History Is Made on the Last Day of the Year
On this day in economic and financial history...
It's that time of year again. The ball drops in Times Square, the fireworks go off, and the world greets another year with a mixture of excitement and uncertainty. Dec. 31 also happens to be a very productive day for the world's businesses, so let's take a quick look at some of the more interesting events that have taken place on the last day of the year throughout history.
Watch the ball drop
The very first ball drop in Times Square took place on Dec. 31, 1907 -- that is, until the very last second, when it became 1908. The New York Times reported on the event:
The flashlight on top of The Times Building kept reminding people that up there at a second after midnight the blazing electric ball would fall. Consequently as midnight approached the crowds drifted up Broadway, adding to those already in Times Square. The crowds from the theatres swelled the waiting multitudes near Broadway and Forty-Second Street.
At ten minutes to midnight the whistles on every boiler in Manhattan, the Bronx, Brooklyn, and the waters thereof began to screech. Tens of thousands stood watching the electric ball. And then --
That's thinking long-term
Although few of those Times Square revelers would have had it, some of their British counterparts were surely enjoying pints of Guinness as the new year dawned. Guinness' history can be traced back to Dec. 31, 1759, when Arthur Guinness signed a 9,000-year lease for the St. James' Gate Brewery in Ireland. The 45-pound annual rent agreed to at the time would be worth about 6,000 pounds today, which is no small sum for pre-industrial Britain. However, since that lease never increased with inflation, it looks like a fantastic bargain today.
Guinness was independent for nearly all of its history, but in 1997 the brewer merged with Grand Metropolitan to become Diageo . Today, Guinness is part of a deep roster of alcoholic brands in beer, wine, and spirits, but the world-renowned stout with the sinking bubbles still makes up more than half of Diageo's beer sales. Beer, however, only accounts for about a sixth of Diageo's total beverage sales by volume.
Get out of jail free, patently
Monopoly has been a favorite board game of budding capitalists for decades, but the classic design actually earned a patent on Dec. 31, 1935. This patent, awarded to Charles B. Darrow, contained a full description of the game's features and would be instantly familiar to anyone who has ever landed on Park Place after another player built a hotel on the property.
This game is now viewed as an evolution of earlier games, notably The Landlord's Game, which was patented in 1904 and which contains striking similarities to the later Monopoly. Despite these similarities, Darrow's version never mentions The Landlord's Game, which has more or less faded into obscurity. Monopoly has gone through many updates and stylistic alterations and is now owned by Hasbro , which has expanded the brand into many new directions.
The original monopoly
The British East India Company was first chartered on Dec. 31, 1600 as "Governor and Company of Merchants of London trading with the East Indies." This company grew into one of the world's earliest megacorporations, thanks to a 15-year monopoly on lucrative trade routes. The Company initially struggled against the Dutch East India Company, which is now recognized as the largest company in history by market cap, but it continued to grow in spite of its obstacles.
By midcentury, the Brits had gained a foothold in India, and the Company managed to survive piracy and war to thrive in the Industrial Revolution. It even survived the loss of the American colonies, but an 1857 rebellion in India marked the Company's downfall. The Company dissolved in 1874, leaving behind a legacy of nearly two centuries of British trade domination and a lasting cultural influence on India, which remained the crown jewel of British territories for decades afterward.
The hottest mail on the 'net
Microsoft didn't wait long to make a splash on the World Wide Web. On Dec. 31, 1997, the software giant bought Hotmail, one of the early Internet's most popular free webmail services. The deal, estimated at $400 million, added about 9 million Hotmail users to Microsoft's struggling MSN operations.
Fast-forward to 2012, and Hotmail's 350 million users are no longer Hotmail users. Instead, they now access their email through Outlook.com, which is one part of Microsoft's efforts to unify its productivity services under the familiar Microsoft Office brands. Despite having lost the webmail crown to Google's Gmail -- which claims 425 million users -- Hotmail was still the most-visited webmail site on the Internet before its changeover, according to ComScore, with 324 million monthly visits versus 278 million for Gmail.
Saying goodbye to a legendary Canal
The Stars and Stripes were lowered from the flagpoles overlooking the Panama Canal on Dec. 31, 1999. The canal, one of modern engineering's greatest marvels since its opening in 1914, had been leased by the United States in perpetuity after the U.S. aided Panama in a war for independence against Columbia. After years of protests, President Jimmy Carter signed new treaties that would transfer the canal back to Panamanian hands in 1999.
Construction of a canal through the narrowest strip of land in the Western Hemisphere had been considered since the 1500s, but the first real effort was not made until 1880, when the French builders of the Suez Canal attempted to dig through Panama. This project was undone by tropical diseases that claimed the lives of thousands, and the rights were sold to the U.S. in 1902. Between 1904 and 1913, 56,000 men worked on the canal, and more than 5,600 lost their lives. The $375 million cost of the canal would have amounted to about 1% of U.S. GDP in 1913.
The Panama Canal has ushered more than 900,000 ships through its locks since 1914, but the growing size of modern commercial ships has made "Panamax" size a restriction for many shipbuilders. The Panamanian people, recognizing the need to accommodate the many post-Panamax vessels that now cruise the open oceans, approved a $5.3 billion expansion project in 2006 that will create a new set of locks in addition to the current ones. This will increase the maximum allowable size from 950 feet in length, 106 feet in width, and 39 feet in depth to 1,400 feet in length, 180 feet in width, and 60 feet in depth.
Up, up, and away!
The Boeing Stratoliner made its first flight on Dec. 31, 1938. This was the luxury liner of early passenger air-transport. Each plane had a name like Rainbow, Flying Cloud, or Apache, and only 10 were produced. The Stratoliner pioneered high-altitude flight by cruising above 20,000 feet, and it was also the first four-engined aircraft in regular service. Boeing's aircraft production soon shifted to wartime purposes, and it would not produce another commercial airliner again until the 377 Stratocruiser in 1947.
Big banks get bigger
On Dec. 31, 2000, the merger of J. P. Morgan and Chase Manhattan into JPMorgan Chase was completed. This merger came barely a year after the last vestiges of Glass-Steagall were torn down, and it augmented Chase's position as the third-largest bank by assets in the United States. The deal, estimated at about $29 billion, was fast-tracked through the regulatory approval process; it was offered in September of the same year.
This was not even close to the largest banking merger of the era. The earlier Citigroup merger between Citicorp and Travelers -- which wound up being spun off not long afterward -- was valued at more than twice the JPMorgan deal's size. Nor has the merger been especially profitable to shareholders: In the decade after the deal closed, JPMorgan Chase's total gain, including dividends, was only 33% -- but that still beats the 8% gain of the Dow Jones Industrial Average , which JPMorgan has been part of since 2003.
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The article History Is Made on the Last Day of the Year originally appeared on Fool.com.Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more news and insights. The Motley Fool owns shares of Citigroup Inc , Google, Hasbro, JPMorgan Chase & Co., and Microsoft. Motley Fool newsletter services recommend Diageo plc (ADR), Google, Hasbro, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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