Guide to US Economic History

Today’s dynamic global economy is one driven by foresight. But taking a look back to the past can provide valuable insight and perspective. 

As practitioners and students of financial services professions, you can use history as a tool for recognizing the potential for future success or failure. Whether you’re an accountant, a financial planner, an investment broker, a real estate advisor, or a risk manager, the Word to the Wise Guide in Economic History will put historical business events in context that you can apply to your profession.

Sept. 1, 1836: American Stock Exchange
Open-air Trading Leads to American Stock Exchange

In 1836, the New York Stock Exchange prohibits its members from trading in the streets outside. But open-air trading persists under the nickname of "the Curb," which ultimately became the American Stock Exchange.

Word to the Wise: The financial world is always on the lookout for alternative investment avenues that yield great rewards. As the Chinese proverb says, “When the winds of change blow, some people build walls and others build windmills.” Smart business people build windmills in the changing business world, and they don’t give up on the vision of change due to setbacks. Finance students at Purdue Global have the opportunity to study the importance of innovations and persistence to face new challenges in the globalized world.

October 20, 1818: Treaty of 1818 Sets Boundary Between U.S. and Canada

To restrain both nations from seeking unfair advantages through accelerated development of the areas, U.S. and Britain agreed to establish the 49th Parallel as the boundary between the U.S. and Canada. The treaty also secured fishing and trade rights for mutual use of the territories, and marked the last major permanent loss of territory for the U.S., as it ceded the northernmost tip of the Louisiana Territory. 

Word to the Wise: Resources are limited and the use of resources calls for sustainable development that takes the long run effects into account. Establishing boundaries for peaceful coexistence can apply to the business world as well for mutual and long run benefits. “People are beginning to realize that we need to live in accordance with the law of ecology, the law of finite resources, and if we don't, we're going to go extinct.” (Paul Watson)

October 31, 1957: Toyota Motor Sales Opens its First U.S. HQ in Hollywood, California

Toyota's compact cars were slow to catch on in the U.S., taking until the mid-1960s to gain a respectable chunk of the American "big auto" market. But by 1972, Toyota sold its millionth car, and three years later became the best-selling import brand in the country. 

Word to the Wise: Seek and grab business opportunities that may defy the usual trends. Don’t lose hope on lack of demand for a new product. Rather, focus on improving the quality of the product that is offered in the market. When you have a good product, you can create an effective demand that gives you a competitive edge in the business world. “Without change there is no innovation, creativity, or incentive for improvement. Those who initiate change will have a better opportunity to manage the change that is inevitable.” (William Pollard)

Word to the Wise: Timeline

We invite you to explore the timeline consisting of dates previously featured in our Guide to Economic History.

First U.S. Census Is Taken

August 2, 1790

The first U.S. census began a year after the inauguration of President Washington to determine state representation in Congress. When completed, the census showed a population of almost 4 million.

Word to the Wise 

Targeting the right audiences is the cornerstone to build foundation for successful business practices. This is why Purdue Global business students study how to get acquainted with the process of customer identification and recognition in order to build sustainable demand base for products. The census might have begun as a method to determine government representation, but today it is used as a business research tool across the board and on a global scale to identify potential customer bases based on demographic factors.

The New York Stock Exchange Is Founded

March 8, 1817

Bulls and bears and brokers, oh my! It was a Saturday when the financial industry forever changed with the establishment of the New York Stock and Exchange Board, later known as the New York Stock Exchange, one of the largest equities-based exchange in the world.

Word to the Wise 

American novelist Ralph Ellison once said, “It takes a deep commitment to change and an even deeper commitment to grow.” NYSE’s persistent transformation to remain relevant reflects what is required of the business sector, and of business education, in today's globalized economy.

Treaty of 1818 Sets Boundary Between U.S. and Canada

October 20, 1818

To restrain both nations from seeking unfair advantages through accelerated development of the areas, U.S. and Britain agreed to establish the 49th Parallel as the boundary between the U.S. and Canada. The treaty also secured fishing and trade rights for mutual use of the territories, and marked the last major permanent loss of territory for the U.S., as it ceded the northernmost tip of the Louisiana Territory.

Word to the Wise 

Resources are limited and the use of resources calls for sustainable development that takes the long-run effects into account. Establishing boundaries for peaceful coexistence can apply to the business world as well for mutual benefits. “People are beginning to realize that we need to live in accordance with the law of ecology, the law of finite resources, and if we don't, we're going to go extinct” (Paul Watson).

Open-air Trading Leads to American Stock Exchange

September 1, 1836

In 1836, the New York Stock Exchange prohibits its members from trading in the streets outside. But open-air trading persists under the nickname of "the Curb," which ultimately became the American Stock Exchange.

Word to the Wise 

The financial world is always on the lookout for alternative investment avenues that yield great rewards. As the Chinese proverb says, “When the winds of change blow, some people build walls and others build windmills.” Smart business people build windmills in the changing business world, and they don’t give up on the vision of change due to setbacks. Finance students at Purdue Global have the opportunity to study the importance of innovations and persistence to face new challenges in the globalized world.

Wells Fargo Comes on the Scene

March 18, 1852

The California Gold Rush prompted a huge spike in the demand for cross-country shipping. To meet demand, Henry Wells and William G. Fargo joined with several other investors to start their namesake company providing mail, freight, transportation, and banking services. It remains one of today's largest banking institutions.

Word to the Wise 

Business managers must study actual and potential demand as factors influencing how companies can grow and diversify their operations and strategies effectively. The same holds true for successful business graduates. Recognizing what skills are in demand can help them shape their education and improve their employment opportunities in the labor market.

First Brokerage Firm Run By Women Is Established

January 20, 1870

Woodhull, Claflin, & Co., run by sisters Victoria and Tennessee Woodhull, becomes the first female-run brokerage firm on Wall Street.

Word to the Wise 

Thanks to an Apple commercial, many recognize the stanza from Jack Kerouac's "The Crazy Ones": "Here's to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They're not fond of rules. And they have no respect for the status quo." Like Apple, you need to challenge the status quo to charter new frontiers and make what is presumed to be impossible, possible. Joining a local chapter of networking or leadership groups can help spark that pioneering spirit and entrepreneurial drive.

Congress Passes the Specie Resumption Act, Making Paper Good as Gold

January 14, 1875

In order to finance the Civil War without exhausting the country's gold and silver reserves, Congress temporarily broke from the gold standard and issued legal tender notes—or "greenbacks"—as currency. Once the War was over, the battle between "soft money" (notes) and "hard money" (gold) escalated, prompting Congress to pass the Specie Resumption Act on January 14, 1875. The Act put in motion a program for the Treasury Department to begin exchanging legal paper tender for gold on January 1, 1879. In making paper money as good as gold, greenbacks continued on as the accepted currency for our nation. 

Is a new battle for monetary supremacy on the horizon as bitcoin, the digital currency, grows in popularity and use?

Word to the Wise 

They say necessity is the mother of invention and I believe it. Be flexible and creative in dealing with difficult problems and challenges, as changing circumstances and times may call for new thinking and solutions. At Purdue Global we often use real-world business problems as a springboard to help students flex their critical thinking and creativity skills.

Yukon Gold Rush Signals End to an Era

August 21,1896

"The Last Great Gold Rush" of the Americas began when George Carmack spotted gold nuggets in the Klondike River, just across the Canadian border, when fishing for salmon. Spawning the phrase "Klondike Fever,” news of the discovery spread fast, heralding the arrival of as many as 50,000 would-be miners to the region over the next 2 years hoping for a last chance to strike it rich.

Word to the Wise 

Business managers need to pay attention when they see a new business trend is unfolding since, usually, “where there’s smoke, there's fire”. If businesses can't be out ahead of trend, they must be ready to react when a genuine opportunity presents itself. Business courses at Purdue Global familiarize students with the importance being alert and seeking out business opportunities by encouraging practices and critical-thinking perspectives that can help them recognize and capitalize on ensuing business trends.

McDonald's Founder Ray Kroc Is Born

October 5, 1902

It's a classic American success story. While working as a milkshake machine salesman, Ray Kroc watched workers churn out the now-classic menu of burgers, fries and shakes. Kroc smelled profits and sat down with the owners—the McDonald brothers—to work out a deal to franchise their restaurant.

Word to the Wise 

Sometimes the best opportunities are staring us right in the face. Having good instincts and insights can lead to success. Smart business people see and grab business opportunities before others are able to see them. "Small opportunities are often the beginning of great enterprises." (Demosthenes). At Purdue Global, business students have the opportunity to trust and build on their instincts in the classroom so they’re ready to translate their skills to the workplace.

Advent of the Federal Income Tax

February 2, 1913

The sixteenth amendment to the Constitution is ratified, giving Congress the power to collect taxes on income without apportioning it among the states. From this time forward, income tax becomes a regular fixture, cementing the adage, "Nothing is certain but death and taxes."

Word to the Wise 

The more things change, the more they stay the same, especially when it comes to tax codes. No matter how many times the rules change, our frustration come tax time remains the same. This makes an accounting career a popular choice, but one that requires constant upkeep. Purdue Global’s School of Business and School of Professional and Continuing Education offers CPAs and other accounting practitioners continuing education courses and certificates to stay abreast of the latest rules and regulations to better serve clients.

Glass-Steagall Act Is Passed By Congress

February 27, 1932

In response to the stock market crash of 1929 and the failure of more than 5,000 banks during the Great Depression, the U.S. government was on a mission to prevent another financial debacle through regulation and reform of the banking industry. Most notably the passage of the Banking Act of 1933—a.k.a. Glass-Steagall Act—prohibited commercial banks from engaging in the investment business and created the FDIC. After more than 70 years of stability, and riding a bullish market, the Act was repealed in 1999, with many believing it was the first domino to fall leading to the global credit crisis 10 years later.

Word to the Wise 

The pace of change in investment and wealth management circles is quick and relentless, which is why some changes have uncalled for and lasting negative consequences. Stay informed of what’s evolving by exploring trends, insights, and answers from industry leaders and senior faculty.

Nation's First Singing Telegram Is Delivered

July 28, 1933

Telegrams sent during the country's war-time and Great Depression era usually held somber connotations—until George P. Oslin sent the nation's first singing telegram. As the PR director for Western Union, he discovered a melodic way to convince people "that messages should be fun." An intriguing modification to a proven concept turned into gold for the company and its creator.

Word to the Wise 

Efficient and effective business managers innovate on a sustainable basis to grow and conquer new business ventures before other competitors can. Moreover, they are not satisfied with simply being good. They strive to be the best by constantly strategizing get better. Business students at Purdue Global discover that growth and improvement require persistent innovation and continuous search for business potential that serve long-run success.

Retiree Receives Nation's First-Ever Social Security Check

January 31, 1940

Vermont resident Ida May Fuller receives the first ever Social Security check for the amount of $22.54. With low payroll taxes, a contribution ratio of 42 workers per retiree, and people not living long in retirement, there was sufficient cash flow into the program. Mrs. Fuller collected $22,888.92 in lifetime benefits after paying a mere $24.75 into the system during her working years. The possibility of a negative return wasn’t contemplated when the system started.

Word to the Wise 

The well-known phrase associated with Benjamin Franklin claims, "A penny saved is a penny earned." Yet, according to the Federal Reserve Board, nearly a third of U.S. adults say they have no savings or pension to help them afford retirement. Financial planning may seem daunting, but it is important to take that first step. Check out online resources like the Center for Excellence's Practicum to Retirement Planning to learn how to structure a ladder approach to savings to help secure retirement planning goals.

Japan's Unconditional Surrender in WWII Eventually Leads to Economic Prosperity

August 10, 1945

Just a day after the bombing of Nagasaki, Japan agrees to the terms of the Potsdam Conference and unconditionally surrenders to the U.S. to end WWII. Five years after the country was ravaged by war, Japanese businessmen turned to industrial experts W. Edwards Deming and Peter Drucker to teach Japan’s manufacturers how to produce top quality products economically. The Japanese used that knowledge to turn the global economy on its head and beat U.S. industry at its own game.

Word to the Wise 

Investment theory asserts that “a modern economy requires modern investment,” which requires educating the labor force, innovations, and new thinking to build a sustainable economy. Japanese businessmen recognized this fact and turned the mission of rebuilding the country's economic infrastructure for sustainability into a formidable global economy thriving on competition. The reconstruction of Japan laid the foundation for a top economic power with new economic models, policies, and manufacturing innovations. It is an example for enduring lessons in the focus on the big-picture strategic and critical thinking that can be applied on a massive scale, even after devastating historical incidents.

Toyota Motor Sales Opens Its First U.S. HQ in Hollywood, California

October 31, 1957

Toyota's compact cars were slow to catch on in the U.S., taking until the mid-1960s to gain a respectable chunk of the American "big auto" market. But by 1972, Toyota sold its millionth car, and three years later became the best-selling import brand in the country.

Word to the Wise 

Seek and grab business opportunities that may defy the usual trends. Don’t lose hope on lack of demand for a new product. Rather, focus on improving the quality of the product that is offered in the market. When you have a good product, you can create an effective demand that gives you a competitive edge in the business world. “Without change there is no innovation, creativity, or incentive for improvement. Those who initiate change will have a better opportunity to manage the change that is inevitable” (William Pollard).

The Hula Hoop Is Patented

March 5, 1963

Classic toy brand Wham-O, inventor of the Frisbee, came full circle on another hit with the Hula Hoop, selling 25 million units in the first four months. Though its popularity was short-lived, its novelty never wore off. How can we spot a trend vs. a fad in today's fast-paced world of innovation and invention?

Word to the Wise 

Establishing a successful brand name is one of the foundations of success in the business world. At Purdue Global, business students develop skills to spot the differences between fads vs. trends in their hands-on-education on branding, product differentiation, product diversification, product development, and consumer marketing.

Minimum Wage Rises to $1.40

September 14, 1966

On this day in 1966 the U.S. Senate adopted legislation to raise the country's minimum wage to $1.40/hour.

Word to the Wise 

The minimum wage debate has been a hot topic for decades and also catching today's headlines. Arguments in favor of setting minimum wage cite keeping up with cost of living increases to meet livable wage. Arguments against it cite its hindering jobs creation based on competitive labor supply and labor demand. “When we talk about the minimum wage, we have to ask ourselves what it is that we owe both our workers and employers. I think clearly we owe them fairness” (Dalton McGuinty). Some debates don’t go away, and open dialogue is essential to navigate in today’s business world.

Nixon Visits China

February 21, 1972

President Richard M. Nixon is the first U.S. president to visit the People's Republic of China since it was established in 1949. The monumental week-long visit to re-establish diplomatic relations with the communist country laid the foundation for U.S.-China trade relations and the eventual entwining of two economic superpowers for decades to come. What lessons have we learned when it comes to opening the (financial) lines of communications with emerging economies.

Word to the Wise 

The world of business has never been more complex or exciting than it is today. Globalization and collaboration are not just buzzwords, they are tactics for corporate and professional growth and development. We cannot look at our career paths with blinders on, which is why Purdue Global's curriculum is developed by business professionals and features projects to help students cultivate broader business perspectives and work in diverse environments.

Federal Express Takes Flight

April 17, 1973

On the first night of continuous operation, 389 Federal Express employees and 14 Dassault Falcon jets delivered 186 packages overnight to 25 U.S. cities—and the modern air/ground express industry is born.

Word to the Wise 

Thinking outside the box is one of the core sources of growth, and it helps businesses make continuous transformations and improvements. Introducing the concept of overnight deliveries was a game changer in the cargo delivery industry. Our business students learn how to develop critical thinking skills and recognize opportunities for improvements through nurturing creativity, innovation, and imaginative thinking in the business world.

OPEC States Declare Oil Embargo on Western Countries

October 17, 1973

In an effort to move ahead a political agenda, several Arab oil producers made a critical move to reduce oil exports to Western countries. This embargo would persist for a year and usher in one of the worst recessions in U.S. history.

Word to the Wise 

There is a need to draw contingency plans that deal with the effects of unforeseen external factors on businesses. In the globalized world, the impact of a political decision on different economies is very significant due to the interdependence of the economic structures of countries. One country's or regional actions can have widespread ripple effects on economic performances in different countries.

Apple Computers Is Born

April 1, 1976

Steve Jobs and Steve Wozniak weren't joking when they wanted to make computers small enough for people to have in their homes or offices. Apple Computer, Inc. was formed on April Fool's Day 1976 to sell the Apple I personal computer kit. And the rest is consumer electronics history.

Word to the Wise 

Thinking big and sticking to their vision to make computers user friendly, Steve Jobs and Steve Wozniak changed the world with their great achievements. This user-friendly philosophy defines the Apple brand, permeating across the entire product line. I believe that business education at Purdue Global can help students refine and implement a lasting business vision. “The future belongs to those who see possibilities before they become obvious.” –John Scully

The Post-It Note Finally Sticks Around

April 6, 1980

3M introduced its Press 'N Peel reusable adhesive notes in 1977 to disappointing sales. It took the product off the market, launched a massive sampling campaign, and renamed the product. It finally grabbed hold with consumers to become one of the most indispensable office products in the world.

Word to the Wise 

“Many of life’s failures are people who did not realize how close they were to success when they gave up,” said inventor Thomas Edison. Successes in life and business call for facing and solving challenges by being adaptable and flexible. Student-centered learning at Purdue Global encourages and mentors students not to give up on their academic dreams due to temporary setbacks and challenges in their lives.

Tylenol Tragedy Grips a Nation and Changes an Industry

September 29, 1982

This day marked the first in a week-long string of deaths resulting from cyanide-laced Johnson & Johnson's Tylenol Extra Strength capsules. Many predicted the brand would never recover. But by immediately recalling all 31 million of the product off shelves, issuing replacement medicines, and relaunching with tamper-proof packaging, Tylenol put the consumer first and strengthened its reputation as a trusted name in the pharmaceutical industry.

Word to the Wise 

Enduring lessons can be learned from a tragedy. In this case, Tylenol was able to build lasting trust with customers by taking rightful actions. “It is fine to celebrate success but it is more important to heed the lessons of failure” (Bill Gates). Businesses must not lose sight of the fact that, behind profits, there are people who can be loyal customers over the long term.

New York Stock Exchange (NYSE) Welcomes First Visit by a Sitting U.S. President

March 28, 1985

After 193 years, a sitting U.S. President visits the floor of the New York Stock Exchange. Ronald Reagan rang the bell to open trading, declaring "we’re going to turn the bull loose,” on the American economy.

Word to the Wise 

Timing and strategy are the cornerstones of long term investment success. Our students learn how recent market conditions are creating new opportunities for financial advisors and investors, as well as how to find and cultivate opportunities in the financial markets.

Coca-Cola Classic Returns to the Shelves

July 11, 1985

Although Coca-Cola was the world’s best-selling soft drink, rival Pepsi-Cola gained market share in the 1970s and 1980s, thanks in part to its aggressive “Pepsi Challenge” campaign. Execs grew convinced that its soda’s taste—not competitor's ads—was the reason for its declining market share, and they changed to the formula for "New Coke." The outcry was immediate and only 79 days after launch, the ignominious change was reversed and "Classic Coca-Cola" returned to market, stronger than ever before.

Word to the Wise 

“If it ain't broke, don't fix it.” Businesses need to adapt to stay competitive in the changing business environments. However, they need to thoroughly evaluate the factors behind the new competitive challenges so that their reactions are not at the expense of ditching sound strategies that have been working all along. Coca-Cola was able to recover from what could have been a catastrophic blunder, but less established brands and businesses may not be as lucky if they don't have a core strategy to fall back on.

GM Orders Massive Recall of Airbags

July 13, 1988

On this day the auto giant was forced to announce a recall of 800,000 vehicles over malfunctioning airbags. Along with exacerbating GM's strike woes, the airbag snafu highlighted the auto industry's struggle to successfully install the safety devices in their vehicles and GM watched its stock price tumble by 1-3/4 points.

Word to the Wise 

One of the foundations of building up a reputation is fostering business trust in integrity, which is maintained by actions that address customers concerns with courage and risks. Even very well-established firms like GM need to usher in a new era of product safety factors into the business model by learning from unexpected failures and by strategically preparing to prevent future failures in order to sustain customer loyalty. Purdue Global offers courses designed to nurture student critical thinking to capitalize on strengths and address setbacks to help prepare for long-term success.

Drexel Burnham Lambert Declares Bankruptcy

February 13, 1990

Wall Street investment banking firm Drexel Burnham Lambert Group, which pioneered the use of “junk bonds,” files for bankruptcy after the economy makes a turn for the worse and a government investigation results in a multi-million dollar fine. Despite the fines and executive Michael Milken's jail time for security fraud, three legacies endure today, according to The Economist: “a junk-bond market that has grown at least sevenfold since the firm's demise; the firms and industries, from gambling to cable television, that owed their rapid expansion to the investment bank's junk bonds; and the influence of the “Drexel diaspora,” the young MBA graduates who worked in the 1980s under Mr. Milken, on the finance industry...”

Word to the Wise 

Henry Ford once said that, "Failure is only the opportunity to begin again, only this time more wisely." It's true that other people’s mistakes can be the source of lasting lessons in life and business. Purdue Global's business curriculum is designed to feature case studies and examples, along with practical skill-building projects, to help students evaluate where mistakes were made along the way and promote sound business and management decisions that could lead to successful outcomes.

Hurricane Andrew Strikes Florida

August 24, 1992

When Hurricane Andrew ripped through Miami, it forever changed the face of South Florida's insurance and housing markets. The storm's greatest financial impact was seen on stringent new building codes that added $20,000 to the cost of new home. Insurance premiums surged 100% while coverage plummeted. Until Hurricane Katrina in 2005, Andrew was the costliest natural disaster in U.S. history, causing an estimated $30 billion in damage.

Word to the Wise 

Natural disasters with recurring probability call for consistent contingency plans and models. Since the insurance models did not include the magnitude of the damage, Hurricane Andrew significantly impacted the insurance industry, almost leading to bankruptcy in Florida. On the other hand, the disaster spurred innovation, ushered in the era of "extreme weather" contingencies, resetting priorities, wake-up call to project vulnerabilities, and models estimating the magnitude of losses. Purdue Global students in our risk management and insurance programs learn about the importance of handling risks through contingency planning in order to react to the changing business environments, including negative externalities like natural disasters.

AT&T Breakup: The Sequel

September 20, 1995

On this day in 1995, AT&T announced that it would voluntarily break itself up into three different companies. The company's divide and conquer attitude was the brunt of many jokes in the business world. But when the company announced an 11% gain in their stock, AT&T was the one laughing.

Word to the Wise 

Break ups aren't easy but sometimes they are necessary and beneficial in the long run. For very large companies, breakups may help to achieve economies of scale by dividing the company into effectively and efficiently manageable companies. “Success is the result of perfection, hard work, learning from failure, loyalty, and persistence” (Colin Powell).

Enron Mixes Oil and Water With Acquisition of Wessex Water

July 24, 1998

Merger mania was in full swing as electricity and gas titan Enron Corporation acquired British-based Wessex Water, PLC for $2.2 billion—reportedly paid in cash. According to company officials, the deal signaled Enron's first move towards creating a global water subsidiary. In the wake of the deal, Enron's eyes were clearly fixed on a handsome payday in the not-too distant future. Just 3 short years later, Enron's demise gripped Wall Street.

Word to the Wise 

Hindsight is 20/20, which is another way of saying that we can all learn from failure. In the case of the Enron debacle, investors and investment managers would have been better served if they had taken a step back to question such major investment activity. How can investors realize when something is too good to be true? How can they spot red flags in a deal? What constitutes a legitimate investment move? Finance students should be are armed with the knowledge of sound investment management skills and concepts, including pros and cons of mergers, long run investment trends, investment diversification, risk minimization in investment, asset bubbles, etc., in order to ask the right questions in advance.

Music Industry Sues Swappers

September 8, 2003

The Recording Industry Association of America filed law suits against 251 individuals across the country, accusing them of illegal sharing of copyrighted music online. The group alleged millions of dollars in losses due to the online sharing of music files.

Word to the Wise 

As technology intrudes into everyday activities, companies need to revamp the way they do everyday things. “As in any technological revolution, there will be winners and losers. On balance, everyone will come out ahead, although there will be particular companies that will not be able to cope with a new environment” (Ralph Merkle). Business students at Purdue Global discover the importance of adaptability to new technological innovation and its challenges for running successful businesses.

Tilahun Ayanou is a faculty member at Purdue Global. The commentary expressed in this article is solely those of the author and do not represent the view of Purdue Global.