T. Rowe Price

Chapter TwelveTRANSITIONS, 1960–1968

The driving forces behind Mr. Price's next investment emphasis on small growth stocks would be the accelerating growth of government spending for defense research and development, particularly for manned space exploration. Just as the strong growth in the consumer‐led economy of the 1950s drove many of the large growth companies in the Growth Stock Fund, defense spending and the new space program would propel the stocks of these small technology companies.

The year 1960 was a good one for Mr. Price, the firm, and much of the country. The earliest members of the Baby Boom generation were no longer babies. They were beginning to enter their teenage years with all of its questions and questioning, seeking answers from an older generation that had survived the Depression and a world war.

In the last years of his term in office, President Eisenhower had begun to seem to some a bit grandfatherly. The communist threat was very real. To a great extent, the Cold War had become a war of technologies. In 1945 America was the only owner of an atomic bomb. Just as the Russians caught up with an atomic bomb of their own, the U.S. exploded the hydrogen bomb on November 1, 1952, vaporizing a portion of the Enewetak Atoll. This new weapon had a force of more than 10 megatons, almost 500 times more powerful than the atomic bomb dropped on Nagasaki. By the 1970s, the U.S. would know how to miniaturize these huge bombs so that they could be placed on the nose ...