JANUARY 2018

JANUARY 2018
The Rich Have Been Advising the Middle Class Not to Invest in Themselves for 200 years

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Thursday, January 18, 2018

GEORGIA PEACHES Chapter One

I have always been confused by Patrick Henry. He is famous for saying, “Give me liberty or give me death”, a bold statement that should have gotten a lot of press. Yet nobody at the time recorded him saying it.  He also supposedly said “If this be treason, let us make the most of it”, another bold statement which, again, nobody wrote down at the time. What is fact is that he was always suspicious of the power of government. We largely have him to thank for the Bill of Rights, today a beacon of freedom for billions of people world wide. But he was also the CEO of the Virginia Yazoo Company, when he sold  swamp land to war veterans and unsuspecting tax payers.
My guess is the Yazoo Indians were only joking with French explorer Robert de La Salle.   In 1682, la Salle asked about the water at the edge of their town and the Yazoos told him it was a river....a 180 mile long by 100 mile wide “river” which did not so much as flow into the Mississippi River, as seep. It was a swamp.  But the last laugh was on the Yazoo Indians because La Salle named the “river” after them.
And since even in 1789 nobody was interested in buying a swamp, American crooks decided to call it the Yazoo Lands, instead.  Besides patriot and ex-governor Patrick Henry's Virginia Yazoo Company, there was the Tennessee Yazoo Company and the Carolina Yazoo Company. And together they formed the first American lobby firm, what they called "The Combined Society".  It's stated purpose was  “By means of certain influences...to obtain from the State (of Georgia) large grants of land...for the end of making a large sum of money...” They were certain they could obtain a deed from Georgia, because Georgia was flat broke.
Georgia had paid for its war of revolution by claiming lands westward to the Mississippi and beyond, and using them as collateral to borrow gold and silver. The problem was that land, including that swamp,  was occupied by native American tribes and claimed by the King of France.
The solution was first suggested by an ex-militia Colonel named Thomas Marston Green.  He'd been farming out in the Pine forests when a bunch of Spanish soldiers and surveyors showed up looking to inventory the lands they had just bought from the French. Colonel Green realized that after the inventory would come the taxes. And he hated paying taxes.  Luckily Green had no objection to collecting taxes. In the fall of 1784 Green showed up in the state capital of Louisville, Georgia, suggesting the state take over his plantation as "Bourbon County".  It would be the largest county in the United States, and Marston Green would, of course, run it, selling the land he did not want and splitting the take with the state. And on 7 February, 1785, the rich white men running Georgia passed the Bourbon County Act, and waited for the money to roll in. 
Unfortunately, Green went home and told the Spanish to get out because Georgia was now running things. They threw him in jail. And as long as Georgia was taking that attitude, the Spanish decided Americans could no longer use the port of New Orleans to ship their produce to market. That made the settlers in western Georgia, very unhappy.  In 1788 the state of Georgia backed down and repealed the Bourbon County Act.  But that still left Georgia flat broke.
The next answer they tried in the fall of 1788 was the infamous Pine Barren Land Speculation, in which a dozen rich white men surveyed (badly) about thirty million acres of Georgia and sold it off (quickly), mostly to smaller speculators, Everybody thought they were going to get rich. The problem this time was that Georgia contained only about nine million acres. There were a lot of duplicate titles, and five or six owners for every section of land. Over night land prices went from sky high to bargain basement,  inspiring a fake advertisement, offering, “ Ten millions of acres of valuable pine barren land in the province of Utopia, on which there are several very sumptuous air castles, ready furnished”.
This business model would later be called a Ponzi scheme, and the only people who got rich were the ones at the top, and none of that money trickled down to the state of Georgia. So in 1789, this time under the Governorship of an arrogant fire plug named George Mathews, they tried it again, only bigger. And this was where Patrick Henry got into the game.
It was enough to make you wonder why the American people continue to have such childlike faith in capitalism, considering how often they keep getting screwed by it. It's a morality play, of sorts, if the moral is "There's a sucker born every minute".
Patrick Henry had never been much of a business man. When he was 18, the “indolent, dreamy (and) procrastinating...ill-dressed young man” impulsively married the equally impulsive, plump and buxom Sarah "Sallie" Shelton. He went to work for Sarah's father in his Hanover Tavern, but after a few months as a barkeep, Patrick decided on a career which would not require so much physical labor. With only six weeks of study he passed the Virginia bar. The parents of the bride were so thrilled, they set the fecund couple up with some land and slaves – an instant entrance into Virginia's upper class. It was the perfect foundation for a politician. But, alas, Patrick would be short of money his whole life. Which is why he formed the Virginia Yazoo company.
The 53 year old Patrick Henry assembled a slightly odd group of investors. At 53, droll and humorless, Paul Carrington was a long time member of the Virginia House of Burgesses, and a judge of the Court of Appeals. At barely 30 years old, Abraham Venerable was an up-and-comer in Virginia society, while 50 year old Francis Watkins was the clerk for the local courts.
But the key investor, the actual brains behind the original Virginia Yazoo Company was David Ross, who had already assembled 100,000 acres in Virginia, buying up plantations and farms abandoned by loyalists during and after the revolution.  Ross also owned 200,000 acres of Kentucky, and several thousand more in what would become Tennessee (claimed by North Carolina). He was a very land rich young man. And, oddly, he was Scottish
See, after the 1746 battle of Culloden, Scotland was under the royal lash, and David Ross stood to inherit nothing from his father's now looted Scottish estates. So in the middle of the 1750's he joined the horde of Scots emigrating to the American colonies. But where most Scotsmen chose the less settled Carolinas, and arrived with little but the clothes on their back, David Ross chose Virginia and arrived with contacts in the colonial government, and with cash,  Almost immediately he invested in the Oxford Iron Works along the Potomac River and the Antietam Iron Works in Maryland. He then began buying land and planting tobacco. It is hard to escape the suspicion that David Ross's family had sold out their fellow Stuart supporters, perhaps his own cousins. It is what the losing side of a rebellion often has to do to save the family fortunes.
Most years the iron works struggled to get by, and the tobacco barely covered operating expenses.  To really build a fortune, Colonial Virginia planters - such as the gout ridden George Mason - used their large plantations as collateral to buy Indian land north of the Ohio River, cheap. The new owners then surveyed it quickly, subdivided it in haste and sold it off in 100 to 600 acre sections to land hungry farmers at inflated prices.  To quote from Wood Holton's 1994 paper in 'The Journal of Southern History:  “Land speculation was a principal source of income for the Virginia gentry, the 2-to-5 % of families who stood atop the colony's pyramid of wealth and power...During the frontier years, absentee landholders owned three-quarters of the region's total acreage...little acreage was left for residents. ”
The only draw back was that the invasion of English farmers set off the French and Indian War, which brought the sale of western lands to a halt for nine long years.  Then  in 1763, after the peace was signed, King George III issued a Royal Proclamation that henceforth no colony could lay claim to any land west of the crest of the Appalachian Mountains. Individual farmers were still free to negotiate with tribes for acreage on Indian lands, but their property rights would not be recognized by the English crown, meaning the land could not be resold, ending speculating in Indian lands.  Wood Holton argues it was this loss of income which spurred Virginians, like the “great land-monger” George Washington, and speculators Thomas Jefferson, George Mason and Patrick Henry, to support the American Revolution
Even before the American victory at Yorktown, in June of 1779, Virginia and her governor Patrick Henry, joined the other southern colonies in reviving virtually all of the land claims rejected by George III's government. George Mason rehired his old employee Daniel Boone to began “exploring” new lands to the west of Boonesborough, paying him in land -  from which Boone earned $20,000, a hefty fortune during the revolution. And on 20 November, 1789, the Virginia Yazoo Company, headed by Patrick Henry and David Ross,  along with the Tennessee Company and the Carolina Company, formally applied for land grants along the Yazoo River from the State of Georgia.  
To the wealthy speculators who were also the founding fathers, this is what they meant by the word “freedom”. And that is the morality play we shall now follow.
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Wednesday, January 17, 2018

A THROW OF THE DICE

I know of only three ways to win at the game of Monopoly. First you buy or trade to get a monopoly of all four railroads and the three orange properties; St. James Place, Tennessee Avenue and New York Avenue. On average, players land on the oranges more often because they are just after the Jail. Then you build three houses on each, no hotels. This gives you a return on your investment about every ten times your opponents roll the die. The only way to give yourself a better chance of winning is to either become the banker and embezzle your way to victory, or get the other players to adopt a house rule that subtly favors you, and then apply it mercilessly. Real Wall Street bankers will only play this way.
Surprisingly few people notice the fundamental capitalistic lesson in Monopoly, which is that you play it with dice. Chance always determines the short term outcome of events, much the same way that derivatives always explode, because sooner or later everybody rolls snake eyes. As proof of this consider what happened to the lady who invented the game of Monopoly. Her name was Elizabeth “Lizzie” Magie, a bright, well educated and determined Illinois Quaker lady, who in her late twenties was looking for a cause. See, Quakers had a long history as abolitionists, and the abolition of slavery after the Civil War, left them with an identity crises. “Lizzie”  found her new cause in the rantings of a self taught economist with two first names.
All you need to know about Henry George is that in the 1870's he owned a newspaper in San Francisco, and in 1886 he ran for mayor of New York City, coming in second but still beating Republican Teddy Roosevelt – in short, all his life George was a square peg in search of a round hole. He did not believe in free trade, he didn't like Asians, he liked paper money but he hated taxes - income taxes, sales taxes, and capital gains taxes. He sounds very Republican, doesn't he? Well, he was a Socialist- Catholic- Trade Unionist, who thought government should be supported solely by property taxes. But if you think a government supported only by property taxes is a good idea, I suggest you talk to any school board in America.
“Lizzie” Magie was a Henry devotee, and as the 19th century drew to a close, she was living in a interracial community of Brentwood, Maryland, and looking for some way to popularize her hero's ideas. Possessing that odd combination of whimsy and discipline required to design games, Lizzie came up with a joyless plaything she called “The Landlord's Game”. “Children of nine or ten,” she assured potential customers, “can easily understand the game and they get a good deal of hearty enjoyment out of it...The little landlords take a general delight in demanding the payment of their rent.”
Lizzie's innovation was that unlike previous Victorian board games, her's had no beginning or end. It was an endless loop. The four corners of her board were labeled Absolute Necessity - Coal Tax, Public Park, Jail and a globe encircled by a banner reading “Labor Upon Mother Earth Produces Wages”. Properties along the straightaways were four railroads, a Water Franchise, four Luxury Lanes, and Easy Street, Lonely Lane, Legacy, the Poor House and Lord Blueblood's Estate (No Trespassing, go to jail), and three other Absolute Necessities – Clothing, Shelter, and Bread. Every time you passed the Labor space you got a hundred bucks, and every time somebody landed on a property it went up for auction. In 1902, “Lizzie” took her new game to America's king of games, George S. Parker
When this George was sixteen he had invented a card game called Banking. Players borrowed money from the bank and a draw from the 160 card deck determined how successful they would be. George invested $40 to print up 500 decks of Banking cards, and sold 488 of them. With that $100 in profit he built an empire, hiring his brothers and issuing similar card games called Klondike Gold Rush and War in Cuba. So,  when Lizzie approached him, George found her a kindred spirit and offered a considered critique of “Landlords”. Basically, he said it stunk. “How do you end this game?” he asked, voicing a concern millions of players would repeat over the next 100 years as 2 in the morning approached with no winner in Monopoly.  But he also urged her to get her game copyrighted, which Maggie did. She was granted U.S. Patent 748,626 on 5 January 1904.  In 1906, the brothers hit it big with George's new card game Rook. Frustrated and almost unnoticed, Lizzie packed her bags and moved to Chicago. And there she started her own game company.
She was supported by other Quakers and followers of Henry George, and in 1906, in Chicago, they formed the Economic Game Company, to publish and distribute the Landlord's Game, with a few modifications. She added a bank, wages, and public transportation in the center of the board. Lizzie kept in contact with the Parker Brothers, who, in 1910, published her her new card game called Mock Trial. Game design wasn't a living, but then Lizzie wasn't in it for the money. She was on a mission. Which is probably why what happened next had little to do with Lizzie.
In 1915 economists Scott Nearing was the most popular lecturer at the Wharton School of Business at Pennsylvania State University. Eventually the trustees would fire him for being a radical, but then eventually the American Communist Party would expel him the same reason. But before he was fired, Nearing introduced The Landlord's game to his students, and they set about spreading it from one fraternity brother to another. Future "new dealer" Rexfordd Guy Tugwell introduced a shortened version the game (called Monopoly Auction) to his classmates at Columbia graduate school of Economics. Another Nearing student, Daniel W. Lyman, started marketing his own shortened version of the game (called Finance) in Indianapolis, Indiana, where he labeled the rental properties with local street names and added Chance and Community Chest cards.
In 1929, school teacher Ruth Hoskins learned the game from her brother, who was friends with Daniel Lyman. Later that year she got a job teaching at the Friends (Quaker) School in Atlantic City, and she introduced the game to her students. When she drew up her version of the game board, she named the properties after streets her students lived on in Atlantic City. But unfamiliar with the area, she misspelled the name of a suburb, Marven Gardens (a combination of two town names – Margate City and Ventor City) as Marvin Gardens. And, since her Quaker students objected to auctions on religious grounds, the game was changed again, so that landing on a property gave you the sole right to buy it, for the price listed on the deed. Once again the game proved very popular.
Ruth's student who lived in Marven Gardens was Charles Todd. He had suggested naming the railroads after real lines. The game's B and O was the Baltimore and Ohio, while the Reading was the Philadelphia and Reading railroad. The Pennsylvania Railroad was for many decades the largest railroad in the world, and while The Short Line was not a specific road, it was the general title for any short commuter line. Just as the Great Depression began in earnest in 1932, Charles Todd introduced the game to two new friends who were in a very rough spot.
William Darrow had been a domestic heater salesman in Philadelphia, until the Depression wiped out his livelihood. His was now working at odd jobs, and his wife Esther was pregnant, and one look at the game Monopoly Auction, convinced William that this could be his salvation. Charles Todd would later testify that “Darrow asked me if I would write up the rules and regulations, and give them to Darrow.” Whereupon, Darrow asked for two or three copies, which Charles gave him. And with that, William Darrow was on his way to being a millionaire.
Charles drew up the game on oil cloth (copying Ruth's misspelling), his wife and son filled in the colors, and a graphic artist then added the icons of Jake the jailbird and Police Officer Edgar Mallory on the Go to Jail cards. The little rich guy with the top hat, Uncle Pennybags would come later, after Charles copyrighted the game under his own name in 1933 before selling it to Parker Brothers in 1936 as his own invention, which it was not.
The marketing department at Parker Brothers made Monopoly the most popular game in America, and made William Darrow a multimillionaire. He spent the rest of his life traveling the world in luxury. Of course, eventually the lawyers at Parker Brothers realized they had a problem with “Lizzie”. Remember her? But this also gave them power over Darrow. So, first they pressured him to give them the free and clear rights to publish the game outside of the United States,  in exchange for taking over all legal costs of defending William against copyright infringement. William Darrow caved under just a little pressure. All that remained was to get Maggie to sign over her rights to her Landlord's Game.
The new president of Parker Brothers, Robert Barton, later testified that he asked Lizzie if she would agree to some changes in her game. He testified later that her answer was “No. This is to teach the Henry George theory of single taxation, and I will not have my game changed in any way whatsoever." So being a good businessman, Barton stopped pushing, bought Lizzie's rights for a measly $500, and an agreement to publish her new version of The Landlord's Game. The third edition was shipped to stores all over the United States  in 1939, but Parker Brothers did nothing to promote it. After a few weeks all copies were called back to Parker Brothers and destroyed. By the time Lizzie realized she had been snookered, it was too late. And her game, and its twin named inspiration, were quickly forgotten.
In a way, she had just gotten a lesson in the game she had invented. And Parker Brothers had just gotten a great big Get Out of Jail Free card. And that is the real lesson in Monopoly.  In business, cheaters always prosper.
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Tuesday, January 16, 2018

HERE'S MUD IN YOUR EYE

I keep reading that the election of 1884 was one of the “dirtiest” in American history, which strikes me as saying that a sewer is dirtier than a septic tank. Still I have to admit that there was a lot of mud flung around by James Blaine and Grover Cleveland. And as usual, he who flung the most, won. Blaine got in the first shot.
The Democratic convention in Buffalo, New York ended on 11 July 1884, after having nominated hometown hero, “Honest” Grover “The Good” Cleveland. Just ten days later the “Buffalo Evening Telegraph” reported “A Terrible Tale”; that in 1874 Cleveland had an affair with a young widow from New Jersey named Maria Helpin. That September Mrs. Helpin had given birth to a son she named Oscar Folsom Cleveland (Folsom was the name of Cleveland’s law partner). According to the “Telegraph”, Maria ended up in an asylum and the poor innocent boy had ended up in an orphanage. The Republican faithful began the chant, “Ma, Ma, where’s my Pa? Gone to the White House, ha, ha, ha.” 
It was a great story, and parts of it were true. But Cleveland (above) refused to panic and instructed his followers to “Just tell the truth”, which is easy to say at those rare times when the truth actually helps you. The truth was that Mrs. Helpin had affairs with several men (something that probably happened a lot more often than anyone in 1884 was willing to publicly admit), and there were several men who might have been the father. Cleveland never admitted parentage. But he had supported the infant after Maria started drinking.  Later, when it became clear Maria was not going to get sober anytime soon, Cleveland had paid her $500 to give up Oscar, and the boy was adopted by a friend of Cleveland’s, and eventually ended up graduating from medical school. So, after all of those details came out, the initial Blaine attack had resulted in Cleveland sounding more honest than before. The second Blaine attack backfired even worse.
There were two “third parties” in 1884; the Greenback Party and the Prohibition Party. The Greenback Party seemed likely to hurt the Democrats most, so Blaine’s Republican supporters actually gave them money. “The Dry’s” had nominated for President John St. John (above), three time governor of Kansas. Blaine’s people were worried that St. John would siphon off Republican votes in upstate New York. They urged St. John to drop out of the race, and when he refused they spread the story that St. John had abandoned a battered wife and child in California. Again, the smear was true, sort of. After his parents had died (when St. John was 15) he had joined the ‘49ers, looking for his fortune in the gold fields. He didn’t find gold but at the age of 19 he had found a wife and fathered a child. And at his wife’s request he had “granted” her, to use the old phrase, a divorce, before returning, broke, back to to Illinois.
Like most smears this one hurt St. John the most among his most fervent supporters. Prohibitionists were always a priggish bunch of humorless unforgiving bores, and they abandoned St. John as if they had just discovered the sacramental wine was actual wine. 
But St. John had that other trait you often find in prohibitionists; he considered revenge a matter of principle. Knowing he now stood no chance of even winning Kansas, St. John concentrated his efforts in upstate New York, just the place the Republicans were the most worried about.  He, in effect, poured cold water (above) on Blaine's dastardly plan.
Meanwhile, James Blaine, the Republican candidate, had his own problems, with the “Mugwumps”. This was yet another group of holier than thou Victorian prigs, but these prigs were Republicans, and they had a hard time deciding whether or not to support Blaine because he was so…well, crooked. They took their name from a supposed Algonquin word for “big leader”, but it was "New York Sun" columnist Charles Dana who defined them as Republicans who had their “mugs” on one side of the fence and their “wumps” on the other.  Republican commentators went so far as to imply that the Mugwumps were “effete”, or to use the 1884 vernacular, “Man millners”, or the 2018 vernacular, homosexuals.

 Meanwhile the Democrats were throwing everything they could think of at "James Blaine, the Continental Liar From the State of Maine", such as calling him "Slippery Jim". They dragged up the old charge of “Burn this letter after reading”. And the Indianapolis Sentinel even discovered that Blaine had married his wife only after her father had threatened him with a shotgun. Blaine sued for liable but the paper then produced the certificates showing the couple had been married in March, 1851 and their first child had been born less than three months later. Unheard of! A young couple had engaged in sex before they were married! Shocking!  Blaine came up with a story about two ceremonies, one private in 1850, and a public wedding a year later, but by the time he finished explaining it all, the audience had turned to the comic pages. 
But the final nail in Blaine’s coffin was supposedly driven in by the Reverend Samuel Burchard, who at a New York City Republican rally, with Blaine sitting at the dais, charged that the Democrats stood for “Rum, Romanism, and Rebellion”. The press had a field day, calling the phrase anti-southern and anti-Catholic, (which it was) and that by his silence Blaine had approved of it. But that last part was absurd. Blaine’s mother was a practicing Catholic. His sister was a nun. The Republicans had even been hoping to attract some Catholic votes away from the Democrats. But none of that mattered to the press, or to the Democrats who publicly organized Catholic Democratic lawyers in case they had to contest the official election results from New York. And they almost did.
In the end it is difficult to say precisely why Cleveland won and Blaine lost. The popular vote cast on Election Day, Tuesday, 4 November 1884, was four million eight hundred seventy-four thousand for Cleveland (48.5%) and four million eight hundred forty-eight thousand (48.2%) for Blaine. But as we all know the popular vote is meaningless. 
What counted was the Electoral College, and there Cleveland won two hundred nineteen votes to one hundred eighty-two for Blaine, giving Cleveland a 37 electoral vote victory. The difference was New York State’s 36 votes which Cleveland won by a mere 1,047 votes out of one million one hundred twenty-five thousand and forty-eight votes cast in the Empire state. 
I think what made those 1,047 votes so powerful were the twenty-four thousand nine hundred ninety-nine votes cast in up[state New York for Prohibitionist Party candidate John St, John. It may have been the last time a prohibitionist could proudly say, “Here’s mud in your eye” - to James Blaine, the Continental Liar from the State of Maine. 

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Monday, January 15, 2018

THE CONTINENTAL LIAR

I blame the Democrats for what happened to James Gillespie Blaine (above). At least in part. The donkies had jumped the ideology shark with their "Southern Strategy" in the run up to the Civil War, and were not present in Washington to perform their nominal job of cleaning up any rotting fruit that dropped from the Republican tree when James Blaine was first elected to congress in 1862. Nor was it James’s fault that his brother-in-law, Eben C. Stanwood, was so greedy. There is always a lot of money floating around Washington during a war, the kind of easy money even a brother-in-law could get his hands on. And James Blaine would have to have been a saint if he had not been tempted by the money to be made by manipulating the stock in the Little Rock and Fort Smith Railroad. Of course James did not have to jump in quite so enthusiastically or so often.
The Little Rock Railroad was supposed to have been completed to Fort Smith before the civil war broke out, but it went bankrupt. And that was when Boston speculator Josiah Fisher convinced a group of investors (including the brother-in-law, Eben) to buy up the worthless stock for pennies on the dollar. It was Eben - and another crooked “investor” named Joshua Caldwell - who dangled fat sales commission checks in front of the Congressman James Blaine.  Now this was a barely started railroad, deep in the by now financially devastated post war rebel south. But from the second he heard about those commission checks,  James Blaine wanted in.
In fact, the Maine Congressman (above) wrote to Josiah  Fisher on 10 September 1867, in a letter marked “Strictly Private”, “…my position will enable me to render you services of vital importance and value….I do not feel I shall be a dead head....Are you not willing to aid me (elsewhere) where you can do so with profit to yourself at the same time?”  Fisher did not reply to this crude solicitation, so evidently James paid him a visit in person. We know about the agreement they reached in private because Blaine was helpful enough to lay out the details in a second letter he wrote to Fisher, which he helpfully marked “Burn after Reading.”  Who wouldn't want to save  a letter marked that?
By September of 1869 James Blaine had sold over $130,000 in Little Rock railroad bonds (worth about $2 million today), mostly to other railroad barons, who, of course, did not need or want bonds they knew were worthless. But still, James was paid very handsome commissions for those sales. By then passengers could actually board the train in Little Rock. However the passengers were required to cover the last fifty miles to Fort Smith in a stagecoach, a 3 ½ hour living hell of dust, mud and potholes.  Not surprisingly, the railroad went bankrupt yet again, as the railroad barons knew it must.
But despite the business having failed  - again -  Congressman Blaine  (above) was still demanding that he be “compensated” in addition to the commission checks he had already cashed. Fisher was ready to tell Blaine to drop dead,  until one of the other robber barons reminded Fisher, “…it is important that he should be conciliated…However unreasonable in his demand…he should in some manner be appeased.” So Speaker Blaine was “appeased” with loans he was not expected to repay. But Banker Fisher was not likely to forget he had been made to feel like one of the suckers of his own scam.
After serving three very profitable terms as Speaker of the House, James Blaine stepped down so he could concentrate on a run for the White House. Just think how much money he could make as President! As the campaign season of 1876 approached, he was a serious possibility. However, one thing had changed in Washington.  The Democrats were back, and had captured control of the House of Representatives. That gave them the power of subpoena, and they used it to subpoena a certain Mr. James Mulligan, who was a Boston bookkeeper in the employ of Boston speculator Josiah Fisher. Remember him?
It seems that Mr. Mulligan had never burned an incriminating letter in his life. On 31 May, 1876, under the gentle guidance of Judiciary Committee Chairman, Democrat Proctor Knott  (I love that name!), Mr. Mulligan casually admitted that he had in his possession “certain letters written by Representative  Blaine to Mr. Fisher”.  Given the panicked high sign by Blaine, the senior Republican on the committee immediately moved to adjourn for the day.
That night  Blaine appeared at Mr. Mulligan’s door at the Riggs House hotel, and proceeded to chase Mulligan all over his room, begging and whining and reminding Mulligan what disgrace would mean to Blaine's poor children. Finally, because he was embarrassed and cornered, Mulligan allowed the Congressman to read the letters (above). But once he had his hands on them, Blaine announced that since they were “his” letters, he was going to keep them, and he left with the letters safely in his own pocket.
On the floor of Congress over the next several days the Democrats demanded that Blaine hand the letters back over.  Finally, on 5 June, James Blaine rose to respond in front of packed House galleries. He thundered, “I have defied the power of the House to compel me to produce these letters…but, sir,…I am not afraid to show the letters. Thank God Almighty, I am not afraid to show them.” As proof of his willingness to show the letters, he showed the letters. He waved them over his head. He did not allow anyone to read them, of course. “These are they…and with some sense of humiliation,…with a sense of outrage which I think any man in my position would feel, I invite the confidence of 44 million of my countrymen while I read those letters from this desk.” And so he did read from the letters, with commentary and asides in his own defense. The Republicans were persuaded, but the Democrats were not.
Having earlier read the letters himself, Chairman Knott (above) knew that Blaine had avoided reading any incriminating sections of the letters, and he rose to challenge Blaine’s version. And that was when James Blaine pulled the rabbit out of his...I'll say hat.
Suddenly changing the subject, he asked Knott if the committee had received a transatlantic cable from Joshua Caldwell (remember him?), supporting Blaine’s version of events. In fact Caldwell had sent such a cable. But Caldwell was a well known liar, and nobody in their right mind would believe anything he said not under oath - certainly Proctor Knott didn't. Still, that was not the question. Representative Blaine stomped right up to Proctor’s desk and accused him, nose to nose, of suppressing the Caldwell cable. Blushing, Proctor was forced to stammer that indeed they had received such a cable. The galleries erupted in thunderous applause for Blaine.
Chairman Proctor Knott himself described the performance  as “…one of the most extraordinary exhibitions of histrionic skill, one of the most consummate pieces of acting that ever occurred upon any stage on earth.” Blaine had so completely turned the tables on the Democrats that nobody except them seemed to notice that he had not, in fact, denied the basic allegations of bribery.
Still, the effort had extracted a toll on Congressman James Blaine. That Sunday he collapsed on the front steps of his church, and passed out. If he was stricken going into the church or coming out I have been unable to confirm.  Maybe God sucked all the air out of this lungs for a second, just to remind him of who was in charge. If so, Blaine failed to take the hint. Luckily, he was bedridden for several weeks, during which time the committee investigation faded until it simply evaporated. But James G. Blaine's dreams of the White House had to be put off for the time being. Of course, being one of the biggest egomaniacs of his age, he never said never. And come 1884 he would try for the White House yet again. Which is when those letters would resurface, again.
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