This Old World
by Ethan Haskel (Cormend@aol.com)
Baltimore, MD (May 19, 1999) -- My eleven-year-old son was playing around the rafters of our garage last weekend (doing what kids shouldn't be doing but do anyway) when he brought me an old, dusty time capsule. Stapled to one of the beams, and brought earthward by a rusty rake, was a copy of The Baltimore Sun dated Thursday morning, February 21, 1946.
Someone was trying to leave a message to posterity, so I couldn't just throw the thing out, although that's definitely what my wife suggested. The paper was brown, crumbling, folded. It all but disintegrated as I pulled the decomposing sheaths apart, with many of the tattered pieces lost forever in the gentle spring breeze. Barred from coming anywhere near the inside of our house with the paper remnants, I spent an hour or so on my back porch, taking a little historical journey to a world far, far away.
The Sun was quite an influential paper in its day. As chronicled in No Ordinary Time, Doris Kearns Goodwin's Pulitzer Prize-winning account of the Roosevelt presidency, it was one of a handful of papers that Franklin read religiously each and every morning. Unfortunately, most of the "hard news" stories in my ragged edition crumbled before I could read them.
A few news items were rescued. Yugoslavia, then as now, was a particular hot spot. Violence broke out around the American embassy. Tito seemed to represent the Milosevic of his day, inciting further anti-American actions.
The basic themes of American life haven't seemed to change much over the years. The populace needs to stay informed. Newspapers and, in particular, radio were the medium of 1946, with the complete radio programming posted daily. Today, television listings reign supreme. Undoubtedly, the news of tomorrow will be distributed primarily through our personal computers.
People need to be entertained. The ads for motion pictures were as prominent as they are now, although the theatres have moved from the stately downtown Hippodrome (with floor shows) to the suburban multiplex. Alcohol ads were conspicuous. Fifty years ago, hard liquor seemed to be the rage, with nary a mention of beer or wine.
While bigotry certainly has not disappeared, it was quite shocking to see it displayed so openly then. The real estate classified section featured ad after ad for "colored apartments." Many help-wanted ads sought "young ladies -- white." While we've come a long way in this department, we still have a ways to go.
Inevitably, I discovered the Sun's finance section. I couldn't help but notice how relatively obscure the section was -- no more than one page in all, including the entire stock listings. One of the few articles, relegated to a small footnote in the midst of the stock tables, carried the tiny headline "Stock Market Tumbles Third Day in a Row." It noted that the "leading stocks" lost 1 to 7 points the previous day. "While the pace of the decline slowed appreciably from Tuesday's precipitate drop, the downturn has wiped out nearly 35 per cent of the average gain made by stocks in the climb to 15-year peaks since the Japanese surrendered last August." The Dow Jones Industrial Average had dropped to 192, a loss of over 5% in three trading days. Trading volume? About 2,100,000 shares, representing a fraction of one percent of daily activity today.
The relative obscurity of yesteryear's financial pages contrasts dramatically with today's daily ten-page Sun fold-out business section and demonstrates how increasingly Wall Street has become an integral part of Main Street. It's gotten to the point now that my morning news radio station routinely informs me of the direction of the Standard and Poor's 500 futures contracts, indicating how the markets are likely to open. In 1999, a market fall of the magnitude seen in that third week of February 1946 would have engendered bold front-page headlines of doom.
Are there any lessons to be found for us modern-day Workshop historians? Probably what impressed me most with the financial section were those stock tables. I didn't recognize probably 90% of the companies listed. Many of these corporations undoubtedly went bankrupt. Some merged with others or were gradually transformed into companies we would recognize today. The so-called "blue chip" issues of the day, however, were all still clearly identifiable and, for the most part, are still going gangbusters.
AT&T (NYSE: T), Eastman Kodak (NYSE: EK), Caterpillar Tractor (NYSE: CAT), General Motors (NYSE: GM), Sears (NYSE: S), and Philip Morris (NYSE: MO) are all very much alive and kicking, despite that big sell-off one winter's day over a half century ago. A long-term buyer of these issues would be worth quite more than a pretty penny today. Although women's hemlines may inch upwards and back down again, investing in large, quality companies never seems to go out of style.
Beating the S&P year-to-date returns (as of 05-18-99):
Schlumberger (NYSE: SLB) +30.2% Kimberly-Clark (NYSE: KMB) +13.0% Campbell Soup (NYSE: CPB) -23.4% Ford Motor Co. (NYSE: F) +0.9% Bank of America (NYSE: BAC) +14.3% Beating the S&P +7.0% S&P 500 +8.8% Compound Annual Growth Rate from 1-2-87: Beating the S&P +20.7% S&P 500 +18.1% $10,000 invested on 1-2-87 now equals: Beating the S&P $102,100 S&P 500 $77,500