Inflation in the 1970s ran at nearly triple the rate of the previous two decades.
By as early as 1972 the adverse effects of the cost of living were being felt across industry in the United States.
The previous year, under the Tehran Price Agreement of 1971, the posted price of oil spiked and, due to a decline in the value of the US dollar relative to gold, certain anti-inflationary measures were enacted.
On 15 August President Nixon, issued an Executive Order effectively making the dollar convertible only to gold directly on the open market.
As the dollar started to float free of the old link to gold, oil producers who priced their product in dollars, began seeing major reductions in income.
In September 1971, OPEC issued a joint communiqué stating that from then on, they would price oil in terms of a fixed amount of gold.
The glacial pace at which OPEC readjusted their prices to reflect the depreciation, however, did little to alleviate mounting pressures on transport businesses especially fledgling independents.
In March of the previous year, Congress had given itself a huge 41 per cent pay rise but only 5.4 per cent for postal workers.
In New York City, where letter carriers walked off the job, the largest wildcat strike in US history ensued lasting eight days.
Not even a month later, Teamster drivers, outraged over the meagre pay raise their union leadership had negotiated, walked off the job in 16 cities across the Midwest.
In Cleveland, strikers devised a patrol system that would stop trucks carrying cargo outside of essentials food, pharmaceuticals and, yes, beer.
All this mattered increasingly to the little guy on the ground, who was getting squeezed by discretionary spending at both ends.
Federal Express, established in 1971, was one of these.
Founder and Executive Chairman Fred Smith, who had raised nearly $90 million in venture capital from investors like Allstate and Newport Securities, was soon haemorrhaging costs mainly on fuel two years later.
Down to his last $5,000, Smith, out of sheer desperation, pitched General Dynamics for a lifeline. But it refused.
Staring down oblivion, he did what any self-respecting executive would have done before the Securities and Exchange Commission got its teeth.
He hit the blackjack tables in Las Vegas — and gambled the lot. In that moment of bravery or recklessness, depending on where you sit on the scales, Smith turned the $5,000 into $27,000.
Having been able to take care of the fuel bill with his winnings, more importantly, it bought him some time.
He soon raised another $11 million and by 1976, FedEx’s revenue was valued at $75 million.
All this after running at a loss for 2.5 years before it would break even. According to its current market cap, FedEx Corp is valued in the top 300 companies in the world.
Smith once said he learned more in three years as a serviceman in the Marine Corps where he was awarded two Purple Hearts and a Silver Star for active duty in Vietnam than his entire time at Yale Business School.
In the movie The Card Counter, a skill the military more than likely also taught Smith, Oscar Isaac notes “what separates blackjack from other games is that it’s based on dependent events, meaning past affects the probability in the future.”
It’s a life lesson that never loses relevance.
Now if someone would inform the blokes in charge of the printer spewing out our fiat currency.