What could Lana’i City, Hawaii; McCloud, California; Redstone, Colorado; and Falls View, West Virginia have in common? They all have a connection to our family history and they are all company towns.
• Lana’i City is where we had a wonderfully relaxing vacation in 2017 and which was bought in its entirety by the predecessor to Dole pineapples in 1922. About 2/3 of the homes are still owned by the current owner of 98% of the island, Larry Ellison.
• McCloud is near where Laura’s great-grandfather built a grand hunting and fishing lodge that still stands and which was built and entirely owned by the McCloud River Lumber Company. McCloud was “privatized” in the 1960’s and the homes and businesses sold to residents but the central heating plant still serves most of the buildings.
• Redstone is near where we go fishing and hiking every year and which was a grand experiment in “enlightened industrial paternalism” in the late 19th century by coal magnate John Cleveland Osgood. Most of the facilities Osgood built to provide services to the coal miners, including a club house, library and inn for single men have been repurposed.
• Falls View is where I attended elementary school and which was built by Union Carbide for workers at their nearby metals plant. Carbide maintained the school, owned and operated local recreational facilities, diverted the New River and built a three-mile tunnel under the mountain to fuel a hydroelectric plant.
These company towns may seem like quaint relics but tell that to the 238 cities, and especially the 20 finalists, that applied to become the second corporate headquarters or Amazon. This headquarters promises to spend $5 billion and create 50,000 well-paying jobs and the applicants showered Amazon with tax breaks and other incentives. They may all do well to consider the history of company towns.
Company towns run the gamut from places of near total servitude to attempts to create a worker’s paradise to the more modern version of providing perks like housing and transportation subsidies. Lowell, Massachusetts is considered to be the first truly planned company town in the US. Founded in the 1820’s, Lowell attracted young single women from the countryside to work in textile mills, live in boarding houses and lead a “moral” life. Pullman, Illinois was developed as a model town around a Pullman railroad car factory but there were deep underlying problems. The panic of 1893 and subsequent wage cuts led to the first national labor strike and, for the most part, the paternalistic company town model gave way to more professionally designed towns with less direct company ownership of town amenities.
In remote areas, however, companies retained their heavy hand. Coal mining towns were built quickly of shabby materials and company housing was the only, and expensive, option. Rent was deducted directly from workers’ pay, as well as other expenses, and any remaining pay was often paid in “scrip”, a private substitute for legal currency that could only be spent at the (high-priced) company store. Most miners were unable to escape these financial and economic burdens until unionization and labor rules broke down the system.
Company towns were not without their successes. Centralized planning and financing allowed the towns to develop quickly and take full advantage of the natural resources or industrial opportunities that drew the companies. Technological innovation was supported with company towns as ready test sites with skilled labor and test grounds. Despite the harsh financial realities of some towns, others provided a real opportunity for immigrants to come to America, benefit from the community support, save a little money, buy their own house and begin the American dream.
With the widespread adoption of automobiles and increased worker mobility and the increasing costs of maintaining community facilities, few company towns were created after the early 1930’s. Many company towns hung on as long as the jobs held up but they evolved and transitioned to more control by elected officials and municipal services. Still, there are plenty of towns and cities of varying size that are heavily dependent on one employer or one industry and the dynamics of company towns are evident as the prospects of these dominant businesses fluctuate.
At this point it seems that Amazon will conquer the world but it is rare that company towns do not eventually fall on hard times. A combination of mismanagement, shifting markets, labor issues, change of ownership, global economics, demographics, regulation and/or new technologies ultimately invades their insular world.
The metals plant near my hometown, which was sold to a Norwegian company in the late 1970’s, is still operating but with a fraction of the workers from my childhood. The town is still picturesque but the population is declining and aging. The school closed years ago and the recreational facilities have either closed or are in disrepair. The hydroelectric plant and diversion dam may be torn down, which will ironically open a stretch of the river to rafting and tourism, the new driver of the local economy.