The Dow Jones Industrial Average has been around since 1896, and its antecedents date to 1884. This venerable index has refused to stand still ever since Charles Dow first sought to represent the American economy in a handful of companies. To date, the Dow has changed 49 times, with many moves occurring in clusters early in its history. What has become of the original Dow Dozen? Does any trace remain of the most notable industrial stocks of mid-1896?
Let’s take a look to see just how important the Dow’s original components actually were to the American economy and what eventually happened to them once they fell out of favor.
American Cotton Oil
This company was originally formed as a cotton oil trust in the 1880s, and it quickly dominated its niche. However, the American Cotton Oil Trust was dissolved in 1889 following a Louisiana antitrust lawsuit and reconstituted as a corporation. This company’s stay on the Dow was brief, and it was gone in 1901. Following removal, the company was absorbed by a former subsidiary in 1929, changed its name to Best Foods in 1931, and merged with Corn Products Company — now Ingredion Inc (NYSE:INGR) — in 1958. Corn Products, which had changed its name to CPI, split into Bestfoods and Ingredion in 1997, and Bestfoods was acquired by consumer products giant Unilever plc (ADR) (NYSE:UL) three years later.
Formed in 1891, American Sugar quickly became the dominant sugar-refining trust, and at one point it controlled virtually all processing capacity in the United States. The company remained a Dow component until 1930, by which point its power had waned. After first changing its name to Amstar in 1970, the company still exists today as Domino Foods.
Added in 1896, removed in 1899, added again in 1924, and removed again in 1930 before grabbing a spot in 1932 that it would retain until 1985, American Tobacco has a history almost as convoluted as its Dow membership. It was the original Tobacco Trust, but it was broken up in 1911 on the same day the Standard Oil Trust lost its antitrust suit. The Tobacco Trust became American Tobacco, R.J. Reynolds, Liggett and Myers (now a subsidiary of Vector Group Ltd (NYSE:VGR)), and Lorillard Inc. (NYSE:LO).
American Tobacco became a subsidiary of holding company American Brands in 1985, as the latter had been buying up various businesses since 1969. At one point, American Brands produced office supplies, golf products, home improvement products, and spirits. The company sold its tobacco business in 1994 and renamed itself Fortune Brands in 1997 to focus on its spirits and hardware segments. These business units split in 2011 to become Fortune Brands Home & Security and Beam , one of the most diverse liquor companies in the world.
A component for only two years, Chicago Gas was bought (and replaced on the Dow) by regional competitor Peoples Gas in 1898. Peoples remained a component until 1915, shortly before the index expanded to 20 components. It became Peoples Energy in 1980 and merged with a Wisconsin utility in 2007 to become Integrys. Integrys is still headquartered in Chicago.
Distilling & Cattle Feeding
This oddly named company became American Spirits Manufacturing mere months after the Dow’s formation, but it was dropped from the list in 1899. Despite this rejection, American Spirits grew into a Whiskey Trust that controlled more than 70 distilleries on the eve of Prohibition. The company returned to the Dow as National Distillers in 1934 after the repeal of Prohibition, and it remained a component until 1959. During this time it expanded into chemicals and metals manufacturing. The company eventually sold its part of its alcohol business to Grand Metropolitan — which merged with Guinness to form Diageo — and to Fortune Brands, which retains Old Grand-Dad whiskey and other National Distillers spirits as part of Beam. The industrially focused business of National Distillers remains as Millennium Chemicals.
General Electric Company (NYSE:GE)
General Electric is still going strong. It is one of the world’s largest companies, with interests ranging from electric generators to mining and manufacturing. After a quick removal in 1898, GE returned to the Dow in 1907, and its steadfastness since then makes it the only member of the Dow’s century club.
Removed after two years (the Dow was inconsistent in its formative years), Laclede Gas is still around. It’s the largest natural-gas utility in Missouri and a subsidiary of holding company Laclede Group Inc (NYSE:LG).