Declining Industries and the Persistence of Government Support Programs: The Quiet Decline of Gum Naval Stores Production in the United States

Understanding industrial decline is important from both historical and policy perspectives. The United States was the world s leading producer of gum naval stores in the early twentieth century, but by the late 1970s production had all but ceased. Evidence presented here indicates that changing relative prices induced forest owners, the key stakeholders, to shift production towards other forest products. Nevertheless, the federal government continued to provide transfers to this industry even as political support for it vanished. The demise of this once-great American industry lends support to the received notion that once instituted, transfer programs tend to persist.