Federal Projects and Las Vegas
In 1927 and 1928 the future looked uncertain for Las Vegas. The railroad, a major employer in the city, had significantly downsized and laid off hundreds of workers. With few jobs and 120-degree heat, the town had little to offer outsiders. Legislators lowered taxes to entice residents to the area, but to little avail. Las Vegans feared that their hometown was on its way to becoming another one of the failed, former boomtowns that littered the West.
The state of Nevada, for many decades, remained a focal point of federal spending -- its rich minerals were essential to the government. The area became an official territory in 1861 when on the brink of the Civil War, the Union needed unfettered access to Nevada's significant source of magnesium, gold, silver, oil, zinc, copper, lead, tungsten and iron.
In the late 1920s Nevada was in the middle of a mining boom. Once again, it was one of the leading producers of raw materials. From the Great Depression through World War II, the U.S. government set up federal public works projects, mining developments and military establishments in Nevada, flooding the state's economy with millions of dollars of federal money. In the atmosphere of 1920s Jazz Age, Nevada's laissez-faire attitude toward vices was not yet part of its draw.
Las Vegas, though, was looking for salvation, and found it in the form of a dam. The story goes that in 1928 when the Swing-Johnson act authorized the Boulder Dam, Las Vegans went down to the river and re-baptized themselves and their city; they knew the building of the dam would bring them new life.
Millions of Dollars
On September 7, 1929, work began on the largest federal public works project attempted in American history, Boulder Dam, a mere 30 miles from Las Vegas. Over the next five-and-a-half years, millions of dollars of federal funds were invested in the area, giving the area's economy the jumpstart it so badly needed. In the middle of this boom, in 1931, the state legislature voted to make gambling legal again.
Water and Lights
Thousands of unemployed workers and their families turned up in Las Vegas hoping to work at the dam. Between the fall of 1930 and the spring of 1931 alone, 42,000 unemployed workers descended on Las Vegas, hoping to get one of the roughly 5,000 jobs available. The project dramatically altered the city. More railways were built, further improving Las Vegas' connections throughout Nevada. Irrigation and electrical circuits were laid connecting Las Vegas to the outside world. Las Vegas grew in leaps and bounds.
Perhaps even more significantly, all eyes in the country were focused on southern Nevada, and Las Vegans were poised to make the most of their moment in the spotlight. Las Vegans pounced on the opportunity to market themselves to a wider audience. Touting itself as "The Gateway to the Boulder Dam," Las Vegas soon found itself a tourist destination for people visiting the dam and stopping to take part in the city's indulgences along the way.
Soon though, there was a war on in Europe, and magnesium, "the wonder metal" became much in demand. Powerful Nevada Senator Patrick McCarran convinced President Franklin Roosevelt to fund a magnesium mining company in Nevada. In 1937 Basic Magnesium, Inc. was established at a site near the now Hoover Dam. The company brought 15,000 new jobs to the area, and was soon processing five million pounds of magnesium every day.
When the U.S. got into the war, the military took advantage of the area's isolation and the perfect flying weather to establish a training ground for the Army Air Corps eight miles away from Las Vegas. By 1942 each week more than 4,000 people were graduating from the Las Vegas Gunnery School, later known as Nellis Air Force Base. The government spent more than $25 million on the facility. At the time Nellis Air Force base was one of the largest employers in the area, with roughly 10,000 personnel.
A New Era of Prosperity
Together, the establishment of Nellis Air Force Base and Basic Magnesium, Inc. combined to bring 12,000 new residents to the area. Coupled with public works projects like the Boulder Dam, these federal efforts converged to buoy Nevada's flagging economy and ushered the state, particularly Las Vegas, into a new era of prosperity.
At the end of World War II, many Americans working on these projects remained in the area, buying cheap land at five dollars per acre, and settling with their families. In an outcome that was typical for many small towns in the West that got a federal economy during the war, Las Vegas' population soared. In 1940 the population was 8,400; by 1945 it had more than doubled.
The war was over, but the atomic age and the Cold War had begun. Federal funding remained central to the economy of Las Vegas even as tens of thousands of tourists visited the city each year.