Dow Jones

History

Dow Jones was formed in the autumn of 1882 by three reporters: Charles Henry Dow, Edward Jones, and Charles Bergstresser, the latter a silent partner whose savings financed the company's launch. Working from a basement office on Wall Street, Dow and Bergstresser produced financial stories and submitted these to Jones, who edited the stories and then dictated bulletins to scribes. These were compiled in handwritten reports known as “flimsies” and delivered to subscribers in the Wall Street area. In November 1883, the company began producing the Customers' Afternoon Letter, a printed two-page publication that summarized the bulletins dispatched that day.

The next year the company introduced the “Dow Jones Average,” published in the Afternoon Letter. It was the precursor of the Dow Jones Industrial Average launched in May 1896, perhaps [Page 463]the most famous and recognized of several stock market indices created by Charles Dow. The average consists of the adjusted value of the stock prices of the 30 largest and most widely held publicly traded companies in the United States. Regarded as the most reliable assessment of the state of the American stock market, it is reported in newspapers and broadcasts around the world.

By 1889, the company was flourishing. Two years previously, Dow Jones had joined in a news exchange agreement with Clarence Barron (1855–1928), who managed a news bureau in Boston and had been producing a financial newspaper there for several years. In July 1889, the Afternoon Letter was transformed into the daily Wall Street Journal, a four-page publication selling for two cents. The two offices, Dow Jones's in New York and Barron's in Boston, reinforced one another's coverage of American business news; in 1896, the aggressive Barron expanded coverage into Philadelphia with his Financial Journal. In 1898, a morning edition of The Wall Street Journal was launched.

In the meantime, the company founders foresaw a need for a quicker way to deliver financial news, especially about the volatile stock market. In 1897, they created the Dow Jones News Service, which provided reports over telegraph wires. Known as broadtape, the local service employed printing devices, called “tickers.” The service was announced in the February 26 issue of the Journal, and proved a modest success. It underwent a major expansion in the mid-1920s: service was introduced in Chicago, St. Louis, and Detroit in 1925; Boston, Washington, and Richmond joined the circuit in 1927; and Los Angeles, San Francisco, and cities in Pennsylvania and Ohio followed in 1928. This news service laid the foundation for the Dow Jones Newswires.

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