7/27/2013

Today in History: Central Banks, Trans-Atlantic Telegraphs, and Bugs Bunny

On this day in economic and business history ...

The Bank of England was established by royal decree on July 27, 1694. Formally known as the Corporation of the Governor and Company of the Bank of England, it was only the second central bank to be established anywhere in the world (Sweden's was established in 1668), and it soon became the model for central banks everywhere.

Established to fund England's revival after a crushing series of naval defeats at French hands, the Bank of England is the third-oldest continuously operating bank in the United Kingdom, and by far the most important. The bank also helped to underwrite English industrialization in the 18th and 19th centuries through debt issuance and loans. It has also historically served as the nation's chief store of gold reserves, which led to its enshrinement as issuer of the national currency when the currency was linked to gold in 1844. Today, it is the only bank with authority to issue bank notes in England, and it regulates the issuance of currency elsewhere in the United Kingdom. The bank also serves in much the same way as the United States Federal Reserve, as it is tasked with maintaining stable rates of inflation while engaging in other economically beneficial monetary policies.

As important as it might be, language buffs and fiscal historians alike might have a difficult time plowing through the bank's formative charter. Despite comprising only two pages of modern size, this document might just contain one of the longest opening sentences ever committed to paper in the English language. By this writer's calculation, that first sentence contains more than 600 words.

What's up, Doc?
Bugs Bunny made his debut on July 27, 1940, in the animated Warner Bros. short A Wild Hare. The cartoon rabbit soon became Warner's (now Time Warner (NYSE: TWX  ) ) answer to Mickey Mouse -- and like Mickey, Bugs came out of the gate strong, as this short earned Warner an Academy Award nomination. Since his debut, Bugs has gone on to become the cartoon world's most enduring icon, appearing in more films of any length  than any other animated character. Hollywood has since rewarded Bugs with only the second star ever given to an animated character (after Mickey, of course), and the wisecracking rabbit continues to serve as Warner's mascot.

A spark across the Atlantic
The first permanent trans-Atlantic telegraph cable was completed on July 27, 1866, linking Newfoundland and Ireland with 1,600 miles of wire. It was the first time in the history of the world (with one small caveat) that two people, standing an ocean apart, might communicate nearly instantaneously rather than over the span of days or weeks.

Although it was completed only five years after the first transcontinental telegraph line in the United States, the trans-Atlantic telegraph line had been on the drawing board for far longer. Western Union (NYSE: WU  ) built the transcontinental telegraph in less than a year, taking advantage of extant lines, but trans-Atlantic cable-laying efforts had been stymied twice in the 1850s before the effort was nearly derailed by the American Civil War.

A trans-Atlantic line was built and successfully transmitted messages for a few days in 1858 before succumbing to corrosive damage in the Atlantic. That project's developer, Cyrus Field, would return to his dream after the war with a better cable design in 1866, and this one would hold up until 1872. By then, newer cables were already in the works. Field's company, the Anglo-American Telegraph Company, laid down four more trans-Atlantic cables from 1873 to 1912, when its assets were leased by the far stronger Western Union. This arrangement continued until 1963, by which point modern telecommunications cables -- in service beneath the Atlantic since the late 1950s -- had rendered the old lines obsolete.

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