The musings of a physician who served the community for over six decades
367 Topics
Downtown A discussion about downtown area in Philadelphia and connections from today with its historical past.
West of Broad A collection of articles about the area west of Broad Street, Philadelphia, Pennsylvania.
Delaware (State of) Originally the "lower counties" of Pennsylvania, and thus one of three Quaker colonies founded by William Penn, Delaware has developed its own set of traditions and history.
Religious Philadelphia William Penn wanted a colony with religious freedom. A considerable number, if not the majority, of American religious denominations were founded in this city. The main misconception about religious Philadelphia is that it is Quaker-dominated. But the broader misconception is that it is not Quaker-dominated.
Particular Sights to See:Center City Taxi drivers tell tourists that Center City is a "shining city on a hill". During the Industrial Era, the city almost urbanized out to the county line, and then retreated. Right now, the urban center is surrounded by a semi-deserted ring of former factories.
Philadelphia's Middle Urban Ring Philadelphia grew rapidly for seventy years after the Civil War, then gradually lost population. Skyscrapers drain population upwards, suburbs beckon outwards. The result: a ring around center city, mixed prosperous and dilapidated. Future in doubt.
Historical Motor Excursion North of Philadelphia The narrow waist of New Jersey was the upper border of William Penn's vast land holdings, and the outer edge of Quaker influence. In 1776-77, Lord Howe made this strip the main highway of his attempt to subjugate the Colonies.
Land Tour Around Delaware Bay Start in Philadelphia, take two days to tour around Delaware Bay. Down the New Jersey side to Cape May, ferry over to Lewes, tour up to Dover and New Castle, visit Winterthur, Longwood Gardens, Brandywine Battlefield and art museum, then back to Philadelphia. Try it!
Tourist Trips Around Philadelphia and the Quaker Colonies The states of Pennsylvania, Delaware, and southern New Jersey all belonged to William Penn the Quaker. He was the largest private landholder in American history. Using explicit directions, comprehensive touring of the Quaker Colonies takes seven full days. Local residents would need a couple dozen one-day trips to get up to speed.
Touring Philadelphia's Western Regions Philadelpia County had two hundred farms in 1950, but is now thickly settled in all directions. Western regions along the Schuylkill are still spread out somewhat; with many historic estates.
Up the King's High Way New Jersey has a narrow waistline, with New York harbor at one end, and Delaware Bay on the other. Traffic and history travelled the Kings Highway along this path between New York and Philadelphia.
Arch Street: from Sixth to Second When the large meeting house at Fourth and Arch was built, many Quakers moved their houses to the area. At that time, "North of Market" implied the Quaker region of town.
Up Market Street to Sixth and Walnut Millions of eye patients have been asked to read the passage from Franklin's autobiography, "I walked up Market Street, etc." which is commonly printed on eye-test cards. Here's your chance to do it.
Sixth and Walnut over to Broad and Sansom In 1751, the Pennsylvania Hospital at 8th and Spruce was 'way out in the country. Now it is in the center of a city, but the area still remains dominated by medical institutions.
Montgomery and Bucks Counties The Philadelphia metropolitan region has five Pennsylvania counties, four New Jersey counties, one northern county in the state of Delaware. Here are the four Pennsylvania suburban ones.
Northern Overland Escape Path of the Philadelphia Tories 1 of 1 (16) Grievances provoking the American Revolutionary War left many Philadelphians unprovoked. Loyalists often fled to Canada, especially Kingston, Ontario. Decades later the flow of dissidents reversed, Canadian anti-royalists taking refuge south of the border.
City Hall to Chestnut Hill There are lots of ways to go from City Hall to Chestnut Hill, including the train from Suburban Station, or from 11th and Market. This tour imagines your driving your car out the Ben Franklin Parkway to Kelly Drive, and then up the Wissahickon.
Philadelphia Reflections is a history of the area around Philadelphia, PA
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Philadelphia Revelations
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George R. Fisher, III, M.D.
Obituary
George R. Fisher, III, M.D.
Age: 97 of Philadelphia, formerly of Haddonfield
Dr. George Ross Fisher of Philadelphia died on March 9, 2023, surrounded by his loving family.
Born in 1925 in Erie, Pennsylvania, to two teachers, George and Margaret Fisher, he grew up in Pittsburgh, later attending The Lawrenceville School and Yale University (graduating early because of the war). He was very proud of the fact that he was the only person who ever graduated from Yale with a Bachelor of Science in English Literature. He attended Columbia University’s College of Physicians and Surgeons where he met the love of his life, fellow medical student, and future renowned Philadelphia radiologist Mary Stuart Blakely. While dating, they entertained themselves by dressing up in evening attire and crashing fancy Manhattan weddings. They married in 1950 and were each other’s true loves, mutual admirers, and life partners until Mary Stuart passed away in 2006. A Columbia faculty member wrote of him, “This young man’s personality is way off the beaten track, and cannot be evaluated by the customary methods.”
After training at the Pennsylvania Hospital in Philadelphia where he was Chief Resident in Medicine, and spending a year at the NIH, he opened a practice in Endocrinology on Spruce Street where he practiced for sixty years. He also consulted regularly for the employees of Strawbridge and Clothier as well as the Hospital for the Mentally Retarded at Stockley, Delaware. He was beloved by his patients, his guiding philosophy being the adage, “Listen to your patient – he’s telling you his diagnosis.” His patients also told him their stories which gave him an education in all things Philadelphia, the city he passionately loved and which he went on to chronicle in this online blog. Many of these blogs were adapted into a history-oriented tour book, Philadelphia Revelations: Twenty Tours of the Delaware Valley.
He was a true Renaissance Man, interested in everything and everyone, remembering everything he read or heard in complete detail, and endowed with a penetrating intellect which cut to the heart of whatever was being discussed, whether it be medicine, history, literature, economics, investments, politics, science or even lawn care for his home in Haddonfield, NJ where he and his wife raised their four children. He was an “early adopter.” Memories of his children from the 1960s include being taken to visit his colleagues working on the UNIVAC computer at Penn; the air-mail version of the London Economist on the dining room table; and his work on developing a proprietary medical office software using Fortran. His dedication to patients and to his profession extended to his many years representing Pennsylvania to the American Medical Association.
After retiring from his practice in 2003, he started his pioneering “just-in-time” Ross & Perry publishing company, which printed more than 300 new and reprint titles, ranging from Flight Manual for the SR-71 Blackbird Spy Plane (his best seller!) to Terse Verse, a collection of a hundred mostly humorous haikus. He authored four books. In 2013 at age 88, he ran as a Republican for New Jersey Assemblyman for the 6th district (he lost).
A gregarious extrovert, he loved meeting his fellow Philadelphians well into his nineties at the Shakespeare Society, the Global Interdependence Center, the College of Physicians, the Right Angle Club, the Union League, the Haddonfield 65 Club, and the Franklin Inn. He faithfully attended Quaker Meeting in Haddonfield NJ for over 60 years. Later in life he was fortunate to be joined in his life, travels, and adventures by his dear friend Dr. Janice Gordon.
He passed away peacefully, held in the Light and surrounded by his family as they sang to him and read aloud the love letters that he and his wife penned throughout their courtship. In addition to his children – George, Miriam, Margaret, and Stuart – he leaves his three children-in-law, eight grandchildren, three great-grandchildren, and his younger brother, John.
A memorial service, followed by a reception, will be held at the Friends Meeting in Haddonfield New Jersey on April 1 at one in the afternoon. Memorial contributions may be sent to Haddonfield Friends Meeting, 47 Friends Avenue, Haddonfield, NJ 08033.
It was mid-afternoon when I pulled into the office parking lot. I picked up my phone messages from Nancy and she told me she had a few letters for me to sign' but otherwise nothing much was happening. Joe Mancuso collared me before I reached my office and said he needed to review some numbers with me for the bid he was working on. I told him to give me thirty minutes and I'd see him in his office.
I was flipping through my messages when Suzy walked in' looking prettier than ever' and planted a kiss on the top of my head. She asked about Tampa and I told her it was a worthwhile trip and that I had a lot to tell her.
"How about having dinner with me this evening?" I asked."We'll try that new place I told you about in Marlton' and we can talk without interruptions and the phone ringing."
"Sounds great. Pick me up around seven?"
"I'll be there' gorgeous."
The phone messages Nancy had given me would have to wait. I had to call Ben first. I got lucky and found him in his office.
"Ben' I just got back from Tampa. I think it was a good trip -I know I found out a lot more than I had hoped to' which I'll tell you about later. In the meantime I need you to do something for me -it's important."
"O.K.' little brother' what?"
"I want you to call Hamilton' your FBI buddy' and see if his people can give us any information on. . ."
"Whoa' hold on Cole'" Ben interrupted'"Like I told you before' Brian Hamilton made it clear the last time I talked to him that he doesn't want me calling him' regardless of our past association. He's not the Brian Hamilton I used to know. Whether it's ego or something else' he made me feel very uncomfortable when I asked him to look into David's murder and what was going on in Atlantic City. What the hell is so important that you want me to call him again?"
"Ben' I've got to find out everything I can about two individuals in the Tampa organization; the first is the founder of the company' a phantom by the name of 'M. R. Shaw'' and the other is one of Shaw's head honchos -an old battle-ax of a woman by the name of Irena Kabojian. I suspect that Shaw' whoever he or she is' is the mysterious client we've indirectly worked for all these years. And the Kabojian woman is wired to Shaw in some way -maybe she is M. R. Shaw. Regardless' I think she's up to her eyeballs in everything that's happened over the years. The real clincher is Irena Kabojian was involved with our dear departed friend' Mousa Muzzadin. They were seen together just before David was killed."
"Who saw them together -because if it's true it really muddies the water -was it somebody you think is reliable?"
"It was Maria Sippano' and contrary to our earlier concern about her' I found her to be not only cooperative' but also very believable. I'm convinced she got sucked up in this just as we did. Aside from her and possibly her boss' Carlton Alvarez' there's something very strange about Shaw's organization' and I'm convinced it revolves around Irena Kabojian. That's why I've got to know more about her background and where and how she fits in the puzzle. She's been involved with the Shaw outfit since the day it was founded' more than forty years ago. There has to be a ton of background information on her -bank accounts' tax records' credit cards' maybe even a pissed-off neighbor or two."
"Well' Cole' you're assuming Hamilton is going to cooperate -and I'm convinced he won't. Regardless' if your right about this woman it might be easier and probably a lot more productive to work through Sam Abromowitz. I think he'd be more willing to cooperate with me. And besides that, he's right here in Cherry Hill."
"I don't agree' Ben. And because he's local is exactly why I feel he can't be much help. The more I get involved in this the more I'm convinced we're looking at something international in scope. I don't think a local police force has the resources and connections to get what I need. On top of that,' I'm convinced the FBI or the CIA' maybe both' have been involved in this from the beginning.
"The reason I believe that is Hamilton was very evasive when you talked to him the last time' yet he admitted that some government agencies were involved in the Atlantic City investigation. If they weren't' he could just as easily have said they knew nothing about David's murder."
"I don't know Cole' maybe you're right. I still think I'll be spinning wheels' but I'll call him again. Just don't get your hopes up."
"Fair enough. Make sure you tell him that I've already done some investigating and' regardless of what he gives us' I'm going to follow this to the bitter end.
"While I have you on the phone' how are you making out with Trimble's bank? Anything new on our agreement?"
"Yes' Cole' it's resolved. I have a facsimile of the agreement on my desk' and the hard copy is coming airmail. It's not totally what I wanted' but I'm satisfied it gives us the protection we may need."
"That's good to hear. I'd like to meet with you in the next few days to tell you what I found out in Tampa. I think you'll find it very interesting."
"O.K.' little brother' how about lunch tomorrow? You buy."
"Fair enough' cheapskate. I'll pick you up at noon. I hope you like McDonald's. And by the way' as soon as you talk to Hamilton let me know what he says. I know it's difficult on the phone' but try to read between the lines of what he says' and whether he still seems evasive."
I spent the rest of the afternoon meeting with Joe Mancuso' reading my mail and returning phone calls. At five-thirty I bailed out' went home' showered' dressed and headed for Suzy's; stopping on the way to buy wine for our dinner -the restaurant was excellent but BYOB -and a Beanie-Baby for Julia. Suzy said it's the latest fad and that Julia is into collecting the stuffed critters in a big way. According to the sales clerk, I should consider myself very lucky; the stuffed animal cost me under ten bucks' but if the company stops making that particular item' it could be worth fifty on the secondary market. Sure. I told her I had an almost new hula hoop in my basement that I'd sell cheap. As I left the store the clerk yelled after me that I should hang on to the hoop -someday it might be worth a fortune. Sure.
The moment we got in my car Suzy started asking questions about Tampa. I told her I didn't want to talk about it until after we finished dinner; I hate discussing a complicated issue like that in bits and pieces.
When the waiter cleared the table and brought coffee Suzy folded her hands on the table and smiled at me."O.K.' love'" she said."You've kept me hanging long enough. I think I've been more than patient' so no more stalling -tell me about Tampa.
For the next half-hour, I gave her a verbatim account of my discussions with Maria' Maria's involvement with David' my impression of Irena' Irena's contact with Muzzadin' and my gut reaction to the entire Tampa situation. I also told her about my phone conversation this afternoon with Ben.
When I finished' Suzy reached across and touched my hand."I have so many questions I don't know where to begin'" she said."So forgive me if I jump around a bit. First though' I'm disappointed with David' but I guess not really surprised by his affair with Maria Sippano. He was a very aristocratic' handsome man and' from the way you described her' she must be a very good looking woman. Probably very lonely as well. Do you think she was completely truthful with you?"
"I do' Suzy. She answered my questions without hesitation. She volunteered a lot of information about her company' well beyond what I expected. For example; she didn't have to elaborate on the roll Irena played from past to present' or' for that matter' tell me about Irena and Muzzadin. And as far as her feelings for David are concerned' I'm no expert but they seemed completely genuine to me."
"She did know you were coming'" Suzy replied."Do you think it's possible that she's a good actress and put on a show just for your benefit?"
"Sure it's possible' but if that's the case why would Maria tell me about Irena and Muzzadin; why admit to an affair with David -she could have easily denied it -why give me all the background on her company? And why arouse my suspicions about their involvement in some huge conspiracy? She could have omitted half of what she told me and sugar-coated the rest. I would have come home as much in the dark as I was when I left here."
Suzy thought for a minute and then tilted her head as though confused."Are you saying you now have some idea of what's been going on' and who's behind it?"
"There's still lots of gray areas' but I think I have some of the answers. And I have some pretty strong hunches about the rest. On the flight home from Tampa, I looked over the notes from my meeting with Maria' and the notes Trimble gave me when we were in London. I also re-read my own notes that I made after David was killed. When I put them all together a few things became very obvious; the most significant being that Muzzadin and Selemi didn't come to this country until 1989' yet the killings and disappearances started back in 1972. According to Ben' their 1989 arrival was confirmed by both the FBI and Immigration. So it's obvious that somebody else was responsible for everything that happened before they came here."
"Do you have any idea who' and what their motive might have been?" Suzy asked.
"Suzy' I'll answer your question with a question. Who profited from those earlier deaths? The only conclusion I can reach is that the client was behind all of them. It's totally unreasonable to attribute four violent deaths to pure coincidence.
"Also consider this; from what David and Trimble told us -and incidentally' Maria Sippano agrees with them -we know the client was paranoid about keeping his or her identity secret. What if the client suspected' for one reason or another' that each of those four people posed a threat to that secret? Even though the four victims apparently had nothing in common with each other' one common denominator did exist -they each had some degree of involvement with the client' and obviously did something to trigger their elimination. Maybe one or more of them found out the client's identity and tried blackmail. Maybe they got pissed-off over something in their business deal with the client and threatened to blow the whistle -who the hell knows. But I believe the perceived threat to the client's identity provided all the motive needed to seal their fate. People have been killed for a hell of a lot less."
"O.K.' Cole' I agree with what you just said about motive' but that still doesn't help us identify the client. And besides' now that Muzzadin is dead and Salemi is in jail -and we're severing our relationship with Trimble's bank -do we really care who the client is? Why should you continue risking your life trying to find out?"
"For a couple of reasons' Suzy' but please understand; now that Muzzadin and Salemi are out of the picture I don't think I'm risking my life. During the past few weeks, I've devoted a lot of time' money' and a giant black eye tracking down this bastard. Now that I'm convinced I'm on to something' my curiosity won't let me quit. Besides' I told Trimble I'd get to the bottom of it. Aside from that' I owe David some kind of final closure. I think he died not knowing any of the answers."
Suzy leaned closer to me across the table and squeezed my hand with both of hers."Let's get back to my earlier question'" she said."Tell me what you learned in Tampa that provided you with answers -and I believe you said 'some pretty strong hunches'-about who's behind all of this."
"O.K.' Suzy' answers may have been an exaggeration on my part -possibilities may be a more accurate term. I'll concede the point that my conclusion may not appear as rock solid to you as it does to me' because it's based on some of those possibilities' mixed with some imaginative hunches on my part. Regardless' I'm sold on it.
"To begin' the first disappearance' and obvious death' was Stiebris' the real estate salesman. That happened back in 1972' shortly after Walter located that large parcel of land in Montana for Trimble's bank. As I recall it was more than six thousand acres. The site was immediately developed by Tampa into an upscale thoroughbred horse farm. The owner was also going to experiment with new strains of hybrid cattle. Anyway' at the time it was the most expensive acquisition Walter and Trimble's bank had ever handled for the client. Shortly after construction began' Stiebris started showing up at the project every day' popping up in different places throughout the site. He insisted on taking a lot of pictures and generally made a nuisance of himself. He was warned repeatedly about trespassing. After being escorted off the site a number of times by their security people' he threatened some kind of legal action against the owner. A few days later he disappeared and has never been seen since.
"Now' consider this -according to both David and Alex Trimble' their first dealing with the client occurred in 1953. Was there a reason why no violence occurred until 1972' nineteen years later? I think so' and I'll tell you why. It's one of my hunches' but I believe the Montana ranch was acquired and built -not for some wealthy investor' but as the home and base of operations for our elusive client. I don't know just yet who he is' but I'll bet a months salary that the ranch is where he is."
"My God' Cole' it just dawned on me' if he's the same individual that started this mess back in 1953' he'd have to be ancient by now. Maybe he's dead. But if he's alive' why... .why would he want to live the life of a recluse all those years' and with all that money? He sounds like another Howard Hughes' only weirder!"
"I agree' Suzy. Unless it's a second generation heir' whoever it is would now have to be in their mid to late seventies. I can think of very few reasons why somebody with that much money would want to hole-up in Montana for the rest of their life. It's been what -twenty-six' twenty-seven years . . . that's a helluva long time. Like I said' I don't know who is' but logic tells me that unless he's a certifiable lunatic' he's got to be recognizable -some sort of celebrity -somebody with sufficient reason to totally drop out of sight that many years ago. Maybe he's some big-shot mob figure who wanted to disappear' or maybe a Nazi war criminal hiding from everybody. Maybe even some foreign dictator in exile who thinks he's safer in Montana' hiding under an assumed name. Regardless' he is' or was' a famous or infamous public figure' and wealthy enough to make it all happen."
"Well sweetheart you're probably right' but how do we go about identifying this notorious star of the past?
"I have an idea about that' too. It's a long shot' but at the moment I can't come up with anything better. Tomorrow morning I'm going to Philly to the main branch of the Public Library. I called there this afternoon and spoke to a woman in the Newspaper Department. She said they have on microfilm every newspaper published by the major area papers' going all the way back to day one. I told her I was interested in papers published between 1952 and 1953' and also 1971 and 1972. I also explained the type of information I was looking for and she said unless I get lucky it'll take a lot of searching to find what I'm after. Unfortunately' even though they have on film every page of each paper' their film isn't indexed by topic. I have no idea how long it'll take or what I'll find' but I think it's worth a shot. I could certainly use your help; want to come with me? Who knows' maybe we'll get lucky and find a name or two worth pursuing."
"Sure'" Suzy answered."I love looking through old newspapers' particularly the society pages and clothing ads. If we only had a few names for starters we might be able to get the information by calling the papers direct. All newspapers keep biographies on the famous and infamous. Whenever Joe-The-Movie-Star does something newsworthy' like getting busted for DWI' or beating up his wife' it gets added to his file. That's so that when he drops dead of a heart attack at age forty-one it takes no more than a few minutes to write a two-column obituary."
"Suzy'" I said with a grin'"Your basic intelligence and worldly knowledge never cease to amaze me. Last night in bed I dredged my brain for any name from that era that I could remember. Part of my problem is that this all started before I was born. I came up with a grand total of two names -and then realized both had something in common. They were dead. So' I have no names to give the lady at the library. . . we're starting from scratch.
"The only clue we have to work with is the person we're looking for would have to be somebody who was in their mid-twenties to mid-thirties in 1953' which kind of rules out my war criminal idea. The candidate would most likely be some sort of national or international figure' and would have accumulated a considerable fortune; one that could be accessed quickly when cash was needed for a new venture. And' if he or she came from outside the country' to relocate and accomplish what they did' they literally had to buy their way into the United States. They needed friends in high places. Maybe those friends included the CIA' or the FBI' or possibly even the White House.
"Think back to a few weeks ago when Ben had that rather cryptic phone conversation with his friend Hamilton in the FBI' and Hamilton's admission that there were `other agencies' involved in the investigation into David's death. Ask yourself why the CIA or Immigration would be the least bit interested in David Nesbitt' and how or why he was killed' unless they had already been involved in the plot -maybe since day one."
"I don't know' Cole'" Suzy said' letting go of my hand."I know I'm tired of this whole business -it's completely taken over our lives. I think the smartest thing you can do tonight is forget foreign affairs and take this local lady home. I think we both need to concentrate for a few hours on a domestic affair. Sound good?"
"It sounds great' I seem to recall knowing a fallen woman' but I'm not sure I know any local lady."
We both laughed and headed for her place.
It was a little past ten the next morning when Suzy and I walked through the doors of the library. The receptionist at the information desk steered us in the right direction' and after an elevator ride to the second floor, we found ourselves in the Newspaper Department. Six hours later' bleary-eyed' we were on our way back to my parked car. Our efforts had uncovered ten names; eight were possibilities' two were a bit of a stretch. There also were a few others that we didn't bother listing' only because they were either in prison or had appeared in public outside the United States within the past couple of weeks.
On the way back to the office Suzy and I went over the list of names. We agreed that the two least likely candidates should be crossed off the list. Both were Nazi war criminals and' if by some quirk of fate they were alive and kicking in 1953' they certainly were not around when the Montana ranch was built in 1972. The youngest of the pair would then have been 97 years old.
The other eight possibilities presented an interesting kaleidoscope of nationalities' ages' character studies and cruel reputations. There was Francois Duvalier' or Papa Doc as he was known' from Haiti; Rafael Trujillo of the Dominican Republic; Pol Pot of Khmer Rouge fame in Cambodia; the Shah of Iran; General Idi Amin from Uganda; Saddam Hussein from Iraq; Muammar Qadhafi of Libya; and Juan Peron from Argentina. If you included Juan's wife Eva our edited list increased to nine names.
By the time we arrived at our office, it was almost quitting time for the staff. Suzy went right to her car and left to pick-up Julia. She had promised to take her shopping for some new clothes. When I passed Nancy's desk she handed me about a half-dozen phone messages and my mail. I told her to go home; I wasn't going to return any calls or see anybody until tomorrow morning. I poured myself a cup of coffee and went to my office' shutting the door behind me.
The first thing I did was to write the name of each suspect at the top of a separate sheet of paper. I then added the biographical data that Suzy and I had copied at the library; initially trying to eliminate anything that didn't seem relevant' which I immediately realized was risky because of my limited knowledge of these people. As a result, I decided it was safer to include everything we found. I listed their birth dates; their ages in 1953 and 1972; facts about their rise to power; their reported wealth; family information' if any; known enemies; where they were last seen' and by whom; any known health problems' and were they reportedly still alive. And on and on and on. I also knew that even though we had the names of eight notorious people -I had no real evidence identifying any one of them as our mysterious client. Eight sheets of paper filled with names and narrative' all of which could turn out to be total garbage.
I sat there a long time with my eyes closed thinking about what I had just written. No matter how I twisted the facts' I could not fit any of the eight into the mold of our client. Maybe I was totally off base. What if it wasn't one of these eight? What if it was an eccentric but totally honest' tax paying' super-rich industrialist? It was certainly possible. When I opened my eyes I saw that the sun was disappearing below the horizon and my office was dark.
I turned on my desk lamp and spread the eight sheets of paper across my desk. I had stacked all of my earlier notes at the end of the desk' including the notes Trimble had given me' and the notes from my visit to Tampa. I started scanning through Trimble's notes again' but gave up when I realized that I'd found nothing I hadn't seen at least a dozen times before. I was getting absolutely nowhere. My frustration with this crazy puzzle was irritating the hell out of me' and I don't work well or think straight when I'm mad. To make matters worse' my investment of time and money was quickly adding up. Hammel & McQuaid simply couldn't afford much more of this. I'll have to come up with something quickly or drop the whole investigation and walk away. Aside from my annoyance at the prospect of giving up' something else was bothering me. I couldn't put my finger on it' but a nagging little thought was spinning around in the back of my brain. My subconscious was trying to tell me something; a name possibly' or a place -I couldn't tell which. I decided that the best thing to do was to leave the problem here on my desk and go home. It would still be here in the morning.
I got about halfway home when I drove past a shopping center. The main store in the row of shops was a K-Mart' or Big-K I think they now call them' with a huge letter `K' glowing red on the front of the building. The glow seemed to burn a hole through my head like a laser beam' and I immediately knew what my subliminal self was trying so hard to tell me. I made a U-turn at the next jughandle and headed back to my office.
When I reached my desk my feet must have been two feet off the floor. I grabbed my Tampa notes and one of the eight sheets still spread across the desk. Flipping through the notes of my conversation with Maria Sippano I quickly found the two things I was looking for. I then picked up the sheet on which I had written one of the eight biographies just an hour ago. And there it was; it wouldn't have been easier to spot if it was flashing red neon -the name Kabogian -smack in the middle of the second paragraph of the biography for the Shah of Iran! I slammed my fist on the desk. Damn' how could I have missed something so obvious?
What the biography told me was that years before the Shah was born' his father' Reza Khan' later known as Riza Shah Pahlavi' was the leader of the renegade Cossacks in northern Persia. With little effort, Reza Khan and his Cossacks took control of one Persian province after another. In an attempt to gain a strong foothold in the province of Isfahan' Reza Khan arranged for the marriage of his sister Farrah to a wealthy Ishfahan farmer and landowner by the name of Oram Kabogian. The marriage was a happy one and it greatly benefited Reza Khan. Not long after the marriage Reza marched on Tehran and took over the city. The paragraph concluded by saying that during the ensuing years Farrah bore her husband six children; five daughters and a son. The names of the children were not given' but I'll bet everything I own that the name of one of the daughters was Irena. Old iron-face!
The second item contained in the notes from my Tampa trip was Maria's answer to my question about how the client paid Tampa for their services. Maria said that Tampa invoices were sent to a post office box in Miles City' Montana. Payment was always by wire to their bank in Tampa. The money was wired to Tampa from various banks in this country and abroad' including Trimble's bank in London and a bank in Milan' Italy.
I could understand sending invoices to a post office box in New York City' or Chicago' or San Francisco -or even Tampa' but Miles City' Montana -it was ludicrous! I got out my road atlas' and when I saw that Miles City had a population of not much more than eight thousand people' and was no more than an hours drive from the Montana ranch Walter had found for the client back in 1972' I knew with certainty that my hunch was right on target. Could it be... .could it really be that our cunning and phantom client was the Shah of Iran? It had to be him -it just flat out had to be! All the pieces of the puzzle suddenly started coming together in my mind; all the things that didn't make sense up to now' inexplicable things that Walter' David and Alex Trimble -not to mention me -couldn't begin to interpret' began to flow together into a brilliant scheme of deception. And all the while the megalomaniac responsible for it all was living on a ranch in Montana' almost under our noses. I was so elated I just had to tell somebody' so I picked up the phone and punched in Suzy's number.
I was staring at the Shah's biography while I waited for Suzy to answer. Before the phone rang twice I was hit with the realization that something was drastically wrong with my conclusion. I quickly hung up the phone and flopped back into my chair. I kept reading and rereading the last paragraph on the piece of paper in my hand. Damn it Cole' you're stupid' I said to myself; how in God's name could the Shah of Iran be the client -he died of cancer back in 1980 -more than eighteen years ago!
I sat at my desk for the next hour trying to reconcile what I knew with what I thought I knew. No matter how I rearranged the facts' everything still pointed to the Shah being our client. But history nullified all of that; the man was dead' and there were probably dozens if not hundreds of witnesses to his death. Could the present resident of the ranch be his son? According to the biography, his son would now be in his late thirties. Was he carrying on his father's legacy? It was certainly possible. Or had somebody else taken over his kingdom in exile? Maybe another relative' or one of the late Shah's associates. While I was thinking I was also doodling on a pad; jotting down dates and the names of people who have been involved in this. I printed the name of the Tampa company in big block letters -THE M. R. SHAW MANAGEMENT GROUP. I printed the name over and over' forward and backward' but nothing new was apparent. It was just a name. I made a list of first names and middle names' beginning with the letters `M' and `R'' but' again' they were just names -a dozen or more. Then something I hadn't noticed before jumped off the page and smacked me right between the eyes.
Ten minutes later I was convinced that I finally had some of the answers. After another thirty minutes of picking apart and challenging the few conclusions I had reached' I was still convinced I was right. But' unfortunately' there were more than a few questions that remained unanswered' and I knew the only place they could be resolved was Montana.
I really couldn't afford the time for another trip -I was already more than a month behind in my work' but if I didn't go' who would? I saw no point in giving what I had to anybody else; it was too late for that. If I told the local police what I suspect they'd write me off as a nut case. And I couldn't go to the FBI or the CIA. If I was right about their involvement in this from the beginning' I certainly couldn't trust them to help. I might even wind up dead. So' if I want answers' I have to go.
First thing the next morning I called Suzy and Nancy into my office and explained what I had found and what I planned to do. Suzy reacted as I knew she would; turn the whole mess over to the FBI and walk away. She said I was getting involved with people who could destroy us' and she was flat out scared -and probably right. I tried to explain why I couldn't do what she asked' but I don't think I convinced her at all.
I asked Nancy to go to the basement' where our dead files are stored' and pull out everything she could find relating to Walter's 1972 acquisition of the Montana ranch land. Fortunately' our old files are cross-referenced by date as well as alphabetically.
"Also' Nancy'" I said."Check the 1971 and 1972 indexes for any reference to the purchase' and for any mention of David Nesbitt or Trimble's bank. And the same goes for any mention of the Tampa organization."
"I'll gladly do it' Cole' but first I'm going home and change into some old clothes; those files boxes are covered with dust. I'd also like to have a strong back to help move the boxes around -they're pretty heavy."
"I agree' and I'm sorry I didn't think of that. Ask Jimmy or Tom to help."
I then placed a call to Trimble in London. As usual' I had to contend with old imperious Miss Nickleby. She insisted that Mr. Trimble could not be disturbed; he had a busy schedule today and was preparing to leave for a meeting. I told her my name and that I was calling from overseas' and insisted she at least tell him I was on the line. She must have remembered our verbal sparring during our conversations of a few weeks ago' because in less than ten seconds Alex was on the line.
After the usual greeting and small talk about the weather, I gave him a synopsis of what had developed since he and I last spoke' including my trip to Tampa' my interaction with Maria Sippano and Irena Kabojian' and my suspicions about the Shah and the Montana ranch. He really didn't say too much except to express disagreement with my theory on the Shah.
"That's preposterous' Cole. I don't remember when he died' but I know it was a long time ago. Unless it was the hoax of the century' the Shah is dead. Exactly what makes you think this person in Montana is the Shah?"
"Well' Alex' whether he's now dead or alive' I'm convinced the Shah of Iran was the original owner of the Montana ranch. I can't prove anything yet' but unless it's the coincidence of the century' there's a ton of evidence supporting my suspicion. First' the Kabojian woman in Tampa is Iranian and is apparently a first cousin of the Shah. She's been a major player in this whole scheme since she came to this country in 1953' and I'm sure that year rings a bell with you. Next' there's evidence that Kabojian was the lover of the late Mousa Muzzadin -and you know the story on him. Add to that what Maria Sippano told me; all Tampa invoices to the client for their services are sent to a post office box in a small Montana town' not far from the ranch. And the clincher is something I haven't shared with anybody yet -my spin on the name of the Tampa company. With all of your dealings with them, I'm sure you know that their name is the `M. R. Shaw Management Group.' The problem is -nobody has ever seen Mr. Shaw' or for that matter Mrs. Shaw -if there is such a person. And this goes back to 1953' the year the company was founded. 1953 Alex' another bell ringer!
"Last night I was sitting at my desk thinking about all the possibilities' all the probabilities' and I was doodling on a piece of paper at the same time. I was substituting names for each of the `M. R.' initials. I was also playing around with the name `Shaw.' And guess what I came up with? Try changing the name `Shaw' to `Shah.' Now plug in `Mohammed Reza' for the initials `M. R.' -and what do you have? How about Mohammed Reza Shah' or more commonly' the Shah of Iran! To be completely correct the name Pahlavi must be added to his title' as in Mohammed Reza Shah Pahlavi. The Pahlavi name was handed down to him by his father; it was apparently the place where his father was born.
"For the first time since David was killed, I feel I'm on to something. The reason I called you is because I wanted to find out how your liquidation effort is coming' and also to let you know that I'm going to Montana as soon as possible. I'm convinced that everything we've uncovered so far leads to that Montana ranch. If my suspicions are correct' and I can find some proof' all hell could break loose. I have no idea how it'll end' but it's possible that Mr. Shah and his little empire just might find themselves out of business. Maybe worse. And' if I'm also right about how that empire has remained invisible for so many years' there's going to be egg on a lot of faces in two or three Washington agencies."
"Whoa' Cole' let's back up for a moment. If your suspicions are correct' do you have any idea what kind of hornet's nest you'll be walking into? I'd say you're going to be in extreme danger. You could be killed!"
"I know the risk' Alex' but let's suppose I don't go and next month or next year somebody else disappears or is killed' how will you and I feel? If it's somebody close to me I know I couldn't live with myself -not having been this close to a possible solution. I may be getting involved in a modern-day David and Goliath battle' but I have to try. Does it really make any difference if the Shah is dead like the history books say? I think not. I don't care if it's his son' or another relative' or some flunky from his Iranian monarchy -I'm convinced it all started with the Shah and still revolves around him or his successor. I've got to find out."
"Well' I guess trying to dissuade you would be futile. Is there anything I can do to help?"
"As a matter of fact, there is. It's another reason I called. I'm trying to put together as much information as possible on the purchase of the Montana property back in 1972. I don't know if anything new will surface' but I can't chance overlooking something that might help me. I'm sure your records contain a lot more detail than ours' particularly on the final stages of the purchase. I'd appreciate it if you would look over what you have and E-mail to me anything you think is important."
"I'd be glad to do that. I'll have the file brought up to me immediately. How soon will you leave for Montana?"
"I hope to leave the day after tomorrow' but that depends on a couple of things. I haven't been able to spend enough time in the office recently and completion of two of our projects has fallen behind. The result is we have two very unhappy clients. I also need to decide what I'm going to do in Montana -and how to go about it. I can't afford to waste time' so that's why I need to learn as much as possible about the purchase and what happened in 1972. Any idea how soon you can send me what you have?"
"The time-consuming effort will be sorting through the file. I doubt if I'll find more than a few pages worth considering' but I'll have Margaret our computer technician stay here as long as it takes to scan and send what I do find. You should have everything before the end of the day -your time that is.
"Before I ring off -you asked about our liquidation effort. I'm pleased to say it is about ninety percent complete. We were able to sell most of the notes at a very favorable rate' actually much better than I thought we would. I'm confident that we could now survive any type of hit the client might throw at us. I'm sleeping much better again. I hope your trip to Montana doesn't change that' so please be careful. And please keep me informed about what is going on."
"I'll do that' Alex. And' likewise' if anything major develops at your end while I'm in Montana' please let my partner Suzy know immediately. I'll be checking in with her from time to time."
After I hung up I called our travel agent to check on airline connections between Philly and Montana. When I explained to her where I wanted to go she said she'd check with the airlines and call me back. Fifteen minutes later she called back to tell me that she could get me there' but I'd have to change planes in Chicago' fly to Billings and then get a shuttle flight to Miles City. With layovers, the whole trip would take about seven hours. I could pick up a four-wheel drive SUV rental in Miles City' and spend another hour or so getting to my destination. I definitely was not looking forward to this trip, particularly after she gave me my choices of motels and restaurants.
Nancy walked into my office just before lunch' looking a bit dusty and disheveled. The look on her face told me she was anything but her good-natured self. She cradled three manila folders which she plopped on my desk.
"I hope I never have to go in that room again'" she said."Not only is it creepy' but there are spiders -and you know how I hate spiders."
"I'll tell you what Nancy; go wash up and get Suzy and I'll take you both out to lunch."
"You're just trying to bribe me now'" she said' doing her best to appear serious."Ten lunches won't get me in that room again -but since you offered' I'll go get Suzy. And she and I get to pick where we eat' O.K.?"
"Fair enough'" I said' laughing."And I'll tell you what; I won't ask you to go down there again -at least not until tomorrow."
With an infectious grin back on her face, she turned and stuck her tongue out at me as she left my office.
While I waited for them I looked through the three files. There were quite a few notes in Walter's handwriting' plus about a dozen letters and memos in the first folder. The second folder contained nothing but photographs marked in red wax pencil to correspond with notations on three large survey prints' yellowed with age' contained in the last folder. I unfolded them carefully because they had started to disintegrate. The surveys covered an area of slightly more than seventy-two hundred acres and contained a lot of scribbled notes in Walter's hand. They also showed the site's topography' reflecting the gently rolling terrain indicated in most of the photographs. The last folder also contained a copy of a geology report covering eight test wells that had been bored in various locations around the property. At first glance, it looked like there was plenty of good water. In addition' the Powder River coursed for almost a half-mile through the southeastern corner of the property. I carefully refolded the survey prints and put them in a large envelope. I wrote a note reminding myself to get copies made at the repro company that does our printing. The information on the surveys might prove very helpful in finding my way around the site.
We went to Nancy's favorite place for lunch' which I usually avoid because it's known as Cholesterol City. Nancy had a bacon burger with cheese' fries and an ice cream soda. Suzy and I had soup and a salad -with a diet soda. I love to tease Nancy' so I told a couple of my favorite spider stories while we ate. Nancy cringed between bites of her burger and Suzy finally asked me to stop. I don't think Suzy likes spiders either.
The E-mail from London came through about four o'clock. Alex had kept his word. Other than copies of the sales agreement' deed and settlement papers' plus copies of correspondence between David and Tampa' there wasn't anything I considered helpful. A note from Alex said this was it. When combined with what I had found in Walter's files all I really had was background information. I knew where the property was; its size and terrain' and how much it cost the client -but very little else.
I called Kelly' my travel agent' and told her to go ahead and book my flights for the day after tomorrow' and reserve the SUV for me in Miles City. I also told her to forget the room reservation; I've been burned before with blind reservations' so I'll scout the area for something decent looking and chance finding a vacancy.
I spent most of the afternoon going over bid estimates with Joe and catching up on paperwork. Suzy stuck her head in my office around five and invited me to dinner at her place. The thought of a long evening with Suzy sounded very inviting' but I knew I needed a full day in the office tomorrow' plus another three or four hours tonight. So we compromised -Suzy ordered Chinese and we had a buffet dinner at my desk. I kissed her goodnight around seven and she left for home to fix Julia's dinner. I got home in time to grab a cold beer and watch the late news on TV.
By seven the following morning I was back in my office' and spent the entire day at my desk. I sent Nancy to pick-up my plane tickets and traveler's checks at the travel agency. When she returned she brought me a deli sandwich and a diet soda' which I ate at my desk. It seemed only minutes later when my phone rang and I realized it was after six o'clock and all of the staff had gone home. I picked up the phone and it was Suzy. In a breathless imitation of Marilyn Monroe, she invited me to her place for dinner and whatever. I told her dinner sounded great' but I'd take a rain check on the whatever because I had a seven thirty-five flight to catch the following morning. I'm going to have to practice self-discipline because after a delicious spaghetti dinner Suzy and I enjoyed more than an hour of whatever. I justified my lack of will-power by saying I'd sleep on the plane.
listened to the analysis by G. Steven Burrill, a noted venture capitalist who specializes in this area. The big firms, like Merck, Wyeth, Johnson and Johnson have recently reported disappointing earnings, and it seems they have been reducing their American research divisions, with more use of small niche research firms as subcontractors, both American and foreign. As they tend to reduce their emphasis on research and manufacturing, Steve Burrill feels they will concentrate mainly on marketing. That sounds like good news for Wyeth, with its traditional focus on marketing, and bad news for Merck, which has always been strong in new product development.
G. Steven Burrill
Burrill also has his eye on the statistic that only 8% of health care spending is devoted to pharmaceuticals, while 40% is spent on nostrums to promote wellness. The sly observation slipped out that if 40% of health spending goes for products of questionable value, just think how big the market would be for new products that really do promote some wellness. So that, in his opinion, is where investors will prosper.
Some of us in the back of the room were troubled by these thoughts. In the first place, the major drug houses have long operated with a financial business plan that takes profits from old established drugs and uses them to pay for research on the new drugs of the future. Small niche companies, that only work on one phase of this cycle, have had difficulty financing expansion and mostly accepted a subsidiary role. You might develop a wonder drug in your garage, but you had to license it to a big pharma concern in order to thrive. The thought pops up that the protracted wait for
PA Drug Industry
Food and Drug approval might be stretching the old-drug/new-drug interval to the point where patent expiration on the current revenue generators interrupts the internal recycling of profits into new drug research. That's been a threat ever since the passage of the Kefauver Amendment, but a new twist has appeared in the form of a tidal wave of cheap liquidity from the Far East, working its way into venture capital pools and assisting the niche firms with their historical shortages of capital. If that's a significant feature of the present environment, it could fizzle out when the Far East stops pumping liquidity into world markets. A new Premier of Japan might be all it would take, or else a drop in the price of oil. Japan's interest rates are now held below 1%, while a realistic price for oil is $45 a barrel, not $65.
And as far as the promotion of wellness is concerned, that concept might just turn out to be a fad. Congress doesn't try to evaluate scientific trends, but it is very fond of insisting that "if it ain't broke, don't fix it". A major advance in the treatment of cancer and or Alzheimer's Disease might very well dampen Congressional enthusiasm for spending 15% of Gross Domestic Product on what's then left to treat, which would mostly be wellness.
Chief Justice John Marshall first took his seat at the opening of the new term, in Washington the new capital, on Wednesday, February 4, 1801. It was also at the end of Philadelphia's twenty-five-year reign as the center of the country, and twelve-year Federalist domination of national power, except for the Supreme Court. The Presidency, both houses of Congress, and the federal bureaucracy were in the hands of Jefferson's party. Only the dwindling life tenure of federal judges permitted some power to remain in the hands of Federalists for several more decades. John Adams the defeated Federalist President realized this very well and hastened to fill any remaining vacancies before he left the office. The Jeffersonian Republicans understood what was happening, resented it, and referred bitterly to the "Midnight Judges". We discuss the Marshall Court in some detail because it leads to the Andrew Jackson escapade in high finance, which ultimately merges with evolving financial history back in Philadelphia at the crashing termination of "Biddle's Bank".
Marshall was himself a Midnight Judge in the sense he was the retiring (Federalist) Secretary of State, immediately appointed by Adams to the duties of Chief Justice. He was himself the office of the Adams Administration who neglected to deliver the certificate of appointment of Justice of the Peace to Marbury, who promptly sued James Madison the incoming Secretary of State, to give him his signed and ratified certificate. Jefferson the incoming President of the United States, ordered Madison not to give it to Marbury. The behavior of all these high officials was unbecomingly petty since it was within the power of several of them to end the tangle in simple ways. To make matters still more infuriating, Jefferson delivered a beautiful, heart-warming First Inaugural Speech, full of forgiveness and invitation to compromise ("We are all Republicans, we are all Federalists"), which his own intransigence before, during and afterward transformed into a Federalist by-word for hypocrisy exceeding anything in Shakespeare. It's hard to say whether it makes these performances more or less bearable to learn that Marshall and Jefferson were first cousins. In any event, Marbury v. Madison was the first example of a Supreme Court ruling that a law was unconstitutional. The legal point on which this titanic Constitutional point rested, however, seems mostly a minor procedural error, leaving poor Marbury's problem as a footnote, Marshall's negligence uncriticised, Jefferson's interference unimpeached, and the whole nation's opinion of its governance sadly disappointed. On vivid display was the dominance of petty private grievances of our most venerated Founding Fathers, in an era when a public policy seemed most in need of getting the highest priority. In 1800, the confluence of names alone suggested crisis: Aaron Burr, Robespierre, Bonaparte, Hamilton. It was certainly a dramatic way for John Marshall to make an entrance on the public stage, but compared with the tie-vote election of 1800, and the Trial of Aaron Burr the Vice President for treason, it scarcely seemed worth public notice.
Within legal circles, professional achievements of Judges are ranked by a different standard which seems obscure to both the public and historians. Oliver Ellsworth, Marshall's immediate predecessor, nowadays seems most highly esteemed in the legal profession for revising the nature of judicial opinions. Prior to Ellsworth, the seven justices gave their opinions individually and serially. Ellsworth simplified this to majority and minority opinions of the entire court, with individual concurring opinions if insisted upon. The Chief Justice selects who will write the majority opinion, and generally writes it himself if he is in that majority. Effectively this makes the Chief Justice the voice of the court in important cases. Ellsworth retired for reasons of health before he got many advantages from this change, so the full force of Chief Justice power began to appear with the voice of Marshall. John Marshall then added his own twist, which was the obiter dictum .
Judges often make little speeches from the bench, which sometimes are on the public record. If they are directly related to the decision or opinion, they have some force as precedents to lower or later courts. In other circumstances obiter dicta have little consequence, but Marshall recognized there was a very big difference when an obiter issued from the pen of the Chief Justice of the United States, speaking for a majority of the Supreme Court. All Judges of every Federal Court and the Judges of State Courts in many situations are then on notice that the obiter is the opinion of that court to which all appeals could ultimately be made. It would be a brave judge who ignored this warning, and only a foolish lawyer would bring a case which flouted it. John Marshall had found a way to legislate what was effectively the Law of the Land, one without the possibility of a veto while he was still on the bench. He had not been made an Emperor, because the power of his dicta would depend on how combative he and fellow justices chose to be about it. But, looking ahead, Andrew Jackson would have been showing a profound lack of subtlety about the way things really are, had he issued his famous jibe that "John Marshall has made his decision. Now let him enforce it." Jackson's most distinguished biographer Robert Remini maintains Jackson never said it, and prudently so.
Marshall was also prudent when he had to be, and acting as a Moses was careful to confine his Commandments to his mandate, which was the American law. Some of his obiter dicta might have been ignored as coming from the most powerful Federalist of his day, a former chief of the Virginia Federalist party, but with the passage of time several of these opinions have passed from statements of early Nineteenth century judicial policy into becoming the accepted American view of things. It is reasonably safe to say the following three dicta anticipate the coming of the Civil War, define its issues, and survived that war, reconfirmed:
The Federalist View of the Constitution. The Constitution is an ordinance of the people of the United States, and not a compact of States.
Enumerated powers. While the government which the Constitution established is one of the enumerated powers, as to those powers it is a sovereign government, both in its choice of the means by which to exercise its powers and in its supremacy over all colliding and antagonistic powers.
States Rights. The National Government and its instrumentalities are present within the States, not by the tolerance of the States, but by the supreme authority of the people of the United States.
Article 1, section 10, clause 1
No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.
The Contract Clause
The Sanctity of Contracts. In a famous dialogue between James Madison and Roger Sherman of Connecticut, Madison identified the erratic and high-handed behavior of state legislatures as one of the main reasons to convene the Constitutional Convention. He was describing a long list of behaviors which included reclaiming sales which had been regarded as permanent, reversing statutes, interfering with executions or other verdicts of courts, intervening in private controversies, calling for new hearings, introducing new rules of evidence after a trial had begun, and so forth. To a considerable degree, these abuses grew out of a collision between the undeniable right of a later legislature to change the rules which had been established by an earlier legislature, balanced against the disruptive effect of making any changes in rules, no matter how beneficial. For their part, the courts were in need of restraining themselves with doctrines like stare decisis , while reserving the right to make desirable changes in the law after serious consideration. They were also in need of establishing best practices and insisting they be followed, eventually evolving into the concept of due process , which eventually became Constitutional doctrine by the XIV Amendment. The legislative equivalent of these judicial principles was seen in laws passed after the crime had been committed ( ex post facto ), special legislation for one case an exception to general rules, and a wide variety of other unfair practices which had grown up. Accordingly, Article 1, section 10, clause 1 of the Constitution was written but often evaded in practice by sly legal tricks with Latin names. Examples of the broad principles might be stated in the constitution, but it required an experienced Judge to recognize the many evasions for what they were and organize a set of rules to implement the Constitutional principle. Marshall appointed himself in that role and systematically integrated his judicial counter-attack into a coherent code of moral conduct, bit by bit in obiter dicta.
We should let the French traveling correspondent, Alexis de Tocqueville, pass the final judgment on Marshall's effort:
"Scarcely any political question arises in the United States which is not resolved sooner, or later, into a judicial question. Hence all parties are obliged to borrow in their daily controversies the ideas, and even the language peculiar to judicial proceedings. . . The language of the law thus becomes, in some measure, a vulgar tongue; the spirit of law, which is produced in the schools and courts of justice, gradually penetrates beyond their walls into the bosom of society, where it descends to the lowest classes, so that at last the whole people contract the habits and the tastes of the judicial magistrate."
Medicare had been in existence for fifteen years when Health Savings Accounts were designed. Medicare was popular and apparently permanent. Accordingly, the HSA proposal was intended to phase out when the individual became a Medicare recipient. Since there might be an unspent surplus at that time, it was provided that the surplus be turned into an IRA, partly as a gesture of deference to Senator William Roth of Delaware, who was the originator of the tax-exempt fund idea.The consequence is that the HSA now bridges the transition, between health care and prolonged longevity. That's a feature now seen to be an enhancement.
However, experience with the program shows we overlooked something. The plans are attracting a following between the ages of 35 and 50, which is to say they turn unattractive to people 50 to 66, who ought to be in their highest years of earning. On interviewing them, the difficulty seems to be that diseases start increasing at about that age, and a depletion of the account gives it scant opportunity to recover before the program terminates. Compound interest is fine, but if you have used it up for disease A, it cannot compound enough to support disease B. By contrast, a subscriber at age 35 might well be in a position to pay for one bout of illness, followed by compound interest build-up. So the plan covered two or three more severe illnesses before age 66 is attained. The contribution limit of $3300 annually is just not enough to provide a comfortable margin. Furthermore, the purpose of the limit is not clear. If a subscriber contributes more, it would be his own money, not the governments. True, it would be tax exempt, but a very large proportion of the population are tax-exempt through their employer, anyway. People whose income is concentrated may be especially affected, such as those who sell a farm or business, or athletes. Finally, everything said about unexpected illness would be true of unexpected stock market fluctuations.
Proposal 3: The annual limit of deposits to HSA should be increased by a COLA based on medical costs, rather than the cost of living. Furthermore, the limit should be a lifetime limit rather than an annual one. At present, this would substitute a lifetime limit of $132,000 for an annual limit of $3300.
This proposal, while welcome, may still not be enough. The employee with recent experience with healthcare costs, has by the age of 50 come to realize that the personal cost of an HSA has three sources: the deposits which we have mentioned; plus the premium of his required Catastrophic insurance; plus the compound interest rate which his HSA manager is allowing to pass through to him. Additional deposits cost the manager nothing, but the insurance premium and the interest rate are passed through to him from vendors, and their cost is largely obscure to the customer. "Kickbacks" are particularly obscure.
First, the interest rate. The stock market has gone up 12% a year for a century. With transaction costs of perhaps 0.5%, the customer should also subtract 3% for inflation. That creates the remote possibility of paying 8.5% to the customer, and we have in this book generally assumed a net return of 6.5%, with a profit to the middle-men of 2.0%, assuming the middle-man accepts the risk of "black swan" volatility. This is generally about 50% every 28 years. However, the broker probably does not look at it that way. He notices the stock market has gone down in the past few months, may go down more in the next year, and might then take ten or fifteen years to recover to a profitable level. Furthermore, new HSA subscribers may well be young and improvident, have few assets to supply a cushion, and background of judging a consultant's value by the labor he applies, rather than the risks he takes. The customer wants 6.5%, the broker offers 1%. Each sincerely believes the other is cheating him.
Disintermediation, def. Eliminate the middle-man.
The Nut of It.
So, there are other places to look for the difference. The employer can afford to give up the difference, providing he gets a 40% tax deduction directly, borrows the money at 6%, and is making profits this year. The HSA manager can afford to make up the difference, providing he treats the HSA deposit as a pass-through rather than a paid service and makes it up by adding a surcharge to the insurance premium. The insurance company can make up the difference by lowering its prices and profits. It would take subpoena power and open books to know what was a fair proportion for each to contribute. However, the customer must receive a higher income rate, or the complicated interactions will not work. That's where we start. The HSA becomes feasible because transaction costs have been lowered by computers and near-zero interest rates. The customers cannot enter into the bargain if the finance industry refuses to share the windfalls along with the risks. The customer is going to get 6% or forget the whole thing.
Perhaps a simpler way to summarize the unfortunate confrontation is to recognize it is going to be difficult to support 6.5% retail interest rates in an environment of 1% bank rates, and historically low-interest rates, generally. That is particularly true in an environment of falling stock market prices. Unless it can be convincingly shown that someone in this circle is making outrageous profits, or unless someone is willing to put up the capital to buy this business at a discount, the following dangers must be faced and surmounted:
1. The medical customer will eventually resort to what he did in the 1930s. He will neglect his teeth, his gallstones, his varicose veins and hemorrhoids, his eyeglass refractions, and other optional, delayable, services. Consequently, the accident rooms of hospitals will be full of treatable but neglected cases.
2. The stockbrokers will recognize that the era of $250 commissions is over, and the retail customer is going to buy index funds over the Internet from wholesalers, and conduct his medical business dealings out of a bank safe deposit box. The history of discounts in closed-end investment funds is part of this conversation.
3. The insurance companies will surrender their surveillance role, and strip down to a re-insurance role. Something like the PSRO (Professional Standards Review Organization, see Senator Wallace Bennett of Utah) will take their place.
4. The hospitals can survive a long time on their present surplus assets, particularly buildings. In time, much of their role will be taken over by retirement villages. Doctors and pharmaceutical companies will be squeezed in ways unique to maintaining their function, more or less.
Which will we choose, if we are headed toward a 1930s depression? All of them. But assuming for the moment that things aren't so bad, let's start with #2. The stockbrokers are doomed, anyway. Almost all banks have some empty floor space, where a fee-only wealth advisor can function with his computer terminal. Alternatively, CPAs can absorb a new business model, in addition to filling out tax forms. One thing is not going to remain the same: the finance industry has a whole lot of disintermediation to do.
Placing a termination point for Health Savings Accounts was originally occasioned by recognizing the overlap created in 1965 by Medicare for everyone. At the time, it seemed pointless to be covered by Health Savings Accounts in addition to Medicare, and there was confusion with Health Spending Accounts with their "use it or lose it" features. Pouring remaining HSA surpluses into a regular IRA retirement fund, seems in retrospect the most effective way to create some incentive to save as much as you can in the Accounts. You couldn't lose it and might well need it. To a certain degree, the size of the resulting retirement package is determined by the frugality of the individual client during his whole medical lifetime long before, but also during, the time he is on Medicare.
He would, however not be in the position of needing to do that, if he had been born earlier. The subscriber to an HSA could continue to deposit extra tax-exempt money in the roll-over IRA for his retirement, giving the appearance of laundering it. Unfortunately, he would first have to drop out of the healthcare benefits, so he would lose the laundered tax exemption for health benefits on withdrawal. You would now have to view the extended tax exemption as repairing that unintended inequity. As Medicare began to be less generous, there were increasing gaps in coverage, and there may be many more in the future.
In what follows, we extend the retirement roll-over idea to several other medical entitlements without suggesting it be required as a universal rule. The time-honored old approach was to use an insurance surplus to reduce costs by recycling its surplus, but there are other things to consider. The first would be to imagine a theoretical sharp drop in the cost of Medicare, itself. Since 80% of Medicare is now spent on five or ten diseases, the possibility of a sudden cheap cure of one of those diseases is raised. The astonishing savings in the cost of strokes and heart attacks, created by taking a daily aspirin tablet -- shows what it might be possible to imagine as happening again. Not to promise, but to imagine.
On the other hand, it is also possible to imagine less desirable priorities getting into the competition for such a financial windfall. Confronted with the issue, the average person would likely suspect such a windfall might as likely pay for aircraft carriers as Medicare deficits. But another opinion would emerge and should be the default position. The Medicare program and its members had experienced the unexpected -- and expensive -- a consequence of more protracted retirement than they planned on (five times as expensive, by one estimate). A more just assignment of such windfall would be to pay for the extra-long retirement cost it had provoked. If other emergencies seemed more pressing at the time, they could always be given priority on the money, but by default, Medicare should first pay for its own consequences. In fact, nothing of the sort occurred.
In a sense, President Obama later created the same political problem for himself with the original budget for Obamacare. He did not need to make any speeches directing attention to the diversion of Medicare money to help pay for Obamacare costs, because plenty of Republican opponents were studying the budget. And plenty of Republicans remembered Richard Nixon's advice, "Watch what I do, don't listen to what I say." Having spoken to many groups of retirees about healthcare financing, I am acutely aware that retirees are watchful for any move to strip Medicare funds for Obamacare's benefit. It's about their highest priority.
And indeed their anxiety would be heightened by discovering Medicare is already 50% subsidized by general taxation, and then unsustainably maintained by borrowing money (selling US Treasury bonds) to foreign countries like China. And still more to the point, medical costs have been and will continue to migrate from working-age people to retirement age people in the future. Just about everyone who dies right now dies at Medicare expense. Even more than that, the effect of medical science has tended to eliminate terminal medical costs for people under 65, shifting them to people who get sick when they are over 65. It can be predicted a major cause of future Medicare cost increases, compared with the cost of living, lies in this shift of disease cost to the elderly. So it's a little hard to project whether Medicare costs will go up or go down, even if the cost of illness remains the same.
Recipients will change insurance compartments. Many attempts have been made to shift Medicare costs to the non-stick working population, such as through the payroll tax deduction and hospital internal cost-shifting, but the trend continues. A more sophisticated thing for the retirees to worry about, is the instability of a system which depends for its financing on that one-third of the population who are at work -- but who are themselves becoming progressively more healthy -- to support the medical finances of the other two thirds of the population, who are sick.
Taken in summary, there exists a great political opportunity for both political parties to put a stop to this "third rail of politics" talk. And to amend the Medicare Law immediately to provide that any declines in Medicare costs be immediately transferred to Social Security, for the purpose of paying for further increases in longevity. That provision should not cost much for some time to come. But the incentive it would give to the retirees to reduce their health expenditures might be considerable. Just as the comparable position Health Savings Accounts achieved, once Medicare coverage was attained.
But its real benefit might be tested on that fateful day in the future. The day you pick up the morning newspaper and discover someone has cured cancer.
109 Volumes
Philadephia: America's Capital, 1774-1800 The Continental Congress met in Philadelphia from 1774 to 1788. Next, the new republic had its capital here from 1790 to 1800. Thoroughly Quaker Philadelphia was in the center of the founding twenty-five years when, and where, the enduring political institutions of America emerged.
Philadelphia: Decline and Fall (1900-2060) The world's richest industrial city in 1900, was defeated and dejected by 1950. Why? Digby Baltzell blamed it on the Quakers. Others blame the Erie Canal, and Andrew Jackson, or maybe Martin van Buren. Some say the city-county consolidation of 1858. Others blame the unions. We rather favor the decline of family business and the rise of the modern corporation in its place.