“Re: Industrial Development in Virginia” (December 15, 1958)

Confidential

December 15, 1958

Re: Industrial Development in Virginia

Memorandum to Messrs. Saunders and Wilkinson:

As I may not return from New York in time for the dinner on Friday with the state officials, and as you included me on the sub-committee to plan for that occasion, I am writing this memorandum to record my general thinking.

In reflecting on the discussion last Wednesday night, its most remarkable aspect was the striking degree of unanimity as to the nature of the two problems which concerned the group. We were convened to discuss ways and means of promoting the sound industrial development of Virginia, and it developed that almost all of those present agreed that the school crisis constitutes a related problem which must be solved if there is to be any hope of effectively dealing with the development problem.

The startling statistics which Stuart Saunders presented to our meeting indicate rather conclusively that Virginia has already come to a virtual standstill in terms of major new industries locating here. At the very least, we are falling far behind our neighboring states—despite the fact that we have resources (in terms of minerals, timber, water power, transportation, harbors, and a favorable labor climate) which appear to be superior to these of any other southern or southeastern state.

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There are, no doubt, a number of contributing causes to this relative lack of success in attracting new business and industry. These include (i) unfavorable tax laws, (ii) a Department of Conservation and Development with the weaknesses of finance, personnel and leadership so vividly described by Gene Sydnor, (iii) a State Chamber of Commerce which, for various reasons, has not been conspicuously successful in this area, and (iv) the apparent disinclination of top state officials to devote intensive personal effort to this program in the same way that is done in other states.

While these negative factors have all contributed to the present situation, they are relatively minor problems compared with the effect of the school crisis. There will be no substantial new capital investment in Virginia until this crisis is satisfactorily resolved.

It is therefore desirable, it seems to me, to discuss frankly with the Governor at least the relationship between the school crisis and the future economic welfare of Virginia. I personally feel that our group also should discuss with him generally, if he is agreeable, possible ways of extricating Virginia from its present impossible position.

If there should be such a discussion, it must of course be done without recrimination or blame—express or implied. While I have felt that massive resistance was sheer folly from the outset,

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we must now take the position that it is time for responsible community, business and political leaders to devote their best thought to sound and practical solutions without regard to past mistakes.

General Position of Group

But before opening up this part of the discussion, perhaps Stuart or Harvie should summarize the collective position of our group. Perhaps it could be generalized as follows:

1. The group is comprised of business and community leaders who are interested in promoting the sound industrial development of Virginia.
2. This is the sole concern of this group at this time, and we do not wish to be injected into the political controversy over segregation and integration.
3. The group believes that the economy (and therefore the welfare of our people) of Virginia is suffering gravely as the result of relatively unfavorable progress in (i) bringing desirable new business and industry into our State and (ii) expanding major industry already located here. This condition will grow progressively worse unless corrective measures are taken promptly.
4. The group feels that there are a number of contributing causes for this lack of progress, and we

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would like to discuss specifically with the Governor Lieutenant Governor and Attorney General ways and means of:

• Greatly improving the Department of conversation and Development, and perhaps creating a new Department at the next session of the General Assembly;
• Using private funds, if necessary, to strengthen both the personnel and program of this Department until the General Assembly can take effective action;
• Studying the role and possible areas of improving the work of the State Chamber in this respect;
• Correcting the unfavorable elements in our tax structure which tend to deter capital formations in Virginia; and
• Developing a more vigorous teamwork between the top State officials and top business leaders in promoting Virginia aggressively along the lines successfully followed in other states.
• While the foregoing types of action will improve the situation, the group feels that unless the school crisis is resolved in a manner which preserves public education, there is no hope of real progress.

Resolution of School Crisis

It is probable that the Governor will agree generally with the views above expressed, and he has repeatedly expressed

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his personal interest in education. He will also, no doubt, point out that he has indicated his intention of appointing a new legislative commission as soon as massive resistance is finally buried by the courts. Knowing how persuasive Governor Almond can be, it is possible that he will convince all of us that a new plan will be developed which meets our basic concerns. But I think we must beware of soothing statements and assurances that all will be well.

It is obviously going to be quite difficult to discuss the realities of the school crisis in any effective way—especially in a large group. Unless we do this to some extent, I fear that the meeting will accomplish relatively little. I would hope, to be specific, that there will be an opportunity to suggest certain points to these important state leaders, including perhaps the following:

• Abandonment of Defiance. While Virginia fortunately has not gone nearly so far as Arkansas, and the Governor has always been careful to speak of “all legal means of resistance”, the basic posture of Virginia has undoubtedly been one of defiance. This is both implicit and explicit in the policy of massive resistance and the laws which implement it. Certainly, the courts and public generally have so construed our position. There can be no satisfactory solution of the problem so long as this attitude continues.

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• Acceptance of the Court’s Historic Position in Our Constitutional Form of Government. This is related to “defiance”, but it also involves something more fundamental—namely, our Constitutional form of government. Responsible public officials and leading newspapers have continued to take the position that the Supreme Court usurped the authority to decree de-segregation. This view attacks the very foundation of our system of government. As every thoughtful lawyer knows, the American system cannot possibly work unless the Supreme Court is the final arbiter as to the meaning of the Constitution. We are all free, of course, to criticize decisions of the Court, but this is quite different from denying that the Court has the authority and jurisdiction to decide constitutional questions. In short, commencing with the fanciful idea of “Interposition” and continuing down to date, the people of Virginia have been subjected to a new and radical doctrine which in effect holds that each state shall decide for itself what the Constitution means. This would result in chaos. I doubt that enlightened business leaders elsewhere would consider Virginia an attractive place to move until we decide to rejoin the Union.

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• Private Schools Are Not the Solution: Although I believe the Governor has wisely refrained from suggesting that private schools constitute the solution to the school crisis, some of our newspapers and political leaders (including one or more members of Congress) have encouraged the belief that private schools can supplant public school education. While the development of private schools as an alternative may be feasible (and indeed necessary) in certain locations such as Prince Edward County, it is incredibly unrealistic to think that any system of private schools can successfully supplant public education in most of Virginia. In Richmond, for example, we have about 2,000 teachers and employees, or school budget is about $11,500,000, and we already own our plant of more than 60 school buildings. Even if the education of negro pupils be abandoned, it would be absurd to suppose that a school system of this kind could be financed and operated privately.
• The Danger of Referenda on Abandoning the Public School System. A body of opinion is developing in favor of a vaguely defined plan of “local option” which would permit each locality to decide, by vote of the people, whether it would abandon the public school system—in whole or in part. Coupled with

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this, is the idea that State “grants” would be made to citizens in communities which vote to abandon public education. This type of plan has a good deal of glamour for many reasons. It appears to be “democratic”; it takes public officials off the spot and leaves decisions to the “people”; it has the attractive label of “local option”; and would be sold as a means of providing the flexibility needed to meet differing public opinion in various sections of the State.

Despite the superficial “merits” of such a plan, I am fearful that the results would be to destroy public education (which means effective education) in large sections of Virginia. In the climate of public opinion which has developed in Virginia, and with the highly inflammatory appeals to emotion and prejudice which local elections of this kind will produce, it seems likely that a great many communities would abandon public education if they were given this opportunity. I earnestly hope that the leaders of our state will not support such a plan and thereby abdicate their responsibility for leadership at a time when it is so greatly needed.

• Education of Negroes. The economic burden of educating the Negroes is one which the South has borne

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for generations. There has been a natural inclination on the part of many of our people to seek a plan which will relieve the State and localities of this burden. There are others who wish to retaliate against the Negroes for the aggressive activities of the NAACP. Happily, Governor Almond has expressed his opposition to “retaliation”, and it is to be hoped that he shares the views expressed by many members of our group that the State, in the interest of all of the people, must continue to provide public education for the Negroes. The alternative of this is unthinkable, as we would then have some 30% of our population growing up in ignorance and crime, and yet having the right to vote and without developing the skills which would enable them to carry their fair share of taxes.

• The Public School System Must be Preserved. It is difficult to think of a greater calamity within our State than the abandonment of emasculation of the public school system. Not only would this tend to weaken America itself over a period of years, but it would have catastrophic effects upon the business, social, economic and political life of Virginia itself. It would retard our development as much as Reconstruction did in the 19^th Century.

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• The Solution? There are, of course, no easy solutions to the greatest problem in the current history of Virginia. It seems to me, however, that the best opportunity of a reasonable and acceptable solution is the Gray Plan in substance—probably under some other name. This plan was carefully developed and reflected some of the best thoughts of our leaders; a major portion of it was approved by the people; and decisions of the courts with respect to the North Carolina and Alabama plans indicate that we could operate legally under this type of plan.

It would, to a large extent, accommodate the views of different localities, and if wisely administered it should preserve the public school system generally without resulting in extensive integration for years and possibly generations.

L. F. P., Jr.

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