Rare Coins & Currency – Page 2 – The Intelligent Collector Magazine

Let’s Not Forget What Colonists Created 400 Years Ago

This 1976 Gold Bicentennial Medal, graded PR64 NGC, sold for $23,500 at a July 2017 Heritage auction.

By Jim O’Neal

We live on a landmass currently called North America that is relatively young in its present incarnation with most estimates in the range of 200 million years. In periods before, a large portion of it was called Laurentia, which drifted across the equator joining and separating from supercontinents in various collisions that shaped it. There are thick layers of sedimentary rocks that are up to 2 billion years old. Eventually, it was surrounded by ocean and anti-passive margins (i.e. no boundaries by tectonic plates). Then an island chain slammed into it, raising mountain ranges. For perspective, the Appalachians were as tall and majestic as today’s Himalayas.

For tens of millions of years, there was not a single human being in North America, primarily because it was covered by a thick sheet of ice and it was before mankind had evolved. As the Ice Age ebbed, adventurous souls began walking across land bridges as glacial movements changed the landscape. There were multiple migrations in and out of other areas of the world, but people who moved into the Americas were generally on a one-way ticket. In modern times, there is no consensus on who “discovered” America first.

North American exploration spans an entire millennium, with the Vikings in Newfoundland circa 1000 A.D. through England’s colonization on the Atlantic Coast in the 17th century. Spain and Portugal squabbled over the discoveries of Juan Ponce de León and Vasco da Gama, as France and the Netherlands had their own claims to litigate. But our America is really a British story starting with Jamestown, Va. (1607) that gradually grew into 13 colonies. They grew tired of the English yoke and declared independence in 1776 and conquered the British Army in a well-known story of revolution. They formed a somewhat imperfect union called the United States of America, with a constitution and a smallish national government that is still struggling with the line between states’ rights.

French sculptor Frédéric Auguste Bartholdi attended the 1876 Centennial Exposition in Philadelphia to celebrate the 100th anniversary of the signing of the Declaration of Independence. Bartholdi had a strong personal passion for the concepts of independence, liberty and self-determination. He became a member of the Franco-American Union organization and suggested a massive statue to commemorate the American Revolution and a century of friendship between our two countries. A national fundraising campaign was launched that included traditional contributions, as well as fundraising auctions, lotteries and even boxing exhibitions.

Bartholdi collaborated with engineer Gustave Eiffel to build a 305-foot-tall copper and iron statue, and after completion, it was disassembled for shipment to the United States. Finally, on June 17, 1885, the dismantled statue – 350 individual pieces in 200-plus cases – arrived in New York Harbor. It was a fitting gift, emblematic of the friendship between the French and American people. It was formally dedicated the following year in a ceremony presided over by President Grover Cleveland, who said, “We will not forget that Liberty has here made her home; nor shall her chosen altar be neglected.” The statue was dubbed “Liberty Enlightening the World.”

In 1892, Ellis Island opened as America’s chief immigration station and for the next six-plus decades, the statue looked over more than 12 million immigrants who came to find the freedom they were seeking and the “Streets of Gold” in NYC. A plaque inscribed with a sonnet titled “The New Colossus” was placed on an interior wall in 1903. It had been written 20 years earlier by the poet Emma Lazarus.

Gustave Eiffel was given little credit, despite having built virtually the whole interior of what would become the Statue of Liberty and he vowed not to make that mistake again. Perhaps that is why his magnificent Paris landmark is simply an incredible skeleton framework with none of the conventional sheathing of most tall structures of that era.

One thing is certain: We may not know who discovered America first, but there is little doubt that whoever follows us will be aware of what those few people huddled along the East Coast 400 years ago were able to accomplish. Maybe Elon Musk will have a colony on Mars that is still functioning when the ice or oceans envelop Earth again.

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].

For North, Tariffs and Taxes to Fund War Gave Way to Printing Money

Series 1861 $10 Demand Notes were placed into circulation in 1862 and were among the first of U.S. Federal banknotes ever issued. This sample, graded PMG Very Fine 30 EPQ, sold for $381,875 at an August 2014 Heritage auction.

By Jim O’Neal

A follow-up to my previous post:

The North had a tough time raising money for the war as well. After the defeat at Bull Run, they suffered a new crisis: the collapse of the bond market. Under the Constitution, the U.S. House of Representatives had responsibilities for originating all revenue measures and under pressure from Treasury Secretary Salmon P. Chase started considering legislation to raise taxes. Ways and Means started with tariffs, but a storm of criticism erupted since it would fall on the poor who needed tea, coffee, sugar and whiskey.

The next option was real estate via “direct taxes,” but Congress objected by noting that wealth in stocks and bonds was excluded, which meant the wealthy could escape paying any taxes quite easily. The more Congress debated the property tax the louder the opposition became. U.S. Rep. Schuyler Colfax from Indiana (a future Republican vice president) said, “I cannot go home and tell my constituents I voted for a bill that would allow a man, a millionaire, who has put his entire property in stock, to be exempt from taxation, while a farmer who lives by his side must pay a tax!” Colfax proposed a tax on stocks, bonds, mortgages and interest on money – and income earned from them. An income tax (inevitably).

U.S. Rep. Thomas Edwards from New Hampshire proposed calling the new tax something other than a direct tax. “Why should we not impose the burdens which are to fall on this country equally, in proportion to their ability to pay them?” An amendment was passed imposing a 3 percent tax on incomes over $600 per year. Someone quoted John Milton in Paradise Lost – he compared the taxpayer to Adam and Eve, driven by necessity “from our untaxed garden, to rely upon the sweat of our brow for support.” An income tax it was.

Secretary Chase was skeptical. He doubted merely labelling the income tax to be indirect would not make it constitutional. More importantly, there were no provisions made for a bureaucratic or enforcement mechanism. The income tax was not collectible. Since it was only a recommendation, he ignored it since he was far too busy with the need to borrow money for the war. As banks were all reluctant to loan a shaky government any money, he turned to a young Philadelphia banker, Jay Cooke, who had a scheme to market the government debt to the public, with Cooke taking a sales commission.

They finally got a consortium of 39 banks to loan $150 million in gold to be paid in three $50 million installments for sale to private individuals. The first $50 million barely sold and the second round failed completely, which killed the scheme. By Dec. 30, 1861, the banks were so stressed they were forced to stop honoring gold payments to their other customers, which was almost tantamount to becoming insolvent.

By the start of 1862, Chase realized he had grossly underestimated the costs of the war. His new estimate for year one was $530 million and the assumed revenues from taxes, tariffs and other schemes were falling short and the Treasury funds were almost depleted. New taxes or loans could not possibly fill the gap in time. With no other alternatives available, Chase and President Lincoln overcame their misgivings and endorsed the idea of simply printing money – $50 million in green paper money that the government would just declare to be valid legal tender, though not redeemable in gold or silver.

Then Congress passed the Legal Tender Act in February 1862, providing for $150 million in currency that became known as greenbacks – the first paper money ever issued by the U.S. government … a practice that continues today as the debt has exceeded $20 trillion and seems to be accelerating. I hope to be around to see how it ends.

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].

Confederacy Relied on Creative Ways to Finance its War

This 1861 Confederate States T1 $1000 Montgomery Issue note from the “Colonel” E.H.R Green and Eric P. Newman collections sold for $76,375 at an October 2015 Heritage auction.

By Jim O’Neal

Several readers have asked how the Civil War was waged for so long with both sides short of the resources needed to wage war. Here is a short example of how it was possible.

Still desperate for money, Confederate States Treasury Secretary Christopher Memminger proved to be creative. After Fort Sumter, he proposed a series of 12.5 percent duties on coal, lumber, cheese, paper and even iron – despite the military need for wood and iron for railroads. He came up $25 million short because of the blockade, especially in New Orleans. But after the surprise Confederate victory at Bull Run, he went back to the Confederate States Congress and asked them to impose taxes on real estate, slaves and any other personal property, since these assets were valued at almost $6 billion. Farmers effectively killed this effort since it hit them disproportionately. The Treasury then resorted to a “war tax,” but it was a real dud.

So, the only way out was to turn to the old tactic of printing money … short-term notes, longer-term bonds. The notes were, in reality, simply “script” forced on soldiers, retailers, suppliers and anyone else the Confederate government owed. Predictably, Confederate currency was issued in bigger and bigger amounts and redemption dates deferred longer into the future. By the end of 1861, the total had grown from $1 million to $30 million, to $450 million in 1862, and doubling into billion territory in 1863. Gold and silver were really the only currencies of value and they were being hoarded as their value continued to grow. In a mark of futility, merchants, railroads and other businesses started issuing their own paper currency, commonly called “shinplasters” since there were basically worthless. An editor in Mississippi wrote, “Great God, what a people. 250 different sorts of shinplasters and not one dime in silver to be seen.”

As the money devalued, a “greenback” was worth four Confederate dollars, a gold dollar went from three to 20, and in the final years, the exchange rate was 1,000 to one … if it was available. For consumers, inflation meant ruinous prices … coffee four times in 1861, 25 times higher a year later, then 80 times higher in 1863, and by the end of 1864, 125 times more expensive. The Daily Telegraph in Macon, Ga., said: “An oak leaf will be worth just as much as the promise of the Confederate Treasury to pay one dollar.”

By the end of the war, the South was a land of blackened cities, destroyed factories, destitute families and rotting wharves. Twenty-five percent of military-age men were dead, 40 percent of livestock and thousands of miles of railroads ruined, and its system of slave labor, the foundation of its economy, was gone. Sixty-five percent of the South’s wealth simply vanished. The South became a place of death, destruction, debt, ruin and humiliation. Recovery would take 100 years.

A good analogy was Germany in the 1920s when they tried to print money until a loaf of bread cost a wheelbarrow of money. It continued to escalate until the paper was worth more than the finished printed money.

Head-Butting with Russia Dates Back Nearly 300 Years

This Nicholas II gold specimen Imperial of 10 Roubles, 1895, sold for $228,000 at a January 2018 Heritage auction.

By Jim O’Neal

In the 21st century, the United States-Russian Federation relationship has become more contentious and complex. The deterioration accelerated during the second Obama term following disagreements over the Ukraine and the reabsorption of Crimea in 2014 after Secretary of State Hillary Clinton was unable to hit the reset button. The U.S. presidential election of 2016 ended with reports of Russian interference and has steadily morphed into a major issue covered obsessively by the media.

Formal investigations include both Houses of Congress, the FBI-Justice Department and a Special Prosecutor who is delving into possible obstruction and conspiracy activities, plus an unknown series of related crimes. It has become a “cottage industry” that is either really big (e.g. subpoenas, indictments and impeachment) or simply another partisan distraction.

For perspective, it is useful to recall that difficulties involving Russia are not a recent or even a 20^th-century phenomenon. They started well before we became an independent nation and continued until we jointly became the world’s two superpowers. From 1732 to 1867, there were a number of squabbles with Tsarist Russia that stretched from the Bay Area in Northern California up the Pacific Coast to Alaska.

Like other European nations, Russia was interested in expanding through a strategy of colonization. They had become powerful under Peter the Great (1672-1725), who needed to develop new territories with fur-bearing mammals after over-hunting depleted the stocks in Siberia. He dispatched cartographer Vitus Bering to explore Alaska, and the first permanent settlement was a fur-trading settlement in 1784. This was followed by the Russian-American Company (RAC), formed in an attempt to monopolize the fur trade and convert Alaskan natives to pseudo-Russian subjects to help with maritime fur trading.

They migrated to the pristine Northern California Pacific Ocean area and in 1812 were able to establish an outpost called Fort Ross. Fort Ross lasted until 1841 and is now a California Historical Landmark an hour’s drive north of the bustling San Francisco Bay. However, the Russians were never able to make North America profitable and Secretary of State William Seward negotiated the purchase of Alaska for $7.2 million in 1867. Originally scoffed at as “Seward’s Folly,” the territory was admitted as the 49th state on Jan. 3, 1959.

At two cents an acre, the state’s 663,268 square miles was larger than the combined areas of Texas, California and Montana. Along with the Louisiana Purchase, it became one of the better land deals the United States made, excluding, of course, areas where we simply overpowered American Indians and took their land and anything else that was unoccupied.

Although we were allies with Russia during World War II, post-war Germany was up for grabs and Berlin became the next area of contention. It was decided to divide it with the United States, the United Kingdom and France taking three parts (West) and Russia taking the remainder (East) in 1945. In 1952, Russia closed the border and in 1961, they built the Berlin Wall to hinder defections to the West. It was here that President Reagan made his famous speech in 1987 … “Secretary General Gorbachev … tear down this wall,” and it did fall on Nov. 9, 1989, and Germany was officially reunited on Oct. 3, 1990. By then, George Herbert Walker Bush was president.

Oh, yes, Reagan’s speech was made on June 12 … while President Bush was celebrating his 63rd birthday. Happy Birthday, President Bush! We miss you. Get well soon.

After Independence, United States and South America Took Different Paths

This Banco de Venezuela 1000 Bolivares ND, circa 1890, proof, featuring Simón Bolívar, sold for $2,115 at a January 2017 Heritage auction.

By Jim O’Neal

Important scholars believe that Simón Bolívar should have been the George Washington of South America. He, too, overthrew an empire (Spain) – but obviously failed to create an Estados Unidos of South America. The American Revolution not only achieved unity for the former British colonies; independence also set the United States on the road to unsurpassed prosperity and power. South America ended up in a different place entirely due to a complex set of events.

Bolívar was born in Caracas in July 1783 to a prosperous, aristocratic family. He was an orphan by age 10 and soldier at the tender age of 14. He studied in Spain and France, spending time in Paris even after all foreigners were expelled in response to a food shortage. He returned to Venezuela by 1807, inspired by Napoleon and disgusted with Spanish rule. Sent to London to seek British help, he met Francisco de Miranda, the veteran campaigner for Venezuelan independence.

On their return in July 1811, they boldly proclaimed the First Republic of Venezuela.

The Republic ended in failure since a disproportionate number were excluded from voting by a flawed constitution and Bolívar betrayed Miranda to the Spanish before fleeing to New Granada. From there, he proclaimed a Second Republic – with himself in the role of dictator and winning the epithet El Libertador.

Eventually, Bolívar became master of what he termed Gran Colombia, which encompassed New Granada, Venezuela and Quito (modern Ecuador). José de San Martín, the liberator of Argentina and Chile, yielded political leadership to him. By April 1825, his men had driven the last Spanish from Peru, and Upper Peru was renamed Bolivia in his honor. The next step was to create an Andean Confederation of Gran Colombia, Peru and Bolivia. Why did Bolívar fail to establish this as the core of a United States of Latin America? The superficial answer – his determination to centralize power and resistance of the local warlords – misses much more complicated circumstances.

First is that South Americans had virtually no experience or history in democratic decision-making or representative government of the sort that had been normal in North America’s colonial assemblies. So Bolívar’s dream of democracy turned out to be dictatorship because, as he once said, “our fellow citizens are not yet able to exercise their rights … because they lack the political virtues that characterize true republicans.” Under the constitution he devised, Bolívar was to be dictator for life, with the right to nominate his successor. “I am convinced to the very marrow of my bones that America can only be ruled by an able despotism … We cannot afford to place laws above leaders and principles above men.”

For remaining skeptics, perhaps it is better to let Simón Bolívar explain in his own words, in a December 1830 letter he wrote a month before his death:

“I ruled for 20 years … and I derived only a few certainties:

South America is ungovernable.
Those who serve a revolution plough the sea.
The only thing one can do in America is to emigrate.
This country will fall inevitably into the hands of the unbridled masses.
Once we have been devoured by every crime and extinguished by utter ferocity, the Europeans will not even regard us as worth conquering.
If it were possible for any part of the world to revert to primitive chaos, it would be [South] America in her final hour.”

This was a painfully accurate prediction for the next 150 years of Latin American history and the result was a cycle of revolution and counter-revolution, coup and counter-coup. One only needs to read of Venezuela today to grasp the totality of how dire the future remains.

By the way, much of this insight comes by way of the highly recommended Civilization: The West and the Rest by Niall Ferguson.

Libertarian Streak Set United States Apart from Rest of Continent

A rare 1874 Venezuelan Republic silver proof, featuring Simón Bolívar and struck by the Paris mint, realized $70,500 at an August 2014 Heritage auction.

By Jim O’Neal

By 1775, North and South America had become remarkably different from a societal standpoint, with economic systems profoundly dissimilar. The only significant similarity was they were both still composed of colonies ruled by kings in distant lands.

That was about to change, rather dramatically.

On July 2, 1776, the Second Continental Congress declared its colonies independent from Britain and King George. Spain’s rule in Latin America would end 40 years later, but the North’s revolution assured the rights of property owners and established a federal republic that would become the world’s wealthiest nation in a relatively short 100 years.

Latin American revolutions, on the other hand, consigned nations south of the Rio Grande to 200 years of instability, disunity and economic underdevelopment.

One important reason was that the independence claimed by Britain’s 13 North American colonies was driven by a libertarian society of merchants and farmers who rebelled against an overzealous extension of imperial authority. It was not only the old issues of taxation and representation; land had become a much more important issue that, in turn, fueled the revolutionary fires. The British government’s efforts to limit further settlement west of the Appalachians struck at the heart of the colonists’ vision of the future – a vision of “manifest larceny” that was especially attractive to property speculators like George Washington.

Still, war may have been averted by concessions on taxes, better diplomacy or even if British generals were more adept and less arrogant. It is even possible to imagine the colonies falling apart instead of coming together. Post-war economic conditions were severe: inflation near 400 percent, per capita income slashed by 50 percent, a mountain of debt over 60 percent of GDP. But losing the yoke of the British Crown created a sense of newfound freedom and brotherhood. These states were now united.

However, had the revolution not progressed beyond the Articles of Confederation, then perhaps the fate of the United States would have been more like that of South America – a story of fragmentation rather than unification. It took the Constitution of 1787, the most impressive piece of political institution-building in all of history, to establish a viable federal structure for the new republic. There was a single market, a single trade policy, a single currency, a single army, and a single law of bankruptcy for people whose debts exceeded assets.

The major flaw was not resolving the issue of slavery and the naive assumption it would vanish over time. It obviously did not and the burden of the Civil War nearly destroyed all of the astonishing progress that followed. The sheer brilliance of Abraham Lincoln’s insight to avoid any action that would lead to disunion trumped the temptation to co-mingle states’ rights or slavery. “One nation, indivisible…”

Yet independence from Spain left much of Latin America with an enduring legacy of conflict, poverty and inequality. Why did capitalism and democracy fail to thrive?

The short answer was Simón Bolívar.

A longer, more balanced view will have to wait for its own blog entry.

For a While, the Tiny Mosquito was Destroying Armies

A key to the success of the Panama Canal was Colonel William P. Gorgas’ mosquito-eradication program, which saved thousands of workers’ lives. This example of a U.S. gold coin commemorating the construction of the Panama Canal and the rebuilding of the City of San Francisco sold for $152,750 at a January 2017 Heritage auction.

By Jim O’Neal

The French were no strangers to the Stegomyia fasciata. It was, after all, that tiny mosquito that wiped out the French troops Napoleon had dispatched to squash a slave uprising in Haiti and then the French-controlled colony of Saint-Domingue. From 1802 to 1803, yellow fever ravaged 50,000 troops, including their commanding officer General Emmanuel Leclerc. His replacement, General Rochambeau, retreated with a mere 3,000 soldier-survivors.

Experts estimate that twice as many soldiers were lost in Haiti than were killed in the world famous Battle of Waterloo!

Napoleon finally conceded that they were no match for this mysterious, silent killer and abandoned the ambitious plans to expand the empire into the Louisiana Territory, selling it for $15 million, which doubled the size of the young United States. It was an epic bargain for the United States and dramatically reduced the risk of future wars with France, which were almost inevitable.

Later in 1889, another Frenchman, Ferdinand de Lesseps, led a decade-long and terminally troubled attempt to build a canal across the Isthmus of Panama that crumbled after 20,000 workers (one-third of his force) died from yellow fever – a highly contagious, usually fatal disease contracted from a single mosquito bite.

Au revoir, monsieurs.

In America, the fever reached epidemic proportions as well. More than 300,000 cases were reported in the United States between 1793 and 1900; at times with mortality rates of up to 85 percent. The disease attacks the liver, turns the skin yellow, raises body temperatures and causes internal bleeding before the victim lapses into a coma. More U.S. troops were killed in the Spanish-American War by yellow fever than by the enemy. Yellow fever, nicknamed “yellow jack” after the pennants that flew to signal a quarantine, arrived in Central America in mid-16th century aboard slave ships travelling from Africa. Despite countless hypotheses, the cause of the disease and its rapid spread remained a mystery.

Dr. Carlos Finlay of Cuba had long theorized that mosquitos carried and spread yellow fever. The conventional medical establishment criticized Finlay, calling him “mosquito man.” But no one had a better idea. In desperation, U.S. Army Major Walter Reed, his fellow doctors, and a detachment of soldiers traveled to Havana in June 1900 and tested Finlay’s theory by volunteering to let indigenous mosquitos bite them.

On Aug. 27, Dr. James Carroll allowed himself to be bitten, fell ill with the disease, but survived. Reed survived his bout as well. Several other colleagues died and both Reed and Carroll sustained lasting damage to their health. The soldiers refused to accept a $250 bonus, believing it would cheapen their sacrifice. Public opinion was cynical and negative. American newspapers mocked the experiment or simply ignored it. Congress even denied a pension to one soldier, the first one who developed the test even though the experiment left him paralyzed.

Yet the team prevailed and in October 1900, Walter Reed finally declared publicly that “the mosquito served as the intermediate host for the parasite of yellow fever.” The disease’s cycle was soon unraveled. Female mosquitos picked up yellow fever in the first three days of a patient’s infection and became contagious after a 12-day incubation period with the pandemic disease.

Eventually, Maj. William Crawford Gorgas eradicated the disease in Panama and the Canal Zone. He also wiped out another mosquito that spread malaria and rats that carried bubonic plague. Gorgas’ triumph allowed the United States to begin their canal dig and finish it by 1914. Panama’s death rate from yellow jack had dropped to only half that of the United States.

Problem solved.

Songwriter Stephen Foster Reflected Yearnings of a Young Nation

By Jim O’Neal

The life of Stephen Foster had an auspiciously American beginning. Like the great stage patriot George M. Cohan, Foster was born on the Fourth of July (Cohan’s birth certificate actually shows a date of July 3). But in the case of Foster, it was no ordinary Fourth. It was July 4, 1826, to be exact, which marked the passing of two great Americans: John Adams and Thomas Jefferson, both having served as vice president and president of the United States. Foster came into this world as they were leaving it.

It was also a memorable date in American history, marking the 50th anniversary of the Declaration of Independence, a time when America was still emerging from its colonial past and establishing its own distinctive culture.

Stephen Foster (1826-1864), like most children in his social class, spent many afternoons playing and singing at the piano. But Foster was more interested in music he heard outside the home: the growing popularity of the “minstrels.” These were white-men-in-black-face performances of the 1830s and 1840s, which dominated the theaters. At once racist and patriotic, these shows permitted Americans (specifically whites) to join in expressing their superiority to the black man, an unfortunate “unifying event” in a nation of immigrants.

However, for the young Foster, who often returned home from the theater and put on minstrel shows of his own for friends, there was much more. There was something fascinating about the black music and lyrics he heard, even as they were twisted for derogatory effects. He developed a sympathy that he carried forward years later when, as a bookkeeper in Cincinnati, he decided to become a professional songwriter. And what an astounding, prolific artist he became!

From his office window on the docks of the Ohio River, Foster marveled at the music of immigrants from Germany, Italy and Scotland … and especially from the blacks who had come to Cincinnati to work on the docks. Now Foster could hear real African-American music, not just the caricatures of the minstrel men, and it captivated him. Locked in complete silence in his study, Foster carefully incorporated the diverse melodies he’d absorbed from the many varieties he heard. First working through them note by note on the flute, then playing them full-out on the piano until they became the raw material for his own music.

In the end, Foster’s lasting appeal was his ability to draw on this reserve from which he created a uniquely American sound. Borrowing from elements of Irish songs, Italian opera, minstrel music and black spirituals, he created simple melodies that spoke to human needs of family and heartbreaks.

The results were staggering.

His first minstrel song in 1846, “Oh, Susanna,” was a smash hit. Arriving at a time when national pride was beginning and new technologies were uniting people across the nation, it caught on like no song before it. The previous most popular piece of sheet music had sold 5,000 copies. “Susanna” would sell over 100,000 and instantly become part of our cultural heritage. California miners hummed it while they dug for gold. Black rowers sang it in the East and South. It was easily the most sung song in America.

After this success, Foster became serious about making a living in music and publishers billed him as the “Songwriter of America.” In 1850, he wrote 16 songs. In 1851, 16 more. Then would come a flood of hits that are too numerous to list. He toned down the dialect, dropped the term “minstrel” and blended the black experiences into metaphors for all manner of American yearnings, especially the one for “home.”

The Father of American music churned out over 200 classics. Then it all came to a sudden halt when he died from a mysterious fall. Stephen Collins Foster was a mere 37 years old when his genius stopped. Yet on the first Saturday of May each year since 1875 (uninterrupted), people gather at Churchill Downs in Louisville to witness “the most exciting two minutes in sports” … the Kentucky Derby. Among the many traditions of mint juleps, burgoo and women’s accessorized hats, the University of Louisville marching band will play his “My Old Kentucky Home.”

Not bad for a shy lad born on the 50th anniversary of our defiant Declaration, which we still rely on today.

Taxing the Rich Never Seems to Quite Cure Society’s Ills

This 1920 President Wilson gold coin, struck to commemorate the July 16, 1920, opening of the Manila Mint, sold for $69,000 at an April 2008 Heritage auction.

By Jim O’Neal

In 1913, after nearly 16 years in the political wilderness, Democrats eagerly seized control of Congress, with Thomas Woodrow Wilson as their leader. They were more than jubilant to once again have a Southern president, but to their disappointment, the president ordered that celebrations be kept to a minimum. He proceeded to deliver a brief inaugural address, canceled the inaugural ball, and stoically suffered the inaugural parade.

By promising “to cleanse, to reconsider, to restore” after many years of perceived misrule, he was committed to an agenda that historian John Morton Blum called “the politics of morality.” This would shape his presidency from its brilliant launch to its disappointing crash-landing.

Under the 1912 campaign slogan of “New Freedom” lurked the greatest wave of social legislation Americans would ever experience. Wilson, ever the political scientist, likened it to the use of Hamiltonian strong-central government to achieve Jeffersonian ideals of egalitarianism. What Wilson envisioned was the creation of a new federally regulated banking system, lower tariffs on imports, aggressive new policies to curtail business collusion, and imposition of an income tax made possible by the new 16th Amendment to the Constitution. He firmly believed the federal government needed to slow corporate wealth and aggressively help ordinary men and women – the backbone of the American system – and he wasted no time in getting started.

The day after his inauguration, he personally convened a special session of Congress, the first presidential appearance in the Capitol since the days of Thomas Jefferson. Thus began a historic assault on the tariff system because “it was a general tax on the entire population for the benefit of private industry.” This was followed by the Federal Reserve Act, Federal Trade Commission Act, Clayton Antitrust Act, and the Federal Farm Loan Act.

The other highly contentious issue would be an income tax, missing since it was dropped in 1872 after the Civil War. However, it was now viewed as an absolute necessity to plug the loss of tariff revenue ($100 million), grow the federal government, and redistribute the wealth of Americans in a way that would be more fair and equitable (i.e., the “surplus” income of rich Americans over and above the amount necessary for “good living”).

This culminated in the Revenue Act of 1913, which imposed a graduated income tax (collected by employers) and a reduction in tariffs from 40 percent to 25 percent. President Wilson signed it into law on Oct. 3, 1913. The reformers were now ready to start building on their accomplishments and the newly established teamwork between Congress and the White House.

Then on June 28, 1914, a shot rang out in Sarajevo and an archduke was dead.

Few wars have transformed belligerent countries as extensively as World War I. It overturned social, economic and cultural order in Europe, Russia and beyond. It also transformed the American economic system, as the cost to the U.S. was $50 billion and the federal budget grew from $742 million in 1916 to $14 billion in 1918. Before WWI, more than 90 percent of federal revenues came from excise taxes and tariffs. Now, the income tax played a central role in revenues and would continue to increase in importance for the next 100-plus years. Today, over 80 percent of federal revenues come from income taxes and associated payroll taxes … and inequality has grown much worse.

For some reason, the “tax the rich” approach never seems to quite cure society’s ills.

Thomas Hart Benton’s Influence Surpassed Nearly All Contemporaries

This $100 1882 Gold Certificate (Fr. 1214), featuring an image of Missouri Senator Thomas Hart Benton, sold for $88,125 at an April 2017 Heritage auction.

By Jim O’Neal

During the winter of 1886-87, cattle rancher Theodore Roosevelt lost a lot of his money as the Dakota weather wiped out his herd. The one-time boy wonder of New York politics was now neither a boy nor a wonder anymore. At age 28, Roosevelt decided to return to writing. Through his friend Henry Cabot Lodge, he got a contract with Houghton Mifflin for a biography of Thomas Hart Benton, the Missouri Senator and apostle of Western geographic expansion of the United States.

Like most authors, T.R. had moments of doubt, writing to Lodge, “I feel appalled over the Benton. Unsure if a flat failure or not. Writing is horribly hard work for me; and I make slow progress.” By June, he pleads with Lodge to send him some research material on Benton’s post-Senate time and receives enough help to finish the biography. The book didn’t break any new ground, but was a much better read than his ponderous Naval War of 1812.

Thomas Hart Benton (1889-1975) is a well-known American painter and muralist, and subject of an eponymous 1988 documentary by Ken Burns. However, Roosevelt’s biography was about a great-uncle, Senator Thomas Hart Benton (1782-1858), who was only slightly less well known and a giant when it comes to the topic of U.S. western expansion, commonly called Manifest Destiny (or God’s will).

Benton was a central figure in virtually all the major geographic additions after President Jefferson essentially doubled the U.S. land area in 1803 via the Louisiana Purchase from France. The modest $15 million price tag added areas that constitute 15 present states and small portions of two Canadian provinces.

T.H.B. was an aide-de-camp to General Andrew Jackson in the War of 1812 and then launched his own political career after the Compromise of 1820. This agreement permitted Maine (free) and Missouri (slave) to become U.S. states without disturbing the delicate balance in the Senate. Benton was one of Missouri’s first two Senators and his Senate career lasted 30 years.

He became the first Senator to serve five terms in office. His strong anti-slavery position prevented him from winning a sixth term, so he became a member of the House of Representatives.

He was the principal supporter behind the annexation of the Republic of Texas (1846) despite the slavery issue, which was rectified by negotiations for the Oregon Territory and anti-slavery provisos for the new areas seeking statehood after the war with Mexico. Benton further encouraged western expansion by legislating the first Homestead Act that offered free land to those who agreed to settle and live there.

It is easy to understand why Roosevelt selected him for a biography. Benton was not a great orator or writer, or even an original thinker. But his energy and industry, his indomitable will and fortitude, gave him an influence that surpassed nearly all contemporaries. Courteous, except when provoked, his courage was proof against all fear and he shrank from no contest, personal or political. At all times, he held every talent he possessed completely at the service of the Federal Union.

John F. Kennedy included Benton as one of the eight Senators he highlighted in his book Profiles In Courage, citing how Benton sacrificed his re-election to the U.S. Senate in a vain attempt to avoid disunion.

I suspect Teddy Roosevelt may have unwittingly adopted some of these personal traits for himself. They seem entirely familiar to the T.R. I admire and respect so deeply.