AIR MAIL

I believe the decision by the United States Post Office to leap into the 20th century of mail delivery was taken with all the alacrity and planning you would expect from the second oldest and most entrenched bureaucracy in the U.S. government.  On Monday,  6 May, 1918  -  15 years after the Wright Brother's first flight - United States Army Major Reuben Fleet was summoned into the office of Secretary of War, Newton D. Baker. There Baker told the pilot that he was now responsible for setting up the first Air Mail Service between Washington, D.C., Philadelphia and New York City. Further, the stunned Major was informed that the first flight of the new service would take off from Washington, D.C. at 11:00 a.m. on Wednesday 15 May , just nine days hence.

Major Fleet was flabbergasted. This is the first he had heard of any such an idea. He pointed out to the Secretary that the best plane in the Army’s inventory was the JN-4D, known as the Jenny. But the Jenny  was so under-powered that if you tried to execute a turn without first dipping her nose, the Jenny would stall.

Worse, the Jenny was a two seat trainer, capable of barely 65 miles an hour and had a range of less than 90 miles. In other words, a Jenny couldn’t reach Philadelphia non-stop from either New York or Washington. The Secretary responded that whatever the difficulties,  they had to be overcome because - and this was the kicker - the Postmaster General, Albert S. Burleson, had already issued the press release. And as any military officer in Washington can explain, once the press release has gone out, you are committed.

Major Fleet - whose personal motto was, "Nothing Short of Right Is Right" -  immediately called the Curtiss Aeroplane Corporation on Long Island and ordered the emergency conversion of twelve Jenny’s - replacing the front seat controls with storage for mail bags, changing the 90 horse power engines for ones with 150 horse power,  and adding fuel tanks to increase the range. Curtiss promised to deliver the planes to Belmont Park airfield by Monday, 13 May.

But as Fleet overcame each obstacle it seemed two more popped up. Naturally, he preferred to start the Washington flights out of College Park, Maryland, nine miles north of the capital (thus saving nine miles on the first or last leg of each flight). But the Post Office press release insisted on using Potomac Park, on the tidal basin, (top of the above photo), right in the middle of Washington, and ringed by tall trees. The Department of the Interior was insistent that not a branch of those magnificent 100 year old trees be broken. Fleet then asked for six of the most experienced pilots in America to fly the routes.

He got four very good pilots and two political "ringers". The two ringers were Lieutenants James Edgerton and George Leroy Boyle, both of whom had just graduated from flight school in Texas (well, almost), and so far their solo flying experience consisted of one 15 mile journey across the south Texas prairies. In fact, before Major Fleet had been given his orders, Lieutenants Edgerton and Boyle  had received theirs, and were already on their way to Washington. It was a an old bureaucratic  trick known as the fait accompli. The two ringers would get the credit if everything went well. Major Fleet would get the blame if the ringers screwed the pouch.

On the other hand, Edgerton was the son of a Post Office purchasing agent,  and Boyle was engaged to marry the only daughter of Interstate Commerce Commissioner Charles McChord (above, holding the bag). That made both young men politically if not avionically well qualified for staring roles in the Air Mail drama. Major Fleet knew enough about the way Washington worked that he did not argue with their selection. So, after leaving instructions for the surreptitious removal of one particularly pernicious tree at the edge of Potomac Park, Fleet left for Long Island by train with what he judged were his five best pilots. Fleet left his sixth pilot, Lt. Boyle, behind in Washington to entertain the lovely Miss McChord, and presumably her  father, Commissioner McChord, as well.  Frankly, after having met him, that was the assignment for which Major Fleet figured Lt. Boyle was best qualified.

At the aerodrome inside the Belmont Park race track outside New York City,  Major Fleet found his modified Jennys were waiting as promised – but still in their crates. The mechanics and pilots spent the next two days desperately lashing together the required six planes. Two first newly assembled Jennys were then flown to Philadelphia. The next two were made ready to fly from what they were now calling Belmont Field. And early on Wednesday, 15 May, the exhausted Major Fleet flew the last plane assembled (Number 38262) from Philadelphia to Washington, landing at Potomac Park at 10:35 a.m., with barely twenty-five minutes to spare before the 11:00 a.m. takeoff deadline, as per the previously released press release.

The makeshift airfield was filled with brass and political heavy weights. Franklin Roosevelt, the under-Secretary of the Navy, had arrived, as did the Postmaster General and the Secretary of the War. Fleet may have been hoping the President would be late. The previous day POTUS had rested his hand on a cannon barrel still hot from having fired a salute in his honor. But just after Major Fleet parked his Jenny, Woodrow Wilson drove up, left hand wrapped in a bandage.. But where was Lieutenant Boyle? Fleet had just about decided to take the flight himself when a voice from the crowd boomed out with disturbing confidence, “Never fear, because Boyle is here.”

Forward stepped the cocky young Lieutenant George Leroy Boyle (left), looking like a young Jay Leno, and followed by the lovely Margaret McChord, carrying a dozen roses she had gotten from somewhere. Boyle put on a brave face during the distribution of commemorative watches and nobly posed for official handshakes. Then , ignoring the photographers, Major Fleet attempted to coach Boyle on how to follow the railroad tracks north from Union Station.  But the closer they got to take off time, the photos of the Lieutenant give the impression of a man prone to motion sickness who has just realized that he has volunteered to be abandoned on a life raft in the middle of hurricane. As he struggled to keep Boyles' attention, Major Fleet was interrupted by a wail of sirens. A mail truck, carrying  four 140 pound bags of First Class (24 cent) Air Mail had arrived.

The photographers were momentarily distracted, getting pictures of the bags being loaded into the Jenny. The noise and excitement did not help Boyles' concentration, and eventually Major Fleet simply taped the road map to the now almost catatonic Boyle’s leg. Boyle was now starting to resemble a hunter on his way to meet a firing squad of well armed pigeons.

There were more photos taken as Boyle climbed aboard the unfamiliar airplane and set the switches to start the engine. A sergeant windmill-ed the propeller three times to pull fuel into the cylinders. Lt. Boyle yelled, “Contact!”, and the sergeant pushed the propeller through again, hard. The engine coughed and died. Twice more Boyle and the sergeant tried to start the engine. But the motor stubbornly refused to engage.

The President was getting annoyed. The crowd was starting to giggle. Boyle was beginning to look as if he might throw up in the cockpit. Finally the sergeant thought to look in the gas tank. It was bone dry. Fleet had been lucky to arrive that morning before he ran out of gas. And no one, amid all the hoopla, not even the exhausted Fleet, had thought to refuel the plane.

Fuel was borrowed from some planes in the nearby U.S. Naval Yard field (which raises the question why the army was not using the Navy air field) and, 45 minutes late, Lt. Boyle's wings  were turned his wings, and he roared down the open lawn. The crowd held its breath as he just cleared the trees at the end of the makeshift runway, by all of three feet. The U.S. Army was in the Air Mail business; sort of.

Meanwhile the flight from Belmont Park had gotten off on time, and arrived at Philadelphia two hours later. Right on schedule.  But after waiting for Boyle in Philly for almost an hour, the New York bound Jenny took off without any mail and headed north. When it arrived on Long Island everyone there was so excited they forgot to ask where the mail was. But eventually somebody thought to ask "What happened to Lt. Boyle?" The answer to that question arrived an hour later.

After finally getting into the air, Boyle came to the depressing realization that he could not read a map to save his life, even one taped to his own thigh. He mistakenly followed a branch line of railroad tracks for 20 miles to the southeast from Washington, the approximate opposite direction from New York City.  By the time Lt. Boyle had realized his error, he had almost run out of gas. On crash landing near Waldorf, Maryland, the chastised Lt. Boyle did a ground loop, flipping his Jenny onto her top.

Boyles’ mailbags were eventually delivered to Philadelphia the next day by another pilot. And thankfully, in a swell of patriotism, the wartime press corps chose to bury the lead of the story. The failure to refuel the plane, and Boyles inability to read a map, went unmentioned. And that should have been the end of that. But the Postmaster General was not inclined to let the story or Lt. Boyle fade into the crowded grey pages of history. Instead the Postmaster General urged Major Fleet to give Boyle another chance.

Which is why, two days later, on Friday 17 May, 1918,  Lt. Boyle took off from Washington, again. This time he was following another (more qualified) pilot, who guided the wandering pathfinder due north out of the national capital and up the four track wide main railroad line toward Philadelphia. Boyle faithfully followed the guide plane for fifty miles. But eventually the guide plane turned back. And that was when, finally alone in the air, headed in the right direction, somehow, someway, the dashing but incompetent Lt. Boyle managed to get turned around yet again. All he had to do was not turn. And yet that is exactly what he did. And evidently, he did so almost immediately after the guide plane left him. This time Boyle ended up flying for three hours and fifteen minutes the  due south. Not only could he not read a map, he couldn't read a compass. Eventually he set his ship down successfully, safely, landing on Cape Charles, on the very Southeastern tip of Virginia, barely avoiding an excursion out over the open Atlantic only because he ran out of fuel first.

Determined not to fail this again,  and having missed the Atlantic ocean by a hair's breath of petrol, Lt. Boyle bought gasoline out of his own pocket, got directions from a farmer, took off again and this time actually made it to Philadelphia. Well, close to Philadelphia. He crash landed on the Philadelphia Country Club golf course, sheering both wings off his Jenny and bending the landing gear.

When the Postmaster General Burleson asked that Boyle be given a third chance, Major Fleet replied, “The conclusion has been reached that the best interests of the service require that Lieutenant Boyle be relieved from this duty.” And so he was. But it would appear that Lt. Boyd was such an incompetent pilot that he somehow managed to cause the man who replaced him to suffer five forced landings over the next three months. Whatever affliction Lt. Boyle was suffering from, it was contagious and he was a carrier.

- 30 -

ET TU Part Four JEWEL OF THE NILE

I don't always believe the Roman historian Plutarch, but then you should never always believe any historian. Still, Plutarch always told a good story. His tale of the death of Pompey the Great is a perfect example. According to Plutarch, after losing at Pharsalus, Pompey sought refuge in Egypt, seeking out the son of an old debter of his, fourteen year old Theos Philopator, Pharaoh of Egypt, also known as Ptolemy 13 – interesting number, don't you think? You see, Ptolemy 13 was in Pelusium, the silt plagued port and fortress at the eastern edge of the Nile delta, because he was avoiding his sisters, both of whom were trying to kill him. It was a great confused mess, and a very bad time to arrive in Egypt seeking help. But then Pompey's timing had never been very good.

Pompey's arrival on September 29, 48 B.C.E., had presented Ptolemy 13's advisors with a bit of a conundrum. If they helped Pompey they would anger Julius Ceasar, who had just defeated Pompey's army at Pharsalus. It they sent Pompey packing and he later won his civil war with Ceasar, Pompey would make sure bad things happened to Ptolemy 13 and his advisers. There was a simple solution to this problem, and I am surprised it never occurred to Pompey. It did occur to Ptolemy 13's advisers.

They sent a boat out to Pompey's ships, which were anchored just outside the harbor of Pelesium. A Roman centurion named Septimius, who had been sent to Egypt by Pompey to reinstate Ptolemy 12, Ptolemy 13's father, stood up in the boat and assured his old commander that it was safe to come ashore. Then one of Ptolemy's generals, Achillas – who was called Egypt but was merely half that - called out that the Pharaoh was very busy but could give Pompey a few minutes of his time, right now, if he would just accompany them ashore. It smelled fishy, but Pompey really had very little choice. Pompey could see Ptolemy 13 waiting on his litter on the beach. Pompey needed water, and food, and somebody who knew the coastline down to Tunisia, where he had more legions and allies...So the old fool got in the boat..

He never made it to shore alive. According to Plutarch, as the boat passed the breakwater, Pompey was rehearsing his Greek greetings for the Ptolemy 13, when Septimius stabbed him in the back. They dragged the boat ashore and then dragged Pompey up on the sand and chopped off his head  It was a cold and heartless thing to do, particularly since Pompey's wife was watching from the galley off shore. But it wasn't anything Pompey hadn't done to countless others. And that was the death of Pompey the Great, one of the most overrated generals in history, a man whose greatest sin was in believing his own press releases, which he had written.

That was one problem solved, leaving Ptolemy 13's advisers with the original problem, his elder sister and her hired army. She was hovering out in the Sinai desert.  It  looked as if she was about to be easily be crushed by Ptolemy 13's army when, just two days later- October 1^st, 48 B.C. - yet another Roman annoyance arrived off shore. This time it was Julius Caesar (above), with a Roman legion. Dutifully, the advisers of Ptolemy 13 sent a boat out to Caesar, carrying the head of Pompey. But if Ptolemy 13's advisers expected Caesar to thank them for eliminating his enemy and sail off back to Rome, leaving them free to finish off their business without further distraction, they were sadly mistaken. Oh Caesar did sail off from Pelusium. He just didn't didn't sail for Rome. A few days later Ceassar landed in Alexandria and took over the royal palace.

I honestly don't know if Caesar really cried when he saw Pompey's head. He said he did. But Caesar must have known the instant he looked into those foggy dead eyes that he had won his civil war. There was more fighting to be done, of course. He would have to move on to Tunisia, to finish off Pompey's troops there. But there was no longer any need to rush. With Pompey dead the Senate aristocrats had lost their champion and rallying point. Caesar could allow their army in Tunisia to wither on the vine a little, while he took advantage of an opportunity right here in Egypt. Ptolemy's army at Pelusium might be blocking his sister's army from entering Egypt, but Caesar's 5,500 man force in Alexandria was sitting on the Egyptian treasury, the gold used to pay Ptolemy 13's army. To paraphrase an American Vietnam War general, grab them by their ingots and their hearts and minds will follow. Caesar now summed both Ptolemy 13 and his sisters to Alexandria to settle their civil war. And to be honest with you, I don't think Caesar particularly cared which ones, if any of them, showed up.

It turned out they all did - Ptolemy 13 and his two sisters, Asinoe 4, and Cleopatra 7. Ptolemy 13 had the easier time getting to the Alexandria, but even Cleo made it, even though she had to first slip around her brother's army and be smuggled into the palace in a rolled up carpet - if you believe Plutarch. But once she was there, Caesar was required to protect her since he had summoned her. And as Caesar was a heterosexual (mostly), he quickly fell under the spell of this extraordinary young woman.

She was 21, and he was 52. He came from a world where women were not allowed to compete with men. The only thing that had kept her head on her shoulders to this point was her brains. A modern Egyptoligist described the lady this way, “Cleopatra was a mistress of disguise and costume. She could reinvent herself to suit the occasion, and I think that's a mark of the consummate politician.” Was she a great beauty? Plutarch, who was born a half-century after she died, wrote that she was not. But he also consulted every word written about her by people who had known her, and the consensus was that “her presence...was irresistible.... (Her) character...was something bewitching.” Wrote another Roman historian, she was “...brilliant to look upon and to listen to, with the power to subjugate every one, even a love-sated man already past his prime.” By all indications, the love-sated old man succumbed the very first night.

The advisers of Ptolemy 13 saw which way the perfumed wind was blowing, and they did not like it.

They formed a secret alliance with Cleopatra's younger sister, Asinoe 4. She slipped out of Alexandria and hurried to join Ptolemy 13's army at Pelusium. But, once there she started calling herself Pharaoh, and when the commander of the Army, General Achillas, the man who had helped trick Pompey to his death, protested her use of the title, she had him killed. Well, turn about is fair play, isn't it? The army did not approve of the lady's ego trip, and offered her in trade for Ptolemy 13. For some reason Caesar accepted the deal, probably because Ptolemy 13 swore he would surrender his army to Caesar. But once back with his army, Ptolemy 13 and his advisers chose to lay siege to Ceasar in Alexandria in December of 48 B.C..

Caesar was trapped in the city, with just one legion, and that was not enough. But he had already called for reinforcements, and when they arrived in early January of 47 B.C. they smashed Ptolemy 13's army. On January 13, the fifteen year old Ptolemy 13 was drowned in the Nile, maybe by accident and maybe by a bribed Egyptian. But however the boy died, Cleopatra 7 was now the Pharaoh in Egypt. Caesar had Asinoe 4 placed under arrest, probably to protect her from Cleopatra – the lady had an understandably heightened sense of self preservation.

Just 8 months after Cleopatra 7 first rolled out of a carpet at the feet of Julius Ceasar, on June 23, 47 BC, she gave birth to a son. It was observed that as the boy, who Cleo 7 named Ceasarian, as he grew, he greatly resembled Ceasar. He was one of two males who may have been Ceasaar's sons. The other was the child of Ceasar's widowed girlfriend, Servilla. That boy, whom Ceasar never officially adopted, was Marcus Junius Brutus.

- 30 -

A LITTLE SOCIALISM

I can't think of a place in America that is more deceptive than North Dakota, 70,000 square miles of not what you thought.  It's most fertile land is the valley of the Red River of the North (above), except its not a valley. It's the bottom of a lake that's no longer there - usually. The river meanders back and forth across a prostrate terrain on its way to not the Pacific or the Atlantic, but the Arctic Ocean. Flowing north, every fall it freezes first at its mouth causing “the valley” below to flood. Every spring, when the rains come to Minnesota, the lake reappears again, but briefly, because in North Dakota the dominant long term weather pattern is reoccurring drought. And in the second decade of the 20^th century, with a population of little over half a million, most of whom were farmers and bred to be conservative and fiercely independent and Republican,  this state created openly socialistic industrial and economic institutions. Perhaps this was because North Dakota's raison d'être from its inception in 1889, was the business plan of two vertically integrated out-of-state corporations. 

Both the Northern Pacific railroad, created to benefit its shareholders, and the Great Northern Railroad, built by the megalomania of its owner, James J. Hill, sold land to European farmers, who bought their inexpensive new American farms sight unseen. The boat and train tickets, and the land itself were loss leaders for the corporations. Their profits came once the farmers were isolated on the Great Plains. They bought their food and supplies from corporate stores, financed their plantings through corporate banks, stored their harvests in corporate silos until it was transported on corporate railroads to be sold to corporate mills in Minnesota. In “bonanza” years the profits ended up in the corporate banks. And in the inevitable non-bonanza years, the farms were reposed by the banks, starting the cycle all over again. It was a very profitable business plan, as long as the customers did not get wise that North Dakota was a colony of the Minneapolis-St. Paul, Minnesota capitalist- industrial complex.

Up to 1916 the great dividing force within North Dakota politics was race. In the 1870's the Red River Valley had been settled by snowy white Norwegians and Icelanders - mostly stern Lutherans. The west and center of the state was settled in the 1880's by creamy white Germans who had been living in Russia since the 16^th century. They called themselves the “volksdeutsch” and they were rigid Catholics all. But in 1916, the North Dakota normal was turned on its head by a political arsonist named Arthur Charles Townley, who split the rigid, stern conservative North Dakota Republican Party into kindling.

When he was a farmer along the Montana border, Townley  (above) was known as the “Flax King”. But an August snowstorm in 1913 cost him his farm and left him $80,000 in debt. He went into politics – Republican of course - there being only one real party in North Dakota - and he pushed for aid for farmers. He was confronted by his fellow Republican Treadwell Twitchell who told him to stop messing in state politics and “go home and slop the hogs”. Instead Arthur cranked up his model T Ford and went on a tour of the state, speaking to hundreds of small groups about the need for North Dakota's 78,000 farmers to organize in self defense. 

 Three thousand paid $6 each to join his Non-Partisan League, because he spoke their language. “If you put a banker, a lawyer, and an industrialist in a barrel and roll it down a hill,” he said, “you’ll always have a son-of-a-bitch on top.” In 1916 the Non-Partisan League had 40,000 members and elected Lynn Joseph Frazier as governor. And in 1918 they swallowed the Republican party whole and won every executive office in state government, control of the house and near control of the state Senate.

Governor Frazier (above, center) now became the head of the new Industrial Commission, a three man board running state owned businesses. Commissioner of Agriculture John Hagan (above, left) was entrusted to construct and run the state's Mill and Elevator Association in Grand Forks. It would buy wheat and barley from farmers at fair prices and sell the final products at a profit for the state. Attorney General William Lemke (above, right) oversaw operations of the BND, the Bank of North Dakota. All state and local tax revenues would be deposited in the bank, and used to offer low interest loans to farmers. When the farmers profited the bank would profit. And you know, it seemed like a good idea at the time. The day it opened the bank had two hundred applications for a total of $8 million in loans.

Then the First World War ended on November 11, 1918. In a flash every industrialized nation slashed their budgets and stopped buying American wheat. Farm prices collapsed. The 650, 000 citizens of North Dakota were hurting, and in order to cover its loan requests, the BND was forced to offer $10 million in bonds for sale. The Minneapolis-St. Paul bankers, who had just lost their best customers to the BND, turned up their noses. They were determined the bank should fail. Faced with impending disaster, the Industrial Commission decided on a bookkeeping slight of hand. They ordered various state agencies and city governments, which were already required to have their money deposited in the bank, to loan the BND $10 million. The cash was never actually withdrawn, so nobody was actually out the money. But cash was available to make loans to the strapped farmers. And the bank of North Dakota had been saved.

It was a bridge too far for the old school Republicans. On April Fools day, 1919, three major players in state politics, Attorney General “Wild Bill” Langer, state Auditor Carl Kositizksy and Secretary of State Thomas Hall all resigned their membership in the NPL in protest. Publicly they blamed Townley's influence. Langer even called the father of the Non-Partisan League a liar. Resistance to the League solidified around The Independent Voters Association - except the IVA was anything but independent. Most of its money came the Minnesota capitalist-industrial complex. So much money poured in that in November of 1919 the first issue of a 40 page monthly magazine appeared, “The Red Flame”, pounding home the message that the NPL were communists, intent on subverting capitalism in North Dakota. Newspapers took sides, and it became clear that the further west within the state, the stronger the NPL became, and feeding off the anti-German sentiment left over from the war, the further east you went the stronger the IVA became.

The IVA tried suing to invalidate the legislation which had created the Industrial Commission, claiming it violated the 14^th amendment. A North Dakota judge tossed the suit, and the State Supreme Court upheld that decision, saying it was an issue of taxation and thus a matter for the the elected officials, not judges. The IVA then appealed to the U.S. Supreme Court which heard the case in in April of 1920. And in June the court admitted that things in North Dakota were getting pretty odd, but again, they refused to stick their noses into a taxation issue.

The primary campaign in 1920 was nasty, and vicious. There were charges that the IVA was bribing politicians, and the IVA managed to put a measure on the ballot to weaken the bank by allowing city or county governments to withdraw their money. Month after month, “The Red Flame” spewed out accusations against Frazier and the Non-Partisan League, charging incompetence and fraud in running the BND. In the October Republican primaries Frazier beat “Wild Bill” Langer for Governor, but the NPL lost control of the House to the IVA, and the bank lost capital when the ballot measure passed. Come November, the wounded Frazier defeated the Democratic candidate for Governor by a mere 5,000 votes.

Governor Frazier responded in December, during a special session of the legislature, when he introduced the “anti-liars” bill, making it a felony for a state employee to publish false statements about the bank. IVA politician Theodore “Two Bit” Nelson went hyperbolic to the Bismark North Star Dakotan, “This is the end of democracy. Nothing is sacred,” he pronounced What it was, was civil war within the Republican Party. Politics in North Dakota ground to a halt. Fist fights erupted periodically in the legislature between NPL and IVA Republicans. But the IVA had managed to turn one of the NPL's political reforms against it, collecting 73,000 signatures and forcing an October recall election on the three freshly re-elected members of the Industrial Commission; Frazier, Lemke and Hagen. At the same time a half dozen ballot measures were offered, any one of which would neuter or destroy the bank.

The vote was held on Friday, October 28^th, and all three NPL members of the Industrial Commission were ousted. Frazier became the first Governor every recalled, by a margin of just 1%, barely 4,000 votes. But the Bank of North Dakota survived, as every ballot measure meant to destroy it was defeated. Wrote the Dakotan, “It seems that the people want the bank and the mill but think that the IVA can do a better job of running them.” In 1921, the IVA tried again to dismantle “Socialism” in North Dakota, and again every ballot measure intended to overturn the bank and the state run flour mill, went down to defeat. They never tried again. Both institutions are still very much alive and healthy today, if reduced in size and goals. But they remain a recognition that when corporations seek to exploit and dominate the people, the people have no choice but to incorporate themselves.

The year after being recalled as governor, the people of North Dakota elected Lynn Frazier to the United States Senate, where he served for 17 years. Arthur Charles Townley the man who splinted the Republican party, served a 90 day prison sentence in 1922 for discouraging enlistments in World War One. He resigned from the NPL, but he never stopped fighting for things he believed in. Without him, his Non-Partisan League remained a thorn in the side of the Republican Party until 1956. Since then they have annoyed the Democratic Party of the North Dakota, which remains a minority party in a state still filled with farmers and still dominated economically from Minnesota.

- 30 -

CRAZY DEAD MAN AT THE SWITCH

I have said it before, and I say it again - letting an economist graduate without a minor in psychology, is like allowing a doctor to become board certified without knowing how to identify their own colon. The original psychologically impaired financial genius was David Ricardo (above). In 1785 the 14 year old David joined his father Abraham's successful brokerage firm in London. David showed an affinity for the business, including the profitable sideline of lending money to his clients. He steadily built a small fortune of his own, until, in 1794, the 21 year old eloped with the 25 year old Priscilla Anne Wilkinson, which precipitated a complete business and familial split with David's father.

The problem was her family were Quaker Christians, while his were Jewish Orthodox. And forced to choose between the woman he loved and the faith of his father, David chose Priscilla. That the marriage was based on passion is hinted at by the 11 children David and Priscilla produced over the next 11 years of their 35 year marriage. But after the marriage David's father disinherited his third born child and forbade all family contact with him. David never spoke with either of his parents again. The finality of the break hints at two men with a rigid absolutist self assurance in their own vision. It was obvious David was destined for a career as an economist.

 

David's second career began in December of 1799 when the 27 year old millionaire read Adam Smith's bone dry book, “The Wealth of Nations”. In this verbose work, the Scotsman argued the greedy selfish practitioners of capitalism were actually useful to society because en mass they were being directed by an “invisible hand” toward doing the public good. But what David Ricardo read was slightly different. To his eye the lesson was that individually the greedy capitalists, such as the successful David Ricardo, were good. Smith's invisible hand became a mystical incantation invoked in the abstract as justification, but legislated against in the actuality. What had motivated Ricardo to finally read “Wealth of Nations'” a quarter of a century after it was first published, was known as the gold crises.

A generation's on again, off again wars with France stretched Britain’s finances to the breaking point. And after two particularly disastrous years, in 1795 and 1796, Britain had a 22 million pound deficit. With the economy and the banking system frozen near collapse, the government became desperate enough to introduce the Restrictive Act in 1797, which for the first time established paper money as legal tender, and put a limit on gold (then referred to as 'cash') withdrawals from the private-public conglomerate Bank of England. It was not much of a limit – 75% of personal gold could still be withdrawn. But the Restrictive Act was still considered so radical the ruling class had built in a time limit. The act would automatically expire in five years.

To David Ricardo the act was an outrageous violation of the “free market” and every business principle he knew. And, of course, he had suddenly lost direct access to a quarter of his 'cash', and was prevented from from demanding repayment of loans in “cash”. David was so angry he even struggled through the tangled web of Adam Smith's book, looking for a rationalization for his anger. And he found it.

David's problem was the Restrictive Act worked. Prices for food and goods stabilized, and despite predictions, gold poured back into the Bank of England. The act was so successful that in 1802 it was extended for another five years, even though England was now technically at peace. The lender class was burning with indignation. To men such as David Ricardo, it did not matter that the paper currency was working for consumers and industrialists. It did not matter that gold deposits were increasing at the Bank of England. The Act was not working for him, and thus it was not working. And he and his “monoterist” allies came up with a long list of ideological explanations as to why, despite the evidence, paper money was a failure.

In 1806 the new French Emperor Napoleon Bonaparte led his grand army into Austria, capturing an entire Austrian army and Vienna, and then smashing a combined Austrian and Russian army at Austerlitz. This victory gave France control of Europe, which was then closed to all British trade. This renewal of the war increased spending to 15 million pounds a year, and despite more “outragous taxes” capping out at 10%, forced the government accounts three million pounds in the red.

The economic disruption created a political opening, into which, in 1810, David Ricardo dispatched his first book on economics: “The High Price of Bullion, a Proof of the Depreciation of Bank Notes.” In it he argued that the Royal Mint's program of releasing quantities of new one and five pound notes – what modern economists would call cheap money - had made all pound notes worth less, or devalued the currency as a whole. As proof David pointed out that the price of an ounce of gold was higher at the European gold market in Hanover, Germany, than in London, which meant the English pound notes were worth less.

The directors of the Bank of England, which ran the mint, responded that it was the growing economy that was pushing the volume of paper currency up, not the reverse. Besides, they asserted, the alleged price variation between London and Hanover was actually a fluctuation in the local value of gold, not the value of the paper money. An ounce of gold was still worth no more than an ounce of gold in either market. But since the Bank of England now had more gold than the Hanover banks, you would expect an ounce of gold would cost more in Hanover. Despite the logic of the Bank's arguments, the bankers and money lenders in Parliament, such as David Ricardo, sitting on the “Bullion Committee” still called for a return to “hard” currency, not so they could profit from it (although they would), but because it was good policy. Still the members of parliament overwhelmingly voted down the committee's suggestions. And the economy kept improving.

By 1815 this hard money movement finally had enough politically clout to convince the Bank of England to reduce the supply of paper money. As predicted by the industrialists, that caused the economy to hiccup. Prices began to fall in 1819, when the Restrictive Act was repealed. In the next two years 89 regional and county banks failed across Britain. The unemployment rate climbed. And that allowed Ricardo and his allies to push for cutting the amount of paper money in circulation. As modern Nobel winning economist Paul Krugman puts it, “Fiscal policy that focuses on deficits rather than on job creation...serves the interests of creditors...(who) want governments to make honoring their debts the highest priority..” And that, in a nutshell, was the economic thought of David Ricardo.

In 1820 the Bank of England began reducing the supply of five pound notes in circulation, from 4 million pounds worth, to, by 1822, less than a million pounds worth. The contraction hit the fan in January of 1825. It started with a series of runs on small regional banks, eventually spreading to larger banks even in London, with customers desperately trying to withdraw their funds. That terrible year another 70 banks failed. That not everyone agreed with David Ricardo's policy is shown when you read the contemporary economist and politician Thomas Attwood, from Birmingham. He witnessed the Panic of 1825 and charged the banker friendly return of the gold standard had created “More misery, more poverty, more discord...than Attila caused in the Roman Empire.”

The loss of money in circulation cut demand, and the loss of demand threw hundreds of thousands out of work. Industrialists complained full employment had been sacrificed to Ricardo's “sound money” program. The directors of the Bank of England, which had become the central bank for England's economy, much as the Federal Reserve is for today's American economy, merely clicked their tongues in moral disapproval of those whose lives had been destroyed. But the panic refused to stop at the suckers window.

The same ideological dogma would lead to a panic again in 2007, when Lehman Brothers banking and brokerage house was allowed to fail, because it was seen as having violated the “moral hazard” rule. But that failure led to a panic which destroyed confidence in the entire banking system. Back in 1825, by December even the directors of the Bank of England were forced to step in, if to save no one else, to save their friends and people their knew. The Bank of England became the “lender of last resort”, printing new paper notes to pay debts that exceeded the failing banks' gold reserves. And with those guarantees, the panic subsided.

Logic would seem to demand that David Ricardo be noted in economic texts as a selfish short sighted fool, who thought that which favored him, favored all, and whose theories produced far more economic misery than success. But that is not the case. Another Nobel Prize winning economist, John Maynard Keynes, admitted to being perplexed as to why Ricardian economics “conquered England as completely as the Holy Inquisition conquered Spain." And Ricardian theory is setting today's conservative agenda. Why? Keynes suggests several reasons: “That it reached conclusions quite different from what the (average)...person would expect, added...to its intellectual prestige. That...translated into practice (it was), was austere...lent it virtue....That it could explain much social injustice and apparent cruelty as an inevitable incident in the scheme of progress...commended it to authority. That it afforded a measure of justification to the free activities of the individual capitalist, attracted to it the support of the dominant social force behind authority.”

In other words, what Ricardo thought made money for the bankers. He preached that government was the enemy of business. His Iron Law said increasing wages was actually bad for the workers. And when David Ricardo died in 1823, two years before the panic that proved him wrong, he left an estate valued at over 600,000 pounds (about $100 million today.) And to bankers that is the final judgement as to the accuracy of his views.

 And that is just nuts.

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