When World War II started, tonnage levels fell and five shipping lines ended service. April
1940 saw streetcar service replaced by buses. Pan Am started air service in 1942. World War II sparked the reopening of Ellington Field. The Cruiser Houston
was named after the city. It sank after a vicious battle in Java, Indonesia in 1942. August 1942 also saw the new
City Manager government enacted. The M. D. Anderson Foundation formed the Texas Medical
Center in 1945. That same year, the University of
Houston separated from HISD and became a private university. Aircraft and shipbuilding
became large industries in Texas as a result of the war.
Tonnage rose after the end of the war in 1946. During the same year, E. W. Bertner gave away 161 acres (0.65 kmē) of
land for the Texas Medical
Center. Suburban Houston
came to be in the period from 1946 to 1950. When Oscar D. Holcombe took his eight terms in 1946, he abandoned the city manager type government. Foley's department store opened in 1947. The Alley Theatre got its first performance in 1947. Also the same year, voters overwhelmingly
rejected a referendum for citywide land-use districts--zoning. The banking industry also rose to prominence in the late 1940s. Houston carried out a large annexation campaign to increase its size.
When air conditioning came to the city, it was called the "World's Most
Air Conditioned City".
The economy of Houston reverted back to a healthy, port driven
economy. Segregation was not as rampant and vicious as it was in other parts of the South. As demonstrated by the NAACP voting drive in the time period, many African-Americans in
the city started to more openly challenge segregational laws.