On this day in economic and financial history...
The Dow Jones Industrial Average (^DJI 0.69%) often responds quite violently to chaos and confusion. Political meltdowns have long been fodder for bears. The threat of war conspires to wipe out weeks of gains. But for one winter, in 1916, the Dow was held in the grip of a "peace panic" as traders frantically dumped the stocks of any company remotely connected to the war in Europe. One of the worst such days was Dec. 21, 1916, when the Dow lost 5.4% of its value on its way to what was then the second-largest trading volume in stock exchange history.
A week earlier, the Dow had tanked over worries that the Germans might seek peace, as well as a Federal Reserve warning to banks to avoid buying fresh bonds from the French and British. By Dec. 21, the peace panic had been replaced by, in the words of The New York Times, a panic brought on by "read[ing] on the news tickers that [Secretary of State] Lansing had said the country was drawing nearer the verge of war."
By this point, the market had become slightly hysterical, as a broad sell-off, in which 3.2 million shares exchanged hands, hit "war brides" and "peace industrials" alike. A sixth of U.S. Steel's (X -2.32%) entire float was traded, and a single offering of 50,000 U.S. Steel shares was "without parallel in the history of the exchange," causing a minor panic. The market carnage might have prompted Lansing's empathetic public disavowal of any American threats to Germany -- which had been conducting submarine attacks in the Atlantic -- after the market closed.
The Dow had peaked exactly a month earlier at 110 points during its third visit to triple-digit territory since 1906. On Dec. 21, it had fallen to 90 points, an 18% decline in 21 trading days. America entered the war in April 1917, negating President Woodrow Wilson's re-election slogan, "He kept us out of war," a mere five months after voters sent him back to the White House. The Dow did not return to a triple-digit level until 1919, and it couldn't hold this level consistently until 1924. It was not until 1935 that the Dow could permanently sustain itself above 100 points.
Heigh-ho, heigh-ho, a landmark film we'll show
Snow White and the Seven Dwarves, the first full-length, full-color animated feature film, premiered on Dec. 21, 1937. It was perhaps Walt Disney's (DIS 1.54%) greatest gamble. Its original budget was estimated to be roughly 10 times the cost of the average animated short that Disney was then known for, but production costs ballooned to $1.5 million -- equal to $24 million today and a huge sum for Depression-era productions. "Disney's Folly" opened to great acclaim, becoming the most successful film of 1938 (releases were far more drawn-out then). By the end of its run, Snow White became the highest-grossing film with sound ever, with $7.8 million in total global ticket sales.
Walt Disney, who had been forced to mortgage his house just to pay for Snow White's production, earned an honorary Oscar, presented as one normal-sized statuette and seven miniature Oscars. The film's success helped finance further animated films, which solidly established Disney as an entertainment company par excellence. Pinocchio was released in 1940, followed by Fantasia in the same year, Dumbo in 1941, and Bambi in 1942. Disney continued to rerelease Snow White from time to time, and over its many reissues, this groundbreaking animated classic earned an inflation-adjusted domestic total of $865 million, according to Box Office Mojo -- good for 10th place on the all-time charts.
