Rural Minnesota Endeavoring To Attract Younger People  

As noted in prior posts, many rural parts of the U.S., including Minnesota, have aging and declining populations that present many problems for the regions.[1] But there are hopeful signs that this trend may be reversing.

“The Blandin Foundation (Grand Rapids, MN) has found evidence of growing interest in small-town Minnesota: A study earlier this year showed more rural Minnesotans are staying put, with fewer considering moving to an urban area. Yet more urban residents — those in the Twin Cities, Duluth, Mankato, Moorhead, Rochester and St. Cloud — are considering moving to rural areas. The top reason they cited? Quality of life.”

This conclusion is supported by a University of Minnesota Extension rural sociologist, Ben Winchester, who said, “Rural Minnesota towns aren’t just experiencing a ‘brain drain’ of people in their 20s but also a ‘brain gain’ of people 30 to 49 years old. The next five, 10 years are going to be a big wave of change across rural Minnesota as we welcome a new generation. It’s good news for our small towns.”[2]

Now some rural towns in Minnesota are responding to those problems by developing programs to attract younger people to move and establish their homes. These newcomers are “all members of a growing migration of people in their 30s and 40s moving to rural Minnesota—a movement that foundations, nonprofits and local entities are hoping to boost even further with new strategies to recruit  and retain newcomers.”[3]

Here is an account of at least some of those programs.

Fergus Falls, Minnesota[4]

Fergus Falls is a town in and the county seat of Otter Tail County in the west central part of the state. The town’s estimated population in 2017 was 13,138, while the County’s was 58,812. The town was incorporated in the late 1870s and is situated along the dividing line between the former great deciduous forest of the Northwest Territories to the east and the great plains to the west, in a region of gentle hills, where the recent geological history is dominated by the recession of the glaciers from the last great Ice Age, with numerous lakes and small rivers.

In the mid-19th century the town and area’s initial settlers were Norwegian immigrants and Union soldiers returning from the Civil War, many of whom became farmers (wheat and corn in the western plains and dairy and hogs in the eastern hills and forests). In the 1950s Interstate Highway 94 was built along the western edge of the town, enhancing the mobility of the town’s residents with many young people leaving town to attend college and not returning.

Now the West Central Initiative Foundation in Fergus Falls is touting Otter Tail County as the place to live and supporting several ways to draw more young professionals to fill job openings and have children to fill classrooms. The Foundation’s CEO, Anna Wasescha, said. “We want to be sure our region of Minnesota is vibrant and sustainable.”

This Foundation began a marketing campaign called “Live Wide Open in 2016 to share stories about why residents are moving from the Twin Cities or other states. . . [It] holds ‘welcome home’ events for natives, hoping to persuade them to return, and also helped fund a nonprofit, the Glenwood Lakes Area Welcome Center, to expand a welcoming program and start a newcomer group.” The Otter Tail County helps these efforts with a  “rural rebound initiative coordinator,” who “tracks data and creates videos and social media posts promoting the county’s 24 communities to show millennials and Gen X-ers there’s a vibrant, affordable life with job openings — and no congested commute.” The county’s coordinator, Erik Osberg, said, “Rural isn’t dying; it’s changing, and it’s changing for the better.”

Osberg also helps organize a “grab-a-bite program” in Fergus Falls, pairing residents with newcomers to help make a friend and learn about the community, and puts on a concert on a frozen lake in the winter to showcase the county to Fargo and Twin Cities visitors. “If we’re going to win the recruiting battle … we need to be the most welcoming community in the state.”

One newcomer couple four years ago moved from the Twin Cities to Fergus Falls when they had their first child. The mother said they wanted smaller school class sizes and a quality of life like the one she had growing up in rural North Dakota; plus, her husband can work remotely for a Minnetonka, Minnesota software company. The mother now works as the  County’s community development director, tracking the ‘rural rebound’ through the county’s growing population and increasing kindergarten class sizes. “It’s amazing how many people we meet with similar stories.”

Another newcomer and mother, Ruth Rosengren, helped launch Fergus Falls’ first co-working space this summer while working remotely for a California-based web development company. “I hope more people see … Fergus Falls as a viable place to live without giving up a job you want,” she said.

Willmar, Minnesota[5]

In the southwestern part of the state, Willmar historically was a largely white, Lutheran, Scandinavian town. Now, however, with a population of 19,610 (2010 Census), t is very diverse with its high school having students from 30 other countries speaking at least four foreign languages. In response the high school has two foreign-language cultural liaisons to work with the students and teachers, and local businesses have created an entrepreneurship program for all the students and a Community Integration Center.

Mankato, Minnesota

In Mankato, a small city of approximately 43,000 in the south-central part of the state, local “businesses found that young professionals without  a social connection left within two years.” So the local chamber of commerce “announced a new program matching a resident with a newcomer.”

Last year Mankato’s local newspaper published an editorial, saying, “Here, in the south-central area of the state, we have seen . . . reliance on a diverse workforce both in small cities and in the regional center of Mankato. Meat plants in St. James, Madelia, Butterfield and Windom [smaller cities in southwestern Minnesota] depend heavily on minority workers. Mankato manufacturing plants also hire immigrant workers and a number of immigrants have become small-business owners.”

The editorial ended with these comments: “Population projections predict that as baby boomers retire, enough workers won’t be available to fill the vacant jobs in Minnesota. Our newest segments of population are going to be key to keeping our businesses going. And a continuing tradition of strong public education in Minnesota, with the financial support it deserves, should help train those workers of today and tomorrow.”

Worthington, Minnesota

Katy Kouba and her husband recently moved to Worthington, Minnesota in the southwest corner of the state in order to raise their three kids in a smaller community after living on both U.S. coasts. She said, “It was a leap of faith, “ but we “wanted the life-style that rural Minnesota had to offer. I love the connection in a small town.”  She now works as the community concierge helping other new residents be integrated into the town’s life.

As recounted in a prior post, Worthington’s population has surged from less than 10,000 in 1990 to 13,000 today with a median age of under 36 and foreign immigrants constituting roughly one-third of the population and owning more than 25% of the town’s businesses.[6]

Other Programs

 Escapees from Chicago to Ely, Minnesota near the Boundary Waters Canoe Area and Canada were Tony Moskowitz and his family. “I feel like I am on permanent vacation,” he said while running his business from his home.

Ely is also part of northern Minnesota’s Iron Range, where in 2015 a group of young adults started the nonprofits ReGen to “help retain young professional by organizing social events like snowtubing and game night while fundraising to revamp towns.

 The Northwest Minnesota Foundation of Bemidji in the northwestern part of the state, is making grants to cities for amenities that attract families — from trails to maps of attractions.”

In Winona in the southeastern part of the state, Project FINE “has a monthly event for neighbors to get to know one another.”

Conclusion

According to The Wall Street Journal, young professionals moving from large metropolitan areas to smaller cities and towns is happening across the U.S. Such workers are “fueling a renaissance in U.S. cities that lie outside the major job hubs. People who do their jobs from home, freelance or constantly travel for work are migrating away from expensive urban centers such as Los Angeles and San Francisco toward cheaper cities including Boise; Denver; Austin, Texas; and Portland, Ore.” This has meant that the smaller cities and towns are starting to see fast-rising home prices and traffic congestion.[7]

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[1] See, e.g., More Warnings of the Problems Facing U.S. Aging, Declining Population  (Aug. 14, 2019).

[2] Univ. MN Extension, A rural brain gain migration.

[3] Smith, Small cities seeing ‘rural rebound,’ Star Tribune (Sept. 1, 2019).

[4] Fergus Falls, Minnesota, Wikipedia; Fergus Falls Chamber of Commerce; Otter Tail County, Minnesota, Wikipedia.

[5] Additional Support for U.S. Needing More Immigrants, dwkcommentaries.com (May 18, 2019); Willmar, Minnesota, Wikipedia.

[6]  Outstate Minnesota City Aided by Immigrants, dwkcommentaries.com (Aug. 5, 2018).

[7]  Eisen, Workers Are Fleeing Big Cities for Smaller Ones—and Taking Their Jobs With Them.,W.S.J. (Sept. 7, 2019).

Principles of Civility from Duluth, Minnesota 

The Wall Street Journal praised Duluth, Minnesota’s citizens for improving its civic life by following these core principles for debating public issues:

  1. Pay attention,
  2. listen,
  3. be inclusive,
  4. don’t gossip,
  5. show respect,
  6. be agreeable,
  7. apologize,
  8. give constructive criticism, and
  9. take responsibility.

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Seib, What Duluth Can Teach America About Declining Political Civility, W.S.J. (July 30, 2018).

 

Federal Regulation of Railroads During U.S. President Theodore Roosevelt’s First Term (1901-1905): The Northern Securities Case

As mentioned in an earlier post, one of President Theodore Roosevelt’s major efforts to enhance federal regulation of railroads in his first term was his Administration’s commencement of an antitrust lawsuit under the Sherman Act against the Northern Securities Company, which combined the stocks of two competing railroads from the Great Lakes and the Mississippi River to Puget Sound on the Pacific Coast.

These two roads were the Great Northern Railway running from St. Paul, Minnesota to Seattle, Washington while the Northern Pacific Railway ran from St. Paul (and separately from Ashland, Wisconsin and Duluth, Minnesota) to Seattle and Tacoma, Washington and Portland, Oregon. In addition, the two of them jointly owned the Chicago, Burlington & Quincy Railroad, which connected St. Paul with Chicago. [1]

Great Northern Railway
Great Northern Railway
Northern Pacific Railway
Northern Pacific Railway

The Legal Background

The late 19th century was an era of “trusts” and of “combinations” of businesses and of capital organized and directed to control of the market by suppression of competition in the marketing of goods and services, the monopolistic tendency of which had become a matter of public concern.

To meet this problem, the U.S. in 1890 enacted “An act to protect trade and commerce against unlawful restraints and monopolies,” 26 Stat. 209, ch. 647 (1890). The statute is commonly referred to as the Sherman Act in recognition of its principal author or sponsor, Senator John Sherman, Republican of Ohio. The statute provided, in part, as follows:

  • “Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several states . . . is hereby declared to be illegal. Every person who shall make any such contract, or engage in any such combination or conspiracy, shall be deemed guilty of a misdemeanor . . . .” (Section 1)
  • “Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several states . . . shall be deemed guilty of a misdemeanor . . . . ” (Section 2)

The prescribed penalty for such misdemeanors was a fine up to $5,000 or imprisonment not exceeding one year or both. In addition, the circuit courts (n/k/a district courts) were “invested with jurisdiction to prevent and restrain violations” of the statute (Section 4), and persons injured in their business or property by any violations could sue the perpetrators for treble damages and attorneys’ fees (Section 7).

The goal of the Sherman Act was to prevent restraints of free competition in business and commercial transactions that tended to restrict production, raise prices, or otherwise control the market to the detriment of purchasers or consumers of goods and services.

The Formation of Northern Securities

On November 13, 1901 (only two months after Roosevelt became President), J. P. Morgan, who controlled 21 railroads, including the Northern Pacific, and James J. Hill of the Great Northern [2] announced the formation of the Northern Securities Company to be a holding company for the common stock of the two competing railroads, This new combination was the second largest company in the world with annual revenues of $100 million and covering commerce from Chicago to Seattle and extending to China over Mr. Hill’s shipping lines.

A New York newspaper saw the new company as another step toward universal monopoly.

The Commencement of the Lawsuit

On February 19, 1902 (only three months after the formation of the Northern Securities Company), the Roosevelt Administration announced plans to commence the antitrust case alleging that the formation and operation of Northern Securities constituted a restraint of interstate commerce in violation of the Sherman Antitrust Act. In addition to the two railroads, the U.S. planned to sue James J. Hill of the Great Northern and seven directors of the Northern Pacific, including J. P. Morgan and George F. Baker. [3]

James J. Hill
James J. Hill
J. P. Morgan
J. P. Morgan
George F. Baker
George F. Baker

 

 

 

 

 

 

 

The U.S. stock market immediately registered significant declines with similar reactions in London, Paris and Berlin markets. In response, J. P. Morgan starting buying stocks in great quantities and helped to stop a panic.

The next evening Morgan and 12 other wealthy men met with Roosevelt at the White House without discussing the lawsuit, i.e., the elephant in the room. The next morning, however, the subject was broached when Morgan returned alone to the White House for a meeting with Roosevelt and the Attorney General, Philander Chase Knox. Morgan asked why the Government had not just called and asked him to correct any irregularities with the charter of Northern Securities, but Knox merely said the Government wanted to stop the company, not to fix it up. Afterwards Roosevelt said, “Mr. Morgan could not help regarding me as a big rival operator who either intended to ruin all his interests or could be induced to come to an agreement to ruin none.”

Theodore Roosevelt
Theodore Roosevelt
Philander Chased Knox
Philander Chase Knox

The Case in the Circuit Court

The bill in equity (or “complaint” in today’s terminology) thereafter was filed with the U.S. Circuit Court for the District of Minnesota.[4] The complaint charged that the Northern Securities was an illegal “combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several states” (Sherman Act § 1).

The next April 9th (1903), the Circuit Court’s four Circuit Judges unanimously upheld the validity of the Government’s complaint (United States v. Northern Securities Co., 120 Fed. 721 (Cir. Ct., Dist. Minn. 1903)) . The court in an opinion by Judge Thayer first entered the following findings of fact as established by the pleadings and evidence:

  • The Great Northern and Northern Pacific owned railroad lines from Minnesota to Puget Sound that are parallel and competing lines.
  • These two railroads in 1901 jointly acquired 98% of the capital stock of the Chicago, Burlington & Quincy Railway.
  • Thereafter in 1901 James J. Hill, J. P. Morgan and six other men, all of whom were defendants in the case and collectively had practical control of the two principal railroads, arranged to place a large majority of the stock of the two railroads in a holding company, Northern Securities, and that was done.
  • As a result, the control of these two railroads was put into a single person and thereby “destroyed every motive for competition” between them.
  • Those “who conceived and executed this plan . . . intended . . . to accomplish these objects.”

The court then concluded that the Congress “deliberately employed words of such general import [in section 1 of the Sherman Act] as, in its opinion, would comprehend every scheme that might be devised to accomplish that end.” In addition, the U.S. Supreme Court had held that the Act “applies to interstate carriers of freight and passengers . . .; that [the Act does] not mean in unreasonable or partial restraint of trade or commerce, but any direct restraint thereof; that an agreement between competing railroads . . . [to fix their rates is] a contract in direct restraint of commerce . . .; and [that the Act is constitutional].”

Therefore, the court entered a decree that the defendants had violated section 1 of The Sherman Act and that Northern Securities was enjoined from acquiring additional stock of the two railroads, from voting its holdings of those shares and from exercising or attempting to exercise any control or direction over the two railroads. Northern Securities, however, was permitted to rescind its acquisitions of the stock of the two railroads.

The Case in the Supreme Court

The case then went directly to the U.S. Supreme Court, [4] which on December 14, 1903, heard arguments. Attorney General Knox appeared for the Government and made what many thought was a brilliant argument without any questions from the Justices.

In March 1904, the U.S. Supreme Court, 5 to 4, affirmed the Eighth Circuit and ordered the company dismantled. (Northern Securities Co. v. United States, 193 U.S. 197 (1904).) The Court’s plurality opinion by Mr. Justice John Marshall Harlan and supported by only three of the other Justices concluded that “the evidence . . . shows a violation of the . . . [Sherman Act, which] declares illegal every combination or conspiracy in restraint of commerce among the several states . . . and forbids attempts to monopolize such commerce or any part of it.”

In so concluding, the Harlan opinion emphasized that the Court’s prior decisions had established that “every contract, combination, or conspiracy in whatever form, of whatever nature, and whoever may be parties to it, [that] directly or necessarily operates in restraint of [interstate] . . . commerce” is illegal. Those prior decisions, said the Harlan opinion, also determined that the statute is not limited to unreasonable restraints of trade; that railroads operating in interstate trade are covered by the statute; and that every contract, combination or conspiracy that would extinguish such competition is illegal. (Emphasis added.)

Mr. Justice David Josiah Brewer concurred in the judgment affirming the lower court’s conclusion of antitrust violations, but disagreed with the rationale of the Harlan opinion because of fear that it “might tend to unsettle legitimate business enterprises, stifle or retard wholesome business activities, encourage improper disregard of reasonable contracts, and invite unnecessary litigation.” Instead, said Justice Brewer, the statute only covered “contracts which were in direct restraint of trade, unreasonable, and against public policy.” (Emphasis added.)

A dissenting opinion was filed by Mr. Justice Edward Douglas White and joined by Chief Justice Melville Fuller and Justices Rufus Wheeler Peckham and Oliver Wendell Holmes. This opinion concluded that the constitutional power of the federal government over interstate commerce did not extend to cover Northern Securities Company’s acquisition of the common stock of the two railroads.

Holmes also filed a separate dissenting opinion that was joined by the other three dissenters. Holmes asserted that the antitrust statute only outlawed combinations in restraint of trade, not of competition and that he saw no evidence of an attempt to monopolize some portion of U.S. trade or commerce. He also expressed relief that “only a minority of my brethren [the four Justices who subscribed to the opinion of Mr. Justice Harlan] adopt an interpretation of the [statute] . . . which . . . would make eternal the bellum omnium contra omnes [the war of all against all], and disintegrate society so far as it could into individual atoms . . . . [Such an interpretation] would be an attempt to reorganize society . . . . I believe Congress was not entrusted by the Constitution with the power to make . . . [such a law], and I am deeply persuaded that it has not tried.”

The high court’s action was a major victory for the administration and put the business community on notice that although this was a Republican administration, it would not give business free rein to operate without regard for the public welfare.

W. C. Brown’s Reaction to the Supreme Court’s Decision 

W. C. Brown
W. C. Brown

Soon thereafter (May 24, 1904), W.C. Brown, my maternal great-great-uncle, in a speech to the Illinois Manufacturers Association that was covered by the New York Times commented on the Supreme Court’s decision. He said, “Propositions looking to the betterment of [railroad] service, having no other object, and impossible of any other result, have been misunderstood and have been fought inch by inch with a perseverance and zeal worthy a better cause.” As a result, Brown continued, it was “not impossible that the language of the majority of the Supreme Court [in the Northern Securities case] may . . . seem to reflect the clamor of the public, rather than the calm, judicial review of a great question.” [5]

Brown added that by “amendment or by judicial interpretation the question of reasonable restraint of commerce, as against any restraint whatever, must become part of the Sherman . . . [Act], and must be considered in its enforcement, or obstacles to commercial and industrial progress are likely to be interposed the gravity of which no one can foresee.” (Emphasis added.)

This commentary was preceded by Brown’s proclaiming that “[e]xcept for the birth of Christ, no event has meant so much to humanity as the U.S. Declaration of Independence;” that the recent U.S. war with Spain was “as holy, as high and unselfish in purpose as ever inspired a people;” and that the U.S. had the “satisfaction of having borne its share of the burden of carrying Christianity, civilization and education to those who sit in the darkness of ignorance and superstition.”

Brown also issued a stern warning that apparently emerged from his growing up in thinly populated Iowa and Illinois and that ignored his presumably elegant life in New York City (and earlier in Chicago). Brown said, “The most serious menace that clouds our national horizon today, ominous now and increasing in size and anger and portent, is the rapid growth of our cities . . . . No man can regard the growth of the great centers of population, with their sinister, dangerous, preponderantly influence in the politics of the State and Nation, without alarm.” He added, “The remedy for this evil and the safety of the Nation was building up, encouraging, and increasing our agricultural population.”

It should also be noted that at the time of this speech, Brown was a Vice President of the New York Central Railway, two of whose directors were defendants in the case: J. P. Morgan, a principal architect and beneficiary of the formation of the Northern Securities Company, and George F. Baker.

Subsequent Supreme Court’s Interpretations of the Sherman Act

Seven years later, in 1911, the approach to interpreting the Sherman act advocated by Justice Brewer and W. C. Brown was in fact adopted by the U.S. Supreme Court. In Standard Oil Co. v. United States, 221 U.S. 1 (1911), the Court, 8 to 1, stated that only combinations and contracts unreasonably restraining interstate or foreign commerce were illegal under the Sherman Act. Justice John Marshall Harlan, the lone dissenter in this case and the author of the Court’s opinion in Northern Securities, said the Rule of Reason was a departure from previous Sherman Act case law, which purportedly had interpreted the language of the Sherman Act to hold that all contracts restraining trade were prohibited, regardless of whether the restraint actually produced ill effects.

Thereafter the Court unanimously reaffirmed the Rule of Reason in two cases: United States v. American Tobacco Co., 221 U.S. 106 (1911) (section 2 of the Sherman Act did not ban the mere possession of a monopoly but only the unreasonable acquisition and/or maintenance of monopoly); Chicago Board of Trade v. United States, 246 U.S. 231 (1918) (agreement between rivals limiting rivalry on price after an exchange was closed was reasonable and thus legal).

Subsequent Supreme Court cases established the concept of per se violations of Section 1 of the Sherman Act. These are “agreements, conspiracies or trusts in restraint of trade” that have been found to have a “pernicious effect on competition” or “lack any redeeming virtue” and include competitors’ agreements to fix their prices or divide markets between them and concerted refusals to deal.

For other alleged violations of section 1 of the Sherman Act, the courts engage in a “rule of reason” analysis to evaluate the intent and purpose of the conduct, the facts peculiar to the business and industry, the history of the conduct and its effect on competition. If the result of this judicial analysis is the conduct unreasonably restrains trade, it is a violation of section 1.

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[1] This post is based upon Edmund Morris, Theodore Rex at 59-65, 87-95, 219, 304-05, 313-16 (Random House; New York; 2001); MIller Center, Theodore Roosevelt: Domestic Affairs; and the other sources cited below.

[2]  The James J. Hill House is a St. Paul mansion now open to the public and operated by the Minnesota Historical Society.

[3] J.P. Morgan and George F. Baker were also directors of the New York Central Railway, and I was a beneficiary of Baker’s wealth as a George F. Baker Scholar at Grinnell College, 1957-1961. Morgan’s Manhattan Library is now the Morgan Library & Museum that is open to the public.

[4] As of 1903 nine U.S. circuit courts had jurisdiction over trials of all civil suits initiated by the U. S. Government in different parts of the country, and the circuit court that covered the State of Minnesota (the Eighth Circuit) had four Circuit Judges (Henry C. Caldwell, Walter H. Sanborn, Amos M. Thayer and Willis Van Devanter). As of January 1, 1912, these courts were abolished, and the previously established U. S. district courts assumed jurisdiction over all civil and criminal cases in the federal courts.

[5] W.C. Brown, Address before the Meeting of the Illinois Manufacturers Association, Chicago, Illinois (May 23, 1904); Supreme Court Influenced, N.Y. Times (May 24, 1904).