The Dark History of Company Towns

Elliot Mashhadi
6 min readJan 1, 2024

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Facebook. Amazon. Google. These corporations all have plans to bring back the company town. But what actually is a company town, anyway? Well it’s quite simple. A town reliant on, and often owned by, a single company. The majority of residents were typically employees of said company, giving rise to a strangely symbiotic relationship. Sometimes the companies would engage in social engineering, motivated either by an interest to coercing employees to work extra hours, or simply by an interest in human behavior. Whichever driving factor was dominant, the outcome was all too often the same tragic reality — abuse of civil liberty. And so company towns grew in infamy to the point they largely went extinct. Yet from the mid 19th century until the 1930s they were a major force in the United States. This is the story of how company towns died.

Fordlandia

What if I were to tell you Henry Ford created his own town in the middle of the Brazilian jungle and called it Fordlandia. Would that sound like a lie? Well it isn’t. By the 1920s the Ford Motor Company was known for the affordability and reliability of it’s cars. Much of this came directly from Henry Ford himself. His innovative business practices meant they could create cars faster and easier, with streamlined factory production. It was a continual process. In 1910 the price of a brand new Ford Model T was nearly 800 dollars. By 1924 the price was less than 300 dollars. Yet there were some factors outside of his control. Rubber. Rubber was needed to make tires, a constant supply of which necessary for any car brand.

To get around this final hurdle, Henry Ford wanted to set up his own community in the rain forests of Brazil — a company town established for one specific purpose — to procure a regular supply of rubber. On the face of it this might sound like a rather outlandish concept, but all of Ford’s previous attempts to create a company town of his liking in the US had failed. Even when teaming up with Thomas Edison, bureaucratic red tape had strangled the dream. And so he looked abroad, striking a deal with the government of Brazil to lease 2.5 million acres of land, upon which countless rubber seeds had been planted. The true value of the lease was in it’s terms. According to them, Ford was allowed to set up his own community and run it however he wished. Thus, Fordlandia was born.

A Utopian Nightmare

Henry Ford’s ultimate goal was always more than making money, and now that he had a free hand, he wanted to build the perfect city. On top of the rubber manufacturing plant, it was a functioning city, with houses, a school, hospital, and even a golf course. Thousands of resident workers were lured to Fordlandia by higher wages and the promise of a better life. But on arriving they were met by the strangely strict rules put in place by Henry Ford. Alcohol, Tobacco, and women were banned from Fordlandia. I guess his standards were pretty specific, at least for a city bearing his name. Also banned was football. Life in the city was micromanaged to the extreme, with managers actually visiting the houses of their workers to make sure rules were being followed.

To make things worse, Fordlandia was so far inland that supply boats could only reach it during the rainy season. This meant the community was deeply isolated for much of the year, having to make do with rotting food and few comforts.

It was in 1930 that the camel’s back broke, and the final straw was inequality. Like in almost every company town, Fordlandia was witness to a large division between skilled and unskilled workers. In this environment all it took to spark a full blown violent class uprising was an argument between one single manual laborer and one single company supervisor. Under usual circumstances the supervisor would pull rank and any conflict would see a one sided resolution. But here the workers rallied together in a spontaneous uprising. Managers were beaten and chased out of Fordlandia. Factories were trashed and machinery destroyed.

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For days the enraged workers literally ran riot, only calming down when the Brazilian army was sent in days later. For the managers it was a humiliation, they having to hide in the treacherous jungle for days. For Fordlandia it was a blow the community would never recover from. Perhaps this is the one way Fordlandia is not unique — it slowly declined and was eventually abandoned. And when I say eventually abandoned, I mean just four years later.

Some would have said Fordlandia was doomed from the start. By the time it was established in 1928 the heyday of company towns had already been and gone.

Decline of Company Towns

Going into the 1900s, company towns were rapidly becoming obsolete. The world was changing. Highways being built and cars growing more affordable. New regulations for city planning were introduced. Unions and the workers movement was making great strides across the industrialised world. These swirling currents of social change gradually formed a noose around the neck of company towns. By the mid 1920s people were less reliant on their employers than ever before. Many lived in regular towns and cities, the advent of automobiles enabling their daily commute. For the first time people could live normal lives while still getting the benefit of working in out of the way industrial compounds. This was arguably the birth of American suburbia, and a key stepping stone to modernity. So when the great depression rocked American and European industry, the corporations themselves largely gave up on the idea of company towns and corporate welfarism. Their single priority was to survive. Some company towns did limp on and survive long enough to morph into more conventional communities — but the vast majority soon became ghost towns.

Ghost Town Example

A fine example of a company town come ghost town is Kennecott. What started off as a remote Alaska mining camp eventually became the town of Kennecott. Overlooked by a large glacier, the town was home to around 500 people in 1920. It was copper ore that drew so many to Kennecott. During it’s time in operation, more than 200 million dollars was generated for the Kennecott Copper Corporation. That kind of money can always attract new residents, and so the corporation called the shots. But as is the way with all mining towns, the ore found at Kennecott was gradually depleted. By 1938 there was so little copper ore that mining was no longer financially feasible. That was the year Kennecott died. A bustling industrial town suddenly ground to a halt, and by 1940 just 5 people lived there.

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Today it is a ghost town and tourist spot, boasting the duel attraction of the nearby glacier. Most company towns have ended up this way. When the business dried up, so did they. The only other option is to be taken over by the government and become regular towns. One of such is Hershey, in Pennsylvania. Originally founded to house workers of the Hershey Chocolate Company, almost 14 thousand people now live there. It also remains the headquarters of the Hershey Company.

A Chilling Legacy

Whether a ghost town or modern municipality, there is a tendency to view company towns in a romantic light, they being a relic from a time of rapid industrial growth. But remember the scale of abuse commonplace within company towns. Remember that those who called it home were entirely reliant on their all powerful corporate overlords. Often, a specific branch of Christianity would be chosen for workers, and all alternative faiths banned. Almost every lifestyle decision was made for workers, not by them. Certain company towns had their own currency. Worthless outside of town, residents would be paid in it and therefore dependent on local suppliers. There are even stories of workers literally being held hostage until they fulfill a set time period of service to the corporation. So now that company towns seem to be making a comeback, be wary of their Utopian lure.

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Elliot Mashhadi

Full time YouTuber, martial artist, travel addict. Here you can find my articles on content marketing/creation and travel. My site: https://elliotmashhadi.com/