Tidbits: Bluebonnets, Sherlock Holmes, Bums and Booze

Julian Onderdonk’s Texas Landscape with Bluebonnets sold for $437,000 at a November 2015 Heritage auction.

By Jim O’Neal

The bluebonnets in Texas are beginning to fade, but two names always come to mind when talking about the flowers: Claudia Alta Taylor (better known as “Lady Bird” Johnson ) and “Cactus Jack” Garner, who lobbied to make the prickly pear cactus the state flower (and lost).

Garner became the 32nd vice president of the United States in 1932 and concurrently was elected back to the House. So for one day, on March 4, 1933, he was both Psident of the Senate and Speaker of the House.

Earlier on Feb. 15, 1933, as VP-elect, he came close to being president when FDR just missed being assassinated in Miami.

Garner served two full terms as VP and died 15 days before his 99th birthday – making him the longest-living VP.

“A Study in Scarlet” by Arthur Conan Doyle was the first story featuring Sherlock Holmes. It was published in 1887 in the magazine Beeton’s Christmas Annual – with only 11 copies known to exist today.

Joe Louis by Irving Penn

The last heavyweight championship bout scheduled for 20 rounds was held in Detroit in 1941. Joe Louis TKO’d Abe Simon in 13 rounds. Simon was a member of Louis’ “Bum of the Month Club” – 13 opponents Louis defeated between 1939 and 1941.

After leaving boxing, Simon went to Hollywood, where he won roles in On the Waterfront, Never Love a Stranger and Requiem for a Heavyweight.

Our 35th vice president, Kentucky lawyer Alben W. Barkley, was elected with Harry S. Truman in 1948 and is still the only one with the middle name of William (he was actually born Willie Alben Barkley).

One of his career highlights was his keynote address at the 1932 Democratic Convention, where he supported Franklin D. Roosevelt and denounced Prohibition (Kentucky bourbon?). It worked … FDR won and prohibition was repealed in 1933.

Although the oldest VP elected at age 71 (Joe Biden was 65 in 2008), Barkley is the only one to marry while in office … a woman half his age. Later, he denounced the 80th Congress as “Do Nothing,” but Truman often gets credit for the phrase.

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].

Transcontinental Railroad a Significant Achievement that United Nation

A cane celebrating the completion in 1869 of the Transcontinental Railroad, made of wood from the same tree as the last tie and the same gold used to case the “Golden Spike,” sold in June 2012 for $113,525.

“May God continue the unity of our country, as this railroad unites the two great oceans of the world.” – One of four engravings on the Golden Spike

By Jim O’Neal

The date was May 10, 1869, at Promontory Summit in the Utah Territory and the occasion was a celebration for the completion of the First Transcontinental Railroad.

Ex-California Governor Leland Stanford (founder of Stanford University) drove in the Golden Spike using a special silver hammer. This “Last Spike” was hooked up to telegraph wires so that news of the completion could reach both coasts as the spike was “tapped” into a hole. Supposedly, Stanford whiffed on the first try, but telegraph operators sent clicks to both coasts – “DONE” – which touched off wild celebrations as the United States was finally connected.

For perspective, the first American common carrier railroad began as a mere 13 miles of track, and formally was known as the Baltimore and Ohio Railroad (the B&O Line). It was begun in 1828 by a group of Baltimore businessmen and opened in 1830.

At the time, rivers, turnpikes and canals were the primary avenues for both travel and transport. So this was a major transition into the future.

When the Civil War started 30 years later, railroads had become a major American industry with many different companies and 30,000 miles of track. However, plans for broader geographic expansion were plagued with a plethora of issues. Major questions included route selection, right-of-way disputes, subsidies, capital financing sources (public or private), and even the gauge (width) of rails.

Abraham Lincoln was a major supporter of a transcontinental railroad, despite the distraction of the Civil War and other presidential commitments. He even got into the minutia, and he and his Cabinet voted to make the gauge 5 feet in an effort to help (it was later revised by Congress to 4 feet, 8½ inches). Lincoln even decided the eastern terminus should be Omaha, Neb. (a clear conflict of interest, since he owned several properties in nearby Council Bluffs).

On the West Coast, four familiar names – Mark Hopkins, Leland Stanford, Charles Crocker and Collis Potter Huntington – formed the Central Pacific Railroad, which was to head east from Sacramento. They immediately ran into a major labor shortage since nearby mines were paying such high wages. In a creative but controversial decision, they brought in 12,000 Chinese laborers, primarily from Canton Province.

Next was the issue of how to get over the 7,000-foot Sierra Nevada mountain range (they simply blasted tunnel after tunnel despite cave-ins, nitro explosions and dead workers). This is a story unto itself!

But finally, the two great lines did come together (whew!).

The Golden Spike that Stanford pounded is housed in the Cantor Arts Center at Stanford University in Palo Alto (no surprise there).

But in a major surprise, a second Golden Spike was discovered in 2005 – exactly like the one from the ceremony. It had been cast at the same time, and held secretly by the family of San Francisco contractor David Hewes for all the intervening years!

It is now in the California State Railroad Museum in Sacramento.

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].

Kennedy’s Court Appointments Kept World of Judiciary at Peace

This copy of PT 109, signed by John F. Kennedy, author Robert J. Donovan and surviving crew members, sold for $13,750 at a December 2016 Heritage auction. The book tells the story of one of the most important episodes in Kennedy’s life.

By Jim O’Neal

When war broke out in 1939, all the Rhodes Scholars in England were sent home and this included Byron “Whizzer” White. He went back to Yale and graduated from its law school with honors. Then, in 1942, he enlisted in the Navy, as so many others did. He was serving in the Solomon Islands as PT boat squadron skipper and intelligence officer when John F. Kennedy was a PT boat officer. It was White who personally wrote the official account of the battle events that were later portrayed in the book and movie PT 109.

Flash forward 20 years and there was a famous photo of a smiling Kennedy, now president of the United States, pointing at the front-page headline of the New York Herald Tribune – “WHIZZER WHITE TO SUPREME COURT – LAWYER, NAVAL OFFICER, FOOTBALL STAR.” It was JFK’s first appointment to the Supreme Court.

In August 1962, President Kennedy got a second bite at the same apple. Justice Felix Frankfurter, once styled as “the most important single figure in our whole judicial system,” bowed to the effects of a stroke and announced his retirement. The president acceded to his request and called a press conference to announce he had chosen Secretary of Labor Arthur Goldberg as the replacement.

This was not a great surprise, since the 54-year-old labor expert was well-qualified and eager to join the court. The only slight reluctance was his close personal relationship to the president and the loss of a highly valued cabinet position. However, both Chief Justice Earl Warren and Frankfurter himself supported the decision and it was made.

The nation’s reaction was universally favorable and the Senate Judiciary Committee was in total agreement. Goldberg was confirmed by the full Senate, with only Senator Strom Thurmond recording his opposition. Thus the new justice was able to take his seat on the court in time for the October 1962 term. The world of the judiciary was at peace, even after the tragic events in Dallas in November 1963 and the Warren Commission investigation that followed.

However, after a mere three years on the Supreme Court, President Lyndon B. Johnson decided that Justice Goldberg should resign from the court and become ambassador to the United Nations, succeeding Adlai Stevenson. It now seems clear that LBJ’s motive was the naive hope that someway Goldberg might be able to negotiate an end to the nightmare in Vietnam. Goldberg was strongly opposed to the move, but as he explained to a confidant, “Have you ever had your arm twisted by LBJ?”

Supposedly, there was also a clearly implied understanding of an ultimate return to the court, which obviously never materialized. Neither did an LBJ suggestion that Goldberg might be a candidate for the 1968 vice-president slot – another false hope that was mooted by LBJ’s decision not to seek reelection.

Lost in all of this was the fact that Goldberg’s intended replacement on the court, Abe Fortas, had repeatedly declined LBJ’s offers to be a Supreme Court justice. In fact, poor Abe Fortas never said yes. The president simply invited him to the Oval Office and informed him that he was about to go to the East Wing “to announce his nomination to the Supreme Court” and that he could stay in the office or accompany him.

Fortas decided to accompany the president, but to the assembled reporters he appeared only slightly less disenchanted than the grim-faced Goldberg, with his tearful wife and son by his side. Goldberg had reluctantly agreed to become ambassador to the United Nations and commented to the assembled group, “I shall not, Mr. President, conceal the pain with which I leave the court.”

It was a veritable funereal ceremony – except for a broadly smiling LBJ, who had once again worked his will on others, irrespective of their feelings. The man certainly did know how to twist arms – and I suspect necks and other body parts – until he achieved his objectives.

He was sooo good at domestic politics, it seems sad he had to also deal with foreign affairs, where a different skill set was needed.

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

We Have Lost Something Sacred in Today’s Judicial Nomination Process

John Jay (1745-1829) was the first Chief Justice of the United States.

By Jim O’Neal

The Supreme Court was created in 1789 by Article III of the U.S. Constitution, which stipulates “the judicial power of the United States shall be vested in one Supreme Court.” Congress organized it with the Judiciary Act of 1789.

John Jay of New York, one of the Founding Fathers, was the first Chief Justice of the United States (1789–95). Earlier, he was president of the Continental Congress (1778-79) and worked to ratify the U.S. Constitution by writing five of the Federalist Papers. Alexander Hamilton and James Madison wrote the other 85-plus essays, which were published in two volumes called “The Federalist” (“The Federalist Papers” title emerged in the 20th century).

Nearly 175 years later, in 1962, President John F. Kennedy nominated Byron Raymond “Whizzer” White to replace Associate Justice Charles Whittaker, who became chief legal counsel to General Motors (presumably with a nice salary increase). Whittaker had been the first person to serve as judge at all three levels: Federal District Court, Federal Court of Appeals, and the U.S. Supreme Court (a distinction matched by Associate Justice Sonia Sotomayor).

White was the 1960 Colorado state chair for JFK’s 1960 presidential campaign and had met both the future president and his father Joe while attending Oxford University on a Rhodes Scholarship in London when Joe Kennedy was ambassador to the Court of St James. This was after White had graduated from Colorado University Phi Beta Kappa, where he was also a terrific athlete, playing basketball, baseball and finishing runner-up for the Heisman Trophy. He is unquestionably the finest athlete to serve on the Supreme Court.

He continued mixing scholarship and athletics at Yale Law School, where he graduated No. 1 in his class magna cum laude and played three years in the National Football League for the Pittsburg Pirates (now the Steelers). He was elected to the College Football Hall of Fame in 1954.

Judge White was in the minority on the now-famous Roe v. Wade landmark decision on Jan. 22, 1973. Coincidentally, there was a companion case that has been virtually forgotten called Doe v. Bolton (Mary Doe v. Arthur K. Bolton, Attorney General of Georgia, et al.) that was decided on exactly the same day and on the identical issue (overturning the abortion law of Georgia). White was in the minority here, too.

White’s nomination was confirmed by a simple voice vote (i.e. by acclamation). He was the first person from Colorado to serve on the Supreme Court and it appears that one of his law clerks … Judge Neil Gorsuch, also from Colorado … most likely will become the second, although it is unlikely he will receive many Democratic votes, much less a voice vote.

Times have certainly changed in judicial politics and, unfortunately, for the worse … sadly. Advise and Consent has morphed into a “just say no” attitude and we have lost something sacred in the process.

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

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

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

By Jim O’Neal

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

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

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

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

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

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

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

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

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

Only Four Presidents Never Appointed a Supreme Court Justice

An 1840 silk banner depicting William Henry Harrison realized $33,460 at a May 2010 Heritage auction.

By Jim O’Neal

When Donald Trump’s appointee fills the Supreme Court vacancy created by the death of Justice Antonin Scalia, the chief executive will escape from a small group of presidents who did not appoint a single nominee confirmed by the Senate. Trump’s pick will join the other 117 justices, 17 chief justices and four women who have served on the court.

Presidents without a Supreme Court appointee:

  • William Henry Harrison (1841) – Died only 31 days after being inaugurated.
  • Zachary Taylor (1849-50) – Died 16 months after inauguration.
  • Andrew Johnson (1865-69) – Victim of a hostile Congress that blocked several nominees.
  • Jimmy Carter (1977-81) – The only president to serve a full term with no vacancies during his four years in office.

It seems clear that the Founding Fathers did not spend a lot of time considering the importance of the Supreme Court as an equal branch of government. That would come later during the tenure of Chief Justice John Marshall, who many credit with providing the balance to ensure that our fragile democracy survived.

One example is there are no legal or constitutional requirements for a federal judgeship. There does exist an unwritten prerequisite to have practiced law or to have been a member of the bar, but it is not mandatory. As a matter of historical record, no non-lawyer has ever been a member of the Supreme Court – and it is a virtual certainty that none ever will.

And, although the methodology for judicial appointments was subject to intense debate, the criteria for such appointments was apparently not a matter of significance. Those few delegates who did raise the issue of criteria did so by assuming merit over favoritism. Congress also did not foresee the role political parties would very soon come to play in the appointment and confirmation process.

Only John Adams clearly anticipated the rise of political parties but, of course, he was not a member of the Constitutional Committee. He summarized it rather well: “Partisan considerations, rather than the fitness of the nominees, will often be the controlling consideration of the Senate in passing on nominations.”

I suspect they would all be disappointed by the dramatic, partisan “gotcha” grilling that nominees face today.

Personally, I would prefer the old process the Scots used to select Supreme Court justices. The nominations came from the lawyers, who invariably selected the most successful and talented members of the legal community. This effectively eliminated their most fierce competition, which then allowed them to solicit their best customers. The court would then truly be assured of getting the best-of-the best, while the profession competed for clientele.

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

Monarch Butterflies Among the Most Intriguing of Earth’s Insects

This photo card of Sitting Bull was produced in the 1890s. Look closely and you can see a Monarch butterfly tucked into the brim of his hat.

By Jim O’Neal

For every single human being on Earth, there are 200 million insects. Both in terms of species and sheer numbers, insects outnumber all other animals on the planet. More than a million different species of insects have been described and named, and thousands more are discovered each year … some estimates exceed 30 million total in existence.

Over 70 percent of all known animal species are insects and almost half of them are in the beetle category. Among the more infamous are boll weevils, which crossed into the United States from Mexico in 1892. They proceeded to destroy great swaths of the cotton grown in the South. Even today, efforts to eradicate them in both countries is problematic.

Thanks to the amazing adaptation skills of insects, they flourish in every land habitat and play a key role in the global ecosystem, recycling dead plants and animals, pollinating flowering plants, and providing food for a host of animals. In fact, insects are so vital to life on Earth, we could not survive without them.

Insects are also the most numerous of the arthropods – animals with tough external skeletons and jointed legs.

A remarkable example of biodiversity is the beautiful Monarch butterfly, which starts life as a wingless caterpillar that spends most of its time eating. Its metamorphosis into a butterfly is one of the most dramatic changes in nature. Within two hours of emerging, the butterfly is ready for flight and launches into the air to start looking for a mate so it can breed and create a new generation.

Monarch butterflies spend the winter asleep in the warm woods of Mexico and California. In spring, they awake and fly north to find milkweed plants that do not grow in the warmer southwest. Then, they lay their eggs and die. The next generation then flies further north and does the same thing. After two generations, they reach the Canadian border. Then, the fourth generation migrates all the way back south again, clear across the United States.

It’s not clear if they seek approval from the Department of Homeland Security or simply rely on special TSA exemptions for frequent flyers. Hopefully, they make it safely, since our fortunes seem to be linked in some mysterious way.

Go Monarchs!

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

Appointments to Supreme Court Have a Long History of High Drama

Chief Justice Earl Warren swears in John F. Kennedy on the cover of the Jan. 27, 1961, edition of Time magazine. This copy, signed by Kennedy, sold for $1,135.25 at a December 2012 auction.

By Jim O’Neal

On June 25, 1968, President Lyndon B. Johnson announced Chief Justice Earl Warren’s intention to retire and the nomination of Associate Justice Abe Fortas to replace him. However, after three months of acrimonious, partisan debate, the Senate refused to vote on the Fortas nomination. When Fortas asked the president to withdraw his nomination, Chief Justice Warren withdrew his resignation. “Since they wouldn’t confirm Abe, then they will be stuck with me!”

And, true to his word, Chief Justice Warren did not retire until June 1969, when President Richard Nixon replaced him with U.S. Court of Appeals Judge Warren Earl Burger.

In a bizarre twist, Justice Fortas had come under intense scrutiny and it was revealed that he had a questionable relationship with Louis Wolfson, the first modern corporate raider, according to Time magazine. This led to the resignation of Fortas – the first Supreme Court Justice to do so under these ethical circumstances.

Nixon was ecstatic that he would get to make a second nomination and he carefully chose judge Clement Haynsworth from the U.S. Court of Appeals-Fourth Circuit as part of a “Southern Strategy.” Congress seemed supportive, but to the president’s anger, frustration and embarrassment, the Judicial Committee found clear evidence of financial improprieties. Like Fortas, nothing illegal, but he went down 55-45 in a display of principled equality.

The president quickly countered with Judge Harrold Carswell, an undistinguished ex-District Judge with only six months of experience on the U.S. Court of Appeals. It was clearly an act of vengeance, intended to teach the Senate a lesson and downgrade the Court. Then, suspicious reporters dug up a statement to the American Legion in 1948: “I yield to no man in the firm, vigorous belief in the principles of white supremacy.”

Oops, there went the Southern Strategy, and the Senate voted him down.

It was another bitter defeat for the president, so Nixon turned North and picked Harry Blackmun of Minnesota and an old friend of Chief Justice Burger. He sailed through 94-0 and there would be no further vacancies for 15 months, when Nixon found himself in yet another imbroglio.

In September 1971, terminal illness compelled the retirement of Justices Hugo Black and John Marshall Harlan II, the two most influential figures and veritable giants of the law. Rather than a diligent search, Nixon tried the trial-balloon strategy and floated the name of U.S. Representative Richard Poff of Virginia, but his civil rights skeletons were easy to uncover and he withdrew. Then Nixon sent six nominees to the American Bar Association for review, but they quickly criticized them as manifesting “a relentless pursuit of mediocrity” and urged the president to “add some people of stature.”

In a dramatic television broadcast, Nixon revealed his “formal nominees” … Lewis F. Powell Jr. and a youthful (47) William Rehnquist (approved after three months of wrangling), who would serve on the court for 33 years – 19 as Chief Justice.

Whew! Next stop: March 20, 2017. Good luck, Judge Neil Gorsuch. This is a tough crowd.

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

Gilded Age Created Super-Wealthy Americans and their Extremely Large Homes

Cornelius Vanderbilt at one point controlled 10 percent of all the money in circulation in the United States.

By Jim O’Neal

A recent New York Times edition has a follow-up story on America’s most expensive house – a 38,000-square-foot beauty listed at $250 million. The current all-time record is believed to be an East Hampton estate that sold for $147 million in 2014, followed by a California house that sold for $117.5 million in 2013. Apparently, there is another Bel Air project under construction that would dwarf all of these at $500 million.

This may seem like a modern-day phenomenon, but it hardly compares with the late 19th century – “The Gilded Age” – when truly vast fortunes were accumulated to the point it required “creative spending,” and real estate was a favored target. The Vanderbilts were a prime example, as shipping and railroad magnate Cornelius Vanderbilt stood out among other famous names of the day, such as Morgan, Astor, Rockefeller, Mellon and Carnegie. At one point, “Commodore” Vanderbilt (as he liked to be called) personally controlled 10 percent of all the money in circulation in the United States.

Naturally, all these wealthy Americans built homes on a grand scale. Grandest of all were the Vanderbilts. They built 10 mansions in New York alone, all on 5th Avenue, one with 137 rooms. And everyone built more palatial homes outside the city, particularly in Newport, R.I. The super-rich even had the nonchalance to call them “cottages,” despite the fact that they were so big even the servants needed to have servants.

This gaudy ostentation generated such widespread disapproval that a Senate committee seriously considered introducing legislation to limit how much a person could spend on a house (but not how many). These were the days when John D. Rockefeller made $1 billion a year (adjusted for inflation) and paid no income tax. No one did. Congress tried to introduce a 2 percent income tax over $4,000 in 1894 and the Supreme Court promptly ruled it unconstitutional.

Warren Buffet thinks we are better off today since rich folks back then couldn’t buy televisions, luxury cars (with GPS), cellphones, jet travel, microwaves, talking movies, air conditioners, Starbucks lattes … or lifesaving CT scans, organ transplants or statins/vaccines – since they didn’t exist. All they had was money.

So like the Commodore’s grandson George Washington Vanderbilt, they turned to real estate and homes. This Vanderbilt heir decided to build a cottage of his own in 1888, when he was still in his 20s. He bought 130,000 acres in North Carolina and built a rambling 250-room mansion. He hired 1,000 workers to build a dining room with a 75-foot ceiling that seated 76. The estate had 200 miles of road and included a town complete with schools, a hospital, churches, banks, a railroad station and shops for 2,000 employees and their families. The surrounding forests were logged for timber and the many farms produced fruit, vegetables, eggs, poultry and livestock.

He had planned to live there part-time with his mother, but she died before it was complete. So he lived there alone until he finally married and had a daughter. Then he died.

As F. Scott Fitzgerald supposedly once said to Ernest Hemingway: “The rich are different from you and me.” To which Hemingway replied, “Yes, they have more money.” (And thus a famous quote/counter-quote myth was born … with many variations.)

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

Events Surrounding Rockefeller, AT&T Recall Story of Hydra

John D. Rockefeller at his desk, 1930s.

By Jim O’Neal

Few people who were alive when Martin Van Buren was president (1837-41) were still alive when Franklin Delano Roosevelt was inaugurated for his second term (1937). John Davison Rockefeller was, and he took advantage of every single day, even preferring to work on his many birthdays.

Were he still alive, it’s almost certain he would be mildly amused to see a modern company – AT&T – seeking approval from a government department for an $85.4 billion acquisition of media giant Time Warner. In 1974, this same agency – the U.S. Department of Justice – filed an anti-trust lawsuit against AT&T. Eight years later, “Ma Bell” was forced to break up by spinning off seven “Baby Bells.”

Perversely, one of these spinoffs, SBC Communications (named Southwestern Bell Corporation until 1995) started methodically reconsolidating and eventually bought the original AT&T and assumed its name. Next, they acquired BellSouth for $85.5 billion, with full FCC approval.

Big ’ins always eat little ’ins (old Texas maxim).

John D. Rockefeller became the world’s richest person (ever) in a similar fashion: consolidating an industry to avoid competition.

The great industrial revolution that transformed America after the Civil War sparked an inflationary boom that resulted in an oversupply of goods. Naturally, this led to price declines that caused a deflationary spiral. The balance of the 19th century was plagued by these boom-bust cycles. As new markets developed, inexperienced businessmen failed to recognize the dangers of supply-demand imbalances as they rushed to make their fortunes.

Crude oil was a classic example, since there was no way to predict increases in supply, and oil refiners proliferated due to low barriers to entry. “So many wells were flowing, the price of oil kept falling, yet they went right on drilling.” Rockefeller was one of the first to recognize there was a need for a systemic solution. He cited the years of 1869-1870 as the start of his campaign to replace competition with “cooperation.”

A Standard Oil Trust stock certificate with two John D. Rockefeller signatures, dated April 5, 1882, sold for $7,500 at an April 2014 auction.

By the early 1880s, his Standard Oil Company controlled 90 percent of U.S. refineries and pipelines. In 1882, his clever lawyers created an innovative new kind of corporation that controlled all of the holdings in a “trust.” The trust controlled over 40 companies and it became easy to control production, distribution and refining (and, obviously, prices).

In 1911, the Supreme Court ruled these were illegal monopoly practices and ordered that it be broken up into 34 new companies. In a twist, John D. Rockefeller ended up with stock in all 34 companies, and over the next 10 years their combined net worth increased fivefold, as did Rockefeller’s personal fortune. Today, ExxonMobil Corporation is the largest of the world’s Big Oil companies and is consistently among the top five companies in revenue and profits.

The Greeks had a myth about Hydra, a multi-headed monster that grew two heads every time one was cut off. You can draw your own parallels.

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