November 2019 – The Intelligent Collector Magazine

‘Some stories are hard to see; other stories hit you in the face’

A collection of 10 typed letters related to Watergate and signed by Richard Nixon, Gerald Ford, John Mitchell and Richard Kleindienst sold for $3,500 at a 2013 Heritage auction.

By Jim O’Neal

On Oct. 12, 2019, The New York Times ran an editorial titled “All the President’s Henchmen,” along with a cartoonish drawing depicting President Trump, Rudy Giuliani, Rick Perry and Pete Sessions. The article concluded, “The impeachment drama had taken on the feel of a telenovela crossed with a mob movie wrapped up in a true crime procedural and decorated with psychedelic TikTok clips. In a word: bananas. But with a cast of bumblers, grifters and self-promoters like those Mr. Trump seems to favor, one should expect nothing less.”

There was little doubt about the allusion to the 1976 Award-winning movie All the President’s Men. The film was almost exclusively based on the Pulitzer Prize-winning book of the same name. It had been authored by two obscure reporters for The Washington Post: Carl Bernstein and Bob Woodward (now almost household names and prolific political writers).

The movie is one of my favorites, with Robert Redford and Dustin Hoffman playing the two reporters. Jason Robards won an Oscar for his portrayal of Ben Bradlee, editor of the Post, and Alan J. Pakula was an Oscar nominee for Best Director. Although the movie primarily covers only the first seven months of what would become the Watergate scandal, the clever use of typesetting bookends the start and finish of the entire event, beginning with the Watergate break-in to Richard Nixon’s resignation several years later.

The actual Watergate affair started in 1972 when a security guard, 24-year-old Frank Willis, was on routine patrol in the basement of the Watergate complex. He found strips of tape across the latches leading to the underground parking garage. He was not overly alarmed. High-priced hotel rooms, prestigious offices and elegant condominium apartments within the Watergate development had been targets of burglars and thieves for several years. Along with three former Cabinet members, and various Republican leaders, the tenants included the Democratic National Committee (DNC). Its offices had been surreptitiously entered at least twice in just the last six months.

However, Willis simply assumed maintenance men had temporarily immobilized door latches as part of a routine repair. Professional burglars typically used less conspicuous wooden matches to keep the doors from closing and locking. The guard naively removed the tape, allowed the two doors to lock, and resumed his regular post in the lobby.

Then fate intervened and, acting strictly on what he called a “hunch,” he returned to take another look at the basement doors. The same latches had been taped again! Additionally, he discovered that two other doors on another level had been taped, despite being unobstructed only minutes before. “Someone was taping the doors faster than I was taking it off,” Willis said in an interview later. “I called the police!” His call was logged at 1:52 a.m. on Saturday, June 17.

First to reach the Watergate were members of the tactical squad of the Washington metropolitan force, who went directly to the top floor. More tape was found on a stairway door. They started working their way down and found tape on a sixth-floor office. With guns drawn, they entered the darkened offices of the Democratic National Committee. Five unarmed men were found crouched down and they surrendered quietly.

John Barrett, one of the plain-clothed officers who handcuffed the burglars, said: “They were very polite, but they would not talk.” The five men were arrested on burglary charges and led to the District of Columbia jail. They all gave false names to the booking officer, but after a routine fingerprint check, all five were identified:

Bernard Barker, 55, a native of Cuba and president of a Miami real estate firm,
James McCord, 55, president of a private security agency,
Frank Sturgis, 48, ex-Castro Army, now at a Miami Salvage Company,
Eugenio Martínez, 51, notary-real estate employee of Barker in Miami, and
Virgilio Gonzalez, 45, a locksmith from Miami.

Four of the men had spent the night at the Watergate Hotel, which connected with the office building via an underground garage.

At the time of the arrests, police had seized all the equipment the men had. It was quite a haul: two 35mm cameras with close-up lens, 40 rolls of film, one roll of film for a Minox “spy” camera, and a high-intensity lamp. All were useful in copying documents. Additionally, there were three microphones and transmitters. Ceiling panels had been removed to allow access to an adjacent office belonging to DNC Chairman Larry O’Brien. In addition to lock-picks and burglary tools, there were two walkie-talkies and a few thousand dollars in $100 bills with consecutive serial numbers.

The White House was quick to deny that any of the men were working for them and Nixon Press Secretary Ron Ziegler famously shrugged it off as “a third-rate burglary attempt” and unworthy of comments. However, at their arraignment, Washington Post reporter Bob Woodward overheard one of the burglars (James McCord) whisper “CIA” when asked what kind of “retired government employee” he had been.

The finest journalists in the world could be forgiven for not realizing that those three little letters (CIA) would be the opening act of a scandalous political drama – unprecedented in American history. Bradlee would later write: “Some stories are hard to see because the clues are hidden or disguised. Other stories hit you in the face. Like Watergate, for instance. Five guys in business suits, speaking only Spanish, wearing dark glasses and surgical gloves, with crisp new hundred-dollar bills in their pockets, and carrying tear-gas fountain pens, flashlights, cameras and walkie-talkies, just after midnight in the headquarters of the Democratic National Committee. … You would have to be Richard Nixon himself to say this was not a story.”

Actually, this is what Richard Nixon did finally say on Aug. 9, 1974, to Secretary of State Henry Kissinger:

Dear Mr. Secretary,
I hereby resign the office of President of the United States.
Sincerely,
Richard Nixon

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].

Yes, highly intelligent leaders with differing viewpoints can run a government

A signed carte de visite of Abraham Lincoln by photographer Mathew Brady sold for $81,250 at an October 2016 Heritage auction.

By Jim O’Neal

In 2005, Pulitzer Prize-winning author Doris Kearns Goodwin published her award-winning book Team of Rivals: The Political Genius of Abraham Lincoln. It begins with the presidential election of 1860 and focuses on the shrewd decision by Lincoln to form a Cabinet comprised of his three main competitors for the Republican nomination.

William H. Seward (Secretary of State), Salmon P. Chase (Treasury Secretary) and Edwin Bates (Attorney General) were molded into a formidable team in perhaps the most unusual Cabinet in history. They enabled President Lincoln to cope with incompetent generals, hostile congressmen, the secession of Southern states and the bloody Civil War that followed. Perhaps he was aware of the axiom to “keep your friends close, but your enemies closer” (often attributed to Chinese military strategist Sun-Tzu in The Art of War).

Team of Rivals was awarded a Pulitzer Prize and director Steven Spielberg’s 2012 film Lincoln was nominated for Best Picture; Daniel Day-Lewis won the Oscar for Best Actor (2013). Both are highly recommended.

The book attributes much of Lincoln’s remarkable accomplishments to his unique ability to help disgruntled opponents solve their differences by empathy – to sense or feel what others experience – and then put himself in their place. This is obviously a factor, but omits his basic wisdom, sense of humor and courage under extraordinary pressure. On the personal ego scale, he ranks at the bottom, along with Harry Truman … and the precise opposite of the current Oval Office occupant, who is off the scale (74-year-old billionaires rarely change their M.O.).

From the standpoint of presidential cabinets, this degree of executive freedom to choose individuals probably only existed one other time: during President Washington’s two-terms. However, the situations were vastly different on several dimensions:

The Constitution did not express the requirement for a “Cabinet” (a term coined by James Madison). However, there was a proviso for the president to obtain advice from others, as desired.
There were no formal political parties in either of Washington’s two terms that needed consideration.
When Washington took the oath of office on April 30, 1789, he had the unfettered flexibility to choose from the best minds in the nation, all of them well known by him. He chose wisely: Thomas Jefferson for State; Alexander Hamilton for Treasury; Henry Knox, War; and Edmond Randolph, Attorney General.

There was a general bias for a small federal government since the states were still leery of ceding any of their hard-won rights to a central entity. However, five months later, President Washington approved the Judiciary Act of 1789 and created a Supreme Court that consisted of a Chief Justice and five Associate Justices. This federal government was run by men responsible for the Declaration of Independence, the Revolutionary War, the U.S. Constitution, and the Bill of Rights. It was a generally harmonious time.

Further, Washington’s style of management was to meet individually with his Cabinet to seek their advice and counsel. This soon evolved into a group meeting that excluded Vice President John Adams, who never attended a single Cabinet meeting. The meetings were efficient and effective despite a low level of acrimony over issues where individuals differed. However, Washington welcomed debates to ensure he had the advantage of bright men with opposing opinions.

For example, in February 1791, Treasury Secretary Hamilton and Secretary of State Jefferson engaged in a debate that would have a significant impact on basic American law. The issue involved the U.S. Constitution that had been ratified two years earlier: Did it authorize the federal government to charter a bank?

The federal and state governments were in debt $100 million, primarily due to the Revolutionary War. Secretary Hamilton wanted to consolidate all the debt and form a federally chartered bank to pay off the debts. In 1790, an agreement had been reached to have the federal government assume all state debts. In a quid pro quo, the nation’s capital would relocate near the Potomac River in Virginia. Twelve months later, Congress passed legislation to create the federal chartered bank. This allowed the creation of a viable national currency, used by all states to pay taxes to retire debt. President Washington was now required to sign or veto the law.

His Cabinet was divided.

Jefferson, Madison and Randolph objected to the legislation, arguing the Constitution did not authorize the federal government to charter or incorporate an institution, let alone a bank. During the Constitutional Convention, Madison had supported giving the government limited power to grant corporations. However, corporations and banks were so divisive they were excluded in order to gain approval of the Constitution. It was argued that Hamilton’s bank would violate the relationship of state power versus federal power. This resulted in Washington asking Hamilton why the powerful trio was wrong?

The ever-energetic Hamilton worked all night to produce a 15,000-word Constitutional interpretation. He argued that the “necessary and proper clause” authorized Congress to make all laws, which shall be necessary for carrying into execution its duties under Article 1. He said that chartering a bank was “necessary for managing the nation’s currency, debt and credit,” which was the purview of the federal government via the clause “to coin money and regulate the value thereof.”

Jefferson had a visceral mistrust of paper money (a basic function of banks) and similar misgivings about incorporation. Since a federal bank was a de facto corporation, he argued their creation was simply a monopoly, like the Bank of England created by the British Monarchy. He and Madison asserted any power the Constitution did not forbid and which was not expressly granted to the federal government automatically stayed with the states, one and all, as dictated by the 10th Amendment. Surprisingly, Hamilton prevailed and Washington approved the legislation on Dec. 12, 1791, thus allowing the Bank of the United States. It opened in Philadelphia as the first central bank in the new nation, with a 20-year charter.

It is in this and many more examples of highly intelligent leaders with differing viewpoints on how best to organize and run a new nation, that we find the seeds of discontent that would lead to political parties. It helps explain how small rifts can grow into chasms over 200-plus years. Even as I finish writing this, a television in the background is chattering with some ruckus to impeach another president. If we ever truly had any political empathy, there is little evidence of it today (sigh).

Twain’s ‘Gilded Age’ in retrospect resembles a warning – comeuppance wrapped in satire

A signed presentation copy of *The Gilded Age* by Mark Twain and Charles Dudley Warner sold for $5,750 at an October 2017 Heritage auction.

By Jim O’Neal

The Gilded Age was a fascinating time for millions of people. It is typically used as a metaphor for a period of time in Western history characterized by peace, economic prosperity and optimism. It is assumed to have started circa 1870 and extended until the horrors of World War I spread a plague of death, disease and destruction that consumed civilized nations and destroyed four empires.

In France, it was called La Belle Époque (Beautiful Era) dating from the end of the Franco-Prussian War (1871). In the United Kingdom, it overlapped the Victorian era, and in Spain the Restoration. In Australia, this period included several gold rushes that helped the “convict colonies” transform to semi-progressive cities. These are only a few of many examples.

Historian Robert Roswell Palmer (1909-2002) noted “European civilization achieved its greatest power in global politics, and also exerted its maximum influence upon people outside Europe.” R.R. Palmer was a remarkable and distinguished historian, educated in Chicago (taught at Princeton and Yale) who published A History of the Modern World in 1950. I believe it has been continually updated, the last time in 2013. Although I’ve never actually seen a copy, it gets high marks. At a reported 1,000 pages and weighing five pounds, it is not on any of my wish lists. (His wife once commented she felt sympathetic for his students having to lug it around!)

In the United States, the Gilded Age is considered to have started following the Panic of 1873. There were a number of contributing factors. Naturally, the post-Civil War era benefited from the cessation of mindless destruction in the Southern states. Then the extensive rebuilding boosted economic activity at the same time Western expansion to the Pacific Ocean created widespread urbanization.

With workers’ wages in the United States significantly higher than Europe, millions of immigrants were eager to join and this provided the manpower ingredient to natural-resource opportunities. It was a perfect fit – unlimited land, vast forests, rivers, lakes and unknown quantities of gold, silver and coal. We had fur-bearing animals, unlimited fish, millions of bison and weather that was moderate and dependable. In a 30-year period, real wages grew 60 percent as the silhouette of a new world power was taking shape. All without the tyranny that was so prevalent in the world.

Mark Twain (Samuel Langhorne Clemens) actually coined the terminology in a novel co-authored by Charles Dudley Warner in 1873. Their book – The Gilded Age: A Tale of Today – was a typical Twain satire that captured the widespread social problems that were masked by a thin gold gilding. It also obscured the massive corruption and wealth creation of the perpetrators.

This was well before his better-known work The Adventures of Tom Sawyer (1876), which described life on the Mississippi River. The sequel, The Adventures of Huckleberry Finn (1884), was even more popular. First published in England, it exposed the prevalence of racism and the frequent use of the “n” word. The U.S. publication in 1885 only fanned the flames of racial debate.

It was banned in many schools and libraries, remaining controversial during the entire 20th century. As late as 2016, both Huckleberry Finn and To Kill a Mockingbird were banned in a Virginia school. Of course, there was some irony in the fact that our first black president was serving his second term in office.

In fact, Twain’s Gilded Age was meant as a pejorative and didn’t really enter contemporary usage until the 1920s. But it was an apt description throughout the 1870s, until the late 1920s ushered in the crash of Wall Street. With the Union off the gold standard, credit was readily available and the U.S. monetary supply was far larger than before the war.

Northerners, largely insulated from the actual war, sensed the almost inevitability of an industrialize nation and railroads across the country like an iron spiderweb. The early days of the Gilded Age – before the name gained its truer historical meaning – were alive with the optimism and speculation on America’s potential. It was a great run and established America as the greatest country in the history of man.

Twain’s Gilded Age looks in retrospect like a prescient warning – comeuppance wrapped in satire. The Great Depression quickly evaporated the hopes and dreams of millions and then consigned them back to poverty pending another cycle of war followed by prosperity. Andrew Carnegie noted for posterity his opinion on wealth creation: “The proper policy was to put all eggs in one basket and then watch that basket.”

It is hard to draw lessons from these cycles if we consider the current federal government, the U.K. and their Brexit, Africa, most of Latin America, virtually the entire Middle East, and the possible outcome of Hong Kong-China. But we keep trying.