Vigilantes Disbanded, Delegate Candidates Abound, Miners Stalled by Deep Snow

Rover, our "sesquicentennial correspondent" whom we heard from on April 7th and 12th, wrote another letter on April 16, 1863. He first noted that the Lewiston “Protective Association” (Vigilance Committee) had met and voted to disband. Members judged that the county government “was now thoroughly organized, and the various offices filled by competent men.”

During the Association’s tenure, the vigilantes had “hanged three murderers and highwaymen, and exiled 200 thieves and gamblers.” Because of their work, Rover went on, “Not a single crime of any kind has been committed in Lewiston during the past five months.”

Another sign of progress: “In anticipation of the early organization of the new Territory of Idaho, candidates for Delegate to Congress are beginning to feel the public pulse as to their chances for honor and glory.”

Eventually, nearly a dozen candidates would vie for the job. As historians Beal and Wells put it, “Idaho did not suffer from any lack of candidates for delegate to Congress in the first territorial election.”

Rover observed that little mining progress had been made around Florence or Warren’s Diggings: “The snow in that region is three feet deep, and not thawing enough to afford water for mining purposes.”

Idaho Mountain Snow. National Park Service photo.

Also, parties that had tried to get through to the Boise Basin had turned back “owing to the deep snow” in the mountains. In fact, Rover reported, “A number of pack trains and a large number of miners [are] camped at the foot of the mountains.”

References: [B&W]
Rover, “Letter from Lewiston,” Evening Bulletin, San Francisco, California (May 5, 1863).

First Steamboats of the Season Arrive in Lewiston

On April 12, 1863, correspondent “Rover” wrote another letter from Lewiston, as he had done on the 7th. A couple days earlier, he had witnessed the arrival of the first steamboats of the season. The newer Kiyuse, the People’s Transportation Company steamer, led its competitor, the Tenino, by a minute or so, although the latter had started out ten hours ahead.

The Tenino belonged to the hated Oregon Steam Navigation Company (OSNC). Rover noted that, “Every one expressed the hope that the People’s Company would be able to successfully compete with that thieving monopoly, the Oregon Steam Navigation Company, who robbed the honest miner of so many of his hard-earned dollars last season.”
(Competition did result in more reasonable rates, but only for a year or so. Then the OSNC bought off People’s Transportation, and regained their monopoly.)

Steamer Tenino. Oregon Historical Society.

The commander of the Kiyuse was Captain Leonard White, one of the most famous steamboat men on the Columbia and Snake rivers. He had actually worked for the OSNC, until they dumped him because they thought he was paid too much. White had, in fact, captained the first steamer to ascend the river to what would become Lewiston.

Correspondent Rover wrote, “Capt. White determined to make his boat the pioneer in the navigation of Snake river above this place.”

With Rover aboard, the Kiyuse chugged up the river to near the mouth of the Salmon River. There, White scouted ahead in a canoe. Rover said the captain “Found a very bad rapid a short distance above the mouth of [the] Salmon, which he thought it prudent not to attempt to go over.”

References: “Capt. Leonard White (1827-1870),” The Oregon Encyclopedia, Portland State University (2008-2013).
“Letter from Lewiston, W. T.,” Evening Bulletin, San Francisco, California (April 28, 1863).

Hundreds of Miners Arrive in Portland on Steamship Brother Jonathan

“Steamship Brother Jonathan, S. J. De Wolf, commander, arrived at this port from San Francisco on the 11th inst. at five o’clock A. M. She brought dates to the 7th from the East, about three hundred and eighty passengers, and a large quanity [sic] of freight. The passengers are mostly miners, bound for the John Day, Powder river, and Boise mines.” This item from the Oregonian newspaper (April 13, 1863), in Portland, was just one of many such reports documenting the stream of miners who rushed through Portland during this period.

Impatient gold-seekers favored the Brother Jonathan because it was the fastest steamer on the Pacific Coast at that time. Its owners, the California Steam Navigation Company, made huge profits from the vessel, and kept it busy. The Oregonian item also said, "Sails To Day. – The steamer Brother Jonathan sails for San Francisco via Victoria this afternoon at four o’clock."

Steamship Brother Jonathan, ca 1862.

Captain Samuel J. De Wolf was one of the most experienced commanders on the coast. Tragically, two year later, a violent storm drove the steamship onto a reef near Crescent City California. De Wolf and over two hundred passengers went down with the ship.

Reference: Alfred L. Lomax, Brother Jonathan: Pioneer Steamship of the Pacific Coast, University of Oregon (1959).

Roving Reporter: Travel Costs High and Winter Impedes the Gold Rush

On April 7, 1863, Correspondent “Rover,” wrote a long letter from Lewiston after arriving there from Portland, Oregon. First, he complained about the cost: “Total expense from Portland to Lewiston, $65.50.” He had good reason to squawk, since that was over a month’s pay for a skilled working man.

Yet in their rush, gold seekers spent as little time as possible in Portland. There, Rover said, “The merchants have large stocks of goods on hand, for which they have no customers.” On the other hand, he wrote, “At the Dalles we found business quite brisk, and a large number of miners fitting out for the different mining camps.”

Still, Lewiston was “the dullest of all dull places.” That was primarily because “No mining is yet being done at Florence, Warren’s diggings, Elk City, or Oro Fino. No pack trains can get into these places at present. Parties go in and come out on snow shoes.”

Supplies were not going to the Boise Basin either, “owing to deep snow on the mountains.” People still wondered about that region – discouraging as well as glowing letters had made their way out.

Lewiston, ca 1863. Nez Perce County Historical Society.

Earlier reports from the East gave the 46th parallel as the northern border of  the new territory. That placed it coincident with the northern border of Oregon (east of the Columbia River) and nearly thirty miles south of Lewiston. Because of that, Rover also said, “The people here are in doubt as to whether they are in Idaho or Washington. No definite news as to boundaries has yet been received from Washington.”

References: [Illust-State]
“Letter from Lewiston, W. T.,” Evening Bulletin, San Francisco, California (April 21, 1863).

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.