NOVEMBER 2019

NOVEMBER   2019
Industry buys a President or Two

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Saturday, April 21, 2018

THE OIL CENTURY

I shall begin illustrating my newly developed theory of the “Rule of the Retroactively-Inevitable” by stating an odd element of chemistry, which is that burning oil releases over twice as much energy as an equal weight of burning coal. Because of this, every admiral knew it was inevitable that eventually every battleship in the world must be powered by oil. But first you had to have oil to burn .And in the mid-19th century the only known large oil fields were in the United States, under Pennsylvania, and on the Pacific island of Borneo, in the far off Dutch East Indies. So, for half a century every war ship built for every navy in the world was powered by bulky, dirty inefficient coal. Then in 1901 a German professor named Kissling discovered a virtually unlimited “lake of petroleum” south of the Ottoman Turkish city of Kirkuk, and around Basra , at the head of the Gulf of Arabia. The professor had been searching in this god-forsaken dessert on orders from his boss, George von Siemens, managing director of Deutsche Bank.
Before he earned his “von”, George Siemens was just a promising Prussian civil servant. His skills in negotiating telegraph treaties had brought him the attention of Otto von Bismark (above), the man who in 1871 had  made Wilhelm Ludwig the first Kaiser of Germany. Otto helped set up the Deutsche Bank and made George it's first director, because to him it seemed inevitable that Germany would be surrounded by enemies; France to the east, Russia to the West, and everywhere the British Navy. But it also was inevitable that money could wiggle through this British blockade.
George von Siemens (above) knew very little about banking, but he was convinced it was inevitable that railroads were going to build a new world order. So,  much of the money that built the second and third American transcontinental railroads in the 1870's came from his Deutsche Bank, and George had a close up view of American capitalism in action. Americans, he wrote, “...are ruthless robbers...but they know how to think big.” So Director Siemens started looking for someplace to invest where the robbers thought smaller.
To Abdul Hamid II (above), 34th Sultan, it was inevitable that the natural resources in the Ottoman Empire ought to make it one of the strongest powers in Europe. But successful rebellions in Hungary, Bulgaria and Albania, and graft and waste in his government, had reduced Turkey to “The Sick man of Europe" - so deeply in debt that Abdul was forced by his creditors in London and Paris to turn over collection of the Empire's taxes (and its post office) to the “Ottoman Public Debt Administration”, run from Paris and London. So when Deutsche Bank offered Abdul a hundred million dollars to build a Railroad from Berlin to Bagdhad, Abdul eagerly accepted, even if George Siemens insisted it be built with “only German materials”, and gave Deutsche Bank mineral rights for 20 miles on either side of the railroad tracks. And that's why Professor Kissling was tapping rocks in the god-forsaken dessert outside of Kirkurk and in the marshes around Basra – to find some way of paying for the railroad. And it was Kissling's report, made public in 1905 to reassure British investors in Deutsche Bank, which started a barrel- chested big-thinker ego-maniac named Winston Churchill to thinking about the inevitable triumph of the British Empire.
Modern history remembers him as the British archetypal bulldog, but that came later. In turn-of-the-twentieth-century Britain he was a more of a Newt Gingrich – a bombastic clown extravagant in his language and his life style, which he financed by writing only slightly embellished books and newspaper accounts of his adventures. Then he went into politics, and in 1913 Winston (above) was named First Lord of the Admiralty, civilian head of the British navy. While everybody else was worried about the German Grand fleet sailing up the Thames, and German armies sweeping across France,Winston was convinced it was inevitable that the Berlin to Baghdad railroad would be the greatest threat to the British Empire.
His Admirals told Churchill the British Navy would need a speed of 25 knots to out maneuver a larger German fleet. Such a speed was possible only with oil powered warships. But in 1913, the British Empire controlled less than 2% of the world's oil reserves. Churchill wrote to his government masters, “We must become the owners or at any rate the controllers at the source of at least a proportion of the oil which we require.” The decision was made that the Foreign Office and the Bank of England were to acquire all the oil reserves that they could.
By now George von Seimens was no longer manager of Deutsche Bank, having passed away in October of 1901. And Abdul Hamid was no longer Sultan, having been deposed by the Young Turks under Enver Pasha in 1909. But so gentle was Abdul's captivity that he was allowed to keep all the land he had donated to himself, including that atop the oil fields around Kirkurk and Basra. And in 1913 there was incorporated a most unusual bank in Constantinople. It was called the National Bank of Turkey, but its money and board of directors were almost exclusively British, with the exception of a duel Ottoman Armenian-slash-British citizen, named Calouste Gulbenkian.
Half of the capital for the new bank was supplied by Deutsche Bank, now with out the guiding hand of George Seimens. The other half was put up by the Anglo-Persian Oil Company, which spurred by Professor Kissling's report, had stumbled upon oil reserves in present day Iran. But what the folks at Deutsche Bank did not know, was that the British government had secretly bought out the Anglo-Persian Oil Company, meaning the German bankers were now unwitting junior partners with the British Government.
The National Bank of Turkey help incorporate the Turkish Petroleum Company. Abdul Hamid put up his property rights, and Deutshe Bank put up their mineral rights, and the Bank of Turkey put up the money for the exploitation of the oil underneath Basra and Kirkurk. And the guy who drew up the paperwork was none other than Calouste Gulbenkian (above), who paid himself for his work by giving himself a 5% share in the new company. For a few brief moments it seemed inevitable that they all were going to get very, very rich. And then World War One broke out. The Berlin to Baghdad railroad had yet to reach Baghdad. Nobody had yet pumped a drop of oil out of the ground. And for the next four years artillery replaced lawyers as the big guns in oil negotiations, and the inevitable was put on hold
In 1915 the British army captured Basra, and in 1917 they captured Bagdhad, in 1918 they captured Kirkurk. And in 1919, at the peace conference in Paris, they sliced all of that off from Turkey, and labeled it a brand new country, which they named Iraq. Deutsche Bank was bankrupt. Abdul Hamid was dead. Turkish Petroleum Company became Iraq Petroleum Company, and was eventually divided up by various oil corporations, including Anglo-Persian. British corporations now controlled most of the world's oil supply outside of the United States. Until...who should suddenly show up but the Armenian/British lawyer, Calouste Gulbenkian. He now had a third citizenship, Portuguese – they had been neutral during the War - but he was still alive and he still had his 1914 contracts, and he insisted it was inevitable that he was going to be paid his 5%.
After ten years of haggling, in July of 1928, the world's oil companies finally caved in. They let Calouste Gulbenkian take a big red marker and draw a circle around all the oil fields he laid claim to. The “Red Line Agreemant” gave him, personally, 5% of the value of any oil pumped out from within that circle - forever. He was now “Mr. Five Percent”, one of the richest men in the world. When he died in 1955, his personal fortune was estimated at $840 million ($39 billion in today's money).
Over time Anglo-Persian Oil became Anglo-Iranian Oil, and then finally, British Petroleum, and then just “B.P.”, the largest oil company and the fourth largest and most profitable corporation in the world.. And as the Petroleum Century drew to a close, at about a quarter to ten on the morning of April 20, 2010, an oil rig leased by B.P., 48 miles off the coast of Louisiana, exploded. Eleven workers were killed. Before the well was capped almost 5 million barrels of toxic petroleum gushed into the Gulf of Mexico, killing everything which ingested it. B.P. has estimated its total cost for the clean up will be about $40 billion. And from the moment the admirals decided battleships would be powered by oil, this spill was inevitable.
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Friday, April 20, 2018

DUER CONSEQENCES

I can't seem to find anyone who was not certain that William Duer (above) was destined to die broke. There were even some ho told him so to his face, some even while helping him while he bankrupted  them as well.   At forty-five Duer was a slight man with “sharp features and a receding hairline”, a man of “...dashing personality...with both talent and wit...”, a gregarious individual of boundless energy and imagination,  “Making schemes every hour and abandoning them as instantaneously”. His fortune, at its peak in 1792, was between $250,000 and $375,000 (over $4 billion today).  But more than that, William Duer was the founding father who put the manic in America's economic depressions. Thomas Jefferson called him “The King of the alley”, meaning both the back alley, and "The Street", as in Wall Street before it was even "The" street of American finance. He suckled at the breast of that most unfair American midwife, Madam Laissez Fair. His bipolar greed added the purge to American gluttony. He was the American fingers on Adam Smith's invisible hand, always reaching for his partner's wallet. Let me give you an example.
The United States officially came into existence on 1 March, 1781, when the Articles of Confederation were finally ratified after four years of bitter debate. But economically America would not be a nation until all thirteen states shared a currency. Paper money was considered too risky to be legal tender, but coins had intrinsic value. In 1786 the Treasury Board accepted a bid from the firm of Jarvis and Parker to supply copper “Fugio” pennies (above), named for the Latin word meaning “I fly” stamped on their obverse.  On the front it said, "Mind Your Own Business" in tiny unfriendly letters.
Winning bidder, James Jarvis (above),  suggested speeding up the process of issuing the coins by melting down the 30 tons of British copper pennies the Treasury already had on hand, and proposed paying for that copper out of his profits the Treasury would pay him for stamping the pennies. And that little bit of economic legerdemain was the opening that William Duer needed to grab a little something for himself. You see, Duer was the head of the Treasury Board, appointed by his friend and business partner, Alexander Hamilton.
According to James Jarvis, when they met in William Duer's New York City mansion to discuss the copper trade, Duer bluntly demanded a share of the business as a bribe. Jarvis says he was offended and ready to walk out, but then agreed so long as Duer remained a silent partner. Duer countered with a demand for a straight $10,000 bribe. Jarvis agreed to that too, but only if the business was successful. And that was what Jarvis thought he had agreed to, “relying on his (Duer's) honor”. Unfortunately Duer had no honor. Only few hundred “Fugio”'s were ever minted. Jarvis returned the unused copper, and that should have been the end of it.  But like a bad penny, William Duer turned up again, still demanding his $10,000 bribe.
Jarvis insisted he was not bound to pay Duer so much as “ten pence”. He insisted, Duer's “share... was conditioned on the success of the contract.” Duer simply ignored Jarvis' arguments and relentlessly demanded to be paid. And Jarvis simply refused. Finally, at the end of September, 1788 Duer turned up the pressure, using his friends in Congress to demand Jarvis pay for the copper used in minting the few hundred “Fugio” pennies. The government already had the pennies. Now they wanted to be paid for the copper that was in them. Given the criminal treatment for debtors in those days, Jarvis was facing some unpleasant jail time.
And just at this moment, Duer suggested that Jarvis might want to invest in another one of his schemes, an Ohio land speculation called the Scioto Company.  Two shares were available, at $5,000 each. Anxious to be rid of the Duer, and reasoning that this way he at least got land that might some day be worth something, Jarvis gritted his teeth and sold off his coin stamping equipment, using the cash to pay a premium price for two sections of land in the “Scioto Company” Ohio reserve. Finally free from the villain (he thought), Jarvis left on a business trip to Europe.
A year later Jarvis returned and found he had no shares and no cash. He wrote to Duer's lawyers, “I demanded of Mr. Duer, the Ohio rights he was to have purchased for my account....He told me they were in the name of Doctor. J. Ledyard, and should be transferred to mine, in the company's books. I applied to...the treasurer, who informed me there were two shares in the name of Doctor Ledyard, but that he could not transfer them to me.....I have more than ten times applied to Mr. Duer, and...I could get no satisfaction....” It was a favorite tactic of Duer, to stubbornly refuse to admit he had stolen money, no matter the evidence or the law or common sense. Call it the Donald Trump approach to business. Poor Mr Jarvis was so worn down by now, and so confused by Duer's shifting arguments, he seems to have forgotten they were arguing over the payment of an illegal  bribe! Jarvis complained, “I have been three years amused in this business, it appears that he (Duer) should at least allow me interest (on his $10,000)..." 
It was like speaking Greek to an Italian donkey. Duer (above) insisted he had sold two shares of the Scioto Company to Doctor Issac J. Ledyard. He (Duer) had been paid. He no longer had the shares. The company was supposed to transfer the shares to Mr. James Jarvis. So if Jarvis had a problem, it was with the company, not with Duer. It was perfectly logical as long as you forgot that the Scioto Company treasurer took his orders from William Duer.  If you did remember that, Duer's arguments would eventually drive you insane. When the Scioto Company finally failed some years later, two shares were still on the companies' books as belonging to Doctor Isaac J. Ledyard. And there is no hint of how many times Duer used Dr. Ledyard's two shares to bilk other partners as he had bilked Jarvis.  But for William Duer all this was a mere distraction to his tour de fraud with the Bank of New York.
The BNY was America's only private bank large enough to have its shares traded on the brand new New York Stock Exchange. Many people expected Alexander Hamilton, as Secretary of the Treasury Department, to eventually take over the BNY. And that was what William Duer assured his neighbor and new partner, Alexander Macomb. Blindly following Duer's instructions, Macomb bought 290 shares of the BNY, expecting to make a tidy profit as soon as Hamilton announced the Federalists were taking over the bank.
Of course, word that Alexander Macomb (above)  was buying BNY stock sent the price climbing, which so impressed Macomb he wrote to a friend in London praising his partner. “Duer's genius assures him it can be done without any further capital farther than can be raised beyond our joint credit at the bank.” Of course, “joint capital” meant Alexander Macomb had co-signed Duer's loans, which meant the money had been raised on Macomb's reputation, not Duer's. But for some reason, Alexander Malcomb had yet to notice that. .
Now, while Alexander Macomb and William Duer continued borrowing and buying BNY stock (eventually $100,000 worth) in New York City,  in Philadelphia Walter Livingston (above) of the wealthy and powerful New York Livingston family, had partnered with William Duer to begin selling 160,000 shares of BNY , but short.  Of course, Walter Livingston had also co-signed William Duer's Philadelphia loans to pay for his shorting of the BNY there.  In other words Walter and William were betting the BNY would go broke while  Alexander and William were betting it would succeed. So without risking a penny of his own money, William Duer had bet both sides of the same penny - heads he won and tails at least one of his partners lost. It was predictable. 
Other members of the Livingston clan certainly predicted it, and Duer's involvement made them very nervous that one of their less brilliant relatives had been suckered in by Duer.  They began to withdraw the gold and silver they had on account at the BNY.  That forced the directors of the bank to tighten their loan levels, and to raise the interest rates as high as 1% per day on just the sort of risky loans that Alexander Macomb and Walter Livingstson had recently made betting for and against the bank.  William Duer (above)  tried to calm his New York partner, assuring Macomb, “I am now secure from my enemies, and feeling the purity of my heart, I defy the world.”
The world did not share the feeling. First Macomb and then Walter Livingston defaulted on their loans and were confined in the Manhattan debtors prison (above) . The financial panic spread and quickly caught up Duer as well.  By the summer, William Duer was also in debtors prison, partly for his own protection.  The silver tongued fraud was flat broke but not broken, still claiming he could save his fortune if the banks would just let him free to correct his mistakes by repeatking them. The young American economy teetered briefly on the edge of its first collapse, the recession of 1792, or what was called "Duer's Panic". 
Five hundred of Duer's victims laid siege to the jail, chanting, “We have Mister Duer. He has our money.” Benjamin Rush, Congressional gadfly and gossip, went down to take a look, and described the victims as,  “merchants and tradesmen, dray men, widows, orphans, oyster men, market women, churches, and even common prostitutes.” A lively trade developed on the streets around the jail in Mr. Duer's IOU's, and fights even broke out over the worthless paper.  One night a man broke into the jail, and confronted Duer with a pair of dueling pistols, demanding he pay what was owed or choose a weapon right there. Duer handed over what he had on him and the would be duelist left..
The end, when it came, was long and drawn out. Confined in jail for seven years for debts he could never pay,  William Duer died, probably of kidney failure, in April of 1799.  He was only 57 years old. He left behind a widow unprepared for a life without wealth, and eight children. Alexander Hamilton wrote the first  epitaph for William Duer,  when he insisted, “There must be a line of separation between honest men and knaves, between respectable stockholders and dealers in the funds, and mere unprincipled gamblers.”.  The problem is, every time Wall Street find that separation, some con man salesman, like Duer or Trump,  comes along and tempts them to cross that line. 
The second, more permanent epitaph for William Duer was delivered on Thursday, 17 May, 1792 when 24 traders signed an agreement under a Buttonwood tree in front of 68 Wall Street. The two regulations they committed themselves to were, one, the signers would only trade with each other, and two, they would charge a ¼ of 1 % fee on each transaction. Like all practical market systems the New York Stock and Exchange Board was created by and survived because of regulations, designed by and for the majority of "respectable stockholders and dealers in funds",  and not the manic gamblers flaming across the horizon every few months.  
Despite having only the Bank of New York and 4 other stocks to trade, a year after it was founded the New York Stock Exchange was successful enough to build itself a home, The Tontine Coffee House (above, left) on the corner of Wall and Water Streets. John Lambert would describe the Tontine as “filled with underwriters, brokers, merchants, traders, and politicians; selling, purchasing, trafficking, or insuring...Everything was in motion; all was life, bustle and activity...”  But the attraction of the dramatic manic was there as well, even with  the wreckage of William Duer still scattered about.  Noted an observer in June of 1793, “There was an affray at the Tontine...(a fight) between...aristocrat and democrat.” A few months later the newspaper “Columbian Gazetteer” would complain, “only persons of the same party” remained at the Tontine."   Wall Street, on its way to the panic of 1798, was again becoming addicted to the dramatic manic depressives in its nature, and likely always will..    
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Thursday, April 19, 2018

A FOREGONE CONCLUSION

I think Thomas Gage (above)  should have called the whole thing off, once the secret was out. And Lord knows it was out almost before General Gage ordered it be kept secret. Maybe the leak was his New Jersey born wife, and maybe it was the government's opponents back in London, and maybe it was just impossible to keep any secrets in a city of 6,700 civilians, occupied by 6,000 soldiers and sailors and their dependents. And maybe the truth is, Britain had already lost the war for American independence before the first shot was fired on 19 April, 1775.
Seven months earlier, on 1 September 1774, General Gage had sent 260 lobster backs 3 miles up the Mystic River to Winter Hill, where they seized the largest supply of gunpowder in the colonies (above). The audacity of Gage's preemptive strike had infuriated thousands of colonists who gathered in Cambridge with their weapons. It was weeks before things calmed down. Since then, Gage had canceled a number of similar expeditions, and pulled all his men back into Boston, abandoning the countryside except for occasional reconnaissance missions. He had warned his London bosses, “if you think ten thousand men sufficient, send twenty; if one million is thought enough, give two; you save both blood and treasure in the end.” What he got, in late February, were orders to get on with disarming the colonists.
Gage's plan was to send out a lightning strike to capture another large supply of powder he'd heard about, 30 miles to the northwest, in Concord. It was a full day's march to get there, giving colonists time to resist, but the expedition could succeed if security was tight and if the rebels were slow to react. So first, Gage wanted to arrest the colonial leaders. He would release them after the powder was safely in Boston, to give him someone to negotiate with. But on Saturday, 8 April, 1775, the two highest value leaders of the Committee of Safety still in Boston, smuggler John Hancock and his cousin, lawyer John Adams, slipped out of the city. Gage heard they had fled to Lexington, 25 miles out the Concord road. Hancock had been born in Lexington, and still owned his family's house there, which was currently occupied by his cousin Lucy and her husband, Jonas Clarke, who was the village pastor. So the first round went to the colonists
The following Monday, 10 April, Gage informed his senior officer, Lieutenant Colonel “Fat Francis” Smith (above), of his plan. Smith suggested a personal reconnaissance, and Gage agreed. So disguised as common travelers 42 year old Colonel Smith and 22 year old Sargent John Howe, who had made a previous reconnaissance, rowed across the Charles River to Cambridge, and started west on foot. After only six miles they stopped at a tavern for breakfast and information. But when Smith claimed to be looking for work, a black servant girl identified Smith by name, and told him he would find plenty of work up the road. Smith retreated back to Boston, but Sergeant Howe continued on. He returned on Wednesday, 12 April, telling Gage the country was so alert it would take 10,000 men to reach Concord and capture the powder and arms the Sargent now confirmed were in Concord.
Three days later, on Saturday 15 April, several companies of grenadiers and light infantry were relieved of their regular duties so they could resole their shoes, change out their canteens, mend their uniforms, and have their muskets serviced. About noon, Royal Navy row boats were seen being gathered in the harbor. At the Green Dragon Tavern on Union Street, one of the rebel leaders remaining in Boston, silversmith Paul Revere, kept the Committee of Safety fully informed of all these preparations..
At nine in the morning, Tuesday, 18 April, patriots in Concord moved their cannon and powder out of town. They already knew the British were coming, and that they were coming soon. About noon John Ballard, a stable boy on Milk Street, reported that a British officer had said there “would be hell to pay, tomorrow”. About two that afternoon, British sailors sent ashore to purchase stores, were heard talking of preparations to row infantry across the Charles River to Cambridge after dark. Doctor Joseph Warren was told by a British officer patient that Hancock and Adams were the intended targets of the movement. 
Around seven that night twenty mounted British officers and sergeants, under the command of Major Edward Mitchell, rode out of Boston, across the Roxbury neck, and headed north. Their mission was to intercept any warning coming from Boston, and to confirm the location of Hancock and Adams. The timing was telling, since most mounted patrols left after dawn and returned by dark. Just an hour later, in Lexington, militia posted a guard at the the Reverend Clarke's house, to protect Adams and Hancock.
About ten that night, under an almost full moon, 700 infantry were formed up in their encampment on the Boston Common, and then marched to the edge of the Back Bay. Boats rowed them across to the Cambridge farm of David Phipps, sheriff for Middlesex County.. The soldiers had to wade ashore through knee high water. Then, Lieutenant John Baker noted “we were halted in a dirty road and stood...waiting for provisions to be brought from the boats...” As the British infantry were stalled on the Concord road, Paul Revere was rowed across Boston Harbor to Charlestown (above), where he had stabled a horse. At about the same time tanner William Dawes managed to slip out of Boston via the Roxbury neck.
About 30 minutes after midnight on Wednesday, 19 April 1775, Paul Revere arrived at Reverend Clarke's house in Lexington. When the guards told him he was making too much noise, the volatile Revere yelled “Noise?! You'll have enough noise before long. The Regulars are out!” At that moment window shutters flew open and a very awake John Hancock invited Revere inside. Within the hour, Revere, joined by William Dawes, and local doctor, 34 year old Samuel Prescott, rode out together to spread the alarm to Concord and beyond. Just north of Lexington the three rebel riders ran into a detachment of Major Mitchell's scouts. Dawes and Revere were captured, but Prescott managed to jump his horse over a roadside fence and escape, taking the alert to Concord. Questioned, Revere told the British there were 500 armed men waiting for them on Lexington Green.

Meanwhile, back on the Phipps farm in the dark, Col. Smith's frustration was growing. It had taken the better part of an hour to get the march restarted, so Smith ordered 53 year old Major John Pitcairn to take the lead with 300 light infantry and marines, and force march until he had seized the bridges north of Concord. Smith would follow with 400 Grenadiers. By the time Pitcairn started it was after after two in the morning. There were only about 2 hours of darkness left. Musket shots and bell alarms were ringing all along the Concord road. Col. Smith sent a messenger back to Boston, requesting reinforcements be dispatched.
In Lexington, about 80 militiamen answered the alarm bell, reporting to 45 year old militia Captain John Parker, a veteran of the famous Roger's Rangers. Parker sent scouts down the road to Cambridge, then, as militiaman Ebenerer Monoe, recalled, “The weather being rather chilly, after calling the roll, we were dismissed, but ordered to remain within call of the drum. The men generally went into (Buckman's) tavern adjoining the common.” (above)  There, most fell asleep in chairs.
The sky had begun to lighten at about 4:15 that Wednesday morning when young Thaddeus Bowman galloped up to the tavern (above). He had been trapped behind Pitcairn's rapid advance, three miles down the road at “Foot of the Rocks.” opposite Pierce's Hill, but had managed to pass the British regulars by crossing fields. Bowman told Parker the regulars were just minutes out of Lexington, and Parker ordered his drummer, William Diman, to sound the “long roll” call to arms. 
 Some 70 militiamen formed a line across the northwest corner of Lexington Green, with Bowman the last man on the right. It is claimed later that Parker told his men, “Stand your ground; don't fire unless fired upon, but if they mean to have a war, let it begin here.” But because he suffered from tuberculosis, Parker's voice was raspy and thin, and few of the militia would have been able to hear Parker, if he said it.
In a soft half light, with a crisp chill in the air, it was approaching five in the morning. The sun has not yet risen over the horizon. But Pitcairn can see militia moving parallel to his march, and periodically even see muskets being fired to track his movements. In the past Major Pitcairn has said, “I have so despicable an opinion of the people of this country...I am satisfied they will never attack Regular troops.” But he now halted his men and ordered them to load their weapons and then fix bayonets. As Pitcairn dropped back to check the rear units of his command, forty year old Irishman Lieutenant Jesse Adair, ordered the 100 men in his command to “double step march” into Lexington.
Lexington Green is a triangle formed by the junction of the west trending Boston and Concord road, and the north trending Bedford road. At the apex of the triangle, where the Bedford Road meets the main road, and on the green, stands the village meeting house. The line of Captain Parker's 70 militiamen were anchored on the Bedford Road, about 75 feet from the northwest base of the triangle. This put them well off the Concord Road, so as not to threaten the British regulars marching to Concord. Parker means his little command as a statement of resolve, and nothing more. It makes the last part of Parker's supposed statement suspect at best.
But as Lt. Adair “quick marched” his command into Lexington the meeting house blocked his view of the militia. And he failed to follow the left curve of the Concord road, but angled to the right, up the Bedford road.  After a few yards the militia, almost equal in size to his own command, was suddenly revealed on his left flank. Startled, Lt. Adair ordered his men onto the green and into a “firing line”. As they did so the regulars let off a self confidence inducing cry of “”Huzzah!”, as they had been trained to do. It took, probably from first sight to the regular battle line, less than a minute.
Major Pitcairn was leading the next three regular companies in line, and guided them in quick step, correctly, angling to the left - west on the Concord road. But as he cleared the meeting house, Pitcairn suddenly saw the militia, and also Adair's company, spreading quickly out onto the green in a line 30 feet in front of the militia. It looked as if a battle was about to begin. Pitcairn ordered his column to halt, and galloped across the green directly toward the American militia. As he came up behind their line, the Major drew his sword and began shouting desperately,  “Lay down your arms, you damned rebels! Disperse! Lay down your arms!” 
Captain Parker, seeing his men outnumbered, and likewise not wanting to start a war, ordered his men to disperse. Few heard him, but those that did turned and begin walking away. But it was at this instant that somebody fired yet another musket, which set off first a hundred others, and then five thousand and then fifty thousand more, over 8 bloody years of war. It was the famous or infamous “Shot heard 'round the world”.
Of the approximately 200 muskets actually on the Green that morning, almost every loaded weapon was British. The regulars had far better discipline than the militia, but were exhausted, having not slept for 24 hours, and were strangers in a strange land. Everybody was on edge, frightened and caught in a rush of an unanticipated crises So, was the first shot intended to kill fired by a colonists or a British regular? In the end it does not really matter. Both sides had been playing with fire for a decade. It was inevitable a flint would spark a conflagration. And in the almost light before dawn on Wednesday, 19 April, 1775, Lexington Green was as good a place as any for that
It took, probably, from first sight to first shot less than 90 seconds. After that it was over, probably, in less than another minute. The regulars fired a ragged volley and then because they could not reload with bayonets on their muskets, charged the colonists. 
They stabbed at least two to death before Pitcairn had the drum beat to quarters, bringing Adair's company back into formation, and ending the melee. There were eight American – from this instant we can call them that - eight American dead. One British regular wounded, but by which side it is not clear. Major Pitcairn's horse was also wounded twice, but he was behind the American line, and those wounds were probably made by British lead.
Pitcairn had never intended on stopping in Lexington, and even now did not pause here for long. He had the entire command give a cheer and fire a volley into the air, but that was more to empty their weapons than anything else. In his mind the Major must have been feeling the weight of the reports he would have to write, and the endless second guessing by his superiors, as after the “Boston Massacare” five years before.But his orders were to seize the bridges north of Concord, so as quickly as he could, and without more than a perfunctory search for Hancock and Adams, who had fled before the shooting started, Pitcairn put his men back on the road, marching for Concord, now in the full light of the morning sun.
What Lexington made as clear as daylight was that America was too big to be controlled by any outside force. And by 1775, that is just what Britain had become. What followed was 8 years of warfare, that killed 50,000 Americans and 25,000 Brits and their hired soldiers. But if he could have divorced himself from his obedience to orders, Thomas Gage knew Britain already lost her colonies, before the first Red Coat had crossed the Charles River in the early hours of 19 April, 1775.  So the American Revolution was a foregone conclusion, all along. A lot of wars are like that.
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