This week in Wall Street's history is marked by the death of the man who wrote the book on being an eccentric billionaire. Other notable events include one of the closing chapters in the Enron scandal and an event that still angers gold bugs even after over 70 years. Read on to find out more. (Find out what's happening in the news this week in Water Cooler Finance: Auto Hope, Bubbling Oil And Obamanomics.)

In Pictures: 6 Biggest Millionaire Flops

The Spruce Goose Is Grounded
On April 5, 1976, Howard Hughes, best known as a legendary aviator and film producer, died during a flight from Mexico to Texas. The billionaire had to be identified by fingerprints because his various neuroses and drug use left him emaciated and unrecognizable. In his prime, Hughes made headlines by setting flight records, making movies and carrying on affairs with a rotating cast of Hollywood starlets. He used the fortune inherited from his father to bankroll his films and create an aircraft manufacturing firm that won many government contracts - although under suspect bidding practices.

The mystery around Hughes deepened as he became more reclusive while also expanding his political influence with his wealth. Hughes continues to be tied to many popular conspiracy theories, while stories of the mental illness that permeated his later years continue to pop up. According to popular accounts, Hughes developed an acute phobia of germs and insects while also allowing his hair and finger nails to grow to extraordinary lengths. Even in death, Hughes continued to grab headlines as a handwritten will left part of his fortune to a service station owner in Utah. It was declared a forgery and, thus, Hughes died intestate. His fortune was eventually dispersed among relatives.

Going for the Gold
On April 5, 1933, Presidential Executive Order 6102 was introduced by President Roosevelt as part of the New Deal controls. This order essentially made "hoarding" gold illegal for private individuals. For gold bugs, this was one of the watershed events in history – a financial massacre akin to Custard's last stand. Gold or gold certificates over $100 in value were to be turned in to the Federal Reserve in return for paper currency. This influx of gold allowed the Fed to keep up transfers of gold abroad – a condition of maintaining a gold standard. Domestically, however, the currency was being inflated via the massive federal programs under the New Deal. This temporary measure remained in effect until 1974. During this time, many people kept secret stores of gold in safety deposit boxes and other unregistered stores. (For more insight on this event, see The Gold Standard Revisited.)

Truman, The Man Of Steel
On April 8, 1952, President Truman seized control of U.S. steel to stop a national strike. The crisis was brought about by government price and wage controls meant to fix the costs of the Korean War. The steel industry was particularly vulnerable to government controls because metal was vital for building the tanks, bombs and guns that were being thrown, tossed, shot and driven over the Korean peninsula. Truman's nationalization of the steel industry was challenged on constitutional grounds, but the government used further threats of seizure to bring both parties to the bargaining table. The whole incident raised unpleasant questions about national security, private industry and the limits of government power. (To learn more, see Why did the U.S. government take control of the steel industry in 1952?)

Patent Law Is Born
George Washington gave the United States its first patent laws on April 10, 1790. The original patent law covered inventions and processes and only lasted 14 years. Upon the expiration of a patent, only the original filer could renew it. Many American inventors opposed the idea of patents, notably Benjamin Franklin, but the new law provided income for inventors who sometimes saw their inventions copied and mass produced by early industrialist with deep pockets.

From a single paragraph in the law books signed by George Washington, patent law has grown to fill volumes of its own and has its own cadre of lawyers who specialize in it. Patents represent a source of profits for many companies while also proving a major source of legislative risk for companies that find themselves on the wrong end of patent infringement litigation. (To learn more, see Patents Are Assets So Learn How To Value Them.)

Absolutely Innocent
On April 10, 2006, former Enron Chief Executive Jeffrey Skilling declared himself "absolutely innocent" at his fraud and conspiracy trial in Houston. Enron had been cooking the books with the help of Arthur Anderson and both companies went down in flames, along with the portfolios of Enron's many investors. The judge must not have believed Skilling's declaration; the CEO was sentenced to over 24 years in prison. (To learn more, see Enron's Collapse: The Fall Of A Wall Street Darling.)

Morality by Taxation
April has traditionally been a bad month for smokers. Already taxed federally, on April 11, 1921, smokers saw Iowa levy the first state tax on cigarettes. And, on April 1, 2009, cigarette lovers saw a record increase in the federal tax from 39 cents per pack to $1.01. Combined with average state taxes, smoking a pack of cigarettes costs over $2 in taxes. The taxes are meant to help offset the cost of tobacco related health problems and, like all sin taxes, guide the public's choices.

That's all for this week. Next week we will look at an insider trading scandal and the birth of two of the largest corporations in the world. Until then.

Missed last week's article? Check out Wall Street History: A Random Walk, Nixon's Taxes and The Marlboro Man.

Related Articles
  1. Chart Advisor

    Traders Step Back to Assess Commodities Damage

    Traders are turning to these exchange-traded notes and exchange-traded funds to analyze key commodities and determine what could be coming next.
  2. Stock Analysis

    How Rollins Inc. Transformed from Radio to Pest Control

    Discover how Rollins, Inc. grew and expanded, making numerous acquisitions, transitioning from the radio industry to the pest control industry.
  3. Entrepreneurship

    Mark Cuban Success Story: Net Worth, Education & Top Quotes

    Learn more about America's favorite billionaire: Mark Cuban, outspoken owner of the Dallas Mavericks and star of the hit show "Shark Tank."
  4. Investing News

    Oil or Gold: Which Will Recover First?

    Not sure where oil and gold are headed? The answer is complex.
  5. Investing News

    How 'Honesty' Could Pay off for Jessica Alba

    Is it possible that Jessica Alba is one of the savviest businesswomen on the planet?
  6. Investing

    Using Fibonacci to Analyze Gold

    Use Fibonacci studies to analyze gold by picking out hidden harmonic levels that can provide major support or resistance.
  7. Investing News

    Acquisition of Zulily Inc

    On August 17, 2015, Zulily Inc (ZU), an e-commerce company that caters mothers and children, announced that it will be strategically acquired by QVC, a part of Liberty Media Corporation (LMCA), ...
  8. Investing News

    Famous Celebrities Who Love Investing

    Celebrities have a bit of a bad reputation these days. These five celebrities, though, have used their fame and their money to invest successfully instead of spending it on looking good.
  9. Entrepreneurship

    Bill Gates Success Story: Net Worth, Education & Top Quotes

    Learn about billionaire Bill Gates, and how the computer genius forged his own path from an early life and eventually changed the world with his innovation.
  10. Entrepreneurship

    Donald Trump Success Story: Net Worth, Education & Top Quotes

    Discover more about Donald Trump the man. Learn about his history and back story, path to success and current political aspirations.
RELATED TERMS
  1. Black Money

    Money earned through any illegal activity controlled by country ...
  2. Synthetic Identity Theft

    A type of fraud in which a criminal combines real (usually stolen) ...
  3. Cyber And Privacy Insurance

    An insurance policy that provides coverage from losses resulting ...
  4. Steve Cohen

    A trading magnate also referred to as the Hedge Fund King and ...
  5. Financial Action Task Force (FATF)

    An intergovernmental organization that designs and promotes policies ...
  6. David Tepper

    A legendary investor who specializes in distressed debt and manages ...
RELATED FAQS
  1. What are some high-profile examples of wash trading schemes?

    In 2012, the Royal Bank of Canada (RBC) was accused of a complex wash trading scheme to profit from a Canadian tax provision, ... Read Full Answer >>
  2. What are examples of inherent risk?

    Inherent risk is the risk imposed by complex transactions that require significant estimation in assessing the impact on ... Read Full Answer >>
  3. What is the difference between wash trading and insider trading?

    Wash trading is an illegal trading activity that artificially pumps up trading volume in a stock without the stock ever changing ... Read Full Answer >>
  4. How did Enron use off-balance-sheet items to hide huge debts and toxic assets?

    Prior to its infamous accounting scandals and collapse, Enron used off-balance-sheet special purpose vehicles (SPVs) to hide ... Read Full Answer >>
  5. What impact did the Sarbanes-Oxley Act have on corporate governance in the United ...

    After a prolonged period of corporate scandals involving large public companies from 2000 to 2002, the Sarbanes-Oxley Act ... Read Full Answer >>
  6. Where did the term 'Nostro' account come from?

    The term "nostro" is Italian in origin. It means "our" or "ours." In accounting and finance, nostro accounts are often differentiated ... Read Full Answer >>

You May Also Like

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!