New York Times Urges Normalization of U.S.- Cuba Relations

In an October 12th editorial the New York Times says, “For the first time in more than 50 years, shifting politics in the United States and changing policies in Cuba make it politically feasible to re-establish formal diplomatic relations and dismantle the senseless embargo.” Indeed, in the Times’ opinion, these changes in U.S. policy should be accompanied by ending the U.S. designation of Cuba as a “State Sponsor of Terrorism.”[1]

 Editorial’s Commentary on Cuba’s Current Conditions

The Times points out that Cuba has “taken significant steps to liberalize and diversify the island’s tightly controlled economy.” This includes “allowing citizens to take private-sector jobs and own property.” encouraging foreign investment, constructing a major deep-sea port in Mariel with Brazilian capital and negotiating a cooperation agreement with the European Union. Although the pace of reform may seem slow and inconsistent, these are significant changes.

On the other hand, the Times asserts that the Cuban “government still harasses and detains dissidents . . . [and has not explained] the suspicious circumstances surrounding the death of political activist Oswaldo Payá.” This is outweighed, however, by the Cuban government’s in recent years having “released political prisoners” and showing “slightly more tolerance for criticism of the [government’s leadership” while loosening travel restrictions “enabling prominent dissidents to travel abroad.”[1a]

Editorial’s Recommendations for U.S. Policy

End Designation of Cuba as a “State Sponsor of Terrorism.” The Times recommends that the U.S. “should remove Cuba from State Department’s list of nations that sponsor terrorist organizations . . . .   Cuba was put on the list in 1982 for backing terrorist groups in Latin America, which it no longer does. . . . [and Cuba now] is playing a constructive role in the conflict in Colombia by hosting peace talks between the government and guerrilla leaders.” [2]

End the Embargo. Just 16 days before the U.N. General Assembly is expected again to overwhelmingly approve Cuba’s resolution to condemn the embargo, the Times says the U.S should end its embargo of Cuba as it has become “clear to many American policy makers that the embargo was an utter failure.” In addition, now a slight majority of Cuban-Americans in Florida oppose the embargo.

“Fully ending the embargo will require Congress’s approval,” which may be difficult to obtain in this time of a dysfunctional Congress, but the Administration could “lift caps on remittances, allow Americans to finance private Cuban businesses and expand opportunities for travel to the island.”

Ending the embargo, according to the Times, “could also help American companies that are interested in developing the island’s telecommunications network but remain wary of the legal and political risks. Failing to engage with Cuba now will likely cede this market to competitors. The presidents of China and Russia traveled to Cuba in separate visits in July, and both leaders pledged to expand ties.”

In addition, ending the embargo would eliminate Cuba’s using the embargo as an excuse for the Cuban government’s shortcomings.[3]

Restoration of Diplomatic Relations. Says the Times, “Restoring diplomatic ties, which the White House can do without congressional approval, would allow the United States to expand and deepen cooperation in areas where the two nations already manage to work collaboratively — like managing migration flows, maritime patrolling and oil rig safety.[4] It would better position Washington to press the Cubans on democratic reforms, and could stem a new wave of migration to the United States driven by hopelessness.”

Closer ties could also bring a breakthrough on the case of an American development contractor, Alan Gross, who has been unjustly imprisoned by Cuba for nearly five years.[5] More broadly, it would create opportunities to empower ordinary Cubans, gradually eroding the government’s ability to control their lives.

In the opinion of the Times, Restoring relations would improve U.S. “relationships with governments in Latin America, and resolve an irritant that has stymied initiatives in the hemisphere.” The most current example of that irritant is “Latin American governments . . . [insisting] that Cuba, the Caribbean’s most populous island and one of the most educated societies in the hemisphere, be invited” to next year’s Summit of the Americas in Panama over U.S. opposition.

Moreover, “The [Cuban] government has said it would welcome renewed diplomatic relations with the United States and would not set preconditions” while a significant majority of Cuban-Americans favor restoring diplomatic ties, mirroring the views of other Americans.

Reactions to the Editorial 

I concur in all of the Times’ recommendations, but believe it understates the economic reasons for these changes in U.S. policy. Here is a fuller exposition of those economic reasons.

This month Dr. José Ramón Cabañas Rodriguez, the Chief of Mission, Cuban Interests Section, said that the U.S. was running the risk of becoming economically irrelevant to Cuba. Many foreign countries, especially China, and foreign companies are developing good commercial relationships with Cuba and its new private businesses with ordinary commercial terms, unlike the U.S. sales of food and agricultural products under an exemption to the U.S. Helms-Burton Law that requires Cuba to pay in advance and in cash for such products. This U.S. practice is not a good way to encourage future business. Moreover, the new Mariel port and its adjacent business park is attracting interest from companies all over the world, and if all the space in that park is committed to these foreign companies, there will be nothing left for U.S. companies.

The geographical setting of the new Mariel port is strategic in terms of trade, industry and services in Latin America and the Caribbean. On the northern cost of Cuba only 45 km west of Havana, it is located along the route of the main maritime transport flows in the western hemisphere. As the largest industrial port in the Caribbean, it will be equipped with state-of-the-art technology to handle cargo from the larger container ships that will begin to arrive when the expansion of the Panama Canal is completed in December 2015. Those larger ships can carry up to 12,500 containers, triple the capacity of the current ships, and the port’s warehouse capacity is 822,000 containers. Here are some photos of the development of this port.

Mariel PortMariel3

The Mariel project includes highways connecting the port with the rest of the country, a railway network, and communication infrastructure. In the adjacent special zone, currently under construction, there will be productive, trade, agricultural, port, logistical, training, recreational, tourist, real estate, and technological development and innovation activities in installations that include merchandise distribution centers and industrial parks.

The special zone is divided into eight sectors, to be developed in stages. The first involves telecommunications and a modern technology park where pharmaceutical and biotechnology firms will operate. Other sectors include renewable energies, agriculture and food, chemical, construction materials, logistics and rental equipment. For the last four sectors Cuba is currently studying the approval of 23 projects from Europe, Asia and the Americas.

The May 2014 visit to Cuba by a delegation from the U.S. Chamber of Commerce evidences U.S. businesses’ cognizance of these economic and commercial realities. The delegation’s head and the Chamber’s president, Thomas Donohue,  said in a speech in Havana, “For years, the US Chamber of Commerce has demanded that our government eliminate the commercial embargo on Cuba. It’s time for a new approach.” At the conclusion of the trip he said the delegation and Cuban officials had “talked about steps forward that might be taken by both countries” to improve U.S.-‪Cuba relations and that their meetings with President Raul Castro had been “positive.” In addition, the Chamber in congressional testimony has called for an end to the embargo and has supported proposed legislation to end the ban on U.S. citizens traveling to the island and easing restrictions on U.S. exports of farm and medical products.

Another sign of U.S. companies’ interest in Cuba is the visit to the island this past June by Google executives. They said they discussed increasing Cubans access to the Internet and Cuba’s need for improving its Internet technology.

These U.S. economic concerns were highlighted in February 2014 by U.S. Senator Patrick Leahy, who earlier had led a visit with four other Senators to Cuba. Leahy said, “Trade with Latin America is the fastest growing part of our international commerce.  Rather than isolate Cuba with outdated policies, we have isolated ourselves.  Our Latin, European and Canadian friends engage with Cuba all that time.  Meanwhile, U.S. companies are prohibited from any economic activity on the island.” Therefore, the Senator said, “It is time – past time – to modernize our policies and the frozen-in-time embargo on Americans’ travel and trade with Cuba that have accomplished nothing but to give the Cuban regime a scapegoat for the failures of the Cuban economy.  Change will come to Cuba, but our policies have delayed and impeded change.  It is time to elevate the voice of a crucial stakeholder:  the American people. Thanks to this [recent public opinion] poll, they are silent no longer. It is time to recognize that U.S. policy toward Cuba has been unsuccessful in achieving any of its objectives.”

Given the limited space for an individual editorial, the New York Times editorial does not discuss any of the other many issues that need to be addressed by the two countries in order to establish truly normal relations. Nor does it discuss how this normalization process can happen or be facilitated.

In contrast, this blog repeatedly has suggested both counties need a neutral third-party with the resources and commitment to act as mediator and has called for such a third-party to step forward to offer such services, rather than waiting for the U.S. or Cuba to make such a proposal unilaterally or for the two countries to agree to such a mediation. [6]

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[1] Interestingly the online version of the editorial is titled “End the U.S. Embargo on Cuba” with a linked Spanish translation while the print version is titled “The Moment to Restore Ties to Cuba.”

[1a] This month Dr. José Ramón Cabañas Rodriguez, the Chief of Mission, Cuban Interests Section, emphasized that Cuba now has term limits on every governmental office, including president: two terms of five years each for a total limit of 10 years, and Raul Castro has announced that this applies to him and thus ends his term as president in 2018. Dr. Cabañas also emphasized that many younger people are taking over many governmental positions and that there has been a decentralization of power to municipalities.

[2] This blog has provided detailed criticism of the ridiculous, absurd, stupid and cowardly rationales provided by the U.S. for such designations in 2010, 2011, 2012 (with supplement), 2013 and 2014.

[3] This blog has provided criticisms of the embargo.

[4] This month Dr. José Ramón Cabañas Rodriguez also said that the U.S. and Cuba in recent years have had bilateral discussions regarding migration, drug trafficking, search and rescue in the Florida straits, stopping oil spills in the Caribbean, airline security measures, scientific exchanges and restoration of direct telephone and mail services. In addition, the U.S. has invited or permitted an invitation to Cuba to attend a Clean Oil Conference in San Antonio, Texas in December 2014.

[5] Although it certainly is debatable whether Mr. Gross was unjustly convicted in Cuban courts for violating Cuban law, I agree that it is in the U.S. national interest to have him released and returned to the U.S. Cuba, however, has argued that the three of the “Cuban Five” still in U.S. prisons should also be released and allowed to return to their homes. At a minimum, I believe that negotiations between the two countries could and should lead to at least a one-for-one exchange with the U.S. President commuting the sentence of one of the three Cubans to time served.

[6] This blog has called for normalization of Cuba-U.S. relations and has criticized the U.S. for insisting on preconditions for holding any talks with Cuba to improve relations. Another blog post was a public letter to President Obama recommending reconciliation with Cuba. In addition, this year a group of 50 prominent Americans issued a public letter to the President urging him to take executive action to expand U.S. involvement with Cuba. Another blog post criticized recent opposition to pursuing such reconciliation.

The New York Central Railroad at Start of the 20th Century

New_York_Central_Herald

 At the start of the 20th century the New York Central Railroad was one of the most important and powerful railroads in the U.S., and because of the importance of railroading at the time, it was one of the country’s most powerful corporations. Its lines stretched from Boston in the east to Chicago and St. Louis in the west and from New York City in the south to the Canadian border in the north.

20th Century Limited
20th Century Limited

Starting in 1902, its flagship operation was the luxurious first-class Twentieth Century Limited, operating on a fast schedule between New York’s Grand Central Terminal and Chicago’s LaSalle Street Station. Here are an image of an early Twentieth Century Limited train and a map of the Central’s lines in 1914.

 

 rail.str.0249.01        

 The Central’s Board of Directors

From its headquarters in New York City, the Central’s board of directors during the first decade of the century included men (all white and no women, sorry) who were wealthy and powerful in their own right and who are important in American history. Here are profiles of some of these figures.

William K. Vanderbilt
William K. Vanderbilt

William K. Vanderbilt, a grandson of Cornelius “Commodore Vanderbilt, [1] had been active in the day-to-day operations of the Central from 1863 until 1903. He was a yachtsman who won the America’s Cup in 1895, an owner of many race horses, an active supporter of the Metropolitan Opera and an owner of fine paintings which he eventually bequeathed to the Metropolitan Museum of Art. His mansion on Fifth Avenue  was regarded as one of Manhattan’s most magnificent residences. When he died in 1920 his estate publicly was estimated at $100 million.

Frederick K. Vanderbilt was another grandson of the Commodore who also had been active in the Central.

Hamlton McKown Twombly
Hamlton McKown Twombly

 

Hamilton McKown Twombly was married to the Commodore’s granddaughter, Florence Adele Vanderbilt, and through wise investment of her inheritance and his own money became very wealthy.

 

 

 

Chauncey Depew
Chauncey Depew

Chauncey M. Depew was the Vanderbilts’ lawyer, a “glib raconteur, master of ceremonies and after-dinner speaker” who used his legal talents in “an essentially public relations role for the [Central] and other Vanderbilt properties.”

Depew also was a prominent Republican Party politician. He was one of the organizers of the Party in 1858; a delegate to every Party convention from 1860 to 1920; a member of the New York legislature, 1861-62; New York’s Secretary of State, 1864-65; a candidate for the Party’s presidential nomination in 1888; President Harrison’s choice for U.S. Secretary of State, which Depew declined; and a U.S. Senator from New York, 1899-1911 (while he was a Director of the Central). During the Civil War he was a confidant of President Lincoln, which lead to Depew’s being New York’s official escort for President Lincoln’s funeral train on its way to Illinois.

In 1866 Depew as the principal speaker at the dedication of the Statue of Liberty said,“We dedicate this statue to the friendship of nations and the peace of the world. The spirit of liberty embraces all races in common; it voices in all languages the same needs and aspirations. The full power of its expansive and progressive influence cannot be reached until wars cease, armies are disbanded, and international disputes are settled by lawful tribunals and the principles of justice. Then the people of every nation, secure from invasion and free from the burden and menace of great armaments, can calmly and dispassionately promote their own happiness and prosperity.” This sounds like the post-World War II Universal Declaration of Human Rights.

 

J. P. Morgan
J. P. Morgan

 

John Pierpont (“J.P.”) Morgan, of course, was the famous Wall Street financier of the robber barons in the late 19th century. He reorganized major industrial companies and railroads and was one of the most powerful figures in railroading. J.P. also helped to halt financial panics in 1893 and 1907.

 

 

George S. Bowdoin was a wealthy partner of J. P. Morgan.[2]

William Rockefeller
William Rockefeller

 

William Rockefeller with his older brother, John D. Rockefeller, established and was active in the Standard Oil Company. William also was part of the “Standard Oil Gang” that engaged in various financial promotions. William was a jovial man who liked good living with little taste for philanthropy.

 

George F. Baker
George F. Baker

 

George F. Baker was another Wall Street financier, an ally of the Rockefellers and a founder of the First National Bank of New York. During the Civil War he was consulted by members of the Lincoln Cabinet on financial matters. He endowed the Harvard Business School and made large contributions to the Metropolitan Museum of Art and the Red Cross.[3]

 

 

 

James Stillman
James Stillman

James Stillman was the President of the National City Bank of New York City (now known as Citibank), and his two daughters married sons of William Rockefeller. Stillman was considered to be one of the 100 wealthiest Americans of his time.

Edward H. Harriman
Edward H. Harriman

 

Edward H. Harriman was the President of the Union Pacific Railroad and an ally of William Rockefeller and James Stillman.[4]

 

 

Marvin Hughitt
Marvin Hughitt

 

Marvin Hughitt was the President of the Chicago & Northwestern Railroad.

Lewis Cass Ledyard
Lewis Cass Ledyard

 

Lewis Cass Ledyard, a Wall Street lawyer, co-founder of the law firm of Carter, Ledyard & Milburn and counsel for the New York Stock Exchange and noted corporations. Ledyard was the executor of the J.P. Morgan estate.

 

Darius O. Mills
Darius O. Mills

 

Darius O. Mills was a Gold Rush adventurer who turned to finance and banking. For a time he was the wealthiest person in California.

William H. Newman was the Central’s President at the start of the 20th century until he was succeeded by W. C. Brown.  Newman was from Virginia and started his railroad career at age 23 in 1869 as a station agent to become in 1898 the president of two Central subsidiaries–the Lake Shore & Michigan Southern and the Lake Erie & Western Railroads.

Conclusion

This was the world that in 1902 welcomed into its senior executive ranks William Carlos Brown, a man of modest background from the State of Iowa.

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[1] “Commodore” Vanderbilt through a shipping fortune and stock manipulations gained control of the Central in the 1860’s. His grand ball in 1883 is often seen as the epitome of the gilded age. The Commodore gave $1 million to Tennessee’s Central University in exchange for its being renamed as Vanderbilt University. A contemporary descendant of the “Commodore” is CNN’s Anderson Cooper.

[2] One of George S. Bowdoin’s ancestors, James Bowdoin, was a Governor of Massachusetts, and the latter’s son, James Bowdoin III, was an early benefactor of Bowdoin College in Brunswick, Maine. The College was chartered in 1794 by Massachusetts Governor Samuel Adams when Maine was part of Massachusetts and was named for Governor Bowdoin.

[3] Baker’s son, George F. Baker, Jr., was another Wall Street financier whose trust established a college scholarship program, of which I was a beneficiary as a George F. Baker Scholar at Grinnell College.

[4] Edward Harriman’s son, W. Averell Harriman (1891 – 1986), was a special envoy to Europe for President Franklin D. Roosevelt, U.S. Secretary of Commerce under President Truman, Governor of New York and U.S. Ambassador to the Soviet Union and later to Great Britain. He was a candidate for the Democratic presidential nomination in 1952, and again in 1956, but lost to Adlai Stevenson both times.

 

William Carlos Brown: A 19th Century Railroading Success Story

My great-great-uncle, William Carlos (or W.C.) Brown, was a senior executive of the New York Central Railroad when Manhattan’s Grand Central Terminal was built in the early 20th century at 42nd Street and Park Avenue. He was one of its Vice Presidents, 1902-1906; Senior Vice President, 1906-1909; and President, 1909-1913.[1]

As we will see in this post, W.C. rose to these important positions with the New York Central from very modest beginnings. He was a 19th century railroading success story.

On July 29, 1853, W.C. and his twin brother, George Lyon, were born in Norway, New York. His father was my maternal great-great-grandfather, Rev. Charles Edwin Brown, who was recuperating in his native upstate New York from “inflammatory rheumatism” he had caught while working as a Baptist missionary in the Iowa Territory (and State after 1846). W.C.’s mother (and my maternal great-great-grandmother) was Frances Lyon Brown.[2]

Four years later (July 1857) Rev. Brown returned to Iowa to continue his missionary work in the northeastern part of that State.[3] Going with him were his wife and their four sons: Charles Perry, 17 years old; James DeGrush (my maternal great-grandfather), 11 years old;[4] and the four-year old twins, William and George.

William in 1869, at the age of 16, after being educated at home and in schools in small towns, started working as a “section hand and wooder” in Illinois for the Chicago, Milwaukee & St. Louis Railroad [“the Milwaukee Road”]. During the day W.C. loaded, unloaded and piled wood that powered the seam-engines of the locomotives. At night he learned telegraphy skills from the station agent.

This was the start of Brown’s 33-year journey in the railroad industry to become a senior executive of the New York Central Railroad in New York City.

By the spring of 1870 he was a telegraph operator for the Milwaukee Road in Iowa, and the next year (1871) he was promoted to night-operator at the Road’s train dispatcher’s office in Minneapolis, Minnesota.

In 1872 W.C. left the Milwaukee Road to join the Illinois Central Railroad as train dispatcher in Iowa. Three years later, in 1875, he was hired in the same position at another Iowa town by the Chicago, Rock Island & Pacific Railroad.

The Chicago, Burlington & Quincy Railroad (“the Burlington Road”) was the next stop on W.C.’s advancement in railroading for the next 18 years. From 1876 to 1880 he was a train dispatcher in Iowa, and during a blizzard he volunteered to help rescue cattle from 400 stalled cattle-cars. This demonstration of ability to act in an emergency and his other skills brought him successive promotions to chief dispatcher, trainmaster, assistant superintendent and then superintendent for the Burlington Road from 1880 to 1890.

In the 1880’s while on duty in St. Louis, W.C. pulled a switch to let a train proceed in the middle of striking switchmen holding rifles. He instantly was anointed with the nickname: “Little Man Unafraid.” This moniker was used again when in 1888 he took over as engineer to take a train out of Ottumwa, Iowa during an engineer’s strike and safely piloted the train to Chicago. Perhaps for the working men on the railroads, he was known as “the Strikebreaker.”

From 1890 to 1896, W.C. was general manager for several railroads with operations in Missouri (Hannibal & St. Joseph; Kansas City, St. Joseph & Council Bluffs; and Chicago, Burlington & Kansas City). In 1893 after learning that a band of robbers were planning to hold up a passenger train, Brown quietly replaced the passengers on that train with armed policemen in the baggage car. When the bandits stopped the train and forced the engineer and fireman to open up the baggage car, the bandits were surprised to be looking into the barrels of police rifles. The robbery was foiled, and a St. Louis newspaper said, “the lives of some innocent passengers, were undoubtedly saved. Mr. Brown thus adds another circlet to the palm and laurel which he already wears.”

In 1896 W.C. returned to the Burlington Road as general manager. This prompted an Ottumwa newspaper to say, “There are a few especial reasons for Brown’s success. He took whatever duties that were assigned to him and gave them his best effort. His methods were always clean and honest and his treatment of his subordinates and of the public has been based on the same candor and courtesy accorded his superiors in rank. The story of his life reads like a romance and in this story is the greatest incentive to youth, for hard work, intelligent effort, and clean methods, in whatever is undertaken.”

Brown remained with the Burlington until 1901 when at age 48 he joined the New York Central system as Vice President and General Manager of its Lake Shore & Michigan Southern Railroad, which ran from Buffalo along the southern shore of Lake Erie through Cleveland, Toledo, and South Bend to Chicago, and of its Lake Erie & Western Railroad, which ran from Fremont Ohio to Bloomington Illinois.

Thus, over his past 33 years, W.C. had advanced from a manual laborer handling wood for steam-engines to become the C.E.O. of two railroads affiliated with the New York Central Railroad. He did this with the modest education available in small towns on the prairie. This remarkable journey shows the amazing employment opportunities then available in railroading before the age of university business education.[5]

During this period of career advancement, W.C. married his sweetheart from Lime Springs, Mary “Ella” Hewitt, in 1874 in her parents’ home in the town, and their five children were born: Georgia Frances Brown, 1875; Charles Edwin “Eddie” Brown, 1877; Lura Belle Brown, 1880; Bertha Adelaide Brown, 1882; and Margaret Heddens Brown, 1891. Two of the children died during this period: “Eddie” Brown, 1882; and Lura Belle, 1882, while Georgia Frances was married to Dr. Frank Ellis Pierce, 1899.

Subsequent posts will look at what the New York Central looked like at the start of the 20th century, at W.C.’s career with the New York Central, his retirement, his being charged (but not prosecuted) with a federal crime, and his death.

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[1] A prior post discussed the Terminal on its centennial in 2013 with other details provided in another post.

[2] Other posts discussed Rev. Brown’s lineage in America, his initial trip to the Iowa Territory in 1842, his missionary work in that Territory (and State), 1842-1851; and his recuperation in New York State, 1851-1857.

[3] Another post was about Rev. Brown’s missionary work in Iowa, 1857-1887.

[4] An earlier post focused on my maternal great-grandparents, James DeGrush and Ella Francelia Dye Brown.

[5] Two of W.C.’s brothers also went into railroading. His twin brother, George Lyon, was a trainman for the Milwaukee Road, but died at age 18 in 1871 from injuries received while coupling railroad cars in St. Paul, Minnesota. Another brother (and my maternal great-grandfather), James DeGrush Brown, worked in railroading his entire working life.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grand Central Terminal’s Centennial

Today (February 2, 2013) marks the centennial of the opening of New York City’s magnificent Grand Central Terminal on 42nd Street. [1]

Whenever I am in the Terminal, I marvel at its beautiful details and overwhelming presence.

Grand Central Terminal
Grand Central Terminal
Grand Central Terminal
Grand Central Terminal

 

 

 

 

 

W. C. Brown
W. C. Brown

 

Being in the Terminal also reminds me of an ancestor who played a significant role in managing its construction for the New York Central Railroad: William Carlos Brown, who was a Railroad Vice President, 1902-1906; Senior Vice President, 1906-1909; and President, 1909-1913. He was the son of my maternal second great-grandfather, Rev. Charles E. Brown, and hence was my second great-uncle. [2]

William J. Wilgus
William J. Wilgus

The idea for the Terminal was suggested in December 1902 by William J. Wilgus, the Chief Engineer of the New York Central Railroad.

Wilgus was responding to the crash earlier that year (January) of two steam-powered trains in the Park Avenue Tunnel at 58th Street in Manhattan. Because of the steam, cinders, heat, fog and snow, the engineer of one of the trains could not see the other train and failed to stop. Fifteen passengers were killed instantly, and many others were injured.

As he pondered that year over the crash, Wilgus became convinced that it was no longer possible to run a massive railroad yard at the heart of the nation’s largest city and that electric locomotives would be much safer and more efficient to operate in cities. Therefore, he suggested demolishing the existing Grand Central Depot, replacing steam locomotives with electric ones and constructing Grand Central Terminal.

The New York Central’s board of directors in January 1903 approved this suggestion and committed to a massive demolition and construction project while not interrupting train service to and from the City.

The demolition phase was the largest in the City’s history at the time: 120 houses, three churches, two hospitals, an orphan asylum, stables, warehouses and other buildings on 17 acres were torn down.

On May 1, 1904, ground was broken for the new building. Upon completion it covered 70 acres with 32 miles of rails that converged into 46 tracks serving 11 platforms. The Terminal alone cost $43 million to build ($1 billion in today’s dollars).

N.Y. Times, Feb. 1913
N.Y. Times, Feb. 1913

When it opened, the New York Times called it the “greatest railway terminal in the world.” Another observer at the time said it “is not only a station; it is a monument, a civic center or, if one will, a city.”

Even more effusive in 1975 was the New York Supreme Court, Appellate Division in rejecting a challenge to the designation of the Terminal as a “landmark” thereby restricting its redevelopment:

  • “Grand Central Terminal is unquestionably one of New York City’s best known buildings. Along with the Empire State Building and the Statue of Liberty, the image of its façade symbolizes [the] City for millions of visitors and residents. The Terminal as a whole includes a variety of architectural and engineering elements: railroad tracks and platforms; space and facilities for marshaling and handling railroad equipment; passage-ways and ramps affording access to adjacent streets, office buildings and subway stations; and concourses for the use of passengers and pedestrians passing through the Terminal. The Main Concourse . . . is a large room, 120 x 375 feet, with a ceiling 125 feet high at its apex. “
  • “From its formal opening to the public in 1913 . . . the Terminal has been recognized not only for its architecture, but as a superb example of comprehensive urban design. The complete submergence of all the tracks and a double track system not only resulted in the accommodation of more trains without the acquisition of more land, but permitted construction of revenue-producing buildings on the air rights over the railroad tracks and the development of Park Avenue as one this nation’s most prestigious residential communities . . . . Today . . . [the] Terminal still remains a splendid edifice and a major part of the cultural and architectural heritage of New York City.”[3]

[1] To celebrate the centennial, Sam Roberts, the urban affairs correspondent for The New York Times, published a wonderful article and video in the Times about the Terminal and its construction. The article was excerpted from his book, Grand Central: How a Train Station Transformed America, which was just published by Grand Central Publishing. The Times also has re-published its February 2, 1913, special section about the Terminal’s opening. Photographs of yesterday’s centennial celebration are online as is a collection of vintage photographs of the Terminal. This post is based upon these Times articles and upon Kurt Schlichting, Grand Central Terminal: Railroads, Engineering, and Architecture in New York City (Johns Hopkins Univ. Press; Baltimore 2001).

[2] Prior posts have recounted tales of Rev. Charles E. Brown. Subsequent posts will review W.C. Brown’s amazing railroad career.

[3] Penn Central Transp. Co. v. City of New York, 50 A.D.2d 265, 377 N.Y.S.2d 20, 24-25 (App.Div. 1975), aff’d, 42 N.Y.2d 1271, 366 N.E.2d 1271 (1977), aff’d, 438 U.S. 104 (1978).

 

My Grinnell College Years

Grinnell College          Residence Halls

I was financially able to attend Grinnell College, 1957-1961, because of its awarding me a full-tuition George F. Baker Scholarship.[1]

The first semester of my freshman year at the College was an intimidating experience. I had excellent, demanding professors: Harold Fletcher for “Introduction to Political Science;”  “Freshman English” with Norman Springer; and “Modern European History” with Samuel Baron. To let the freshmen know how we were doing, we all were given mid-term exams and grades. As a 4.0 valedictorian of my small Iowa high school,[2] I was shocked to have a C+ average at the mid-term. I also was surprised when Professor Baron refused to grant me honors for an extra paper in the history course; afterwards I realized he was correct.

Norbert Weiner

I also was stunned that first semester at the College’s Convocation, “American Culture at Mid-Century,” to hear a speech by MIT cyberneticist, Norbert Weiner. He talked about the parallels he saw in the history of mathematics, on the one hand, and of music and art, on the other hand. This was something I had never imagined. Another speaker was Joseph Welch, the Boston lawyer for the Army in the 1954 McCarthy Hearings. Welch, I discovered, was a Grinnell alumnus (1914) from another small town in Iowa, but I was too timid to approach him with questions.[3]

Outside the classroom that first semester I was in awe of classmates from large, metropolitan high schools (New Trier High School in suburban Chicago was one) and from prep schools who had a much more sophisticated preparation for college and who had been overseas. Gradually I came to realize that those advantages did not automatically make for a better college student and that I could successfully compete with them academically.

By the end of the first semester of the freshman year, I studied harder and significantly improved my grades and made the Dean’s List. I maintained this performance through the rest of my time at Grinnell and was elected to Grinnell’s senior men’s honorary society (the Friars) as well as Phi Beta Kappa.

I majored in history with minors in economics and political science, and I especially recall the excellent teaching and passion for their subjects by Historians Al Jones and Richard Westfall in addition to those mentioned elsewhere. I also took advantage of the College’s Program in Practical Politics to have an internship in the summer of 1960 with the Democratic Party of Iowa.[4] At the time, there was a requirement for two years of a foreign language; I took two years of German. There were also requirements for at least two science courses. In all of these courses, I had excellent professors and always was glad to be at a small college where you developed real, positive relationships with your professors.

John Maynard Keynes
John Kenneth Galbraith

The academic highlight of my Grinnell years was the senior-year Seminar in Political Economy.  A group of 10 students joined Professors John Dawson, Robert Voertman and Philip Thomas from the Economics Department, Harold Fletcher from Political Science and Joseph Wall from History. Together we read John Maynard Keynes’ magnum opus, The General Theory of Employment, Interest and Money, John Kenneth Galbraith’s The Affluent Society and a book by a Polish economist, Oskar Lange, The Economic Theory of Socialism. Another work on our agenda was Economics and Action by Pierre Mendes-France, the former French prime minister and a lecturer at Grinnell that semester.

In December 1960 I was chosen as one of 32 American Rhodes Scholars to go to the University of Oxford the following Fall which I will discuss in a separate posting. Just before this unexpected and thrilling honor, however, I had an embarrassing faux pas at the College’s special Boar’s Head Dinner. Modeled after such a dinner at Oxford’s Queen’s College, it featured a fake boar’s head brought into the dining hall on a silver platter by men dressed in red English garb and by special music from the men’s glee club (The Scarleteers). Before the dinner I had attended a cocktail party. At the dinner I felt the effects of the alcohol and just managed to rush to the kitchen where I vomited into an empty water pitcher. (When I returned to the College after the vacation, I was justly fined by the men’s governing council and chastised by the College President, Howard Bowen.)

My major extracurricular activity for my first three years of college was intercollegiate baseball. I was awarded a freshman numeral and letters for the other two years even though I was at best a mediocre player. When I returned for my 10th reunion, the baseball coach said that on the 1971 team I would be Mickey Mantle. This was a commentary on the poor quality of that year’s team, not my ability.

My sophomore year I was a member of the intercollegiate football squad, but I was not fast enough, tall enough or strong enough to have a real position. They tried me at offensive guard, but that meant I was supposed to block much bigger and stronger defensive tackles, something I could not do. I sat on the bench and played on the kickoff team. My accomplishment was lasting the season.

Otherwise I was a quiet, reserved student who was not well known on campus for the first two years. I still saw myself as an outsider.

I spent the next semester (the first of my junior year) on the Washington Semester Program at American University.[5] Enjoying life in a big city and spending time with students from other colleges from across the country boosted my confidence in my abilities to handle new and challenging situations.

Thus, when I returned to Grinnell for the second semester of my junior year, I decided to run for president of student government on a platform of our becoming involved in state and national policies and decisions affecting higher education. Foremost was going on record as opposed to the loyalty disclaimer affidavit for federal scholarships and loans and then advocating nationally for its repeal. I also suggested the student government should be concerned with the College’s admission policy and curriculum as well as changes in dormitory arrangements and adopting a student honor court and system. I won the election, 323 to 300. I then embarked upon one of the most rewarding experiences of my college days.

In the Fall of 1960, I welcomed the opportunity as president of student government to address the incoming freshmen class to let them know that they were an important part of this community going forward. I titled the speech “The Year of the Student.” After reviewing recent student protests around the world and the work of Grinnell’s student government, I challenged them. “Know thyself. Know, value, and honor freedom . . . . Accept others for what they are, accept non-conformists. Meet and get to know students from other lands. Forget exclusive thoughts of personal security and extend your horizons to include the international community of students and the whole world. Ask questions and seek answers. Do all that you can to make your and our education at Grinnell better and thus adopt your part of the burden in our national purpose, the pursuit of excellence.”

In my year as president, the student council adopted a resolution opposing the loyalty oath, and this action and the College’s refusal of funds under the National Defense Education Act of 1958 were recognized with an award from the Iowa Civil Liberties Union. We then advocated for repeal of the oath through letters to government officials, newspapers and other student governments and obtained a similar resolution from a meeting of the Midwest Conference student body presidents. Other important achievements were the following:

  • We formed a National Affairs Committee to coordinate various campus social-political action groups, to bring national issues before the student body and to take stands on such issues. This included study of our students’ interest in the Point-Four Youth Corps (later known as the Peace Corps).
  • We formed a Race Relations Committee to investigate problems encountered by American students taking part in “sit-down” strikes in the South; two members of that committee attended a national student conference on the “Sit-Down Movement.” We sponsored a rally to raise money for the Movement.
  •  We organized a new Faculty-Student Encampment to discuss issues at the College and make recommendations that resulted in the College’s purchase of a bus for student activities and the expansion of the recreation program and consideration of having a one-month reading period in the academic year.
  • We held a constitutional convention that, subject to approval by the College President and Trustees, substantially changed the structure of student government. During the convention, one of the speakers referred to me as “the passive voice” behind many of the suggested changes.

At the end of my year in office an editorial in the campus newspaper commended my “enthusiasm and true leadership qualities” and “the Krohnke spirit.” A columnist for the newspaper said, “A new spirit has entered Grinnell: a spirit of honest evaluation, constructive criticism, open-minded discussion, awareness of our good and bad points as Grinnellians and as people, and interest in the world beyond.” She attributed this new spirit, in part, to “an articulate and clear-thinking Student council president.”

The election of the next student council president started with a convention to select two candidates to run for the office. We had a time limit on nominating speeches. When one speaker had reached the limit, I said as the convention chair, “Just one more sentence.” The speaker was quick on the uptake; he kept talking with the repeated insertion of an emphatic “and” between what were clearly separate sentences. I had to chuckle in the background. Near the end of the convention, as the College annual for 1961 reported, one of the delegates stood and said that I had “done much for Grinnell by filling his office and filling it well.” The report continued, “A convention in standing ovation to our past president; here’s hoping we choose as wisely this time.”

On an October Saturday evening of 1958, after returning to the campus from an out-of-town football game, I went to the college union. I saw a group of freshmen women standing by the jukebox. I went over and asked one of them, a very attractive young woman, to dance. She accepted. Thus started my courtship of Mary Alyce. We dated for the rest of my time at the College. After her graduation in 1962, she came to England and found a research lab job in an Oxford hospital and an apartment with the fiancée of a Canadian Rhodes Scholar. In June 1963 after I finished my examinations, we were married at Oxford’s Manchester College Chapel.


[1] Post: Selecting a College (Aug. 10, 2011).

[2] Post: Growing Up in a Small Iowa Town (Aug. 23, 2011).

[3] Post: Adventures of a History Detective (April 5, 2011).

[4] Post: Encounters with Candidates JFK and LBJ (April 26, 2011).

[5] Post: The Washington Semester (July 11, 2011).

Resolving Disputes between Manufacturers and Distributors/Dealers

Since at least the last half of the 20th century, manufacturers of consumer goods typically have gotten their products to the end user in the U.S. via independent distributors and dealers or franchisees. Usually the manufacturers are larger companies while the others are smaller entities. They all have a community of interest in promoting the sales of the products at the highest prices with the greatest profits. But there also is a constant tension and friction between them and the potential for disputes. This is at its worst when the manufacturer terminates the distributor or dealer or franchisee.

I frequently was the attorney for the manufacturer in such termination cases. I successfully represented Chrysler Motors Corporation against a terminated Duluth dealer and Benjamin Moore & Company against a terminated St. Paul distributor.[1] I also was able to obtain judicial reduction of adverse results against a manufacturer and a franchisor that had been represented by other counsel.[2] Three of these four cases started in Minnesota’s federal court (Post: Minnesota’s Federal Court (June 28, 2011).

In addition, I helped to settle other such cases. One was for a Canadian manufacturer of snowmobiles. Another, for a U.S. manufacturer of farm equipment. Both of these cases were in Minnesota’s federal court.

Another type of dispute erupted between Chrysler and its Dodge dealer in St. Paul over the planned relocation of another Dodge dealer from East Lake Street in Minneapolis (the automobile row of the early 20th century) to Roseville, a suburb between the Twin Cities. Under a Minnesota statute that sought to protect existing dealers, the St. Paul dealer sued to block the relocation. The trial court, however, decided in favor of Chrysler, and the appellate court affirmed that result.[3]

Because of the costs and risks of such litigation and because of my interest in Alternative Dispute Resolution, I helped other lawyers in the firm draft dispute resolution provisions for various agreements, including distribution agreements.

Often such provisions would first call for mediation where a neutral third-party assists the disputants in trying to settle their disputes. This was my preferred dispute resolution method because it empowered the parties themselves to settle their disputes, because it opened the way for creative solutions that were not possible in court or in arbitration and because it was the least expensive option. Only if mediation failed, would such a contractual provision call for submitting the dispute to arbitration under one of several general sets of arbitration rules where the arbitrator resolves the dispute. Arbitration was preferred to court litigation because the former eliminated the expensive pre-trial discovery and other processes of the latter and because the parties participated in selecting the arbitrator who was seen as a safer decider than an unknown judge or jury.

From the outside these disputes took the form of a large corporation versus a small corporation. But human beings were involved on both sides. The executives of the manufacturer had made decisions they thought were fully justified, and their careers and compensation conceivably could be affected by the resolution of the conflict. The same was true of those on the other side. Moreover, emotions often were intense in such quasi-divorce situations. In one case, the owner of the dealership sued his own lawyer over the settlement of his case against the manufacturer. Later that owner killed his girl friend and was acquitted on the grounds of insanity. I was worried because he might view me as part of the conspiracy against him.


[1] Piccard Motor Co. v. Chrysler Motors Corp., 940 F.2d 1163 (8th Cir. 1991)(held Minnesota statute requiring manufacturer to pay terminated dealer one-year’s fair rental value of facilities did not apply to dealer that owned the facilities); Elvgren Paint Supply Co. v. Benjamin Moore & Co., 948 F.2d 1082 (8th Cir. 1991)(affirmance of summary judgment for manufacturer’s termination of an at-will distributor).

[2] W.K.T. Distributing Co. v. Sharp Electronics Corp., 746 F.2d 1333 (8th Cir. 1984)(remand to trial court to reconsider award of $300,000 damages); W.K.T. Distributing Co. v. Sharp Electronics Corp., 786 F.2d 898 (8th Cir. 1986)(noting trial court’s reduction of damages from $300,000 to $85,000 after remand, but refusing to make further reduction); Team Central, Inc. v. Teamco, Inc., 271 N.W.2d 914 (Iowa Sup. Ct. 1978)(en banc reduction of adverse judgment from $2,550,000 to $1,500,000).

[3] Wilkins Dodge, Inc. v. Chrysler Corp., 426 N.W.2d 903 (Minn. Ct. App.), pet. for review denied (Minn. Sup. Ct. 1988).

Downgrading the U.S. Credit Rating

On Friday, August 5th, after the close of the U.S. securities markets, Standard & Poor’s (S&P) reduced its rating of the U.S. Government’s debt from S&P’s highest rating of “AAA” to its second highest rating of “AA+.” [1]

S&P’s announcement of this action was headlined: “United States of America Long-Term Rating Lowered To ‘AA+’ Due To Political Risks, Rising Debt Burden; Outlook Negative.” The key reasons for this downgrade were the following:

  • “The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.”
  • “More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.”
  • “Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government’s debt dynamics any time soon.” [2]

In short, this objective outsider concluded, properly I think, that the U.S. “policymaking and political institutions” are not working. As S&P further stated, the U.S. recently has seen “political brinksmanship,” and “the statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy.” In addition, S&P noted that “new revenues have dropped down on the menu of policy options.”[3]

While these observations are appropriately phrased in terms of the “U.S. policymaking and political institutions,” they really are a negative assessment of the political objectives, strategy and tactics of the Tea Party contingent of the Republicans in the House of Representatives and to a lesser extent in the Senate.[4]

Moreover, according to S&P, “the difficulty in framing a consensus on fiscal policy weakens the government’s ability to manage public finances and diverts attention from the debate over how to achieve more balanced and dynamic economic growth in an era of fiscal stringency and private-sector deleveraging.”[5] This comment raises the important need for the U.S. to reduce unemployment and achieve higher economic growth, which is made more difficult by the austerity measures promised in the debt ceiling compromise that became law on Tuesday, August 2nd.[6]

If the above were not enough criticism of the U.S. federal government, S&P made the following two ominous statements about its future actions:

  • First, S&P signaled that on Monday, August 8th, it will be downgrading its credit ratings of “the funds, government-related entities, financial institutions, insurance, public finance, and structured finance sectors.”
  • Second, S&P said, “The outlook on the long-term rating [of the U.S.] is negative. We could lower the long-term rating to ‘AA’ within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.”[7] This warning stemmed from S&P’s “downward scenario.” There were two key facts for this scenario. The “recent [U.S.] recession was deeper than previously assumed, so the GDP this year is lower than previously thought in both nominal and real terms. Consequently, the debt burden is slightly higher.” The U.S. is experiencing “sub-par path of the current economic recovery when compared with rebounds following previous post-war recessions.”[8]

Although two other independent credit-rating entities did not change their top ratings of the U.S. government, S&P’s downgrade, the rationale for its downgrade and its ominous warnings of further negative assessments of the U.S. undoubtedly will create next week another turbulent period in U.S. and world security markets.


[1] S&P, United States of America Long-Term Debt Rating Lowered to ‘AA+’ Due To Political Risks, Rising Debt Burden; Outlook Negative (Aug. 5, 2011), http://www.standardandpoors.com.

[2]  Id.

[3]  Id.

[4]  See Post: Disgusting U.S. Political Scene (July 23, 2011); Post: The Founder of Modern Conservatism’s Perspective on the Current U.S. Political Turmoil (July 28, 2011); Post: A Message for Speaker Boehner (July 29, 2011); Post: Dysfunctional U.S. Congress Careens Toward U.S. Default (July 30, 2011); Post: Dysfunctional U.S. Congress Averts Default (Aug. 2, 2011); Editorial, Political Roots in U.S. Economic Crisis, N.Y. Times (Aug. 5, 2011).

[5]  See n.1 supra.

[6]  See n.3 supra.

[7]  See n.1 supra.

[8]  Id.