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Politics and Welfare in Birmingham, 1900â?"1975
By Edward Shannon LaMonte The University of Alabama Press
Copyright © 1995 the University of Alabama Press
All rights reserved.
ISBN: 978-0-8173-8892-8
CHAPTER 1
Birmingham, Alabama
The Historical Background
BIRMINGHAM, ALABAMA, was incorporated 19 December 1871 with an estimated population of eight hundred. The new city was located in the sparsely settled hill country of Jefferson County, an area avoided by enterprising farmers because the rocky, sterile soil was unsuited for the staple crops of corn and cotton. There had been a hint of the future in the crude industrial furnaces in the area that had been used during the Civil War to produce pig iron for the Confederate arsenal at Selma. But the furnaces had fallen into disuse, and Jefferson County offered no attraction to newcomers until two railroads were projected through it shortly after the Civil War ended. Where the railroads crossed, Birmingham was laid out. Land speculation provided the impetus for its early development. Reconstruction laws gave Birmingham an early boost by providing conditions favorable to a manipulated election that established the new city as the county seat, removing it from the neighboring village of Elyton. "Construction trains were brought into service on the morning of the election and hundreds of Negro laborers were hauled to town, as were large groups of white people." Local historians support the story that Blacks were duped into voting for the change of location by Col. James R. Powell, one of the town's most avid promoters, president of the Elyton Land Company and later Birmingham's first elected mayor. Mounted on a splendid horse, this impressive figure is said to have ridden among the Blacks, identifying himself as General Grant and urging them to vote for Birmingham as a personal favor to him.
But 1873 nearly brought ruin to the newly designated county seat. A cholera epidemic in the summer killed 128, and this disaster was immediately followed by the Panic of 1873. Driven by the fear of disease and economic stagnation, early settlers abandoned Birmingham; the population declined from an estimated 4,000 to about 1,200 in 1878.
Birmingham's fortunes began to improve in 1876 with the demonstration that coke pig iron could be manufactured in the district, using coal rather than the usual charcoal. Two years later speculators opened the first coal mine in the district and began operation of the first blast furnace in 1880. Northern money flowed into the district between 1880 and 1884 to establish additional furnaces, as word spread in financial circles that Birmingham was able to produce pig iron more cheaply than anywhere else in the country. By 1890 the population had increased to over 26,000 citizens, who had been attracted by a vibrant economy based upon mining, 25 blast furnaces, and 437 real estate offices. The profits of the Elyton Land Company skyrocketed; in 1887 the company paid dividends representing a 2,305 percent return on original investment. One-hundred-dollar shares of stock that sold for $17 in 1875 were marketed for $6,400 twelve years later.
In the midst of this boom the powerful Tennessee Coal, Iron and Railroad Company entered the district in 1886 through purchase of several existing operations; nine years later the company produced the first successful basic pig iron that could, in turn, be made into steel. Birmingham entered the modern era of steel production when two open-hearth steel furnaces were built in 1897. At the turn of the century three northern-based companies dominated the Birmingham economy: the Tennessee Company, the Sloss-Sheffield Coal and Iron Company, and Republic Iron and Steel Company. The Tennessee Company absorbed Republic in 1906, shortly before the Panic of 1907. When the Tennessee Company itself nearly went bankrupt during the Depression, the local economy was rescued by a special exemption from antitrust laws granted by President Roosevelt to United States Steel so that it might purchase the huge Birmingham facility. This $50 million acquisition was the single largest financial transaction in the history of Alabama, and the decision of United States Steel to enter the district was undoubtedly the most significant decision, public or private, affecting the city's early development. As one historian notes, "Birmingham thus began its life as an adjunct of a land company owned by southern land speculators and ended its first forty years as an adjunct of an industrial corporation owned by outside capitalists."
During the period 1900–1917, Birmingham stood as the preeminent example of industrialization in the New South; a very young city, it owed its strength and development to its position as one of the nation's leading steel-producing centers and as the center of the country's cast iron pipe industry.
Birmingham did not escape economic distress during this period. Plunged into a serious depression during the Panic of 1907, the city experienced another serious downturn in 1914. It was estimated that 40 percent of the work force in heavy industry was unemployed in the fall and that 50 percent of black workers were idle. For the first time in its history, the city created work to aid the unemployed, paying men to cut wood. Private charity also strained to meet the crisis; the Associated Charities handled 5,589 cases during December 1914 and the first quarter of 1915. The load for the corresponding time one year earlier was 1,180. But conditions improved through 1915 and 1916, and at the close of the period Birmingham was once again a thriving industrial center, caught up in the heavy demands of a wartime economy.
While the successful operations of the huge steel mills employed many of Birmingham's residents, the strength of the private sector did little to bolster the public economy. City boundaries had been drawn with great care to exclude many of the largest plants, especially the U.S. Steel works, thus exempting them from municipal taxation. From the beginning, the city operated under constitutionally imposed tax and debt limits that prevented it from meeting the demands imposed by rapid growth. The 1875 Alabama Constitution allowed a tax rate of $.50 per $100 of assessed value, forcing the city to issue bonds in order to finance necessary public projects. The 1901 constitution doubled this rate, but Birmingham in 1914 still had the lowest tax rate of the thirty-eight American cities in the 100,000–300,000 population class. Coupled with this low rate was an equally low assessment figure. Central-business-district property was assessed at 18.5 percent of market value, while residential property was calculated at 20–35 percent. When the county proposed a 60 percent assessment schedule consistent with the recommendations of the state tax committee, large real estate developers, as well as the Birmingham Real Estate Association, mounted a vociferous protest; the assessments remained unchanged.
Citing the financial plight of the city in his 1907 annual message, Mayor George Ward lamented "the failure of the city government to carry on modern legitimate municipal functions." He particularly mentioned the need to increase charity appropriations: "The city of Birmingham probably donates less to work of this nature than any city of similar size in the United States. While we can continue to repudiate such obligations, the duty ever resting on the strong to take care of the helpless is upon us, notwithstanding." To compensate for its limited revenues from real and property taxes, the city adopted a stiff license schedule for local businesses; it was the only city in the nation where license collections exceeded real and property taxes. In Ward's opinion, the only satisfactory solution to the financial dilemma was a constitutional amendment increasing the maximum allowable tax rate, but this relief eluded Birmingham until 1920.
The financial problems of the city prior to 1910 were sharply intensified after the 1910 consolidation of Birmingham with surrounding municipalities. Birmingham in 1900 covered 11.4 square miles and had a population of 38,415. As a result of the consolidation, the city in 1910 had an area of 48.3 square miles, a population of 132,685, a large and growing deficit, and service demands that far outstripped the government's capacity to provide services. Each year the situation grew more serious.
In 1911 the newly formed city commission faced a deficit of over $560,000. It promptly reduced the city's payroll by $80,000 per year and turned over responsibility for operation of the municipal parks to the women's garden clubs, which were aided by an advisory committee from the Chamber of Commerce. The public schools were serving 2,500 additional students from the suburban neighborhoods in 1911, but the commission was compelled to reduce its appropriation to the board of education by $30,000.
Continuing deficits forced the commission to drop twenty-six men from the police department in 1913; the 115-man force was one-half as large as it had been immediately after consolidation and before the economy measures. Birmingham now ranked twenty-first out of the twenty-three cities above 100,000 in population in per capita expenditures for local government; still the city continued to fall behind at the rate of $1,000 per day. The deficit at year's end was nearly $2 million.
The year 1914 saw the city reach the constitutional limit of its borrowing power, a figure fixed at $800,000. Current operating expenses were reduced by another $100,000, lowering the annual deficit but taking a huge toll in the level and quality of services. The commission completely eliminated the city's recreation, welfare, and smoke control departments; halted all public improvement work; and reduced school appropriations $340,000 by cutting teacher salaries, discontinuing night and vacation schools, discontinuing free textbooks and supplies, and closing the kindergarten program. In order to keep the public schools open for the full term, the board of education charged monthly fees for all students in attendance. Commissioners drastically cut public library appropriations, reduced the police and fire departments by one-third and instituted twelve-hour shifts, and halted all street sprinkling. During this time of general economic depression, they also discontinued all aid to private charities.
The Birmingham News, which prided itself on boosting the city, reviewed the commission's economy measures of the summer of 1915 and glumly wrote:
So, in one week, the city of Birmingham will be changed almost visibly. Its Fire Department will be too small to handle large fires; its Police Department, already insufficient, will be cut further; its library, already admittedly beneath the dignity of Birmingham, will suffer materially; officially there will be no recreation, welfare, or humane department; one-third of the present lighted places at night will be dark; there will be no street sprinkling and no street repairs to speak of; the parks will be without care of keepers; there will be no charitable appropriations; and the schools will be without free textbooks or supplies and facing the graver contingency of a term shortened under the standard.
The city's auditing company, after comparing the finances of Birmingham with other cities, concluded that "the appropriations for practically all the main departments are clearly inadequate for truly efficient service, and that if such a condition is allowed to continue indefinitely serious injury will result."
It would be tempting at this point to conclude that Birmingham was a potentially progressive city in the early 1900s, but that her development was thwarted by a rural-dominated legislature and statewide electorate that clamped restrictive limits on her tax and debt limits. And there is some measure of truth in this position.
Most notably, George Ward, mayor from 1905 to 1909, commission president from 1913 to 1917, and dominant public figure throughout the period, repeatedly advocated a constitutional amendment raising the tax limit as "fundamental and necessary to the success of any administration." Supported consistently by the city's leading newspaper, he asserted that "progressive cities with high tax rates always outstrip the older centers with low tax rates."
But the position of Ward and the local press was clearly not shared by either the business community or the voters of the city. Seeking solutions to the financial plight of the city, Commission President Ward in 1914 joined the president of the Chamber of Commerce in appointing a citizens' committee of one hundred to review municipal finances and recommend future actions; this committee included virtually the entire economic leadership group of the city. The committee was divided into three subcommittees, one concerned with a plan of permanent relief for the city. This subcommittee recommended a legislative prohibition against the city's expenditures exceeding its revenues in any fiscal year and called for the equalization of assessments. Significantly, the business leaders recommended that the permanent tax rate remain fixed at 1 percent.
This recommendation by the elite was endorsed by the voters at large in December 1915. The state legislature had authorized a statewide vote on a constitutional amendment to permit municipalities to raise their tax rates from 1 percent of assessed value to 1.5 percent; Commission President Ward himself led the local campaign in behalf of the amendment, supported by the Birmingham newspapers. Not surprisingly, the amendment lost by a majority of 8,480 across the state. But even the local vote was against the measure, which lost in Jefferson County 1,386–2,634.One is forced to conclude that the city's business elite and voting citizenry consciously chose to maintain a level of public services that was uniformly recognized as being deficient, the commission president and media notwithstanding. In a postreferendum editorial, the News said: "It will take some teamwork to awaken a city which apparently lost all of her old 'magic' yesterday but it must be done!"
Birmingham residents throughout the 1900–1917 period received an inferior level of general municipal services, which declined in quality toward the end of the period as the financial condition of the city worsened.
Early in the century the police force was inadequate. Late in the nineteenth century seventy-two men had patrolled the city; in 1903, fifty officers covered the same geographic area and an increased population. Birmingham's force was one-half as large as those of other southern cities with comparable populations, and all but Birmingham had comprehensive telegraphic communication systems. A ratio of one officer per one thousand citizens was regarded within the profession as being minimally acceptable; typical ratios were 1:300 (Chicago) and 1:500 (New York City) in the North and no more than 1:1000 in the South. Birmingham's ratio was 1:2000. Reductions in the force during the teens resulted in a force of 115 in 1914 as opposed to the 50 men of 1903. However, in the interim, the geographic area to be protected had more than quadrupled and the population had increased almost as much.
Birmingham ranked last among southern cities in parks in 1907; six years later two park commissioners issued a statement of complaint: "Birmingham has probably a smaller developed park area on the whole than any other city of its size and population in the United States."
Education was notoriously bad throughout the South in the early twentieth century, and Alabama ranked last among the states in per capita expenditures for public schools. Although Birmingham ranked at or near the bottom of each year's list of major cities in this category of expenditures, local officials noted with pride the fact that expenditures per pupil were, in fact, declining. The 1883 per-pupil expenditure by the young school system had been $17.20; this figure had dropped to $13.29 in 1893 and further to $11.41 in 1903. Lest this be interpreted as regression, the News assured its readers that because of better teaching methods and superior physical facilities, students received "vastly more" from their schooling than they had twenty years earlier.
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Excerpted from Politics and Welfare in Birmingham, 1900â?"1975 by Edward Shannon LaMonte. Copyright © 1995 the University of Alabama Press. Excerpted by permission of The University of Alabama Press.
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