China – The Intelligent Collector Magazine

United Airlines, China and Course Corrections

This United Airlines travel poster from the 1950s sold for nearly $900 at a July 2017 Heritage auction.

By Jim O’Neal

In 1985, a man by the name of Richard Ferris, CEO of United Airlines, developed an innovative one-stop shopping strategy (Fly-Drive-Sleep) and then bought Hertz and Hilton hotels to add the two legs he needed. The expected synergies did not materialize, but he did manage to alienate his pilots and their powerful union. Rumors circulated that he had to travel incognito – under an assumed name – to avoid “last-minute mechanical failures” if his employees discovered him onboard.

In April 1987, barely two years into the new program, the angry pilots’ union made a hostile takeover bid, which effectively put the entire company “in play” on Wall Street. A compromise was reached for Ferris to resign, sell Hertz and Hilton, and change the company name from Allegis back to United Airlines. Everyone was happy except Ferris and the customers, who had suffered through two years of lousy service due to the squabbling.

The new UAL management aggressively decided to rebuild their frayed customer relations. Nancy and I were invited to go on a multistep goodwill tour to China and back. This was our first (of many) long, international flights to Asia that included a stop in Hong Kong, Guangzhou (Canton), Beijing, Shanghai and back to Hong Kong. Everything was first class-plus and I met some interesting CEOs from several major corporations. There were only 20 people (plus crew) on a specially outfitted 747 with fully reclining seats … a novelty in those days.

The food and beverage service was exceptional. However, what impressed me the most was the vastness of the Pacific Ocean. I could finally grasp what Ferdinand Magellan (1480-1521) and his crew encountered when they miscalculated, ran out of food and were so desperate they survived on a tasty dish of rat droppings mixed with sawdust. There were also stories of men gnawing on the ropes that lashed the mainsail. Only 18 men survived, and that did not include Captain Magellan.

The Pacific Ocean is the oldest of the world’s seas, a relic of the once all-encompassing Panthalassan Ocean that opened up 750 million years ago. It is by far the world’s biggest body of water – all the continents could fit easily within its borders, with ample room to spare. It is the most biologically diverse and seismically active, and holds the planet’s greatest mountains and deepest trenches. Its chemical influences and weather systems affect the entire orb we call home.

Most think of the Pacific Ocean in parts … a beach here … an atoll there … a long expanse of deep water. Captain James Cook wrote that by exploring the Pacific, he had gone “as far as I think it is possible for man to go.” Cook was not aware that it is 64 million square miles and humans are still exploring it.

Even the highly revered British Admiralty’s chart room bible “Ocean Passages for the World” still cautions sailors embarking on a crossing: “Very large areas are unsurveyed … no sounding at all recorded … only safeguards are a good lookout …”

The Chinese have always had good lookouts and now view the Pacific Ocean as their next area for expansion and dominance. They tell me to consider the past 4,000 years when judging their progress and to view the 20th century as an anomaly. They made a course correction to compensate for Mao Zedong and are now back on track for the next 1,000 years. They studied the flaws in our last financial system meltdown (greed and overleverage) and decided to create their own World Bank. They view our form of democracy with disdain since we appear irreparably divided over every single important strategic issue, with our economy bankrupt and elected officials in Washington, D.C., as the only ones with good health insurance, pensions and job security … hopelessly gridlocked.

They think it is better to have a strong leader and a navy capable of dominating the South China Sea with impunity. The great battle for the 21st century is essentially over. However, what they don’t understand is that we always find a way, then come together as needed. Winston Churchill put it best: “Democracy is the worst form of government, except for all the others.”

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].

Atom Bombs: From Pop Culture Novelty to Unimaginable Threat

first-day-cover-postmarked-july-28-1955 — A First Day Cover postmarked July 28, 1955, and signed by six crew members of the Enola Gay, which dropped the first atomic bomb on Hiroshima, went to auction in April 2005.

By Jim O’Neal

As North Korea continues to relentlessly pursue offensive atomic weapons – perhaps a weaponized missile delivered by a submersible vessel – the world is perplexed over how to respond. U.S. sanctions are ignored, China is permissive, complicit or both, and South Korea and Japan grow more anxious as the United Nations is irrelevant, as usual.

Concurrently, polls indicate that attitudes about the use of atomic bombs against Japan to end World War II are less favorable. But this was not always the case.

At first, most people had approved the use of the bomb on Hiroshima, followed by a second bomb a few days later on Nagasaki. They agreed the bombs hastened the end of the war and saved more American lives than they had taken from the Japanese. Most people shared the view of President Truman and the majority of the defense establishment: The bomb was just an extension of modern weapons technology.

There had even been some giddiness about the Atomic Age. The bar at the National Press Club started serving an “atomic cocktail.” Jewelers sold “atomic earrings” in the shape of a mushroom cloud. General Mills offered an atomic ring and 750,000 children mailed in 15 cents and a cereal box top to “see genuine atoms split to smithereens.”

But the joking masked a growing anxiety that was slowly developing throughout our culture. In the months after it ended the war, the bomb also began to effect an extraordinary philosophical reassessment and generate a gnawing feeling of guilt and fear.

Then, the entire Aug. 31, 1946, issue of The New Yorker magazine was devoted to a 30,000-word article by John Hersey entitled, simply, “Hiroshima.” The writer described the lives of six survivors before, during and after the dropping of the bomb: a young secretary, a tailor’s wife, a German Jesuit missionary, two doctors and a Japanese Methodist minister.

The power of Hersey’s reporting, devoid of any melodrama, brought human content to an unimaginable tragedy and the response was overwhelming. The magazine sold out. A book version became a runaway bestseller (still in print). Albert Einstein bought 1,000 copies and distributed them to friends. An audience of millions tuned in to hear the piece, in its entirety, over the ABC radio network.

After Hersey’s book with its explicit description of the atomic horror (“Their faces wholly burned, their eye sockets were hollow, the fluid from their melted eyes had run down on their cheeks”), it was impossible to ever see the bomb as just another weapon. The only solace was that only America possessed this terrible weapon.

However, it soon became clear that it was only a matter of time before the knowledge would spread and atomic warfare between nations would become possible. People were confronted for the first time of the real possibility of human extinction. They finally grasped the fact that the next war could indeed be what Woodrow Wilson had dreamed the First World War would be – a war to end all wars – although only because it would likely end life itself.

Let’s hope our world leaders develop a consensus about the Korean Peninsula (perhaps reunification) before further escalation. It is time to end this threat, before it has a chance to end us.

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].

Trade Has Created Economic Opportunities for More than 100 Years

To celebrate the opening of the Panama Canal, the U.S. Mint produced this 1915-S $50 Panama-Pacific Octagonal. This example, graded MS67 NGC, realized $282,000 at an April 2014 Heritage auction.

By Jim O’Neal

The ceremonial opening on Nov. 17, 1869, of the Suez Canal, linking the Mediterranean and Red seas, was an emphatic declaration of European – specifically French – technological and financial means. It was also a significant illustration of a rapidly emerging and increasingly global economy and, simultaneously, a further boost to Europe’s imperial ambitions.

The Suez Canal reduced the sailing time between London and Bombay by 41 percent and the route to Hong Kong by 26 percent. The impact on trade was obvious, as it greatly simplified the defense of India and its critical markets, Britain’s key imperial goal. Trade in the Indian Ocean was now protected by 21 Royal Naval bases, making it a virtual monopoly.

An even more challenging project was the construction, begun in 1881, of the Panama Canal linking the Atlantic and Pacific oceans. It was a French initiative, but plagued by controversy and a consistently hostile climate that cost the lives of 22,000 laborers. The United States eventually completed the project in August 1914 after the French finally conceded defeat.

It was the largest and most expensive engineering project in the world.

It, too, dramatically reduced sailing times, shortening the Liverpool to San Francisco route by 42 percent and the San Francisco to New York time by 60 percent. The project assumption by the United States marked a crucial shift in attitudes in both trading and advancing U.S. interests in foreign affairs. This started in 1898 when the United States itself became a colonial power by taking over the Philippines from Spain.

It then accelerated under President Teddy Roosevelt (1901-09), when he actively advocated American military involvement, especially in Latin America, to ensure stability as a means of advancing American interests. A major consequence was the strengthening of the U.S. Navy and its “Great White Fleet,” which completed a circumnavigation of the globe between 1907 and 1909. This was followed by President William Howard Taft’s Dollar Diplomacy, by which American commercial interests – primarily in Latin America and East Asia – were secured by the backing of the U.S. government to encourage huge investments.

A hundred years later, we are still actively pursuing a variant of this strategy by advocating two-way investment with Brazil, China and India despite being on a short hiatus until the current political season ends. This is the only rational way to create the jobs we need and keep our trading partners’ markets open.