Arming for War - Losing our Hearts and Minds

America didn't always have the world's most powerful and best equipped military, and although Commodore Perry had forced the opening of Japan with a small force of steamships in the 1850's, the oceans definitely belonged to Old England. Global power shifts happen much quicker these days, primarily due to the fact that perceived power (that which is reported on by the media) has replaced steel and guns in the thinking of most leaders and intellectuals. It's an interesting outcome, that the power to utterly destroy one's opponents is held in low esteem as long as one is self-restrained from doing so on humanitarian grounds. What strikes me as particularly ironic is that the ideological basis of many of today's terrorists, destruction of the West's corrupt way of life, would have signed their death sentence in in the 1800's, had the the corrupt Western governments of that time been equipped with modern weaponry. The following is from the New York Daily Times of June 29, 1882 - 123 years ago today:

PROPOSITION FOR NEW CRUISERS

The Senate Committee on Naval Affairs to-day authorized Mr. Rollins to report favorably a bill authorizing the construction of a number of vessels of war for the Navy and appropriating $10,000,000 for that purpose. The bill provides for the construction of six open-hearth steel cruisers, two of them to be not less than 5,000 for more than 6,000 tons displacement, and to be armed with 4 breech-loading rifled cannon of not less than 8-inch calibre, and 21 breech-loading cannon of not less than 6-inch calibre; the remaining 4 to be of not less than 4,300 nor more than 4,700 tons displacement and to be armed with 4 breech-loading rifled cannon of not less than 8-inch calibre, and 15 breech-loading cannon of not less than 6-inch calibre. The bill also authorizes the construction of one steel ram of not more than 2,000 tons displacement, four steam cruising boats and four steam harbor torpedo boats. It further provides that the steel used in the construction of these vessels shall be of domestic manufacture, and that one-half of the number of vessels authorized to be constructed, including their engines and boilers, shall be built in the navy-yards of the United States, and that the others, in their whole or part by contract. The bill was reported to the Senate this afternoon and placed on the calendar to await further consideration.

That we've been building and deploying some pretty powerful weapons systems around the world since the ocean going Monitors of the post Civil War period is known to all. The subtle change in the balance of power is the growing obsession in the Western World with television images and collateral damage. Collateral damage wasn't always viewed as a bad thing, in fact, all damage inflicted on the opposition was once seen as good damage, because it had become apparent that modern wars couldn't be won by simply destroying a professional military group on the other side, it required destroying the opposing group's places to hide and will to fight. Our new morality demands that we play by a unilaterally imposed set of rules and wait until we destroy our own will to fight, at which point we lose. It seems we're doomed to become a fine bunch of humanitarians, damned for our humanity, and scheduled to be written out of history.

Dogs or Bears - Modern Value Systems

I usually depend on old newspapers for historical source material, but today I'm going with a 200 year old diary excerpt from Meriwether Lewis, of Lewis and Clark fame.

June 28, 1805 "The white bear have become so troublesome to us that I do not think it prudent to send one man alone on an errand of any kind. they come close around our camp every night by have never yet ventured to attack us and our dog gives us timely notice of their visits, he keeps constantly patrolling all night. I have made the men sleep with their arms by them as usual for fear of accidents." Lewis

Science tells us that Dogs and Bears evolved from a common ancestor, creatively named the "dogbear." I grew up with dogs running around the neighborhood, and never saw a live bear outside a zoo until one came wondering up my residential street a couple years ago with two cubs in tow. I've encountered bear in town twice since, once walking to the supermarket when I looked up and saw a large brown bear loping towards me from about 100 ft away, and once walking in the evening when a mother bear with three cubs wandered across the main drag, with a tardy cub causing a driver to lock up the brakes.

I don't have anything against bear, though one coming at me gave me a scare. What bothers me is the judgment made by society around here that wandering bear are good but dogs off leash are bad. Civilized man (and dogs) made our choice thousands of years ago. We're on one side, and the bear are on the other side. The earthy-crunchy types in the 300 year old Massachusetts town I live in have decided that bear are somehow more valuable than dogs (amongst a raft of other revisions to traditional value systems) and don't see the harm of bear wandering freely through town at night. I figure they'll change their minds when some cute kid tries to pick up a bear cub that's eating out of the garbage and the mother bear breaks the kid's skull.

Bear and people aren't meant to share the same space. Yes, we can manage it for a short while, when the number of bear is low and the local wildlife cops can tranquilize the young males and move them somewhere where hunters are still active, but sooner or later as the bear population continues to grow, it's going to be us or them. I'm in favor of us, or at least, me, and a few dogs running around off leash and barking at bear would be a good start.

D.C. Housing Bubble - 110 Years of the Washington Post

Somebody once said there are only two groups of people in the world: The first group believes there's housing bubble, the second group wants to kill the first group. Being in the first group, I suspect the second group has a classic Karen Horney neurosis they would go mad to protect, but I'm getting way off mission here. If you want to know about the housing bubble in Washington D.C., the Washington Post would be a good place to start. I started with a sampling of the Real Estate ads from the Post of 110 years ago today, June 27, 1895.

FOR SALE - 2 BARGAINS, TO-MORROW - Look- 6-room brick, 2d and N sts, se., bay window; water, sewer and gas; $1700; $700 cash; cheap at $2,000; 5-room frame, N st, near 11th st. se.; rented at $9, for $950 cash. JOHN F. DONOHOE, 308 East Cap. st.

FOR SALE - $8,000 WILL BUY AN ELEGANT new brownstone and press brick bay-window house, 1342 U st, near 14th; lot 18x100 to paved alley; 9 rooms and bath; handsomely papered throughout; this is a great bargain. Apply on premises.

NEARLY NEW BRICK; 6 ROOMS; bath, concrete cellar, papered; lot 18x90; in good location; northwest; only $3,500; worth $4,500; owner must sell. BOOTH & BRUNER, 1003 G nw.

and, from a large agency ad:

REAL ESTATE BULLETIN BY
THOMAS E. WAGGAMAN, 917 F ST. NW TWO-STORY BRICK AND FRAME HOUSES FOR SALE

413 O st nw, b, h, 9 rms........................................$5,200
1343 and 1345 V. st nw, b, h, 6 rms....................$3,500
Stable, bet 20th and 21st and L and M sts nw..$2,500
Hurst Place, Conduit road, f, h, 6 rms.................$2,200
Frame Cottage, Brightwood, 9 rms.....................$6,500
422 and 422 1/2 11th st sw b, h, 6 rms each.....$3,000
2009-11-13 and 15 Gale st ne f, h, 6 rms..........$1,060
27 Dingman place nw, b, h, 5 rms.......................$750
13-15 and 17 Burk's alley sw, f, h, 4 rms............$900
109 and 111 N st se, b, h, 6 rms...........................$900

So the average price for a decent size house for the times (probably around 1500 sq ft, max) was around $3,000. You could get cheaper by living in a much smaller house or in a cheaper area, or you could pay more for 9 rooms and a bay window, but $3,000 looks around average. Now, according to Robert J. Shiller, as reported by the Post in April, housing prices in the U.S. have risen at an average of 0.4% above inflation since 1880, with most of that gain coming in the last few years. We're only going back to 1895, but let's look at our $3,000 investment with simple annually compounded interest over the last 110 years.

5% - $642,605
6% - $1,822,915
7% - $5,120,788
8% - $14,247,358
9% - $39,267,750
10% - $107,230,078

The long-term return expected through the stock market is usually kicked around at 10%, and that $107 million dollars looks a lot better than having owned, maintained and paid taxes on a house in D.C. for 110 years. Even the 5% simple interest isn't bad, and $642,645 is just a little more than 200 times our $3,000 investment. The interesting point here is that absolute inflation over the last 100 years is generally given as x20, ie, our dollar today buys about 1/20th of what it bought in 1900. Assuming there wasn't a huge run-up in DC real estate between 1890 and 1900, this would indicate that real estate does much better than the .4% above inflation. Even if compounded continually, 0.4% interest will barely ad 50% to a sum over 110 years, so we would expect our $3,000 house in D.C. to cost $90,000 today, which is obviously low.

According to a recent Economist article, housing prices in the US have actually gotten cheaper on an inflation adjusted basis since 1900, I'd estimate about 30% cheaper, according to their bar graph:-) You could argue the Economist numbers (at the top of our bubble) to suggest that housing is a bargain, but I would argue their numbers, and the basic interest calculation above, to suggest that housing is just a lousy investment. A similar situation exists in Jerusalem these days, where foreign buyers have distorted the upper end of the market all out of proportion

Public Transportation and Sport Don't Mix - Especially with Steamboats

Today's post includes a length excerpt from a gruesome newspaper article published 110 years ago, today. I wouldn't suggest it to the squeamish. What's particularly fascinating is this entirely avoidable accident was brought about by sport, two excursion steamers racing on Lake Michigan. Can you imagine two jumbo jets operated by competing company's racing across the U.S. until one of them shook itself apart? Yet this story was hardly a rare event in the 1800's. If I recall Mark Twain's brother was killed in such an accident racing riverboats on the Mississippi (Samuel Clemens who was also a riverboat pilot took the pen name "Mark Twain" from the call of the boatman who would check the river depth with a lead weight). You would think by 1895, the passengers or crew would mutiny if a boat got involved in a race, but adrenaline conquers all.

BURST A STEAM VALVE
Serious Accident on the Christopher Columbus.
Two Killed; Thirteen Injured

Result of Reckless Racing on Lake Michigan - The Officers of the Big Whaleback Were Bound to Beat Their Rival, the Virginia, and Overpressure of Steam Did the Rest - Judge Grosscup Calmed the Excited Passengers and Prevented a Panic. By the explosion of a steam valve in the whaleback Christopher Columbus, off Waukeegan, two men were killed and thirteen were dangerously or painfully injured. The victims were:

DEAD

FRANK WILSON, coal passer
E. J. STREIT, fireman

INUJRED

Edward Darow, leader of the orchestra; scalded on the face and hands very painfully.
John Hopper, fireman, inhaled steam, and face, neck and breast seriously scalded.
George W. Keil, waiter, Buffalo, hands and face scalded.
John W. Keough, meat carver, Buffalo, hands and face scalded.
Arnold Klein, passenger, Dubuque, Iowa, face and hands badly scalded; accompanied by student, also scalded.
Robert McConkey, coal passer, back terribly scalded.
Miss Miller, orchestra, scalded and hands and face burned.
Frank Rosner, fireman, badly scalded on face, hands and body.
James E. Ryan, fireman, scalded on back, neck and hands.
Nic Sasser, water tender, Cleveland, Ohio, hands scalded.
Miss Voxhelmer, orchestra, face painfully scalded
W. L. Webster, chief engineer, hands scalded
James Lorimer, coal passer, face, neck, breast and hands seriously scalded.

It was the homeward run of the whaleback in its opening summer excursion to Milwaukee. About 350 souls were aboard. Flying flags, with music and dancing was the order of the evening.

An Exciting Race

Half a mile in the boat's wake plowed the rival excursion steamer, the Virginia, which, clearing the harbor some fifteen minutes later, had on every pound of steam possible to overtake her competitor. On the outward trip the Virginia had not only held the advantage, but doubled it, and the crew of the whaleback were determined that they should not be passed. And the Virginia was gaining. As the sun went down the boats pushed ahead neck and neck, not more than 300 yards apart. The decks and promenades of both steamships were blackened with passengers. Shouts and waving garments told the same interest in the outcome that attends the race course. The Virginia surged ahead. Word passed from the engine room that the Christopher Columbus was resolved on a little fun. The rival boat should be allowed to gain a half mile on the whaleback, and then steam was to be run up and the situation would be changed before reaching Chicago harbor. Scores went below to watch the machinery.

The clouds of black smoke forming a dense low-hanging airwake to the whaleback, the vibrations of the craft from stem to stern, the unusual plowing of the water, all told that the Columbus was under a giant strain and would win if it was in her. Some grew anxious, Judge Grosscup and his party, who were sitting aft, deserted their seats and stood under the bridge.

A Steam Valve Burst

Those watching the gauge said that the pressure was exceeding the limit to which the boilers had been adjusted. From 132 pounds the steam had run up to 177 pounds and was still rising. Suddenly there was a shock of explosion. The steam valve in a six inch connecting pipe over the starboard notary of the three boilers had blown off. Down in the hold, six firemen and a waterman found themselves enveloped in a scalding mist so thick that one could not see his hand. When they tried to make the ladder, they jammed against the heated oven doors. In their frenzy they fell over one another and delayed embracing the slight chance of escape offered. The blinding vapor made help impossible. The steam crowded everywhere. It was instantly in every compartment of the vessel.

In the main saloon, 150 persons seated or reclined were suddenly seized with panic. It was increased by all the lights going out. The passengers rushed to the decks. Several women fainted. The men did all in their power to quiet the frightened. Many believed the ship was sinking. Then the steam reached the passengers. A score or more of women who had inhaled steam swooned, and in the excitement, their friend believed they had been overcome by breathing deadly vapor. (For the rest of the story, see the June, 24th, 1895 edition of the Washington Post).

I can't think of many industrial acidents nastier than steam burns. Steam actually contains about five times the calories (heat) as boiling water, so steam burns from pressurized steam always result in serious injury. When I wrote a novel about a troubled young engineer who wrote poetry about engineering disasters in the early 90's, I

East India Company Dispatch - Real Corporate War

The following dispatch from the commanding officer of an East India Company expedition in 1805 speaks for itself. The British Empire took over India less by design than by mercantile accident, the ready availability of British troops to compliment company forces, and the fact that India had been occupied by Muslim Mughal's for a few hundred years and was anxious to see them off. Presented in its entirety:

From the London Gazette, Saturday, June 23
The following intelligence has been received at the East-India House, from Bengal
To his excellency the Most Noble Marquis Wellesley
My Lord - My dispatches of the 24th and 25th instant [letters were not received] will have informed your Lordship of the complete success of our operations against the town and fort of Deig. I attribute our early possession of this strong fortress entirely to the panic which the garrison experienced, on witnessing the irresistible valour and intrepidity of our troops in carrying by assault the outwork, and storming their numerous batteries under the walls of the town, which were supported by extensive entrenchments, occupied by a large force consisting of several of the Rajah of Burtpore's battalions, and the remaining infantry of Jeswunt Rao Holkar. The number of enemy killed on the night of the 23rd inst. Was immense. The ardent zeal, energy, and irresistible valour which marked the conduct of our Officers and troops deployed on the occasion, under circumstances of peculiar difficulty and danger, must ever reflect on them the highest credit and the benefit the nation has received from their exemplary and heroic behavior, must be matter of proud exultation to every well wisher of the British empire. Too much praise cannot be bestowed on every corps engaged, for the perfect regularity with which this service was performed. I found it necessary to divide the force, destined for this service, into three columns, the whole moving off so as to reach different points of attack a little before twelve at night. The right column, under Captain Kelly, consisting of four battalions companies of the Hon. Company’s European regiments, and five companies of the 1st battalion, 12th regiment Native Infantry, were ordered to carry the enemy’s batteries and trenches on the high ground to the left of the town. The success of this party was complete, and entides Capt. Kelly to every praise for the manner in which it was conducted, and for the coolness and gallantry he displayed under every trying circumstance, exposed to heavy fire from artillery, which was defended with desperate resolution. Captain Raban, of the Artillery, who accompanied this party for the purpose of spiking or bringing off captured ordinance, particularly signalized himself in this dangerous service. The left column under Major Radcliffe, consisting of the remaining four battalion companies of the Honorable Company’s European regiment, and five companies of the 1st battalion 12th Regiment Native Infantry, were destined to carry the trenches and batteries on the enemy’s right. The column was equally successful with that opposed to their left, and the service was performed with equal gallantry and spirit, and reflects infinite credit on Major Radcliffe. The centre column, led by Lieut. Col. Macrae (who had the general command of the whole), consisting of the flank companies of his Majesty’s 22d, 76th, and of the Hon. Company’s European regiment, and of the 1st battalion 8th Regiment Native Infantry, composed by the storming party. I have hardly words to express my sense of the conduct of this party, who, under a galling fire, on their flanks, of cannon and musketry, from the enemy’s batteries and trenches, and over broken and extremely unfavourable ground, rushed onto the breach and gained possession of the work, with a spirit and ardour which must have ensure success, whatever might have been the opposition.

I feel myself under the greatest obligation to Lieut. Col. Macrae, to whose conduct on this occasion I attribute the ultimate success of the attack. Lieut. Col. Ball, who commanded the 1st battalion 8th Regiment Native Infantry, is entitled to the greatest praise for the activity and spirit he displayed in leading on his men; and for the able assistance he rendered Colonel Macrae, in the adoption of such measures which afterwards became necessary to secure us in possession of the place. It is with sincere grief I add that this Officer received a severe, though, I trust, not a dangerous wound, but which, I fear, will deprive me of his services for some time. The conduct of Capt. Lindsay, of his Majesty’s 22d Regiment, has been represented to me as highly meritorious; I lament to add that this gallant Officer is likewise wounded. It is unnecessary for me to detail more fully the conduct of individuals, on a service where merit has been, throughout all ranks, so eminently conspicuous; but I feel it my duty to draw your Lordship’s attention to the services rendered by Lieut. Col Horsford, commanding the Artillery, to whose professional knowledge and service throughout this siege, and on every other occasion, I feel infinitely indebted, as well as to the whole of that corps, for their spirited and unremmited exertions. The Officers of the Engineer department, Capt. Robertson, and Lieut Smith, have particular merit, and are entitled to my best thanks and approbation. The corps of the Pioneers, under the orders of Capt. Swinton command my warmest praise for the cheerfulness with which they performed their laborious duties, and particularly the alacrity the displayed on the night of the 23rd inst. Too much credit cannot be bestowed on Capt. Swinton, who on this and every former occasion has been most zealous and active. I am sorry to add that this excellent Officer is severely wounded, as is Lieut Forrest of the same corps, whose conduct was equally meritorious. Your Lordship will, I am confident, receive much pleasure in learning the highly exemplary conduct of the three corps of British calvary in the camp, the whole of whom volunteered their services as working parties for the trenches and batteries, and assisted very materially in accelerating our operations against this place; they have received my sincere thanks for this duty, and for a zeal so honourable to the British character. I have the honour to enclose returns of the killed and the wounded during the siege, and on the night of the assault, with a return of the captured ordinance &c. The fugitives, composed of the Rajah Burtpore’s battalions and his garrison, with the remainder of Jeswunt Rao Holkar’s infantry, appeared generally to have taken the direction of Burtpore. By every information, great numbers have deserted; and I do not imagine they will again attempt to oppose us. I shall move toward Burtpore as soon as possible. Before I conclude this dispatch, I beg leave to mention to your Lordship the very spirited conduct of Mr. Metcalf of the Civil Service. He volunteered to accompany the storming party, and was, I am informed, the foremost to ascend the breach.

I have the honour to be, &c. G. LAKE
Head-quarters, Camp at Deig, Dec 26, 1804
Total Return of Killed and Wounded of the troops that formed the Storming Party, commanded by Brigadier Macrae, on the night of the 23d inst:
Europeans, 28 killed, 78 wounded – Natives, 101 killed, 100 wounded, 5 missing (supposed to be killed).
(Signed) J. GERRARD, Adj. Gen

As it turns out, the town and the citadel were taken, but the fortress at Burtpore never was, despite several assaults. It's interesting to note that this dispatch, written the day after Christmas in 1804, didn't reach England and get published until June 23rd. The only other thing I have to add to this excerpt is a minor note on English literature. I've often come across the phrase "mentioned in a dispatch" as a testament to the worthiness of a character in a novel. One such civilian is mentioned in this dispatch, he earned his placed by being first into the breach. Not an easy way to get your name into the newspapers. Franklyn Dailey has transcribed a Parlimentary debate about the condition of the British soldier about this time, the third reading of the Mutiny Bill.

Slow and Steady Wins the Race to the North Pole

President John F. Kennedy announced in a speech before the joint Congress on May 25, 1961 that America would put a man on the moon by the end of the decade. On July 20th, 1969, Neil Armstrong walked on the lunar surface. Eight years is a long time for Americans to stay focused on a goal these days, you have to wonder if we'd set out to reach the moon in 2001, would Congress have defunded the project to buy more Viagra for retirees before it got off the ground? Exploration has always been a costly and slow moving process, costly in terms of both dollars and lives. When Peary set out to reach the North Pole in the 1893, he took an incremental approach, though he never expected it would take four expeditions and an act of Congress to guarantee his place in history, one that's still questioned by some historians. Peary invested 16 years in reaching his goal, twice as long as it took America to reach the moon in the 1960's. Today, the expeditions may actual be more famous for the presence of his servant, Matthew Henson, a black man who receives much attention in African-American history courses, than for the deed itself. That Peary got off to a rough start is witnessed by this low key article to appear in the Washington Post 110 years ago today.

PEARY RELIEF EXPEDITION

The Party will Embark To-day on the Steamship Portia

The World to-morrow will publish a statement made by Mrs. Josephine Peary, to the effect that the steamship Portia will leave Brooklyn Saturday, June 23, carrying members of the Greenland scientific expedition of 1895 to St. John's N. F. They will board the steam barkentine Kite there, and will sail for Greenland about July 1. The expedition will be under the direction of Emil Diebitsch, of Washington, DC, the brother of Mrs. Peary, and the party will be composed of Prof. Rollin D Salisbury of Chicago University,; Prof. L. L. Dyche, of Kansas State University; Theodore Le Boutillier, of Philadelphia, and Dr. John E. Walsh of Washington.

The expedition has two principal objects in view. First, to reach Anniversary Lodge, Bowdoin Bay, in North Greenland, in order to communicate with Mr. Peary, his companion Hugh J. Lee of Meridan Conn., and his servant, Matthew Hepston. Second, to afford the scientists who accompany the expedition opportunities to study the geology and glaciers of the country, as well as the flora and fauna of the region to be visited.

The misspelling of Henson's name as Hepston is faithfully reproduced from the original article. It would be 14 more years before Peary and Henson would reach the North Pole and live to tell the tale, be it tall or true. The important thing is they didn't shunt the task off on the next generation, tired as their legs must have been, and they didn't leave their children a multi-trillion dollar bill to pay for rented Huskies and dog food.

Cars are the Father of Devils - Oil IS the Devil

The price of oil touched over $60 again today and pundits did what pundits do, namely talk a lot of garbage. It escapes me how an intelligent man or woman with a PhD in something that involved math can get on the idiot box and say, "Well, America isn't really dependent on Middle Eastern oil." The logic (if you can call it that) is that only a small percentage of America's oil imports come from the Middle East. Most of the oil comes from Canada, Mexico and South America, along with Nigeria and the UK. There are two primary reasons for this, first, the length of the supply line (cheaper to import from closer countries) and second the suitability of the crude for our refineries, essentially a matter of tradition. What the pundits never want to admit is that there's really only one oil market in the world. If Russia stops supplying oil to Germany and France, does anybody believe they will simply go without, or will they bid up the price on oil from our traditional suppliers? If the mullas in Iran close the spigot, will the Chinese and the Japanese shut down their economies, or will they buy some of our "share" from the Saudis? These truths I hold self evident.

Sometimes, if you really want to know the truth of a matter, you have to consult somebody who has no preconceptions. An excellent example of this was given by an article run 100 years ago today in the NYT under the heading "SHOWED FIJI ISLANDERS THEIR FIRST MOTOR CAR," and subtitled "Natives Called Mr. Glidden's Auto Father of Devils." An excerpt follows:

FINE ROADS NEAR ANTARTIC
Those in Australia, He Says, Resembled the Route from Albany to Utica - Pause in His World Tour

Charles J Glidden, the world touring automobilist, who has traveled more than 25,000 miles in his motor car in foreign lands in the past four years, arrived home yesterday on the steamer Kronprinz Wilhelm. Mrs. Glidden accompanied her husband. She has been with him in every mile of his trip in his big gasoline touring car.

They ran over nobody, had no accidents, and were only delayed one hour for repair.

"Automobiles have had some pretty hard names given to them," said Mr. Glidden, "But the natives of Fiji, who are only one generation removed from cannibalism, devised a name for my machine which is full as good as those originated by more civilized individuals. They styled it "The Father of Devils." As it was the first automobile that ever entered the Fiji Islands, I don't blame them. When they saw that it did not scatter death and ruin in its wake they eased up on the name a little and called it 'boat on the road'"

The implication of "They ran over nobody, had no accidents," is that running somebody over doesn't count as an accident, unless of course it damages the big gasoline touring car. What we learned about the Fiji Islanders from this story is they take a very accurate first impression but lack temporal vision. If they could see the future, they would know that the automobile indeed scatters death and ruin in it's wake, and will certainly cause more death and ruin in the future. While technological innovation have made cars somewhat safer over recent years, for both passengers and the environment, the incredible increase in the number of vehicles on the road worldwide must outweigh this. The Fiji Islanders, while blameless in the matter, were also ignorant of a little thing called strategic interest, and oil is the possibly the world most strategically valuable commodity parked in one of the most volatile regions of the world. Well, addicts will do anything to feed their addiction, and in the coming years, I expect that anything is exactly what we'll do.

Accept Only Original Snake Oil - No Imitations

While I'm generally more interested in matters of high finance than dentistry, a visit to the latter today convinced me that the two are one and the same. For years I've yawned (and shown my teeth) as contemporaries carried on about the cost of their dental work, now I'm up against a similar decision myself. A less gracious dentist would have hammered home that ignoring the early warning signs (for years) is what did me in. In the first decade of the 1800's, everybody thought that George Washington had wooden teeth and nobody wanted to emulate him, so snake oil remedies multiplied. The proprietors of these miracle treatments earned enough by their sale to afford regular space ads on the front page of the London Times. An example follows:

For the TEETH. Patronized and used by his Royal Highness the Duke of Kent. TROTTER's ORIENTAL DENTIFRICE, or ASIATIC TOOTH POWDER, had been for 20 years acknowledged by the most respectable Medical authorities, used by many, and recommended. The Powder cleanses and beautifies the teeth, sweetens the breath, posses no acid that can erode the enamel, and puts a beautiful polish on the teeth. From its astringency, it strengthens the gums, eradicates the scurvy (which often proves the destruction of a whole set of teeth), preserves sound teeth from decay, secures decayed teeth from becoming worse, fastens those which are loose, and proves the happy means of preventing their being drawn. But what has enhanced it in the estimation of thoses who have been in the habit of using it is it prevents the return of tooth-ach, (with which, before that period, they had been violently afflicted), and obviates the necessity of that most disagreeable of all operations, scaling the teeth. Likewise, a Tincture, which posses the power of easing the most violent tooth-ach, and is awash with the powder. A caution against purchasing any Asiatic Tooth Powder without "M Trotter" on the stamp on the back of the box. All others are counterfeits. Sold, wholesale and retail, by the Proprietor, at her house, (and nowhere else on the Strand), No. 3 Beaufort buildings, Strand, and by her appointment, by Gattie and Lea, New Bond street; Davison and Son, 59, Fleet street; Tott and Boulton, Royal Exchange; Tait, 41, Cornhill; Hendrie and Son, Perfumers, Tichborne street; and most of the wholesale vendors in London, price 2s, 9d, a box and a bottle.

I was willing to believe it would whiten the teeth and freshen the breath, but "secures decayed teeth from becoming worse" and "fastens those which are loose," stretches my credulity beyond the breaking point. However, my favorite part of the ad is where it says (paraphrase)"Buy only our snake oil, all the other snake oils are counterfeits."

Take Our Money - Go Directly to Gaol

In a time when our government runs deficits of hundreds of billions of dollars on a regular basis, it's hard to determine the difference between good debt and bad debt. My oversimplified take on the matter is debt that you considered "bad debt" five years ago isn't magically transformed into "good debt" this year just because you're short. That's a message that our leading economists seem to be ignoring as they state (paraphrase) "We don't understand why the chickens haven't come home to roost, but we're hoping it's an unseen grace that has been bestowed on our great nation." I'm as in favor of grace as the next guy, I just don't believe it to be the case in this instance. Alan Greenspan worries the hell out of me when he says that America has always found solutions to it's problems so this time shouldn't be any different.

Good times or bad, there will always be people ready to advance you a small sum of money on a large quantity of possessions. The following ad from the front page of the London Times, June 19, 1805, caught my eye.

Money Ready to Advance - All Persons in possession of incomes arising from freehold, copyhold or leasehold estates in land or houses, money in the funds, rent charges, marriage settlements, widows jointures, annunities, patent places, church livings, or any certain income for life, may be supplied with temporary or permanent sums to any amount by paying annuity interest on the same. The Nobility and Gentry of known property, or their heirs, may be accommodated on their own personal security; and any instance where the single security of an individual may be deemed insufficient, the addition of another person to guarantee the payment of the interest, will remove the objection; and in all cases privilege will be given to the public to return the principal at their own option. Personal applications will be received every day until 4 o'clock, and letters from Correspondents in town or country, post-paid, will be immediately answered, addressed to the Director of the Knightsbridge Bank, at his town house, No. 8, Lower John street, Golden square.

How nice of them to give special consideration to the Nobility and the Gentry when it came to loan-sharking. The previous day, on nearly the exact same place on the page, a much clearer request for funds was displayed.

A Young Lady, through the unforeseen misfortune of losing her friends, is reduced to the painful necessity of soliciting the attention of some Gentleman of honour to extricate her from the most distressing situation, by only assisting her with the small sum of Ten Pounds, for which sum, unless procured, she is fearful of confinement. Letters addressed to M. M. Twopenny, Post-Office, Bridge street, Westminster, will be instantly acknowledged, with most grateful thanks.

The 19th century historians amongst us might be tempted to read "confinement" as "an interesting situation" but in this case it clearly means debtors gaol. It's hard to imagine that the standard punishment for being unable to pay your bills was to be thrown into prison, where your only chance of getting out was if your family or friends would then come up with the scratch to pay off your debts. I wonder how effective it was particularly with those who had no friends or family, but then again, maybe nobody would extend them credit.

British Extravagance Causes Trade Decline

There's a lot of talk in business circles about America being the ngine that pulls the world economy. A couple weeks ago, Richard Fisher, president of the Dallas Federal Reserve Bank, used a number of bad baseball analogies to say that the Fed was almost done raising rates, and more importantly, to say that American extravagance is a good thing. Fisher put on his blinders and said, "Where would the world be if Americans did not live out their proclivity to consume everything that looks good, feels good, sounds good, tastes good?." His analysis of the current account deficit is that America is providing the world a service (by continuing deeper and deeper in debt to buy the stuff they make), and he wonders where the world would be without us. I wonder where he's going to be when the world knocks on our door and presents a bill.

However, there's nothing new in the world's leading economy running up debt and living it up. A hundred years ago the British were bemoaning the situation, which was nicely summed up by a banker, Mr. Edgar Speyer of the banking firm of Speyer Brothers. Quoting from the NYT article of June 17, 1905, which was subtitled "Americans Are The Gainers - A Tax on Expensive Houses Recommended by the Banker as a Deterrent to Extravagance."

"The consequence of this general extravagance, [a greater than 50% rise in government spending over the past decade, plus private debauchery - MR] which I ventured to point out a year ago, has been that our imports have been very largely increased while our exports have remained relatively stationary. The result has been that the balance of our imports over our exports has more than doubled since the later eighties."

Sound familiar? He went on to say,

"I do not think we need to go into our fiscal system, or find any other scapegoat, for the state of things. The reason seems to me perfectly obvious. We have been spending too much money. To use a well-known expression, we have been burning the candle at both ends"

I find his imagery somewhat lacking. Here in America, we've scraped the wax off the middle of the candle where it could stand it and lit the wick in multiple spots. We're burning the candle at both ends, the middle, and at all the naked points in between. It's interesting to note that Britain was the worlds largest manufacturing economy in the 1800's, and was just losing it's place to America when this speech was made. Shame we didn't learn anything from them.

Alien Influx Increasing - Divorce Rate Tops 6%

I hear a lot of numbers batted around about the divorce rate in America, seems to me it's been on the order of 50% for years now. I'm generally convinced one of the leading reasons for divorce is that people can afford it, and all those extra "households" have helped drive housing through the prices roof. It turns out that Secretary of War William Taft, who would go on to be the 27th president of our country, was concerned as well. He spoke out on the soaring divorce rate and against the immigration policies of the time at the commencement of Miami University class of '05. The NYT reported on the speech on June 16, 1905 under the headline, "Against Chinese Exclusion - Based on Prejudice and Injures Commerce, Secretary Taft Says."

Touching the application of the Chinese exclusion law, the secretary asked: "Is it just that for the purpose of excluding one hundred Chinese coolies from slipping into this country we should subject an equal number of Chinese merchants and students of high character to an examination of such an inquisitorial, humiliating, insulting and uncomfortable character as to discourage altogether the coming of merchants and students?'

Regarding divorce the Secretary said, "Last year there were 612 divorces out of every 10,000 marriages. Should there not be some radical measures to prevent the looseness with which the marriage bond is tied and with which it is dissolved? If it were given to Congress to pass uniform laws of marriage and divorce, there would be proper divorce restrictions, and we could be certain that administered as divorce law would be by Judges of the Federal courts, subject as they all would be to the general supervision of the Supreme Court of the United States, there would be uniform administration of the law in the court."

The very next day, the Times carries a small story titled "Alien Influx Increasing. Class of Emigrants Less Desirable Than Formerly, Inspectors Say."

Marcus Braun and Maurice Fishberg, the American Immigrant Inspectors who have been investigating emigration from the Continental countries to the United States, having concluded their labors in Austria-Hungary and Russian Poland, respectively, are now looking up conditions prevailing at the embarking points of the big Atlantic liners.

They express the opinion that emigration, which has exceeded all previous records, promises to be even greater in the future. On the whole, the say, the class of emigrants going to the United States is not so desirable as formerly.

That would be my grandparents they were talking about.

Not Unaptly Denominated Bulls and Bears

The excerpt from the following speech by Mr. Whitbread is from a debate on the legality of loan made by the government, through the offices of the Admiralty, to a questionable character with government connections. It was reported 200 years ago today in The London Times - Saturday, June 15, 1805.

Mr. WHITBREAD continued. "It might be so (a cry of hear! hear!) but he [Boyd, the questionable character who got the loan] was the contractor. This was not all; in the month of April ensuing, this soaring speculator engaged for an additional loan of seven millions and a half, expanding his concerns with the Government to the magnitude of twenty-five million and a half sterling. Where would this terminate? Was there no monied in the world but Mr. Boyd? It would be found upon inquiry that he was pennyless; that he was in a state of insolvency and ruin, when the confidence of the Minister was thus reposed in him. Some suspicions might naturally have been entertained when the sum of 40,000 was applied for to the government. I am astonished by these money transactions. Accustomed from my infancy to trade, tp the Corn market and the Hop market, and with the regular plan of commercial intercourse. I can annex no idea to this vast scheme of speculation. The person to whom I am most indebted, of whom I say little when I assert to him I owe all of my property (or from him I have received what is much more valuable), I say, that venerated relation of mine , by the industry of half a century, amassed a considerable fortune: but these monied men acquire in a single day what it is the labour of a protracted lifetime to obtain. I do not mean to detract from the nobility, from the rank they enjoy, and the influence they possess in the State; yet while others are proud of the distance at which they are removed from their founder, I may be permitted to exult in the proximity I bear to the founder of my family. The monied markets are very different from the ordinary trade; great gains are made in a short interval, and passions are inflamed by the spirit of gambling, and an assembly of reasonable people are degraded below the condition of humanity, and thus debased, were not unaptly denominated bulls and bears.

They remain with us today, these monied men who "acquire in a single day what it is the labour of a protracted lifetime to obtain." If anything, there are more of them now than in the days before Charles Dickens was born, and their building of fortunes without contributing anything of value to the capitalistic system was certainly part of the rampant poverty in London he so vividly depicted. When an individual saves a modest sum of money and invests it in a business, together with his credit and good name, he bears the risk alone, yet if he speculates with billions of other peoples money, there's always an opportunity for a government bailout, which is somehow perceived to be in the public interest. When the New York Stock Exchange replaces the floor specialists with computer programs in the not too distant future; there will almost certainly be one good market collapse blamed on their demise. However, I'm in favor of any measure that removes middlemen and speculators from the financial system, and it will be a triumph for capitalism if stock markets ever become safe places to invest money.

In The Present

Every blog has to start somewhere, and the purpose of this post is just to make sure that somewhere is actually here. I'll be writing about two of my favorite things on this blog, the past and the future. The present is for the birds.