YEARS OF READJUSTMENT (1945-1950)

The first five-year period after World War II began with the problem of rebuilding war-torn countries and ended with the threat of a new world war in Korea. It began with the consequences of the first atomic destruction still reverberating around the world and closed with the decision of President Truman to develop the hydrogen bomb. It began with concern about post-war inflation and ended with economic stimulation from the Korean conflict. It saw the differences between Marxism and its enemies divide the world into hostile camps of a "cold war", with steady deterioration between the Soviet bloc and the Western nations.

The first post-war year brought some formidable domestic problems with acute shortages of housing, spiraling inflation, and bitter labor disputes. It saw appalling poverty in Europe with the United States reluctantly assuming a role of stabilizer in an uncertain world. Despite warnings that a state of war still existed and pleadings that the emergency was not yet over, the public was impatient in 1946 with the pace of the shift back to peacetime living. And thus began a politically troubled period that failed to contribute much in the way of human achievements of major distinction.

In Texas the closing of ordnance, aircraft and ship-building plants caused considerable shifts in population and lessened the drastic labor shortage without creating significant unemployment. Some people returned to rural areas, but most of the 500,000 who had moved to town during the war preferred to remain in an urban environment. State constitutional amendments provided bonds to help war veterans buy farms, established a pension system for state employees, and restricted the use of gasoline tax revenue to highway construction. The gubernatorial election in 1946 culminated a controversy over the control of the University of Texas that had left it on probation with the Southern Association of Colleges and Secondary Schools.

Houston began the task of reconversion with many things in its favor. Cash, bank deposits and government bonds in the hands of individuals were estimated at about three times the prewar figure. The backlog of rationed wartime demands was huge. There was a pressing need for housing, automobiles, washing machines, refrigerators, and all of the other so-called consumer durables. Business itself needed millions for new plants and for deferred maintenance and, in the main, had the funds for these purposes. Thus, at the close of World War II, we looked forward to a relatively short period of hesitancy, covering the transitional period in which industry would reconvert its productive facilities to peacetime uses; a longer period of active business while production caught up with accumulated demand; a period of some months for trade and financial re-adjustment while the economy shifted to a more self-sustaining basis; and then to a succeeding period of several years of prosperity.

There was also a community aspect in connection with reconversion. This was a result of the changes that had taken place in Houston during the war years. The impact of the war in Houston can be indicated by some statistical comparisons: from 1940 to 1945, population increased from 384,000 to 471,000; bank debits increased from about $3,000,000,000 to over $6,000,000,000; bank clearings jumped from $2,500,000,000 to almost $5,500,000,000 and, under wartime restrictions, building permits dropped from $26,000,000 to $9,000,000. During this period, the effective buying income of Harris County increased from $300,000,000 to over $750,000,000, and, in spite of limited stocks of merchandise, retail sales climbed from $126,000,000 to $357,000,000.

Industrial development had progressed at a record-breaking pace, and industrial employment had jumped from about 22,000 to about 64,000. During the war, many of the steamship lines to South America and other ports of the world were diverted from Houston for safety reasons. These lines, joined by many new ones, soon resumed service to the Port of Houston. In 1944, the last full year of the war, only 16,956,538 tons of cargo had moved through Houston, compared to 27,739,616 tons in 1940, when 5,624 vessels arrived and departed. In 1945, the tonnage climbed to 23,869,878 tons, and the upward trend continued. Thus, after but one year of peace, the Port of Houston was able to look back upon a period of solid achievement and progress.

The question was whether or not we could hold the gains of the war years and sustain the momentum that had been built up. We had every reason to expect a continued growth in population, with returning veterans migrating to Houston, with a continued high birthrate, and with the trend from farm to city being sustained. Even during the depression years from 1930 to 1940, the population of Houston had increased 31.5 percent. Industrial growth seemed assured. Surveys indicated that we would not only hold the high level of wartime industrial employment, but that it would continue to show some increase.

The rate of construction would be limited only by the availability of materials. Surveys showed projected building plans aggregating more than $400,000,000. The commercial picture was promising. Retailers, wholesalers, and service establishments all expected an increase in employment. In the long run, the 3,000,000 people living in the Houston primary retail area would determine whether or not Houston retail stores would continue to grow; what proportion of the tremendous pent-up consumer-products demand would be satisfied by Houston retailers; and the future expansion of the city’s retail influence and volume. These people would be influenced in part by the type of consistent, unified, year-around entertainment and recreational programs carried on in Houston; by the type of access streets and parking facilities; by the quality, type and range of merchandise carried by the retailers, and how it would be displayed and advertised; and by the courtesy and efficiency of the sales force.

During the period from 1945 to 1950, we saw the beginning of the so-called "flight to the suburbs", with people attempting to combine city benefits with country living. We saw the beginning of a new pattern of urban development with a core city surrounded by many local and regional shopping centers. We began to recognize for the first time the relationship of slums to the welfare of the entire city, and the need for urban renewal. If the central city were not to become an area for the concentration of the poor, the elderly and the discriminated-against, we would have to take steps to make close-in living more attractive. Already the problems of city and county financing were beginning to be felt.

Some needs for the development of a great city could not be recognized as well in 1945-1946 as later. The wartime demands had emphasized team effort to such an extent that the role of the individual was not as clearly seen as it had been during the pioneering period of our country. We would need a reawakening of a sense of individual responsibility and a cultivation of the highest type of citizenship. The functioning of the democratic process would need new emphasis and understanding.

Education at the adult level would be essential in this objective. The role of the arts and sciences, of the visual and performing arts, would assume greater significance in the development of a great city. Urban renewal, health and welfare, and a religious revival would be recognized as essential activities in city building, as well as economic growth, technological change, and the nation’s new role as a world power.

Early in the twenty decisive years following World War II, therefore, we began to realize that the future of the city depended upon the type of city our people wanted and what they were willing to do to get a great city. We realized that high standards would have to be set to challenge the best efforts of our people. We realized that our city would be rebuilt and improved in the same way that it was built in the first place—by many people making many improvements and investments because of their confidence in the future of Houston. We appreciated the fact that a healthy economy is basic to a great city, and that a favorable business climate is basic to a healthy economy. And, eventually, we came to a somewhat agonizing conclusion that the process of solving our community problems and of capitalizing upon our possibilities would take time, would take hard work, would take dedicated citizens, and would take millions of dollars in public expenditures.

Construction had the green light all along the line in Houston with the beginning of 1946. The greatest building and construction era in the city’s history was already under way. The all-time high building record of $41,088,844 had been set in 1945, and the more than $400,000,000 in projected construction indicated that this was but the beginning. Over $58,000,000 was earmarked for home construction to help meet an estimated shortage of almost 40,000 home units. Public-works construction plans included: $38,406,968 for the City of Houston, $11,577,981 for Harris County, $10,057,726 for the Flood Control District, $5,550,000 for the Navigation District, $7,500,000 for the Houston Independent School District, and $30,000,000 for state and federal highways. The United States Navy was building an $11,000,000 hospital, and many other multi-million-dollar construction projects had been announced.

The majority of the industrial plants that had sprung up almost like magic under the stress of wartime demands continued to operate in peacetime. Some of these, such as synthetic rubber, magnesium and steel, required no reconversion to meet normal demands. In metal-working plants, little reconversion was needed to swing into the production of heavy consumer products such as oil-field equipment. In this way, the wartime gains were held, and expansion immediately followed the war. Important additions were made to research facilities in the petroleum and chemical fields.

"Industrial possibilities in this area are not limited to the output of chemical products. We are in the pathway of a geographical trend of industrial dispersion. We already have important manufactured goods produced within the area. We are fortunately located with reference to basic raw materials for which modern research is opening up the most varied opportunities. We have the advantage of deep-water transportation and we are favorably located to serve a national market as well as to capitalize upon increasing trade with the Latin American countries. We emerged from the war with three times as many trained and skilled industrial workers as we ever had before."

Thus we had every reason to believe we could hold our wartime gains and continue to grow. The war demonstrated that industry in our area was capable of mass production on a scale theretofore believed impossible. The Houston area, as a source of basic raw materials, had been advanced to a new position of national leadership. We had the manpower to produce a host of new products, and with the increase of population in our area and improvements in transportation facilities, we had new market potentials. We had an appeal for industries complementary to existing plants, for industries utilizing intermediate materials for consumer products, for industries rendering special services to existing plants, and for industries built around the management skill and inventive genius of technicians and scientists available in the area. Industrial expansion, therefore, was expected to pace the peacetime developments in the Houston-Gulf Coast area.

In 1946, the six percent of the land area of Texas in the 19 counties surrounding Houston accounted for 20 percent of the state’s total crude oil production and 40 percent of its refinery capacity.

This area had over 100 oil fields with almost 7,000 producing wells, with an average daily production of 64 barrels per well compared to a state average of 21 barrels. The area had 17 natural gasoline and cycling plants processing gas to recover liquid hydrocarbons. There were 14 refineries in the area with a total crude-oil processing capacity of 593,000 barrels daily. Synthetic rubber facilities included two butadiene, two styrene, and two copolymer plants and one butyl rubber plant. A network of pipelines centering in Houston was moving 527,000 barrels of crude oil per day into the area and 370,000 barrels of crude oil plus 36,000 barrels of refinery products daily out of the area.