Lets Talk About It

Editor's Note: This countdown was originally compiled by TheStreet Staff and published as a multi-part series, beginning May 1999. The original, unedited text is reproduced below.

 

NEW YORK ( TheStreet) -- The American Century has become the Business Century.

 wall-street-bull

Two World Wars reduced politics to rubble, giving rise to government-by-focus-group. Art and culture have ground to a halt. Religion and science are locked in a futile struggle. Capitalism "won." Our colleagues are our families, and we increasingly find meaning in work. Like David Mamet says, Get them to sign on the line which is dotted. Nothing else matters.

 

If you buy all that, take a day off. You're working too hard. Still, business has been important, if not quite a replacement for everything else Americans held dear 100 years ago. TheStreet.com decided to examine the century in U.S. business and finance. There aren't enough lists floating around out there.

 

Here follows Countdown: A Century of U.S. Business, an all-week series ranking the top 100 signal points, inventions, ideas and companies of the 20th century, from least important to most. (Apologies to the rest of the world; look for our take on the 21st century's top global business events in mid-2099.) Each of the entries wrought some major change in the way business is done, the way money is invested, the way life is lived.

 

A word on methodology: We have focused on when a development became commercialized, when a company came of age, when an idea rose to become a reality. The emergence rather than the beginning. George Mallory may have gotten to the top of Everest first, but Edmund Hillary got up and down. The century is riddled with brilliant inventions and wonderful entrepreneurial ideas. Few were seminal.

 

For instance, when Microsoft licensed MS-DOS to IBM and when IBM let the PC clones license the operating system on their own, Bill Gates' company became the Standard Oil of the latter half of the century. If it hadn't penned that deal, Mister Softee might have remained one more West Coast thought to die still in the garage. The first successful commercial airplane, Douglas Aircraft's DC-3, is on the list; the Wright brothers didn't make the cut.

 

Don't expect the Great Crash of 1929 to top the list. And we don't really buy into the Great Men of History theory, so there aren't too many dead white guys on the list. All those things your parents and grandparents talk about -- the Depression, the RJR Nabisco takeover fight, walking barefoot to school in the snow, uphill both ways, and on and on? They're certainly important, but as time has gone on, some events and people necessarily have receded in importance. And some things that seem so vitally significant today -- say, the electronic auction phenomenon -- seem faddish. At least for now.

 

Should you take this list as gospel? Rankings are always subjective. We've tried to bring our passion for and knowledge of business and finance to this list. We hope to inform and we hope to give you some laughs.

 

We hope you get agitated, too. You'll find some gaps and horrible omissions. There'll be plenty of space for your quibbles, protests and, if warranted, praise. Whatever it may be, we want your feedback (include your full name).

 

hallmark 

100. Hallmark gets its start: Jan. 10, 1910.

 

 

Joyce C. Hall, a teenager (and a guy, by the way) from Norfolk, Neb., arrives in Kansas City, Mo., in 1910 and starts building a picture-postcard business into a giant of doggerel and cheer that would reshape American holiday celebrations. Hallmark is instrumental in the commercialization of holidays, which has driven a huge amount of the growth in U.S. retailing (and the growth in bogus holidays like Sweetest Day).

 

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three mile island 

99. The Three Mile Island disaster: March 29, 1979.

 

So much for alternative energy. Three Mile Island's near-meltdown renders nuclear energy but a Simpsons joke, increasing the country's dependence on oil.

 

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Disney land opening day 

98. Disneyland opens: July 17, 1955.

 

With Ronald Reagan hosting a live ABC special, Disneyland opens in Anaheim, Calif. The first major destination theme park spurs growth in travel and tourism nationwide. Today Disney's parks alone are a $5 billion annual business, and Walt Disney World in Orlando, Fla., which has more than 50,000 employees, is the largest single-site employer in the U.S.

 

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beatles

97. Nike's Revolution ads commodify dissent: 1987.

 

It's not the first time the ideals of the 1960s -- freedom, individuality, antimaterialism, dissent -- are called upon to push product. But it may stand as the biggest co-optation. Right at the height of the Summer of Love anniversary celebration, Nike nike uses the Beatles song to sell sneakers. Now it's almost impossible to escape ads that sell not just products but breaking the rules, dude.

 

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university of phoenex 

96. The University of Phoenix, a for-profit university, is accredited: 1978.

 

The University of Phoenix is accredited in 1978, and few think that without the benefit of a Final Four-bound athletic team or ivy-encrusted heritage it will amount to much. It becomes the nation's largest private university. And unlike its more traditional academic competition, it turns a profit.univ. phoenix Phoenix's rise goes hand in hand with the boom in private prisons since 1984, when Corrections Corp. of America takes over the county prison in Hamilton County, Tenn.

 

Both developments indicate the increased willingness of Americans and their elected representatives to hand over to the private sector functions previously reserved to government. But the move to market incentives hasn't unfolded like a libertarian's dream. Many educators criticize Phoenix and other for-profit education providers, saying they lack comprehensive library and lab facilities and a full-time, dedicated faculty. Prisons, meantime, face new regulations in the wake of violence and inmate escapes at CCA's prison in Youngstown, Ohio.

 

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jaws 

95. Jaws ushers in the blockbuster era in Hollywood: June 20, 1975.

 

Before Steven Spielberg's little flick, starring a gape-mawed contraption named Bruce and co-starring Roy Scheider, movies almost invariably opened gradually and tried to build an audience through word-of-mouth and limited advertising. Jaws, which goes on to gross $260 million in the U.S., introduces the concepts of heavy preopening marketing and wide releases -- sound familiar?

 

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Scientific Management 

94. Frederick Taylor's 'scientific management' theory gains legitimacy: 1910.

 

Frederick Taylor forms his theory of "scientific management," a patchwork of efficiency and cost-cutting ideas, in the 19th century. But it doesn't gain wide currency until Boston lawyer and future Supreme Court justice Louis Brandeis argues on behalf of consumers that a $27 million rate increase sought by the nation's Eastern railroads should not be approved by the Interstate Commerce Commission. Brandeis contends that the railroads cannot justify their costs. Citing Taylor's ideas, Brandeis maintains that the railroads could save $300 million a year through improved productivity.

 

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post ww1 

93. The U.S. is a giant creditor nation: 1918-1982.

Following World War I, the winners (Allies) and losers (Central Powers) have something in common: They owe lots of money to the U.S., making it the world's biggest creditor nation. The tables turn by 1985, however, as the U.S. becomes a net debtor. And because we like to be No. 1 in everything, we quickly become the world's largest.

 

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harley bike 

92. Harley-Davidson adopts Japanese management techniques: October 1981.

Having just bought the company in a leveraged buyout, Harley-Davidson Chairman Vaughn L. Beals Jr. and his management team realize that Japanese motorcycle makers are kicking their butts. To beat them, they join them, adopting such Japanese techniques as "just-in-time" inventory control. Just-in-time eliminates the high and costly inventory levels that require elaborate handling systems. Other U.S. major manufacturers, like General Motors, soon follow, lemminglike.

 

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S.W. Airline 

91. Southwest Airlines begins flying: June 18, 1971.

 

Southwest Airlines begins flying between Houston, Dallas and San Antonio. With its cheeky attitude, wink-and-a-nudge ads and low prices, the new carrier is an immediate success.

 

In 1978, the U.S. begins deregulating interstate airfares and schedules, enabling Southwest to fly outside Texas. While other discount airlines rush to grow, often destroying themselves in the process, Southwest expands more cautiously, becoming the nation's dominant low-fare carrier by avoiding expensive mistakes.

 

Today, the company's everyday low fares give millions of Americans the chance to enjoy the speed and convenience of flying, and its good relations with employees and simple but superior customer service make it the most feared competitor in the airline business. Last year, the company earned more than $400 million on revenue of almost $4.2 billion. Not bad for a company that flies only 737s.

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              Lou Gerstner                

90. Lou Gerstner turns IBM around: April 1993 to present.

 

 

Big Blue is still big in early 1993, but not big like Mark McGwire -- powerful, potent, popular. Big, instead, like Babe Ruth in the '40s -- unhealthy, and with its best days sadly receding. Along comes Louis V. Gerstner Jr., who replaces Chairman and CEO John F. Akers on April Fools' Day.

 

Gerstner, a former McKinsey consultant coming off stints at American Express and RJR Nabisco, joins an IBM hobbled by bloat and bereft of focus.

 

Gerstner bluntly declares, "The last thing IBM needs now is a vision" and instead quickly seeks to slash costs by more than $8 billion. The skeptical market keeps IBM on a downward course at first. But Gerstner winnows the workforce to 215,000 by mid-1995 from about 300,000, consolidates facilities and otherwise flenses the fat. Wall Street cheers.

 

A ghoulish management style is born. Gerstner's success is the most dramatic example, with hired-gun CEOs jettisoning staid traditions -- along with thousands of workers -- to upsize the stock price. Of course, it doesn't always work -- see "Chainsaw(ed) Al" Dunlap, late of Sunbeam.

 

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 John Bogle John Bogle launches the First Index Investment Trust: August 1976.

89. John Bogle launches the First Index Investment Trust: August 1976.

 

The fund that becomes the mighty Vanguard Index 500 starts with just $11 million in assets under management and can't even buy all of the S&P 500 stocks until 1977. But it starts a revolution in investing, luring billions from investors concerned about the risks and costs of actively managed funds.

 

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Thomas Watson  

88. Thomas Watson becomes president of IBM's predecessor: 1914.

 

Thomas J. Watson is fired from National Cash Register in 1913, after having been framed for a scheme to create a dummy competitor to the monopolistic NCR. He joins Computing-Tabulating-Recording and quickly rises to lead the company, which is renamed International Business Machines in 1923. All's peachy until Bill Gates.

 

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Valium 

87. Valium is introduced: 1963.

 

Feel-good remedies and snake-oil cures have been around forever. Lifestyle drugs, which garner attention in the media, aren't that big a business. But Valium, from the Latin for "to be strong and well," is different.

 

Introduced by Swiss drug company Roche Labs in 1963, it quickly becomes mother's little helper for millions of housewives throughout the '60s and beyond. The first billion-dollar medicine and one of the first brand-name drugs, Valium launches the era of blockbuster medicines. More prescriptions are written for it than for any other drug between 1969 and 1982. But while the Swiss may have pioneered the blockbuster, the Americans later master it. Valium's descendants range from Eli Lilly's Prozac to Pfizer's Viagra.

 

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The Panama Canal  

86. The Panama Canal opens: Aug. 15, 1914.

 

In the late 19th century, the French try to build a canal across the Panama isthmus connecting the Atlantic and Pacific oceans. They fail. Early in the 20th century, the U.S. has the same goal and seeks permission from Colombia, which then rules Panama. No dice.

 

So the U.S. sends a gunboat down Panama way, the supportive sight of which inspires the Panamanians to overthrow their Colombian overlords. The U.S. then gets a nice rent deal on the Canal Zone (which will revert to Panama on Dec. 31, 1999), and many massive engineering feats and mosquito bites later, the oceans meet. Now ships traveling from New York to San Francisco can save a modest 7,872 miles by not detouring around South America. U.S. and global commerce never look back.

 

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The Public Utility Holding Company Act  

85. The Public Utility Holding Company Act is enacted: 1935.

 

The law breaks up the powerful trusts that had dominated the nation's electricity and gas utilities. Power companies are rendered a political afterthought throughout the century, unlike, say, oil companies, which continue to wield influence. Sixty years later there would be talk of repealing or reforming PUHCA, which some see as an antiquated impediment to competition among utilities.

 

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84. HBO via satellite accelerates the fragmentation of the TV marketplace: September 1975.

 

Today a unit of Time Warner, HBO broadcasts the heavyweight boxing championship match between Muhammad Ali and Joe Frazier live from the Philippines. The "Thrilla in Manila" marks the first time satellites are used to deliver regularly scheduled programming and link together previously isolated cable systems.

 

HBO's bold move helps create the modern cable business, now the largest single segment of the entertainment industry. Twenty-four years later, U.S. consumers will spend close to $40 billion on cable, more than they spend on music, home videos and movies at theaters -- combined. Live satellite feeds also make it possible to offer national and worldwide broadcasts of everyday sporting events, turning collegiate and pro athletics into an 11-figure annual business. Unfortunately, the massive expansion does little to improve the quality of our entertainment.

 

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83. The surgeon general reports that smoking causes lung cancer in men: Jan. 11, 1964.

 

Surgeon General Luther Terry, who picked tobacco in Alabama as a boy, startles Americans with the news that deliberately inhaling smoke deep into your lungs dozens of times every day might be bad for you. Cigarette consumption would drop 20% in the three months following the report, and over the next 35 years the tobacco industry would face an ever-increasing torrent of criticism.

 

In 1971, television and radio ads for cigarettes would be banned; in 1998, the industry would agree to pay $206 billion to settle state lawsuits over the public health costs of smoking, an unprecedented transfer of wealth from a legal private industry to the government. Still, coffin nails would remain a very profitable business. In 1998, industry leader Philip Morris would earn $5.3 billion, almost as much as Microsoft.

 

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82. Michael Milken starts Drexel's junk-bond trading operation: 1971.

 

Michael Milken, a young punk out of Wharton, convinces his firm that there's gold in junk. After making a killing in "fallen angels" -- once-investment-grade bonds that have fallen in price because of investor worries that their issuers will default -- Milken and the firm then known as Drexel Harriman Ripley begin underwriting high-yield "junk" bonds for entrepreneurs previously cut out of the capital markets. Milken's clients include Turner Broadcasting and Mirage Resorts, unleashing Ted Turner and Steve Wynn on an unsuspecting American public. Would-be corporate raiders soon turn to junk as a source of financing. A little insider trading later, the 1980s are in full swing.

 

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"The first U.S. supermarket" 

81. The first U.S. supermarket, King Kullen, opens: Aug. 4, 1930.

 

The Piggly Wiggly chain popular in the South lays claim to being the first self-service grocery store (and the even older A&P sold a lot of tea and stuff), but Michael J. Cullen's King Kullenstore in Queens, N.Y., is the first to bring together the high volume and low cost that are the hallmarks of the U.S. supermarket.

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           Intelsat          

80. Intelsat 1 goes into service: June 28, 1965.

 

 

The first commercial communications satellite, nicknamed Early Bird, introduces live commercial television across oceans. Years later this wonderful technology would mean we could share the O.J. trial -- live! -- with our friends in Yemen.

 

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79. Maiman unveils the first working laser: July 1960.

 

Building on the work of a bunch of other guys, Theodore Maiman's creation paves the way for multiple innovations, including high-quality printing, new forms of surgery, fiber-optic communications, bar-code scanners, CDs and laser tag.

 

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78. The Black Monday crash: Oct. 19, 1987.

 

Really just a bump in the night.

 

The Dow Jones Industrial Average drops 508 points, a stunning 22.6%, on "Black Monday," raising fears that the U.S. economy is headed for a severe recession, or even a depression. But the Federal Reserve acts quickly to cut interest rates and pump cash into the banking system, helping end the threat. Little over a decade later, the slide would be remembered as not much more than a chance for investors to buy on one of history's biggest dips.

 

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At&t Booth 

77. MCI is authorized to compete with AT&T: 1971.

 

MCI, founded in 1968, receives FCC approvals in 1969 that let the company build its first microwave route and interconnect with local phone companies. But the upstart scores its big breakthrough in 1971, when MCI (today subsumed into MCI WorldCom) becomes the first company authorized to compete with AT&T in the domestic private line market.

 

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76. Bernays lights the 'Torches of Liberty': March 31, 1929.

 

In 1928, George Washington Hill of American Tobacco comes to public relations master Edward L. Bernays with a problem: Public smoking by women is taboo, and the untapped market potential is maddening. Bernays, a nephew of Sigmund Freud, consults a psychoanalyst to divine what might lead ladies to light up outdoors. The answer, in these just-past-suffrage days: Appeal to their desire for freedom and equality.

 

Bernays has his secretary quietly orchestrate a debutante demonstration at New York's 1929 Easter Parade: Young women of good breeding boldly fire up cancer sticks and puff away as they stroll Fifth Avenue. The effort, known as the "Torches of Liberty" or "Torches of Freedom" march, boosts sales of American's Lucky Strikes and reinforces the power of PR. Years later Bernays would put his PR skills to work against tobacco, disavowing Hill. But the damage was done: Flackery and cigarettes were big business and would stay that way.

 

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75. The explosion of RCA's stock epitomizes market mania: 1928-29.

 

The Internet stock party of recent months wouldn't be the first time that stocks in a promising new technology have acted maniacally. Early in 1928, Radio Corp. of America is selling for 85 1/4. But over the next year and a half, it begins a dizzying climb. It hits 200 in May; 400 in November; 500 the following summer. After a 5-for-1 split, it rises even further, to the presplit equivalent of 573 3/4. It is probably the most pronounced symbol of excess of the bull market of the '20s. And guess what: It wouldn't be in business 70 years later.

 

When RCA and other stocks plunge below pre-1928 levels, it puts the fear of stocks in Americans. Investors turn to safer investments like bonds and, eventually, federally insured bank accounts and certificates of deposit. It would take a younger generation who knew not Joseph, unscarred by the crash and egged on by the great bull market of the 1980s and 1990s, to erase the troubling memory of the 1920s bubble.

 

That younger generation would learn that everything's different now, because there's a new economy and all.

 

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74. AOL goes to flat-rate pricing: Oct. 29, 1996.

 

America Online's move away from rates based on the amount of time spent online to pay-one-price charging is a crucial step toward the now-dominant view of the Internet as an advertising-driven mass medium.

 

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73. FDR signs the act creating the Federal Housing Administration: June 1934.

 

With innovations like the 30-year self-amortizing mortgage, the Federal Housing Administration puts the power of the federal government behind home financing, helping to make home ownership a reality for tens of millions of Americans and powering the residential real estate industry.

 

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72. Rosie the Riveter and FEPC: Women and minorities contribute to the war effort: 1941-45.

 

World War II puts a quick end to the high unemployment levels of the Depression, as most non-flat-footed young men abandon their plowshares for guns. Women take factory jobs previously reserved for men, making Rosie the Riveter into a feminist and patriotic icon. And under pressure from civil rights leader and union president A. Philip Randolph, President Franklin Roosevelt in 1941 issues an executive order banning race discrimination by the feds and government contractees and creates the Fair Employment Practices Committee to enforce the rule, helping blacks to get previously unavailable jobs.

 

But civil rights progress would stall after the war as men returned from the front: Women would be laid off from their jobs and urged to return to the kitchen and play their part in the baby boom, while Congress would refuse to renew the FEPC.

 

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71. Black and Scholes introduce their options pricing model in the Journal of Political Economy: May/June 1973.

 

Fischer Black and Myron Scholes of the University of Chicago devise a pricing model that establishes a standard by which options can be priced. Until Black-Scholes, traders and investors have been pretty much guessing. The model figures out a way to measure the volatility of the underlying instrument and its erosion of value over time. Black-Scholes adds enough credibility to pricing to make options -- and later more complex derivatives -- legitimate, liquid instruments for all sorts of institutional investors, ranging from Goldman Sachs to Barings' Nick Leeson.

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The Agricultural Adjustment May 12, 1933. 

 

 

 

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toys r us

 

 

 

 

 

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medicare 

 

 

 

 

 

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carrier

 

 

 

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bull market begins

 

 

 

 

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The first Wal-Mart opens

 

 

 

 

 

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  TSC's Countdown was conceived, coordinated and overseen by Senior Writers Jesse Eisinger and Alex Berenson, Staff Reporter Katherine Hobson and Markets Editor John J. Edwards III. Some items were written by George Mannes, Cory Johnson, Aaron L. Task and Gregg Wirth. Production Editor Jacqueline Waters, Graphic Designers Paula Wood and Roger Spence and Production Assistant Michael Podrazik created and coordinated the graphical elements. Associate Editor Ellen Leventry and Assistant Editor Laura Poynter handled interactive features. Copy Editor Jennifer Howze and Executive Editor Jamie Heller contributed sharp-eyed editing. TSC consulted with academic experts for advice on the Countdown and would like to thank R. Douglas Hurt, editor of Agricultural History; Michael Lehmann, professor of economics at the University of San Francisco; Austin Kerr, professor of history at Ohio State University; Ed Perkins, professor emeritus of history at the University of Southern California; Christine Rosen, associate professor of history and public policy at the Haas School of Business at the University of California at Berkeley; and Chris Sterling of George Washington University. We retain responsibility for all errors, however (and will take credit for all the good stuff). https://www.thestreet.com/story/11173297/1/100-events-that-changed-business-1900-2000.html#5