Some Supreme Court Confirmation Hearings Would Make Great Pay-Per-View TV

This oversized photograph of the U.S. Supreme Court, circa 1984, is signed by all nine justices, including Lewis F. Powell Jr. It realized $4,481.25 at an April 2011 Heritage auction.

By Jim O’Neal

When Justice Lewis F. Powell Jr. unexpectedly announced his retirement in June 1987, no commentator failed to emphasize the implications for the future of the Supreme Court. The New York Times stated the obvious: “Powell’s resignation gives President Reagan a historic opportunity to shape the future of the Court.” Justice Powell had played a pivotal role as the tie-breaking vote on controversial issues such as abortion, affirmative action and separation of church and state.

Yet Powell was not merely a simple tie-breaker. Since he frequently swayed the court’s decision from one ideological camp to another by virtue of his swing vote, he was viewed as mainstream. As a result, President Reagan attempted to portray Powell’s replacement, Robert Bork, as neither conservative nor liberal, stressing his “evenhanded and open-minded approach to the law.”

The president’s lack of success was immediately evident when Senator Edward Kennedy – only 45 minutes after Bork’s appointment – fired the opening salvo against Bork’s record on abortion, civil rights and criminal justice. Kennedy declared, “Robert Bork’s America is a land in which women would be forced into back-alley abortions, blacks would be forced to sit at segregated lunch counters, rogue policemen could break down citizens’ doors in midnight raids, schoolchildren could not be taught about evolution, and artists could be censured at the whim of government.”

Once Kennedy unleashed these polemics, there was no turning back. Southern Senators were intimidated by the possible loss of black voters and liberals in the Senate were eager for a good fight after eight years of frustrating losses to conservatives.

Despite being confirmed unanimously for the U.S. Court of Appeals, Judge Bork was stepping into a veritable political hornets’ nest and he was the wrong person in the wrong spot at the wrong time! His copious scholarly writings – an asset in academia – and his lucidly crafted, elegantly penned opinions on the appellate bench were red meat in the hands of hostile interest groups.

Bork with President Ronald Reagan in 1987.

Moreover, Bork’s personal appearance and demeanor seemed as suspect as his ideology. His devilish beard and turgid academic discourses did not endure him to the public or wavering Senators. His detailed, scholarly, lecture-like answers to every single question would be considered naive today … where nominees are well versed in the art of non-answers to tough questions, and grilled by “murder boards” designed to prepare careful answers to virtually everything the nominee has written or spoken since puberty. Today’s Google/Facebook generation of staffers can unearth obscure facts that might be even slightly contentious.

Judge Bork’s nomination was rejected by a resounding 42-58 vote. After being transfixed by the riveting testimony, I personally believe that even if Judge Bork were given another try today (he died in 2012), the outcome would be similar. He had such a high regard of his superior legal acumen and was so openly dismissive of the twits on the Senate Judiciary, it would be another verbal combat that would end just as badly.

It would be a perfect scenario for a pay-for-view cable TV spectacle, especially for Supreme Court nerds like moi.

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].

Supreme Court Appointments Are Always Soap Operas, with Gavel-to-Gavel Coverage

This Rehnquist Supreme Court photograph, circa 1989, is signed by all nine justices, including Antonin Scalia and William H. Rehnquist. It realized $1,171.25 at an April 2015 auction.

By Jim O’Neal

On June 17, 1986 – to the surprise of his colleagues, the public and President Reagan – Chief Justice of the U.S. Supreme Court Warren Burger submitted his resignation. After 17 years as head of the U.S. federal court system and within months of his 79th birthday, Burger wanted to devote all of his time to organizing ceremonies for the bicentennial of the U.S. Constitution in 1987.

Almost immediately, President Reagan announced his choice for Burger’s replacement: sitting Associate Justice William H. Rehnquist. Judge Antonin Scalia of the U.S. Court of Appeals for Washington, D.C., was selected to fill the vacant position. The Burger court had been surprisingly active in civil rights and President Reagan resolved to fill the vacancies with conservative, strict constitutionalists.

Rehnquist certainly met these criteria, as his 14-plus years on the bench validated. He made that abundantly clear during his confirmation hearings that opened July 30, 1986, by telling the Judiciary Committee they should not expect any change in his jurisprudence. His years on the court were on the record.

His primary opponent, Senator Edward Kennedy, acknowledged this, but also assailed the chief justice nominee in harsh terms, thundering, “By his own record, he is too extreme on race, on women’s rights, separation of church and state, and too extreme to be chief justice.” Kennedy’s assertions set the tone for two weeks of stormy testimony. No one dared to dispute Rehnquist’s powerful intellect or keen understanding of the law. He was just “out of the mainstream” – a standard ploy for any opposition.

After three months of divisive, acrimonious debate in the full Senate, he was confirmed 65-33. The 33 nays were the most votes ever cast against a nominee who won confirmation. Charles Evans Hughes prevailed in 1930 after a vote of 52-26, the previous record.

Scalia had a much easier time, perhaps because the partisan vitriol was exhausted on Rehnquist. The New Republic had earlier written, “A Scalia nomination makes political sense.” And a White House official had exclaimed, “What a political symbol! Nino would be the first Italian-Catholic on the court. He has nine children and everyone likes him. He’s a brilliant conservative. What more do you want?” Moreover, the 50-year-old Scalia was 10 years younger than the other possible candidate, Judge Robert Bork.

Even ideological foes were hard-pressed to challenge Scalia’s meritorious credentials. A product of New York public schools, he tied for first at Xavier High School, graduated at Georgetown University as valedictorian summa cum laude, and at Harvard Law was editor of the law review and a postgraduate fellow. This was followed by the law faculty at University of Virginia and appointments at Georgetown Law, the American Enterprise Institute, Stanford Law, and the University of Chicago Law School.

He sailed through the Judiciary Committee 18-0 and the full Senate 98-0. He served on the Supreme Court until his death last year. Strict constitutional conservatives are still in mourning over his loss.

The upcoming hearing on March 20 is designed to select his replacement. We will all have a ringside seat at what promises to be another Supreme Court soap opera, with gavel-to-gavel TV coverage ad nauseam.

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].

Reagan Made History with Appointment of O’Connor to Supreme Court

An Annie Leibovitz photograph of Ruth Bader Ginsburg (left) and Sandra Day O’Connor, dated 1997 and signed by the photographer, realized $1,750 at a February 2017 auction.

By Jim O’Neal

Ronald Wilson Reagan won two presidential elections, both by overwhelming margins. In 1980, he took 44 states with an electoral vote total of 489. Four years later, he crushed Walter Mondale, winning 49 states and 525 electoral votes (the all-time record).

The Reagan agenda included an attempt to alter the contemporary jurisprudential approach to the federal judiciary; he quickly made it known he would return to traditional criteria in selecting jurists. As a candidate, he made it crystal clear he was opposed to any type of racial or other quotas.

During the 1980 presidential campaign, candidate Reagan had promised “one of the first Supreme Court vacancies in my administration will be filled by the most qualified woman I can find, one who meets the high standards I will demand for all my appointments.” The opportunity to fulfill this pledge came within the first six months of his presidency.

On June 18, 1981, in what appeared to be a major surprise, Associate Justice Potter Stewart publicly announced his retirement from the Supreme Court, effective at the close of the 1980-81 term in July. However, members of the administration had actually known three months earlier and had informed the president (while he was still recovering from the assassination attempt). This gave the administration three months to search quietly for a nominee without outside pressure and feverish media speculation.

On June 25, Attorney General William French Smith gave the president a list of 25 names – approximately half of them women – clearly a new record in this regard. Among the women were Arizona Court of Appeals Judge Sandra Day O’Connor; Chief Justice of the Michigan Supreme Court Mary Coleman; and Judge Amalya L. Kearse of the U.S. Court of Appeals for the Second Circuit, a youthful black Carter appointee. On July 1, O’Connor and two other candidates met with the president and she quickly reminded him they had met 10 years before when he was governor of California and she was a member of the Arizona State Senate.

In addition to the successful interview, there was the Stanford connection: U.S. Supreme Court Justice William Rehnquist graduated from Stanford Law School in the same class as O’Connor. When Senator Barry Goldwater urged her selection, that was enough to clinch it.

The only strong dissent came from the New Right, including the Reverend Jerry Falwell of the Moral Majority, who encouraged all “good Christians” to express concern. Goldwater’s characteristically frank retort was “Every good Christian ought to kick Falwell right in the ass!”

On Sept. 15, 1981, the Senate Judicatory Committee approved Judge O’Connor 17-0 and six days later, the full Senate voted 99-0 to confirm (Senator Max Baucus of Montana – a strong supporter – was out of town for the vote).

So history had been made!

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].

Nathan Bedford Forrest Emerged as the Civil War’s Most Dreaded Cavalry Commander

This albumen photograph, purportedly the last taken of Nathan Bedford Forrest in Memphis before his death in 1877, sold for $7,170 at a December 2007 auction.

By Jim O’Neal

In 1980, Frito-Lay made a strategic blunder by entering the Ready-To-Eat (RTE) cookie category where Nabisco, Keebler and a bevy of regional competitors were dominant in supermarkets. In typical Frito-Lay tradition, we went all-in. I built two new bakeries and bought Grandma’s cookies in Oregon and Jacks in Pulaski, Tenn.

Pulaski has the dubious distinction of being the home of the KKK and there were various memorials to one of my favorite Civil War generals, Nathan Bedford Forrest.

NBF was an early member of the Klan and (by some accounts) its first Grand Wizard. However, his daring exploits in the Confederate military bordered on being astonishing. Union General William Tecumseh Sherman described him as “the most remarkable man our Civil War produced … on either side.”

Forrest joined the Confederate States Army as a lowly private after an extremely successful business career as a land owner, cotton grower and slaver. His personal wealth was estimated at $1.5 million, despite being uneducated, but not illiterate. When he was quickly given command of a regiment, the 3rd Tennessee Calvary, they were so poorly equipped that Forrest used his personal wealth to buy horses and equipment for the entire battalion.

Although he also lacked a formal military education, his special talents for horsemanship and tactics earned him the nickname “Wizard of the Saddle.” His exploits in battle were legendary, even in a hotbed of politics and war like Tennessee, where 100,000 joined the Confederacy and 50,000 joined the North.

Forrest’s untutored instincts were characterized by an almost surreal ability to analyze complex situations. At the Battle of Shiloh in 1862, the Confederates were jubilant after the first day of fighting. But NBF warned everyone, “We’ll be whipped like hell in the morning.” He was uncannily correct, as the seesaw battle doomed any hopes that the war would be quickly ended … by either side.

Lieutenant General Forrest ultimately emerged as the war’s most dreaded cavalry commander. In one astonishing raid, he struck Sherman’s supply lines with a vengeance, capturing over 2,300 Union soldiers, seizing 800 horses and wrecking the Tennessee and Albany railroad so thoroughly it took Sherman’s indefatigable crews six weeks to repair it. An incensed Sherman demanded that Forrest “be hunted down and killed even if it cost 10,000 lives and bankrupts the Federal Treasury.”

It never happened.

Forrest is sometimes (erroneously?) quoted as saying, “I git thar fustest with the mostest” in describing his success. Whether or not he used this phrasing, it is a certainty that his command of mobile warfare is still a viable strategy in the 21st century.

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].

McNamara a Fascinating Executive with a Fascinating Career

A large photograph of John F. Kennedy and his original cabinet, signed by cabinet members including Robert McNamara (fourth from left), sold for $7,500 at a December 2016 Heritage auction.

By Jim O’Neal

Lieutenant Colonel Robert McNamara had planned to return to Harvard after his stint in the military since he truly enjoyed the Cambridge lifestyle and teaching statistics was his first love. However, in a bizarre twist of coincidence, he and his wife Margaret contracted polio. They were still hospitalized in August 1945 when World War II. His mentor, Tex Thornton, persuaded him to consider a new, higher-paying career in the private sector to help with the family hospital bills.

McNamara and the other Whiz Kids excelled at the Ford Motor Company by utilizing the skills they honed in the Army: control the organization by converting facts and numbers into meaningful information that was actionable. This was particularly valuable at Ford and its archaic operations … pitted against its main competitor General Motors and its classic style of highly accountable, decentralized profit centers. McNamara became the unofficial leader when Thornton left Ford for greener fields in aerospace.

McNamara rose quickly, as Henry Ford II was new and unsure of himself. To Ford, McNamara offered reassurance; when questions arose, he always had answers, not vague estimates, but certitudes, facts and numbers … and a lot of them. On Nov. 9, 1960, McNamara was promoted to president at Ford. It was the first time someone outside the Ford family was in charge.

As fate would have it, the prior day, on Nov. 8, John F. Kennedy became president-elect of the United States. Their careers would soon be joined in a truly unexpected way.

Kennedy sent Sargent Shriver to offer McNamara either the Secretary of Treasury or Secretary of Defense cabinet position. McNamara was disdainful of Treasury, but eager to take on something much more exciting, assuming his boss would agree (it had been only six weeks since he had taken the reins at Ford).

We all know how this turned out, but perhaps not the financial sacrifice involved. By accepting the Defense position, McNamara left $3 million in stock options.

Robert Strange (his mother was Clara Nell Strange) McNamara served as Secretary of Defense under two presidents (JFK and Lyndon B. Johnson) from 1961 to 1968, the longest tenure in history (10 days longer than Donald Rumsfeld), and during the important build-up years in Vietnam. In 1968, he sent a letter to LBJ advising him that the war was unwinnable and recommending the United States end it. The president never replied and McNamara was finished.

Later, he told his friend, Washington Post publisher Katharine Graham, he wasn’t sure if he quit or was fired. She replied, “Are you crazy? Of course you were fired!”

In 2003, Errol Morris produced the documentary The Fog of War, which captures these war years, including a poignant ceremony when McNamara retired and LBJ awarded him the Medal of Freedom. McNamara was so emotional that he had to defer on his acceptance remarks. It is a good flick and recommended since it uses archival film with contemporary comments from McNamara.

A fascinating man and career. He served as president of the World Bank from 1968 to 1981 before dying in 2009 at age 93.

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].

Military Officers Swooped In and Saved Ford Motor Company

Henry Ford, left, often took trips with Thomas Edison and Harvey Firestone. This photograph, circa 1924, signed by Ford, sold for $1,195 at a June 2010 auction.

By Jim O’Neal

In 1968, General Curtis LeMay was the vice presidential running mate with American Independent Party candidate George Wallace. This unlikely duo snagged 46 electoral votes and five states with almost 10 million popular votes. This was the last time a third-party candidate won a state.

During World War II, LeMay had implemented a controversial bombing campaign in the Pacific. It was during this time that future Ford Motor Company President Robert McNamara was busy analyzing U.S. bomber efficiency and effectiveness, especially the B-29 command of General LeMay, as part of a team headed by Colonel Tex Thornton.

LeMay and McNamara would cross paths again during the Bay of Pigs fiasco and the war in Vietnam.

During the late war years of the 1940s, the Ford Motor Company was struggling to remain viable. President Edsel Ford, son of founder Henry, died of stomach cancer in 1943 and the board made the mistake of bringing back an ailing Henry Ford in an act of desperation. The company was losing $9-10 million a month and the Roosevelt administration had considered nationalization to keep vital war materials flowing.

In 1945, Edsel’s son Henry Ford II was discharged from the Navy and the board quickly named him president of Ford. However, the company he inherited was still a shell of a corporation badly in need of modernizing its production, establishing financial controls and building an organization.

In a stroke of genius, Tex Thornton decided to market his staff of nine wartime officers to corporations that were reconverting from military to civil production. After all, his colleagues were part of a management science operation within the Army Air Force and, without a doubt, were the most talented managerial team of the century … young men who had gained 25 years of experience in just four years.

Thornton sent a cable to young (28) Henry Ford II and after an impressive interview, Ford hired the group with salaries ranging from $10,000 to $16,000. Bob McNamara was the second-highest paid and he took over finance at Ford. This is the group that became the famous “Whiz Kids” (although internally they were called “Quiz Kids” since they were always asking “Why?”). The Ford Motor Company would never be the same, fortunately, and slowly started catching up with rival General Motors.

One amusing anecdote involves The Edsel Show, a live one-hour television special designed to promote Ford’s cars. It aired on Oct. 13, 1957, and featured Bing Crosby, Louis Armstrong, Rosemary Clooney and Frank Sinatra. The show drew great reviews.

Clooney received one of the new Edsels as a gift and after the show, she and Henry Ford were walking together when she went over to get in. The door handle came off in her hand, so she turned and said, “Henry, about your car…”

Quality control was still en route to Dearborn, Mich., but arrived after the Edsel’s funeral.

More about Robert Strange McNamara, who became Secretary of Defense in 1961, in future posts.

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].

Our Planet is a Truly Remarkable Piece of Real Estate

A 1968 “Earthrise” photo signed by the Apollo 8 and Apollo 11 crews sold for $16,730 at a November 2010 Heritage auction.

By Jim O’Neal

In a little-known experiment, a graduate student at the University of Chicago hooked up two test tubes containing water (the “ocean”) and a mixture of methane, ammonia and hydrogen (the “atmosphere”). A few days later, after a few electrical sparks to simulate lightening, there was a goopy broth of organic compounds … “life.” His professor, Nobel Laureate Harold Urey, reportedly exclaimed, “If God didn’t do it this way, he missed a good bet!”

This theory has since been dismissed since Earth didn’t have these inputs available that early.

The experiment happened in 1953 and more than a half-century later, there is still no certainty on how life actually began on this planet. Famous people like Lord Kelvin (1871) have suggested it came from outer space via aliens or comets. But that theory – panspermia – doesn’t answer the basic question; it just moves it to some distant location. But there is general consensus that life on Earth started about 3.5 billion years ago.

Rather than pursue how life started, NASA in the 1960s assembled a team to think about how to look for life … on Mars. British scientist James Lovelock decided to solve the problem by identifying the necessary features for life on Earth. He started with water, since all life depends on it. Then he specified that the average temperature must stay between 60 and 65 degrees to ensure it remained liquid, as it has for the past 3.5 billion years.

Next was salinity, since cells cannot survive levels above 5 percent and the oceans have remained at about 3.4 percent. Oxygen is another must-have element, but close to the 20 percent when it first appeared 2 billion years ago … 16 percent to 20 percent for breathing, but below 25 percent because at that level, forest fires would never go out.

Eventually, Lovelock suggested that the entire planet makes up a single, self-regulating being which he called Gaia. The very presence of life regulates the temperature of the surface, the concentration of oxygen and the chemical composition of the oceans.

Voilà … the perfect conditions for life.

However, Lovelock also warned that the human impact on the environment may disrupt this delicate balance. As early as 1935, another British scientist, Arthur Tansley, described Earth lifeforms, landscapes and climate as a giant ecosystem.

Personally, each time I see pictures of Earth taken from space – this astonishing blue orb suspended in space – it reminds me just how insignificant we are. Relative to the enormity of the ever-expanding universe, we live on a truly remarkable piece of real estate. I hope we can maintain the balance Lovelock identified. Moving isn’t an option … yet.

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].