FACING DOWN THE RULERS OF WALL STREET A HUNDRED YEARS AGO. THEY ARE BACK.
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Sunday, January 17, 2010
HOLDING A CANDLE
I wonder if you realize how dark the world has been for the last 10,000 years? For most of that time you could burn wood for light, but firewood was not a quickly renewable resource. Emperors and Kings prefered to build ships and thrones out of it, rather than incinerate it. Sure, you could burn olive oil in a lamp, but olive oil creates smoke, and it has a limited shelf life, and it is really not very portable. And then some Etruscan genius in the eleventh century B.C. invented a thing you could carry in your pocket and which gave off light slowly over a long period of time. It was such a great invention that it was given the Sanskrit name of “cand” meaning 'to give light'. And whoever that Etruscan Thomas Edison was, I bet he got stinking rich, mostly because the stuff they made candles out of - rancid animal fat - tended to produce a powerful stench when it was heated.
It is stunning to realize how much human effort over the next 3,000 years was devoted to inventing the stink-less candle. The guy who finally did it was a Jew who had escaped Seville just ahead of the Spanish inquisition. Jacob Rodriguez Rivera landed in Newport, Rhode Island in 1748. He arrived there because eight years earlier the English were so desperate for white people willing to settle in America that George II had rescinded the requirement that colonists pledge their loyalty to him "upon the true faith of a Christian." With the removal of those five little words America was endowed with all the brains, blood and brawn the rest of the world didn’t approve of for one reason or another. That is what made us what we are, which is not a Christian nation, but a multi-religious nation, the most consistantly sucessful nation (over the last 200 years) in the world.
Anyway, Jacob went into business with his brother-in-law, Moses Lopez, who was a candle maker. And while wandering the docks of Newport looking for cheap supplies of animal fat Jacob stumbled upon the dockside slaughter of a sperm whale. Now, whale blubber had long been boiled down for the oil it contained, but burning whale fat stank even worse than cow or pig fat. And since Whales were difficult to find, kill and slaughter, blubber was usually mixed with other fats to reduce the stench and stretch the more expensive stuff. But since the blubber was cheap Jacob bought a couple of barrels to see what he could make of it, and while he was at it, he also bought some spermaceti, because nobody knew what to make of that, either.
See, if you poke a hole in a Sperm Whale’s head you will find hundreds of gallons of the stuff. Maybe it helps the whales eco-locate their prey, and maybe it helps them dive so deep. No human is really sure what it does. But it’s white and sticky and it looks like…well, you know what it looks like. That’s why they called them Sperm Whales.
Within a few years Jacob developed the following process; each fall when the whaling fleets returned, the spermaceti was bought from the whalers in 42 gallon barrels. (The ships sailed with the barrels filled with water, and as the crew drank the water, the empty barrels were filled with spermaceti.) The stuff was boiled down, the oil floated to the surface and was drained off. And the residue was allowed to congeal over the winter into a spongy, sticky, stinky mass. Yuck.
Then, when “…the temperature rose” in the spring, the stuff was shoveled into bags and pressed until the “winter –strained oil” was squeezed out. This was considered the creme-de-la-crème of sperm oil, and sold for the highest price. But Jacob was not done yet.
After more processing and squeezing, Jacob was left with a solid black cake of gunk that could be melted and formed into smokeless, stink-less candles, ready for shipment in the spring. When they burned spermaceti candles actually smelled sweet and produced almost no smoke. And the light they made was such a pure white light that a “foot-candle”, the amount of light a spermaceti candle produces at a distance of one foot from the flame, remains the standard for measuring light output to this very day.
Jacob’s only problem was that within a couple of years several competitors had either guessed or stolen his process. Okay, mostly stolen. So, in 1761 the United Company of Spermaceti Chandlers decided to form a cartel. Jacob Rivera teamed up with Obediah Brown & Company, primarily a Quaker family business based in Providence, and thus was born "Quaker Oil". Eventually they united with whalers along the east coast down to Philadelphia, and called themselves 'The Spermaceti Trust’.
The rules of The Trust set a top price of six pounds Sterling that its members would pay for a pound of spermaceti, and set the minimum price for one hundred candles its members would sell at one pound and one shilling.
The hunt for the Sperm whales was on. From 1770 until the start of the American Revolution, The Trust produced 45,000 barrels of sperm oil annually, compared to just 8,500 barrels a year of oil from all other types of whales. After the War of 1812 The Trust became unofficially based on the Quaker power center of Nantucket Island, 30 miles off the coast of Cape Cod, where some 36 chandlers made the precious spermaceti candles. So much money was made that the Brown family endowed a university with the profits.
By 1846 the tiny harbor in Natucket supported more than 700 whaling ships and more than 70,000 jobs, full and part time. Then, just after 11:00 p.m. on the windy night of July 13 of 1846, a faulty stovepipe led to a fire which, by morning, had destroyed 250 buildings, seven chandler factories, tens of thousands of barrels of spermacti oil stored in warehouses and on wharves, (three of the town’s four wharves burned completely), stores and warehouses, blacksmiths’, rope-makers’ and Sail-makers’ workshops and leaving 800 people homeless.
The proud town of Nantucket was reduced to begging for “…provisions, clothing, bedding, money…” Help poured in, but the golden age of the Spermaceti Trust was over. Nine years later the Trust was completly broken and the industry had been cut by half. By 1875 the island’s population had been reduced by two-thirds, down to just 3,200 souls.
The reason for the breaking up of The Trust was not just the Nantucket fire, of course. That didn't help. But what really hurt was the discovery of gold in California. A ship owner could make as much in six months carrying miners and mining equipment to California as he did on one three year search for whales in the Artic. At least half the forrest of masts of abandoned ships in San Francisco Bay, left adrift when their crews went hunting for gold, were ex-whalers.
And The Trust was also doomed by the development of drilling for petroleum in Canada and Pennsylvania. Krosene lamps replaced spermaceti lamps and candles because they were cheaper and almost as odorless.
The new baron of oil would be John D. Rockefeller, who called his company “Standard Oil” to sooth buyers used to variations in oil grades produced from different species of whales. But he supplied his product in the same 42 gallon barrels used to supply whale oil. (We still measure oil in terms of those 42 gallon barrels). John D. seemed to be reassuring his customers that nothing had changed in the oil business, except the names of the people who ran The Trust.