JUNE 2017

JUNE  2017
J.P. Morgan as a young man in his own words - "The Public Be Damned."

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Friday, July 30, 2010

A LEVEL OF INSANITY

I think my favorite moment in all of history occurred at about eleven on the chlly autumnal morning of October twenty-fifth. It had been raining for a week, and everything and everybody in the world was soaked to the skin. The six thousand man English army had been marching without food for several days. Dejection dripped from every frayed shirt and torn gauntlet. Nobleman and peasant had spent the previous night standing, because laying down in the cold mud was worse. They had no fires to warm themselves, because there was no dry wood, anywhere. Standing between them and a warm meal and the stout safe walls of the English channel port of Callais were over 35,000 offended Frenchmen. And then this twenty-eight year old hot head, Henry Lancaster, came striding from his tent, (he was probably the only who who had a bed) looked over that miserable multitude, and annouced “We shall attack”. His nobles must have thought he had lost his mind.
I can see them in my mind’s eye now, taking the royal lunatic aside to quietly explain to him that six thousand hungry and exhausted, demoralized and outnumbered men, do not attack a 35,000 strong well fed and well rested army. They slip away in the night. They pay a ransom. They negotiate a treaty. They do not attack. But, Henry was frustrated. The previous day had been spent in fruitless negotiations. The French were in no hurry. They had the home field advantage and were growing stronger by the hour. But Henry was insistant. He wanted to attack. And since the King is king by the will of God, unless he should accidently fall on his sword, you must do what he says. And Henry V, Plantaganet King of England, said “attack”. So they were going to attack. Still, I cannot but believe that at moments like this democracy was starting to look pretty good
Alas, this was not 1776. This was 1415. So, to the astonishment of everybody the entire English army picked up and struggled forward in knee deep mug, across the freshly plowed field, right up to arrow range of the French front line, about 200 yards. And there they stopped. They shouted insults, flashed the Middle Ages equivalent of gang signs, pounded their stakes and flashed their naked bottoms, and loudly discussed the questionable linage of the French nobility. Of course, the French were insulted, estranged, aggravated and enraged. The Frenchies drew themselves up in their noble outrage and threw themselves on the offending English with a vengence.
By any measure the English should have been massacured on the spot. They were not. Over the next three hours it was the French who were butchered. When it was all over about ten thousand Frenchmen were chucked into a mass grave. The English, who had lost about 1,500 dead, limped the sixty miles to Callais and that warm meal. Henry was given the French King’s daughter in marriage, which merely strengthened his claim to the French throne. It was a miracle. And, in retrospect, it was, of course, inevitable.
You want to know why most people think history is boring? It is usually taught in retrospect, as in “B” happened because “A” happened first. But that is never true. History never had to come out the way it did. If it was inevitable, it would be much faster. Gallieo would have been flying his helicopter over the fifty story office tower of Pisa. Humans are not logical. We are emotional creatures. And the cocaine addicted hedge fund managers who gambled their reputations and the futures of millions of investors on the ability of some alcoholic in Kansas City to make his mortgage payment on time, only thought they were being logical. History is actually one great big “What were they thinking?” moment of revelation after another. Like evolution, there is a logic to it only in retrospect. To expect the world to be otherwise, is a level of insanity which leaves little hope that the human species will ever rise above the level of smart monkey.
So what was the smart monkey King Henry thinking when he ordered the atttack at Agincourt? He was thinking he had really screwed up. He was thinking he had gotten where he was because of one stupid impuilsive mistake after another. But, true to his character, he made one final stupid, impulsive mistake. And that final one turned his entire world around.
The classical historical view of Argencourt is that the battle was won by the 6 foot long English Longbow, the high tech smart weapon of the Middle Ages. It took four years to make one, and up to 160 pounds of pull to draw one. It’s average rate of fire in the hands of an expert was less than six arrows per minute, and it was not of much use beyond 200 yards. Even at closer ranges it could not penetrate good solid chest armor. The catch for the targets, the French nobility, was that most of their armour was only of fair quality, and lesser strength chain mail was used to shield the arms and legs. But the longbow did not win the battle of Argincourt.
So what was the real miracle at the Battle of Argencourt? John Keegan in “The Face of Battle” attempts to recreate the experience. “Had most of the French first line kept their feet, the crowd pressure of their vastly superior numbers….would have forced the English back. Once men began to go down, however….those in the next rank would have found they could get within reach of the English only by stepping over or on the bodies of the fallen…yet in doing so they would have rendered themselves even more vulnerable…Seeing the French falling at the heads of their columns….the archers siezed the chance that confusion and illresolution offered. Drawing swords,…axes, bills or mallets…they ran down to assault the men in armor (on their flanks).
“…while an archer swung or lunged….another…(landed) a mallet-blow on the back of the head or behind the knee. Either would have toppled (the Frenchman) and once sprawling, he would have been helpless; a thrust into his visor…or through the chainmail of his armpit or groin, would have killed him outright or left him to bleed to death. Each act of execution need have taken a few seconds…Little scenes of this sort must have been happening all over the (battlefield)…”(pp 93-103)
So it was not the magical mystical longbow that won the battle, nor the sword held by a king. It was the simple hammer and mallet, in the hands of a villan, who butchered his enemy like a swine. It is not a very romantic image. But it is profoundly pragmatic. And that is why that moment before the battle of Argincourt, is my favorite moment in all of history. 
- 30 -

Wednesday, July 28, 2010

WILD CARD IN KANSAS CITY

I think if the train had been late, things might have been different. Perhaps the three waiting men would have attracted attention, or grown bored or been out of position. But the overnight Missouri Pacific train from Fort Smith, Arkansas was, unfortunately, right on schedule, pulling into Kansas City’s Union Station at 7:15 A.M. on Saturday, June 17th., 1933. And because it was punctual, the train efficiently, smoothly delivered an FBI agent, three local cops and one gangster on time to their final destination. For the waiting men it looked like they had drawn four aces. And then there was the joker in the deck, which turned the aces into eights.
It all started 24 hours before with the re-capture of Frank “Jellybean” Nash, “the most successful bank robber in U.S. history.”  Frank's 20 year career as a thief had allowed him to work with the Barker gang and the Dillinger mob, amongst others. But longevity was just half the story. He worked with so many gangs because Frank was a nice guy. As one author pointed out, it was hard to find anyone who didn't have something nice to say about Frank. Even the cops liked him. They liked and trusted Frank so much that while he was serving a 25 year term in Leavenworth, the likeable thief was able to walk right out the front gate, carrying a copy of Shakespeare. No one even thought to stop him. Once he was out, Frank was so well connected and so often employed as a bank robber, that in the summer of 1933 he could afford to take his wife and daughter to Hot Springs, Arkansas for a vacation.
And it was there, on July 16th, that two FBI agents, Joe Lackey and Frank Smith, and an Oklahoma police chief named Otto Reid, took Frank into custody at gunpoint in a Hot Springs cigar store.  Dick Galatas, who ran the gambling in Hot Springs, took the arrest of an underworld tourist in his territory, personally.
The local cops, paid more by Galatas than by the taxpayers, labeled Frank a kidnap victim and threw up roadblocks on the highway back to Little Rock. So the FBI took their prisoner the other way, on the long drive west and then north to Fort Smith. There they intended to catch the 8:30 P.M. overnight train to Kansas City. They wired ahead to Special Agent in Charge of the F.B.I..’s Kansas City office, R.E. Vetterli, to meet them at Union Station in the morning. But the train was late in arriving at Fort Smith, and by sheer chance a stringer for the Associated Press spotted the three men and their shackled prisoner in the waiting room. The reporter asked questions, and thinking they were now safe, the cops gladly talked. Shortly thereafter the story broke on the wires: “Frank Nash…was recaptured today at Hot Springs, by three Department of Justice agents…They revealed the identity of the prisoner for the first time here...”.  And with that the cops were back in the trap they had just escaped.
Galatas had already asked for help from Johnny Lazia (above, coatless), who ran the gambling and vice for the Pendegrast machine, which controlled Missouri politics and Kansas City. Under Pendegast, KC was a wide open town. A  newspaper editor at the time described the level of mob activity, “If you want to see some sin, forget about Paris. Go to Kansas City.”
Eager to do a favor for his friend Dick Galatas, Lazia assigned Frank's rescue of one of Frank's old buddies,  an ex-South Dakota Sheriff turned bank robber, named Vernon Miller (above).
Working out of Mulloy’s Tavern and the Monroe Hotel, next door to Pengergast’s office at 1908 Main Street (above) in Kansas City, Miller called in two gunmen to assist him. Their identities have remained a mystery to this day. But it occurs to me that now might be a good time to address the question of just why crime in America in 1933 was centrally organized but law enforcement was not.
When J. Edgar Hoover took over the Bureau of Investigation in 1924 he commanded just 400 agents. They were lawyers and bureaocrats,  not cops. Hoover spent the next forty years building the FBI in numbers and budgets.  And yet, until 1963, Hoover denied the existence of a centralized crime organization in America, commonly called the mafia - even after the Appalachian Conference of November of 1957, where more than 60 criminal bosses from the U.S., Canada and Italy were detained by local cops in upstate New York.  Hoover said, “The F.B.I has much more important functions to accomplish than arresting gamblers all over the country.”
But whatever his reasoning, there is no justification for the police and innocent civilians who paid with their lives for Hoover's denial.
That July morning in Kansas City's Union Station, the three agents, Frank Smith, Joe Lackey and Oklahoma Chief Otto Reid, left the train heavily armed. Still within minutes of reaching the station, all three men, and thier prisoner would be dead, and the rescue mission would prove to be a disaster, all because of a wild card, neither the cops nor the mobsters had anticipated.
According to research done by Pulitzer winner Bob Unger – “The Union Station Massacre: The Original Sin of the FBI” - agent Lackey inadvertently grabbed the wrong gun - he grabbed a pump action Winchester Model 1897 shot gun, which belonged to Chief Reid, who grabbed Lackey’s twelve gauge, also by mistake. And that simple mixup in weapons, would prove to be the death of six men. It is the only logical explination for what happened.
On the platform the three agents and their prisoner were met by Agent in Charge Vetterl i(above), and agent Ray Caffrey(below) from the Kansas City office.
Also meeting the train were two K.C. police detectives, Bill Grooms and Frank Hermanson (below).
As the seven men moved through the third largest train station in the country, they formed a V, with prisoner Frank Nash sheltered in the center.
An unmarked police two-door Ford sedan was waiting  in the crowed parking lot in front of the station. Nash was hustled into the front bench seat, while Lackey, Smith and Reed squeezed ino the back seat. As Agent Caffey was about to enter the driver’s side door, Joe Lackey noticed three men appear from behind a green Plymouth parked next to their Ford. He saw that at least two of them carried machine guns. And, according to Bob Unger, Lackey now found himself holding the wild card.
The Winchester 1897 was a WWI army surplus shotgun origionally intended for use as a "trench sweeper." As such it lacked a safety feature most modern shotguns have – a trigger disconnect. The “trench sweeper” would automatically fire if the trigger was compressed and the action was  pumped, forcing a new round into the chamber. Unfamiliar with this feature, and without even waiting to get his weapon up, Lackey pumped a first round into the chamber, As he did so the weapon went off. It blasted load of shot directly into the back of Frank Nash's head, barely a foot away. A stray pellet from the same blast also went “…right into the side of the head of agent Caffrey.”
Panicked at the unexpected explosion, Lackey pumped the action on the shotgun a second time, and again the weapon immediately discharged. In an interview, Bill Unger described what probably happened next. “(As) Joe Lackey gets off a second shot, (it)...takes off the left side of Frank Hermansons’ head…. So here we are in the first two seconds of shooting, and already Frank Nash – the top of his head is gone and he is dead. And Ray Caffrey is dying of a fatal wound….And Hermanson is dead. So far no one has fired a shot except Joe Lackey…At this point everyone begins to shoot, and there’s massive firings by machine guns. And by the time all of this is over, Bill Grooms, the other Kansas City policeman, is also dead. And Reed in back seat….when they finally get to him, he has a fatal wound…”
The entire shootout took less than 30 seconds. When one of the mob gunmen finally reached the unmarked police car he glanced inside and shouted, “They’re all dead. Let’s get out of here.”
They weren’t all dead. Agent Lackey was wounded three times and barely survived. Agent Smith, having ducked as the shooting started, was uninjured. And that quickly the Kansas City Massacre was over.
Of the men who could be proven to have been responsible for the shootout, Vernon Miller, the organizer of the "rescue" mission, was found murdered and mutilated, outside of Detroit, Michigan 5 months and two weeks later. And one week short of the first anniversary of the massacre the man who had hired Vernon, Johnny Lazia, was gunned down out side of his hotel. Ballistics tests run years later proved that the gun which cut down Johnny Lazia, had also been used in the massacre.
As he lay dying in a Kansas Hospital, Johnny Lazia asked his doctor, “Doc, what I can't understand is why anybody would do this to me? Why to me, to Johnny Lazia, who has been the friend of everybody?” It was a question that Frank "Jellybean" Nash would probably have asked as well, if he’d had the time.
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Sunday, July 25, 2010

FRIENDS AND FOES. ONE OF THREE

I suppose the world always seems simpler when you are young. The difference between friends and enemies seems clear and obvious. Only experience can teach us that we are as shaped by our enemies as we are by our friends. And only age can show us that the villians in our lives are much closer to us than we think. Consider the friendship between William Mulholland and Frederick Eaton. One man left his name on a lot of Los Angeles real estate. The other is largely forgotten. But 20th century Los Angeles could not have been built without both of them. They were, both of them, partners in a great dream and a great disaster.
Fred Eaton was a force of nature. Historian William Kahrl described him as “Youthful, aggressive, innovative, (and) startlingly handsome…”. He was also well connected. Fred’s father was one of the founders of Pasadena, California, one of the richest cities in America. After college, in 1875, Fred became superintendant for Los Angeles’ private water company.
In that job Fred hired a muscular Irish immigrant named William Mulholland, as a lowly well digger. “The two of them made an unlikely pair”, wrote DiLeo and Smith in their book "Two Californias", “Eaton was elegant, well born, refined. Mulholland was gruff, a blunt man who loved games and jokes. While Eaton craved public attention, Mulholland shunned it, preferring to spend his evenings reading for his own edification.” With Eaton’s encouragement, Mulholland taught himself engineering and as he advanced in authority with the Department of Water amd Power he became a close confidant of Eaton’s. But in 1892, when a drought struck the American southwest, Eaton became convinced the city had to find a more dependable supply of drinking water. Mulholland scoffed at his concerns and told his mentor, “If you don’t get the water, you won’t need it.”
Eaton refused to be dissuaded. He traveled to the eastern ramparts of the Sierra Nevada Mountains. There he found year round snow capped summits producing streams that fed two sinks  in one of the driest places on earth......
Mono Lake in the north...
And in the south, closer to Los Angels, there was Owens Lake, fed by the Owens River.
As an engineer Eaton realized that it might be possible to draw water from the Owens River for Los Angeles by gravity alone, because the river had a higher elevation than the city. But separating the two was two hundred fifty miles of lava fields, desert and mountains, wilderness that mostly belonged to the Federal Government. Eaton realized that at the moment financially and politically his goal was impossible to achieve. Still, someday those conditions might change. So, after he capped his career in Los Angeles by serving a 2 year term as Mayor in 1898, he retired to spend his summers at a 12,000 acre ranch he bought along the Owens River. And there he might have quietly remained in serene retirement, biding his time. But then two things that changed.
The first was that his friend, William Mulholland, became Chief Engineer for the Los Angeles Water Department, now a city agency. Faced with the same problems Eaton had faced in the same job, Mulholland now came to the same conclusion; if it was to survive and grow, Los Angeles had to find more water. And the second thing that changed was the weather.
As 1892 had been a year of drought, 1905 was a year of floods. In the spring that year heavy rains and heavier than usual snow melts in the Rockies, forced the lower Colorado River to burst through its banks and pour into the depression that became The Salton Sea.
In response to this disaster, and under political pressure to help a millions of farmers around the nation (e.g. “pork projects”) the Teddy Roosevelt Administration created the Reclamation Department (forerunner of the Interior Department). It was America’s first experiment with “big government”. And one of the first projects under consideration by the Reclamation Department was a plan to improve irrigation along the upper Owens River.
The new Department asked Fred Eaton to go to the Mono County, California Court House (above) to investigate property records, which he did. This meant that when Fred started to buy options on water rights to the lower (southern) Owens River, the farmers and ranchers assumed he was buying for the irrigation project. They eagerly sold Eaton their rights at bargain basement prices; except that Eaton was not authorized to buy anything for the Federal Government. In August of 1905 Eaton admitted to the Los Angeles Express newspaper what his game had been. “I knew the government was planning to put in irrigation works… If I had waited until after the government was at work, it would have required $1 million to $2 million more to get the water for the city, and that probably would have killed the project.” Back in Los Angeles Fred met with the city attorney. “The result”, he told the Express, “was an agreement that I would turn over to the city all the water rights I had acquired at the price I had paid for them…”.
The cost was $700,000, for which Eaton was fully reimbursed from Los Angeles Department of Water and Power funds. It was a brilliant and glorious gamble for the city, and presented the city fathers' with an accomplished fact. Any resistance to the Owens River plan was simply run over by Eaton's success. On the face of it, it appeared that Fred Eaton had risked a substantial portion of his wealth out of his love for Los Angeles. There was a catch, of course. Fred had not made his own fortune, and was not risking it, without a catch.
As William Mulholland began to update the plans for and then build the $24.5 million Los Angeles Aqueduct to carry the Owens River to the city limits,  it was obvious that the system would require a reservoir at the head end. Such an artificial lake would provide a dependable flow of water regardless of drought years or downpours. And Fred Eaton owned just the spot for that reservoir; his ranch above Lone Pine in what was called Long Valley.
In the original paperwork in which Eaton had been reimbursed for the water rights he had bought, he had also granted permission for the City to build a dam on his Long Valley property. But hidden in the details was a height limit on the proposed Long Valley dam of 100 feet high. Being an engineer, Eaton knew that 100 feet was not high enough. And Eaton had decided that a variance which would allow the extra 10 feet in height required, would cost the city $1 million more. That was going to be Fred Eaton's profit from his gamble. And once he got into the nitty-gritty details of planning the Long Valley dam, Mulholland realized he had been backed into a corner. The problem was that he realized it at a most inconvenient moment.
Just as Fred Eaton sprang his trap, the bankers back east, who had loaned the city the money for the aqueduct, sprang theirs. In late 1910, with the aquedeuct construction just past the half way mark, they lowered the cities’ credit rating. The bankers were hoping that a cash shortage would force the city to sell to them its most valuable asset, the Los Angeles Department of Water and Power. Instead the Board of Public Works which had oversight of the DWP, cut expenses to the bone, eliminating the million dolalrs for Fred Eaton’s higher Long Valley dam.
Mulholland tried to reason with his old friend  But Fred Eaton (center) decided that Mulholland was merely being a tough negotiator, and refused to compromise. The friends argued. Heated words were exchanged. And Mulholland (right) walked out of the meeting with his old boss, saying angerly and prophetically, “I’ll buy the Long Valley three years after Eaton is dead.”
How could either man have known that this bitter arguement between two old friends would inspire an open and violent rebellion in the Owens Valley, kill 1,000 innocent people in Los Angeles and Ventura counties and cause the greatest man made disaster in California history?
 - 30 -

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