On this day in economic and business history...
JPMorgan Chase (NYSE: JPM ) was already one of the world's largest banks when it merged with Bank One on July 1, 2004. However, folding the Chicago-based bank into JPMorgan's already substantial operations brought one very important change to the banking world: It put Bank One CEO Jamie Dimon in position to take over JPMorgan.
Dimon's steady hand at the helm of a once-floundering bank -- Bank One suffered from a great deal of technological incompatibility as a result of mashing so many smaller banks together at a rather rapid pace -- helped right Bank One, establishing his reputation as one of the industry's best executives. Dimon ascended to the corner office at JPMorgan within two years of the merger, by which point the bank's total assets had swelled beyond $1 trillion. That year, he earned the first of four (and counting) placements on TIME's list of the world's 100 most influential people. A year later, in 2007, Dimon became a director of the New York Federal Reserve.
Dimon steered JPMorgan through the financial crisis in a buyer's mind-set, acquiring both Bear Stearns and Washington Mutual during the early days of the crash. As a result of his generally cautious (but acquisitive) stewardship, JPMorgan exited the financial crisis as the largest bank by assets in the United States. Dimon has often been held up as the best CEO in a floundering industry, but Fool contributor Morgan Housel finds that this praise rings somewhat false:
Since Dimon became CEO in late 2005, JPMorgan shares have returned -7%, including dividends. Dimon was paid $148.9 million during that time, according to S&P Capital IQ. An S&P 500 index fund returned 14.9% over the same period, and the average CEO earned a cumulative $71.9 million, according to Forbes. ...
Of course, shareholder returns aren't always the best way to measure CEO performance. But even judged by internal metrics the results are mixed. JPMorgan has posted an average return on assets -- arguably the most complete measure of a bank's performance -- of 0.8% under Dimon's lead. ... A collection of the 50 largest public banks shows the group's average return on assets since 2006 is 0.8%. Sort them in order, and JPMorgan ranks as the 31st best. Dimon may be one of the industry's best CEOs in people's minds, but on paper, he's distinctly middle of the pack.
Another banking match made in heaven
JPMorgan wasn't the only bank to get bigger on July 1: Bank of New York Mellon (NYSE: BK ) was formed by the merger of BNY and Mellon on July 1, 2007. Popularly known as BNY Mellon, the new financial company combined deep historical roots and immense financial management assets.
The Bank of New York was both the first bank in New York City and the oldest continuously traded company in the United States. It also owns the assets of the First Bank of the United States, which was America's first brief experiment in central banking. Mellon Financial, though not quite as old, had over a century of its own history, which included the financing of three different past and present Dow Jones Industrial Average (DJINDICES: ^DJI ) components (Alcoa, Bethlehem Steel, and Westinghouse Electric). The two banks were also leaders in "custodial banking," which is essentially the servicing of financial transactions and other related asset oversight. Together, they became the largest asset servicer in the world.
Today, BNY Mellon has over $26 trillion in assets under its custody, nearly twice the amount overseen by its next-largest competitor.
The kiss of success
Hershey first began to produce its trademark Kisses on July 1, 1907. Though Hershey itself won't confirm it, the popular theory of this candy's naming stems from the "kissing" sound of the depositing machinery on conveyor belts. It was Hershey's fourth year in operation at its groundbreaking Pennsylvania plant, and the Kisses were a great way for founder Milton S. Hershey to spread the love of chocolate in a bite-sized package. The little chocolates became a big hit, and Hershey now produces over 80 million Kisses each day at three different plants in the United States. Thanks to Hershey's innovative mass-production methods, the world's love of chocolate has since exploded into an industry with over $83 billion in annual global sales.
Opening the advertising floodgates
The first television commercial in history, for Bulova watches, aired during a baseball game between the Brooklyn Dodgers and the Philadelphia Phillies on July 1, 1941. Television had been an experimental technology since the late 1920s, but it wasn't until the FCC began issuing licenses in 1941 that broadcasters were finally allowed to recoup the costs of the broadcast by selling time to advertisers. The ten-second ad cost Bulova a paltry $9 (roughly $150 today). Since it only reached 4,000 viewers, the ad's low cost wasn't too unusual.
Today, TV advertising has become an indispensable element of the worldwide advertising industry. American broadcasters alone are expected to sell $66.4 billion worth of advertising in 2013, which is a big (but not dominant) chunk of the $350 billion spent on TV commercials around the world. The single largest advertiser on local American TV stations is Ford (NYSE: F ) , which frequently spends close to $100 million on local commercial time every quarter, according to Kantar Media. Other automakers are close behind -- the auto industry combines to spend about twice as much on local TV advertising as either the communications or restaurant industries. When you include auto dealers and auto insurers in the tally, efforts to sell Americans on driving usually costs more than $1 billion every three months. This is just for local ads, which account for only 20% of all the money spent on TV advertising.
Walk(man) like an Egyptian
Before the iPod, there was the Sony (NYSE: SNE ) Walkman, the first successful portable cassette player. Released on July 1, 1979, the iconic blue-and-silver first-generation device came with two headphone jacks so a listener could share their favorite tunes with a friend. It was the result of a chance suggestion from Sony chairman Masaru Ibuka, who was every bit the world traveler you might expect a major multinational executive to be, and who wanted a truly portable music player for those trips. Engineers modified an existing Sony product between Ibuka's request and his next long flight, and the prototype so impressed the executive that development began quickly once Ibuka pushed through internal objections by saying "Don't you think a stereo cassette player that you can listen to while walking around is a good idea?"
History.com takes a look at the rush to completion.
After a breakneck development phase of only four months, Sony engineers had a reliable product ready for market at 30,000 Yen (approximately $150 in 1979) and available before the start of summer vacation for Japanese students -- both critical targets established at the outset of development. The initial production run of 30,000 units looked to be too ambitious after one month of lackluster sales (only 3,000 were sold in July 1979). But after an innovative consumer-marketing campaign in which Sony representatives simply approached pedestrians on the streets of Tokyo and gave them a chance to listen to the Walkman, the product took off, selling out available stocks before the end of August and signaling the beginning of one of Sony's greatest success stories.
At first marketed as "Sound-About" in the United States and "Stowaway" in Britain, the Walkman became the Walkman after company execs decided to riff on the Sony Pressman cassette recorder their engineers had based the device on in the first place. By 1983, cassettes were outselling vinyl records for the first time, largely because of the popularity of Sony's portable player. Three years later, "Walkman" became part of the Oxford English Dictionary. Sony had sold 200 million Walkmans by the end of its hugely successful run, paving the way for the iPod over two decades later.