Customer's Afternoon Letter, May 15, 1984.

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A: Brooklyn, New York, United States

Foundation of the Dow Jones Industrial Average


On May 26, 1896 Wall Street Journal editor and Dow Jones & Company founder Charles Henry Dow founded the Dow Jones Industrial Average. This represented the dollar average of twelve stocks from leading American industries.

"Previously in 1884, Dow had composed an initial stock average called the Dow Jones Averages, which contained nine railroads and two industrial companies that appeared in the Customer's Afternoon Letter, a daily two-page financial news bulletin which was the precursor to The Wall Street Journal. The original group of 12 stocks ultimately chosen to form the Dow Jones Industrial Average did not contain any railroad stocks, but purely industrial stocks. Of these, only General Electric currently remains part of that index.

"The other 11 were:

"American Cotton Oil Company, a predecessor company to Bestfoods, now part of Unilever.

"American Sugar Company, became Domino Sugar in 1900, now Domino Foods, Inc.

"American Tobacco Company, broken up in a 1911 antitrust action.

"Chicago Gas Company, bought by Peoples Gas Light in 1897, now an operating subsidiary of Integrys Energy Group.

"Distilling & Cattle Feeding Company, now Millennium Chemicals, formerly a division of LyondellBasell, the latter of which recently emerged from Chapter 11 bankruptcy.

"Laclede Gas Company, still in operation as the Laclede Group, Inc., removed from the Dow Jones Industrial Average in 1899.

"National Lead Company, now NL Industries, removed from the Dow Jones Industrial Average in 1916.

"North American Company, an electric utility holding company, broken up by the U.S. Securities and Exchange Commission (SEC) in 1946.

"Tennessee Coal, Iron and Railroad Company in Birmingham, Alabama, bought by U.S. Steel in 1907; U.S. Steel was removed from the Dow Jones Industrial Average in 1991.

"U.S. Leather Company, dissolved in 1952.

"United States Rubber Company, changed its name to Uniroyal in 1961, merged with private B.F. Goodrich in 1986, bought by Michelin in 1990.

"When it was first published in the late 1890s, the index stood at a level of 40.94, but ended up hitting its all-time low of 28.48 during the summer of 1896 during the depths of what later became known as the Panic of 1896" (Wikipedia article on Dow Jones Industrial Average, accessed 01-11-2013).

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