Spain – The Intelligent Collector Magazine

Benjamin Franklin’s basement was literally filled with skeletons

A pre-1850 folk art tavern sign depicting Benjamin Franklin sold for $11,250 at a May 2014 Heritage auction.

By Jim O’Neal

The Benjamin Franklin House is a formal museum in Central London near Trafalgar Square. It’s a popular location for kooky political speeches and peaceful demonstrations. Although anyone is free to speak about virtually anything, many visitors are not raptly paying attention, preferring to instead feed the pigeons. I never had the temerity to practice my public speaking, although I’m sometimes tempted (“Going wobbly,” as my English friends would observe).

Known once as Charing Cross, Trafalgar Square now commemorates the British naval victory in October 1805 off the coast of Cape Trafalgar, Spain. Admiral Horatio Nelson defeated the Spanish and French fleets there, resulting in Britain gaining global sea supremacy for the next century.

The Franklin House is reputedly the only building still standing where Franklin actually lived … anywhere. He resided there for several years after accepting a diplomatic role from the Pennsylvania Assembly in pre-Revolutionary times. Derelict for most of the 20th century, the site caused a stir 20-plus years ago while it was being renovated. During the extensive excavation, a cache of several hundred human bones were unearthed

Since anatomy was one of the few scientific things Franklin did not dabble in, the general consensus was that one of his colleagues did, at a time when privately dissecting cadavers was unlawful and those who did it were very discreet. I discovered the museum while riding a black cab on the way to the American Bar at the nearby Savoy Hotel. I may take the full tour if we ever return to London.

However, my personal favorite is likely to remain the Franklin Institute in the middle of Philadelphia. A large rotunda features the official national memorial to Franklin: a 20-foot marble statue sculpted by James Earle Fraser in 1938. It was dedicated by Vice President Nelson Aldrich Rockefeller in 1976. Fraser is well known in the worlds of sculpting, medals and coin collecting. He designed the Indian Head (Buffalo) nickel, minted from 1913-38; several key dates in high grade have sold for more than $100,000 at auction. I’ve owned several nice ones, including the popular 3-Leg variety that was minted in Denver in 1937. (Don’t bother checking your change!).

Fraser (1876-1953) grew up in the West and his father, an engineer, was one of the men asked to help retrieve remains from Custer’s Last Stand. George Armstrong Custer needs no introduction due to his famous massacre by the Lakota, Cheyenne and Arapaho in 1876 – the year Fraser was born – in the Battle of the Little Bighorn (Montana). But it helps explain his empathy for American Indians as they were forced off their reservations. His famous statue titled End of the Trail depicts the despair in a dramatic and memorable way. The Beach Boys used it for the cover of their 1971 album Surf’s Up.

Another historic Fraser sculpture is 1940’s Equestrian Statue of Theodore Roosevelt at the American Museum of Natural History (AMNH) in New York City. Roosevelt is on horseback with an American Indian standing on one side and an African-American man on the other. The AMNH was built using private funds, including from TR’s father, and it is an outstanding world-class facility in a terrific location across from Central Park.

However, there is a movement to have Roosevelt’s statue removed, with activists claiming it is racist and emblematic of the theft of land by Europeans. Another group has been active throwing red paint on the statue while a commission appointed by Mayor Bill de Blasio studies how to respond to the seemingly endless efforts to erase history. Apparently, the city’s Columbus Circle and its controversial namesake have dropped off the radar screen.

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].

McKinley Skillfully Assumed More Presidential Power

This William McKinley political poster, dated 1900, sold for $6,875 at a May 2015 Heritage auction.

By Jim O’Neal

William McKinley was 54 years old at the time of his first inauguration in 1897. The Republicans had selected him as their nominee at the St. Louis convention on the first ballot on June 16, 1896. He had spent several years as an effective congressional representative and more recently the 39th governor of Ohio. Importantly, he had the backing of a shrewd manager, Mark Hanna, and the promise of what turned out to be the largest campaign fund in history – $3.5 million – largely by describing the campaign as a crusade of the working man versus the rich, who had impoverished the poor by limiting the money supply.

In the 1896 election, he defeated a remarkable 36-year-old orator, William Jennings Bryan, perhaps the most talented public speaker who ever ran for any office. McKinley wisely decided he could not compete against Bryan in a national campaign filled with political speeches. He adopted a novel “front porch” campaign that resulted in trainloads of voters arriving at his home in Canton, Ohio.

Bryan would lose again to McKinley in 1900, ducked Teddy Roosevelt in 1904, and then lose a third time in 1908 against William Howard Taft. The three-time Democratic nominee did serve two years as secretary of state for Woodrow Wilson (1913-15) and then died five days after the end of the Scopes Monkey Trial in 1925.

William and Ida McKinley followed Grover and Frances Cleveland into the White House after Cleveland’s non-consecutive terms as the 22nd and 24th president. Cleveland’s second term began with a disaster – the Panic of 1893 – when stock prices declined, 500 banks closed, 15,000 businesses failed and unemployment skyrocketed. This significant depression lasted all four years of his term in office and Cleveland, a Democrat, got most of the blame.

His excuse was the 1890 Sherman Silver Purchase Act, which required the Treasury to buy any silver offered using notes backed by silver or gold. An enormous over-production of silver by Western mines forced the Treasury to borrow $65 million in gold from J.P. Morgan and the Rothschild family in England. Since Cleveland had been unable to turn the economy around, it virtually ruined the Democratic Party and created the era of Republican domination from 1861 to 1933, with only Woodrow Wilson winning in 1912 when squabbling between Roosevelt and Taft split the vote three ways.

It’s common knowledge that McKinley was assassinated in 1901 after winning re-election in 1900, but there’s little attention paid to the time he spent in office beginning in 1897. 1898 got off to a wobbly start when his mother died, leading to a full 30 days of mourning that canceled an important diplomatic New Year’s celebration. Tensions between the United States and Spain over Cuba had electrified the diplomatic community and it was hoped that a White House reception would have provided a convenient venue to discuss strategic options.

Spain had mistreated Cuba since Columbus discovered it in 1492 and in 1895, it suspended the constitutional rights of the Cuban people following numerous internal revolutions. Once again, the countryside raged with bloody guerilla warfare; 200,000 Spanish troops were busy suppressing the insurgents and cruelly governing the peasant population. American newspapers horrified the public with details that offended their sense of justice and prompted calls for U.S. intervention. Talk of war with Spain was in the air again.

On Feb. 9, two days before a reception to honor the U.S. Army and Navy, the New York Journal published a front-page article revealing the details of a Spanish diplomat denouncing McKinley as a weakling, “a mere bidder for the admiration of the crowd.” The same day, the Spanish minister in Washington retrieved his passport from the State Department and boarded a train to Canada.

A rapid series of events led to war with Spain, including $50 million that Congress placed at the disposal of the president to be used for defense of the country, with no conditions attached. McKinley was wary of war due to his experience in the Civil War, but he carefully discussed the issue with his Cabinet and key senators to ensure concurrence. This was the first significant step to war and ultimately the transformation of presidential power. On April 25, Congress formally declared war on Spain and the actual landing of forces took place on June 6, when 100 Marines went ashore at Guantanamo Bay.

McKinley’s skillful assumption of authority during the Spanish-American War subtly changed the presidency, as Professor Woodrow Wilson of Princeton University wrote: “The president of the United States is now … at the front of affairs as no president since Lincoln has been since the start of the 19th century.” Those who followed McKinley into the White House would develop and expand these new powers of the presidency … starting with his vice president and successor Theodore Roosevelt, who had eagerly participated in the war with Spain with his “Rough Riders at San Juan Hill.”

We see their fingerprints throughout the 20th century and even today as the concept of formal declarations of war has become murky. Urgency has gradually eroded the power enumerated to Congress and there is almost always “no time to wait for an impotent Congress to resolve their partisan differences.”

The Founding Fathers would be surprised at how far the pendulum has swung.

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].

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.

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].

As Civil War Loomed, Buchanan Failed to Act, Assumed the Worst

James Buchanan Carte de Visite Signed — This James Buchanan carte de visite, signed and dated September 1866, sold for $6,572.50 at a February 2010 Heritage auction.

By Jim O’Neal

James Buchanan was elected to the U.S. Senate in 1834 and represented Pennsylvania for 11 years during the administrations of presidents Jackson, Van Buren, Harrison and Tyler. He turned down offers to serve as U.S. attorney general for Van Buren and an appointment to the Supreme Court by Tyler. After campaigning for Polk in the election of 1844, he finally accepted the position of secretary of state, since it seemed like a clear path to the presidency.

This was a bad decision and when he and President Polk could not agree on major issues, Buchanan would complain to a friend, “My life is that of a galley slave.”

Buchanan then failed to win the Democratic nomination in 1848 and 1852, but at the age of 62, was given the post of U.S. Minister to Great Britain. There, he gained unexpected notoriety when he secretly joined with other ministers (Pierre Soulé in Spain and John Mason in France) to draft the infamous “Ostend Manifesto,” which proposed to buy Cuba from Spain. If Spain refused, then “we shall be justified in wresting” the island from its owners … a strong inference of war.

Cuba was especially important to Southern Democrats since it was primarily a plantation-slave economy based on sugar and having it as a state would add two senators and nine members to the House of Representatives. However, anti-slave Northerners were not about to go to war with Spain to add more slave states to the Union and the effort was easily defeated.

At the Democratic National Convention in Cincinnati in June 1856, Buchanan bounced back, winning the nomination and then the election.

Two days after Buchanan was sworn in as president, the Supreme Court handed down the Dred Scott decision, which affirmed the right of slave owners to take their slaves into Western territories. This bolstered Buchanan’s belief that slavery was rooted in the Constitution and could not be legislated out of existence; it was an issue for each state to decide.

Then came the Panic of 1857, which was caused by the failure of Ohio Life Insurance Company of Cincinnati. The sudden demise of a once-solid institution touched off a wave of bank runs across the nation that plunged the nation into a deep economic depression. Many railroads failed due to over-expansion as did many state banks that were operating under flimsy regulations. The only areas that were unaffected were the cotton-growers exporting to England (and they needed more slaves to expand production).

It was clear that the slavery issue would lead directly to a civil war and James Buchanan was too inept or unwilling to provide leadership to avoid one. He just assumed the worst and declared that he “would be the last president of a United States.”

Fortunately, he was wrong, but it would take four long years and 620,000 dead Americans to prevent it.

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.