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| Building electric power and light systems |
I have written extensively at Where the Gold Is about the decades leading up to creation of the Federal Reserve system--in particular about William Collins Whitney's role
in setting up a corporate infrastructure of electric street railways and an electric
power grid across the nation, using funds invested by the public.
However, some of the stocks and bonds being marketed by American corporations were being sold abroad and traded on foreign stock exchanges.
Before
the United States acquired its superpower status in the aftermath of
the two World Wars corporate stock and bond issues contained a provision
that any funds payable in Dollars could be convertible in gold at the
price of gold set in London.
At that point in time, Whitney, a Democrat, was actively assisting President Grover Cleveland (22nd and 24th President) in his attempt to stanch the flow of gold sucked from the United States across the Atlantic Ocean by Europeans who had invested in American companies.
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| Electric powered streetcar |
W. C. Whitney had worked closely with August Belmont, and both men poured money into electing a network of men, influenced by their knowledge of the workings of the London Gold Exchange, who were dedicated to ensuring that America continued to guarantee that notes issued by U.S. corporate bankers would be backed by gold.
Until 1900 the policy of the Democrats was that any notes payable in the United States, even if held by overseas creditors, could be exchanged for gold. That had been the policy favored by America's primary international banker of those decades before Junius Pierpont Morgan's death in 1913, the same year Congress passed the Federal Reserve Act, which was intended to give more credibility to the strength of the Dollar in international exchange. U.S. paper money was not legal tender for those payments until 1933 by Executive Order 6102, followed the next year by the Gold Reserve Act.
A Dollar Backed by Gold
The favorite banker of William Collins Whitney (primary funder for the Democratic Party) and his associate, Thomas Fortune Ryan was the J. P. Morgan Bank, which had professional assistance from attorneys and bankers, such as Elihu Root, Paul D. Cravath, John Godfrey Moore, and Grant Barney Schley.
These financial professionals had worked long and hard to get The Federal Reserve Act passed through Congress with repeated failures. As a consequence, panics and recessions recurred as some banks issued more paper money than they could back in the event of a recall--a demand by customers that the notes be converted into gold. The legislation was written by international exchange bankers, who met at the secluded Jekyll Island Club, as I wrote about years ago in one of by blogs.
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| Obit for Grant Barney Schley |
Morgan proposed to James Stillman of the National City Bank (now Citigroup), that they and a few other bankers pool enough money together to help U.S. Steel (Morgan-financed) purchase Moore & Schley's shares in Tennessee Coal, Iron and Railroad Company, a big rival of U. S. Steel.
Fearing that Republican President Theodore
Roosevelt would view this as a tilt toward monopoly, they sought to cut off his objection by full disclosure of the probable result if not done--a deepening of the panic into a full-blown depression.
Schley's own death in 1917, four years after Morgan's left the "banking trust" in limbo for several years. Who could possibly succeed such giants?
The partners in the old Alex. Brown & Sons of Baltimore and its loose affiliate Brown Brothers in New York were getting too old to envision a project of that magnitude.
E. H. Harriman had died in 1909, and his eldest son, W. Averell Harriman, had just finished his studies at Yale. He was ambitious. He was also arrogant enough to see himself as Morgan's replacement. If he and his younger brother Roland (always known as "Bunny,") merged their inheritance to form a new investment bank, they thought they might be able to pull it off.
One Yale friend in Skull and Bones was Robert Abercrombie Lovett, the son of their father's successor at the Union Pacific, Texas lawyer Robert Scott Lovett. He was married to Adele Brown, daughter of the senior partner at Brown Brothers. Another Yale buddy from Skull and Bones, Prescott Bush, was engaged to Dorothy Walker, daughter of George Herbert Walker, president of G. H. Walker & Co., a brokerage company, based in St. Louis.
Their eventual plan was to take over the role Morgan had played as de facto central banker for the United States through a merger with Brown Brothers, after first setting up their own investment bank, W. A. Harriman & Co., with Walker as president.
Convincing the Clients
According to Schley's obituary, his clients had included Henry H. Rogers, William Collins Whitney, Thomas Fortune Ryan, William Rockefeller, Oliver Hazard Payne, and John W. Gates.
The wealth of H. H. Rogers and O. H. Payne was derived from their
investment in Standard Oil, while William Rockefeller was engaged with
James Stillman in building National City Bank. Thomas Fortune Ryan had bought a majority of the Equitable Trust shares from Henry Hazen Hyde but had sold them to J. P. Morgan. They were up for grabs. American Smelting, a Guggenheim interest, was financed by the Morton Trust and Guarantee National Bank, controlled by the husbands of Paul Morton's daughters.
Banking on Politics
Politics played a role in the plans. The Democrats saw metal backing as the only way to ensure a stable monetary currency. From Grover Cleveland to William Jennings Bryan, that had been their primary platform plank in every election from the 1880s to 1908. The two men who provided most of the financing for Democrats were W.C. Whitney and August Belmont, who represented the Rothschilds in London.
Whitney wanted to retire from political fundraising efforts by 1900, but it took his death in 1904 to seal that decision.Who would replace him? He had lived long enough to notice changes taking place on the political landscape, as well as within his own family. He had feuded with his brother-in-law, Oliver H. Payne, who supported the Republican Party.
John D. Rockefeller and his brother William were major investors in the stock of the Federal Reserve Bank of New York, in which they controlled two member banks--Chase National and City National (now called Citigroup).
With William Collins Whitney gone, his sons Harry Payne Whitney and Oliver Payne Whitney abandoned the Democratic Party in favor of Republican policies and sought out a new banker, whom they discovered in the form of W. A. Harriman & Co., incorporated in 1920.
***
As William C. Whitney was drawing his last breath, men were waiting in the wings to continue building the electrical infrastructure on which his wealth was based. Security Underwriters' Corporation, organized the same year Whitney died, became a super-secret company as well as a pipeline to fund Democrats. Incorporated in Washington, D.C. in August 1903, a year later it received a transfusion--all the stock of the Interstate Railway, Light and Power corporation was transferred to Security Underwriters at cost.
Interstate Railway, Light and Power--the dream of Illinois Congressman, Andrew Jackson Hunter, a Democratic Congressman from Paris, Illinois--was a suburban electric railway that fed into the Insull system that was destined to crash in 1929. But nobody knew that in 1903 when Hunter transferred all his stock in the Illinois electric railway to Security Underwriters Corporation.
Oscar Terry Crosby
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Oscar Terry Crosby's name appeared in newspapers in 1911-12 in connection with an investigation then being made into the mysterious Security Underwriters' Corporation, which was marketing swamp land in Florida with promises that buyers would become extremely wealthy. Though Crosby's personal history seems at odds with that type of criminal enterprise, he was indeed involved in the project through his association in Warrenton, Virginia, with Florida landowner E. Nelson Fell.
Oscar Crosby had married Jeanne Bouligny in 1885 in New Orleans, while he was stationed with the Army Engineers. Two years later he began a career in "development and promotion of electric traction," and in 1890 was named to head the Edison Electric branch in New Orleans before setting himself up in his own business in Washington, D.C., where he built the Potomac street traction works, also building systems in the suburban areas which he consolidated.
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| Abyssinia circled |
While the construction was being done in Washington, Crosby and his wife sailed in June 1899, bound for Africa, exploring Abyssinia, allegedly for the National Geographic Society. Abyssinia would soon be named the Empire of Ethiopia, centered in the midst of what has been termed the "Scramble for Africa."
Crosby hired lawyers to defend civil suits filed against his overhead electric lines while the big news in Abyssinia was that King Menelik planned on building an empire across Africa. Crosby returned from his African trip to give lectures of his impressions of the "Mad Mullah," as some reporters described the emperor Menelik, from whom Crosby had obtained permission to make his explorations.
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| TR and Kermit |
Crosby was close at that time with E. Nelson Fell, proprietor of Fellsmere Farms, the corporation for whose benefit Securities Underwriters Corporation began promoting sales of land, allegedly from Kansas City.
The Fell family was intermarried with the Vans Agnew family--both families having been British colonists in central Florida as early as the 1880's. Fell's son-in-law, P.A. Vans Agnew could even boast of being one of Theodore Roosevelt's Rough Riders during the Spanish-American War. Through Vans Agnew, Crosby had made contact with the imperialist-minded Republican President, Theodore Roosevelt, who, almost immediately after he was replaced as President by William Howard Taft, went on an African safari and expedition through British East Africa with his son Kermit. His grandson, Kermit, Jr., would later be one of the most notorious clandestine operatives for the Central Intelligence Agency.
Nonetheless, Crosby was traditionally a Democrat. According to his West Point biography:
...He worked with Edison General, Thompson-Houston, and General Electric. In 1894 he was a partner of Crosby-White—when that became the J. G. White Engineering firm, he remained on the Board thereof. By 1897, he and Charles Lieb bought up and reorganized several companies in Washington, D.C., converting them from horse to electric traction, and forming the Washington Traction and Electric Co. During the same period he founded and was president of the Potomac Electric Power Co. (Washington, D. C.) until 1899. His last traction activities were with the Trenton Street Railway and the Wilmington-Philadelphia Traction Co. of which he was president in 1910. He retired in 1913 and celebrated the event by taking his family around the world.
Security Underwriters in Kansas City!
But such a vital person could not remain idle long, so in 1915 he was Director of the [Hoover] Commission for Relief in Belgium, (which included northern occupied France). He remained there for six months. He always claimed that the Europeans had suffered less in World War I than the Southerners during the Civil War.
A friendship begun in the 90’s with W. G. MacAdoo led the then Secretary of the Treasury to ask Crosby to become Assistant Secretary of the Treasury in April 1917. As such he was in charge of the loans to the Allies. In order to deal with the conflicting and complicated demands of the Allies, the Inter-Ally Council for War Purchases and Finance was established the following November, with headquarters in Paris and London, so he presided over this body with the rank of U.S. Commissioner of Finance. The functions of the Council terminated shortly after the Armistice, and he was asked to stay on hand in Paris as an advisor, but unfortunately illness prevented his fulfilling this assignment with his usual thoroughness. His war time activities, fraught with interesting contacts and events, ended his private and public business career.
Fellsmere Farms' Link to Security Underwriters
Crosby was brought into Fellsmere Farms prior to 1911 by his neighbor in Warrenton, Virginia--Edward Nelson Fell, the youngest son of a successful British wholesaler working in Nelson, New Zealand, who moved his family to London in 1857, the year Nelson was born.
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| E. Nelson Fell |
As for Nelson, he married Anne Mumford Palmer of New York in 1885 and became a U.S. citizen in 1891. His work took him all across New England, as the births of their children shows. Daughter Marian was born in New York in 1887, Olivia in Massachusetts, and Nelson Jr. in 1895 in New Haven, Connecticut.
The members of the Disston colony who had not already returned to England because of the Panic of 1893 did so after Disston committed suicide in 1896. Nelson Fell remained in Florida until brother Arthur sent him to Omsk, Siberia, where he (referred to in newspapers as Col. E. N. Fell) worked with a London-based company buying up silver and copper mines in Russia's frontier. According to the Orlando Sentinel:
Nelson Fell was 27 when his brother sent him to Central Florida to take charge of a family partnership that owned 12,000 acres of raw frontier land, including 2,000 acres at what became the English colony of Narcoossee. Fell was a new Osceola County commissioner in 1890 when he brought the oldest son of another Narcoossee family into his enterprise.
P.A. Vans Agnew and his younger brother, Frank, had grown up as friends of Fell's daughters, Marian and Olivia. The Fell family's homestead at "The Point," land jutting out from the northeast shoreline of East Lake Tohopekaliga, was a frequent gathering place for British holidays and other community celebrations. The guests included the Vans Agnews, whose children also rowed in the lake with the Fell girls. Vans Agnew would become one of Nelson Fell's business partners.
The relationship, however, was not quite so simple as that. Patrick A. Vans Agnew was born in 1868 in Madras, India, where his father was employed at the time by the East India Company. The 1881 British census showed the family living in a stately home in the Kensington Chelsea section of London called "Percy Lodge," located near Percy Villas.
Marian Fell married Patrick A. Vans Agnew in 1914, and Olivia Fell married Frank Vans Agnew in 1928, thus linking the two families who had been pioneers in Osceola County east of Orlando in the 1880s. In 1910, Nelson Fell had acquired title to 144 square miles of land (equal to about 92,000 acres) in this part of Florida adjoining the Vans Agnews' 12,000 acres.
The Vans Agnew heirs sold their lands in 1957, only a handful of years before these lands, located near the huge tract sold in 1965 to Walt Disney, whose top-secret land agent was Paul Helliwell).
Fell had approached Crosby's former engineering company, J.G. White & Co., for help in building a railway in St. Lucie, Florida. That business transaction does not appear to have begun as a scam, although it ended up as one.
SECURITY UNDERWRITERS CORPORATION is an entity registered at county with company number 1293. N. W. ROSS located at the address 55 Liberty Street New York, New York, 10005. Company is incorporated on January 3, 1912. Current status of the company is active.
cost someone with a connection both to the White-Crosby engineering company, then controlled by Oscar T. Crosby, and to Florida swamp land owned by British businessmen.
***
Security Underwriters was also involved in a different type of engineering work at Fellsmere Farms in Florida, and according to Fellsmere Collection documents, Oscar Crosby was a principal in that corporation.
Four years earlier A. J. Hunter had been one of the featured speakers in a Democratic campaign rally in Chicago in late October, appearing alongside Adlai E. Stevenson,
who had previously hoped to succeed President Grover Cleveland, but
whose hopes had been dashed when the 1900 convention had nominated
William Jennings Bryan, a populist, instead of this first Adlai.
Texas Governor James S. Hogg and Joseph W. Bailey, then a candidate for U.S. Senator from Texas, were present with Hunter and Stevenson at that rally in Chicago, and, though he was not named, we sense the presence also of political strategist Col. E. M. House, lurking in the shadows. House had worked for both the Hogg and Bailey campaigns before 1912, the year he became determined to find and elect his perfect candidate to run as President for the Democrats.
Adlai Ewing Stevenson had been Vice President for Grover Cleveland during 1893-97 and was running again in 1900 for vice president with Illinois-born William Jennings Bryan. W. J. Bryan's mother, Mrs. Silas (Mariah Jennings) Bryan, was a sister of the late Josephus Waters Jennings, and she was the aunt of Charles Edgar Jennings, who ran the family law practice at Salem, Illinois.
Charles Jennings, in 1880, had been an
enthusiastic supporter of former U. S. Senator Lyman Trumbull, the
Democratic candidate for governor of Illinois, professor of and mentor
to W. J. Bryan. Trumbull taught at Union College of Law in Chicago, where Bryan graduated in 1883. Charles Jennings ran unsuccessfully for Congress in 1898 and in 1902, while his brother, William Sherman Jennings, left Illinois for Florida, where he was elected governor in 1900.
In Salem, Illinois, Silas Bryan, W.J.'s father, had studied law years earlier, and formed a partnership with his wife's brother, Josephus Waters Jennings. Silas died in 1880, thus dissolving the partnership. One of Josephus' sons, William Sherman Jennings, moved to Florida in 1885, leaving his father and brother to continue the firm's practice in Salem on their own, before Josephus also died in 1890.
Charles' cousin, William Jennings Bryan, began his own law practice in Jacksonville, Illinois, before moving to Lincoln, Nebraska in 1887. Three years later he too entered politics, winning his race for Congress in 1890. The following March, Bryan joined with other successful Democrats in Chicago to celebrate.
***
Switch from Electric Traction to Oil
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| Spindletop, 1901 |
Bankers and investment managers who recognized the impact that would follow were eager not only to invest in the new oil-based and personal-automobile industries, but to capture control of the old investments in electric street railway systems and electrical power producing companies that they saw as being merely a passing phase.
Streetcars were initially drawn through town by horses, but in 1892
the company decided to power them with electricity acquired from the Edison Electric plant located in York County, Pennsylvania. It was also in 1892 that three of the companies
in which Edison was invested were consolidated into the General Electric Company. Edison's intent to use direct current for his light bulb was in contrast to George Westinghouse's adaptation of alternating current, which could travel farther distances from the source of power.
Once
poles were placed and electric lines laid, the company decided to
expand into the suburban county, but it did so in phases involving capital
supplied by businessmen in numerous areas within the region.
Consolidation occurred in 1907 when York Railway Company was formed to buy all the components of the system, financing the purchase in 1907 by an issue of 30-year gold bonds through the Philadelphia office of Brown Brothers & Co. New bonds were issued by the same bank in 1913 when York Railways purchased Edison Light & Power, as well as other electricity generating plants in the same territory.
J. Crosby Brown was vice-president and director of The Citizens Traction Co. in Oil City, Pa., which owned all street railways and light companies in that area
as well as collateral businesses. Brown Brothers (the New York-based
investment bank founded by sons of Alexander Brown in Baltimore) also held almost $5.5 million of 30-year mortgage notes in the Lehigh Valley Transit issued in 1905 and acquired through foreclosure, as well as more than $5 million in 50-year mortgage bonds--aggregating a $10 million investment in this one traction system!
What was it that caused the nation, then, to switch from electricity-based motive power to petroleum-fueled transport? And when did the change transpire?
Those answers must remain unanswered for the time being. A clue can be found, however, in Antony C. Sutton's book, WALL STREET AND THE BOLSHEVIK REVOLUTION, which he published in 1974.
Whatever
plans were leading investors into new types of infrastructure would be
followed by those funding political parties. The shift from electricity
to oil becomes apparent in the shift from the funding of Democrats
(electric motive power) to that of Republicans (oil-fueled power).
Engineers who had made a fortune building street railway, electrical generating and power distribution systems began to turn their eyes to other projects, many of which were located overseas in underdeveloped nations, as we see below. This model is merely one instance in the pattern played out national-wide. Electrical engineers and bankers were working together in the first decade of the 20th century to supply the new power to American towns and cities. Another instance in Pennsylvania shows how heavily invested the same financier became in other parts of the state.
Oregon's commissioner of corporations in 1912 exposed "Ramifications of Great Octopus" by declaring that the monopoly known in the Northwest as Pacific Power & Light was a wholly-owned subsidiary of American Light & Power, and furthermore, that other companies not owned by American were in a "pact" with it and connected through interlocking directorates to both General Electric and the banking interests of J.P. Morgan. One of the members of the water and electric power pact was Anthony Nicholas Brady, an ancestor of Nick Brady, who in later years was an important member of the cabinet of President George H. W. Bush.
After the decade 1900-1910, when Insull was also acquiring local traction companies, which he planned to consolidate into a nationwide grid. Following its completion, in 1906, Potomac sold $1.3 million in 30-year mortgage bonds through Brown Brothers & Co. in order to raise money to build new power stations.
Assuming Brown Brothers still held what remained of this huge portfolio in 1931, the year of its merger with the Harriman interests, it would have portended a huge shift from Morgan-related companies to those controlled by Rockefeller interests--in effect, to shift electric power over to petroleum-based fuels. In 1912 an Oregon newspaper would call attention to the inter-relationship between the "water power trust," i.e. electrical generation, and the "street railway trust," both of which were controlled by the "electrical trust."
Years later researchers would learn that
His retirement from electric street railway business, occurring at the height of his success in that field, was thus announced shortly after his involvement in the Florida land boondoggle was disclosed. As president of the Wilmington & Philadelphia Traction Company, he had addressed the American Electric Railway Association's convention in October 1912, shortly before retiring.Two years later he was named by President Woodrow Wilson (Democrat) to be Director of the Commission for Relief in Belgium, headed by Herbert Hoover.
The Supreme Court had held in the 1911 landmark case of Standard Oil of New Jersey v. United States, that the Rockefellers' oil company was part of a
"combination ... [constituting] an unreasonable and undue restraint of trade in petroleum and its products moving in interstate commerce, and falls within the prohibitions of the act as so construed."There had been an initial "conspiracy" formed in 1870 "by three of the individual defendants, viz: John D. Rockefeller, William Rockefeller, and Henry M. Flagler," evidenced by a trust agreement which evolved into those individuals receiving shares of stock in various competing corporations, and that those shareholders had agreed not to compete, but to fix prices in violation of the Anti-Trust Act passed in 1890. The Court decided that, for purposes of the Act, a corporation fit within the definition of the word "person":
The word "person" in § 2 of the Anti-Trust Act, as construed by reference to § 8 thereof, implies a corporation as well as an individual.
Oscar Crosby, whose family had resided in the Virginia hunt country at Warrenton for years, was in 1912 building street railways in Wilmington, Delaware. He suddenly retired from business at the age of 52 and began working for the government--first within the Belgium Relief efforts headed by retired miner Herbert Hoover. There he is said to have met President Woodrow Wilson's Secretary of the Treasury, William Gibbs McAdoo, under whom he was named Assistant Secretary in 1917.
During World War I, he was the sole representative of the U.S. at the Inter-Ally Council on War Purchases and Finance in 1917, also serving as President of the Council, advised by attorney Paul D. Cravath of the Wall Street law firm. He was in charge of the loans to the Allies which culminated with the Dawes Act.
Yet, among all these important responsibilities, he had time to create a land fraud scam in Florida? What are we missing here?
Even prior to his
retirement, we are told, he was a world traveler:
In 1900 he crossed Abyssinia from East to West—King Menelik’s passport issued to “Mr. Crosby, the Englishman"—(after all, O.T.C spoke English) is extant. He reached the headwaters of the Blue Nile at the time that the Caliph was being defeated by the British. His becoming a Fellow of the Royal Geographical Society resulted from that trip. Needing surcease from business in 1903, he went to Thibet. Since the British did not approve entrance via the Indian Frontier, he went through Russian and Chinese Turkestan. At that time the vast areas of the Thibetan region were uncharted—he added some data concerning that terra incognita. His impressions and experiences are summed up In his “Thibet and Turkestan".A letter dated July 12, 1911, from Oscar Crosby to Pierre du Pont [quoted in a book by Carol E. Hoffecker, Corporate Capital: Wilmington in the Twentieth Century: (1983), p. 56] revealed that Crosby was a tool of Pierre, Alfred, and Coleman duPont and J. J. Raskob, the principal stockholders of the corporation, shortly before Alfred du Pont allegedly broke with his relatives in Delaware, prompting his move to Florida only a couple of years before WWI erupted in Europe.
Crosby's wife, Jeanne de Bouligny, descended from French nobility, a fact which facilitated the marriage of their daughter, Miriam Crosby, to an Italian count in 1915. An ancestor of Jeanne Bouligny Crosby was Juan de Bouligny, Spanish Envoy to Constantinople, and it is likely from her family that Crosby received his opportunities to travel so widely in that part of the world. Her father was Dominique Paul de Bouligny, and her grandfather (Charles Joseph Dominique Bouligny), had been the first U.S. Senator from Louisiana, elected in 1824. They were descended from French military governors of the territory France acquired from Spain:
BOULIGNY, Dominique (full name: Charles Joseph Dominique Bouligny) [sic? Actual names Charles Dominique Joseph Bouligny?], soldier, politician, U. S. senator. Born, New Orleans, October 4, 1773; son of Francisco Bouligny (q.v.) and Marie Louise Le Sénéchal d'Auberville. Appointed cadet in the Louisiana Infantry Regiment, of which his father was then lieutenant colonel, March 1786. Promoted to sub-lieutenant, October 1787; lieutenant, December 1795. Commanded a galley (gunboat) in the Mississippi Squadron; second in command and interim commandant during construction of Fort San Fernando de las Barrancas (present-day Memphis), 1795; in naval action against British warship at mouth of Mississippi, 1799. Became member of cabildo as regidor perpétuo, December 1800. After obtaining official permission in late 1802, married Anne Arthémise LeBlanc (1785-1848), daughter of Valérien Valentin LeBlanc and Marie Anne Bernoudy. Children: Francisco (b. 1803); Ursin (b. 1807); Sophie (b. 1807); Léontine (b. 1808); Modeste (b. 1810); Alfred (b. 1812); Gustave (b. 1814); Dominique Paul (b. 1815); Arthémise (b. 1817); Anne Odile (b. 1820); Adèle (b. 1823); Henry (b. ca. 1825); Charles Edouard (b. ca. 1827). Elected to the first territorial house of representatives, 1804; reelected, 1807; nominated for appointment to the legislative council, November 1805 and April 1806. Commissioned major in the territorial militia, October 15, 1805. Member, Committee for the Defense of New Orleans, 1814-1815; justice of the peace and ex-officio member of the Orleans Parish Police Jury. Elected United States senator, succeeding Henry Johnson (q.v.), served, 1824-1829. As senator, pursued to a satisfactory settlement claims by Louisiana citizens for losses in the War of 1812. A Whig and supporter of Henry Clay, was the first Louisianian in Congress to champion a protective tariff when he voted for the Woolens Bill, 1827, and again stood alone when he cast his vote for the Tariff Act of 1828, known to its opponents as the "Tariff of Abominations." Continued as a Whig leader until his death in New Orleans, March 6, 1833; interred St. Louis Cemetery I. F.M. Sources: St. Louis Cathedral Vital Records; Archivo General de Indias, Papeles procedentes de Cuba, legajo 32; Jack D. L. Holmes, Honor and Fidelity … (1965); Jack D. L. Holmes, Gayoso … (1965); François Xavier Martin, The History of Louisiana … (reprint ed., 1963); Dunbar Rowland, ed., Official Letter Books of W. C. C. Claiborne (1917); Joseph G. Tregle, Jr., "Louisiana and the Tariff, 1816-1846," Louisiana Historical Quarterly, XXV (1942); Louisiana Gazette, September 20, 1805; September 25, 1807, September 20, 1814; obituaries, New Orleans Bee, March 6, 1833; Courrier de la Louisiane, March 9, 1833; New Orleans Genesis, I (1962).
Knight was the son and grandson of retail lumber merchants--Raymond Demere Knight and Albion W. Knight, respectively. His first name was given him by his mother, Varina Telfair, who named his sister, Varina Knight, after herself as well.
Not long after Telfair Knight's sister married William Marcy Mason, also a Jacksonville lumber merchant, Telfair would in 1927 become the uncle of her first child, Raymond Knight Mason, who would later run The Charter Company, traced back to yet another Florida lumber company. Wikipedia has compiled some interesting facts that link Charter and Raymond Mason--Telfair Knight's young nephew--to his mentor, Edward Ball, of Jacksonville. That relationship was mentioned in Pete Brewton's book, The Mafia, CIA, and George Bush; David Guyatt has also explained the 1980's money-laundering implications of the Du Pont owned St. Joe Paper Company in "Deep Black Lies":
In another Florida S and L bust that cost $200 million in a shady land deal, the cash disappeared down the sunset-trail of Du Pont's St. Joe Paper Co. The trail went cold in Jersey, one of the Channel Islands. The Channel Isles have long been an off-shore tax haven with strict banking secrecy, and as a consequence a large contingent of foreign banks have offices there. It is now believed that the looted funds were ultimately used by CIA cut-outs to procure weapons for Iraq.So, how do we get from the real estate boom days of the 1920's down to the real estate boom and bust in Texas of the 1980's? We follow the money and the politics behind it.
Starting Place for QJ's "Land and Loot" Series
Raymond K. Mason’s Charter Company, based in Jacksonville, was the parent of a subsidiary corporation which became the research starting point for Quixotic Joust's author, Linda Minor, back in the early 1990's, when she began tracking an elusive land deal that went down in Houston, Texas in 1986, which,
if analyzed correctly, can reveal the missing links between the actual smuggling and trafficking of illegal drugs in America, the laundering of drug proceeds through offshore banks and the reinvestment of those funds into land development projects.Pete Brewton had written about the failure of numerous savings and loan associations in Texas during the time George H. W. Bush was vice president and was running for president against Bill Clinton and his running mate, Texan Lloyd Bentsen, in 1992. Brewton's suspicion was that deregulated Texas savings and loan institutions had been used by "the Mafia" and "the CIA" to launder money through real estate transactions to provide funds for the Contras in Nicaragua during Reagan's terms of office, while leaving the FDIC and FSLIC--i.e., taxpayers like us--holding the bag when the institutions failed as a result of massive fraud. Both political parties had their hands in the till, according to Brewton, and the choice between Bush on one hand and Bentsen (as vice president) on the other, was not a viable choice.
At the time he rushed his book to publication before the fall election, all roads seemed to terminate at the gates of The St. Joe Paper Co. St. Joe's ecological abuses have been well documented in Green Empire by Kathryn Ziewitz and June Wiaz, though the company's engagement in tax fraud, bribery and financial corruption has never been fully explored.
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| Ed Ball, "absolutely ruthless" |
Another source relates:
By 1925 duPont owned nearly 100,000 acres, mostly of cut-over forest land where growth was slowly returning. In an effort to develop the economies of these areas [in the Florida Panhandle], duPont organized the Gulf Coast Highway Association, whose mission was to build roads and develop the transportation infrastructure in northwestern Florida....Ball used duPont's fortune and his access to the banks to acquire an additional 240,000 acres of land in 1933. This included properties in Gulf, Bay, Liberty, and Franklin Counties and the city of St. Joe, a dying fishing community of 500 people on St. Joseph Bay, about 150 miles east of Pensacola.At the same time duPont started pouring money into Florida, a Jacksonville attorney named Telfair Knight moved to Coral Gables to work for the Bank of Coral Gables and for George Merrick's development company. The first advertisement placed for the Coral Gables company in early 1924 gave its address as 158 East Flagler in Miami, address for the old Halcyon Hotel as well as the Miami address for Merrick and his architect. The hotel building was demolished in 1939 to build the Alfred I. DuPont Building on its site.
Just a few doors down in 1923 was a company called the Everglades Land and Development Co. at 144 E. Flagler. This was the remnants of Florida's land development scheme to reclaim the swamplands promised in 1900 by Florida's governor, William Sherman Jennings, with help in 1911 from Richard J. Bolles in Jacksonville:
Florida Fruit Lands Company, managed by real estate promoter Richard "Dicky" Bolles, auctioned off tracts of undrained swamp land at Progreso (now Fort Lauderdale).Although prosecuted in 1913, Bolles was acquitted and died in 1917, along with
"the dreams of many disillusioned Everglades land buyers. The proposed town of Progreso never materialized; the majority of land contracts lapsed; and much of the property purchased from Bolles' enterprises reverted to the state for nonpayment."
It was Bolles who had paid a firm in Kansas City (Everglades Land Sales, with offices in the Scarritt Building) to advertise in midwestern newspapers about the Everglades lands for sale, and federal prosecutors in Missouri brought charges against him. (Michael Grunwald, The Swamp: The Everglades, Florida, and the Politics of Paradise). One "news" article appeared in an Austin, Texas newspaper in 1911, touting the opening of the lands for sale by Securities Underwriters Corporation from its headquarters at 209 Scarritt Building in Kansas City. The article also mentioned that Fellsmere Farms was having the swamp land drained by the engineering firm of J. G. White & Co., Crosby's former company.
The failure of
the Florida state government to follow through on promises to drain the
swamps was a constant problem for businesses attracted into the area.
One of those businesses, Pennsuco Farms, employed Ernest R. "Cap" Graham to move to Florida in 1921 to grow sugar cane.
The Bush Connection
After the crash in the Florida land boom, DuPont and Ball, under the name of Almours Securities, began buying shares of the Florida National Bank of Jacksonville and controlled it by 1929, buying the stock cheap after the crash.
They had soon chartered Florida National Banks in six other Florida
cities before Alfred's death in 1935. Under Alfred's will, all of his
businesses were poured into a charitable testamentary trust on behalf of the Nemours Foundation's "mission
to restore and improve the health of children," with Ed Ball, a man
never accused of being charitable, as the sole trustee.
The year after Alfred's death, Ball finished the Port St. Joe project and constructed a paper mill near the port in 1938 in a joint venture with the Mead Corporation in Ohio.
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| St. Joe Paper officers overlapped with Mead Corporation of Ohio |
One of Elsie Mead's bridesmaids was Prescott's sister, Nancy Bush. The best man was James Wear Walker, and groomsmen included Poppy Bush's favorite uncle Herbie Walker, Prescott Bush, Potter Wear and James Bush, in addition to the bride's brothers--George H. Mead, Jr., H. Talbott Mead and Nelson S. Talbott.
Elsie Mead's uncle was Harold E. Talbott, Jr. who in 1921 succeeded his father as president of the Mead Pulp and Paper Co.:
In 1938 Mead entered two joint ventures in an effort to reduce its dependence on imported pulp and to enter the kraft linerboard business. It formed the Brunswick Pulp & Paper Company with Scott Paper Company to supply both parent companies. In addition, with the holding company of the Alfred du Pont estate—Almours Security Company—it built a huge pulping plant in Port St. Joe, Florida. By 1937 the Brunswick mill was producing 150 tons of pulp per day. Soon the Port St. Joe facility was yielding 300 tons of pulp and 300 tons of linerboard daily. It was widely regarded as the leading linerboard mill in the country and by 1940 was grossing $1 million a year. Relations with the Almours Security Company deteriorated, however, and Mead sold its share of the operation.
At about the same time that Telfair Knight was learning how to develop land in Coral Gables, and his nephew, Raymond Mason, was born in Jacksonville, Alfred DuPont, who knew but had not yet married the love of his life Jessie Ball, was making plans to relocate all his business enterprises to Florida, which was then in the heyday of a speculative land boom.
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| Heard Bank |
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| W.J. Bryan in Coral Gables |
Knight
and his wife lived in the oldest neighborhood of the new town, at 1311
Granada. In four years the company built 600 homes, which brought in
about $7 million. They used popular populist William Jennings Bryan,
uncle of Sherman Bryan Jennings, as a spokesman (see inset photo
to the right).
The crash of 1929, however, dealt a severe blow to
Merrick and to his associates, from which Merrick did not soon recover. Nevertheless, Knight quickly bounced back by becoming president of the Peacock Motion Picture Co. of Shanghai, China, from 1930 until 1934.
The motion picture company which came to Knight's rescue -- Peacock -- was ostensibly owned by James Augustus Thomas, managing director of British American Tobacco in China from 1905 to 1922:
When Thomas married Dorothy Quincy Read, he was 31 years older than his bride, who had been born in France in 1892 en route to China. Daughter of Sheridan P. Read, who had been appointed consul to Tientsin by Grover Cleveland, was there during the Boxer Rebellion. Dorothy, as daughter of a diplomat, had lived in China, Siberia, Russia, and England. Once a teacher at a private school in Russia, she was also involved with the women's suffrage movement in England.James Augustus Thomas, tobacco merchant and philanthropist, was born March 6, 1862 in Rockingham County, NC to Henry Evans Thomas and Cornelia Carolina Jones Thomas. At the age of 10, he started working in a tobacco warehouse, and in 1881 he graduated from Eastman National Business College in Poughkeepsie, NY. He began working at the British-American Tobacco Company, Ltd. at its inception in 1902 and by 1904, he was serving as Managing Director in China. Thomas is considered the person largely responsible for introducing American cigarettes to China and other countries. He founded the Chinese-American Bank of Commerce and two schools for Chinese children.
James Thomas with Chinese smokers
He retired from the BATC in 1922 and settled in White Plains, NY. His association with the Dukes in the tobacco industry culminated in a relationship with Duke University. In 1928, Thomas donated his Far East Library to the university. He was a member of the Board of Trustees and also served as Chair of the Duke Memorial Association, which built the Memorial Chapel within Duke Chapel, wherein the remains of Washington Duke, James B. Duke and Benjamin N. Duke are interred.
In 1922, he married Dorothy Quincy Hancock Read on Nov. 21, 1922. They had two children: James Augustus Thomas, Jr. and Eleanor Lansing Thomas.
Thomas was the author of two books: A Pioneer Tobacco Merchant in the Orient (1928) and Trailing Trade a Million Miles (1931).
Was Knight in Shanghai undercover during the two years prior to the bombing of the United States Pearl Harbor base by Japan? As a civilian, he would undoubtedly have been a resident of the British-run Shanghai International Settlements community of which Sir William Johnston Keswick was chairman. Keswick headed the Jardine-Matheson Shipping Company with intimate connections to international drug smuggling, as documented by Douglas Valentine in his book, The Strength of the Wolf.
Perhaps Keswick had influenced the selection of Telfair Knight in 1936 as secretary of the U.S. Maritime Commission created by passage in 1936 of the Merchant Marine Act. As a member of the merchant navy, not part of the U.S. military, Knight held successively the positions of director of training, chief of bureau, and commandant of the service. In 1944 he received the rank of commodore, and by 1946 he held the rank of rear admiral. The first head of the Maritime Commission was Joseph P. Kennedy, who served until 1938, when appointed as Ambassador of Great Britain.
The Maritime Commission replaced the old Shipping Board, which had directed the construction of ships for World War I. During this pre-war C.I.A. era, civilian intelligence gathering was primarily the work of the International Red Cross, whose War Council then consisted of Morgan Bank's Henry P. Davison, Ex-president William Howard Taft, Robert N. DeForest, and Col. Grayson M.-P. Murphy.
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One of the trust's assets in 1981, when Edward Ball died, consisted of 21,000 acres of virgin beachfront land between Panama City and Pensacola, Florida. A new trustee was named--another DuPont relative, Jacob C. "Jake" Belin. Belin, who lived in Port St. Joe, had joined the board of the St. Joe Paper Co. in 1953. Belin's eventual successor would be Win L. Thornton, who had begun his career at the Florida East Coast Railway in 1960.
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DRUCE, Hubert; b. 1870, Richmond, England; educ. London Univ.; stage career, with Richard Mansfield, John Drew, Grace George, Laurette Taylor, produced "Mr. Hopkinson," "The Night of the party"; screen career, Empire All Star Mutual ("Please Help Emily," "My Wife"), Goldwyn ("Dodging a Million"). Ad., home, 62 Sherman ave., Lincoln Park, Yonkers, N. Y. Yonkers 279-J.
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The Charter Company in Jacksonville, Washington, D.C. and New York City and assisted the Chairman, her father, in hosting Jacksonville visits by President Anwar Sadat of Egypt, King Hussein of Jordan and the Shah of Iran. Varina served as a director of Intrepid Capital Corporation of Jacksonville Beach, FL and Ballynahinch Castle, Inc. of County Galway, Ireland.-------------------
With Mr. Mason are his wife, Minerva, and daughter, Varina Druce. Meeting with the chairman in his light and sunny office.
NATION'S BUSINESS - Page 98
In 1924 Telfair Knight was president of the Bank of Coral Gables and lived on Granada Blvd, just east of the country club. According to the Miami article, however, he relocated with his family to Canada in 1927. There his only son married and had three children before his death from polio in 1955. It was at that point when the Newkirks returned to the U.S., though Newkirk stated he was in the process of moving to The Bahamas. A genealogical tree online reveals he died in Cornwall, England in 1966, though his wife was in Coral Gables at her death in 1984. The widow of their son died in Wilmington, N.C. in 1998.
Although the genealogical study reported that Lucile King was the daughter of William Lyon King and Estil Dopson, that was a total fabrication. She was, in fact, the younger daughter of John G. King, who worked for the Atlantic Coast Line Railroad in Wilmington. His wife was Estelle King.
http://library.digitalnc.org/cdm/compoundobject/collection/newselon/id/13363/rec/1
http://libres.uncg.edu/ir/uncw/f/depaolor2011-1.pdf
worked as a financier in Florida until he moved to Toronto and became a Canadian citizen. In 1938 he had returned to 1418 Salzedo St. in Coral Gables for two months.
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