Freedom from Want by Norman Rockwell was published in the March 6, 1943 issue of The Saturday Evening Post.

There is no holiday, except Christmas, that has more tradition surrounding it. What does July 4th or Labor Day have that compares with the wealth of traditions surrounding Thanksgiving? The big turkey dinner, the football games on TV, Macy’s parade, the start of Christmas season—all in honor of a three-day feast in Plymouth Colony that occurred 391 years ago.

While we know the traditions, we’re still fuzzy on the meaning and origins of the day. For instance, we’re not quite certain that the 1621 Massachusetts feast was, in fact, America’s first Thanksgiving. An earlier thanksgiving-like feast had been held in the Colony of Virginia in 1610. And residents of St. Augustine, Florida, talk of a thanksgiving celebration held by Spanish colonists in their city back in 1565.

Furthermore, as Roger Butterfield’s 1948 article “What You Don’t Know About Thanksgiving” points out, the Pilgrim feast of 1621 did not launch a yearly tradition. There is no record of a similar event the following year. In fact, the 1621 festival was not a “thanksgiving feast” but a simple harvest celebration. The first event dedicated to giving thanks to God was held in 1623 after a heavy rainfall resulted in a larger harvest than expected.

Pilgrim by J.C. Leyendecker appeared on The Saturday Evening Post cover November 29, 1924.

It really wasn’t until 1777 that the Continental Congress spread the idea of a thanksgiving day beyond New England, when it asked colonists to set aside December 18 as a day of prayer to God for an independent and strong nation. That same year, George Washington proclaimed a Thanksgiving day to celebrate the victory at Saratoga.

Not everyone welcomed this idea of a government holy day. When a congressional bill proposed the first national Thanksgiving Day in 1789, two Southern congressmen shot to their feet to protest, as Butterfield writes. “They did not think, they said, that the people had anything to be thankful for in their new government, and even if they did, the president and Congress had no right to tell them how and when to express their thankfulness.” Ultimately, President Washington overrode their objections and proclaimed a national day of Thanksgiving for that year.

But it was very different from what we know today. For most Americans the holiday was honored by fasting and prayer.

Thanksgiving would not become a national holiday until 1863, and its designation was more political than religious. Though President Lincoln called it “a day of thanksgiving and praise for our beneficent father who dwelleth in the heavens,” his principle goal was to reinforce the sense of union in loyal states through a commonly celebrated holiday.

This Currier and Ives print, Home to Thanksgiving, helped popularize the holiday.

Americans have honored Thanksgiving every year since then. And while we agree on the importance of the holiday, there is less agreement on what giving thanks should involve. The more traditional, religious idea emphasizes mortification and repentance. As the Post editors noted in 1877, government and commerce stops so we can have a day to express gratitude for everything, including hardships. After all, “our trials are invariably for our benefit, and that we are made to suffer apparent evil that good may result. The ways of God are inscrutable, and it’s a blessing to morals that they are so.”

Yet these same editors, just three years earlier, had seemed to recognize that some measure of joyous celebration was to be expected, even encouraged. As they wrote in 1874:

There’s a deep fund of vitality in the human breast, and the most solemn or most sorrowful observance cannot induce a major of the people to wear long face and penitential hearts. And who can blame them? We have all legitimate causes enough for depression without suffering ourselves to be legislated into the blues, while our hears are merry and our horizons clear

The right to laugh or cry is one of the reserved rights of the people, not delegated to Congress, but retained as a constituent of individual freedom.

So if we find indecorously joyful faces shaming the solemn occasion, we can console ourselves with the reflection that laughter is better than tears, and that the making of happy people is the crowning glory of a good government.

But now joy is our business. We celebrate the good that has come unto us. And God is best thanked for His gifts by clear brows and smiling faces. The let us shout and be merry, eat our fill, and laugh to our heart’s content while east and west, north and sought, the wail of the turkey is heard in the land.

The True Spirit of Thanksgiving The Saturday Evening Post

In this alternative history …

How It Might Have Looked: President Roosevelt reviews tanks from 1st Armored "Rough Riders" battalion heading to France.

• America enters World War I two years earlier.
Teddy Roosevelt could never sit by and watch a fight: he either had to break it up or join in. So when the old Rough Rider hears, in 1914, that Germany has marched over neutral Belgium to attack France, he commits our resources, and then our soldiers, to the Allied cause.

• World War I ends two years sooner.
It takes almost a year to build the ships, arm the troops, train them, and land them in France. By late 1915, though, the American Expeditionary Force of 10 million soldiers is fighting alongside the French and English armies on the Western Front. Even with the wasteful tactics of the European generals, which sometimes wipe out thousands of soldiers in hours, the Allies put enough pressure on the Germans to crack their defenses. The Kaiser’s army falls back, across France, into Germany, with the Allies in pursuit. As winter begins in 1916, the Germans are asking for peace terms.

• Adolf Hitler never comes to power.
The German people see their army in retreat, and the Allied armies occupying their cities. They blame their defeat on the military adventurers who run the Kaiser’s government. When young Adolf Hitler starts proclaiming the invincibility of the German army, and the need to prepare again for war, few Germans are interested. Mostly, they’re relieved when the occupying Allied forces arrest him and keep him in a French prison. Without him, the National Socialist party withers away.

The global peacemaker.

• The Communists never gain power in Russia.
Although the Russian army suffers a paralyzing defeat on the Eastern Front, it is mostly intact when the war ends and the troops march home. The German government is too busy saving itself in 1917 to send the exiled Lenin back into Russia. Without their charismatic leader, the Bolsheviks of Moscow make little progress stirring up revolution. Russian veterans happily round up the loudest revolutionaries and ship them off to Siberia. By November, when the Bolsheviks would have seized the government, they have disappeared underground.

• Europe forms a union.
Since the war ends almost two years earlier, Roosevelt is able to talk the Allies into seeking reasonable reparation costs from the Germans and their allies, the Austrians. Before he dies in office in 1918, he has convinced England, France, and Italy to a continental plan similar to that created for France after Napoleon’s defeat. Having exiled its Kaiser and become a Republic, Germany is invited to rejoin the European nations. For the next 30 years, the Congress of Paris ensures the status quo between nations and suppresses any talk of revolution or nationalism.

All these benefits wouldn’t have accrued without some problems. According to one way of looking at history, if Communism didn’t get a strong foothold in Russia, it would have done so in Germany. Japan would still have emerged as a world power and very likely would still have invaded China. If successful, Japan and the US would have very likely found themselves in conflict over control of the Pacific.

Very probably, the atom bomb would have still been developed. Given human nature, it’s very likely one country or another would have had the curiosity to use it. Which country that might have been is anyone’s guess …

Teddy Roosevelt And World War I: An Alternative History The Saturday Evening Post

When the owners of the Central Pacific Railroad drove the golden spike that completed the transcontinental railroad in 1869, they were widely hailed as heroes. Visionaries. Men of ambition, drive, and patriotism. Newspapers praised the hard work and high risks they’d undertaken to build the first railroad across the United States.

What they didn’t mention was how much cheating, perjuring, short-changing, misleading, and outright theft went into the railroad’s achievement.

For 30 years, the Central Pacific was able to shape public opinion about itself, and manipulate legislation in state and federal governments. Starting in 1896, though, its fortunes changed. Dennis Drabelle’s book, The Great American Railroad War: How Ambrose Bierce and Frank Norris Took On the Notorious Central Pacific Railroad, recounts how two writers helped expose the corruption of the Central Pacific to the country.

Of the two, Ambrose Bierce is probably the better remembered. In 1896, his great successes—his Civil War stories and Devil’s Dictionary—were behind him. He was a fading journalist looking to revive his career. The opportunity came when William Randolph Hearst asked him to cover a congressional funding bill and the actions of Central Pacific’s owner-builder, Collis Huntington.

The last of the Central Pacific’s founders, Huntington had arrived in Washington with an army of lobbyists, hoping to convince Congress to forgive a debt of $75 million. The government had loaned his company this amount in 1866 to build the railroad eastward over the Sierras to link up with the Union Pacific. A Supreme Court decision had freed the railroad from paying back a single penny of the loan for 30 years. Now, with that grace period about to expire, Huntington believed he could convince the government to write off the loan.

Huntington didn’t count on Bierce, who began filing scathing reports from the Washington hearings on the railroad’s misdeeds and bribery of government officials. Bierce created so much noise over the deal that legislators who’d been longtime friends to the railroad suddenly forgot who had paid for their campaigns and opposed forgiving the debt.

Unfortunately, Drabelle gives us only small samples of the fiery denunciations that Bierce served readers of Heart’s papers. Even if readers couldn’t understand all the references, they would appreciate Bierce’s skills with an acid-tipped pen.

The other author in Drabelle’s account is Frank Norris, a promising young novelist who set out to expose the corrupting influence of the Central Pacific in his 1901 novel, The Octopus. Norris further damaged the railroad’s reputation by dramatizing several events in which the railroad had imposed its will on California’s government, businesses, and communities. Unfortunately, some of the events Norris used were based more on legend than fact, as Drabelle points out. However, he includes a factual account of the shootings at Mussel Slough, which he contrasts with Norris’ fictionalized version.

The Octopus became an important bestseller in the Progressive Era, and one of the more readable muckraking texts of the early 20th century. As Drabelle points out, the novel was more than simply an attack on the railroads’ executives. Norris was chiefly concerned with how the railroad and the wheat market, as vast, inhuman forces, shaped the destiny of all who came close to it.

For both writers, their critiques of the railroads marked the high point of their careers. Bierce drifted off into war-torn Mexico and was never seen again. Norris died young, never finishing the trilogy he had begun with Octopus. (The second book, The Pit, first appeared as a serial in the Saturday Evening Post.)

Drabelle narrates this tale of railroads and reformers with enough context that the reader gets a sense of the scale of fortunes and corruption in this great American epic.

The Great American Railroad War is available on Amazon.

Book Review: The Great American Railroad War The Saturday Evening Post

September 17, 2012, marks the 150th anniversary of the Battle of Antietam, the bloodiest single-day battle in American history.

Late in the second year of the Civil War, the Confederate army switched from defense to offense. General Robert E. Lee marched the Army of Northern Virginia into Maryland, which had remained loyal to the Union.

He had recently defeated the Union forces at the Second Battle of Bull Run and decided it would be better to keep the momentum from this victory by a march into Union territory. Maryland was the natural choice; a large number of slaveholders in the state were strong supporters of the Confederacy. Lee hoped they would join his army and bring needed supplies. If he could score a victory against the Union forces, the Confederacy might win recognition from Great Britain and France. If so, the South could resume trade with Europe. The British Navy would break the Union’s blockade so that cotton could be shipped to the mills that were now laying idle from lack of material. Lincoln would have to fight the Confederacy and the British Empire. If Lee could win a victory.

The odds were in his favor. He was opposed by the Union’s General McClellan—an able administrator but a hesitant commander who always over-estimated the enemy. He had resisted Lincoln’s orders to move south toward Richmond. When Lincoln finally ordered him south, he was bluffed out of a strong position outside Richmond, Virginia, so close he could hear the church bells of the city.

Now Lee was coming at him. For the first time, the great Confederate commander would fight an offensive campaign, which was always more risky. It didn’t help that a union soldier found a copy of his strategy, copied for his generals. McClellan would never again have such an advantage. The Southern command soon realized that the orders had been found by the Union, but Lee stayed with his plan. McClellan attached Lee and, at Antietam, had the advantage for once.

Had he been a more decisive general—as determined as General Grant, for example—he might have defeated and captured Lee’s army. But McClellan wasn’t that bold or imaginative a general. And Lee was. The Confederates were able to withdraw their forces in the face of a large Union army.

All the same, it was a rare defeat for the Confederates. And for both sides, it was particularly bloody. In one day, nearly 23,000 Americans were killed, wounded, or missing.

Lincoln was shocked that General McClellan would not pursue the Confederate army and make it a decisive, war-determining battle. Yet, it was still a victory, and there had been very few for the North. Lincoln used the opportunity to announce a momentous change in policy, and a change in the direction of the war.

The following is taken from “The Recent Contests” from The Saturday Evening Post, September 27, 1862.

A week of anxiety ends with the joyful assurance that the rebel invaders have been forced to fly from “Maryland, My Maryland,” and entirely give up for the present the prospect of overrunning Pennsylvania.

It is evident that it was a most desperate struggle, in which though we can scarcely claim a decisive victory, the balance of advantages was decidedly in favor of the Union forces. The next day both armies were apparently too much exhausted to recommence the contest, the rebels probably secretly employing themselves in commencing their retreat into Virginia. On Friday, judging from our present advices, they completed their passage of the Potomac—with how much loss of men, trains, and artillery, we are yet unable to say. The amount of such loss of course will determine the extent of the disorganization they have sustained, and the character of the defeat they have suffered.

It is probable that the designs of the rebels in their recent movement were as follows:

1. To capture Harper’s Ferry and the 12,000 men at that place, by surrounding it, and moving on it from the North, from which side it is said to be least defensible, the Maryland heights being higher than the Virginia ones.

2. To replenish their supplies.

3. To raise Maryland in their favor, and largely recruit their forces.

4. To menace Baltimore and Washington, and the railroad communications of those cities with the North.

5. To invade Pennsylvania by way of the Cumberland Valley, allow us in this state to feel the ravages of war, supply themselves at will from our overflowing resources, and sicken us of the contest.

Of all these object the rebels have gained the first, and, it may be, in a degree, the second. Owing to shameful incompetency or treachery, Harper’s Ferry was captured. Whether the report of the recapture is true, we are at present unable to say.

But Maryland would not rise—even her secessionists will not put their property and lives in peril on so desperate a venture. For they see that even if the North were defeated, and the Union allowed to be dissevered, the North and Pennsylvania must at least insist on the Potomac for a border line.

To cross the Potomac is in fact to invade Pennsylvania—recent events have impressed this upon the great majority of our population. It therefore does not seem possible for Maryland to be severed from Pennsylvania without exposing both of them to great peril.

Antietam: Our Post-Battle Report The Saturday Evening Post

As we honor the victims of Sept. 11, we are also reminded how our country came together to stand as one.

The Golden Rule
by Norman Rockwell
April 1, 1961

We love Norman Rockwell’s 1961 Post cover, The Golden Rule, which reflects that same sentiment. Each person depicted in this illustration is one of Rockwell’s neighbors from Arlington, Virginia, and Stockbridge, Massachusetts. It represents the universal fact that all men, great or unknown, are members of one family.

After The Golden Rule appeared as a magazine cover, Rockwell was presented with the Interfaith Award from the National Conference of Christians and Jews, recognized for “his dedication to the highest ideals of amity, understanding, and cooperation among men.”

Remembering Sept. 11 The Saturday Evening Post

Thank you for a balanced, thoughtful and insightful piece. I believe that, even with Normandy, Iwo and the Bulge, the Canal was the seminal moment, the tipping point, for our victory in the Pacific, a war we (the United States) won alone. As a combat veteran and the son of a WW2 veteran I sincerely thank you.

Respectfully,

– CWO2 Stephen A. (USAFA, Ret.)

Paul A. Nilsson, Col., US Army, as a Captain in Guadalcanal.

I wrote this piece in memory of one of those Army engineers who endured the Japanese suicide attacks, and the bombings every night, huddled in a watery trench in the jungle, waiting for dawn and another day of fixing the holes in Henderson Field.

He was one of the fortunate ones who survived, though he was eventually shipped stateside after contracting malaria and dengue fever and losing over a third of his weight. I know almost nothing of what he experienced. Like many World War II veterans, he would never speak of what he saw or endured to his sons.

Regarding “A Turning Point in the Solomons” The Saturday Evening Post

This August marks the 70th anniversary of the assault on Guadalcanal.

But in early August, the U.S. began its offensive in the Solomon Islands, northeast of Australia. On the morning of August 7, 1942, the U.S. Marines made their first amphibious landing in 44 years at Guadalcanal.

The Japanese had landed on the island in June and started building an airfield.

Before the Japanese were finally forced to evacuate the island in early 1943, a total of 48 warships had been sunk. Ashore the Japanese lost 24,000 men; the U.S., 1,752.

When completed, it would enable their bombers to push the U.S. and Australia out of the Solomons and even strike the Australian mainland.

Samuel Eliot Morison was the official naval historian at the time, and had already begun writing the complete naval history of World War II. By the time he finished his 15-volume account, he had studied every naval engagement of the war. This is what he said about Guadalcanal in an article written on July 28, 1962, in the Post:

“You may search the seven seas in vain for an ocean graveyard with the wrecks of so many ships and the bones of so many sailors as that body of water between Guadalcanal, Savo and Florida islands which our bluejackets called Ironbottom Sound.

“There is something sinister and depressing about that Sound. [The marines] who rounded Cape Esperance in the darkness before dawn on 7 August remembered, ‘it gave you the creeps.’ Even the land smell failed to cheer sailors who had been long at sea; Guadalcanal gave out a rank, heavy stench of mud, slime, and jungle. And the serrated cone of Savo Island looked as sinister as the crest of a giant dinosaur emerging from the ocean depths.”

Marine LTVs approached neighboring island Tulagi.

The U.S. forces were understandably intimidated.  “The Japanese army in Malaya, the Philippines, and Java had acquired a reputation of invincibility, especially in jungle fighting, and its losses so far were minute. Their navy, despite its defeat at Midway, still had plenty of ships and planes to throw into the Solomons.” Fortunately, the Marine landing at Guadalcanal and neighboring Tulagi went well. By 4:00 PM, they had seized the unfinished airfield.

“Things looked very bright for the Expeditionary Force. Then, shortly after midnight, [began] the worst defeat in a fair fight ever inflicted on the United States Navy.” A Japanese task force of seven cruisers and one destroyer descended upon the Expeditionary Force, shot up the landing craft, and left the Marines without their naval supply line. Proceeding on to Savo island, they attacked first the Australian, then the American ships. Miscommunication, bad luck, poor judgment, and the element of surprise combined to give the Japanese a sizeable victory.

Japanese bombers attacked the American squadron off Guadalcanal.

“It was not a decisive battle and not an unprofitable defeat,” wrote Morison, “although the cost was heavy—four heavy cruisers and one destroyer a total loss; 1270 officers and men killed and 709 wounded. … The Navy held an investigation, which found the blame so evenly distributed that nobody was punished.  And it is well that Admiral Turner, primarily to blame, was not put ‘on the beach,’ because he became the leading practitioner of amphibious warfare in the Pacific. Many lessons were learned from this disastrous battle.”

As so often before, America’s entry into the war was marked by costly mistakes. Not being a warrior nation, we start each conflict with a civilian attitude and a reliance on what worked in the last war, and we are handed defeats. Fortunately, the American military always learns from these mistakes.

Smoke rose from a burning American ship in Savo Bay.

At night, the Marines threw back repeated suicide attacks by the Japanese garrison. In the morning, Army engineers began to repair the bombing damage to Henderson airfield so vital supplies could be flown in.

Marines operated a howitzer near Mount Austen on Guadalcanal, sketched by Sgt. Howard Brodie.

“Ship losses were fairly balanced; two American light cruisers and four destroyers against two Japanese destroyers and a battleship. … But the enemy bombardment mission was completely frustrated.”

The Grumman F4 at Henderson Field.

America didn’t know it was a turning point in the war. Military planners worried that every island battle across the Pacific would be just as long and bloody. But in 1962, Morison could point to Guadalcanal as “a definite shift of America from defensive to offensive, and of Japan in the opposite direction. Fortune now, for the first time, smiled on the Allies everywhere: not only here but in North Africa, at Stalingrad, and in Papua.”

Marines at rest in a Guadalcanal field, November 1942.

Credit for victory in the Solomons should be given to over 80,000 Allied soldiers who fought there, and especially the 10,000 who died. But just as valuable as their fierce devotion and sacrifice was America’s readiness to learn from mistakes, to bring in better commanders, and to continue fighting when the grim price seemed too high. It was this spirit that prompted Winston Churchill to say, in 1942, “Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”

A Turning Point in the Solomons The Saturday Evening Post

J.P. Morgan - Wikipedia

The Federal Reserve is an independent central bank that derived its power in the aftermath of the Panic of 1907—a crisis caused by several factors: contraction of money supply, falling stock prices, and a failed attempt to corner the copper market. Leery of banks, depositors withdrew savings in droves. The run ignited widespread concern in banking circles and Congress. As the crisis unfolded, prominent financier J.P. Morgan intervened, using his money (and recruiting help from fellow bankers) to keep banks afloat and prevent the New York Stock Exchange from going under. Many considered Morgan a hero for saving the economy, but the perception changed as the public came to believe Wall Street bankers actually caused the panic.

Senator Nelson Aldrich - Wikipedia

In response to the outcry for banking reform, Congress created the National Monetary Commission to review bank policies and develop a sound national monetary system. Chairing the Commission was Senator Nelson W. Aldrich, who, closely aligned with bankers, had no intention of leaving them out when crafting the Federal Reserve Act—not an easy task given the public’s attitude against the concentration of wealth and power.

Frank A. Vanderlip - Wikipedia

But something had to be done. At the request of Senator Aldrich and Assistant Secretary of the Treasury A. Piatt Andrew, five of the nation’s top financiers arrived at the exclusive Jekyll Island Club on the Georgia coastline for one purpose: to devise a plan to restructure banking in America.
In “From Farm Boy to Financier,” an article in the February 9, 1935, issue of the Post, author Frank A. Vanderlip—a leading banker and former Assistant Secretary of Treasury for President William McKinley—chronicled the top-secret meeting that helped create the Aldrich Plan, which would frame the Federal Reserve Act.

A. Piatt Andrew - Wikipedia

In the Post story, Vanderlip outlines events leading up to the meeting on Jekyll Island. Aldrich had visited central banks in Europe and returned to the U.S. with no firm plan to address the crisis. Concerned about the report he was expected to present as a bill to Congress, Aldrich concocted a scheme to bring together an elite group to help draft reforms. To ensure secrecy, Aldrich invited five key leaders from banking and government—Henry Davison, A. Piatt Andrew, Benjamin Strong, Paul Warburg, and Vanderlip—to the isolated Jekyll Island Club—“without a journalist within 50 miles.”

Henry Davison - Wikipedia

Vanderlip recounted how the men arrived “… one at a time and as unobtrusively as possible to the railroad terminal on the New Jersey littoral of the Hudson, where Senator Aldrich’s private car would be in readiness, attached to the rear end of a train for the South.” So great was the need for secrecy that last names were taboo—even among the five men. The train crew was kept unaware of the identities of the car’s prominent passengers to prevent any leaks to the press.

“We were taken by boat from the mainland to Jekyll Island and for a week or ten days were completely secluded, without any contact by telephone or telegraph with the outside. Even the servants had no idea who the men were. We had disappeared from the world onto a deserted island…. We worked morning, noon and night…. We stuck to our plan of putting down on paper what we agreed upon.”

Vanderslip acted as secretary. In the Post, he describes in minute detail the plan beginning to take shape. At issue was the fact that the country hadn’t had a central bank for 75 years and a belief that the lack of central authority was responsible for the current financial crisis. But establishing a new national bank was perceived as a dangerous recipe for excessive power and corruption: “If it was to be a central bank, how was it to be owned—by the banks, by the Government, or jointly? Should it restrict its services to banks? What open-market operations should be engaged in? … at the end of our week, we had whipped into shape a bill that we felt, pridefully, should be presented to Congress …. We returned to the North as secretly as we had gone South. Senator Aldrich would present the bill we had drafted to the Senate. It became known to the Country as the Aldrich Plan.”

Benjamin Strong - Wikipedia

Unfortunately when Congress was slated to meet, Aldrich was “too ill to write an appropriate document to accompany his plan.” Strong and Vanderlip went to Washington and prepared that report. However, at the time, both political parties opposed the idea of a central bank as did a distrustful public, so the bill was defeated. But as Vanderlip wrote, the Jekyll Island group’s plan greatly influenced the final Act eventually adopted by Congress: “Although the Aldrich Federal Reserve plan was defeated … Aldrich undoubtedly laid the essential, fundamental lines which finally took the form of the Federal Reserve Law.”

To read Frederick E. Allen’s article on banking, go here.

Jekyll Island and the Secret Behind the Fed The Saturday Evening Post

It began in the colonial era when we had no conventional banks of our own. Banks were all in England, and England made sure they stayed there. So banks, right from the start, represented the wealth and domination of our foreign overlords. We didn’t even have a single kind of money; people used British and French coins and Spanish dollars, among other things, or just bartered goods. In Virginia, tobacco was used as money. Some colonies issued paper notes redeemable in gold. Not until 1775 did the Continental Congress issue the first all-American paper money used to fight the Revolution. With no gold or silver backing, the currency quickly lost value—thus the expression “not worth a Continental,” which survives even today.

It was Thomas Jefferson who gave birth to the American dollar and came up with the then-novel idea to divide it into an utterly rational 100 cents. Shortly afterward, Alexander Hamilton founded one of the new country’s first banks, the Bank of New York. He was still in his twenties at the time, and five years later he became the first Secretary of the Treasury.

1791: Our First National Bank

If you disapprove of the national debt, the blame goes back to Hamilton. He argued that the nation needed to be able to take on debt—to issue bonds and to invest in building and growth. National debt also was a tool that allowed the federal government to take over the various states’ crushing war debts. To oversee the flow of money, regulate all the country’s smaller banks, and manage the debt, he founded a national bank (the Bank of the U.S.).

Hamilton’s idea was that only a central bank could impose order on American money and banking. But Jefferson opposed the idea bitterly. He embodied the American horror of banks as manipulative tools of the rich. He once wrote, “My zeal against those institutions was so warm and open at the establishment of the Bank of the U.S. that I was derided as a Maniac by the tribe of bank-mongers, who were seeking to filch from the public their swindling, and barren gains.”

Jefferson was vindicated when almost right away there was a banking scandal. In 1792 people began starting up new banks and selling stock in them; there were rumors that the new national bank would buy at least some of the stocks, and a speculative bubble formed, expanded, and burst. The main speculator, William Duer, wound up in debtor’s prison, and Jefferson estimated that $5 million was lost.

In 1811 the Bank of the U.S.’s charter was allowed to expire, and, with no central authority, the banking business quickly became messier—true to Hamilton’s prediction. There was no national paper money, only banknotes printed by individual banks, and they were typically worth far less than their face value, depending on how much faith people had in the banks behind them. For the entire century, a series of tumultuous events periodically sapped American faith in the banking system. The major disasters included:

• Depression. A deep national economic depression that lasted for years hit in the late 1830s. The problem was caused by a rash of speculation on Western lands paid for with paper money issued by weak banks.

• Crash. Another big banking collapse followed in 1857. The blame is traced to the California Gold Rush, which pumped excessive amounts of money into the economy, leading to a tsunami of reckless borrowing and lending.

• Bad paper. In 1861 President Lincoln started printing the first federal paper money to pay for the Civil War. But without a federal bank behind the money, it lost value just like the old Continentals. In fact, the government itself didn’t accept these “greenbacks” for payment of taxes.

• Bust. Another speculative bubble burst in 1873 leading to still another depression that lasted six years.

• Panic. In 1893 a financial fever broke out that put more than 500 banks out of business, leaving many of their customers broke. The main problem this time was that silver strikes in the West meant there was suddenly a glut of silver. Therefore silver coins became worth less for the value of the raw metal than gold ones despite their equivalent face values. Naturally people started buying the more valuable gold coins with their silver coins, draining the federal Treasury.

1861: Confederate Money

Although the country had no federal bank in these years, it did finally get a head of banking, but a completely unofficial, self-appointed one. That was John Pierpont Morgan, by far the most powerful banker of his age. Morgan believed that the most important thing in business was character—an all-too-rare virtue then as now. He once said that “a man I do not trust could not get money from me on all the bonds in Christiandom.”

Morgan stepped in as America’s unofficial head banker to solve the crisis of 1893, finding a way to buy gold in Europe to keep the Treasury from running out of the metal that was the basis of American money. Still, the nation had to endure a depression that lasted for years, and in the 1896 presidential election people who had put their money in silver—largely Western and rural people who hated banks—rallied behind William Jennings Bryan and his famous proclamation that “you shall not crucify mankind upon a cross of gold.”

By 1907 the economy had grown much bigger than all the government’s gold could cover, yet the nation was still on a gold standard. That meant too much borrowing and too much circulating money against too little metal on reserve to guarantee the money’s worth. Another panic hit, and again Morgan had to come to the rescue. He announced that “if people will keep their money in the banks, everything will be all right.” That was entirely true, but saying so wasn’t enough. He singlehandedly called all the nation’s top bankers to his New York City mansion and got them to raise money so cash could keep flowing and to cooperate to keep weaker banks from going under.

This time a depression was averted, but the need for a strong central national bank was finally recognized. It came into existence in 1913 in the form of the Federal Reserve (Read on the Federal Reserve). The Federal Reserve could try to control the health of the economy and banks in general by setting interest rates for its own lending that would set a standard for how much or little borrowing and lending there would be, slowing down the economy when there was too much money and exuberance and speculation and then turning the spigot back on when there was too little. That worked, most of the time, until the Stock Market Crash of 1929 and the Great Depression that followed.

Financial game-changers who are on the money.
Click on the image to view it full size.

The Crash of 1929 was driven by the widespread belief in an endlessly growing economy. (continued on page 70) There was wildly excessive borrowing and investing in overvalued stocks. When it all came tumbling down, banks failed by the thousands. More than 3,000 of them went under in 1931 alone. Another 1,453 failed in 1932, and thousands more in 1933.

In 1933 Franklin Roosevelt was elected president. He leapt into action, immediately closing all the nation’s banks for several days as he pushed through Congress a bill to give the government unprecedented new powers to regulate the whole system. He also effectively took the nation off the gold standard, allowing the dollar to decline in value so that people’s debts would be worth less—and easier to repay. He made the Federal Reserve much stronger than it had been before. And, most important, he pushed through the Glass-Steagall Act. That law put a federal guarantee behind bank deposits, automatically increasing public confidence in them, and it also made banks choose to be either deposit businesses or investment businesses but not both. Banks could no longer be safe harbor for people’s hard-earned savings and casinos at the same time.

Finally, after more than a century and a half, the U.S. had a truly solid banking system. There had been runs on banks and major waves of bank failures throughout our history; there hasn’t been one since. This country has not been immune to crises, however. In the early 1980s there was the savings and loans (S&Ls) debacle. S&Ls were small local savings banks that dealt mainly in savings accounts and home mortgages instead of checking accounts and business loans. They ran into trouble because they weren’t allowed to raise the interest rates they paid on savings accounts when interest rates everywhere else were rising, so people started withdrawing their money from them. The government responded by letting them raise those rates, but the banks’ home mortgages didn’t make enough money to pay for the high rates. S&Ls went bankrupt en masse, and the federal government had to pay $20 billion in insurance to their depositors.

In the 1990s the federal government for the first time let banks operate across state lines, leading to a long series of mergers and the rise of the nationally operating institutions we’re all familiar with today. Unfortunately, it also—after more than half a century of dependable if unexciting banking—lifted Glass-Steagall’s ban on speculative investment by deposit banks.

2008: As banks teeter on verge of collapse, George W. Bush asks Congress for emergency funds. TARP Program loans banks $700 billion. Fallout: Most banks have since repaid TARP loans plus interest, but economic damage lingers. Many argue bailout undermines confidence in free enterprise system.

That development was one of the causes of the recent Great Recession, as banks discovered they could make the most of the housing boom—which turned into the housing bubble—by gambling on it, bundling ever-more-dubious mortgages, slicing them up, and blending them together to turn them into seemingly fail-safe investments. The banks’ gamble ended not only with millions of Americans bankrupt and homes in foreclosure but also with the huge government bank bailouts of late 2008. It then led to new attempts at stronger regulation again, including the Dodd-Frank Act and its Volcker Rule, which attempts to reinstate some of Glass-Steagall’s prevention of speculative betting by banks. However, many bankers are aghast at the new regulations, especially the Volcker Rule. Jamie Dimon, the head of JPMorgan Chase, recently said of the former Federal Reserve chairman who devised the rule, “Paul Volcker by his own admission has said he doesn’t understand capital markets. He has proven that to me.” The law is unquestionably extremely complex and expensive for banks to implement. Its proponents say it will keep the economy safe; its enemies say it will strangle the economy.

In other words, after centuries of hard experience, we still can’t agree about banking, how powerful banks should be, or how free they should be to do what they want to—or think they must—do. What then have we learned, after more than 200 years of banking disasters? We’ve learned a lot, actually. We’ve gone from a small, new, rural frontier nation of no banks at all to the world’s modern economic behemoth with banks and banking power to match. We’ve grown very painfully at times, but we’ve grown in ways no one ever could have begun to imagine. And we at least were able to keep the Great Recession from becoming another Great Depression. Unemployment reached 10 percent in 2009, but it hit 24.9 percent in 1932—and didn’t fully recover until World War II.

In the end there may, sadly, be a limit to what we can learn and how much we can control about banking. The people who run banks are only human. They see the world imperfectly, as we all do, yet they must make decisions of great consequence based on what they see. Only a national bank can try to control the sum of what all the nation’s bankers do, but that is almost like controlling the weather. An economy is the total of everybody’s activities everywhere, so it is as complicated as all the wind and rain and sunshine in the world combined. And even if bankers were superhuman and we could truly dominate something as complex as weather or an economy, there would still be that vexing choice between risk and opportunity. We all want a higher return on our investments, but that means taking a greater risk that we’ll lose it all. We all want to borrow at lower rates, but that means less money going into banks to create those higher returns we want. We all want to take chances, but we don’t want to be hurt if those chances go wrong.

Our whole economic system, like our political system, is but a reflection of the imperfectability of human nature. And that is why capitalism is, as Winston Churchill once said of democracy, the worst possible way of doing things—except for all the other ways that have ever been tried.

BANKS: A Love Hate Story

U.S. Banks: A Historical Timeline.
Click on the image to view it full size.

We can’t live without banks, but that doesn’t mean we have to admire them. Banking excesses and the attempts to curb them have shaped our economy since the founding of the republic.

In recent years we’ve seen the bailout of some of our largest banks—with the resulting hue and cry of such diverse groups as Occupy Wall Street and the Tea Party. Most banks have since paid off their loans, but critics warn that a “too big to fail” mentality will ultimately harm the nation.

Will a few big players—the top five banks today control more than half of all U.S. assets­—now be encouraged to engage in even riskier behavior, knowing the government will step in to catch them if they fall? Have we undermined the free enterprise system—not to mention the American sense of fair play—by sending the signal that the system supports the strong and abandons the weak?

Finally, did the bailout even work? Four years later the financial markets are in better shape, but unemployment continues to be unacceptably high, state and local governments are starved for cash, and housing has not yet recovered.

Some experts also ask whether it is even possible to manage domestic finance in a global economy: Today, more than ever, the collapse of a foreign country would have disastrous ripple effects on our shores.

Love it or hate it, the bailout is best understood in the context of the historical tug of war between those who support federal banking authority and those who oppose it. The latter group warns of the excess power and potential for corruption in a central bank; those favoring a centralized bank believe a united authority is essential for managing the money supply and the national debt. Key dates in banking history are at right.

Read Jekyll Island and the Secret Behind the Fed for more history from the Post.

Too Big to Fail? The Saturday Evening Post

During the battle of Leyte Gulf in the Philippines, ships of America’s 7th fleet surprised a large taskforce of the Japanese fleet at Suriago Bay. Late in the ensuring gun battle between battleships, the Mississippi fired a salvo at the retreating Japanese ships. No one could have known at the time, but that twelve-gun volley was the last salvo fired by one battleship at another. The era of the decisive naval battle was ending.

For over 300 years, battleships had been one of the most important weapons a nation possessed.  By dominating sea lanes, battleships could decide the outcome of wars and the fates of nations.But after this last salvo, battleships stopped engaging each other in direct, decisive battle, and naval warfare came to rely on air and underwater forces.

Just as the age of the battleship ended, the age of the suicide bomber began. This is how William L. Worden, writing for the Post in 1945, described the appearance of kamikazes in Leyte Gulf.

A kamikaze pilot attacks the USS Columbia.

A lone aircraft comes out of a cloud with a strange deliberation. It reaches a spot over the outer rim of ships, and then, seeming more deliberate than ever, the plane tips over into a steep nosedive. It is not a smooth dive. Tracers cut holes in the plane before it is well started down. Bigger shells take off pieces of the wings and crash into the cockpit. But the plane is traveling on a near-vertical course and does not veer.

The plane crashes head-on into the rigging of a ship. A cargo boom swings wildly, wreathed in fire from the plane’s gasoline tanks. The plane [crashes] through radio aerials and cargo lines, and into the sea a hundred feet beyond the target vessel. There it burns awhile, then sinks.

Conservatively, there have been well over 1,000 such dives against shipping all the way from the Philippines to the sea 100 miles off the mouth of Tokyo Bay. ["Kamikaze: Aerial Banzai Charge," William L. Worden, June 23, 1945]

Suicide dives were not new, as Worden pointed out, nor were they unknown among American fliers.

Individual airmen of most of the world’s flying forces [have], at one time or another, used it as a desperate last-minute attack when they knew they were going to crash anyhow.

You may remember that Maj. Lofton Henderson, of the Marine Corps—for whom Henderson Field at Guadalcanal is named— was last seen diving his flaming, bomb-laden plane into the deck of a Jap carrier that was trying to flee from Midway.

It was also during the battle of Midway that fifteen pilots from a Navy Torpedo Squadron flew directly into the fire of Japanese ships knowing they had almost no chance of survival. (Just one pilot survived.)

The difference between a true suicide dive and the attacks Torpedo Squadron 8 made is an almost indistinguishable hair line.

A kamikaze pilot steers his plane toward a collision with the USS White Plains, October 25, 1944.

The important difference, Worden said, was the official nature of these suicide tactics. The Japanese military had purposely ordered the strategic suicide, making it a part of official government strategy.

Did it work? Official military reports at war’s end concluded that kamikazes had sunk 34 and damaged 368 ships. They had also killed 300 and wounded over 4,000 American servicemen.

The Japanese military might have thought kamikaze attacks would ensure victory. But by the end of the battle for Leyte Gulf, even they realized it was hopeless. Still they ordered their men to continue flying into U.S. ships. And they assured their men that vast numbers of kamikazes were held in reserve to halt any American invasion of Japan. In another Post article, a captured Japanese air commander told his American interrogator that—

“we had a plan to send out our entire kamikaze strength—more than two thousand planes—in wave after wave.”

What damage did be estimate this would have inflicted?

” Fifty to seventy-five per cent of your force,” he said. “All the carriers. Many other ships as well.” He added that they would have saved some six hundred of their best new fighter planes for a last-ditch aerial defense of the homeland. ["A Japanese Officer Explains Nippon Mistakes," Lt. S.P. Walker, USNR, Nov. 11, 1945]

The Japanese military hadn’t expected that their kamikazes would motivate the Navy to be more vigilant and to fight smarter. They hadn’t considered losing and answering for their barbarities. They couldn’t have dreamed that their suicide bombers would be a factor in America’s decision to use a nuclear weapon on them.

A government that employs suicide attacks ignores the historic failure of terrorism, the inevitable day of earthly reckoning with an outraged enemy, and the fact that America can’t always be relied on to forgive and forget. By stiffening the resolve of its enemies, terrorists forge the weapon that will destroy themselves.

Broadsides and Suicides: How War Changed During Three Days The Saturday Evening Post

In his most recent book, Alexander the Great, classics professor and author Philip Freeman explores the ancient ruler, whom he calls “fascinating.” Freeman begins his tale with Alexander’s father, King Philip, and continues all the way through Alexander’s life and conquests to his death and legend.

Alexander the Great could be a boring book, fit only for history majors and Plutarch fans. Fortunately, Freeman set out to write “a biography of Alexander that is first and foremost a story”—and, in this, he succeeded. The book is not full of historical mumbo-jumbo that only scholars can understand and enjoy; rather, Freeman tells us about Alexander’s life like a novel—a remarkably interesting novel, to boot. Freeman brings the characters to life, making them seem real and relevant rather than people whose bones have long since faded to dust.

We learn in the book that Alexander’s yearning for conquest began at an early age, as he followed in the footsteps of his mighty father, who felled the city-states of Greece. Freeman relates events from Alexander’s youth, including his parents’ divorce and his annihilation of the famous warriors of the Theban Sacred Band. My personal favorite anecdote, however, is the story of his acquisition of Bucephalas, the horse who would follow him “to the ends of the earth” on his quest to dominate.

Freeman details Alexander’s conquests right up until the king’s death, concluding with the redistribution of his empire and the effect of his legacy. Along the way, he explores what drove Alexander’s passions and the battles and conquests that earned him the title “the great.”

The greatest victory of the book, however, is Freeman’s storytelling. This biography stands out from others written about Alexander thanks to its smooth flow and interesting narrative. It is, as Freeman hopes, a history book for those readers who are not already experts on Alexander or his world.

Alexander the Great is available now from Simon & Schuster at a list price of $30.

Alexander the Great The Saturday Evening Post

There’s nothing quite like a teddy bear. At some point, every child has—and loves—a stuffed bear. But for one family, a teddy bear wasn’t just a childhood playmate; it was the key to millions of hearts all around the world.

That bear’s name, of course, was Winnie-the-Pooh.

In her new book Life and Times of the Real Winnie-the-Pooh, The: The Teddy Bear Who Inspired A. A. Milne, Shirley Harrison goes beyond the books, movies, and TV shows, delving into the bedroom of the real-life Christopher Robin where the stuffed bear and his friends once played.

Christopher Robin’s father, A. A. Milne, was enchanted by his son’s teddy bear, which was brought to life by Christopher Robin’s mother, Daphne. His wife and son’s imaginative games inspired Milne to pen stories about the bear and his friends—which were later adapted to the silver screen by Walt Disney.

In her book, Harrison shares intimate knowledge of the Milne family as well as stories collected from family and friends about the real Christopher Robin’s childhood and his famous stuffed companion. She recounts Pooh’s journey from London to the English countryside to New York—where he and some of his co-stars remain to this day. Harrison also shares the details of Pooh’s “life,” including his friendships with famous authors and his travels on both sides of the Atlantic as he was given the VIP treatment.

I loved Winnie-the-Pooh as a child, and I thoroughly enjoyed learning about his creation in Harrison’s charming book. To me, Winnie-the-Pooh was always an animated bear in a red shirt who loved “hunny” and playing with his animal friends. Reading this well-researched account gave me the opportunity to discover the story of the real Pooh—from the moment Daphne Milne brought him home to his journeys in the U.S. to his philanthropic activities. This book is a must-read for anyone who has ever visited the Hundred-Acre Wood.

Life and Times of the Real Winnie-the-Pooh, The: The Teddy Bear Who Inspired A. A. Milne by Shirley Harrison will be available as a 192-page hardcover from Pelican Publishing on October 1 at a list price of $24.95.

The Life and Times of the REAL Winnie-the-Pooh The Saturday Evening Post

In her book Tea Culture: History, Traditions, Celebrations, Recipes & More, Beverly Dubrin covers many tea-related topics—from a brief history of the discovery of tea to information about different kinds of tea and their respective health benefits. Readers will discover a wealth of information about the drink and how people have consumed it over the centuries. Dubrin, a longtime tea fan, gives tips on how to steep different types of tea and how to get the best-tasting beverage.

In addition to fun informational snippets, Tea Culture includes dozens of full-page photographs with subjects ranging from 19th-century tea drinkers to tea plantation workers. Dubrin also includes recipes for different types of tea drinks as well as some sandwiches and snacks to make every tea party complete! For our own tea party here at the Post, we decided to try two recipes from the book—Spicy Apple Tea and Marion’s Dream Bars. They were both delicious! In fact, we liked them so much that we decided to include the recipes elsewhere on the site.

As someone who drinks tea in part to alleviate blinding headaches, I particularly appreciated the section of the book on the health benefits. Much is made of its miracle effects on such serious problems as heart disease and cancer, as well as its power in calming anxiety, aiding digestion, and lowering blood pressure; it’s good to get the true story and learn about which teas and tisanes help with specific ailments.

Tea Culture: History, Traditions, Celebrations, Recipes & More, a 144-page hardcover from Imagine Publishing, is available now at a list price of $18.95.

Tea Culture: History, Traditions, Celebrations, Recipes & More The Saturday Evening Post

History is full of bizarre people and events, and Joe Rhatigan chronicles them in his book Bizarre History: Strange Happenings, Stupid Misconceptions, Distorted Facts and Uncommon Events
. Rhatigan takes us through history, from ancient Egypt to the Middle Ages to the 20^th century, revealing everything from strange wars to crazy rulers.

This book is everything that you never learned in a history class: early campaign mudslinging (John Adams’s people said that Jefferson would burn Bibles and outlaw marriage while the Jefferson camp claimed that Adams planned to start a new royal line as King John I), embarrassing family members (Jimmy Carter’s brother judged a world belly flop competition and endorsed a beer), presidential pets (including some alligators), the history of high heels (not just for women!), and more.

They say that truth is stranger than fiction, and Rhatigan proves it with this laugh-out-loud history of the world. Even the biggest history buffs are sure to learn something as the book travels from the American heartland to the steppes of Asia and back with humorous and completely true anecdotes.

Bizarre History is a must-read for everyone who thought that high school history was lacking a little something. This hilarious collection of historical footnotes certainly kept me turning its pages!

Bizarre History: Strange Happenings, Stupid Misconceptions, Distorted Facts and Uncommon Events by Joe Rhatigan will be released as a 157-page paperback from Imagine Publishing on October 1, 2011 at a list price of $7.95.

Bizarre History The Saturday Evening Post

But pirates operated in other waters as well. In his latest book, Pirates of Barbary: Corsairs, Conquests and Captivity in the Seventeenth-Century Mediterranean, historian Adrian Tinniswood delves into the world of North African pirates under the rule of the Ottoman Empire.

The Barbary corsairs wreaked havoc from Gibraltar to the Dardanelles for more than a century, earning the wrath of the great European nations and making names for themselves in history. They had their own heroes—John Ward, an English traitor who turned corsair and sailed the seas with his captured fleet; Simon Dansekar, the “Devil Captain of Algiers”; and the Barbarossa brothers, who are credited with the rise of Ottoman strongholds along the Barbary Coast.

But who were these men who ruled the Mediterranean and earned the enmity of European nations? Tinniswood recounts their exploits—from attacks on Spanish ships to raids on British-held Ireland. He also goes deeper, sharing the stories of their lives—their struggles, their loves, their victories, and their deaths.

Tinniswood tells the whole story, from the pirate Hizir’s conquest of North Africa to the death of Hamidou Rais, the “last of the great corsairs.” Pirates of Barbary is about the bloody conquest of the Mediterranean: land raids for captives that went as far north as Ireland; battles over the islands and the fight for the control of Crete; and the Ottoman takeover of North Africa. These corsairs battled and pillaged, fighting for money, empire, God, and control of the Mediterranean.

But this is not just a story about the Barbary corsairs; it is also the story of the European men who fought them, bargained with them, and—in some cases—came to respect them. These are the men who experienced firsthand life on the Barbary coast—Thomas Baker, an English consul in Tripoli who worked to keep peace between the nations; Edmund Cason, who tried to free European slaves held captive in Algiers; William Okeley, a former slave who led a successful escape attempt; and Sir Robert Mansell, who led an expedition against the Barbary Coast.

In Pirates of Barbary, Tinniswood gives readers a glimpse at real-life piracy that will thrill—and, at times, frighten—lovers of fantasy pirates like Captain Jack Sparrow. Given time, the heroes and villains of the Barbary Coast might just grow into legends to rival their Caribbean counterparts.

Pirates of Barbary: Corsairs, Conquests and Captivity in the Seventeenth-Century Mediterranean, a 343-page hardcover book from Riverhead Books, is available now at a list price of $26.95. It will be available in paperback on September 6 for $16.00.

Pirates of Barbary The Saturday Evening Post