This month the world is marking the 100th anniversary of the end of World War I which officially ended at 11 am on November 11, 1918.  Few people, however, have talked about the impact of the Great War on financial markets, both during and after the war was over. Global stock markets closed when World War I began and the globalized economy which existed on July 31, 1914 didn’t return for 75 years. Before World War I began, the world’s financial markets were integrated.  The gold standard fixed exchange rates between different countries. Russian bonds traded on the bourses of St. Petersburg, Berlin, Paris, Amsterdam, London, Vienna and New York simultaneously as did South Africa mining and other shares.  The world’s financial markets were truly globalized with capital flowing freely from one country to another. It would take over 75 years for globalization to return to the world’s financial markets once the war began. When World War I began on July 31, 1914, the immediate impact was the closure of stock exchanges throughout the world. There was a fear that shareholders would sell stock to raise capital and repatriate their money. Share prices began to collapse and the only way to prevent a panic was to close stock exchanges and prohibit shares from being sold.  By August 1, virtually every stock exchange in the world had closed.  Some exchanges opened later in 1914, but some such as the Berlin Stock Exchange, did not reopen until 1917.  St. Petersburg reopened in 1917, but closed soon after as a result of the October Revolution.  Other exchanges, such as Paris and London, reopened in a few months, but with restrictions on the price shares could be sold at.  Even if you were able to sell shares, foreign exchange restrictions prevented shareholders from repatriating capital. The government in each country was mainly concerned about funding the war.  Restrictions were placed on issuing new shares and each country issued large amounts of government bonds to fund the war.  Citizens were encouraged to buy war bonds to cover the costs of the war. The needs of capital markets were considered secondary. To see the impact of World War I on global stock markets, we have divided countries into three groups, combatants (Great Britain, France, Germany, Italy, Belgium), neutral European countries (Spain, Denmark, Switzerland, Sweden, the Netherlands and Norway) and non-European countries (United States, Australia, South Africa, Japan, Canada).  Each of these groups was affected differently by the onset of World War I and its aftermath. Generally speaking, the stock markets of combatants did poorly during World War I as is illustrated below. Although the share markets of those countries went down slightly during the war, this understates the extent of the damage to shareholders because all of these countries suffered inflation which reduced the real value of their stock markets. Governments encouraged investors to buy government bonds, not shares and the performance of each stock market reflects this. It is interesting to contrast the behavior of the stock markets of the victors after the war (France, Belgium, Great Britain) with the loser Germany.  France’s stock market behaved the best of the five after World War I while the German stock market, primarily as a result of the hyperinflation in 1923 and its closure during the 1930s, showed the worst performance. Germany suffered economic and political turmoil after their defeat in World War I and the stock market shows this.   Each country’s role in World War I was a strong predictor of their performance both before and after the war.  Combatants did poorly during the war and their performance after the war depended upon whether they were a victor or were defeated in the war.  Neutral European countries profited from the war and their stock markets did well until 1918, but those countries underperformed once the war was over with because of the restrictions on trade that existed.  Non-European countries did well, both during and after the war. Regardless of their performance, it should not be forgotten that the world did not return to the globalized, integrated financial markets that prevailed before World War I.  World War I was followed by the uncertainty of the 1920s, the Great Depression in the 1930s, and World War II in the 1940s which introduced even more restrictions on the movement of capital than World War I. After World War II, foreign exchange flows were restricted between countries until the 1970s, and it was only in the 1980s that global capital markets began returning to the globalized capital markets that had existed before World War I. Global stock market returns were lower than average between 1914 and 1981 throughout the world.  World War I impacted global financial markets not just from 1914 until 1918, but for decades after.  Let’s hope for the sake of investors and everyone that a similar war never happens again.

There are several people who have lost over $1 billion in the markets, with two people, Bruno Iksil and Howie Hubler alleged to have lost $9 billion, but I know of only one person who managed to lose over $1 billion twice.  The winner of this award is Nelson Bunker Hunt who lost his first billion in oil and his second billion in silver. And in each case, it wasn’t just one billion dollars that he lost, but several billion. And in both cases, Hunt blamed the government, rightfully so, for the losses he incurred. Nelson Bunker Hunt was the son of oil wildcatter H.L. Hunt, who was a gambler in life and in oil.  H.L. Hunt was a math prodigy who allegedly succeeded in turning $100 into $100,000 gambling in New Orleans in the early 1900s.  With this money, he purchased oil properties in Arkansas to try his luck at bigger stakes.  Hunt’s strategy was to drill in already known areas, buying leases wherever a new discovery was made, and drilling until he struck oil. In November 1930, Hunt heard about a large oil strike in Texas made by Columbus “Dad” Joiner, H.L. negotiated the purchase of Dad’s properties for $1,340,000, paying Joiner only $30,000 down and the rest to be paid out of future revenues.  Hunt also guaranteed Joiner legal protection against his many fraudulent transactions. Hunt succeeded and made one of the biggest oil strikes in the history of Texas.  By 1936, Hunt was able to incorporate the Hunt Oil Co. worth $20 million and use his profits to move on to more drilling. H.L. Hunt soon became one of the richest men in the world, and was the inspiration for J.R. Ewing’s character in the TV series Dallas. H.L. Hunt was as prodigious in producing children as he was in making money.  He had fifteen children through three women, one of whom he paid off to avoid a bigamy lawsuit. Appropriately enough, one of his sons, Nelson Bunker Hunt was born in El Dorado, Arkansas.  His son, Lamar founded the American Football League and owned the Kansas City Chiefs.  Nelson Bunker and William Herbert went into the oil business.  H.L. Hunt owned Placid Oil and Penrod Drilling and Hunt left control of these companies to his sons. Once in control, they started drilling outside of the United States to strike it big as their dad had.  

Losing the First Billion

Nelson Bunker Hunt wanted to make his millions on his own, not just inherit the money from his dad, and went looking for oil outside of the United States.  Hunt first drilled for oil in Pakistan which failed to deliver. Then he went to Libya where Nelson Bunker Hunt found the huge Sarir oil field in 1961 that made him a billionaire and one of the richest men in the world virtually overnight.  Nelson signed an agreement to produce oil with King Idris, but on September 1, 1969 Nelson Bunker discovered that his fortune was at the mercy of government politics. While King Idris was on sick leave in Turkey, Muammar Gadaffi led a coup in Libya that overthrew King Idris. Gadaffi nationalized Nelson’s 50% ownership in the Sarir oil field on June 11, 1973 without providing compensation to Hunt.  Nelson Bunker Hunt lost his first billions as a result of government intervention. Overnight, Hunt went from being one of the richest billionaires in the world to being a mere millionaire. Who doesn’t want to be a millionaire? A billionaire. Gadaffi’s seizure of Hunt’s assets deepened his distrust of government and the paper money it created.  From then on, Hunt would put his money in hard assets, such as silver, which couldn’t be stolen from him by government fiat. Or so he thought. Nelson had three loves, horses, silver and Jesus. Nelson had a stable of over 500 horses and his thoroughbreds won almost every major race in the world. H.L. Hunt was a member of the First Baptist Church in Dallas and supported conservative causes all of his life.  Nelson Bunker Hunt followed in his dad’s footsteps, was a member of the John Birch Society and believed that the apocalypse would soon occur and that paper money would become worthless. Nelson was the chairman of the Texas Bible Society, the head of Campus Crusade for Christ International and funded the film Jesus which has allegedly been seen by three billion people worldwide. Nelson learned from his Libyan losses that governments could not be trusted.  Since he no longer trusted paper money, Hunt decided to pour his money into silver.  Trading in gold was forbidden by the U.S. government after the United States went off the gold standard in 1933, and it was only in 1974 that trading in gold in the United States was allowed once again. Nelson Hunt purchased 40 million ounces of silver in 1973 and flew his hoard to Switzerland for safekeeping. 15 million ounces also went to Chicago and New Jersey increasing his hoard to 55 million ounces.  Texas imposed a 5% state tax on silver, so Hunt found it cheaper to fly his millions of ounces in silver to Switzerland than to keep the silver safe in Texas. Nelson knew that he could “buy” silver through the futures market, though few people did. Whenever someone purchases a futures contract in the silver market, there is certifiable silver that is tied to each contract.  Silver producers can lock in the price of silver to obtain a fixed price for the silver in the future.  If the contract is at $10 for an ounce of silver and the price closes at $9, the silver producer will make a $1 profit on the contract and add that profit to the $9 the silver is selling for to net $10.  If the contract price is at $11, they lose $1 on the futures contract, but receive $11 for the silver netting them $10.  No matter what happens to the price of silver, the producer has locked in their price. The primary risk to the silver producer is that if there are large fluctuations in the price of silver, for example, if the price went from $10 to $20, the producer would have to put up additional margin to cover their anticipated losses since the producer is short silver and will lose money on the contract when it expires. Under normal circumstances, this is not an issue, but 1979 and 1980 were not normal times in the silver market. Futures contracts are typically for a period of three months, and when the contract expires, most silver producers and speculators sell their contract and collect or pay the difference between the strike price on the contract and the price the contract settles at.  Hunt, however, took delivery of the silver.  

The Hunt Family Tries to Corner Soybeans

In 1977, Nelson made his first attempt at cornering a market, i.e. having control over the supply in the market so he could fix the price of the commodity. When a seller has to go to the market to cover their position, they can only go to the person who has cornered the market and pay whatever price they demand to close out their positions. Nelson bought a substantial number of soybean contracts attempting to profit from the ensuing rise in the price of soybeans. In 1977, the legal limit on soybean contracts was 3 million bushels which was equal to about 5% of the market. He and William Herbert both bought contracts controlling 3 million bushels.  Then Nelson created dummy accounts for five of brother Herbert’s children. The Commodity Futures Trading Commission (CFTC) easily saw through the ruse. When the CFTC realized all the accounts used the same address, they realized someone was trying to corner the soybean market.  As one CFTC member put it, the only member of the family who didn’t have an account to trade soybeans was the family dog. The family’s control rose to 24 million bushels, about 40% of the soybean market, and eight times the legal limit for one person.  The Hunts represented about half of the trading in soybeans in 1977 and the price of soybeans rose from $5.15 to $10.30 as is illustrated below. The CFTC alleged that Nelson, his brother and his brother’s children were trying to manipulate the price of soybeans, but Nelson alleged they were all acting independently of one another and the only reason their trades were similar was because they had access to the same information. The Chicago Board of Trade had encountered a similar situation when Tony de Angelis had tried to corner the soybean market several years before, but de Angelis was a member of the exchange and did not face limits on the amount he traded.  The Hunts were complete outsiders and did face limits. The CFTC took the Hunts to court in April 1977 and forced the Hunts to divest themselves of their positions, but it is estimated that the Hunts made tens of millions of dollars in their attempt at a corner.  As the chart of soybeans above shows, the price of the commodity rose from under $5 in 1976 to over $10 in 1977, but quickly fell back after the Hunts were forced to divest themselves of their holdings. In 1981, the Hunts had to pay a $500,000 fine for exceeding the position limits, which compared to the tens of millions in profit they probably made was little more than a speeding ticket. Nelson Bunker Hunt’s distrust of government officials only deepened.  

The Silver Corner Begins

Nelson Bunker Hunt had bought millions of ounces of silver in 1973, but had generally ignored the precious metal for the next few years. In 1978, following his success in the soybean market, Nelson decided to take control of the silver market. Nelson’s idea was to “buy” millions of ounces of silver through the futures markets and corner the amount of certifiable silver that was available, driving up the value of his holdings and making billions in the process.  Nelson had seen the price of oil go from $3 to $30 during the 1970s and with inflation raging throughout the world, he saw no reason why silver shouldn’t permanently rise in price as well. Silver had been used as money for thousands of years.  Hunt believed paper money was a false creation of the government that would ultimately collapse.  If OPEC could create a cartel that drove up the price of oil, why couldn’t Nelson create a cartel to buy up the supply of silver and profit from it? As in the case of soybeans, Nelson got fellow family members involved in the corner as well as several Saudi sheikhs and other speculators who agreed with Nelson’s evaluation of the silver market.  On July 1, 1979, the Hunts formed the International Metals Investment Co. (IMIC) with Prince Fahd who ran the Saudi Central bank to buy silver and drive the price up. IMIC bought 43 million ounces which added to the 55 million ounces the Hunts already owned. The attempt to corner the silver market had begun. However, as I have shown in similar blogs on the Piggly Crisis and Stutz Automobile, the problem with executing a corner successfully is that you have to borrow money to drive the price up and you can create a huge profit on paper once you corner the market, but inevitably, you must sell the underlying stock or commodity to someone else, and when this happens, the price of the good will collapse and the accumulated debt will drive most speculators into bankruptcy. This is why selling the underlying commodity after a corner is completed is called “burying the corpse” because it is probably the corpse of the person who cornered the market that will be buried. Throughout the silver fiasco, the Hunts alleged that they were not trying to corner the silver market, but that they were simply trying to hedge against the voracious inflation that engulfed the world in the 1970s.  But did the Hunts need to own three-fourths of the world’s privately-owned silver to achieve that? As I detailed in the case of Eddie Gilbert, there is no clear line between speculation and manipulation.  Attempts to manipulate the price of a commodity is illegal in the United States and if the weight of the market doesn’t overwhelm the person trying to corner the market, the government and the commodity exchanges will.  

The Exchanges Change the Rules

The house makes the rules and they can be changed. The first change occurred on January 7, 1980, when the CBOT limited buying to 3 million ounces of silver and COMEX limited buying to 10 million ounces of silver.  Nelson Bunker responded by promising to reduce his involvement in the silver market, but secretly bought an additional 32 million ounces of silver. One thing you have to admire about the Hunts is that they never did anything half way.  When they went into silver in 1979, they pulled no punches. In January 1979, the actual silver owned by the Hunts and their futures contracts amounted to 75 million ounces. By January 1980, this amount had grown to 375 million ounces, and the Hunts were short an additional 100 million ounces in straddles (buying long and short positions simultaneously).  This gave the Hunts and their fellow traders a net position of almost 300 million ounces of silver and control over 70% of all contracts listed on the futures exchanges.  Every $1 increase in the price of silver netted them $300 million and at the height of the silver squeeze, the silver bars they owned were worth about $6.6 billion. In addition to actual silver they owned, they had an equal amount in silver contracts. As the price of silver rose, producers who were short silver had to put up additional margin against their positions.  These deposits were transferred to the Hunts who used their profits from the rising price of silver to increase their silver holdings even more. When the price of silver rocketed up from $5 at the beginning of 1979 to $51 at its peak, not only were the silver markets thoroughly disrupted, but financial markets throughout the world were affected.  Photograph companies like Kodak which used silver to develop pictures as well as dentists and jewelers like Tiffany’s were forced to buy silver at ten times the price it had been at just one year before.  Tiffany & Co. took out an ad in The New York Times condemning the Hunts for their manipulation of the silver market. But to the average American, the silver rush was on. Moms and pops throughout the country took their silverware to local metal dealers to sell their heirlooms at a profit. Millions of dollars of silver coins, which the government had stopped producing in 1964, were sold to coin shops. This brought tens of millions of dollars of silver onto the market.  The silver was purchased by Englehard Silver who converted the coins and silverware into certificated silver, adding to the hoards the Hunts had already accumulated. If you read Mark Cymot’s account of the trial of the Hunts over their attempts to manipulate the price of silver, entitled Squeezing Silver, you can see that the Hunts had running battles with COMEX and the CFTC during 1979 and 1980 with the commodity regulators demanding that the Hunts reduce their positions in silver, the Hunts promising they would, and then adding to their positions instead.  One ploy the Hunts used was that they wanted to delay the tax impact of selling their contracts at a profit in 1979.  The Hunts wanted to wait until January 1980 to sell their contracts so the profits would be in 1980 and not in 1979 and delay the amount of taxes they had to pay the IRS. The exchanges gave the Hunts to January to sell their silver, but instead the Hunts loaded up even more. On January 18, 1980, the price of silver peaked at $50.35, up tenfold from the price a year before. The Hunts had billions in unrealized profits. After the first of the year, COMEX got serious in limiting the Hunts’ speculation in the silver market.  On January 7, COMEX adopted Silver Rule 7 which capped the size of silver futures exposure to 3 million ounces. When this didn’t stop the Hunt’s greed, on January 21, the Chicago Board of Trade pulled their trump card and suspended the issue of ANY new futures contracts in silver. Buying silver was effectively banned on the exchange.  Traders were only allowed to close out existing contracts, not create new contracts.  In other words, you could only sell silver, you could not buy it. The Hunts accused the CBOT of “changing the rules of the game” since they had turned a market where people could buy and sell into a market where people could only sell. No doubt, on this point the Hunts were right.  Gadaffi had changed the rules on oil in Libya and the CBOT had changed the rules on silver in the United States. The impact was immediate, and the price of silver fell $10 in one day. Silver had traded over 300,000 contracts on January 3, 1980, but only 12,000 contracts on January 25. On March 14, 1980, Paul Volker, head of the Federal Reserve, demanded that banks limit lending for speculative purposes, in part, to constrain borrowing by the Hunts to cover their losses.  Since the banks wouldn’t loan the Hunts more money, the Hunts had problems meeting their margin calls.  The Hunts owed Englehard Silver $665 million for delivery of 19 million ounces of silver due March 31.  The Hunts did not have the money to meet this call, and they turned to the banks to bail them out. The Hunts had borrowed billions to support their position in silver, but they were no longer able to borrow hundreds of millions of dollars. Consequently, the price began to crash.  Bache Group asked the Hunts for $100 million in collateral to cover their losses on March 25, 1980, but the Hunts were out of cash and defaulted on their loans.  Bache Group had no choice but to sell silver and the price collapsed from $30.80 on March 12 to $21.25 on March 25 and $10.80 on “Silver Thursday”, March 27, 1980. Some people feared that Bache Group might go bankrupt under the pressure of selling its silver contracts at a loss.  If the companies that had loaned money to the Hunts went under, some people feared a depression-like crash of the markets similar to what happened in 2008 when Lehman Brothers failed.  Instead, a consortium of banks put together a billion-dollar loan to bail out the companies that had loaned money to the Hunts and allow an orderly disposal of the Hunts’ silver contracts. The Hunts were provided with a $1.1 billion line of credit which allowed them to pay off Bache Group. The Hunt Brothers’ ownership in Placid Oil was used as collateral on the loan.  

The Aftermath of the Silver Fiasco

A Peruvian silver company, Minpeco had sold their silver production in the futures market in 1979 and was unable to keep up with the increased demands for margin the commodity exchanges demanded as the price rocketed up.  The company put up over $100 million in cash to cover their positions, but were unable to raise additional funds and sold off their contracts during the price increase in 1979, closing out their futures positions at a loss. Minpeco sued the Hunts for their losses and in 1988, after a six-month trial, the Hunts were found guilty of manipulating the price of silver and forced to pay $134 million in compensation.  The Hunts were unable to pay the $134 million and declared bankruptcy, forcing Nelson Bunker to sell his stable of 500 horses, his collection of Roman and Greek coins and other items he had accumulated on the way up. It is estimated that Nelson Bunker Hunt was worth $16 billion in the 1960s after he discovered oil in Libya, but after settling all the lawsuits against him in 1988, his fortune had sunk to $10 million.  Hunt spent the next seven years disposing of his assets to meet the demands of his creditors. The Senate led an investigation into the silver fiasco the Hunts had created, and during the proceedings, a Senator asked Nelson Bunker Hunt how anyone could lose a billion dollars.  And you have to remember, this was 35 years ago when $1 billion was a lot of money.  Nelson Bunker Hunt responded in his best good ole’ boy Texas drawl, “Well, Senator, a billion dollars just ain’t what it used to be.”

One of the questions I hear from customers is how to find a particular file among the 150,000 files that are included in the GFDatabase. Is there any shortcut or rule of thumb I can use to find the file I’m looking for? The answer is yes. Global Financial Data has made the search for some files easy by using codes that will enable users to put together with some degree of accuracy the tickers that are used for different files.  This tutorial is designed to help you understand how codes are put together to create many of the most-often used tickers that are used in the GFDatabase  

The Basic Mnemonic

Global Financial Data combines a number of different codes into a single ticker that can be deduced and used to find files within the database.  The code is designed to have 8 letters or less since many of these codes were designed back in the 1990s when files could only have 8 letters as identifiers.  The keys to this code are the  

Ticker Prefix of 2 or 3 letters

This prefix usually identifies the type of code that it is.  CP is used for Consumer Prices, POP for Population, GDP for GDP, etc.  

Country ISO Code of 3 letters

The International Standards Organization (ISO) has assigned two-letter and three-letter codes for every country on the planet, such as USA for the United States, CAN for Canada, and JPN for Japan.  In some cases, the codes reflect the name in the national Language, DEU for Deutschland/Germany, ESP for España/Spain and CHE for the Latin Confeoederatio Helvetica/Switzerland.  GFD has also created ISO Codes for countries that existed before World War II that have no codes (DZG for Danzig) as well as codes for regions, such as WLD for World and EUR for Europe. The list of ISO Codes that GFD Used can be downloaded here.  

File Identifier of 1 or 2 letters or numbers

Most files don’t have this identifier, but some files, especially interest rates do.  The identifiers for T-bills and T-bonds use the number of years to maturity to differentiate between the different types of yields.  The ticker for the 3-month US Treasury bill file is ITUSA3D while the 6-month ticker is ITUSA6D.  The 5-year US Government Bond is IGUSA5D while the 10-year is IGUSA10D.  

Periodicity identifier of 1 letter

The codes for these are D for Daily, W for Weekly, M for Monthly, Q for Quarterly, and A for Annual.  These codes are based upon the highest periodicity in the file.  IGUSA10D has monthly, weekly and daily data, but ends in D since daily data is the highest frequency in the file.  GFD does not provide separate files for the Daily, Weekly, Monthly, Quarterly and Annual versions of the file, but files with those periodicities can be downloaded when requested.  

Ticker Suffixes

In come cases, GFD provides a suffix to the code to identify either the source of the data or the type of data that is provided.  Eurostat provides tens of thousands of files to the GFDatabase and we usually put an EU after the ticker for that file to identify the file as coming from Eurostat. For example, ALD0036AEU is the Eurostat file for the Population of Albania. GFD also provides thousands of files that calculate the Annual Percentage Change (APC) for the underlying file.  Although it might be interesting to know that the index value for the United States CPI was 252.439 in September 2018, it is more interesting to know that consumer prices increased by 2.27% between September 2017 and September 2018.  It is also more interesting to know the change in Real GDP than the actual value of Real GDP since the Real GDP value tells you what GDP would be as measured in Dollars from several years ago.  For many of these files, GFD Calculated the Annual Percentage Change and designates these files with the suffix APC.  The annual percentage change for the US CPI is the file CPUSAMAPC and the annual percentage change in Real US GDP is GDPCUSAAPC. So if you know the underlying ticker, you can add APC to the ticker and get the annual percentage change rather than the data values.  

Examples

We have already mentioned that IGUSA10D is the ticker for the 10-year US government bond.  IG is the Prefix for Government Bonds, USA is the ISO Code for the United States, 10 is the years to maturity and D is the periodicity, thus IG + USA + 10 +D = IGUSA10D.  The code for Canadian Consumer Prices is CPCANM since CP is the Prefix for Consumer Prices, CAN is the ISO Code for Canada and M is the Periodicity, thus CP + CAN + M = CPCANM. TRDEUGVM is the ticker for the Total Return on German 10-year Bonds since TR is the Prefix for Total Returns, DEU is the ISO Code for Germany, GV is the File Identifier for 10-year Government Bonds and M is the Periodicity Identifier, so TR + DEU + GV + M = TRDEUGVM. Of course, there are always exceptions to these rules, but we think that using these mnemonics, you can put together the tickers for many of the files that you are looking for and avoid the problem of looking them up.  This can help you to create long lists of tickers simply by changing the ISO Code or Prefix for the file.  GFD provides a list of the mnemonics in an Excel File, but if you download a Main Indicator and can sense that a mnemonic is used to create the ticker, you can probably figure out most of the associated codes just by changing the ISO portion of the ticker. Also, please note the following:  

Exchange rates

The ISO has created three-digit exchange rate ISO codes for all of the currencies in the world.  These three-letter codes use the two-letter ISO code for each country, plus a third letter for the currency.  The code for the United States Dollar is USD (US for United States and D for Dollar), while the code for the Japanese Yen is JPY (JP for Japan and Y for Yen).  GFD uses a six-digit code for exchange rates by combining the two three-letter codes into a single six-letter code. The currency the exchange rate is calculated in is placed first and the currency that is converted  is put second.  Thus, USDJPY is the number of Japanese Yen you receive in exchange for 1 United States Dollar.  However, you have to be careful.  The British Pound-US Dollar exchange rate is usually quoted in terms of how many US Dollars you receive for a British Pound so GBPUSD is the “normal” exchange rate that is quoted for these two currencies, not USDGBP. Sometimes, the three-letter code is not what you might expect. The code for the Mexican Peso is not MXP, but MXN because the new Mexican Peso (thus the N) replaced the old Mexican Peso in 1993 at the rate of 1000 MXP = 1 MXN.  Venezuela has recently gone from the Bolivar (VEB) to the Bolivar Fuerte (VEF) to the Bolivar Soberano (VES).  GFD will be happy to provide its subscribers with a list of ISO currency codes so they can put together the correct codes for exchange rates.  

Excel Worksheet

The attached Excel Worksheet describes the Mnemonics that GFD Uses. The GFD Mnemonics worksheet provides information on the Type of Mnemonic (Column A), the Prefix (Column B), the ISO Code (Column C), whether a Special Suffix is used (Column D) and the probable Periodicity for the file (Column E).  This is followed by a sample code (Column F) and a description of the file for that code (Column G). The World Bank WDI provides Codes for the different types of annual files we provide from the World Bank. To find a code for a particular country, place a dot at the end of the code and add the ISO Code for that country.  The World Bank Code (Column A) is followed by the Type of File (Column B), the Indicator (Column C) and a description of the Indicator (Column D).  So the Code for United States S&P Global Equity Indices (annual % change) is CM.MKT.INDX.ZG + .USA = CM.MKT.INDX.ZG.USA. Conclusion We hope this guide enables you to make better use of the Global Financial Database.  If you have any questions, please feel free to contact us.

We recently wrote a blog on Tom Moore’s Distillery which along with Park and Tilford and the National Distillers Products Corp. paid dividends in whiskey to their shareholders. Companies are not required to pay out cash dividends, and they can pay out in-kind dividends in any way they want. Back in the 1980s, Ranchers Exploration and Development Corp. paid their dividends in bars of gold and silver!  

From Uranium to Copper to Silver

Ranchers Exploration and Development Corp. incorporated in New Mexico in 1954.  The company operated several uranium mines in New Mexico and Utah.  Its principal uranium mine was the Johnny M Mine located near Granta, New Mexico. The company also mined uranium from the Small Fry Mine located near Moab, Utah, and mined cathode copper at its Bluebird Mine near Miami, Arizona. However, two of the company’s mines produced precious metals.  The company conducted placer operations for gold in Alaska, developed the Escalante Silver Mine in southwest Utah and the Revenue Virginius Silver Mine near Ouray, Colorado. During the first ten years of its existence, the Ranchers Exploration mines failed to generate any significant results, but in 1966, the Bluebird Copper Mine began to produce large amounts of copper and the price of the stock shot up from $5 per share in 1966 to $70 per share in 1967. The company used their increased valuation to acquire the Big Mike Corp. and expand its operations. In 1970, the company moved from the over-the-counter market to a listing on the American Stock Exchange where it stayed for the next 14 years. Ranchers Exploration and Development Corp. is another example of a company that made its major move over-the-counter before moving onto an exchange. By 1971, the company’s sales had risen from $400,000 in 1963 to over $15 million in 1971, and to over $30 million by 1978. The company had 2-for-1 splits in 1970 and 1980 and a 3-for-2 split in 1983.

Pay Me in Bars of Gold and Silver!

Ranchers Exploration read the writing on the wall and began offering to pay dividends not in US Dollars, but in gold and silver, in part to attract shareholders to their stock.  The Dutch East India Company had regularly paid in-kind dividends to its shareholders in the 1600s and the Ranchers Development and Exploration Corp. decided to follow in their footsteps. The June 1981 dividend was payable in 2.5 grams of gold for every 500 shares held. Holders who owned 6,221 shares received a one-ounce gold bar.  Cash equal to $0.0766 was paid for fractional shares. The September 1981 dividend was payable in 2.5 grams for each 400 shares held.  Holders of 4,997 shares received a one-ounce bar in gold. Gold was selling at $600 an ounce on June 8, 1981 and $700 an ounce on September 24, 1981. In 1981, Ranchers Exploration had about three million shares outstanding, so the company would have paid out about 600 ounces in gold. In December, the company switched from gold to silver, and shareholders received a one-ounce bar of silver for every 120 shares that they owned. This would mean that the company paid out 25,000 ounces of silver to its shareholders. The March and June 1982 dividends were also payable in silver at the rate of 1 ounce of silver for each 120 shares, the September 1982 at the rate of 1 ounce of silver for each 100 shares, and the December 1982 dividend was payable in gold at the rate of 1 ounce of gold for every 4,977 shares. The 1983 dividends were payable at the rate of 1 ounce of silver for each 100 shares owned and the 1984 dividends were payable at the rate of 1 ounce of silver for each 150 shares owned. Investors who were tired of getting paid in dollars that were rapidly losing their value to inflation piled into the stock. The price of Ranchers Exploration shares gyrated with the price of gold and silver as the graph above illustrates. The stock price fell from over $65 at its peak in April 1981 to $12.50 in March 1982 and rose up to $53 ($35.25 after the 3-for-2 split) in April 1984. Other corporations saw value in the company, and on July 27, 1984, Ranchers Exploration and Development Corp. was acquired by Hecla Mining with shareholders receiving 1.55 shares of Hecla Mining Co. common stock, equivalent to about $21 in cash. Hecla Mining did pay dividends to its shareholders, but in cash, not in gold or silver.  Nevertheless, I would imagine that some of the former shareholders still probably hold bars of gold and silver they received from Ranchers Exploration and Development Corp. when it paid its dividends in bars of gold and silver.