December 2017 – The Intelligent Collector Magazine

Presidential Politics Always Filled with Strange Twists and Turns

This rare 1902 Oklahoma Territorial Red Seal, with a vignette of President William McKinley, sold for $16,450 at an April 2015 Heritage auction.

By Jim O’Neal

The 56th Congress (1899-1901) had assembled in a spirit of tranquility. For the first time since 1883, Republicans were in control of every branch of government and they rejoiced in an exceptional unity. It was the third and fourth years of President William McKinley’s presidency and included one African-American, George Henry White of North Carolina – the last black member of Congress until 1928 and the last one from the South until 1972.

McKinley was in the midst of a dramatically expanding era of foreign trade and the entire nation was applauding U.S. Secretary of State John Hay’s negotiations for the “Open Door Policy” into China. Republicans were also free to take action on the president’s policy to establish a temporary government in Porto Rico (the name was changed by Congress in 1931), with free trade between the islands and the United States. In addition, they needed to provide a territorial government for newly acquired Hawaii.

The minority lost no time in seeking revenge. Lacking a constructive program and impotent to prevent legislation on which the majority united, Democratic leaders resorted to opposition in its rawest form: Seek any device to divide or delay the Republican steamroller (sound familiar?). Constitutional questions were raised on a wide range of resolutions, with special attention to matters involving the Philippines, another recent addition courtesy of the Spanish-American War in 1898. They accused the administration of censorship and obscuring facts from the people on a broad set of issues. Anything to slow them down.

Despite furious, intermittent debates, the chairman of the Committee on the Philippines recommended granting the president broad legislative authority, almost carte blanche legal authority to do as he pleased. This further outraged Democrats and even seemed radical to many Republican senators. But the legislation had been carefully constructed by the superbly knowledgeable Senator John Spooner and modeled on the act by which Congress had authorized Thomas Jefferson to govern Louisiana nearly 100 years earlier.

This further emboldened the president and he adopted an even broader assumption of power and established a new commission to “build up from the bottom” and create a central government to be established in Manila, with the head likely to become a civilian governor. For this position, McKinley wanted a man of unusual qualifications, not only administrative and judicial, but moral as well. He wanted someone who possessed the extraordinary tact and patience required to bridge an interim period of joint control with a military government.

In the middle of January, the president telegraphed Judge William Howard Taft of Cincinnati politely asking him to call.

Taft was an affable man of 42; jolly but impressive with a big body, big smile and a bigger judicial brain, serving as judge of the U.S. Circuit Court at Cincinnati for eight years. Though Taft was a prominent jurist and a highly respected Republican, he did not know McKinley well during McKinley’s time as governor of Ohio. Taft had mingled in politics without becoming a typical politician. He was far too fastidious for the compromises and bargains, uneasy with the quid pro quo and backslapping of politics. Further, he did not have a high opinion of McKinley, despite a cordial dinner on the night of the Ohio elections of 1899.

Less than three months later came this unexpected call from the White House, presumably at the urging of Mark Hanna, the ultimate kingmaker.

Taft was perplexed by the call since he had a single all-consuming ambition, to become a member of the Supreme Court, and there had been no talk of a vacancy. When he arrived at the White House, McKinley came straight to the point, asking him to be a member of the Philippines commission and intimating he would head it. Years later when he was president-elect of the United States, Taft recalled the conversation in a speech: “Judge, I’d like you to go to the Philippines.” “Mr. President, I would like to help, but I am sorry we got the Philippines and I don’t want them.” “Judge, you don’t want them less than I do, but we’ve got them and I can trust a man who doesn’t want them more than a man who does!”

So Judge William Taft became governor of the Philippines (a job he didn’t want) and, ultimately, the 27th president of the United States (another job he reluctantly accepted). He finally got his dream job as the Chief Justice of the Supreme Court on July 11, 1921. He would serve until he retired on Feb. 3, 1930. After his death the following month, he was buried at Arlington National Cemetery, the first president and first Supreme Court Justice to be interred there.

Presidential politics took some strange twists and turns along the way … and some things never seem to change.

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chair and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

National Debt on Automatic Pilot to More Growth

A letter by President George W. Bush, signed and dated July 4, 2001, sold for $16,730 at an April 2007 Heritage auction.

By Jim O’Neal

In May 2001 – just 126 days after President George W. Bush took office – Congress passed his massive tax proposal. The Bush tax cuts had been reduced to $1.3 trillion from the $1.65 trillion submitted, but it was still a significant achievement from any historical perspective. It had taken Ronald Reagan two months longer to win approval of his tax cut and that was 20 years earlier.

Bush was characteristically enthusiastic about this, but it had come with a serious loss in political capital. Senator James Jeffords, a moderate from Vermont, announced his withdrawal from the Republican Party, tipping control of the Senate to the Democrats, the first time in history that had occurred as the result of a senator switching parties. In this instance, it was from Republican to Independent, but the practical effect was the same. Several months later (after the terrorist attacks on the World Trade Center and the Pentagon), there was a loud chorus of calls to reverse the tax cuts to pay for higher anticipated spending.

Bush had a counter-proposal: Cut taxes even more!

Fiscal conservatives were worried that there would be the normal increase in the size and power of the federal government, lamenting that this was a constant instinctive companion of hot wars. James Madison’s warning that “A crisis is the rallying cry of the tyrant” was cited against centralization that would foster liberal ideas about the role of government and even more dependency on the federal system.

Ex-President Bill Clinton chimed in to say that he regretted not using the budget surplus (really only a forecast) to pay off the Social Security trust fund deficit. Neither he nor his former vice president had dispelled the myth about a “lock box” or explained the federal building in Virginia that had been built exclusively to hold government IOUs to Social Security. In reality, they were simply worthless pieces of scrip, stored in unlocked filing cabinets. The only changes that had ever occurred with Social Security funds were whether they were included in a “unified budget” or not. They had never been kept separate from other revenues the federal government received.

But this was Washington, D.C., where, short of a revolution or civil war, change comes in small increments. Past differences, like family arguments, linger in the air like the dust that descends from the attic. All of the huge surpluses totally disappeared with the simple change in the forecast and have never been discussed since.

Back at the Treasury Department of 15th Street, a statue to Alexander Hamilton commemorates the nation’s first Treasury Secretary, a fitting honor to the man who created our fiscal foundation. But on the other side stands Albert Gallatin, President Thomas Jefferson’s Treasury Secretary, who struggled to pay off Hamilton’s debts and shrink the bloated bureaucracy he built.

Hamilton also fared better than his onetime friend and foe, James Madison. The “Father of the Constitution” had no statue, no monument, no lasting tribute until 1981, when the new wing of the Library of Congress was named for him. This was a drought that was only matched by John Adams, the Revolutionary War hero and ardent nationalist. It was only after a laudatory biography by David McCulloch in 2001 that Congress commissioned a memorial to the nation’s second president.

Since the Bush tax cut and the new forecast, the national debt has ballooned to $20 trillion as 9/11, wars in Iraq and Afghanistan, and the 2008 financial meltdown produced a steady stream of budget deficits in both the Bush and Barack Obama administrations. The Donald Trump administration is poised to approve tax reform, amid arguments on the stimulative effect on the economy and who will benefit. In typical Washington fashion, there is no discussion over the fact that the national debt is inexorably on automatic pilot to $25 trillion, irrespective of tax reform. But this is Washington, where your money (and all they can borrow) is spent almost with no effort.

“Just charge it.”

News Reporting Has Come a Long Way, but Kinks Remain

A sketch of Edward R. Murrow, signed, by artist Johnny Raitt is among six sketches of famous newscasters that went to auction in July 2010.

By Jim O’Neal

In the past year, several prominent newspapers and TV networks have corrected or retracted provocative political stories that were factually wrong. Critics are prone to blame the insatiable appetite to feed the 24/7 news-cycle beast and, increasingly, a news organization’s rush to be first. This has been compounded by the steady transition from costly field correspondents to much-less expensive panelists sitting around a table in the TV studio offering personal opinions.

Most of these discussions start with “I think” or “In my opinion,” which by definition blurs facts with subjective comments. Unbiased, factual reporting is mixed into a lethal cocktail that blurs reality and has inexorably led to an environment where charges of “fake news” are routine. Then social media further distort issues and reality. People can now easily shop for any “facts” on TV or the internet that support their opinions. However, the “need for speed” is not a recent phenomenon.

Triggered by the oldest of journalism’s preoccupations – the desire to be first with a dramatic story – Edward R. Murrow, William L. Shirer and their network, the Columbia Broadcasting System (CBS), made broadcast journalism history on March 13, 1938. What set the stage was CBS founder and CEO William S. Paley’s realization that his radio network had just been soundly beaten again by the National Broadcasting Company (NBC) and their reporter “Ubiquitous Max” Jordan, with his eyewitness account of Austria’s fall.

Worse, the fault was Paley’s. Until Jordan’s story and its effect on America, Paley had supported news director Paul White’s decision not to use network employees for hard-news reporting. To their increasing chagrin, men like Murrow and Shirer were forced to cover truly soft stories like concerts instead of Adolf Hitler and the Third Reich’s actions and intentions. Paley had had enough. He asked White to call Shirer and tell him, “We want a European roundup tonight.” The broadcast would cover the European reaction to the Nazis’ Austrian takeover. The players would include Shirer in London with a member of Parliament; Murrow in Vienna; and American newspaper correspondents in Paris, Berlin and Rome.

They had eight hours to put together what had never been done before. As Stanley Cloud and Lynne Olson describe in their book The Murrow Boys: “Never mind that it was five o’clock, London time, on a Sunday afternoon, which meant that all offices were closed and that all technicians and correspondents and members of Parliament they would need were out of town, off in the country or otherwise unreachable. Never mind the seemingly insuperable technical problems of arranging the lines and transmitters, of ensuring the necessity of split-second timing. Never mind any of that. That was what being a foreign correspondent was all about. It was part of the code of the brotherhood. When the bastards asked if you could do something impossible, the only acceptable answer was yes. Shirer reached for the phone and called Murrow in Vienna.”

Beginning at 8 p.m., with announcer Robert Trout’s words, “We take you now to London,” Murrow, Shirer and their comrades proved radio was not only able to report news as it occurred but also able to put it into context, to link it with news from elsewhere – and do it with unprecedented speed and immediacy. They set in motion with that 30-minute broadcast in March 1938 a chain of events that would lead, in only one year, to radio’s emergence as America’s chief news medium and to the beginning of CBS’s decades-long dominance of broadcast journalism. The broadcasts by Murrow and his team during the London blitz and over the entire course of the war set the standard for broadcast reporting style and eloquence.

We have come a long way since then, but it’s not clear to me if we’ve made any progress.

Chester Arthur Surprised His Critics, Overcame Negative Reputation

This ribbon with an engraved portrait of Chester Alan Arthur, issued as a souvenir for an Oct. 11, 1882, “Dinner to The President of the United States by The City of Boston,” sold for $437 at a November 2014 auction.

By Jim O’Neal

President Ulysses S. Grant appointed Chester Alan Arthur to the lucrative post of Collector of the Port of New York in 1871. Arthur held the job for seven years, and with an annual gross income of $50,000, was able to accumulate a modest fortune. He was responsible for the collection of about 75 percent of the entire nation’s duties from ships that landed in his jurisdiction, which included the entire coast of New York state, the Hudson River and ports in New Jersey.

In 1872, he raised significant contributions from Custom House employees to support Grant’s successful re-election for a second term. The spoils system was working as designed, despite occasional charges of corruption.

Five years later, the Jay Commission was created to formally investigate corruption in the New York Custom House and (future president) Chester Arthur was the primary witness. The commissioner recommended a thorough housecleaning and President Rutherford B. Hayes fired Arthur and then offered him an appointment as consul general in Paris. Arthur refused and went back to New York law and politics.

At the 1880 Republican National Convention, eventual nominee James Garfield first offered the VP slot to wealthy New York Congressman Levi Morton (later vice president for Benjamin Harrison), who refused. Garfield then turned to Chester Arthur, who, when he accepted, declared, “The office of the vice president is a greater honor than I ever dreamed of attaining.” It would be the only election he would ever win, but it was enough to foist him into the presidency.

The Garfield-Arthur ticket prevailed and after being sworn in on March 4, 1881, the 49-year-old Garfield’s first act was to turn and kiss his aged mother. It was the first time a president’s mother had ever been present at an inauguration. She would outlive her son by almost seven years. President James Polk (1845-1849) also died three years before his mother, the first time that had happened.

On the morning of July 2, President Garfield was entering the Baltimore and Potomac Railroad Station in Washington, D.C., where he was to board a train to attend the 25th reunion of his class at Williams College. A mentally disturbed office seeker, Charles J. Guiteau, shot him twice. He died 80 days later and for the fourth time in history, a man clearly only meant to be vice president ascended to the presidency.”

“CHET ARTHUR PRESIDENT OF THE UNITED STATES! GOOD GOD!”

Although President Arthur’s greatest achievement may have been the complete renovation of the White House, he surprised even some of his harshest critics. Mark Twain may have summed it up best: “I am but one in 55 million, still in the opinion of this one-fifty-five millionth of the country’s population, it would be hard to better President Arthur’s administration.”

Faint praise, yet probably accurate. (First, do no harm.)

‘MAS*H’ Showed Us How Far Intelligent TV Can Go

Rick Meyerowitz’s original *M*A*S*H* art for a 1974 cover of *TV Guide* sold for $657 at a June 2008 Heritage auction.

By Jim O’Neal

By 1983, the population of the United States had increased to 232 million … and virtually everyone was watching television on a regular basis. On Feb. 23, over 50 percent of them (best estimate is 125 million) tuned in that night to the last episode of one of their all-time favorite shows, M*A*S*H.

For weeks, newspapers had run contests asking readers to suggest how the show should end. “M*A*S*H Bashes” were held in every major city and people donned old army fatigues to watch the show, primarily in bars. Seventy-one percent of viewers watching television that night helped “Goodbye, Farewell and Amen” become the most-watched show in history. (No. 2 is Cheers for its finale “One For The Road.”)

We were saying farewell, not just to beloved television characters, but to an era and anti-war spirit that the show had captured so brilliantly.

M*A*S*H, which ran for 11 years (1972-83), with 251 episodes that snagged nearly 100 Emmy nominations, is still broadcast in reruns and is considered one of network television’s finest efforts. It was based on Richard Hooker’s 1968 bestselling novel Mash: A Novel About Three Army Doctors and the 1970 feature film directed by Robert Altman. (Note: Some nitpickers claim it was really based on the failed film M*A*S*H Goes to Maine, which itself was based on Hooker’s 1972 book sequel.)

The story of a fictional Mobile Army Surgical Hospital near the front lines of the Korean War (technically a U.N. “police action”), the TV show was filled with the high jinks typical of the book and movie, yet it established its own tone of prickly intelligence, wit and sardonic warmth. In tackling the darker aspects of war, the show perfectly echoed a conscience-stricken America, deeply troubled by Vietnam. In reality, and with an exquisite touch of irony, the book’s author was a surgeon from Maine who served in a MASH unit in Korea and actually hated the show for its anti-war message!

M*A*S*H creator, comedy writer Larry Gelbart, put the wise-cracking, womanizing, yet humane Benjamin Franklin “Hawkeye” Pierce (Alan Alda) at the center of the action. Sharing Hawkeye’s flea-bitten tent were fellow surgeons “Trapper” John McIntyre and Frank Burns, who was having an affair with Margaret “Hot Lips” Houlihan, the strong-willed head nurse. A favorite was Max Klinger, a cross-dresser who would try anything to get home. The cast changed over time, and finally even Gelbart left, exhausted from battles with network sensors.

The last episode, “Goodbye, Farewell and Amen,” which ran 2½ hours, was a remarkable culmination of everything the series represented: good, funny television drama that probed the ugly underside of war – in that last case, the savagery of peace in the closing days of Korea.

“What happened on the bus?” psychiatrist Sidney Freedman keeps asking Hawkeye, who in the final episode’s opening is in a mental institution.

Slowly, we learn that on July 4, after a day at the beach, the unit’s bus stopped to pick up refugees and wounded G.I.’s who told them to drive the bus into the bushes to hide from an enemy patrol. Hawkeye keeps hissing at a refugee woman, to keep her rooster on her lap quiet. The woman complies and eventually the repressed memory emerges … the woman has smothered her own child.

Hawkeye shakily returns to the 4077th and on the night of the armistice, one of the worst rounds of casualties is brought in. “Does this look like peace to you?” Margaret asks. Then over the PA system comes a litany of the war’s damage, ending with “2 million killed and 100,000 Korean orphans.” As the unit is broken down, each character gropes toward civilian life.

As Hawkeye lifts off in a helicopter, he sees down below on the deserted 4077, spelled out in stones, a message from his friend B.J. Hunnicutt: GOODBYE.

This last episode, considered the best in television history, was more than a goodbye. It was an example of how far serious and intelligent television can go, and a reminder that it very rarely does.

Carnegie Coveted Crown of Richest Man in the World

This Andrew Carnegie photograph – inscribed, signed and dated Dec. 11, 1917 – realized $1,015 at a September 2011 Heritage auction.

By Jim O’Neal

Jeff Bezos of Amazon is the world’s richest man, with an estimated net worth of more than $100 billion. A hundred years ago (1916), John D. Rockefeller became America’s first billionaire, which in today’s economy would be two to three times greater than Bezos’ fortune. In the late 19th century, Andrew Carnegie coveted this crown and saw steel as his road to stardom.

In the post-Civil War era, America grew rapidly as railroads crisscrossed the country and extended their reach to all four corners. Electricity arrived to light up buildings and homes, oil supplemented kerosene and coal, iron and steel production grew as demand soared to keep up with rapid economic expansion. Occasional booms/busts occurred since the markets were unregulated and coordination was difficult.

Carnegie had led the growth in the American steel industry and his ambition to snatch Rockefeller’s crown became more acute. One of the key industry developments involved the construction of a steel bridge to connect St. Louis and East St. Louis on opposite banks of the mighty Mississippi River. The Eads Bridge, named for its designer, engineer James B. Eads, relied heavily on steel for its revolutionary design. It was set to become the first significant bridge using steel girders and a cantilever form.

A young Carnegie supplied the financing and the steel, despite skepticism over the sturdiness of the structure after it was completed. A man named John Robinson came up with a clever way to dispel any doubts. Elephants were believed to have good instincts about where they stepped, so Robinson borrowed a fully grown one from a traveling circus. On June 14, 1874, he led the beast across the length of the bridge, with crowds on both ends going wild. Later, a convoy of locomotives were driven back and forth as a further (and final) test of soundness.

On July 4, 1874, the bridge officially opened with General William Tecumseh Sherman driving the last spike as 150,000 people looked on. Demand for steel exploded, forcing Carnegie to develop creative ways to boost production. One was a modified vertical production technique that maximized factory output. But that was still not enough. It became obvious that a 12-hour, six-day workweek was needed. The only problem was that workers’ health couldn’t keep up. Carnegie hired tough managers to impose the onerous schedule and he left for Scotland to escape the critics. Later, his guilty conscience led him to an unprecedented binge of philanthropy after he sold the Carnegie Steel Company to J.P. Morgan for $480 million. It became U.S. Steel, the first billion-dollar corporation in the world.

John D. Rockefeller took an even more devious strategy to his domination of the oil-refining industry. In 1872, he formed a shell corporation: the South Improvement Company (SIC). He then struck an agreement with large railroad companies whereby they sharply raised freight rates for all oil refineries, except those in the SIC (notably Standard Oil), which received substantial rebates – up to 50 percent off crude and refined oil shipments. Then came the most deadly innovation – SIC members also received “drawbacks” on shipments made by rival refineries. So when Standard Oil made shipments from Pennsylvania to Cleveland, they received a 40-cent rebate on every barrel, plus another 40 cents for every barrel of oil shipped by every competitor!

It has been called “an instrument of competitive cruelty unparalleled in industry.” In fact, it was collusion on a scale never equaled in American history. And it was only one of several techniques employed. But it did help Mr. Rockefeller and his investors achieve a 90 percent share of the entire U.S. oil business.

All Bezos has is the internet.