The New York Times – The Intelligent Collector Magazine

Newspapers Have Been Rushing to ‘Break News’ for 150 Years

A Nov. 21, 1863, edition of the *New York Tribune*, which reprinted President Lincoln’s Gettysburg Address, sold for $632.50 at a June 2005 auction.

By Jim O’Neal

Today’s occasionally frenetic journalism began during the Civil War, for two basic reasons.

The first was the telegraph, since this was the first instant-news war in history, and the issue was much like we have with today’s internet. Reports could be filed almost immediately and it resulted in a mad rush to be first with “breaking news.”

The other was steam, used for steam-powered locomotives and the relatively new steam-powered printing presses. Reporters could hop on a train and return to their offices quickly if a telegraph office wasn’t handy. Either way, the demand for timely and accurate news from the front lines transformed American journalism. It was a culture of “Telegraph all the news you can get, and when there is no news, send the rumors.”

They did a lot of that, and the competition was ferocious. New York had 18 daily newspapers, with four or five focused on the war – including the New York Tribune (Horace Greeley), The New York Herald (James Gordon Bennett), and The New York Times (Henry J. Raymond). Of the three, Greeley was the acknowledged celebrity and well-known for his erratic views as opposed to straight news.

He would later challenge President Grant’s reelection in 1872 by splitting the Republican Party, which resulted in the Democrats cancelling their convention and throwing their support to Greeley. So it was Republican Grant against Liberal Republican Greeley … and no Democrats. Grant won easily and Greeley died before the Electoral College could vote (Greeley actually received three posthumous electoral votes).

Bennett may have been the first great genius in American journalism. He had migrated from Scotland after being trained as a Catholic priest, had the finest education, and was devoted to a balanced approach to the news. However, even he occasionally fell victim to rushing to print too fast.

An interesting feature of the “war newspapers” was that each copy was handed around and read by dozens of people. Another is that the armies – both sides – did not report casualties. There were no official lists of those killed, captured or wounded. This was done by individual reporters, who compiled lists and published them. This enhanced reader interest immensely when a reporter was covering specific units where loved ones were involved.

As a group, Civil War correspondents were a motley group of ruffians who called themselves the “Bohemian Brigade.” There was lots of criticism, particularly of The New York Herald, for sending out these hard-drinking characters into the field. Even so, simply substitute today’s gossipy and irresponsible websites for the Civil War telegraph and it becomes perfectly clear how little reporting the news has changed in 150 years.

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].

J.P. Morgan was Crucial to the Financial Development of the United States

5-brown-back-bears-signature-of-new-york-financier-j-pierpont-morgan-a — An 1882 $5 Brown Back, National Bank of Commerce in New York note, bearing the signature of J.P. Morgan as vice president (lower right), went to auction in September 2007.

By Jim O’Neal

John Pierpont “J.P.” Morgan may have been the preeminent U.S. banker in the last half of the 19th century. He was born in 1837, avoided serving in the Civil War by paying a substitute the traditional $300 to take his place, and started his banking career … first in London with his father and then in New York City. In addition to becoming a famous financier, he accumulated a world-class art and precious gem collection.

It is his role in helping finance the development of the United States that provides the most interest. In fact, throughout the entire span of his lengthy financial career, there was a chronic lack of capital in the United States to fund economic development. This was primarily due to the lack of a strong national bank or a system to monitor monetary policy and ensure adequate liquidity … without triggering runaway inflation.

This situation was exacerbated by a series of “financial panics” that seemed to occur with regularity every 15 to 20 years due to myriad factors (e.g. bank failures, speculative bubbles, asset-liability mismatches, over-leverage, economic recessions, depressions, etc.). The United States had several in the 19th and 20th centuries and we almost collapsed the entire financial system in 2007-08 after the bursting of the housing bubble and too much bank leverage using exotic products. Central bankers around the world are still struggling with economic development while sovereign governments abdicate their fiscal responsibility.

During Morgan’s career, there was also the issue associated with European investors being skittish about investments in America that were hard to monitor from 3,000 miles away. This was especially true for railroads that were enormously capital intensive. This void created a perfect role for Morgan in New York and his father in London. They could match up sound investments in the United States with eager foreign investors by taking “moral responsibility” (their term) for overseeing their clients’ investment through their bank.

If a railroad went bankrupt, J.P. would personally step in and take charge by managing the bankruptcy, replacing top management, restructuring the financing, installing a new board (often including himself) and staying until the company’s health was restored. This reorganization of railroads came to be called “Morganization.”

Once the essential railroad structure of America had been knitted together into a sound economic and geographic sector, he then turned his talent to industrial organizations. He put together the first billion-dollar corporation by combining several small steel companies with Carnegie Steel and creating U.S. Steel. Next was Edison Electric and Thomson-Houston to form General Electric, one of the original 12 Dow Jones companies.

He and his partners put together International Harvester, financed AT&T, bailed out the U.S. Treasury when they were about to run out of gold during the 1893 Panic, and almost single-handily stopped the Panic of 1907. In this case, he was a national hero, but within a short period many Americans were horrified that one private citizen had so much power. This led to a national monetary commission and eventually the Federal Reserve System of today.

When J.P. Morgan died in 1913 and billionaire John D. Rockefeller read in The New York Times that his estate was only worth $80 million, Rockefeller reportedly shook his head and said, “And to think, he wasn’t even a rich man!”

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].

When Nation Faces Uncertainty, Good Leaders do What They do Best

Merritt Mauzey’s Depression-era oil on masonite, *Uncle Fud and Aunt Boo*, realized $77,675 at a December 2007 Heritage auction.

By Jim O’Neal

In January 1931, a 46-year-old tenant farmer drew the nation’s attention to a small event in rural Arkansas. Homer C. Coney harvested corn and cotton on land he rented for $8 an acre. But a tremendous drought the previous summer meant that most farmers had no crop, no money and no way to survive the winter.

Coney tried to sell his truck for $25 … no takers. So he and his family – trapped in a one-room shack – tried to exist on a Red Cross relief ration of $12/month. Coney, his wife and five sons lived on beans mixed with lard (to “give it flavor”).

A young neighbor mother visited the family frantically seeking help because her children had not eaten for two days. Coney said, “Lady you wait here. I am a-going to get some food over at Bells – the Red Cross man that never give out nothing.” In England, Ark., Coney discovered a big crowd of people, hungry since the Red Cross office there was out of food vouchers. Soon, there was a crowd of 500 people who confronted the mayor and chief of police. “We’re not beggars and will work for 50 cents a day, but we will not let our families starve.”

All over the country, people read about the brave souls who gathered to demand food. “500 Farmers Storm Arkansas Town Demanding Food for Their Children,” read the front page of The New York Times. “You let this country get hungry and they are going to eat, no matter what happens to budgets, income taxes or Wall Street values,” wrote populist Will Rogers in his newspaper column. “Washington mustn’t forget who rules when it comes to a showdown.”

The Great Southern Drought of 1930 was a catastrophe, to be sure. But this act of desperation was only a small part of the bigger issue in the new decade. In 1930, 26,000 businesses collapsed. In 1931, 28,000 more, and by the beginning of 1932, 3,500 banks, holding billions in uninsured savings, went under. 12 million people (25 percent of the workforce) were unemployed and real earnings fell by one-third. In some cities, it was worse; 50 percent of Chicago was out of work, 80 percent of Toledo.

Soup lines stretched as far as the eye could see. America the land of possibility was the land of despair. In 1931, the people of Cameroon in West Africa sent a check to the people of New York for $3.77 to aid the “starving.” About 20,000 veterans of WWI arrived at the U.S. Capitol to demand early payment of their pensions. On July 28, 1932, General Douglas MacArthur – side by side with Major Dwight Eisenhower with a parade of infantry, cavalry and tanks – routed the squatters as ordered.

Today, it is hard to imagine the level of expectation that greeted President Franklin D. Roosevelt when he took the reins from the much-maligned Herbert Hoover. However, the Democratic platform in 1932 was much the same as Hoover’s: a balanced budget and a curb on spending. Even the term “New Deal” was a fluke line from a nomination acceptance, until it surprised everyone and became popular.

But Roosevelt had a supreme confidence, enormous energy, and a determination equal to that of George Washington and Abraham Lincoln. He quickly cribbed a line from Henry David Thoreau (“Nothing is so much to be feared as fear”), began fireside chats with the American people from a room with no fireplace, and started leading.

That’s what good leaders do.

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.

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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.

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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?)

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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.”