Tuesday, April 15

Another Hamburger Joint? What a Kroc!

image = google images
By Art Cashin

On this day in 1955, in the city of Des Plaines, Illinois, a great American institution began. And, like most successful American institutions it made no sense on paper and was started by the illogical. It was a fast food restaurant.

It was not started by some hotshot kid but, rather, by a 55-year-old guy who previously sold blenders for making milkshakes. The year before, on one of his sales trips to California he noticed a drive-in that was doing more business than any other. He itemized its features, it was clean, service was fast, food was uniform. And the fries....they were like nobody else's.

That's when he discovered that they always left on a tiny bit of potato skin in each batch so that the flavor transferred in the frying. Knowing that you probably could not start a nationwide chain of "French Fry Joints" he asked the owners, a certain couple of brothers named McDonald, if he could possibly franchise their fast food hamburger joint.

His name was Ray Kroc and the rest is history. Luckily, he didn't have to apply to the SBA. (Yeah! Sure, Mr. Kroc, just what this country needs, another hamburger joint. How ya gonna make any money. Ain't-cha got any sense of business??)

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.

Monday, April 14

Mabel, Manley, Martin, and Capone

Image source = SF Library
By Grant Davies

No, the above title isn't the name of a law firm. Nor is it the name of an accounting firm. But today's story has to do with both accounting and the law.

On this day in 1927, a lawyer named Mabel Walker Willebrandt was preparing to argue a case with lasting implications before the Supreme Court of the United States. The case is known as United States v Sullivan.

It seems that Mabel was trying to figure out a novel way to catch a bootlegger named Manley Sullivan and prosecute him for making booze and not paying taxes on the profits. Obviously, if you want a cut of the action from someone else's illegal doings you are either a mobster collecting a street tax or the government doing the same thing. Sometimes it's hard to tell the difference, but I digress. She decided to claim that Sullivan owed Uncle Sam his share and was holding out on him.

Manley's lawyers made the rational assertion before an federal appellate judge named Martin T. Manton that Manley's fifth amendment rights would be violated if he was forced to confess to crimes when filing his income taxes. They also observed that if the government took their cut as taxes they would be guilty of aiding and abetting Sullivan. Many judges agreed, and Martin Manton was one of them. That is how the whole thing ended up before the Supreme Court. Manton said it was incredulous that the government would get part of the proceeds of illegal activities.

The Supreme Court sided with Mabel. This was very bad news for a guy who wasn't even involved. A guy named Capone. You may recall that Al Capone - a fairly successful mobster from Chicago who didn't have the benefit of the IRS to collect his street taxes - was sent to Alcatraz after this precedent was set. But as it turned out, he was just one of the early convictees.

Another notable one was a guy named Martin Manton. Yep, the above named federal judge was later found guilty of taking $186,000 in bribes without including the feds in on the take. He got only seventeen months in prison. Maybe the fix was in.

Source material = One Summer by Bill Bryson

Friday, April 11

The Magic Ingredient

Image = jalopnic.com
By Art Cashin

On this day in 1916, a self-styled genius demonstrated a miracle product to a major corporate entity. The product was so deliciously fascinating that its concept lives today. Any tabloid will tell you that it's really true and that corporate America found it and suppressed it.

The product was that mysterious ingredient that you pop in a tank of water and it can run an automobile. And through all these years the "big guys" kept it hidden. Where were "60 Minutes" and "Geraldo" when we really needed them?

Well, anyway, on this day in 1916, the developer showed this particular hot-shot corporate type how you take said bucket of water, add said mysterious ingredient, pour into said gas tank and run said car. The corporate type was amazed. His name was Henry Ford and he gave the entrepreneur - one Louis Enricht a binder of a year's salary and a free Model T to work on. A few months later Ford read that Enricht had sold the rights (for several years' salary) to another guy. Trying not to be a bad sport - Ford asked for his Model T back. Enricht sent it back without the motor. Rumors said that Enricht had refused to let his new investors examine test engines either.

Scientists now believe that Enricht's magic ingredient was a form of acetone - which would make your engine run while burning it out at the same time. Enricht disappeared but the rumor of a magic pill for the gas tank has hung on through several wars and a few energy crises.

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.

Tuesday, April 8

A Few Things About Charlie Lindbergh

Lindbergh's triumphant return
By Grant Davies

It was eighty-seven years ago this coming summer -that's 1927 for those who jot down such things - that a fellow named Charles Lindbergh beat the odds by avoiding getting lost at sea. It was no small feat since almost everyone who previously tried what he was trying had not beaten the odds.

What Charles was trying to do was cross the ocean without the benefit of a boat. Instead, he carefully made his calculations and hopped aboard a flimsy airplane named the Spirit of St Louis and took off for Paris. That he made it was remarkable.

But this story isn't about how he made it to Europe without ending up in the drink. It's mostly about how he got home again without suffering that fate after taking a safer mode of travel on a ship named the USS Memphis.

It seems that Lindbergh decided to take a walk around the ship after supper one evening. It was an ill-advised notion because the seas were higher than the passengers at the bar that night. As he reached the bow, a series of large waves washed over the deck and he was one lucky Lindbergh not to get washed away himself. Only the presence of a handy lifeline saved him from what should have been his fate on the outward leg of the round trip. He hung on for dear life for about ten minutes before things settled down long enough for him to walk calmly, though briskly, to a safer spot. He later commented, "It was an exciting experience."

For the normally stoical Charles, that was about as emotional as he ever became. It was likely in his genes to be so dispassionate. His upbringing occurred in a home where demonstrative affection was totally absent. No hugging or kissing for the Lindberghs. In fact, when Charles (never Charlie or any other affectionate nickname) went to bed each night, instead of hugging his mother, they shook hands. That kind of warmth just melts the heart.

In the end, Charles returned home as a hero to everyone. Of course, that was before the public's love affair with him ended some years later after he made his Antisemitism known. He revealed it during a well attended speech in Des Moines, Iowa in September 1941. The timing couldn't have been worse. It was just as America was about to go war against some antisemitic folks in Germany.

He went on to father thirteen children, including six with his wife Ann Morrow Lindbergh. His first born was a son who was kidnapped and murdered in one of the most sensational crimes of the time. The rest of his seven children were the result of long term affairs he carried on with three women in Europe (two of them sisters) starting in 1957 and not ending until shortly before his death in 1974.

It's not known if he ever hugged or kissed any them, nor if any of them considered him as much of a hero as the adoring throngs who greeted him when he first returned to America in 1927.

Source information for this post was taken from the excellent book "One Summer" by Bill Bryson.

Thursday, April 3

The Pony Express - A Risky Business

By Art Cashin

On this day in 1860, a group of entrepreneurs launched their dream. And what a dream it was! They were in the telecommunications business. The nation was suddenly bi-coastal. At both oceans America was thriving. And these guys knew that communications was the key to the future

So, on this day, the first Pony Express rider left St. Joseph, Mo. on his leg of the 1966 mile route to Sacramento California. The cost was $5 per 1/2 ounce (it was later cut to a buck). Ten days later the mail arrived in the Golden State (to the amazement of nearly everyone).

They promoted the service well-very well. The image of a rider fighting off storms, Indians and various animals while rushing your mail was an instant hit. It was a depiction of pioneer life like none before or after. America bought it then and bought it now. The Pony Express thrives to this day in image and movie retelling as the epitome of American survival. Even their recruiting posters smacked of the romance and risk inherent in the endeavor. One example read: "Wanted: Young, skinny, wiry fellows not over 18. Must be expert riders willing to risk death daily. Orphans preferred."

Unfortunately, while it sold as an image, it failed to sell as a service. While the image has lasted nearly a century and a half as a national standard the company lasted only 18 months as a business. Even though the Pony Express used tried and true methods that had been used by Ben Franklin almost 100 years before (and by Darius of Persia nearly 2,000 years before that), the situation failed. What they missed in their calculations was something called the telegraph. So in less than 18 months they were out of business.

To celebrate invite someone who doesn't look like Ben Franklin to play "Pony Express" - - It's a lot like Post Office only there's more horsing around.

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.
Related Posts Plugin for WordPress, Blogger...