On this day in economic and financial history...
The longest closure in American stock-market history took place from the end of July to the end of November in 1914. The closure was an attempt to stem the outflow of funds from a European investor class frantically seeking liquidity after the onset of World War I. In a gold-standard era, sudden and rapid stock-market liquidation into gold destined for overseas vaults could have easily sparked a financial panic.
Finally, on Nov. 28, 1914, the New York Stock Exchange -- now NYSE Euronext (UNKNOWN:NYX.DL) -- reopened for limited trading in bonds. Transactions that day were minuscule: Only $644,000 worth of bonds traded on Nov. 28, which is roughly the amount of money Warren Buffett makes while eating a sandwich. Full trading in stocks soon followed on Dec. 14.
Informing the masses
One of the first steam-powered automatic printing presses was sold to the London Times in 1814. It was an impressively advanced machine for the time, capable of making 1,100 impressions per hour. The first edition of the Times printed on these newfangled devices was that of Nov. 28, 1814. The adoption of automated printing presses would soon lead to an explosion of news and literature, which helped drive increased literacy and education throughout the industrializing world.
The Times is now owned by the same entertainment conglomerate that produces the Dow Jones Industrial Average (DJINDICES:^DJI) through its ownership of The Wall Street Journal: News Corp (NASDAQ:FOX). Few modern companies have gained as much from the proliferation of high-speed automated printing presses. Only one company that earns significant revenue from printing presses has ever been a component of the Dow: International Paper (NYSE:IP), which was part of the index from 1956 to 2004. You might think that a paper-focused company would perform poorly in a digitizing world, but that's not the case. International Paper gained 7% in the eight years following its removal. It would have dragged down the Dow, however; the index is up 25% in the same period.
Occasionally, tragedy can give rise to meaningful reform. Such was the case after Boston's Cocoanut Grove nightclub burned to the ground on Nov. 28, 1942, killing 492 people trapped inside. It was the deadliest nightclub fire in American history and the second-deadliest building fire after the 1903 Iroquois Theater fire in Chicago. However, it led to stronger safety standards and practices for buildings around the country, as well as advances in burn treatment.
One of the most immediate results of this tragic fire was that it proved the efficiency of the just-commercialized antibiotic penicillin. Merck (NYSE:MRK), which had developed the first doses, rushed 32 liters of culture liquid to Boston to treat the afflicted. Its success at combating the bacteria that often infect skin grafts led to U.S. government support, and Merck quickly had a big order to fill from the armed forces.
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