THE GREAT SILVER HUNT

I think the best way to describe Nelson Bunker Hunt is this; Archie Bunker with couple of billion dollars in the bank. He did not smoke, drink or gamble. He was the son of a flagrant womanizer, who had openly produced two completely separate families, and a third in secret (fifteen children in total by three women), In response to his father's sins,  Nelson was a major financial supporter of Fundamentalist Christian political groups. Nelson was friends with and a financial supporter of both Senator Jesse Helms.of North Carolina and Senator Strom Thurmond of South Carolina. He was also a major financial supporter of the John Birch Society.  He collected a thousand thoroughbred race horses and yet always flew coach. He was famous for searching his couch cushions looking to recover lost change, his own and visitors.

Said a family member; “Sometimes he’s brilliant. The rest of the time you wonder whether he’s really there with you or not.” Said a business partner; “He doesn’t just want some of it. He wants it all.” Said his father, legendary oil man Haroldson Lafayette Hunt Jr.; “I could find more oil with a road map, than Nelson could with a platoon of fancy geologists”. Said Nelson himself; “Worrying is for people with strong intellect or weak character.”

But maybe the key to his personality was that Nelson Baker Hunt was born a second son. Nelson’s eldest brother - his father’s “run away favorite” -  Hassie Hunt, was an oil wildcatter and “a millionaire in his own right by the age of 21.”  And then this older, smarter brother developed schizophrenia and his desperate father decided to treat him with a lobotomy. Since that "Hail Mary Pass" of treatment, Hassie spent the rest of his life under 24 hour nursing care.  Thus Nelson became the replacement son.  But he was never his father’s favorite. And that may explain why one dark night in 1974 Nelson and a staff descended upon New York City in three charted 707 jets, paid for and then transported 40 million ounces of silver to Nelson's leased vaults in Switzerland.

Now, silver is a commodity, like wheat or oil or steel. You can buy a commodity, and you can even sign a contract pledging to buy it at a set price some time in the future. These futures are a bet as to what the price of that commodity will be. The vast majority of futures traders never intend upon taking delivery of the actual commodity. They merely bet on the market, providing producers and buyers a hedge against price fluctuations. In most cases,  these bets can stabilize the market, which is good for everybody. And to encourage trading in futures, they are bought at only a percentage of the actual price, called a “margin”.  But Nelson was willing to suffer the expense of transportation, storage and insurance, by actually taking delivery on his silver, because he believed in a doomsday fundamentalist theology,  that the world’s financial markets were going to collapse. Paper money would be worthless. A commodity like silver would still have intrinsic value.

In 1974 the world wide production of new silver was 245 million ounces, while annual consumption was 450 million ounces. The imbalance (67%) was made up through recovery of “scrap silver”, everything from industrial applications to melting down family heirlooms. But that imbalance also meant that the control of a tiny percentage of the world’s silver could swing the price. This meant that every ounce of silver that Nelson bought and stored in his Swiss vaults was another ounce removed from the market. And that drove the price of the remaining silver up. As the price went up, the silver in Nelson’s vaults increased in value. He cashed in on that increase by using it as collateral for loans, which he used to buy more silver and silver futures. He was gambling that the price would always go up, and he had enough control of the game, called leverage, to insure that it did.

The price rose from $6.22 per ounce in November of 1971 to $11.00 per ounce by the end of 1979. Nelson now controlled 1/3 of all the silver in the world, not sitting in various government vaults. But Nelson’s manipulations had not gone unnoticed. Tiffany took out a full page ad in the New York Times naming Nelson, and stating, “We think it is unconscionable for anyone to hoard several billion, yes billion, dollars worth of silver and thus drive the price up so high that others must pay artificially high prices for articles made of silver.” By the end of December 1979 the price of silver had risen to over $50 an ounce. Five years after that first late night silver flight, Nelson and his younger brother, had earned between two and four billion dollars in paper profit from the (by then) 100 million ounces of silver they had in their Swiss vaults, And they had  future contracts to buy even more at higher prices.

But while Nelson had been buying silver futures “long”, betting that the price would go up, he was also squeezing the manufacturers who needed silver. They would have to pass their price increases to the millions of customers who used their products, all in the name of higher profits for Nelson Baker Hunt, his family and friends. On 7 January, 1980, the United States Commodity Trading Commission, which had oversight of the futures market in America, issued “Silver Rule 7” which increased the margin required for silver futures. Justs four days later the price of silver had fallen back to $25 an ounce.

As the value of Nelson’s collateral began to plummet, the brokerage house and banks which had made him loans to buy silver futures, now put the squeeze on Nelson. By March they had issued a “margin call” of $100 million on those loans. In effect, Nelson would either have to make that payment, or fulfill the entire contract, and take delivery on and pay for $1.7 billion in additional silver.

Early on the morning of Thursday 26 March, 1980, before the commodity markets opened, Nelson’s younger brother and partner, Herbert Hunt,  placed a telephone call to the chairman of the Futures Commodity Trading Commission and asked him not to open the silver market. The reason given for the extraordinary request was that the Hunt brothers would not be meeting their margin calls that morning – “would not”, Hunt had said, not “could not.”  As John Bloom noted in an article he wrote for the magazine “Texas Monthly” “Here was one of the leading spokesman for unbridled free enterprise in America, asking a federal regulator to close a market. If the federal government would not do that, then he simply wouldn’t pay up.”

That day, the silver markets did open. They just collapsed. The price of silver futures fell to $10.20 an ounce. The day passed into history as “Silver Thursday”.

As the Federal government attempted a postmortem, they discovered that Nelson Hunt had assets of $1.5 billion, and now owed $2.43 billion. In addition he owned 6.5% of one of the brokerage houses which had loaned him money on the Silver Futures, a fact never revealed to the Security Exchanges Commission, which regulated those houses. That was illegal. The feds also discovered that Federal Reserve Chairman Paul Volcker had met with Nelson several times in an attempt to find funding to save him from bankruptcy. As Time Magazine noted, Volcker’s “continual monitoring of the situation was interpreted by bankers to mean that the Federal Reserve…favored some kind of bailout to keep the Hunts from going under…(which) showed that when big speculators lose millions, “telephone calls come to Paul Volcker for a quick fix.”  Those banks put together a one billion dollar line of credit to save, not the Hunt brothers, but the brokerage house he had defaulted. Yes, it has all happened before.

The aftermath to Bunker Hunt’s silver manipulation is also informative. The banks eventually went after the Hunt’s fortune, seeking return of another billion dollars lost in their game. Like all good defendants, Nelson countersued, accusing the banks of lending him money because they knew he couldn’t possibly repay it.  It was an absurd argument, but it allowed the Hunt’s fifteen lawyers to negotiate a reduction of the repayment. In 1998 a federal jury found both Nelson and Lamar (another brother) guilty of fraud and conspiracy to monopolize the world's silver market. Nelson was banned for life from ever trading in futures again. And finally Nelson Bunker Hunt was personally forced into Chapter 11 bankruptcy.

The extended family remains wealthy and politically well connected. Nor was Nelson reduced to poverty. A reporter for the Dallas Morning News found in March of 2009 the 83 year old living “in relative modesty in a North Dallas house with his wife of 57 years”. Nelson insisted he had no regrets.

In better times, Nelson Baker Hunt said, “People who know how much they're worth, aren't usually worth that much.” Stephen Susman, one of Nelson’s lawyers, said, “These people are gamblers. If you’re a gambler, you take your shot.” Except, of course, these powerful folks always think they have the biggest gun in town.  And until they were able to sucker the American public into joining their gambles, they did not. 

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THE PROFESSIONAL

I hate the image of Lincoln that most Americans hold, the five dollar profile of “The Great Emancipator”. You see, Abraham Lincoln saved the Union and ended slavery not because he was a saint but because he was the greatest politician who has ever occupied the White House. And to those who despise “professional politicians”, my response is they have probably never seen a real professional in action. Such Pols  don’t come along often, but when they do, they make the puny impersonations that must usually suffice seem like clowns.

And Lincoln’s professionalism was best displayed in his handling of the biggest clown in his cabinet, a man you have probably never heard of but whose best work you see every day of your life, Salmon Portland Chase. If Chase had been half as smart as he was ambitious, he would have been President instead of Lincoln. That to his dying day he continued to think he deserved to be so, shows what a clown he really was.

Doris Kerns Goodwin has called Lincoln’s cabinet “A Team of Rivals”, but I think of it more as an obtuse triangle. At the apex was Lincoln. He was the pretty girl at the party. His suitors didn’t really want to know him, but they all wanted to have him. On the inside track was the brilliant, obsequious William Seward - the Secretary of State who thought of himself as Lincoln’s puppet master. And the right angle was Salmon Chase, Secretary of the Treasury, born to money and brilliant,  but with a stick up his alimentary canal. And on Tuesday, 16 December, 1862 , the competition between these two paramours of Old Abe's banged heads in the head of Senator Charles Sumner, the Chairman of the Senate Foreign Relations Committee and leading Senatorial Cassandra.

Sumner had come into procession of a letter written by Seward to the American Ambassador to France. In the letter Seward complained that “…the extreme advocates for African slavery and its most vehement opponents are acting in concert together to precipitate a servile war, the former by making the most desperate attempts to overthrow the federal Union; the latter by demanding an edict of universal emancipation as a lawful and necessary if not, as they say, the only legitimate way of saving the Union.” To Sumner this passage was proof that behind the scenes Seward was not fully committed to destroying slavery and the Confederacy. And it confirmed what he already heard from Chase.

Stephen Oates writes in “With Malice Toward None”, “Chase in particular felt snubbed and resentful…what bothered Chase the most was the intimacy between Lincoln and Seward…In talks with his liberal Congressional friends, Chase intimated that Seward was a malignant influence on the President...that it was (Seward) who was responsible for the administration’s bungling. So it was that Seward became a scapegoat for Republican discontent.” (pp 355-356)

Sumner convened what I call "The Magnificent Seven", the Republican Senate caucus. Once the Seward letter was read out loud, Senator Ira Harris from New York recorded the reaction. “Silence ensued for several moments, when (Senator Morton Wilkinson of Minnesota) said that in his opinion the country was ruined and the cause was lost…” Senator William Fessenden from Maine added his two cents worth. He had been told by a member of the cabinet there was “…a secret backstairs influence which often controlled the apparent conclusions of the cabinet itself. Measures must be taken”, Fessenden concluded, “to make the cabinet a unity and to remove from it anyone who does not coincide heartily with our views in relation to the war.”

It is sad to say there was not a first rate mind in that room. There might have been, but arrogance drops a smart person’s I.Q. by forty points or more. It can drop the average mind to zero. Not one of the seven seems to have suspected they were being manipulated by Chase, that it was Chase who had whispered Fesseneden's ear, and Wilkinsen' s ear as well. But each was convinced they they and they alone held the solution as to how to conclude the Civil War. It is startling to think that men who used an outhouse every day, could be that arrogant.

They skewered up their courage for two days before saddling up and calling on the President at 7 P.M. on Thursday, December 19, 1862. For three hours they harangued poor Mr. Lincoln on the dangers of Seward. Lincoln remained agreeable but noncommittal, and proposed that they meet again the next night. And the amazing thing was that throughout the meeting Lincoln actually had William Seward’s resignation in his coat pocket.

Understand, Seward had not offered his resignation out of nobility. He was a politician. After hearing of the intentions of the Seven, Seward had a flunky deliver his resignation in private, as a back door demand that Lincoln pick Seward over Chase, the genial New Yorker over the prig from Ohio. Of course, the loss of support from New York would poke a fatal hole in Lincoln’s ship of state. So Seward was not expecting Lincoln to pick the prig for the poke

Lincoln’s problem was he also needed the prig. Chase’s handling of the Treasury  was brilliant. He was financing the entire war. It was Chase who had begun issuing official U.S. government backed paper currency, greenbacks. That had not been done since the American Revolution. It was Chase who had put the words “In God We Trust” on every bill, and it's still there today. Of course, Chase had also put his own face on every $1 bill, as a form of political advertising, but Lincoln was willing to tolerate that because Chase was honest in his job, and because without Ohio, the Union would lose the war.

The other factor was that the whispers about Seward’s “backstairs influence” were false. By December of 1862 it was dawning on Seward that Lincoln was thinking for himself. When Lincoln had first heard about the Magnificent Seven’s deliberations (from Senator Preston King, the flunky who had delivered Seward’s resignation), the President had exploded. “Why will men believe a lie, an absurd lie, that could not impose upon a child, and cling to it, and repeat it, and cling to it in defiance of all evidence to the contrary?” Lincoln was beset by arrogance and delusion from all sides. It seems that everybody in Washington thought they were smarter than Lincoln. But the skinny lawyer from Illinois was about to prove them all wrong.

At ten the next morning Lincoln told his cabinet about the previous night’s meeting. He made no accusations, but Chase immediately blubbered that this was the first he had heard about any of this matter. The President, who had mentioned no names and made no allegations, asked them all, except Seward, to return that night to meet with the Seven. Seward felt the ground giving way under his feet. He had never expected Lincoln might pick Chase. At the same time, Chase was not entirely certain he had won.

That night the Seven were now an audience to a bravo performance. Gideon Welles, the Secretary of the Navy (then a cabinet office) recorded the festivities. The President “…spoke of the unity of his Cabinet, and how although they could not be expected to think and speak alike on all subjects, all had acquiesced in measures when once decided. ...Secretary Chase endorsed the President's statement fully and entirely…” There were hours more of talking but right there, when Chase agreed with Lincoln, that was the end of Chase's mutiny. As the Magnificent Seven were leaving the White House a stunned Senator Browning of Illinois asked one the leaders of the mutiny how Chase could tell them that the cabinet was harmonious, after all his talk to them about back stairs influence. The reply was simple and bitter; “He lied.” Chase was done as a malignant political influence in the cabinet. No Republican was going to believe anything he ever said again.

The next morning Lincoln called both Seward and Chase to the White House. Welles was again present, I suspect as a witness for Lincoln. Wrote Welles,  “Chase said he had been painfully affected by the meeting last evening, which was a total surprise to him, and…informed the President he had prepared his resignation…“Where is it?” asked the President quickly, his eye lighting up in a moment."

“I brought it with me,” said Chase, taking the paper from his pocket…”Let me have it,” said the President, reaching his long arm and fingers towards Chase, who held on, seemingly reluctant…but the President was eager and…took and hastily opened the letter. “This," said he, looking towards me with a triumphal laugh, “cuts the Gordian knot.” An air of satisfaction spread over his countenance such as I have not seen for some time. “You may go to your Departments,” said the President;…(This) “is all I want…I will detain neither of you longer.”

Both Seward and Chase spent a nervous night, not certain as to what Lincoln would do. They had both just been reminded who was in charge of this game. And it was not until a few days later that Lincoln sent a message to both Chase and Seward, saying that the nation could not afford to lose either of their talents. And it did not. Seward never tried to pull Lincoln's strings again. Chase petulantly continued to resign annually until late 1864, when Lincoln could finally afford to take him up on the offer. But never a man to waste talent, Lincoln appointed the clown to the Supreme Court, where Chase’s firm stance for racial equality would have the best influence on America’s future.

And that is what it looks like when a professional is on the job.

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ITS ONLY A GAME

I might say the weather was prophetic. A thunderstorm blew in before dawn that Tuesday morning, 14 June,  1949.  It must have felt a relief at first, breaking a ten day dry spell. But when the thunder faded, the sky remained so uninviting that only 7,815 showed up at the corner of North Clark and West Addison, to file into Wrigley Field. Last place Chicago was hosting fourth place Philadelphia, but the real draw was the first return of two popular players, first baseman Eddie Waitkus, and pitcher Russ “Mad Monk” Mayer, who had both been traded to the Phillies the previous December. At first it seemed unlikely the ex-Cubs would get their revenge, but after noon the clouds parted, and by game time the sun was driving temperatures into the low eighties.

“Rowdy Russ” pitched his typical game. While there were no temper tantrums this time, the scowling screw ball pitcher went eight and two-thirds innings, gave up ten hits and made two wild pitches, while allowing only one walk. Eddie, who was such a good defensive player he was known as "the natural",  also rose to the occasion, going two for four, with a walk, and he scored twice. The Cubs staged a ninth inning rally on two solo home runs, but 2 hours and 12 minutes after it began, the Phillies had won 9 to 2, improving their record to 29 and 25, while the Cubs sank to a dismal 19 wins against 32 losses. As morality plays go it was very satisfying for the pair of exiled heroes. But it was only the opening act.

Two miles north of the ballpark, the Edgewater Beach Hotel (above) had opened on Chicago's North Shore in 1916, just in time for the Roaring Twenties. With a thousand rooms and twelve stories over looking Lake Michigan, a private beach, tennis courts, swimming pools, a golf course, hiking and riding trails, a five star restaurant, and sea plane service to the downtown Chicago lakefront, the Spanish stucco hotel was the Midwest coast du jour for a decade. During the thirties, Benny Goodman and Artie Shaw played in the outdoor and the indoor ballrooms, and were broadcast over the hotel's own radio station – WEBH. However the depression eventually grew so great it forced the owners to sell, and by 1949, 'The Sunrise Hotel” was an aging dame, concealing the mends in her petticoats - hiding the truth that fame and fortune, and youth and health are merely temporary distractions.

The Phillies team bus got back to the Edgewater at 5349 North Sheridan by four, and after showering, Russ met with his parents and his fiance Dorthy, who had driven the 80 miles up from their homes in Peru, Illinois. Eddie joined them taking a cab to a restaurant. Eddie Sawyer, the Phillies manager, had set a ten o’clock curfew. Although Myer usually paid little attention to such restrictions (one teammate admitted he roomed only with Russ's bags), this night he and Eddie made the check in. After escorting Dorthy and Meyer's parents to their room, the ball players returned to their own quarters in room 904. There they discovered a note addressed to Eddie, taped to the door.

Written on hotel stationary, the note read: “Mr. Waitkus; It's extremely important that I see you as soon as possible. We're not acquainted, but I have something of importance to speak to you about. I think it would be to your advantage to let me explain it to you. As I am leaving the hotel the day after tomorrow, I'd appreciate it greatly if you would see me as soon as possible. My name is Ruth Ann Burns, and I am in room 1297a. I realize this is a little out of the ordinary, but as I said, its rather important. Please come soon. I won't take up much of your time, I promise.”

Eddie would say later he thought the note was from an old girl friend from his hometown of Boston. But whatever his reason, instead of just calling the twelfth floor room, despite the late hour, Eddie decided to go there directly. It was about eleven thirty, and another thunderstorm was ripping the darkness, when 29 year old Eddie Waitkus stepped off the elevator on the twelfth floor.

The door of room 1297a was opened by a tall, dark haired young woman, who introduced herself as Marry Brown. She told Eddie, “Ruth Ann will be back in a few minutes. Why don't you have a seat.” Eddie squeezed past the fold out bed in the small room (above). As he sat in a nondescript chair (right)  he noticed three empty drinking glasses sitting on the dresser (left) – a daiquiri and two whiskey sours. Eddie realized with a start the woman was staring at him. He remembered, “She had the coldest looking face I've ever seen.” And then he realized the woman was holding a rifle. As he stood up, she shot Eddie in the chest.

The bullet drilled through Eddies' right lung, causing it to collapse, and lodged in the muscles of his back, next to his spine. Stunned, Eddie asked the woman, “Oh Baby, what did you do that for?” As he fell the blinding pain hit him. And as he struggled to catch his breath, Eddie heard the clinking of the telephone dial. After a moment, he heard the woman's voice. “I've just shot a man, in my room” she said. Then she hung up, walked out and waited beside the elevator for the police to arrive. When the attendants carried Eddie out of the room, Rowdy Russ heard his friend Eddie asking, over and over, “Why?”

The shooter willingly identified herself as 19 year old Catherine “Ruth” Ann Steinhagen (above), a typist for the Continental Casualty insurance company. She told the detectives, “I went to Cubs Park and watched Eddie help the Phillies beat the Cubs 9 to 2. It was wonderful.” But then she said, “If he had just walked into the room a little decently, I would have told him to call the police. However he was too confident. He swaggered.” Asked to describe her relationship with Eddie, Ruth Ann said, “I just became nuttier and nuttier about the guy. I knew I would never get to know him in a normal way...Then I decided I would kill him. I didn’t know how or when, but I knew I would kill him.” She added, “I'm sorry that Eddie had to suffer so, but I had to relieve the tension that I have been under the past two weeks.”

The cops checked out Ruth Ann's apartment at 3600 North Lincoln Avenue, where it crossed North Addison. From the Brown Line station on the corner, it was less than five minutes to The Loop, where she worked at the CC Insurance Company. It was also less than half a mile west of Wrigley Field, where Ruth Ann had been a regular during the 1948 season, attending 50 games - before Eddie had been traded to Philadelphia. And on the walls of Ruth Ann's room there was a shrine to Eddie Waitkus, a collage of photos cut from magazines and newspaper clippings, even on the ceiling above her bed.

Her mother admitted the girl had developed an obsession with the Boston native, even regularly eating baked beans. Ruth Ann even studied Lithuanian, because Eddies' parents had immigrated from that nation. In 1948, when Ruth Ann started setting a place for Eddie at the family dinner table, her parents sent her to a psychiatrist. She told the doctor, “I used to go to all the ball games to watch him. We used to wait for them to come out of the clubhouse after the game.” When Eddie was traded to Philadelphia, Ruth Ann cried “day and night.” As spring training approached in 1949, she moved out of the family home to her Lincoln Avenue apartment.

At her arraignment on June 30, 1949 – 17 days after the shooting - Dr. William Haines diagnosed Ruth Ann as suffering with schizophrenia, and her lawyer affirmed that she was “unable to cooperate with counsel in her own defense”. Judge James McDermott committed her to the Illinois Eastern Hospital for the Insane at Kankakee. 

Meanwhile, Eddie had suffered through four surgeries, and came close to dying more than once. But he was young,  and in good shape, even after his combat tour in the Philippines in 1944-45, where he had earned four Bronze Stars.   He would miss the rest of the 1949 season, and he never again achieved the .306 batting average he held on June 14, 1949.  But on opening day of the 1950 season, the Philadelphia first baseman went three for five.

Ruth Ann spent three years in Kankakee, repeatedly under going electroconvulsive shock therapy, as well as hydro and occupational therapy. In April 1952 the doctors deemed her to be “cured”. The prosecutors office asked if Eddie wanted to pursue a case against Ruth Ann, and he said no. Ruth Ann was never tried for her shooting of Eddie Waitkus. When the 22 year old was released into the custody of her parents (above), Ruth Ann told reporters she was going to go to work at the Kankakee hospital as a physical therapist, but she never did.

Most of the Edgewater Hotel was demolished in 1968, leaving a single pink colored apartment tower, and the once private beach. The site is now Park Tower Market.

Eddie retired in 1955 at 35 years of age, with a life time batting average of .285. He had married one of his nurses, and they had a son. For many years he was an instructor at a Ted Williams baseball camp, teaching future major league players. But Eddie also showed the symptoms of Post Traumatic Stress Disorder, from his war experiences and his shooting at the Edgwater. He became an alcoholic, and a recluse. Said his son, “His nerves were shattered for awhile...and he didn't recognize the problems, but they hampered him for the rest of his life.” Edward Stephen Waitkus died of esophageal cancer on September 16, 1972, at just 53 years of age.

Catherine Ruth Ann Steinhagen lived quietly with her family in a nondescript north west Chicago home (above) until her parents died in the early 1990's. Her sister died there in 2007. Just after Christmas of 2012 Ruth Ann fell in her home,  hit her head and suffered a subdural hemotoma. She died on December 29 in the Swedish Convent Hospital, at 5145 N. California Avenue, two-and-a-half miles north of Wrigley Field, and about two miles west of the old site of the Edgewater Beach Hotel. She was 83 years old..

The incident inspired the book and film “The Natural”. But as you can see, legend often has only a passing acquaintance with reality. And reality, often has only a passing acquaintance with  legend.

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