NOVEMBER 2017

NOVEMBER  2017
The Rise of the Billionaires Leaves the Middle Class Stranded

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Friday, October 01, 2010

THE COWS COME HOME

I would say that the O’Leary family of Chicago was pretty average, in all aspects, even the extraordinary  ones. The 40,000 Irish in Chicago in 1870 made up 13% of the cities’ 300,000 citizens. In the popular image of the day the Irish, as a group were stupid, lazy, alcoholic and violent. But, like the vast majority of the real immigrants, Catherine and Patrick O’Leary frugally invested their meager savings not in education, not in comforts, but in property, even pulling their four girls out of school and putting them to work to hold onto as much of their adopted country as they could afford.
Like many other Union Army Civil War veterans, Patrick O’Leary had saved much of his pay, and used it to purchase a lot on the west side of Chicago. In the spring of 1864 his new estate at No. 137 DeKoven Street was all of 25 feet wide and 100 feet deep, situated halfway between Jefferson and Clinton Streets, and it cost him $500. There were two shacks on the lot and one barn (above). The O’Leary’s rented out the larger shack, on the street, and Catherine, “a stout woman of about 35 years”, turned the barn into a dairy. It wasn't much to look at, Lord knows, and the birth of her son in 1869 barely delayed her struggles, as she increased her herd to five cows. She sold the milk throughout the neighborhood, and as the summer of 1871 came to a blistering end, Kate even laid in a stock of 2 tons of hay and 2 tons of coal to feed and warm the Dairy cows throughout the coming winter. And this was the woman most people blamed for burning down Chicago.
There had been only an inch of rain since June. The city’s 185 firemen were stretched to the breaking point. They beat back three fires on October 4th, four on October 5th and 5 on October 6th. And then about 10:30p.m.on Saturday, October 7th, they were faced with heavy dry winds from the west, feeding a blaze at the Lull-Holmes Mill at 209 Canal Street. Within 20 minutes four city blocks were ablaze. Somehow with their primative tools, the firemen held the line, but a few of their pumps were damaged, and some of their hoses singed, and several firemen were injured, and all of them were exhausted. And less than 24 hours later, two men would be banging on Catherine and Patrick’ O'Leary's side door, yelling that their barn was on fire.
The alarm just after 9p.m. on Sunday October 8th, woke Catherine and Patrick from a dead sleep. The entire family rushed out into the darkness to fight the flames. A few minutes later they were joined by one fire department pumper, named appropiatly enough, The America. One of the firemen said later that “with the help of two more engines we could have knocked it cold.” Alas, the exhausted firemen did not have two more engines. The dry winds sent the sparks leapfrogging eastward across the neighborhood, all the way to the lake shore.
When the conflagration finally succumbed on Tuesday, October 10th, over 3 square miles of Chicago were burned down, 100,000 people were homeless, and at least 300 people were dead.
It was a very sad tale, and the villain of the piece as far as Kate O’Leary was concerned, was not the fire but the aptly named Michael Ahern, a reporter for the Chicago Tribune. It was Mr. Ahern who created the story of Mrs. O’Leary’s cow kicking over a lantern while the woman was milking the beast at night. It was patently false, as anyone who has ever lived with a cow could testify to. Cows are milked in the morning, and Catherine testified at the hearings investigating the fire, that she never milked her cows at night. Her neighbors agreed, and insisted that she and Patrick had both been in the house when the fire had sparked to life.
But the Ahern story had what in modern parlance is called “legs”. A poem, published a few months later in the “Insurance Monitor” magazine, would prove that. “This is the cow, at the Leary back gate, Where she stood on the night of October the eighth, With her old crumpled horn and belligerent hoof, Warning all "neighbor women" to keep well aloof. Ah! this is the cow with the crumpled horn that kicked over the lamp that set fire to the barn That caused the Great Fire in Chicago!”
In 1895 Mr. Ahern admitted he had concocted the entire story. But he remained seemingly unrepentant for the grief he had caused the O’Leary family. Their house had been saved, but the barn and its contents had not. The O'Learys had no insurance, so the barn was a complete loss, as were the animals, and the coal and hay. But the public scorn, based on the Ahern story, was far worse, repleat as it was with death threats and public mockery. The official commission completely exonerated Catherine, but Mr. Ahern’s tale withstood even reality. Kate was “heartbroken” and eventually broken financially; in 1879 the O’Leary’s sold their property, and were forced to move to the working class tenements “behind” the Union Stock yards.
 Ironically, the spot where Kate’s barn once stood is now the site of the Chicago Fire Academy.
Patrick O’Leary died in September of 1894, and Catherine on July 3rd, 1895. Her death certificate says Kate died of acute pneumonia, but James Patrick O’Leary, who was two years old that night in 1871, contended that she actually died of a broken heart.
James Patrick O'Leary went to work in the stockyards, acquiring the moniker of “Big Jim” O’Leary. But at heart, his whole life he was a gambler. He took a second job working for local bookies, and that led him to open an off-track betting parlor across the border in Indiana. That went bankrupt in the 1880’s, and then in 1892 James bet everything he had on “Gentleman” James Corbett in his fight with John L. Sullivan, and Cobert and James O'Leary both won big.
James then opened a saloon back in Chicago, right across Halsted Street from the entrance to the stock yards. Over the years he expanded this to include billiard rooms, a bowling alley, a barbershop and a Turkish Bath. As a matter of pride he put the name “O’Leary” over the front door (above), in electric lights. Catherine would have been proud.
For thirty James O’Leary (above) was the most famous gambler in Chicago. In his view, “Nearly everybody gambles. Sometimes it's with money, sometimes it's with time, sometimes it's with jobs. Nearly every fellow is willing to take a chance… A fellow that won't gamble or steal is a beggar.” It was hard to argue with his success. His club's telephone number “YArds 628” was instantly recognizable all over Chicago. His bookies were available in every downtown hotel, and rare amongst bookies, he promptly paid off if he lost. And in an age before public opinion polls, newspapers would visit “Big Jim” before every Election Day to get the odds – in 1908 he offered 4-1 on Taft and 5-1 on Bryant. Taft won. Of course, so did James O'Leary.
He had married Annie McLaughlin, whose family had lived next door to his parents back on DeKoven Street. Their son, James Jr., married the daughter of the top police inspector.
James was indicted four times for gambling but convicted only once, when he was 53.  Then, in the early 1920’s police found a stash of now illegal whiskey in his club. In court “Big Jim” produced a pharmacist license, but the judge was not buying the argument that he was selling the booze for medicinal purposes. The club was shut down.
When asked how much money he had made, Jim O’Leary insisted, “I’ve got enough to take a trip around the world when I sell my shop.” It was a false front. The youngest son of Patrick and Catherine O’Leary died of a heart attack in January 23, 1925, just 56 years old
It would be nice to say that the O’Leary’s had gone from paupers to millionaires in one generation, achieving the Amiercan dream through hard work and stubborn perserverence, but James’ estate was valued at a mere $10,200 - more than most, but hardly millions.
So, by the time James O'Leary died the Irish in America had proven those terrified of immigrants to be wrong. They might have had a strange religion, and when they first arrived, they appeared to be dirty and ignorant to the "nativists" Americans. But up close, they were, on average, pretty much average; thrifty, hard workers, at either honest or illegal jobs. And all things considered the O'Leary's could look back at their lives and say they were not extraordinary at all, just living average American lives, in which, occasionally, extraodinary sparks were struck. And that is what we celebrate every Saint Patrick's day. It makes you wonder what Muslim holiday will be celebrated a generation hench. 
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Wednesday, September 29, 2010

NEW UNDER THE SUN

I celebrate the fourth of July, every year. But I also be celebrate the fifth of July, because on the fifth of July in 1883 the U.S. government granted patent #278967 for a formula of something that had never existed under the sun before. The patent was granted for an invention that every one reading this has probably used at least once in the past year, and if you haven’t used it in the past year, you really ought to. It was the brainchild of an energetic young marketing genius with some help from his brother, and the invention made them both rich – even though their original idea was pretty much a bust.
The story begins with a pharmacist in London named Gustave Mellin. Like many other pharmacists of his day, Gustave was looking for a magic elixir that would make him rich. In the second half of the nineteenth century, all over Europe and America, ambitious young men were throwing chemicals into pots and kettles and selling the resultant concoctions to unsuspecting guinea pigs (aka customers). Some of these latter day alchemists just made people ill. A few killed people. And a very few got very rich.
It was an Atlanta pharmacist, Dr. John Pemberton, who cooked up Coke-a-Cola in his back yard in 1886. And Caleb Bradham of New Bern, North Carolina invented Pepsi Cola in his pharmacy during the summer of 1893. In Cincinnati in 1886 Robert Johnson, who had worked as a pharmacists’ apprentice, joined with his brothers James and Mead in forming Johnson and Johnson, to sell their inventions of band aids and first aid kits. But the guiding light for Gustave Mellin was Henri Nestle, a Swiss citizen who in 1867, made his reputation and his fortune by saving a premature infant with a recipe of powdered milk and ground up wheat. Nestle's formula released the proteins trapped in wheat by grinding it into a powder, and thus making it easier to digest. And, though Nestle and Mellin did not realize it yet, this also made it possible to transport the wheat protiens over vast distances and store them for long periods.
Nestle sold his product by warning first time mothers that “impure milk is one of the chief causes of sickness among babies.” And in London that other Swiss citizen, Gustav Mellin began selling his own version of Nestle's formula, which he inventively called “Mellin’s Food”.  Mellin marketed his product with free samples, and a pseudo-scientific booklet convincing new mothers his formula was better for their babies than breast milk. Within a few years Mellin became Nestle’s principle competitor. And the success of Mellin attracted the attention of a young, dashing, handsome, ambitious and driven Englishman from the tiny village of Ruardean, in Gloucestershire.
James Horlick (above) began as an apprentice at the feet of the master, and what he learned from Mellin was that marketing was at least as important as the invention itself. But working for somebody else was no way to get rich, and in 1873 James quit his job and immigrated to America, to join his younger brother William (below) in Chicago. And James took with him a little something he had been working on.
In 1860, for the last time in history, the value of American agricultural goods was greater than the products from her factories. And amazingly this shift happened at same time that American farms were becoming the breadbasket of the world. Chief among this new bounty which was flooding the world markets was American wheat and rye. And that is why James and William Horlick had emigrated to America. The money was still in England, but the source of that wealth, the vast sources of plant protien, was now in America. And within weeks after James arrived in Chicago the brothers set up J and W Horlicks to market their new baby wonder food, “Diastroid”.
What William and James needed was a community with cheap property values, a ready supply of clean water, an already industrialized work force, easy access to their raw materials (wheat and rye) and to shipping routes. They found just what they were looking 60 miles north of Chicago, where the Root River enters Lake Michigan, in Racine, Wisconsin.
The city had been incorporated in 1848 with a population of 3,000, and by 1870 was approaching 30,000, filling with English, Danes, Czechs, Swedes and Norwegians. The foundation of the economy was the town’s harbor and rail connections. Early on, Fanning Mills built heavy farm equipment here, including machines to separate the wheat and barley from its chaff, the slurry of which is called a malt. That created a pool of trained factory workers which attracted Jerome Case who built his heavy equipment factory there, and S.C. Johnson who established his cleaning products factory in Racine.
So, in 1877 the Horlick brothers opened their single story factory in Racine, making "Horlick's Infant and  Invalids Food" and got ready for success. Okay, it was a little slow in coming. Oh, the baby formula business was doing okay, but it was by now very competitive and not the rocket to success that James had dreamed about along the banks of the River Wye, back in England. Still, in 1883, James’ preeminence in the field of baby food had been confirmed with the new patent, thus effectively limiting their competition.
In 1890 James returned to England to be closer to the money, and to handle the European marketing of their infant cuisine empire. In 1908 Horlick’s opened a new, much larger plant in Racine (above). And they just kept plugging away, searching for that marketing angle that would make them rich beyond their wildest dreams.
They thought they had hit the mark in 1909 when explorers Robert Peary (above), Amundsen and Scott all three pick Horlik’s product to supply protein for their assaults on the North and South Poles. Overnight Horlick's food was in the forefront of the "health food" craze. And it remains a popular health food item to this day. That same year, 1909, the brothers opened a new plant in New Zealand, to supply mothers and explorers down under with portable protein. But that was not the advancement that changed human life.
But it was in the early years of the 20th century that the great revolutionary event did occur. It’s unclear who did it first, but my bet is it was the new player on the stage. They were called "soda jerks" because in the early years they were required to jerk on the levers to dispense the carbonated water that was the main ingrediant of their trade. I doubt that it was an employee of Horlick who first made the discovery, else their name would have been enshrined in company legend. Besides, after all, it was a small step and may have been taken in several places at about about the same time.
Remember the Horlick formula was a concoction of ground wheat, dried, just-sprouted barley malt and powdered milk, which was then mixed in water or milk at the point of sale. And then some unknown genius added ice cream, and thus was born the malted milk shake.
I doubt that most people realize that everything “malted” can only be made under license from Horlick’s, including malted milk, malted milk balls, malted tablets or disks and malted “shakes”. Malted is a flavor that is owned. It was invented. It does not appear anywhere in nature. It started out as baby food, then became a health food before it became a treat of magical proportions. And it gave all those soda jerks something to serve with the ice cream Sundaes they had invented, because in the conservative core of middle America carbonated water was considered too racy a drink to be served on the Lord's day.
But surely, before the judgment of God, the invention of the cold, frothy and thick Malted Milk Shake will count on the plus side for humanity come the judgement day.
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Sunday, September 26, 2010

1920 - JUST AN AVERAGE YEAR

I have to say that all things considered, 1920 started out as a typical year in Boston, Massachusetts.
America was a nation of 106 million that year. Boston had a population of over 100,000. The first World War had ended one year and one month before, and the world was still recovering from a flue pandemic that
had killed 3% of the world's population. Over 600,000 Americans had died, and over 45,000 Bay Staters.
Unemployement was at 5%, and the illiteracy rate was just 6%. and falling  And beginning at about six on the morning of Friday, January 2, and continuing throughout the day, officers of the Boston Police Department and the Federal government exploded through doors throughout the city with guns drawn, but without arrest or search warrants. They detained at least 400 people. In handcuffs and leg shackles the stunned prisoners were hustled aboard boats and transported to the aging Deer Island House of Corrections Prison in Boston Harbor. These raids, part of a nationwide sweep in 30 cities and 24 states, were meant to snuff out an incipient communist revolution, according to the Press Releases. Privately, they were also meant to get the Attorney General elected President of the United States.
The unlucky subjects were held in the unheated, overcrowded aging prison for several weeks, while the government tried to determine who they had actually swept up. One Boston woman, seized from her own bed because she was suspected of being an illegal alien and a communist, was found to be an American citizen and to have no ties at all to the Communist party. Most of those seized were legal Russian immigrants, members of labor unions or others labeled as dangerous by various questionable sources. In Detroit the police arrested every customer in a foreign-food restaurant and an entire orchestra, while in the city of Philadelphia, an entire choral society was imprisoned. In Hartford, Connecticut worried family members who inquired at the police station about missing relatives were also detained for a week.
During their incarceration many of the prisoners in Boston were beaten to force confessions from them. At least one of the prisoners went insane. There were several suicide attempts and one desperate successful five story plunge from the main cell block on Deer Island. In April, when one of the cases actually made it to trial, a Boston Judge commented on the level of infiltration of the Communit Party by Justice Department agents, by observing that the government "owns and operates part of the Communist Party."   Of the 4,000 "radicals" who had been seized nationwide, only 556 would ever be actually deported.
The raids were the brainchild of U.S. Attorney General Alexander Mitchell Palmer, “The Fighting Quaker”, and politician to the core. He had almost been the victim of a 1919 anarchist bomber (the man had blown himself up on Palmer's front porch).  AG Palmer had seen considerable public support for similar but smaller raids the previous November. But for the January raids, Palmer had turned their organization and execution over to the head of the Justice Department's Bureau of Investigation, the 20 year old J. Edgar Hoover.
Palmer and Hoover were effectively operating without supervision because President Woodrow Wilson had suffered a stroke the previous October, which had largely incapacitated him. In November, Palmer had conducted his first “Red Scare raids” to positive public support. But the January raids were more than twice as large, and had been so badly organized that even Hoover had to later admit they contained a few “clear cases of brutality”. Innitially the Justice Department claimed the raids produced several bombs, but in truth, the only weapons actually siezed were four pistols, from amongst the 4,000 suspects.
One U.S. Attorney, Francis Fisher Kane, even resigned in protest over the raids. He wrote,“By such methods we drive underground and make dangerous what was not dangerous before.” Palmer responded by insisting he could not use standard law enforcement techniques to fight an “epidemic” of communism in America. But worse for Palmer was that the raids kept his name in the headlines for just 48 hours. The news cycle remains the worst enemy of the ambitous politician.
The Palmer raids were superseded in the public’s mind on the following Monday, January 5th , with the stunning announcement that Babe Ruth, star left handed pitcher for the Boston Red Sox, had been sold outright to the New York Yankees for the unheard of price of $125,000, more than double the price ever  paid for a player.
There seemed little argument that he was worth it the money. In 1919 Babe Ruth the pitcher had suffered a slump, winning just 9 games to 5 losses. Boston Manager Ed Barrow had coaxed Ruth into shifting to the outfield, and coached him in hitting. And Ruth, becoming increasinly comfortable as a batter, had hit 29 home runs, breaking a 35 year old American League record, and hitting 3 times as many homers as the next nearest batter that year. Barrow was furious at Ruth's sale, and said bluntly that the owner must have been out of his mind to let Ruth go at any price.
The owner of the Red Sox since 1916 had been Harry Frazee. He had paid $675,000 for the championship club, which had won the World Series in 1912, 1915 and again in 1916. Under Harry and Manager Barrow, the Red Sox won the series again in 1918. But in 1919 the club had slipped to sixth place. On the plus side, Ruth had just signed a new contract, paying him $30,000 for the next three years. So dispite the disappointing season just passed, the future looked bright for the Red Sox.
But Harry Frazee was not a baseball man. His office was in the the Longacre Theatre on Broadway, and that was where he had made his money, in the theatre.  And America’s entry into World War One had produced a recesssion in entertainment. Harry was caught in the pinch between his shrinking box office and what he still owed on the Red Sox (almost half the original sale price). The solution to his problem was two blocks away from Harry’s office.
The solution was to be found in the offices of the Ruppert Brewery, owned by Colonel Jacob Ruppert. The beer maker was also a part owner of the New York Yankees, along with a Mr. Tillingham, who happened to a friend of Harry Frazee.
The year before this connection had facilitated the sale of the premire Red Sox right handed pitcher, the intimidating submariner Carl Mays, to the Yankees. So, it seemed only natural that Harry would again seek financial assistance from the beer magnet. The Ruth deal, actually signed in December of 1919, now financed Frazee’s production of the play “My Lady Friends.” Five years later that successful play would be turned into a musical called, “No, No, Nanette”.
A story is told that shortly after the sale of Babe Ruth, Harry was in a cab bound for Fenway Park seeking to impress a young woman with a display of his wealth. The cab driver overheard his passanger boasting to the woman about owning the Red Sox. The driver pulled the cab over, dragged Harry from the back seat and punched him in the face. That may be an apocrophal tale, since sources as respectred as the “Boston Evening Transcript” saw the sale as a hopeful sign. “Red Sox players doubtless will be pleased with the disposal of the incorrigible slugger, and team play should be in more evidence”. However the New York Times was slightly less sanguine over the transaction, saying, “It would not be surprising if Ruth surpassed his home-run record of 29 circuit clouts next summer.”
Oddly enough, on the same day the sale of Babe Ruth was anounced there was another announcement - on January 5th , 1920 - involving Colonel Ruppert. The Supreme Court held, in the case of Jacob Ruppert, Inc. v Caffey, that the Federal government did have the power and the right to outlaw all beaverages containing more than one half of one percent of alcohol. That decision removed the final barrier against prohibition. The great social experiment in legislating morality had begun.
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