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Charles DowCharles Dow

co-founder of The Wall Street Journal and the Dow Jones Average

Charles Henry Dow was born in Sterling, Connecticut, on November 5, 1851, the son of Charles and Harriet (Allen) Dow. His father died in 1857, and Charles helped his mother manage the family farm. Charles's two older brothers died in childhood.

Despite having very little education, Dow decided to pursue a career in journalism. His first job was with the Springfield (Massachusetts) Daily Reporter, where he worked as a city reporter from 1872 to 1875. The paper's publisher, Samuel Bowles, taught his reporters to write crisp, detailed articles, with the most important information first, and those lessons became the hallmark of Dow's future success. From Springfield, Dow moved to the Providence (Rhode Island) Star, where he worked for two years as a night editor; he also reported for the Evening Press during this period. In 1877, he moved to the Providence Journal, where he specialized in articles on regional history. In 1879, the Journal sent him on a train trip to Leadville, Colorado, heart of the Rocky mountain silver industry. In the course of reporting on the silver industry, Dow interviewed many capitalists, financiers, and industrialists. He used these interviews to learn about the methods Wall Street insiders used to evaluate stocks.

After completing his assignment in Colorado, Dow decided to move to New York City, hoping to find a job reporting on mining stocks. His articles had already caught the attention of financier Cyrus Field, who hired him to provide financial reports and criticism for the New York Mail and Express. Dow's work there caught the attention of the Kiernan News Agency, which hired him as a financial correspondent. At Dow's urging, Kiernan also hired Edward Davis Jones, with whom Dow had worked while in Providence. The two men were put in charge of making sense of the stock market and stock speculation, and they proved to be a very capable team. While other financial reporters could often be bribed into reporting favorably on a company in order to drive up stock prices, Dow and Jones quickly became known for their honest reporting.

On April 9, 1881, Dow married Lucy Martin Russell. The couple had no children between them, but Lucy had a daughter from a previous marriage.

In November of 1882, Dow and Jones, along with Charles Bergstresser, decided to start their own financial reporting service. Operating out of a room at the back of a candy store on Wall Street, Dow, Jones & Company's first "product" was a two-page summary of the day's financial news called the Customers' Afternoon Letter, which included movement of certain stock prices, laid out in an easy-to-understand format. Before long the paper had over a thousand subscribers, both on and off Wall Street.

The first Dow Jones Average was published in the July 3, 1884 edition of the Afternoon Letter. To compile it, Dow averaged the closing prices of what he considered eleven key stocks -- Chicago & North Western, Delaware, Lackawanna & Western, Lake Shore, Louisville & Nashville, Missouri Pacific, New York Central, Pacific Mail, St. Paul, Northern Pacific, Union Pacific, and Western Union. The very first average was 69.93, and the difference (up or down) in the Dow Jones Average from day to day became a standard indicator of the country's general economic health.

The success of the Afternoon Letter and the influence of its Dow Jones Average led Dow and Jones to begin the Wall Street Journal, the first issue of which was published on July 8, 1889. The first edition was four pages long and sold for two cents. As had the Afternoon Letter, the Wall Street Journal quickly became "the paper" for anyone wanting to keep up with the stock market and the nation's economy in general. As the paper's circulation grew, so too did the scope of its coverage, and by the mid-1890's its reporting of national and international news was as respected as its financial reporting.

On October 7, 1896, Dow replaced his original eleven stocks with twelve "industrial" stocks for the Dow Jones Industrial Average, which was reported as 40.94 on that day. Because ten of the twelve companies represented in Dow's calculations produced consumer goods, the Average became a good indicator of consumer confidence in the economy (the more confident the consumers, the better the average).

Charles Dow resigned as director and president of Dow, Jones & Company on March 7, 1902. On March 14th, the company and its Wall Street Journal was sold for $130,000 to Charles Walker Barron, who had headed Dow's news bureaus in Boston and Philadelphia. Dow died in Brooklyn, New York, on December 4, 1902.


American National Biography Online http://www.anb.org/articles/16/16-03537.html
Investopedia
http://www.investopedia.com/articles/financial-theory/08/charles-dow.asp

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This page was last updated on April 23, 2015.

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