Thursday, September 19

Freddy Phillipse and the Wampum Factory

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Footnotes since the Wilderness
By Art Cashin

On this day in 1666, on the island of Manhattan, one Frederick Phillipse, a noted merchant found a way to corner the market. Of course it was 126 years before the New York Stock Exchange would be founded, but markets are markets.

At the time many of the early Dutch settlers and the new English immigrants made a handy living trading goods. There was no foreign exchange markets at the time, so Fred, "the would be furrier", realized that there was a limited supply of wampum - the polished clam shell fragments and shiny beads that Indian traders valued. So he bought up a large supply of wampum and buried it in the backyard. The effect was instantaneous and Fred's wampum was suddenly worth a fortune.

Now, in case you fell asleep in sixth grade during Sister Anesthesia's course on "Modern Money Mechanics", let's review. By burying a lot of wampum, Phillipse had artificially and substantially decreased the money supply. (Yes, Virginia that is called deflation.) Thus, there were more goods (skins) around than money, so prices dropped. Old Fred could then sneak into the yard at night and unbury a little money buying lots of goods and slowly re-flating the economy. (Wow! No FOMC and no Congressional critics.)

Unfortunately, someone noticed that Fred had an uncanny ability to come up with fresh wampum whenever needed. Instead of applauding his good fortune his neighbors arrested him and put him in prison claiming they were saving him from the irate Native Americans.

To celebrate take Ben Bernanke out for a nip at "The Clam and Bead." Have a barrel of laughs but don't try to hide anything.

Many thanks to Mr. Cashin and UBS Financial Services who graciously allow his historical musings to be republished on this site. To enjoy more of Art's posts simply click on "Cashin's Comments" in the label section on the sidebar.

Editor's note: Posting to this site will continue to be sporadic and unpredictable while the editor deals with some personal issues. Please continue to stop by and perhaps enjoy some of the older posts while we wait for a more predictable posting interval to emerge. We appreciate your interest and hope you enjoy our efforts. Many thanks to Art Cashin for taking up the slack in the meantime.

Wednesday, September 4

A Yellow Rose in Texas?

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By Art Cashin

On this day in 1858, a man in New York City was granted a copyright on a song. While there was nothing unusual about a New York man writing a song, this case was a bit different. Most folks think this guy didn't write the song (it had probably been sung for ten years or more). Secondly, it seemed to refer to a non-existent flower. The name of the song was…."The Yellow Rose of Texas" and there was no yellow rose native to Texas. That's because the song was about a girl (er...a woman) not a flower.

The song was about a beautiful young slave named Emily Morgan. She was, in the words of those times, a mixed-race with rather fair complexion, a combination which in those pre-Civil War days was called a high yellow.

When General Santa Ana set out to crush Sam Houston and the Texas rebellion, he overran the plantation of James Morgan. He noticed Emily's stunning beauty and carried the young slave off with him to be his "companion" for the campaign. Santa Ana fancied himself a great lover and set up an opulent "love tent" each evening.

When Santa Ana was preparing for what he hoped would be the decisive battle, Emily sent another slave to warn Sam Houston. Then she kept Santa Ana busy through the evening and through much of the next morning. That gave Houston enough time to launch a surprise attack and decimate the Mexican Army in less than 20 minutes. Santa Ana was so surprised he ran from his tent wearing only his underwear.

For the next decade, the Yellow Rose of Texas became celebrated in song. The folk song swept across America. And, since there was this popular song with no known author, why not copyright it. We don't know how much the opportunist made on the song, but we hope he did better than the Hill sisters of Kentucky, who copyrighted the most frequently sung song in America. We'll bet you sang it recently and never sent them a dime. (It’s called “Happy Birthday to You”.)

Many thanks to Mr. Cashin and UBS Financial Services who graciously allow his historical musings to be republished on this site. To enjoy more of Art's posts simply click on "Cashin's Comments" in the label section on the sidebar.

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