The Founding Fathers of Insider Trading (The GOP, Lincoln & Co.)

To this day, the U.S. government has not provided a clear legal definition of insider trading. This allows the feds to engage in periodic witch hunts against unpopular business people such as Martha Stewart, the purpose of which is to divert the public’s attention away from the government’s own failed policies and blame it all on "capitalism."

But there is a particular type of insider trading – political insider trading – that has been clearly understood for generations. Because this kind of insider trading involves politicians themselves, however, there are no laws against it. A good example of political insider trading appeared recently on an episode of "The Sopranos," the HBO television series about a New Jersey Mafia family. The "don," Tony Soprano, is friends with a sleazy and corrupt state legislator, who gives Tony an inside tip that the legislature is about to give the go ahead to commercial development along the riverfront. Tony quickly purchases some land in the area, and his insider information allows him to buy low and sell high, after the development is announced, and make a killing. The state legislator does the same.

The great historian of the American west, Dee Brown, describes the historical origins of political insider trading in her book, Hear that Lonesome Whistle Blow: The Epic Story of the Transcontinental Railroads, which was recently brought to my attention by John Denson. The book tells the story of a group of men who might be called the founding fathers of political insider trading, the most prominent of which was Abraham Lincoln. The rest were some of the founding fathers of the Lincoln’s Republican Party; many of them served as generals in the union army.

In the mid to late 1850s Lincoln was a prominent railroad lawyer. His clients included the Illinois Central, which at the time was the largest corporation in the world. In 1857 he represented the Chicago, Rock Island and Pacific Railroad, which was owned by four men who would later become infamous as "robber barons" for receiving – and squandering – millions of dollars in federal subsidies for their transcontinental railroad. Granting these men their subsidies would become one of the first orders of business in the Lincoln administration.

These men – Thomas Clark Durant, Peter Dey, Grenville Dodge, and Benedict Reed – were easterners from New England and New York State who had "a store of hard experience at canal and railroad building and financing," writes Dee Brown. And they must also have been quite expert at stealing taxpayers’ money for useless government-funded boondoggles. Prior to the War between the States, government subsidies for railroad and canal building were a financial disaster. So disastrous were these government pork barrel projects that by 1860, according to economic historian Carter Goodrich, Massachusetts was the only state in the union to have not amended its constitution to prohibit taxpayer subsidies to private corporations (Carter Goodrich, Government Promotion of American Canals and Railroads, 1800–1890, p. 231).

In a dispute with a steamship company the above-mentioned men "sought out a first-rate lawyer, one who had a reputation for winning most of his cases," writes Dee Brown. "They found him in Springfield, Illinois and his name was Abraham Lincoln." The jurors in the case failed to reach a decision, but Lincoln’s performance "won him a considerable amount of attention in the Chicago press and among men of power, who two years later would push him into the race for President of the United States." One of those "men of power" was Chicago newspaper editor Joseph Medill, whose newspaper trumpeted the Lincoln candidacy on behalf of the railroad interests of Illinois.

This powerful clique of New England/New York/Chicago business interests "aroused the suspicions of the South," says Brown, since they were so vigorously lobbying Congress to allocate huge sums of money for a transcontinental railroad across the Northern states. Southern politicians wanted the route to pass through their states, naturally, but they knew they were outgunned politically by the political clique from "the Yankee belt" (New England, Pennsylvania, Ohio, the upper Midwest).

These Northern political insiders, who would form the core of leadership of the Republican Party and later, in some cases, of Lincoln’s army, positioned themselves to earn great riches from the proposed railroad subsidies. John C. Fremont, who would be a general in Lincoln’s army, was a wealthy California engineer who conducted an extensive engineering survey "to make certain that the most favorable route would end up not in San Diego but in northern California, where Fremont himself claimed sizable land holdings." Another wealthy Yankee, Pierre Chouteau, "put his money into a St. Louis factory to make iron rails and went to Washington to lobby for the 38^th parallel route."

Illinois Senator Stephen Douglas "owned enough strategically located land in Chicago to be a millionaire if his favored route westward through Council Bluffs and Omaha was chosen . . ."

And "Abraham Lincoln, the future President evidently agreed with his debating partner that the route through Council Bluffs-Omaha and the South Pass was the most practical. Lincoln acquired land interests at Council Bluffs" (emphasis added). A short time later, after the Chicago/New England/New York "men of power" propelled him into the White House, Lincoln began signing legislation giving these men millions of acres of public lands and other subsidies for their railroads.

Virtually all of the "leading lights" of the Republican Party got in on the political insider trading game by demanding bribes for their votes in favor of the subsidies. Pennsylvania congressman Thaddeus Stevens "received a block of . . . stock in exchange for his vote," but he also demanded "insertion of a clause [in the subsidy legislation] requiring that all iron used in the construction and equipment of said road to be American manufacture." In addition to being a congressman, Stevens was a Pennsylvania iron manufacturer. At the time, British iron was far cheaper than Pennsylvania iron, so that Stevens’s "restrictive clause" placed a bigger burden on the taxpayers of the North who, at the time, were already being taxed to death to finance the war.

Congressman Oakes Ames, "who with his brother Oliver manufactured shovels in Massachusetts, became a loyal ally [of the subsidy-seeking railroad companies] and helped to pressure the 1864 Pacific Railway Act through the war-corrupted Congress." (It took a lot of shovels to dig railroad beds from Iowa to California).

During the post-war Grant administration the Republican Speaker of the House of Representatives, Schuyler Colfax (later Grant’s vice president) visited the western railroad routes to attend a ceremony in his honor but, writes Dee Brown, "he preferred cash above honors, and back in Washington he eagerly accepted a bundle of Credit Mobilier stock from his follow congressman Oakes Ames, and thus became a loyal friend of the Union Pacific."

Another of Lincoln’s generals, General John Dix, was the Washington lobbyist for the railroads who "spent most of his time strutting about Washington in a general’s uniform." (Dix was the same general who Lincoln ordered in 1862 to shut down all the opposition newspapers in New York City and arrest and imprison the editors and owners).

General William Tecumseh Sherman was also sold land at below-market prices and, after the war, he would be in charge of a twenty-five year campaign of ethnic genocide against the Plains Indians, which was yet another form of veiled subsidy to the railroad corporations. After the war Grenville Dodge, who was also a Union Army general despite his lack of military training, proposed making slaves of the captured Indians and forcing them "to do the grading, with the Army furnishing a guard to make the Indians work, and keep them from running away."

These men – the founding fathers of insider trading – were responsible for the massive corruption of the grant administrations which was only the beginning of what historians call "the era of good stealings."

To: GOPcapitalist

Since arriving on this thread you have not posted ONE WORD about the contents of Tom DiLorenzo's article or its subject matter. Instead you have launched into a wholly irrelevant ad hominem tirade against Lew Rockwell for what seems to be no particular reason whatsoever. In light of that fact I must question your purpose of posting.

You would never post on a thread ignoring the topic of the thread and simply post attacks would you?

(Look here at post #59 to see how well GOPcapitalist stays on topic and refrains from personal attacks. LOL)

41 posted on 08/30/2003 4:21:24 PM PDT by #3Fan

Also a word of friendly advice for you and any lurkers out there. It looks like FR's resident pet lunatic ole #3 ran out of people to flame on his chosen thread of the day and has relocated over here. Just as he does with every other thread that has the misfortune of encountering his computer screen, expect him to attempt a hijacking of this one by polluting it with an endless stream of highly venomous, rabidly vitriolic, and wholly unsubstantiated personal attacks upon everything and anything that crosses his way. I see that he has begun attacking me even though I have not made a single comment to him on this thread.

The only way to put an end to it is to ignore him entirely. Do not respond to him. Do not acknowledge his posts to you. Otherwise he will flood you with a set of posts from a realm of anal retentiveness unseen even in Walt. He has previously and will again quite literally attempt to debate what the meaning of "is" is. Abstain from responding to his posts though and he will bore of this thread and quickly find another one to pollute.

42 posted on 08/30/2003 4:23:14 PM PDT by GOPcapitalist

To: Ronly Bonly Jones

It's personal, GOPcapitalist; I did it specifically and with absolute intent to annoy you. Nothing more.

Now that's odd, cause it looks to me as if you arrived here, saw the name "Lew Rockwell" in the headline, and started ranting about Lew Rockwell without bothering to check what the article was actually about.

43 posted on 08/30/2003 4:25:26 PM PDT by GOPcapitalist

The railroads got so much a mile allotted them for construction in the mountains and a lesser amount in flat areas. Since the construction was 1-3 thousand miles from D.C. guess what happened?

Like today we have stories of $800 monkey wrenches and $1500 toilet seats. And Hillary's cattle futures, senators like Toraccelli, DNC chairmen like Terry McCallauff(sp?) making millions on Global Crossing.

My uncle was a small town pol here in NJ. He told me it was very difficult to stay honest but possible. He said it was impossible at county level and forget state. Federal is even worse. That is why this talented man stayed local - he was honest to a fault. Just because it's the way of the world doesn't mean I have to like it or accept it.

> but if the government felt there was a security advantage and an economic advantage for the country

Sorry to say those are always the reasons trotted out for this stuff. That's why it is important to study the history of this crap closely. When enough people realize how many scams are conducted in the name of the people's benefit or national defense and their taxes get high enough maybe, just maybe the brakes might be applied.

44 posted on 08/30/2003 4:25:52 PM PDT by u-89

To: GOPcapitalist

Here we go, I got him going again. ROFL

Woohoo, hell of a rant, hell of a rant!

I see that he has begun attacking me even though I have not made a single comment to him on this thread.

Kind of like you did in Post #59 in the thread linked above?

Another figment of your imagination.

Abstain from responding to his posts though and he will bore of this thread and quickly find another one to pollute.

You were getting in a flame war before I said anything to you at all. Have you ever went to a thread without getting in a flame war?

45 posted on 08/30/2003 4:28:40 PM PDT by #3Fan

The railroads got so much a mile allotted them for construction in the mountains and a lesser amount in flat areas. Since the construction was 1-3 thousand miles from D.C. guess what happened? Like today we have stories of $800 monkey wrenches and $1500 toilet seats. And Hillary's cattle futures, senators like Toraccelli, DNC chairmen like Terry McCallauff(sp?) making millions on Global Crossing. My uncle was a small town pol here in NJ. He told me it was very difficult to stay honest but possible. He said it was impossible at county level and forget state. Federal is even worse. That is why this talented man stayed local - he was honest to a fault. Just because it's the way of the world doesn't mean I have to like it or accept it.

Yeah, there will always be those that position themselves to make money when they foresee these big projects coming. I don't think it's fair to say that only Republicans did this. Since the nation divided between Republican and Democrat in the Civil War, it's only natural that when the railroad got built that it would be Republicans building it because the Democrats seceded, there weren't many around were there?.

Yeah, I agree. In this age of computerization and the internet, it should be more practical to keep the taxpayer informed of how their money is spent and it should be done so people can see scams.

46 posted on 08/30/2003 4:36:10 PM PDT by #3Fan

Why start with Lincoln?

Why not go back to Washington' time and take a look at the companies selling government lands? Take a look at the banks financing those sales.

Greed is about as constant as an atomic clock.

47 posted on 08/30/2003 4:40:55 PM PDT by fightu4it (conquest by immigration and subversion spells the end of US.)

You are correct of course that there has always been those in and out of government working in tandem with selfish, venal motivations. I believe the point DiLorenzo has been making with his book on Lincoln and his follow up commentaries is that the country was fundamentally altered by the ascension of the GOP and The War Between the States.

Regarding the specifics of corruption sure it existed before 1861 but it was checked to a degree by partisanship, regionalism and sometimes even a respect for constitutional law. Lincoln and the GOP's success established corporate welfare, bribery and graft as official policy, all at the expense of the general public. Conservatives tend to blame all of today's ills on FDR and LBJ. The point is we were in trouble long before them.

48 posted on 08/30/2003 5:57:55 PM PDT by u-89

Lincoln and the GOP's success established corporate welfare, bribery and graft as official policy, all at the expense of the general public.

Yes. That and the fact that Mr. Lincoln's real image is nowhere near as pretty as the snow white secular saint of democracy of popular portrayal.

49 posted on 08/30/2003 7:38:57 PM PDT by GOPcapitalist

To: GOPcapitalist

before launching into a string of anti-Dilorenzo ad hominems. It puts you ahead of your colleagues by a few feet though you are still behind any substantive discussion by several miles.

String of ad hominems? Come now. The closest thing to an ad hominem is my claim that Mr. DiLorenzo is trying to make a career out of Lincoln bashing. I said Lincoln is DiLorenzo's single-minded obsession. I don't actually think either of those statements qualifies as ad hominem. And even if they do, they are hardly a string. So back off on that one. You're completely wrong. Totally off base. Whining up the wrong tree. And by the way, can DiLorenzo go two paragraphs without mentioning Lincoln? I don't think he could write a recipe for cornbread without mentioning old Ape Lincom.

As for substantive discussion, I said very plainly in my post that I don't see any point in it, and I gave my reason why. It's pointless. Get it?

As for Rockwell, anyone with any sense knows he's scum. Now THAT'S ad hominem. It's also right on the money. Good day.

50 posted on 08/30/2003 8:14:08 PM PDT by Huck

To: Ronly Bonly Jones

Not that Rockwell is a credible forum, but hey.

Of course it isn't. It's a joke.

51 posted on 08/30/2003 8:17:52 PM PDT by Huck

String of ad hominems? Come now.

String indeed. Your post was a list of personal attacks on DiLorenzo and those who read him. What it failed to do is address any matter of substance whatsoever as it relates to the article.

I don't actually think either of those statements qualifies as ad hominem

Let's see then...

"Attacking the Person (argumentum ad hominem)
Definition:
The person presenting an argument is attacked instead of the argument itself. This takes many forms. For example,the person's character, nationality or religion may be attacked. Alternatively, it may be pointed out that a person stands to gain from a favourable outcome. Or, finally, a person may be attacked by association, or by the company he keeps. There are three major forms of Attacking the Person:

1. ad hominem (abusive): instead of attacking an assertion, the argument attacks the person who made the assertion.
2. ad hominem (circumstantial): instead of attacking an assertion the author points to the relationship between the person making the assertion and the person's circumstances.
3. ad hominem (tu quoque): this form of attack on the person notes that a person does not practise what he preaches."

Now, back to what you said.

"He is trying to make a career out of attacking Lincoln. Beats attacking someone who can fight back, I suppose."

That certainly appears as if you are making an attack upon DiLorenzo's character by assigning a negative motive to him personally and attacking that alleged motive. That's one ad hominem.

"His single-minded Lincoln obsession is absolutely hysterically funny."

...which certainly appears to be an attack upon DiLorenzo the person in absence of a response to the arguments he made in his article. That makes two.

"Anyone who can be duped by DiLOrenzo is just a dupe anyway."

...and that is indisputably a personal attack upon all who favorably respond to DiLorenzo's writings, giving us our third ad hominem. So yes, you did indeed engage in ad hominems.

And even if they do, they are hardly a string. A "string of ad hominems" could properly be defines as a succession of consecutive ad hominems in the plural sense of two or more. Your post contained three in succession, thereby making it a string.

So back off on that one.

Considering that I have been able to make my case and stand by my previous assertion within all reasonable considerations and documentation I see no need to back off from anything.

And by the way, can DiLorenzo go two paragraphs without mentioning Lincoln? I don't think he could write a recipe for cornbread without mentioning old Ape Lincom.

...which takes us to #4 and #5 while simultaneously indicating that the previously referenced string of ad hominems is by no means a closed one.

As for substantive discussion, I said very plainly in my post that I don't see any point in it, and I gave my reason why. It's pointless. Get it?

If in that you mean to convey that your reasons were stated in your previous post I need only note that, being ad hominem arguments, they were accordingly fallacious as reasons. If in that you mean to convey that an attribute of pointlessness serves as your reason for determining that there is no "point in it," namely the act of a substantive response to Dilorenzo's argument, I need only note that your conclusion is a circular one in which not only does the conclusion depend upon the premise but also the premise upon the conclusion, thereby rendering it void on a problematic self-contingency.

52 posted on 08/30/2003 8:40:09 PM PDT by GOPcapitalist

To: GOPcapitalist

your conclusion is a circular one

He-heeeey, you did get it! Well, you move to the head of the class! Way to go! Right on! Woo-hoo!

53 posted on 08/30/2003 8:49:20 PM PDT by Huck

To: GOPcapitalist

By the way, every time you said this:

That certainly appears as if you ...

or words to that effect, what followed was dead wrong. Absolutely incorrect. The fact is, DiLorenzo talks of nothing but Lincoln. All I did was acknowledge that simple fact. It's not ad hominem. You're wrong to think it is. Incorrect.

54 posted on 08/30/2003 8:52:30 PM PDT by Huck

To: GOPcapitalist

Waaaaaaaaiiiiiiiiiiit. Hold the phone. I see where you are getting confused. The definition of ad hominem you posted begins with "instead of attacking an assertion." See, that's where you are getting it wrong. I wasn't pointing out DiLorenzo's Lincoln fetish instead of attacking his, ahem, "assertions". I thought I had made it clear that I don't believe his, ahem, "assertions" merit a rebuttal. There is no point. Get it? I think you still don't. I was simply pointing out that DiLorenzo, not Rockwell, wrote the article. See, you thought there should be some sort of debate of facts or something. I'd sooner debate the flatness of the earth.

55 posted on 08/30/2003 8:57:34 PM PDT by Huck

I agree some of the laws here in the South were quite ridiculous and I wouldn't have supported even one of them.

Your precious and venerated ancestors did, though - some of whom you still remember.

However the issue behind that is, do the separate and sovereign states have the right to order their own affairs as they see fit within their borders?

You lost, and your cause was repugnant. Get over it - the name of the country is THE United States of America - drop the goofy redneck affectation. Besides, had things turned out a little differently in the 50s and 60s, I'm sure that your hysterical ancestors would have overcome those "principles" and come running to Uncle Sam for troops the moment that your fine white churches, businesses and government buildings would have started lighting up in the real civil unrest that y'all were deserving to receive.

You should be on your knees every day, thanking God that MLK came along and created a peaceful path instead of that trail of violence which was coming, and which was so justly deserved.

56 posted on 08/30/2003 9:05:11 PM PDT by Chancellor Palpatine (Give death the finger. Try new things, live, enjoy simple pleasures.)

The definition of ad hominem you posted begins with "instead of attacking an assertion." See, that's where you are getting it wrong.

In light of the complete absence of any substantive commentary on DiLorenzo's article in your post, exactly what, other than an assault upon his person in their place, is one to construe of your attacks of DiLorenzo? Your actions were ad hominem by definition and no ammount of ex post facto equivocation will ever change that.

I thought I had made it clear that I don't believe his, ahem, "assertions" merit a rebuttal.

And that is precisely the problem with your argument. You originally premised your conclusion that they do not merit a rebuttal upon your attacks against DiLorenzo's person. Now, in turn, you are premising your attacks upon DiLorenzo's person on the conclusion that his arguments do not merit rebuttal. In short, your argument is wholly circular and contained within that circle is a definite string of ad hominems.

57 posted on 08/30/2003 9:51:05 PM PDT by GOPcapitalist

He-heeeey, you did get it!

Glad to see you admit it then. Now I need only note that as a circular argument, your statements are without any intellectual substance or merit and may be dismissed as gratuitously as they were stated in the first place. Have a nice day.

58 posted on 08/30/2003 9:52:30 PM PDT by GOPcapitalist

The fact is, DiLorenzo talks of nothing but Lincoln. All I did was acknowledge that simple fact.

Your so-called "fact" was gratuitously asserted to begin with and, given due scrutiny, fails to hold up as a fact. A quick search on Amazon.com reveals that Thomas DiLorenzo is the author of some 10 or so books, one of which is his Lincoln biography. The remainder cover a variety of wholly unrelated subjects including public healthcare policy, political lobbying, the economics of charities, and government food and drink regulation among others. Thus your conclusion that he writes only on Lincoln is not only wholly unsubstantiated but, seeing as the majority of his published work is on entirely different subject matters, also wholly off base.

59 posted on 08/30/2003 10:00:33 PM PDT by GOPcapitalist

To: GOPcapitalist

You originally premised your conclusion that they do not merit a rebuttal upon your attacks against DiLorenzo's person.

Wrong again. Man, you have a real knack for being totally mistaken. I didn't premise my conclusion on anything. I just laid it down. My comments--they were not "attacks--on DiLorenzo's Lincoln fetish were (in your own words)gratuitious. And if you wanted to reach for a "premise" for not rebutting DiLorenzo, it would have to be the "dupe" comment, which was not a comment on DiLorenzo, but on his adoring fans.

You are a perfect example of that. All I have done is post ridiculously argumentative posts worded in such a way as to get a rise out of you, and you are so intent on being right, on proving your point, that you are blind to the silliness of it. You say it should be disregarded, but you can't bring yourself to disregard it.

I didn't call DiLorenzo an ass. I didn't call him a racist. I didn't call him a pseudo historian, a hack, an amateur, a lightweight, a liar. I didn't call him any of those things. I didn't say he still lives at home with his mother. I didn't say he is to the left of Ralph Nader. I said he's got a Lincoln fetish.

Here's a list of his articles on LewRockwell.com:

Dishonest Abe
The Lincolnians were inside traders.

1-0 me.

Statism, Imperialism, Hubris
Thomas DiLorenzo on Irving "the Godfather" Kristol's neocon manifesto.

You would think not, but by the middle of the article, "Like the neocon Lincoln idolaters..." etc etc.

That's 2-0 me.

The GOP-Liberian Connection
Lincoln started it, with the plan to deport American blacks to Africa.

3-0 me.

Supreme Dictators
Thanks, as a happy Woodrow Wilson explained, to Lincoln.

4-0.

The Political Economy of World Domination
Thomas DiLorenzo on the neocons and their strange, Eastern European philosophy.

I almost thought the shutout was beat, until: "That’s why they go on and on about what it takes to be a "great statesman" and constantly invoke their two most adored heroes, Lincoln ..."

5-0.

Leo Lincoln
No wonder neocons love Abe, says Thomas DiLorenzo.

6-0.

States Rights vs. Tyranny
And tyrannical central banking.

"after Lincoln’s war the Supreme Court "became the sole and final arbiter of constitutional controversies. No longer could a Jefferson arise"

7-0

Six Myths About Lincoln
Thomas DiLorenzo explodes them.

8-0

The 'Buy America' Myth
The South, unlike Lincoln and the Buchananites, was right on tariffs, says Thomas DiLorenzo.

9-0

Northern States Rights
Thomas DiLorenzo on Straussian lies about America.

10-0

Lincoln's Spectacular Lie
That the central government created the states.

11-0

Protectionism Means Hostilities
As in 1861.

12-0

What Lincoln's Army Did to the Indians
No wonder the neocons love General Sherman.

13-0

The Lincolnian Graveyard
Neocons are whistling past it, says Thomas J. DiLorenzo.

14-0

Lincolnites Love Bush
Uh oh.

15-0

Lincoln: Slavery A-OK
Thomas DiLorenzo on the Great Emancipator's real 13th amendment.

16-0

Anti-Lincoln Gangs of New York
Some effects of Lincoln's military slavery.

17-0

I am going to stop there. But there are at least another DOZEN articles listed that have Lincoln in the title. We can safely assume that he worked old Abe into the others as well.

The first 17 all dealt directly or indirectly with Lincoln. OK? So, once again, you are totally wrong. Surprise surprise. So, is saying Lorenzo is obsessed with Lincoln ad hominem? Hardly. More like an understatement. You through yet, or you want some more?

60 posted on 08/31/2003 7:09:22 AM PDT by Huck

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