On this day in economic and business history...
On Oct. 21, 1987, a mere two days after suffering the worst crash in its history, the Dow Jones Industrial Average (DJINDICES:^DJI) posted a then-record gain of 186.84 points. The day's 10.1% pop was the largest such gain since the Great Depression, and in nearly every way the excitement of that Wednesday was an inverse image of the carnage wrought on Black Monday.
News of the "Greenspan Put," first presented the day before, combined with a huge rebound on the Tokyo exchange and rumors of a dwindling budget deficit to send eight stocks higher for every one that declined. By the end of the day, $60 billion in market value had been restored -- hardly as much as was lost on Black Monday, but impressively brisk progress nonetheless. It had taken only two days to race back to the 2,000-point level, as the Dow closed at 2,027.85 on Oct. 21.
Thomas Czech of Blunt Ellis & Loewi told the Oklahoma Journal Record: "We are seeing a large increase in greed here. We're seeing people throwing money fast and hard and maybe without thinking." Thomas Hodgman of Portfolio Group told The Wall Street Journal that "the real opportunity to bottom-fish [is] past," and Hugh Johnson of First Albany told USA Today that "it will take a long time before investor confidence is restored." The attitude among professional money-managers seemed to be largely one of guarded optimism -- the worst was probably past, but the best might be a long time coming. That attitude turned out to be appropriate for the situation. The Dow climbed 8% over the following year -- a solid but hardly spectacular gain -- but two years later it was 31% higher.
Let there be light
"How many geniuses does it take to invent a light bulb? Just one. Thomas Edison!"
--The Simpsons, "The Wizard of Evergreen Terrace."
Thomas Edison developed the first commercially feasible carbon-filament light bulb on Oct. 21, 1879. The 32-year-old Edison was already an established inventor with more than a decade of patented electric devices -- many of which involved the telegraph -- under his belt. But the electric light proved particularly difficult for Edison, as his team had slogged through some 1,200 experiments and over $40,000 in development funds (worth over $900,000 today) to find the right setup for an electric lamp that could last many hours before burning out. This interminable streak of unsuccessful attempts eventually produced the popular quote: "I have not failed 1,000 times; I've just discovered 1,000 ways that don't work." This utterance, which has several versions in the popular imagination but which seems likely to have originated with Edison himself, is easy to understand -- you only fail when you give up the attempt. Edison, of course, was not much of a quitter.
Edison went through many hundreds of filament materials before settling on a piece of cotton, baked into solid carbon. This thread stayed lit for half a day, and Edison's team quickly improved the design until they managed to keep a bulb glowing for more than three full days. In the years that followed, Edison's research team plowed through thousands of plant-based filaments before the industry finally settled on tungsten around 1910.
Edison would capitalize on this breakthrough by launching two industry-building companies: Edison General Electric (NYSE:GE), formed by the merger of several of Edison's electric-light companies, and the Edison Electric Illuminating Company, which ran the world's first electric utility in New York City beginning in 1882. Edison General Electric, as you might surmise, was the foundation of General Electric itself, formed in 1892 by the merger of Edison's company and a rival manufacturer. Edison's electric utility underwent several mergers and acquisitions before becoming Consolidated Edison (NYSE:ED) in 1936. It's possible that these developments might have taken place without Edison's tireless tinkering, but would the spread of electricity and electric lighting have moved so far and so fast without him?
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