THE DOW JONES INDUSTRIALS, THEN AND NOW

A FELLOW ALUMNUS of Worcester Polytechnic Institute, class of ’65, inspired me to learn more about the Dow Jones Industrial Average, 1965 versus 2021. The Dow’s evolution is a suitable accompaniment to Leslie J. Allen’s discussion “On Industry 4.0” here at SimanaitisSays.

Dow, Jones, and Bergstresser. In 1883, Dow Jones & Company was established by journalist Charles Dow, journalist/statistician Edward Jones (born in Worcester, Massachusetts), and journalist Charles Bergstresser. 

The trio’s Dow Jones & Company went on to found The Wall Street Journal, its first issue published on July 8, 1889. The original WSJ costs 2¢. According to Merriam-Webster, it wasn’t until circa 1939 that “two cents” was “a sum or object of very small value: practically nothing// said angrily that for two cents he’d punch your nose.”

To put 2¢ in 1889 perspective, according to the CPI Inflation Calculator, its value today would be around $0.57.

The Original Dow Jones Industrial Average. Dow and Jones calculated their first average of industrial stocks on May 26, 1896. None of the original 12 companies remains part of the index today. 

They were American Cotton Oil, now part of Unilever; American Sugar Refining, now Domino Foods (nothing to do with Domino Pizza); American Tobacco, trust-busted in 1911; Chicago Gas; Distilling & Cattle Feeding, now Millennium Chemicals; General Electric, removed from the Dow Jones in 2018; Laclede Gas; National Lead; North American, an electric utility broken up in 1946; Tennessee Coal, Iron and Railroad; United States Leather, dissolved in 1952; United States Rubber, changed to Uniroyal in 1961, merged with Goodrich in 1986, the tire business bought by Michelin in 1990. 

It’s a typical batch of 1896 industries, with interesting histories. 

Jump to 1965. Wikipedia notes, “The Dow began to stall during the 1960s, but still managed a respectable gain from the 616 level to 800.” The average level in 1965 was 910.70; in 1966, it was to drop to 872.78. 

Here’s a Dow Jones Industrials list from 1965. (The change from 12 to 20 selected companies came in 1916; the jump to today’s 30 in 1928.)

Allied Chemical and Dye Corporation	General Electric Company	The Procter & Gamble Company
American Can Company	General Foods Corporation	Sears Roebuck & Company
American Smelting & Refining Company	General Motors Corporation	Standard Oil Co. of California
American Telephone and Telegraph Company	Goodyear Tire and Rubber Company	Standard Oil Co. of New Jersey
American Tobacco Company (B shares)	International Harvester Company	The Texas Company
Bethlehem Steel Corporation	International Nickel Company, Ltd.	Union Carbide Corporation
Chrysler Corporation	International Paper Company ↑	United Aircraft Corporation
Corn Products Refining Company	Johns-Manville Corporation	United States Steel Corporation
E.I. du Pont de Nemours & Company	National Distillers Products Corporation	Westinghouse Electric Corporation
Eastman Kodak Company	National Steel Corporation	F. W. Woolworth Company

There are plenty of familiar names. Curiously, though, the only one remaining today is Procter & Gamble, added in 1932.

Here’s the Dow Jones Industrials as of August 20, 2020.

Notable omissions are automotive giants Chrysler (replaced by IBM in 1979) and GM (replaced by Cisco Systems in 2009). Both are part of what Leslie J. Allen called the transitions of Industry 3.0 and Industry 4.0.

An easy call; an odd one. Eastman Kodak was replaced by Pfizer in 2004; Pfizer was dropped from the Dow Jones Industrials by August 2020.

I don’t pretend to understand the wisdom of selecting stocks, for any reason. I leave it to the experts. However, I note I got my first Pfizer shot a couple weeks ago. ds 

© Dennis Simanaitis, SimanaitisSays.com, 2021