Jan 2015

Military-Industrial Complex, WWI-Style

In his final speech as President, Dwight D. Eisenhower famously warned Americans to guard against the creation of  a "permanent armaments industry of vast proportions." But reading Ferdinand Lundberg's America's 60 Families, it seems a military industrial complex was already well established. Here are some passages relating to military spending in World War I:

According to "House Report No. 637, sixty- sixth Congress, second session…although more than $1,000,000,000 had been spent [during World War I] for combat airplanes none was ever delivered. The airplane scandal became so notorious in 1918, indeed, that President Wilson appointed Charles Evans Hughes [Standard Oil attorney, Supreme Court Justice, Secretary of State] to investigate." (193-4)

The Senate Committee on Naval Affairs determined in 1916 that the cost of producing armor plate by the steel companies was $262 a ton, against prices of $411 to $604 charged the government…United States Steel Corporation and Bethlehem Steel Corporation charged Russia $349 a ton, Italy $395 a ton, and Japan $406.35 a ton for identical plate…profits of the United States Steel Corporation during the war were $888,931,000, or more than the par value of its stock." (196-7)

According to House Report No. 998, 66th Congress 2nd session, "The committee finds that there has been expended for construction upon the Government's nitrate program to the present time the sum of $116,194,974.37, and that this expenditure produced no nitrates prior to the armistice, and contributed nothing toward the winning of the war. The nitrates program originated with the War Industries Board of the Council of National Defense, and is directly traceable to Mr. Bernard M. Baruch." Lundberg continues, "Although the nitrate plants were not necessary, as there was an abundant supply of Chilean nitrate, their construction entailed the placing of huge orders for steel, lumber, copper, cement, dynamos, etc. The Du Ponts were given $90,000,000 to build a nitrate plant at Old Hickory, Tennessee, on a cost-plus basis; after the war this plant was sold to the Nashville Industrial Corporation for $3,500,000." (197)

Then there's this page:

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"Up to September 1, 1919, the War Department spent $18,501,117,999, and, judging by the Graham Committee's findings at least one third of this was dissipated in channels that had no relation to a successful prosecution of the war…The basis for many prosecutions was laid by the Graham Committee, and there were indictments of various minor figures. But there were no convictions. By November, 1925, the last of the indictments was quashed." (201)

1928 Kingmakers

From They Told Barron:

New York, January 25, 1928
Mr. Schwab  [Charles M. Schwab, steel magnate, 1862-1939] feels very kindly toward Hoover, knows him very well, and has crossed the country with him, and thinks he would make an admirable president, but he doubts if he can be elected against Al Smith.
"I think," said Schwab, "that [Pittsburgh banker and Secretary of the Treasury Andrew W.] Mellon may be the next President. I don't think he is too old. The people have been educated to see he has reduced expenses, handled the national finances, and what a success he has made."

According to Lundberg, "Mellon was outmaneuvered at the Kansas City Republican convention by the Philadelphia machine of William S. Vare, under control of E.T. Stotesbury and Morgan, Drexel and Company…the Republican convention contest was strictly one between Morgan finance capital and Mellon finance capital." (
America's 60 Families, p. 177) Hoover succeeded in getting the nomination, and his supporters spent $9.4 million getting him elected. Mellon stayed on as Hoover's Secretary of the Treasury. In the 1932 election, neither party spent over $3 million. But by then, there was a Great Depression on.

Compare Clarence Barron's and Ferdinand Lundberg's descriptions with the three sentences given the Hoover nomination in the popular college textbook,
Nation of Nations:

Hoover was not a politician but an administrator who had never once campaigned for public office. It did not matter. Republican prosperity made it difficult for any Democrat to win. Hoover, perhaps the most admired public official in America, made it impossible.

Call me a cynic, but combining the accounts of Barron and Lundberg, two journalists from opposite sides of the political issue, seems to get us much closer to a plausible story than the professional historians.

Most Scientists are Atheists

Scientists, says Catholic priest Robert Barron in a Youtube video posted last week, rarely understand what serious, smart people mean when they use the word God. That may be quite true. But it's equally true that most average people who follow these serious, smart people also don't know what they mean when they use the word. And let's recognize that Western religion is pretty much all about following the lead of serious, smart theologians. Martin Luther may have believed everyone should think it through for themselves, but most of his followers ditched that in the first generation.

And it's precisely because these serious, smart people don't bother to explain to the rest what they mean by God, that the rest keep on doing amazingly ignorant and bad stuff in God's name. That's the responsibility of those serious, smart people.

Also, it's just a bit too easy to say, "no, you just don't get the God I'm talking about." This God not only can't be measured in any scientific way, but can't be experienced at all. Because now the priest is misrepresenting the scientists and philosophers. They aren't saying that god needs to be measurable in a laboratory to exist, but that God needs to be experienced empirically. If a God can't be experienced at all, then it's Spinoza's God. It's not one that you can get up in front of a congregation and say the Nicene Creed about. So if that's the one you're arguing for, take off that white collar.

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A lot of professional philosophers have not specialized in the philosophy of religion, he says. But it's a pretty safe bet anyone who has studied philosophy, even as an undergraduate, has read David Hume. Saying they need to be specialists in the philosophy of religion in order to "adjudicate these complex questions about the existence and nature of God" is the same as saying you need to be a specialist in Middle Earth to decide whether Hobbits exist. There's no evidence for them outside the book, much as we'd all like to believe they're hiding somewhere just out of sight of us clumsy big folk.

He claims to find the historical arguments against God to be "remarkably weak." That's interesting. But isn't it really an argument from authority? Isn't he really saying "if you just trust me, you don’t have to bother your little head with reading Hume yourself"? If you want to compare personal opinions, I find
his argument to be one I've heard again and again. It's the argument you'll find in William Ellery Channing's Discourse on the Evidences of Revealed Religion, and the argument against it is still the one made by Hume in his essay "Of Miracles," and also in Dr. Charles Knowlton's 1833 letter to the Boston Investigator, written in a Cambridge prison cell where he was imprisoned (due to a criminal complaint by religious authorities) for publishing a book on birth control.

Barron goes on to say it's really all about academic politics. Junior scientists and philosophers are browbeaten by their Department Heads. Even many Philosophy departments at Catholic Universities tend towards atheism, he says. But is this because of the success of atheist leaders in enforcing their beliefs, or the failure of theists? Who historically has been more prone to abuse the threat of punishment? No one expects the Spanish Inquisition!

His final argument is that in scientism (if not in science), "newer is truer." And he has a point. Science advances by seeking new evidence and improving its hypotheses. Other types of knowledge, he says, don't progress this way. The arts, for example. Today's playwrights are not necessarily better than Shakespeare, just because they're newer. Okay, sure. But the arts are not claiming to instruct us on the origin, design, and purpose of the universe. He's trying to get away with something here: equating religion with philosophy. No, I would not say that Michel Foucault is a better philosopher than Aristotle because he's newer. But that has
no bearing on evaluating religious claims to truth and authority. It's sleight of hand.

And then there's the real final argument: "the denizens of today's Philosophy  lounges" are no match for Wittgenstein or Husserl. And these guys were friendlier to religion than the current denizens. QED. Really? That's what you saved for last? Your best shot? Barron admits he hates (yeah, hates) the arrogance of Daniel Dennett. Well, duh. The four horsemen are easy to dislike. And you're right, an opinion poll proves nothing. But don't think those objections get anywhere near proving your argument.

Criticl Thoughts

A couple of days ago, after posting a blog announcement of my new online lectures for this semester's American Environmental History class, I got a message saying I had been "followed" on Twitter by Criticl.me. So I checked them out. Criticl, whose tagline is "Truth Lives," describes itself as a crowdsourced alternative news platform. Based in San Francisco, the website (apps are promised) rewards articles with rankings based on number of reads and up and down votes. Criticl claims this provides an incentive for originality and accuracy. It'll be interesting to see if this is true. Traditional news does suck, but so far the alternatives haven't found the sweet spot  -- at least for me. Reddit is too hard-core geeky, and tumblr is too fluffy.

According to a
September 10, 2014 press release, published on October 31st, Criticl is the project of Jake Counsell, an activist/designer/pro-BMX rider. I like that, maybe because I like to describe myself as a farmer/author/inline Sk8r. I've received tweet messages from Counsell, and also from a couple other people I assume are part of the team, saying "We’re writers and thinkers working collectively to understand the world critically. Join us." So far, I've been impressed. It'll be interesting to see what this evolves into. I joined a couple of days ago, and have posted a half dozen pieces chosen from this blog.

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At this point, when you go to the site you get a page with panels featuring the most popular posts.  These blocks tell you how "Crucial" the post is (which I assume is based on some combination of reads and votes), as well as the vote score, number of reads and comments, and author. It's possible to up- or down-vote the post just based on the headline and image, which is a little weird. It'll be interesting to see whether this format encourages "thoughtful and well-written content" -- which is what Criticl asks for when you hit the "New Post" button -- or splashy images and sensational headlines. It's worth noting that the oldest (2 weeks) and most successful (3486 reads) post on the "Popular Today" page uses an animated gif and the word "Fuck" in its headline. But my own post about political campaign spending from yesterday (which features a photo of a beardless Lincoln) has been read 200 times and commented on -- which is far better than it has done on my blog!

And maybe that's the real point. Yeah, it's the "attention" thing
Cory Doctorow swears by and Jaron Lanier criticizes. We're all donating content that Criticl benefits from. But creating a forum where the right kind of people will see content definitely adds value. What are the right kind of people? Well for me, people who will read my stuff, think about it, and maybe engage in some discussion. I'm not looking to be "discovered" by a publisher. Criticl may be attracting people who do hope for something like that. If so, hopefully they'll post their best stuff and engage with others.

The Rockefeller Syndrome, or Why the Standard Oil Fortune Still Matters

Ferdinand Lundberg (1902-1995) was an American journalist who wrote eleven books. The best known of these are America's 60 Families and The Rich and the Super-Rich, published in 1937 and 1968. Although now often written off as a muckraker or a sort of early conspiracy theorist, in his own day Lundberg was not only widely read by regular people, the data he uncovered was respected by academics. So it's unfortunate that at a time when we face many of the same issues, Lundberg isn't better known.

And it's not all about the Gilded Age or the Depression Era. Although Lundberg began his career as a reporter in 1924 and
did see the Crash and the Depression first hand, he continued working -- and the topics that interested him continued providing new material -- into the 1990s. An example of this continued relevance was the 1974 appointment of Nelson A. Rockefeller as Vice President under Gerald Ford. Rockefeller was a grandson of Standard Oil co-founder John D. Rockefeller, and although he had run for President several times, his appointment by the Senate opened the door for a debate over his suitability that included a review of the Rockefeller family fortune and an investigation into their role in the economy of the 1970s. This debate and the information it uncovered were recorded by Lundberg in The Rockefeller Syndrome, published in 1975.

There's a lot of information in this volume, so I'll cover it in a series of posts. Lundberg begins his introductory chapter with a statement that is interesting in its own right. The full extent of the Rockefeller fortune, he says, is unknown. Like other wealthy families, the Rockefellers had managed to insure "there are on the public record positively no authentic, fully certified, standardly audited figures and inventory on the dimensions of the fortune." This might seem insignificant, or even a triumph of the right of privacy against government spying. But the Rockefellers weren't just some middle class family minding their own business and asking others to mind theirs. Their wealth (even the investments they donated to foundations but retained voting rights on) was all hard at work earning them more wealth. Seems logical the government would want an inventory of those assets, if only to keep track of the tax bill.

The chapter devotes a lot of time to the many attempts that have been made to assess the Rockefeller family's net worth. The figure Lundberg arrives at is $4.741 billion. This is a lot of money in 1975 dollars, but Lundberg says the real number "had to be higher owing to items not included" in the count. The extent of the Rockefellers' wealth is important, not out of envy or an objection to the way it was obtained (as
many are still claiming or implying even today) but because it suggests how much influence even third, fourth, and fifth generation Rockefellers have on the American economy.

 
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Nelson Rockefeller famously argued during the Senate hearings that his family was much less wealthy and powerful than it had been. The Rockefeller family, he said, owned less than 2% of the companies that had been Standard Oil. And anyway, this was an era of "managerial" corporate control, as shown by Berle and Means in their 1932 book,
The Modern Corporation and Private Property. Lundberg disagrees with both Nelson and the "professors." He claims "Corporations are controlled, in fact, by owners or owning trustees of big blocks of stock." These blocks may be held in foundation portfolios, bank trust departments, company pension funds, university endowments, or insurance companies -- but they're still controlled, says Lundberg, by a small group. He quotes government investigator James C. Knowles, who concluded the wealthy families he investigated "do not function as individual centers of power in competition with one another. Instead, they have formed alliances with other wealthy families." Corporate control, Lundberg concludes, "is a very quiet affair--until it is challenged."

To illustrate his point, Lundberg tells the story of Robert W. Stewart, the Chairman of Standard Oil Company of Indiana who tried to take the company away from the Rockefellers in what we'd now call a raid on the stock. Lundberg was a financial reporter, and he asked his Wall Street contacts whether Stewart would be able to gain a majority and oust the Rockefellers.

It was explained to me that there was no chance at all because on the Rockefeller side would be (1) whatever stock they owned, (2) the stock in Standard of Indiana owned by Standard of New Jersey, (3) all the stock of Indiana owned by various Rockefeller foundations, (4) endowment stock in Indiana owned by the University of Chicago, (5) stock in "Street" names, (6) stock in [Rockefeller controlled] Chase National Bank trust funds, (7) stock in other bank trust funds, (8) stock still owned by members of all the old-line Standard Oil families, etc.

Lundberg went to the special company meeting. "The Rockefellers won with close to 65 percent of the stock, a walkaway. Small pro-Stewart stockholders were flattened…The true bosses were showing their hand--all aces."

Lundberg then traces the members and assets of the "Rockefeller Syndicate" of companies, which included banks like Chase and National City (now Citigroup) and industrial companies like DuPont, W.R. Grace, Corning Glass, Cummings Engine, and Hewlett Packard. Other companies under what Lundberg calls "coalition" or "joint" syndicate control included Consolidated Edison, AT&T, US Steel, Monsanto, General Foods, Chrysler, Colgate-Palmolive, and Anaconda Copper. He concludes that "the Rockefeller Syndicate…controls or influences possibly $500 billion (or more) of income-producing assets." Again, that's $500 billion 1975 dollars.

There's an awful lot of other good material here, including a bit about the CIA and the Allende coup in Chile. In a prescient moment, Lundberg predicts that "the principal international threat stems from the continued position of the oil industry as the Group's industrial mainstay." But I'll end here for now, with another passage Lundberg quotes from Knowles:

The structure and exercise of vast economic and political power on the part of the Rockefeller Financial Group stems ultimately from the enormous repositories of inherited wealth represented by the Group's leading families. No set of reforms or controls short of breaking down the immense concentration of so much personal wealth would have any lasting effect in altering the present distribution of power in this country.

Clichés About Rich & Poor

FEE posted another in their series debunking "Clichés of Progressivism." This installment is called "The Rich Are Getting Richer and the Poor Are Getting Poorer." The author of this particular essay is Max Borders, editor of FEE's magazine, The Freeman. Borders begins with a little thought experiment. He asks what would you do, if you could go back fifty years and rig the economic game in favor of the rich?

Borders answers his question with the five policies FEE has been complaining about since I visited them in the summer of 1982: the minimum wage, crony favors, over-regulation, welfare, and inflation. Borders says "you have probably noticed that every one of the policies above has been implemented to varying degrees since the Great Society. And yet
the poor have still not gotten poorer." [his emphasis] So the thesis of his argument is 1.) these factors are the important ones when we discuss economic change over the last 50 years, and 2.) let's ignore whether the rich have gotten disproportionately richer, and talk about the poor.

First, the debate is far from over among economists and historians that Borders's five factors are the most important. To give just a single example, in the past fifty years we've seen a dramatic shift from a "managerialist" approach to corporate governance to a "shareholder value" approach at the same time we’ve seen an ownership shift (to where mutual funds like BlackRock, Fidelity, and Vanguard own the majority of all publicly traded companies) and increasing globalization (where jobs and capital cross borders much more easily than people). This is a complicated change (see the books and articles of
Gerald F. Davis for details), and it's not one that it's easy to apply the "blame game" to. Borders's five factors all have the advantage of allowing him to point the finger of blame at someone. Reality is more complex, and while we can cheer some of the results of change, we might want to think about their costs -- and what we want to do about them.

Second, Borders claims that the pie has gotten bigger and as a result the poor are better off than they were. His source for this claim is
Michael Shermer, a professional skeptic with an academic background in psychology and the history of science. There are plenty of actual economists like those working at the Bureau of Economic Analysis whose work suggests that economic growth has largely left middle-income Americans behind, but even if we take Shermer's skeptical counter-claim seriously we ought to examine it closely. His numbers compare conditions in 1979 with 2010. Anybody remember the economy in 1979? Furthermore, are we talking about nominal dollars here, or real dollars after inflation? And, in a period when taxes were becoming increasingly light on the rich and onerous on the middle class, are we looking at pre- or post-tax dollars?

 
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In his discussion after the data, Borders makes a series of points that have themselves become clichés. First, he asks if you'd rather have "50 percent of a million or 20 percent of a billion?" His implication is that the poor are just envious. But there are other implications of extreme inequality he ignores. Access to political power, the level of overall consumption, even the composition of the goods and services produced change as the ownership of the "pie" shifts. Henry Ford famously observed that in order for the Model T to be a success, his workers needed to be able to afford the product they were building.

Borders then draws an oversimplified picture of his opponents' point of view. He suggests the "distribution" argument assumes the pie is static -- assuming that as long as it's growing, no problem! But this is silly: an economy growing by building a lot more F35 fighter jets is a lot different from an economy growing by producing goods and services to meet the needs of regular people. Further, he claims that the "distribution" choice is between "meritocracy" and "social justice." It's really not. No intelligent critic of the system is saying what Borders claims we're saying. What we ARE saying is that these simplistic straw-man arguments are a diversion -- what we really ought to be doing is understanding that in complex dynamic systems we can't anticipate all the consequences. We can no longer hang onto the static, Newtonian determinism that informed the thinking of the classical economists (including the Austrians).

Borders goes on to revisit the claim that "egalitarians" just don't appreciate the fact that the rich are "smarter investors, cleverer innovators, or better organizers." Again, no one ever denied this -- but the rich
continually fail to acknowledge the social infrastructure, access to capital (inheritance), and the uneven educational playing field that not only allows them to stand on the shoulders of others while they pretend to be self-made men, but also actually reduces the amount of innovation and competition we might otherwise enjoy.

There's an aside about "fair shares," where the editor says "
I often ask this question of a redistributionist in the presence of another person and ask the former to specifically tell me how much is his ‘fair share’ of what the other person in our presence has earned. I’m still waiting for a satisfactory answer." This is out of place, I think. It's just a little too dickish and bullying for this article.

Borders widens his view to the global and rightly observes that "In only 20 years, extreme global poverty has been cut in half." He attributes this to freer global markets, which in this oversimplified context means his side gets to take credit. But again, globalization isn't that simple and isn't simply the result of laissez faire. There have been winners and losers. As a middle class has risen in China on globalized technology jobs, an earlier middle class in America has fallen. To the extent that these people are much less mobile than the capital that's redistributing these jobs (even if the economic outcome is increased global efficiency), and to the extent that especially in America, corporations used to provide the social safety net (a career ladder, long-term employment, old age pensions, health insurance -- again, see Gerald F. Davis's
recent work), it's legitimate to ask what governments (which could be viewed as voluntary associations of people, and should at least be recognized as sharing the geographic limitations faced by most people, relative to capital) can do to respond to these uneven changes.

Borders concludes by suggesting "Progressives should be honest." I agree, but I think in this case FEE is in as much danger of cliché as their opponents. His final point, that "redistributing wealth is just slicing the pie differently, at the risk of shrinking the pie," might be compelling if it were the issue at hand. Actually, the issue is trying to get beyond nineteenth-century economic dogma, honestly assessing the effects of changes as the economy becomes more global, and deciding what combination of private and public actions we can take to increase the benefits and decrease the penalties for as many people as possible.

What's the Point of Climate Skepticism?

The AGW (anthropogenic global warming) opponents at WUWT posted a review of an article on RealClimate this morning. The gist of the post is that the author (who by the tone of comments is well-known and well-hated) was admitting that "modeled absolute global surface temperatures" are bogus. A closer reading of the article, I think, suggests that the modelers are aware of the shortcomings of models but still believe them to be relevant and useful in some situations. And that they're trying to refine the models and trying not to use them inappropriately.

I commented on a quoted passage where the RealClimate author says “no particular absolute global temperature provides a risk to society, it is the change in temperature compared to what we’ve been used to that matters.” This seems like common sense, if a global surface temperature number is an average. It is easy to imagine that plus 5C, for example, might not be as devastating to human society in the Sahara as it would be on the Himalayan glaciers.

 
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Responding to my comment, a "Jeff Alberts" said "Anyone who expects 'the temperature we’ve been used to' to never change, has no common sense. The question is, are changes we’re seeing due primarily, or even measurably, to human industrial activity. We simply don’t know. CO2 went up, but temps went up and down, and even remained static in many places. Therefore we have no evidence of any even minor impact due to CO2. We have no evidence as to whether today’s temps are unprecedented in any way, none."

But I wonder if that
really is the question? If mountain glacier systems at the headwaters of many of the world's most important watersheds are melting at an alarming rate, does it matter whether the cause is AGW or some natural process? Won't the billions of people depending on that water be equally effected either way? And if the natural processes of climate are as variable as AGW skeptics claim (to be the cause of all the observed changes), is there any reason to believe they'll bounce back right away and remain in a range that's comfortable for us?

If you were a nation depending on glacier-fed rivers, wouldn't it be incredibly irresponsible not to consider the possible continuing reduction of glaciers and the concurrent possible challenge to your national water supply? Would you care whether the cause was AGW or nature? Yes, you would, because if it's AGW, there may be ways to mitigate or reverse the effects - not to mention the potential liability involved. But would you wait until the jury was "in" and nobody was arguing on the cause before starting to think about what to do? I hope not!

Does all this suggest that that one of the goals of AGW skeptics is muddying the water in order to prevent action? I don't know. My free-market friend Bob recently said the skeptics are frustrated because so much money as been poured into this -- in his opinion, down a drain. He mentioned "
$165 billion so far (CBO report)." The number I was able to find for 2014 was $21.4 billion, which is definitely a lot of money. But in perspective, the total federal budget is about $3.9 trillion, so we're talking about a half a percent. And that spending is spread across dozens of government agencies including Defense (the DOD believes climate change is a strategic concern). The DOD budget is about $457 million, out of a total package of over $600 billion. So I don't think studying the climate is bankrupting America.

1930 List of the "Men Who Rule"

In the summer of 1930, James W. Gerard published a list of 59 names he called "Men Who Rule." The list hit the Associated Press wire on August 20th and caused a furor that lasted several weeks. Gerard was Ambassador to Germany during World War I (until the US declared war, when he was asked to leave) and had written a book about his experiences that had been made into a Hollywood movie.

Gerard produced his list as part of an endorsement of the "Beaverbrook Plan" for protected British trade. Gerard commented that England was still weak following the Great War, but claimed "give the forty men who rule the United States ten years for the development of this industrial empire and no country on this earth could approach it in per capita wealth." His point was that without the protectionist Beaverbrook Plan, even these men would not be able to save Britain (he was arguing against a European common market). When asked the names of the forty men, Gerard responded with his list of 59. The list quickly became bigger news than its original context, and Gerard was immediately criticized for his choices. Herbert Hoover wasn't included, complained one commentator. The list was about the powers behind the throne, Gerard explained. There were no inventors or intellectuals, said another critic. Gerard responded "I would hate to have to compile a list of intellectual leaders and continue to live here."

New York Representative Fiorello La Guardia commented, "Mr. Gerard, I am sure, does not at this moment realize what he has started. I predict now that Mr. Gerard's list will be referred to more times in the next Congress in connection with revenue legislation than any other source of information. Mr. Gerard has furnished a bill of particulars of what has generally been known since the war…Mr. Gerard's statement is a particularization of what I said in Congress during the discussion of the 1924 tax bill."

Gerard's list:

John D. Rockefeller, Andrew W. Mellon, J. P. Morgan, George F. Baker, John D. Ryan, Walter C. Teagle, Henry Ford, Frederick K. Weyerhauser, Myron G. Taylor, James A. Farrell, Charles M. Schwab, Eugene G. Grace, H. M. Warner, Adolph Zukor, William H. Crocker, O.P. Van Sweringen, M.J. Van Sweringen, W. W. Atterbury, Arthur Curtis James, Charles Hayden, Daniel C. Jackling, Arthur V. Davis, P. G. Gossler, R. C. Holmes, John J. Raskob, the Dupont family, Edward J. Berwind, Daniel Willard, Sosthenes Behn, Walter S. Gifford, Owen D. Young, Gerard Swope, Thomas W. Lamont, Albert Chase Wiggin, Charles E. Mitchell, Samuel Insull, the Fisher Brothers, Daniel Guggenheim, William Loeb, G. W. Hill, Adolph S. Ochs, William Randolph Hearst, Robert R. McCormick, Joseph Medill Patterson, Julius Rosenwald, Cyprus H. K. Curtis, Roy W. Howard. A few days later, Gerard added five more names: Sidney Z Mitchell, Walter Edwin Frew, Amadeo P. Giannini, William Green, Matthew Woll.

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James W. Gerard

Challenging American History

Although it's not my main goal for this semester's Environmental History class, one of the important side goals (and I admit, an ongoing interest of mine) is correcting bad history that has been taught for so long that it's hardly ever questioned. So once I completed my story of pre-Columbian America for my first lecture, I compared it to the way some highly-regarded recent US History textbooks have covered the topic.

In many older American History textbooks, of course, the pre-Columbian story wasn’t told at all. American history begins in 1492. While some of the archaeological information available today was unknown to these earlier historians, they were often just not particularly interested in Indians or prehistory. It was remote, unknowable, and irrelevant. Lately this has changed a bit, and in the interests of inclusivity—or at least political correctness—contemporary textbooks usually say something about the people who were here before the Europeans. Here's what a sample of recent textbooks had to say about early America:

Proudly announcing added coverage of pre-Columbian America in the 1987 edition of his textbook,
American History, Richard N. Current devoted four pages to his description of America before Columbus. Current said Native Americans shared a common Asian ancestry that enabled Europeans to think of them all as a single race, although he acknowledged the fact that “natives had no reason to consider themselves part of one race or culture.” He explained how colonial whites believed Indian men were lazy because the women always seemed to be doing all the work. Current described the introduction of old world crops like sugar and bananas that “Indian tribes in time learned to cultivate,” but he failed to mention that they had independently developed the staple crops they already grew when Europeans arrived, such as maize, potatoes and cassava. Current commented that Indian farming “would often seem crude to Europeans” without explaining that most of the time the Europeans’ disdain for native practices arose from their profound ignorance of the environment and climate of the new world.

In his extremely popular and well-received 2011 textbook
Experience History, James West Davidson gives just three paragraphs to the arrival of humans in the Americas. He calls the people who came “nomads,” highlighting the term in a rare use of bold-face type. “Nomads” is a loaded concept that has been used regularly in American history to suggest that Indians never had the same type of relationship with their territories that whites do, and thus no claim of “ownership” of their land.

Describing pre-Columbian culture,
Experience History mentions that “pioneers in Mesoamerica began domesticating squash 10,000 years ago.” But in spite of this, the text stresses the idea that most Indians were simple hunter-gatherers who “continued to subsist largely on animals, fish, and nuts, all of which were abundant enough to meet their needs and even to expand their numbers.” Davidson characterizes the Adena and Hopewell cultures as “peoples who did not farm,” and explains that Indians didn’t farm in the Pacific Northwest because “Agriculture was unnecessary in such a bountiful place.”

Clearly Hopewell or Mississippian cities containing tens or hundreds of thousands of people needed more reliable sources of food than what hunters carried back from the woods. So what’s the point of Davidson’s portrayal of Indians as primitive hunter-gatherers? Davidson does mention the fact that the modern world’s most important food crop, maize, was developed by Indians – but this is how he explains it:

Modern-day species of corn, for example, probably derive from a Mesoamerican grass known as teosinte. It seems that ancient peoples gathered teosinte to collect its small grains. By selecting the grains that best suited them and bringing them back to their settlements, and by returning the grains to the soil through spillage or waste disposal, they unintentionally began the process of domestic cultivation.

What’s wrong with this description? First, there’s
no doubt that corn comes from teosinte, since they share the same genome. Second, Davidson’s suggestion that the multi-generational process that changed a self-seeding grass into a hybrid (maize) that needs humans to plant it was an accident is not only ridiculous, but it obscures the fact that these ancient people knew what they were doing and had the long-term cultural orientation to do it. Davidson’s portrayal does not reflect the fact that archaeologists and historians agree this process probably took hundreds of human generations from start to finish (thousands of generations for the plants), and incidentally, was probably done by women.

aztec1
Centeotl, Aztec Maize God

In spite of admitting that “plants domesticated by indigenous Americans account for three-fifths of the world’s crops” today, Davidson manages to make it seem like that’s no big deal, and almost an accident. Davidson’s discussion of ancient American farming ends with a chart of the “Place and Timing of Pioneering Plant and Animal Domestications.” Southwest Asia tops the list, with the development of Wheat, Peas, Olives, Sheep and Goats dated to 8500 BCE. Next comes China, with Rice, Millet, Pigs and Silkworms “By 7500 BCE.” New Guinea and the African Sahel are next, followed finally by Mesoamerica and the Andes & Amazonia, which produced Corn, Beans, Squash, Potatoes, Manioc, Turkey, Llamas, and Guinea Pigs “By 3500 BCE.” This is just flatly wrong. Maize, potatoes, and cassava,
three of the top five staple crops in the world today, were all developed in the Americas beginning over 9,000 years ago. Eastern North America brings up the chart’s rear, producing only Sunflowers and Goosefoot by 2500 BCE. Never heard of goosefoot? Maybe you’ve heard it called grain Amaranth, its scientific name and the way it’s known by farmers worldwide who raise it for its high levels of protein and essential vitamins and minerals. So why call it goosefoot, unless your goal is to make it seem trivial and silly?

Davidson concludes his coverage of pre-Columbian Indians by observing that “a few centuries before European contact…the continent’s most impressive civilizations collapsed.” Davidson says the “sudden” and “mysterious” disappearance of cultures like the Mayan, Olmec, Mogollon, Hohokam, Anasazi, and Cahokian was due to “a complex and still poorly understood combination of ecological and social factors.” In other words, through some combination of ecological mismanagement and social failure, Indians “went into eclipse by the twelfth century…[and] had faded by the fourteenth,” making room for whites from Europe. It almost seems like Cotton Mather’s famous explanation of how Providence had cleared the woods “of those pernicious creatures, making room for better growth.”

They Told Barron

I got a pile of old used books in the mail today, mostly titles I had found in the notes and bibliography of Lundberg's America's 60 Families. One that looks particularly interesting is They Told Barron, which is a collection of the notes taken by newspaperman and owner of Dow Jones, Clarence W. Barron. Barron, who began the weekly financial magazine that bears his name, talked to everybody. And apparently, everybody talked to Barron. The book's Foreword says "People talked to Barron not only because he was a power in journalism, able to push or retard their interests and plans, but also because his personality invited the confidences of overburdened souls. In physical appearance he was jolly Kris Kringle in the flesh. Short of stature, but impressive of breadth and girth, his sparkling blue eyes, ruddy cheeks, and whitening beard completed a Santa Claus picture which did not belie its owner, for his heart was as benevolent as his appearance."

Barron was born in the North End of Boston in 1855. He worked as a newspaperman in Boston before founding the Boston News Bureau in 1887. Specializing in financial news, Barron became not only a dispenser of news to the public, but an insider who frequently passed information personally between other insiders. This makes his collected notes especially interesting.

Since they're written in diary form, I thought I'd post a note from Barron's book on the day he wrote it. The first book (there's a sequel called
More They Told Barron) covers the decade of the 1920s (Barron died in 1928), and rather than taking ten years to post the interesting bits, I thought I'd ignore the chronological order and stick with the date format. I'll try to point out where a particular note connects strongly with something else before or after that I've already mentioned.

Rather than wait to do the first half of January, I'm going to just catch up as quickly as possible. The first example, dated January 2, 1927, describes Barron's lunch at the White House with President Calvin Coolidge and his family. It runs a couple of pages (many of the notes are shorter), so I've read it into the file below. Some highlights:

I reviewed the motor and Ford situation with him, told him that the Chrysler people estimated there would not be a fluctuation of more than five per cent in the motor business in the coming year, what [John J.] Raskob had said to me about the solidity of the motor business, on so solid a basis that replacements now took care of the motor output except for 500,000 new cars annually to be sold…Explained how fashion regulated things, and that the Ford car was behind the times. Ford's obstinacy to meet the public demand for luxury in transportation has put out of the running the old Ford car, which, as Raskob said, needs to be redesigned to meet new conditions. [Raskob was a Du Pont and General Motors executive, who was chairman of the Democratic National Committee -- but opposed FDR's New Deal -- and built the Empire State Building.]

Shallow Billionaires

I didn't like this book. Didn't hate it either. But although I'm very interested in the subject matter, there was a lot of trivia and shallow description in this book, and there weren't a lot of original ideas. I've never read anything else by the author, Darrell M. West. He's apparently the director of a technology center at the Brookings Institution. So I assume he knows more about the topic than he relates in this book. It may be a case of trying unsuccessfully to take a complex topic and make it accessible to regular people. This isn't an easy or trivial challenge, but I think this book generally fails.

The book was
reviewed for the Wall Street Journal by billionaire Tom Perkins, who West criticizes for suggesting the rich should get more votes. Perkins says the "dollar per vote" idea was just a joke, and that West's book is a "red-tinged" call for more government. Among the things Perkins particularly objects to is West's suggestion that the tax-break hedge fund managers get on "carried interest" ought to be eliminated. This controversy isn't unexpected, but it's almost more interesting than the book itself.

But there were a couple of things that I did find interesting. The idea that plutocrats can gain a lot of leverage on the government by influencing a single Senator is interesting. West was told by a "wealthy individual," he says, that "a person needs to obtain the support of only a single member to prevent the chamber from taking a particular action." The ability to "get a senator" allows the rich to block legislation, delay political appointments, and potentially bring the government to a standstill. This is the type of influence that the Seventeenth Amendment to the Constitution was passed to fight. But direct election of Senators is less meaningful  after Citizens United and McCutcheon.

Another interesting data-point was West's observation that there has been a "staggering loss of reporting firepower in America's state capitols." West says the number of full-time reporters covering state government has dropped from 513 in 1998 to 355 in 2009, leaving an average of 7 reporters per state. As a result, he says, "special interests often are able to work their will in near-secrecy at the state level." I'm not sure I buy this argument. I suspect a lot depends on who you consider a reporter. Do the numbers represent only those working full-time for traditional national news outlets? What about regional news sources? In the internet age it's much easier for an article from the Minneapolis Star Tribune or
KSTP TV News to get national exposure.  And while decreased visibility is clearly bad, as national news sources come under increasing suspicion, is their loss of a monopoly on reporting really that tragic?

West spends a lot of the book outlining issues that other books cover more thoroughly and more engagingly. Reduced transparency in elections, super-PACs, the connection between education and earning power, and rich political candidates are all covered. There's a long section of little biographical vignettes of plutocrats. I was particularly disappointed with this. In the couple of pages devoted to Bill Gates, for example, West's narrative read like a bland entry in Who's Who. I didn't get the sense he wanted to really drill down into details (which I remember well, having been in the clone-building business when Microsoft was gaining its monopoly. I remember using DR-DOS instead of MS-DOS, and how that ended), so the little bios felt more like People Magazine filler than evidence supporting a thesis.

After the section of mini-biographies, I started skimming. Still, there was an interesting detail that jumped out at me about how many of President Obama's 2008 supporters like George Soros and Oprah Winfrey pretty much stayed on the sidelines in 2012. West opines that it was probably "Obama's tax policies" that turned the rich donors off, assuming (apparently without evidence, because in a heavily footnoted section this particular analysis quotes no one) that folks like Soros and Winfrey couldn't share the general disappointment felt by Progressives at the lack of "Change We Can Believe In" during Obama's first term.

Later, West spends some time talking about philanthropy, quoting an article in
The Nation which said "Sixty-seven charitable foundations have assets of $1 billion or more." This 2013 article by Amy Schiller, titled "Can Billionaire Philanthropists replace the Federal Government," sounds very interesting. West's endnotes and bibliography are filled with articles like this -- it's a good source of material on these issues, although very much a snapshot of late 2013 and early 2014. On the whole, the sources are probably much better than what West does with them in this volume.

Money & Metropolis

The Monied Metropolis: New York and the Consolidation of the American Bourgeoisie, 1850-1896
Sven Beckert, 2000

I probably should have read this a long time ago. I've met Beckert and I was aware his world-view and mine are a bit different, so I held off. After reading Part One, I think my suspicions about where our world-views differ were true. But there's a lot of interesting material in the book. Unlike some of the other recent histories I've been reading, The
Monied Metropolis has a thesis and argues its points using actual primary evidence.

I was going to respond to the whole first part of the book, but as I review my notes and highlights, I think there's a bit more to say about the book's Introduction than I'd expected. Beckert begins by reminding us that the story he's going to tell is about change. He isn't going all the way back to the Colonial era like Charles Beard, and he definitely isn't embracing Beard's "economic interpretation." Beckert is saying that whatever it was beforehand, the New York elite became something different in the second half of the 19th century. "Alexis de Tocqueville," he says, "observed that 'in the United States the more opulent citizens take great care not to stand aloof from the people; on the contrary, they constantly keep on easy terms with the lower classes: they listen to them, they speak to them every day.' "

I get his point, I think. But it's also worth noting that Tocqueville recognized classes when he saw them. He knew who the "more opulent citizens" were, and if a foreign observer was able to see that the elites were "taking care" not to distance themselves too much from the masses, then it's a fair bet the elites were self-conscious and acting deliberately. And what does he mean by class, anyway? Tocqueville was comparing American elites with European nobility (this was before the rise of a Euro-British middle-class "gentry" which was a result of the industrial revolution). Beckert says America had "the first elite not to derive its status from the accidents of birth and heritage," which sounds to me more like an ideological/interpretive "position" than like an empirical observation. Certainly the
slaves derived their status (the antithesis of the elites) from exactly those accidents. And even in white society the advantages of birth enjoyed by a Thomas Jefferson and even a John Adams (fifth generation New Englander, son of a deacon and selectman of Quincy) had to count for something. And further (one last thing), when Beckert says "In the absence of an aristocracy or a feudal state, both bourgeois society and the bourgeoisie burst more powerfully onto the scene than anywhere else," I'm willing to grant that America was a little more open to this expansion than Europe. But It's also possible that in the absence of a hereditary elite, the merchants and manufacturers of New York immediately filled the vacuum and quickly became a hereditary elite -- maybe even in the course of a single generation. So although Beckert accepts the idea of "sharpening social inequality" in the period, he sticks to the conclusion that "it is the distinguishing feature of United States history that no true aristocracy emerged."

Beckert spends a lot of the Introduction arguing for the term bourgeoisie and against alternatives like aristocracy, plutocracy, and ruling class. He draws a distinction between skills and capital that will apparently be important throughout the book as the merchant elite clashes with the rising manufacturers. Beckert says the elite was "unstable because bourgeois New Yorkers were committed to social mobility." Again, I'd question whether these folks remained committed to mobility after they had completed their own moves. The aristocratic costumes the elite partiers wear to the 1897 costume ball Beckert begins the Introduction with suggest that the rich at least aspired to aristocracy. But he poses an important question about "when, how, and why the coherence between these different groups" that formed the New York elite "became dominant over their differences."
Stay tuned for Part One, tomorrow.

Why Scientists and Regular People Disagree

I ran into this interesting chart today, describing a Pew poll comparing the opinions of scientists with those of the general public on "science issues." Here's the graphic (click image or find bigger original here) and AP/Huffpost's summary:

2015-01-30-pewsciencevspublic


Seth Borenstein: "The American public and U.S. scientists are light-years apart on science issues. And 98 percent of surveyed scientists say it's a problem that we don't know what they're talking about. Scientists are far less worried about genetically modified food, pesticide use and nuclear power than is the general public, according to matching polls of both the general public and the country's largest general science organization. Scientists were more certain that global warming is caused by man, evolution is real, overpopulation is a danger and mandatory vaccination against childhood diseases is needed. In eight of 13 science-oriented issues, there was a 20-percentage-point or higher gap separating the opinions of the public and members of the American Association for the Advancement of Science, according to survey work by the Pew Research Center. The gaps didn't correlate to any liberal-conservative split; the scientists at times take more traditionally conservative views and at times more liberal." [AP/HuffPost]

So what should we make of this data? There are certainly some like evolution and climate where I read the scientists' position and think, "yes! thank you!" Other opinions like offshore drilling I'm less excited about. But am I cherry-picking? Is there some type of implied obligation in the way the information is presented, to either take it or reject it in total?

I'm not sure if it's intentional, but I think the presentation does nudge the reader in that direction. But looking more closely at the different statements (and trying to imagine the questions that led to these answers), it seems to me there are two basic types of issues jumbled together here. First, there are statements of fact. "Humans have evolved over time." "Climate change is mostly due to human activity." Then there are statements that advocate taking (or not taking) a particular action. "Favor use of animals in research." "Favor more offshore drilling."

And not for nothing, the factual statements tend to be the ones I agree with the scientists on, and the action statements tend to be the ones I disagree with (although there are some I agree with). I think that's because it makes sense to me that when you ask a scientific question of fact (did we evolve), science -- and scientists -- are the source of the best answers. But on the other hand, when you're asking a social question like should we build more nuclear power plants, the answer doesn't rely solely on science. The costs and benefits, even the safety of a nuclear program depend not only on scientific data, but on economic and social factors that may be outside the competence of the scientists polled. For example, it may be possible to make a nuclear plant 100% safe, and we might still fail to do so through cost-cutting, shoddy oversight, terrorism, or any number of other factors not present in the scientist's assumptions about the future when she gave her opinion.

So the "what should we do" questions not only involve assumptions about the future, but these assumptions are much more ambiguous and political than simple scientific facts. Also, I chose nuclear power because the answer
I'd give might vary with the wording of the question. Generating electricity by burning coal kills many more people annually than nuclear. The potential for nuclear disaster may be higher, but the actual disaster that is coal is a fact we've chosen to sweep under the rug. So I'm not sure how my opinion on that issue would be recorded -- it would depend on the way the question was asked.

Postscript: There are also several statements I just set aside. "Safe to eat genetically modified food" is one of these. I think the question fails to encompass the whole issue. I suspect most GMOs are more or less safe to eat (relative to Big Macs at least, if not raw kale). But I object to GMOs for a host of other reasons including promotion of single-source monoculture, patenting of genomes, etc. So the question as it was apparently asked really doesn't do justice to the issue.

Millionaires in the 1920s

American Millionaires and Multi-Millionaires: A Comparative Statistical Study
Pitirim Sorokin
Journal of Social Forces, May 1925, 627-640

Pitirim Sorokin was a Russian-born sociologist who founded Harvard University's Department of Sociology. Ferdinand Lundberg refers to Sorokin's 1925 article in
America's 60 Families, so I thought I'd take a look. Sorokin begins by remarking that "American millionaires and multimillionaires…have not been seriously studied." His analysis was based on a sample of about six hundred men. Slightly fewer than half were dead (sources for these included encyclopedias of national biography, Who's Who, etc.), slightly more than half were alive in 1925 when Sorokin wrote. The sources for these were the income tax returns published in the New York Times in October and November of 1924. This was the famous experiment in publishing financial details of the wealthy, which Lundberg points out was so unpopular with the plutocrats it was never tried again.

Sorokin looks at a variety of demographic items like life expectancy, age at marriage, number of marriages, fecundity, etc. He compares wealthy men with scientists, and finds they are very similar. Not surprisingly, he finds New York is the leading birthplace of millionaires, living and dead; and that the percentage of millionaires born in New York was increasing when he compared the dead with the living. Of the dead millionaires group, over two thirds were from UK (English, Scotch, Irish) ancestry. In the living group, the UK ancestry was still well over half. The most interesting data was on the occupations of the millionaires' fathers. Of the dead group, half the fathers were "Merchants, Manufacturers, bankers, Financiers, Business Men," and another quarter were "Farmers" (which included large land-owners). Of the living group, two thirds of the fathers were "Merchants, etc." and fewer than 10% were "Farmers."

Sorokin summarizes, "the percentage of living millionaires whose fathers followed 'money-making' occupations is much higher than that of the deceased group. This fact taken together with some further data gives a basis to state that
the wealthy class of the United States is becoming less and less open, more and more closed, and is tending to be transformed into a caste-like group. [Sorokin's emphasis] The further data Sorokin mentions is his finding that "While in the deceased group only about 49 per cent of the  rich men had the same or similar occupation to that of their fathers, among the living group this percentage is about 72. Furthermore we shall see that the percentage of those who started their money-making career as wealthy men is also much higher in the living than in the deceased group." These factors are "doubtless the surest marks of the increase of social 'rigidity' of the rich American class."

These findings are important, Sorokin suggests, because they contradict the American myth of "social mobility." Ironically, Sorokin observes that in Europe hereditary transmission of class status is only 24.5 %, and in England about 20%. Assuming America had
once been a land of opportunity, Sorokin concludes "American society is being transformed--at least in its upper stratum--into a society with rigid classes and well outlined class divisions." [again, his italics] More than half the millionaires in the living group started their lives that way. "In light of these figures we must recognize as only partially true the statements of many wealthy men that 'there is always room at the top'…(S. W. Winslow) [or] that 'the young man now still does have a chance' [Andrew Carnegie]." In fact, Sorokin finds that because they have such an extreme head-start, the sons of millionaires don't' even need to be that well educated. Only about half the men in the living millionaire group have college degrees, Sorokin finds, compared with three quarters of the leaders of other fields.

But Sorokin disagrees with Thorstein Veblen's claim that the wealthy are slackers. Instead of the "conspicuous leisure" Veblen sees, Sorokin finds "it is difficult to find any social group which would be as busy and as energetic in activity as American money makers." Chrystia Freeland says something similar
about today's plutocrats: they work very hard which leads them to believe in meritocracy. They ignore their advantages and claim hard work is all it takes. And while Sorokin admits "It is true that some of these men made their money in quite a 'predatory' or socially harmful way," Sorokin says many of the inheritors "leave 'hard business' and more and more dedicate themselves to 'fine arts' and literature and partially to political and scientific activity, becoming…scholars, philanthropists and diplomats, statesmen and politicians."

This is an interesting observation to conclude an article on. Sorokin is looking at individuals, of course, rather than at families. Years later, Ferdinand Lundberg developed the thesis (in
America's 60 Families and then even more in The Rich and the Super-Rich) that after the initial founding generation, the family rather than the individual is the appropriate unit of analysis. He saw some family members branching out into philanthropy or government while others ran the business -- and all living under the protecting umbrellas of trust funds and foundations that perpetuated the caste system Sorokin discovered.

Not Submarines: The Case for WWI

Now, back to the action, as Ferdinand Lundberg describes the financial case for entering World War I:

"After President Wilson was maneuvered into permitting loans to the Allies, J.P. Morgan and Company in October, 1915, headed a syndicate of leading banks which floated the $500,000,000 Anglo-French loan. The biggest individual subscribers were the Guggenheim brothers (copper), James Stillman, J. P. Morgan, George F. Baker, Andrew Carnegie, Vincent Astor, Otto H. Kahn, Hetty Green, William H. Clark (copper), Charles M. Schwab of Bethelehem Steel, and Samuel Untermyer, New York lawyer." (140)

"Early in 1917 the Allied governments, which now owed the American bankers and their clients nearly $1,500,000,000, had been brought virtually to their knees by the German armies…On March 5, 1917, Walter Hines Page, American Ambassador to England, sent to President Wilson a long dispatch…[he] pointed out frankly, 'If we should go to war with Germany, the greatest help we could give the Allies would be such a credit. In that case our Government could…make a large investment in the Franco-British loan or might guarantee such a loan…Unless we go to war with Germany our Government, of course, cannot make such a direct grant of credit.' The alternative to war, Page warned, was domestic collapse" if the Allies defaulted on their debts to the New York banks. (141)

"Within four weeks President Wilson asked Congress for a declaration of war…Out of the proceeds of the very first Liberty Loan more than $400,000,000 was paid to J. P. Morgan and Company in satisfaction of debts owed by the British Government! During its participation in the war the United States lent to Europe $9,386,311,178…Europe got none of the money lent by the Treasury; it received only materials of war. The owners of American industries got the money." (141-2)

"When Wilson in 1913 broached the idea of the London ambassadorship to [Walter Hines] Page, the latter held back on the ground that he could not support himself in the proper ambassadorial style. Wilson thereupon called on [Cleveland H.] Dodge to make up the needed funds out of his private purse. Dodge agreed to give Page $25,000 a year during his tenure of the London post. Page was, therefore, as wartime ambassador to Great Britain, financed by a big stockholder of the National City Bank who also happened to be one of America's munitions magnates." (142-3)

"Munitions exports in 1914 totaled $40,000,000; in 1915 they were $330,000,000, in 1916, $1,290,000,000." (143) But the price of profitability was high: the US death toll in World War I was 405,399.

Lundberg on Roosevelt, Taft, Wilson

Here's another installment of my notes on Ferdinand Lundberg's book, America's 60 Families. In the last post, we ended with Teddy Roosevelt's "hint" that the Panic of 1907 was "aggravated, if not started, solely to permit the United States Steel Corporation to gobble up the Tennessee Coal and Iron Corporation in contravention of the Sherman Act."

Lundberg continues: "The academic historians, in analyzing the "Bankers' Panic" of 1907, have ignored the significance of [F. Augustus] Heinze's downfall…the doom of Heinze and United Copper was
a quid pro quo exacted by the Rockefellers for permitting Morgan to swallow Tennessee Coal and Iron." (91)
George B. Cortelyou -- someone to keep track of, as is George W. Perkins

"October 24, 1907, a front-page story appeared in
The New York Times, published by Adolph Ochs, relating that there had been a terrific run on the Trust Company of America and that worried bankers had met in all-night conference. The information was false; there had been no run. As brought out before the Stanley Committee, the article was planted in the unsuspecting Times by no other than George W. Perkins…" (93)

Elbert "Gary admitted to the Stanley Committee that the Trust Company of America had never been in danger. Its supposed insolvency merely provided an excuse for shifting desireable stock into Morgan's hands…[Senator] Aldrich, decided in 1908, however, that there had been no conspiracy. But Roosevelt, when later confronted with all the evidence, admitted that the Senate committee had been deceived. If this is true then Roosevelt himself deceived the committee…" (95)

"In 1900…there were 149 trusts of $4,000,000,000 capitalization; when the "trust busting" Roosevelt breezed out of the White House, there were 10,020, with $31,000,000,000 of capitalization." (100)

"Taft's first message…promised tariff reform…Instead of tariff reform Congress produced the Payne-Aldrich Act, which boosted the tariffs on more than six hundred items…LaFollette showed that the tariff reductions amounted to only $45,000 and the increases to $10,000,000." (101)

"Taft brought forty-five [antitrust] suits, against only twenty-five by Roosevelt, and yet roosevelt is remembered as the 'trust-buster.'" (102) Lundberg goes on to say it was Taft's suit against Morgan's US Steel that "finally swung Roosevelt against Taft," but he admits that after the Stanley Committee announced its findings, Taft had little choice.

"Secretary of the Interior Richard A. Ballinger had been an attorney for some of the Guggenheim interests before he took office. A controversy broke out between Ballinger and Chief Forester Gifford Pinchot over the disposition of the lands, to which fraudulent claims had been filed by the Guggenheims in concert with J.P. Morgan and Company…Taft promptly ousted Pinchot." (103-4)

I should really get my hands on the transcripts of the Stanley Committee and the Pujo Committee.

The 1912 presidential election looks just crazy. The plutocrats were apparently split. "Roosevelt's preconvention backers were George W. Perkins and Frank Munsey. These two, indeed, encouraged Roosevelt to contest Taft's nomination…Munsey was the biggest stockholder in United States Steel…The financial genius behind Woodrow Wilson was Cleveland H. Dodge, of the National City Bank…Roosevelt was defeated for the Republican nomination at the Chicago convention when the legitimate credentials of most of his delegates, won at primaries, were blandly ruled out by the credentials committee under Root and Aldrich. Root bore a fresh grievance against Roosevelt, who, he believed, should have thrown the presidency to him in 1908." (105-8)

"Roosevelt, ever irresolute, would not, as [Henry L.] Stoddard makes clear [in
As I Knew Them, 1927), have contested Taft's nomination and candidacy had it not been for the insistence of Munsey and Perkins…The notion that Perkins and Munsey may have wanted Wilson to win, or any Democratic candidate other than Bryan, is partly substantiated by the fact that Perkins put a good deal of cash behind the Wilson campaign, through Cleveland H. Dodge…for Perkins and J.P. Morgan and Company were the substance of the Progressive Party; everything else was trimming." (110-1)

"Wilson's nomination represented a personal triumph for Cleveland H. Dodge, director of the National City Bank, scion of the Dodge copper and munitions fortune, and inheritor of the invisible mantle that passed from Mark Hann to George W. Perkins…Dodge and McCormick had been Wilson's classmates at Princeton University, class of 1879. When Wilson returned to Princeton as a professor in 1890 [they were both] university trustees…by 1910 Dodge stood as close to Wilson as Hanna in 1896 had stood to McKinley. (113-5)

Lundberg says "vested wealth accepted Wilson's election 'without serious misgivings'…The first Wilson Administration brought various superficial reforms. The Underwood Tariff Act scaled down the rates of the Payne-Aldrich Tariff by ten per cent…The Clayton [Antitrust] Act was, not without design, even less of a bar to monopoly than its predecessor…The Federal Reserve Act was passed…" (120-2)

In 1916, Wilson narrowly beat Charles Evans Hughes for the reelection. "After his defeat in 1916 Hughes became chief counsel for the Standard Oil Company, succeeding Joseph H. Choate. He joined Harding's 'Black Cabinet' as Secretary of State, later resumed his Standard Oil practice, and in 1930 was named Chief Justice of the Supreme Court by Herbert Hoover…As Chief Justice he succeeded Taft (Standard Oil), who had been appointed by President Harding (Standard Oil)." (129)

Wilson is remembered by most historians as being a Progressive, and also as pledging during the 1916 campaign to keep America out of the European War. Lundberg has a LOT to say about the "World War," which I'll dive into next time.

Approaching WWI with Thomas Lamont

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Continuing my notes on America's 60 Families, with a digression to a little-known speech:

Lundberg says "total wartime expenditures of the United States government from April 6, 1917, to October 31, 1919, when the last contingent of troops returned from Europe, was $35,413,000,000. Net corporation profits for the period January 1, 1916, to July, 1921, when wartime industrial activity was finally liquidated, were $38,000,000,000…" (134)

By the end of the American involvement, US national debt had reached $30 billion, "or more than thirty times the prewar national debt. The only way the people could recover some of this money was by taxing the corporations" that had made some extreme windfall profits during the war. But the Republican administrations that followed Wilson's "saw that taxes on the rich were sharply reduced rather than increased." (135)

JP Morgan and Company acted as purchasing agent in the US for the European allies. Wilson's Secretary of State, the Populist William Jennings Bryan, warned the President in August 1914 that Morgan was seeking credit for Britain and France. Bryan told Wilson "money is the worst of all contrabands," and that if the loan was permitted, "the interests of the powerful persons making it would be enlisted on the side of the borrower, making neutrality difficult, if not impossible."
Wilson concurred, and Bryan wrote to JP Morgan in his official capacity as Secretary, outlining the administration's position that "Loans made by American bankers to any foreign nation which is at war are inconsistent with the true spirit of neutrality."  So on October 23, 1914, "with Bryan out of town," the bankers tried an end run. Samuel McRoberts, vice president of National City Bank, approached a State Department advisor named Robert Lansing, who called on Wilson. "Between them they drew a Jesuitical distinction between credits and loans: credits were held to be permissible…the Allied governments…began buying supplies in large quantities on bank credits…it was only a little more than six months before Wilson secretly gave permission for the flotation of the huge Anglo-French loan." (Wilson's good friend and trusted advisor Cleveland Dodge was a director of National City. 136-7)

Lundberg then moves on to JP Morgan and Company and especially to Thomas Lamont, who was to play an important role in financing the war and negotiating the peace at Versailles. Lamont gave an important but little-known speech in April, 1915, Lundberg says, which laid out the bankers' agenda for the war. Lamont spoke to the American Academy of Political and Social Science. Although Lundberg observes the speech, titled "The Effect of the War on America's Financial Position," was "neither reported in the newspapers nor was it brought to light by the Nye Committee." (139) Luckily, a transcript was published in the
Annals of the Academy. Here are some highlights:

Lamont begins by recounting that at "the outbreak of the general war…We saw our high-grade securities fall with great violence; we saw the entire fabric of our foreign exchange, built up over many generations, knocked completely awry; we found ourselves unable to buy sterling exchange wherewith to pay our debts in London. Our gold was exported in great volume…Domestic rates for money advanced to a high figure, and even at that money was scarce and hard to obtain." This alarming chain of events, Lamont recalls, was met with swift and decisive action. "Our securities were being dumpoed upon us in large volume by foreign holders. Therefore, we closed our exchanges…Gold was being exported and there was danger of a money panic. Therefore…under the Aldrich-Vreeland Act $400,000 of additional currency was almost immediately issued." To forestall the calling of foreign loans, the financiers of New York "sold $100,000,000 of its 6 per cent notes," raising $80 million in gold. When the South was panicking over the breakdown of the cotton market, the financiers "organized a banking pool to lend up to $150,000,000 on cotton." In these ways, Lamont says, "a comparatively few active and patriotic men acting as leaders, but with the loyal and united support of the whole financial community," saved the American economy.

Since the initial crisis, Lamont continues, the situation has turned to America's advantage. "Money is easy, we are importing gold on a good scale, having already brought back over $50,000,000 of what we sent out last year…we are turning from a debtor into a creditor…We are piling up a prodigious export trade balance [with] war orders, running into the hundreds of millions of dollars." Lamont lists a half dozen countries the financiers have loaned money to since Wilson allowed "credits," concluding "these foreign loans that we have made since war broke out [are] well above two hundred million dollars." But that's just the tip of the iceberg. "Many people seem to believe," Lamont says, "that New York is to supercede London as the money center of the world. In order to become the money center we must of course become the trade center of the world." So instead of a dangerous crisis, the European war might just be a tremendous opportunity for America.

But it's not a sure thing. In order to take advantage of this opportunity, the financiers will need to be both smart and bold. And a lot rests, Lamont admits, on "the duration of the war." If it's over quickly and Germany is able to regain its competitive position in international trade, "we should find that the building up of our foreign trade would be a much slower matter than if the war were to continue indefinitely…If we should continue to buy such securities [of US companies] back on a large scale -- and the chances are that if the war continues long we shall do that -- then we should no longer be in the position of remitting abroad vast sums every year in the way of interest…If the war continues long enough…then inevitably we shall become a creditor instead of a debtor nation, and such a development, sooner or later, would certainly tend to bring about the dollar, instead of the pound sterling, as the international basis of exchange."

So what's it going to take to bring about this historic reversal of America's financial fortunes? First, of course, American financiers need to be allowed to loan (and American manufacturers to sell) as much as possible to the warring Europeans. But in order to do this, Lamont says the US government needs to turn control over to the patriots who saved the economy at the war's start. "We are witnessing extraordinary developments on the other side of the water," he says; "we are seeing government control of industry being undertaken on a gigantic scale. Will such control continue in part or in whole after the war? Will the value of the cooperative effort which is now being demonstrated, be so great as to demand continuance after the war is over?" This passage may be confusing to people reading today, since we now expect businessmen to be against government involvement. Lamont is
calling for government cooperation with business -- but with himself and his fellow financiers calling the shots.

"Here in America," Lamont asks, "shall our manufacturers and merchants be able to take effective steps, with the active cooperation of the government for the development of foreign business? Will American producers be able to arrange for cooperation among their organizations?" To make America the world leader in trade and finance, Lamont says, things will have to change because "Today our laws do not allow them." In order to take advantage of the opportunity before them, "this year to one billion dollars," Lamont says the government needs to start looking the other way on antitrust and let business "cooperate."

"Some fail to realize," Lamont concludes, "that finance and general business are so interwoven that the success of manufacture and trade depends entirely on the cooperation of finance." Trusts and the holding companies that followed them, by the logic of the day, allow financiers to rationalize industries and make them more efficient and profitable. Bigger is better -- this is an idea we still recognize as part of the philosophy of big business. Lamont is calling for unlimited size, and also for cooperation by government to turn control over American foreign financial policy over to the people who took "those great remedial and protective steps that I have briefly alluded to…taken by a few gentlemen quietly and without legislative action."

How Does History Get Forgotten?

One of the things that struck me when I began reading Ferdinand Lundberg's 1937 book, America's 60 Families, was "why haven't I heard about this before?" Not only the facts and perspective Lundberg was offering, but the book and the author. I did a PhD field in 19th Century American History. Okay, sure, Lundberg wrote in the 20th century. But his writing covers the late 19th. So how is it I was unaware of him?

I read an article the other day called "
What New Left History Gave Us," in the online journal Democracy. The author takes Gabriel Kolko to task, remarking at one point that not only was Kolko's work "arid and mono-causal," but that it was wrong on the facts of J.P. Morgan's involvement in the Panic of 1907. I did a search inside The Triumph of Conservatism (thanks, Amazon!) on the word Lundberg. Zero instances. I also searched The Age of Reform and The Search for Order, because Amazon "suggested" these books on the Kolko page. No dice. But Alan Brinkley mentions that FDR borrowed the phrase "Sixty Families" for his December 30, 1937 radio address, in The End of Reform. Sigh of relief.

How is it that a historian writing about J.P. Morgan in the 1970s would not be aware of Lundberg's work? Especially a historian claiming to represent the Left? This made me wonder (as I often do), am I being led astray? Was Lundberg a crackpot? Is his perspective so marginal that it was ignored by serious scholars? So I searched the journals for reviews of Lundberg's book.

I expected the left would have some good things to say, and I wasn't disappointed. The radical journalist and author, Harvey O'Connor, reviewed
America's 60 Families in the Marxist journal Science and Society, announcing that "Lundberg states a thesis certainly not novel in essence but never more thoroughly illustrated than in this book, crammed as it is with the factual results of a study of finance and government of this generation." But the Marxists were not the only people impressed by Lundberg's book. The Annals of the American Academy of Political and Social Science (an organization whose membership included not only academics, but Herbert Hoover and Frances Perkins) ran a review by Michael B. Scheler a year after the book's publication. Scheler said:

"Mr. Lundberg, supporting the radicals' contention, has offered in his book not merely theory and generalizations but a mass of facts, figures, statistics taken from authoritative sources. Since its publication America's 60 Families has served as a challenge to American plutocracy, but to date, despite several lame attempts which were easily shattered by the author, none of its facts and figures has been disproved. Mr. Lundberg names names and lists intimate details in the lives of the families involved, but so far, to the reviewer's knowledge, no libel suits are pending against either the author or the publishers."

A 1938 review in
Social Science (published by Pi Gamma Mu, the International Honor Society of the Social Sciences) by philosophy professor Herman Hausheer, calls the book "An eminent and incontrovertible performance of classic magnitude." Paul H. Douglas (University of  Chicago, later US Senator from Illinois) wrote  a long review for the Oct. 1938 Public Opinion Quarterly. While he disputed a few of Lundberg's facts and inferences, Douglas acknowledged "the general picture of concentrated control which this work paints if probably substantially correct, and many reviewers have erred in not being able or willing to see the forest for the trees. There is no doubt that the situation which this book reveals more clearly than any other of which I know does present a serious challenge to true democracy."

So it seems that although Lundberg's book was controversial when it came out, it was recognized as a legitimate contribution to the field. That means something happened between then and now, to take
America's 60 Families off the table and hide it on a back shelf where no one ever looks. While I think "historiography" is of much more interest to academics than to regular people, changes in the way we think about wealth and inequality are important enough that it might be worth looking at this more closely.

FEE Quotes Weber, Misses Point

Yesterday FEE posted an excerpt from Max Weber, under the title "Politics is Violence." While I think I get their point, and I even agree that the ways contemporary governments -- including our own -- use their powers is a big problem, I think the article oversimplifies the issue in a way that supports a core libertarian narrative about the difference between government and business.

In a 1918 article titled "Politics as a Vocation," Weber says:

"Today, however, we have to say that a state is a human community that (successfully) claims the monopoly of the legitimate use of physical force within a given territory.

"Note that 'territory' is one of the characteristics of the state. Specifically, at the present time, the right to use physical force is ascribed to other institutions or to individuals only to the extent to which the state permits it. The state is considered the sole source of the 'right' to use violence."

The problem is, there's a disconnect between the first and second statements. The "human community" and the agency of the humans in that community of the first paragraph disappears from the second, and the state is reified. That is, the state becomes a monolithic agent -- a "person" with one particular outlook and agenda. I don't think this reflects reality, where "the state" can be better understood as an ongoing, never-ending negotiation between its members. Name me a state that speaks with a single voice, where there is no dissent, no disagreement on ends or means. And since this is so, the question of violent means is much more complicated than FEE is trying to suggest.

Also, in the real world, although "the state" may
claim a monopoly on violence, it is clearly not the only agent of violence. So really, what's the point of retreating into a hundred-year old theoretical argument about abstractions that didn't reflect reality then or now?

Notes: America's 60 famiies

I'm starting to digest the items I marked and highlighted in Ferdinand Lundberg's 1937 book, America's 60 Families. I haven't decided exactly what I think about each of these items yet, so this isn't a review. It's more of a peek into my own process. These are the things that jumped out at me as I was reading. For the most part, they show Lundberg's radical interpretation of events and people the mainstream historians treat quite differently. I'll need to read more to decide how to react to this material. If nothing else, it's an interesting challenge to the way we view the past. (First 90 pages here. More to come)
Lundberg's basic argument is that 60 families "are the living center of the modern industrial oligarchy which dominates the United States." (3)
"Concentration…by means of majority ownership, legal device, and diffusion of fractional and disfranchised ownership…" (8) This could be right out of Jerry Davis's recent book,
Managed By the Markets.

In spite of the overwhelming use of the limited liability corporation to organize business, "The control points of private wealth in industrial capitalistic society, as in feudal society, remain the partnership, the family, and the family alliance."

Franklin Roosevelt Jr. married Ethel du Pont (daughter of Eugene) in 1937

"few of the present owners of big fortunes are the architects of these fortunes…class differentiation is becoming more and more hereditary in the United States." (20-2)

Find out about the Atlas Corporation (early fund?) 1924 Floyd B. Odlum (32)

"J.P. Morgan was purchasing agent for the Allies [in WWI] at a commission of one per cent." (36)

"National City's leading stockholder is A.P. Giannini" who also owned BofA and TransAmerica Insurance. (40)

"J.P. Morgan and Company would, of course, deny that it controls A.T. & T., whose advertising stresses that no individual owns so much as one per cent of its stock…Briefly, the greater the fractional distribution of share ownership…the more secure is the control of the managing directorship." (referring to Berle and Means, 42-3)

"Although incomes above  $50,000 accounted for thirty per cent of individual savings in 1929, Bureau of Internal Revenue figures show that only 38,889 persons, or .05 of one percent of the adult population received such incomes." (46)

In other words, Lundberg says, "the big fortunes tend to reproduce themselves on an enlarging scale." In contrast, "about ninety-nine per cent of all citizens had gross incomes of $5,000 or less, and eighty-three per cent of all liquid wealth was possessed by the one per cent that received $5,000 or more annually."
According to an IRS official testifying before the Senate Finance Committee in 1935, "It is often asserted that large wealth is dissipated in three generations…[but] large estates…we find, not only perpetuate themselves but are larger as they pass from generation to generation." (48-9)

"The first fortunes on the virgin continent," Lundberg reminds us, "were out-and-out political creations--huge tracts of land and lucrative trading privileges arbitrarily bestowed by the British and Dutch crowns upon favorite individuals and companies." (50)

Lundberg continues, observing that "in 1860 more than half the land area of the nation was held in trust for the people by the government, but by 1900…natural resources owned today by the Unites States Steel Corporation, the Aluminum Corporation, the Standard Oil  Company, the railroads, and, in fact, nearly all private corporations, were in 1860 communally owned under political auspices." (53)

"That there was universal popular approval for the dismemberment of the public domain does not alter the fact that it was the common people, ever slow to comprehend their true economic interest, who were despoiled." (53-4)

Campaign spending chart on p. 55

Cleveland, McKinley, Taft, Harding all from Ohio -- Standard Oil. Mark "Hanna's Rockefeller affiliation. In 1891, was intimate and of long standing." (57)
McKinley: "In 1893, while Governor of Ohio, he went bankrupt, but was secretly salvaged by a syndicate comprising Mark Hanna, Myron T. Herrick, Samuel Mather, Charles Taft, Henry C. Frick, Andrew Carnegie, and others…After his elevation to the White House, McKinley, to make room for Hanna in the Senate, designated as his Secretary of State the octogenarian Senator John Sherman." (58)

"Seven Presidents served under [Nelson W.] Aldrich, Republican Senate whip. Destined to become young Rockefeller's father-in-law…When Aldrich gave up his wholesale grocery business in 1881 to enter the Senate [from Rhode Island]he was worth $50,000; when he died, after thirty years in politics, he was worth $12,000,000." (61)

"The Morgan syndicate that floated the United States Steel Corporation in 1901 exacted a fee of $62,500,000…whereas the tangible value of the entire property was only $682,000,000; the new securities had a face value, however, of $1,400,000,000." (63)

McKinley's Cabinet: "Elihu Root, who took the portfolio of war in 1899, was [Thomas Fortune] Ryan's attorney and became Morgan's; he had been Tammany Boss Tweed's lawyer…Philander C. Know was a Frick-Mellon man, a director in several Mellon banks that had long financed Frick's coke business, and the reorganizer of the Carnegie Steel Corporation as a holding company…Root and Know sat in the cabinets of three Presidents, faithful janizaries of the economic royalists." (64-5)

Roosevelt's "purely verbal radicalism was to hold in check the rising tide of social discontent…a virtuoso at deception, [Roosevelt] is even today looked back on as a great liberal reformer…nominated for the mayoralty of New York in 1886 by Chauncey Depew, president of Vanderbilt's New York Central Railroad…Roosevelt was placed in nomination at Saratoga [for Governor in 1898] by Depew, and was seconded by Elihu Root…Frick himself became one of Roosevelt's private advisers…as Vice-President Elect [Roosevelt] had given a private dinner in December, 1900, in honor of no lesser personage than J.P. Morgan." (66-8) In 1903, Roosevelt invited Morgan to the White House "to talk over certain financial matters." (69)

"Elihu Root stepped out of the Cabinet to act as the Morgan-Hill defense counsel for Northern Securities, and succeeded in obtaining a purely technical dissolution decree from the Supreme Court." Then Root rejoined the Cabinet. (70)

Panama Canal p. 74

Aldrich-Vreeland currency bill -- LaFollette filibustered eighteen hours in vain (89)

"It was freely charged later, and President Roosevelt himself hinted it, that the panic [of 1907] was aggravated, if not started, solely to permit the United States Steel Corporation to gobble up the Tennessee Coal and Iron Corporation in contravention of the Sherman Act." (90)

Campaign Spending has RULED since 1860

Occasionally (really, pretty frequently) I'm struck by all the interesting stuff you can find in books written by people marginalized by the history profession. For example, Ferdinand Lundberg's 1937 book, America's 60 Families, includes a chart of presidential campaign spending beginning in 1860. I've never seen anything like this in a mainstream history book. But it should probably be there, because it turns out that the guys who won the highest office were almost always the guys who spent the most, from Abe Lincoln on.

National Party Funds in Presidential Years

Year
 
Republican
 
Democrat
 
Winner
1860
 
$100,000
 
$50,000
 
Lincoln -R-
1864
 
$150,000
 
$50,000
 
Lincoln -R-
1868
 
$150,000
 
$75,000
 
Grant -R-
1872
 
$250,000
 
$50,000
 
Grant -R-
1876
 
$950,000
 
$900,000
 
Hayes -R- (lost popular vote)
1880
 
$1,100,000
 
$355,000
 
Garfield -R-
1884
 
$1,300,000
 
$1,400,000
 
Cleveland -D-
1888
 
$1,350,000
 
$855,000
 
Harrison -R-
1892
 
$1,850,000
 
$2,350,000
 
Cleveland -D-
1896
 
$16,000,000
 
$425,000
 
McKinley -R-
1900
 
$9,500,000
 
$425,000
 
McKinley -R-
1904
 
$3,500,000
 
$1,250,000
 
Roosevelt -R-
1908
 
$1,700,000
 
$750,000
 
Taft -R-
1912
 
$1,071,548
 
$1,131,848
 
Wilson -D-
1916
 
$2,500,000
 
$2,000,000
 
Wilson -D-
1920
 
$9,700,738
 
$2,537,750
 
Harding -R-
1924
 
$4,370,409
 
$903,908
 
Coolidge -R-
1928
 
$9,433,604
 
$7,152,511
 
Hoover -R-
1932
 
$2,900,052
 
$2,245,975
 
Roosevelt -D-

So in every election except two, the party that spent the most money won. The two exceptions were Woodrow Wilson's 1916 re-election (when Wilson promised to keep the US out of a European War), and Franklin Roosevelt's 1932 landslide victory over Hoover (who was blamed for exacerbating the Great Depression). In both those cases, though, the winning party spent three quarters of the money the money spent by the loser.

What I found interesting was that the historic break in the Republican Party's half-century in the White House were the two non-consecutive terms of Grover Cleveland. In 1884, Cleveland outspent his Republican rival, Maine Senator James Blaine, by raising a million dollars more than the Democrats had spent four years earlier. The general consensus of Political Historians is that "popular outrage at the influence of money in politics helped put Grover Cleveland into the White House." (Heather Cox Richardson,
To Make Men Free, 2014, p. 122) A standard undergraduate textbook remarks that "the election of 1884 was one of the dirtiest ever recorded." But it fails to mention that the mudslinging in the media was fueled by a doubling of the money spent by the campaigns four years previous. The textbook paints Cleveland as a reformer of sorts, although it mentions without explanation that Cleveland "vetoed two out of every three bills brought to him [by a Democrat-controlled Congress], more than twice the number of all his predecessors." (Davidson et. al, Nation of Nations, 2005, 676-7)

In 1888 the Republicans outspent the Democrats by nearly a half million dollars, and Cleveland lost to Benjamin Harrison. Harrison's victory is portrayed as the accomplishment of "a rising kingmaker named Mark Hanna." (
To Make Men Free,123) Cleveland "decried the takeover of government by the wealthy," which some historians take as a suggestion the Democrat believed himself to be a people's candidate. The Republicans tried to insure their control over the presidency by bringing western territories into statehood, buying newspapers like Frank Leslie's Illustrated, and stuffing the Civil Service with their cronies. But in 1892, Cleveland's campaign outspent the Republicans by a half million dollars, and the Democrat became the only President to be elected to non-consecutive terms.
Cleveland is often considered a political outsider and champion of the common man because he was from Ohio. But by the end of the 19th century, Ohio was not the wild frontier it had once been. Five other presidents including Cleveland's rival Benjamin Harrison claimed a close connection (birth or public service) with the state, which during the last decades of the 19th century was the home of Standard Oil. While John D. Rockefeller "habitually contributed large funds to the Republicans in return for lucrative concessions; Colonel Oliver H. Payne, his partner, gave liberally to the Democrats." (
America's 60 Families, 54) Payne's son-in-law, William C. Whitney, became Cleveland's Secretary of the Navy.

While it is too simplistic to claim that the results of all these elections simply followed the money, the standard approach of political historians and the authors of history textbooks seems to go too far in the other direction. They say nothing -- leaving "fringe" historians like Ferdinand Lundberg the task of pointing out the fact that kingmaker Mark Hanna was considered by many the "statesman of Standard Oil." Luckily, the writings of these fringe historians, although left out of the history books, are not that hard to find online.

Herbert Hoover was Dangerous

From They Told Barron:

About January 3, 1923.  S. Davies Warfield [Boston Banker and Railroad man] tells me:

"The case of the railroads is getting stronger every day, but getting worse in politics and at Washington. The farmers could not get cars and Harding has been ill-advised by Hoover [then Secretary of Commerce] -- the most dangerous man in the Cabinet. Hoover knows something about everything but nothing fully.

"Association of Railroad Executives is going to pieces.

"Railroads and steamships should be united as in the C.P.R. [Canadian Pacific Railway] Mellen's consolidation for New England was right. He wanted to trade en masse with the rest of the country with steamships and Canada."

hoover_and_harding_at_baseball_game
Hoover and Harding at a ball game, 1921

Google Glass Gargoyles

The Atlantic ran an article this week called "How the Camera Doomed Google Glass." It was the creepiness of being "walking, talking invasions of privacy" that people found unacceptable. Funny that Neal Stephenson predicted that reaction in 1992 in Snow Crash. Hip skateboard courier YT is appalled when Hiro Protagonist (yep, that was really the central character's name) straps on a wearable computer fitted with surveillance gear and becomes a walking intel-vacuum. Stephenson calls these guys gargoyles, and captures the combination of creepiness and lameness this way:

Gargoyles represent the embarrassing side of the Central Intelligence Corporation. Instead of using laptops, they wear their computers on their bodies, broken up into separate modules that hang on the waist, on the back, on the headset. They serve as human surveillance devices, recording everything that happens around them. Nothing looks stupider; these getups are the modern-day equivalent of the slide-rule scabbard or the calculator pouch on the belt, marking the user as belonging to a class that is at once above and far below human society. They are a boon to Hiro because they embody the worst stereotype of the CIC stringer. They draw all of the attention. The payoff for this self-imposed ostracism is that you can be in the Metaverse all the time, and gather intelligence all the time. (pp. 123-124)