The Economy of War


World War I shook the world at the beginning of the 20th century. Millions lost their lives, leaving behind loved ones overcome with grief. Europe encountered mass destruction. Yet, on the other side of the world, Ann Arbor basked in a state of economic prosperity. Ann Arbor's economy boomed after the onset of World War I due to the increase of local industry. Manufacturing plants reaped benefits from the war. Due to the demand for ball bearings, Hoover Steel Ball tripled its capitalization. Money circulated the city at a rapid pace. Such economic prosperity deterred Ann Arbor residents from acknowledging the atrocities of the war. The Christmas of 1916 is documented in A History of Ann Arbor as one of the most memorable of all time. The construction of Nickels Arcade in 1916 contributed to the commercially prosperous season. Residents were anxious to shop at the trendy Arcade which housed small, specialty stores. Five thousand residents participated in the holiday cheer at the courthouse during the first outdoor tree lighting. Ann Arbor residents found it all too easy to celebrate the benefits of the war without acknowledging the horrors which accompany it. Such ignorant bliss was not to last for long.

As U.S. involvement in the war increased, more and more young Ann Arbor men were called upon to serve their country. The loss of loved ones emotionally wore down those left behind in Ann Arbor. The growing economy could not compensate for the emotional onslaught of personal grievances. In the year of 1916 University enrollments plummeted from 7,500 to 6,000 students. In the following years Ann Arbor felt the resonance from the decrease. The town experienced a steady decline in demand for rental properties and commercial goods. As student enrollment decreased, economic stability decreased. This simultaneous decrease demonstrated the interdependence of the two. The economy heavily relied upon the success of the University. Although the war had positive impacts on the manufacturing industry of Ann Arbor, it had negative impacts on the University and emotional stability of residents.

The increase in industry prosperity compensated for the decline in students. By the end of the war the number of Hoover Steel Ball employees had increased from 842 to 1,612. The year of 1919 marked a time of unprecedented economic growth due to manufacturing companies. The social impact of the increase in the manufacturing sector of the economy makes one question the liberal policies associated with Ann Arbor as we know it today. The growth of manufacturing companies made Ann Arbor attractive to blue collar workers. The migration of blue collar workers to Ann Arbor made residents uneasy. Residents were unaccepting of the new workers due to the unappealing stigmas attached to blue collar workers. In order to combat the arrival of lower class migrants, the local government issued the Olmsted Report which called for "a city zoning policy," (Marwil, Jonathan, A History of Ann Arbor; Ann Arbor Observer Company, Ann Arbor, 1987). Residents claimed that the report addressed the fact that the natural aspects of the city were being smothered by the influx of workers. Although the report did address this issue, it also suggested ways of making it difficult for migrant workers to purchase land. The ordinance was passed in 1923 and led to the preservation of trees and wildlife. It also led to the obstruction of new residents from purchasing land. Ann Arbor residents chose to identify more with the intellectual student base than with the hard-working blue collar workers.

Although student enrollment declined during the war, the University embarked on a crusade to pour money into the campus. They built taller, better, more impressive buildings. Angell hall, the first portion of the law quadrangle, and a football stadium were constructed. Ann Arbor focused its energies on the improvement of the University rather than catering to the needs of the influx of migrant workers. The city made a conscious decision to designate itself as a college town to attract an intellectual, high class population. 15,000 copies of a pamphlet entitled "Ann Arbor: The City Where Commerce and Education Meet" were published and distributed. The title indicates the leading role education was to play in every day life. The growth of the University led to an increase in the cost of living and a shortage of housing. Property values skyrocketed. Barton Hills was established as a haven for the wealthy. The city expunged its reputation as a manufacturing area during the war and assumed the reputation as a college town. The manufacturing companies from an economically booming Detroit did not migrate to Ann Arbor. Ann Arbor's chronic lack of housing deterred manufacturing companies from establishing residence. In A History of Ann Arbor Marwil refers to Ann Arbor as pursuing "the industry of education," (p.112).

The economic prosperity during WWI was not felt by all. Germans in particular were targeted as suspicious foreigners not to be trusted. German residents found a decrease in employment and an increase in hostility towards them which led to extreme poverty. Historian Jonathan Marwil writes, "On the night of April 15, 1918, twenty-four hours after a boisterous bond rally, several businesses and offices were smeared with yellow paint, a gesture intended to identify the owners as pro-German," (p. 87). Such acts inhibited residents from aiding Germans during this time of need. Similar to the intolerance of manufacturists, this intolerance of Germans suggested conservative sentiments brooding beneath a liberal façade. Ann Arbor did not emerge after WWI as an industrial giant. Rather, it emerged as a conservative, college town in pursuit of the more prestigious values in life, mainly education.

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