On this day in economic and business history ...

The Organization of Petroleum Exporting Countries, better known as OPEC, was formed at the conclusion of the Baghdad Conference on Sept. 14, 1960. At that time, five countries -- Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela -- agreed to band together to coordinate national oil policies for their national interest. As strange as it may seem, the nations with the largest oil reserves were not always in firm control of production within their borders. OPEC's historical website explains the economic climate that led to its formation:

OPEC's formation by five oil-producing developing countries in Baghdad in September 1960 occurred at a time of transition in the international economic and political landscape, with extensive decolonization and the birth of many new independent states in the developing world. The international oil market was dominated by the "Seven Sisters" multinational companies and was largely separate from that of the former Soviet Union and other centrally planned economies. OPEC developed its collective vision, set up its objectives and established its Secretariat, first in Geneva and then, in 1965, in Vienna. It adopted a 'Declaratory Statement of Petroleum Policy in Member Countries' in 1968, which emphasized the inalienable right of all countries to exercise permanent sovereignty over their natural resources in the interest of their national development. Membership grew to ten by 1969.

All of America became quite familiar with OPEC in 1973, when its member nations initiated an oil embargo against the United States. These oil-producing nations flexed enough muscle at that time to tighten global oil supplies by 8%, which resulted in an unprecedented oil price spike and a grinding recession.

OPEC remains an important force in international politics to this day. Its current roster of 12 member nations -- charter members Iraq, Iran, Kuwait, Saudi Arabia, and Venezuela, plus Algeria, Angola, Ecuador, Libya, Nigeria, Qatar, and the United Arab Emirates -- now supplies about 40% of the world's oil and controls about 75% of all proven oil reserves worldwide. This is a major reversal of fortune for the Seven Sisters, which controlled roughly 85% of global oil reserves before OPEC's formation. The "Four Sisters" of the present day -- BP, Chevron, Royal Dutch Shell, and ExxonMobil, which (except for Shell) merged with the other three members of the original Seven Sisters -- now control a comparatively paltry 3% of global oil and gas reserves and account for only 10% of global petroleum production.

However, that's not to say that these oil giants have been greatly hurt by OPEC's emergence. Their superior infrastructure now combines to produce $1.5 trillion in annual revenue and nearly $110 billion in annual profit. By comparison, Saudi Aramco, the national oil company of OPEC's largest oil-producing nation, generates annual sales estimated in the $300 billion range, despite producing about 3.5 billion barrels of crude oil and 3.9 trillion cubic feet of natural gas per year (a combined 4.3 billion barrels of oil-equivalent production).

Trust your real estate
A different sort of economic shift also began on Sept. 14, 1960, when President Dwight Eisenhower signed into law an obscure bill with a big provision. That day, the Cigar Excise Tax Extension implemented real estate investment trusts, or REITs, for the first time. It was a rather strange bill into which lawmakers might stick a major tax exemption for investors who sought buy shares in certain special-purpose real-estate holding companies, but it served its purpose, and REITs soon began to crop up, guided into existence by the National Association of Real Estate, an organizational predecessor to NAREIT -- the National Association of REITs -- that was established the day after Eisenhower signed the bill into law.

Within a year, the first six REITs were established. By 1965, the first REIT was listed on a major stock exchange, and by the end of the decade mortgage REITS were helping to swell total REIT assets to $21 billion. Today, there are roughly 300 REITs listed with the Securities and Exchange Commission. Of these, 160 are listed on the New York Stock Exchange, with an aggregate market capitalization of $650 billion. REITs paid out about $29 billion in dividends in 2012, which represents substantially all of the net income derived from total industry holdings of about $1 trillion. That year, the largest REIT by market cap was Simon Property Group, which at a $45 billion valuation was roughly twice the size of the second-place REIT. Simon was far from the highest yielder, however -- ARMOUR Residential REIT (ARR -1.37%) boasted a yield in excess of 20% that year!

A whole new way to sell
Alexander Turney Stewart opened the world's first department store, the "Marble Palace" in New York City, on Sept. 14, 1848. Stewart was already a wealthy and successful retail operator, but the four-story structure raised him into New York's elite. Merchandise displays, replete with elaborate imported gowns that could be tried on in a mirror-lined "showroom" on the second floor, drew in many well-to-do shoppers, and by the mid-1850s Stewart was worth roughly $2.3 million, which would be roughly $60 million in present terms. Through savvy expansions of the store's product offerings, Stewart continued to grow his empire, and his success led to the opening an even larger department store, six stories tall and employing 2,000 people, in 1862. The concept was catching on.

A.T. Stewart eventually became one of the richest men in history on the strength of his retailing abilities. Brian Warner of Celebrity Net Worth estimated in 2012 that Stewart's reported wealth at his death in 1876 would be the equivalent of $90 billion in today's terms. Marble Palace still stands in Broadway today as a historic landmark. Government offices occupy the upper floors, and smaller retailers have set up shop on its first two stories. Today, more than 1.5 million Americans work in or for department stores, which combine to generate more than $200 billion in annual revenue in the United States.

King of the world!
Microsoft (MSFT 0.37%) passed General Electric to become the world's most valuable publicly traded company on Sept. 14, 1998. That day, CNNMoney reported that the software superstar had closed with a market cap of $261.1 billion to GE's $257.3 billion market cap. The event was not entirely unexpected, since the markets were then racing toward the peak of the dot-com boom, and Microsoft was riding a red-hot hand it had dealt itself with the launch of Windows 95. In the five years leading up to this changing of the guard, Microsoft's shares had grown 1,000%, roughly four times the gains GE shareholders earned over the same time frame.

Microsoft rode that hand to a market cap of just over $600 billion by the end of 1999, which remains the largest valuation in modern American market history when adjusted for inflation. Near its peak, Microsoft also joined GE on the Dow Jones Industrial Average (^DJI -0.11%) as a symbol of the new digital economy, and also as a rite of passage -- all of the 11 companies that have claimed the largest-of-all-time market cap mantle in the past century, save the most recent one, have been part of the Dow. However, the end of the dot-com bubble deflated Microsoft's market cap, and in the 15 years that followed its first day as top dog, the software giant has spent far more time looking up at GE than it has leading the pack.