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This Day in Business History

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June 1

1495		Friar John Cor records the first known batch of Scotch whiskey in the Exchequer Rolls of Scotland.
1774		The British government orders Port of Boston closed.
1812		President James Madison calls on Congress to declare war on Great Britain, after fiscally minded measures fail to dissuade the British from harassing American ports and ships.
1869		Thomas Edison receives a patent for a voting machine. It was his first patent for a device.
1905		The first world's fair to be held in the Pacific Northwest, the Lewis & Clark Centennial and American Pacific Exposition and Oriental Fair opens in Portland, Oregon.
1911		The Equitable Life Assurance Society of New York issues the first U.S. group insurance policy to the Pantasote Leather Company and its 121 employees.
1917		Henry Leland, founder of the Cadillac Motor Car Company, resigns as company president.
1947		Corning Glass Works publicly announces its development of photosensitive glass.
1961		Regular FM multiplex stereo broadcasting debuts in Schenectady, New York and Chicago, Illinois.

June 2

1912		Carl Laemmle merges his Independent Motion Picture Company with several movie studios, creating Hollywood's first major studio, Universal.
1985		Tobacco titan R.J. Reynolds Industries begins a short but intense courtship of National Brands Inc. (Nabisco). Though the origins of both companies dated back to the late 19th century, R.J. Reynolds and Nabisco seemingly shared few other similarities. Reynolds made its money from cigarettes, a putatively adult-oriented product, while Nabisco mined the more family-minded vein of cookies and crackers. But R.J. Reynolds had been expanding into the food industry since the 1960s and partnering with Nabisco, then the largest producer of packaged snack items, promised to be a most profitable union. After sustained wooing and negotiation, Reynolds and Nabisco joined forces to form a $4.9 billion company. However, Wall Street buyout firm KKR & Co. purchased RJR Nabisco Inc. in 1989 for a record $23 billion. In 1999, RJR Nabisco sold its international tobacco business for nearly $8 billion to Japan Tobacco Inc., and planned to separate its remaining food and domestic tobacco interests.

June 3

1996

An Alabama jury slaps General Motors with $150 million in punitive damages. Though plaintiff Alex Hardy would likely never walk again, the auto giant's general counsel, Thomas Gottschalk, called the decision "the crowning example of a state tort system gone berserk." During the trial, Hardy's legal team presented internal documents in which GM's own engineers conceded that the Chevy Blazer's latch was "substandard" and prone to failure. The documents also revealed that GM had decided against recalling and repairing the defective vehicles because it deemed the $916 million cost for such measures to be too hefty.

June 4

1910

Robert Anderson, the lawyer turned legislator who helped shape the conservative economic policies of President Dwight Eisenhower's second administration, is born in small-town Texas. Anderson spent part of his life hopping from modestly prestigious public posts to relatively lucrative spots in the private sector. After securing a law degree from the University of Texas in 1932, Anderson did an extended stint in the state government, serving first as the assistant attorney general and then the state tax commissioner. By the dawn of the 1940s, Anderson worked in the private sector as the general manager of a Texas-based oil and ranching concern. During the 1950s, he continued to move between business and government, though this time his dalliances with the public sector landed him a seat in President Eisenhower's administration. After working as Eisenhower's secretary of the Navy (1953) and then the secretary of defense (1954), Anderson temporarily retreated to the private world. However, in 1957 Eisenhower again appointed the Texas businessman to run the Treasury, which he headed until Eisenhower left office in 1961.

June 5

1883		John Maynard Keynes, the groundbreaking economist who argued for the benefits of full employment and active government involvement in economic matters, is born in Cambridge, England. Keynes's early career centered on fiscally minded government work, both at home and in India. After the end of World War I, Keynes wrote about various economic issues, publishing all-too prescient attacks on the decision to have heavy reparations imposed on Germany. During this period Keynes also began increasingly critical investigation into then dominant fiscal policies like "laissez-faire" economics. By the early 1930s much of the Western world struggled through dire economic slumps, which reinforced Keynes's belief that governments, rather than "natural" fiscal forces, should be relied upon to steer national finances. Keynes articulated these beliefs in The General Theory of Employment, Interest and Money (1935-1936), a landmark work that informed Roosevelt's interventionist approach to ending the Depression. In 1944, the U.S. government asked Keynes to partake in the Bretton Woods Conference and help draft the blueprint for post-WWII global fiscal order. Whatever his past success in shaping economic policy, Keynes's voice was largely drowned out by American leaders. Two years after the conference, Keynes passed away in Sussex, England.
1947		In one of the most significant speeches of the Cold War, Secretary of State George C. Marshall calls on the United States to assist in the economic recovery of postwar Europe. His speech provided impetus for the Marshall Plan, under which the U.S. sent billions of dollars to Western Europe to rebuild war-torn countries.

June 6

1934

President Franklin Roosevelt signs the Securities Exchange Act, sanctioning a set of regulations designed to rein in the stock swapping shenanigans and duplicitous sales tactics that had riddled the New York Stock Exchange and helped spark the Great Crash of 1929. Along with imposing registration requirements for all exchanges and curbing stock purchases by cash-strapped traders, the legislation created the Securities Exchange Commission (SEC), charged with reviving public faith in the stock market, and monitoring both brokerage houses and investment banks. Few pieces of New Deal legislation played well on Wall Street; the Securities Exchange Act--along with the adjoining Exchange Act passed in 1933--was particularly loathed by traders and investment leaders. Whatever the fiscal and moral impact of the Great Crash, Wall Street had operated almost entirely unfettered since the late 18th century and was not ready to submit to government control. However, the relative restraint of the Securities Exchange Act left traders a fair amount of latitude, and the ensuing appointment of Joseph P. Kennedy, a business-friendly industrialist, to head the SEC eased Wall Street's fears.

June 7

1955

CBS unveils The $64,000 Question, which would fast become the model for a small army of money-minded quiz shows. The $64,000 Question was founded on the simple but alluring premise of doling out fiscal rewards to contestants who were able to answer a series of quiz questions, racking up correct answers until they reached the $64,000 plateau. Originally pegged as a summer fill-in, The $64,000 Question took the postwar public by storm, as millions of viewers tuned in to watch their fellow Americans become rich and famous. However, despite minting celebrities like Joyce Brothers and spawning spin-offs and competitors, The $64,000 Question's run lasted only until 1958 when the FCC discovered that some quiz shows were fixed and that certain contestants were handed answers to questions before the show. The ensuing scandal prompted the television networks to put the kibosh on The $64,000 Question and the rest of the once-mighty quiz shows.

June 8

1998

Nabisco Holdings Corp. announces moves that suggest its profits for 1998 would be well below expectations. Nabisco's stringent fiscal measures included taking a $406 million restructuring charge and slashing 3,100 jobs, or roughly 6 percent of its workforce. Despite the severity of these moves, Nabisco did not dwell on its dwindling bottom line or the consequences for the laid-off workers. Instead, Nabisco officials focused on plans to ramp up the company's marketing budget. Wall Street, however, wasn't swayed by talk of "aggressive" advertising campaigns: market analysts wondered aloud if the company would also be forced to lop off its margarine subsidiaries.

June 9

1943

The Current Tax Payment Act becomes law, paving the path for withholding on income taxes--at least one wartime fiscal policy has had some enduring impact. In particular, the bill popularly known as the "Pay As You Go Tax" allowed American taxpayers to withhold federal income taxes before getting paid their wages or salaries.

June 10

1998

Mitsubishi Motor Manufacturing of America Inc. (MMMA) agrees to settle a nasty and long-festering sexual harassment lawsuit. On behalf of 300 female workers at Mitsubishi's Normal, Illinois plant, the U.S. Equal Employment Opportunity Commission (EEOC) filed suit against the carmaker in the spring of 1996. According to the EEOC, female employees were groped by their male counterparts, and were forced to trade sexual favors for job security. The ensuing settlement, which called for MMMA to pay an unprecedented $34 million to its female workers, left officials for the EEOC feeling guardedly optimistic. EEOC Chairman Paul M. Igasaki noted that MMMA's willingness to pay such a hefty sum was a sign of the company's willingness to "act decisively to stop the serious problem of sexual harassment." The record-setting settlement was the second time that MMMA was forced to make amends for the indiscretions of the Normal plant's male workers, after the $9.5 million settlement of a private suit filed by 29 female plant workers in 1997.

June 11

1998

TV Guide becomes more dominant as its parent company, Rupert Murdoch's News Corp., inks a $2 billion deal to merge the magazine with Tele-Communications Inc. (TCI). By joining forces with TCI, News Corp. primed TV Guide to become a cross-platform force in the rapidly converging communications industry.

June 12

1915

David Rockefeller is born. The youngest of oil baron John D. Rockefeller's five children, David ably continued the family tradition of acquiring vast sums of money. Before 1941, David had obtained degrees from Harvard, the London of School Economics and the University of Chicago. Following a stint in World War II, Rockefeller started working at Chase National Bank, chaired by his uncle, Winthrop W. Aldrich. David enjoyed a fast rise through the ranks at Chase and was named the bank's vice president in 1952. A few years after his promotion, Rockefeller helped engineer the merger between Chase and the Bank of Manhattan Company. Rockefeller didn't stall as the second in command of the newly formed banking conglomerate; by 1969 he was tabbed to serve as both the chairman of the board and CEO of the Chase Manhattan Bank. A well-traveled expert in international finance, Rockefeller's reign at Chase lasted until the dawn of the 1980s.

June 13

1933		U.S. Congress approves the Home Owners Refinancing Act. The legislation, passed during the first 100 days of President Franklin Roosevelt's New Deal administration, was designed to help Depression-stricken citizens refinance their homes. The Act established the HomeOwners Loan Corporation (HOLC), which wielded federal funds against the Depression. Chaired for a time by New Deal stalwart Jesse Holman Jones, it helped finance mortgages and even helped pay for repairs on some people's homes. Though the HOLC lasted but three years, it doled out loans for roughly one million mortgages.
1978		Ford Motor Company chairman Henry Ford II fires Lee Iaccoca from the position of president, ending a bitter personal struggle between the two men.

June 14

1946

Real estate magnate Donald Trump is born in New York. His father Fred Trump was a successful developer in Queens. After his MBA at the Wharton School of Finance, Trump took a job in his father's company. Demonstrating a fast command of the knotty world of development, Trump translated New York's fiscal woes of the 1970s into a pack of tax concessions and prime property purchases. Flush with wealth and burgeoning fame, Trump turned his attention to the world of hotels and high-rise apartments: he renovated war-horses and erected new behemoths, investing his buildings with more than little doses of glitz and flash. Trump continued to pile up wealth during the 1980s--he claimed that his net worth "had been in the billions"--only to suffer a hard fall in the early 1990s: a severe economic downturn, coupled with the passage of retroactive tax laws, sent the superstar developer spiraling into the red. But, deploying his trademark blend of business savvy and bluster, Trump shook off the effects of what he dubbed "the depression of 1990-1993" and soon started rebuilding his fortune.

June 15

1993

John Connally, the fiscally minded lawyer who survived both the Kennedy assassination and the Nixon Administration, dies. Born in Floresville, Texas in 1916, Connally fought in World War II and served as a legislative aide to Lyndon Johnson. Connally was President John F. Kennedy's Secretary of the Navy in 1961, then left to mount a successful bid to become Governor of Texas. In 1963, Connally joined Kennedy in what should have been a triumphant motorcade through Dallas, but the President was assassinated and Connally was wounded. Connally eventually recovered and returned to run Texas. In 1969, Connally, a life-long Democrat, signed up to serve in Richard Nixon's Republican Administration; two years later, the former Texas Governor won the nod as the 61st Secretary of the Treasury. However, Connally's tenure in the Treasury was marked by struggles to guide the nation's increasingly troubled finances through the early 1970s. In 1974, Connally was accused of accepting a $10,000 bribe from the American Milk Producers Company; in return for the money, Connally supposedly used his influence to push through increased "price supports" for milk producers. Though he was acquitted of the charges in 1975, Connally's latter years were marked by adversity: along with a failed stab at the Presidency, Connally made an ultimately ruinous attempt to cash in on Texas' oil and real estate businesses.

June 16

1998

A Brooklyn jury tosses out a lawsuit filed against computing giant Compaq and its subsidiary Digital Equipment Corp. (DEC) by nine people claiming that DEC's keyboards had caused them "repetitive stress injuries." The plaintiffs sought $10 million in damages. While the verdict may have been a disappointment for the plaintiffs, it was just another day in court for DEC and the embattled keyboard industry. The increasing prominence of computers in the workplace had putatively caused everything from niggling pains to more severe injuries, thus inspiring a rash of suits against the keyboard industry, but the Brooklyn jury didn't quite see the connection between the keyboards and the workers' ailments, which inspired sighs of relief and giddy comments from DEC's new owners. But, while the jury may have exonerated Compaq and DEC, their ruling likely did little to quell the debate over injuries caused by extensive use of computer keyboards.

June 17

1930

President Herbert Hoover signs the controversial Smoot-Hawley Tariff, which raised duties on imports to great heights in hopes of preserving the domestic market for American-made goods. Along with forwarding the protectionist cause, the legislation also embodied Hoover's belief that a revived American economy would aid global fiscal health. Smoot-Hawley was a fast hit with protectionist forces still licking their wounds from the Great Crash of 1929. However, economists and international business leaders blasted Smoot-Hawley as an overly aggressive bill that would hurt foreign markets; a month before Hoover signed the bill, over one thousand economists signed a petition that protested the tariff. Fears that foreign governments would view Smoot-Hawley as a bellicose bill proved to be all too well-founded: a raft of foreign nations retaliated by enacting their own hefty tariffs, as well as quotas on imports and other measures that not only made international trade all that more difficult, but that also exacerbated America's fiscal woes.

June 18

1998

"Traditional" media giant Walt Disney Co. enters the web development fray by snapping up a minority stake in Infoseek Corp. In return for 43% interest in Infoseek, Disney handed over control of Starwave Corp., a new media company which produces ESPN.com, and $70 million in cash. While other portal companies like Yahoo had yet to yield profit, Disney honcho Michael Eisner believed acquiring Infoseek left Disney "well-positioned to take advantage" of the medium as it blossomed into "commercial maturity." The Disney and Infoseek web teams went back to the lab to give their portal a thorough overhaul. The revised site, with new graphics, snazzy functionality and the catchy name Go.com was launched with full hype and marketing hoopla in 1999.

June 19

1934

U.S. Congress passes the Silver Purchase Act. Along with nationalizing silver stocks, the bill charged the President with increasing the Treasury's silver supply. Though silver was hardly about to supplant the gold standard, the legislation called for silver to equal one-third of the Treasury's gold holdings. While to some the Silver Act was little more than another blip during Franklin Roosevelt's turbulent first term, the passage of the bill marked a rare victory for the long-suffering silver movement, which had pushed for the adoption of metal since the late 19th century.

Nathanael West's novel A Cool Million, a satire of rags-to-riches morality tales, is published.

June 20

1931		President Herbert Hoover urges leaders of various nations to suspend payment of international debts and reparations for the next year. The moratorium was intended as a precautionary measure: with the recent demise of a major Austrian bank, Hoover feared that the international economy was on the brink of a slump that would only worsen the United States' woes. The international community readily acceded to Hoover's wishes and by July the freeze was in effect. Though Hoover's moratorium initially helped restore confidence in the world's various markets and economies, its healing powers were short-lived: that fall, Great Britain abandoned the global economy, shattering most nations' fragile faith in the international economy.
1977		In Prudhoe Bay, crude oil from America's largest oil field begins flowing south down the trans-Alaska pipeline to the port of Valdez, Alaska. The steel pipeline, 48 inches in diameter, winds through 799 miles of Alaskan wilderness, crossing three Arctic mountain ranges and hundreds of rivers and streams. Environmentalists fought to prevent its construction, saying it would destroy a pristine ecosystem, but they were ultimately overruled by Congress, who saw it as a way of lessening America's dependence on foreign oil. The trans-Alaska pipeline was the world's largest privately funded construction project to that date, costing $8 billion and taking three years to build.

June 21

1877

Ten members of the "Molly Maguires" are hung for murder. A strident band of anthracite miners from Pennsylvania, the "Mollies" had formed a few years earlier to improve work conditions for coal miners, who received scant pay for toiling long hours in hot and hazardous conditions. The courts and other official channels offered the miners little refuge: mine operators used well-placed bribes to skirt around labor regulations and hold government inspectors at bay. The Mollies, who borrowed their nom de guerre from a radical Irish mining organization, did not use official channels to effect change. Rather, like their Irish forebearers, they donned women's clothes and waged a campaign of violence and intimidation against the mine bosses. At first, the Mollies' brutal tactics had their intended impact and struck great fear into the hearts of Eastern Pennsylvania's mine officials. But management soon fired back and hired an operative from the anti-union Pinkerton Detective Agency to infiltrate the sect. The Pinkerton op was able to marshal enough evidence to bring 20 members to trial; though some labor historians still dispute the outcome of the case, ten of the Molly Maguires were nonetheless found guilty and executed. Duly cowed by this turn of events, the remaining members of the Molly Maguires swiftly disbanded their organization.

June 22

1775

Congress authorizes issuance of some $2 million in bills of credit to help the Revolution. Though not the colonies' first dalliance with paper notes--the Massachusetts Bay colony issued its own bills in 1690--the large scale distribution of the Revolutionary currency was fairly new ground for America. Moreover, the bills, known at the time as "Continentals," notably lacked the then de rigeur rendering of the British king; instead, some of the notes featured likenesses of Revolutionary soldiers and the inscription "The United Colonies." The Continentals proved to be a poor economic instrument: backed by nothing more than the promise of "future tax revenues" and prey to rampant inflation, the notes ultimately had little fiscal value.Thus, the Continental failed and left the young nation saddled with a hefty war debt. Duly frustrated by the experience with Continental Currency, America resisted the urge to issue new paper notes until the dawn of the Civil War.

June 23

1810

German-born merchant John Jacob Astor establishes the Pacific Fur Company, strengthening his grip on America's burgeoning fur industry. The founding of Pacific Fur came but two years after Astor incorporated the American Fur Company. A hard-driving businessman, Astor had already established a toe-hold in the industry in the late 1700s; with the founding of American Fur, he became one of the kings of the fur trade. American Fur quickly established choke holds over the Missouri River valley, as well as the Rocky Mountains and Great Lakes regions, but Astor wanted to conquer the Pacific Northwest. In 1811, Astor used Pacific Fur to found the village-cum-trading post of Astoria, which was designed to facilitate the fur maven's exchanges with China. However, Astor's hopes for Astoria were soon dashed: the village, nestled near the Columbia River, was a casualty of the War of 1812. The loss hardly deterred Astor, who continued to rule the fur trade until 1834, when he left the business to attend to his fortune.

June 24

1998

In a move to return to the local phone service game, AT&T buys cable heavyweight Tele-Communications Inc. for a reported $48 billion. The deal, inked a mere ten days after the two companies opened negotiations, gave AT&T cable connections in roughly 33 million homes across the United States. This was a stunning reversal of fortune for the phone industry king, which, a decade back, had been forced to relinquish its choke hold over local phone lines and divest itself of its regional service providers (the "Baby Bells"). The acquisition of Tele-Communications also boosted AT&T's status in the booming Internet industry, and in the long-awaited convergence of telecommunications channels. For cash-strapped Tele-Communications, the merger would ease the debts company chief John Malone piled up in his quest to make his company the king of convergence.

June 25

1921

Erstwhile labor leader Samuel Gompers seizes his 40th term as president of the American Federation of Labor (AFL). This was a heady achievement for Gompers, an English immigrant who spent much of his childhood working alongside his father in New York's cigar shops. Gompers became involved in the burgeoning labor movement, and rose to prominence in the cigar makers' union. In 1886, Gompers spearheaded the cigar union's departure from the Knights of Labor, opting instead to form the American Federation of Labor. As chief of the AFL, Gompers eschewed labor's left leaning tendencies in favor of labor action--namely strikes and boycotts--tempered by responsibility and reason; he focused on economic goals and hailed binding contracts, rather than overt political affiliations, as the key to improving the lives of workers. However, Gompers' policies sometimes seemed ineffectual in the face of labor's struggles; his reluctance to lend significant fiscal or political support to the Pullman Car strike of 1894 helped derail the train workers' battle for wages and rights. In 1895, the AFL's rank and file, swayed by socialist sentiment, ousted Gompers. That defeat proved temporary: Gompers regained the reins of the AFL in 1896 and didn't let go until his death in 1924.

June 26

1948		In response to the Soviet blockade of land routes into West Berlin, the United States begins a massive airlift of food, water, and medicine to the citizens of the besieged city. For nearly a year, supplies from American planes sustained the over 2 million people in West Berlin.
1998		Struggling electrical giant AMP Inc. forces 22,000 employees to take "mandatory furloughs" instead of dumping a chunk of its workforce. Along with this respite--in the form of either a week without pay or a "week-long holiday"--AMP also announced that 2,200 of its workers were volunteering for early retirement. Despite its status as international leader in the field of electrical connections, AMP's sales had been hit hard by the recent Asian economic crisis. Company chief William Hudson blamed "higher than normal pricing pressures in the marketplace and a strong dollar, which led to losses in foreign currency translations." The move marked the second time in as many months that AMP mandated furloughs in hopes of soothing its various ailments. Despite the efforts to avoid layoffs, AMP laid off nearly 4,000 employees in 1998, and while most jobs were replaced within a few months, an additional 15 percent of AMP's workforce (including the jobs that were replaced from the first round of layoffs) was eliminated when Tyco International Ltd bought out AMP. That same April, AMP's chairman and CEO Robert Ripp resigned, becoming yet another casualty of Tyco's buyout.

June 27

1905

The Industrial Workers of the World (IWW) is formally consecrated in Chicago. Organized by industrial labor's more militant members, including Eugene Debs, William D. "Big Bill" Haywood and the long-stymied Socialist segment of the American Federation of Labor (AFL), the IWW tilted at the formidable windmills of industrial capitalism and its caste-like wage system. IWW leaders sought to build a massive union that, rather than give in to labor's nativist tendencies, built its numbers by pooling members from all races and ethnicities. Once the IWW became large enough, its leaders planned to call an apocalyptic strike to effectively fell the capitalist system. Though the IWW did score some key victories, including leading a successful strike by textile workers in Lawrence, Massachusetts (1912), it also drew heavy fire from business leaders, government officials and conservative sectors of the union movement alike.

June 28

1894		U.S. Congress passes a bill that called for the regular observance of Labor Day in the District of Columbia and the territories.
1919		Germany signs the Treaty of Versailles with the Allies, officially ending World War I, but the English economist John Maynard Keynes, who had attended the peace conference, left in protest of the treaty. He was one of the most outspoken critics of the punitive agreement. In The Economic Consequences of the Peace published in December 1919, Keynes predicted that the stiff war reparations and other harsh terms imposed on Germany by the treaty would lead to the financial collapse of the country, which in turn would have serious economic and political repercussions on Europe and the world.

June 29

1906

The Hepburn Act of 1906 gives teeth to the previously ineffectual Interstate Commerce Commission (ICC), despite Congress dragging its heels and tacking on several self-serving "amendments" before agreeing to pass the bill. The Hepburn Act greatly enlarged the ICC's jurisdiction and forbade railroads to increase rates without its approval. By giving the ICC the authority to set maximum rates, President Theodore Roosevelt effectively created the first of the government's regulatory commissions and thus cleared a milestone on the long road to the modern social-service state. By using the same tactics of aggressive leadership, Roosevelt in 1906 also obtained passage of a Meat Inspection Act and a Pure Food and Drug Act. Passage of the former was aided by the publication of Upton Sinclair's famous novel, The Jungle (1906), which revealed in ghastly detail the unsanitary conditions of the Chicago stockyards and meat-packing plants.

June 30

1957

The U.S. Federal Government pulls the plug permnanently on the Reconstruction Finance Corporation (RFC), one of the remaining vestiges of the Great Depression. The RFC was formed in 1931, the brainchild of President Hoover, who felt that a revived private sector could best lead America back to prosperity, and it was charged with propping up the nation's struggling banks and businesses. The RFC was given license to hand out $300 million in credit to ailing financial institutions. However, the agency truly blossomed when Franklin Roosevelt ascended to the Presidency. Under Roosevelt's lead, the RFC helped drive the New Deal recovery program and became a key player during World War II, making disbursements to America's burgeoning defense industry, as well as cash-strapped foreign governments. But by 1951, rumors of impropriety in the agency spread in Washington, leading to a congressional probe that revealed RFC corruption. These findings coupled with President Eisenhower's push to curtail the government's role in the economy signaled the end for the agency. In 1953 Eisenhower signed the RFC Liquidation Act into law, stripping the organization of its duties as a lender.