility of the nation wi ll be att~:rnked. 32 LABOR DI]~, ICULTIES one of the by-products of our modern factory system has been the ever-occuring rniav..nderstandings between the employer and employee. These differences, through acts of violence, have at times threatened the very social foun-• dations of a oity, its law and order. Thorough co-operation couple<-i with a. stern determination on the part of all the citizens is neoessary to deal with this difficulty. I:f this problem is not handled in the right mann-er, it may mean the failure of that locality industrially. CITY PLAN once thought of as a luxury, a city plan is now conceded~ bj· a majority of right-thin.,'tring people, to be an absolute necessity. A comprehensive plan should rnake pro- vision for the abolition of grade crossings as far as possible; for ample transportation facilities; for parks, playgrounds, and various other i toms concerned vd th the layout of the city and the welfare of the people. City planning has been one of the f a ctors which has made the German city so efficient industrially, f oi"" it has a direct bea ring on pract ically every inclustry located within the district. SMOKE l'JUISA1WB Chicago and a number of other large industrial centers in the East are experiencing great difficulty in dealing with the smoke nuisanae. In a report published 33 in 1915 by the Con.uni ttee of Investigation on Smoke Abatement appointed. by t he Chicago Association of Commerce. the following statement is made:' 1 The industrial activity of all important cities has brought about an increase in coal consumption which is greater than the increase in populat ion. Smoke formation and the consequent pollution of the atmosphere by smoke have in recent years tended to i11c.rease and have done so, except so :far as the adoption of various measures in smoke prevention have proved ef:feotive.--- 11 Another interesting point brought out in the same investigation was the fact that the steam roads caused. approxirna:tely 23'.li of the smoke in the cH;y of Chioa.go. The city layout should be pl anned so that the prevailing winds will not carry the smoke. caused in the industrial section, over the residential and business portion of the city. The ultimate solution of this problem lies in the electrification of the railroads and in ordinanc~es regulating the time and duration o:f firing in the factories. EFFECT ON TRAUSPOHTATIOH The advent of industries in a community will affect materially the transportation within the city. The increase in the number of workers will cause congest ion in the morning and evening hours whe n they travel to and from their work. ~i'his is a serious difficulty which 1:iractically 34 every large city has to face. There is, ill addition, an ef:fect of a di:t'ferent character upon the c ity's transportation. The coming of industries inevitab l y gives new importance to the provision :for more :frequent, rapid, and inexpensive freight service~ The extension of such facilities has, of oourse, a very beneficial influence up o.n the already established ·busines.s activities of the city, a..s well as giv ing the business men the quicke r passenger service which is often so imp.or'tant . BDUCATIOU It is safe to say that extensive industrial development will inevitably be aceompaniecl by an influx of a low class of citizens into a city. measures are possible. No preventive It is, however , the duty of the city to improve their mental capacity and make better citizens of these people after t hey have become part o:f the community. To that end schools should be established to teach foreign- CONCLUSIOU 13ig indv.s·tries will bring with them 11 big men 11 who are indispensable to the civic life of a comrrn:mi ty. 1ien like Patterson, of the National Cash Register Co. and Eehwab of the Bethlehem Steel Coot are a tremendous asset to a cii;y-. They have vision; they have the capa city to initiate and undertake civic improvements on a large scale. The experience 35 of Dayton under the bene:ficient dictatorship of :Patterson at the time of the great flood is a noteworthy example of what a. big man ca.11 do for a city, He was in a large meas- ure responsible fo:r. the installation o:f the City Mana.ger plan in tha:t comr.n:uni ty. Industrial aativi ty breeds men of that ty:pe . .An effort has ·been. ma.de in the last few pages to give some idea as to the klnd and oha.ra.oter of :problems ind.ustrial developrne:nt will force upon the city~ These will vary with each locality; the housing problem will be different in Los Angeles ·than it would in Philadelphia; Chicago will experience difficulties which are and will perhaps always be foreign to :Detroit, only a few hundred miles away. It is possible to formulate a few general prin.,. ciples which will be found applicable to practically a.11 localiticsa In considering any local quest ion, these prin- ci:ples should be kept in mind and should form the backbone of the investigation. The work should bo conc1ucted on a scientific basis and with an eye for the future for the future is a·bsolutely essential. a Planning PART TWO Tlill I NDUSTRIAL BUHEAU: A SOLUTION Chapter 4 Wo:-ck and lt"ethocls of an Industrial Bureau.. The purpose of the Industrial .Bureau is to develop the district i ndu.strialJ.y in accorda nce with scientifi c pri nciples so e,s to obtain -the ·ves-t results for the city and the industry~ To accomplish this end its work may be logically divided. i nto the t'o lJ.owirig four parts : lr' IHS'.l: : It mu.s·t oh ta.in. and "'c;abu.la te all the inf or- matio.u poss ible with reference to the indus trial interests of the district. 0.iCO.tm: It must formultite and pu.t into practice an. agressive , yet sotu:i.d poli cJT :for the promotion o:f all the inlu.strial possib lJ.i ties of the cl ist:rict , t hrough the loc~tion of new i ndust:cies " '.i:.llIIi.t : It must devise ;·. :ays and t1eans f'o:r help0 i ng the established ind.us t:ries "i:Jy co - operati.:a.g with them in their 1'iork ancl by creating new :possibi1i ties fo:r their plants and products. 1;,oU!iT.H: rt r:m.st t a,ke an acti Ve par t in any ci v ie 11rops,ganda a ff eating thG inuu st ri n l a.eve lo rnneut. It wi ll be the o'bjoct of this cha:pte:r to outl ine the work of , f1no. show some of the methods in use by Indus- trial Bureaus . Perhaps t he greator part of the work of the b'ureau 31 may be alaaaified under this head. As has been said ea r- lier in this discussion , the Bureau shoulcl consider it se lf an agent f'or selling the industria l opportunities of its clistrict. In order ·to sell intelli gent l y . one must nec- essarily Jr.now· the qua lity and quant ity of the goods. 11hc only poBsible means of determining these things is by taki ng an inventory . '.::his wil l b e the f irst task co1rl'rontina, ., a new Industria l Bu:ceau ; it is D eons -t::-.nt tusk of everJl Bureau,. fo:r th is inve:nto::cy nust be of the p <~:r•rjotual k i nd j_n order to be effectlve" AB the se inventories, or surveJlS , as the y a re more cormnonJ.y termed ,. compose the bu.lk of the experimente,l or l abo1·ator ;y· sia.e o f the s cience of indm-,trtal development ,. the work E1ust }Je co nd u cte d in u thorough a nd conscientious manne r., surveys may he made i n any field t""t hich the Bu.re au feels callea_ UllOn to inves•tignt e . s ome of the following surveys ,, howevc~r, a re absoJ:ntel~• essentiecl to the purpose of the Bu.roan , and. should. be lu1cle:rb1Jrcn as soon as :possible a:fter its organization. ( 1) ;~urvey of Resources This surve2r should resul·b in the collection of a ll the d.atu possible upon the ng rj_cultura l . mining ,. live stock,. and a l1 other raw materia l resource s , not onl;1 of the district itself , lrnt also of the conti.r.1.gexrt ·te:critory 38 if its data is significant~ 1.\ survey of the resources of the Los Angeles district would perhaps include a large sec~ tion of Cal ifornia and parts of lJe iv Iviexico and Arizona~ This is not as great a task as it may appear to be from the prece ding statement, i'or by f'ar the greate:r part of this information ca:n be obtfaine d with suf:t'ioient accuracy from the government , from e:xch.anges ,. and from local centers ( 2) Stu-vey of Marke ts The work under this hend may be said to consist i:n. obtaining data of the quantities of p:rod.ucts consumed "by the local pub lic. tiios-1; of this information can be ob- t a ined directly from the whole s a le ancl jobbing houses .. :s stims:tes mf.Hle by re_p uta ble business men ac·tively engaged. in the various fields investi gated, IBay be deemed sufficient to answer the purpose. (3} Survey of Labor The o'bj ect of' this survey is to ascertain for the district (a) the percentage of skilled and unskilled l abo r , ( b) the percentage of open and closecl. shor, opera- tives, (c) the number of women and childern employed, ( d) the nationalities of the workir1g population, 39 ( e) the _p ercc :nt c gc of married a nd. unmarr ied. vrnrke r s , ( f ) the m.:urJ.be r and charncter of t he union l abo r orgHnizati ons, and (g) the prevai l ing ·wage for a l l kinds of work . (4) Survey of Industr i es S:his surve~7 shoul d. be made wi th the fo llowi ll8 objects in vie w: (a) '.i: o as c ertain the amou.nt o:E' capital i n vested i n e a ch enterprise. (b ) 1 CZ. 0 1-:: s ceri; a in the v a lue of the aru.1ual :pro- duction of each enterprise . (c) ~o asce rta i n the quant ity and kind of mate ria l used i n product i on uml from where obtained. (d) To a soertain the markets where i n ea ch industry d.is_poses of i -cs pro <iuct. (e) To a s certain the labor conditions f or each ind.uBtry .. ( f ) ~:o a_eter mine -p ower and fue l cha:rges :for oach i ndustry . ( 5) s u.rve;v of Industrial Sites a.net Building Concli tions ~ An accura te list should be made and kept of all sites and empty buildings - in the district which :may be put 40 to inclu13 tria.l pu1"poses . It i s a r ood p l an to m.ak e ma1'1s of the indus trial d.istrict i.n conjunction with this work. These maps r;hould be made in secti ons , ~ma. on a scale of' about a huudreo_ feet to the inc h ; t h ey shou.lcl shO'w every build.ing , its cha racter 01' construction, number of st ories , all the frei ght ;,7a :rd.s , r;pur tra c ki;:: , cha r<':1. c: te r of pavement a.na_ servic es , 2.11d. t:.ny othe r informat io n v1hich woul d be of interest to a prospective mam1facturer and whi ch can be depicted g:raphicall3r . By a system of cros s i .na.exins , refer- ences should be macJ.e from the ma ps to a c a rd ind.ex file contai ning informat ion as to the cost , s ize , ront , i nsurance, interest , ovme rr s name , terms and. other data relative to available f a c to r y sites and builcti:ng t;. '.i:he Bure au should. also acquaint itself with bu ildi ng cona_iticns i n the local- ity , and s hould be n.b l e to m2,ke rough e s tLnc.tes of cost of' c onstructing p l ant s , ·b nsed on this know l edge. ( 6) Gcn1oral Inf or an -'c ion In add.it io n to the Rforernentio11ed survey-s, it wil1 be found rwcerssar;y- to e;uther .~1nc1 corrrpile cb.ta i::.1. a numbe r of' other fi e l ds . of v1hic h tho fo llowi ng ,:~ re the most important: p opulation; t~cansportation, i nclucling not o::1ly fa - cilities bu.t a 1.s o frci g:i1t r r:. t es , etc.; -r-") ,u ,1ci n l facili ·1;i es ; service s ; living conditions ; ~~ll'i ce s of fu.e l gnd other cor:amodi ties b.E..wi:ng an :L.niLtu:r trhcl Di{?ni:f:i. e a:nce . 41 In conducting these surveys it will be found possible in a number of cases to obtain the desired infor- mation from governmental and othe:r reliable sources. How- ever, most of the data will have to be procured either through personal solicitation or by means of questionnaires. As the latter is a less expensive medium, it should be used whenever it is cap.ab le of producing the desired result. Great care should be exercised in its use, however , for success depends entirely upon the manner in whi ch -the inquiries are composed. and presented. The best of feeling and confidence must exist between the Bu.reau and the people from whom it is seeking information, fo:r most of the data will be of a very confidential nature. ]1 ollowing is an ex- ample of a typical questionnaire having for its purpose a survey of industries. LOS 1UJGEL.E S INDUSTRIAL BURKAU. NO. DA TI:. ---- ----- TO THE BUSIIIES S MhlN OF LOS ANG};LES AN:D VICI NITY . Gentlemen:- iln Industrial Survey of this section is being made uncter the direction o:f the Los .Ange le s Ind.u.st::ciP.1 Bureau, which will embrace all enterprises in operation; 42 the object bej_:ng to compile such a ccur a te ini:ormation as ,yill enable us to fo:t·m a basis for t,he promot ion of iudus- 1 trinl a_eveloi,ment in this locali ty. Will yo11 aBs i st u.s i n gathering -this in:forma.-tion by answering the 11 Inq_uiries 11 f'ollmving , and return to t he Industria l Bureau, Los .Angeles, as promptly as :possible '? You. may r est asmu·ed tha:t the infornmtion fm" nished by you will be us ecl in the STRICTBST GOlTIHDBUCE, and only in COMPILING, IN Tl:I.1-i; 1\GGfil~G.A'.l:12, a Des criptive Inventory of the i.na_us-tries opera ting in this territory. LOS AIJG·ELBS nmus·l1RIAL BUREAU • NOTE :- {l) Inquiries that are follmve d by a question mark (?) should ·be a11sv1ered 11 3resn Ol' ' 1 no l' ; or if this i s no-t applicable ; p lease 11vrite word nnone n. I:::VSRY QUESTIOU SHOULD B:e I BUS INE SS Alm ADUI N'IS TRATIVE 1. Name of estab lishment ---------------------- 2. Cha r a c te r of organiza ti on____,....,..__,,._........,,,__,..___,,_.._.....,..___ {fnd1vfdual, partnership or cor poratio n) 3 . .P. O. address of genera l office _____________ 4. Date business was estahlishea -----·--- 5. lti11d of business - -- 6. App roxima te v a lue of phys ica l :p lant -~;: ------(plant, buildings, machinery.. tools, equi pment, sup plies ,., . Yearly a.mount of t otal sales billed ~P~--- - - - 8. Yearly cost of r aw material 43 II PL'UJT 1. Location of pl ant -------------------- 2. nu.n1ber o:f buildings ----- 3. Are buildings owned or rented 4. If rented. when does lease expire ------ 5. Plant surroundings ""'f....i_s_o-=-1-a'""t_e_,d,...._p_o_s_i,_~... -l...o-n-,-·-c-0_1_n_g_e_s...t_e..,a.......,,a-i_s_t-·r--i-c"'c , etc. ) 6. Total ground area________ 7. Ground u:rea unoccupied available for expansion . ----- 8. Building construction _.,_(_c__o_n_c_r_e-.t-·e-··,---b-r_i,....o...'.k.....-,-,.-vo-o-·a:-·-.-e....t-c-.-)-9 _ l'fumber of stories 10. Insurance rnte 11. Floor s pace ---·- - 12 . Can stories be aclded ? _ How many_ _ __ 13. Was pl ant desi ened by yourselves or is it an old pl ant ------------------------ made over 14 . Are y ou conBidering rebuilding o~f p l ant?_ _ - 15. Do ;you develop your own p- ower'? How much yearly 16. Do you purchase p ower '? R OVJ much yearly HP. uu . .... III LilJ.HUlilACTUHI UG AIID PROJJUCTION 1. F!1w.t do you. produce ( if available, :please enclose catn - _ _________________________ :;;, logue ) , 44 2. What quantity of your product is sold per year ---- ----- 3. i~1a t raw materials do you use and quantities ------·-··-------·- ----------------- ------------ 4. What markets do you buy them in 5. Have you a ny by-product and was tes, and if so, how ar e -------------------- they disposed of 6. What f'reight rates do you pay on your r aw ma teria l and is it trans ported by water or r ail ----------- IV DISTRIBUTIO.N' 1. ·where are your l)l"incip le markets ------------- 2. What percentage of your product is sold in, (a ) Los Angeles Cou.n·ty _______ (b) Cali:fornia (south of San Francis co) ---- (c) .Arizona ----( d) IJevv Mexico ----3 . vrnat freight rate s do you pay on the finished product_ 45 4. How are proa.ucts marketed '? {a ) Direct ? --- (b) Jobbers ': 5 . Are branch offi ce s or de pots mainta ined f'or distributing --- If so, where--------------- purp oses '? 6. Have you Brunch Assembly pl a nts '? --- If so, where _ _ V LABOR ---- (b} Females employed----2. (a) Skilled labor ----- (b) Unskilled -----1. ( a ) lviales emp loyed 3. ls labor easy to obtain '? _ _ If factory were enlarged '? _ -- 4. Union shop'? 5. General labor conditions ---- ·- - - - - - - -- --------------6. Any labor trouble within the past 3 years'? --- Causes --------------------- and how settled --------------~·•-~--·- --------------7. W'hat is the present per hour ra·te paid labor on the dif- ferent processes in your production: ------------------------------- --------------·---- --------------------------- --·-------------- 46 VI GEliBRAL REMARKS Each community is $ituated in an entirely dif~ ferent. position with relation to industrial activity; henQe local f:aet·ors should be given considerable attention in eomposing questionnaires. A questionnaire whieh would serve admirably in one cit~,. may not begin to answer the purpose in a different locality . It will be noted that the surveys desoribed in the preceding page s are interrelated in their scope ,, and prob.ably oould be carried on simultaneously, with eoonomy in both time and monQy .. One questionnaire may be composed. to serve the purpose ,o f praotioa lly all the surveys. The name aommonly given to an inve st igation of thi.s chs.ra oter and magnitude is that of an Industrial survey. All of the effort expended in the gathering and 47 compiling of data should be productive of the following results: FIRST: It should :fur-aish an aoourate desari1)-. tive inventory of the imlu~rtrial advantages and disadvan- tages of the locality. SECOIID: It should enable the Industrial Bureau to oonduet its work more intelligently and efficient.ly to get the fsots needed to place proper information before pro·s peetive manufa.eturers and to serve 2s a basis for (a) remedying defects which are ha.ndiaapping "the city industrially" and (b) oonduoting a general aampa.ign for new industries .. THIRD: It should give information as tot.he percentage of manufactured goods consumed. locally •. furnishing a basis for developing plans :for inoreasing t .h e looal demand for looal products •. rt should i.nd.ieate to ban.."Irers which in- FOURTH: dustries already located in the district are capable of extraordinary expansion, if adequate financial as~istanee is given. FIFTH: It should reveal the tj,"])es of indUBtry not already represented here, . but which should m.iturally thrive in this locali;ty .. SIX!l1H: It should fu.rni.sh comprehensive knowledge as to labor conditions in the locality. SEVENTH: It should enable the people to grasp 48 comprehensively the industrial status of their oommu..nity and. encourage every citizen to disseminate information upon the widespread inditatrial aotivi ties of his city, thus developing a greater eivic patriotism. II THE LOCATION OF l~W INDUSTRIES The next important step in the work of the Bureau, after the oompletion of the Industrial survey, is to .rectify oonditions adverse to industrial development and to capitalize those that are :favorable; this means the acqui- sition of new industries .. The results of the survey will indioate the industries which are most needed by the community and to whiah the looality is best suited eaonomieally. It is far better to decide on some one l.ine at whieh to fire the Bn.rea.u' s broadside than to scatter-gun over the entire industrial field. A oomprehenaive brief should be oonstruoted. taking up point by point the advantages of the looality for the pa.rticn:i.la.r indttstry in view. This work should shov.r in dolls.rs and cents as nearly as possible the aetual opera.ting and marketing e·o sts o Ea.oh element treate d. in Chapter TV'JO, which deals with the fact-ors influencing the location of an industry~ should be taken up in detail and. always from a finanoia.l standpoint. ~rhe po int of view taken th'.'Coughout the entire investigation should 1)e that of the industry. In short this brief should take the form of a. report ma.de 4!) by an engineer who has been hired by a prospective industry to investigate its problem o:f location. The next ste 11 ma.y be said to consist in interesting people in the ~proposition. Dragnet publicity- methods end formletter propaganda have not proved su.ocess:ful in adding new :factories. , Selling Los Angeles'' to a prospec1 tive nev:r ind.u.stry should be based on methods as prEi.otical, thorough~ a11d persistent as those used in the marketing of any other nationally sold commo (l ity. Prospects can be discovered through d..i r-ect inquiries by principals , information furnishecl ·by members, or information sent by observers, established :for this purpose~ in large industrial centers 8 rr.r1en the information presents u.nusu.al promise, a capable representative from the Bureau should make a personal call .. Every opportunity. however remote 0-.r uncertain ~ should be conscientiously :followed to a de.finite c-onalusion, and dv...ring the ne gotia tions every opportunity should. be utilized to advertise the industa.•ial a.cl.vantages of the locality. When the Survey d.iso1oses, and the Brief proves that an unusually favorable opening exists for an industry that is not represented. in the district, the attention of all the lea.ding establishments in that field in all parts of the country should be directed to the opp ortunlty. Too much stress can not be l)laced. upon the need of the personal element entering into all ·the negotiations. The represent ... 50 ative of the Bu.reau should be thoroughly conversant with industria l problems, especially with the problems and needs of the industry with which he- is clealing at the time .. If' the community actually p osse sses ino:r)..strial advantages. it will be found that this sound , businesslike program will effeot the des irecl results in the majori-ty o:f cases without artificial help. However, sometimes beaause o f the irmnobili ty of es"Gablished factories and. laek of ca:p- i talon the part of :prospective industries, it will be found necess-ary to devise and put into practice some plan by. which financial and other he l p may be a c corded.. Pollowing a re some of the pl ans in us.e by many eities at the present time: The Development Company Plan This p lan requires the formation of a hola.ing company by the aitizens of a community. It is a corporation organize-d :for the profit and benefit of its stoor.holders and to further ·the industrial clevelopment of the city-. Its mem- bers are as a rule the big business men of the oommunity. The capital should be of an amount suffioiently large to permit of extensive operations. It is v-1ell to have the Dir- ector of the Industrial Bu.reau act i n the capao ity of seare- tary in the De-velopment Company. A :prospe ctive industry requiring help applies to the Development Compa.r1y. The directors with the a i<.l of the Industrial Baroau thoroughly investigate both the eaonomio and :finaneia.1 features :pertinent to the proposition. If 51 the report 1s .favora1)1e, the Development Company will invest a certa.i n preo.eterrnined percent of the total investment in the bonds or perhaps the l)refe rred stock of the new enterprise . :i.'111e Deve lopment Compa.11.y will be cluly represented in th.e board of directors, and will have a large influence in the management of the new concern; the stockholders of the Development Company will be well protected. This is a soimd and by far the best :f)lan yet de- vised. It is in successful operation in ~3cranton, :Penna .• Lafayette, Incl., Bal.timore, ¼d ., Dt:;wen:port > Ia., and many other cities. The Guarantee i.i'u.nd .Plan Under this plan an organization is formed of a number of public spirited citizens who agi~ee to endorse or guar antee the loans made by hanks to new industries which have been il13estigat0d and found. clesc rvi.ng .. The rflf~oogement of this c.rec1i t :tuna. i .s plaaed in the hands of' a small commi t'tee who are namecl the triu~ toes ~ 1:10 money is co.llec te d, but ea ch member subscribes to any amount which he would. be williiig to guarantee. payments are due. The banks notify the t:rus·tees when If they are clefaulted, the los s is pro- r ated among the subscribers according to the a.m.01u1ts which they have promised to gu.ars.ntce. Ha.ny small loans will work bettor under this plan than a few l ar ge 0110s . One of -the disadvantages of ·this J)lan vihen compa.r ed to the Development Company is that the orgti.nizatiou haa very li -ttle direct influenae in the management of the new eonoerna ~ It will 52 also be found harder to organize than the Development Company b-ecsuse of the eleemosynary oha.raoter of its invest- ment. The Town Lot Plan The usual pro-oedure is to organize a oompa.ny of loonl men with su.f:fioient capital to purchase a piece of acreage property situated either in, or in the vicinity of the oity. The land is then subdivided into town lots and improved with streets, etc. A pa.rt of it is reserved as a site for the proposed ind.ustrial establishment. This in- dustry is then offered the site free of eharge oz- at a nominal cost; the lots are then sold to the new working population brought there by the new enterprise, at an advanee in price equal to the oost of improvement and intal"est oharges, and to oover lose on the site taken by the factory. This plan presents an exeellent opportunity for cities to secure model factory additions. This plan may be l aunol1ed upon a much larger soale by providing for sufficient land for an entire industrial district instead of just enough for one enter-prise. German cities have., with pnblie fu..nds and under public con- trol, developed their entire industrial districts by similar planso Frankfort-on- the-Main is an excellent illustration of a city developed by use of this method .. (A deseription o:f its plan will be given in A.: ppendix I.. ) This plan is some- times operated to net a handsome profit to the promoters of 53 the enterprise. This seheme 0£ inclustrial development is to be found in use in a munber of cities at the present time. It has its largest application in small communities. The Incmba tor Plan The plan under this eaption 1s as follows: An organization is incorporated having for its purpose the oonstru.otio11 of a. building or group o-:f build- ings with terminal faailitiea, and all modern f'e,o:tory oonvenienees and necessities. Space in these buildings is rentoed to a ma.nu:faoturing coneern too small 'to own its own plants. The r 'e ntal is usua.lly mao.e to cover all utilities, auoh as power, light-., heat~ elevator service, water and shipping facilities. An undertaking of this -character has been found very profitable to investors in the past. large cities are withouts. building of this sort. Few They make possible the existeno-e of business enterprises which otherwise ,vould find the cost of production prohib itive .. Some of these inoubators, as they are called, are very l arge and house hundreds o:f il'ldustries. sometimes each floor of the building will have a number .o ,f varied industries, eaoh manufacturing artioles entirely di:ff.erent from its next door neighbor. The Bttsh Terminals in Hew York City and the Toledo Factories Building furnish splendid examples of the possibili't;:.tes of locating industries under this plan. Build.illh-"B of this character a.re a.b-solutely essential to the industrial development of a. oity. 54 The Investment Department This is an innovation in Industrial Bu.reau work :for which cre:di t must be given Orne.ha . The e.im of this de- partment is to carry a. list of the names of possible in.vestors together with all the information which may lead to obtaining investment funds for industrial purposes in the distriet. Its purpose is •. by sy-stematic methods, to interest local capital in prospective industrial enterprise.s ; i t acts as a :promoter• with the be st interests of' t-he investor at heart. This department should be made a feature of all Bureaus. The plans described in the last fev, pages, as will be noticed, are of very general character; local factors will greatly influence the ehoioe of plan. Per- haps no one plan will meet all the needs o-£ the di.strict. Usu.ally the one adopted will be a. combination of all the plans. The Development Company plan, however, is the one mo-s t universally usecl, and promises to outlive all the others. All of the plans require the most careful inves- tigation of th-a prospective concern. seekers must be guarded against. Bonus and :free-site (A description of plans in use by a number of cities will be found in Appendix I . } III CO-OPERATION WITH EXISTiliG I lIDUSTH. n:s This phase of "'cba .Bureau's work is as important as that of loea.ting new industries; sound industrial develop- 55 ment demands not only the location of all the factories possible. but also that these :factories shall develop and grow on a healthy basis. The importance of this :function has not been recognized by Industrial Bureaus until very reoently, so that the work in thi.s field is still in an early stage of development. However, a fairly definite program may be constructed for a Bureau to follow in co11dueting this work. The first and moat important part of the work in this :field will consist in the creation of new markets and possibilities for looally manufaotu.red products. In our dis- cussion o:f markets in a previous ehapter it was found convenient to divide the subject into two sub-divisions, foreign and localo So in dealing with this problem it will not only be advisable but it will be found neoessa.ry to adhere to this olassif'ication. In either case, effort should be expended along the :following two lines: investigation and publicity. The demands of both the foreign and looal markets should. be studied with great care, and the quality and quantity of production should be based. u pon the findings. A study of this ohe.racter will sometimes reveal the need. :for a small change 1n the product which will increase its aalability mani:fold; it will show the possibility for products which are not, but could be znanufactnred by existing local concerns; it will help local factories to determine a sound. ma.nufaotu.ring policy for them to follow. 56 Publicity in this field may be aoeomplislled in a great number of ways. Following are a few of' the forms: (a) Permanent Exhibitions Some organizations make the practice .o:f conducting a permanent eY..h.ibi t of locally manufactured produc·t;s, either in the Chamber of Commerce building or in some con- spicuous :plaoe in the oenter of the aity. such a display is of value in oalling to the attention of visitors the in.dust.rial activity of a city. However9 the value of this kind of exhibit as a local trade-getter is in most cases overestimated. (b) Rotary Permanent :r~xhibi ts This is a variation of' the straight permanent exJ1ib it in that the display confines itself to one indus- try at a time, a number of days being allotted to each industry in the locality. ~his kind of exhibit will be found very effect-a.al in arousing local interest in local products. Its use is recommended whenever possible. (o) Home Products Week A week is set a.Bide in which al.:; mu.ah wind.ow space as possible is secn.-a-ed in the business section of the oi ty and devoted to the display of locally ma.de produets. An inJuense campai gn of this sort will always be found productive of good results. Every community should atternpt an exhibit of this kind . (d) Newspapers and Periodicals An effort should be made by the Bureau to write 51 u.p some local industries in the newspapers periodiae.lly . This will be found inexpensive and_ will arouse a looal in- terest for the good of the ind.ustry. It will be f ound ad- vantageous sometimes to eause these articles to appear in nation-wide publication. (e) Hi gh School Clubs ~ese clubs should. be formed with the objeot o:f interesting the young people in local indus·tries and their products . Excursions may be eondueted under the e.usnioes of the Bureau. to further this work. These clubs may also be made the basis :for a great deal of vocational gui dance worlt . (f) Woman's 11 llome Products" Club These olubs are formed for the pur1)0.se of con- ducting exaurstons through industries whose products are of interest to women. The a.a.vantages of buying a home produ.ot whenever possible should be brought home to the menibers o A large runount of business will be stimulated. by the aotivities of these organizat ionso The Bureau will also be oalled upon to help established industries financially when large expansions are und.ertaJren. This may be aceomplished either through co- operation with the ban.ks or through the Development Company. It is best that in these t:ransa.otions the Bureau serve merely in an advisory capacity. 58 Another important :fu.notion of the Bureau in this field is to co-operate with local educational institutions in the solution of industl"ial problems which will come up fxom time to time in lo.cal factories. The problems may be those of administration, of efficiency, of the profitable disposal of wastes, eta. Such co~operation would be of ad- vi:tntage to everybodJ/ concerned. '.che Bureal'l. should also organize clubs such as The M:armfacturer Executives Club, The Salesman Club . The Shipping Clerks Club, etc. 'J:'hese clubs may be conducted. as classes in whi ch the problems relative to their posit ions would be discussed. The results of this effort may not be felt imme diately but will finally appear in the increased efficiency of the entire industrial district. In general~ s.11 the effort possible should be made by the Bttreau to })romote the welfare s,nd prosperity of the existi ng industries. IV GEli!BRA.L CIVIC ];•UUCTIOJ:I The Bureau should take an active part in any civi c :propagaude, which would affe ct the industrial development o:f the city. It should. consi(ler itself' the re presentative o:f the industrial interests of the distric•t , and in 'that capacity it should leave 110 stone unturned in its effort to protect those interests~ 59 Chapter 5 Organization and Policy of the Industrial Bureau Organization is, without a doubt, one of the most p otent factors in the success of any unclertaki.ng. This ap- plies e qually well in fostering the industrial development of' a community. The work must 'be thorm1ghl;y~ or8a.nlzed. It will be the purpose of the following pages to discuss a few of the. general principles upon. which Industrial Bureau or£,1'8.niza:tion is based. FUNDAMENTAL C0HSIDERATI0ifS Shall the Industrial Buresu be made a part of -the municipal government, or shall it be ma.d.e the aativi ty of a private organization? This will probably be the first question nrising in planning the estahllshrnent of a Bureau . 11he 1,7ri ter :!:irmly believes that private organization is by far the most efficient mode of cona.ucting this worlr . To function :properly the Bureau not only demands the a:'ctention of men trained in industrial development work, but a.J.so the equally important factor of an enthusiastic membership, which is willing: and a ble to stand ba ck of the Eurei:m in it;:=: work , a nd which is composed of indiviclu.als ha.vtng commercis,l and. industrial interests in the community. This factor would be entirely l a cking under the public form of' organization. .J:he voters 1 would visit t he polls peri odica lly, re gister their desires, 60 and forget all abou.--'G industrial needs until it vms time to vote again. liot only would the lack of --'chis support be felt i n the :Bureau's work but the non-existence o:f the public intere st would. nmke it possible for inefficient me n ·to be pl a ced in cha r ge of t h is i m1>ortant work ¢ be ke pt out of politics. The Indus tri a l Bure au must For'tu.ml tely very few cities hs;ve a dop ted the Bureau as a public f unction. Niagar a lfalls. H. Y.. and Peoria , Ill., nre the only two cities which have come ~Go the writer I s notice a s having municipa lly controlled Bu- re ~ms. The Industrial Bureau should be organized a s a p riva te enterp rise for the following reasons: :FI RST : Because it will a ssure the emplo;,rment of t he ri ght men to hand.le the work . SECOND: Because the 13u.reau will a t all time s ha ve the ba cking of men interested in the community from the in- dus trial and comme::ccia l stnndpoint. 'l111IRD : Bec ause it will free the Burea u from po- liticul influence. Shall t he Ina.us-tria l Bure au be ma de a part of t he Chamber of Commerce, or sh.a ll it be rna a.e an entirely rie par a te organiza tion ? In p r a ct:i.ca lly every community t he organization of a n a ssociat ion to p romote cormnercial a nd. industri a l f-t ctivi t y has been found productive of goocl rosul ts . These com- mercia l bodi es are known by different name s in different 61 communi tics. Boards of Some are calle a. Chambers of Commerce, some '.L1rade , some As sociations of Commerce, etc. In pract ically all cases , however, their ±'unction is the same L e. ) to co-ordinate the forces for fostering commercial development in the locality. For the :i;mr:pose o-f this dis- cussion an organization of this character wi ll be termed a Chamber of Commerce. The commercial and ind.u.stria1 interests of a cornmuni ty are so closely a lliea. that the writer does not believe it advisable to entirely separate the organizations whi ch function to improve thes(➔ interests. If a city devel-- ops industrially, it develops com.mercia lly. The con\'-erse is also tru.e. The best form of organization is the one which combines these interests yet divid.es the work so tha t j_t can function best i n each O.irection. A Chamber of Com- merce functioning through a number of Bu.reaus has been fou.nc1 the best ty_pe of organization for this vrnrk. GE.llERAL 0HGAIUZATI0 N It is recommemled. in order that it ma;y perform the vt:i.ried business functions within its scope more effi~ ciently, that u Chamber of Commerce be organized under the general corporation law of the state. The a ccompanying diagram shows the pla.n and struc!ture of the Chamber orga11ize.tion. The basic st1'1J.ctu1~e of the Chamber is represe ni;e(l on the diagram by the series of rectangles at the top. The top rectangle repreGents the members of t h e 62 Chamber, who elect the Board of Directors, which Board is represented. by the next :rectangle, To the Bos.rd of Direct- ors, the members of' the Chamber commi·t all pmve:r, authority, and responsibility for the conduct of the business of the organization. 1l1he Board should hold regular meetings month- ly, 2.nd s_peois,1 meetings a s occasion may require. The next smaller rectangle represents the Executive committee of the Board of' Directors, which during the interim between the meetings of ·the Board has the power and authority of' "the Board itsel:fo The Executive Committee should be very careful ab out exercising such power, unless the general policy has already been determined by the Directors. This com- mittee should meet re gul arly each week, special meetings may be held as the work of' the orga.niza.tion re quires. S:his Executive Committee constitutes the point at which a ll the various lines of the Chamber's activities shoulcl be co-ordinated and harmonized~ 7he smallest and bottom recta ngle represents ·the officers of the Chamber, Y,ho should be elected a nnually by the noard of Director~,. This is the center of a.11 power , authority , and responsibility in the orgnniza tion. Action on the part of t he Boa rd of Directors or Executive Committee is. however, predicated upon a careful analysis o:f subjects . J?or this _p1.u:·1)Qse the investigative a nd recommendat ive machinory. as indicatea_ on the righthand side of' the diagram, is constituted . (Jenera/ Membership Board or ;)!rectors. ExecutJve Com/ltee of the Board Officers. l f3A3/C '5TRUCTUR[ I 1 I "5ecy I I I T General Office I BUREAUS I I I l I CHART#6 OENERAL 0.-L?OANIZATION of the CHAMBER AOMIN/5TRATIVE. LJ;--awn o/ or COMMERCE Al Askena-sy 63 The individual rectangles represent the variou.s sta.nding committees of t he Cham.her~ which ma y be enlarged. or reduced. at any time by a-uthori t;;y- from the Boartl of :Di- rectors. The members of these various investi gative com- mittees are a11pointed. bJr ·the President. '.i.1he function of each committee is to investigate, analyze, and report v;i th recommendations to the }~xecutive Committee, and through that commit tee to the Board of I;ireotors. by whom the final decision as to the J)Olicy of the Charrrber is ma de. Subjects for investi gation by the .a ppropriate committee and. action by the Chamber may be suggested by the committee itt1elf, by any officer, by the bxecu.'tive Committee, by the Board of Directors , or by any member of the Chamber. After the determination a s to the question of' policy and of the result which should be attained has been ma d.e b y the Board of Directors, then the admini stra tive res ponsibility pases through the Secretary to the official staff o:f the organization, which is repre uented b~r the administra tive group on the left-hand side of the diag rn1no Bach one of' the v a rious branches of the Chamber staff is under ·the genera l supervision and cl irection of t h e f:iecreta ry, ·v'.fllO constitutes in the nd.m:tnistrn tive work of the Chamber the co-ord inating a nd h a rmonizing· a geney Bimila r to the function performed by the .i::xecutive Com.mi tt ee in the ba sic structure of the organization. It will be seen tha t the Dtructure of the entire organization is representative in character 9 and follows very closely the organization of a business corporation. The form ia one which insures promptness, elasticity, and efficiency , which are three vital :faotors in the su.coess:ful prosecution of cw-operative effort for ·the city . Following is an outline of the provisions which the By-Laws o:f an org~nization o:f this character should contain : (1) Na.me and Object ( 2 ) Membership ·( 3) Management and Offioers (4) Duties of Officers ( 5) Meetings ~ma PowerB of Directors (6) Standing Committees (7) Order of Business, Director 1 s meetings (8) Meetings of Chamber (9) Order of Business at Meetings of Chamber (10) Expulsion (11) Signing the Roll (12) Amendments ORGANIZATION OF THE. BUP&U The responsibility for the work o:f -the Industrial Bureau. should be placed in the hands of one man, calle d the Dire ctor~ In the diagram his position is indicated. ·by th-e circle at the top. He should be a man trained oommercially and should have a general technical knowledge of the various '5taff 1 - - - - - - - - ~ Drec~r i------------' lndustr!t:1/ Commiltee vENEl?AL OrF/Cf LJ£PAR Tli1E!VT5 '5urveys !Jepr. E;stob. lntlustnes Oep'f New lndvstries fJept CHART:lt7 INTERNAL 0R6ANIZAT/tl!V OF THE /NIJIJSTRIAL 131/REAIJ fJrawn o/ Al Asken~y. C/v/c IJept 65 industries. The success or failure of the Bureau will de- pend in a l ar ge measure upon the accomplishments, forcefulness. and :personality of its Director . He will be helped i n his work by the t wo investi- gative and recomrnendative bodies indicated in the diagram by the two rectangles to the right and left of his pos ition. H:e should. meet with the standing I ndus-trial Committee of the Chamber periodic.ally to discuss and plan the general work of the Bureau. His staf£ will conBist of his assistants, each o:f whom will have charge of a department, and any number of experts ho may see fit to ca l l in in an a dvisory capacity. As ha s been stated previously in t he textt the work of the Bureau may be a dvantageously divided into the four following branohes: (a) Making of 8urveys (b) Establishing J:Tew Im'.iust:ries (c} Helping Established Industries (d) Civic Industrial Activity If the volume of business justifies such a oourse, a department may be created for ea.oh one of these functions and placed in .char ge of a tra ined and co mpetent as sistant. In small communit;ies it vd ll be found advisable to have the Director hanrlle a ll the work himself e However . even "chough the work is accomplished by one man the records and other material of the diff erent branches should be kept separated . GE iiJERAL POLICY The success of a Bureau depends upon the following 66 three factors: FIRST: The work must be based upon a sound busi- ness :policy o The practice o:f offering inducements such as free sites, cash bonuses, exemption from taxes, eto .. is :fundamentally wrong , and, in the majority of cases, is prod.uctive of disastrous :results. .An industry which requires induc-eme11ts of this character for its existence will not, as a rule, be found. an asset to the commu.ni ty. SECOND: The work must be conducted in a scientific manner. Industrial development is a science; it is the science of nsellingn the industrial ad.vantages of a community. Thoroughness a11d integrity~ the fund.amentals of all scientif- ic work, should govern the con1uot of the Bureau. THIRD: ~Che work must be placed in competent hands. It is absolutely essential to the success of a Bureau. that its management be placed in the hands of men having wide business experience, and men who have been technically trained. Seientific work must be placed i11 scien- tific hands. And finally, the .Bu.ronu should never lose sight of its ultimate aim, the WEJ.Jf1ARE OF THE CO!vIMUJUTY. APPE:NJ) I XES 61 AP P E N DI X I PARTD\L LIS T OF FilfANC I AL AND BUILDI NG PL.Alm ADOPTED BY COUfMERCIAL ORGANI ZAT IONS TO FOEW.ABJ) I NDUSTRIAL DEVELOPMEifi' CONfPILED PROM COI,DV IBRCIJH,; ORG1UUZA TION RB~PORTS AUD L.BTTKHS Hl AIJSW:JtR TO IIK~UIRIES. !n the follo wing extx·a cts from the experience of various eities i n the United St a tes will be fOUJld a wide variety of expedients to assis t t he establishment of' new industria l enterprises o It is hoped tha. t :profiting by t h eir combined ej,.,']_)erienee, dangers may be avoided tind s1.woessful plans made av&ilable for other cities which a re conc.lucting Industrial Bu.reaus. WILLil!llSPORT , l?A . ~:he Williamsport p lan, adopted in 1900 and abandoned in 1915. was essentially a subscription of credit by responsible local business men. Williamsport was a pioneer in the guarantee :fund movement and. its plan has been widely copied. Under this plan the local banJrs agreed to :furnish money to the extent o:f the total subscriptions on the ind.orsement of three a ttor:a.eys-in- fact, elected by and represe:rrting the subscribers to the fund.. period. of five years. contrac ts ran f or a Copies of the contract n.:nd ceri, i:fi- cates o:f the action of subscribers i n electing the attorneysin-fa~t were filed with the ban..~s, and the attorneys-in•fa~t were authorized to indorse for the whole or any part of the 68 fund. Befor.e such indorsement was made I applications by borrowing firms for aid were l'e quired to be approved. by the commeroia.l organization. If at matu:rity the appli cant failed to meet the obligation. the subscribers to the fund had to pay the a.mount dv.e by them, ea.ch subscriber being liable ±'or a prorate share only· of the indeb·tedness. If by reason of the de a t h or failure of' a subscriber the total amount of the :fund. was reduced, the aonrpany he.d :power to secure new subscribers to kee·o - it inta.ot. Under this nlan ~ there v"ias no advanee of money , but a guarantee of ere di t merely, and usually no security wa.s taken from an applicant for financial aid. The Wi l liams port Board of Tradet in a letter commenting upon the abandonment of the plan, states that in.asrm1oh as ore di t was onlJr extended to i nclust:ries that oould not get a loan from a bank , the resul·t was that the credit of any eoncern so helped was materially injured and it was doubly difficult for it to secure acoomodatians from local balurs without the same sort of security that aooompanied the original loan~ In conclusion the letter says: 11 I am not prepared to say what would have been the suooesa of this pl an if it had been operated on a rnore liberal seale. but I do believe it is doubtful if any plan of this sort, or any modifioation of it. will secure for a city industries which are really worth while that could 69 not be secured through established and liberal banking circles; together with the aid of pub lic spirited eitizens able to become investors i n a worthy ind.u.stry. n D.A VRN1:0RT , I.A . .rhe Davenport Industrial Development Compazw , 1 inaugurated in July, 1911, has a capital stock of $300,000, that is 3000 shares at :~)100 a share. J'J,. business man sub..: scrtbes to, say $1000 worth of stock t and pays in :1~100, or lO f~. He owes the company ~)900. Together with the other subscribers the oom:pan,y hs.s in cash $30,000 and owed to it ~,WIO; 000. . The ~~30, 000 is put in the bank and draws inter- est. The subscriptions for the remaining :t 270, 000 a.re used to establish a line o:f oredit with the looal banks. The holding com_pany goes to the ban..'!{, and draws a predeterrnined amount t giving its note. -nth this money the holding com- pany buys securities in industries anxious to move into Davenport. These securities are deposi•ted with the bank a.s additional collateral u The holding company buys the stock outright and can do with it what it pleases . SCH.ANTON, PA. The Soran-ton Industrial Development Company was organized in Hay, 1914, with $1,000,000 capital stock into 100 ;000 shares of the par value of ~~10 each, no subsoription to be ta.ken for less than five sh.area. l'lo more than t wenty per oent of subscriptions oan be called in any one yearo 70 Investments are to be ma.de only in the securities of manufacturing I)lants in or hereafter to be located in Scranton. stockholders elect Board of Diree·t ors with complete control, but they are to consider no investment except those investigated and approved by the Tu!anu:faoturers' oommi ttee and the Board of Directors of the Scranton Board of Trade. no call is made on stockholders until the immediate occasion arises. and upon a majority vote of the Board o:f Directors of the Board of Trade and the Development Company; and every call shall be on a printed form signed by the President and Secretary of the .Board of Trade and the l?resio.ent of the Development Company, and shall clearly set forth the purpose for which the oall is madea No more than 20 per cent of the oapital subscribed shall be used. in a.:ny one ooncern. Following is an excerpt from the annual report of. the Scranton Board of Trade for 1916 whioh refers to the Development Company: 11 All of the concerns which have been assisted :fi- nanoially by the Development Company since its existence are successful~ going concerns, contributing to the prosperity of Scranton, with the exception of the Scranton Axle and Spring Company. The amount of actual cash invested in all of these concerns totals ~~808,342 of which su.m but $16,000 has actually been lost, and more than ~~200, 000 has already been repaid. Every one of these concerns owe their existenoe in sers.nton toa.ay 'to the practica l efforJcs of the 71 Deitelopment Company, and the payroll they are putting out in this eity every year is not less than ;f,1,200,000, and will probably in the coming year pass $1,400,000. The per- centage of loss to total investment is exceptionally low, and with the results attained constitutes a record which I do not believe has been surpassed l1y any financial plan to help locate new ind.us tries in the United s tates. Whe11 i t is remembered that the industrial f"v..nds placed by the Development Company must bring not less than 5 per eent, the achievement becomes all the more creditable. " LAFAYETTE, nm . Following a.re extracts from a letter received from the Chamber of Lafayette, Ind.:nwe feel that we have placed the work o:f securing industries for this oity on a very substantial and permanent basis. We started 'Nith the belief that the Screnton and Williamsport and Davenport plans were not sufficiently effective or business-like to meet our neecls, and that our efforts should be directed to a consia.erable extent toward the providing of advantages by whieh manufacturers could be induced to locate here on the basis o:f our meri"cs as a manu- facturing location, and that the raising of a f'u.nd. for finanoing enter11rises should be made a secondary matter. nwe realized, however, that a great many manufacturers who might locat.e here on the basis of our merits, would also include in their moving plans some kind of re- 72 organization which ·,vould. mean additional finan-ces. and therefore we raised t he fund. nw i th these ideas in vie1,~ we ha'\Te a factory ter- n1inal project under way whioh is expected to fi.nance itself through the sub-division :plan. nwe also organized. the La±'ayette J)evelopment ComPrul..Y, tion. a separa te corporation subsidia ry to this organizaThis eompany has a e a.p i tal stock o:f ~;200 , 000 of which two-thirds has been subscribed. for and the rest is being subscribed for without any particular effort a·t solici tationo The payments extend. over a five year period. 11 irThe Development Company virtually does a banking and b'rokerage businesso Its purpose is to operate for l)rof- it and at the same time seeure tenants for our factory terminal and other factory buildings. "The idea in making a profit is that in a great rna.ny instances concerns whose preferred stoolc or bonds we purchase and locate here will be willing to give us either a small brokerage fee or some proportion of their common stock~ we •. of oourse, would expect to sell the pre f erred stook or boncls to the pu.blic as c1u.iclrly as possible so that we could again llave this money available to invest in other new factories~ The l)evelopment Compariy would retain the bro1cerage fee or the common stock, and this would go to the stockholders of the Development Compar1..y in the sru.1.pe of dividends. 73 "our idea of se-euring factories is that we will not wait for concerns to write to us, but we will conduct a number of investigations to secure the kind of plants whioh we believe can be operated suecess:fully here.n EASTON, EA. Following is from the Easton Board of Trade concerning its guarantee fund of ~~600, 000: n0u.r banks first pass upon a list of names, consisting of our investors, professional and business people, as to the amount they are willing to accept in indorsements, which amount is reduced to a minimume Every man. :firm or corporation on our list, in the judgment of our banks, is good for a few to many times the amount of the Guarantee or indorsement, but in order to make it possible, acceptable and safe, a conservative minimt1m allotment of credit was fixed by the Guarantee Fund Committeeo The large corpora- tions, including the publio utilities, breweries, etc., were allotted $20,000 as the maximum; other sma11er corporations and large business houses were allotted $10 ,000, a still greater number $5,000; a few ;j~3, 000; a large number fji2 ~ 500 and one hundred fifty (150) $1 ,000 each. Ho subscriptions less than $1,000 were taken~ "Under this guarantee plan. we get industries only after full investigation as to their desirability, purchase sites, put up their buildings and take a first mortgage for 1001i of the actual a.mount involved and on which they are 1..e- 74 q_u.ired to issue bond,s. We then take negotiable notes :from the various industries so assisted whioh notes are made by the parties at interest, and further secured by eollateral, consisting o:f the mortgage bonds so issued. In addition these notes a.re indorsed by the Attorneys-in-Fact of the subscribei...s to the guarantee .E'Und who are empowered to aat by a regular :power of Attorney given by each su.bsariber to the guarantee Fund, r:1.nd all oontained in a substantially bound book. The notes are usually four month notes and dis- oounted by our banks st 5 .. 4 % per annum, and promptly renewed by the makers. who pe.j.r the diseou.nt each time, for such length of time in years as may originally be agreed upon by the new conoer-:u and our Exeautive Council, {who are also individual subscriher.s themselves} and our Banks .. At the end of the first or seoond year we ask the borrowing concern ·to start repayment o:f pr inc ipa.l in such sums as may be no hard.ship to the looating parties, so tha.t our fund may be available for other new cono.e rns desiring to loo.ate hez-e and take ad.vantage of ou.r fnnd. and. its system.r: 1Hl'Hlt1APO~IS_t__ MI .NJ! " ? J.ans for a n industri a l tract ht-we been advanced to a successful conclusion by the Committee on Industrial Development of the Civic and Commerce .Association. These pl a ns involv·e the F.J.cqnisition for 5.ndustrial purposes of a 265-acre tract of l ano. in Northeast 1.Iinneepolis by the Minneapolis Ind.ustri.es li.ssociation, a compEtny which is now 75 a permanent and dominating influence in the growth of the city .. It was for the fu.rtheranoe of this purpose that the organization of the Minneapolis Industries Association was brought about, a corporation with a capi ts,l stock of 4~300, 000 whose purpose is to aoquire and develop what is known as the nMew Indnstrial Tracto n The Association will carry on an extensive and aggressive campaign to interest manufacturers in this tract and will put a price upon the land which can not fail 'to be at·t raoti•17e to Former .President Fiske of the Oivio and Commerce .Assooiation; in an address o-0mmenting on the su.coessful or- ganization of the Minneapolis Industries Association; said:-11 The Company aims to provide i.\i inneapolis manufao ... turers both present and prospective, at reasonable cost, with the very hes"t sites, having the most advantage ous facilities for securing and handling -their raw materi als and_ finished :products; in a loca.li·b.y easily accessib l e to the best labor district. Thus ., will NLi.:nneapo lis manufacturers he enabled :for many years to come, to develop their 9lants under the most; fA.vorable conditions n 6 TOLE.!"?O , OliI 0 Po l lowing is an extract from a letter from. the Toledo Commeroe Club: 11 Several yea.rs ago a few men with particularly broad. vision had the conception that a great step might be made by constructing a building wherein small manufao- $ 76 turers might be given a ehanee to launch their enterprise 1.v ithout first having to erect a building. This idea \'vhich. has since become suoc:<.rnfu.lly crystallized., has taken shape in the Toledo 1i1actories Builcling. Since the time of its establishment it has become a factor in the comm:v.nity and has not only been profitable from the stand:poin-t as an investment but has amply repitid those interested. as being a veritable Incubator of Irifant Imlustr-ies." !tThe lmildi.ng has been filled to oa.paci-'cy during the entire length of its existen ce. It has been the metJ,:ns of developing many small indu.s-tries into la.rger ones which have been forced to move into other quarters and have construoted bu.ildi11gf3 which they are now occupying.. The di- rectors of the ?oled.o Factories Building f'eel ths,t the time is now come to seriously conside:r the <Yr·c1ction of two more wings as the business of the present tenants 1s growing very nThe ~l'.'entals are moa.erate , and include all the charges except for power and supplies, ancl a low rate is charged the temmt :for -'i;hese. 1';1ectricity. sterun, gas, water and compressed air are furnished through ind.iviclu.al lines. n ~iAR '.f!.QH T...t..JlQJH\T . Following is an excerpt from a letter from the Hartford Chamber of Commerce: 11 0ur general plan is to erect a imildj_ng for n solvent and going concer11,. provi.di:ng the Company will procure 77 a site and take a port ion of the amount necessary to erect a building, inaluding therein the value of the site and the amount o:f stock t aken ., usually about 20 fb of the whole. Thi.s builcli:ng is usuall y erected through the :formation of a stock company known as the Chamber of Commerce Building As sociation, and. the members of our organization are asked to subscribe to the stock. In t wo instance s this plan has been followed with excelle nt resul ts. The Chamber o:f Commerce has also as an organiza tion t tiken stock in the project& The usual condition is that t he Company may have the privile ge of buying in not le s s than th1·ee yea.rs nor more than ten years and shall pay an annua l rental that will net shareholders 7 /~. n CL.BVEMNJ) z OHIO The p lan of a Deve lopme nt Comps.n.;:r proposed. by the Chamber of Commerce of Cleveland in its armual report f o:t 1916 is by :far the most comprehensive one ye t evolvede A sy-t1o ps is follows: It i s proposecl to incorpo r 2.te a company for prof'i t under the l aws of Ohio to be known a.a The Cleveland Industrial Development Company with a cs,pi t a lizat ion of five hundred thousand dollars ( ~j 500 ,000} of common stock divi de d into five t h ousand (5,000) shares of one hundred dollars ( ~~100) e acJh. The pl an pro poses a pr omoting company with a suffi- cient paid-up stock to permit of operation, to investigate and report u pon industrial investments for the benefit o:f its stockholders. The compan,y would be inde pe ndent of The 78 Cleveland Chamber of Commerce. but would work in harmony with the chamber at a ll •times. Articles of Incorporation I:u order that the compan.y may enjoy full benefits from the result of its investigations, the articles of' inco q )orati on will be of sufficient scope to permit of the widest range of investment and developments 1mnagement The government of the company will be vested in a board of a_irectors. J~ ge neral secretary, a director of u.nderwri ting, and other executive officers ·~'Vill be employea_. Other employees will be secured as re quired. Liembership It was suggested that the board of directors of the company select a list of from t·wo hundred to four hundred men, whom they believe to be qualified, as charter members of the company, additi onal members to be added upon approval by the board of directors. (l,ualiflcations of 1,lembers One of the fundamental essentials to the success of ·the plan is that the u.nit of efficienc y should be kept in mina_ in selectlng the members. The foll owing requirements should be insisted upon: 1st. IJembers should be financia lly able to assist in the underwriting of enterprises indorsed for promotion. 2nd . lfembers should be prominently identified wi th industrial or other enterprises in the city of' Cleveland . 79 3rd. :Members s hould understand and be in full sympathy with the plans and purposes o:f the company. 4th . i'J:embe:rs should. he willing to contribute time and jud 6ment to the invest:i. gation of projects 1Nhich the board of directors approve a s worthy. 5th. Members s hould have experience in some field o:f activity tha t will enable them to assist in determining the a dvisab ility of promoting any en-torprise una.cr investigat iono Stock Subscriptions '.fhe p lan contemplates that each memb e r fmbscri'be to not less than ten (10) and not more than twenty (20) shares of stock; payments to be c a lled for, r-1. s re qui 1·ed by the bogrcJ. of directors . No stock in the parent company is to be transferred without the consent of the board of directors. Stock in .P1"omoted uompanies It is proposed tha t no stock in any enterprises promo ted. by the compa.ny be sold exce pt to members until e ach member shHll have first had an opportunity to purchase said stock. Investigations The board of directors shall f irst decide whether a proj ect is worthy of investigatio n . ~he board will then appoint a committee o~ members especia lly qualified to make the investiga tion . Members •w ill receive just compensation for their services . If it is deemed advisable, expert serv- 80 ices may be employed by the board to ass ist the committee. Purpo se of Investi gation The purpose of the investi gat ion is to place before the members in concrete form, definite detailed information concerning ea ch enterprise investigated. such i.rrvestigo:tion is to be made by mE'ln thorou.ghl;;7 qu.alifie(l b:v experience and training to dete:rmi.ne tho facts concerning the enterprise. The result is to be placed before t he mem- bers of the company for examination and criticism in order JGhat all objections 1na.y be me·t and difficulties solved be- fore stock subscriptions are called f.'o:r. Investment It is expec ted that the members of the company will have full confidence in a.n,y prospectus submitted after such an investira tion and will not hes itate to :tnveGt suf ficient fv.nd.s to und.erwri te the })roject. Income The ini•tial operating expense woul d be furnished through stock subseription. It is proposed that the com- pany charge an u.nderwri ting fee which with ~m.ccessful opere;tion , would supply the necessa ry wort:ing cap ital and provide a f a ir d.iviclencl to the h old.ers o±' stock in the parent compan;),r. !2-~~£~P_H_T-0.N-T1ili.-~·¥IM, {~¾I~A!ITX l!'ollovdng is a n extrac JG from the book e:nti tled n.~urop ean Ci ties at 1Jorkn written b;y• Frederick C~ :Hovrn: 81 nThe city (Frankfort-on-the-Main) acquired an area of 1180 a cres of agricultura l l a nd at a ~tela tively low price a nd. in s.nticipation of the 1).roje cJr, . a.11Jr pub lic discu ssion of E:e r e it iNO:rked ou t a harbor, trs.11s1)orta tion, i ndustrial d.ev elopmen -'G, and housing programme of the most comprehens ive sort~ t:ngineers were employed to p l r1. n the whole -territory f or the va rious uses -to which it was to be put , ancl 350 ucres were deducted for streets, railways, te r- minals, and emb anJrments along the wat er basins. .A number of harbors were dredged into the l and and connected with the river, wh ich were lined _w i -'lih concrete. were used f or the harbors ~nroper. 110 acres -more 1~ft er these deductions b.ad been made , 720 acres remained for development purposes, which were l a j_d out for v arious factory uses, all so conne ct e ll tha t the r a ilways, docks, and warehouse s could b e oper2.ted in the mos t eco nomica l manner pos s ible. 150 a cres were assigned. to miscellaneous traffic, of v1hich 37 acres were dedica.tecl to coa l traffic . The 570 acres remaining Nere set a side for manu facturing sites, of' ·w hich 135 a cres 1 were reserved f or l a r ge water-front industries and 435 acres v1ere kept f or inland factory loca tions . .rhe w:.v i gnb le shore 1 line of the various harbors is over 9 mile s in l ength and is connected up vii th 35 miles o:f railway track and siclings and 30 miles of s treets. n 11 rt was obvious that provision had to be made for workmen for th i s new district, so -the city included a housing 82 project as a part of the programme. The city owns the street railways, and laid tracks ou·l; into the suburbs as well &s rapid transit lines to distant villages. recognized. however , tha t m}ln.y It was of the working- people prefer to live in the city because of the a.istractions and amusements which it offers, so an area of 157 acres was acquired c1ose by the industrial section for the building of workmen's houses. Upon a portion of this l nncl houses are ·b eing built by the city, of which 550 have already been erected. In the i mmediate neighborhood a large park was laid out with recre- ation grounds , swimming and bathing establishments, pla.ygrouna.s and football fie lds. for-es'ts. rrot far avmy is one of the city Together with the private property developed, the harbor and industrial undertaking inoreased the area of the city by 50 per cent, and when it is completed, provision will have been m11,de for every need o:f this new commu.ni ty on vvhat a few years ago was cheap agricultural land of li-ttle value." T!The city is financing the project by retaining the unearned increment which the development create d . " 83 Al?PENDIX II TABULATION OF ANSWERS TO QUESTIOlUfA I:RE As a part of this investigat ion a quest ionnai1~e was sent to the Commercial Organizations of 114 important cities throughout the Uni tec1 States o The answers served in a large measure to shape the views of the writer on the different questions. These views are outlined in full in the preceding :pages. Following is a tabulation of the 92 answers recieved:- Question l Do y ou distingttish between the inctustria l activi- ty and. the general work of your commercial body by detailing this function to a separate organization, such ss an Industrial Bi.;.reau, etc.'? If so, how is the ·work organized '? Humber Cities pl acing this fu.:nction in the ha nds of an Ind.ust:eial Bureau--- ---- ---- - --- ---- --- - - ·-- --- --- ---- 16 Ci ties relying u pon a corr:m1i ttee composed of members in the Chamber of Commerce to take care of this work----------·---------- -·-----------·--- 49 Ci ties not attempting ·to cUffere:ntiate between the industrial e.nd other functions of the Commercial Organization------------------------- 27 84 Question 2 Do you make a practice of. offering special inducements such as free-sites, bonuses, exemptions from taxes, etc.? Ul.unber Cities ma.king a practice of offerin~ free-sites-------------- -- ----------------CJ 18 Cities offering a cash bonus as en inducernent--------------------------------------- 2 Ci ties exempting ne~v industries from taxes for a short period of time-------------------- 5 Cities unalterably opposed to practices of this kind- ---------------------- - ------ 67 Question 3 Have you made an industrial survey? Humber Cities having completed such surveys---------------- 10 Cities which have completed the surveys but have failed to keep them up to date------------- 8 Ci ties which are conducting su.rveys at the present time---------------------------·---- - - 9 Ci ties which inte.nd to be g in such sur1eys in the near future---- - --------------------- 6 Cities which have not made and do not propose to make an effort in this direction•--------- 57 85 ~'llestion 4 Do you hold exhibits of local products ? Yes Mo 21 71