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Merck & Co., Inc. (MRK), Sony Corporation (ADR) (SNE): How the Dow Jones Industrial Average (.DJI)’s Oldest Company Got Started

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On this day in economic and business history…

The Dow Jones Industrial Average (INDEXDJX:.DJI) has 30 components, and all but one can trace their origins to a company founded in the United States after the American Revolution. The one exception is Merck & Co., Inc. (NYSE:MRK), one of the world’s largest pharmaceutical companies. Merck was born when Friedrich Jacob Merck bought the Engel-Apotheke (“angel apothecary,” or pharmacy) in Darmstadt, Germany, on Aug. 26, 1668. Pharmacist Merck thus began a family drug business that would stretch all the way to 1891, when descendant George Merck emigrated from Germany to the U.S. and established Merck & Co., Inc. (NYSE:MRK) in New York as a foreign subsidiary of the family’s pharmaceutical-chemicals business.

Merck & Co., Inc. (NYSE:MRK)

The 1891 subsidiary prospered for a time, but it fell under U.S. government control during World War I, when German-owned companies were seized to prevent domestic assets from flowing to the Kaiser’s war effort. After the war, Merck & Co., Inc. (NYSE:MRK) was re-established under American corporate governance and soon taken public, and it reclaimed its position as one of the leading companies in a relatively unformed industry. It was not until 1942, when Merck & Co., Inc. (NYSE:MRK)’s manufacturing operations were tuned to produce mass quantities of penicillin, that it moved toward becoming a truly modern pharmaceutical company — nearly three centuries after a German pharmacist established the Merck name in a far different “pharmaceutical” environment.

Merck & Co., Inc. (NYSE:MRK)’s transition toward its present form was sealed ion 1953, when it merged with Sharp & Dohme one of the early major pharmaceutical manufacturers. Merck & Co., Inc. (NYSE:MRK) scientists would go on to create a number of groundbreaking vaccines and treatments, and it became the Dow’s first pharmaceutical company in 1979. Today, Merck & Co., Inc. (NYSE:MRK) is the fourth-largest pharmaceutical company in the world , according to Forbes, but that ranking may change if the company’s top scientists come up with another hugely important new drug or three by next year.

Good news, everyone!
Philo Taylor Farnsworth, inventor of the first all-electronic television system, received the first modern television technology patent on Aug. 26, 1930. The technical wunderkind had been pondering and prototyping the technology for in-home moving pictures when he was a 16-year-old in high school, and he demonstrated the first working system in 1927 at the age of 21. This system had been inspired by Farnsworth’s Midwest farm upbringing, which exposed the boy to the back-and-forth sensory experience of plowing a field. The horizontal “scanning lines” of cathode-ray television tubes are artifacts of this visual construction.

The early work Farnsworth scratched out at 16 became crucial in the patent battle to follow, as a competing inventor named Vladimir Zworykin had applied for a similar patent in 1923, which later became the property of radio giant RCA. Since Farnsworth’s chemistry teacher was able to reproduce the teenaged Farnsworth’s technical drawings — created a year before Zworykin’s application — in court, Farnsworth won the case and forced RCA into royalty payments. However, since television’s development was largely forestalled until after World War II, Farnsworth never received much in the way of royalties. By the time the war ended, his patent was already 15 years old.

Today, there are more than 2 billion televisions in use around the world. Most are now manufactured in Asia by South Korea’s Samsung and LG Electronics and Japan’s Sony Corporation (ADR) (NYSE:SNE), which have consistently claimed first through third place in market share in recent years. Philo Farnsworth’s name and penchant for invention live on for fans of Futurama, who know to expect “good news, everyone!” when Professor Hubert J. Farnsworth walks into the scene.

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