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Quote of the Day
“Most significant of all, perhaps, it can help improve our Nation’s very low savings rate. Now not much more than 3 percent of earnings go into savings, perhaps the lowest rate in the last 30 years. And of course, this small savings rate has been a major factor in increased inflation. This encouragement of savings is important not only to consumers but also to financial institutions in the breadth of our financial system.”
-Jimmy Carter, in a speech made on this day in 1980 as he signed landmark financial reform into law, the Depository Institutions Deregulation and Monetary Control Act of 1980.
March 31st – This Day in Stock Market History
March 31st, 1917 – The United States purchases the Dutch West Indies, now known as the Virgin Islands, from Denmark for $25 million in gold.
The U.S. was anxious to acquire the islands as German U-Boat activity increased during World War 1. Officials worried that Germany would invade Denmark and annex the islands and establish submarine bases to further disrupt trade in the Atlantic and the Caribbean.
Adjusted for inflation, the United States paid $425 million in today’s dollars for the Virgin Islands. Today the group of island has a combined GDP of about $4.5 billion.
Source: U.S. Department of State Archive
March 31, 1980 – Jimmy Carter signs the Depository Institutions Deregulation and Monetary Control Act of 1980 into law.
The act allowed banks to pay higher interest on balances in checking and savings accounts, which before this law was passed, was capped by law. Because banks could not offer as high of interest rates as other options available, deposits were leaving the banking system.
The act also broadened the number of banks under Federal Reserve control and oversight, and forced all banks to meet certain reserve requirements.
Paul Volcker, then chairman of the Federal Reserve said that the price of legislation “will undoubtedly take their place among the most important pieces of financial legislation enacted in this century”
Source: Federal Reserve
Best March 31st in Dow Jones Industrial Average History
1926 – Up 3.89%, 5.26 points.
Worst March 31st in Dow Jones Industrial Average History
1932 – Down 5.02%, 3.87 points.
Read of the Day
Paul Volcker has a storied history as a former Chairman of the Federal Reserve. During his time, he help fight the worst inflation the U.S. had seen in modern times. At its peak, interest rates were over 10% and the stock market was in the middle of one of its worst bear markets in history.Paul Volcker: The Making of a Financial Legend
Bonus Read of the Day
In the late 90s, the United States government was paying down its national debt and running a annual surplus. Now an idea that seems crazy, but at the time it seemed very plausible.
Here is an ad that appeared in the New York Times on this day in 1999, worth a laugh now!:
Go To Next Day: April 1st: 1976 – Apple Computers is formed –>