1873

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The Money Monster and the First Great Depression

The big money guys are making some big money, and this Money Monster is feeding on the mid-range investor who is trying to make the big score... people like Colonel Custer. He is a war hero without a war. The US Army is shrinking so rather than retire, General Custer trades on his political connections and wins a colonel's commission. Why stay in the Army? Well... he needs a steady source of income. He has overcome his drinking problem, but the Wall Street Money Monster has reawakened his gambling habit. Without his wife's knowledge, he has put all their savings and borrowed even more money to buy a silver mine. It seemed like a good idea at the time... too good. By law, silver is trading at a ratio of 16 ounces of silver to 1 ounce of gold. The actual market value is closer to 32 to 1. In modern times the ratio is more like 77 to 1, but you see the point. With a trade ratio fixed by law rather than by market forces the owner of a silver mine could strike it rich in gold... supposedly. But the world economy is at the breaking point. There is the disaster when Mrs. O'Leary's cow kicks the lamp over and causes the Great Chicago Fire, (OK. No one knows how the fire started, but it began in O'Leary's barn.) Then there is Vienna's economic collapse followed by Germany discontinuing the silver thaler (or dollar). Good money pushes out the bad, and in this case, the value of silver is dropping fast and thus becoming the "bad money". It is pushing gold out of the market. That is why Congress, in its wisdom, demonetizes silver this year. Oh dear God! The USA is now on the GOLD STANDARD! Silver is now traded at fair market prices which suddenly makes Custer's silver mine scheme unworkable. Jay Cooke is heavily invested in railroad bonds when the money supply suddenly contracts. Jay Cooke is one of the big boys and he is going down hard. What follows next will be called "the Great Depression"... that is, until the next "Great Depression" comes along. It is a world-wide economic slowdown and it is going to last for years. [1] [2] [3] [4] [5] [6]

My Take by Alex Shrugged
I've seen the movie "Money Monster" and even though it stars George Clooney, it is still pretty good. Clooney plays a TV financial pundit who recommends buying a certain stock. It's a sure bet! A delivery man dumps all his savings into the investment and loses it all. He uses a bomb and a gun to take over the TV studio and demands the truth. (No spoilers. The movie has a lot of twists and turns. It's not perfect, but it is exciting.) There is corruption in large markets, so only the large investors can be expected to weather the storm. I read an article in a magazine about an investor that made a deal with Chinese manufacturers for DVD players. But when the price of DVD players dropped he could not cover the contract. Then he disappeared like Jimmy Hoffa. Know what I mean? J.P. Morgan survived the Great Depression of 1873. He always kept his word which meant that you had to understand EXACTLY what he was promising because that was all you were going to get. And you always lived up to your word because if you didn't, there was no hole deep enough to hide. Mr. Morgan was quite dependable in that respect too. He objected to letting the small investor into the big leagues because they didn't fully understand the markets. He also thought that government could not guarantee fair dealing other than through contract enforcement in the courts which was always after the fact. Creating more and more complex regulations just confuses the regulators and fools the unwary investor into believing that he is safe when he is nothing of the sort. [7]

East Bound and Down, Loaded Up and Truckin'

Adolf Coors and Company have bought the formula for a Pilsner beer. It is a relatively new process that provides a lighter color and more consistent taste. Mr. Coors establishes his first brewery near the springs of Golden, Colorado. No preservatives. It is shipped cold. Eventually he will buy out his partners and it will become a family business. I'd like to say that the fame of his brew soon spread from sea to shining sea, but it will remain a favorite of the west until a popular movie starring Burt Reynolds, and his then girlfriend, Sally Field will bring the brand name to national attention... along with the Pontiac Trans-Am. In the movie "Smokey and the Bandit," Reynolds takes a bet that he can deliver a truckload of Coors Beer from Texarkana to Atlanta, Georgia in 28 hours. "That's bootleggin' son!" In the 1970s when the movie is made, Coors Beer cannot be sold east of the Mississippi River. ITS THE LAW! As far as I can tell, it is a law left over from the Prohibition era. In any case, Reynolds and his stunt drivers will go through 4 Trans-Ams and push the last car to the finish. The theme music for the film is "East Bound and Down" and is sung by Jerry Reed who also drives the truck in the movie. (It's a Kenworth W900A.) "Smokey and the Bandit" is a classic CB movie. (That is a movie where citizen band radio is used as a theme.) Several sequels will be filmed but none better than the original. It's not Shakespeare. It's just fun. [8] [9] [10] [11]

My Take by Alex Shrugged
1873 was the same year that a Dutch concern opened its second brewery in Rotterdam and renamed itself Heineken. In the same year they hired Dr. Elion who was a student of Louis Pasteur. He eventually developed a new type of yeast for brewing. One assumes it added a distinctive taste to the beer. I wouldn't know. I don't drink beer. It is actually funny that I am writing about beer at all. I hate beer and I believe I've said why before but it bears repeating. One day, as a child, my father decided that he would free me from any desire to drink or smoke, so he gave me a cigarette and a beer. I was delighted until I took a big swig and a puff. I just about puked. And it worked. I never again desired a beer or cigarettes. Instead I grew up to drink whiskey and smoke cigars! I can't do either any more. I used up all my tickets on that ride. Just about killed me. It was exciting, though. [12] [13]

Remington Typewriters and Good Testing

Remington makes firearms, sewing machines and farm equipment, but after they are approached by two inventors with a new-fangled thing they call a typewriter, Remington agrees to buy the patent. They pay $12,000 to one of the patent holders, but to the other they pay a royalty. In the long run the one who gets the royalty collects over a million dollars. ($12,000 is something like a quarter of a million in today's money.) This typewriter has gone through extensive testing by a rather critical stenographer who reviews the machine with the eye to actually using it over and over again. He doesn't hold back... at all... and breaks machine after machine. They would like to strangle him, but they realize that it is best to discover all the defects and fix them BEFORE they become a problem for customers. In addressing the problems with their typewriter, a machinist recommends Remington for manufacturing the completed machine. The deal is done and the first commercially viable typewriter is on the market. Remington will eventually sell off the typewriter business, and the spinoff company will retain the Remington Typewriter name. [14] [15] [16]

My Take by Alex Shrugged
I used to be a computer BIOS programmer. I was always friendly to the testing department even though testing is essentially trying to break my work. When they break something it is a GOOD thing because the customer won't have to deal with it later. I tested my own stuff as well. One day, after we released a product we were called in. Something had gone wrong, so naturally we had a meeting. These things always went poorly since I don't like meetings. Yes. I'm THAT guy. Our new machine wasn't working and it was a major failure. My co-worker said, "We'll test it some more, I guess." Everyone started to get up but I said, "Hold it! I don't want to do this." The machine was good. I knew that. I had tested it. I said, "Let's all get into a time machine. It is now one week later and we haven't seen a darn thing in testing. What do we do now?" Eventually we found that a technician had jury-rigged a crude Ethernet hub out of pieces of copper wire and had hidden it under the workbench... BECAUSE HE KNEW IT WAS WRONG! It was amazing that it worked at all. We replaced it with a real hub. We were saved. Years later, I walked into an electronics store looking for an Ethernet hub. The counter guy said, "Oh. I just tell everyone to use one of these Y-connectors. It works!" I just about strangled the little... uh... guy.

In Other News

  • Barbed wire for corralling your cattle. Mr. Joseph Glidden is going to be filthy rich. [17]
  • Copper rivets for corralling your Levis. Levi Strauss patents the copper rivet for his blue jeans. [18]
  • DDT for corralling nothing at all. It is only a curiosity. It's lethality to insects will be noticed by Dr. Paul Müller in 1939. He will win a Nobel Prize for saving million and millions. Rachel Carson will have DDT banned thus casting away the lives of millions and millions. [19]

This Year in Wikipedia

Year 1873, Wikipedia.

See Also

References

  1. Stiles, T. J.. Custer's Trials: A Life on the Frontier of a New America. Alfred A. Knopf. ISBN 9781101875841. “What Custer and Hall needed from Belmont and others was money--they had little of their own--and the credit that would flow from their goodwill. They needed it simply to begin operations--to dig for silver, crush and refine the ore, and sell it--and to try to create and ride a great updraft on Wall Street.” 
  2. Jay Cooke & Company - Wikipedia (2016). Retrieved on 19 September 2016. “Jay Cooke & Company was a U.S. bank that operated from 1861 to 1873. Headquartered in Philadelphia, Pennsylvania, with branches in New York City and Washington, D.C.,[1] the bank helped underwrite the Union Civil War effort. It was the first 'wire' brokerage house, pioneering the use of telegraph messages to confirm securities transactions with clients. The bank became overextended in the building of the Northern Pacific Railway and failed, contributing to the Panic of 1873.”
  3. Long Depression - Wikipedia (2016). Retrieved on 16 September 2016. “The Long Depression was a worldwide price and economic recession, beginning in 1873 and running through the spring of 1879. It was the most severe in Europe and the United States, which had been experiencing strong economic growth fueled by the Second Industrial Revolution in the decade following the American Civil War. The episode was labeled the 'Great Depression' at the time, and it held that designation until the Great Depression of the 1930s. Though a period of general deflation and a general contraction, it did not have the severe economic retrogression of the Great Depression.”
  4. Panic of 1873 - Wikipedia (2016). Retrieved on 16 September 2016. “The Panic of 1873 was a financial crisis that triggered a depression in Europe and North America that lasted from 1873 until 1879, and even longer in some countries. In Britain, for example, it started two decades of stagnation known as the 'Long Depression' that weakened the country's economic leadership.[1] The Panic was known as the 'Great Depression' until the events in the early 1930s set a new precedent.”
  5. George Armstrong Custer - Wikipedia (2016). Retrieved on 16 September 2016. “In 1873, Custer was sent to the Dakota Territory to protect a railroad survey party against the Lakota. On August 4, 1873, near the Tongue River, Custer and the 7th Cavalry Regiment clashed for the first time with the Lakota. One man on each side was killed.”
  6. Coinage Act of 1873 - Wikipedia (2016). Retrieved on 16 September 2016. “The Coinage Act of 1873 or Mint Act of 1873, 17 Stat. 424, was a general revision of the laws relating to the Mint of the United States. In abolishing the right of holders of silver bullion to have their metal struck into fully legal tender dollar coins, it ended bimetallism in the United States, placing the nation firmly on the gold standard. Because of this, the act became contentious in later years, and was denounced by people who wanted inflation as the 'Crime of '73'.”
  7. Money Monster (2016) - IMDb (2016). Retrieved on 19 September 2016. “Financial TV host Lee Gates and his producer Patty are put in an extreme situation when an irate investor takes over their studio.”
  8. Smokey and the Bandit (1977) - IMDb (2016). Retrieved on 16 September 2016. “The Bandit is hired on to run a tractor trailer full of beer over county lines in hot pursuit by a pesky sheriff.”
  9. Pilsner - Wikipedia (2016). Retrieved on 16 September 2016. “Brewers had begun aging beer made with bottom-fermenting yeasts in caves (lager, i.e. German: gelagert [stored]), which improved the beer's clarity and shelf-life.”
  10. BREWING: The Beer That Won the West - TIME. content.time.com (February 11, 1974). Archived from the original on February 5, 2011. Retrieved on 19 September 2016. “Gerald Ford had a case of it tucked away in his luggage when he returned to Washington last month from a vice-presidential skiing trip to Colorado. President Eisenhower had his own steady supply airlifted to the White House aboard an Air Force plane. Actor Paul Newman refuses to be seen drinking any other brand on the screen. Until a court made him stop, Frederick Amon, 24, used to drive a refrigerated truckload every week from Denver to Charlotte, N.C., where he sold it to restaurants and country clubs”
  11. How 'Smokey and the Bandit' was born. fortune.com (February 9, 2011). Retrieved on 19 September 2016. “I called Pontiac and asked if they would like to have the car in the movie. They asked how many I thought I would need. Knowing the Trans Am was going to take a beating, I asked for six. We negotiated down to four, and I also asked for four Bonnevilles to use as Gleason’s sheriff car and settled for two. The bridge jump in the movie wiped out one Trans Am. Jumping the fence into the ball field took care of the second. Jumping curbs and driving through ditches and down embankments pretty well trashed the other two. Using parts from the cars that would no longer run, we managed to make it to the final day of shooting. When we got ready to shoot the last scene, car number four just flat- out wouldn’t start, so we used another car to push it into the scene.”
  12. Heineken International - Wikipedia (2016). Retrieved on 16 September 2016. “In 1873 the brewery's name changed to Heineken's Bierbrouwerij Maatschappij (HBM), and opened a second brewery in Rotterdam in 1874. In 1886 Dr. H. Elion, a pupil of the French chemist Louis Pasteur, developed the 'Heineken A-yeast' in the Heineken laboratory. This yeast is still the key ingredient of Heineken beer.”
  13. Heineken - Wikipedia (2016). Retrieved on 19 September 2016. “In 1873 after hiring a Dr. Elion (student of Louis Pasteur) to develop Heineken-A Yeast for Bavarian bottom fermentation, the HBM (Heineken's Bierbrouwerij Maatschappij) was established, and the first Heineken brand beer was brewed. In 1875 Heineken won the Medaille D'Or at the International Maritime Exposition in Paris, then began to be shipped there regularly, after which Heineken sales topped 64,000 hectolitres (1.7 million U.S. gallons), making them the biggest beer exporter to France.”
  14. E. Remington and Sons - Wikipedia (2016). Retrieved on 16 September 2016. “In 1856 the business was expanded to include the manufacture of agricultural implements. Upon Eliphalet's death in 1861, his son, Philo, took over the firm during the Civil War, and diversified the product line to include sewing machines (manufactured from 1870 to 1894) and typewriters (1873), both of which were exhibited at the Centennial Exposition in Philadelphia in 1876.[”
  15. Remington Standard No. 6 Typewriter - National Museum of American History. americanhistory.si.edu (2016). Retrieved on 19 September 2016. “The first commercially successful typewriter was designed by Christopher Sholes and Carlos Glidden and manufactured by gunmakers E. Remington and Sons in 1874 in Ilion, New York. The typewriters manufactured by E. Remington and Sons had been sold by the company Wyckoff, Seamans & Benedict since 1882. In 1886 E. Remington and Sons sold the entirety of their typewriter interests to Wyckoff, Seamans & Benedict. Wyckoff, Seamans & Benedict manufactured their typewriters under the Remington Standard Typewriter Company name beginning in 1892. The company became the Remington Typewriter Company in 1902, before merging with the Rand Kardex Company in 1927 to become Remington Rand.”
  16. Christopher Latham Sholes - Wikipedia (2016). Retrieved on 19 September 2016. “Sholes took this advice and set to improve the machine at every iteration, until they were satisfied that Clephane had taught them everything he could. By this time, they had manufactured 50 machines or so, at an average cost of $250. They decided to have the machine examined by an expert mechanic, who directed them to E. Remington and Sons (which later became the Remington Arms Company), manufacturers of firearms, sewing machines, and farm tools. In early 1873 they approached Remington, who decided to buy the patent from them. Sholes sold his half for $12,000, while Densmore, still a stronger believer in the machine, insisted on a royalty, which would eventually fetch him $1.5 million.”
  17. Joseph Glidden - Wikipedia (2016). Retrieved on 16 September 2016. “He created barbed wire by using a coffee mill to create the barbs. Joseph placed the barbs along a wire and then twisted another wire around it to keep the barbs in place. He received the patent for barbed wire in 1874 and was quickly embroiled in a legal battle over whether he actually invented it. He eventually won and created the Barb Fence Company in DeKalb, Illinois, making him extremely rich.”
  18. Levi Strauss - Wikipedia (2016). Retrieved on 16 September 2016. “Jacob Davis, one of Strauss's customers and one of the inventors of riveted denim pants in 1871,[11] went into business with Strauss to produce blue jeans. The two men patented the new style of work pants in 1873.”
  19. DDT - Wikipedia (2016). Retrieved on 16 September 2016. “DDT was first synthesized in 1874 by Othmar Zeidler under the supervision of Adolf von Baeyer. It was further described in 1929 in a dissertation by W. Bausch and in two subsequent publications in 1930. The insecticide properties of 'multiple chlorinated aliphatic or fat-aromatic alcohols with at least one trichloromethane group' were described in a patent in 1934 by Wolfgang von Leuthold. DDT's insecticidal properties were not, however, discovered until 1939 by the Swiss scientist Paul Hermann Müller, who was awarded the 1948 Nobel Prize in Physiology and Medicine for his efforts.”

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