munity would crumble. In fact the city would become within a few hours an uninhabitable place and the citizens would have to leave with as much speed as possible to avoid actual starvation. While such a misfortune is not apt to befall any large city, the illustration will serve to show dramatically the part which the streets play in the economic life of Chicago. By analogy it is clear that anything which threatens to limit the utility of the streets and the convenience of their use serves to a like degree to impair the commercial efficiency of the city. Ease and cheapness of street use is an important factor in conducting any business enterprise. Costliness and inconvenience in street use increases the cost of carrying on business and impairs the effectiveness of the economic structure of the city. A condition of congestion upon the main thoroughfares of the city is one therefore which affects to varying degrees all business activity, and finds its ramification far down in the foundations of commercial enterprises of all kinds. ACCESSIBILITY AS A BASIC FACTOR IN BUSINESS VALUES Modern cities are to a large degree a product of transportation. No city of the world has grown to a position of first rank without a strategic location upon important highways of commerce. Nowhere is the principle of accessibility as a factor in business value better illustrated than in the city of Chicago. It has become the fourth city of the world because it has become the central market of one of the most prosperous territories to be found anywhere. That it has obtained dominance in this region is the result of its central location and its transportation connections which have given it a superior accessibility both to the seller and the buyer. Business values within the city of Chicago are likewise based upon facility of communication. The central district has become dominant in the commercial life of the city because of the fact that it is central and, therefore, most accessible to the bulk of the community. Every secondary business district that has prospered owes its development to the fact that it affords to the people of its neighborhood an advantage of easy access. The facility with which people may reach any establishment is one of the prime factors in business location. So important a part does this element play that firms desiring a location often spend thousands of dollars in the study of alternative sites. Manufacturing plants must be located within easy distance of their labor supply, office buildings must be situated where there are good transportation facilities and in such a manner that transactions with firms in other structures can be consummated easily, theaters and similar recreational facilities must be situated where patrons will find the least difficulty in attending. Retailing establishments are most vitally affected by the factor of accessibility. They gain their business by attraction and not by compulsion. They offer to the public certain values, which unlike wages are not essential to livelihood. The traffic which is composed of purchasers follows the course of least resistance. If values are equal, purchases will be made in those establishments which offer the greatest convenience in the form of accessibility and comfort to customers. DECENTRALIZATION THE INEVITABLE RESULT OF CONGESTION It is a well-known fact in the growth of American cities that when travel over the streets becomes difficult and inconvenient, retail business tends to move outward from the original centers of trade toward the most valuable purchasing power. This tendency is known as decentralization and has been an increasing condition in all of the larger cities during the past decade, stimulated chiefly by the growing congestion upon city streets. The movement of retail districts is illustrated in New York City by the now classic march of business up the island from Fourteenth to Forty Second street and even beyond; in Boston it is shown by the Boylston Street Development; in Los Angeles by the shift of the central district down Broadway and out Seventh Street. In Chicago it is illustrated by the recent development and rapid growth of secondary business districts. Chicago now possesses seventy-five major and twenty minor neighborhood or package goods districts. A diagrammatic representation of these districts is shown in Fig. 26.1 Statistics as to the growth of these districts have been impossible to obtain. It is generally understood, however, that the past few years 1 For the preparation of this chart the Survey is indebted to the Merchandising Department of the Chicago Herald and Examiner. have shown a very decided increase in the volume of business which they transact. While it is not an accurate index to business activity, the deposits of the neighborhood banks reveal something of the growth. There are in Chicago 173 outlying banks with total deposits at the present time in excess of $615,000,000. This marks an increase of 3,000 per cent since 1900, partially to be attributed to the growth in the branch type of banking business, but indicative to a degree of the increasing commercial transactions in the neighborhood districts. During 1923 and 1924 the outlying banks grew more than 42 per cent in deposits, as compared with the 20 per cent increase in the central business district institutions, and have at present more than 50 per cent of the total bank deposits in the city.' The past few years have shown a marked change in neighborhood district development. Formerly business was generally of a staple character composed largely of the ordinary necessities of life. Now there is a movement toward supplying in the larger of the districts, variety and specialized merchandising services in direct competition with the older established stores of the central district. This outlying district development has not resulted from a public whim, but in answer to a basic economic demand for a higher degree of accessibility. Growing congestion, manifesting itself in inconvenience and discomfort of travel, has created a desire for markets in closer proximity to homes. How far this movement will proceed, and the effect which it will have upon established retail business values in the central district will be determined by traffic and transportation improvements of the future, and the competitive advantages which the secondary districts will be able to offer. It should be thoroughly understood, however, that the problem of accessibility is not one which is borne alone by the retailing interests of the central district. The primary advantage of accessibility, especially to automobile patronage, which a newly established neighborhood district possesses is of short life. The growth of the congestion problem in such a district is in direct ratio to its prosperity. There is no important outlying district in Chicago where congestion has not already made itself felt, and where the original freedom of access has not been materially reduced. 1 Cf. Survey of Banking and Financing, Chicago Association of Commerce (Chicago, 1925). Lack of facility for traffic movement and for parking which inevitably follows success in neighborhood districts causes a further dispersion of business activity, and a destruction of economic solidarity. Herein lies the chief threat of street traffic and transportation congestion. It is a well recognized fact that there are economic advantages accruing from large scale merchandising and that there is an additional economic advantage resulting from the grouping of similar establishments. Decentralization abnormally fostered will result in smaller and more scattered retail units and multiplied overheads which must eventually be carried by the consumer. From the standpoint of community efficiency the problem of street use, therefore, is the joint problem of the merchandisers in the central district and in the neighborhood districts, and of the purchasing public. Central district merchants must preserve their accessibility for the public at large, outlying merchants must preserve the accessibility of their district not only for their direct patronage but for the attractiveness of their territory as the place of residence. The most serious blow that could be given the prosperity of outlying districts is a street and transportation congestion that would reduce the accessibility of the central district, for this would render their neighborhoods less desirable as the place of residence of tens of thousands of workers, who must carry on their gainful activity in the central portion of the city. The general public is interested in the problem both because of immediate convenience and because of economies resulting from business solidarity. So important a factor has street congestion become in retail business that the Domestic Commerce Division of the United States Department of Commerce, was recently moved to undertake a study of conditions throughout the country.1 Information was collected from the following classes of cities: Group I, cities of over 200,000 in population; Group II, cities between 50,000 and 200,000 in population; Group III, cities of from 10,000 to 50,000 population, and Group IV, cities of from 2,500 to 10,000 population. The study sought first to learn the number of retail stores where interference occurred because of street congestion. 1 Vehicular Traffic Congestion and Retail Business, Trade Bulletin No. 394. |