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Statehood Economics
U.S. Statehood Economy, 1912-1945

In 1912 New Mexico achieved statehood. Business and civic leaders in Albuquerque had worked tireless for years to shed the status as a territory.

Albuquerque continued to grow and prosper. The federal government in the early 1900s would become an increasingly large presence. Downtown began to fill in with more sophisticated buildings. And neighborhoods sprouted near the railroad’s operations and continued to expand across East Mesa, enveloping UNM and moving beyond. More than 300 subdivisions were registered between 1900 and 1940.

The lumber industry, following its peak in 1910, began a rapid descent. After harvesting millions of board-feet of timber over the previous decade, American Lumber in 1913 halted operations and went into receivership, throwing hundreds out of work. The Santa Fe Railway, on the other hand, was still growing and in 1914 began building its shops and roundhouse south of Downtown.

New technology – the automobile – would threaten the old. New Mexico in 1915 had 4,250 cars and 92 dealers, and these “automobilists” demanded better roads. That year work began on the transcontinental highway system called the National Old Trails Highway, the forerunner of Route 66. In 1920 Albuquerque could boast of 60 miles of graded streets. By 1929 it had 53 miles of paved streets, much of it paved by contractor A.R. Hebenstreit.

In 1917 Albuquerque Gas, Electric Light and Power Co. and the Albuquerque Electric Power Co. merged to form Albuquerque Gas & Electric Co. The company’s offices were at 422-424 Central. Its biggest customers then were the trolley company and American Lumber. The lumber company provided wood chips for the first power plant.

Understanding that flood control was critical to Albuquerque’s economy, the Chamber of Commerce in 1920 organized a mass meeting of property owners that ultimately resulted in creation of the Middle Rio Grande Conservancy District in 1923.

With the end of World War I in 1918, New Mexico suffered from a postwar recession brought on by drought and falling prices for agricultural products. With the downturn, State National Bank of Albuquerque failed. George A. Kaseman bought up the bank’s assets in 1924 and used them to start Albuquerque National Trust & Savings Bank, which became Albuquerque National Bank.

Albuquerque was then seeing some tourists, but business people wanted more. In 1923 they raised money to build the elegant, Southwestern-style Franciscan Hotel at Sixth and Central because they thought the Alvarado was too small to attract conventions. (Both hotels became parking lots in the early 1970s.)

In 1925 business people petitioned the railroad to begin promoting tourism. Always an eager partner in the city’s development, the railroad started its “Indian Detours” program the same year. Albuquerque became a hub of the program, which relied on rail and bus to take visitors around to see the sights. Tourism got another shot in the arm a year later when the new Route 66 began moving travelers from Chicago to Los Angeles. In Albuquerque the route initially passed down Fourth Street.

In this period the Chamber of Commerce helped create The First American Pageant, a four-day event with parades, concerts, dances, arts and crafts, races and night dramas performed before a papier mache pueblo. The event was intended to replace the defunct State Fair.

In 1927 two railroad workers, inspired by Charles Lindbergh’s flight across the Atlantic, built runways on leased acreage and created an air field. Entrepreneur James Oxnard bought Franklin’s interest and added new hangars, lights, beacons and expanded runways. The facility was named Oxnard Field. By 1929 Albuquerque’s central location and good airfield had attracted two competing carriers – Western Air Express and Trans-Continental Air Transport. In 1929 Western Air moved to a second airfield on the West Mesa. The two merged and became Transcontinental and Western Air, or TWA, in 1930.

The first housing boom was in 1922 with the Country Club Addition, named for the club to the east and later known as Spruce Park. Grenada Heights followed in 1925 and a year later, Parkland Hills, Knob Heights, Monte Vista and College View. Seventeen subdivisions sprouted in quick succession on the East Mesa.

In 1928 lawyer William Keleher and contractor A.R. Hebenstreit acquired land from Franz Huning’s heirs and platted the Huning Castle Addition. Swamps made much of the land unattractive for development, but that was remedied after the Middle Rio Grande Conservancy began projects to drain marshy lands and control the river. They only got a few homes built before the Stock Market Crash of 1929.

Health care, including TB treatment, continued to be a thriving industry. (See Statehood Health Care.)

Albuquerque didn’t feel the brunt of the Depression right away, but after 1931, the city reeled from business failures and bank failures. Hardest hit were the small businesses on Route 66. Tourists were replaced by the migration of impoverished job seekers immortalized in John Steinbeck’s The Grapes of Wrath. In New Mexico, unemployed Hispanic and Indian people formed another wave, traveling north to work in Colorado or south to the cotton fields of New Mexico.

As the economy began to shrink in 1931, the Santa Fe Railway had to cut its Albuquerque workforce by nearly 40 percent and reduce its work week to four and a-half days. The county tried to help with temporary road jobs, and the federal government provided commodities, but it wasn’t enough. In 1933 the Roosevelt Administration began the Civil Works Administration, which would provide a 90 percent match for public works projects. The CWA in 1933 and 1934 supported more than 30 projects in Albuquerque, including construction of Roosevelt Park and Tingley Beach, and provided hundreds of jobs.

First National Bank closed in 1933 but reopened in six months through a loan blessed by FDR himself, plus the agreement of depositors to become shareholders. One of the board members was real estate promoter D.K.B. Sellers, who named Nob Hill and developed much of that area.

In 1934 Clyde Tingley was elected governor. In 1935 Tingley launched a national advertising campaign to promote tourism. After that, Albuquerque enjoyed full hotel rooms and tourist camps, crowded restaurants and out-of-state cars on the street. Route 66, once again, delivered visitors, especially after paving was complete in 1937. The realigned route now crossed Albuquerque along Central Avenue, and diners and tourist courts sprouted up.

Meanwhile, the Chamber of Commerce had agitated to restore the State Fair and raised money to buy land and construction materials. The chamber also worked to attract federal offices to the city, and in some cases members put up money to offer rent-free downtown offices.

By 1935 the chamber was seeking an army air base. Board members began lobbying personal friends and acquaintances in Washington D.C. The prime movers were Oscar Love, Frank Shufflebarger, Ray McCanna, and Pierce Rodey, who often traveled to the capital.

The same year TWA had suggested that Albuquerque have a municipal airport. With financial help from George Kaseman, chamber boosters got an option on 2,000 acres of land on the southeast mesa. The City Commission agreed to sponsor a WPA project. Gov. Clyde Tingley and two other men attended FDR’s second inauguration in 1936 and returned with approval for $700,000.

By 1936 Clyde Tingley had become friends with FDR. Tingley and Sen. Clinton P. Anderson secured a bounty of federal funding, in addition, for the State Fairgrounds, schools, UNM’s library and administration building, Monte Vista Fire Station, Jefferson School, Nob Hill Elementary School, Monte Vista Junior High School, Pershing Elementary School, the old UNM Student Union, plus street and sidewalk construction, sewer and power lines and road paving.

With WPA funds pouring in, Albuquerque turned a corner. There were signs of optimism. The most important development in years was the ten-story Hilton Hotel completed in 1939 by New Mexico native Conrad Hilton. Hilton believed Albuquerque was destined for great things.

Also in 1939 the municipal airport opened with one of the longest runways in the country. Boosters said Albuquerque was the “Air Capital of the Southwest.” Experts claimed the weather was ideal for flying 97 percent of the year. The city’s excellent air and rail facilities were a deciding factor in the selection of a site for Los Alamos Laboratory.

By then, war had broken out in Europe. The groundwork laid by chamber representatives paid off when the Army Air Corps leased land east of the city’s new airport to build a flight training base, which became Kirtland Field. In 1941 2,000 men worked around the clock building structures on the base, for a $3 million infusion into the local economy.

The Santa Fe Railway’s repair shops and yards, with 1,800 workers, were still the city’s largest private employer. The military presence increased rail activity. During the war the railroad operated around the clock to keep rolling stock in condition for unprecedented demands of transportation.

The activity fueled a building boom in Downtown. In 1940 and 1942, 450 new small businesses opened their doors, and the city’s population grew by 3,000. Home builders raced to provide new housing at a rate of nearly one house a day, with an average price of $3,200.

The first government contractors of the modern era appeared. The Eidal Manufacturing Co. opened a factory in 1943 to assemble truck trailers and tractors for the Army. Eaton Metal Co. built metal pontoons used by the military in amphibious landings. Martin Laboratories made parts for autopilot gyroscopes.

The El Rey Theater opened in 1941. Albuquerque had eight other movie theaters by then – the Sunshine, KiMo, Chief, Rio, Savoy, Mesa, Coronado and Lobo.


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