Shrinking city: Detroit
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Shrinking City: Detroit Nikunj Gupta
Detroit was the centre of American car production. It was one of the richest countries in not
only the US but also in the world. Ford, Chrysler and General Motors were the “Big Three”
automobile countries attracting vast population into the city. Buildings after buildings came
up, concentrated infrastructure became common. The concept of skyscrapers was becoming
popular to accommodate more and more people.
But our ‘motor city’ started to lose its importance since the 1930s. It started losing its
population, i.e., started “shrinking”. According to Karina Pallagst, professor for International
Planning Systems at Kaiserslautern University’s faculty of Spatial Planning (she previously
worked at UC Berkeley’s centre for Global Metropolitan Studies (GMS) and the Institute of
Urban and Regional Development (IURD)), says that “A shrinking city is characterised by
economic decline and-as a consequence- the transformation of urban areas. In addition, loss
of employment opportunities tend to spark partial out-migration. In the United States,
shrinkage can either be part of post-industrial transformations related to the decline of the
manufacturing industry, or it can be triggered by economic changes in the so-called “post-
industrial transformations of a second generation” within the high tech industry(e.g. the
dot-com bust) [12]. (Pallagst, 2007)”
Picture source (Pallagst, 2007).
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The Figure shows the clusters of shrinking cities with over 100,000 inhabitants in the US. The cities are listed by their population growth rate, with Detroit showing the highest shrinkage rate. Detroit did not shrink overnight. It took decades and decades for the seed of
shrinking to grow and turn our ‘Motor City’ into the state in which it is
presently.
Suburbanisation
As we are talking about a ‘notable’ reduction in the size of population in
Detroit, suburbanisation is an important point to cover. Suburbanisation
caused people to start living on the outskirts of Detroit, indirectly leaving the
core area lonely. Slowly and slowly the city came to be known as the ‘ghost’
city.
According to the encyclopedia.com, “Suburbanisation describes the general
trend of city dwellers to move from the city into residential areas in ever-
growing concentric circles away from the city’s core. The trend began briefly in
the nineteenth century and the exploded after World War II (1939-1945)” [4]. There are many reasons because of which suburbanisation took place in
Detroit.
One of the most important reasons that caused suburbanisation was the fact
that the city centre had become an extremely crowded urban place. According
to Kenneth T. Jackson, author of the book “Crabgrass Frontier: The
Suburbanisation of the United States (1985)”, it was a very congested city.
Residences, shops and all types of infrastructure existed side by side. Building
were tall but not wide, streets were narrow, crowded together. People wanted
to live close to their workplaces at that time firstly because transportation
systems were not very good and secondly, foot and horses were the only
modes of transport prevailing at that time. But, such situations didn’t exactly
provoke the idea of suburbanisation at that time but was an important point in
time when seeds were sown. (Jackson, 1985)
The next important factor that led the city to get suburbanised was the
“Automobile Age”. Though the road and street systems was not very good in
the city, Ford’s Model T had become “the staple of American auto consumers”
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[4]. The car was durable, cheap and could easily run over uneven roads, dirt
and ditches. In the “Automobile Age”, travelling to rather far places had
become easier.
This still didn’t cause a lot of suburbanisation in Detroit. According to Lewis
Munford in his book “City in History: Its Origins, Its Transformations, and Its
Prospects (1961)”, though city planners began to consider every other
possibility to the car, suburban growth was slow. Munford (1961) found that
“Only 17 percent of the nation’s population lived in suburbia in 1920. As with
everything else, the Great depression retarded growth. By 1940, only 20
percent of the population was classified as suburban.” (Munford, 1961) [4]
In Detroit, during the time of World War 2, many of the central factories were
being used to produce military products and materials required for the war.
Also new factories and industries were set up as the existing ones were not
enough. With newer infrastructures, new transport system was also
demanded. The city started expanding to accommodate the increasing
population and infrastructure. If Detroit’s map including nearby areas, if looked
upon closely, we can figure out that there is no major natural boundary to the
“motor city”, and for such a city to expand, is not a difficult task. Now these
newer factories were not built in the central region of Detroit, in fact that’s
why they demanded a proper transport system. Later, after World War II,
when these factories were no longer required to produce military armaments,
vehicles and other such items, the quite famous (by that time) automobile
industries started to shift there. This can be termed as “decentralisation” of
these industries. To live near to their workplaces, people started migrating
outwards, away from the city. Also the transportation systems and facilities
had already been improving, so creating parts locally had become less
necessary, and outsourcing of jobs began to trend [6].
The increased job opportunities in Detroit in not only during the Second World
War (in military factories) but also post war era (“The Automobile Age”) led to
increased incoming of population, especially the black from Africa, to Detroit.
Between 1940 and 1960, about one-third of the population of the city had
grown to be consisting of the blacks [5]. This caused a feeling of resentment
amongst the whites, due to various reasons such as ego issues and racial
discrimination riots, and they fled to the periphery of the city. The whites were
not ready to take the blacks for their neighbours.
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However, the “great suburban explosion” took place after the Second World
War [4]. According to Eric Foner and John A. Garraty, the editors of “The
Reader’s Companion to American History”, “The GI Bill, officially the
Servicemen’s Readjustment Act of 1944, provided many benefits to veterans of
World War II. It established veterans’ hospitals, provided for vocational
rehabilitation, made low interest mortgages available, and granted stipends
covering tuition and living expenses for veterans attending college or trade
schools [7].” This insured issuance of new bachelors’ degree and so this
created a new “professional class” in the United States. Veterans who opted
for vocational education improved the service sector [4]. Both classes started
increasing their population and needed low costing houses. According to the
Housing Act of 1949, federals backed the home loans [8], shortage of houses
after the Second World War posed as an obstacle [4].
An ideal solutions to all such problems was found in the suburbs.
Transportation was no longer an issue as it was the “automobile age”. (Car
sales had reduced during the war time period [4]. Firstly because millions of
men were outside the country, secondly, gasoline was rationed which
prevented travelling during the war and thirdly, during the war many of the
factories had been turned into military products manufacturing units. But still,
the sales increased after the end of the war, the number jumped to more than
2 million in 1946 and more than 5 million in 1949 [4]. Many American families
now earned enough money, as the men would be earning their army pay and
the women earned an income by working in the way industry plants. These
earnings gave them plenty for a down payment of a house and buy them a car.
All these facts and incidents that led to suburbanisation meant that people
were actually leaving Detroit and had started living outside. The motor city
which had been known for its high population had started losing its population,
i.e., was “shrinking”.
The Great Depression
The Great Depression is the world economic crisis in the US that caused
widespread unemployment, a near halt to production and construction and
89% decline in stock prices. 29th October, 1929 (commonly known as the “Black
Tuesday”) is regarded as the day of the start of the ‘depression’, when the
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stock market crashed [3]. On “Black Tuesday”, some 16 million shares were
traded, on a loss, creating a panic over the Wall Street [2].
This crash led to the loss of consumer confidence. Product sales came down by
huge amounts. Companies reduced the production of products and as a result
of the losses they faced, they started firing their employees. Construction of
new factories and industries came to a halt. Wages were reduced by a drastic
amount. Matters continued to become worse. By 1930, about 4 million
Americans were looking for work (but could not find it) and by 1931, that
number rose to 6 million [1]. The Great Depression is one of the major reasons
because of which there was a huge population decline in Detroit. Automobile
jobs were lost, people had become homeless, unemployed and started out-
migrating the city. Companies started firing the working staff. The people who
retained their job started getting a low salary.
Also during the late nineteenth century and early twentieth century,
population in Detroit and other American cities increasingly concentrated and
led to many cultural developments [9]. The literacy rates ‘sky rocketed’ and
newspapers, magazines and books gradually became an important source of
knowledge. According to encyclopedia.com, “Giants in the journalism field
such as Joseph Pulitzer, William Randolph Hearst and Edward Wyllis Scripps
purchased and merged big city newspapers. Advancing printing techniques,
expanded communication, improved newsgathering efficiency and increased
advertising revenues turned huge profits for the newspaper organisations that
quickly became corporate businesses [9].”
But then, when the Great Depression hit in 1929, the newspaper business was
also struck hard due to loss in advertising revenue. This led to lowering of
wages of employees, firing of reporters and editors and increase in workloads
of existing staff members. Around 40 percent of advertising revenue had
decreased between 1929 and 1933 [9]. Such sudden unemployment even in
the advertising and newspaper sector along with other residents of Detroit
(the newly fired automobile works men) were forced to leave the city in search
of jobs in other places.
According to an article from 2003 (THE GREAT DEPRESSION AND THE
AMERICAN PEOPLE (1928–1933), 2003), “the national unemployment rate
skyrocketed from 3.2% in 1929 to nearly 25% in 1933. In some areas, the rate
was even higher for instance, in Detroit, unemployment was over 50% in the
early 1930s. More than 100,000 businesses closed between 1929 and 1932.
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(By 1932, 152 businesses per 10,000 were closed – a mark never reached
earlier or till date in American history).”
The Great Depression caused the pause of credit system for consumers as
banks were in loss [3]. So now, the consumers had suddenly lost their power to
purchase good and the unsold products were piling up in the godowns
(warehouses). This led to halt the production of newer goods in Detroit.
The Great Depression rose the “Crime Rates” in not only Detroit but also other
American cities that were affected by the Depression [10]. People had no other
option but to either become a criminal to put food on their tables or to commit
suicides. The situation had also increased the number of suicides in Detroit, in
turn helping in decreasing the population which had already started shrinking.
Demographic trends changed sharply [10]. Birth rates fell sharply, especially
during the peak times of the Depression. The Americans now had also learned
about birth control in order to reduce their family expenses. Mass migrations
were noticed all over the cities. “The Great Plains” lost a lot of their
populations to cities like California and Arizona [10].
The Great Depression proved to be a serious and crucial factor leading to loss
of huge amounts of population by Detroit. People had lost their confidence in
investments, jobs were lost as companies and industries were shut down and
as discussed above crime rates had also been increasing, so people ran away.
Bankruptcy
In October 2009, the nation struggled with worst financial crisis since the Great
Depression, and so Detroit decided to use 15.2 million dollars from its stimulus
money to help 3500 city residents hold off eviction from their property or if
they were homeless, then to pay for housing. The city was critically poor and
had to face the auto-industry’s financial crisis on top of that. It was just about
two generations ago when the city was healthy, the heart of the American
economy, with the auto-industry accounting for one in six jobs in the whole
nation. But now, all that had collapsed. General Motors was trading as a penny
stock before it got bankrupt in 2009. This automobile industry’s collapse,
supported by deindustrialisation, proved to be brutal for Detroit. It was the
nation’s fourth largest city (US Census Report, March, 2011). In March 2011,
the US Census Report said that the population of Detroit had dropped to
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714,000 people which is down by a quarter million since 2000 and by more
than 1.1 million people from its peak of 1.8 million residents in 1950.
Surprisingly, no other American city faced such a huge population decline.
Chicago lost 964,000 people since 1950s but still has about 2.7 million people
residing in it. That is about 25 percent of its peak of 3.62 million population in
1950. Detroit lost a shocking 60 percent of its peak population (Martelle,
2012).
The oil embargo (an official ban on trade) of the early 1970s and its
consequences for the domestic auto industry added fuel to the already
declining city. The number of jobs fell by over half (52.8 percent) between
1970 and 2010, and the number of residents in employment dropped by 43.5
percent over the same period. People started abandoning Detroit in search of
new jobs and new ways of earning a living. The Great Recession of 2008-09
augmented to the problems by making the housing opportunities in the
suburban areas more affordable. Detroit residents took such opportunities and
obtained newer homes in communities that offered a more desirable tax-
public service package. (Laura A. Reese, September, 2013)
Such high indebtedness to the federal government for new development
projects left the city with fewer funds to support community based
organisations. The city introduced new taxes: a utility use tax in 1962, a
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municipal tax in 1964, and a casino wagering tax in 1999. (Laura A. Reese,
September, 2013)
Detroit’s General Fund has five major sources of revenue: property tax, income
tax, utility use tax, state revenue sharing and casino wagering tax. All these are
making tough for people to live in the city. The city became expensive as it had
already gone into debts and revenues were being collected to pay the money
back that was borrowed. Detroit residents and businesses are subject to
property taxes that are higher than most of the cities in Michigan. The table
given below compares property tax burdens on property in Detroit and Grand
Rapids, Michigan’s second largest city. (Laura A. Reese, September, 2013)
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The city now just has 10,525 employees, down from 17,772 earlier (Table 3).
According to the new proposal, there will be elimination of an additional 2,227
positions soon. All this is occurring due to bankruptcy that Detroit is facing.
These are all cost saving measures which the city is taking. Other cost-saving
measures include wage cuts of ten percent, elimination of step and merit
increases, reduction in number of paid holidays and a reduction of the pension
multiplier. All these factors added to the incentives of leaving the city for good.
(Laura A. Reese, September, 2013)
It’s a big factor. There are abandoned factories all over the city built in the
post-war years, most of which have multiple stories. Also, the Japanese auto
invasion began cutting into Detroit’s sales. General Motors, Chrysler, Ford and
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hundreds of other auto parts companies looked forward to moving outside the
city where they would build one-storey plants that could handle more
assembly lines. Slowly, more and more companies began to move out leaving
‘the hulking buildings to squatters’. Detroit’s tax base was eroding. By the time
the auto industry declined in 2009, only a few factories from GM and Chrysler
were left. GM was the only one that had its headquarters in Detroit, though it
had its research and testing centres with thousands of jobs outside the city
[13].
The Big Three
Summarising Scott Martelle’s views (as written in his book Detroit: A
Biography), there is a tendency to blame The Big Three auto companies and
their corporate leaders for abandoning the Detroit workforce upon which they
made their fortunes. It was them who decided to decentralise from Detroit,
and then to globalise. They are also accused of putting their interests of profits
and shareholders ahead of those of the communities that gave rise to the
industries in the first place. Corporate decisions can destroy communities, a
major component in Detroit’s collapse. Scott says, “For years our political and
social culture has put the interests of corporations ahead of interests of
individuals and community stability. That has led to the decimation of the
middle class, and well-paid working-class jobs, as US based corporations
shifted production overseas to keep up with the global drive for the lowest
possible production costs. In theory, that is good free market economics. But in
practice, those production costs are, on the local level, individual jobs and
neighbourhoods.” So, indirectly, the social and economic stability has been
traded for higher profits for corporations which has made cities like Detroit
just countless small manufacturing towns for the nation. Such are the effects
of national policies and until such policies are changed to put the needs of
people and communities ahead of corporations, ‘there is no answer to the
troubles afflicting places like Detroit.’ (Martelle, 2012)
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Racism
In Urban Fortunes, the writers (Logan and Molotch) challenged the view that
the economic growth is good, saying that these developments are benefitting
some groups while oppressing others. Detroit’s supposedly beneficial policies
are creating conflicts based on race, class, tenure and age, rather than uniting
all the city’s residents and neighbourhoods under a common cause. Until these
conflicts are resolved, Detroit is not going to recover. Given Detroit’s racially
divisive history, many readers may assume that racial division is the primary
reason for Detroit’s economic collapse. (Silver, 2015)
There was a major riot in 1943 which reflected an increasing competition for
housing and jobs between newly arrived African-Americans, white migrants
from South and ethnic whites. The disturbance left 34 dead and was America’s
deadliest civil disturbance to date (Sugrue, 1996). There was another major
racial conflict in 1967 facing 43 deaths. There were many reasons and factors
that contributed to the violence like the brutality against blacks by the largely
white Detroit police force. A persistent issue was whether blacks and whites
could live on the same blocks. Issues of housing were prominent in Detroit
during the World War II when the black and the white population grew rapidly.
Whites tried a lot to keep away the African-Americans but the latter continued
to flock into the city in huge numbers.
Employment was another area that caused tension between the two races. In
the 1930s, for instance, the schools were willing to hire blacks to teach at
elementary schools but it took from civil rights groups to get them hired in
secondary schools. Detroit became home to “Hate Strikes” in which whites
would walk away from a job if blacks get promoted to better jobs and the
blacks walking away if they are not treated as equal to the whites. The solution
to these racial conflicts was the withdrawal of most of the whites from the city
(Massey and Denton 1993). Attractive new homes were offered in the suburbs
with more amenities at a lower cost to the whites with exceptions. Detroit
faced a tremendous decline in the city’s tax base due to the leaving of the
whites in large quantities. The old houses did not provide for amenities like a
bedroom for each child, modern kitchen, efficient heating and cooling, a two
car garage, and a reasonable amount of space around the house. All these
were facilitated by the new houses in the suburbs. So the whites moved out in
considerably large numbers. If there had been no “race division” issue,
Detroit’s population would have not declined so rapidly and a somewhat larger
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quantity of area’s middle class people would have stayed in the city itself. This
would have prevented bankruptcy to an extent. Residential segregation
hastened bankruptcy in Detroit. (Silver, 2015)
Insecurity to Residents of Detroit
Over the past few decades, Detroit has been plagued by internal conflicts and
controversies, turning out to be long-term annoying challenges which are
being treated as short-term problems. The city’s responses to these challenges
have been ineffective. Laura A. Reese, in her paper No Easy Way Out, says that
by showing temporary budget deficits, corporate officials continue to justify
their high expenditure. Underfunding retiree pensions and other benefits also
lie in the similar unwise and immoral category. She also says, “Funding cash
flow deficits with long term borrowing is not a rational long term policy. And, it
has been observed that Detroit has been funding budget deficits with bonded
debt since the Young administration, which was around 30 years ago.” These
misguided policies has pushed the city into bankruptcy. The city has now come
to a stage of deep crisis due to ‘accumulation’ of debt and long-term liabilities.
“The political and civic culture of Detroit and its metropolitan region bear a
great deal of responsibility for failing to lead the city out of the ongoing chronic
economic challenges as well as its current crisis,” says Laura Reese. (Laura A.
Reese, September, 2013)
All this has made Detroit’s residents create a feeling of insecurity due to
concerns over personal safety, financial security (at least in home values),
better educational systems for their children, and a desire for a more stable
and satisfying daily existence.
Now, the government agreed to deep ‘staffing cuts’, which augmented not
only the high unemployment rate but also the delivery of some of the key
services and so in turn the income taxes those workers were paying. In April,
2012, Robert Bobb, the school district’s state-appointed emergency financial
overseer, announced that he would be sending layoff notices to nearly 5,500
school teachers (Martelle, 2012). Schools are where the new generation gets
trained to forge a new kind of life and when schools fail a city cannot survive.
One more factor that led to the case that most of the employees turned out to
be uneducated was the fact that they got jobs in large factories with assembly
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lines. They had monotonous work to do all day which could be learnt by
practice and no sort of education was necessary. So, the residents of Detroit
and other American cities turned out to totally jobless when these assembly
lines were no longer in operation. (Martelle, 2012)
As observed by Michael Harrington in his book The Other America: Poverty in
the United States, “Poverty is often rooted in a specific place, and the spread of
impoverished neighbourhoods in urban centres, and the inner-ring suburbs,
serve as an infrastructure for poverty.” Sharkey writes, “Over seventy percent
of African American who live in today’s poorest, most racially segregated
neighbourhoods are from the same families that lived in the ghettoes of the
1970s. I do not mean that children grow up and remain in the same physical
space, but rather children remain and grow up in the same type of
environment. The level of poverty and racial composition of families’
neighbourhood environments remain incredibly similar across generations of
family members.” (Sharkey, 2013)
Such racial tension and poverty gave people enough reasons for abandoning
the city in search of new job opportunities and the desire to live new lives in
new cities.
Conclusion: Detroit Today
The scope of Detroit’s bankruptcy has never been known to be comparable
before amongst the American cities, but the auto industry led the city’s boom
uniquely. By mid-century, as manufacturing jobs increase, so did the city’s
population, but within a generation itself, everything started falling apart.
Union disputes and racial unrest would ‘leave their mark’ as automation began
to replace jobs. An aging population, who were not getting their pensions,
along with others who could not afford property taxes, continued to flee the
city, away from Detroit’s increasingly underfunded schools and city services
[14].
The responsibility to help Detroit survive still lies in many corporate shoulders.
In 2013, after many protests of this city’s elected leader, Governor Rick Snyder
of Michigan called for an appointment of an emergency manager to repair the
city’s finances. Also, a Washington bankruptcy lawyer, Kevyn D. Orr, was
appointed to the job. The city’s then-new mayor, Mike Duggan, a former
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hospital executive and prosecutor, had to share power with Mr. Orr as they
dealt with questions regarding the future of the city. The North End has not
only glorious homes but also some of the city’s “harshest blight”. Thought it
has residents like judges, doctors and other professionals, it also is a home to
mostly low-income backs who bear the “brunt” of Detroit’s economic decline
[14].
Presently, a city of 1.8 million in 1950, Detroit is home to nearly 690,000
people, along with thousands of abandoned buildings, vacant lots and unlit
streets. Residents are struggling through diminished city services, soaring
poverty rates, trying to preserve their homes and to get a sense of community
and overall safety [14].
Detroit formally emerged from bankruptcy in December, 2014 which is about
18 months after the time when it had crated history by becoming the largest
municipal bankruptcy in American history. The city’s leaders are beginning to
plan Detroit’s recovery which include plans of renewing city services. And
while the business leaders and foundations have committed funds to help
revitalisation, a commission would check out the city’s finances for some years
that would include a majority of state-appointed representatives. But the road
to full recovery will be long. Detroit is still struggling with a costly pension-
system, emptying neighbourhoods, crime, insufficient city services and
immense ‘blight’ [14].
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References [1] http://www.history.com/topics/great-depression
[2] http://www.u-s-history.com/pages/h1569.html
[3]http://topics.nytimes.com/top/reference/timestopics/subjects/g/great_depression_1930
s/index.html
[4] http://www.encyclopedia.com/topic/Suburbanization.aspx
[5] http://shrinkingcities.com/detroit.0.html?&L=1
[6] http://detroitwillrise.weebly.com/suburbanization.html
[7] http://www.history.com/topics/world-war-ii/gi-bill
[8] https://bulk.resource.org/gao.gov/81-171/00002FD7.pdf
[9] http://www.encyclopedia.com/article-1G2-3424800047/journalism-1929-1940.html
[10] http://www.ushistory.org/us/48e.asp
[11]http://www.littlejohnexplorers.com/jeff/history/greatdepressionfromtext.pdf
[12]Karina Pallagst. In Proceeding of Conference on the Future of Shrinking Cities, UC
Berkeley, 2007.
[13] http://globalnews.ca/news/727460/why-did-detroit-go-bankrupt/
[14] http://www.nytimes.com/interactive/2014/07/06/us/detroit-the-path-to-recovery-
from-bankruptcy.html?_r=0
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Works Cited Jackson, K. T. (1985). Crabgrass Frontier: The Suburbanisation of the United States. Detroit.
Laura A. Reese, G. S. (September, 2013). NO EASY WAY OUT Detroit’s Financial and Governance
Crises. 36.
Martelle, S. (2012). Detroit: A Biography. Detroit.
Munford, L. (1961). Lewis Munford in his book “City in History: Its Origins, Its Transformations, and
Its Prospects.
Pallagst, K. (2007). Proceeding of Conference on the Future of Shrinking Cities., (p. 8).
Sharkey, P. (2013). Stuck in Place: Urban Neighbourhoods and the End of Progress toward Racial
Equality. Chicago: University of Chicago Press.
Silver, H. (2015). Editorial: The Urban Sociology of Detroit.
Sugrue, T. J. (1996). The Origins of the Urban Crisis: Race and Inequality in Postwar Detroit. Princeton
University Press., 29.
THE GREAT DEPRESSION AND THE AMERICAN PEOPLE (1928–1933). (2003).