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. . . Must Go Up. By spring, autos were in such demand that customers again had to wait as long as three months for delivery. Makers of TV sets and refrigerators began to ration their output. By June the economy was at the highest production peak it had ever been in peacetime. Industrial production had climbed to 199 in the Federal Reserve Board's index (1935-39 = 100), four points higher than 1948's boomtime top. Employment rose almost 2,000,000 in a single month. In mid-June, the stock market officially blessed the new growth of the boom by soaring to a 20-year high.
Two weeks later, war in Asia began.
Thus ended the first half of economic 1950, a time during which President Truman had repeatedly stated that "peace was never nearer."
Business as Usual. The news from Korea knocked the bull market to its knees. Wall Street traders, well aware that war always disrupts business, sold stocks in such a frenzy that the Dow-Jones industrial average fell 17.63 points in four days. But in retail and wholesale markets, the cry was "Buy!" With memories of World War II shortages still fresh, housewives stampeded the nylon counters, grabbed for sheets, towels, soap, sugar, and everything else that had been short only a few years ago. In cities like Dallas and San Francisco, department store sales rose more than 40% over 1949.
Industry, strong in its World War II expansion, poured out such a flood of civilian goods that the shelves were restocked in jig time. Panic-buying gradually subsided; prices had had but an imperceptible rise.
All during the summer, the Administration's soothing watchword was "business as usual." When Congress hustled through $11.7 billion more for arms, and a Defense Production Act that gave President Truman broad powers to mobilize the economy for war, Harry Truman strongly insisted that he did not need the powers. To Harry Truman, "business as usual" also meant that no businessmen would be called to Washington. Big Business was still a favorite whipping boy of the Fair Deal. In a score of suits, the Fair Deal's trustbusters went right on attacking the companies whose size and strength had won World War II's production battle.
This time, said the President, there would be no dollar-a-year men, no WPBs to help speed production. If big businessmen were needed, they would serve only in an advisory capacity. To drive home his point, he scattered the Defense Act's mobilization powers among a dozen existing bureaus. Through the summer and fall, industrial mobilization crept along, hobbled by indecision and conflicting authority. The only cry for action came from the NSRB's Stuart Symington.
Vice into Virtue. Then, overnight, as in World War II, the "vice" of bigness became a sudden virtue. To build the hydrogen bomb plant, the Government called in Du Pont, one of antitrust's prime targets. After that, the Administration eased up on trustbusting all around.