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The Last Time a Republican Reigned in Big Business - 1903

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Friday, October 30, 2009

HUNTING THE BIG UMBER BIRD


I have to tell you a very dull story. It relates no shootouts, no hangings, no burnings at the stake. This story would make a really bad comic book, er, sorry, graphic novel. Heck, it would make an uninspiring regular novel. And as a television series it is just a non-starter. So it must not be important, huh. And because it lacks all of those dramatic threds to string you, the reader, along, it will never make it on the news networks - which are in fact rarely new. But it really is an important story. And if I try and gin it up a little bit, you may agree. The facts, I assure you, are all accurate.

The central character is a guy named Charles Pollock. He lived in Boston in the 1890’s, a dull town in a dull time. And Charles worked in a bank; dull, dull, dull. But at least he was narcissistic. That made him a little interesting, if only to himself. And in 1894 dull Charles took a lawsuit all the way to the Supreme Court. It was that case which made Charles the hero of the modern anti-tax movement. And here let me suggest you imagine a really big explosion, a sucide bombing maybe, with piles of innocent people dead and dismembered laying all over the place, because, really, the anti-tax movement is just a looney tunes version of suicide.

I don't like paying taxes. I never have, I never will. There are somethings my taxes have helped pay for that I don't approve of; a couple of wars, subsidies to a few domestic monopolies and some foriegn dictators, to name just a few.  But those pale in comparison to the sin of not having a state to protect me and you. And, call them libertarians or anarchists, those who oppose the power of the state to tax its citizens resemble, to borrow a description from Tom Wolf, “…the logician who flies higher and higher in ever-decreasing circles until, with one last, utterly inevitable induction, he disappears up his own fundamental aperture and emerges in the fourth dimension as a needle-thin umber bird.” (“From Bauhaus to Our House”) To whit:

The U.S. government has been taxing income since 1861, as permitted in the Constitution under Article 1, Section 2 ("Representatives and direct Taxes shall be apportioned among the several states…") and Article 1, Section 8 ("The Congress shall have Power To lay and collect Taxes,…"). But in 1862 Supreme Court Chief Justice Roger Taney, the author of the Dredd Scott decision which had helped to bring on the Civil War, became incensed that money was actually being taken out of his paycheck to help pay for the Civil War. Taney was a very strong believer in slavery and in being treated as somebody special.

And Taney’s objections to paying taxes for the Civil War also struck a cord with those who might not like slavery but who thought they were also special and did not deserve to be paying taxes. We're talking about rich people here, very rich people, who had no compunction about buying politicians to get what they wanted. Buying politicians is what is currently known as free speech, if your logic can somehow equate "buying" with "free" in the same thought without your head exploding.

Anyway, in 1872 the rich people had the income tax laws repealed. Unfortunatly for Taney he was already dead and he wasn't getting his money back. Or his slaves. For that he would have to wait until the "Inheritance Tax" could be redefined as the "Death Tax".  But I digress...

For the next twenty years the Federal government struggled along supported by import duties alone, which amounted to less than 2% of the nation’s gross domestic product.
And yes, that is how we funded government before 1861. But before 1861 we were primarily an agricultural economy, where farm workers do not require much education, where populations are scattered and where all health problems are local. After 1861 we were a growing industrial economy. Factory workers require a high school education (or better), are concentrated in population centers, which make public health a regional problem. In other words, economic conditions had changed.

Now, besides being unable to support an effective government,  import duties (taxes on imports), raised the price of all consumer goods, imported and domestic. In fact during the 1880's import duties added as much as 48% to the final price consumers paid, for milk, for steel, and for everything in between. This protected domestic companies and allowed them to keep their prices high enough to ensure high profits. Are your eyes glazing over, yet?  Picture this; you walk into your local 'speak easy ' and discover that overnight the price of a beer has gone up 50%. You ask the owner what gives. He tells you that he has new suppliers, and the cost of beer from them is 50% higher than from  the old suppliers.  You ask why he switched suppliers, and he explains, "They made me an offer I couldn't refuse."  

Congressman William Jennings Bryant of Nebraska labeled high tariffs  “socialism for the rich”. “They weep more because fifteen millions are to be collected from the rich than they do at the collection of three hundred millions upon the goods which the poor consume.”  But it ain't like they did it in secret.

Between 1871 and 1891 sixty separate bills were introduced in congress to reestablish an income tax. That's right, people were actually fighting for the right to pay taxes. The Republicans, the party in power at the time, beat all of those efforts back. And then in 1893 a new tariff reform bill was introduced by Democratic Rep. William Wilson of West Virginia. Wilson's bill was primmarily intended to lower the import duties on foreign iron ore, coal, lumber, wool and sugar. But the bill also included a minor amendment, introduced by Rep. Benton McMillan from Tennessee, which read, “That from and after the 1st day of January, 1895, there shall be levied, collected, and paid annually upon the gains, profits, and income of every person residing in the United States, derived from any kind of property, rents, interest, dividends, or salaries…a tax of 2 per cent on the amount so derived over and above $4,000” during any five year period (equal to $88,400 today).

The pundits paid little attention to Mr. McMillan’s amendment because so many income tax measures had been introduced so many times before, and none of them ever came to anything. This was because the rich and powerful had a secret weapon, sort of a human tommy gun, a Homo sapian Chicago typewriter, if you will.

His name was Senator Arthur Gorman of Maryland, and he was a tool, a tool of the rich and powerful. Gorman helped the opponents of the Wilson bill attach more than 600 amendments which reinstated almost all of the import duties the bill had attempted to lower. It was a St. Vaentine's Day Massacre on the floor of United States Capital building, right in front of God and everybody, as my father used to say.

With the “Tariff reduction” bill thus bullet ridden and bleeding, no one believed that President Grover Cleveland, who had campaigned on a lower tariff platform, would ever sign the misbegotten bill into law. And he didn’t. He simply let the bill become law without his signature. It didn't cost him anything. At least the tariffs had been marginally lowered. At least he could claim that he had done everything he could to lower prices for working class Americans, while not having to actually do anything.

Imagine the mobster's shock the next morning to discover that Al Capone had beat the rap for murdering the Bugs Moran's gang, but he was going to jail anyway for income tax evasion. There was the shock amongst the rich and powerful. America had returned to a national income tax. And the response was just what you would expect it would be from the rich and powerful. They sued.

The fine print of the accidental income tax law required that all stock companies pay the income tax for individuals before distributing any dividends to them. Dividends were income. And when he received his notice from the Farmers' Loan and Trust Company (because he owned all of ten shares of stock in Farmers’ Loan and Trust) Charles Pollock was very angry. He was angry enough to hire high priced Wall Street top gun lawyer Joseph Choate, who filed a lawsuit against the bank claiming the income tax was unconstitutional.

The Massachusetts courts disagreed, as did the Federal courts. But somehow Charles Pollock found the money to appeal his lawsuit all the way to the United States Supreme Court, which, to everyone’s surprise, agreed to hear the case immediately.

On April 8, 1895 the court ruled, 5-4, in favor of Mr. Pollock, that slim majority saying in essence that the source of income mattered; salary could be taxed but income from property – rent, interest on savings or dividends paid on stock - were not “apportioned” by population, and thus the government was denied the power to tax it.

The dissenting opinions were intellecutally devstating. Justice Brown wrote that “This decision involves nothing less than the surrender of the taxing power to the moneyed class…Even the specter of socialism is conjured up to frighten Congress from laying taxes upon the people in proportion to their ability to pay them.”

And Justice Harlan argued that the court's majority opinion, “…declares that our government has been so framed that,...those who have incomes derived from...bonds, stocks and investments...have privileges that cannot be accorded to those having incomes derived from the labor of their hands, or the exercise of their skill, or the use of their brains.” These were bother powerful arguements. But then the greedy have always been willing to lose the intellectual arguements, as long as they get to keep their money.

Working people were outraged. They were infuriated. They were fighting mad. And it would still take 11 years before the will of the people could overcome the power of the “moneyed classes”.

In 1909 President Howard Taft proposed a Constitutional Amendment (in part because he thought it would never pass) to allow a Federal Income Tax. On July 12, 1909 the 16th amendment passed the Congress and was submitted to the states, in part bcause the congress never thought the states would pass it. The amendment was brutally blunt and short. It reads in total, “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration.”  Period.  End of Amendment.

Alabama took less than a month to vote for the 16th amendment. Kentucky, South Carolina, Illinois, Mississippi, Oklahoma, Maryland, Georgia and Texas all passed it in 1910. Twenty-three more states followed in 1911, three more in 1912, and six more in 1913.

It was with the vote of the New Mexico legislature, on February 3, 1913, that made the 16th amendment the law of the land. Six states either rejected the amendment or never took it up, but that did not matter. The Constitution only requires that two-thirds of the states approve of an amendment to make it the law.

And so, when some lunatic or confidence man or woman tries to seduce you with a magical scheme to avoid paying taxes, you can now explain to them that, by placing the source of support for the government in the people’s hands, income taxes places the power there as well.

The relevancy of this narcissist tale to your life may become clearer when you realize that the Farmers Loan and Trust Company named in the lawsuit was established in 1822 in New York City. On June 1st, 1929 they changed their name to City Bank Famers Trust, and in 1976 they changed their name again. This time they shortened it to Citibank.

This is the same Citibank that has recently swallowed at least $320 billion of taxpayer (meaning your) bailout dollars. Oh, as of 1894, Charles Pollock was an employee of Farmers Loan and Trust in their Boston branch. And it seems likely to me that he sued his own employer with their connivance. Looking at history it seems to me that the limits to which the rich will go to avoid paying their fair share of government remains endless. These people just think they are top of the world, ma!

- 30 -

PIKE'S PIQUE


I have been searching for the right word to describe Zebulon Pike, and I keep coming back to the word “Shlub”. It is Yiddish word meaning a foolish, stupid or inferior person. But at least he was handsome. He was, visually, a perfect hero. He stood
“…5'8" tall, with a ruddy complexion, blue eyes and light hair…(was) a crack shot…(with) great physical endurance …” He was also a teetotaler who one biographer kindly described as “an efficient but unremarkable career officer” while another put it more succinctly; “…a puffed-up little popinjay...”. As proof of Zeb’s shlub-dom I submit his first voyage of discovery in 1805 when he was ordered to find the source of the Mississippi River. And he couldn't.

The 27 year old lieutenant set out on August 9, 1805 from Fort Belle Fontaine, on the south bank of the Missouri River, four miles upstream from its joining with the mighty Mississippi. He was accompanied by what he called a “Dam'd set of Rascels,” 20 soldiers manning a 70 foot keelboat. He included on his voyage no doctor, no interpreter and no one qualified to map the voyage, including Pike himself. Because of the low water level (it was August, after all), Pike’s men spent as much time dragging their keelboat over sand bars as they laboriously poled  it northward.

Two days of exhausting work brought them to the mouth of Illinois River, near present day Grafton, all of twenty miles from their starting point.At this rate the could expect to reach the headwaters by November, 1905. The Mississippi river has been winding and looping through here for about 145 million years, following a weakness in the crust now called the New Madrid Fault. But north of the Illinois river the big river has been more influenced by ice.

A mere 130,000 years ago the “Wisconsin Ice Sheet” covered most of modern Indiana under a lake. I have the clay and sand left behind by that lake two feet under my back yard. When the ice damn collapsed the lake drained catastrophically. Called "The Kankakee Flood" it carved a valley so deep that when a similar glacier blocked the big river again 13,000 years ago, the Mississippi chose for itself the Kankakee channel, before rejoining its old course at Rock Island, Illinois, some 200 miles above St. Louis.

Another 150 miles above Rock Island, Pike found a perfect place for a fort. It was a 500 foot tall bluff (locally called 'Pike’s Peak'), across the river from Prairie du Chien, a trading post at the mouth of the Wisconsin River. Actually, no fort was ever built there, but everybody agreed it would have been a dandy spot for a fort. However, it was the spot where Lt. Pike finally agreed the 70 foot keel boat monstrosity was too much trouble. The expedition was finally shifted to two barges, which were easier to handle in the low water; easier being a relative term.

At the mouth of the Minnesota River (655 river miles from his starting point), on September 23rd, 1805, Lt. Pike took advantage of a gathering of the local Sioux Indians for a little land grab. He promised to pay them less than a dollar an acre for land on which the government would eventually build a fort, which would eventually become the city of Minneapolis. There is no record that the Sioux ever asked what a dollar was - or an acre. I think they signed the treaty because it seemed to make the shlub happy. Not that it mattered.

When Congress finally got arround to paying for their new “Fort Snelling” the price had been summarily reduced by 90%. And even that was actually paid to the French and British traders who had been feeding the Sioux rot gut whiskey on credit during the intervening two years. Commenting on the friendly welcome Lt. Pike received from the Sioux and the treaty he had duped them into signing, a modern Sioux has observed, “They gave him the keys (to the city), but they didn't expect him to think he owned the city”. I would say that seventy years later General Custer got the revised bill for this deal. Worse was to come.

The next morning Pike arose to discover his personal flag was missing. Being an intrepid explorer, he threw a hissy fit. Like a five year old in grocery store he stomped his feet and got very red in the face. Except this juvinile was an officer and a gentleman. So he had a soldier stripped to the waist and flogged for losing his flag. The Sioux were so disturbed by this display of pique that they dispatched two men downstream, where  they found the flag floating in the river. The precious toteem was returned to the brave if emotionally unstable explorer. And word went up and down the river that the Lt. was as crazy as a beaver with a toothache.

Fifty miles further to the north Pike reached the 60 foot high St. Anthony Falls, where the Mississippi River passed from the hard surface dolomites of the outer edges of the Canadian Shield to the softer sandstone bedrock. It took three days for his men to drag their bulky barges around the falls. And here it occurred to Pike (finally) that the local Ojibwe Indian canoes’ were lighter and more maneuverable than his barges. But instead of asking for help, Pike instructed his men in building their own canoe. He'd seen hundreds of them by this time. He knew how to build one. You just hollow out a large log, right?

Wrong. In making a canoe, size is everything, and smaller is better. Pike however, seems to have been over compensating, because his canoe was humongous. First they loaded all their supplies into the new leviathan, including all of their black powder. Then they slid their wooden Titanic into the river…and watched it immediately sink. Pike ordered all the wet powder kegs rescued and stacked over a fire, to dry out. The resulting explosion burned down his own tent, with most of his personal clothing, supplies and notes. Pike barely saved his trunk. You can imagine the faith his men now had in their commander, especially since he was forced to borrow clothing from them.

Back into the river again, this time in two smaller canoes. But progress was slowing. The channel was narrowing every day, winding and twisting. Four of Pike’s men were close to physical collapse. Sergeant Henry Kennerman, ““one of the stoutest men I ever knew,” according to Pike, began to vomit blood. Pike wrote that his men were, “…killing themselves to obey my orders.” My personal suspicion is that the young officer was misinterpeting the looks on his men's faces, and that Pike's sick call would have been a little shorter if his "Dam'd Rascels"  had any faith their "Lost Pathfinder" had the slightest idea where he actually was.

With snow already falling, on October 16, 1805, Pike ordered his men to pull into shore, where they built a blockhouse. While they worked, he hunted, supplying them with fresh meat. Sgt. Kennerman was left in charge of the men too sick to continue. Lt. Pike and a small detachment continued overland, wearing snowshoes and pulling sleds they had both borrowed from local British traders. It is important to point out at this point that Lt. Pike was not traveling into unknown territory. It was well known territory. The French had been through here beginning in the seventeenth century, and the English since the early eighteenth. Still, Lt. Pike persisted (like a typical man) in not asking for directions. He was like a ten year old exploring the neighbor's back yard.

Pike followed the river as best he could - without asking for help. On December 10th his tiny command reached the little falls of the Mississippi. On the last day of the 1805 they camped near the mouth of the Pine River. On the night of January 4th Pike suffered another black powder explosion. (Where was storing his powder, in the smoking tent?)

Finally, on February 12th , 1806, “…exhausted and worn out by cold, hunger and exposure” Pike reached Red Cedar Lake (later renamed Cass Lake). Here, I suspect out of sheer desperation, Pike wrote, “This may be called the upper source of the Mississippi River.” Yea, right.

Pike may have called it that, but it wasn’t. Twenty- six years later, in 1832, Henry Rowe Schoolcraft followed an Anishinaabe Indian guide (another approach Pike never tried - asking the locals!) to a small lake which he named Itasca, and which he declared was the actual source of the great river, and that is what most tourist today accept. But that isn’t the actual source either.

The actual source of the “father of waters” is Little Elk Lake, 9 miles further upstream. Little Elk Lake drains into Elk Lake, which drains into Lake Itasca. Ninety days after a deer pees into Little Elk Lake, it flows into the Gulf of Mexico.

Pike was not very concerned with details like that. He was exhausted. What concerned him when he got back to the blockhouse was that he found that Sgt. Kennerman had recovered. The Sargeant was feeling so well, in fact, that he had eaten or bartered away the entire companies’ supply of meat and Pike’s personal trunk as well, which had survived two explosions and at least three dumpings in the river. The mafia never cleaned out a government expedition any more effectivly. Just a few weeks earlier Pike had thrashed a man for a lost flag. Now, he quietly sighed, reduced the sargeant to a private, and ordered his men back to their canoes.

He arrived back in Fort Belle Fontaine on April 30th , 1806, just in time to avoid the high water of the spring flood. Ordered to find the source of the Mississippi, Lt. Pike went looking during the time of year when there was less of a river to find. And he had failed. In fact he had failed to locate a single stream, river or lake which had not been previously mapped, including the ones which would later be connected to the Mississippi. And yet the “Lost Pathfiner” was immediately dispatched to explore the southwestern edges of the Louisiana Purchase, during which he probably spotted a mile high peak named after him, and during which the long suffering Private Kennerman deserted, never to be seen again. Only a government agency would have kept hiring this misguided direction impared shlub as a pathfinder.

Ever a self promoter, Pike rose to the level of Brigadier General during the War of 1812. And he played a crucial if little known role in that war. It was General Zebulon Pike who led the assault on the capital of Upper Canada, the city of York, (since renamed Toronto), on April 17, 1813. When a British mine exploded prematurely, killing 42 British soldiers, among the 52 American victims was General Pike. In retribution his soldiers burned the Parliamentary Buildings in York. And it was that act of vandalism which the British repaid by the burning Washington, D.C. on August 24, 1814.

I would call that quite an impressive funeral pyre for a schlub. Wouldn't you?
- 30 -

Wednesday, October 28, 2009

AN UNPAID DEBT


I would say it was the nastiest letter ever written by Ben Franklin (that we know of). On April 4, 1778, Franklin dipped his bitter pen in his own long simmering sense of moral outrage to write, “I saw your jealous, malignant and quarrelsome temper which was daily manifesting itself against Mr. Deane, and almost every other person you had dealings with.”

Future historians would invent the story that Franklin was revered at the French Court because on his first appeareance he had fortotten his wig, and appeared bare headed. If it happened this would have been a social faux pas. But it was not the old man's bare head that made set the French court all a tremble with excitment, and inspired his nickname as "the child of nature". Each winter's morning in his rented house the 70 year old man sat for half an hour reading the newspapers before an open window, stark naked. During the summer months he sat in the garden reading the papers, absolument nu. His sophisticated Parisian neighbors were electrified, while their poor children recieved an unvarnished American education. You had to travel no small distance to offend the morals of such a man as Ben Franklin.

The object of Franklin's naked bitterness was Arthur Lee, youngest son of the powerful Lee family of Virginia, the man whom George Trevelyan described as “… the assassin of other men’s reputations and careers ..." Mr. Trevelayn dared to add, "The best that can be said of Arthur Lee is, that in his personal dealings with the colleagues he was seeking to ruin, he made no pretence of friendship…and his attitude toward his brother envoys was to the last degree, hostile and insulting.” (pp 455-456 “The American Revolution Part III” Longmans Green & Co. 1907.) This man Lee was so filled with hate and bile that he almost destroyed the thing he professed to love, the American Revolution. And the man he hated the most was Silas Deane.

Deane was a lawyer/merchant from Connecticut who had been dispatched by the Continental Congress in 1776 to buy guns from the French. There were three men in the deligation, Deane, Ben Franklin and the pus filled Mr. Lee.  Clearly, Arthur Lee felt that he was more qualifed to negotiate than either the geriatic nudist or the country bumpkin. And, in truth, Deane's only qualification was that he was very smart and rich enough to buy the desperatly needed muskets while Congress dithered, and he carried a letter of introduction from Ben Franklin to a friend of Franklin's living in England, Dr. Edward Bancroft.

When Silas Deane arrived home from France in 1778 he brought with him a treaty pledging French military and financial aid for the American Revolution. It had primarily been negotiated by Franklin. The French found Mr. Lee to be a stuck-up pain in the derriere. Accompaning Dean was a French Ambassador,  the first to America, M. Gerard. He didn't think very much of Msr. Lee either.

Deane rightly expected to be received as a hero bearing gifts. Instead he was treated like a traitor and grilled about the last packet of letters the Congress had received from the American delegation in France.

When those boxes of secret dispatches, which had arrived via the same boat carrying Deane and the treaty and the ambassador, were opened, they were found to contain nothing but blank pages. Clearly whoever had penitrated the American security arraingments must have been rushed, as they had no had time to laboriously copy the dispatches before replacing them.  And by not replacing them the British agents had made a much bigger impression than the theft itself.  But, alas, the Congress of 1778 was no brighter then the Congress of 2009.  Congressional paranoia took flight. And it was a darned impressive bird. The ship’s captain was jailed and questioned.

When it finally occured to the investigators that the one group of people with plenty of time to laboriously copy the dispatches and replace them would have been members of the ship's crew, stuck on board during the six week voyage from France with nothing to do but paperwork, the captain was released. But in any legislative body the level of intelligence is usually in indirect proportion to the position of authority. So as soon as the Captain was released the senior members of Congress ordered his re-arrest.

But it was obvious to Mr. Deane that certain members of the Congress now suspected him of being a British spy. It was also obvous to Deane that they had been encouraged in their suspicion by his fellow diplomat in Paris, Arthur Lee.

Lee even alleged in private letters to friends in Congress that Deane might have destroyed the dispatches because the dispatches contained letters accusing Deane of profiteering. Such letters, if they existed, would have come most likely from the posioned pen held by Arthur Lee.  So why bother to steal these anti-Deane dispatches, since obviously, Lee was free to write more? But Lee even went further, to hint that “Dr. Franklin himself…was privy to the abstraction of the dispatches.” So, now we have ask why Franklin would have stolen them? And a moment of logical thought will dismiss such naked accusations against Ben. And yet there were members of Congress who were convinced that a grand conspiracy was at work here, a plot to betray the nation and insult the character of... Arthur Lee. It was insane, of course, the kind of loopy idiotic illogic that only the brain of a politician, and an elected poltician at that, would believe. But the Congress of 1778 was just as jammed packed with such psychotics as the Congress of 2009.

The special Congressional hearing listened skeptically to Deane’s spur of the moment defense. He claimed the account books which would have disproven the charges of his profiteering were in France. He would have brought them but he had no idea they would be demanded. Deane was then forced to wait for Congress to issue him further instructions and re-embursment for the money he had spent on muskets which were already killing British soldiers. The instructions - and the money - never came.

Finally, short of funds (which by itself should have disproved the charge of profiteering), Deane did something foolish. He went public. In December 1778 he published his defense - a pamphlet, "An Address to the Free and Independent Citizens of the United States" - in which he identified the problem in Paris as Mr. Arthur Lee. He also reminded the public of all the weapons and supplies he had bought in France for the American army with his own money, and for which the Congress had not yet repaid him.

The public reaction in America was immediate and vicious. “The educated public saw in his (Deanes’) publication a betrayal of an official trust, and the public regarded it as effusion of an angry and detected man”(ibid). The public now joined the members of the Congress in believing Silas Deane of theft and betrayal.

No less a powerful voice for America than Thomas Paine, the author of “Common Sense”, and now serving as Secretary to the Foreign Committee of Congress, came to Arthur Lee's defense in a Philadelphia newspaper. He wrote that the supplies, “which Mr. Deane…so pompously plumes himself upon, were promised and engaged… before he even arrived in France.”  Bluntly, that was not true. Paine was merely repeating a lie which Arthur Lee had made back in 1776 in his private letters to relatives and allies in America. But that one sentence came close to unraveling the entire American Revolution.

The British were thrilled with Paine's story because for the first time the Americans had revealed a rift within their own ranks. And more importantly, if the supplies had really been promised and assigned to America before Mr. Deane had even arrived in France, as Paine claimed, then the King of France, Louis XVI, had lied when he publically assured the British and the Spanish that he was not helping the Americans prior to 1778. Worse, Louis had violated the Treaty of Paris signed in 1763, which had ended The Seven Years War (known as the French and Indian War in America.) To call the French King a liar and say he had violated a standing treaty was to say that his word was worthless. Roality does not like being called things like that.

The brand new French ambassador, M. Gerard, was enraged. He demanded an explanation. The Congress, recognizing they had been put out on a limb by Mr. Paine (and by Mr. Lee, although they didn't seem to have realized that, yet), beat a hasty retreat and announced that “…his most Christian Majesty…did not preface his alliance with any supplies whatever sent to America, so they have not authorized the writer of said publication to make any such assertions…but, on the contrary, do highly disapprove of the same." Congress also recalled what was left of the Paris delegation, both Franklin and Lee. They were replaced with one man, Thomas Jefferson.

Thomas Paine was forced to resign his post, and became estranged from the revolution he had helped so much to create and succor. Following a logic which would have been instantly understandable by any member of a local Parents' Teachers' Association, Paine's friends in Congress blamed Silas Deane for Paines' stupidity in believing Lee. And Mr. Deane, who had first been maligned and smeared by Arthur Lee, and then had been accused and maligned by Thomas Paine and his allies in Congress, also found himself estranged from his American Revolution.

Deane returned to Paris, intending to obtain his account books to prove his loyalty to the cause. But the books had been destroyed; by whom it was not clear. Dejected and angry, Deane swore he would never return to America. He moved to London, where he re-newed his connections to Dr. Edward Bancroft, and struck up a friendship with that other disabused American patriot, Benidict Arnold. That friendship did nothing to help Deanes' cause in America.

In the summer of 1780 Deane unloaded, in a letter to his family, suggesting that America would never win the war and should think about negotiating with the British to be accepted back into the empire. The ship carrying Deane’s letters was captured by an American privateer and Deane’s letters were published in a Conneticut newspaper, appearing in print just after the British surrender at Yorktown in 1781.

It was a nasty case of very bad timing. The public reaction was so negative that Deane's dreams of returning to America had to be put on hold for another eight years. He spent the last month of his life preparing for that voyage. But he died (in September 1789) before his ship could sail, and he was buried in England.

In his obituary published by a London newspaper Silas Deane received the final defense he should have received from the American Congress. “Having (been) accused of embezzling large sums of money entrusted to his care…Mr. Deane sought an asylum in this country, where his habits of life …penurious in the extreme, amply refuted the malevolence of his enemies. So reduced, indeed, was this gentleman, who was supposed to have embezzled upwards of 100,000 pounds sterling,...that he experienced all the horrors of the most abject poverty in the capital of England, and has for the last few months been almost in danger of starving.”

And what about Arthur Lee, the source of all this venom? After the war Arthur Lee was elected to Congress and for the first time his friends and allies got an up-close view of him in action. They found him so “…perpetually indignant, paranoid, self-centered, and often confused” that his fellow Virginians, Jefferson and Washington, avoided all contact with him. I wonder if any of them ever gave any thought to how they had depended on this man in their judgement of Silas Deane? Evidently not.

Arthur Lee opposed the new American Constitution, and after losing that fight he ran for a seat in the new Congress anyway. He was defeated. Arthur Lee died "embittered" on his 500 acre farm in Virginia in December of 1792.

It was not until 1835 that Congress finally acknowledged the debts Silas Dean had incurred in helping to create America. Hs surviving family was paid $38,000 (the equivalent of almost a million dollars today). It was generally admitted that this was but a fraction of the money Silas Deane had spent in helping to create our nation.

Thank you, Silas; for whatever it is worth.

And a post script; it was not until recently that letters from various English and French sources revealed that the true source of the leak in the American ministry in Paris, the real "snake in the grass", had been the sloppy bookeeping and slipshod security arraingments of the pompous and the paranoid Mr. Auther Lee of Virginia. The conduit who took advantage of his failure was Dr. Edward Bancroft, recomended by Ben  Franklin.
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