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The Roaring Twenties were Outrageous, and Then … Black Tuesday

The Roaring Twenties as depicted in Everett Shinn’s 1925 Curtain Call. This oil on canvas realized $119,500 at a May 2007 Heritage auction.

By Jim O’Neal

One man poisoned himself, his wife and their two young children. Another dropped dead in his stockbroker’s office. Still another (in North Carolina) went into his garage and shot himself. Both the rich and poor were affected.

Winston Churchill woke up in a New York hotel room to a loud commotion. “Under my very window, a gentleman cast himself 15 stories and was dashed to pieces.” Irving Berlin explained it this way: “I had all the money I wanted for the rest of my life. Then suddenly I didn’t!”

It was Black Tuesday, Oct. 29, 1929.

The “Roaring Twenties” conjures up Prohibition, gangsters, flappers and bizarre fads: flagpole sitting, dance marathons, talking movies, the Marx Brothers … and the greatest fad of all … playing the stock market.

Previously a rich man’s game, by the 1920s one million Americans owned 300 million shares of stock, much of it bought on margin. And why not? There were all these new things like radios, telephones, affordable cars and, especially, the ticker tape machine allowing individuals to buy and sell stocks almost instantly.

A person would have to be crazy to stick their money in a bank when you could make a small fortune buying “on the margin.” Calvin Coolidge said: “The business of America is business” and business was booming!

New technologies for refining oil allowed companies to produce more iron, steel, gas and chemicals. Then Treasury Secretary Andrew Mellon cut corporate taxes and previously marginal companies had more money to spend. Many of them spent it buying stocks, driving the stock market even higher (and also boosting their profits).

During the summer of 1929, the stock market reached an all-time high with a record number of shares purchased. However, astute investors noticed a number of troubling warning signs. First was the ever-increasing number of shares bought on margin, a key indicator of increased leverage and a tell-tale sign of speculation versus investing. Second, only 400 of the 1,200 companies listed on the NYSE were actually increasing their revenues and profits fast enough to justify the higher stock prices. Lastly, “Stock Trusts,” pools of money by wealthy investors, could manipulate individual stocks by simply investing heavily in them.

The stock market was being rigged in plain sight, but only a few like business theorist Roger Babson was warning about an impending crash.

Throughout September and October, market volatility increased sharply and on Oct. 24, a near-crash occurred (Black Thursday) when there was a sharp, terrifying plunge. When the market opened, it went straight down and by mid-afternoon stocks had lost $11 billion. But brokers managed to stabilize it and it recovered 75 percent.

On Monday, there was another plunge as those who had survived decided to try and salvage what they had, despite many calls of reassurance. And on Tuesday, Oct. 29, the carnage really began.

The day started with thousands of people congregating on Wall Street, as if they needed to be present for some historic event. All of the major stocks began to crash.

Brokers were flooded with sell orders.

In two hours, eight million shares were sold. Then more margin calls were made and people began to literally fall into shock. By 3 p.m., after five hours of trading, the market closed. Sixteen million shares had been traded at an estimated loss of $15 billion.

Then stories of suicides began. Will Rogers wrote, “You had to stand in line to get a window to jump out of.” Then businesses began to die as well. First to go were the investment firms, followed by the companies who over-speculated on stocks, and then finally the banks.

Like a house of cards, the Roaring Twenties tumbled to an end and the country was entering the first phase of the Great Depression. It would continue for another 12 long years until we entered World War II.

Nothing like a nice little world war to get the economy humming 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 Chairman and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

Inquisition Remains a Dark Stain on Reputations of Ferdinand and Isabella

Documents signed by King Ferdinand and Queen Isabella have appeared at auction, with some pieces realizing more than $13,000.

By Jim O’Neal

On Feb. 6, 1481, seven people were marched out of the Cathedral of Seville, led by chanting black-robed Dominican Friars. The seven were dressed in yellow robes, held votive candles and had nooses around their necks.

These seven people (six men and one woman) were “conversos” – Jews who had been converted to Christianity, but were suspected of having relapsed and practicing the Jewish faith (again).

King Ferdinand and Queen Isabella had decided everyone in Spain would worship the same God … period. Thus began the infamous Spanish Inquisition. Just as remarkably, it lasted officially for almost 400 years until abolished in 1834, but most active from 1480 to 1530.

Ferdinand and Isabella married in 1469, both devoutly religious Catholics, and wanted all of Spain to worship Christ. Earlier, Judaism, Islam and Christianity had co-existed in peace, but in the 15th century, Jews and Muslims were increasingly persecuted. Many fled or simply converted to Christianity.

But there were widespread rumors of the conversos, which prompted the Catholic Monarchs to investigate. They turned to Pope Sixtus IV for guidance. On Nov. 1, 1478, he issued a papal bull authorizing the Inquisición.

It took three years to complete, but then the purgative flames blazed high.

The seven were marched to an open field, which became known as the Quemadero (or burning place). They were offered a chance to repent … which only offered an option to be strangled … and then burned at the stake.

The Inquisition quickly spread from one Holy Office in Seville to nearly two dozen across the entire country. However, treatment was so harsh that eventually Ferdinand decided to expel all Jews and issued the Alhambra Decree of March 1492, which ordered the expulsion of all Jews and Muslims from Spain in three months.

Historians debate the number that were killed and the actual role of the Catholic Church. However, the Spanish Inquisition remains a dark stain on the otherwise sterling reputations of King Ferdinand and Queen Isabella.

When George Washington Told a Lie

The U.S. Capitol first appeared in its entirety on Series 1869 $2 Legal Tenders.

By Jim O’Neal

George Washington died in December 1799 at age 67 and numerous writers sensed an opportunity to record the details of his life. One of the first to get a publisher’s approval was an itinerant book peddler and Episcopal priest by the name of Mason L. Weems.

He rushed out The Life of Washington in pamphlet form in mid-January 1800. In that and succeeding volumes, he began manufacturing enduring myths regarding Washington, including the famous “chopping down the cherry tree.” In Weems’ version, 6-year-old George told his father “I cannot tell a lie, I used my little hatchet to cut it down.”

Generations of schoolboys (including me) were taught about the virtues of truth using this delightful little parable. However, there was one man who caught President Washington in an embarrassing lie.

The story begins with a dinner hosted by Thomas Jefferson for Alexander Hamilton and James Madison to resolve two thorny issues being debated. The first was the permanent site for the capital. The second was Hamilton’s insistence on the federal government assuming all the states’ debts from the Revolutionary War.

Jefferson and Madison finally agreed to passage of the debt assumption bill. In return, Hamilton promised to lobby the Pennsylvania delegation to endorse Philadelphia as the temporary capital and a site on the Potomac as the final.

Congress passed the Residence Act, which approved Philly as the capital for 10 years and then a permanent home on a 10-mile-square federal district on the Potomac near Mount Vernon.

When the capital moved to Philadelphia, Washington decided to bring his favorite chef from Mount Vernon, the slave Hercules, who ran an immaculate kitchen. The handsome and talented Hercules had a lot of freedom in Philly and plenty of cash from selling the food left over from presidential dinners.

However, Attorney General Edmund Randolph startled Washington when he told him that under Pennsylvania law, any adult slave residing for six consecutive months was automatically a free person.

So George sent Martha back to Mount Vernon before six months lapsed and told Hercules he wanted him to accompany her to be sure she was well cared for. Hercules became enraged since he was well aware of the law. He was also angered because he was so loyal to the family and this ploy questioned his integrity and fidelity.

He was so sincere that he was allowed to stay in Philadelphia and thus became the only man known to be lied to by George Washington!

P.S. Hercules took advantage of the law and secured his freedom, permanently.

Presidential Election Has All the Elements for a Third-Party Surprise

This Roosevelt & Johnson campaign flag for the 1912 “Bull Moose” Progressive Party ticket realized more than $5,900 at a May 2010 Heritage auction.

By Jim O’Neal

Former NYC Mayor Michael Bloomberg recently indicated he may once again consider a run for the presidency, presumably as a third-party candidate. He had similar aspirations in both 2008 and 2012, but finally concluded it would be futile.

Most politicos presume this is a low possibility, primarily because historically, third-party aspirants have not fared well at the ballot box. Most believe that the current two-party system is tilted against third parties, unless there are unusual situations.

The most prominent example was over 100 years ago when Teddy Roosevelt broke his promise of “no third term” by declaring he had actually meant “no consecutive three terms.” Once he failed to get the Republican nomination, he broke away and ended up finishing second as a Progressive (Bull Moose) candidate in 1912. This ended up dividing Republican support for President Taft and allowed Woodrow Wilson to capture the presidency in an upset.

A similar situation occurred in 1992 when Ross Perot siphoned off 19 percent of the popular vote and Bill Clinton defeated the incumbent President Bush 41 with 43 percent of the popular vote.

Another example is the Libertarian Party, which fielded their first presidential candidate in 1972. After a convention in Salt Lake City, they chose John Hospers (who was chairman of the Philosophy Department at USC) for president and Theodora “Toni” Nathan for vice president.

Out of 77 million votes cast, they received a grand total of 3,674 official votes.

However, there was one “faithless elector,” Roger MacBride from Virginia, who decided that the Libertarians were more deserving than Nixon/Agnew and cast his vote for them (maybe he knew something?). Regardless, the result was that Hospers became the last third-party candidate to win an electoral vote and Toni Nathan became the first, last and only female to ever win one (as a third-party candidate).

For the record, Strom Thurman snagged 39 electoral votes in 1948 and George Wallace ended up with 46 in 1968. Ross Perot received almost 20 million votes in 1992, but ended up with zero electoral votes.

The “Corrupt Duopoly” that journalist Tom Friedman labels the current political elite has become very effective at limiting third-party efforts to break through. This may be a good thing when compared to the multi-party systems in Europe that require odd coalitions to form governing majorities.

This election year has all the elements to provide a surprise for the first time in many years.

Highly Hunted Sperm Whales Brought Wealth to Eastern Ports

A true first edition of Herman Melville’s *Moby Dick* (The Whale, in three volumes, London: Richard Bentley, 1851), preceding the New York edition by about four weeks, realized $53,775 at a June 2008 Heritage auction.

By Jim O’Neal

In November 1851, Herman Melville’s Moby Dick was published in the United States. It was based on a true story of a sperm whale that attacked and sank the whale ship Essex.

It was not successful until long after Melville died and even the eight or nine movies that followed were box office disappointments. My favorite movie, Moby Dick (1956), directed by John Huston and starring Gregory Peck, has yet to turn a profit.

Until the 18th century, the quality of lighting had remained relatively unchanged for 3,000 years. People had devised many low-tech, ingenious solutions to combat darkness without much success. But in 1783, Swiss physicist Aimé Argand invented a lamp that dramatically improved its use by feeding more oxygen to the flame. It even featured a knob to easily adjust the light output.

Thomas Jefferson was so impressed he brought several back from Paris in 1790.

However, the best light of all came from burning whale oil and the best whale oil was spermaceti from the head of sperm whales. Sperm whales even now are mysterious and elusive animals, but they produce and store great reserves of spermaceti – up to 3 tons – in a cavernous chamber in their skulls.

The sperm whale is also the largest of the toothed whales and the largest of any toothed predator. It has the largest brain of any animal – modern or extinct – on Earth. This combination produced a legendary battle between man and a highly hunted creature of the sea.

Whale oil became an American specialty and it was primarily whaling that brought so much wealth to New England and the key eastern ports. In 1846, America had more than 650 whaling ships, three times the rest of the world, combined.

Let there be light.

There Might be a Reason We Haven’t Met Little Green Men

Alien life forms as envisioned by Al Feldstein for the 1952 cover of *Weird Fantasy* #16. This original cover art realized $50,787 at a May 2012 auction.

By Jim O’Neal

I was discussing with friends the famous Fermi paradox, which raises the question: Why haven’t we detected signs of alien life, despite high estimates of probability – such as observations by the Kepler telescope of planets in the “habitable zone” around a Sun-like star and calculations of hundreds of billions of Earth-like planets in our galaxy that might support life?

Now, astrobiologists from Australian National University (ANU) Research School of Earth Sciences say they have the best answer: Because life on other planets would likely be brief and would become extinct quickly from runaway heating or cooling.

“The universe is probably filled with habitable planets, so many scientists think it should be teeming with aliens,” said Aditya Chopra, lead author of a paper published in Astrobiology. In fact, “early life is fragile, so we believe it rarely evolves quickly enough to survive. Most early planetary environments are unstable. To produce a habitable planet, life forms need to regulate greenhouse gases such as water and carbon dioxide to keep surface temperatures stable.”

For example, about 4 billion years ago, Earth, Venus and Mars may have all been habitable. However, a billion years after formation, Venus turned into a hothouse and Mars froze into an icebox. Early microbial life on Venus and Mars, if there was any, failed to stabilize the rapidly changing environment, while life on Earth played a leading role in stabilizing the planet’s climate.

The authors name this near-universal early extinction the “Gaian Bottleneck,” which also leads to the prediction that the vast majority of fossils in the universe (found in future meteorites, for example) will be from extinct microbial life, not from multicellular species such as dinosaurs or humanoids that take billions of years to evolve.

So far, that is the case.

The aliens are silent because they’re dead.

State of the Union Speeches Will Continue Evolving

Twenty-three lines in Abraham Lincoln’s own handwriting from his last State of the Union address went to auction in June 2009.

By Jim O’Neal

On Jan. 15, 1975, President Gerald Ford in his State of the Union speech said:

“The State of The Union is not good. Millions of Americans are out of work. Recession and inflation are eroding the money of millions more.”

“Prices are too high and sales too slow.”

“The national debt will rise to over $500 billion.”

“We depend on others for essential energy.”

These were remarkably candid admissions and atypical from most of his predecessors, who took great leeway with the facts to spin a nice story.

George Washington personally delivered the first State of the Union to a joint session of Congress on Jan. 8, 1790.

Then Thomas Jefferson abandoned the “in person” practice because it was too similar to what a monarch might do, something he was trying to avoid (i.e., a speech from the throne).

In 1913, President Woodrow Wilson revived the practice and it has gradually become a major national event. It has also morphed into a presidential wish list rather than a practical, non-political assessment of national conditions … as designed.

Personal attendance by high-profile politicians is a “must,” except for one Cabinet member who is in the line of secession (a designated survivor) in the event of a major catastrophe.

In 1981, Jimmy Carter felt compelled to issue an “exit” State of the Union, but that lame-duck ritual has been discontinued.

However, I suspect presidents will increasingly remind us … one more time … about everything that was accomplished, in case we forgot. It provides an excellent chance to combine a farewell with the start of a memoir … and not leave a legacy assessment in the hands of less gentle hands.

I would.

Coolidge’s Quiet Demeanor Was No Hindrance to a Winning Campaign

This four-inch Calvin Coolidge “Deeds Not Words” political button alludes to his taciturn nature. It realized $3,346 at a November 2011 Heritage auction.

By Jim O’Neal

In 1924, incumbent President Calvin Coolidge (R) squared off against Democrat John W. Davis. As vice president, Coolidge assumed the presidency as a result of Warren G. Harding’s odd death in 1920 and voters were still trying to assess this quiet, taciturn man born on July 4 in Plymouth Notch, Vt. He favored U.S. participation in the World Court, but opposed any involvement in the League of Nations.

Although in opposing parties, Coolidge and Davis shared similar conservative views on the role of the federal government: lower taxes, less regulation and a small, focused agenda (some things never change … just the individuals espousing them).

In fact, their views were so similar that historians call this election “the high water mark of American conservatism.”

Naturally, this didn’t sit well with Liberal Progressives, so they formed a new Progressive Party (it only lasted for one election) and then ratified the nomination of Wisconsin Senator Robert M. La Follette for president.

Although La Follette represented this minor third party, he managed to snag 4.8 million votes and 13 electoral votes … probably just as well since he died several months after the election of heart disease (a common malady for men of this era).

The third party divided the Democratic Party rather badly and allowed President Coolidge to keep his job.

Coolidge’s vice president, Charles G. Dawes, had written the music in 1911 for a tune which eventually became a big hit in 1958 for Tommy Edwards. “It’s All in the Game” is the only number one hit co-written by a VP.

The election of 1924 was also the first presidential election in which all American Indians were recognized as citizens and allowed to vote.

How an ‘Oops’ Turned Into a Popular Magazine Feature

This signed Charles Lindbergh photograph realized $3,883 at a September 2007 auction.

By Jim O’Neal

In 1928, Time magazine was chagrined when they realized they had left Charles Lindbergh off the cover after he made his historic transatlantic flight.

So the editors came up with a novel provision and literally created a new feature: “Man of the Year.” Naturally, the first was Lindy, and it started an exciting new trend that also boosted sales.

●●●

In 1920, The New York Times wrote a scathing editorial that scoffed at the idea of rockets being launched into space. They opined that “they would need something better than a vacuum against which to act.”

Forty-nine years later, after Apollo 11’s 1969 launch, the Times published a retraction. “It is now definitely established a rocket can function in a vacuum as well as in an atmosphere.” The Times regretted the error.

●●●

On Jan. 1, 1902, Michigan beat Stanford 49-0 in what would later become the Rose Bowl. This first game was called the “East-West” and Stanford was so beat up (physically) that they quit with eight minutes left to play.

The attendance was so poor (8,500) the promoters dropped football for the next 14 years. They switched to polo, chariot races, ostrich races and even an elephant-camel race.

The first official Rose Bowl was 1923.

That first Michigan team, dubbed the “Point a Minute Team,” won all 10 games with combined scores of 555-0.

I suspect this may have included the first serious college recruiting efforts. (Do you think?)

●●●

In 1973, a Florida shipbuilder by the name of George Steinbrenner bought the New York Yankees from CBS for $10 million. Four years later, he paid right fielder Dave Winfield $20 million for one season.

Last year, the team franchise was valued at $3.2 billion – second only to the Dallas Cowboys at $4+ billion.

In his initial press conference, Steinbrenner promised he would not interfere in the day-to-day operations of the team. (However, he did not specify how long this would last. My guess is sundown on day two.)

In Texas, that’s called the Golden Rule – “He who has the gold, makes the rules.”

There May be a Ninth Planet (Not You, Pluto)

This oil on board by Chesley K. Bonestell titled Solar System realized $7,170 at a June 2007 auction.

By Jim O’Neal

“There might be a ninth planet in the solar system after all, and it is not Pluto.” — The New York Times, Jan. 21, 2016

Our solar system consists of the sun and a family of planets and other bodies trapped in orbit around it by the force of gravity.

Our sun formed 4.6 billion years ago. Vast amounts of matter were attracted by the developing star, but not all of it was absorbed. A tiny fraction of leftover material – a mere 0.14 percent of the solar system’s mass – formed a disc of gas and dust encircling the newborn star. Over millions of years, the grains of dust in this disc clumped together, growing into ever larger bodies.

Eventually, they grew to the size of planets, pulled into spheres by their own gravity.

In the inner solar system – where the sun’s heat was too intense for gases to condense – planets formed from rock and metal. In the outer solar system, gases condensed to form much larger planets.

Today, our solar system has eight planets, more than 100 moons, an unknown number of dwarf planets (e.g. Pluto) and countless millions of comets and asteroids.

The four small, inner planets are Mercury, Venus, Earth and Mars. Our home planet is the only place known to support life, thanks to the liquid water on its surface and its PRECISE distance from the sun that provides just the right amount of heat.

Four gigantic planets dominate the outer solar system, very different from the rocky inner planets. These strange worlds are huge globes of gas and liquid, with no solid surfaces.

Mighty Jupiter is the fifth planet from the sun and the largest in the solar system, so big that it is 2.5 times more massive than all the other planets put together (1,300 Earths could easily fit inside Jupiter’s volume).

Its strong gravitational pull greatly affects the orbits of the other bodies in the solar system.

In 1665, a great red spot was first noticed that turns out to be a giant storm (bigger than Earth) that has been raging for over 350 years. Several craft have visited Jupiter, including Galileo, which orbited from 1995-2003.