Semmes One of Greatest Commerce-Raider Captains in Naval History

The oil on canvas Sinking of the Alabama, circa 1868, by American marine painter Xanthus Smith (1839-1929) sold for $38,837 at a June 2008 Heritage auction.

By Jim O’Neal

By the time Abraham Lincoln was inaugurated in March 1861, seven of the Southern slaveholding states had seceded from the Union before even hearings his inaugural address. In it, he declared, “I have no purpose, directly or indirectly, to interfere with the institution of slavery in the states where it exists. I believe I have no lawful right to do so, and I have no inclination to do so.”

During the run-up to the 1860 election, Lincoln had chosen not to actively campaign and simply refused to comment on the issue of slavery. However, his Democratic opponent, Stephen A. Douglas (the “Little Giant”) campaigned across the country. In the South, he denounced threats of secession, but warned that Lincoln’s election would inevitably lead to that tragic end.

Capt. Raphael Semmes

I have often wondered if the Civil War could have been averted if Lincoln had taken his inaugural speech to the South before the election or if a civil war was the only alternative to end slavery permanently. I suspect emotions were too high and that many actually hoped for a war, especially after all the heated rhetoric in places like South Carolina.

It became a moot point when barely a month later on April 12, 1861, Confederate forces fired on the Union garrison Fort Sumter and forced it to surrender. Now president, Lincoln announced that part of the United States was in a state of insurrection and issued a call for military volunteers. Four states – Virginia, Tennessee, Arkansas and North Carolina – refused to provide troops and instead joined the Confederacy.

As positions hardened, Lincoln proclaimed a naval blockade against the seceded states, however, this was a futile effort since the Navy only had 42 ships to monitor 3,500 miles of Confederate coastline. They started chartering ships for blockade duty and soon there were 260 warships in service. Their task was made easier since the Confederate “Navy” consisted of 10 river craft armed with a total of 15 guns and not a single ship on the high seas.

Even the South’s military mobilization was devoted almost exclusively to ground forces since this was clearly the most urgent short-term priority.

However, one man was determined to change that. His name was Raphael Semmes (1809-1877) from Mobile, and following Alabama’s secession from the Union, Semmes was offered a Confederate naval appointment. He resigned from the U.S. Navy the next day, Feb. 15, 1861, and set off to the interim Confederate capital of Montgomery. There, he met with Jefferson Davis – the newly inaugurated president of the Confederate States of America – and Stephen R. Mallory, Secretary of the Navy. He outlined his plan to take the war to the enemy … not the federal Navy (that was too large to challenge), but to the U.S. merchant fleet.

In 1861, the U.S. Merchant Marine was the largest in the world. No one surpassed the skill and ingenuity of Yankee shipwrights in the design and construction of wooden vessels. America’s carrying trade had steadily increased in the 1840s-50s, fueled by the discovery of gold in California, treaty ports in Japan and China, and the whaling fleet that operated from the North Atlantic to the Bering Straits.

Semmes theory was that if Confederate cruisers could disrupt the merchant marine, the powerful shipping interests in the North would force the Lincoln administration to reconcile with the South and end the war. After studying naval commander John Paul Jones, the American Revolution, and the War of 1812, Semmes was convinced a weak naval power could neutralize the merchant marine of a more powerful adversary.

President Davis approved the concept and thus launched the career of Raphael Semmes as one of the greatest commerce-raider captains in naval history. Along the way, he traveled 75,000 nautical miles without ever touching a Confederate port and is credited with 64 of the 200-plus Northern merchantmen destroyed by Confederate raiders, many as the commander of the cruiser CSS Alabama. (The warship was eventually sunk in battle with the USS Kearsarge in 1864.)

Fittingly, he is a member of the Alabama Hall of Fame and a monument by sculptor Caspar Buberl (1834-1899) still stands proudly in Mobile … unless, of course, Monument Marauders figure out who he was.

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chair and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

G.I. Bill Crucial to Creation of our ‘Greatest Generation’

Illustrator Mort Künstler’s depiction of D-Day, which began the liberation of German-occupied northwestern Europe, went to auction in May 2017.

By Jim O’Neal

By 1944, it was clear that World War II would end the following year and America had a difficult question to answer: What to do with the 16.35 million men and women serving in the armed forces when they came home from the war?

One estimate from the Department of Labor was that up to 15 million of them would be unemployed since the economy (which was winding down) would not be able to absorb them, especially in an orderly fashion. A similar post-war situation of lower production and a bulge of returning veterans had resulted in a sharp depression after WWI, from 1921 to 1923. To further complicate things, the world was in worse economic shape following the devastation the war had produced. The government had tried a cash bonus program and it failed so miserably that many Americans were angry for the next decade.

President Franklin Roosevelt was well aware of the potential implications and determined to avoid a repeat performance. He proactively took to the nation’s airwaves, proposing a series of benefits for all the men and women who had sacrificed so much for the country. The veterans’ self-appointed lobby, the American Legion, grabbed onto the proposal with both hands – as did Hearst newspapers. Legion publicist Jack Cejnar came up with the term the “G.I. Bill of Rights,” officially passed as the Servicemen’s Readjustment Act of 1944.

Returning veterans could borrow up to $2,000 to buy a house, start a business or start a farm. They would receive $20 a week for 52 weeks, until they found a job. There would be lifelong medical assistance, improved services for those disabled in action, and a de facto bonus of $1,300 in discharge benefits.

The effect of the program was substantial and immediate. By 1955, 4.3 million home loans worth $33 billion had been granted. Veterans were responsible for 20 percent of all new homes built after the end of the war. Instead of another depression, the country enjoyed unparalleled prosperity for a generation.

However, few veterans bothered to collect their $20-a-week unemployment checks. Instead, they used the money for the most significant benefits of all: education and vocational training. Altogether, 7.8 million vets received education and training benefits. Some 2.3 million went to college, receiving $500 a year for books and tuition, plus $50 a month in living expenses. The effect was to transform American education and help create a middle class.

College was sheer bliss to men used to trenches and K-rations. By 1946, over half the college enrollments in the country were vets, who bonded into close, supportive communities within the wider campuses. Countless G.I. Bill graduates would go on to occupy the highest ranks of business, government and the professions, and even win Nobel Prizes.

The number of degrees awarded by U.S. colleges and universities more than doubled between 1940 and 1950 and the percentage of Americans with bachelor degrees or more rose from 4.6 percent in 1945 to 25 percent a half century later. Joseph C. Goulden writes in The Best Years, 1945-1950 that the G.I. Bill “marked the popularization of higher education in America.” After the 1940s, a college degree was considered an essential passport for entrance into much of the business and professional world.

Thanks to the G.I Bill, a successful entrance into that world was created for the millions of men and women who kept our world free and assured its future. Along the way, they also helped rebuild a world that had been ravaged.

I offer you the Greatest Generation!

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chair and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

United Airlines, China and Course Corrections

This United Airlines travel poster from the 1950s sold for nearly $900 at a July 2017 Heritage auction.

By Jim O’Neal

In 1985, a man by the name of Richard Ferris, CEO of United Airlines, developed an innovative one-stop shopping strategy (Fly-Drive-Sleep) and then bought Hertz and Hilton hotels to add the two legs he needed. The expected synergies did not materialize, but he did manage to alienate his pilots and their powerful union. Rumors circulated that he had to travel incognito – under an assumed name – to avoid “last-minute mechanical failures” if his employees discovered him onboard.

In April 1987, barely two years into the new program, the angry pilots’ union made a hostile takeover bid, which effectively put the entire company “in play” on Wall Street. A compromise was reached for Ferris to resign, sell Hertz and Hilton, and change the company name from Allegis back to United Airlines. Everyone was happy except Ferris and the customers, who had suffered through two years of lousy service due to the squabbling.

The new UAL management aggressively decided to rebuild their frayed customer relations. Nancy and I were invited to go on a multistep goodwill tour to China and back. This was our first (of many) long, international flights to Asia that included a stop in Hong Kong, Guangzhou (Canton), Beijing, Shanghai and back to Hong Kong. Everything was first class-plus and I met some interesting CEOs from several major corporations. There were only 20 people (plus crew) on a specially outfitted 747 with fully reclining seats … a novelty in those days.

The food and beverage service was exceptional. However, what impressed me the most was the vastness of the Pacific Ocean. I could finally grasp what Ferdinand Magellan (1480-1521) and his crew encountered when they miscalculated, ran out of food and were so desperate they survived on a tasty dish of rat droppings mixed with sawdust. There were also stories of men gnawing on the ropes that lashed the mainsail. Only 18 men survived, and that did not include Captain Magellan.

The Pacific Ocean is the oldest of the world’s seas, a relic of the once all-encompassing Panthalassan Ocean that opened up 750 million years ago. It is by far the world’s biggest body of water – all the continents could fit easily within its borders, with ample room to spare. It is the most biologically diverse and seismically active, and holds the planet’s greatest mountains and deepest trenches. Its chemical influences and weather systems affect the entire orb we call home.

Most think of the Pacific Ocean in parts … a beach here … an atoll there … a long expanse of deep water. Captain James Cook wrote that by exploring the Pacific, he had gone “as far as I think it is possible for man to go.” Cook was not aware that it is 64 million square miles and humans are still exploring it.

Even the highly revered British Admiralty’s chart room bible “Ocean Passages for the World” still cautions sailors embarking on a crossing: “Very large areas are unsurveyed … no sounding at all recorded … only safeguards are a good lookout …”

The Chinese have always had good lookouts and now view the Pacific Ocean as their next area for expansion and dominance. They tell me to consider the past 4,000 years when judging their progress and to view the 20th century as an anomaly. They made a course correction to compensate for Mao Zedong and are now back on track for the next 1,000 years. They studied the flaws in our last financial system meltdown (greed and overleverage) and decided to create their own World Bank. They view our form of democracy with disdain since we appear irreparably divided over every single important strategic issue, with our economy bankrupt and elected officials in Washington, D.C., as the only ones with good health insurance, pensions and job security … hopelessly gridlocked.

They think it is better to have a strong leader and a navy capable of dominating the South China Sea with impunity. The great battle for the 21st century is essentially over. However, what they don’t understand is that we always find a way, then come together as needed. Winston Churchill put it best: “Democracy is the worst form of government, except for all the others.”

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chair and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

‘Huck Finn’ Established Enduring Hallmarks of Our National Sense of Humor

A first American edition, first issue of Mark Twain’s Adventures of Huckleberry Finn, with a tipped-in Twain signature, sold for $11,875 at an April 2016 Heritage auction.

By Jim O’Neal

Here’s a good literary rule of thumb. Any book that someone has seen fit to ban has got to be worth reading. And when a book has been banned for so long and so often and for so many reasons – as has The Adventures of Huckleberry Finn – that’s as compellingly an endorsement as you can hope for.

If anything, Huckleberry Finn has become even more disturbing since its first appearance in 1885. It’s a book that, even when you reread it, is never what you expect – by turns raw, sweet, funny, deeply principled and deliberately shocking.

Twain

It has been a lightning rod for the squeamish and for naysayers and prigs of every stripe. Huck Finn was a victim of political correctness long before there was such an imprecise, overused and contentious term. The indictment is by now tiresomely familiar and of some of the charges, at least, plainly guilty. Yes, it uses the “n” word – 215 times to be accurate. People used the word back then and still do today. However, who is allowed to seems to be fungible and the rules enforced for maximum social effect. And Huck – not to mention most of the book’s other characters, black and white – does engage in what we would call racist thinking.

But Huck is not Mark Twain, remember, and early on we discover he has a lot to learn. The story of Huckleberry Finn is, in part, the story of Huck’s education and he is taught by none other than Jim, the runaway slave who is in fact the book’s wisest and most humane character. Set at a time when America was still riven and corrupted by slavery, Huckleberry Finn is a depiction of racism at its most virulent, but it is itself among the most anti-racist novels ever written.

The charge of racism is so specious that it invites us to wonder if some other agenda isn’t at work in the minds of those who raise it. And the same is true of those 19th century moralists like librarians, town fathers and custodians of the public weal who originally objected on grounds of vulgarity and sacrilegiousness. What really upsets people about Huck Finn is that it is so deeply skeptical – subversive even – of received wisdom and official pieties of every sort. It breaks all the rules and does so from its first sentence: “You don’t know about me, without you have read a book by the name of The Adventures of Tom Sawyer, but that ain’t no matter.”

There had never been a sentence like that in American literature before. It is vulgar, in the way that everyday speech is vulgar, and it introduces us not to the familiar narrator of 19th-century fiction, with measured cadences and worldly wisdom, but to a 14-year-old boy, a wiseass who takes nothing on faith, especially not what he’s been told by his elders. It’s a voice so authentically American that it’s startling that we never heard it in books until then. In an almost embarrassing way, it reveals as phony so much written until then.

Ernest Hemingway famously said of Huckleberry Finn that all American literature comes from it and that “there was nothing before” – which is a stretch, but not by much. What is certainly true is that all American comedy comes from Huck Finn and it established in an instant the two enduring hallmarks of our national sense of humor: a deadpan delivery and a take-no-prisoners attitude. We get taken on a tour down Twain’s beloved Mississippi through an America in the process of becoming a country. Filled with an incomparable gallery of rogues, swindlers and hypocrites, it’s Twain’s take on this nascent country … withering, but exact.

I suspect nothing would please Twain more – or surprise him less – to learn that his book still has the power to both amuse and make us wince … things that are in short supply as we hurry from one outrage to another by people that will probably always be angry, about something.

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chair and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

Passion, Singular Vision Form Foundation of Successful Projects

Models of the 1957 Chevrolet Corvette, like this 1.6 scale model of the classic V-8 finished in Venetian red, remain popular with collectors.

By Jim O’Neal

“For years, I thought what was good for our country was good for General Motors, and vice versa.” – Charles Erwin Wilson, CEO of General Motors, as a nominee for Secretary of Defense for President Eisenhower in 1953 confirmation hearings (often misquoted)

From 1931 to 2007, General Motors was always the biggest and then, as predicted, they couldn’t pay their bills. They chose to file Chapter 11 bankruptcy and gratefully accepted a federal bailout. The corporate name was formally changed to “Motors Liquidation Company,” an entity that allowed them to deal with their many creditors through a complex structure of four trust funds. Then voilà – a new General Motors was born. It issued an IPO in 2010 that raised $20.1 billion, and by 2016 established record sales of 10 million units.

“General Motors is alive and Osama bin Laden is dead” became a clever line used in the Obama vs. Romney presidential race.

Before all this happened, much earlier, the first Chevrolet Corvette rolled off the production line in Flint, Mich., in 1953. However, it wasn’t until spring 1956 that I recall seeing one. We were parked at Gene’s BBQ Drive-in on Long Beach Boulevard in Compton, Calif., when a smallish, white convertible pulled in. I’m not sure what model it was or even the year, but it didn’t impress anyone (yawn). I had a cherry red 1951 Mercury with 17 coats of hand-rubbed, lacquer paint that was way cooler.

Duntov

His name, Zora Arkus-Duntov, seemed better suited for the ruler of a planet in a Buck Rogers comic strip than as the father of this little “Vette” that was destined to become a true American sports car. Duntov joined the GM-Chevrolet R&D group in 1953, but the Corvette (French for a small, highly maneuverable ship, smaller than a frigate) didn’t get his full attention until 1955.

The first cars were six-cylinder two-seaters and white, “Polo White” to be precise, and only 300 were produced in 1953. The next year, sales were projected to be 10,000, but only 3,640 were assembled and only two-thirds of those were sold by year’s end. Then, unexpectedly, sales in 1955 declined to a measly 700. The drop was worrisome, especially to those who truly believed in the destiny of a car with Corvette’s aspirations.

Duntov was born in Belgium to Russian parents. He was raised in Russia and, in retrospect, the signs of where he was headed were clear. He loved motorcycles and at the tender age of 14 designed a motor-driven ice sled. The family moved to Germany and at university, he wrote his thesis on supercharging.

When he left the Chevrolet R&D team for Corvette, he could see the car wasn’t quite right. “The first time I saw Corvette, I think … beautiful, beautiful car … but I was disappointed what was underneath … but visually, it was superb!” He believed in its future, as did the man who created it, Harley Earl. Earl’s 1927 LaSalle had placed him at the forefront of Detroit’s great stylists. But it was Duntov who transformed the Corvette into “a bat out of hell.”

The 1956 Corvette was the first model to feel the impact of Duntov’s influence. The 210-horsepower engine could be cranked to 225 with the optional twin, four-barrel carburetors. Then, for racing, you could add Duntov’s cam, 240 horsepower. This one reached 163 mph, which really got the automotive world’s attention!

Despite all the improvements, the team was still restless. Bill Mitchell succeeded Earl as head of design and when he saw the designs of Larry Shinoda, a young Japanese-American who created his first designs while in a WW II internment camp, he knew they had it – the most striking of all Corvettes, the 1963 Sting Ray. This marked Corvette’s true arrival and when combined with what Duntov put under the hood, it ensured them a place in history. Corvette would lose its way at various times over the years, but a sense of heritage and resilience always enabled it to come back.

If the new General Motors ever stumbles again, they would be wise to look back at their own Corvette history. They will be reminded that the cars we admire most (and buy) derive from true passion and a strong singular vision.

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chair and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

Peter the Great Modernized Russia and Opened its Path to Power

An extremely rare mint state Peter I Rouble 1723 sold for $63,250 at a May 2008 Heritage auction.

By Jim O’Neal

When I was diagnosed with prostate cancer in 2001, it didn’t seem to faze me. After reading all the literature on this pernicious disease, I was convinced of two things: First, surgery was the best option and second, the skill of the surgeon was the critical variable to ensure a positive result. I had heard the finest surgeon for this kind of procedure was a doctor at Johns Hopkins named Patrick Walsh and I had a connection that got me an appointment in June of that year.

After waiting in line behind the governor of Connecticut and the king of Spain, my operation was scheduled for Sept. 5 (it was a long line and Walsh performed only four procedures a week). Strictly by chance, I watched 9/11 unfold on CNN while recuperating in a rental recliner in a Baltimore hotel room.

PepsiCo made a healthy donation to a special research fund and invited Dr. Walsh to be a guest speaker at a boondoggle in 2003 in St. Petersburg, Russia, that coincided with the city’s 300-year anniversary. Pepsi-Cola had been the first western brand sold in the USSR (1972) since Chairman Don Kendall had a theory that trade was a better alternative than nuclear war. Since the Russians were short of hard currency, we traded Pepsi concentrate for Stolichnaya vodka. By the time I got to Europe, there were 26 Pepsi-Cola bottling plants in Russia.

St. Petersburg was always intriguing to me since it had been founded by Peter the Great in 1703. Peter (1672-1725) became ruler of Russia in 1682 (yes, he was 10 years old), at first jointly with his half-brother as co-Tsar and his mother as regent. In 1696, he became sole ruler of a vast empire. Seven years later, he founded St. Petersburg on the estuary of the River Neva and this new city, fortress and port by the Baltic Sea gave Russia direct access to Europe. This opened new opportunities for trade and military conquest, so Peter boldly made his new city Russia’s capital, stripping the title from the ancient seat of Moscow.

An admirer of Western palaces, Peter employed European architects to design the government buildings, palaces, houses and university in the fashionable baroque style. Labor was no problem with 30,000 peasants, Russian convicts and Swedish prisoners of war available for the construction gangs. More than 100,000 died, but those who survived could earn their freedom.

Peter proceeded to use his unchallenged power to make significant changes in Russia by founding the Russian navy and reforming the army along European lines, developing new iron and munition industries to equip it. By 1725, Russia had a first-rate army of 130,000 men. His court system was also transformed, adopting French-style dress. New colleges forced the nobility to educate their children and established a meritocracy for promotion. However, he treated rebels ruthlessly and adopted an aggressive foreign policy that gave him control of the Baltic Sea.

Although Peter wisely forged diplomatic ties with Western Europe, he failed to form an alliance against the Ottomans. His enlightened reforms established him as a powerful emperor of a vast empire and monarchy that survived until the bloody Russian Revolution in 1917.

“I built St. Petersburg as a window to let in the light of Europe!” Not a bad legacy and certainly superior to what has occurred in the past 100 years.

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chair and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

Artists Recognized James Monroe as a True American Hero

A charcoal sketch of George Washington aide Lt. Col. Robert Hanson Harrison that artist John Trumbull did for his epic painting The Capture of the Hessians at Trenton sold for $8,962 at a May 2009 Heritage auction.

By Jim O’Neal

John Trumbull (1756-1843) deservedly earned the sobriquet as the “Painter of the Revolution.” He actually started out as an aide to General George Washington, but ended up in London, where he developed into a highly respected artist. One of his paintings, which illustrates the signing of the Declaration of Independence, graces the $2 bill that features Thomas Jefferson. The bill was issued in 1976 to observe the bicentennial of that historic event.

Another of his numerous works is the The Capture of the Hessians at Trenton on Dec. 26, 1776. This one naturally features General Washington again, but there is also a depiction of future president, Lieutenant James Monroe, being treated for a near-fatal damaged artery.

An even more famous painting of the times is an 1851 oil on canvas that also features Washington – Washington Crossing the Delaware on Dec. 25-26, 1776. It was painted by Emanuel Leutze (1816-1868), a German-American immigrant. Once again, we find James Monroe holding the American flag – the Stars and Stripes – which critics are always quick to remind was a flag not adopted until the following year, 1777. Some nitpickers also harp that the time of day is wrong, the ship is incorrect, and (sigh) even the chunks of ice in the river aren’t right.

But the role of James Monroe as a true hero is beyond any doubt.

Often called the “Last of the Founding Fathers,” he was the fifth president of the United States and like Washington, Jefferson and Madison, the son of a Virginia planter. It is sometimes overlooked that in the first 36 years of the American presidency, the Oval Office was occupied almost exclusively by men from Virginia. Somehow, John Adams (Massachusetts) managed to squeeze in a quick four years as president (1797-1801) before sneaking out of Washington, D.C., when Thomas Jefferson ousted him.

James Monroe entered politics after his service in the Revolutionary War and systemically worked his way up after serving in the Virginia legislature. He was a U.S. senator, a minister to France, and then governor of Virginia. After helping negotiate the Louisiana Purchase, he served as minister to Britain, followed by another stint as Virginia’s governor. But after only four months, President Madison offered him an appointment as secretary of state to help draft the recommendation to Congress that led to the declaration of war against Great Britain in 1812.

When the war got off to a poor start, Madison wisely appointed him secretary of war and Monroe held both of these critical Cabinet positions until the war ended. After the war, the prosperity of the country improved dramatically and with Madison’s strong support, Monroe easily was elected president in 1816.

Taking office when the country finally had no unusual problems, the 58-year-old Monroe was bold enough to declare during his inaugural address: “Never did a government commence under auspices so favorable, nor ever was success so complete. If we look to the history of other nations, ancient or modern, we find no example of a growth so rapid, so gigantic, of a people so prosperous and happy … the heart of every citizen must expand with joy … how near our government has approached to perfection…”

It was truly the “Era of Good Feelings!”

Things change … and they will again.

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chair and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

How We Record History Has Evolved Over the Ages

A 1935 copy of The History of Herodotus of Halicarnassus (Nonesuch Press) sold for $1,125 at an October 2013 auction.

By Jim O’Neal

We often fail to remember that history (itself) has a history. From the earliest times, all societies told stories from their past, usually imaginative tales involving the acts of heroes or various gods. Later, civilizations kept records inscribed on clay tablets or the walls of caves. However, ancient societies made no attempt at verification of records, and often failed to differentiate between reality and mythical events and legends.

This changed in the 5th century B.C. when historians like Herodotus and Thucydides explored the past by the interpretation of evidence, despite still including a mixture of myth (“history” means “inquiry” in Greek). Still, Thucydides’ account of the Peloponnesian War satisfies most criteria of modern historical study. It was based on interviews with eyewitnesses and attributed actual events to individuals rather than the intervention of gods.

Thus, Thucydides managed to create the most durable form of history: the detailed narrative of war, political conflict, diplomacy and decision-making. Then, the subsequent rise of Rome to dominance of the Mediterranean encouraged other historians like Polybius (Hellenic) and Livy (Roman) to develop narratives to capture a “big picture” that made sense of events on a longer time frame. Although restricted to just the Roman world, it was the beginning of a universal history to describe progress from origin to present, with a goal of giving the past a purpose.

In addition to making sense of events through narratives, there was a tradition growing to examine the behavior of heroes and villains for future moral lessons. We still attempt this today with a steady stream of studies of Lincoln, Churchill and Gandhi, as well as Stalin, Hitler and Mao.

But there was a big hiccup with the rise of Christianity in the late Roman Empire era, which fundamentally changed the concept of history in Europe. Historical events started to be viewed as “divine providence” or the working of God’s will. Skeptical inquiry was usually neglected and miracles routinely accepted without question. Thankfully, the Muslim world was more sophisticated in medieval times and they rejected accounts of events that could not be verified.

However, neither Christians nor Muslims produced anything close to the chronicle of Chinese history published under the Song Dynasty in 1085. It recorded history spanning almost 1,400 years and filled 294 volumes. (I have no idea how accurate it is!)

By the 20th century, the subject matter of history – which had always focused on kings, queens, prime ministers, presidents and generals – increasingly expanded to embrace common people, whose role in historical events became more accessible. But most world history was written as the story of the triumph of Western civilization, until the second half when the notion of a single grand narrative simply collapsed. Instead, the post-colonial, modern world demanded the study of blacks and women’s histories, in addition to Asians, Africans and American Indians.

Now we are in another new place where it is increasingly difficult to know where to find reliable accounts of real events and a flood of “fake news” is competing for widespread acceptance. Maybe Henry Ford was right after all when he declared that “History is bunk!”

Personally, I don’t mind and still enjoy frequent trips to the past … regardless of factual flaws.

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chair and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

Cotton Gin Extended America’s Abhorrent Practice of Slavery

The 1796 patent signed by George Washington for “new machinery called the Cotton Gin” realized $179,250 at a May 2011 Heritage auction.

By Jim O’Neal

In 1776, Scottish economist, philosopher and teacher Adam Smith wrote The Wealth of Nations, a book that helped create a new understanding of modern economics. A pervasive theme was the idea that any economic system could be automatic and self-regulating if it was not burdened by monopolies or artificial trade barriers. This theory has become widely known as “the invisible hand.” It heavily influenced my favorite economist Milton Friedman and his Free to Choose basic philosophy.

One highly topical insight was that slavery was not economically viable and contributed to inefficient markets. Aside from the obvious moral issue, Smith believed slave owners would benefit by switching to a wage-labor model, since it was much more inexpensive to hire workers than own them and provide decent conditions. Buying slaves was much more costly due to ongoing expenses of feeding, housing and caring for workers with a high mortality rate, workers who eventually would have to be replaced.

In the United States, there was also a major disconnect between the concepts of all men being created equal and the cruel practice of slavery, which was prevalent especially in the agrarian states of the South. Although many sincerely believed that slavery would gradually die out, powerful Southern states needed some kind of assurances before they agreed to the new federal Constitution. Section 9 Article 1 of the Constitution barred any attempt to outlaw the slave trade before 1808. Other provisions prohibited states from freeing slaves who fled from other states, and further required them to return “chattel property” (slaves) to their owners. Kicking the issue down the road 20 years enabled the delegates to reach a consensus.

Historian James Oliver Horton wrote about the power slaveholder politicians had over Congress and the influence commodity crops had on the politics and economy of the entire country. A remarkable statistic is that in the 72 years between the election of George Washington (1788) and Abraham Lincoln (1860), in 50 of those years, the president of the United States was a slaveholder; as was every single two-term president.

The passage in 1807 of the Act of Prohibiting Importation of Slaves in America, and the Slave Trade Act in Great Britain marked a radical shift in Western thinking. Even as late as the 1780s, the trade in slaves was still regarded as natural economic activity. Both U.S. and European colonies in the Caribbean depended on slave labor, which was relatively easily obtained in West Africa.

However, it was really the invention of the cotton gin by Eli Whitney in 1793 that dramatically extended the abhorrent practice of slavery. Cotton was suddenly transformed from a labor intensive, low-margin commodity with limited demand into a highly lucrative crop. Production in Southern states exploded as demand skyrocketed. The number of slaves grew concurrently from 700,000 in 1790 to 3.2 million by 1850. The United States quickly grew into the largest supplier in the world and snagged 80 percent of the market in Great Britain, whose appetite seemed insatiable.

As an economist, Adam Smith was undoubtedly right about hiring workers versus owning them, but everybody was too busy getting rich to worry about optimizing labor costs. And the more demanding abolitionists in the industrializing North denounced slavery the more Southern states were determined to retain it. It would take a bloody four-year Civil War and 630,000 casualties to settle it.

Harry Truman once explained why he preferred one-armed economists: It was because they couldn’t say “On the other hand…”

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chair and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

Wall Street was Booming Just Months Before the Great Depression

Vintage photograph shows Calvin Coolidge in Plymouth, Vt., shortly after learning of President Warren G. Harding’s death.

By Jim O’Neal

After the 1928 election, President-elect Herbert Hoover met with incumbent Calvin Coolidge to make a special request. There were four months to go until inauguration and Hoover planned to use six weeks of that time to tour Latin America. He asked the president to place a battleship at his disposal since he wanted to include Mrs. Hoover, who spoke fluent Spanish.

Initially, Coolidge suggested a cruiser “since it does not cost so much,” but finally relented and gave Hoover the battleship USS Maryland one way and then the USS Utah to come home from Montevideo, Uruguay. This was classic Calvin Coolidge, always looking for creative ways to avoid federal spending.

Then Coolidge dispatched his final annual message to Congress on Dec. 4. The document revealed the optimism felt by Coolidge and the nation as a whole: “No Congress of the United States, on surveying the State of the Union, has met with a more promising prospect than that which appears at the present time. In the domestic field, there is tranquility and contentment, harmonious relations between management and wage earner, freedom from industrial strife and the highest record of years of prosperity.”

In his budget address, read to Congress the following day, Coolidge said estimated revenues for 1929 were $3.831 billion with expenditures of $3.794 billion. Since the surplus was smaller than hoped for, he would not ask for yet another tax cut.

Calvin Coolidge – who assumed the presidency when Warren Harding died in 1923 – had a simplistic fiscal philosophy: hold the line on spending and if possible reduce it, while at the same time cutting taxes. He believed this would result in greater personal freedom and a more moral population. In 1923, federal expenditures were $3.1 billion and fell to $3.0 billion by 1928. Despite tax cuts, revenues were the same at $3.9 billion and the national debt fell from $22.3 billion to $17.6 billion. The number of federal employees in Washington fell from 70,000 to 65,000.

By 1929, automobiles jammed the roads, spurring a major construction boom. The Ford Model A was enthusiastically greeted in 1927, but the talk of the industry was Walter Chrysler, who came from nowhere to build the third-largest company in the industry. Auto sales zoomed and the Federal Oil Conservation Board announced the country was in danger of running out of petroleum.

The front-page news of early 1929 was Britain’s ailing King George V, whose sons were rushing home to his bedside. But the business pages focused on RCA’s purchase of the Victor Talking Machine Company, following the acquisition of Keith-Albee-Orpheum, which was renamed RKO. The stock of RCA was now selling at a P/E of 26 and there was talk of a 5-for-1 stock split.

Wall Street was booming and dividends were at an all-time high. The Federal Reserve was complaining about the banks using their money to fuel speculation, but the only response was from the small Dallas Reserve, which raised their discount rate to 5 percent (yawn). A few months later, Wall Street crashed and the entire country spiraled down into the Great Depression, which would last the next 10-plus years.

Welcome to Washington, D.C., President Hoover. It’s all yours!

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chair and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].