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100 Events That Changed Business: 1900-2000

70. Federal Express begins operations: April 1973.

Before Federal Express, today a unit of FDX, mail delivery is the sole province of the federal government. Options for overnight, cross-country delivery range from telexing to getting on a plane documents in hand. FedEx and other overnight delivery companies revolutionize business in the U.S., allowing both corporate chieftains and average schmoes to reach heretofore unseen heights of procrastination.

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69. The government bails out Chrysler: Jan. 7, 1980.

President Jimmy Carter signs the Chrysler Loan Guarantee Act, offering the troubled automaker $1.5 billion in federal support. One of the few useful pieces of corporate welfare ever enacted, the guarantees helped pull Chrysler (now a unit of DaimlerChrysler) through a severe recession, saving tens of thousands of jobs. The company would pay back the loans in 1983, seven years ahead of schedule. But the bailout wouldn't create the great moral hazard critics feared, since most big companies would either straighten up and fly right or, like Pan Am, be allowed to go bankrupt.

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68. President Johnson's Texas-sized spending spurs domestic inflation: 1960s.

Guns? Butter? Guns? Butter? Hell, I'll take both! Lyndon Johnson's effort to conduct a war in Vietnam and a War on Poverty at the same time causes inflation to triple from 1.9% in 1965 to 6.2% four years later. The price hikes give Americans their first taste of the double-digit inflation that would follow a decade later.

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67. Cohen and Boyer pioneer recombinant DNA techniques: 1973.

Herbert Boyer, a University of California at San Francisco biochemist, and Stanley Cohen, a Stanford University geneticist, slip a gene from an African clawed toad into a bacterium. The transplanted gene starts producing protein inside the bacterium, proving that simple organisms could be called upon to become protein "factories." The discovery is recombinant DNA, the first time the stuff of life is taken from its natural place and artificially inserted into another piece of DNA. The biotech industry is born.

Stanford and UCSF see the discovery as a money-making opportunity. In the years to come, the universities would license the process to dozens of companies, reaping millions of dollars. Science, the academy, medicine and the corporation would be inexorably entwined from then on.

Boyer, stricken with the Silicon Valley bug, would go on to help found the first biotech company, South San Francisco's Genentech. Genentech in 1982 would win the first approval for a genetically engineered protein, human growth hormone, giving hope to short kids everywhere that their hoop dreams might be realized.

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66. Alfred Sloan becomes president of General Motors: 1923.

At the beginning of the 1920s, General Motors is nearly bankrupt and Ford has nearly 60% market share. But then Alfred P. Sloan comes along. He brings discipline to the far-flung company, actually doing some planning, strategizing and organizing. And he would manage, over his decades at the helm, to master market segmentation, selling Chevrolets to Joe Sixpacks and Caddys to the upper crust and, later, pimps. By targeting sales, the company avoids internal competition, a strategy that enables GM to bypass Ford as the No. 1 car maker. Sloan's revitalized GM establishes decentralized management, with division heads given the freedom to come up with their own ideas. Almost 80 years later, no large company would go untouched by Sloan's decentralization concept.

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65. The CCITT Group 3 recommendation for facsimile machines is adopted: 1980.

The fax alone doesn't speed up the pace of American business -- after all, the first facsimile was patented in the mid-19th century. What changes things is the fax standard -- an international committee's adoption of specs for fax machines. Finally, offices know that if they buy a Brand X fax machine, they can send documents in a matter of minutes to a Brand Y machine across the country.

Once hooked on speed -- we're talking about the pace of business here, not the drug -- companies can't give it up. And so, getting the job done fast, faster and fastest would become an unshakeable part of American business. With the innovation of email, faxing would seem to take forever. And a T1 line becomes a must.

Business and the markets would speed up to match communication technology. Stock-market corrections would begin in the morning and be over by noon. Jay Goulds (and Gatsbys) would mint money instantly. On Internet time, companies would not only achieve stellar success but also flame out in a fraction of the time it took previous generations to build empires.

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64. Nasdaq gets its first blue-sky exemption: Dec. 6, 1984.

By the mid-1980s, the upstart Nasdaq National Market System, run by the National Association of Securities Dealers, is pretty well sick of being called an upstart. Nasdaq wants to play on the same lucrative and prestigious field as the New York Stock Exchange. One key to level competition for Nasdaq is gaining exemptions from the so-called blue-sky laws, state-by-state regulations governing what securities can be sold to state residents. While NYSE and American Stock Exchange stocks have automatic exemptions, Nasdaq issues have to endure arduous registration processes in the various states.

That starts to change in December 1984, when Georgia becomes the first state to grant Nasdaq stocks the same treatment granted to the older exchanges' issues. Many states would follow suit. By the mid-1990s, giant companies such as Microsoft and Intel would turn down the Big Board's entreaties and stay on the formerly small-cap-only Nasdaq. The Amex would become such a shell of its former self that the NASD would effortlessly swallow it in 1998.

But the ascendancy of the Nasdaq would prove to be more than just a story of competition between stock markets. In giving a legitimate trading forum to entrepreneurial start-ups with little operating history and continuing losses, the Nasdaq would contribute to the "venture capitalization" of the country. These companies would be volatile and orders-of-magnitude riskier than many NYSE listings. But many individual investors would seize the chance to live entrepreneurial lives vicariously, seeking to discover -- and strike it rich on -- companies that go from the garage to the Fortune 500.

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63. Frances Kelsey blocks the U.S. approval of thalidomide: 1961.

Worried about its potential for side effects, Food and Drug Administration medical officer Dr. Frances Kelsey delays the application for approval of thalidomide, a sleeping pill that later turns out to cause serious birth defects. Her action leads to the overhaul of the FDA and a tightening -- a creation, really -- of drug approval standards that live today. Not only would the overhaul bring regulation to the enormous and powerful pharmaceutical industry, it would haul the drugmakers into the modern era, forcing them to conduct scientifically rigorous clinical trials.

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62. Benjamin Graham's Security Analysis is published: 1934.

"Margin of safety." Mull those words. Now apply them to your stock portfolio. Benjamin Graham would have wanted it that way.

Born Benjamin Grossbaum in London in 1894, Graham emigrates to America with his family a year later. By 1934, he's teaching evening classes to Depression-wearied business students at New York's Columbia University and joins fellow prof David L. Dodd in writing the seminal guide to value investing, Security Analysis.

Graham's bracingly simple philosophy hinges on those three little words, margin of safety. That means you buy stocks trading at a significant discount to their intrinsic value. To be extra safe, you buy stocks worth at least 50% more than they cost. You skip the high price-to-earnings ratios, the swollen price-to-book ratios. Graham popularizes the concept of valuation, and value, as guiding forces of investing.

The much-married, womanizing Graham's prudence (at least in finance) would inspire many to follow his teachings, perhaps most famously Warren Buffett, the billionaire Nebraskan more closely associated with the word oracle than Larry Ellison. Value investing would remain in sharp conflict with the headlong, and lately vastly profitable, chase after growth at all costs, but millions of investors would be more than content with the minimized risks and steady rewards of the Graham way.

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61. Hoover Dam is completed: March 1, 1936.

The greatest American engineering feat of the century, Hoover Dam harnesses the power of the Colorado River and opens up the Southwest for major settlement and development.
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