Puttin' the hurtin' on 'em... - The Daily Reckoning

Puttin' the hurtin' on 'em...

Dec 1, 2014

New York, New York

Dear Diary,

Friday was only a half-day on Wall Street. Stocks didn't move.

But gold traders were active...selling gold! The yellow metal lost $22 on Friday.

But it was a successful Thanksgiving, as measured in your editor's favorite currency. He had planned to try to rescue an old tobacco from its quiet decay, using the strong backs of his own sons, and two of their friends. Our old friend, Tommy, who has made his living for the last 60 years in farming and earthmoving, stopped by too...just to offer advice and encouragement.

"You puttin' the hurtin' on em now..." he said, watching the young men with their shovels and post-hole diggers.

When the holes were prepared, we toted 300-lb treated poles and planted them around the inside perimeter. The idea was simple; we were transforming a frame barn into a pole barn, supplanting the regular foundation with stout poles. The old upright oak posts had rotted at the sill; we bolted the new poles to them.

The project was a challenge. First, because management didn't know what it was doing. Second, because labor had even less experience with labor. And third, because we were all lost in polyglot jargon of the building trades. We barely know the difference between a joist, a sill, and a stud in English. Trying to communicate in three languages added an extra complication. All considered, we would have been flattered by anyone who called our crew 'unskilled labor.'

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Nevertheless, by the time we settled into our chairs for Thanksgiving dinner we were already feeling confident. The plan seemed to be working. Tobacco barns may be falling down faster than WWII veterans. But ours will not be among them.

In the barn were the tools of the trade, abandoned decades ago.

"This is an old hickory tobacco stick, split by hand," we explained to the Frenchmen.

"The tobacco plants are hung on the stick for the leaves to dry. Then, they are stripped off and wrapped into a 'hand.' The hands are then placed in this...well, I don't remember what it is called...a basket, I guess...the hands are packed into these things, creating a 'burthen' of tobacco, which would have been taken to the tobacco warehouse in Upper Marlboro and sold at auction."

"Is it still legal to grow tobacco," one asked.

"Tobacco was always heavily regulated in France," he continued. "In the 18th century, you needed the permission of the king to grow it. And I think you still need permission from the government. But if you got the permission you had a monopoly and you could make a lot of money."

In America, tobacco got its start in Maryland early in the 17th century, as the Virginian settlers brought it with them as they expanded up the Chesapeake Bay. In a few years, it was a cash crop in the purest sense. It was used as a currency, with promissory notes and other contracts settled in pounds of tobacco, rather than ounces of gold.

Gold is not perfect money. It is simply the best money we have found so far. Tobacco was valuable. But supply could be increased fairly quickly.

Initially, tobacco use in England was limited to the rich; only they could afford it . But as more and more acreage was put into tobacco in the New World, prices fell in the Old. Tobacco was quickly taken up by the common man. By the mid-20th century it was ubiquitous. Film stars smoked on the silver screen. Board meetings included ash-trays. Dying soldiers asked for cigarettes, at least in the movies.

In the '50s, farm boys in the Chesapeake region drove brand new Chevys or Fords. They were typically given an acre or two on which they could grow tobacco for their own accounts. By the time they turned 16, they had a pile of savings.

But by the '70s, the feds...and competition...put the hurtin' on Maryland's tobacco industry. Popular culture turned against smoking; it was blamed for serious illnesses. Smoking was banned from public places - even bars. Smokers became pariahs. Fashionable people claimed they couldn't stand the smell of it. A business party has a special entrance for cripples and a special room for those who want to lift weights; smokers stand outside...even in the worst weather.

While tobacco is out of style, marijuana is hot. The baby boomers have aches, pains and insecurities that 'weed' might help. The cronies are angling for market share. Like tobacco in France, marijuana is on its way to becoming a state-sponsored monopoly, with the plant grown in specially-adapted and government approved greenhouses. Big money will be made; but not by farm boys.

Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

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