August 2019 – The Intelligent Collector Magazine

FDR deserves credit for steering our ship through dangerous waters

This Wendell Willkie “Out at Third” campaign button – a reference to Franklin Roosevelt’s 1940 third-term candidacy – sold for $9,560 at a November 2009 auction.

By Jim O’Neal

On Sept. 19, 1940, loyal hard-core supporters of the New Deal awoke to a rather startling surprise. The venerable editorial gurus at The New York Times announced their choice for the upcoming presidential election … and it was not Franklin Delano Roosevelt!

The Times had supported FDR in 1932 and 1936, but in 1940, they decided to support his Republican opponent, Wendell Willkie. In rationalizing this decision, they prepared a long preamble describing the seriousness of national and world affairs, but without offering anything new that was not already common knowledge: “One of the great crises in American history … a hostile force sweeping across Europe … impossible to continue isolation … world revolution at stake … Americans fortunate to have two candidates who agree on fundamental foreign policy.”

To buttress their choice of Willkie, they asserted he was better equipped to provide the country with an adequate national defense. They described him as a practical liberal who understood the need for increased production and, lastly, because the fiscal policies of Roosevelt had failed disastrously. And, as a coup de grâce, it was their belief that the traditional safeguards of democracy were failing everywhere. They did not mention that Willkie was a corporate lawyer, read Marx and lobbied for his college to teach socialism. They also failed to mention that Fortune magazine had dedicated an entire edition to Willkie.

Instead, they added to this litany the old third-term taboo, a principal that dated to George Washington. Perhaps they didn’t realize that Washington was too sick to serve a third term (he would die the following year) or that Thomas Jefferson turned down a third term for purely precedent-setting political reasons.

But The Times conceded that FDR had a taken a number of steps to bolster defense, including the new Defense Advisory Commission, before quickly deriding it for lack of real power (it had become a mere consultancy) unable to cut through Washington’s red tape. Instead, they much preferred Willkie’s call for individual sacrifice, hard work and “sweat and toil.” They found this more reassuring than Roosevelt’s speeches, designed to maintain morale. In essence, they were charging the president with a lack of substance.

In choosing Willkie, they were arguing for a business leader with practical experience in stimulating economic growth, while expanding industrial production. “In this field, Willkie is the professional and Mr. Roosevelt the amateur.” A harsh indictment of the country’s leader!

Then the NYT in its editorial proceeded to excoriate FDR for fiscal policy (under an argument it titled “The Road to Bankruptcy”) by highlighting three specific policies that had become reckless:

● A silver policy that had grown to incredible proportions. They cited more than 2 billion ounces of silver – “which our government has no earthly use” – purchased by the Treasury “at overvalued prices in an artificial market. This policy makes no sense, except as a political maneuver.”

● A national debt that had doubled in seven years.

● Welfare programs that would lead citizens to bed rather than work.

In retrospect, we know the NYT was wrong on many levels. Collectively, the New Deal kept the country together through the entirety of the two greatest travails ever visited on the United States. Times were tough and sacrifices many, but we emerged with our republic intact. Roosevelt proved himself tough enough to steer our ship through rough and dangerous waters.

The economic and social reforms of the New Deal created a legacy of new solutions, from the Works Progress Administration and Social Security to banking and financial regulations and a modicum of security to millions of people who’d never tasted it. FDR managed to impart a freedom from fear that resulted in a platform to take on the sacrifices of the impending war.

We ramped up a massive display of Americanism. The Selective Service Act established the first peacetime conscription in U.S. history, while Rosie the Riveter galvanized generations of women as factory workers, warriors and healers … all keeping the home safe. The stimulus from war production produced a Keynesian effect that wiped out the lingering depression.

Thanks to the strategic blunder of Dec. 7, 1941, we saved the free world and possibly civilization as well. Starting with a “Germany First” strategy (whereby the United States and the United Kingdom agreed to subdue Nazi Germany first), Americans gradually led the world back to peace and, in the process, became the Peace-Keeper-Rebuilder.

Perhaps for the first time in modern history, conquering armies did not take vast territories or treasure. We brought our troops home and resumed the American story.

The world owes America a debt that has long been forgotten.

A little-known postscript: FDR and Willkie discussed starting a new liberal party to supplant Republicans and Democrats. Willkie died before the idea had a chance to become a reality, but it’s fun to contemplate how different things might be today.

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].

Who will continue the story of the greatest country in history?

The myth of George Washington chopping down a cherry tree appears on this tin mechanical badge, which dates to 1889.

By Jim O’Neal

It is always a pleasant surprise to discover an obscure name that has been lost in the sands of America’s history. Charles Thomson (1729-1824) falls into that category. He was Secretary of the Continental Congress from 1774 continuously until the U.S. Constitution was firmly in place and the bi-cameral government was functioning in 1789.

He was also the only non-delegate to actually sign the Declaration of Independence. A surprisingly active participant in the Revolutionary War, he wrote a 1,000-page manuscript on the politics of the times. It included the formation of the Continental Congress and a daily recap of speeches and debates right up to the agreement to go forward. In concept, it was a remarkable, contemporary record that is unique (except for notes James Madison complied). The public was not allowed to even attend the meetings in Philadelphia.

Alas, Thomson’s manuscript was never published since he destroyed it. Purportedly, it was because he wanted to preserve the reputations of these heroes and assumed that others would write about these historic times. The obvious implication is that his candid verbatim notes might tarnish some of his fellow colleagues. Thomson receives credit for helping design the Great Seal of the United States and since he personally chose what to include in the official journal of the Continental Congress, we’re left to wonder what he omitted or later burned … another example of why history is normally not considered precisely correct.

As Secretary of the Congress, Thomson personally rode to Mount Vernon, Va., and delivered the news to George Washington that he had been elected president of the United States. He told Washington that Congress was delighted he’d agreed “to sacrifice domestic ease and private enjoyments to preserve the happiness of your country.” Washington, in turn, said he couldn’t promise to be a great president, but could promise only “that which can be done by honest zeal.”

Political pundits opine that the office of the president was perfectly suited for George Washington, especially during the early formative years of the nation. A well-known hero in the fight for independence, he was a national leader who gained power without compromising himself or his principles. Absent the burden of a political party, he could have easily assumed the kind of monarchical power the nation had fought against. But, like his hero Cincinnatus, he had laid down his sword and returned to the plow. Clearly, this was a case of the office seeking the man as opposed to the reverse.

Washington truly did not aspire to the presidency – perhaps unique compared to all the men who followed. In his own words, he considered those eight years a personal sacrifice. In that era, land was the ultimate symbol of wealth and prestige. Through inheritance, he had acquired Mount Vernon and roughly 2,000 acres. That was not close to satisfying his ambitions and he spent much of his private life in a search of more … much more!

Historian John Clark called him an “inveterate land-grabber” and there’s plenty of evidence to support the claim. In 1767, he grabbed land set aside for Indians by the Crown by telling the surveyor to keep it a secret. This was followed by another 20,000 acres designated for soldiers in the French and Indian War. Washington arranged for officers to participate and then bought the land after telling the solders it was hilly, scrubby acreage. Washington would later boast that he had received “the cream of the country.”

Most biographies have been consistent in pointing out that land may have been a prime factor in his decision to court the widow Martha Parke Custis. They invariably point to his strong affection for Sally Fairfax, but she was his best friend’s wife. Martha was not without attraction. As one of the richest widows in North America, her marriage to George resulted in a windfall since what was hers became his. In addition to nearly 100 slaves, her 6,000 acres made George a very rich man. Details of their relationship are not available since Martha burned their love letters after his death.

However, since slaves over 12 were taxed, there are public records. During the first year of their marriage (he was 26 and she was 28), he acquired 13 slaves, then another 42 between 1761 and 1773. From tax records, we know he personally owned 56 slaves in 1761 … 62 in 1762 … 78 in 1765 … and 87 in the 1770s. Washington, Jefferson, Madison and most Virginia planters openly acknowledged the immorality of slavery, while confessing an inability to abolish it without financial ruin.

Washington had a reputation for tirelessly providing medical treatment for his slaves. But, was it for regard of property or more humane considerations? I suspect the answer lies somewhere in between.

As the first president, the paramount issue – among the many priorities of his first term – was to resolve the new government’s crushing debt. In 1790, the debt was estimated at $42 million. It was owed to common citizens of modest means and to thousands of Revolutionary War veterans whose IOUs had never been redeemed as stipulated by the Articles of Confederation. The war pension certificates they held had declined dramatically by 15 to 20 percent of face value.

Raising taxes was too risky and states might rebel. Ignore the debt, as had been the custom for several years, and the federal government risked its already weak reputation. The new president had to turn to his Cabinet for advice. He had an excellent eye for talent and the brilliant Alexander Hamilton was Treasury Secretary. He quickly formed a plan to create a new Bank of the United States (BUS). Since the bank would be backed by the federal government, people would feel safer about lending money and, as creditors, they would have a stake in both the bank and the government. Although Thomas Jefferson opposed the BUS, Washington prevailed in Congress.

Washington was re-elected four years later, again with a unanimous vote in the Electoral College. The first popular voting would not occur until 1824 and since that time, five presidential candidates have been elected despite losing the popular vote: John Quincy Adams (1824), Rutherford Hayes (1876), Benjamin Harrison (1888), George W. Bush (2000), and Donald J. Trump (2016).

It’s not easy starting a new country. There were no cherry trees to chop down as Parson Weems’ story describes. George Washington did not throw a silver dollar across the Rappahannock River. These are all fairy tales that grew over time. Yes, George Washington owned slaves and told a lie now and then. He was obsessed with land at one time. But, when it came to crunch time, he stepped up and committed eight years of his life to his country.

The big question now seems to be where we’ll find another man or woman to continue the story of the greatest country in history?

Latest volume on political career of Johnson can’t come soon enough

A photo of Lyndon B. Johnson being sworn in as president, inscribed and signed by Johnson, sold for $21,250 at an August 2018 Heritage auction.

By Jim O’Neal

Like other reverential fans of author Robert Caro’s multi-volume biography of Lyndon Baines Johnson, I’m still waiting patiently for him to finish volume five. It will cover the entire span of LBJ’s presidency, with a special focus on the Vietnam War, the Great Society and the Civil Rights era. Caro’s earlier biography of Robert Moses, The Power Broker, won a well-deserved Pulitzer in 1974.

In 2011, Caro estimated that his final volume on LBJ (his original trilogy had expanded to five volumes) would require “another two to three years to write.” In May 2017, he confirmed he had 400 typed pages completed and intended to actually move to Vietnam. In December 2018, it was reported Caro “is still several years from finishing.”

Since Caro (b.1935) is two years older than me, there may exist a certain anxiety that time may expire unexpectedly. However, it will still be worth the wait and I shall consume it like a fine 3-Star Michelin dinner in Paris. Despite all that’s been written about this period of time, Caro is certain to surprise with new facts and his unique, incomparable perspective.

Recall that planning for the 1963 campaign was well under way by autumn for the 1964 presidential election. The razor-thin victory of JFK over Richard Nixon in 1960 (112,000 votes or 0.12 percent) had largely been due to VP Johnson’s personal efforts to deliver Texas to the Democrats.

Others are quick to remind us that allegations of fraud in Texas and Illinois were obvious and that Nixon could have won if he had simply demanded a recount. New York Herald Tribune writer Earl Mazo had launched a series of articles about voter fraud. However, Nixon persuaded him to call off the investigation, telling him, “Earl, no one steals the presidency of the United States!” He went on to explain how disruptive a recount would be. It would damage the United States’ reputation in foreign countries, who looked to us as the paragon of virtue in transferring power.

Forty years later, in Bush v. Gore, we would witness a genuine recount in Florida, with teams of lawyers, “hanging chads” and weeks of public scrutiny until the Supreme Court ordered Florida to stop the recount immediately. Yet today, many people think George W. Bush stole the 2000 presidential election. I’ve always suspected that much of today’s extreme partisan politics is partially due to the bitter rancor that resulted. His other sins aside, Nixon deserves credit for avoiding this, especially given the turmoil that was just around the corner in the tumultuous 1960s.

Back in 1963, Johnson’s popularity – especially in Texas – had declined to the point JFK was worried it would affect the election. Kennedy’s close advisers were convinced a trip West was critical, with special attention to all the major cities in Texas. Jackie would attend since she helped ensure big crowds. Others, like U.N. Ambassador Adlai Stevenson and Bobby Kennedy, strongly disagreed. They worried about his personal safety. LBJ was also opposed to the trip, but for a different reason. Liberal Senator Ralph Yarborough was locked in a bitter intraparty fight with Governor John Connally; the VP was concerned it would make the president look bad if they both vied for his support.

We all know how this tragically ended at Parkland Hospital on Nov. 22 in Dallas. BTW, Caro has always maintained that he’s never seen a scintilla of evidence that anyone other than Lee Harvey Oswald was involved … period. Conspiracy theorists still suspect the mob, Fidel Castro, Russia, the CIA or even the vice president. After 56 years, not even a whiff of doubt.

Lyndon Baines Johnson was sworn in as president in Dallas aboard Air Force One by Judge Sarah T. Hughes (who remains the only woman in U.S. history to have sworn in a president). LBJ was the third president to take the oath of office in the state where he was born. The others were Teddy Roosevelt in Buffalo, N.Y., following the McKinley assassination (1901) and Calvin Coolidge (1923) after Harding died. Coolidge’s first oath was administered by his father in their Vermont home. Ten years later, it was revealed that he’d taken a second oath in Washington, D.C., to avert any questions about his father’s authority as a Justice of the Peace to swear in a federal-level officer.

On her last night in the lonely White House, Jackie stayed up until dawn writing notes to every single member of the domestic staff, and then she slipped out. When the new First Lady walked in, she found a little bouquet and a note from Jackie: “I wish you a happy arrival in your new home, Lady Bird,” adding a last phrase, “Remember-you will be happy here.”

It was clear that the new president was happy! Just days before, he was a powerless vice president who hated Bobby Kennedy and the other Kennedy staff. They had mocked him as “Rufus Corn Pone” or “Uncle Corn Pone and his little pork chop.” Now in the Oval Office, magically, he was transformed to the old LBJ, who was truly “Master of the Senate.” Lady Bird described him with a “bronze image,” revitalized and determined to pass Civil Rights legislation that was clogged in the Senate under Kennedy. Historians are now busy reassessing this period of his presidency, instead of the prism of the Vietnam quagmire.

LBJ would go on to vanquish Barry Goldwater, the conservative running as a Republican in 1964, with 61.1 percent of the popular vote, the largest margin since the almost uncontested race of 1820 when James Monroe won handily in the “Era of Good Feelings.” 1964 was the first time in history that Vermont voted Democratic and the first time Georgia voted for a Republican. After declining to run in 1968, LBJ died five years later of a heart attack. Jackie Kennedy Onassis died on May 19, 1994, and the last vestiges of Camelot wafted away…

Clock ticking for one of America’s most influential retailers

A photograph signed by Richard W. Sears sold for $1,792 at an October 2009 Heritage auction.

By Jim O’Neal

This is a highly condensed story of an American retailing giant that only seems relevant as just another casualty of internet e-tailing. In cultural terms, it is generally portrayed as just another backwater wasteland. But this situation seems oddly different, since it seems like Sears has been a central player in the story of American life.

For a long time, the retailer’s products, publications and people influenced commerce, culture and politics. And then, slowly, it became subsumed into the gravitational pull of business bankruptcies that is relentless when corporate balance sheets weaken and finally fail. I selected it – rather than, say, Montgomery Ward, Atlantic & Pacific, or J.C. Penney – because of its long history and because its demise was like losing a century of exciting surprises to an indifferent bankruptcy judge who yawned and gaveled it into the deep, dark cemetery of obscurity.

Sears has roots to 1886, when a man named Richard W. Sears began selling watches to supplement his income as a railroad station agent in North Redwood, Minn. The next year, he moved the business to Chicago and hired Alvah C. Roebuck, a watchmaker, through a classified ad. Together, they sold watches and jewelry. The name was changed in 1893 to Sears, Roebuck & Company and by 1894, sewing machines and baby carriages were added to its flourishing mail-order business. Its famous catalogs soon followed.

Sears & Roebuck helped bring consumer culture to middle America. Think of the isolation of living in a small town 120 years ago. Before the days of cars, people had to ride several days in a horse and buggy to get to the nearest railroad station. What Sears did was make big-city merchandise available to people in small towns, desperate for news and yearning for new things. It made hard work worthwhile knowing that there was a surprise just over the horizon.

The business was transformed when Richard Sears harnessed two great networks – the railroads, which now blanketed the entire United States, and the mighty U.S. Postal Service. When the Postal Service commenced rural free delivery (RFD) in 1896, every homestead in America came within reach.

And Richard Sears reached them!

He used his genius for promotion and advertising to put his catalogs in the hands of 20 million Americans, at a time when the population was 76 million. Sears catalogs could be a staggering 1,500 pages with more than 100,000 items. When pants supplier and manufacturing wizard Julius Rosenwald became his partner, Sears became a virtual, vertically integrated manufacturer. Whether you needed a cream separator or a catcher’s mitt, or a plow or a dress, Sears had it.

The orders poured in from everywhere, as many as 105,000 a day at one point. The company had so much leverage that it could nearly dictate its own terms to manufacturers. Suppliers could flourish if their products were selected to be promoted. Competition was fierce and the Darwinism effect was in full play. Business boomed as the tech-savvy company built factories and warehouses that became magnets for suppliers and rivals as well. City officials complained that it was harming nearby small-town retailers (sound familiar?).

There was a time when you could find anything you wanted in a Sears catalog, including a house for your vacant lot. Between 1906 and 1940, Sears sold 75,000 build-from-a-kit houses, some still undoubtedly still standing. The Sears catalog was second only to the Holy Bible in terms of importance in many homes.

In 1913, the company launched its Kenmore brand, first appearing on a sewing machine. Then came washing machines, dryers, dishwashers and refrigerators. As recently as 2002, Sears sold four out of every 10 major appliances, an astounding 40 percent share in one of the most competitive categories in retailing.

By 1925, they opened a bricks-and-mortar retail store in Chicago. This grew to 300 by 1941 and more than 700 in the 1950s. When post-war prosperity led to growth in suburbia, Sears was perfectly positioned to cash in on another major development: the shopping mall. A Sears store was an ideal fit for a large, corner anchor store with plenty of parking. Sears revenue topped $1 billion for the first time in 1945 and 20 years later it was the world’s largest retailer and, supposedly, unassailable.

Oops.

By 1991, Walmart had zipped by them … never bothering to pause and celebrate. For generations, Sears was an innovator in every area, including home delivery, product testing and employee profit-sharing, with 350,000 dedicated employees and 4,000 outlets. What went wrong?

The answer is many things, but among the most significant was diverting their considerable retail cash flow in an effort to diversify. Between 1981-85, they went on a spending spree, first acquiring Dean Witter Reynolds, the fifth-largest stock brokerage, and then real estate company Coldwell Banker. They ended up selling the real estate empire and then spun off Dean Witter in a desperate effort to return to their retailing roots. This was after someone decided to build a 110-story, 1,450 foot skyscraper with 3 million square feet (the tallest building in the world at the time) to centralize all their Chicago people and then lease whatever was left over. You have to wonder what all these people were doing. (It wasn’t selling perfume or filling catalog orders!). The Sears Tower is now called Willis Tower (don’t ask).

They stopped the catalogs in 1993. One has to speculate what would have happened had they simply put their entire cornucopia of goodies online. I know timing is everything, but in 1995, on April 3, a scientist named John Wainwright bought a book titled Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought. He purchased it online from an obscure company called Amazon.

I will miss Sears when they gurgle for the last time. I cherished those catalogs when we lived in Independence, Calif. (the place Los Angeles stole water from via a 253-mile aqueduct). Me and my Boy Scout buddies all made wish lists, while occasionally sneaking a peek at the lingerie section.

Are we ready to continue building this great nation?

Two weeks before the Treaty of Paris ended the Spanish-American War, Princeton Professor Woodrow Wilson in this letter to an anti-imperialist says it’s too late to protest and that the focus should be on the “momentous responsibilities” facing the nation.

By Jim O’Neal

Many historians believe that the European exploration of the Western Hemisphere (1500 to 1800) was one of the most transformative eras in the history of civilization. The great Scottish philosopher Adam Smith (1723-1790) took it a step further and labeled it “one of the two greatest and most important events recorded in the history of mankind.” Much of the modern world is a direct result of these 400 years of colonization and transference of culture. In the end, the world seemed inexorably on the way to what we now call “globalization.”

It seems overly dramatic to me (and omits great chunks of transformative periods) but also unambiguously clear that – despite the broad participation of other important nations – the people from England and Spain had the most influence on the vast territories of the New World. However, these two genuinely great empires ultimately evolved into dramatically different societies. Also in the crystal-clear category is that, in the end, they both managed to dissipate the powerful advantages they had created.

A quick snapshot of the world today confirms this devolution. The once mighty Spanish Empire is reduced to a relatively small, unimportant European nation (with a shaky economy, disturbing brain drain and geographic unrest). The other powerful empire of even greater influence in the world is now back to being a small island, wracked with political dissent over further retreat from the European Union (Brexit) and a dangerously unstable government.

In their place is the most powerful, democratic, innovative nation in the history of the world. But even the remarkable United States has developed troubling signs that pose a real threat to a continuation of prosperity. If we don’t find a way to reverse the issues that divide us (basically almost every single issue of importance) and close the inequality gap, our future will inevitably end up like those that went before. An economic boomlet has masked deep, difficult issues that politicians are blithely hoping will somehow be solved by some unknown means. We lack leadership at a time when Waiting for “Superman” is not a prudent strategy.

Some believe we are in a steady decline and that China will surpass America in many important areas this century. However, that is pessimistic conjecture. It’s more useful to re-examine the factors that propelled us to a pinnacle of unprecedented prosperity. I find it more interesting to visit the past rather than speculate on a future with so many possible outcomes (e.g. extinction via asteroid collisions, interstellar travel or a billion robots with superior intellect). It is an unknowable with questionable benefits.

One simplistic way is to skip our story of independence from England and correlate the decline of the Spanish Empire with our annexation of the Spanish-speaking borderlands. It broadly occurred in three phases, starting with the annexation of Florida and the Southeast by 1820. This was followed by California, Texas and the greater Southwest by 1855. Mexico lost 50 percent of its land and up to 80 percent of its mineral wealth. The final phase occurred with the Spanish-American War of 1898, which added Central America and the Caribbean to complete the New American Empire.

Virtually every American president was complicit in varying degrees, bookended by Thomas Jefferson and Teddy Roosevelt, who wrote as if this was preordained by a benevolent entity. With immigrants flowing into the East, the promise of free land and the lure of gold in California, the land between the oceans became steadily populated and blended. The short war with Spain was merely the capstone for a century of annexation, population growth and a perfect balance of territory, people and economic development. The motivation was clear (“sea to sea”) and the manipulation perfectly illustrated by this anecdote:

Publisher William Randolph Hearst (eager to have a war to sell more newspapers) hired Frederic Remington to illustrate the revolution erupting in Cuba. In January 1897, Remington wrote to Hearst, “Everything is quiet. There is no trouble. There will be no war. I wish to come home.” Hearst quickly responded, “Please remain. You furnish the pictures and I WILL FURNISH THE WAR.”

A year later, the Treaty of Paris was signed and Spain relinquished all claims of sovereignty and title to Cuba (long coveted by the U.S. for its sugar and labor), then ceded Puerto Rico and Guam to America. The Philippines was (much) more complicated. The islands had been under Spanish rule for four centuries and waging a war for independence since 1896. The U.S. Navy prevailed and Spain sold the Philippines to the U.S. for $20 million. However, Filipino nationalists had no interest in trading one colonial master for another. They declared war on the United States. Finally, in 1946, the U.S. recognized the Philippines’ independence.

And that, dear friends, is how you build (and lose) an empire.

In a different time, we would simply annex the rest of Mexico, eliminate the border with Canada and create a North American juggernaut to counter China and end squabbling over a wall. We could help Mexico (now perhaps a few U.S. states), eliminate drug cartels, develop the entire Baja California coastline to match Malibu and take advantage of the outstanding Mexican labor force to rebuild infrastructure. All the wasted money on border security (DHS, ICE, asylum, deportations, etc.) would be spent rebuilding old stuff.

But, I will need your vote for 2020! (I feel certain Adam Smith would agree.)