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The impact of new industry on municipal services and amenities and on the economic structure of some… Walton, Dennis Brian 1960

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THE IMPACT OF NEW INDUSTRY ON MUNICIPAL SERVICES AND AMENITIES AND ON THE ECONOMIC STRUCTURE OF SOME SELECTED SMALL COMMUNITIES oy  DENNIS BRIAN WALTON B.A.Sc. University of Toronto 1 9 5 5  A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF M.Sc.  in the Department of COMMUNITY AND REGIONAL PLANNING We accept this thesis as conforming to the required standard  THE UNIVERSITY OF BRITISH COLUMBIA April,  I960  In the  presenting  this thesis  in partial  fulfilment of  r e q u i r e m e n t s f o r an a d v a n c e d d e g r e e a t t h e U n i v e r s i t y  of  British  it  freely available  agree that for  Columbia,  copying  gain  shall  s h a l l make  and s t u d y .  I further  f o r extensive  representatives.  or publication  copying  of  CL&^^v^^  Of  IT"  of this  thesis  by t h e Head o f my I t i s understood  of this thesis  for financial  n o t be a l l o w e d w i t h o u t my w r i t t e n  The U n i v e r s i t y o f B r i t i s h V a n c o u v e r S, C a n a d a . Date  the Library  p u r p o s e s may be g r a n t e d  o r by h i s  that  Department  for reference  permission  scholarly  Department  I agree that  permission.  (WoV^^^ugnM^^^^^^^ Columbia,  - i ABSTRACT For some time now there has been a growing tendency for new industry to locate in or near small communities for reasons varying from deliberate decentralization for defense purposes to the purely economic necessity of locating near the site of required natural resources.  This study is concerned with  communities in such area where the new industry's activity is large in comparison with the economic activity already i n existence and thus the new industry often becomes the dominant or characteristic function of the community. Quite naturally under these conditions new industry has a considerable impact on the social, economic and physical makeup of a community.  The effects may be, and often are,, so sign-  ificant that the resources of the community may be stretched to breaking point in i t s effort to adapt to meet the changes brought about.  Far worse i s the fact that within the community  i t s e l f there is often l i t t l e realization of the far reaching changes which may result from the presence of a new plant and therefore l i t t l e forethought i s given to population changes, i n terms of number or characteristics, or the changes i n community service and f a c i l i t y needs which w i l l ensue.  As a result l i t t l e  i f any planning i s done to meet and ameliorate these changes. There is much evidence of this sort of thing having taken place i n British Columbia and there are indications that large industr i a l concerns w i l l continue to locate i n small communities i n that Province.  - ii -  Different methods commonly used for measuring the impact of new industry are discussed and evaluated, and the proposition is advanced that the use of any one method may not have any meaning. The approach adopted i s therefore descriptive and qualitative. No quantitative indices are sought and no attempt is made to arrive at a precise quantitative measure of change, rather the area of change i s emphasized throughout.  The procedure followed  consists of an examination of published accounts of experiences in the United States and Canada and a study of some selected communities i n the Province of British Columbia.  The work is  chiefly concerned with community economic structure and services and f a c i l i t i e s ;  the sociological aspects of change are not  examined. The analysis of the experience of communities is concerned with isolated significant aspects of change and with the broader effects on the economic structure of the community as a whole. The analysis is further concerned with different types of communities and how the impact of a given new industry may vary with community type. Implications for planning are dealt with and specific planning measures are. advanced to ameliorate the impact of new industry.  Since the knowledge of this impact is not enough for  municipalities in poor financial condition the notion is advanced that financial assistance is necessary from a higher level of government and that there i s a definite role for a super municipal  - iii -  government i n many communities for this and other reasons.  - iv ACKNOWLEDGEMENTS It is with pleasure that I acknowledge the deht owed to the many people who helped me throughout this project.  I thank  Mr. L. S. McGill of Oelgar L t d . , Mr. Muir of Rayonier Canada Ltd. and Mr. McKeaehie and Mr. Barringer of Crown Zellerbach Ltd. for their patience and assistance in collecting data on some of the pulp and paper communities. I must particularly thank Professor I. M. Robinson of the Department of Community and Regional Planning for his constant help throughout the entire project.  Dr. H. P. Oberlander of the  same Department was helpful in rigorously appraising the study and giving i t structure.  Miss M. Dwyer of the University  Library was a great help at a l l times.  I should also like to  thank my wife who had the miserable luck to type the f i r s t draft and Mrs Norma Nutt who typed the f i n a l report. I also acknowledge the Central Mortgage and Housing Corporation who through their Federal planning fellowships made i t possible to pursue this f i e l d of interest.  -  V  -  TABLE OF CONTENTS Page Number Abstract Acknowledgements List of Tables List of Illustrations Chapter I Chapter II  INTRODUCTION EXISTING APPROACHES TO MEASURING THE IMPACT OF INDUSTRY The Survey Method Input - Output Analysis Basic-Ratio Analysis Chapter III NEW INDUSTRY'S IMPACT ON POPULATION, MUNICIPAL SERVICES AND THE ECONOMIC STRUCTURE OF SELECTED COMMUNITIES New Industry's Impact on Municipal Services and Amenities New Industry's Impact on Population and the Economic Structure Chapter IV THE PULP & PAPER INDUSTRY'S IMPACT ON COMMUNITIES Chapter V SIGNIFICANT ASPECTS OF CHANGE CAUSED BY INDUSTRIAL LOCATION Chapter VI THE BASIC SERVICE RATIO AND THE MULTIPLIER EFFECT Chapter VII . NEW INDUSTRY'S IMPACT ON DIFFERENT TYPES OF COMMUNITIES Group 1 Isolated Communities Group 2 Communities in an Agricultural Region Group 3 Communities in a Non-Agricultural Area Chapter VIII IMPLICATIONS FOR PLANNING What should be done and a possible Order of Priority The Role of a Higher Level of Government BIBLIOGRAPHY  i - iii iv vi.; vi,' 1 7 8 10 12 19 19 25 39 52 61 69 69 72 73 78 78 83 88  LIST OF TABLES Page Number 1.  The Impact o f 100 New Workers  2.  C o m p a r i t i v e Economic Data f o r Warren County V i r g i n i a - 1935 - 1945 T o t a l B a s i c and N o n - B a s i c Employment i n A j o 1942 - 1952  3. 4. 5. 6.  9 28 33-34  P e r C a p i t a Wages & S a l a r i e s f o r the U . S . , A r i z o n a and A j o , 1950  36  Aggregate Wages & S a l a r i e s i n t h e B a s i c I n d u s t r y and N o n - B a s i c I n d u s t r i e s i n A j o 1942 - 1952  36-37  B a s i c and S e r v i c e Employment, P o p u l a t i o n & t h e Multiplier Effect  66  LIST OF ILLUSTRATIONS F o l l o w i n g Page Number MAPS: Map 1 .  L o c a t i o n o f Communities - U n i t e d S t a t e s  19  Map 2 .  L o c a t i o n of Communities - Western Canada  19  Ajo, Arizona, U.S.A.  32  Ocean F a l l s , B r i t i s h C o l u m b i a , Canada  45  Port A l i c e ,  47  PHOTOGRAPHS.:  B r i t i s h C o l u m b i a , Canada  CHAPTER I INTRODUCTION For a considerable time new industry has been locating in communities in developed and underdeveloped areas alike. most part new industry has a beneficial effect.  For the  It can reduce  unemployment and balance an economy through diversification.-.:-.. Unfortunately, the establishment of new industry in a community can have some unwanted and disturbing side effects. These may become apparent in the social, economic or physical make-up of the community's fabric.  For example, people in resort  towns such as Aiken, South Carolina, may be particularly disturbed by changes brought about and feel a loss of exclusiveness. Serious clashes may even develop between new settlers and the original inhabitants.  New industry may precipitate a rapid trans-  ition in the urban nature of a community and bring about the necessity of services and f a c i l i t i e s which were not hitherto required.  As was experienced in Warren County, the economic  structure of the community may not always be financially capable of meeting such necessary changes.  The physical changes brought  about may not always be desirable as was the case in Lexington Park, Maryland, where honky-tonks and big signs sprang up along what were previously quiet country roads.  There are of course  many other aspects of change of the physical make-up of a community which may not be satisfactory. One of the objectives of planning is to smooth out the effects of such changes as may be brought about by the establishment of new industry in a community.  Indeed i t is the contention  - 2 of t h i s t h e s i s that adequate p l a n n i n g  a c t i v i t y , can i n d i c a t e areas  i n a community's f a b r i c which, as the r e s u l t of the e f f e c t s of the establishment date.  of new  i n d u s t r y , may  cause problems at a l a t e r  I t i s f u r t h e r contended that the a d o p t i o n of c e r t a i n p l a n -  n i n g measures may Industry may  then ease and  ameliorate  these adverse changes.  l o c a t e i n or near a small community f o r a  v a r i e t y of reasons among which i s a d e s i r e to a v o i d the c o n d i t i o n s w i t h i n urban c e n t r e s .  congested  Sometimes i t i s the r e s u l t of a  d e l i b e r a t e p o l i c y of d e c e n t r a l i z a t i o n stemming from defense reasons.  In some cases i n d u s t r y l o c a t e s i n such communities  be-  cause of a t t r a c t i v e l i v i n g c o n d i t i o n s which the company concerned may  regard as being a key  ent l a b o r f o r c e .  element i n the m a i n t a i n i n g  of a perman-  Of course, i n a l a r g e number of i n s t a n c e s i t i s  a matter of pure economics, whether i t be the n e c e s s i t y to l o c a t e near the s i t e of a n a t u r a l resource,  or f o r other economic  considerations. N a t u r a l l y enough the communities s e l e c t e d by new vary i n character according structure.  industry  to t h e i r l o c a t i o n and f u n c t i o n a l  Some of the accounts of communities chosen f o r the  case s t u d i e s of t h i s t h e s i s were s e l e c t e d because they w e l l u s t r a t e a new  ill-  i n d u s t r y ' s e f f e c t on p a r t i c u l a r aspects., of a.  community's f a b r i c .  D e s c r i p t i o n s of other communities i n the  process of change as a r e s u l t of the establishment  of new  industry  were s e l e c t e d because they emphasize the e f f e c t s on the o v e r a l l economic s t r u c t u r e and p o p u l a t i o n of the community, although e f f e c t s are a l s o i n c l u d e d .  other  F i n a l l y , i n f o r m a t i o n was c o l l e c t e d  - 3 -  locally on some communities in the province of British Columbia i n an effort to determine the effects on them of a specific industry. These communities were re-classified into three different groups for purposes of analysis.  The f i r s t group consists of those  communities which are isolated and located in areas in which there i s only one dominant economic activity.  The second group includes  those communities which are in regions that possess more than one economic activity and which are predominantly agricultural areas. The last group is composed of those communities which are in areas in which there is more than one economic activity but where agriculture is of l i t t l e significance in-terms of either occupation or economic activity.  This study is concerned with communities in  such areas where the new industry's activity i s large in comparison with the economic activity already in existence and thus the new industry often becomes the dominant or characteristic function of the community. Quite naturally under these conditions new industry has a considerable impact on the social, economic and physical make-up of a community.  The effects may be, and often are, so significant  that the resources of the community may be stretched to the breaking point in an effort to meet the changes brought about.  Par  worse is the fact that within the community, i t s e l f there is often l i t t l e realization of the far reaching changes which may result from the presence of a new plant and therefore l i t t l e forethought i s given to population changes, in terms of numbers or  character-  i-istics, or the changes in community service and f a c i l i t y needs which w i l l ensue.  As a result l i t t l e i f any planning is done to  meet and ameliorate these changes.  There is much evidence of  this sort of thing having taken place i n British Columbia and there are indications that large industrial concerns will continue to locate in small communities in that province. In recent years some techniques-have been evived to measure the impact that a new industry might:: have on-a community and these are discussed in the following chapter.  Gne of the methods used  for guidance of a community's future development is based on surveys of the experience of communities elsewhere.  Such surveys are  often conceived i n terms of what the effects are of a hundred work ers of a manufacturing type being added to the labor force of a community.  Another method of evaluating the impact of industry  upon a community takes advantage of a regionally orientated technique.  The underlying premise of this concept is that any  urban centre is effected by other centres of activities in its immediate region and is ultimately linked to the national economy as a whole. It is basically an input-output analysis.  A third  method, commonly used, takes advantage of the economic base concept which makes a distinction between productive activity which brings money into the community and activities which simply recirculate money which is already there.  Proponents of this method  usually advance the notion of the existence of a ratio between basic and service  activities.  The approach of this study i s really two-fold;  it  consists  of an examination of published accounts of experiences i n the United States and .Canada..and a study of some selected communities i n the Province of B r i t i s h Columbia.  In connection with the form-  er, B u l l e t i n #31 of the Planning Advisory Service of American Society of Planning O f f i c i a l s has been heavily r e l i e d on and case studies have been extracted from t h i s source unless otherwise indicated.  Studies of the B r i t i s h Columbia Communities are based  on information obtained from l o c a l private i n d u s t r i a l companies and the actual f i e l d observations of the writer.  By and large the  work i s concerned with effects on community economic structure and services and f a c i l i t i e s and not to any degree on s o c i o l o g i c a l aspects. The analysis of the experiences of communities i s concerned with isolated s i g n i f i c a n t aspects of change and with the broader effects on the economic structure of a community as a whole. In dealing with the f i r s t , a detailed examination i s made of new industries  1  impact on community f a c i l t i e s and services and commer-  c i a l enterprises.  Its concern i s to draw attention to the areas  where change w i l l probably come about.  In examining the effects on  the economic structure of a community, use i s made of the basicservice r a t i o and the m u l t i p l i e r effect since i t i s f e l t that t h i s i s a quick and useful device which appears to have some measure of v a l i d i t y i n conditions as are contemplated here. The analysis i s further concerned with different types of community and how the impact of a given new industry may vary with community type.  The types of community described e a r l i e r are  - 6 -  u t i l i s e d , and an attempt is made to illustrate how the population and the multiplier effects do in fact vary with these types. • Finally, the implications for planning are dealt with.  Spec-  i f i c planning measures are advanced to ameliorate the impact of industry on community f a c i l i t i e s and i t is seen how an analysis of the type of community may he of assistance in their preparations. The awareness of industry's probable impact and i t s implications i s however often not enough for many communities which are in poor financial condition.  It is suggested that financial assistance i s  often necessary from a higher level of government and further, that there is a definite role for a super municipal government in many communities for this and other reasons. In dealing with the case studies i t i s believed that the application of any one method of gauging the impact may not have any meaning.  The approach taken is therefore descriptive and  qualitative.  No quantitive indices of change are sought and no  attempt is made to arrive at a precise quantitive measure of change, rather the area of change is emphasised throughout.  CHAPTER II EXISTING APPROACHES TO. MEASURING- THE IMPACT OP NEW INDUSTRY The most potent force in a community for the attraction of people i s the opportunity for employment.  Needless to say, a  number of areas exist that do not possess employment opportunities which can and do attract people but these are relatively few and i t is only, normally, the wealthy and retired who are affected. Such areas ordinarily are noted for the number of amenities they have to offer.  These might range from the possession of scenic  beauty or a healthy environment, to more practical considerations, such as educational f a c i l i t i e s .  For the majority of people,  however, employment opportunity possesses the greatest lure. Income opportunities may be offered by a wide range of acti v i t i e s of which the more significant are the production, distribution and consumption functions of an urban centre.  As  these functions grow they create jobs which i n turn attract more people who w i l l eventually require land for residential and other purposes and communities destinies are governed to a high degree 1  by them.  It is therefore v i t a l to recognise the original stimulus  or stimuli of an- economy and to have a knowledge of the economy's structure and function i f planning is to have any value. It is clear that some of these functions w i l l be interrelated and that different kinds of industries and businesses willInfluence and attract different kinds of people and industry to them.  Therefore the nature of an economy should really be ascert-  ained in order to judge the amount and kind of housing and recreational and other f a c i l i t i e s .  Moreover, the speed or rate of  -  8  -  economic growth w i l l a f f e c t the r a t e of development i n the present and i n the f u t u r e .  The i d e a l method of e v a l u a t i n g impact would he  to take the dynamic nature of an urban economy i n t o There are c u r r e n t l y three approaches probable impact of new  account.  i n use t o assess the  i n d u s t r y on a community.  These a r e : ( l )  the use of surveys of communities' experiences elsewhere, input-output a n a l y s i s and  (3) the b a s e - r a t i o a n a l y s i s .  of these i s r e a l l y a c o l l e c t i o n of data on i n d u s t r i e s '  (2)  The  the  first  impact  elsewhere while the other two methods hinge upon w e l l developed theories.  Each i s described and i t s value and shortcomings  dis-  cussed below. The Survey Method T h i s approach takes i n t o account the e f f e c t s of new i n d u s t r y ' s establishment elsewhere.  S e v e r a l surveys of the experiences of  v a r i o u s communities have been undertaken by d i f f e r e n t agencies and three examples are presented below.  They are g e n e r a l l y conceived  i n terms of what the e f f e c t s are of 100 workers of a manufacturing type being added t o the l a b o r f o r c e of a community.  As may  be  seen from the three examples wide v a r i a t i o n s occur between the results.  T h i s should not r e a l l y be s u r p r i s i n g s i n c e they may  been undertaken i n widely d i f f e r i n g areas.  have  While such r e s e a r c h  r e p r e s e n t s a l o t o f work and i s of i n t e r e s t to the o r i g i n a t i n g area i s i t i n f a c t l i k e l y to be o f s i g n i f i c a n t value to other areas? The answer to t h i s i s of great importance  s i n c e such surveys seem  to be s e l f - p e r p e t u a t i n g i n t h e i r use and are b e i n g u t i l i s e d as a b a s i s of p r e d i c t i o n by communities i n widely d i f f e r i n g circumstances.  - 9 -  -For example, the Department of Municipal Affairs i n Saskatchewan recently utilised one such survey i n predicting future developments i n Esterhazy, where a salt mining company initiated operations. It appears highly improbable that the remits of the U.S. Survey would be of any value as far as Esterhazy i s concerned, even i f used as a point of departure for i t i s hardly likely that experiences of communities i n the U.S. w i l l correspond to those of a rural community i n the Canadian Prairies. TABLE 1 THE IMPACT OF 100 NEW WORKERS No. of people they w i l l support  A 700  B 131 (households)  C 600 to 800 150-200 400 12  No. of new homes 200 No. of new School children 400 66 No. of new School teachers required 12 No. of new Schoolrooms required 12 No. of ears likely to be purchased 200 187 200 No. of new Proffessional people 12 16 No. of new stores 16 3 20 Amount of new r e t a i l sales $375,000 $939,000 $350,000 No. of new workers i n other fields 117 Amount of taxes to the community per annum $30,000 Amount of tax foundation established $1,600,000 Provide a payroll of $130,000 to 170.000 Sources: A. Saskatchewan, Department of Municipal Affairs, Esterhazy Plans i t s Development. 1958 P.15 ;  B. C.  Ontario Industrial Development Council, "What does a New Plant Mean to a Community", Financial Post. Feb. 28, 1959 American Society of Planning Officials, Planning. Advisory Service, "Impact of Industry on Small Communities". Bulletin No.31  Even where the surveyed community bears resemblance to the community experiencing the establishment of new industry such results should be used with caution since the type of industry and i t s relations with other industries w i l l have a bearing on any effects generated.  Another important aspect is the time element.  How much time is involved before some of the effects actually take place?  Is i t at a l l l i k e l y that i t w i l l be similar in different  communities in different areas?  The answer is surely no, and for  this and the previous reasons an approach based on the effects of the addition of manufacturing workers does not seem to offer a vaiid method for predicting the probable impact of a locating industry. Input-Output Analysis Another method of evaluating the impact of industry upon a community might take advantage of a regionally-orientated technique.  The underlying premise of this concept is. that any urban  centre is affected by other centres of activities in i t s immediate region and is ultimately linked to the national economy as a whole.  This technique, commonly known as the input-output,  analysis, is based on theoretical work by an economist, Wossily_ Leontief.  Although originally conceived and actively applied in  practice to national economic analysis, in recent years this method has attracted researchers concerned with regions and metropolitan areas.  Isard, for example, experimented with i t and  recently applied i t to the study of the impact of a steel mill on the greater New York-Philidelphia industrial region.  (2)  '  - 11 Such a study would involve: (l) an inter-industry analysis establishing the basic relationship existing between the volume of output for each industry and the volume of input required from a l l other industries in the production processes of each such industry; and ( 2 ) the relationship between the flow of commodities between regions which occur in f u l f i l l i n g output requirements.  '  In Isard's New York-Philadelphia study the direct and indirect repercussions of the operations of the steel mill were quantified by compiling the entire set of inputs. "This b i l l of goods was constructed 1., by multiplying the cent s worth of every input required per dollar output of a given steel fabricating activity by the dollar volume of that activity corresponding to the estimated new employment, 2., by multiplying the cent's worth of every input per dollar of output of steel by the dollar volume of new steel output corresponding to our estimate of new steel capacity; 3 . , by summing horizontally for each of the forty-five different industrial inputs the requirements by steel and each fabricating activity". (4J 1  Thus this technique clearly offers many possibilities and might with refinement be one of the best tools available upon which to base projections for the urban economy, since i t offers a means of evaluating inter-industry and inter-regional relationships and also permits analysis of the economic functioning of one urban centre in relationship to other urban centres. However, limitations are imposed upon this method by the lack of data and the question of i t being in a suitable form to permit analysis.  Furthermore, i t is questionable whether such a method  would be either justifiable or even practical for a region below a metropolitan area.  In a resource-based economy, such as British  -  -  12  Columbia, the location of industry in a small community remote from a large urban centre would clearly have an impact on the economy of the Province as a whole which could be evaluated to advantage, without assisting too much the evaluation of the impact on the community i t s e l f .  This would be especially so in the case of  industry which relies either on i t s proximity to markets or the -ease-of getting its products there.  In other words, the inter-  industrial relationships developed might be widely dispersed geographically because of the strong market pull on those related manufacturing processes inducing them to locate in larger urban centres.  Thus a large measure of the impact of the inter-industrial  relationships might have l i t t e or no effect on the community where the original industry located.  Clearly the foregoing must be temp-  ered by the type and size of the industry and the situation and size of the community located i n . Base-ratio:-Analysis Another, perhaps most widely used method of assessing economic, change in a community, employs the use of the "economic base "._.. concept.  Homer Hoyt's experimentation and work in economic analy-  sis has provided the contemporary model of the ..base concept now .in (5)  general use.  This concept makes a distinction between.productive  activity which brings money into the community .and,.activity .which simply recirculates money which i s already there. "The f i r s t class i s composed of basic or town building activities which according to theory are industries which export goods beyond the boundaries of the metropolis. The second class is composed of the service or town f i l l i n g  -Inactivities which are purely local in nature. They complement the base and react to changes in i t . The forces of change, however, according to the theory, develop in the base industries, and therefore for purposes of analysis the base industries are the more significant". (6) In other words basic industry is held to be the key to a c i t y ' s economic strength and expansion in basic lines usually means growth in service activities. The f i r s t step in the application of the economic base technique is the classification of activities as either basic or service.  The manner in which this is done w i l l have.considerable  bearing on the results of the analysis, for i t is this relationship which establishes the base-service ratio.  Some hold that the add-  ition of basic activity w i l l cause service activity to rise in proportion to the ratio established and thus be utilized, for employment and population projection. have included:  Units of measure frequently used  employment, payrolls, value, added, value of prod-  uction, dysical production and dollar income and expenditure accounts for an entire urban area. Classification is not however simple and a l l forms of economic activity cannot be sharply defined since some activities serve the outside as well as local activities. Hans Blumenfeld who acknowledges that the concept has value in analysing areas of local economic activity, questions the validity in predictive studies, and queries the distinction between basic and nonbasic activity. "If an area produces i t s normal share of, say, elect-  - 14 -  - t r i c a l machinery i t would be completely erroneous to assume that this i s non-basic industry working exclusively for the local market. It i s entirely possible, and probable, that most locally produced machinery is exported, while at the same time most locally consumed electrical machinery i s imported".(7) Blumenfeld also states that the applicability of the base concept tends to decrease with the increasing size of an urban centre, suggesting that the numerical value of the ratio tends to be highest in small, relatively new cities and lowest i n large metropolitan areas. The linkage between Basic and Uon-basie activities, or the multiplier effect, has been the subject of much discussion and study.  At one time i t was thought the multiplier effect was  1 : 1 , i . e . , for every worker^in a Basic industry there was one engaged in a service activity on the premise that a direct relationship existed between the two.  If an increase of 1 0 0 Basic Workers  occurred then the number of service workers would increase by 1 0 0 and similarly there would be a proportionate negative effect. However, there would appear to be innumerable occasions when this proportionate change should not take place.  For example, i f  newly added basic workers are assiduous savers or are not spending much money i n their new area due to attachments i n old areas the multiplier effect w i l l not behave as expected.  Moreover, service  activities may be working under capacity prior to the expansion of basic activities.  An increase of 1 0 0 basic, workers may not mean  a corresponding increase of the service workers because that activity i s already lagging and the deficit may be made up by working overtime for example.  - 15 -  In the light of the former comments any study of a communi t y ' s economy wishing to take advantage of a Base Service method would have to take into account to what degree the labor force is expandable within the area and in addition the spending habits that exist at present and what they are likely to be in the future. It may then be possible to forecast what the service activities are likely to be in relation to an increase of basic activity. In the event of a decrease in basic activities i t has been found that certain service core elements exhibit resistance to negative change.  Not only do a number of factors tend to minimize  a decrease in service activities but there is often a perceptible lag here too, which is evident in the study of Ajo, Arizona.  v  '  The notion that total population w i l l decline with a decrease in basic activities assumes complete mobility of labor.  Clearly  this is not so and outward migration is not proportionately related to declines of basic activity.  Sentimental ties, social attach-  ments, home ownership and a host of factors prevents this and often causes labor to indulge in marginal activity in an economic sense, rather than to move away. An area's propensity to consume can change over time irrespective of any change of basic activities and thus change the level of service activities.  Technical improvements in industry of basic  or service type leading to higher productivity can provide higher wages and salaries which may increase- consumption spending. Increase in income due to union or company policy could have the same effect, quite independent of the number of basic employees.  - 16 -  The consumption function, however, is f a i r l y stable over time and varies mainly with the income class of family. Autonomous public or private investment can play a role in modifying a B/S ratio but the bulk of public investment is for schools which is usually in response to population growth.  Local  savings in British Columbia communities in their early stages of growth are usually devoted to foreign investment and the improvement of basic things which do not directly effect service activities. Higher utilization of an area's service activities may enable i t to decrease i t s imports and expand i t s service activities quite independently of basic activities. Total employment may change independently of basic activity due to emigation for health reasons or as a result of an increase of expenditure of service firms.  Long run social changes, such as the  birth rate, custom or taste, not associated with basic activities, w i l l effect the service activities as well. The ratio of total employment to total population also can and does change.  In the early stages of a community's growth i t tends  to be higher and as expansion takes place, the ratio tends to decline. It is generally conceded that four main factors influence the basic service ratio: (a) the nature of the basic activities themselves, (b) a community's geographic location, (c) i t s degree of maturity, and (d) i t s size.  A government centre such as Victoria  with a high proportion of professional people w i l l have a different  - 17 B/S ratio from a city based on an extractive industry.  A relatively  isolated community may have a higher ratio than one in a metropolitan area which relies on the central city for most of i t s  services.  An older or slower growing city frequently has a higher ratio than a young city concerned with export activity and larger cities seem to have lower ratios than small communities. Although the base ratio has many defects i t is relatively easy to obtain.  It does permit a rough prediction.  It may not be a  suitable tool for the detailed analysis for which i t has often been (q)  used;  i t is at least a starting point.  '  Chapin points out that: "there are some urban areas where a basic service system of classification can be applied with l i t t l e or no qualification - particularly in the smaller communities engaged in activities that are mutually independent of one another". (10) Because i t is relatively easy to obtain and fewer complications arise in the classification of basic-service activities in small communities i t is proposed to u t i l i z e this method in analysing the effects of new industry on some of the case study communities discussed in the chapters which follow.  Moreover, since this type of  analysis has not been so extensively used for small communities, such a study would be a contribution to knowledge. However, since in practice there are a number of factors which cause the ratio to deviate from i t s theoretical value, i t is not proposed to rely solely upon this method.  Further,  quantitative  indices are not being deliberately sought and the application of -any one method would not have any meaning for purposes of this  - 18 study since i t would not reflect a. sufficiently comprehensive view of new industry's impact on communities' fabric.  It i s  therefore proposed to examine new industry's impact on communities for other effects,  such as the impact on community services  and amenities, and on the population. Sources: (1)  Saskatchewan, Department of Municipal Affairs, Esterhazy Plans i t s Development. 1958 P.15  (2)  ¥ . Isard and R. Euenne, "The Regional Impact of Steel", Review of Economics and Statistics. Nov. 53 P.294  (3)  Chapin, P . S . , Urban Land Use Planning, Harper and Brothers, New York 1957 P.91  (4)  Isard and Kuenne, op.cit. P.295  (5)  Chapin, op.cit. P.106  (6)  Grigsby W. and G i l l i e s J . , "Classification Errors in Base-Ratio Analysis", American Institute of Planners Journal. 1956 Vol.XXll No.l P.17  (7)  Blunremfeld, Hans, "The Economic Base of The Metropolis", American Institute of Planners Journal, Vol. XXI No. 4 P.114-132  (8)  Casady, L.W., "The Economics of A One Industry Town", The Arizona Business and Economic Review. Dec. 1954 PP2 - 6  (9)  Grigsby and G i l l i e s , op.cit. P.22  (10) Chapin, op.cit. P.106  CHAPTER III NEW INDUSTRY'S IMPACT ON POPULATION. MUNICIPAL SERVICES AND THE ECONOMIC STRUCTURE OP SELECTED COMMUNITIES Two distinct groups of communities comprise the case studies of this chapter.  The. f i r s t group consists of those accounts of  communities which emphasize new industry's impact on municipal services and amenities.  The second group of communities i l l u s t -  rates more clearly new industry's impact on population and on the economic structure.  The location of these communities is shown on  the accompanying maps. Information for the f i r s t group of communities was derived from Bulletin #31,  "The Impact of Large Industries on Small  Communities" prepared by the Planning Advisory Service of the American Society of Planning O f f i c i a l s . Information on communities in the second group was derived, from three sources.  The accounts of Front Royal and Edmore were  extracted from a pamphlet entitled, "What Will New Industry Mean to My Town?" by W. Calef and C. Daoust of the United States Department of Commerce.  Information on Ajo was derived from, "The  Economics of A One-Industry Town" by L. W. Casaday as presented in the Arizona Business And Economic Review of December, 1954.  The  account of Leduc was obtained from, "A General Plan for the Town of Leduc" as prepared by the Edmonton District Planning Commission in 1954. NEW INDUSTRY'S IMPACT ON MUNICIPAL SERVICES AND AMENITIES Seneca. I l l i n o i s was a quiet town with a population of approximately 1,200 people before the establishment of an L . S . T . ship'yard i n 1942 caused the population to jump some 6,500 people.  At  0CATION  UNITED  STATES  OF COMMUNITIES  D.WALTON  APRIL  I960  - 20 that time- it • supported- some- forty commercial establishments. -  It  had a six room school house with an enrollment of approximately 175 students and i n addition, a high school with 131 students and a parochial school with forty-five students. provided by volunteer citizens.  Fire protection was  Sewage disposal was accomplished  by septic tanks and privies with the result that a small stream which meandered through the community was polluted. An in-migration of about 5,000 people caused a l l existing housing f a c i l i t i e s to be f i l l e d , both i n Seneca and for thirtyfive miles around.  Hundreds of trailers were located i n back yards  and trailer camps.  Since private enterprise was unwilling or un-  able to supply housing which was s t i l l needed the Federal Public Housing Authority built some 1,500 family units and a dormitory for 300 single men. The number of commercial establishments grew to sixty-five. Restaurant business expanded thirty to forty times, the news service increased eight times, and food stores and the Post Office increased business i n proportion to the population increase of some five times.  The sales volume of clothing stores increased four and one  half times, drug stores by three times and hardware and furniture stores doubled their volume of business. After two years, enrollment i n schools reached a peak of 700 in elementary schools, 250 i n high school, and ninety-five i n parochial schools.  A new school was eventually built with sixteen  classrooms at a cost of $110,000. increased from $45,000 to $124,000.  Expenditure for schools  - 2-1 The f i r e station had to employ two f u l l time men and a drainage and ssrer system was built with a grant of $187,000 from the Federal Government. Generally speaking, at the beginning of the boom the following were inadequate:  commercial f a c i l i t i e s , housing, schools,  recreation f a c i l i t i e s , transportation and sanitation f a c i l i t i e s . Police protection was termed inefficient.  After two years, housing,  schools, medical services and police protection were adequate and transportation, commercial and recreation f a c i l i t i e s were passable. Schools and sewage disposal were rectified near the end of the boom but recreation and transport f a c i l i t i e s remained unsatisfactory. When the shipyard closed i n 1945 the population sank back" to slightly above the pre-war population figure, school enrollment was only thirty above, and thirty-six stores were vacant. Neosho, Missouri i s another community which experienced rapid growth during the Second World War.  It was a town of some 5,000  people of whom some 800 found employment i n commercial activities and in'the processing of farm goods. Upon the construction of Camp Crowder nearby, thousands of construction workers settled i n and around Neosho while many others settled i n nearby towns.  A peak force of 21,000 workers was  employed. A housing shortage quickly developed with a rise i n rents of almost f i f t y per cent.  It was commonplace to take i n roomers and  a l l sorts of make-shift shelters were u t i l i s e d . Real estate transfers of property along highways on the edge, of  -  the camp were very active.  22  -  There was no roadside control with the  result that liquor stores, t r a i l e r and tent camps, jerry-built hotels, gas stations and amusement centres rapidly developed. A rapid rise in business was experienced by hotels, restaurants, grocery stores and f i l l i n g stations.  Along with a housing  problem came d i f f i c u l t i e s in health and sanitation although the Federal Government assisted i n the construction of a new sewage disposal plant and a sewerage system. Finally a tremendous overcrowding problem of the three elementary schools and the junior-senior high school was experienced. Following the location of a Du Pont powder plant in Chariestown. Indiana, a population explosion of from 936 to 17,000 people resulted in the war years, and extensive commuting i n a sixty mile area took place. A local and a county interim zoning ordinance was enacted at an early time as were subdivision controls and a simplified building code.  However the transportation system proved to be inadequate  for the large amount of commuting that was taking place and serious t r a f f i c problems were common until a t r a f f i c code was formulated to ameliorate i t .  At the time, i t was observed that a t r a f f i c light  twelve miles away stopped traffic^ i n Charlestown;  such was the  volume of t r a f f i c on the state highway. Workers were discouraged from settling i n the town but a housing shortage swiftly occurred and an enormous number of trailers moved into some twenty-one trailer camps despite i t and a -Federally assisted building program.  -  23 -  Adequate school f a c i l i t i e s were lacking as were water mains and sewers and in connection with the latter a widespread fear of epidemics developed as the sanitation control broke down. Lexington Park in St. Mary's Gounty, Maryland. provided yet another example although of rather a different type.  The establish-  ment of a Navy Air Test centre in the early days of World War II near this town contributed to i t s doubling i t s population in about ten years.  Such social f r i c t i o n was generated as was testified by  the Baltimore Sun of August 4th, 1946, which stated: "Regardless of what the Navy Officers said, the county folks saw the picture of- the area in the light of what had happened in the past two years (during the temporary boom period). They saw more honky-tonks - and worse - springing up along once quiet country roads, they saw big signs going up to attract customers where once there was only Southern Maryland Sedateness".(l) More recent experience after the cessation of hostilities in World War II provides further illustrations of new industries impact. When U.S. Steel located i t s Pairless Steel Plant outside Morrisville, Pennsylvania. i t precipitated the location of numerous cooperant and other manufacturing plants in the same general vicinity.  The resultant change of economic base from agriculture  to manufacturing has caused a tremendous influx of workers into the area and a consequential housing construction rate in excess of 150 houses per week. One of the paramount problems i s finance; the industries pay and to whom?  how much tax w i l l  The area of impact as regards  housing and f a c i l i t i e s spreads across two States, New Jersey and Pennsylvania, and since most residential property does not  - 24 -  contribute sufficient funds i n taxes to pay for demanded services the apportionment of industrial taxes i s c r i t i c a l . The construction of a hydrogen bomb plant by the Atomic Energy Commission i n Georgia took place some twenty-seven miles south of Augusta, a town of some seventy thousand people, and about the same distance from Aiken, South Carolina. ... Many small communities experienced a population increase including Aiken, a resort town, which went from 7,000 to 9>000 people.  Aside from housing problems and rapid inflation of land  values, especially along highways leading to the plant, serious clashes developed between the new settlers and the original inhabitants. Many people were disturbed by change, per se, the loss of exclusiveness, the loss of riding t r a i l s and the peaceful agricultural setting.  Many had resisted and resented the invasion of  their town by the construction force.  Crowded stores, t r a f f i c  congestion and the ubiquitous trailer camps have brought home" to -  the residents of Aiken the fact that the community w i l l never be the same again. Brandenburg, Kentucky felt the impact of industrial location and i t s population has risen from 800 to approximately 5,000 people.  Its water system and housing proved to be inadequate and  the construction of a sewer system was precipitated. Corona, California, a community of some 11,000 people found i t s e l f with problems when a large, dormant Naval Hospital was reropened.  As might be expected the community did not possess a mass  - 25 transit system or a bus line and consequently transportation problems became acute.  Recreation f a c i l i t i e s and schools became  particularly inadequate and a housing shortage was aggravated by shortage of local mortgage money. NEW INDUSTRY'S IMPACT OH POPULATION AND THE "ECONOMIC STRUCTURE Front Royal. Virginia Front Royal, a rural market town i n Warren County, an area characterized by general farming, had a population of two thousand, four hundred twenty-five persons i n 1935.  It i s situated seventy  miles west of Washington, D . C . , i n the Shenandoah Valley. Warren County contained 8,340 persons i n 1930 and economic and population growth was f a i r l y well stabilized, although the agricultural economy may be judged to be f a i r l y near the subsistance l e v e l .  Agriculture was the largest source of employment and  i t realized an income of 1800,000 i n 1935 while manufacturing, the second largest source of employment earned three million dollars. Five hundred and thirty two persons were employed by eleven firms which paid them $302,000 per annum. Warren County was served by 126 r e t a i l establishments providing a livelihood for 286 proprietors and employees, and realizing gross sales of $1,600,000.  Eight' wholesale establishments employed  twenty-four persons and forty-four service establishments provided work for seventy-nine persons. The town government was simple and on a small scale and ordinary operating expenses were balanced by revenues of about seventy thousand dollars.  A total of twenty-two persons carried  - 26 out a l l the county administration and judicial activities while the state maintained a l l roads.  The County maintained nine schools  staffed by sixty teachers for 1,950 pupils at a cost of $105,000 per annum. In late 1936 the opening of an entrance road to a nearby national park, stirred: increased economic activity through the development of a tourist trade which caused the construction of tourist homes, motels, restaurants,  curio shops and other f a c i l i t -  ies. A few months later i n the Summer of 1937 the American Viscose Corp. commenced the construction of a large textile chemical plant just outside the corporate limits of Front Royal.  Material and  labor requirements for the plant were significant but aside from the purchase of 45,000 gallons of drinking water per day i t made few direct demands on the town's f a c i l i t i e s . Population increased with the arrival of construction workers, but new homes were built and no stringent pressures were placed on housing, u t i l i t i e s , or community f a c i l i t i e s .  Although when the  plant started production i n 1940 with 2,500 workers i t was not until 1942 when a major plant expansion took place that the resources of Front Royal and Warren County were unable to cope with rising demands.  This and subsequent expansions led to a peak labor  force i n 1946 of 3,937 workers. Warren County's population increased by thirty-six per cent to 11,350 people i n 1940 and had reached 14,425 by 1947.  The town of  Front Royal grew i n population from 2,425 i n 1935 to 3,831 i n 1940  - 27 and to four thousand by 1947.  It is interesting to note that a  significant portion of the new population in both came from surrounding counties which in a l l cases but one lost population in the 1940's. Most of the new residential construction took place outside the corporate limits after 1940 since l i t t l e land remained vacant within. Gross expenditures for municipal functions tripled during the ten years following Viscose's a r r i v a l . in the fields of water, electricity, ies and streets.  This was especially marked  sewage and education f a c i l i t -  The number of churches in the town doubled and  more f a c i l i t i e s for entertainment appeared.  In addition, hospital  f a c i l i t i e s had to be modernized and expanded. Air pollution in the community resulted from the plant stacks despite efforts to prevent i t and increased waste disposal from both the plant and the municipality polluted the Shenandoah River although the chemical effluent from the plant was later purified. Education, the principal County function, caused much of the increase in County expenditure.  School enrollment increased from  1,980  Both expenditures for Warren  i n 1935 to 3,080 in 1947.  County grew much faster percentage wise than did those of the Counties of Virginia as a whole. The number of r e t a i l and service establishments in the County increased rapidly during the early years of industrialization with the r e t a i l units jumping from 126 in 1935 to 186 in 1939 but apart from an expansion in size there has been no subsequent  increase.  - 28 Their employees rose from 173 i n 1935 to 681 i n 1948. Service functions i n Front Royal were apparently over expanded since there were only three more i n 1948 than existed i n 1935. Ret a i l sales volume jumped more than six hundred per cent, service fees more than 550 per cent and the wholesale volume was twenty times greater i n 1948 than i n 1935.  Industrialization was the  chief factor i n the increase i n economic activity although not the sole cause. With the increase of 2,626 jobs i n manufacturing from 1935 to 1945 the further 795 jobs have come about i n other activities i n Warren County.  That i s , for every three and one third jobs i n man-  ufacturing one job i n non-manufacturing activities has occurred. Wages rose generally throughout the are^- and i n point of fact wages and employment increased far more i n Warren County than they did i n any of the other six contigous Counties or throughout Virginia. Data comparing the situation i n Warren County i n 1935 with that i n 1945 i s summarised i n the Table which follows. TABLE 2 Comparative Economic Data for Warren County. Virginia - 1935 and 1945 1945 Agriculture Value of farms $5,750,330 $5,002,485 Farm Labor 1,240 661 Wages Paid 112,388 237,749 Manufacturing Employees Wages Paid Value of Products  532  301,861 $1,389,638  3,158 6,5?3,984 $27,744,602 (cont  )  - 29 TABLE 2 (cont...) 1935  Retail Trade Number of Establishments Total Employed Sales Wholesale Trade Number of Establishments Total Employed Sales Service Trade Number of Establishments Total Employed Receipts Per Capita Income  126 286 $1,602,000  186 860 111,568,000  8 24 $460,000  17 100 $9,768,000  44 79 $87,000 $461  47 169 $571,000 $931  Source: Calef, W., and Daoust, C , "What Will New Industry Mean to My Town?". U. S. Department of Commerce 1955 The Village of Edmore, Montcalm County. Michigan Edmore i s located i n east central Michigan on the northern fringe of the manufacturing belt.  Although the area has numerous  lakes and a minor tourist trade the leading economic activity i s agriculture- with general farming and commercial vegetable production predominating.  The largest city i n the County i s Montcalm with  a population of 6,608 and Edmore i s one of a few tiny villages and hamlets scattered about i t . In 1952 Edmore, with a population of 971, had three small manufacturing plants a l l related to agriculture, providing employment for f i f t y f u l l time employees and a few more temporary workers for a few weeks i n the Summer.  At that time the village had f i f t y -  eight r e t a i l and service establishments, a relatively large number reflecting the seasonal influx of tourists, since most sales and service activities were orientated to a farm populace.  - 30 In 1951,  the Carboloy Dept. of the General Electric Company  began construction of a plant for fabricating cutting tools.  After  receiving more than four thousand applications for the two hundred, jobs available, General Electric decided to build an additional plant and work began on the Alnico plant the following year.  When  in production the two plants provided employment for 285 people. Supervisory personnell and some labor was transferred from the old plant in Detroit while many more were hired l o c a l l y .  Only 37  per cent located in Edmore while the remainder scattered to villages and farms as far as thirty-five miles distant.  60 per  cent of the employees resided at least six miles away although less than 20 per cent commuted more, than twelve miles. This high dispersal was in part due to the fact that almost 70 per cent of the labor force were local farmers or part time farmers.  In addition, out of town housing was available in surplus  farm dwellings and numerous cottages and summer homes which could be bought cheaply and converted into permanent dwellings. Five new subdivisions were planned of which four were extensions of the village into agricultural land.  Since no integrated  u t i l i t y system was provided by the developers and l i t t l e immediate advantage was offered by locating there, the newcomers went elsewhere with the result that by 1953 only thirteen of thirty-one new housing units completed were in the new subdivisions. The subdivisions had many desirable features:  lots were large  and there were restrictive covenants regarding land use, minimum value construction, floor space and the location of structure on the property.  A survey of employees showed that the lack of  - 31 .utilities was a major obstacle and that cheaper sites on good roads free from any restrictions proved much more attractive to most potential home builders and buyers. Business in Bdmore was affected only slightly and the most visible effect was a general remodelling and refurnishing of the buildings on the main business street. service businesses were established.  Only seven new r e t a i l and It was felt that r e t a i l and  service trade experienced no more than a ten to fifteen per cent increase in volume despite a 450 per cent"increase in industrial payrolls..  Less than twenty additional employees were hired in a l l  r e t a i l and service activities. Trade, however, has been stabilized, since before the plant arrived business failures were numerous and the l i f e expectancy of a newly established business was approximately two and one half years. Village expenditures and receipts were largely unaffected and certain capital expenditures would have been done anyway since state funds were available.  School expansion had come about in  1950 and no new f a c i l i t i e s were needed although the old water system had to be rebuilt to facilitate the larger population. The plant added greatly to the tax base in Home township but expenditures increased negligibly while the valuation in Montcalm County increased only about 2 per cent. Because the volume of 'phone calls increased 50 per cent the modernization and enlargement of the operation of the telephone company became necessary and this was probably the most significant change directly attributable to the plant's a r r i v a l .  - 32 The plant's higher wages caused some Edmore employers to raise wages i n order to retain personnell.  Garboloy o f f i c i a l s estimated  that one million dollars was added to the area's annual income by their plant but the purchasing power was diffused i n accordance with the geographical distribution of employees.  An increase of  twenty other jobs i n Edmore came about i n other activities with the increase of 285 manufacturing jobs reflecting the dispersion affect and the possible under utilization of existing r e t a i l and service facilities. The Gommunity of Ajo. Arizona Ajo is' a company owned community f i f t y miles south of Gila Bend, a small village, and about the same distance north of the Mexican border.  The surrounding countryside i s desert and as such  i t i s virtually barren of any economic activity.  The photographs  on the following pages illustrate this and other aspects of the community i t s e l f . Ajo owes i t s existence to the mining operation of the Phelps Dodge Corporation, since i t has only a negligible tourist trade- and is not a shopping centre for residents of other areas. Over an extensive period of time, some thirty years, the size' and growth of population have closely followed the rate of increase' in copper production at the New Cornelia Mine.  The rate of incr-  ease of population has differed substantially -from-that of either Pima County or the State of Arizona. By way of illustration, between 1920 and 193© copper production was mp idly increased, using, a leaching process developed earlier.  The community's population grew from 2,336 to 4,570, a  THE COMMUNITY OF AJO, ARIZONA, U.S.A  Samples o f Some R e t a i l B u s i n e s s  Establishments  - 33 rate of increase (96 per cent) higher than for Pima County (61 per cent) or for the State (30 per cent). Between 1940 and 1950 labor shortages and wartime and postwar d i f f i c u l t i e s held the copper production growth to less than 25 per cent, a very moderate rate of increase.  Similarly, Ajo's  population only increased about 14 per cent or from 5,795 to 6,588.  This and the former illustration demonstrates Ajo's pop-  ulation dependance on the local mine's activities rather than on general conditions i n the State which had a population increase of 50 per cent or those of Pima County which had an increase of 94 per cent. In 1950, average' employment i n the mining operation was 1,126 while at the same time the community's population was 6,588.  In other words for every one employee i n mining there  were 5.85 people living i n the community.  Earlier i n 1940, one  thousand workers were employed by the company and the population at that time was 5,795 giving a ratio of one to 5.79, and suggesting a f a i r l y constant ratio between employment i n the mining occupation and the total population i n the community. In the following table basic employment refers to workers employed i n the mining operation since i t was felt that industry was fundamentally responsible for the town's existance and that due to the community's isolation a l l other employment activities are supplementary to, and i n a sense, supported by i t . TABLE 3 Total Basic and Non-Basic Employment i n Ajo. 1942 - 1952 (cont...)  - 34 TABLE 3 (cont...) Year 1942 1943 1944 1945 1946 1947 1948 1949 1950 1951 1952  .  Total 1,314 1,310 1,141 1,037  Basic  1,057  1,050 875 768 933 1,049 1,007 1,032 1,126 1,161 1,220  1,211  1,346 1,328 1,389 1,509 1,565 1,642  -  Hon-Basic 257  260 266 269 278 297  321  357 . 383 404 422  Ratio Basic/Non-Basic 1 to .24 1 to .25 1 to .30 1 to .35 1 to .30 1 to .28 1 to .32 1 to .35 1 to .34 1 to .35 1 to .35  Source: Casady, L.W., "The Economics of a One-Industry Town", Arizona Business and Economic Review. Dee. 1954 At any given time between 1942 and 1952,  employment in the  mining industry was from three to four times as large as employment in a l l other activities combined.  That i s , during this  period i t was considered that one worker in the mining industry supported only the equivalent of between a quarter and a third of a worker i n activities other than mining.  Further i t may be seen  that between 1942 and 1952 while the community's population grew moderately, the ratio of non-basic employment to employment in the mining industry rose from .24 to 1 in 1942 to .35 "bo 1 at the end of the period. Referring again to Table 3 i t may be seen that basic employment i n Ajo rose from 1,057 of 163 workers.  in 1942 to 1,220  in 1952,  an increase  During the same period non-basic employment ad-  vanced by 165 workers.  The two categories rose at a ratio of 1  to 1.01 over this period.  However i t may be seen that this is  true only in total and that non-basic employment increased at a  - 35 -  steadier but slower rate of increase than basic, and thus there appears to be a substantial lag in time in the basic working force and the responsive change in the non-basic working force. Moreover, when the basic employment experienced a decline in 1943, 44 and 45 and 48 the non-rbasic showed no decline, i n fact, moderate increases were experienced in those years. Table 4 shows that, on a per capita basis, wages and salaries in 1950 were substantially higher in Ajo than the average for Arizona and nearly as high as the average for the United States. This is explained in part by the fact that the mining industry pays relatively high wages and that a high proportion of Ajo's total population may be assumed to be wage and salary earners than i s true for the State or country as a whole. On a similar basis to Table 3 , the aggregate section of Table 5 presents the relationship between basic and non-basic wages and salaries.  By way of example, in 1952, non-basic workers received  twenty cents in wages and salaries for each one dollar the basic employees received.  Over the long term from 1942 to 1952 the  basic industry payroll increased at a ratio of one to .23 to the non-basic activities.  The long run ratio does not differ mater-  i a l l y from the ratio of any given year and i t may be assumed that the basic and non-basic payrolls rose at approximately the same rate during the eleven year period.  The steadiness of non-basic  employment over the same period is reflected in the absence of non-basic wages and salaries following the slump of basic wages and salaries. The aggregate ratio of basic to non-basic for 1952 was 1 to  - 36 :.20 while the average ratio was 1 to .59.  Each worker i n the  non-basic industries earned a salary or wage equal to 59 per cent of that received by each employee i n the basic industry. From 1942 to 1952 basic wages and salaries increased by $2,790 while non-basic increased by $1,405 representing a ratio of 1 to .50.  Since this ratio i s lox\rer than the lowest ratio for  any individual year i t seems apparent that average wages and s a l aries for the non-basic activities did not climb as rapidly as those for the basic a c t i v i t i e s . TABLE 4 Per Capita Wages & Salaries for the U . S . . Arizona, and Ajo, 1950 Per Capita Wages & Salaries Wages & Salaries Population 150,697,361 $141,632,000,000 $940 U.S. 749,587 535,000,000 Arizona 713 6,588 5,953,000 904 Source: Casady, L.W., "The Economics of a One-Industry Town", Arizona Business and Economic Review, Dee.1954 TABLE 5 Aggregate & Average Wages & Salaries i n the Basic Industry and Non-Basic Industries i n Ajo 1942 - 52 AGGREGATE Year 1942 1943 1944 1945 1946 1947 1948 1949 1950 1951 1952  Total $3,317,781 3,560,928 2,752,543 2,3.95,218 3,529,491 4,282,939 4,723,422 4,930,393 5,953,010 7,064,590 8,053,031  Basic $2,851,194 3,053,067 2,249,394 1,855,273 2,934,933 3,569,295 3,867,470 3,951,031 4,871,873 5,856,375 6,693,620  Non-Basic $ 466,587 507,861 503,149 539,945 594,553 713,637 855,952 979,362 1,081,137 1,208,215 1,359,411  Basic/Non 1 !..16 1 ..17 1 :..22 1 !..29 1 : .20 1 : .20 1 :..22 1 .-.25 1 ! .22 1 •..21 1 i .20  - 37 TABLE 5 (eorrt...) Year 1942 1943 1944 1945 1946 1947 1948 1949 1950 1951 1952  AVERAGE Basic $2,697 2,908 2,571 2,416 3,146 3,403 3,841 3,829 4,327 5,044 5,487  Total $2,525 2,718 2,412 2,310 2,915 3,182 3,557 3,550 3,945 . 4,514 4,904  Non-Basic $1,816 1,953 1,892 2,007 2,139 2,403 2,667 2,743 2,823 2,991 3,221  Basic/Non-Basic 1 : .67 1 : .67 1 : .74 1 : .83 1 : .68 1 : .71 1 : .69 1 : .72 1 : .65 1 : .59 1 : .59  Source: Oasady, L.W., "The Economies of a One-Industry Town", Arizona Business and Economic Review. Dee.1954 Leduc. Alberta The settlement of Leduc was incorporated as a village i n 1899 and as a town i n 1906. steady and continuous.  Erom 1901 to 1931 i t s growth was  The growth of Leduc was brought to a stand-  s t i l l by the declining agricultural prosperity of the thirties and only very minor increases i n the post war period indicated that the town had reached i t s upper limit of growth as an agricultural service centre.  In 1947 the discovery of o i l provided the town  with a new basis of expansion and the population doubled i n the next five years as i t climbed to 1,842 i n 1951. Future development of Leduc was considered to be linked to agriculture and o i l exploration and d r i l l i n g and the general plan for Leduc assessed the trends i n o i l and agriculture i n addition to any latent potential that might have provided a basis for further groiirth. Leduc's role i n the development of the surrounding o i l fields  - 38 was mainly confined to a place of residence for o i l f i e l d workers and the location of offices and yards of o i l f i e l d welders, truckers and d r i l l i n g firms. In 1951 there were approximately 160 o i l workers living i n Leduc; by 1954,  200.  These workers, together with their depend-  ents and the accompanying service population, now account for more than 50 per cent of the population.  This survey revealed that the  growth of the town since 1951 had been largely the result of o i l f i e l d exploitation and any assessment of future growth had to consider prospects for employment in the town. Accordingly, o i l activity was investigated and i t was determined that the greater percentage of o i l wells had been completed in the Leduc-Woodbend f i e l d and had resulted in an overall decline of d r i l l i n g activity and firms engaged in this aspect of the work had to adjust to the trends.  For those workers engaged in mainten-  ance and production, employment stabilized and i t was estimated that the f i e l d would be in production for at least ten years. Assumptions were therefore made regarding these trends in o i l and agricultural activities and their effects on population; and community planning commenced on this basis. Source: (1)  As cited by American Society of Planning Officials, The Impact of Large Industries on Small Communities. Bulletin No.31 1951  .CHAPTER IV THE PULP AMD PAPER INDUSTRY'S IMPACT PIT COMMUNITIES British Columbia has a resource based economy and the major, source of income is from the forestry industry.  There are many  operations such as logging and sawmills, on the coast and in the interior but one of the more rapidly expanding activities has been the pulp industry.  In the last decade over half a dozen  large mills have been constructed and brought into production i n the Province. Under modern conservation practices mills u t i l i z e tree farming methods to insure a long and continuous supply of timber. Companies concerned procure licenses from the Provincial Government to operate such farms which are often very extensive i n area. Frequently mills are located on tidewater to ensure cheap transportation f a c i l i t i e s by ship. For these and other reasons pulp and paper plants are normally located in rural areas where there may be either only small communities nearby or none at a l l .  Naturally enough these mills,  employing between six hundred and twelve hundred workers, have a not insignificant impact on the local economies concerned and the physical and social aspects of the communities that are present. Since i t is likely that more of such enterprises w i l l come into being in the future i t i s of interest to examine some typical examples.  Four communities were therefore chosen:  Ocean F l l s , Campbell River and Castlegar. a  Port Alice,  Their location may be  observed on the maps presented earlier in this thesis. Two of these, Ocean Falls and Port Alice, are company-ownedcommunities and are virtually isolated from any other economic  - 40 -  activities, making them completely dependent on the company's operation.  It therefore follows that there is no question of  examining any impact of industry upon them since the settlements were created to serve the m i l l s . However both settlements have existed for a long period of time and are relatively stabilized although of course changes periodically occur with production fluctuations.  There is something  to be learned from what has evolved physically and population wise as a result of the operation of these industries. The third example, Campbell River, represents an attempt to actually describe and measure the impact of the location of a pulp mill near to a small village which was formerly dependent chiefly on commercial fishing and a tourist trade for its livelihood. Castlegar i s a small village in the interior of B . C . located between the cities of Trail and Nelson.  It is close to the site  chosen for construction of a pulp mill which expects to be operating in a year's time (1961).  In this case, change is looked at  through the eyes of the company and what they expect to take place i s described. Although the discussion is by no means exhaustive i t is hoped that a reasonable cross section of the impact of a specific industry is presented. Unless otherwise indicated information on Castlegar was obtained from Celgar L t d . , information on Ocean Falls was obtained from Crown ZellerbacBr L t d . , and information on Port Alice was obtained from Alaska Pine & Cellulose Ltd.  Crown Zellerbach Ltd. also  supplied information on the company's activities near the village of  - ,41 ^Campbell River. . Photographs of Port Alice and Ocean Falls may be seen i n the set of illustrations. The Village of Castlegar. B.C. The villages of Castlegar and Kinnaird are located i n the southern part of the West Kootenay region of B . C . , roughly half way between the two largest population centres of the region, the cities of Trail and Nelson.  Population-wise, Castlegar i s the  larger with some 1,329 people i n contrast to 947 people i n Kinnaird. Castlegar participates i n several ways i n a larger economic unit which includes the cities of Trail and Nelson with their industrial and other activities and as a forest industrial area. In the vicinity of Castlegar, forestry operations include logging and twelve sawmills which employ a total of 200 men (1955). Castlegar has nine service establishments providing fifteen to seventeen people with a payroll of $29,900. almost $200,000 i n 1951.  Receipts amounted to  Some twenty-three r e t a i l stores provide  twenty-eight to forty-five employees with a payroll of $70,000, and have an annual sales value of $996,000. The relatively large number of stores i s again similar i n ratio to Nelson and larger than T r a i l , indicating that the trade area of Castlegar extends beyond the village boundaries. However, sales per person and per store are only about one third of those in the cities (of Nelson and Trail) showing that a large portion of the money used for purchases by Castlegar people was spent i n the cities.  ^  This condition has probably started to change during the seven years since 1951 and i t i s expected that i t w i l l gradually improve in favour of local shopping f a c i l i t i e s as the local population increases.  The number of employees per store is small and  the total payroll amounts to about 10 per cent of the wage earnings of Castlegar's inhabitants.  '  Celgar Limited is at present constructing a bleach feraft pulp m i l l with a capacity of five hundred tons per day some two miles west of Castlegar and i n addition a new small mill with a capacity of approximately sixty-two million board feet per year. It is expected that, the pulp m i l l . w i l l employ about 325 workers and the sawmill three hundred f i f t y workers when each is i n production.  Since the company has a sawmill already in production  employing about 220 men this means that the company's new a c t i v i t ies w i l l provide about 450 new jobs.  It is estimated that when  the two operations are running at normal production rates the annual payroll w i l l amount to three million dollars, or an increase of two million dollars for the area. Celgar Limited expects to find some two hundred men locally in the area and to have to recruit the remaining 250 from other parts of the country.  Although i t i s not the company's intention  to create a "Company Town" i t decided to organize housing units for one hundred sixty workers. rental, row-type houses.  One half of these units would be  For the remainder, the company arranged  the subdivision of a small piece of land into lots upon which the workers may build, i f they should so choose, and take advantage of the company's offer to underwrite second mortgages.  - 43 Services to be provided include roads, water mains, sewers and a sewage disposal plant.  The company i s thus insuring some  accommodation for workers by assisting the purchase of houses and guaranteeing a minimum occupancy to the organization which is constructing and financing the rental units.  Later, i t seems, a  policy w i l l be pursued of encouraging non-company workers to u t i l i z e this accommodation. Although the company does not expect to be i n production until March of 1961 there are already about six hundred construction workers i n the area and i t i s expected that a peak construction force of twelve hundred workers w i l l be employed i n June, tapering off after September of this year. In anticipation of the increased purchasing power, a new, large shopping centre has already been constructed and brought into operation and there i s talk of a new motel. The Village of Campbell River. B.C. The village of Campbell River i s located on the east coast of Vancouver Island near the northern terminus of the Island highway.  It i s the largest settlement north of the Courtnay-Comox  complex and i s about one hundred miles north of Nanaimo. To the north, south and east (Quadra Island) of the village there are numerous small, unincorporated communities and i n 1948, prior to the locating of a pulp m i l l , there were 5,400 people living i n the Campbell River area. to approximately 11,000.  By 1956 this number had grown  In the village i t s e l f the population  grew from 2,400 i n 1948 to 3,100 people i n 1956. Originally the area's and the village's economy depended on  - 44 logging, commercial fishing and small mining operations.  The area  is well-known for i t s excellent salmon fishing and i n then Summer the tourist trade precipitated by this adds a significant.sectorto the economy.  The village was basically a "jumping off" point  for the logging and fishing industries.  Reference to the "Camp-  bell River area" above could be a bit misleading since i t comprises school district 72 and covers an area of five thousand two hundred and f i f t y square miles.  However, i t should be understood  that Campbell River i s the significant service centre for this area.  As a corollary of this the number of commercial and ser-  vice activities of the village both i n 1948 and the present time. -  are more meaningfully related to the number of people i n the area as opposed to the number of people i n the village i t s e l f . In 1949 the Crown Zellerbach Corporation started construction of a groundwood pulp mill which was completed i n 1952.  In  1954 construction of a kraft pulp mill was started and eventually brought into production i n 1956. 1958.  Finally a sawmill was added i n  A l l three units have been expanded i n their capacity since  their ineeptionauntil now the groundwood mill has a capacity of 420 tons daily:  the craft m i l l 500 tons per day and the sawmill  seventy-five million board feet per year.  This vast plant now  employs approximately 700 men and women and has an annual payroll of $3,400,000. It i s s t i l l too early to analyse f u l l y the impact this has  -  had on Campbell River.  45 -  However between 1948 and 1956 the popul-  ation of the village increased some 30 per cent.  The population  of the Campbell River area i n the meantime doubled by increasing from f i f t y - f i v e hundred to eleven thousand people.  Obviously  such a large gain cannot be attributed solely to the Crown Zellerbach activities.  It should be remembered that the payroll of  155 various business and industrial operations i n 1947 i n the Campbell River area amounted to $5,700,000. 1  Between 1953 and 1958 the number of commercial and service  establishments increased by 150 per cent, or from 50 to 127. The following types of establishments experienced most significant gains:  electrical appliance stores, furniture stores, grocery  stores, hardware stores, auto dealers, banks, butchers, garages and restaurants.  A large increase i n the number of restaurants  could be due i n part to an increase i n activity of the tourist trade. The 1951 census of Canada l i s t s forty-five stores i n the village with a sales volume of $3,260,000 and a number of employees fluctuating between a minimum of 95 and a maximum of 151. Clearly there was l i t t l e change i n the number of stores between 1951 and 1953.  While there was a large construction force i n the  vicinity the groundwood mill operation at this time was only employing some 200 men on a permanent basis. Aside from changes in quantity there has been a qualitative change for the better i n the appearance of the commercial area of the village.  It i s apparent that the population and the number of  functions of the village now place i t well above average i n  The Commuhity  o f Ocean P a l l s ,  British  Columbia,  Canada.  - 46 -  comparison with other villages in the Province of British Columbia. Above a l l the village now has a semblance of urban character which i t did not previously have. The Community of Ocean F a l l s . B.C. Ocean Falls is a company owned community located on the northern B.C. coastline.  It owes i t s existence to the operation  of the Crown Zellerbach Company's various industrial activities. These include a 240 tons per day capacity groundwood m i l l , a 120 ton per day capacity sulphite mill and a 190 ton per day capacity kraft pulp m i l l .  The operation is in general relatively more  labor intensive than some operations due to the number of speciality and newsprint machines operated and also to the fact that i t is a very old m i l l . In 1958 the annual average earnings of company employees amounted to $5,377 or approximately $5,940,000 in t o t a l . The community has a population of some 3,200 people composed of 1,230 married people and 550 children of school age.  The  remainder are single. The largest single employer is the mill which employs approximately 1,200 men.  A Hudson Bay store, formerly the property of  Crown Zellerbach, employs about 50 people.  A bank employs three,  Standard O i l two, the Canadian Legion Hall two, a Government Liquor Store two, Johnston's Terminal Storage Ltd. six, Northwest Telephone four and a Post Office two.  Other employers include  Pacific. Western Airlines and Nelson's Laundry.  An R.C.M.P. detach-  ment makes i t s headquarters in the community and there is one Dentist.  -  47  -  In the original townsite there are 3 1 2 houses and 2 2 2 apartments, which are a l l owned by the company and rented to the occupants.  A small subdivision i n the nearby Martin Valley  provides a further 3 0 houses which are privately owned by the occupants.  Single accommodations are available i n the company  Hotel, dormitories and the Martin Inn Annex.  An apartment block  was constructed for Provincial Government employees. The Hudson Bay Store' is- the largest commercial establishment. In 1 9 5 2 , while i t was s t i l l i n the hands of Grown Zellerbach, i t had an annual sales volume of  $1,750,000  when the approximate  annual earnings of the Crown Zellerbach employees amounted to $4,500,000.  It was believed that this sales volume represented  98  per cent of a l l r e t a i l sales i n the area at that time. Other small concerns include a bank, a Standard O i l establishment, Johnston's Terminal Storage, Nelson's Laundry and Pacific Western Airlines.  The Hotel provides space for such functions as  a barber shop, beauty salon, beer parlour, cafeteria and a bakery. Communications are handled by North West Telephone Company. There are eighty clubs i n existence of various types including a yacht club, tennis, rod and gun, and bowling alleys.  There i s  a library which has the second highest circulation rate i n the country.  A Community Hall i s utilized for many functions and also  houses an indoor swimming pool. A five hundred seat company theatre i s open three or four nights a week. A newspaper i s published once a week by a private individual. •There is a ski lodge complete with power driven ski tow.  The  Community o f  Port A l i c e ,  British  Columbia,  Canada.  - 48 Three churches are represented i n Ocean Falls and there i s a 33 bed hospital staffed by two doctors and several nurses.  In  the town site the f i r e department employs six men on a f u l l time basis plus other volunteers.  The Martin Valley residents built  their own f i r e h a l l and staffed i t by volunteers. There i s a courthouse, a custom office and a Provincial Forestry Office. General municipal services include common sewers, water mains and street lighting.  Martin Valley residents are charged two  dollars per month for water and other services. Port Alice. B.C. Port Alice is a company owned community located at the northern end of Vancouver Island.  It owes i t s existence to the  operation of the Alaska Pine and Cellulose Company s 350 ton per 1  day bleach sulphite pulp m i l l .  There is no other major employer i n  the settlement and only a very limited number of minor employers. The company owns a l l of the land and buildings. In 1958 the average annual earnings of Company employees amounted to $4,562 or approximately $1,921,000 i n total. The community has a population of some 951 people of whom 421 are employed by the m i l l .  There are 264 single people and 360  married people, with 327 children of whom 180 attend school.  It  ' i s normal practice for children to leave Port Alice i f they wish to continue their education past grade ten. Of the working force of 420 some 320 were foreign born and of mainly British and Italian origin.  There is a high "community"  'spirit and i t has not been necessary to selectively choose  -  49 -  employees on an origin basis, i n view of the easy blending of the different racial groups.  During a recent survey i t was found that  139 workers had served the company for five years, 17 for twenty-five years and 11 for thirty years.  Despite the high r a i n f a l l (120  inches per year) and the relative isolation from large urban centres many people wish to retire i n the area or on the nearby Gulf Islands. There i s often a waiting l i s t for housing although there are 160 houses and 26 apartments.  A large number of people live i n  the company bunkhouses or dormitories.  The company periodically  adds to the number of houses and the more recent ones are of a very attractive type.  Materials are supplied free of charge for any  occupants who wish to construct additions.  The building program  i s , however, limited since space i s very important there being l i t t l e suitable land and furthermore an annual loss exceeding $200,000 results from the maintenance of the houses.  Between 8  and 10 men are kept busy on a f u l l time basis on townsite maintenance. It i s interesting to note that many own summer cottages on Lake Victoria and on the nearby Gulf Islands. A company owned store employing ten people provides a l l but very large goods.  The annual sales volume of the establishment  is i n the vicinity of $500,000 but i t i s impossible to state what proportion of r e t a i l sales this represents since large goods such as furniture are purchased through mail order services and a large number of people supply goods and services on a sideline .basis.  The latter finds encouragement from the company for i t  -50-  creates additional interests for people.  Such activities include  dressmaking, insurance and clothing agencies and a jewellry outlet. Other extra company commercial activities include a bank employing three people and a cookhouse operated by a married couple on a contract basis with the company. There is no liquor store and a l l liquor has to be obtained from Vancouver on a C.O.D. basis. A v i s i t o r to Port Alice would probably find himself staying at the company guest house i n the absence of a commercial Hotel. He might then be pleasantly surprised to find, not far away, a nine hole golf course.  A gardening club closely rivals this for  popularity for i t seems that most people have a plot of land i n a valley jst outside the community which they cultivate intensively. A community h a l l serves as a focal point for social l i f e and is a centre for numerous activities such as bowling and also as a theatre. A company owned hospital provides nineteen beds tended by a doctor and four nurses. Fire protection is provided by a citizen volunteer group who look after mill and townsite. Electricity is relatively cheap.,:-the f i r s t two hundred twenty-five kilowatt hours are free, the next one hundred seventyfive, kilowatt hours are charged at the rate of three cents per kilowatt hour and at five cents per kilowatt hour in excess of four hundred kilowatt hours.  - 51 Source: (l)  Nauman, D.K., Planning for Castlegar's Future, A Study of Community Planning "by Associated Engineering Services Ltd. 1958 P.8  (2)  Ibid, P . 9  CHAPTER 7 SIGNIFICANT ASPECTS OP CHANGE CAUSED BY INDUSTRIAL LOCATION In the preceding chapters the experiences of various communi t i e s were related.  This chapter discusses some of the more  important aspects of communities fabric which are affected by i n coming industry.  In attempting to generalize on this experience  i t has been kept in mind that different communities have different problems and some problems are more c r i t i c a l than others.  To a  large degree i t w i l l depend on the urban nature of the community prior to the coming of industry.  Even more, i t w i l l vary accord-  ing to the magnitude of the incoming enterprise. Throughout most of the examples however there appears to be a thread-which does unite these communities on a common basis. In each there appears to. be a portion of the urban fabric that is affected to a degree whether i t be c r i t i c a l or otherwise.  This  then, is the area of interest here, and although no effort has been made to quantify the effects - i t being considered outside the scope of this study- i t is believed that this summary w i l l serve to focus attention on the area of the impact of v i t a l concern to planners. LAND VALUES Prior to the construction phase i t seems common to expect a boom in land values as was experienced in Aiken and Neosho..  This  is especially marked in land fronting on roads leading to the site of the new plant.  Real-estate market activity increases and  this may be prolonged or merely temporary according to the react-  - 53 -  -ion precipitated in economic activity by the incoming industry. HOUSING- • One of the f i r s t and most v i t a l areas of the community's structure affected is housing.  Not only i s i t the f i r s t to be  affected but i t also provides one of the problems that is most prolonged. Although the previous statement is true, more often than not, i t depends to a large degree, as was seen in the case of Edmore, on where the new labor force is recruited from.  If, as in the  case of Edmore, a large number of workers are recruited locally there may be l i t t l e or no housing problem at a l l .  Moreover, the  condition of housing in surrounding areas and communities and the willingness of workers to commute long distances w i l l also temper housing demands.  It was seen that workers commuted as much as  35 miles to Edmore while employees of the Morrisville Steel Plant located in an area spread over two States. The former conditions w i l l determine to some extent whether there w i l l be an influx of t r a i l e r s .  It i s reasonable to expect  some trailers, due to the temporary nature of the construction crewfe employment.  Such trailers as may come w i l l be located in  camps, back yards or any odd spot according to the local regulations in force.  The availability of local housing w i l l probably  determine the number. Rents may rise drastically and i t may become common to take in roomers.  As was the case in Neosho a l l sorts of makeshift  - 54 -  shelters may be pressed into service during the construction phase and afterwards. Private enterprise may be unwilling or unable to supply housing required for the permanent labor force when the construction phase is ended and the industry established. New subdivisions may be unacceptable due to the lack of f a c i l i t i e s or to more attractive sites being available elsewhere as happened i n Edmore.  Certainly i f there is l i t t l e land available  within the municipality new residential construction may take place outside corporate boundaries i n an indescriminate fashion and take the form of 'shack towns', trailer camps and so on. SCHOOLS In almost every community study there was a demand created for additional educational f a c i l i t i e s as a result of incoming industry and the accompanying population increase.  Edmore was the notable  exception to this and there i t was accounted for by the fact that school expansion had come about shortly before the new industry arrived;  moreover, the impact was dispersed over a relatively  wide area. • But elsewhere tremendous overcrowding of existing faci l i t i e s led to expansion of educational f a c i l i t i e s in a relatively short time, presumably before much adjustment could take place. . The effect on schools would appear to be related to population pressure and population characteristics kind of industry.  rather than to any specific  Where the incoming population tended to be  dispersed the pressure on schools was dissipated.  - 55 -  TRAFFIC AND TRANSPORTATION Remarkably few of the communities examined suffered in any c r i t i c a l way from trafficker transportation problems as a result of incoming industry.  Those which did had to contend with an  extremely high population influx relative to the size of the settlement, as i n the ca.se of Charlestown, or as in Corona's case a large number of people dependent on public transportation. Clearly the amount of commuting that takes place is very c r i t i c a l , as is the location of the plant relative to the community and the capacity of the existing circulation system. Ribbon development along the roads leading to the new plant site tends to exaggerate the congestion problem.  The inflation  of land values along such roads tends to increase the problem by making i t more expensive to ameliorate the difficulty by such measures as street widening.  Operational characteristics of the  industry concerned w i l l tend to magnify or reduce the congestion dependent on the time of termination of the day's activities relative to the same i n other activities within the community, or, i f the industry i s working on a shift basis the time of the day* s h i f t ' s completion. WATER. SEWERS AND SEWAGE TREATMENT Most of the communities studied embarked on an expansion program of one or more of these services as the result of a new industry's establishment. always clear cut.  The relationship, however, is not  In some eases these services were expanded merely  to service new residential areas developed as a direct result of  - 56 population pressure. was  -  In others the old. water or sewerage system  rendered inadequate;  while i n yet other cases the change  i n the urban f a b r i c of the settlement rendered one or more of the s e r v i c e s necessary as was had t o be  the case i n Brandenburg where a system  built.  E v i d e n t l y i n t h i s f i e l d the degree to which the community i s urbanized p r i o r to the i n t r o d u c t i o n of new s i n c e the i n c r e a s e i n p o p u l a t i o n may t e x t u r e from t h a t of a r u r a l n a t u r e .  industry i s c r i t i c a l  be enough t o change i t s Where such s e r v i c e s are  a l r e a d y i n e x i s t e n c e t h e i r c a p a c i t y f o r expansion i s of  importance.  POLICE Few  of the examples r e q u i r e d e x t r a p o l i c e p r o t e c t i o n or  direction.  Of those which d i d , the i n c r e a s e of p o p u l a t i o n was  very  h i g h i n p r o p o r t i o n t o that of the community or it_.was p r e c i p i t a t e d by a s p e c i f i c problem such as t r a f f i c c o n g e s t i o n . FIRE PROTECTION Only i n Seneca was f i r e protection.  there evidence of a change i n the l e v e l of  In Seneca's case the impact was very l a r g e .  It  i s b e l i e v e d t h a t where a change of s t a t u s i s i n v o l v e d f o r a commu n i t y p r e v i o u s l y of a d e f i n i t e r u r a l nature then the establishment of t h i s s e r v i c e may  become necessary.  The settlement's l o c a t i o n  r e l a t i v e to other communities a l s o has a d e f i n i t e b e a r i n g . RECREATIONAL FACILITIES Again i t appears t h a t the degree to which the i n d u s t r y causes change i n the urban nature of a community i s the most s i g n i f i c a n t •in p r e c i p i t a t i n g the requirement  of r e c r e a t i o n a l f a c i l i t i e s .  In  -  57 -  Seneca where the p o p u l a t i o n pressure was v e r y i n t e n s e r e c r e a t i o n a l f a c i l i t i e s were termed inadequate at the beginning o f the boom and only passable a f t e r two years had passed. Resort towns such as Aiken may l o s e an i n t a n g i b l e r e c r e a t i o n a l atmosphere which i s i n h e r e n t i n the c h a r a c t e r of t h e community itself. In s p e c i a l cases such as Corona where a l a r g e number o f people without p r i v a t e means o f t r a n s p o r t a t i o n are added t o the p o p u l a t i o n , urban r e c r e a t i o n a l f a c i l i t i e s may be p a r t i c u l a r l y v i t a l .  Obviously,  t h e i r l o c a t i o n w i l l be c r i t i c a l . OTHER PUBLIC FACILITIES In  some communities i t was observed t h a t medical s e r v i c e s and  h o s p i t a l f a c i l i t i e s became a problem because of t h e i r  inadequacy.  These seemed t o occur only where the impact was p a r t i c u l a r l y large populationwise. PUBLIC NUISANCE EFFECTS In one community the p o l l u t i o n of both the atmosphere and a stream r e s u l t e d although measures were l a t e r taken t o c o r r e c t this.  T h i s e f f e c t was caused by a s p e c i f i c type o f i n d u s t r y .  TAXATION AND PUBLIC FINANCE The i n c r e a s e i n demand f o r p u b l i c f a c i l i t i e s caused i n c r e a s e d m u n i c i p a l expenditure and t a x a t i o n i n a l l cases with the exception of  Edmore where the impact was widely d i s p e r s e d .  The experience  of Front Royal was that expenditures f o r i t and Warren County grew much f a s t e r percentagewise V i r g i n i a as a whole.  than d i d those o f t h e Counties o f  The shock o f t h i s i n c r e a s e caused a s e r i o u s  - 58 -  imbalance between municipal revenue and receipts.  In many cases  balance was only restored by U.S. Federal Government assistance. In other words, even where the industry increased the tax base of the community i t was not sufficient to meet increased public costs. Another problem in this f i e l d was illustrated by Morrisv i l l e ' s experience.  There, difficulty was met in assigning a  mutually agreeable proportion of the tax burden to the steel industry.  In addition i t was recognised that the results of that  industry's establishment, such as housing, did not contribute sufficient taxes for the demanded services and, moreover, since the employees of the new concern scattered over a wide area the apportionment of the firm's taxes was enormously complicated. Clearly, the public finance, problems are two-fold.  First,  the direct contribution that the incoming industry makes to municipal revenues may not be sufficient to meet the costs precipitated by the incoming employees' demanded level of services. Secondly, this situation is worsened by the complication of municipal and other governmental boundaries separating the industry from the areas where the increased costs are incurred. SOCIAL CONFLICTS In Lexington Park and Aiken i t was noted that much social f r i c t i o n was generated between the incoming people and the original residents.  The Lexington Park residents resented the new develop-  ments that resulted and regarded then as being incompatible with the Maryland setting to which they were accustomed.  The residents  -  -of  59  -  Aiken, (which, as w i l l he r e c a l l e d , i s a rescxb town) were more  disturbed by change per se and what they regarded as being an intrusion of t h e i r exclusive way  of l i f e .  Clearly these issues are a question of values and i t i s impossible to generalize on such matters since human values d i f f e r widely from area to area.  Whether the c o n f l i c t was resolved i n  Aiken on the termination of the construction phase i s not known-. For purposes of t h i s study i t i s s i g n i f i c a n t that such an effect can be caused by new  industry's  establishment.  COMMERCIAL FACILITIES In the early construction phase an increase i n business seems to be apparent i n c h i e f l y , the Hotel, restaurants, grocery f i l l i n g stations.  and  Later i t seems common f o r r e t a i l outlets such  as clothing stores, drug stores, hardware and furniture stores, e l e c t r i c appliance stores' and auto dealers- to have increased, salesvolume.  It was  found- i n Edmore that although business was  s l i g h t l y affected, trade was  on-ly --;  s t a b i l i z e d , where once business-failrr  .  ures were numerous and the l i f e expectancy of newly established^ businesses was  only two and one h a l f years.  .  ..  The change i n the absolute number of r e t a i l stores varied, with--, each community and the population increase. as Front Royal experienced  Some communities .such...  a rapid increase i n the number of  r e t a i l stores during the early years, of i n d u s t r i a l i z a t i o n . the early impact there was no subsequent increase—but qualitative change.  After..  rather a  In the same community over the same period  there was l i t t l e increase i n the number of service functions,  - 60 although .service fees jumped over 550 per cent in comparison to r e t a i l sales, increase of 600 per cent.  Retail and service trade  experienced no more than 10 to 15 per cent increase in volume despite a 450 per cent increase in industrial payrolls in Edmore reflecting again the dispersion of new employees.  It seems  common for new r e t a i l and service establishments to locate on roads leading towards the site of new industry. While the number of manufacturing jobs in Warren County increased by 2,620 between 1935 and 1945,  the number of jobs in  other activities increased by 795, or for every 3»3 jobs in manufacturing there was one i n other activities.  In Edmore 285  jobs were provided by the new industry while jobs in other acti v i t i e s increased by only 20, or for every 14.2 jobs added in manufacturing there was only one job added in other activities. In summary, the establishment of new industry does affect r e t a i l business, can affect the number of stores and sometimes stabilizes trade. extent.  Service activities are affected to a lesser  With the increase in business comes an increase in the  number of service and r e t a i l jobs.  There is often evidence of a  qualitative change and a general refurbishing of stores.  Since  the accompanying increase- in employment provided by the incoming industry and the accompanying increase in jobs i n other activitiesi s so c r i t i c a l in precipitating increased population and conse- ^ quential demand for services and f a c i l i t i e s the following chapter is devoted solely to this topic.  .CHAPTER VI THE BASE-SERVICE RATIO AND THE MULTIPLIER EFFECT In the previous chapter i t was seen that additional employment, with i t s consequential population increase, was a c r i t i c a l factor in the increase of demand for public f a c i l i t i e s and service among other things.  It was also evident that the addition of jobs  in one f i e l d of activity was followed by the creation of employment opportunities in other activities.  Since overall community  growth and hence the demand for f a c i l i t i e s and amenities is dependent on the sum total of a l l economic activity i t is of considerable value to the planner to establish what relationship, i f any, exists between the new incoming industry and the employment i n other activities i t generates. Some of the case studies w i l l therefore be re-examined i n an effort to investigate this relationship.  For the sake of simpl-  i c i t y , convenience and other reasons discussed in Chapter I I , use is made in some cases of the Basic-Service ratio concept, but this should not be interpreted as implying implicit faith in the concept's v a l i d i t y .  Where Basic-service terminology is used-,• basic  industry should be interpreted as*meaning' that economic activity which brings money into the community from outside.  Service  activities are used as defining those activities which merely re-circulate money earned by the basic industries. A few of the communities are relatively easy to analyse from this standpoint due to their isolation, while others are complex because of their regional setting and the consequential c l a s s i f i c ation problems.  The study is not a detailed one, the object being  - 62 to effect some comparison and hence estimates are frequently presented.  However the situation of each community is outlined  and pertinent conditions presented in order to prevent any significant misinterpretations. Front Royal and Warren County Front Royal and Warren County, although only 70 miles from Washington, are clearly in a rural area characterized by farming. In 1935, prior to the new industry's arrival, agriculture was the area's largest source of employment but i t is evident that much of the production was consumed on farms and hence only a relatively small amount was sold outside the County.  Between 1935 and  1945, an increase of 2,626 jobs in manufacturing resulted in an increase of 795 jobs in other activities, or the two rose i n a ratio of 1 manufacturing job for every .3 jobs in other activities. Over the same period population rose at the rate of 2.3 persons for every manufacturing worker. For every one person engaged in agriculture or manufacturing i n 1935 there were 4.7 people living in the County and i n 1945 this had dropped to 3.8.  Assuming that in 1945 a l l manufacturing  and agricultural workers were engaged in basic employment then while 3,819 workers were thus engaged there were 1,129 workers in other activities, or at a basic service ratio of 1 to .3.  The  uncertainty of the agricultural sector in 1935 precludes any hazarding of an estimate for 1935, while by 1945 i t is assumed that the subsistance portion of the agricultural, sector.had been largely eliminated.  - 63 Edmore Edmore, i t may be recalled, i s a rural service centre i n a general farming area.  Prior to the establishment of new industry  i t had a population of 971, and Greenville the next largest community i n the County had a population of 6,668.  At that time  50 workers were employed i n manufacturing, a few i n r e t a i l and service stores and the majority i n farming.  An increase of 285  jobs i n manufacturing resulted i n an increase of 20 jobs i n other activities, or at a Basic-service ratio of 1 to .07.  In  point of fact only 37 per cent or 105 of these new workers located i n Edmore while the rest commuted from outlying areas. It i s of course impossible to assign the correct number of basic workers responsible for the increase of service activities since i t depends on where they spend their earnings.  If the smaller  number of basic workers were taken i . e . 105, then the ratio would be 105:20, or 1 to .2.  Population figures are not available to  compute the effect of the new basic industry on generating additional population. Ajo Because of Ajo's geographical isolation and it s dependence on a mining company for i t s existence, this community presents an ideal situation for a study of basic service relationships. There are virtually no classification problems. At any given time between 1942 and 1952 employment i n the basic mining industry was from 3 to 4 times as large as employment i n . a l l other activities.  In 1942 the Basic-service ratio was  -  64  -  •1 t o .24 w h i l e i n 1952 i t had d e c l i n e d t o 1 t o .35. I n 1940 when 1,000 workers were employed i n the b a s i c m i n i n g i n d u s t r y , A j o ' s p o p u l a t i o n was 5,795, o r i t may be c o n s i d e r e d t h a t every 1 b a s i c worker supported 5.79 persons i n t o t a l . 1952 the number of b a s i c workers had i n c r e a s e d t o 1,126  By  and the  p o p u l a t i o n t o 6,588 o r 5.85 p e o p l e f o r e v e r y b a s i c worker. over t h e s e t w e l v e y e a r s the r e l a t i o n s h i p  Thus  between b a s i c employment  and p o p u l a t i o n has been f a i r l y c o n s t a n t . Between 1942 and 1952,163 workers have been added t o t h e b a s i c i n d u s t r y w h i l e 165 workers were added t o n o n - b a s i c a c t i v ities.  Thus growth proceeded a t a r a t i o o f 1 t o 1.01.  t h i s i s the l o n g term e f f e c t ; years.  However,  i t was not t h e case f o r i n d i v i d u a l  There i s c l e a r l y a l a g which i s a c t i v e both ways between  b a s i c and n o n - b a s i c a c t i v i t i e s .  I t i s interesting  t o note t h a t ,  on'the average, each n o n - b a s i c worker earned o n l y 59 p e r cent o f the wages and s a l a r i e s earned by each b a s i c  employee.  Ocean F a l l s T h i s i s an i s o l a t e d em  coast.  company-owned community on B.C.'s n o r t h -  I n 1958 i t had a p o p u l a t i o n of 3,200 dependent  income of 1,200  company employees.  on the  I t may be c o n s i d e r e d t h a t  e v e r y one company employee s u p p o r t s 2.7 p e o p l e .  There are approx-  i m a t e l y 100 persons engaged i n a c t i v i t i e s o t h e r t h a n t h e dominant i n d u s t r y , r e a l i z i n g a B a s i c - s e r v i c e r a t i o of approximately 1 to .08. Port  I t i s not known how t h i s r a t i o has v a r i e d o v e r t i m e . Alice P o r t A l i c e i s a company owned community a g a i n i n an  isolated  -6-5 site on the B.C. coast.  It has a population of 951 who are depend-  ent on the earnings of 4-21 company employees, i . e . for every person employed by the company there are 2.3 persons living i n the community. It i s estimated that there are approximately 25 persons engaged i n activities other than that of the company giving a Basic-service ratio of 1 to .06.  It i s not' known how this has  changed over time. Campbell River The village of Campbell River i s a service centre for a considerable coastal area which makes i t most complicated from the point of view of attempting a Basic-service classification. However, between 1948 and 1956 the village.' s population grew from r  2,400 to 3,100.  During this period, although there was a decline  in mining operation which employed a small number of persons, the construction of a pulp mill added approximately 450 employees to Campbell River's basic labor force.  The population increase of  700 i s accounted for i n the main, then, of 450 basic employees. Thus for every 1 basic worker added the population increase by 1.6 persons.  While i t is known that almost a l l the mill workers  located i n the village i t s e l f , employment i n other activities increased but exact figures are not available.  In recent years  there have been further additions to basic employment and there i s much evidence of refurbishing of stores and other qualitative changes. Leduc In 1946 Leduc*s 900 people were dependent on agriculture.  - 66 In 1954 the town's population had grown to 2,168 after the development of nearby o i l f i e l d s .  It was estimated that 200 work-  ers lived in Leduc who were employed by o i l companies and they supported 1,168 persons while 1,000 persons were by then dependent on agricultural employees.  'Thus for every one o i l worker 5.8  persons were added to the town. TABLE 6 BASIC & SERVICE EMPLOYMENT, POPULATION & THE. MULTIPLIER' EFFECT Basic/Total Basic/ Basic/ Basic/PopCommunities Warren County 3.8 1 to .3 1 to .3 1 to 2.3 Edmore 1 to .2 Ajo 1 to .35 1 to 1.01 1 to 6.3 5.85 Ocean Falls 2.7 1 to .08 Port Alice 1 to .06 2.3 Campbell River 1 to .15 1 to 1.6 Leduc 1 to 5.8 Basic Employment & Total Population Those adherents of the Basic-service concept consider basic industry as the supporting sector of the economy of a community. If the surveyed communities are approached in this light reference to the above table indicates that one basic worker supports between 2.3 people and 5.85 people.  It is interesting to note that these  maximum and minimum figures are based on communities which are geographically isolated.  In addition basic workers in both places  earn high incomes per capita in relation to their respective national average incomes.  Both communities have small populations,  Ajo with 6,588 and Port Alice with 951, and both are company towns.  - 67 -  There is of course a difference in climate and their isolation aspect is not strictly compatible in the sense that whereas Ajo is accessible by road, Port Alice can only be reached by sea or a i r . Basic Service Ratio Curiously enough the same two communities also provide the maximum and minimum basic-service ratio.  The average earnings of  basic workers obviously must have an effect on the amount of service activities that can be supported i f the concept is followed, yet here they are both on a par while there s t i l l remains a striking difference in the ratios.  Since both have been in existence  for f i f t y years there seems l i t t l e likelihood of there being any significant lag effect contributing to the difference for which there is no obvious accounting. The Multiplier Effect The addition of one basic worker in Ajo has for the last eleven years been followed by at least one service worker which follows a commonly accepted assumption of the concept's adherents. There is a big difference however between the effect in-Ajo, Warren County and Edmore and an even more significant one between Ajo and Campbell River. It must be remembered that Ajo is isolated and the other communities mentioned are service centres for their respective surrounding areas which are in a sense supporting the central place.  There would be a good reason, therefore why the addition of  one basic worker should have a dissimilar effect in Ajo compared to the others since the impact w i l l be more, proportionately, in Ajo.  - 68 -  Multiplier Effect - Basic Employment & Total Population There are wide differences between the communities in terms of the effect of basic employment on total population.  The large  impact on population that the addition of one basic worker has in Ajo is not matched by any other community except perhaps Leduc which i s certainly not isolated, i t being within a few hours drive from Edmonton.  Basic employment in Ocean Palls and Port Alice  fluctuates without such a high related change between i t and total population.  Almost a l l the incoming basic workers located within  Campbell River's municipal boundaries as did the generatedpopulation increase.  Yet this was s t i l l much lower than Ajo's  experience. Conclusion There are wide differences in a l l aspects of the Basicservice ratio among the communities examined.  As a general rule  the addition of basic employment in the pulp and paper communities resulted i n smaller numbers of people and fewer service activities. In addition, basic industry seems to support less-service industry in the pulp and paper communities and fewer people. true even where such communities are isolated.  This holds  .CHAPTER VII NEW INDUSTRY'S IMPACT ON DIFFERENT TYPES OF COMMUNITIES In Chapter V significant aspects of change were discussed on a functional basis, and in Chapter VI new industrial activity was dealt with i n terms of i t s impact on service activities and i t s population effect.  In this Chapter an attempt is made to dist-  inguish new industry's impact on different types of communities. For purposes of this study three different types of communi t i e s are considered.  The f i r s t category includes those  communities which are isolated and where there is only one dominant economic activity in the area.  The second category includes  those communities which are in regions that possess more than one economic activity and which are predominantly agricultural areas. The third group is composed of those communities which are in areas in which there i s more than one economic activity but where agriculture is of l i t t l e significance in terms of either occupation or economic activity. By analysing the case studies in this fashion the possibility of the magnitude of a given industry's impact varying with types of regions i n which the industry locates might be demonstrated. Since many of British Columbia's communities f a l l in category three i t i s of value to determine whether in fact the experience of those communities i n other groups i s applicable and i f so, to what degree. Group 1 - Isolated Communities Three of the communities studied were geographically isolated* These were Ajo, Port Alice and Ocean F a l l s .  Ajo was in actual  - 7-0 fact accessible by road while the other two could only be approached by sea or a i r . In examining these settlements i t should be borne i n mind that each is a company town built expressly to service the operation of a resource based industry.  Thus the examination i s not  a question of analysing the impact of a new industry upon the community but rather the study of the effects of the fluctuation of a specific industry's activities and what that industry supports. In considering the basic service structure of the communities i t w i l l be recalled that every one basic worker i n Ajo supports 5.85 people while- i n Ocean Falls and Port Alice one basic worker supports 2.7 and 2.3 people respectively.  The average earnings  of basic workers were $5,487 i n Ajo i n 1952, $5,370 i n Ocean Falls in 1958 and $4,560 i n Port Alice i n 1958.  There i s l i t t l e sign-  ificant difference therefore between the average earnings of basic, workers i n Ajo and Ocean Falls to account for the discr.epancy_in_ population supported.  Without attempting to answer why Ajo's  figure i s high or Ocean F a l l s ' and Port Alice's figures-are-low-itshould be remembered that there are significant climatic differences between Ajo and the two pulp and paper-communities.  Ocean  Falls has approximately 170 inches of rain per year and Port Alice about 100 inches per year.  Thus neither has a climate particul-  arly suited to human settlement compared to Ajo's dry desert climate. Ocean Falls has a high turnover i n i t s labor force which i n  - 71 -  1958 amounted to 80 per cent of a l l workers.  Clearly, despite the  high income potential workers doe not wish to stay for any length of time.  Perhaps these two factors account i n some measure for  the difference in population supported by basic workers.  In add-  ition i t could account for the difference in basic-service ratio since although in this aspect the pulp and paper settlements are comparable, they are significantly lower than Ajo. Whether these two pulp and paper communities experience a multilplier effect as high as Ajo's 1 to 1.01 is extremely doubtf u l since both have frequently fluctuating basic labor forces, partly due to the persistant labor turnover and partly due to present uncertainty of the pulp market.  The core of service act-  i v i t y at such a low level necessarily remains f a i r l y stable.  In  view of the high number of single people employed in itese palp and paper settlements i t is also doubtful whether the population added per basic worker equals that in Ajo.  A demographic survey  of this aspect might be quite revealing*,, L i t t l e i s known as regards the impact of fluctuations in activity of the dominant industries on community f a c i l i t i e s in these particular settlements although they possess, in common with many other communities of this type, a remarkably high level of f a c i l i t i e s and s e r v i c e s . ^  In this regard i t should be recalled  that since they are ' a r t i f i c i a l ' in the sense that they were created for a specific purpose they should not be viewed as being directly comparable with communities that have developed in an organic manner.  -  72-  Group 2 - Communities in an Agricultural Region Of the case studies the following communities f a l l into this category: Seneca, Neosho,.Charlestown, Lexington Park, Morrisv i l l e , Pront Royal, Edmore and Leduc. Unlike the isolated communities this type of settlement is i n a sense a service centre for economic activity of an agricultural type already i n progress in a region.  The impact of an incoming,  new industry on the community and i t s hinterland w i l l depend, to some extent, on the intensity of activity already i n being and the magnitude of the new industry in proportion to i t .  In addition  i t w i l l depend on the relationship between the new industry and existing activities. In considering the multiplier effect i n two such communities namely Warren County and Edmore, i t was seen to be 1 to .3 and 1 to .2 respectively.  In other words the addition of one basic  worker to the labor force accounted for the addition of .3 and .2 workers in other activities.  These figures are not directly  compatible since they correspond to calculations made over d i f f erent periods of time and thus may be subject to lag effects. This multiplier effect is considerably smaller than that i n Ajo in Group 1 although comparable to that of Campbell River in Group 3. Figures are available for only two communities as far as the effect of increased basic employment on total population.  In  Warren County the addition of one basic worker realized a gain of 2.3 people while i n Leduc i t meant a gain of 5.8 people.  Some of  •the large difference between the effect on population in these  -73 -  two communities may be explained by the former presence of subsistance farming in Warren County leading to a re-allocation of • employment requiring fewer employees from outside the area.  How-  ever this may be only a partial explanation and the analysis is very slender upon which to base generalisations. The impact of f a c i l i t i e s and services was described in detail in Chapter V.  Much of the information presented there was obtain-  ed from communities in an agricultural setting.  Since few of  these communities had significant excess capacity i n their f a c i l i t ies nearly a l l went through a period of d i f f i c u l t y due to the sudden population pressure overloading or overcrowding such f a c i l i t i e s that existed.  In addition, the rapid urbanization of some  of the more rural settlements created an urgent demand for f a c i l i t i e s which had not previously been required or available. Group 3 - Communities in a Non-agricultural Area Campbell River- and Castlegar f a l l in this category.  The  distinction between an agricultural region and a non-agricultirr al region has been drawn because many British Columbia communities are located in the latter situation.  Although a l i t t l e agricult-  ural activity is maintained in the surrounding area of such communities i t plays only a minor role in the economy.  Basically the  communities house workers who are engaged in resource based industries such as forestry, mining and fishing.  Workers often  commute up to 2 0 and 30 miles to the location of employment activity which may be continually changing.  Much of this type of employment  may mean seasonal unemployment with a consequential low level of  - 74 -  .service activity. In the study of Campbell River i t was found that the addition of basic workers had a multiplier effect of 1 to .15.  This was  the lowest multiplier effect in a l l three types of community studied although the value of this finding is based on the narrowest, of surveys.  The population added per basic worker of 1.6 to 1  i s also the lowest found in a l l the groups although this findingtoo is based on only slender evidence. It should be recalled that there has been a steady increasein basic activities in Campbell River for the last ten years. Although there has been a marked increase in service activities there may be a substantial lag effect suppressing a further increase in this type of activity.  There is certainly much evid-  ence of recent refurbishing and other qualitative changes in this community's appearance. Nothwithstanding the foregoing there may be other good reasons for a lower multiplier effect and less induced population in this type of community.  Climate, for example, and other attract-  ions may not be as conducive for settlements as in agricultural areas.  The population effect may be lower due to the absence of  subsistance farming. Prior to the establishment of the pulp mill in Campbell River, services and f a c i l i t i e s were at a very low l e v e l .  As in many of  the settlements in agricultural areas the rapid urbanisation of this community has precipitated the necessity for many new f a c i l > i t i e s in addition to the expansion of those already in existence.  - 75 -  Summary.  Communities i n the f i r s t category would appear to have Basic-service ratios lower than communities in the other groups although since Ajo's experience is so strikingly different to that of the pulp and paper settlements the relative nature of isolation and other factors such as elimate may distort t h i s . Basic employment in inaccessible, isolated communities appears to support and cause the addition of fewer people than i t does in other types of communities although Ajo again isa notable exception.  There is evidence to suggest thm the multiplier effect  is lower in this type of settlement than in the others since the population added tends to be low. Many of these communities were company towns, planned from the outset and often more efficient in terms of land use.  It  follows that the expansion of f a c i l i t i e s and services due to increased basic activity i s often more easily brought about.  The  communities examined appear to have a remarkably high level of services.  It is perhaps enlightening to conclude with the state-  ment of Mr. Harry Walker, who said: " Beyond their (the companies') ownership and operation of uifl-ities and services ordinarily associated with municipal government, the companies responsible for the creation of townsites in conjunction with their industr i a l operation often provide f a c i l i t i e s and services normally supplied by the individual himself or by separate, private enterprise. The rationale behind the ubiquitous company operation is that the company must supply these services because no one else can or w i l l ; they must be supplied so as to create conditions of modern, comfortable urban living in an isolated area to attract and hold responsible employees". ( 2 )  - 76 -  The second category of communities appear to have a higher basic-service ratio than isolated communities.  The multiplier  and population effects of the addition of basic workers seem to be more than in Group 3 communities although this is based on slender evidence.  Obviously, the intensity of economic activity already  in progress is a variant in agricultural areas.  There may be  considerable subsistance farming in existence and the incoming industry may cause a re-allocation of jobs rather than an influx of workers from outside.  Total employment and added population  might thus be less than that expected. Agricultural regions are often more conducive to settlement than those regions in which category 3 communities are found. This may be due to climate or topographic features or even to the presence of the means of subsistance farming per se.  At any rate  the sum total is that new industry entering agricultural areas may expect to find f a i r l y stable economic conditions which i t w i l l frequently disrupt.  Group 3 communities are somewhat similar to  those of Group 2 in that they exist because of economic activity already in existence in an area.  Incoming, new industry would  seem to have a lower multiplier and population effect than i n Group 2 communities.  As already stated i t may be due to conditions  being non-conducive to settlement.  It may also be due to this  type of region having a lower level of economic activity than agricultural areas.  More important, i t may be due to the instab-  i l i t y of this type of region, for i t s economic activity w i l l often pivot around the recovery of natural resources which may be subject  - 77 -  .to unstable market conditions. Community services and f a c i l i t i e s are often at a low level in communities of Groups 2 and 3 and the establishment of a new industry with i t s accompanying population influx may mean rapid urbanization which in turn could cause an urgent demand for f a c i l ities and services hitherto not required. Source: (1)  Institute of Local Government, Queens University, Single Enterprise Communities in Canada, A Heport  to C.M.H.C. 1 9 5 4 (2)  Loc. c i t .  CHAPTER VIII ' IMPLICATIONS FOR PLANNING In the earlier Chapters, the sorts of changes that communities experienced as a result of the establishment of new industry were discussed.  Further, the communities were analysed in an effort to  establish whether i t was possible to indicate the magnitude and sort of impact by type of community.  In this concluding Chapter  the aim is to discuss possible approaches of meeting the expected impact of new industry and ameliorating some of the problems i t raises. In approaching the question of the impact of industry on small communities the problem really amounts to what should be done, and in what order of priority, and how any action contemplated may be brought about.  Stated another way, i t is the intention  here to discuss some of the things that community planning, can. do, to meet the problems raised by new industry and.how planning may best be initiated. WHAT SHOULD BE DONE AND A POSSIBLE ORDER OF. PRIORITY Irrespective of the type of settlement the f i r s t fundamental requirement for communities about to experience the establishment of'new industry i s the need for a community inventory._ The purpose o f this is to establish the resources that the community has available to meet the expanding requirements of the ensuing period. It should be as comprehensive as possible and cover, a range..of aspects from the capacity of various facilities...and_s.ervi.ce.s_to-the financial resources of the community.  Further , i t should include.  - 79 a study of land utilization within the corporate limiIsland—the, availability of land for future development. Since the expansion of services and f a c i l i t i e s is predicated on population growth, i t i s v i t a l to undertake an estimate of the future population which may result from the coming of new industry.  This i s really a two-sided issue since some people may  enter the community because of increased services per se and not directly due to the industry i t s e l f .  However, i t i s suggested  that the classification of the community by i t s type would be of assistance here.  In dealing with the population issue i t is  necessary also to attempt a forecast based on not only the permanent labor force but also the temporary construction force since the community might have to undergo a quite lengthy transitional period which should be taken into account.  Additions to the  housing supply and the capacity of u t i l i t i e s and f a c i l i t i e s should be planned on the basis of the eventual population but, i f these can be commenced early enough the extreme shortages during—the- .... transitional or construction period may be considerably eased. Once an idea of the eventual population has been established the likely demands for housing and f a c i l i t i e s and services may be compared with those i n existence as established by the community inventory and the areas of possible maladjustment and crises anticipated in advance.  By planning the use of community resources  at an early stage to reduce the discrepancy between existing faci l i t i e s and future requirements the chaotic results in some of the communities described may be avoided to a considerable extent.  -  80 -  Thus, armed with a community inventory and an estimate of future population, planning studies may properly commence. HOUSINGOne of the earliest fields for the attention of planning activity i s that of housing.  Judging by the experiences of  Seneca, Neosho, Aiken and Charlestown the population during the construction phase w i l l probably be too large to be adequately accommodated in existing permanent housing. It is likely that the discrepancy w i l l be f i l l e d by the use of t r a i l e r s , temporary structures, conversions and makeshift dwellings, as took place in the above communities, and therefore i t is advisable that regulations governing such forms of housing be drawn up in advance to prevent haphazard location, construction and use.  The building  code, where there is one in existence, should be revised and simplified i f necessary.  It may be advisable to draw up a local  by-law covering the permitted locations, standards of density, sanitation and improvements for t r a i l e r camps. It may be necessary to formulate standards for temporary housing and conversions and in connection with the latter to develop some control over the number of roomers permitted in terms of density, for example.  It may be deemed expedient to relax such  standards where they are already in existence;  in either event  they should be r e a l i s t i c . LAND USE REGULATIONS •" Concommittant with the problem of housing is i t s location and the location of land uses generally since the problem cannot be  -  completely isolated.  81  -  Where there is either no zoning by-law in  existence or the zoning by-law is incapable of coping with the expected expansion, a general land use plan w i l l be of value in guiding the development or revision of a zoning by-law.  It is  possible that in the interest of time an interim zoning by-law may be deemed essential to set out rough boundaries for zones of residential, commercial, industrial and possibly agricultural use and establish certain basic standards and requirements.  Since the  traditional type of interim zoning by-law freezes a l l construction except residential (which is the f i e l d of activity likely to be most active and to cause most permanent problems), i t has serious limitations i n a period of rapid change and thus is no substitute for a zoning by-law based on a general development plan. QTHES-MUNICIPAL REGULATIONS Where zoning provisions have been made establishing zones for residential use i t is s t i l l necessary to formulate subdivision regulations to guide the development of new areas.  In connection  with this i t i s advisable to develop a general street pattern i n order to co-ordinate any subdivision plans that might be submitted by developers.  Local traffic by-laws per se may be necessary to  handle acute problems that may arise as was evident in one of the case studies. Rapid expansion, and more particularly, higher utilization of housing f a c i l i t i e s may necessitate a c r i t i c a l examination of health and sanitation codes i f in fact any are in existence.  In most  cases this w i l l be essential since acceptable standards for a  - 82 -  •densely developed communi.ty w i l l differ drastically from those permissable in a sparsely settled area. COMMUNITY FACILITIES AND SERVICES Earlier studies of the estimated population increase and housing requirements w i l l give a clue to the additional f a c i l i t i e s and services required.  Seneca, Neosho and most of the other  communities studied required substantial additions to educational facilities.  Where the community is small and the influx of people  large (and those usually being young couples) i t may be necessary to consider educational f a c i l i t i e s which are flexible because of a large body of children of similar age advancing through the grades together.  Thus i t may be expedient to consider the con-  struction of schools which may be easily converted from elementary to high school uses. Some of the communities experienced the need for additional f a c i l i t i e s and services such as water supply, sewerage treatment, refuse collection, recreation, f i r e and police protection and even municipal personnel.  It is suggested that a system of priorities  be set up as soon as possible in order to establish the respective needs for these public works and services. An early extension of the water supply system may be necessary.  Sewerage and refuse collection and disposal may be particul-  arly c r i t i c a l dependent on local conditions.  It w i l l be recalled  that sanitation was a major d i f f i c u l t y i n several of the case studies.  The individual disposal systems - septic tank, cesspool,  ' etc. - may not be too inadequate when housing is dispersed, but  -  83 -  such methods of disposal may be disastrous in areas of increasing population density even i f the installations are in conformity with existing health standards and are inspected regularly. ANALYSIS OF THE COMMUNITY'S FINANCIAL POSITION Faced with the prospect of the wholesale expansion of housing f a c i l i t i e s and services, communities may benefit from another major planning activity, that i s , the preparation of an. analysis of the community's financial position.  Such an analysis could inclzde  not only an assessment of the community's financial resources but also the drafting of a tentative capital improvement budget for the provision of required public improvements and the enlargement of inadequate systems of u t i l i t i e s . Planning the budget is essential since there may be problems of financing the required improvements and in formulating taxation policies with respect to the new industry and i t s employees. ' There may be an increase in revenue i f the plant is located inside the settlement's boundaries.  In addition there may also be increased  revenues from new commercial and residential properties constructed. Unfortunately, i t is likely that there w i l l be a time lag' between the increased expenditures for capital improvements and expanded municipal government and the collection of new taxes.  Moreover,  since the residential property may not be expected to pay entirely for the services i t receives there may be a net loss to the city from the new construction. ROLE OF A HIGHER LEVEL OF GOVERNMENT The previous section has dealt with some of the specific  - 84 -  measures a community should undertake to meet the problems raised by the establishment of-new industry; - B y taking advantage of such measures communities can maximize the use of their resources often with a minimum of planning assistance.  Unfortunately, many  small communities do not possess a planning staff or even officers qualified to properly assess the resources at their disposal. This is often the case in a l l three types of communities studied. The communities may feel that they are financially unable to afford the services of a full-time planner or engineer and even their use of consultants in these fields may be of necessity limited. Even where the community has been able to afford a minimum of planning services the rapid urbanization and consequential demand for services may simply be too much for i t s financial resources in either the immediate or foreseeable future.  Many of the commun-  i t i e s described had c r i t i c a l problems i n , for example, the f i e l d of permanent housing which private builders were unable or unwilling to supply. assistance.  The situation was eased only by federal government Similarly, those communities which required new or  additional water or sewerage f a c i l i t i e s only got by through the extension of federal government financial help. The financial straits which a municipality may find i t s e l f in is well illustrated by a statement by Richardson Wood: "One thousand dwellings are added to a community and are normally financed. But there is a charge on the city of $ 1 , 0 0 0 a unit for roads, pavements and water and sewer connections on the site, $ 1 , 0 0 0 , 0 0 0 there. Then the sewage disposal plant must be enlarged, $•£• million, water systems, ditto. Suppose that is a l l except a new school  - 85 -  \  at $4" million, and more teachers, police and firemen - that may be $150,000 a year. If the city can borrow at 3 per cent and amortize at 5 per cent, i t w i l l need ' $200,000 a year for debt services, plus the new payroll, or $350,000 a year i n a l l . But the new development i s assessed at $10 million ($10,000 per unit) and the city tax rate i s 2 per cent on 80 per cent of that figure, or $160,000, less than half of what is needed. Moreover, the city's debt limit i s 10 per cent of assessed value and i t i s up to i t s limit already so i t can borrow only a million more, not the two and one half million i t needs, but can't service anyhow. This is where the federal government gets a distress c a l l " , (l) There are, thus, grounds for super municipal governmental ass-  istance not just for planning functions but also for assistance i n overcoming the problems of financing, housing, and f a c i l i t i e s and services. Another financial aspect of the establishment of new industry is the fact that i t very often locates outside the corporate limits of the settlement i n question.  This i s particularly true  of Group 3 communities where the industry locates at the site of the resource rather than, as i n the case of some secondary industries, locating i n the community i t s e l f .  Campbell River i s an  example of this situation and i s typical of many British Columbia communities.  In British Columbia! industry locating outside the  municipality i s , i n the absence of any county t i e r of government, in unorganized territory and not subject to any direct form of taxation that might accrue to the municipality i t s e l f . The municipality thus finds i t s e l f i n the unenviable situation of being faced with rapidly expanded expenditures for new and additional f a c i l i t i e s and services.without receiving any revenue i n " the form of tax from the industry precipitating such expenditures.  -  86 -  Further problems which are raised i n British Columbia and which may be typical of some Group 3 communities elsewhere are caused through new workers building their homes often in a haphazard manner locationwise, outside the municipality in unorganized territory.  True, i n some cases such as Castlegar, the new company  in question takes considerable pains to design the layout of such residential areas and provide the required f a c i l i t i e s , but this is often the exception rather than the rule.  The construction of  isolated housing units outside the municipal boundaries often leads to sprawl, causes problems later i f additional services are required and frequently makes general development of the community more d i f f i c u l t . As was seen in the case studies, commercial enterprises tend to locate on the highways leading to the new plant and in situations such as British Columbia, this i s particularly disturbing where i t takes place outside the city limits for the previously mentioned reasons.  There is l i t t l e or no control on such develop-  ment and i t often precipitates further development leading to ribbon and sprawl conditions. One very t i c k l i s h problem for these small communities i s the fact that they seldom i f ever have any advanced warning of industry's intention to locate in or near the municipality concerned.  Since, as has: been- previously- s e a t e d , many communities do  not have the benefit of planning activity or staff, they are totally unprepared for the changes to come.  The impact is upon them  ^before they can properly take stock of the situation, and many  lasting problems are created which might otherwise have been avoided. It is suggested that i n cases such as these there is a real need for planning activities to be carried on for their benefit by a higher level of government, such as a county;  in.British  Columbia where these do not exist, such a function is a legitimate f i e l d of activity for regional planning.  The municipalities  themselves are unable to afford -full-time planning offices, and, apart from sporadic aid from consultant planners, are unlikely to receive planning assistance in any other way. Such regional planning activity could keep an up-to-date account of community inventories and prepare general plans as was in fact done by the provincial government of Alberta for the town of Leduc.  This might not solve a l l the problems raised by new  industry but i t would certainly alleviate them. In conclusion it should be repeated that there is a very definite role for a higher level of government in the case of small communities, particularly those of Group 3 type, and this is v i t a l to the public interest in British Columbia, where there are indications of many communities being affected this way in the future. Source: (l) As cited by American Society of Planning Officials, The Impact of Large Industry on Small Communities. Bulletin Number 31, 1951 P.25  - 88 BIBLIOGRAPHY American Society of Planning Officials, Planning Advisory Service, The Impact of Large Industries on Small Communities, Bulletin No.31.1951 Blumenfeld, Hans., "The Economic Base of The Metropolis", American Institute of Planners Journal, Vol. XXI No. 4 pp 114-132 Calef, W., and Daoust, C , Dept. of Commerce, What w i l l New Industry Mean To My Town?, A Summary of Two Case Studies on The Impact of New Industry on Small Towns, April 1955. Casaday, L.W., "The Economics of A One-Industry Town", The Arizona Business and Economic Review, College of Business and Public Administration, University of Arizona, V o l . 3 No. 12 Dec. 1954 pp 2 - 6. Chapin,P. S., Urban Land Use Planning. Harper and Brothers, New York, 1957. Chapin, F . S . , Wirths T . , Denton A . , Gould J . , In the Shadow of A Defense Plant. A S^udy of Urbanization in Rural South Carolina, Institute for Research in Social Science, University of North Carolina, Chapel H i l l , June 1954 Edmonton District Planning Commission, A General Plan For The Town of Leduc. 1954. Grigsby, W., and G i l l i e s , J . , "Classification Errors in Base Ratio Analysis", American Institute of Planners Journal, 1956 Vol. XXII No. 1 pp 17 - 24 Institute of Local Government, Queens University, Single Enterprise Communities in Canada, A Report to C.M.H.C. 1954. Isard., W., and Coughlin, R., Municipal Costs and Revenues Resulting From Community Growth, U. S. Federal Bank of Boston, 1958. Isard, W., and Kuenne, R., "The Regional Impact of Steel", Review of Economics and Statistics. Nov. 1953. Nauman, D.K., Planning for Castlegar's Future, A Study of Community Planning by Associated Engineering Services L t d . , 1958 Ontario Industrial Development Council, "What Does a New Plant Mean to a Community", Financial Post, Feb. 28 1959. Saskatchewan, Department of Municipal Affairs, Esterhazy Plans its Development. 1958.  


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