@ toastermike
That is why you never ever ever ever plug in old electrical items without going over the cord first! I do believe what happened is the insulation inside the main wire has perished and allowed the two wires to touch each other, and it made a dead short. If the cord was wrapped around the handle or on a hook, this would have increased that chance a great deal, since it would essentially make a crimp in the wire where it was bent around.
This happened to me in my garage to an old auto work light that had been unused in the garage cupboard for 30 years. I inspected everything on it, and it looked alright. But when I plugged it in, I heard a whistling like a teakettle, then before I could rush to unplug it, the entire cord exploded at the short and blew hot molten rubber everywhere! The cord also blew off at the plug end and then caught fire and started burning the end of the plug as it was in the socket. I grabbed a bag of sand from nearby and put the flame out with that. I had to replace the outlet later because I got sand inside it. I was smart enough to be wearing lineman's gloves anyway, so I stayed safe from harm. It was a very scary situation.
I have an upright Bee-Vac that I got last fall and the hot and neutral wires run independent of each other, but are twisted together as a pair on their own and they go up the handle, so I believe yours used to be run that way. Maybe this one had a rewire job done in the 50s and that has also decayed with time.
With these vulcanized rubber cords I replace them anyways, they do not age well. It does not detract from the value if you replace the cord, it's an acceptable loss. I'd just find a photo of one from an old advertisement and see if you can get a replica antique cord to match it.
