I stood 726 feet above the ground as the mighty Colorado River roared below me.Red mountain peaks towered in front of me as far as I could see… And for a moment, I was speechless.
Nomi visits the iconic Hoover DamIf you’ve ever been to the Hoover Dam, you might know the feeling.I’ve traveled all over the world, from Brazil to Thailand. I’ve seen hundreds of historic landmarks – from the Great Wall of China to the Sydney Harbour Bridge in Australia.And the Hoover Dam still blew me away.But as I’ll show you below, there’s more to this American icon than meets the eye. In fact, it holds moneymaking clues today – if you know where to look.So let’s take a step back in time. Because the past can show us a profit opportunity that is unfolding as I write this…
Where Public Money Goes, Private Money Follows
The Hoover Dam was a feat of bipartisan support and private companies’ efforts.It stemmed from President Herbert Hoover’s decades-long push to rein in the power of the Colorado River.A government agency called the Reconstruction Finance Corporation (RFC) financed the project. Funding was just shy of $49 million (about $903 million in today’s dollars).The government didn’t set up the RFC with the dam in mind. It was a finance vehicle designed to help Wall Street weather the Great Depression.But because of one of five key RFC provisions, funding for the Hoover Dam became a reality.Under Provision 4, private companies could help the government with public infrastructure projects. That included “bridges, tunnels, docks, waterworks, canals, and markets devoted to public use.”The Hoover Dam ticked that box.Now, the government provided the initial funding for the project. But that doesn’t mean the government built the dam.First off, companies had to put their own skin in the game.If a company wanted to bid on the mega-project, it had to cough up $2 million. Then, it had to shell out another $5 million to back a performance-related bond. This was to guarantee it would keep to the job, no matter how difficult it became.At the time, the nation was stuck in the Great Depression. So the idea of paying up for a juicy government contract was enticing.That was especially true in the construction industry. The Great Depression was eating into jobs and forward-looking business strategies.But the dam was too expensive and complex of a project. No single company could pony up that much money for the contract… or guarantee the project’s completion.So, in the end, the contract didn’t go to just one firm. Instead, on February 19, 1931, a group of companies formed a coalition.
The Six Companies That Built the Dam
Six Companies Inc., as it was called, won the $49 million contract.At the time, it was the largest contract of its kind. And the largest public-private partnership in the history of the United States up to that point.The winners were all relatively small or family-owned companies. But one name in particular stands out: the Bechtel Corporation.You might recognize the Bechtel name as a multinational mega-company. But it wasn’t anywhere near that back then.Until the Hoover Dam project came along, Bechtel was a tiny family road construction company founded in 1898.But it seized the challenge of the Hoover Dam project. And – together with Henry J. Kaiser Co. of California – Bechtel put $1.5 million into the dam.The Bechtel family grew into a global construction, energy, and technology company on the wings of that project.Today, Bechtel is the second-biggest construction company in the United States. And it’s one of America’s largest private companies, with a $40 billion market cap.It was in the right place at the right time.
What This Means for Your Money Today
Now, I’m not suggesting that you buy Bechtel. It’s a private company. So even if we wanted to, it’d be nearly impossible.Instead, I’m telling you this because we’re at another crossroads for our nation’s energy infrastructure.In the 1930s, the Hoover Dam gave small companies the chance to grow bigger. And right now, legislation coming out of Washington is creating a similar opportunity.More By This Author:Political Drama, Middle East Conflict, And Record Debt Is Fueling The De-Dollarization Flames This Payment System Is a Trojan Horse For CBDCsThe Fed Created This Financial Frankenstein’s Monster
