Health food claims? Nothing new here.

 

 

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From the New York City’s Jewish Daily News, July 12, 1926.

“Zeit Gezunt!” says the headline.  “Be Healthy!”

This quarter-page ad for the “Natural Health Food Store” comes from the July 1926 Jewish Daily News, a favorite among Yiddish-speaking Jewish immigrants on New York’s crowded lower East Side back then, almost 90 years ago.  But the ad could have come from any health food store, then or now.  People have always wanted to eat well, eat healthy, eat smart.  But back then, long before claims were checked by any government agency like the US Food and Drug Administration, the chance of being fooled by smooth-talking nonsense was much greater.

“Eat Natually Healthy Food!” this ad says — using phonetic Hebrew letters to spell out English words like “naturally” or “specialty” or “rhumitism,” words with no Yiddish equivalent that immigrants barely understood.  Still, they sounded wonderful, just like the handsome, bare-chested young man in the drawing and the gorgeous-looking plate of grapes, bananas, pears and apples in his hand.

For just $3, the Natural Health Food Store offered you a wonderful meal that, among other things, would cure diabetes, stomach flu, kidney disease, and over-eating.  How did you know?  Because they said so.  And perhaps hopefully because nobody who ate there got sick before walking out.

People today may complain that government regulators sometimes are too strict or intrusive in demanding honest disclosures about what we eat.  Sometimes too much information causes confusion or can be misleading, or there are honest diisagreements about the underlying science.  But don’t forget the big picture.  Given the choice, I’d still rather have an FDA and all the other government watchdogs, with all their faults, then none at all.

But that’s just me.      (And a well-earned thanks to my colleague Dick Siegel of OFWLAW for his help in deciphering the Yiddish.)

FAMILY HISTORY: Anniversary- One hundred years in America.



Copy of the original ship’s manifest.  Our family is listed at lines ten through fourteen.  From Ancestry.com.

I can’t let this September go without marking an anniversary for my own family.  It was exactly one hundred years ago this month that my father, Bill Ackerman, landed in America.  My mother would come a few years later, in 1926, and they would meet on the lower East Side of NYC.  The rest, as they say, is history.

My Dad was five years old at the time.  (In the photo below, taken in Poland, he is the baby sitting on his mother’s lap.  On the ship’s manifest above, he is listed on line 14 under his Yiddish name, Meier Zev.)   Their ship, the SS Main,  left Bremen and landed in New York on September 19, 1912.   On their reasons for the trip, see A Love Story from Poland – Sheah and Yetta Akierman.

Photo taken shortly before leaving Poland, circa 1910.  The children Ruchel, Bill (Meier Zev), and Chafa and Feiga are left to right, with Yetta (Yachel) seated in the middle and Abe, the oldest son, standing behind. 

Here’s how my Aunt Rachel (the little girl Ruchel standing on my Dad’s right in the photo above) described the trip many years later in her self-published memoir Horseradish: Jewish Roots.  Enjoy-

“In 1912 we were ready to leave for America.  From our little town we took a horse and cart to Yanow. From there we took a train to Warsaw.


“In Warsaw I met my father’s mother, who I had never seen before. We stayed overnight with them. My grandmother was straight, tall and very quiet. She kissed us and cried because she was an old woman and knew she would never see us again. Aunt Geitle Vlotover gave us presents from her store to take along with us on the train to Hamburg. In the morning we took the train to Hamburg, Germany, to reach the ship, the Main, that was leaving for America.
…..

“We sailed on the Main for thirteen days. We traveled 3rd class. It was very crowded and we had to stand in line with tin plates like animals to get food. Most of the people got seasick and stood by the rails all day vomiting or rolling on the decks, too ill to get up.


“My mother and Hannah were very, very sick. Fanny, Bill and I were the only ones who were okay. Bill was too young to remember anything.

“While I was on the ship, I missed my friends and thought about the little town that I had left. I remembered how we used to do the wash by a little brook. You had to lift your skirts not to get wet, then kneel by the rocks and wash the clothes with soap and then bang them with the rocks.

…..

The Main, the ship that brought my family to America in 1912.

“After a few days on the ocean, many people began to get very, very sick – in addition to the sea sickness. Some of them died and were buried at sea. The waves looked so high to me that they seemed to reach the sky. We were very frightened. My mother and sister Hannah got very sick also. We cried because we were afraid they would die and be thrown overboard like the other dead people we saw. Hannah was delirious and had a high fever. So did my mother.


“On the 12th day out we were on the deck crying and the sailors were talking to us. They told us that, in a couple of hours, we would be in sight of land. They knew this because they could see birds flying.

“While we were standing there a miracle occurred. We saw our mother and Hannah coming to us on the deck from the sick bay. We started to scream and shout in disbelief.

“My mother told us later she had a dream while she had the fever, and Hannah had the same dream at the exact time. They dreamt that my mother’s dead brother, Moses Zies, had come to them. He gave them a piece of veal to eat and even told them to suck on the bones. They dreamt that they did what he told them to do, although in reality they had been throwing up since coming aboard the ship. The dream meat tasted delicious, they said. As they told the story, they vomited one more time, but from that moment on they were well.

“One of the funnier things that happened to us on the ship took place earlier in the voyage. The sailors pointed out to my mother that we were passing London. My mother’s half-brother, Jack Baumiel, lived in London. Although there was no land in sight, my mother made us line up at the rail and wave “hello” to Uncle Yankle.

“I remember the food they gave us was so salty you could hardly eat it. We used to take a walk to the upper decks to see how the 1st and 2nd class passengers lived. There were tables and fancy dining rooms, and we were jealous.

“We landed on a beautiful day in September. We passed the Statue of Liberty and landed at a place called Castle Gardens [the US government immigration station on the lower tip of Manhattan]. We were among the first ones off the ship.
…..
“We got off the ship and all the immigrants were herded into a big building on the water’s edge. The first thing that happened was an eye examination by doctors. Anyone who had a disease was sent right back to Europe.


“As we stood in the line waiting, my mother prayed that they wouldn’t find anything wrong with us. We all passed. After that, we waited less than ten minutes before my father, my aunt Nettie, my sister Helen, and Nettie’s husband the policeman, all appeared to greet us. By now, Helen had gotten married and had a little six month-old girl named Florence.

“They took us to my aunt Nettie’s store where she had rooms in the back. The address was 24 Second Avenue in Manhattan. We couldn’t believe we were on American soil. Everyone talked English at us and we couldn’t make out what they said. I thought they were talking about us.  …..”

GUEST BLOG: Civil War- Antietam 1862 and its terrible general, George B. McClellan

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Oil painting of General George Brinton McClellan, from a photograph by Matthew Brady.

  

With all attention these days on the national political campaign, let’s not forget another big item this month, the 150th anniversary of Antietam, the bloodiest single-day battle in American history.  With 23,000 casualties, Antietam marked a turning point in the Civil War, prompting President Abraham Lincoln to move ahead with his Emancipation Proclamation while also ending the military career of the Union’s controversial general, George Brinton McClellan.  McClellan’s refusal to chase the enemy, either before or after the battle, finally would led Lincoln to take away his command.

In the new book The Maryland Campaign of 1862:Vol.. II: Antietam, Thomas Clemens brings us a newly edited and annotated version of the original intimate account from Ezra Carman, a Union officer who commanded the 13th New Jersey Volunteers at Antietam and became the country’s leading scholar on the battle.  In this excerpt, he focuses on McClellan’s hesitancy the day before the big shootout.  (Click here to see the book trailer on YouTube):

    During the afternoon and night of the 15th McClellan’s forces moved to the positions assigned them, but it was not until after daybreak of the 16th that the great body of them were in their designated places, some brigades did not get up until noon. Hooker’s (First) Corps was in the forks of the Big and Little Antietam. Sumner’s (Second) Corps was on both sides of the Boonsboro and Sharpsburg road, Richardson’s Division in advance, near the Antietam, on the right of the road. Sykes’ Division was on the left of Richardson’s, and on Sykes’ left and rear was Burnside’s (Ninth) Corps. Mansfield’s (Twelfth) Corps was at Nicodemus Mill or Springvale. Pleasonton’s cavalry division was just west of Keedysville.7
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      Near midnight of the 15th two companies each of the 61st and 64th New York, under command of Lieutenant Colonel Nelson A. Miles, passed along the rear of Sedgwick’s Division and some distance along the bluff below the “middle bridge”, then turning back reached the bridge just as a party of Union cavalry came riding sharply over it from the south bank. They informed Miles that the enemy had fallen back and that there were none in the immediate front of the bridge. Miles crossed the bridge to the west side of the creek, and marched cautiously west along the highway. 

It was then daybreak. A heavy fog prevented vision for more than fifteen or twenty feet; the dust in the road deadened the sound of the footsteps and silence was enjoined. Miles who was in advance, had reached the crest of the ridge about 600 yards beyond the Antietam, and was about to descend into the broad ravine where the Confederates were in position, when he ran upon a Confederate crossing the road, whom he captured and from whom he learned, that he was very near the Confederate line. The command was faced about and moved back with as much silence and celerity as possible, and recrossed the bridge before the fog lifted, but long after daylight of the 16th.  
        There has been much criticism on the failure of McClellan to attack Lee on the afternoon of the 15th or at least early on the 16th. We have referred to the failure to do so on the 15th. The situation, inviting prompt attack on the morning of the 16th, is well stated by General F. A. Walker in the History of the Second Army Corps:
“If it be admitted to have been impracticable to throw the 35 brigades that had crossed the South Mountain at Turner’s Gap across the Antietam during the 15th, in season and in condition to undertake attack upon Lee’s 14 brigades that day with success, it is difficult to see what excuse can be offered for the failure to fight the impending battle on the 16th, and that early. It is true that Lee’s forces had then been increased by the arrival of Jackson with J. R. Jones and Lawton’s divisions [also Walker’s—inserted by Carman], but those of Anderson, McLaws and A. P. Hill could not be brought up that day. A preemptory recall of Franklin, in the early evening of the 15th, would have placed his three divisions in any part of the line that might be desired. Even without Franklin, the advantages of concentration would have been on the side of McClellan. When both armies were assembled the Union forces were at least nine to six, of the Confederate six only four could possibly have been present on the 16th. Without Franklin the odds would still have been seven to four.”

       It is evident that McClellan had no idea of fighting Lee on the 15th. There seems to have been no intention to do it early on the 16th, certainly no orders to that effect were issued, nor did he make any preparations. In fact he expected Lee to retreat during the night of the 15th.  
       At 9 o’clock on the morning of the 16th, after telegraphing his wife that he had 
no doubt “delivered Pennsylvania and Maryland,” McClellan dispatched Halleck: 

“The enemy yesterday held a position just in front of Sharpsburg. This morning a heavy fog has thus far prevented us doing more than to ascertain that some of the enemy are still there. Do not know in what force. Will attack as soon as situation of enemy is developed.”

       Halleck replied to this dispatch:

”I think however, you will find that the whole force of the enemy in your front has crossed the river. I fear now more than ever that they will recross at Harper’s Ferry or below and turn your left, thus cutting you off from Washington. This has appeared to me to be a part of their plan, and hence my anxiety on the subject.”

       When this dispatch was read by McClellan, during the afternoon of the 16th, contempt was written on his face as he remarked, “the idea of Halleck giving me lessons in the art of war.”

       When the fog lifted he missed S. D. Lee’s guns, which had been moved to the
left, or, as he reports:

”It was discovered that the enemy had changed the position of his batteries. The masses of his troops, however, were still concealed behind the opposite heights. Their left and center were upon and in front of the Sharpsburg and Hagerstown Turnpike, hidden by woods and irregularities of the ground, their extreme left resting upon a wooded eminence near the cross-roads to the north of Miller’s farm, their left resting upon the Potomac (sic in McClellan’s report.) Their line extended south, the right resting upon the hills to the south of Sharpsburg near Snavely’s farm.” This changed position of the batteries is given by McClellan as one of the reasons for not making the attack before afternoon, for, he says, he was “compelled to spend the morning in reconnoitering the new position taken up by the enemy, examining the ground, finding fords, clearing the approaches, and hurrying up the ammunition and supply trains, which had been delayed by the rapid march of the troops over the few practicable approaches from Frederick. These had been crowded by the masses of infantry, cavalry and artillery pressing on with the hope of overtaking the enemy before he could form to resist an attack. Many of the troops were out of rations on the previous day, and a good deal of their ammunition had been expended in the severe action of the 14th.”
       From the time of McClellan’s arrival on the field until Hooker’s advance in the afternoon of the 16th, nothing seems to have been done with a view to an accurate determination of the Confederate position. From the heights east of the Antietam the eye could trace the right and center, but the extreme left could not be definitely located, nor was the character of the country on that flank known. It was upon this flank that McClellan decided to make his attack and one would suppose that his first efforts would be directed to ascertain how that flank could be approached and what it looked like. This was proper work for cavalry, of which he had a good body available for the purpose. Pleasonton’s cavalry division was in good shape and elated with its successful achievements, culminating in the discomfiture of Fitz-Hugh Lee’s Brigade at Boonsboro, the day before, and confident of its capacity for further good work. But it was not used.

       As far as we know, not a Union cavalryman crossed the Antietam until Hooker went over in the afternoon of the 16th, when the 3rd Pennsylvania cavalry accompanied him. Nor can we discover that the cavalry did any productive work elsewhere. It did not ascertain that there were good fords below the Burnside Bridge, leading directly to the right-rear of the Confederate line, and we know of no order given for its use, save a suggestion to Franklin, to have his cavalry feel towards Frederick. The part taken by the cavalry this day is very briefly told by Pleasonton, in his report: “On the 16th my cavalry was engaged in reconnaissances, escorts and support to batteries.” If any part of his command, except the 3rdPennsylvania, was engaged in reconnaissances and supporting batteries we do not know of it.
         The first movement of the day was to crown the bluff east of the Antietam with 
artillery and cover the Middle Bridge. This bluff, which, south of the bridge, almost over-hangs the Antietam, recedes from it north of the bridge for a short distance, then approaches it. It rises 180 feet above the stream and commands nearly the entire battlefield.

       The Reserve Artillery, which arrived late in the evening of the 15th, was put in position, early in the morning, by General Henry J. Hunt, chief of artillery. Taft’s New York battery, and the German (New York) batteries of von Kleiser, Langner, and Wever were placed on the bluff north of the Boonsboro road, Taft’s Battery relieving Tidball’s which rejoined the cavalry division. Von Kleiser relieved Pettit’s New York battery. The four New York batteries had 20 pound Parrott guns and were supported by Richardson’s Division. South of the Boonsboro road, and about 9 a. m. Weed’s Battery (I, 5th U.S.) and Benjamin’s Battery (E, 2nd U.S.) were run up the bluff in front of Sykes’ Division. Each battery, as it came into position, opened upon such bodies of Confederate infantry as could be seen, and upon the Washington Artillery and Hood’s Division batteries, on Cemetery Hill, and the batteries on the ridge running north from it, and the reply was prompt and spirited, during which Major Albert Arndt, commanding the German artillery battalion, was mortally wounded.

       As the Confederates were short of ammunition and the range too short for their guns, Longstreet ordered them to withdraw under cover of the hill. General D. H. Hill says that the Confederate artillery was badly handled and “could not cope with the superior weight, calibre, range, and number of the Yankee guns. An artillery duel between the Washington Artillery and the Yankee batteries across the Antietam, on the 16th, was the most melancholy farce in the war.”  …..

Check out at Amazon.com or from the publisher at SavasBeatie.com 

POLITICS: The five longest Democratic Conventions.

 

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Delegates gather in Baltimore for the 1912 Democratic Convention.  They would nominate Woodrow Wilson for President on the 46th ballot.

In case you forgot, the five longest National Political Conventions in American history all were on the Democratic side.  Democrats used to requires a two-thirds majority to pick a presidential nominee, a device designed in pre-Civil War days to assure slave-holding southern states a veto.  Scrapped in 1936, this two-thirds rule actually changed the outcome in 1860 and 1912, and made the others way longer than needed.

The longest Republican convention by far was the 1880 epic (36 ballots) that produced winning candidate James A. Garfield (R-Oh).  No other Republican convention went beyond ten ballots.

So here they are, the five longest, in order:

  • 1924: New York, took 103 ballots to nominate New York lawyer John W. Davis, who lost in a landslide to incumbent Calvin Coolidge;
  •  1860: Charleston, took 57 ballots to reach a deadlock.  Illinois U.S. Senator Douglas had a majority of the delegates on several ballots but he could not reach two-thirds and stubborn Southerners refused to back down.  The delegates decided to call it quits.  Then, a few weeks later, the Party split, with Northerners meeting in Baltimore to nominate Illinois U.S. Senator Stephen A. Douglas as their candidate for president and Southerners choosing sitting Vice President John Breckinridge, a Kentucky slaveholder. Both lost to Republican Abraham Lincoln;
  • 1852: Baltimore, took 49 ballots to nominate New Hampshire’s Franklin Pierce — elected;
  •  1912: Baltimore, took 46 ballots to nominate New Jersey Governor Woodrow Wilson — elected.  Wilson’s chief rival, House Speaker Champ Clark (D.-Mo.), actually won a majority of the delegate votes during the early ballots but failed to reach two-thirds;
  •  1920: San Francisco, took 44 ballots to nominate Ohio Governor James M. Cox, who lost to Ohio Republican U.S. Senator Warren G. Harding
1924
Delegates at the 1924 New York 104-ballot epic demonstrating for losing candidate Alfred E. Smith.  Smith would win the nomination the next time, in 1928, but lose the White House that year to Republican Herbert Hoover.

 

POLITICS: Is it Time to Scrap the National Political Conventions?

Texas delegate Clint Moore and the rest of Texas delegates fashion their cowboy hats at the Republican National Convention in Tampa, Fla., on Tuesday, Aug. 28, 2012. (AP Photo/Jae C. Hong)
Texas delegate Clint Moore and the rest of Texas delegates fashion their cowboy hats at the Republican National Convention in Tampa, Fla., on Tuesday, Aug. 28, 2012. (AP Photo/Jae C. Hong)

Thanks to our friends at the Huffington Post for first running this piece on August 27, 2012:

Washington, DC — When Republicans and Democrats meet at their national conventions to anoint Mitt Romney and Barack Obama as their Party nominees for President of the United States, few Americans will bother to interrupt their summer vacations long enough to watch more than a speech or two from either side. It’s not just that voters are tired after almost a full year of non-stop campaigning. The fact is, conventions themselves, staged meticulously by strategists and media consultants, have become increasingly stale for outsiders, looking more like extended televised pep rallies for party activists, lobbyists, politics junkies and media celebrities.

Is it time to scrap them? Or stop covering them? Not by a long shot….

It is easy to forget that, not long ago, these conventions used to be among the most anticipated, exciting, and consequential events in American politics. From the 1830s through the 1950s, conventions refused simply to coronate candidates. They picked them, while also tackling key public issues from Civil War to prohibition to civil rights to the Viet Nam War to tax policy.

Waves of reform since the early 1900s have stripped these gatherings of any real decision-making power. No national party convention has gone beyond a single ballot since Democrats took three to nominate Adlai Stevenson in 1952. None has voted on a platform plank or credentials fight since 1992. Gone are the days when freewheeling multi-ballot conventions gave us some of our best presidents: Franklin D. Roosevelt in 1932 (four ballots), Woodrow Wilson in 1912 (46 ballots), and Abraham Lincoln in 1860 (three ballots).

Party conventions represented a great reform when they first appeared in 1832. Credit for the first goes to the National Republicans, meeting in Baltimore that year to nominate Kentucky Senator Henry Clay; Clay would lose to the incumbent, Democrat Andrew Jackson, also nominated by convention that year. Originally, presidential candidates was chosen by a few party elders meeting behind closed door. Conventions threw the doors open to delegates from across the country and invited the public to watch. In their golden age, they could be dazzling spectacles rivaling a modern Super Bowl or World Series — the speeches, the deal-making, the surprises. The delegates, proud political professionals, made real choices, and usually good ones. Critics called them “bosses,” but they saw their job as winning elections and usually preferred capable, mainstream leaders.

Lincoln’s convention in 1860 showed the old system at its best, a three day, three ballot carnival of music, fireworks, and politics in frontier-era Chicago. Lincoln, a long-shot, used the setting to out-hustle better-known rivals led by New York’s U.S. Senator William Seward, who led on the first two ballots. Lincoln’s team used every trick in the book – packing the galleries, manipulating floor seats, cutting deals for votes — but mostly they just talked. They buttonholed delegates and explained personally to each why their man deserved support. It was the kind of inside politics that made reformers cringe, but it gave us one of the best presidents in American history.

Voters finally rebelled. Florida held the first binding presidential primary in 1904, and a dozen states soon followed. Party leaders fought the tide. In 1912, for instance, former President Theodore Roosevelt won eight out of 11 primaries for that year’s Republican nomination, but backers of incumbent President William Howard Taft used their control of the Party’s national committee and credentials process and deny seats to some 235 Roosevelt delegates from contested states – enough to block any challenge. In 1968, Democrats nominated Hubert Humphrey, the sitting Vice President to the incumbent Lyndon B. Johnson saddled with the widely unpopular war in Vietnam, despite the fact that Humphrey had not run in a single primary (though had he endorsed “favorite son” stand-ins in several states who won on his behalf). This contributed to violence in Chicago and prompted major party reforms.

Today, Democratic and Republicans both require each state to choose delegates in an open process, primary or caucus. The long state-by-state slog, starting more than a year before Election Day, has replaced the conventions for settling party fights. By the time the conventions come in late summer, the arguments are done. The candidates are picked, they have announced their Vice Presidential running mates, and the platforms are prepackaged

So what’s left for the conventions themselves? Aside from the lavish parties, social regalia, and good times for those lucky enough to attend, I see three things that make them still compelling for voters across the country:

  1. The big speeches: After months of over-exposure, negative attacks, and sore feelings from the nomination fights, the candidates deserve the chance to reintroduce themselves before the final push, and the public deserves to see it. The convention gives each party one last clean opportunity to make its case, feature his best speakers, tout its top issues, and show its enthusiasm. Prime time convention speeches usually give the candidates a full hour to address voters directly without interruption. These speeches are often been the best and most memorable of the campaigns. The cacophony, spin, and nit-picking will start soon enough.
  2. A window on the next administration: But there’s more. Politics is a team sport. A vote for Romney or Obama elects not just the one man but also his friends and Party. As president, Romney would choose thousands of appointees to staff the federal government, just as Obama has: judges, agency heads, commissioners, generals, Cabinet members, and all the assistants and deputies. Those delegates in the room represent the prime talent pool for the incoming administration. They are on the ballot just as much as the candidates, and this is our chance to take a good look at them.
  3. A limiting factor on the fall campaigns. Finally, simple logistics demand that the final, full throttle campaign cannot start until the conventions are over. Candidates must be named, platforms adopted, and party organizations set. By pushing the starting gun until Labor Day, the conventions give us one last chance to enjoy the summer and not worry too much they about politics.

National conventions have a different role today than historically, but it’s still am important one. So let’s enjoy it, and then buckle up for an exciting race.

How an Act of Congress Killed the US Gold Market

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A view inside the New York Gold Room from Harper’s Weekly, October 1869.

 Thanks to our friends at Bloomberg Echoes for  first running this post last week on August 2, 2012.

When President Abraham Lincoln acted in December 1861 to suspend the national gold standard — the legal right to convert paper money into gold coin or “specie” — he wasn’t trying to start a fight with financial speculators in New York.

Lincoln had a bigger headache at that moment: trying to finance his rapidly growing Union Army in its fight against the South.

Within three years, though, Lincoln’s decision would bring a defining moment that would shape the federal government’s relationship with Wall Street. It came in June 1864 when Congress passed the Gold Act — the single time in U.S. history that Congress used its power to directly close a major financial market in the middle of active trading. It was such a failure that Congress never tried again.

The Gold Act was Washington’s response to a case of extreme profiteering during one of the bloodiest periods of the Civil War. After Lincoln had suspended the gold standard in 1861, he immediately asked Congress to float about $450 million in paper currency for the government to pay its bills. These steps created a temporary dual-currency system: paper “greenbacks” as legal tender for domestic debts, and gold coin as the currency of the world, needed for foreign trade, tariffs and custom duties.

Confederate Victories

Without government backing, the value of paper floated freely against gold. Within a few weeks, there was a brisk market on Wall Street for trading between gold and dollars. Each Confederate military victory sent gold prices soaring.

Speculators, stock traders, rebel and Union sympathizers, and government officials soon dominated the market, far outnumbering the bankers, exporters, importers and other commercial gold users. Daily price fluctuations affected the national war effort because rising gold prices directly eroded the value of the federal Treasury.

A Philadelphia banker, Jay Cooke, called the New York gold traders “General Lee’s left flank.” The New York Stock Exchange agreed; it considered gold trading disloyal and refused to allow it under its roof. This forced gold speculators to form a separate Gold Exchange on nearby William Street.

Gold prices spiked in June 1864 to $200 in paper — a 50 percent devaluation of the nation’s paper currency. That spring marked the culmination of General Ulysses Grant’s “Wilderness campaign,” a particularly bloody set of encounters as the Army of the Potomac pursued Confederate General Robert E. Lee across Virginia toward the Confederate capital of Richmond. Casualties on both sides were enormous, about 40,000 killed and wounded for the Union and another 70,000 for the Confederacy.

Gold prices peaked just as Grant’s army reached Petersburg, Virginia, to begin a desperate seven-month siege. The spectacle of New York financiers profiting from this carnage particularly outraged the public, and Congress decided it had to act.

The result was the Gold Act, passed with little debate on June 17, 1864. It was designed to close the Gold Exchange immediately and thereby end the speculative bubble in prices. To the surprise of senators and Treasury officials, however, it did nothing of the kind.

In fact, closing the Gold Exchange only made matters worse, by encouraging hoarders and fueling a panic. Kinahan Cornwallis, a British-born writer working in New York during the war as a reporter for the New York Herald, described how “the real holders of gold were thus isolated,… and purchasers had to run from office to office, inquiring the price at which holders were willing to sell … The whole country was alarmed by the rocket- like ascent of the [gold] premium, including Congress, amazed and rebuked by the advance.” Finally, he wrote, “Leading merchants and bankers, who had urged upon Congress this prohibitory legislation, now wrote and telegraphed to Washington, imploring the repeal of the Gold bill.”

Price Spikes

Gold prices would touch almost $300 before Congress would finally reverse course, repeal the Gold Act, and reopen the Exchange on July 2 — barely two weeks after the law was passed. Even after the Gold Room reopened, chaos continued with further corners and price spikes. Only the capture of Atlanta by General William T. Sherman in August 1864 finally broke the bull market in gold. By the time Lee surrendered to Grant at Appomattox Courthouse on April 9, 1865, the gold price was $144, less than half its wartime high.

In the 148 years since the Gold Act, Congress has developed extensive systems to regulate Wall Street –including the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Federal Reserve, and the latest additions under the Dodd-Frank law, the Consumer Financial Protection Bureau and Financial Stability Oversight Council — but never again has it shut an actively trading market. Closing a market can turn excitement into fear and transform a bubble into a panic.

The Gold Act episode taught a simple lesson. In a crisis, politicians and financial regulators should follow the same rule as physicians: First, do no harm.

For Kinehan Cornwallis’s full story of the of the 1864 Gold Act episode, see the new reissue of his classic account — The NEW YORK GOLD ROOM: Wall Street’s Big Gamble on the Civil War.

Paul Ryan for Vice President — Three quick comparisons

Mitt Romney and Paul Ryan, the 2012 Republican ticket.    Photo from CNN.

Mitt Romney may get a nice bounce in public opinion polls from announcing 42 year-old Wisconsin Congressman Paul Ryan as his vice presidential running mate.  And why not?  Ryan, though very conservative, has many appeals.  He is young, energetic, articulate, and, as chairman of the House Budget Committee and author of its recent controversial ten-year plan, has made himself an intellectual leader of Congressional Republicans on the financial issues.  He will give Joe Biden a tough VP debate come October, bring knowledge on fiscal matters, and unify the Republican Tea Party faction behind Romney’s campaign.

Already, the optics seem to work: Romney the father figure, Ryan the smart protege (about the same age as Romney’s own eldest son Tagg).  What could go wrong?  

Watching the announcement this morning, three comparisons came quickly to my mind, all with the same idea, but very different ends:

Dwight Eisenhower and Richard M. Nixon, 1952.

Eisenhower and Nixon, 1952
Probably the best use of father-son optics in recent decades was engineered by General Dwight Eisenhower in 1952 when he picked a smart, young, 39-year-old California U.S. Senator named Richard M. Nixon as his running mate.  Eisenhower not only was relatively old — 62 years old — but a political newcomer, a career soldier.  Nixon, like Paul Ryan, was a rising intellectual leader of the Republican right who had starred in House and Senate anti-Communist investigations.  He offered Eisenhower a bridge to the Party’s Congressional wing and beautiful optics as a young family man with two cute daughters.

Nixon weather an early storm over a financial scandal resulting in his famous “Checkers Speech,” (click here to see it).  But after that, the strategy worked.  Eisenhower and Nixon won two terms, and it wasn’t until later, when Nixon sought the Presidency on his own, the Nixon’s full set of eccentricities came into full flower, culminating in Nixon’s 1974 resignation in disgrace from the hite House   in the Watergate scandal.

Kerry and Edwards, 2004:

John Kerry in 2004 also decided to pick a younger man, though the age difference between him and campaign rival John Edwards was much smaller than Eisenhower and Nixon.  Kerry was 61 years old in 2004, while Edwards was 51.  Still, Edwrad, a North Carolina U.S. Senator and acomplished courtroom lawyer, had made a good impression during the primaries that year and brought energy to the ticket.

The criticisms of Edwards came later.  Many backers were disappointed by Edwards’s lackluster debate in October 2004 against Republican Dick Cheney.  And since then, Edwards has shown himself to be a remarkably duplicitous character, chearing on his wife Elizabeth during his 2008 presidential campaign as she was dying with cancer and covering it up with campaign contributions, resulting in the recent criminal trial.

Reagan and David Stockman, 1980:

Ronald Reagan and  David Stockman.

But to my mind, Ronald Reagan, as usual, made the best decision in this type of situation.  Reagan’s list of potential running mates in 1980 included a particularly smart young Michigan Congressman named David Stockman, 34 years old but already an intellectual leader of House Republicans on budget issues.  Reagan decided not to make Stockman his running mate — Stockman wasn’t old enough in any event.  He chose for the job a more experienced hand, future president George H.W. Bush.

Instead, Reagan gave Stockman a more appropriate role in his White House: Director of his Office of Management and Budget.  This allowed Stockman to take full direct control of Reagan’s early effort to cut taxes and cut spending, a major accomplishment of Reagan’s presidency.

Stockman mostly did a fine job, but he was too much a purist.  When Congress passed Reagan’s tax cuts in 1981 but failed to adopt enough spending cuts — producing unprecedented budget deficits throughout the 1980s — Stockman went rogue. In gave an interview to Atlantic Monthty  in which he openly criticized the outcome and acknowledged “None of us really understands what’s going on with all these numbers.”   Reagan took Stockman “to the woodshed” — yes, that’s how they described it.  Stockman ultimately had to resign, and afterward, he wrote a book called The Triumph of Politics: Why the Reagan Revolution Failed. 

By making Stockman his OMB Director rather than VP, Reagan had made the best managerial choice.  He allowed Stockman to focus on his signature budget issues, but where Reagan could jettison him the minute he malfunctioned.  

Bright young man can be great things, but pose risks as well.  Will Paul Ryan be a purist like David Stockman, pushing candidate (or president) Romney farther right then he really wants?   Will Ryan be a secret cad like John Edwards, with lingering skeletons in the closet?  Will he serve faithfully like Richard Nixon, then let his own ambition take control when he gets the chance to run for himself?  

Most likely, it’s none of the above.  History never really repeats itself; each situation is new and different.   For now, let’s hope that Paul Ryan is just what he seems, a smart, idealistic, articulate advocate of conservative fiscal views who, agree with him or not, is ready to defend them in good faith and good spirit.  Let the games begin.

Why I hate this year’s Presidential campaign !!

Some of you have noticed that I’ve written very little — almost nothing — in this Blog lately about what usually is my favorite topic: politics.  Yes, one reason is that I’m lazy, it’s summer, and I’ve been busy  with other things — more on that later.  But here’s the basic truth:  I am finding this year’s 2012 presidential contest a pathetic disappointment.  The candidates are shallow: Romney and Obama both.  The debate over “issues” is pointless chatter.  The news coverage is insipid.    The time spent on it — sixteen months to pick a president — is ridiculous. (In France or Britain, the whole campaign lasts two months.)   The free-reign influence of big money is cheapening the whole affair.  And the actual task of governing the country and dealing with the real economic crisis is treated as a boring afterthought.  (In fact, the actual decisions that Congress will make in this year’s “lame duck” session after Election Day — not talked about by either candidate — may prove far more important to the future of the country that the presidential choice itself.)

Yes, the Republicans have been particularly terrible this year with their incoherent economics and right wing social views.  (Why couldn’t we have George Romney as the candidate instead of Mitt?) But the process itself is out of control and off-putting.

So why have I been silent about this?  Frankly, I don’t like having to sound like a crabby, cynical, nasty, grouchy old man on the Internet.  But when it comes to this 2012 presidential election, I don’t know how to avoid it.   

So, in the spirit of straight talk,  I have decided to break my silence and start laying out my case.  It may take a few weeks and many posts — using my usual historical comparisons —  but I’ll give it my best.  And maybe in the process we’ll discover some silver lining to this awful-looking mess.

So stay tuned to this spot.  More is coming.  All the best. –KA

POLITICS: In 1868, a Wild Fraud to Dwarf Today’s Political Sleaze.

Photo from Library of Congress, Prints and Photographs Division.

Thanks again to our friends at the Bloomberg “Echoes” financial history blog for running this item first on June 14, 2012.  Check them out for a great daily history fix.

Do big corporations really control U.S. politicians through money and contributions? Is the system more corrupt today than ever before?



It often seems that way. U.S. corporations spent about $3.32 billion in 2011 to lobby officials in Washington, according to OpenSecrets.org. This, plus billions more in newly liberated campaign contributions and other practices have combined to create a system many describe as “legalized bribery.”


Still, lobbying is protected by the First Amendment and, if anything, decades of reforms designed to increase transparency have made today’s abuses mild by comparison.


How bad was it?


Probably the low point for corporate-influence peddling in the U.S. came in 1868, when the New York state legislature decided a contest over control of the Erie Railroad, then one of America’s premier corporations.


The battle pitted the venerable Cornelius Vanderbilt, the owner of the New York Central Railroad, against Daniel Drew of Erie and his two young proteges, Jay Gould and James Fisk Jr.


Vanderbilt’s goal was simple: With Erie in his pocket, he could control all rail links from New York City to the Great Lakes, an immensely profitable monopoly. But Drew, who had grown rich manipulating Erie stock prices as company treasurer (before insider-trading bans), had no intention to let go.


The so-called Erie War took place during one of the most corrupt periods in American history. Historians call it the “Era of Good Stealings,” the years just after the Civil War when William “Boss” Tweed ruled New York City, Ulysses S. Grant sat in the White House, and scandals — from the Whiskey Ring to Credit Mobilier to postal frauds to Reconstruction to Indian agent frauds — all bubbled just beneath the surface. The New York Stock Exchange was an unregulated frontier of booms, busts and manipulations.


The complex contest between Vanderbilt and Drew — involving bribed judges, stock fraud, dueling injunctions and corporate piracy — reached its climax in March 1868. Decades before the existence of rules governing tender offers, stock registration, disclosures or other such niceties, all Vanderbilt had to do was buy Erie stock as fast as he could until he owned enough to control the company — what was known as a “raid.”


But Drew cheated. Tipped off to Vanderbilt’s plan, he secretly authorized and printed thousands of new Erie shares, turning the market into a quicksand pit.


Furious, Vanderbilt responded by finding a friendly New York judge to declare Drew, Gould, and the other Erie directors in contempt, forcing them all to flee across the Hudson River to New Jersey to avoid arrest.


Drew, in turn, responded by sending Gould to Albany to persuade the state Legislature to approve a bill legitimizing the large block of new stock issued to thwart Vanderbilt’s raid. Tweed, as a state senator (among other titles), personally represented Vanderbilt in the fight.


It’s difficult today to conceive the scale of the ensuing contest between Gould and Tweed for the hearts and minds of the state Legislature. Gould brought along a suitcase full of cash and set up shop in Parlor 57 of Albany’s Delavan House hotel, tending bar and doling out largess — in thousand-dollar bills. Tweed was equally generous. Nobody knows the true totals, but the two men reportedly distributed close to $1 million apiece (worth about $50 million or more today) to Albany lawmakers as they debated the Erie legislation.


It wasn’t just a senator or two they were trying to buy, but the entire statehouse.


The lawmakers, in turn, played both sides for suckers. For years, a group of about 20 assemblymen calling themselves the Black Horse Cavalry had specialized in blackmailing businesses with what they called “strike bills” — proposed laws designed to cripple businesses that refused to pay bribes. For them, the Erie War would be the richest payday ever. Instead of directly taking sides, most simply bid the two against each other.


One state senator, A.C. Matoon, reportedly took Erie’s side after receiving $15,000 from Gould, switched to Vanderbilt’s after taking $20,000 from Tweed, then supported Erie on the final vote.


“The wealth of Vanderbilt seemed pitted against the Erie treasury,” wrote Charles Francis Adams Jr. in his classic expose, “Chapters of Erie.” At one point, when a Vanderbilt agent arrived from New York with fresh cash, Gould reportedly paid him $70,000 to disappear.


Vanderbilt steamed at the spectacle. “It never pays to kick a skunk,” he said. He then ordered Tweed to cut off the bribes.


The legislators realized their fountain of easy money had run dry. Senators and assemblymen who had demanded a thousand dollars for their vote days earlier now offered their support for a mere hundred. To Adams, the mood among lawmakers was reminiscent “of the dark days of the war when tiding came of some great defeat.”


The legislators passed the Erie bill — which made the secretly issued Erie stock legitimate and thus secured Drew’s hold on the company — by a vote of 101 to 6. They had rejected it 83 to 32 when Vanderbilt money was being offered.


Vanderbilt and Drew ultimately settled their battle with a backroom deal that made them both much richer at the expense of Erie stockholders, in effect paying them both “golden parachutes” long before that term became common. At the same time, it left Gould and Fisk in charge of the company — Gould’s first big step in building one of the great American fortunes.


How does this compare with today’s big corporations attempting to influence Congress on issues close to their pocketbooks? There’s still plenty of money in politics, and plenty of favoritism by politicians toward big donors and high- powered lobbyists. But today the system is far more public and regulated — even with its flaws and gaps. And sunlight, as Justice Louis D. Brandeis famously told us, is the best disinfectant.


(Kenneth D. Ackerman is the author of four books, including “Boss Tweed: The Corrupt Pol Who Conceived the Soul of Modern New York.” The opinions expressed are his own.)

NEW SUMMER BOOK: Abraham Lincoln’s Convention: Chicago 1860



Scene in the Chicago convention hall at it prepared to nominate Abe Lincoln for president, from Harper’s Weekly, May 1860.

Every president is shaped by his nominating convention. Lincoln’s in 1860 not only was one of the most important, but also the most exciting in America up to that point. In a three day, three-ballot carnival of music, fireworks, and politics drawing some 40,000 people, Lincoln and his friends outwitted the leading celebrities of their party, capturing the prize with nerve, ambition, and brass tacks. They played the kind of hardball politics that usually made reformers cringe. Still, it gave us one of the best presidents in American History.

Joe Howard Jr. of the New-York Times, who wrote the article below, was one of the most flomboyant newsmen of the era.  His dogged Civil War reporting sometimes crossed ethical lines even by Nineteenth Century standards.  Still, it was first rate, earning him a national following and a rare by-line.

From Abraham Lincoln’s Convention: Chicago 1860:

1. Headline: They nominated who?

The New-York Times, Saturday, May 19, 1860.
By Joe Howard, Jr.


FROM CHICAGO.

——-
THE REPUBLICAN TICKET FOR 1860.
——-
Abram Lincoln, of Illinois, Nominated
For President.
_____
The Late Senatorial Contest in Illinois to be Re-
Fought on a Wider Field.
——-
Disappointment of the Friends of
Mr. Seward
——-
INTENSE EXCITEMENT AND ENTHUSIASM
——-

Special Dispatch to the New-York Times
Chicago, Friday, May 18




The work of the Convention is ended. The youngster who, with raged trousers, used barefoot to drive his father’s oxen and spend his days in splitting rails, has risen to high eminence, and ABRAM LINCOLN, of Illinois, is declared its candidate for President by the National Republican Party.


The result was effected by the change of votes in the Pennsylvania, New-Jersey, Vermont, and Massachusetts delegations.

Mr. SEWARD’s friends assert indignantly, and with a great deal of feeling, that they were grossly deceived and betrayed. The recusanis endeavored to mollify New-York by offering her the Vice-Presidency, and agreeing to support any man she might name, but they declined the position, though they remain firm in the ranks, having moved to make Lincoln’s nomination unanimous. Mr. Seward’s friends feel greatly chagrined and disappointed. [Recunasi is an old word referring to English Roman Catholics in the 1600s who refused allegiance to the Church of England, a crime back then.]
Abraham Lincoln in 1860.

Western pride is gratified by the nomination, which plainly indicated the departure of political supremacy from the Atlantic States. …


Immense enthusiasm exists, and everything here would seem to indicate a spirited and successful canvass. The city is alive with processions, meetings, music, and noisy demonstrations. One hundred guns were fired this evening.


The Convention was the most enthusiastic ever known in the country, and if one were to judge from appearances here, the ticket will sweep the country


Great inquiry has been made this afternoon into the history of Mr. Lincoln. The only evidence that he has a history as yet discovered, is that he had a stump canvass with Mr. Douglas, in which he was beaten. [U.S. Senator Stephen A. Douglas from Illinois was the likely Democratic nominee and Lincoln’s likely chief opponent for President. Lincoln actually had won the popular vote in his 1858 Senate contest against Douglas, but the Democratic Illinois legislature nevertheless awarded the seat to Douglas.] He is not very strong at the west, but is unassailable in his private character.


Many of the delegates went home this evening by the 9 o’clock train. Others leave in the morning…..


Massachusetts delegates, with their brass band, are parading the streets, calling at the various headquarters of the other delegations, serenading and bidding them farewell. “Hurrah for Lincoln and Hamlin – Illinois and Maine!!” is the universal shout, and the sympathy for the bottom dog is the all-pervading sentiment.


The “Wide-Awakes,” numbering about two thousand men, accompanied by thousands of citizens, have a grand torch-light procession. The German Republican Club has another. The office of the Press and Tribune [today’s Chicago Tribune] is brilliantly illuminated, and has a large transparency over the door saying “For President, Honest Old Abe.” A bonfire thirty feet in circumference burns in front of the Tremont House, where thirty-three guns were fired from the top, and illumines the city for miles around. The city is one blaze of illumination. Hotels, stores and private residences, shining with hundreds of patriotic dips. Enough.


–Howard

We hoped you enjoyed this excerpt from Abraham Lincoln’s Convention: Chicago 1860.  If you enjoyed it, please consider downloading the full book through Amazon, Nook, or Apple iTunes.

In Abraham Lincoln’s Convention: Chicago 1860, we tell the story of Lincoln’s convention primarily through the eyes of newspaper writers, giving it the immediacy of the moment, with annotations, background, and updated formatting.