On this day in economic and business history...
The dog days of summer are here, but most of you will be reading this where the temperature is almost always in the mid-70s (or about 22 degrees Celsius, for our international readers). If that's the case, you can thank Willis Carrier, an air-conditioning pioneer who founded the Carrier Engineering Corporation on June 26, 1915. Carrier was not the first person to develop air conditioning -- prototypes had been displayed at the St. Louis World's Fair and installed in the New York Stock Exchange building a decade earlier -- but his contributions are widely credited with the development of modern air-conditioning systems, which can accurately control temperature, humidity, circulation, and air quality through mechanical means.
Willis Carrier first developed a humidity-control system in 1902, and this first invention, patented in 1906, helped inform later work on air-conditioning systems. Carrier made a critical breakthrough in understanding humidity in 1906, the same year he received his first patent. This discovery formed the basis of his first true air-conditioning patent (granted in 1914), as well as his discipline-defining 1911 research document on psychrometrics, an engineering discipline primarily concerned with humidity that informs both air conditioning and meteorology.
Carrier and his business partners gained a number of contracts within months, as temperature and humidity control were essential in the manufacture of advanced munitions for the European forces fighting World War I. Carrier Engineering continued to grow after the war, its international expansion no doubt aided by the recognition and goodwill generated by its wartime work. Four years after the war's end, Carrier unveiled the breakthrough that eventually brought air conditioning to billions of homes and offices around the world. The Carrier Engineering history site has the details:
In May 1922, Willis Carrier unveiled his single most influential innovation, the centrifugal refrigeration machine (or "chiller"). Over the next decade, the centrifugal chiller would extend the reach of modern air conditioning from textile mills, candy factories and pharmaceutical labs to the revolutionary work of ensuring human comfort in theaters, stores, offices and homes.
Powered by these innovations [including an advanced heat exchanger as well as the chiller], Carrier launched its own version of "the Roaring Twenties" in 1924 with the first in a series of historic installations. The J.L. Hudson Company, Detroit's largest department store, installed three, 195-ton centrifugal chillers. Officially classified as comfort air conditioning, Willis Carrier noted, the installation was also designed "to meet an emergency as temperatures soared on basement bargain days -- people fainted." Other sophisticated retailers in Seattle, Boston, Cincinnati, Dallas and New York City soon followed.
By the late 1920s, Carrier had brought comfortable cool to movie theaters, skyscrapers, banks, office buildings, Naval warships, and even a few well-to-do households. The Crash of 1929 did not leave Carrier unscathed, but the allure of air conditioning was simply too powerful to let the company sink. In time, many of the world's buildings and automobiles would be equipped with air conditioning. Carrier became part of United Technologies (NYSE:UTX) in 1979. Today, as the key component of United Technologies' climate and security segment, Carrier contributes nearly 30% of the company's annual revenue. Between its Carrier and Otis Elevator businesses, United Technologies is likely the one component of the Dow Jones Industrial Average (DJINDICES:^DJI) most responsible for enabling today's modern high-rise office culture.
Big "G" for the first time
Google (NASDAQ:GOOGL) placed an official mark on its long-assumed search dominance in two ways on June 26, 2000. First, the company announced a partnership with Yahoo! that replaced Yahoo!'s search technology with its own. Second, Google announced that it had become the world's largest search engine by indexed pages, beating out competitors that had been operating for years longer. Google, officially founded only two years earlier, had already indexed more than a billion links and had become the search engine of choice for more than 70 major online portals around the world. The first era of the Internet was over, and the Age of Google had begun.
The national banking alternative
President Franklin D. Roosevelt signed the Federal Credit Union Act into law on June 26, 1934. Credit unions had been first established in New Hampshire in 1909, but until the 1934 Act there had been no national system of chartering and oversight for the nonprofit, community-owned bank alternatives. The Act created the Bureau of Federal Credit Unions for these purposes, and this agency operated until 1970, when it was replaced by the National Credit Union Administration. Today, there are more than 6,800 federally insured credit unions, managing $1 trillion in combined assets, for 94 million members across the United States.
The code of commerce
The first Universal Product Code was scanned from a pack of Wrigley's chewing gum at a supermarket in Troy, Ohio on June 26, 1974. It was the culmination of nearly three decades of development and an intense competition between rival tech firms, and it would bring to a close the era of inefficient and imprecise retail inventory control.
Bar codes, as they're popularly known, were first devised in the late 1940s by Drexel graduate students Bernard Silver and Norman Woodland. Their great breakthrough came on a Florida beach, when Woodland scratched out a form of Morse code on the sand. By elongating the dots and dashes, he arrived at a simple, elegant way for optical readers to quickly scan codes from many angles. The pair eventually developed an early prototype that, after patenting, almost wound up in IBM's (NYSE:IBM) hands before being sold to RCA.
Neither company could do much with the bar code for years until the underlying technologies caught up to the concept, but by the early 1970s both were hard at work on the problem. By this point, the Silver and Woodland patent had expired, leaving IBM free to develop a similar system without fear of a lawsuit. Both companies had commercial systems available by 1973, but it was the IBM system that wound up in Troy for that first scan.
As a result, IBM became one of the leading vendors for retail bar-code equipment during the early years of the technology's adoption. However, that first system was almost prohibitively expensive: The checkout counter and scanner combined to cost $14,000, which comes to nearly $60,000 when adjusted for inflation. Network effects eventually placed UPCs on just about everything sold in retail stores, and the popularity of the code combined with technological advances to push the costs of scanning to a small fraction of what it cost that Troy supermarket to install the first IBM system.
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