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This Day in Business History

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July 1

1858		The first Canadian coins are minted (1¢, 5¢, 10¢ and 20¢).
1862		The U.S. Congress approves the Revenue Act, which was soon signed into law by President Abraham Lincoln. It imposed a three-percent tax on people with incomes between $600 to $10,000; and a five-percent tax on people with incomes over $10,000. The Revenue Act is notable for creating the Bureau of Internal Revenue to collect the revenue generated by the new taxes. Though the Revenue Act and its attendant taxes lapsed into legislative oblivion after the Civil War, the Bureau of Internal Revenue came back in 1913 when the Sixteenth Amendment was added to the Constitution. Along with sanctioning income tax, the amendment paved the path for the opening of the Internal Revenue Service.
1869		The Dutch government repeals the stamp tax system for newspapers.
1916		Coca-Cola adopts its distinctive contoured bottle.
1941		During a Dodgers-Phillies game broadcast, NBC runs the first TV commercial to be sanctioned by the Federal Communications Commission (FCC). Advertiser Bulova paid $9 to advertise its watches on the air. The FCC began licensing commercial television stations in May 1941, granting the first license to NBC.
1967		The European Community is formally created out of a merger with the Common Market, the European Coal and Steel Community, and the European Atomic Energy Commission.
1987		Top investment banker Geoffrey Collier receives the first conviction for insider dealing since it became illegal.
1990		East Germany accepts the Deutsche Mark as its currency, thus uniting the East and West German economies.

July 2

1890		The federal government tackles the rising specter of outsized business conglomerations by passing the Sherman Anti-Trust Act. Sponsored by Ohio Senator John Sherman, the bill was designed as a direct strike against "every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade of commerce among the several States, or with foreign nations." Along with attempting to block the future creation of monopolies, the Sherman Anti-Trust Act also called for existing monopolies to be disbanded. But, such seemingly strong tactics betrayed the bill's weak language. Written by Senator George Hoar (Mississippi) and Senator George F. Edmunds (Vermont), the Sherman Act was fraught with ambiguous terms like "trust," leaving it ripe for exploitation by both litigious business officials and savvy attorneys. Sure enough, the ensuing years saw anti-labor forces manipulate the bill in their crusade against organized labor unions. In 1894, these anti-labor efforts were legally sanctioned by the Supreme Court which ruled in United States v. Debs that the Sherman Act did indeed cover unions, as well as hulking business entities.
1947		Soviet Foreign Minister V. M. Molotov walks out of a meeting with representatives of the British and French governments, signaling the Soviet Union's rejection of the Marshall Plan.

July 3

1996

Surface Transportation Board casts a unanimous vote in favor of the merger of Union Pacific Railroad and Southern Pacific. The Board's approval removed one of the final obstacles to the completion of the deal; later that year, Union and Southern Pacific were joined as one. The thrill of victory didn't linger long, however: Southern Pacific was plagued by "infrastructure problems" that effectively spoiled some of the benefits of the deal.

July 4

1840

After a nasty political tussle, legislators pass the Independent Treasury Act. The bill mandated the transfer of funds from state banks to a putatively "independent" treasury. To help handle the inevitable tide of fiscal transactions, the bill created a network of subtreasuries, which were dotted along east coast--including branches in Boston, New York and Philadelphia--and in other patches of the country.

July 5

1935		President Franklin Roosevelt signs the National Labor Relations Act (also known as the Wagner Act) into law. The freshly consecrated legislation was, at least in the short term, a boon for America's workers, granting them the right both to strike and to freely select their own union via voting, and clamping down on "unfair labor practices" by management, which encompassed a myriad of methods designed to prevent workers from organizing.
1940		U.S. Congress passes the Export Control Act, forbidding the exporting of aircraft parts, chemicals, and minerals without a license. This prohibition was a reaction to Japan's occupation of parts of the Indo-Chinese coast.

July 6

1955		The Federal Air Pollution Control Act is implemented, providing federally allocated funds for research into causal analysis and control of car-emission pollution.
1981		Dupont Company officials announce merger with Houston-based oil and energy titan, Conoco Inc. Valued at between $6.5 and $7 billion, the deal was then the single biggest merger in U.S. corporate history. Despite the rather hefty outlay for Conoco, Dupont didn't stop diversifying: throughout the decade, the company spent a total of $10 billion to seal a series of acquisitions and joint ventures. But as the 1980s melted into a new decade, Dupont's strategy shifted; by the mid-1990s, the company was ready to close the books on its dalliance with the energy industry. In 1998, Dupont unveiled plans to gradually divest itself of Conoco via offerings to the public and its shareholders alike.

July 7

1550		Chocolate is introduced in Europe.
1896		William Jennings Bryan, then just a young scribe from Nebraska, speaks before the Democrats' 20,000 national convention delegates. An ardent supporter of the silver movement, Bryan seized the reins of the party by railing against the Republicans "demand for a gold standard." During his speech, Bryan laid down his now famous vow: "You shall not press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross of gold." These indelible words effectively sealed Bryan's unlikely nomination as the Democrats' candidate for President. But Bryan's fiery oratory proved to be no match for Republican presidential nominee William McKinley's fat coffers: backed by the money and influence of the nation's business leaders, the Republicans were able to lavish roughly $7 million on their campaign. Bryan, on the other hand, spent a scant $300,000 and ultimately lost his bid for the White House.
1955		Officials in China and Hanoi announce that Beijing will extend 800 million yuan (about $200 million) in economic aid to Hanoi. This announcement followed a trip to Beijing by Ho Chi Minh and his ministers of finance, industry, agriculture, education and health. On July 18, the Soviet Union announced that it would grant Hanoi 400 million rubles (about $100 million) in economic aid. This aid from fellow communist nations helped sustain North Vietnam in its war against the South Vietnamese and their American allies until 1975, when they defeated the South Vietnamese forces and reunified the country.

July 8

1871

The recklessly profligate practices of William "Boss" Tweed, the New York City official who helped pioneer urban America's lucrative version of government corruption, are exposed in a series of articles published by the New York Times.

July 9

1892

The state sends a band of 7000 troops to Andrew Carnegie's Homestead, Pennsylvania plant to "restore law and order." The militia effectively squelched the Amalgamated Association of Iron and Steel Workers' strike: the troops helped the Carnegie restaff its plant with non-union workers and by September, the Carnegie company had resumed production. Later that November, the union conceded defeat and called off its strike; Carnegie responded by summarily firing and even blacklisting the strikers.

July 10

1832

President Andrew Jackson vetoes the Bank of the United States' request for a new charter. Historian turned financier Nelson Biddle was the director of the bank. The Bank's allies grumbled that the veto was motivated less by principle than Jackson's cozy relationships with business leaders. No matter his rationale, Jackson continued his crusade against the Bank and in 1833 ordered the withdrawal of all federal funds from the institution. This move ultimately sent the nation into a fiscal panic, and helped seal the fate of Biddle and his Bank.

July 11

1916		In a White House ceremony, U.S. President Woodrow Wilson signs the Federal Aid Road Act, the first grant-in-aid enacted by Congress to help states build roads.
1985		Coca-Cola unveils plans to return the "old" version of Coca Cola--now christened "Classic Coke"--to the market. In the wake of this groundbreaking, company officials quietly conceded that they had erred in halting distribution of the "classic" version of the drink. However, they refused to admit that releasing New Coke was a mistake. Indeed, even though American consumers reviled it, the company kept New Coke in circulation, albeit in cans and bottles that identified the drink simply as "Coke."

July 12

1810

The New York branch of the Journeymen Cordwainers begin a trial that potentially imperiled their ability to go on strike. An affiliated group of shoemakers, the Cordwainers had been charged with illegal conspiracy stemming from one of their recent strikes. Though the walkout in question was seemingly defensible--the Cordwainers had hit the picket line to protest for better wages--legal precedent was against the union: in 1806, the Philadelphia branch of the Cordwainers had lost a similar conspiracy case, and it was no surprise when the New York court handed down a guilty verdict against the shoemakers. As in the Philadelphia case, the court held that the strike had been rendered illegal by the Cordwainers' conspiratorial tactics. In return for their putative offense, each member of the Cordwainers was forced to pay a $1 fine. The shoemakers' defeat, however, did little to defuse the debate over strikes: forces for organized labor continued to press their point until 1842, when the Massachusetts Supreme Court overturned the legal conflagration of strikes and conspiracies.

July 13

1995		The Chrysler Corporation opens a car dealership in downtown Hanoi, Vietnam. One week later, Chrysler opened another dealership in Ho Chi Minh City, intending to market 200 import vehicles per year through the two dealerships. The openings were a part of Chrysler's long-term goal of implementing auto production in Vietnam--something that rivals Ford and Toyota were also pursuing at the time. On September 6, Chrysler received the Vietnamese government's permission to assemble vehicles in Vietnam, and Chrysler constructed a production facility in Dong Nai Province, Southern Vietnam, aiming to manufacture 500 to 1,000 Dodge Dakota pick-up trucks for the Vietnamese market annually.
1998		Already embroiled in a nasty strike, the auto giant General Motors (GM) is forced to announce a recall of 800,000 vehicles due to malfunctioning airbags: over the past two years, the company found that a number of Chevrolet and Pontiac cars displayed "an increased risk of an air bag deployment in a low speed crash or when an object strikes the floor pan." Along with exacerbating GM's strike woes, the air bag snafu highlighted the auto industry's struggle to successfully install the safety devices in their vehicles (air bags had long-since been deemed mandatory elements of cars by federal regulators). Overly responsive sensory systems often caused air bags to inflate at the slightest provocation. In the wake of announcing the recall, GM's stock price tumbled by 1-3/4 points.

July 14

1877

Members of various Baltimore rail unions walk off the job to agitate for higher pay and fairer work conditions. Over the ensuing week, workers managed to seize the local railroad station. Panicky officials for the company responded by calling in the Maryland militia to break the strike. The presence of the militia hardly eased the situation, however, and on July 20, they opened fire on a crowd of strikers, killing nine of the workers. Along with sparking four days of riots in Baltimore, the deaths of the rail strikers unleashed a torrent of labor activity: workers at other rail lines, as well as in other industries, called massive sympathy strikes, some of which were also marred by violence between strikers and State troopers. In the end, "the summer of strikes" had mixed results: while the wave of walkouts helped refuel the once-flagging labor movement, some workers--most notably the strikers at the Baltimore and Ohio company--were cowed into signing agreements that did little, if anything, to help their plight.

July 15

1998

In line with the Pentagon's efforts to scuttle Lockheed Martin's slated mega-merger with fellow defense giant Northrop Grumman, the administration announces plans to bring Lockheed to court on anti-trust charges. The Pentagon's hardball play came a few months after it had first announced its opposition to the proposed $10.7 billion deal. During the intervening time, the government had attempted to work with both Lockheed and Northrop to make their union more palatable. But, despite Lockheed's willingness to divest nearly $1 billion in assets, the Pentagon still felt that the merger would stanch competition in the defense industry. The government also feared that a Lockheed/Northrop union would clog up a disproportionate share of the industry's electronic assets. While Lockheed disputed these charges, they nonetheless wilted at the thought of a court battle with the Pentagon: on July 16, Lockheed officials announced that they were scrapping the multi-billion dollar merger. But even in the wake of this decision, Lockheed refused to cede the point to the government; company chief Vance Coffman downplayed the failed merger, stating that "continuing litigation is not in the best interests of the company and its customers, shareholders, (and) employees."

July 16

1998

Health Care Services Corporation, the giant Medicare subsidiary, agrees to settle a pack of felony charges by paying the federal government roughly $140 million. The Medicare carrier for both Illinois and Michigan, Health Care Services had been charged with eight different counts of felony, including the mishandling, and even shredding, of claims, and various attempts to manipulate and obscure evidence. On top of the hefty civil settlement, the Medicare giant also copped to charges that it had blocked government attempts to audit company records; the price tag for this confession was a mere $4 million. In the wake of these settlements, the government pledged to keep a close watch on Health Care Services and even locked the company into a "strict corporate integrity agreement."

July 17

1916

Congress passes the Federal Farm Loan Act. The legislation called for the creation of a land bank that would dole out loans to farmers who sorely needed funds to preserve and upgrade their crops. The passage of the bill was celebrated by American farm owners, who had long struggled to secure equitable loans from commercial banks.

July 18

1955		Following a visit from Ho Chi Minh and his ministers, the Soviet Union announces that it will grant Hanoi 400 million rubles (about $100 million) in economic aid. On July 7, China had announced that Beijing would extend Hanoi economic aid of 800 million yuan (about $200 million). The July grants from China and the Soviet Union enabled Hanoi to initiate an ambitious industrialization program. In less than 10 years, the North was producing items not yet made in the South. Continued aid from Hanoi's fellow communist nations would sustain North Vietnam in its war against the South Vietnamese and their American allies until 1975, when they defeated the South Vietnamese forces and reunified the country.
1996		Erstwhile car seating manufacturer Johnson Controls, Inc. makes a bid of $1.35 billion to acquire Prince Holding Corporation. For the past 30 years, Prince pioneered the use of electronics in car interiors; one of the company's main claims to fame was grafting lighted mirrors on to car's sun visors. This and other luxury-minded novelties made Prince an attractive partner for Johnson; as company honcho James Keyes noted, Johnson had been looking to expand beyond the world of automotive seating "systems." Viewed in purely fiscal terms, the addition of Prince and its lucrative roster of products promised to fatten Johnson's already healthy coffers. In a statement released shortly after the deal, the companies estimated that their combined sales muscle would skyrocket Johnson's annual sales from $850 million to $6 billion.

July 19

1956		Secretary of State John Foster Dulles announces that the United States is withdrawing its offer of financial aid to Egypt to help with the construction of the Aswan Dam on the Nile River. The action drove Egypt further toward an alliance with the Soviet Union and was a contributing factor to the Suez Crisis later in 1956.
1979		G. William Miller is nominated by President Jimmy Carter to run the beleaguered Treasury Department. A lawyer turned businessman, Miller certainly was qualified to lead the Treasury: he had run a few corporations, including Textron Inc., and also served a stint as the director of the Federal Reserve Bank of Boston. And Miller, who, at the time of his nomination, was working as the Chairman of the Federal Reserve Board, was well acquainted with America's financial maladies. So it was no surprise that Miller passed through the approval process with little fuss; he was sworn in to office on August 6. Whatever his skills and experience, Miller was no match for the economy. By the dawn of 1980 inflation had ballooned to its highest point in 33 years and an increasingly frustrated electorate was primed to oust Carter and his staff from office.

July 20

1894

The militia leaves Chicago, and the "war" between the troops and the Pullman Palace Car Company strikers had left 34 men dead. The ranks and clout of the Pullman strikers had been depleted, and when American Federation of Labor chief Samuel Gompers refused to lend them any substantial support, the rail workers were forced to capitulate to management. In the wake of the settlement, many of the strikers were barred from working in the rail industry.

July 21

1877

Workers in rail-heavy Pittsburgh hit the picket line to stage a sympathy strike with the Baltimore and Ohio railroad strike. Coming but a day after the outbreak of fighting in Maryland, the Pittsburgh strike was all but bound to degenerate into violence. When the state militia entered the scene, Pittsburgh was primed to go up in flames. The workers greeted the troops with a volley of stones; the militia responded with a round of gun fire and Pittsburgh's sympathy strike soon turned into an all out war, during which fires ravaged the surrounding area and forced the militia to beat a temporary retreat. But after a night of a fighting that cost local rail companies some $10 million, the troops regained a modicum of control over the city. While the brutish events in Pittsburgh were repeated in Chicago later that month, the bloodshed did little to aid the Baltimore and Ohio strikers: indeed, the rail workers ultimately signed an agreement that did little to ameliorate their conditions.

July 22

1944

The Bretton Woods conference closes; the delegates had voted to create both the World Bank and International Monetary Fund (IMF), institutions which, in the minds of some historians, sealed America's role as the leader of the post-war economic order. Though U.S. leaders positioned the World Bank and IMF as "financial institutions" shorn of political entanglements, both bodies bore the traces of American influence. The brainchild of American officials, the IMF was charged with stabilizing exchange rates and enforcing the dollar-centric currency standard. Likewise, the World Bank, which was devised to dole out international loans, received good chunks of its fiscal resources from the United States.

July 23

1964

Legislators accede to President Lyndon B. Johnson's request and hand over $947,000 for a melange of literacy, drug rehabilitation and employment programs. While the War on Poverty was borne of high ideals and good intentions, it met with only modest results. Johnson's programs did help precipitate a steady decline in America's poverty rolls between 1962 and 1973; however, the War hardly came close to fulfilling LBJ's grander goals.

July 24

1998

Enron Corporation inks a deal to acquire British-based Wessex Water PLC. For the sum of $2.2 billion--which was reportedly paid in cash--the electricity and gas titan from Houston, Texas made its first move towards creating a global water subsidiary; Wessex Water was slated to be the crowning jewel of the new concern, which would focus on developing water distribution systems and treatment plants in Asia, Europe and Latin America. Enron's eyes were clearly fixed on a handsome payday in the not-too distant future; company chief Kenneth Lay noted the "worldwide water market" was quite lucrative (company figures pegged the field's worth at $300 billion), but sparsely populated.

July 25

1904

Some 25,000 textile workers in Fall River, Massachusetts picket to protest against conditions at the mills. The strike stretched on for most of the late summer, and though they hardly toppled the textile owners, the workers helped force the situation at mills, as well as the plight of child laborers, onto the national stage. The child labor issue, which was symptomatic of a larger phenomenon (in 1900 roughly 250,000 children under the age of 15 worked in mills, factories and mines) proved to be particularly resonant and prompted the formation of the National Child Labor Committee later that year.

July 26

1996

U.S. President Bill Clinton announces that the Department of Energy had handed erstwhile computer giant IBM a computer development contract. For a fee of $93 million, Big Blue's top of team of developers were set to spend two years developing a custom "supercomputer." IBM was slated to build the world's speediest computer, capable of finishing tasks 300 times faster than any previous computing machine. The Department of Energy intended to harness the machine's processing power to conduct nuclear test simulations. Though the concept sounded as though it had been ripped from a Tom Clancy novel (the supercomputer even came complete with a stealthy code name, "DOE Option Blue"), the faux weapons tests were in fact a key plank of the Comprehensive Test Ban Treaty. The deal also called for the supercomputer to be swiftly converted to civilian duty, to perform tasks including the replication of hurricanes and wind tunnels in tests on space ships and airplanes.

July 27

1933

American and European big wigs gathered in London for the World Economic Conference from June 12 to July 27, but the talks yield few tangible results. The Conference stalled on differing opinions on how to revive international trade. European leaders pushed for the stabilization of exchange rates as a measured first step that would initially boost international prices and eventually goose global trade. But with an eye clearly cast on national interests, recently elected American President Franklin Roosevelt balked at this "internationalist" solution. Much to the chagrin of "American internationalists," including Secretary of State Cordell Hull, Roosevelt maintained his refusal to liberalize trade by reining in the dollar throughout the rest of 1933.

July 28

1841

The Senate narrowly passes the Fiscal Bank Bill, an initiative of the embattled Whig party calling for the creation of the Fiscal Bank of the United States, a federal financial institution to be located in the District of Columbia. The Whigs sought the revival of the Second Bank of the United States, the ill-fated institution that Andrew Jackson had putatively killed in the name of states' rights earlier in the 1830s. For a brief spell during the summer of 1841, it looked as though the Whigs would have their day; however, despite the Fiscal Bank Bill passing through the House in early August, the legislation--and its Whig advocates--was doomed to failure. On August 16, President John Tyler, a staunch state supporter, announced that he was vetoing the bill. The legislation bounced back to the Senate, but the Whigs failed to marshal sufficient support to override Tyler's veto.

July 29

1909		The Buick Motor Company acquires the Cadillac Motor Company on behalf of General Motors for $4.5 million.
1932		Duly persuaded by General Douglas MacArthur and his assistant Dwight Eisenhower marshaling troops, tanks and tear gas, the remaining members of the Bonus Army head home. Two months before, the so-called "Bonus Expeditionary Force," a group of some 1,000 World War I veterans seeking cash payments for their veterans' bonus certificates, arrived in Washington, D.C. Most of the marchers were unemployed veterans in desperate financial straits. In June, other veteran groups spontaneously made their way to the nation's capital, swelling the Bonus Marchers to nearly 20,000 strong. Camping in vacant government buildings and in open fields made available by District of Columbia Police Chief Pelham D. Glassford, they demanded passage of the veterans' payment bill introduced by Representative Wright Patman.

July 30

1998

Hercules Inc., a specialty chemicals concern, pays $2.4 billion in cash to acquire industry cohort BetzDearborn Inc. The deal capped off Hercules' quest to snag a large-scale partner who could bolster its product line. Hercules' acquisitive odyssey began in January of 1998, when it marshaled its forces for a hostile takeover of British-based Allied Colloids PLC; however, Ciba Specialty Chemicals topped Hercules' bid and won the Allied sweepstakes. Undeterred, Hercules cut a "modest" deal to acquire a paper chemicals company, Houghton International Inc., before setting its sights on BetzDearborn. Though the acquisition fulfilled Hercules' expansionist goals, and boosted its bottom line (the company's combined revenue in 1997 was reportedly in the $3.5 billion range), BetzDearborn did not come cheap: along with paying the $2.4 billion sticker price, Hercules also agreed to swallow up $700 million of the company's debts. These hefty figures caused more than a few raised eyebrows on Wall Street; as some analysts noted, Hercules had essentially paid $72 a share for the company, a 100 percent markup on BetzDearborn's trading price of 35-7/8.

July 31

1912

Brooklyn, New York's leading conservative economist, Milton Friedman, is born. Friedman picked up a string of degrees from schools including Rutgers University and Columbia University, before taking up a post in the University of Chicago's economics department. An ardent proponent of laissez-faire economics, Friedman readily articulated his faith in a fiscal system that depended less on policy than "natural" forces. Along the way, Friedman became the leading light of the "monetarist" school, which, in the laissez-faire tradition, dismissed the government's role as the supposed engine of business. Rather, Friedman and his fellow monetarists believed in stable interest rates and robust money supplies. Friedman used a number of his publications, including Capitalism and Freedom, (written with his wife, Rose) to further stump against "big government." While Friedman's beliefs aroused considerable criticism from liberals, leftists and even a few government-centric voices on the right, he was honored with the Nobel Prize for Economics in 1976. The award hardly slowed Friedman, who continued his battle against the perceived inanity of the Federal government's fiscal policy.