Industrial New England: Community Coöperation and Value of Research Methods by Manufacturers Stimulating Industrial Expansion

IT is an established fact that New England’s economic progress is the sum total of the economic progress of her communities.

Through the leadership established by the New England Council, an organization that has effectively knit the states of Maine, New Hampshire. Vermont, Massachusetts, Rhode Island, and Connecticut together for united action, this territory, embracing a population upward of 8,000,000, functions as a unit.

In 1927, the Committee on Community Development undertook the first study ever made to determine the extent of migration of industry within, to, and from New England. This 1926 study of migration of industry showed a net gain, after subtracting industries which suspended operations or moved to other localities, of 224 industries and 10,998 employees. Twenty-three industries came from other sections to New England, while only eight moved away. The study covered 197 communities.

The committee repeated the study for the year 1927, in 1928. Reports were received from 266 communities. Without the cooperation of the Chambers of Commerce and Hoards of Trade throughout the six stales, this study would have been impossible, Of the 2 (id communities reporting, 149, or 56 per cent, showed new industrial growth in 1927. Many of the 117 communities reporting no new industries were purely residential, recreational, or agricultural in character.

The 149 communities reported 483 new industries, employing 26,511 workers. Fifty-eight communities reported the loss, through failure or removal elsewhere, of 217 industries, employing 18,924 workers. New England thus shows a net gain, for 1927, of 266 industries and 7587 employees.

It was ascertained that a new industry provides, on the average, for only about two thirds of the number of workers previously employed by an industry which had failed or moved elsewhere. Industries gained by New England communities employed an average of 55 workers, whereas the industries which failed or moved to other localities employed an average of 87 workers. This emphasized the importance of every community doing all it could to retain its established industries. It takes, on the average, three new industries to replace two already in operation.

The study brought out the fact that, whereas only five industries moved to points outside New England, twenty industries moved into New England from outside points. These figures do not include branch plants established in New England in 1927. Of the industries moving away from New England, three went to New York State, one to Ohio, and one to North Carolina. Of the industries coming to New England, fourteen came from New York State, three from New Jersey, one from Georgia, one from California, and one from the Middle West.

From this statement of facts it is evident that, instead of an exodus of New England industries to other sections of the United States, more industries are being attracted to New England than to other points from New England.

Of the 483 new industries reported by the 149 communities, 213 were new undertakings, 38 were branch plants, and 71 were removals from other communities. The type was not reported in 161 cases. Approximately one half of the new industries were financed entirely by local capital. This indicates that the most important single source of new industries in the average New England community is the local enterprise backed by local capital.

Of the 217 industries reported as lost by New England communities, 147, or about two thirds, were due to failure. The chief reason for failure was poor management and lack of business.

The results of these studies for two years indicate that New England is maintaining a favorable balance in the exchange of industries; that new undertakings and the acquisition of branch plants leave a net gain in both plants and employees; that the growth of industry can best be promoted by local enterprise; that part of the migration is from one New England community to another; and that individual communities should devote more attention to the welfare of their established industries.

One of the first groups formed to work with the New England Council was the Railroads Committee on Industrial Development, because the railroads have long been interested in promoting industrial activity. The past year this committee made a study of methods used and results obtained by railroads in promoting their territories.

The efforts of the Council in enlisting the active interest of electric service companies in promoting industrial development brought gratifying results. For example, 104 electric service companies out of a total of 117 have assigned definite personnel in their organizations to carry on industrial development work in the communities which they serve. These companies serve 8.5 per cent of the total New England population and generate 95 per cent of the electricity used in the six states.

The New England Gas Association appointed a committee to work with the Council. This committee is now conducting a study to determine what industrial work is being undertaken by gas companies, how it can be extended, and to what degree gas companies can increase their service to established industries.

Thirty-nine communities have completed, or are in process of making, industrial surveys. Twenty-six of these were started or completed in 1928. There are now industrial bureaus in fifteen communities.

There are six community funds already established to acquire or construct buildings for rental to small industries, for construction loans, or for working capital loans. These six funds range in size from $7000 to $300,000.

Nineteen communities report that they have spent $52,400 in advertising their industrial and recreational advantages.

Emphasis is being given constantly, through the activities of the Council, to stimulate assistance to established industries.

Since continual research is essential to the growth and prosperity of any industry, the Research Committee of the Council is bending every effort to promote improvements of processes of production, the development of new products, and increasing profitable sales.

Commercial banks, to the number of 234, shared in the financing of a study to ascertain the progressive steps taken by banks in New England and elsewhere in broadening their services to their industrial customers.

Recognizing the need of demonstrating, by example, the value of research, the Research Committee invited the Policyholders Service Bureau of the Metropolitan Life Insurance Company to make a study of the use of research in New England industries. This heavy expense was undertaken because it was believed that it was an investment in protecting New England business. Over 800 New England manufacturers were interviewed by members of the staff, and 317 actual cases of the successful use of research methods were reported.

The first results of the marketing and industrial survey of New England, conducted by the Domestic Commerce Division of the United States Department of Commerce, are now available. This survey is the most comprehensive study of the economic development of New England ever undertaken. The results will give New England, for the first time, a common set of authentic facts about its agriculture, commerce, and industry.

Industrial New England has been making progress. The various communities have been working through the Council in getting the facts together in a logical and uniform manner. Standardization of data has been the aim wherever possible. The community development and research departments have stressed the importance of quality products. Studies which have been made have had for their object the improvement of industrial production on a fact basis.

The soundness of the foundation on which New England’s future industrial growth and expansion are being built cannot be questioned.