November 29, 2011
Three years removed from the stock market crash of 1929, America was in the throes of the Great Depression, with no recovery on the horizon. As President Herbert Hoover reluctantly campaigned for a second term, his motorcades and trains were pelted with rotten vegetables and eggs as he toured a hostile land where shanty towns erected by the homeless had sprung up. They were called “Hoovervilles,” creating the shameful images that would define his presidency. Millions of Americans had lost their jobs, and one in four Americans lost their life savings. Farmers were in ruin, 40 percent of the country’s banks had failed, and industrial stocks had lost 80 percent of their value.
With unemployment hovering at nearly 25 percent in 1932, Hoover was swept out of office in a landslide, and the newly elected president, Franklin Delano Roosevelt, promised Americans relief. Roosevelt had decried “the ruthless manipulation of professional gamblers and the corporate system” that allowed “a few powerful interests to make industrial cannon fodder of the lives of half the population.” He made it plain that he would go after the “economic nobles,” and a bank panic on the day of his inauguration, in March 1933, gave him just the mandate he sought to attack the economic crisis in his “First 100 Days” campaign. “There must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and wrongdoing,” he said.
Ferdinand Pecora was an an unlikely answer to what ailed America at the time. He was a slight, soft-spoken son of Italian immigrants, and he wore a wide-brimmed fedora and often had a cigar dangling from his lips. Forced to drop out of school in his teens because his father was injured in a work-related accident, Pecora ultimately landed a job as a law clerk and attended New York Law School, passed the New York bar and became one of just a handful of first-generation Italian lawyers in the city. In 1918, he became an assistant district attorney. Over the next decade, he built a reputation as an honest and tenacious prosecutor, shutting down more than 100 “bucket shops”—illegal brokerage houses where bets were made on the rise and fall prices of stocks and commodity futures outside of the regulated market. His introduction to the world of fraudulent financial dealings would serve him well.
Just months before Hoover left office, Pecora was appointed chief counsel to the U.S. Senate’s Committee on Banking and Currency. Assigned to probe the causes of the 1929 crash, he led what became known as the “Pecora commission,” making front-page news when he called Charles Mitchell, the head of the largest bank in America, National City Bank (now Citibank), as his first witness. “Sunshine Charley” strode into the hearings with a good deal of contempt for both Pecora and his commission. Though shareholders had taken staggering losses on bank stocks, Mitchell admitted that he and his top officers had set aside millions of dollars from the bank in interest-free loans to themselves. Mitchell also revealed that despite making more than $1 million in bonuses in 1929, he had paid no taxes due to losses incurred from the sale of diminished National City stock—to his wife. Pecora revealed that National City had hidden bad loans by packaging them into securities and pawning them off to unwitting investors. By the time Mitchell’s testimony made the newspapers, he had been disgraced, his career had been ruined, and he would soon be forced into a million-dollar settlement of civil charges of tax evasion. “Mitchell,” said Senator Carter Glass of Virginia, “more than any 50 men is responsible for this stock crash.”
The public was just beginning to get a taste for the retribution that Pecora was dishing out. In June 1933, his image appeared on the cover of Time magazine, seated at a Senate table, a cigar in his mouth. Pecora’s hearings had coined a new phrase, “banksters” for the finance “gangsters” who had imperiled the nation’s economy, and while the bankers and financiers complained that the theatrics of the Pecora commission would destroy confidence in the U.S. banking system, Senator Burton Wheeler of Montana said, “The best way to restore confidence in our banks is to take these crooked presidents out of the banks and treat them the same as [we] treated Al Capone.”
President Roosevelt urged Pecora to keep the heat on. If banks were worried about the hearings destroying confidence, Roosevelt said, they “should have thought of that when they did the things that are being exposed now.” Roosevelt even suggested that Pecora call none other than the financier J.P. Morgan Jr. to testify. When Morgan arrived at the Senate Caucus Room, surrounded by hot lights, microphones and dozens of reporters, Senator Glass described the atmosphere as a “circus, and the only things lacking now are peanuts and colored lemonade.”
Morgan’s testimony lacked the drama of Mitchell’s, but Pecora was able to reveal that Morgan maintained a “preferred list” of friends of the bank (among them, former president Calvin Coolidge and Supreme Court justice Owen J. Roberts) who were offered stock at highly discounted rates. Morgan also admitted that he had paid no taxes from 1930-32 because of losses following the crash of 1929. Though he had done nothing illegal, the headlines damaged him. He privately referred to Pecora as a “dirty little wop” and said he bore “the manners of a prosecuting attorney who is trying to convict a horse thief.”
At a break in the hearings, a Ringling Bros. press agent barged into the room, accompanied by a performer named Lya Graf, just 21 inches tall. “Gangway,” the agent shouted, “the smallest lady in the world wants to meet the richest man in the world.” Before Morgan knew what was happening, the diminutive lass was perched on the tycoon’s lap, and dozens of flash bulbs popped.
“Where do you live?” Morgan asked the girl.
“In a tent, sir,” she answered.
Senator Glass’s description of the hearings proved prophetic; the atmosphere had become truly circus-like. And although Morgan’s appearance marked the height of the drama, the hearings continued for nearly another year, as public outrage over the conduct and practices of the nation’s bankers smoldered. Roosevelt took advantage of the public sentiment, arousing broad support for regulation and oversight of the financial markets, as the Pecora Commission had recommended. After passing the Securities Act of 1933, Congress established the Securities and Exchange Commission to regulate the stock market and to protect the public from fraud. The Pecora commission’s report also endorsed the separation of investment and commercial banking and the adoption of bank deposit insurance, as required by Glass-Steagall, which Roosevelt signed into law in 1933.
By investigating Wall Street business practices and calling bankers in to testify, Ferdinand Pecora exposed Americans to a world they had no clue existed. And once he did, public outrage led to the reforms that the lords of finance had, until his hearings, been able to stave off. His work on the commission complete, Pecora had hoped to be appointed chair of the SEC. Instead, Roosevelt surprised the nation by naming Joseph P. Kennedy to the position—a reward, many assumed, for Kennedy’s loyalty during FDR’s campaign. When asked why he’d chosen such a manipulator as Kennedy, FDR famously replied, “Takes one to catch one.” Pecora was nominated as commissioner of the SEC, where he worked under Kennedy.
In 1939, Pecora published Wall Street Under Oath, which offered a dire warning. “Under the surface of the governmental regulation, the same forces that produced the riotous speculative excesses of the ‘wild bull market’ of 1929 still give evidences of their existence and influence.… It cannot be doubted that, given a suitable opportunity, they would spring back into pernicious activity.”
Ferdinand Pecora would be appointed as a justice on the New York State Supreme Court in 1935 and run unsuccessfully for mayor of New York City in 1950. But he had already left his legacy: his investigation into the financial abuses behind the crash of 1929 led to the passage of the Securities Act, the Glass-Steagall Act and the Securities Exchange Act. The protections he advocated are still being debated today.
Books: Michael Perino, The Hellhound of Wall Street: How Ferdinand Pecora’s Investigation of the Great Crash Forever Changed American Finance, Penguin Press, 2010. Charles D. Ellis with James R. Vertin, Wall Street People: True Stories of the Great Barons of Finance, Volume 2, John Wiley & Sons, Inc, 2003.
Articles: “Mitchell Paid No Tax in 1929,” Daily Boston Globe, Feb. 22, 1933, “Clients ‘Sold Out’ As National City Saves Officers,” The Atlanta Constitution, Feb. 23, 1933. ”Pecora Denounces Stock Manipulation,” New York Times, Feb 19, 1933. ”Pecora to Question Private Bankers,” New York Times, March 16, 1933. “Where is Our Ferdinand Pecora?” by Ron Chernow, New York Times, Jan. 5, 2009. “Ferdinand Pecora, ‘The Hellhound of Wall Street’” All Things Considered, NPR, Oct. 6, 2010. http://www.npr.org/templates/story/story.php?storyId=130384189 “Ferdinand Pecora, An American Hero,” by Jackie Corr, Counterpunch, Jan. 11-13, 2003. http://www.counterpunch.org/2003/01/11/ferdinand-pecora-an-american-hero/ “Ferdinand Pecora Ushered In Wall Street Regulation After 1929 Crash” by Brady Dennis, Washington Post, Sept. 16, 2009. “Where Have You Gone, Ferdinand Pecora?” by Michael Winship, Bill Moyers Journal, April 24, 2009. http://www.pbs.org/moyers/journal/blog/2009/04/michael_winship_where_have_you.html “A Midget, Banker Hearings and Populism Circa 1933″ by Michael Corkery, Deal Journal, Wall Street Journal, Jan. 12, 2010. http://blogs.wsj.com/deals/2010/01/12/a-midget-banker-hearings-and-populism-circa-1933/ “When Washington Took on Wall Street” by Alan Brinkley, Vanity Fair, June 2010.
November 23, 2011
The gloomy, sprawling Victorian mansion is nestled in the center of Ham Common, a village outside London. During World War I, Latchmere House served as a hospital for the Ministry of Defence; officers were treated for shell shock in the bucolic setting along the Thames. But by World War II, Her Majesty’s Prison Service had taken control of the house and surrounded it with barbed wire. The silence there gave little indication of the intensity and importance of the work being done in the building known as Camp 020, MI5’s secret interrogation center. Within those walls, captured German agents were questioned under the command of a ferociously tempered British officer named Lieutenant Colonel Robin Stephens. Boorish, disdainful of the non-English but half-German himself, Stephens was nicknamed “Tin Eye” for the monocle he was said to wear even when he slept. He had a record of breaking down even the most hardened of German spies.
“Figuratively, a spy in war should be at the points of a bayonet,” wrote Stephens, who insisted that he be addressed as the “commandant.” Yet he was adamant about one thing at Camp 020. “Violence is taboo,” he wrote, “for not only does it produce answers to please, but it lowers the standard of information.” In his instructions for interrogators, Stephens wrote, “Never strike a man. In the first place it is an act of cowardice. In the second place, it is not intelligent. A prisoner will lie to avoid further punishment and everything he says thereafter will be based on a false premise.”
Guy Liddell, a fellow officer at Latchmere House, wrote in his diary of Stephens’ efforts to prevent violence there after an officer from MI9 “manhandled” a prisoner during an interrogation. “It is quite clear to me that we cannot have this sort of thing going on in our establishment,” Liddell wrote. “Apart from the moral aspect of the whole thing, I am quite convinced that these Gestapo methods do not pay in the long run.” At one point, Stephens expelled an interrogator from the War Office for striking a prisoner.
But the commandant did apply many forms of psychological pressure. He created an eerily silent and isolating environment at Latchmere House that seemed to evoke a sense of foreboding among the captives. Guards wore tennis shoes to muffle the sound of their steps. Cells were bugged. No prisoners encountered one another. “No chivalry. No gossip. No cigarettes,” Stephens wrote in his reports. Prisoners were kept alone and in silence. Food was kept bland, and no cigarettes were to be offered. Sleep deprivation was a common tactic, as was the hooding of prisoners for long stretches of time.
Stephens also found significant leverage in a provision of the law: in wartime, captured spies who refused to cooperate could face execution. Of the nearly 500 prisoners who arrived at Latchmere House during the war, 15 were shot or hanged at the Tower of London under Stephens’s command. (William Joyce, the American-born, Irish fascist known as Lord Haw-Haw, was interrogated there after he renounced his British citizenship and fled to Germany to broadcast Nazi propaganda over the radio; he was hanged for treason in 1946.) There were also several suicides.
But the number of prisoners who provided useful intelligence for the British was significant: 120 were judged to be of high value and handed over to MI5′s B Division for misinformation and other counterespionage purposes, and Stephens turned more than a dozen of them into highly successful double agents. (More…)
November 18, 2011
On September 14, 1224, a Saturday, Francis of Assisi—noted ascetic and holy man, future saint—was preparing to enter the second month of a retreat with a few close companions on Monte La Verna, overlooking the River Arno in Tuscany. Francis had spent the previous few weeks in prolonged contemplation of the suffering Jesus Christ on the cross, and he may well have been weak from protracted fasting. As he knelt to pray in the first light of dawn (notes the Fioretti—the ‘Little flowers of St Francis of Assisi,’ a collection of legends and stories about the saint),
he began to contemplate the Passion of Christ… and his fervor grew so strong within him that he became wholly transformed into Jesus through love and compassion…. While he was thus inflamed, he saw a seraph with six shining, fiery wings descend from heaven. This seraph drew near to St Francis in swift flight, so that he could see him clearly and recognize that he had the form of a man crucified… After a long period of secret converse, this mysterious vision faded, leaving… in his body a wonderful image and imprint of the Passion of Christ. For in the hands and feet of Saint Francis forthwith began to appear the marks of the nails in the same manner as he had seen them in the body of Jesus crucified.
In all, Francis found that he bore five marks: two on his palms and two on his feet, where the nails that fixed Christ to the cross were traditionally believed to have been hammered home, and the fifth on his side, where the Bible says Jesus had received a spear thrust from a Roman centurion.
November 15, 2011
Gertrude Stein said it best: “There will never be anything more interesting in America than that Civil War.” And of course interest is high, now that we’ve begun commemorating the sesquicentennial anniversaries of the war’s key events. For the First Battle of Bull Run (or Manassas, to Southerners) last July, re-enactors descended upon Gainesville, Virginia, from as far afield as Germany, Uruguay, and Hawaii.
Even with the war’s vast bibliography—more than 60,000 books have been published since the last shot was fired, in June 1865—some of the odder coincidences and bizarre facts of the period are overlooked. Wilmer McLean became one of the legendary figures of the war merely by trying to escape it. (After his house was shelled in a skirmish preceding the First Battle of Bull Run, he moved—to Appomattox Court House, where General Lee surrendered to General Grant.) (edit: A correction was made to this paragraph — see the comments below for details.)
Here are some other noteworthy people and artifacts:
• The Unusual Bunker Brothers. Chang and Eng Bunker are best known as “the original Siamese Twins.” Natives of Siam (modern Thailand) and joined at the sternum, they became a popular attraction with traveling museum exhibitions.In 1839, they bought 110 acres in the Blue Ridge Mountains in North Carolina and settled down. They married sisters, built a successful farm (with slave labor) and became naturalized citizens and devoted Confederates. In 1865, Union General George Stoneman raided North Carolina and decided to draft some of the locals, regardless of sympathies; the names of men over 18 were put into a lottery wheel. Eng’s name was drawn, but he resisted the draft. Since Chang’s name was not drawn, there was little General Stoneman could do; the brothers were not only joined at the sternum, their livers were fused. Neither one served in the war, but their eldest sons both enlisted and fought for the Confederacy.
• The secret hiding place. In 2009, a woman visited the Museum of the Confederacy in Richmond, Virginia, with an acorn-shaped object in hand. It was made of brass and had no inscriptions or markings. She said that according to family lore, one of her ancestors (edit: whoops! thanks for the catch!), a Confederate soldier, used the device to smuggle secret messages, hiding it in his posterior until he reached his destination. Museum officials were intrigued by what she called a “rectal acorn,” but she declined to donate it.
• General Lee’s chicken. In 1862, a Virginia farmer gave Robert E. Lee a flock of chickens. Confederate General John Bell Hood’s men ate all of them—except for one, who had survived by making her roost in a tree overhanging Lee’s tent. Lee took a liking to the chicken. He named her “Nellie” and raised the flap of his tent so she could come and go as she pleased. She began laying eggs nearly every day under the general’s cot. On the eve of the Battle of the Wilderness, Lee invited a group of generals to dine with him, but his slave cook, William Mack Lee, couldn’t find sufficient food to make a meal. Although he “hated to lose her,” the cook said he “picked her good, and stuffed her with bread stuffing, mixed with butter.” He said it was the only time in four years that Lee scolded him. “It made Marse Robert awful sad to think of anything being killed,” he said, “whether ’twas one of his soldiers or his little black hen.”
• Mourning rituals. Wartime convention decreed that a woman mourn her child’s death for one year, a brother’s death for six months, and a husband’s death for two and a half years. She progressed through prescribed stages of heavy, full, and half mourning, with gradually loosening requirements of dress and behavior. Mary Todd Lincoln remained in deep mourning for more than a year after her son Willie’s death, dressing in black veils, black crepe and black jewelry. Flora Stuart, the widow of Confederate General J.E.B. Stuart, remained in heavy morning for 59 years after the 1864 death of her husband, wearing black until she died in 1923. By contrast, a widower was expected to mourn for only three months, simply by displaying black crepe on his hat or armband.
• Glowing wounds. After the Battle of Shiloh in 1862, soldiers reported a peculiar phenomenon: glow-in-the-dark wounds. More than 16,000 soldiers from both armies were wounded during the battle, and neither Union nor Confederate medical personnel were prepared for the carnage. Soldiers lay in the mud for two rainy days, and many of them noticed that their wounds glowed in the dark. In fact, the injured whose wounds glowed seemed to heal better than the others. In 2001, two Maryland teenagers solved the mystery (and won a top prize at an international science fair). The wounded became hypothermic, and their lowered body temperatures made ideal conditions for a bioluminescent bacterium called Photorhabdus luminescens, which inhibits pathogens.
• The other Jefferson Davis. Union General Jefferson Davis shared a name with the Confederate president, a circumstance that didn’t cause as much confusion as might be expected—with one notable exception. During the Battle of Chickamauga in 1863, as darkness fell on Horseshoe Ridge, members of the 21st Ohio saw a swarm of men approaching but couldn’t tell if they were friend or foe. Most assumed they were Union reinforcements, but a few feared they were Confederates. As the troops grew closer, one Union soldier called out, “What troops are you?” The collective reply was “Jeff Davis’s troops.” The Ohio soldiers relaxed, believing they meant the Union general. A few moments later, they were staring down the muzzles and bayonets of the 7th Florida. The Ohioans surrendered. The Confederates won the battle.
• Stonewall Jackson, hypochondriac. The Confederate general thought himself “out of balance.” Even under fire, he would raise an arm so the blood might flow down into his body and re-establish equilibrium. (His hand was wounded when he did this during the First Battle of Bull Run). His refused to eat pepper because it seemed to make his left leg weak. He sucked lemons, believing that they helped his “dyspepsia.” He was most comfortable standing upright so that all of his organs were “naturally” aligned. He suffered from poor eyesight, which he tried to treat by dunking his head into a basin of cold water, eyes open. And yet he once told a captain that he felt “as safe in battle as in bed.”
• The Things He Carried. After President Abraham Lincoln died, on April 15, 1865, his leather wallet was found to contain a $5 Confederate bill, imprinted with the image of Confederate President Jefferson Davis. Lincoln may have gotten the bill when he visited Petersburg and Richmond earlier in the month.
Books: Andrew Ward. The Slaves’ War: The Civil War in the Words of Former Slaves. Boston: Houghton Mifflin, 2008; Derek Smith. The Gallant Dead: Union and Confederate Generals Killed in the Civil War. Mechanicsburg, PA: Stackpole Books, 2005; Archibald Gracie. The Truth About Chickamauga. Boston: Houghton Mifflin, 1911; Burke Davis. The Civil War: Strange and Fascinating Facts. New York: Fairfax Press, 1960; Drew Gilpin Faust. This Republic of Suffering: Death and the American Civil War. New York: Alfred A. Knopf, 2008.
Articles: “Mystery of Glowing Wounds Solved,” by Linda Searing. HealthScout News, June 11, 2001.
November 10, 2011
At eight on the evening of June 16, 1944—dusk on the tenth day after the Allied invasion of France–the Gestapo dragged 28 French resistance fighters from the cells where they had been incarcerated, tortured and interrogated at Montluc prison, Lyon. Handcuffed in pairs, the men were thrust onto an open truck and driven to an empty field outside the little village of Saint-Didier-de-Formans. Along the way, a German officer bragged to them that the war would still be won, and that London was about to be destroyed by V1 flying bombs.
London would, of course, survive, and the war would not be won by Nazi Germany, but that was scant consolation to the resistance men as they were taken four by four into the field for execution. The accounts of two men among the prisoners who miraculously survived being shot in the back at close range allow us to know something of their final moments. There were no pleas for mercy. Some of the men shouted out last words as they were led into the field—”Adieu ma femme!” one of them called—but most remarkable was the brief scene that played out between the oldest and the youngest of the prisoners.
The younger man was really a boy, 16 years old and terrified of what was about to happen. The older was small, balding but distinguished-looking, and, at 58, he wore round glasses and the haggard look of a prisoner who had survived repeated torture. As the execution party cocked its guns, the boy groaned, “This is going to hurt.” “No, my boy, it doesn’t hurt,” the older man assured him. He reached out to enclose the child’s hands in his own and held them, shouting “Vive la France!” as the first volley of machine-gun fire rang out.
So died Marc Bloch, arguably the most important and influential historian of the 20th century, and without much doubt one of the greatest men among historians. It is given to very few members of any academic profession to revolutionize the way in which it is studied, but Bloch did that, helping to create the hugely influential Annales school, which argued compellingly in favor of the study of “history from below”—of everyday life, that is, studied in the context of geography and the social environment and over la longue durée, the long term: typically a thousand years or more. Even fewer men combine careers of such distincti0n with success in other fields. Bloch, though, fought in two World Wars, receiving four citations for bravery and winning the Légion d’honneur—the French equivalent of the Congressional Medal of Honor—in the first, and sacrificing his life to free his country from totalitarian dictatorship during the second. It is hard to think of any man who better deserves the tribute paid by L’Association Marc Bloch, the society set up to preserve his memory: “Historian and man of action.”