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Financial Trivia!

Here are some interesting facts that I have stumbled upon.  Some are fascinating, others important, and some make good teaching references.  Of course, a few might be all of the above! ;-)
 

  1. Wall Street gets its name from a defensive wall that was put up to protect New Amsterdam (now New York) from New Englanders. Source (The Great Game--John Steele Gordon)
  2. Eugene Fama was a French Major (Note this is especially interesting since he later became famous for some of his works with Kenneth French.)
  3. The Famous Buttonwood Tree Agreement was probably signed under a Sycamore.  It was called Buttonwood as the seeds looked like buttons.
  4. The Adams Express closed-end mutual fund got its start as a delivery company.  During the Civil War they delivered paychecks to both sides, and even delivered a boxed-up slave to freedom!
  5. The first "green backs" were issued by the Union in 1862.  The smallest denomination was $5.  This led to the use of postage stamps for change. http://www.acwa.org/pay.html
  6. The Dow Jones Industrial Average is an average of 30 stocks.  When it started there were only 12 stocks.  General Electric is the only company of the original 12 still in the index.
  7. Intel and Microsoft were added to the Dow Jones Industrial Average in late 1999.  They became the first non-NYSE stocks to be included.
  8. The NYSE ticker symbols I and M are currently unused.  Reportedly they are being held in reserve in case Intel and Microsoft decide to join the NYSE.
  9. In 1618, 3000 tons of spices sold in India for 91,041 British Pounds, could be sold at the Eastern End of the Mediterranean for 789,168 Pounds!  A nearly 800% return! (source: The People's Chronicle)
  10. In 1384 Venice signed a trading agreement with the Ottoman Turks that effectively gave the Venetians preferred trading rights.
  11. In 1151 fire and plague insurance debuts in Iceland (source: The People's Chronicle)
  12. In 1840, it is estimated there are 20 millionaires in the United States.(source: The People's Chronicle)
  13. In the 9 years following the invention of Eli Whitney's Cotton Gin, cotton production rose from 140,000 pounds to 35 million pounds!(source: The People's Chronicle: 1791 to 1800)
  14. In 1792 the Bank of the United States was first formed by Alexander Hamilton.  It was one of the first Hot issues in the IPO market.  Trading began before the stock was even issued (when issued).  (source: The People's Chronicle and The Great Game)
  15. By 1836 Wall Street was widely recognized in the US and "came to stand for the American Securities market." (The Great Game p. 181)
  16. Thomas Jefferson did not believe in paying employees on a piece-meal rate as he feared quality would suffer.
  17. In 1968 Wall Street frequently shut down on Wednesday afternoon in order to allow itself time to catch up on the paper work associated with a jump in volume.
  18. The NYSE closed at 2pm the week following the crash of 1987 in order to catch up.
  19. May-Day refers to the end of set commissions on May 1, 1975.  These commissions came into existence in 1792 with the Buttonwood agreement.
  20. Mutual Fund expenses rose 27% from 1980 to 2000. (Bogle interview in WSJ May 2000)
  21. Joseph Patrick Kennedy was the first head of the SEC in 1934. (The People's Chronicle)
  22. 1934 Benjamin Graham first published Security Analysis. 
  23. Wall Street often has a bad reputation on discrimination.  It is hard to imagine why.  The first woman member of the NYSE was Muriel Siebert  in 1967.  The first black was not until Joseph L. Searles III in 1970!  Siebert goes on to become a well known trader and starts Muriel Siebert & Co a discount brokerage.
  24. In 1886 the NYSE had its first million share day.
  25. In 1984 the NYSE had its first 200 million share day.
  26. In 1997 the NYSE had its first billion share day.
  27. In 1942 membership to the NYSE fell to $17,000. 
  28. In 1999 membership cost a record $2.65 million.
  29. Donaldson Lufkin and Jenerette was the first NYSE member firm to go public.  It did this is in 1970.
  30. 24 people signed the Buttonwood Agreement.
  31. During the late 19th and early 20th centuries, the firm was instrumental in the initial structuring and financing of U.S. Steel, General Electric, American Telephone & Telegraph (www.jpmorgan.com)
  32. The Glass-Steagall Act forced "the House of Morgan" to be split up in the US.  Morgan Stanley and Morgan Guaranty Trust Company resulted.
  33. Weis Markets has historically held more cash than any grocery store chain of its size.
  34. Ronald Reagan was the first president to visit the NYSE.
  35. NYSE listed stocks have 3 or fewer letters in their ticker symbol.
  36. Arnold Schwarzenegger was a finance major. Source: www.uselessknowledge.com
  37. The US first issued paper money to help finance the Civil War.
  38. The Bank of England was founded in 1694.
  39. After the American Civil War volume and stock prices rose dramatically.
  40. In 1069 China imposes a tax to slow inflation.(The People's Chronicle)
  41. The Founder of Merrill Lynch (Charles Merrill) played semi-pro baseball prior to coming to Wall Street.  The Lynch in the name is from Edward Lynch who was a soda fountain salesman.
  42. The German fear of inflation may be grounded in the hyper-inflation of post W.W.I Germany.  The mark fell from 162 per US dollar to 7000 per dollar!  This inflation ends in 1923 with credit tightening and new taxes under the Dawes Plan.(The People's Chronicle)
  43. In 1912 the Wall Street Journal had only 7,000 subscribers. (source Fidelty's World).  It was then edited by Clarence Barron.
  44. The UPC bar Code was first introduced in 1973.
  45. The NASDAQ was started on February 8, 1971. 199 years after the New York Stock Exchange. Originally only median quotes were listed.
  46. In 1980 the Nasdaq began listing the inside spread.  predictably spreads decrease on most stocks.
  47. Prior to 1986, Nasdaq-listed stocks could not be bought on margin.
  48. Reminiscences of a Stock Operator was 1st published in 1922.  It tells the story of Jesse Livermore who may be most famous for making $250,000 when the San Francisco earthquake seriously damaged Union Pacific's railroad and stock price.  Livermore had been shorting the stocks for days on a whim.
  49. Mutual Funds were first sold in the US in the 1920s.  They were then called investment trusts and often were sold by unscrupulous brokers.  In 1929 over $2 billion was invested.  However only a small portion of this was invested in what today would be called an Open-ended mutual fund.(Source Fidelity's World.)
  50. Joseph Kennedy got his start in finance and helped to thwart a hostile takeover of Columbia trust in 1914.  (Source Fidelity's World.)
  51. It is estimated that only 4 million Americans owned stock in 1929. (http://www.arts.unimelb.edu.au/amu/ucr/student/1997/Yee/1929.htm#Reasons) 
  52. Merrill Lynch can trace its heritage back to 1885 when The Burrill & Housman investment firm is founded.  In 1914 Charles E. Merrill & Co. begins. Sixteen months later, the name is changed to Merrill, Lynch & Co. (www.ml.com) 
  53. Isaac Newton "discovered" calculus in 1666.  He was 23 years old.
  54. It took the Dow Jones Industrial average 25 years to recoup its losses from the crash in 1929 and the Great Depression. 
  55. In 1974 Commercial banks made 35% of all loans, by 1994 that number had fallen to 22% as "non-bank banks" and public debt markets picked up market share.
  56. At the end of 1999, roughly $33 trillion in derivatives were outstanding.  Of this only $4 million was exchange trades. The rest were over-the-counter derivatives. (source Alan Greenspan March 2000)
  57. William Sharpe developed much of CAPM as part of his doctoral dissertation at UCLA.  (On the other hand I worked on firms that had high cash.)
  58. Eugene Fama got tenure at the University of Chicago before he was 30 years old!  Amazingly his dissertation was published as the sole article in the school's Journal of Business.
  59. John Wanamaker is credited with the idea of one price per item in retail stores.  Prior to his 1862 store opening in Philadelphia, everything was up for negotiation.  (Later the Wanamaker compnay sponsored the famous Wanamaker Mile at the Milrose games). (Source: the People's Chronicle)
  60. For much of history the press has not differentiated stocks from bonds.
  61. In the middle 14th century Venice passed a law outlawing the spreading of rumors designed to lower the value of investments.(Source The Devil Takes the Hindmost.)
  62. Throughout Northern Europe in the 1400s there were "great fairs" at which financial securities exchanged hands.    These securities include municipal bonds and lottery tickets.  The fairs were generally held after lent.(The Devil Takes the Hindmost.)
  63. Total vendor financing (accounts payable etc) is generally greater than the M1 money supply by 50%. (Ng, Smith, and Smith. JF, 1999)
  64. At the peak of Tulip Mania, a Gouda bulb rose (no pun intended) from 20 guilders to over 1,200 guilders in a single week!  To put in perspective, a small house would sell for 300 guilders!  Tulip Mania is often used to show that the Market is not always correct. Tulip mania lasted for about 3 years and ended in 1637 when prices came crashing down.  The time period is also interesting as most of the trades were actually in tulip futures and not the actual plant.(Source The Devil Takes the Hindmost.)
  65. The first graduates of the St. Bonaventure Business program graduated in 1936.  This is after an earlier attempt to begin a school of commerce failed in 1919.  There was only one teacher a Leo Minton. 
  66. From 1929 to 1947 St. Bonaventure ran a small railroad to deliver coal to campus.  Thomas Plassman was the President of the line which may have been the smallest in the land at less than a mile.  (however as Plassman remarked-it was as wide as any of them!)  Source St. School of Business Administration-St. Bonaventure: the First Half Century by A.L.F.--I only have initials-any help from SBU people?.)
  67. Faced with losing many of there students due to W.W.II, SBU ran extra long classes in order to finish before April and thus let ROTC members join in the war effort.
  68. The slowest day is NYSE history was March 16, 1830, when only 31 shares changed hands.
  69. The top four online brokers (ranked by volume at the end of first quarter of 2000) were Schwab, E*Trade, Waterhouse, and Ameritrade.  Collectively they accounted for approximately 750,000 shares per day. (WSJ 5/30/00)
  70. In an effort to get cattle to drink more water prior to sale, some farmers used to feed them extra salt.  This led to the idea of watering down the stock or a watered stock as one that is over-valued.
  71. In the days before market regulation, insider trading was rampant. As a Director of the Erie Railroad, Daniel Drew was notorious for his less scrupulous ways.  He even became known as the "Speculative Director" for his stock price manipulations.(Source The Devil Takes the Hindmost p.163.)
  72. The Prudential Insurance Company was was founded in 1875.  By 1896 it was running an advertisement designed by J. W. Thompson "Prudential has the Strength of Gibralter."(The People's Chronicle)
  73. The First US Income Tax ran from 1861-1872.  It was designed to pay for the Civil War and was a tax of 3% of income in excess of $800.
  74. Henry Dupont was a major gun powder manufacturer for the Union side during the Civial War.  Of course his firm became DuPont one of the largest in the world.(The People's Chronicle)
  75. The US Treasury first began printing paper money in 1862.  The denominations were as low as 3 cents!  US Treasury
  76. Inflation was bad on both sides during the American Civil War as the governments increased the money supply to help finance the war effort.  In the Confederarcy was so bad that many viewed the Confederate Dollar not worth the paper it was printed on  After the war, there was a severe depression as the US tried to check inflation.
  77. Telephones were first used on the NYSE in 1878.
  78. The NYSE was closed from March 4 to March 14, 1933 for FDR's Bank Holiday.
  79. The city of Detroit defaulted in its debt during the depression.(The People's Chronicle)
  80. The Glass-Steagall Act was names after Senator Carter Glass of Virginia and Representative Henry Steagall of Alabama.
  81. In 1943 Roosevelt proposed a $109 Billion budget to congress.  $100 billion of which is to go to the Military. (The People's Chronicle)
  82. Alexander Hamilton lived on Wall Street and was instrumental (possibly even crucial) in its development.  How?  His plan to redeem Continental debts at face value gave Wall Street brokers the jump start they needed.  (There is debate however whether these brokers traded on inside information.)
  83. Musicians often earned more than the fighting men in the Confederacy Army. (source King 2000 working paper on Accounting in CSA)
  84. As of 1999, the Dow Jones Industrial Average has had three days when it lost more than 10%. (October 19, 1987, October 28, 1929, October 29, 1929) http://indexes.dowjones.com/dja_fact.html#3
  85. As of 1999, the Dow Jones Industrial Average has had 4 days when it has gained more than 10%.  (Oct 6 1931, October 30, 1929, September 21, 1932, and October 21, 1987) source: http://indexes.dowjones.com/dja_fact.html#3
  86. The crashes of 1929 and 1987 were both followed by an aftershock approximately a week later where the market drop was one of teh ten worst percentage losses ever. 
  87. Sherlock Holmes, the fictional detective, was a regular advocate of free trade.
  88. Ticker symbols were officially adopted by the NYSE in 1867. 
  89. In 1895 the NYSE recommended that listing firms distribute annual financial statements to shareolders.
  90. The NYSE closed for over four months in 1914 due to the onset of WWI.  It did not close for WW II but trading was halted for two days to celebrate vistory in Japan.
  91. Until 1915, trading on the NYSE was quoted as a percentage of par value for stocks as well as for bonds.
  92. Half-day trading on the NYSE was allowed from 1873 to 1952.
  93. From 1873-1952, the NYSE's regular hours were from 10 to 3:00.  From 1952 to 1974 the market closed at 3:30.    In 1985 the hours were again extended from 9:30 to 4:00 pm.  Additionally after hours traded was started.
  94. Trading stopped on October 27, 1997 at 3:30 due to the market dropping by over 500 points.  Six months later the circuit breakers were changed to be based no percentages rather than a total point move.
  95. Turnover of shares has increased dramatically US.  In 1962 13% of the shares listed on the NYSE were traded.  In 1999, 78%.
  96. The NYSE operated from a rented room in 1817.  The room was at 40 Wall Street.
  97. It can be argued that there would be no Washington DC if it weren't for inside trading.  Many contend that Alexander Hamilton's plan to pay off the debts stemming from the revolution was tainted with insider trading as the debts were selling at a fraction of face value.  To counteract public criticism, Hamilton and Jefferson agreed to move the capital to what is now Washington DC.
  98. How much is a "ton of money"?  It depends of course on the cosnition of the moeny and the denomination.  Supposing new $20 bills and you would have about $19.6 million dollars. US Treasury (and my math)
  99. The "Open Interest" in futures that is reported by thge press is in fact the open interest of the two days before and not the previous day. Thus, reported in Friday's AM paper is Wednesday's open interest.
  100. The word accounting is likely a cross of the from the old French words "acompter" which means to count or reckon and "aconter" which means to tell. (TheLearningKingdom.com)
  101. During the American revolution inflation was rampant.  In an attempt to slow it, in Novemeber of 1780 a "Committee of Merchants" went through Philadelphia and tried to dictate the value of the Contintental money.  This was not successful however and by mid 1781 the value was depreciated by nearly 90%.  The Revolutionaries.
  102. 95% of the money printed in the US each year is used to replace old money that has worn out.  45% of all printing is for $1 bills. US Treasury
  103. Gresham's Law (Bad money will be used before good money) was developed by Thomas Gresham in 1562.
  104. The term Ponzi scheme is named for the pyramid investment scheme devised by Charles Ponzi in Boston in 1920.  Ponzi promised 50% returns in six months but invesors ended up losing million of dollars.  In reality he was merely paying older investors with the investments made by newer investors.
  105. The Confederacy issued 10 year callable bonds (8% coupon) on Feburary 28, 1861!  Before Fort Sumter!  The bonds were callable in 5 years. http://www.financialhistory.org/civilwar/
  106. US Treasury Secretary Laurence Summers has a strong pedigree. Two of his uncles are Nobel prize winners: Ken Arrow and Paul Samuelson. Source: Slate 7/7/00
  107. A fire in 1835 destoyed Wall Street's  Merchants' Exchange which was the location of what would become the NYSE.(The Great Game--John Steele Gordon)
  108. The first Morgan Bank on Wall Street was build in 1871 on the former site of a grocery store.(The Great Game--John Steele Gordon)
  109. The first Wall Street Journal was published July 8, 1889.  It sold for 2 cents, a yearly subscription was $5.00) and it was published 6 days a week at 3:15 pm. (Front Page First WSJ)
  110. There were no commercial banks in colonial America.  Borrowing was done largely from merchants who borrowed in turn from Merchant banks in England or from friends and family acquaintances.  The first US chartered bank was the Bank of North America in 1781. (www.Historychannel.com)
  111. The National Bank Act (1863) mandated reserve requirements that ranged from 25% at major banks in NY to 15% for small rural banks. (www.Historychannel.com)
  112. Andrew Jackson is renowned for his hatred of teh Second Bank of teh United States.  He is largely responsible for its demise.  In what was called a Bank War, he took federal Money out of the US bank and had it deposited in State Banks.  Then he also fought the National Bank's recharting in 1836.(www.Historychannel.com--search Bank War)
  113. Thomas Jefferson died penniless.  Always cash poor, building Monticello had been much more expensive then he had planned and he owed many people much money.  This debt has been cited as a reason he failed to release the vast majority of his slaves.
     

26/04/03

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