On this day in economic and business history...
Thomas J. Watson, Sr. became president of the Computing-Tabulating-Recording Company on May 1, 1914 -- you know it today as International Business Machines (NYSE:IBM), and it's thanks in no small part to Watson's enduring legacy that you know it at all. In 1914, the future IBM was a disjointed, sprawling enterprise that its founders were having difficulty controlling. Watson streamlined the company, giving it a focus, a motto, and a corporate identity that persists to this day.
To understand Watson's importance to the fledgling IBM, one need only see the facts presented in the obituary that ran in The New York Times on the day of his death on June 20, 1956:
The Computing-Tabulating-Recording Company was a small organization when he took over with fewer than 400 employees. Its products were a punch-card tabulator, which had been invented in time for use in the 1890 census; time clocks and other business machines. In February, 1924, the company was merged with the International Business Machines Corporation and assumed its name. ...
It would have cost $2,750 to buy 100 shares of the company's stock in 1914, the year Mr. Watson took over. Anyone exercising rights accruing to those shares through 1925 would have increased his cash investment to $6,364 for 153 shares.
Such a person would now hold 3,990 shares, and would have obtained a value of $2,164,000 based on market prices this year and cash dividends of $209,000 paid thus far. ...
The company has 60,000 employees. Its gross assets last year were reported as $629,510,998, and its 1955 net income after taxes reached a record total of $55,872,633.
Watson's legacy lived on at IBM after his death thanks to the work of his son, Thomas J. Watson, Jr., who became a legendary businessman in his own right by moving the company boldly into the computer age. Together, the two Watsons would helm IBM from 1914 through 1971, molding in a way few executives have ever molded a company. To read more about the Watsons' impact on IBM, click here to read about the three secrets to IBM's success.
Targeting low prices
The first Target (NYSE:TGT) opened in a suburb of St. Paul, Minn., on May 1, 1962. At the time, the store was a concept in upscale discount retailing developed to expand the reach of the Dayton Company, a department store company that had a critical role in the development of the modern shopping mall.
Target was at first merely one of several Dayton (and later Dayton-Hudson following a 1969 merger) store concepts, but by the mid-1970s Target had grown to become the company's most important revenue-driver. However, the company whose shares now read "Target" remained Dayton-Hudson until the year 2000, at which point it renamed itself. Four years later Target would divest itself of its department store segments, fully embracing the upscale-discount "concept" that had brought it from one of many to the second-largest discount retailer in the United States.
When Dayton-Hudson went public in 1967, it reported prior-year profit of $8 million on annual revenue of $223 million. Four decades later, Target earned $2.8 billion on revenue of $63.4 billion, representing annual growth rates of 15.8% and 15.2%, respectively.
It's not so BASIC as that
The very first BASIC program ran through the very first BASIC compiler at Dartmouth College on May 1, 1964. It was not the first high-level programming language -- FORTRAN had been released seven years earlier -- but it was the first language designed from the ground up to be easy to use (at least for those with technical inclinations). BASIC was so effective at spreading programming to the masses that it deserves primary credit for bringing about the PC revolution. Microsoft's (NASDAQ:MSFT) original business purpose, way back in 1975, was to implement a BASIC compiler on the MITS Altair microcomputer, and the company would continue to develop BASIC compilers well into the 1980s.
Kiss the sky
May 1 is a special day in the history of skyscrapers. The very first began construction on May 1, 1884. Built for the Home Insurance Company in Chicago, the Home Insurance Building was the first to ever use structural steel in its frame (although much was built with iron) and the first tall building to be supported by a fireproof metal frame. It would rise 138 feet into the air and comprise 10 stories by the time construction wrapped up later in the year. The metal-construction techniques pioneered for the Home Insurance Building brought its weight down to a mere third of that borne by similarly sized masonry-and-brick constructions, and it was one of the first to use another new high-rise development: the elevator.
Nearly 50 years later, on May 1, 1931, the Empire State Building opened to the public with a grand ceremony, complete with an appearance by President Herbert Hoover, who pressed a button to turn on the skyscraper's lights. The Empire State Building's construction was record-breaking and also quite rare -- it went up in a little more than a year, under budget and well ahead of schedule, employing up to 3,400 workers who built at a frenzied pace. Nearly five stories of the building were completed per week during the most productive construction periods.
However, the building also became a symbol of wealthy hubris in the face of an economic downturn: Its construction began in the early days of the Great Depression. When ground was broken in early 1930, the Dow Jones Industrial Average (DJINDICES:^DJI) was already 35% off its 1929 high. By the time President Hoover pressed his ceremonial button, the index had utterly collapsed to a level 60% lower than that 1929 high -- already a record decline but far from the end of the slide. This horrendous market crash would later make the Empire State Building the prime example of the Skyscraper Index, which posits that record-breaking buildings often coincide with devastating stock losses.
The Empire State Building reigned as the world's tallest until it was surpassed by the World Trade Center's twin towers near the end of their construction. These new record-breakers also became examples of the Skyscraper Index, arriving as they did in the middle of the worst market decline since (you guessed it) the Great Depression.
You might soon be able to invest in the Empire State Building, if you're so interested -- the family that controls it is pushing hard to offer shares to the public as a real-estate investment trust.