T. F. McElroy, Territorial Revenue Collector, arrives in Lewiston

On April 4, 1863 (150 years ago today), according to a correspondent to the San Francisco Evening Bulletin, “The U. S. Revenue Collector for this region, T. F. McElroy, arrived here on Saturday, and entered upon his duties of taking “notes” – legal tender notes – in exchange for licenses … ”

At this point, the new Idaho Territory had no government, so Washington Territory retained responsibility for collecting license fees from merchants, saloon keepers, professional offices (doctors and lawyers), and other businesses.

Born in Pennsylvania, in 1825, Thorton F. McElroy emigrated to Oregon in 1849. He relocated to what became Washington Territory in late 1852. In a letter to his mother dated July 19, 1863, from Olympia, he noted that he had just recently returned from Lewiston, and that he had been “absent from home near three months.” McElroy later served a term as Mayor of Olympia.

References: “Letter from Lewiston,“ Evening Bulletin, San Francisco, California (April 21, 1863).
Olympia Mayor – Thornton Fleming McElroy, City of Olympia, Washington (2010).

Confederate Newspaper Publicizes Gold in Idaho

In the spring of 1863, Chattanooga, Tennessee was Confederate territory. But Union forces were pushing south through the state.  The  Chattanooga Daily Rebel newspaper published the following: “Wednesday Morning, April 1, 1863. The war is about to [see] the interposition of an agent mightier than crown or sword. This agent is Gold. … Not from England or France, but from the Far West … ”

The paper described a place “hereafter to be known as Idaho, pronounced Ida’ho. The Yankee Congress at its last session passed an act for the purpose of organizing a territorial government for [the region].”
It went on, “A few years ago no white man resided within its wide limits. … [But that has changed because] Idaho is found to be a land of gold!”

The Daily Rebel had a suggestion: “Let the soldiers of [the Union Army] give up the poor pay, rations and reward of their vile crusade against the South, throw aside their muskets, shoulder their pick-axes, and start at once for the Gold fields of Idaho.”

Thus, 150 years ago today, the story of Idaho had reached across the battle lines to a city whose citizens knew it was only a matter of time before they came under siege. Perhaps they could be spared if enemy soldiers would mine Gold instead of making war.

Meanwhile, early arrivers in the Boise Basin were already finding fabulous amount of the metal, and “large numbers [of miners] are leaving Lewiston daily … for the Boise mines.”

Reference: Merle W. Wells, Gold Camps & Silver Cities: Nineteenth Century Mining in Central and Southern Idaho, 2nd Edition,  Bulletin 22, Idaho Department of Lands, Bureau of Mines and Geology, Moscow, Idaho (1983).

***

This being the Idaho Territorial Sesquicentennial (created March 4, 1863), I thought some shorter 150-year “On This Day” items would be of interest. (I’ll try to post one or two a week, although that may prove difficult.)

The U.S. Tax Code: Is it Fair? What About Capital Gains and Dividends?

James Madison. Library of Congress.

It’s tax season. We’re busy collecting tax forms, receipts, and so on to get ready to do our taxes. That got me to thinking about the history of our tax system, and all the political rhetoric about whether the tax code in the United States is “fair” or “unfair.”

For what little it’s worth (these days), the “Founding Fathers” were vehemently against any notion of a personal income tax. They foresaw that allowing one powerful group of voters – through their elected representatives – to tax any other group for their own benefit would be divisive, and a violation of the true spirit of democracy.

When test cases arose, the Supreme Court leaned on the technicality that such taxes were not apportioned among the states according to each state's population. (The Court did allow some very narrow exceptions.) Note that the court did not rule one whether or not a tax imposed on some persons, but not others, violated other provisions of the Constitution – such as the “equal protection” clause. However, legislators sensed a bonanza and passage of the Sixteenth Amendment, in 1913, over-rode the technicality used by the Supreme Court to reject previous income tax laws.

So the notion of a “fair” tax code depends upon your notion of what’s fair. Is an escalating tax rate “fair” by any common usage? I don’t think so. (By the way, the term “progressive” income tax is so loaded with other connotations, we should abandon it totally.)

As a matter of curiosity, I ran some numbers through TurboTax. I assumed a two-earner couple making $35 thousand. According to the latest wage data, a married waiter and waitress could make about this amount. To keep it simple, I included no investment income, but added a bit of interest from a savings account. TurboTax calculated that their “typical” deductions (for mortgage interest, charity, medical, etc.) would not give them any benefit over the standard deduction. Their tax bill came out to be $1,603.

Suppose the income doubled to $70 thousand? Two school teachers could make this amount in the more poorly-paying states. I doubled most of their common deductible expenses, but they still failed to gain by itemizing their deductions. Their tax bill would have been $6,804 … more than four times (4.2) the base number above. (Keep in mind that they would have also paid double the Social Security and Medicare tax.)

No such outcome in ordinary life would, by any stretch of the imagination, be considered “fair.” In fact, a business transaction where the price varied with the buyer’s income would be consider grossly unfair (and, I suspect, illegal, but I’m no lawyer). Two wait-persons pay $16 for tickets to a show, while some teachers pay $32, or even $68? Give me a break!

How “fair” is it that the top 5% (1 in 20) households pay way over half (58%) the Federal personal income tax bill? The cut-off for that group is around $155 thousand per household, by the way. A junior college teacher and a government lawyer might make roughly that amount. While it’s a wonderful number, I don’t think most of us would consider a couple making $155-160 thou “rich.” Well off, surely, but not rich

College "Mass" Lecture Hall.

Of course, we’ve heard about those few households (roughly one in a thousand) who make a lot of money but pay no taxes. This is “blamed” on lower rates for Capital Gains and Dividend income, plus deductions for investment losses. Of course, the tax laws allow all of us to offset gains by losses when we gamble – and, make no mistake, investing is gambling, no matter how the stockbrokers avoid the term.

As for Capital Gains, a not-insignificant chunk of that is simply inflation. If you held a stock for the past ten years, and it increased in market value from $40 a share to $50 … you lost money on the deal: That $50 stock was worth just $39.40 in inflation-adjusted buying power. But your tax return will show a $1,000 “gain” if you sell 100 shares. Is it “fair” for the government to tax inflation, for which it is totally responsible? (Only the government can “print” money, the root cause of inflation.)

Dividend income is also taxed at a lower rate, which some consider unfair. That ignores that fact that the money one receives in dividends is only what was left after the company has paid over a third (34-35%) of the revenue in corporate income tax. So if an investor gets $650 in dividends, he/she has, essentially, already paid $350 in income taxes. Isn’t that enough?

In fact, “ordinary” people who have the foresight to invest in mutual funds, should complain bitterly about the double taxation of dividends. That includes workers who are vested in retirement plans, which often own big blocks of mutual funds. Dividends are, arguably, the only reliable gains one can count on for a typical mutual fund. (Of course the paper returns of the mutual fund do benefit from inflation.)

What does that mean?! Illinois historical archives.

Clearly, other perversions of the code in favor of narrow “special interest” factions should be examined closely. In fact, there is no doubt that the very complexity of the tax code is “unfair” in that it discriminates against those who cannot afford to hire a tax specialist to sort out its arcane, and often contradictory details.

So the answer to the question posed above is: No, the U. S. tax code is not equitable in any sense expected in common, ordinary life. It may, in some ways, offer “societal” re-distributions that many people approve of … but let’s not kid ourselves that it is, in any way, “fair.” And the unfairness by no means favors just “the rich.”

References: U.S. Census Bureau and The Economist. Standard TurboTax software. "Business Reference Services," Library of Congress.

Blackfoot Attorney and Idaho Supreme Court Justice William Lee [otd 12/11]

The Honorable William A. Lee, Idaho state Senator and Supreme Court Justice, was born December 11, 1859 in the extreme southeast corner of Nebraska. He was only four years old when his father was killed in the Civil War. William graduated from Washington University (St. Louis) with his LL.B. degree in 1885, and established a practice in Nebraska.

In 1892, Lee came west and opened a law office in Ogden, Utah. Five years later, he moved his practice to Salt Lake City. There, he helped write a major revision of the Utah legal code and served four years as Assistant Attorney General.

Meanwhile, in 1896, the American Falls Canal & Power Company retained Lee as an attorney. He became their General Counsel in 1904. Although based in Utah, the company sought to develop irrigation projects in Idaho. They planned for systems along the Snake River from above Blackfoot to below American Falls.

Lee came to Idaho in 1911 to represent the Company, but soon resigned that position to open a practice in Blackfoot. Unfortunately, tragedy struck soon after he arrived there. A son died from what was ruled an accidental gunshot to the head. The Idaho Register reported (June 4, 1912), “The revolver, a 38-calibre, had been borrowed by the boy who left his own gun, a 22-calibre, at home. Five chambers of the revolver had been emptied.”

From his offices in Blackfoot, William handled cases at all levels of the state courts, at federal circuit and district courts, and even the U. S. Supreme Court. He was a member of the American Bar Association, and served as vice president of the Idaho State Bar Association

In 1918, in his first try for public office, voters elected him to the state Senate by “a comfortable majority.” In that body, he served as a member of several committees, including the Judiciary Committee. He also Chaired the Committee on Code and Law Revision.

The Hawley biography for William Lee said that he traced his lineage back to the Lees of Westmoreland County, Virginia. (The Westmoreland Lees played a prominent role in the Revolutionary War, and Confederate General Robert E. Lee was born in the county).

U.S. destroyer laying smoke, 1918. National Archives.

Perhaps because of those roots, he had a strong interest in military history. One of William’s sons graduated from the U. S. Naval Academy and served on a destroyer during World War I. Naturally, the father followed the war news closely, and studied analytical reports after the war.

In 1920, the Idaho ballot included a Constitutional amendment to expand the state Supreme Court from three to five members. The measure enjoyed considerable support, so voters were also asked to select from a slate of candidates to fill the new positions. The amendment passed handily, and William A. Lee was one of the Justices elected at that time. He had ascended to the position of Chief Justice when he died in September 1926.
                                                                                 

References: [Hawley]

Carl F. Bianchi (Ed.), Justice for the times: A Centennial History of the Idaho State Courts, Idaho Law Foundation, Boise (1990).

“Idaho State Supreme Court Justices, 1890-1993,” Reference Series No. 347, Idaho State Historical Society (1993).

Special Fun at the Barnes & Noble Book Signing

The book signing on Saturday (Dec 1) at the Barnes & Noble store went very well. I did not sell a ton of books, but at least more than last time. Of course, this time I had both books to offer. I was somewhat surprised to sell about the same number of each. I rather assumed that few copies of Boise River Gold County would move, since it has nothing about this side of the state. But then, I suppose the mention of "Gold!" helped.

Chuckwagon at Work.

As you might expect, with the holiday buying season in full swing, there was much more traffic through the store. Although books on Idaho history are not high on many Christmas lists, several people stopped by the talk.

I did sell one book when the conversation turned to where the visitor was from. He had driven in from an area about sixty miles to the northwest of Idaho Falls. When he heard that Before the Spud included the cattle history of where he lived, he bought a book.

But the best fun happened toward the end of the afternoon. In the last chapter of Before the Spud, I write about the “Idaho Century Farms and Ranches.” This is a list kept by the Idaho State Historical Society based on properties that have been “owned and operated in Idaho by the same family for at least 100 years, with 40 acres of the original parcel of land maintained as part of the present holding.”

In reality, some of these holdings go back almost a century and a half – a testament to how well these families have been stewards of their land. Shortly before I decided to call it a day, a couple dropped by to talk about the book. I’m pretty sure they planned to buy one anyway. However, it became a definite sale when we determined that one of them was descended from a century ranch pioneer specifically mentioned in the book. (I won’t say more, to protect their privacy.) For a writer of history, it doesn’t get much better than that.

Book Signing at Idaho Falls Barnes & Noble

This coming Saturday, December 1, I will be available at the Barnes & Noble bookstore located in the Grand Teton Mall (2300 East 17th Street, Idaho Falls, Idaho). Be glad to talk about either of my recently-published books – Before the Spud and Boise River Gold Country – and sign copies for people who buy them. The event is schedule to begin at 1 o’clock in the afternoon and will likely run to 4:00 or 5:00. The store announcement also links to other events that will be at the store that day.

Before the Spud: Indians, Buckaroos, and Sheepherders in Pioneer Idaho outlines the history of Idaho stock raising. It spans the century that followed the 1805 meeting between the Lewis and Clark Expedition and the horse-owning Lemhi Shoshone and Nez Percés Indians ... the “first stockmen of Idaho.” The Indians remained Idaho’s only stockmen until mid-century, when white traders, missionaries, and Oregon Trail emigrants brought cattle into the region.

However, gold discoveries after 1860 brought tens of thousands of prospectors into the region. Supply trains, and droves of cattle to provide meat for the hungry miners followed hard on their heels. That influx led to the creation of Idaho Territory, in March 1863. Stock raising blossomed, and after about 1875, Idaho stockman began driving surplus animals to railway shipping points in Wyoming and Nebraska.

Over the years, Idaho and neighboring regions to the south saw the emergence of the “buckaroo,” a herder whose equipment, dress, and techniques were more akin to the Spanish vaqueros than to the cowboys of Texas and the Southwest. They’ve remained a distinctive feature of Western stock raising ever since.

Shortly before World War I, stock raising and dairy overtook mining as the leading income sector of Idaho’s economy. Before the Spud tells the stories of the Indians, buckaroos, and sheepmen who helped make that happen. For more information, or to order, visit the Createspace “storefront” for this book. You can also visit my blog item about the book, posted on October 23, 2012. That item includes the Table of Contents.

Boise River Gold Country tells the story, in words and pictures, of the rush of miners and settlers into the mountainous regions drained by the Forks of the Boise River. The northern portion of that drainage, comprising a rough divided plain surround by high mountain, came to be called the Boise Basin. Prospectors first found gold in the Basin in August 1862. Within a year, the Boise River region held over half the 32 thousand people enumerated in Idaho Territory.

After a few years, the solo prospector gave way to investors and speculators. Large scale mining continued another ninety years. In the end, miners would extract over $5 billion (at today’s prices) worth of gold out of the region. Later, logging crews
came to harvest the area’s vast pine forests. Today, recreation, small-scale logging, and specialized mining drive the local economy.

In text and vintage photos (over 200 of them), Boise River Gold Country tells the story of those early sourdoughs, investors, loggers, and more. Freighters, merchants, doctors, and others also came to build the settlements. Naturally, that brought in a “rough element” to prey on the honest folks. Some of their stories are here too.

For more information, or to order, visit the Createspace “storefront” for this book. The blog item for this book also shows the Table of Contents.

But, best of call, come by the store on Saturday, buy a book, and let me sign it right then.

Indians, Buckaroos (Cowboys), and Sheepherders in Pioneer Idaho: New Book Published

Say "Idaho" to most people, even Idahoans, and they think "potato." Fair enough, considering decades of relentless marketing. What many do not think of are "cowboys" and "cattle." Yet Idaho was, and is, as much a cowboy state as its more-recognized cattle-state neighbors in the Intermountain West.

My new book – Before the Spud: Indians, Buckaroos, and Sheepherders in Pioneer Idaho – seeks to correct that mis-perception. Published under the "Sourdough Publishing" imprint, the book is now available from a dedicated web site and also online from Amazon.com and Barnes & Noble. Any B&N store can order you a copy, although they will not generally carry independently published books on their shelves. (Sigh.)

Before the Spud tells the story of how the Idaho stock raising industry developed. It begins with the "first stockmen of Idaho" – Shoshone and Nez Percés horse raisers – and carries forward to about 1910, followed by a brief survey of the state of affairs today.

Among the pioneer stories is that of French émigré Alexander Toponce. In the 1870's, he ran "as high as 10,000 head of cattle" on leased land at Fort Hall Indian Reservation. Toponce played many roles: freighter, stage line operator, mining investor, sheep raiser, and mayor of Corinne, Utah.
In 1888, George L. Shoup, in one routine transaction, sold a thousand cattle from his Salmon River ranches. Two years later, he became Idaho's first state governor and then one of its first two senators.
In 1897, a jury convicted hired cowboy-gunman "Diamondfield Jack" Davis of murdering two sheepmen south of Twin Falls. Although two other "respectable" cattlemen soon confessed to the killings, Davis twice came within hours of hanging and was not pardoned until 1902.

Table of Contents

Preface: Ground Rules

Chapter One: The First Stockmen of Idaho

Chapter Two: Fur Trade Era – Canadians Dominant

Chapter Three: Competition Heats Up

Chapter Four: Wagons Across Idaho

Chapter Five: Mining Makes a Territory

Chapter Six: Idaho Meat for Hungry Miners

Chapter Seven: Stock Raising Grows

Chapter Eight: Filling in the Gaps

Chapter Nine: The Last Stands

Chapter Ten: Cattle Drives Across and From Idaho

Chapter Eleven: Rails Across Idaho

Chapter Twelve: Livestock Boom

Chapter Thirteen: Nature Delivers a Lesson

Chapter Fourteen: Range Conflict Heats Up

Chapter Fifteen: A New Century

Afterword