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.The Eternal American Battle - Humans V Money

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Friday, September 28, 2012

ROAD TO REVERE


I present to you a symbol of the Gilded Age, a captain of industry, a practitioner of power and a advocate of wealth; George Morgan Browne. I'll wager you've never heard of him. He was a lawyer and was responsible for one of the most infamous train wrecks in American history - and I'll bet you've never heard of that, either. He graduated from the New Haven law school (Yale) in 1836 and four years later, before he was thirty, he had opened his own practice in Boston . He never doubted the nobility of his beliefs - after all his second wife was a Cabot, and this was Boston “...The home of the bean and the cod, Where the Lowells talk only to Cabots, And the Cabots talk only to God.”. And what God told  George Browne was that the rich in America did not have enough power. “They are in a small minority at the polls”, he wrote, and “their influence in....elections is notoriously less than that of an equal number of voters.” His villain would be familiar to a political observer today. “The spoilsmen avail themselves of whatever party is in power, and are equally at home in either.” The “spoilsmen” were, of course, progressives..
The same year that George Browne graduated law school, the Eastern Railroad was chartered in Massachusetts, capitalized with just $1,300.000. That was barely enough to lay a single line of tracks eight miles north from Boston to the beach hamlet of Revere, then 3 miles further to Lynn, then Salem, Marblhead, Newburyport and finally all the way to Portland, Maine. The Eastern line carried 75, 000 weekly working class commuters at fifty cents for a ticket to Lynn, a dollar to Portland. But it was so underfunded that from the beginning it struggled with shortages of equipment. and personnel.
One of the conductors would later describe the job as “...down one day and up the next, and rest the third, and brake by hand the whole way as...(the) cars were not fitted with the air brake” The Westinghouse air brake was invented shortly after the Civil War, but the Eastern did not trust it anymore than they trusted the 30 year old telegraph. The management avoided these “unnecessary” expenses, and despite its reputation for shoddiness in service and equipment, the Eastern was always able pay annual dividends to its stockholders of between 6 and 8%. It was a business model that seemed to work, at least until July of 1855 when President and Treasurer, Mr. William Tuckerman, was forced to admit that he had lost $281,000 (equivalent to $64 million today) while gambling to make corporate ends meet. (Sound familar?).
The hard nosed Mr. John Howe replaced Tukerman as President, and new blood was brought onto the board as well - including George Browne. Sixty-five of the firm's 354 employees were laid off, and the remaining workers scrambled to keep 26 trains running every day. For the time being, dividends were forgotten. In 1858 Mr. Howe stepped down and George Browne became President, at a salary of $5,000 a year (equivalent to over a $1 million today) .
After eight years of rigorous penny pinching President Browne had returned the yearly corporate dividends to 8%. According to an official company history, the Eastern's 29 locomotives, 48 yellow passenger cars (fewer than they had owned in 1858) and 13 baggage cars, were not considered “worn out until (they) had been rebuilt from one to three times” despite assurances in the annual reports that the equipment was “...equal of any first class railroad in New England”
George Browne, who signed those annual reports, even managed to pick up a cheap Confederate locomotive which had been captured by Union troops. The Eastern's maintenance chief complained this bargain was so prone to breakdowns, he refereed to it as “The Rebel”.  Even after the war the 28 trains scheduled to run on the Eastern line daily still did not have “air brakes”, nor did the company use the telegraph to communicate between stations. But the 55 tired locomotives, 98 worn out passenger cars and 27 baggage cars owned by the Eastern Railroad were simply not enough to keep the system running smoothly. Delays and breakdowns were daily events,. and passenger complaints fell on deaf ears because the company was listening to the stockholders, not the customers. The Eastern was the only line servicing the fishing villages along the coast, turning them into suburbs of Boston but also making them captive customers. The stock rose to $125 a share.
Finally, in the spring of 1871, in an attempt to deal with the endemic over-stretched company, President Browne authorized doubling the shares available – increasing the working capital for the road to eight million dollars. The goal was to buy more locomotives and cars, but no one was so impolite as to point out that this was just the sort of “gamble” which had gotten poor Mr. Tuckerman into such trouble. But it was already too late.
The problem came to a head on a sweltering Saturday, August 26th, 1871. Because of the summer weekend traffic, the single track line was again overloaded. The schedule called for 152 trains this day, but the passenger load forced the overworked staff at the Eastern's Boston terminal to send out 192. They spent the day desperately jamming passengers into hastily turned around cars and dispatching trains as quickly as they could. The schedule was in tatters, the customers were grumbling about the even worse than usual service, and express trains were slipped in between scheduled ones whenever possible. Just about 8:30, as the exhausting day was finally drawing to a close, a misty fog settled in off Revere Beach, the first truly public beach in America. A local from Everett pulled into the tiny station at Revere, running 20 minutes late. And while the passengers were still edging past each other through the open doors, the rear car was suddenly illuminated by the headlight of an oncoming express, bound for Sargus at thirty miles an hour. The Sargus engineer slammed on the locomotive’s brakes, but inertial drove the following cars onward.
The collision, it would be later judged, occurred at well under 20 miles an hour. A survivor in the fatal rear car told the New York Times, “Suddenly I...saw the crowd of passengers rushing over the seats and through the aisle, and the locomotive coming like fury after them.” The cowcatcher on the front of the engine split the wooden passenger car like a can opener. Yellow painted wood was instantly converted to kindling, which the kerosene lamps illuminating the car set aflame. The engine's smokestack snapped off, along with its steam valves. Victims, struggling to catch their breath, sucked scalding air into their lungs.
Reported the Newport, Rhode Island Daily News, “The shrieks and groans of the wounded and scalded, their frantic calls for help and their wild ejaculations caused by a frenzy of pain formed a continuation of sounds such as no mortal ear desired to hear a second time...Some were pinned with splinters, some had arms and legs broken, while other were mangled beyond recognition. Many, in fact the majority of the dead, were apparently free from bruises, but the peeling skin and deathly pallor which overspread the flesh told plainly that steam and scalding water had been frightful and effective agents of death.”
Of the 75 people jammed into the last passenger car, 29 died instantly or over the next several days. Along both trains, 57 more were injured, and many more emotionally maimed for the rest of their lives. It was far from the worst rail accident in American history - 101 dead in Nashville, Tennessee in 1918 - but it was the seminal event in rail safety, thanks to Charles Frances Adams – grandson of John Quincy Adams – and director of the Massachusetts Board of Railroad Commissioners.
Adams' investigation discovered that the company had a regular policy of issuing schedule changes at the last minute, and verbally. It was a system which almost seemed designed to cause confusion, delays and accidents - and it had repeatedly caused all three. And the Commission's final report explained the failure in terms even a businessman like George Browne might understand; “A very large proportion of the rolling stock of the Eastern railroad was rendered unavailable...when it was the most needed, because trains were standing still at points of passing, waiting for other trains which were out of time...to the equal loss and inconvenience of the public and the corporation.”
Adam's report, and two coroners' juries, blamed the conductor and engineer of the express for the accident. That was as standard as citing “pilot error” in an airline crash. But Adam's report went further. It dwelt on the management of the Eastern, and it named in particular George Browne, who had directed the Eastern Railroad for fourteen years. The public agreed. Said a politician, “There is no accident in this case...only the greed of the Eastern Railroad Company”. Six months later, on February 5, 1872, George Browne resigned. His replacement invested in telegraph lines, and Westinghouse air brakes, and electric signals to warn engineers of trains ahead of them. All these improvements (and settling the civil lawsuits) cost the Eastern $510,600 (the equivalent to $90 million today). No dividends were paid in 1872, and the stock value dropped to $51 a share. In retrospect the cost of safety seemed cheap. To an ideologue, this was proof that unrestricted capitalism worked. But ideology failed to consider the moral cost of the the 29 dead and the many more scared survivors.
To escape the public outrage, George Browne left the country, living in Europe for a year. But he never altered in his views or his willingness to make them known. He even wrote letters to the London Times, correcting British politicians in their thinking. And when he came home to Boston he became a consultant for other corporations, always an advocate for the wealthy against what he termed “the vicious caprices of the populace”. In 1881 he moved to Washington, D.C., and lobbied for railroads and his vision of capitalism. He died there on April 25, 1895, at the age of 73.
By then the Eastern Railroad had been gobbled up by its competitor, The Boston and Maine. That is the nature of capitalism - its strength and its sin – at its core, it is cannibalism.

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Wednesday, September 26, 2012

MARY CELESTE

I think the rafts washed up on the beach at Playa del Silencio. It seems a fitting place for a mystery to end, swept by the stormy Basque Sea, along the lonely Astrurian northern coast of Spain. According to a report in a Liverpool newspaper, there were two makeshift rafts found by fishermen off that coast. One was flying the American flag. Lashed to that raft were the decomposed remains of a human being. Lashed to the second raft, were five more badly decaying bodies. It was the spring of 1873, and this may have been where the mystery of the Mary Celeste washed ashore.
She was big; a 282 ton sailing brig built for the prosaic business of the North Atlantic,  and launched in Nova Scotia in 1861. But the "Marie Celeste" was always an unlucky, sad ship. Her first captain died of pneumonia on her maiden voyage. Her second captain struck a fishing boat and was dismissed. In 1867 a storm ran her ashore and her owners sold her for salvage. She was bought for $11,000. Repaired and refitted, she went back to work.
And at anchor at Staten Island, New York City, on November 3rd, 1872, her new Captain, Benjamin Biggs, wrote a letter to his mother in Marion, Massachusetts .“My Dear Mother:…It seems to me to have been a great while since I left home, but it is only over two weeks…For a few days it was tedious, perplexing, and very tiresome but… It seems real homelike since Sarah and Sophia (his wife and 2 yr. old daughter) got here, and we enjoy our little quarters…We seem to have a very good mate and steward and I hope I shall have a pleasant voyage…We finished loading last night and shall leave on Tuesday morning if we don't get off tomorrow night, the Lord willing. Our vessel is in beautiful trim and I hope we shall have a fine passage, but I have never been in her before and can’t say how she'll sail. (You) shall want to write us in about 20 days to Genoa, care of the American Consul… Hoping to be with you in the spring with much love, I am yours, affectionately, Benjamin.”
Captain Biggs sailed on November 5th with a crew of eight, (three Americans, four Germans and one Dane), and two passengers - his wife Sarah and little Sophia. His cargo was 1,701 barrels of commercial alcohol bound for customers in Italy. The ship docked next to the Mary Celeste at Staten Island had been the British merchant brig Dei Gratia, captained by a friend of Briggs, David Morehouse. The Dei Gracia left New York Harbor ten days later, on November 15, bound, like the Mary Celeste before her, for the straits of Gibraltar and the Mediterranean beyond.
The Dei Gratia had a smooth voyage and three weeks later was approaching the coast of Portugal on December 4th, when a lookout reported a ship at five miles distance which was sailing oddly. The sails, two of which were fully rigged, appeared to be slightly torn. As Captain Morehouse moved closer he realized she was the Mary Celeste. There were no distress flags flying and everything otherwise appeared normal except in two hours of observation not a soul appeared on deck. Three men were sent to board the Mary Celeste.
The boarding crew reported “…the whole ship was a thoroughly wet mess”, but fully seaworthy. She still carried a six month supply of food and fresh water. The crew’s personal possessions appeared untouched, including their valuables, and their foul weather gear. There were no signs of a struggle, although the Captain’s cabin was in considerable disarray. No flag was found.
The log book, the sextant and chronometer were all missing, as was the 20 foot life boat with sail. A thick line had been tied to the Mary Celeste’s railing. The other end was frayed and dragging in the current. And there was not a single soul on board, not even a cat. The 3 man crew sailed the Mary Celeste to Gibraltar, where an Admiralty’s court was convened and a commission was appointed to investigate the mystery.
The investigation found that nine of the barrels of alcohol aboard the Mary Celeste were empty. But the boarding party had reported smelling no fumes. The last entry in the captain’s log was dated November 24th, 1872 - when the Mary Celeste was 100 miles off Santa Maria, the southern most of the Azores islands. This seemed to imply that the ship had sailed another 370 miles in nine days with no one at the helm.
Frederick Solly-Flood, the Attorney General for Gibraltar, seems to have suspected the captain and crew of the Dei Gratia of some involvement, but all suggestion of evil was shown to be baseless after a suspected blood stain on a knife was proven to be mere rust. A diver found the hull did not “…exhibit any trace of damage or injury or…had any collision or had struck upon any rock or shoal or had met with any accident or casualty.” The commission’s final judgment was that there was no evidence of foul play, piracy, mutiny or violence.
But if that were so why would a healthy crew abandon a seaworthy ship in the middle of the ocean? The British suspicions undoubtedly influenced what the Admiralty’s court did next. The crew of the Dei Gratia was awarded $46,000 in salvage rights for the Mary Celeste (the equivalent of a quarter of a million dollars today). But this was barely 20% of what the ship and cargo had been insured for.
Over the next year the owners and American authorities offered a reward and conducted a search in ports large and small around the Atlantic rim, for anyone matching the description of Captain Briggs, his wife and child, or any of the crew members from the Mary Celeste. Not a trace was found. It was as if they had simply vanished from the face of the earth.
The Mary Celeste was returned to her owners in New York and sold 17 times over the next 13 years. Finally, in 1885, she was driven onto a reef off Haiti and then set afire in an insurance scam. But she refused to sink and the owner was jailed. The sad, unlucky Mary Celeste slowly decomposed on the reef until a storm finally freed her last timbers to slide into the sea.
This leaves me to ponder the fate of the human cargo of the Mary Celeste; a woman and child and eight men - ten souls in a twenty foot single mast-ed yawl life boat. Whatever their reason for abandoning the Mary Celeste, once they did they were fully exposed to the winds of fate.
The weather service on the Azores records that on the morning of November 24th , the date of the Captain's last log entry, a gale blew up with torrential rains, a gale which finally blew itself out only on the morning of December 4th, the morning the lookout on the Dei Gratia spotted the abandoned Mary Celeste.
The Azores current travels eastward at 2 knots an hour away from the islands. Suppose, for some reason - perhaps because of a leak of explosive alcohol fumes, or  crew members driven mad by drinking the pure alcohol - the crew had abandoned the Mary Celeste in good weather. And suppose that a gale had suddenly blown up, separated the life boat from the ship, and had driven the desperate little yawl northeastward for three or four days while breaking the little life boat to bits. And suppose the survivors had gathered the flotsam into a pair of rafts. Without food or water, suppose those rafts, carrying the remains of the crew, and still tied together, had drifted for five months into Biscayne Bay. And suppose the rope joining those rafts had finally separated, just before they were driven in toward The Beach of Silence, on the northern coast of Spain. Suppose all of that happened. That may have been what happened to the crew of the Mary Celeste.
I think it was. And I think little Sophia would have grown into a very lovely young lady.
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Sunday, September 23, 2012

GEORGIA PEACHES Part Two


I marvel at the ability of the human mind to see connections where none exist. Its a talent we share with many predators. Frogs see nothing but flies. Cats see parakeets floating amongst dust motes in the dark. And in 1971 an 83 year old Baptist preacher named Elvy Edison Callaway saw the garden of Eden on a bluff above the Apalachicola River, in Florida's panhandle. Elvy's 99 page tome - “In The Beginning: The Four Greatest Recorded Events of This Earth” - swung between “loving pastoral contemplations, and theories one might expect to find written on the walls of an asylum,” as Jeremy (J.D.) Swartz noted on his blog (Here). In his book Elvy observed the Florida river had four heads, just as did the river running through the biblical paradise. He also proclaimed that the rare Torrey tree, found in the beautiful Alum Bluff State Park, was in fact the gopher wood, from which Noah had built his ark. All this and more, the lawyer turned preacher saw floating in the shadows above the Apalachicola.
Imagine what Elvy could have made of the morality play enacted on July 15, 1788, when Congress requested that Georgia cede her “vacant territories” west of the Apalachicola River to the nation. It was for the good of the nation, and since in exchange the national government would assume Georgia's war debt, good for Georgia too. But the Georgia politicians said “no thanks”, choosing instead to reach for the false profits of the Yazoo lands. And with that the brash young state of Georgia made partners with the 18th century venture capitalists like Patrick Henry, and left the Garden of Eden far behind.
Now, in truth, Patrick Henry had never been much of a business man. When he was 18, in 1755, the “indolent, dreamy (and) procrastinating...ill-dressed young man” impulsively married the equally impetus, plump and buxom Sarah "Sallie" Shelton. Her father owned the Hanover Tavern, amongst other things, and after a few months as a barkeep, Patrick decided on a career which would not require so much physical labor. With only six weeks of study he passed the Virginia bar. The parents of the bride and the groom were so thrilled, they set the fecund couple up with some land and slaves – an instant entrance into Virginia's planter class. It was the perfect foundation for a politician. But, alas, Patrick would be short of money his whole life. Which is part of why it is assumed he formed the Virginia Yazoo company
The 53 year old Patrick Henry assembled a slightly odd group of investors. At 53, droll and humorless, Paul Carrington was a long time member of the Virginia House of Burgesses, and a judge of the Court of Appeals. At barely 30 years old, Abraham Venerable was an up-and-comer in Virginia society, while 50 year old Francis Watkins was the clerk for the local courts. None of them were national figures. But the key investor, in fact the man I suspect was the actual brains and force behind the Virginia Yazoo enterprise was David Ross, who had already assembled 100,000 acres in Virginia, buying up plantations and farms abandoned by loyalists during and after the revolution. He was also owned 211,417 acres of Kentucky, and several thousand more in what would become Tennessee (claimed by North Carolina). He was, by any measurement, a very rich man and amazingly, for the time, he was Scottish.
See, the middle of the 18th century was a bad time to be a Scotsman. First came the battle of Culloden in April of 1746, in which Bonnie Prince Charlie, the last Stuart to claim the Scottish crown, was crushed by the army of King George II of England. This was quickly followed by punishment for the rebellion - the Highland Clearances, the “disarming act” and the outlawing the clans wearing their tarters.  Scotland was under the royal lash, and David Ross's family had been at the core of the rebellion. As a younger son he stood to inherit nothing from his father's now looted estates. So in the middle of the 1750's he joined the horde of Scots emigrating to the American colonies.
But where most Scotsmen chose the less settled Carolinas, Ross chose Virginia. And somehow he arrived with contacts and with money. Almost immediately he invested in the Oxford Iron Works along the Potomac River, south of Alexandria, and the Antietam Iron Works in Maryland. He then began buying land and planting tobacco. It is hard to escape the suspicion that David's family had strategically sold out some Stuart supporters, perhaps his own cousins. It is what the losing side of a rebellion often has to do to save the family fortunes.
But most years tobacco barely covered operating expenses for the Virginia plantations. The truth was, slave labor was ruinously expensive and never very efficient. To really build a fortune, the Virginia planters - such as the gout ridden George Mason - were required to buy Indian land cheap (prior to the revolution, mostly north of the Ohio River), or pick it up for pennies on the pound from veterans who had been paid in land  for service. The new owners then surveyed it quickly, subdivided it in haste and sold it off in 100 to 600 acre sections to land hungry farmers at inflated prices. And this was the game David Ross entered into as soon as he could.
To quote from Wood Holton's 1994 paper in 'The Journal of Southern History ' ('The Ohio Indians and the Coming of the American Revolution in Virginia'); “Land speculation was a principal source of income for the Virginia gentry, the 2-to-5 % of families who stood atop the colony's pyramid of wealth and power. Starting in 1745, the gentry-dominated Executive Council gave to gentry-owned land companies preliminary grants to millions of acres west of the Appalachian Mountains...During the frontier years, absentee landholders owned three-quarters of the region's total acreage...little acreage was left for residents. ”
The nine year long French and Indian War (AKA in Europe the Seven Years War) interrupted this profitable enterprise. And after the peace was signed, and before the eager speculators could even reopen their purses, King George III issued the Royal Proclamation of 1763. Henceforth, no colony could lay claim to any land west of the crest of the Appalachians. King George III's goal was to save himself the expense of another war by keeping the speculation hungry colonialists separate from the Indian tribes. Individual farmers were still free to negotiate with tribes for acreage in the Indian lands, but their property rights would not be recognized by any colonial government, meaning the land could not be resold, meaning speculating in Indian lands was dead. Wood Holton argues it was this loss of income which spurred the Virginia power structure, including that “great land-monger” George Washington, and speculators Thomas Jefferson, George Mason and Patrick Henry, to support the American Revolution.
Almost the instant that shots were fired on Lexington Green,  David Ross et al were back in business. Even before the American victory at Yorktown, in June of 1779, Virginia and her governor Patrick Henry, joined  the other southern colonies in reviving virtually all of the land claims rejected by George III's government. And once the states turned to the speculators, the yeoman farmers would no longer be buying their land directly from the government. George Mason rehired his old employee Daniel Boone to began “exploring” new lands to the west of Boonesborough, paying him in land -  from which he earned $20,000, a small fortune during the revolution. And on November 20, 1789, the Virginia Yazoo Company, headed by Patrick Henry and David Ross , along with the Tennesse Company and the Carolina Company, formally applied for land grants from the State of Georgia.
  
The middle man had returned. To a substantial portion of the wealthy speculators who were founding fathers, this is what they meant when they said “freedom”. And that is the morality play we shall now follow.
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