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As politicians and business leaders try to determine how best to face these new urban challenges, in Manhattan and elsewhere, it’s useful to remember how the government responded at another moment in history when cities were potentially "ground zero." Today’s situation has some eerie parallels to the first years of the Cold War, when U.S. military strategists considered American downtowns to be primary targets for Soviet nuclear attack. In contrast to today’s public-sector efforts to keep firms within city limits, the Truman and Eisenhower administrations used public policy incentives to encourage essential industry to move out of cities to "safer" locations in the suburbs.
In a 1951 executive memorandum, Truman ordered all government agencies "to enact concrete measures encouraging industries to move out of dense urban cores." The Truman and then Eisenhower administrations followed up this directive with a number of changes to defense procurement regulations that restricted contract awards to firms located at least 10 to 20 miles outside downtown areas.
Along with executive action, federal officials made industrial dispersion an important part of the public relations campaigns around civil defense. Pamphlets with ominous headlines like "Is Your Plant a Target?" encouraged businesses that weren’t government contractors to move out of cities as well.
City planners enthusiastically endorsed these measures, seeing that civil defense could also be a way to cure the perceived ills of the modern city, like overcrowding and deteriorating infrastructure. One city planner argued that dispersion of industry would "produce a dispersed pattern of small, efficient cities much more attuned to the needs of modern living, modern commerce and modern industry and far less inviting as potential targets."
The outcome of these policies was that companies with properly dispersed —i.e., suburban—facilities had a giant advantage in the competition for defense contracts. In the case of "new and expanding" industries like aerospace and electronics, most of which depended upon defense contracts for their survival, this was more like coercion than encouragement. It’s hardly surprising that the industrial sectors that were among the first to move to the suburbs were high-tech companies that, during the early Cold War, depended heavily on defense contracts.
The industrial dispersion program of the early Cold War is but one example of the powerful influence government incentives have had on private-sector location decisions. Other public policies have played a giant role as well. The interstate highway system, federal home mortgage assistance, and the lack of effective race- and class-based housing discrimination laws are among the many federal public policy choices that encouraged people and businesses to leave the central cities and created a low-density and car-dependent suburban geography.
