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.The Eternal American Battle - Humans V Money

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Friday, April 23, 2010

ONE NIGHT IN DODGE CITY

I suppose the way these three men crossed paths could be called fate, or kismet. To label it a mere chance encounter could be seen as denigrating the life of one who died and the one who killed him. And, yes, there were great invisible social forces guiding events that hot summer night, and cold blooded economic factors as well. But there was also poetry, and the wild card of alcohol. But in 1878 when a “rather intelligent looking young man” named George Hoyt, a young vaudevillian named Eddie Foy, and a young assistant sheriff named Wyatt Earp, all collided in Dodge City, Kansas, they made history.
Dodge City owes its fame to a tiny tick, Boophilus microplus, which carries anthrax. The tick and the disease were endemic amongst the herds of Texas Longhorns, which had developed a resistance to the fever. But in 1868 anthrax on imported Longhorns killed 15,000 cattle across Indiana and Illinois. So as the sod busters plowed across Kansas they insisted the state restrict the rail heads for Texas cattle drives further and further away from their farms. In 1876 the demarcation line was moved to the 100th meridian, which made the town on the north bank of the "Are-Kansas" River, the new “Queen of the cattle towns”, the ‘Wickedest Little City in America’. Over the next ten years, 75,000 head of cattle a year were shipped out of , "The Beautiful, Bibulous Babylon of the Frontier"; Dodge City, Kansas.
Like the other ten to fifteen cowboys in his crew, George Hoyt had just ended two months of hard, dusty, dangerous and monotonous work. He had $80 cash money burning a hole in his pocket. And it was the business of the merchants of Dodge City to separate George from as much of that cash as possible before he left town. In essence Dodge City was a tourist trap, dependent for its yearly livelihood on the May through August ‘Texas trade".
The little town of less than 1,000 year round citizens could boast, during cattle season, 16 saloons, and south of the “deadline” (Front Street that bordered the tracks of the Atchison, Topeka and Santa Fe railroad) there were uncounted assorted brothels and dance halls where “anything goes” during the summer cow season. However, it might be helpful to remember that during the ten years that Dodge City stood at the edge of the "frontier" at total of 15 people were victims of violent death, or 1.5 per year. Given the relativly small population, that gave Dodge City a murder rate fairly close to that of modern American cities. The level of violence, along with the "anything goes" prostitution, was just another tourist attraction.
All the bars served the latest mixed drinks and ice cold beer. Many enticed customers with a piano player or, in the case of the Long Branch saloon, a five-piece orchestra. Ben Springer’s Theatre, the cavernous  “Lady Gray Comique” (com-ee-cue), at the corner of Front and Bridge Street (modern day 2nd Avenue), was divided between a bar and gambling parlor in front and a variety theatre in the back. In July of 1878 the Comique featured an entire vaudeville show headlined by “…that unequalled and splendidly matched team of Eddie Foy and Jimmie Thompson.”
Eddie Foy had been dancing and clowning in Chicago bars to feed his family since he was six. He was now 22, and this was his second swing through the western circuit, telling such local jokes as “What's the difference between a cow boy and a tumble bug (a dung beetle)? One rounds up to cut and the other cuts to round up”. Eddie had an appealing V-shaped grin, and a comic lisp, which he offered each night in a solo rendition of the plaintive homesick poem, “Kalamazoo in Michigan”.
At about 3 A.M. on Friday, July 26th, while Eddie was just beginning his reading, George Hoyt and several of friends left the Comique and saddled their horses at a nearby stable. Then the cowboys buckled on their gun belts and mounted up. As they rode up Bridge Street, past the Comique, on their way back to camp, George suddenly wheeled his horse aside. He rode up to the side of the Comique and reined up. George pulled his six shooter and banged out three quick shots into the side of the building.
According to Eddie Foy, inside the hall “Everyone dropped to the floor at once, according to custom.” Amongst the crowd of 150 gamblers and poetry aficionados in attendance was lawman Bat Masterson and gambler Doc Holiday, both of whom, according to Eddie, beat him to the floor. “I thought I was pretty agile myself, but these fellows had me beaten by seconds at that trick.”
The Dodge City Globe agreed. “A general scamper was made by the crowd, some getting under the stage, others running out the front door and behind the bar; in the language of the bard, “such a gittin up the stairs was never seed”. Observed Bat Masterson, “Foy evidently thought the cowboy was after him, for he did not tarry long in the line of fire”. But, in fact, there were people even closer to the line of fire.
In George Hoyt’s impulsive decision to blast away at the Comique he had failed to notice two men lounging in the shadows on the sidewalk. One was Jim Masterson, younger brother to Bat and a fellow city deputy. The other shadow was soon to be legendary lawman Wyatt Earp. Wyatt (above,on the right) was 30 years old and stood about six feet tall, weighed about 160 pounds and had light blue eyes. But what friends and opponents remember most about Wyatt was his manner. The editor of the Tombstone Epitaph would later note his calm demeanor, saying he was “…unperturbed whether...meeting with a friend or a foe.” Bat Masterson (on the left) described him as possessing a “… daring and apparent recklessness in time of danger.” But beyond that the man did not seem legendary at all.
After serving in an Illinois regiment during the Civil War, Wyatt became a teamster between the port of Wilmington, outside of Los Angeles, and the desert mining town of Prescott, Arizona. He then managed houses of prostitution in Peoria, Illinois for several years before becoming a lawman in Wichita, Kansas. He lost that job in 1874 for embezzling county funds, which he probably used to finance his education in gambling.
Moving on to Dodge City along with the railroads, Wyatt was hired again as a police officer . But he took time off to travel Texas and Dakota Territory to continue his schooling in poker and games of chance. But as  a “cop” in Dodge City Wyatt's fame did not extend beyond stopping spit ballers disrupting an evening’s performance at the Comique, and his recent slapping of a prostitute named Frankie Bell. Frankie spent the night in jail and was fined $20, while Officer Earp was fined $1. But that slapping incident made clear that the nominally bucolic Wyatt Earp would not sit idly while his honor or his life was insulted.
So when George Hoyt began blasting away in the dark, Wyatt made the immediate assumption that the cowboy meant to kill him. As George galloped his horse back up Bridge Street, Wyatt drew his own weapon and fired after the fleeing cowboy, once; and then a second shot. The second bullet hit Hoyt in the arm.
Bat Masterson claimed years later that George Hoyt fell from his horse, dead on the spot but that seems embellishment. Bat, as we now know, was on the floor of the gambling parlor. His brother Jim was outside standing next to Wyatt but never spoke of the shooting. Other accounts say the two lawmen ran up the street together after Hoyt.
Given the lack of adequate street lighting in a frontier cattle town of 1878 Hoyt would have soon disappeared in the dark. And that makes it seem likely that Bart got at least that much right; Wyatt fired only twice. And George Hoyt just wasn’t fast enough in escaping. The cowboy fell from his horse, and either from being shot or simply from the fall, he broke his arm. Wyatt and Jim Masterson ran up on Hoyt, and after he was disarmed they sought out Dr. T. L. McCarty to treat him. The Globe commented that George Hoyt “…was in bad company and has learned a lesson “he won’t soon forget”. He didn’t forget soon. Gangrene set in and the cowboy George Hoyt died a slow and foul death, passing at last on Wednesday, August 21st, 1878; 26 days after Wyatt shot him. The Legendary Wyatt Earp had killed his first man. He shot him in the back, if he hit him at all.
Eddie Foy would later claim that his suit, hanging back stage, was punctured twice by the gunfire, but that too seems an embellishment. The Dodge City Times said the bullets went through the theatre’s ceiling.
Eddie Foy went on to a successful career on the vaudeville stage, appearing for several years with his children in an act billed as “Eddie and the Seven Little Foys”. He was the last of the great vaudeville entertainers before the advent of film, and so is almost forgotten today. Eddie Foy died of a heart attack in 1927 at the age of 71.
In September of 1878 a cattle broker and gunman named Clay Allison came to Dodge looking for a showdown with Wyatt Earp. One story told is that Allison was a friend of George Hoyt’s. It seems that Wyatt sensibly stayed out of sight until Allison left town, despite Wyatt's strories to the contrary. In 1879 Wyatt and his brothers left Dodge City and moved on to Tombstone, Arizona.
There, in October of 1881, he took part in the infamous Gunfight at the O.K Corral, which in fact was a gangland brawl which occurred in a vacant lot down the street from the rear entrance to the O.K. Corral. But none of that reality stopped the fight from becoming the most famous twenty seconds in the American West.
Wyatt remained a professional gambler all his life and died in Los Angeles of a chronic bladder infection at the age of 80 years, in January of 1929. He is mostly portrayed today as a hero, mostly, it seems to me, because he had no aversion to spinning tall tales, and because he was that true rarity, a gambler who usually won.
After the railroads penetrated south Texas in the mid 1880’s the need to drive cattle a thousand miles to Kansas came to an end. And with it the “Queen of the Cattle Towns” became just another small American town of some 25,000 people.
It’s connection to its past is the Dodge City Cargill packing plant, whose 2,500 employees can slaughter up to 6,000 head of cattle a day, turning them into four and a half million pounds of meat shipped all over the world. It was always the unpleasant underside of Dodge City that the town depended for its fame and fortune upon the death of so many.
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Wednesday, April 21, 2010

THE GREAT SILVER HUNT

I think the best way to describe Nelson Bunker Hunt is this; Archie Bunker with couple of billion dollars in the bank. He does not smoke, drink or gamble. The son of a flagrant womanizer, who openly produced two completely separate families, and a third in secret (fifteen children in total by three women), Nelson is a major financial supporter of Fundamentalist Christian political groups. Nelson was friends with and a financial supporter of both Senator Jesse Helms.of North Carolina and Senator Strom Thurmond of South Carolina. He is also a major financial supporter of the John Birch Society. He collected a thousand thoroughbred race horses and yet always flies coach. He is famous for searching his couch cushions looking to recover lost change, his own and visitors.
Said a family member; “Sometimes he’s brilliant. The rest of the time you wonder whether he’s really there with you or not.” Said a business partner; “He doesn’t just want some of it. He wants it all.” Said his father, legendary oil man Haroldson Lafayette Hunt Jr.; “I could find more oil with a road map, than Nelson could with a platoon of fancy geologists”. Says Nelson himself; “Worrying is for people with strong intellect or weak character.”
But maybe the key to his personality is that Nelson Baker Hunt was born a second son. Nelson’s eldest brother, and his father’s “run away favorite”, Hassie Hunt, was an oil wildcatter and “a millionaire in his own right by the age of 21.” And then this older, smarter brother developed schizophrenia and his desperate father decided to treat him with a lobotomy. Since that "Hail Mary Pass" of treatment, Hassie has been and will be under 24 hour nursing care for the rest of his life. Thus Nelson became the repacement son. But he was never his father’s favorite. And that may explain why one dark night in 1974 Nelson and a staff descended upon New York City in three charted 707 jets, paid for and then transported 40 million ounces of silver to Nelson's leased vaults in Switzerland.
Now, silver is a commodity, like wheat or oil or steel. You can buy a commodity, and you can even sign a contract pledging to buy it at a set price some time in the future. These futures are a bet as to what the price of that commodity will be. The vast majority of futures traders never intend upon taking delivery of the actual commodity. They merely bet on the market, providing producers and buyers a hedge against price fluctuations. These bets thus stabilize the market, which is good for everybody. And to encourage trading in futures, they are bought at only a percentage of the actual price, called a “margin”. But Nelson was willing to suffer the expense of transportation, storage and insurance, by actually taking delivery on his silver, because he believed in a doomsday fundamentalist theology,  that the world’s financial markets were going to collapse. Paper money would be worthless. A commodity like silver would still have intrinsic value.
In 1974 the world wide production of new silver was 245 million ounces, while annual consumption was 450 million ounces. The imbalance (67%) was made up through recovery of “scrap silver”, everything from industrial applications to melting down family heirlooms. But the imbalance also meant that the control of a tiny percentage of the world’s silver could swing the price. This meant that every ounce of silver that Nelson bought and stored in the vaults was another ounce removed from the market. And that drove the price of the remaining silver up. As the price went up, the silver in Nelson’s vaults increased in value. He cashed in on that increase by using it as collateral for loans, which he used to buy more silver and silver futures. He was gambling that the price would always go up, and he had enough control of the game, called leverage, to insure that it did.
The price rose from $6.22 per ounce in November of 1971 to $11.00 per ounce by the end of 1979. Nelson now controlled 1/3 of all the silver in the world, not sitting in various government vaults. But Nelson’s manipulations had not gone unnoticed. Tiffany took out a full page ad in the New York Times naming Nelson, and stating, “We think it is unconscionable for anyone to hoard several billion, yes billion, dollars worth of silver and thus drive the price up so high that others must pay artificially high prices for articles made of silver.” By the end of December 1979 the price of silver had risen to over $50 an ounce. Five years after that first late night silver flight, the Nelson and his brother, had earned between two and four billion dollars in paper profit from the (by then) 100 million ounces of silver they owned and had future contracts to buy more.
But while Nelson had been buying silver futures “long”, betting that the price would go up, he was also squeezing the manufacturers who needed silver. They would have to pass their price increases to the hundreds of millions of customers who used their products, all in the name of higher profits for Nelson Baker Hunt, his family and friends. On January 7, 1980 the United States Commodity Trading Commission, which had oversight of the futures market in America, issued “Silver Rule 7” which increased the margin required for silver futures. Four days later the price of silver had fallen to $25 an ounce.
As the value of Nelson’s collateral began to fall, the brokerage house and banks which had made him loans to buy silver futures, now put the squeeze on Nelson. By March they issued a “margin call” of $100 million on those loans. In effect, Nelson would either have to make that payment, or fulfill the entire contract, and take delivery on and pay fpr $1.7 billion in silver.
Early on the morning of Thursday March 27th 1980, before the commodity markets opened, Nelson’s younger brother and partner, Herbert Hunt, placed a telephone call to the chairman of the Futures Commodity Trading Commission and asked him not to open the market. The reason given for the extraordinary request was that the Hunt brothers would not be meeting their margin calls that morning – “would not”, Hunt had said, not “could not.” As John Bloom noted in an article he wrote for the magazine “Texas Monthly” “Here was one of the leading spokesman for unbridled free enterprise in America, asking a federal regulator to close a market. If the federal government would not do that, then he simply wouldn’t pay up.”
That day, the silver markets did open. They simply collapsed. The price of silver futures fell to $10.20 an ounce. The day passed into history as “Silver Thursday”.
As the Federal government attempted a postmortem, they discovered that Nelson Hunt had assets of $1.5 billion, and now owed $2.43 billion. In addition he owned 6.5% of one of the brokerage houses which had loaned him money on the Silver Futures, a fact never revealed to the Security Exchanges Commission, which regulated those houses. That was illegal. And, the feds also discovered that Federal Reserve Chairman Paul Volcker had met with Nelson several times in an attempt to find funding to save him from bankruptcy. As Time Magazine noted, Volcker’s “continual monitoring of the situation was interpreted by bankers to mean that the Federal Reserve…favored some kind of bailout to keep the Hunts from going under…(which) showed that when big speculators lose millions, “telephone calls come to Paul Volcker for a quick fix.” Those banks put together a one billion dollar line of credit to save, not the Hunt brothers, but the brokerage house he had defaulted. Yes, it has all happened before.
The aftermath to Bunker Hunt’s silver manipulation is also informative. The banks eventually went after the Hunt’s seeking return of another billion dollars lost in their game. Like all good defendants, Nelson countersued, accusing the banks of lending him money because they knew he couldn’t possibly repay it. It was an absurd argument, but it allowed the Hunt’s fifteen lawyers to negotiate a reduction of the repayment. In 1998 a federal jury found both Nelson and Lamar (another brother) guilty of fraud and a conspiracy to monopolize the world's silver market. Nelson was banned for life from ever trading in futures again. And finally Nelson Bunker Hunt was forced into Chapter 11 bankruptcy.
The extended family remains wealthy and well connected. Nor was Nelson reduced to poverty, either. A reporter for the Dallas Morning News in March of 2009 found the 83 year old living “in relative modesty in a North Dallas house with his wife of 57 years”. Nelson insisted he had no regrets.
In better times, Nelson Baker Hunt said, “People who know how much they're worth, aren't usually worth that much.” Stephen Susman, one of Nelson’s lawyers, said, “These people are gamblers. If you’re a gambler, you take your shot.” Except, of course, these powerful folks always think they have the biggest gun in town.
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Sunday, April 18, 2010

AMAZING RACE[ PART VI - TROUBLE AT HOME

I am impressed with the level of cupidity amongst the participants in the amazing race. (It means they were avaricious.) Certainly the pilots, Bob Fowler and Cal Rodgers, were risking their lives day after day and deserved some reward for that risk. At Dallas, where Cal stopped on the night of the 17th of October, and at Fort Worth, where Cal put in two days of flights before 75,000 at the state fair, he sold photo’s and autographs, as Bob Fowler did at his stops - just as musicians do today at personal appearances. And there were always the “Vin Fiz” coupons Cal was still dropping over unsuspecting soda drinkers in cities where he did not land. The Waco Texas Young Men’s Business League offered Cal an impressive fee, so on October 20th he took a long detour south and did several loops around the cities’ sky single sky scrapper.
But acquisitiveness was evident amongst everyone associated with the race, and even Mable had gotten into the act. Dear, sweet, shy, retiring and innocent Mable Rodgers had tried to convince the United States Post Office that the historical nature of the race warranted creating her a special “Post Mistress”, so that she could stamp “Postmarked Vin Fiz Special” on cards and letters bought from her while en route, for a small fee, of course. But when that moneymaking idea failed to inspire Congress to act, and after W.R. Hearst had abandoned the race (and her husband) in Missouri, Mable sent Cal’s brother Robert out ahead to Kansas City to order unofficial oversized “Vin Fiz Flyer” and “Rodgers Aerial Post” stamps, to be sold at a quarter apiece once the Flyer had crossed into Texas.
Buyers would still have to affix official postage to have anything delivered, and the stamps had no glue backing, but Mable was trying squeeze every penny out of the insanity she was caught up in. It’s difficult to know if enough stamps were actually sold to cover the cost of printing them, but we do know that only thirteen “Vin Fiz” stamps still survive, eight on postcards, one on a letter and four “off cover”, meaning individually. One of the “off cover” stamps sold in 2006, when the world was still drunk, for $70,000. That amount could have financed the entire flight back in 1911. I guess Mable had the right idea, just bad timing. And I’m certain that Maria (ne Rodgers) Sweitzer, Cal’s mother, was certain to reminded poor Mable of her financial gaff, at every opportunity.
Avarice of a particular kind was on view in the hothouse of the 66 foot long by 8 ½ foot wide pressure cooker of the “Vin Fiz Special” Pullman sleeping car, with wife and mother-in-law cooped up for endless days together on the endless stretches of track between the way stations of civilization across the American West. The air must have been thick with slights (real and imagined), invective (real and imagined), criticism and denunciations (real and perceived). The two ladies endured each other for Cal’s sake from New York to Chicago. Then mother Maria found an excuse to leave the train. But at Kansas City she rejoined the caravan, only to disembark yet again at San Antonio.
Perhaps the expense of printing up the stamps came up once too often in conversation, because when Maria rejoined the train outside of El Paso she brought reinforcements – 22 year old Lucy Belvedere, a reputed heiress, and at least in Maria’s mind, an improvement over Mable. For example, I presume that dear Lucy could swim. It would appear that Cal was somewhat distracted by the drama building in the Pullman car. In what can only be seen as an omen, as he approached El Paso, Cal had a near miss in mid-air with an eagle, or maybe it was a vulture. On the 24th of October at Spofford, Texas, Cal’s attention slipped just enough to allow his right propeller to strike the ground, sending him into a ground loop that broke another wing and “splintered” both props. Through yet another Herculean effort Chief mechanic Charlie Taylor and his first assistant, Charlie “Wiggie” Wiggin, were able to get Cal back into the air the next morning.
Then, just before noon on Friday, October 29th, the object of this maternal verses matrimonial completion, landed at the corner of Duval and 45th street in Austin, Texas. Three thousand came out to cheer the hero. And Mable was quoted by a local reporter as saying, “Sometimes I suspect that Calbraith thinks showing affection to a woman would be unfaithful to his machine.” Yes, that was Mable’s concern right then, trapped aboard the sleeping car with her mother-in-law and a woman her mother-in-law clearly saw as her replacement. I wonder if Mable noted ironically to herself that one of the things still holding Cal in the air was her corset, strapped into an upper wing as repair.
In Deming, New Mexico, on Halloween, Cal’s ignition system went on the fritz. Can it be any wonder? Still he persevered. He refueled at Wilcox, Arizona on November 1st, and took the short hop from there to Tucson, where he paused just long enough to travel the six blocks by car to the ball park where Bob Fowler’s "Cole Flyer" had landed. They shook hands, but Cal was so rushed the photographers had no time to snap a picture. Being in the air, seated directly in front of a pounding engine, must have been the only peace the boy boy had. But help was at hand. This time Mable would finally showed a nerve equal to her Cal’s. This time she wasn’t waiting to be rescued.
After the refueling stop at Wilcox, Arizona, Lucy, the lady mother Maria had brought aboard, discovered that her entire trousseau had been stolen from her compartment. As Mother Maria and Lucy digested this horrifying disaster, and pondered who could have absconded with the frillies and lace, shy little Mable quietly informed them that the luggage was not really missing. Rather it was perfectly safe...aboard the east bound baggage car of the train they had just passed at the station back at Wilcox. The trousseau had been placed there by "Wiggie" on shy little Mables' instructions. It was a display of verve and determination that mother Maria had not expected out of her husband's wife. And while Cal struggled for fame and fortune above the unforgiving desert of Arizona, Lucy gathered her few remaining belongings and left the “Vin Fiz Special” via the next east bound passenger train, with her tail between her legs, chasing her corsets and her luggage back into Texas, and out of the pages of history.
 It seems that at some point in the cross country adventure above the desert, little Mable had taught herself how to swim.
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NEXT; INTO THE VALLEY OF DEATH

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