Economy after 1945 in two minutes
- Wartime savings and pent-up demand fueled spending on cars, appliances and houses after 1945, and the Depression did not return; the economy grew for most of the next 25 years.
- The GI Bill of 1944 paid for college for about 2.2 million veterans and guaranteed home loans, but local control let many colleges and banks shut out Black veterans.
- William Levitt mass-produced houses on Long Island from 1947 and built over 17,000 by 1951, but he refused Black buyers, and Federal Housing Administration rules and redlining steered loans toward white neighborhoods.
- The Federal-Aid Highway Act of 1956 funded 41,000 miles of interstates, with Washington paying 90 percent; highways spread suburbs and malls, but many routes ran through Black neighborhoods.
- In 1950 General Motors and the United Auto Workers signed a five-year contract with raises, pensions and health insurance, called the Treaty of Detroit, which became a model for other unions.
- Defense spending drew people to the Sun Belt, and California gained eight House seats after the 1960 census; about five million Black Southerners left the South between 1940 and 1970.
- On the exam: Expect causation questions on why suburbs and the Sun Belt grew and comparison questions on who benefited, tied to the New Deal, the Cold War and civil rights.
Topic 8.4 key terms
- Peaceful coexistence
Khrushchev's line, from 1956, that communist and capitalist countries could compete without war, through trade, science and living standards. It led to 1959 exhibitions in New York and Moscow where each country showed how its people lived.
- Kitchen Debate (1959)
The unscripted argument between Vice President Richard Nixon and Premier Nikita Khrushchev at the American National Exhibition in Moscow, July 24, 1959. Each defended his country's economic system by pointing to the ordinary home.
- Cold War
The U.S.–Soviet rivalry after 1945, fought through alliances, arms, aid, spying and propaganda instead of direct war between the two. By 1959 it included a contest over how ordinary people lived.
- Postwar economic boom
Rapid U.S. growth after World War II. New jobs, rising incomes, cheap mortgages and heavy government spending put homes, cars and appliances within reach of millions of families.
- Pent-up demand
Spending held back by the Depression, wartime rationing and a shortage of goods to buy. Once the war ended it poured out into cars, appliances and houses and helped drive the postwar boom.
- Postwar housing shortage
The gap between the number of American families and the number of homes for them after 1945. Builders had built few houses during the Depression and almost none during the war, while veterans married and started families.
- GI Bill (1944)
Federal law (the Servicemen's Readjustment Act) that gave veterans college tuition and living costs, job training, unemployment pay and government-guaranteed loans for homes, farms and businesses. It helped fuel the growth of higher education and the suburbs.
- Baby boom
The surge in U.S. births between 1946 and 1964, peaking at 4.3 million in 1957. It raised demand for houses, schools and consumer goods for decades.
- Levittown
A mass-produced suburb of more than 17,000 houses on Long Island, built from 1947 to 1951 by Levitt & Sons. It became the model for postwar suburbs across the country.
- Restrictive covenant
A clause in a deed or lease that bars selling or renting to certain groups. Courts stopped enforcing racial covenants after Shelley v. Kraemer (1948).
- Federal Housing Administration (FHA)
The New Deal agency, created in 1934, that insured home mortgages. It made long loans with small down payments normal, and its rules steered that money to white neighborhoods.
- Redlining
Denying mortgages and insurance to people in certain neighborhoods, often Black or immigrant ones, because of where they lived. The name comes from the red zones on 1930s federal maps.
- Treaty of Detroit (1950)
The five-year contract between General Motors and the United Auto Workers. The union promised labor peace; workers got rising wages, pensions and health insurance. Other factory unions won similar deals.
- Federal-Aid Highway Act (1956)
Created the Interstate Highway System: 41,000 miles of road, with Washington paying 90 percent. Official name: the National System of Interstate and Defense Highways.
- Franchise
A business deal that lets local owners use a company's name and methods. Franchising spread identical restaurants, motels and stores across the country, a big part of the new national mass culture.
- White flight
The movement of white families from cities to suburbs, often as Black families moved in. Highways and cheap FHA loans made the move easy, and older cities lost tax money.
- Defense spending
Federal money spent on the military and on the companies that supply it. During the Cold War much of it flowed to the South and West, and it helped move industry, people and political power there.
- Second Great Migration
The move of about five million Black Southerners to cities in the North and West, from about 1940 to 1970. War-industry and factory jobs drew them, and Jim Crow segregation and violence pushed them out. It followed a first wave that began around World War I.
- Reapportionment
After each census, the 435 seats in the House of Representatives are divided among the states by population. Electoral votes follow the seats, so a growing state gains power in presidential elections too.
- Sun Belt
The fast-growing states of the South and Southwest, from Florida to California. After 1945, defense money, air conditioning and cheap land drew people and jobs there, and political power followed.
Transcript
Quotes are from the historical record and name their source. Lines marked Dramatized are reconstructions.
The Kitchen
July 24, 1959
Key terms: Peaceful coexistence, Kitchen Debate (1959), Cold War, Postwar economic boom
Moscow · July 24, 1959
In the summer of 1959, the United States brought a house to Moscow. It was a copy of a real ranch house from Commack, Long Island.
So crowds could see inside, the builders split it in two with a walkway down the middle. They called it the Splitnik.
Vice President Richard Nixon walked the Soviet premier, Nikita Khrushchev, into the kitchen.
Nobody taped what happened next. Reporters wrote it down.
Richard M. Nixon
Is it not far better to be talking about washing machines than machines of war, like rockets?
The Cold War, arguing about a washing machine. Each believed this kitchen proved his system gave ordinary people a better life.
The house was real, and so was the boom that built it. That house raises three questions: who built it, who was kept out, who felt boxed in. Start in 1945, when the soldiers came home.
Coming Home
1945–1947
Key terms: Pent-up demand, Postwar housing shortage, GI Bill (1944), Baby boom
Sixteen million Americans served in the war. Many economists feared that when they came home, the Depression would come back.
It didn't. During the war there had been little to buy, so people had saved. Now they wanted cars, refrigerators and, above all, houses.
There weren't nearly enough houses. In Chicago, 250 old trolley cars were sold as homes.
Period announcer
Big Ice Box, 7 × 17 feet, could be fixed up to live in.
That was an ad in an Omaha newspaper.
Congress had already passed a law for them. Its official name was the Servicemen's Readjustment Act. Everyone called it the GI Bill.
Franklin D. Roosevelt
It gives emphatic notice to the men and women in our armed forces that the American people do not intend to let them down.
It paid for college. About 2.2 million veterans went. It guaranteed their home loans, so banks would lend with little or nothing down.
But Congress let local officials run the program. Many Southern colleges wouldn't admit Black veterans, and banks often wouldn't lend to them.
In Mississippi in 1947, banks made 3,229 GI Bill loans for homes, farms and businesses. Two went to Black veterans.
The veterans married young and had children fast. Births jumped in 1946 and peaked at 4.3 million in 1957. That was the baby boom.
Every one of those babies needed a crib, then a school, then a bicycle.
On Long Island, a builder named William Levitt was looking at a potato field.
Levittown
1947–1951
Key terms: Levittown, Restrictive covenant, Federal Housing Administration (FHA), Redlining
Levitt built houses the way Detroit built cars, except the workers moved and the houses stood still. He broke a house into 26 steps.
He bought a lumber mill in California and made his own nails.
In 1950, a veteran could buy one for $7,990. No down payment. Fifty-six dollars a month.
Levitt liked to say a man with his own house had too much to do to be a Communist.
Buyers agreed to rules. No fences. Skip mowing for a week, and Levitt's men mowed it and sent you the bill.
By 1951, there were more than 17,000 of them.
Step inside one on moving day.
Levitt's leases said this.
In 1948, the Supreme Court ruled that courts could not enforce clauses like it. Levitt dropped the clause.
His company's announcement said that changed nothing.
December 1949 A Levitt sales office
In December 1949, a salesman told Eugene Burnett, a Black veteran, the owners hadn't decided to sell to Black buyers. The policy stayed.
Washington insured many of these mortgages, through the Federal Housing Administration.
Period announcer
With a small down payment, your rent money will buy a home.
In its 1938 manual for lenders, the same agency said a neighborhood should keep “the same social and racial classes.”
Same agency. Two audiences. The card was selling. The manual was deciding. If you only had the card, you'd never know the rule.
In the 1930s, a federal agency colored Black and immigrant neighborhoods red and called them hazardous. Loans there were hard to get.
A house was the biggest thing most families would ever own, and what they handed down.
The suburbs built a new middle class. By law and by habit, they built it mostly white.
The Road
1950–1960
Key terms: Treaty of Detroit (1950), Federal-Aid Highway Act (1956), Franchise, White flight
Levittown ran on cars, and so did the economy. In 1950, General Motors gave its union five years of raises, pensions and health insurance.
Fortune magazine called it the Treaty of Detroit.
Charles E. Wilson
For years, I thought what was good for our country was good for General Motors, and vice versa.
Newspapers printed only the second half: what's good for General Motors is good for the country. That's the version people remember.
In 1919, a young Army officer named Dwight Eisenhower crossed the country in a truck convoy.
It took 62 days, at about six miles an hour.
In Germany in 1945, he saw the autobahns.
Dwight D. Eisenhower
In case of an atomic attack on our key cities, the road net must permit quick evacuation of target areas.
The case for highways was partly a case for escaping the bomb.
In 1956, Congress approved 41,000 miles of highway, with Washington paying ninety percent.
Along the new roads came businesses built for drivers: motels, franchises, malls.
And a new way to pay. In 1950, the Diners' Club card let members eat now and pay later.
The highways also had to go through cities. Planners often sent them through Black neighborhoods, where land was cheap and residents had little say.
In St. Paul, about 600 families in Rondo lost their homes to Interstate 94.
Many white families drove out along the same roads. By the 1960s, many older cities were poorer and more divided by race.
Go South, Go West
1945–1962
Key terms: Defense spending, Second Great Migration, Reapportionment, Sun Belt
The Cold War moved money south and west. Washington built bases and bought jets, missiles and electronics, much of it in California, Texas, Florida and Arizona.
Then there was the machine that made the heat bearable.
Retirees and young families poured into Florida. Its population grew by almost 80 percent in the 1950s.
Universities grew with the jobs. Engineers who'd gone to college on the GI Bill followed the work west.
In ten years, California alone added 5.1 million people.
Other Americans were moving too. Between 1940 and 1970, about five million Black Southerners left for cities like Chicago, Detroit, Los Angeles and Oakland.
They wanted better jobs and a way out of Jim Crow. Many arrived just as white families were leaving those cities for the suburbs.
Washington also urged Native Americans to leave reservations for cities, in a program it called relocation.
After the 1960 census, California gained eight seats in Congress, and Florida four. New York lost two, and Pennsylvania three.
In new Southern California suburbs, engineers and their neighbors met in living rooms to talk politics. Many distrusted Washington, though defense contracts paid a lot of their salaries.
Nobody called it the Sun Belt yet. A political strategist named it in 1969, when it was already helping choose presidents.