This week in Wall Street's history shows us two sides of one of the most famous men in finance, John D. Rockefeller. It marks his time as a cutthroat tycoon as well as the launch of his massive philanthropic foundation. This week has also seen structural changes in the world of finance, including the beginnings of the anti-trust movement and an important moment in the history of unionization. Read on to find out more. (Missed last week's article? Read Wall Street History: Al Capone Vs. The IRS.)

In Pictures: World's Greatest Investors

The World Gets Smaller
May 10, 1869, a golden spike was hammered in at Promontory, Utah, to mark the completion of the first transcontinental railroad in the United States. The history of the railroad and financial history are inseparable up to the 20th century – and with Buffett's high profile buy of Burlington Northern this year, the connection is still persevering.

The railroads were among the first companies to issue bonds and stocks in the United States. They also sped up the flow of information and, by extension, the mechanics of investing. As railroads were laid, telegraph companies worked out a deal where their lines would follow the tracks. The transcontinental line and its accompanying high-speed (compared to mail horses) communication was one more link between the financial hubs and the industrial and agricultural centers spread across the nation.

Venture Capital and Jamestown
On May 13, 1607, English colonists arrived by ship at the site of what was to become the Jamestown settlement in Virginia. The Virginia Company of London, a collection of venture capitalists, funded the whole expedition. The thought was that unimaginable wealth was waiting in the new world. It turned out that there weren't nuggets of gold lying out for the taking, nor was the land unoccupied. Between harsh winters and the occasional hostile raid, it took many more ships of settlers to establish a beachhead in the new world. The wealth that did eventually flow back to England was in the form of tobacco. The crown nationalized the private venture following the Jamestown massacre, declaring it a royal colony of Britain.

A Different Kind of Board Member
On May 13, 1980, Douglas Fraser was appointed to the board of Chrysler. This marked the first time that a large American corporation picked a union member to join the board. Fraser helped Chrysler secure a government bailout the previous year by winning concessions from the union - though Chrysler only made it 30 years before having to go completely into bankruptcy in 2009. As a board member, Fraser acted as the vote for the entire union, often opposing management stock options and cuts to worker benefits. (Learn more about getting involved in the auto industry, read Analyzing Auto Stocks.)

A Clearly Named Party
Ambiguity in politics is the tiresome norm now, but on May 14, 1884, the Anti-Monopoly Party's goals were made crystal clear at its first convention. As the name suggests, the party was against large trusts with monopoly power – the ability to set prices and force out new competition. General Benjamin Butler was their pick for the presidency, but Butler didn't quite make it into the oval office on what was essentially a one issue platform. However, the party didn't fade completely after the loss. The monopoly issue was taken up on its populist merits and many of the reforms the Anti-Monopoly Party sought were brought about in the Sherman Antitrust Act six years later.

Rich Like Rockefeller
On May 14, 1913, New York Governor William Sulzer approved the charter for John D. Rockefeller's Rockefeller Foundation. Rockefeller created the foundation to carry out his charitable works, following in the footsteps of fellow tycoon, Andrew Carnegie. Started with $35 million, the Rockefeller Foundation is now a billion dollar organization carrying out the original mandate to, "to promote the well-being of humanity around the world." (To learn more about Rockefeller, check out J.D. Rockefeller: From Oil Baron To Billionaire.)

Stocks Take Over Tokyo
In film, Tokyo is constantly being leveled by Godzilla, but the city saw a different type of beast arrive on May 15, 1878, when the Tokyo Stock Exchange (TSE) was formed. Following WWII, the TSE surged ahead with the development of Japan as an industrial and technological power. The TSE has fluctuated between being the second largest exchange in the world and merely rounding out the top five, but it also brought Japan a Godzilla-like beating. In the massive Japanese bubble, many of the stocks on the TSE were used for collateral for loans of all types. The crash has left Japan with zombie banks and massive debts that are still an issue more than 20 years later.

Sherman Vs. Standard Oil, NFL and More
On May 15, 1911, the Supreme Court ordered the dissolution of Standard Oil. The government previously used the Sherman Antitrust Act to break up the oil trust in 1892, but the trust was quickly cleverly converted into a holding company. After the court ruling in 1911, however, Standard Oil was carved up into smaller, yet still sizable, chunks. They've altered their names over the years, but Chevron, Exxon and Conoco, among others, all share a Standard Oil pedigree. These companies had the advantage of Standard Oil's R&D and infrastructure, so they easily made the transition to gasoline producers as kerosene sales dropped due to Edison's electric light.

May 16, 1991, saw an antitrust suit filed against the NFL. William Sullivan founded the Boston Patriots - now the New England Patriots - but was forced to sell the team due to financial problems. Sullivan launched the suit against the NFL because the league blocked him from raising financing from public investors via a stock sale of half the team. Sullivan settled with the league for $11.5 million. Along with MLB other pro sports organizations, the NFL has found itself facing antitrust legislation more than once. Many of the cases have centered around barriers to entry, but there are similar cases over licensing, television and even free agency. Currently the NFL is back in Supreme court with an apparel-makers claim that the league is made up of 32 businesses colluding, rather than a single business offering one product as the league maintains. This distinction has been the crux of the NFL avoiding a clear antitrust loss in the past.

That's all for this week. Next week we'll cover the birth of the NYSE, the beginnings of the movie industry, and much more.

Feeling uninformed? Check out the financial news highlights in Water Cooler Finance: Greece Is Burning And Buffett's Under Fire.

Related Articles
  1. Entrepreneurship

    Top 5 Most Successful Swedish Entrepreneurs

    Understand what makes Sweden a great place for entrepreneurship. Learn about five successful Swedish entrepreneurs who are making big impacts.
  2. Options & Futures

    Pick 401(k) Assets Like A Pro

    Professionals choose the options available to you in your plan, making your decisions easier.
  3. Stock Analysis

    The Biggest Risks of Investing in Berkshire Hathaway Stock

    Learn about the risks of investing in Berkshire Hathaway. Understand how issues of succession, credit downgrade risk and increased regulation could hurt it.
  4. Entrepreneurship

    Top 5 Most Successful Mexican Entrepreneurs

    Understand why so many socially conscious entrepreneurs have come out of Mexico. Learn about the top most successful Mexican entrepreneurs.
  5. Investing Basics

    The Top Five Public Railroad Stocks in the U.S.

    We offer a breakdown of the seven Class I railroads in North America based on their annual revenues.
  6. Entrepreneurship

    Top 5 Most Successful Canadian Entrepreneurs

    Understand what makes an entrepreneur successful. Learn about five Canadian entrepreneurs who were able to achieve success in their respective times.
  7. Investing News

    Germany Tech Startups: Keep Them On Your Radar

    Many German companies, which are eager to catch up with the rest of the world by entering the digital age, are investing in tech startups.
  8. Economics

    The 5 Countries That Produce the Most Solar Energy

    Discover which countries are taking advantage of solar power and how they are implementing systems to use solar as a viable source of energy.
  9. Stock Analysis

    3 Stocks Warren Buffett Sold in Q2 2015

    Learn from Warren Buffet, world-renowned investor and CEO of Berkshire Hathaway. Uncover his most recent investment decisions as of Q2 2015.
  10. Professionals

    3 Tips For Finding a Job in Private Equity

    Understand how difficult it is to break into the field of private equity, and increase your chances by preparing early and following these tips.
  1. Is Japan an emerging market economy?

    Japan is not an emerging market economy. Emerging market economies are characterized by low per capita incomes, poor infrastructure ... Read Full Answer >>
  2. How do you find the break-even point using a payback period?

    It does not make sense to find the breakeven point using a company's payback period. A company's payback period is concerned ... Read Full Answer >>
  3. What is considered a reasonable interest rate for a syndicated loan?

    A 2010 survey of syndicated loans found an average interest rate of 7.9%. However, the majority of syndicated loans are floating ... Read Full Answer >>
  4. How strong are the barriers to entry for new companies in the telecommunications ...

    The barriers to entry for new companies in the telecommunications sector are very strong and primarily revolve around the ... Read Full Answer >>
  5. What are the pros and cons of downround financing?

    Down round financing is often reflected in very negative terminology. In some cases, it can be very bad for existing shareholders. ... Read Full Answer >>
  6. What type of companies use downround financing?

    Down round financing involves selling stock to new investors at a lower price than the investors paid. Shares for the company ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  2. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  3. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  4. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
  5. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
  6. Cost Of Funds

    The interest rate paid by financial institutions for the funds that they deploy in their business. The cost of funds is one ...
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!