On this day in economic and financial history...
December might just be Boeing's (NYSE:BA) favorite month. Many aviation milestones in December have helped build the company into the global powerhouse it has become, including both the first flight in history, the maiden voyage of the legendary Douglas DC-3, Boeing's acquisition of former rival Rockwell International, and the first flight of Boeing's next-generation passenger jet, the 787 Dreamliner. It should come as no surprise, then, that Boeing celebrates another milestone in December, reached on Dec. 20, 1957: the first flight of the prototype 707. This was the aircraft that started the Jet Age.
An article in Time waxed optimistic about the jet's transformative potential a year after its first successful flight, and shortly afterward Pan Am became the first airline to put the 707s into service:
The jet will fly nearly twice as fast and nearly twice as high as the present piston planes, pack 40 times the power in its turbine engines. It will shrink the world by 40%, making no spot on earth more than a day's distance from a jet airport.
Manhattan businessmen will be able to commute to San Francisco for lunch, be back home after an afternoon's work in time for bed. Weekend flights to London and Paris will be as easy -- perhaps easier -- than weekend drives to the country in jam-packed Sunday traffic.
These are true statements, although such a daily commute might quickly become exhausting. The flight time for a nonstop trip between John F. Kennedy International to San Francisco International is just more than five hours, which allows that businessman to get to the West Coast before noon if his flight leaves at nine. A flight from JFK to Heathrow in London is barely six hours -- but you'll still have to work your way through customs.
The 707 led to rapid developments of the global airport infrastructure, including all manner of technological and comfort improvements for travelers and air traffic controllers. The first 707s were powered by four J57 turbojets made by United Technologies (NYSE:RTX) subsidiary Pratt and Whitney -- the same design used in the legendary Boeing-built B-52 Stratofortress. Boeing produced 878 commercial 707s between 1958 and 1978, with more than 100 military variants pushing the total past 1,000 before the line was shut down for good in 1994.
Birth of the American (Industrial) Revolution
The first American cotton mill started operating in Pawtucket, R.I., on Dec. 20, 1790. The mill is now credited as the site where the Industrial Revolution first took hold in the New World, and its creator, Samuel Slater, was later dubbed "The Father of the American Industrial Revolution" by President Andrew Jackson.
Slater, formerly a superintendent in one of Britain's most innovative cotton mills, had emigrated the previous year, defying a mandate that kept British textile workers from bringing valuable knowledge outside of the country. His mill initially used workers on a treadmill to generate the power necessary to drive the machines that turned raw cotton into thread -- probably one of the few times in history that a treadmill has produced anything besides sweat and boredom. Within a year, Slater upgraded the mill to run on a water wheel. His early success allowed him to expand, and in 1803 Slater and his brother built an entire village in Rhode Island to operate a newer, better mill.
Slater's British-sourced designs were quickly surpassed by enterprising Yankees, and the Industrial Revolution continued to be driven by textiles for the first half of the 19th century. From the time Slater opened his first mill to the time of his death in 1835, America's cotton production leapt from a mere 3,135 bales to 1,060,711 bales, with each bale weighing 500 pounds.
Born on the bayou
America's booming textile industry suddenly had a much larger market on Dec. 20, 1803, when the Louisiana Territory was formally transferred from France to the United States. With the stroke of a pen, 828,000 square miles of territory changed hands for only $15 million, or less than $0.42 per acre. In modern terms, that's about $233 million in all.
The Louisiana Purchase brought the territory of about 13 new states into the young country. Two centuries after the territory became part of the United States, these 13 states contributed almost $1.2 trillion to the national GDP. A 500,000% return on investment is pretty impressive, even after 200 years.
High frequency origins
The New York Stock Exchange (NYSE:NYX.DL) got by with phone calls and paper records for most of its history, but there were more than a few speedbumps along the way. After World War II, however, rising interest in the stock market threatened to overwhelm the antiquated stock-market system. The exchange implemented a simple but transformative solution on Dec. 20, 1966, when all trade and quote data transmission became fully automated.
The Dow Jones Industrial Average (DJINDICES:^DJI) finished at 795 points on the day of the switch, with 6.8 million shares traded on the entire New York Stock Exchange. Four decades later, the Dow had grown to 12,464 points, the NYSE handled 2.4 billion shares, and the Nasdaq (NASDAQ:NDAQ) handed another 1.7 billion shares. In 2006, General Electric (NYSE:GE), one of the Dow's most heavily traded components, saw more than five times the trading volume of the entire stock exchange in 1966. The transition to a multibillion-share market wasn't without its hiccups, though. Many Wall Street firms were slow to catch up on the technological front, and a deluge of paperwork forced the exchange to close on Wednesdays for half of 1968 to give overworked employees a breather.
Vegas of the East
The region of Macau was a Portuguese territory for much of its existence. On Dec. 20, 1999, Portugal completed a 1987 agreement with the Chinese government, and Macau's sovereignty was transferred to China for the first time since the 1500s.
The changeover marked the start of Macau's rise to prominence as a global gambling haven. For the latter half of the 20th century, Macau's gambling industry was run by a government-sponsored monopoly. This expired in 2002, and leading gaming companies moved in quickly. Although the former monopoly company still maintains 16 casinos in Macau, another 17 have since opened.
The gold rush began with the 2004 opening of the Sands Macao, owned by Las Vegas Sands (NYSE:LVS). The single-largest casino in the world and the sixth-largest building in the world is the Venetian Macao, also owned by Las Vegas Sands. Today, Macau casinos generate more than $34 billion in annual revenue, which is more than five times the gaming revenue generated in Las Vegas, the casino capital of America.