AUGUST 2017

AUGUST  2017
FACING DOWN THE RULERS OF WALL STREET A HUNDRED YEARS AGO. THEY ARE BACK.

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Friday, April 29, 2011

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 appearance he had forgotten 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 excitement, 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 received 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 delegation, Deane, Ben Franklin and the pus filled Mr. Lee.  Clearly, Arthur Lee felt that he was more qualified to negotiate than either the geriatric nudist or the country bumpkin. And, in truth, Deane's only qualification was that he was very smart and rich enough to buy the desperately 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 back home from France in 1778 he brought with him the muskets and a treaty pledging French military and financial aid for the American Revolution. It had primarily been negotiated by Franklin. The French had found Mr. Lee to be a stuck-up pain in the derriere. Accompanying 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, the muskets and the treaty and the ambassador, were opened, they were found to contain nothing but blank pages. Clearly whoever had penetrated the American security arraignments 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 2013.  Congressional paranoia took flight. And it was a darned impressive bird. The ship’s captain was jailed and questioned.
When it finally occurred 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 obvious 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 poisoned 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 illogical thinking, that only the brain of a politician, and an elected politician at that, would believe. But the Congress of 1778 was just as jammed packed with psychotics and nincompoops as the Congress of 2013.
The special Congressional hearing listened skeptically to Deane’s spur of the moment defense. He claimed the account books which would have disproved the charges of his profiteering were back 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 reimbursement 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 publicly 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. Royalty 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." Ignoring that they had just validated Deane's defense, Congress now 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 the liar 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, Benedict 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 Connecticut 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. His 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 bookkeeping and slipshod security arraignments of the pompous and the paranoid Mr. Auther Lee of Virginia. The conduit who took advantage of his failure was Dr. Edward Bancroft, the man recommended by Ben  Franklin.
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Wednesday, April 27, 2011

GOING TO SEE THE ELEPHANT

I want to tell you something about fame and fortune. They beat the heck out of obscurity and poverty. As proof I give you the life of the “fearless frogman”, Paul Boyton, the Victorian era’s Esther Williams and a newspaper editor’s dream. He lived on adrenaline and publicity. One commentator described him as having a  “…gift for gab, lust for life, and the pluck to take great calculated risks.” And his life reads like a comic book adventure hero.
During the American Civil War Paul joined the U.S. Navy. He was just 15.  He formed a life saving service on the New Jersey coast, and pulled 71 swimmers back from the brink of death. Fifty years before the first swimmer made it, Paul paddled across the English Channel while floating in an inflatable rubber survival suit. He met Queen Victoria and floated down most of the rivers of Europe. The Italians labeled him “L’uomo pesce” – the fish man. The government of Chile charged him with espionage. He wrote two autobiographies. He was a star in P.T. Barnum’s traveling circus. His image was used to sell cigars, calendars, music and playing cards – so many items that a new word had to be invented to describe his popularity; “Boyton-mania”. For some thirty years the “Captain”, as his friends called him, was the most famous man in the world. And ultimately, like all the other great forces of nature, Paul Boyton came to Coney Island.
In 1895, when Paul Boyton stepped off the train from Chicago, his sly but unapologetic mustache was still brown. But at 48, he was getting too old to risk his life four times a day for ten cents a ticket. But Paul had arrived in Coney Island with a new idea, something he had developed at the Chicago Colombian Exposition, in 1893. It was to be called an “Amusement Park”.
It is human nature to be attracted to novelty. And after the Civil War, as the population of New York City approached 3 ½ million, the occupants began to look for a way to escape, at least for a few hours.
Steam powered rail lines spread out from the city, carrying the wealthy to summer mansions and genteel racing tracks on the Long Island sea shore.
Luxury hotels sprang up in Brighton and Manhattan Beaches to house their middle class pretenders. The imitative working masses followed, and were transported at 35 cents a head by excursion boats from the Manhattan docks or the newly electrified rail lines from Brooklyn, (or “Breukelen” in the original Dutch).
In the spring of 1884, James Lafferty spent $65,000 to build a hotel on the empty stretch of sand known as Coney Island, just across Surf Avenue from the boat pier and the railroad terminals. When finished, four months later, the wooden and tin inn stood seven stories tall and was constructed in the shape of an elephant.
To enter you climbed a stairwell in a rear leg to reach the reception desk in the abdomen. Visitors could get an elevated elephant’s eye-view of the ocean for a penny. For the price of a full night's stay, a guest could sleep in the Shoulder Room, the Throat Room, the Stomach Room, or any of the other 27 bedrooms. The unusual structure quickly became an icon on Coney Island, a landmark, and people traveled all the way from Manhattan to be able to say they had “gone to see the elephant”.
But financially the hotel was a disaster. Within a few years Lafferty was forced to sell his poisonous white pachyderm of a public house to a Philadelphia syndicate. And the new owners were willing to switch to a more iconic business model.
The Elephant Hotel was converted into a bordello. And “going to see the elephant” acquired an entirely new iconic meaning. Still, it was a long train ride when you could “see the beast” a lot closer to home and save the 35 cents. So by the time the Captain arrived, although the Elephant hotel was still open, it was on its last legs.
Paul Boyton was attracted by the 16 cheap acres directly behind the failing hotel (the above photo was taken from the Elephant's hinie). There Paul  erected the greatest innovation so far in entertainment history; a fence - with a ticket booth at one end. By selling general admission tickets to his “Sea Lion Park”, which opened on Thursday, July fourth, 1895, Boyton kept his customers captive so he could sell them food and drink all day long, pulling in around $1,000 a day during the 90 day long season. And curiosity about the elephant behind the fence kept the customers lined up at the ticket booth.
Several times a day Boyton himself would appear to demonstrate his rubber suit, and to
feed four dozen hungry sea lions in the park’s central lagoon. The performance was described by the Lubin film studios, who were selling a 30 second Kinetoscope of the show to nickelodeon operators, as “a decided novelty”. Once the pinnipeds were sated, the “Shoot-the-Chutes” took over the lagoon.
Designed originally by Thomas Polk, for Boyton’s Chicago exhibition, it was a short but exciting ride. A flat bottomed boat was released at the top of a long ramp. Near the bottom, the ramp curved upward. This sent the boat and its passengers skipping across the lagoon. When the boat slowed, the on board operator would then pole the boat to the landing. The passengers would be unloaded, before a cable pulled the boat back to the top of the ramp for the next joy ride.
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http://www.youtube.com/watch?v=zXqeLGnP6wY
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In addition, inside the fence Boyton had the “Flip Flap Railroad”. This was a two seat two car roller coaster, and the first in the world to feature a complete 360 degree 25 foot tall loop. It was also the first to explore the physics of inverted amusements. Unfortunately the loop contained a minor design flaw. It was perfectly circular. And it turns out that this perfection delivered 12 g’s to the passenger’s necks, equal to the maximum endured by the astronauts during a Space Shuttle launch. The unprepared customers, sitting upright, suffered whiplash, blackouts, headaches, nausea, tunnel vision, and loss of balance for hours afterward, not the mention the joy of losing your lunch at thirty-five miles an hour while upside down. People paid just to watch the more adventuresome ride through the loop of the “Flip Flap”, but because of injuries the amusement did not last into the Park’s second season.
That year, to replace the nausea loop, Boyton added a mill ride and cages of live wolves. But at the end of that second season the park lost its landmark. On the Sunday night of September 27, 1896, the abandoned Elephant Hotel burned to the sand. Three years later, Boyton bought the property and replaced the elephant with a large ballroom. But he simply could not afford to add new rides year after year. And that was required to keep the curiosity level high enough to bring repeat customers behind the fence.
The breaking point for Paul arrived in 1902. That summer saw 70 days of cold rain out of a season of just 92 days. Business at Sea Lion Park that horrible summer has been described as "macabre". Over the winter Boyton was easily convinced to lease the park to competitors, Frederick Thompson and Elmer Dundy, for 25 years.
They renamed the 16 acres “Luna Park”, built palaces and lit the place with electric lights (still a novelty to most people, even in New York City). But by then, Paul Boyton had retired from the limelight.
But his idea was developed by others, and soon Coney Island became crowded with amusement parks, fence touching fence, each competing with its neighbors for the customer’s nickels and dimes. Albert Bigalow Paine described Coney Island as where “the cup of gaiety and diversion overflows.” Thousands still went to the beach to frolic in the surf for free. But the high roller coasters, the parachute rides, the Ferris wheels and the joyful screams of patrons was a constant temptation for those masses to spend the quarter and go to “see the elephant” behind the fence.
Having spent half his life on such a quest, Paul Boyton was no longer curious enough to look. He bought a small home in Brooklyn and died in relative obscurity in 1924. He was 77 years of age. By then his invention had been passed on to future generations, who continued to build fences around elephants. You, see in the entertainment industry, the money is all in the fence.
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Sunday, April 24, 2011

THE LITTLE GREEN HOUSE ON K STREET PART ONE

I blame the current sorry state of American government on John Dickinson, President of Pennsylvania. On the morning of June 20th, 1783, some 400 long suffering soldiers of the Continental Army surrounded Independence Hall in Philadelphia and refused to let the Congress out, until they had voted to give the soldiers' their back pay. The politicians negotiated their way out of this difficulty without parting with any money. But this effrontery by working stiffs directly petitioning their government so angered Alexander Hamilton that he dispatched a note to Dickinson, demanding that he call out the state militia to arrest the army. Dickinson refused.
So, like a boarder sneaking out on the rent, overnight, the Continental Congress slipped across the Delaware River to Princeton, New Jersey, just to avoid paying their army. And for the next 13 years the American government wandered the eastern seaboard avoiding debt collectors, both foriegn and domestic. And to prevent that from ever happening again, in 1800 they built their own city, where they had to ask no one's permission to arrest people trying to hold them accountable. And thus was born the Federal District of Columbia, and the city of Washington, as a direct of result of the lesson taught by John Dickinson – that government, like many people, provides justice only when forced to – or when it is to their advantage.
There was already a town in the new district, called Funkstown. But that village disappeared after the owner, Jacob Funk, was paid off - unlike those Continental soldiers. Thus Washington was founded on the principle of payoffs to the land owners, and a cold shoulder to the working stiffs. Pierre L'Enfant designed the nation's capital on the square, ten miles on each side. But geographic reality required that it be balanced for all time on one corner. There were named avenues running North-west to South-East and lettered streets (minus a “J”) running East-to-west, starting with “A” along the Potomac. The entire lopsided place was lorded over by the Capital, perched proudly atop Jenkins Hill.
Oddly, the plan for the city had no space set aside for the sinew and sweaty realities that make all cities possible. In the 18th century that meant fetid livestock yards, noisome smithies, reeking slaughter houses, putrid tanneries and malodorous glue factories. The 19th century added the town's rancid gas plant, surrounded by mounds of sooty black coal, fed by belching steam engines puffing clouds of black soot right into the center of town. The reeking vaporous working class neighborhood where all that stink eventually settled was almost a mile from the capital, but a mere two blocks from the White House, which showed where on the social totem pole the Founding Fathers placed the chief executive. The constant clouds of vile vapors gave a fit nickname to this sorry section of town - Foggy Bottoms.
But the expansion of Washington and its government by the Civil War brought gentrification to Foggy Bottoms, driving the stink further out, into Maryland and Virginia. Thus the Bottoms' primary artery, K Street, could stretch its golden mile from Washington Circle on the west to Vernon Square on the east, with nary a sniffle or a gag between. And in 1880, along the very center of that route, between 16th and 17th streets, adjacent to an alleyway, Mr. J.B. Edmonds, decided to build himself a house.
Edmonds told people he was a retired banker, and he was. But he was also a land developer from Clay County, Iowa. He had been the first mayor of the county seat of Spencer,  Iowa, so he was no stranger to politics, either. Just the year before he had also begun publishing a magazine called “The Owl”, which promoted immigration and farming into western Iowa. All things considered I would say it seems unlikely that the 35 year old Edmonds had moved to Washington to retire, as he claimed. He had been proffered a job in the President Chester A. Arthur adminstration as one of the three comissioners of the district. It was one of those jobs that Dickinson had taught the government it needed for its own protection.  But in truth I suspect Edmonds had come to Washington to pursue an active career as a lobbyist. He just had too much pride to admit such a disingenuous occupation in public.
His brand new three story Victorian house at 1625 K Street (above), complete with servant's quarters in the attic, and faced with a green sandstone, had cost him $17,000, the equivalent of almost half a million dollars today. So it seems that whatever Edmonds' s endeavors in the nation's capital were, they paid very well. Edmonds lived in his home until his death at the age of 55, in 1901.
His widow, Lydia, held onto the property, but she rented the house out to the newly elected Senator from Maryland, "Fighting" Senator Louis Emery McComas of Maryland (above) and his wife. He proved to be an honest politician and thus a one term Senator. However he had earned the respect of some, and in 1905 President Teddy Roosevelt appointed him to the Washington, D.C., District Court of Appeals. Two years later Senator McComas was dead, and Lydia moved back into the Little Green House on K street.
The City of Washington began the first decade of the 20th century with 279,000 residents, two thirds of whom were described as “white”. People then still expected to live within walking distance of where they worked. In 1900 there were only some 8,000 automobiles and just 10 miles of paved roads in the entire country. That year there were 96 people killed in automobile accidents nationwide - compared to 115 lynchings. But by 1906 enough atuobmobiles had arrived that the District felt required to establish a top speed limit of 20 miles an hour on city streets. And in 1907 the District of Columbia issued its first license plate. That change was happening became evident in 1910 when there were only 76 lynchings nationwide, compared to some 1,700 deaths in automobile collisions.
By 1910 Washington, D.C. had grown to 331,000 people, while the racial mix had stayed about the same. Nationwide, over that decade, life expectancy had increased by about a year. Salaries had risen from an average of $670 a year (for a 59 hour work week) to $750 a year. And there were still over 2 million unemployed in America.
And then there came the leap year of 1912. That was the year New Mexico and Arizona became states. It was the year that 30,000 textile workers staged the Bread and Roses strike in Lawrence, Massachusetts. It was the year that first lady Helen Taft planted the first cherry tree in Washington. It was the year that the United States Marines pulled off a triple play, invading Honduras, Nicaragua and Cuba. It was the year the Titanic sank off of Newfoundland. And that November Teddy Roosevelt and Taft split the Republican vote and allowed the Democrat, Woodrow Wilson, to be elected President. Thirteen days after that election day, on November 18, 1912, Lydia Edmonds died in the little green house on K street. She left behind an estate valued at half a million dollars, equal to $11 million today. It would appear that being a lobbyist paid really well, even in the 19th century.
In the new century, using that same little green house on K street as a balancing point, lobbyists were going to reach new heights of wealth and influence, on their way to establishing a government of the lobbyists, by the lobbyists, and for the lobbyists.
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