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The Lawyers Carve Up the Golden Goose

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Tuesday, December 19, 2017

FINDING OUR WAY AMID NET NEUTRALITY

I believe we will create a better world, someday – just probably not while I am still breathing in it. My personal philosophy can best be expressed as  a “depressed optimist”.  Case in point -  recent research of the 3 inch fossil Fuxianhuia protensa, (above)  has postulated that about half a billion years ago, as the autotrophs were beginning to droolthey suffered a glitch during mitosis or meiosis, or some sort of reproduction, and begot a double pair of a particular genomic sequence in their proto-brains, and then passed that “oops” down to their daughter cells. As Neanderthals developed tools, this “double dose” of DNA strands gave rise to higher brain functions in humans. Evidently, it also gave rise to crazy.
As one brainiac involved in this study put it, “The price of higher intelligence and more complex behaviors is more mental illness.” What this implies is that whether you are studying religion or astronomy, Descartes or Deuteronomy, you are ingesting a degree of insanity right along with all the knowledge you acquire. The ability to use fire allowed us to break down meat proteins, but that also bestows the ability to burn down the house you live in. And we do it all the time – ask any Tea Party Member. Music or mythology, Einstein or astrology, nothing that humans have ever invented could not also be used to destroy humans. Why should the Internet be any different from that?
Which bring me to Net Neutrality. There is a Republican frat boy named Ajit Varadaraj Pai, a one time lawyer for Verizon, and a Mitch McConnel appointee to the United States Federal Communications Commission.  As chairman Ajit is seeking to cap his  first 5 year term by achieving  the capitalist dream of self-destruction.  Like a dung beetle dancing atop his ball of poo, Ajit means to allow net providers to offer volume discounts to big corporations, muffling their smaller competitors. “Father of the internet” Tim Berners - Lee has described Ajit's campaign as “based on a flawed and factually inaccurate understanding of Internet technology...” , but I think its more like stuffing any new crap balls up the cows ass. Like all frat boys, and a few dung beetles, Ajit is blinded by the crap he already has. He's willing to kill the cow, and eliminate a lot of future crap, for the thrill of making his current stock pile of crap more valuable.   In other words, the $8 trillion web is being destroyed because somebody found out a way to make 50 cents profit by blowing it up.
My question is , what kind of idiot would try to make a profit from destroying all future profits?  But the answer is obvious. The same kind of idiots who blew up the world wide economic system in 1929 and again in 2007, the same kind of idiots who are currently running the National Rifle Association, seemingly determined to convince the vast majority of Americans that the terms “gun owner” and “gun nut” are synonymous. As a famous fictional American once said, “Stupid is as stupid does”.
On the plus side, I also recently came across research from South Africa and Sweden, which reveals that the average dung beetle uses GPS in rolling their poop balls back home. But this G in GPS does not stand for global, but for galactic. We've always known that once the lady beetle gets a nice juicy ball of dung together, they climb on top and do a little dance. Entomologists assumed it was the beetle's way of saying to the universe “This ball of crap is mine!” But now it seems they are actually seeking to orientate themselves so they can find their way back to their burrow.  If the sun is up, they use the sun. At night they use the moon. And on moonless nights they use the Milky Way, that smear of billions of stars that runs across the night sky, that nobody ever figured a dung beetle was even aware of.
According to Professor Marcus Bryne, from Wits University in Johannesburg, “The dung beetles don't care which direction they're going in; they just need to get away from the big fight with the other beetles at the poo pile.”   And there appears to be a lesson on the relationship between Newtonian and Quantum physics here. The beetles can use the Milky Way to define a straight line back to their burrows, because they are so small, and the Milky Way is so far away. However, a moth, using the same basic methodology, circles a flame because they are bigger and closer to the light source. In other words, the moths think they are flying in a straight line, as long as they keep the light at an equal distance. Its the difference between walking from New York to Los Angeles, or orbiting there outside the atmosphere.  It's the Flatland thought experiment, but with moths and poop, rather than circles and triangles.  And humans like the FCC chairman do not come out well, when placed in comparison to moths or dung beetles.
But to get back to my original example, Fuxianhuia protensa, has been described as a “missing link”, or more accurately as “a mistaken link”. The problem is the little multi-legged beetle, which an average human would instantly step on if they spotted it in their closet, might have been the ancestor of all bugs – crickets, cockroaches, beetles, moths and honey bees. But it also might not.  I probably better explain my last statement, or rather let Professor Nicholas Strausfeld from the University of Virginia explain it. “There has been a very long debate about the origin of insects,” he says. And that, it seems, explains everything.
See, to put it simply, the grandaddy of all buggies was either a crab or a sea monkey (brine shrimp if you are over the age of twelve). Crabs are crustaceans, and sea monkey's are branchiopods. Crabs have much more complex bodies than do sea monkeys. So, ancient sea monkeys were thought to have evolved into insects, while ancient crabs evolved into everybody else. Or so the thinking used to go. But then along comes Fuxianhuia protensa, with a squiggly body and an organized brain, and a dependable dated age of 520 million years old. And that is old enough to have been the great-great-great-etcettera-granddaddy of both – which means that life  got smart and then found it might be more advantageous to get stupid again, but with fewer legs. Like a human running the F.C.C..
I can dig that. I can even empathize with how the little buggies felt. Every human male reaches some point in their lives when they realize that women often prefer bastards to nice guys. As your father might have told you at that point, “Life isn't fair”, and he may even have asked you, “If you ever figure women out, will let me know?” To put it in a more gender neutral way, most people reach a point when they suspect that their brains are just getting in the way of their hormones making them happy. And it appears that sometime in the Cambrian period, the squiggly crawly things wiggling across the ocean floor first confronted that basic philosophical conundrum: brains or balls? Which way will I go?
At that point it now appears that the balls returned to a simpler brain and instant gratification,  also known as the profit motive,  while the brains tried the deferred reward path. And the amazing thing is, it appears we both ended up in the same place, standing atop a pile of our own shit and looking to the Milky Way for direction.
It's enough to make anybody a depressed optimist.
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Monday, December 18, 2017

DUER CONSIQUENCES

I can't seem to find anyone who was not certain that William Duer (above) was destined to die broke. and even a few who told him so, some even while helping him bankrupt themselves. 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...” and “Making schemes every hour and abandoning them as instantaneously”.  At its peak in 1794 his fortune was between $250,000 and $375,000  - over $4 billion today.  But more, William Duer was the founding father who put the manic in America's first and succeeding economic depressions. Thomas Jefferson called him “The King of the alley”, meaning both the back alley, and "The Street", as in Wall Street,. He suckled at the breast of that most self destructive 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 those days. 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.
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 the copper out of his profits. 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 looking at 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 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. 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 how many times Duer used Dr. Ledyard's two shares to bilk other partners. 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. By 1792 a growing number of people no longer  trusted William Duer enough to do that . Macomb was one, and Walter Livingston, of the large and wealthy and powerful Livingston family, was another.
While in New York City, Alexander Macomb and William Duer continued borrowing and buying BNY stock (eventually $100,000 worth), in Philadelphia Walter Livingston (above)  and William Duer were buying $160,000 shares of BNY futures, and buying them short. In other words Walter and William were betting against Alexander and William. Of course, Walter Livingston had also co-signed William Duer's Philadelphia loans. So without risking a penny of his own money, William Duer had bet both sides of the coin - heads he won and tails at least one of partners lost. It was predictable. .
Other members of the Livingston clan certainly predicted it, and Duer's involvement made them nervous. 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. 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, flat broke but not broken, claiming he could save his fortune if the banks would just let him free to repeat his old mistakes. The 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. 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 second, more permanent epitaph to 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.  
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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Sunday, December 17, 2017

VICKSBURG Chapter Forty-Seven

May of 1863 was a dry month. In California it was the second spring of a 4 year drought, which killed half a million cattle and sheep. It was so dry that spring in Kansas, the Junction City Union reported “If this continues another week, this section, at least, will be 'blowed' away.” In Nebraska hot dry winds converted the muddy South Platte river into “...clouds of dust and sand...”. Farmer Sam Clark wrote from southern Iowa, “Unless we have rain and that very soon the corn crop in this state will be almost a complete failure… “
In Saint Paul, Minnesota, the Mississippi River fell so low that May, riverboats were unable to navigate. During the first three weeks of the month, Milwaukee, Wisconsin receive just six-tenths of an inch of rain. In Kentucky, the dry weather sped up the hay and grain harvesting, but also “shriveled the rivers (to) fordable in many places”. But the dry weather made marching easy for the long columns of blue clad locusts as they spread across the interior of the state of Mississippi, consuming everything within reach.
But all good - and bad - things must come to an end, and in the early morning darkness of Thursday, 14 May, 1863, a cold front slipped across the American south. Clouds suddenly appeared. and dropped a brief downpour on the dirt roads and the 55,000 sleeping Yankee soldiers. 
When 33 year old Hoosier, Brigadier General Marcellus Montroe Crocker (above), saw the Clinton – Jackson road that morning, the water was pooling a foot deep in low spots on the sun hardened pavement. Over night General McPherson and, 9 miles to the south, General Sherman and agreed to coordination their assaults, so Crocker found himself burdened with a schedule.
General Crocker, also known as "The Black-Bearded Cossack", for his behavior under fire,  was another example of the way the war had reshaped men’s lives. He had been forced to leave West Point in 1849 when his father’s death required him to return to Indiana. In 1851 Marcellus had moved to Iowa, where he passed the bar in 1852.  But when the war broke he immediately raised a company of volunteers. Over the winter of 1861-62 Marcellus was promoted 4 times, eventually to Brigadier General. He commanded a brigade at the battle of Shiloh (above)  - where he was wounded in the arm, the neck and the shoulder. He also led a brigade at the Battle of Corinth, throwing the rebels back with a desperate charge. He had now risen to command the 17th division, 13 regiments from Iowa, Missouri, Illinois, Indiana and Ohio.
On the other side of the war, just about dawn that Thursday, General Gregg led the about 900 men - 24th South Carolina, 46th Georgia, and 14th Mississippi Regiments – past the deaf and dumb asylum, 2 miles out the muddy Jackson - Clinton road. Their goal was the hilltop farm of 51 year old Oliver Perry Wright.
Oliver had been born in North Carolina, married Katherine “Kate” Barrett and moved to Mississippi in 1852. Over the next eight years the couple raised six children, 1 boy and 5 girls, supporting them by using slaves to cultivate 400 acres of not cotton but fruit and foodstuffs for the citizens of Jackson. Like all white males in Mississippi, Oliver was a member of the anti-slave militia. And despite his age Oliver was a member of the 23rd Mississippi Volunteer Infantry, but probably as a staff officer. He was not listed as captured when the 23rd surrendered at Fort Donaldson in February of 1862. But he was a loyal southerner. And now, General Gregg had decided to turn the Perry “farm” into a battlefield.
It took the rebels about an hour on slick, muddy roads to reach the farm, and they immediately began laying out a defensive line, with skirmishers out front in the fields. The 24th was stationed behind the fence line in front of the house and barns, the Georgia 46th cleared some some fields of fire in an orchard by chopping down a few trees, and the 14th Mississippi was held back in reserve. By about 10:00am the rebels were as ready as they were ever going to be, when the lead elements of General Crocker's 2nd Brigade arrived from Clinton. The rebel skirmishers were pushed back into their lines by the advance of 5 regiments under 32 year old Colonel Green Berry Raum, a fiercely anti-slavery Democrat from Illinois. And Raum had just gotten his men into a line of battle for the uphill assault when the skies opened up again.
The down pour forced a full hour's delay. Frustrated by the rain, General Crocker ordered Colonel Raum to quickly clear the road to Jackson. So, about 11:00am, with bayonets fixed, the 17th Iowa, the 10th Missouri, and the 80th Ohio regiments (above)  surged forward toward the fence line. The rebels had time to fire a single volley before they were swamped by the blue coats. 
For a few long moments the entire war was reduced to twenty-five hundred men in hand to hand combat, struggling for personal survival. The 80th Ohio suffered 90 men killed or wounded. The Missouri and Iowa regiments probably matched that loss. The 24th South Carolina Volunteers lost over a 100 men, and the Georgia boys almost as many.
Realizing he had already bought the city of Jackson an addition 2 hours, General Gregg  (above) sounded the recall. And covered by the 14th Mississippi, Gregg's bloodied little force of now less than 700 men, arrived back in the Jackson trench lines about 1:00pm. But by 2:00pm, “Crocker's Grayhounds” had been reorganized and were following the rebels back up the road to Jackson.
Ten miles to the south the 16,000 men of Major General William Tecumseh Sherman's XVth Corps had spent the evening camped around an old health spa called “Mississippi Springs” - half way between Raymond and Jackson. 
In a rough circle, 7 sulfur springs fed pools, each with a distinctive taste, smell and laxative effect, and with their adjacent hotels or rooming houses. The Federal soldiers, road grit grinding between their teeth, would have understood the words offered 20 years earlier by the drill operator to the Reverend Cooper. When he hit water south of Raymond, he told the Reverend, “It is water, but it stinketh mightily. It stinketh so bad you can never use it." So, like the Reverend Cooper, the owners of the Mississippi Springs labeled their source a “health spring” and charged more for bathing in and drinking it. But all these dusty Yankee visitors wanted was a long drink of cool untainted water, and after midnight the cloud burst gave them that, and more.
Come the dawn, the Federal advance was led by the 5,000 men of the 3rd division under 39 year old Brigadier General James Madison Tuttle (above).  
In the front was Brigadier General Joseph “Fighting Joe” Anthony Mower (above)'s brigade. Immediately behind them was the 6 gun 2nd Iowa Battery, and 6 guns of Battery E of the 1st Illinois Artillery. Clearly Sherman expected some delaying action by the Confederates to try and stop  his corps from getting into Jackson. The rest of the division's infantry, Brigadier General Charles Matthies and Brigadier General Ralph Buckland's brigades, followed.
General Gregg had just dispatched 900 men up the Clinton road when his few cavalry pickets reported Yankees out the Raymond Road. Quickly Gregg threw what he had at the new problem, the 1st Georgia “Sharpshooter” Battalion and the 3rd Kentucky Mounted Infantry, both under the 34 year old Kentucky lawyer, Colonel Albert Petty Thompson (above). 
His orders to Thompson were to hold the enemy at the Lynch Creek bridge. And to provide the defense some punch he also dispatched a precious 4 gun battery – a pair of six pound Napoleons and two 3 inch rifles – the Brookhaven Light Artillery - commanded by Captain James S. Hoskin. Gregg made it clear to the Captain those guns had to hold the Yankees until relieved.
Two miles from the trenches of Jackson, and at about 9:30am, Thursday, 14 May, 1863, the 5th Minnesota Infantry crossed the crest of a ridge above Lynch Creek. Hoskin's artillery immediately laid down harassing fire on the approaching Yankees So 27 year old Colonel Lucius Frederick Hubbard got his Minnesota men spread out into a skirmish line, and Captain Nelson Spoor deployed all 12 federal guns on both sides of the Raymond road and started laying down a counter-battery fire.
One of the rebel crewmen in Hoskin's battery, the unit's bugler, Isaac Herman, remembered that counter fire as very personal. “One of their shots passed over my gun,” he wrote later, “and knocked off its sight. passed between the detachment, striking the caisson lid in the rear and staving it in.” Herman stuck to his gun, until he, “... saw a ball rolling on the ground, about six feet to my right. It seemed to be about the same caliber as ours. It rolled up a stump, bouncing about fifteen feet in the air. I thought it was a solid shot and wanting to send it back to them through the muzzle of our gun, I ran after it. It proved to be a shell, as it exploded, and a piece of it struck my arm...Another ball struck a tree about eight inches in diameter, knocked out a chip, which struck my face and caused me to see the seven stars in plain day light...”.
In the meantime, General Tuttle started looking for a way around the bridge. The overnight rain had converted the usually lazy Lynch Creek into a full river, but after half an hour the Hoosier found a ford to the south, and started pushing the rest of the 2nd battalion across. As they did, Colonel Thompson realized his position had been turned. So he sent his Georgia foot soldiers streaming back toward the Jackson trenches, relying on his mounted Kentuckians to cover the withdraw of the cannon. They were not in time, and the battery was captured.
By 2:00pm, General Tuttle had advanced up to the Jackson defenses, and seeing the trench line filled with men and cannon, he again moved to outflank the rebels. But the enemy to his front were now mostly Mississippi militia. Johnston had declared the evacuation complete, and Thompson's men were retreating through the city. Only Gregg's 700 were still in the western trench line. But they were ready to follow.
When Tuttle's latest flanking movement found empty trenches, Sherman ordered his corps to move into the city, sweeping up the militia in the process. By 4:00pm the stars and stripes was flying again from atop the Mississippi statehouse (above). The Battle of Jackson – such as it was – had cost General Grant 42 dead, 25 wounded and 7 missing in both corps. Rebel losses were about double that The second Confederate state capital – after Nashville – had fallen to federal forces. Immediately Grant issued orders to first gut the place and then to abandon it.
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