Topics in the News
Advertising in the 1950s
During the 1950s American businessmen began to suspect that consumers could not be trusted to know what products they wanted to buy. Makers of everything from cars to catsup regularly lost money when they offered Americans what they said they wanted. A survey revealed that most beer drinkers would prefer a "light, dry" beer; but when questioned further, no one could explain how a "dry" beer would taste. Further, as U.S. companies produced goods in increasing amounts, it was in their interest to stimulate demand—that is, to convince consumers that they wanted (or, better yet, needed) products that otherwise would begin stacking up in warehouses. In 1955 the religious magazine Christianity and Crisis lamented the pressure on Americans to "consume, consume and consume, whether we need or even desire the products almost forced upon us." That same year advertisers were spending approximately fifty-three dollars per man, woman, and child in the country to hawk products. The key to sales success, advertisers believed, was reaching the irrational side of people that seemed to control their buying habits as much as their rational side did.
The Hidden Persuaders.
Vance Packard's 1957 best-seller The Hidden Persuaders offered people an eye-opening account of business's use of motivational research (MR) to...
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A Year of Change.
Events in 1952 had profound effects on the American Federation of Labor (AFL) and the Congress of Industrial Organizations (CIO), the country's two large federations of labor unions, which together represented 14.5 million of American workers. The election of President Eisenhower in November of that year brought an end to twenty years of Democratic, prolabor control of the national government. Within a
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Air Travel in the 1950s
In the 1950s the American aviation industry grew dramatically. Airline companies had gradually adopted the technological improvements of World War II for their civilian planes, and commercial air travel became faster and more comfortable. It also became cheaper as new planes accommodating more people were introduced. Airlines began to offer "air coach class" seating, priced to compete with railroad's "coach" business. By paying coach fares, passengers could fly almost anywhere in the country for about one hundred dollars, one-third less than airfares of the late 1940s. "For the first time the ordinary man began to fly with us," observed Juan Trippe, longtime head of Pan American. By 1955 more Americans were traveling by air than by railroad.
Traffic Jams in the Sky.
So many ordinary people began to fly that the industry had to struggle to serve them. Boardings more than doubled from 17.3 million in 1950 to 38 million in 1958. The nation's airports had to expand to accommodate heavy air traffic: ports built to handle hundreds of passengers were faced with thousands, even tens of thousands. With the crush of passengers, waiting became an unpleasant fact of air travel—waiting for baggage, in traffic on the congested roads to the airport, and in the air. A foggy day in New York City, 14 September 1954, became known as "Black...
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Alcoa, Aluminum, and the End of a Monopoly
Government Creates Competition.
The production of commercial aluminum was a twentieth-century industry. A natural oxide found in bauxite mined directly from the earth's crust, aluminum was made by running an electric current through molten bauxite to remove ferric ore and silica. The metal was lightweight and highly tensile, a strong, cheap alternative to steel. For the first half of the century aluminum production was monopolized by Alcoa (Aluminum Company of America). During World War II, however, the government's enormous demand for aluminum exceeded Alcoa's ability to produce it. To make up for the shortfall, the government encouraged smaller competitors such as Reynolds Metals and Kaiser Aluminum and Chemical to increase their output; it also funded new production facilities, which Alcoa built and operated. After the war, in 1946, the government's War Surplus Properties Board, under the supervision of Stuart Symington, sold its plants to Alcoa's competitors, specifically to break the company's monopoly and create a competitive situation.
Spurred by the Korean War, the aluminum oligopoly thrived. Despite the presence of new competition, Alcoa found itself hardly worse for wear: between 1946 and 1958 the company's gross revenues grew threefold, to $869 million. Net income reached a high of $89.6 million in 1958—more...
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Bank of America Leads a Financial Expansion
Big vs. Small Businesses
Land of the Giants.
Clearly big business reigned supreme in the United States. In 1951 AT&T became the first American corporation to have one million stock-holders. In 1957 the largest real-estate deal in U.S. history, a $66 million sale of William Zeckendorf's share of the Chrysler Building, occurred. Chemical giant DuPont employed more than one-third as many chemists as all of academia. Large corporations made their share of crucial technological breakthroughs: IBM introduced new computers; NBC and CBS pioneered color television broadcasts; and airlines introduced jet aircraft service.
Despite the dominance of big business in American industry (General Motors was the largest company in the world, Bank of America the largest financial institution), the 1950s also witnessed a boom in small businesses, many of which became well known. Companies such as Baskin-Robbins Ice Cream, McDonald's, Church's Fried Chicken, Stouffer's Frozen Food, Oscar Meyer, Culligan, Gerber Baby Foods, Bic, TRW, and Holiday Inn all started, made significant business surges, or introduced product breakthroughs during the 1950s. Other small businesses verged on tremendous technological successes, from Bill Lear's small, six-to eight-seat private jet to the introduction of the silicon chip by numerous small computer companies. The Small Business...
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Creating the Computer
The "Automatic Calculator."
Americans of the 1950s witnessed the dawn of the information age. During the decade the computer developed from its earliest models—hundreds of square feet of flashing neon bulbs, dials, cables, and clicking switches—to relatively small units that were widely affordable by the academic and business communities. In 1950 there were twenty computers in the United States, with a total worth of one million dollars. No two of these machines were the same; they were all refinements of the ENIAC (Electronic Numerical Integrator and Computer), the first real computer, which had been developed by scientists at the University of Pennsylvania for the government during World War II. The "automatic calculator," which weighed thirty tons and occupied eighteen hundred square feet, was first demonstrated to the public in 1946.
As the first electronic machine that could solve mathematical problems quickly, ENIAC was a marvel of the time. The scientists who created the computer were aware of its flaws, however, and immediately began work on a better machine. Reprogramming the huge computer was a complicated process of changing dial settings and rewiring cables. What the ENIAC lacked was stored memory, that is, the ability to save and retrieve previous instructions or calculations. In the late 1940s several...
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Credit, Inflation, and Price Controls
"Buying on Time."
During the 1950s "buying on time"—paying for a large purchase in monthly installments—became acceptable as a regular practice, not just in time of need. Americans used credit to purchase new cars, electronic equipment, household goods, and appliances at a record pace. (Of course, age generally determined whether you were a borrower or a saver: people forty years old or older saved far more and borrowed less than younger people.) During the 1920s, the last time consumers had any real purchasing power, banks were reluctant to grant personal loans for consumer spending. But the late 1940s saw a sharp increase in the number of new families, many of whom were furnishing their new households. Banks recognized a large pool of potential loan customers and encouraged consumers to finance their auto purchases. By 1956 nearly 20 percent of the nation's commercial bank loans were to individual consumers. Banks profited by collecting interest on the loans, between 6 and 12 percent annually. By 1960 consumer loans had risen to more than $47 billion.
The increase in money circulating in the economy due to the credit boom, higher employment and rising wages, and increasing consumer spending brought with it inflation. In August 1952 the government reported that retail food prices had soared to 235.1 percent of the...
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A Reliance on Oil.
Aside from the relatively new atomic energy, the United States relied on crude oil (in refined form) to run its automobiles, to produce electricity in power plants, and for lubricants. Oil use exceeded that of coal or natural gas. In 1953 the United States imported more oil than it exported for the first time. Congress attempted to protect domestic producers of oil with a quota system on imports, initiated in 1959.
The Appliance Boom.
Electrical-energy production stood at 329 billion kilowatts in 1950, 232 percent more than the 142 billion in 1940, with the cost per kilowatt steadily declining. Soon after the end of World War II a vast array of new electrical devices made its way into households, including dishwashers, freezers, dryers, vacuum cleaners, ranges and ovens, and refrigerators. The availability of smaller items such as vacuum cleaners increased through door-to-door sales, and larger items benefited from another institution to emerge in the 1950s, the shopping mall. When combined with the new eagerness of banks to lend money for such items, an electric-appliance boom ensued, and with it a demand for more electricity. Production increased to meet the demand: by 1959 the United States generated 798 billion kilowatts. Political power followed consumer demand: in 1953 the National Association of Electric...
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Farming in the 1950s
American farmers continued to dwindle in number during the decade. In 1950 the farm population of 23 million stood at slightly more than 15 percent of the total population. Ten years later only 15.6 million farmers remained, constituting 8.7 percent of the total population. The American farmers of the 1950s did not necessarily resemble the gentleman farmers of Thomas Jefferson's day: they had become specialized and mechanized "agri-businessmen."
Leaps in Production.
Despite the decline in the number of farmers, gross income from farming rose steadily from $32.3 billion in 1950 to $38.1 billion a decade later. Still, the cost of living increased faster than farm income. Between 1950 and 1960 total farm output rose 23 percent. Farm output per man-hour soared, increasing 157 percent during the decade. The staggering leaps in productivity, coming at a time when European markets still needed U.S. food imports, were made possible by two primary factors, increased mechanization and the use of fertilizers and pesticides. Mechanical power and machinery use climbed by more than 15 percent, while fertilizer use rose by almost 70 percent. Farmers in 1950 made use of 3.3 million tractors, 2.2 million motortrucks, 714,000 grain combines, and 456,000 corn pickers. Ten years later they used 4.6 million tractors, 2.8 million trucks, 1...
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Housing in the 1950s
At the end of World War II, soldiers returned home, took brides, and started families. These new families needed housing. With wartime controls lifted, consumer and mortgage lending rose. Using Veterans Administration (VA) and Federal Home Administration (FHA) loans, banks could insure their loans to qualified home buyers through the federal government: if the home buyer defaulted the government paid off the loan. Banks in the West, in particular, used huge savings pools accumulated by eastern insurance companies to fund new loans. By 1953 the number of Americans owning their own homes climbed to twenty-five million, up from eighteen million in 1948. Throughout the decade Congress provided greater opportunities for individuals to buy homes by lowering the down payments on FHA-insured loans and increasing the limit on purchases from other agencies or investment groups by the Federal National Mortgage Association on the second-mortgage market.
The boom in home construction, especially in the newly developing West, came through a unique set of circumstances. Cheap water, made available by government water projects and dams, made land inexpensive to develop. At the same time, eastern sources of investment funds, particularly insurance companies and savings banks, suddenly had no outlet for their mortgage loans. As...
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Labor in the 1950s
Labor Asserts Itself.
American workers never had it so good as in the years after World War II. The postwar boom created a demand for consumer items of all sorts, from appliances to autos. Organized labor, which had gained power during the Great Depression, had consolidated its gains during the war. Yet by 1946 many unions felt that the nation owed their members for the sacrifices they had made during the war. Wages, for example, had been frozen. Postwar inflation cut into workers' pay-checks for the first time in twenty years. Consequently, as the recession of 1948-1949 ended, labor was poised to reassert its interests.
The decade started well for the unions. Strikes of the coal industry and the Chrysler company's automotive plants led to the adoption of company-financed pension plans and health insurance. Such benefits soon became standards of American business. In May of that year a wage settlement between General Motors and the United Auto Workers also had a significant effect on industry. The GM contract entitled employees to pay raises based on increases in the cost of living and technological improvements which raised profits. Other unions were quick to work this wage system (called an "escalator arrangement") into their own negotiations. By the end of 1950 more than two million U.S. workers benefited from the GM...
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The Merger Wave
If You Can't Beat 'em.
American businesses merged with increasing frequency in the 1950s. By 1955, the year that marked the crest of this "merger wave," combinations ran at three times their 1949 rate. In 1955 Chase National Bank and Bank of the Manhattan Company merged to create Chase-Manhattan, the second largest bank in the nation, and First National City Bank, the nation's third largest, was formed from the union of National City Bank and First National City Bank. Within a few months in 1955 Remington-Rand merged with Sperry Corporation to form Sperry Rand; Childs Food Stores (Piggly Wiggly) was purchased by the Kroger Company; Neiman-Marcus of Dallas merged with Wolfman, Inc., of Houston; Stromberg-Carlson merged with General Dynamics; and Brown Shoe Company and G. R. Kinney Company announced a merger. Most of these combinations represented attempts by companies to expand their production or to increase their market share, as when Hilton Hotels gobbled up numerous other hotel companies over the course of the decade. Other mergers, such as Kaiser-Frazer with Willys-Overland, represented attempts by sick companies to get well, usually with unsuccessful results.
The Celler-Kefauver Act.
Such business activity was closely scrutinized by the federal government throughout the 1950s. With the passage of the Celler-Kefauver Act in 1950,...
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The Military-Industrial Complex
No Profit in Peacetime.
Cold-war politics dictated that the United States maintain a standing army, navy, and air force equipped with modern weapons. But no profit existed in making weapons during peacetime—even the purchases of the U.S. military proved too small to support many of the major defense companies. Manufacturers anticipated and planned for peacetime lulls in their production, but ultimately the government had to support defense contractors with constant new orders or subsidize them directly with cash payments. Reasoning that it never hurt to have state-of-the-art equipment, the government pursued the policy of continually developing and deploying new weapons systems. This policy also kept most of the major manufacturers' production lines primed in case of emergency. Near the end of his presidency, in 1961, Eisenhower cautioned Americans about the growth of this new sector of the economy, which he called the "military-industrial complex."
Aircraft manufacturers such as Convair, Lockheed, and North American Aviation that were able to make the transition to missile production in the 1950s found a solid, if somewhat erratic, profit in defending the nation. In 1955 North American correctly anticipated significant gains in missile work and restructured into three divisions in order to meet the government's needs:...
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The National Highway Act and the Auto Industry
By the 1950s Americans had made a firm commitment to private cars over public mass transportation such as buses and trains, even though it meant higher personal expense, traffic jams, and occasional frustrations. The dominance of the transportation field by the automobile and trucking industries was assured when Congress passed the National Highway Act in 1958. America already had 1.68 million miles of surfaced road in 1950—up from 1.34 million in 1940—but the highway act promised a significant improvement over even those paved roads by funding the building of wider, safer, more-modern four to eight-lane freeways. Justified as a defense measure to speed the transport of troops in an emergency, the new freeways benefited the average American, who could shave days off cross-country auto trips by avoiding the "backroads." Also as a result, once-legendary highways such as Route 66 were virtually abandoned in favor of the new freeways.
Although frequently criticized as extravagant or wasteful, transportation by private autos gave Americans an independence that no other nation had. Drivers enjoyed greater safety and comfort than they could expect on subways or buses. For Americans their private means of transportation was part of their lives: in 1950 there was one passenger car for every 3.75 Americans,...
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The Railroad and its Decline
All But Obsolete.
Due to the increasing popularity of air, auto, and truck transportation, the railroad industry during the 1950s became all but obsolete as a competitive form of passenger transportation. The railroads had to make massive new investments to keep up with its competition. By 1955 estimates placed the needed improvements at $3.3 billion, for twenty-one thousand new diesel locomotives alone. Track, rolling stock, and other capital improvements would be extra. That year the Interstate Commerce Commission chairman predicted the end of railroad passenger service without the help of increased government subsidies.
Congress Steps In.
Shortly thereafter the famous B&O (Baltimore and Ohio) Railroad requested permission from the state public-service commissions of Mary-land and New York to discontinue all service on its Baltimore-New York City run due to that route's "enormous deficit." State governments had the ability to force rail-roads to maintain a certain passenger route, no matter if the route lost money for its owners. Congress attempted to help the railroads by passing the Transportation Act of 1958, which gave the Interstate Commerce Commission the authority to approve discontinuation of passenger routes. As a result, many railroads gutted their passenger services by the end of the decade.
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The Largest in the Country.
During the decade retailers discovered that while America's cities were growing, their stores were not necessarily gaining new customers. Cities expanded mostly outward, away from their traditional downtown shopping and business districts. Rex Allison, the manager of a Bon Marche department store in Seattle, Washington, used an aerial photographic map in 1946 to determine that a suburban branch of the store would be within twelve minutes' driving time from 275,000 Seattle consumers who spent $500 million yearly. Allison proposed to Allied Stores Corporation, the owner of Bon Marche, that the company build a shopping mall, with Bon Marche as its cornerstone. In May 1950 Seattle's Northgate Mall, at the time the largest in the country, opened for business.
The Appeal of the Malls.
Across the country retailers were making similar decisions. The new malls had obvious appeal for both shoppers and merchants. Parking was abundant and usually free, and shoppers could go from store to store without moving the car or worrying...
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The Stock Market and Investment Trends
New Types of Investment.
Stock prices rose during the 1950s. In 1954 the market passed a milestone of sorts, finally eclipsing the 1929 Dow Jones high of 381.17. Part of the growth occurred due to a new type of investment, the mutual fund, which made its appearance during the decade. Mutual funds expanded to 2.5 million shareholders by 1960. Mutual funds were mixtures of many different stocks managed by a brokerage firm or mutual-fund firm. For a small sum an investor could purchase a small "piece" of General Motors, IBM, Coca-Cola, or any of dozens of other companies. The flexibility of the fund reduced risk and encouraged small investors to get back into the market. Direct stock ownership remained in the hands of a small minority, however, as only 8 percent of Americans owned stock in 1955.
Massive Pools of Money.
The rise of huge insurance companies, with their massive pools of money (assets of $56 billion by 1948), brought on another change in the capital markets. Insurance companies found they could subscribe to an entire issue of a security from the borrowing corporation in direct competition with investment bankers. That gave the insurance companies considerable influence in the business decisions of companies. Banks increasingly found their share of the investment market shrinking. By 1955 banks' share of the assets held...
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The Sun Belt
The Frost Belt Peaks.
The 1950s marked the peak of the northern-midwestern industrial axis as an economic power. In 1950 the midwestern, middle Atlantic, and New England regions combined to add 67.7 percent of the total value added to manufacturing. With only 8 percent of the nation's land area, the Northeast alone had 43 percent of the U.S. population and 68 percent of the manufacturing employment. Two of the three largest banks in America were located in New York. The dense population of the Northeast gave it political power to match its economic clout: the Frost Belt (as the manufacturing belt was alternately called) carried 286 electoral votes in the presidential election of 1960, compared to 245 for the increasingly important Sun Belt.
Defense Leads the Way.
The Sun Belt was the term used to describe the southern one-third of the United States, stretching from the southeastern states across to the Pacific coast, as far to the north as San Francisco. The migration of American business from the Frost Belt to the Sun Belt was led by defense industries. The open spaces and milder climate of the Southwest, in particular, provided the ideal environment in which to test missiles and aircraft. At the start of the Korean War, New York and Michigan accounted for 30 percent of prime defense contracts, but by 1962 California alone...
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The Television Industry
Two Thriving Industries.
The "television industry" actually comprised two industries: one that manufactured television receiver sets, and one that manufactured the shows that people watched. Both of these industries developed quickly in the years after World War II, and both were thriving by the middle of the 1950s. The percentage of American homes with television sets rose dramatically throughout the decade, from slightly less than 20 percent in 1950 to nearly 90 percent in 1960. By then few aspects of American life remained untouched by the new medium.
A Long Infancy.
Industry pioneers such as Sarnoff, president of the Radio Corporation of America (RCA), had waited several decades to offer television for mass consumption. Sarnoff had followed research on the broadcast of images since the mid 1920s. By the late 1930s several companies, including RCA, were Broadcasting experimentally in large urban areas. In 1940 there were twenty-three stations in the country, offering limited schedules of sports, filmed stage plays, old cartoons, and government documentaries. That year RCA planned its first large-scale test of the medium, building twenty-five thousand sets for sale in New York City to receive broadcasts from RCA's transmitter in the Empire State Building. The Federal Communications Commission (FCC) gave approval for the test but then...
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The Turbulent Teamsters
Teamsters and Crime.
Once a union that represented coach and wagon drivers, the Brotherhood of Teamsters dominated the trucking industry by the 1950s. Few industries were as vulnerable to under-the-table or illicit operations as was trucking. In the 1950s the connections between the Teamsters and gangsters became public and ultimately led to the ouster of the Teamsters union from the AFL-CIO.
Trouble started when Teamsters president Dave Beck was accused by the AFL-CIO of abusing union funds. Such suspicions only brought the character of all union leadership into question. The first indication of the seriousness of Beck's activities, and its effect on the entire AFL-CIO, came in March 1957 when Labor Secretary James P. Marshall rejected George Meany's nomination of Beck to serve as a delegate to a committee of the United National International Labor Organization in Hamburg, Germany. On 9 April 1957 AFL-CIO president Meany attacked Beck without calling him by name, but the implication was clear: the Teamsters were a blot on organized labor.
The McClellan Committee.
Beginning in May the Senate Select Committee on Labor-Management Relations, under Arkansas senator John McClellan, investigated the Teamsters and publicly accused Beck of misuse of funds. When called as a...
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Hoffa, James R. 1913-1975(?)
LABOR LEADER AND RACKETEER
At one time possibly the most powerful union leader in the United States, James R. (Jimmy) Hoffa had worked his way up through the ranks of the Teamsters union, the largest union in the nation. In 1952 he won election as international vice-president of the Teamsters behind president Dave Beck, who was already under investigation by federal agencies. Hoffa centralized the administration and bargaining procedures of the union in the international union office and succeeded in creating the first national freight-hauling agreement.
In 1957 Beck was summoned before the U.S. Senate's McClellan Committee, where he took the Fifth Amendment approximately two hundred times. When Beck finished his testimony, he had little credibility left as the Teamsters leader. Hoffa moved in. The election to put Hoffa in the presidency was disputed, and the government publicly emphasized Hoffa's connections with organized-crime figures. Nevertheless, Hoffa held on to the presidency and avoided jail for almost a decade.
During that time Hoffa became the target of U.S. Attorney General Robert F. Kennedy and Federal Bureau of Investigation director J. Edgar Hoover. The two, however, despised each other so much that...
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Kroc, Raymond A. 1902-1984
Few millionaires begin a worldwide empire with a paper cup. But Raymond A. Kroc, who had sold Lily cups for almost twenty years, started just that way. Kroc spent much of his early life as a paper-cup salesman until, in 1941, he abandoned cups for the milk-shakes that went in them. He joined the Mult-A-Mixer company, which produced multiple-milkshake mixers for restaurants. When he visited the McDonald Brothers hamburger stand owned by Dick and Mac McDonald in San Bernardino, California, in 1954, Kroc saw a mass-production operation—using his Mult-A-Mixers in sets—that no one else had developed. Kroc was impressed by the McDonalds' procedures for food preparation: "each step was stripped down to its essence and accomplished with a minimum of effort." Kroc reasoned that by combining the fast service offered at McDonald Brothers with his Mult-A-Mixers and disposable eating utensils (exemplified by his paper cups), a new type of restaurant could be created. He signed an agreement with the McDonalds, acquiring virtually all of their business, including their name. Kroc said "visions of McDonald's restaurants dotting crossroads all over the country paraded through my brain."
The key, Kroc thought, to spreading McDonald's product to the American consumer lay in consistent...
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Meany, George 1894-1980
PRESIDENT OF THE AFL-CIO
Reunion of Labor.
To many Americans in the 1950s, the term organized labor meant George Meany, president of the American Federation of Labor (AFL) after his election in 1952. Meany orchestrated the reunification of that union with the Congress of Industrial Organizations (CIO) in 1955. As president of the newly unified AFL-CIO, Meany led the campaign to rid the union of its gangster elements.
Organized labor was a part of Meany's life since his childhood. His father had been the president of the Bronx's local chapter of the Plumbers International union. Young Meany regularly spent Sunday afternoons watching the informal union meetings that took place in his home. After he left school, and against his father's...
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Reuther, Walter Phillip 1907-1970
PRESIDENT OF THE CIO
Walter Reuther, long associated with the United Auto Workers (UAW), established his legitimacy in a May 1937 leaflet distribution outside the River Rouge plant at Ford where he and several others were physically assaulted and hospitalized. His commitment to the labor cause, combined with his organizing skills, made him a natural leader, although early in his career he was an avowed Socialist. By 1938, however, Reuther had abandoned the Socialist party; even so, his close connections with Communists opened him to allegations from the Dies Committee, predecessor to the House Un-American Activities Committee (HUAC), that he was a Communist.
When World War II came, Reuther helped to isolate and expose the Communists in the UAW, showing that they supported "the brutal dictatorships, and wars of aggression of the totalitarian governments.… "He devised a plan to adapt automobile mass-production methods to producing warplanes, but the head of the government's Office of Production Management,...
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Watson, Thomas J., Jr. 1914-1993
PRESIDENT OF IBM
Taking over an industry giant is never easy, but replacing a legend is even more challenging. Thomas Watson, Jr., had to do both when he assumed command of IBM from his father in 1952. Watson, Sr., had been the company's president since 1915, bringing his experiences from his previous work as a corporate officer at the successful National Cash Register Corporation to IBM. He dominated IBM with his personality and infused it with a spirit exemplified by his one-word motto THINK. Under Watson, Sr., IBM rarely made the great technological breakthroughs but always caught up with or passed its competition with superior sales and service.
When Thomas Watson, Jr., took over, IBM entered the computer market to compete with Remington-Rand's UNI VAC, a vacuum-tube technology computer. Watson allowed his competitors to develop new technologies, such as the transistorized computer, pioneered by Sperry Rand (Sperry...
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Wilson, Charles E. 1890-1961
PRESIDENT OF GENERAL MOTORS, SECRETARY OF DEFENSE (1954-1957)
Controversy and Power.
Charles Erwin Wilson, best known for a quotation he never uttered—" What's good for General Motors is good for the country"—played a key role in the development of General Motor's Corporation (GM) and as secretary of defense during the Dwight D. Eisenhower administration. As the head of GM, Wilson had led the world's largest corporation; President Eisenhower wanted him to oversee the rapidly growing military and the developing "military-industrial complex." Wilson's association with the enormous automaker, however, made his cabinet appointment Eisenhower's most controversial.
Trained as an electrical engineer, Wilson climbed steadily up GM's long corporate ladder, becoming chief executive of the conglomerate in 1946. As head of GM, Wilson successfully negotiated labor agreements with the United Auto Workers (UAW) in 1948 and 1950. In the 1948 contract he offered the innovative "escalator clause," which raised employee salaries to meet increases in the cost of living. During a new round of negotiations two years later, the union suggested a pension plan. Wilson was a strong proponent of a profit-sharing plan for GM workers even before the union included them as negotiating points. He proposed to invest the pension...
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People in the News
In January 1951 Michael V. DiSalle, director of the Office of Price Stabilization, endorsed a freeze on prices by saying it was like "bobbing a cat's tail": better to do it all at once close to the body, otherwise the result would be a mad cat and a sore tail.
On 7 October 1959 Walter D. Facler, assistant economic research director of the U.S. Chamber of Commerce, told a Senate committee that some unemployment could be a "positive economic good."
In 1959 Harold Geneen, executive vice-president of Raytheon, took over as president of International Tele-phone & Telegraph (IT&T).
In 1957 Fortune magazine listed Jean Paul Getty, with a fortune of $700 million to $1 billion in American and Arabian oil and real estate, as the richest American.
In 1959 Milton J. Hammergren, former vice-president of Rudolph Wurlitzer jukebox manufacturers, testifying before a Senate hearing on the $2-billiona-year industry, admitted that his company found it difficult to sell jukeboxes until it started working with the under-world.
In 1959 Stanley C. Hope, president of the National Association of Manufacturers, urged Congress to outlaw industrywide collective bargaining.
In 1957 Roy Hurley, chairman of Studebaker-Packard Corporation,...
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Horatio M. Adams, 102, founder of Adams & Sons (later American Chicle Company), which secured the first U.S. patent for making chewing gum in 1872, 27 January 1956.
Vincent Astor, 67, board chairman of Newsweek and great-great-grandson of New York real-estate tycoon John Jacob Astor, 3 February 1959.
Walter C. Baker, 87, inventor of Baker Electric auto (1897) and autoequipment manufacturer, 26 April 1955.
Cesare Barbieri, 78, the Italian-born inventor of auto antifreeze and machines to make paper cups, 25 May 1956.
Sailing P. Baruch, Jr., 53, president of Baruch Brothers and Company, an investment house, and nephew of Bernard M. Baruch, 9 February 1956.
Siegfried Bechhold, 55, German-born industrialist and former president of Armored Tank Corporation of New York, which developed the Sherman tank during World War II, 7 February 1956.
Lawrence Dale Bell, 62, founder and chairman of Bell Aircraft Corporation who aided in the design and construction of the Bell X-l experimental jet (the first aircraft to surpass the speed of sound) and several other experimental aircraft, 20 October 1956.
Clarence Frank Birdseye, 69, who developed methods of freezing and dehydrating foods for...
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Adolf A. Berle, The 20th Century American Capitalist Revolution (New York: Harcourt, Brace, 1954);
Edward Bursk, Donald T. Clark, and Ralph W. Hidy, The World of Business (New York; Simon & Schuster, 1962);
Richard Caves, American Industry: Structure, Conduct, Performance (Englewood Cliffs, N.J.: Prentice-Hall, 1964);
Caves, Essays in Positive Economics (Chicago: University of Chicago Press, 1953);
Peter F. Drucker, The New Society (New York: Harper, 1950);
Marriner S. Eccles, Beckoning Frontiers (New York: Knopf, 1951);
Milton Friedman and Rose Friedman, Capitalism and Freedom (Chicago: University of Chicago Press, 1962);
John K. Galbraith, The Affluent Society (Boston: Houghton Mifflin, 1958);
Galbraith, American Capitalism: The Concept of Countervailing Power (Boston: Houghton Mifflin, 1956);
Arthur J. Goldberg, AFL-CIO: Labor United (New York: McGraw-Hill, 1956);
Stewart Holbrook, Machines of Plenty: Pioneering in American Agriculture (New York: Macmillan, 1955);
Lewis Mumford, The Myth of the Machine: The Pentagon of Power (New York: Harcourt Brace, 1964);...
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Important Events in Business and the Economy, 1950–1959
- The gross national product (GNP) reaches $284.6 billion, up from $100.6 billion in 1940.
- Television advertisers spend $171 million.
- DuPont introduces Orlon and approves plans to spend $50 million on construction of research and development facilities.
- The first Xerox copy machine is produced.
- On January 1, some 31 percent of U.S. women work outside the home.
- From January 11 to March 5, the U.S. coal industry suffers from massive strikes.
- On January 22, auto inventor Preston Tucker is cleared of securities and fraud charges related to the failure of his attempt to build an innovative automobile.
- From February 8 to February 9, federal courts uphold U.S. Justice Department suits against U.S. film companies, ordering them to separate production and distribution.
- On March 1, Congress allocates $429 million for highway construction. Congress will increase this amount in 1956 and 1958.
- On March 29, RCA demonstrates the first single electronic color-television tube.
- On June 2, Congress passes the Celler-Kefauver Amendment, strengthening the Clayton Antitrust Act by prohibiting corporate acquisitions that reduce competition.
- On June 20, the housing...
(The entire section is 1793 words.)