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"Black Friday"

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“Black Friday”
Written by Donald Fagen and Walter Becker (1975)
Performed by Steely Dan

The Music

With songs about everything from flashy drug czars to downtrodden jazz musicians, Steely Dan have always cast their lyrical net far from the usual romantic fare of pop music. On one of the standout tracks from their 1975 album Katy Lied, they dug back to the 19th century to write about an infamous financial disaster. Not that it was straight history. Songwriters Donald Fagen and Walter Becker, true to their left-of-center muse, imagined a savvy investor who cashes out just before the crash and escapes to Australia to walk barefoot on the beach and watch the kangaroos.

“Black Friday” reached #37 on the charts. It also marked the debut of Michael McDonald as Steely Dan's background vocalist of choice. McDonald, who went on to fame with the Doobie Brothers and as a solo artist, would lend his distinctive voice to many more Dan tunes, including “Kid Charlemagne,” “I Got The News” and “Peg.”

The History

Today, we associate the term Black Friday with the day after Thanksgiving, and all its pre-Christmas shopping madness. But the original Black Friday was about something more dire and disastrous.

During the Civil War, both the Union and Confederate governments financed their military operations with “greenback” currency—that is, money not backed by gold or silver reserves. After the Union won, the government, under President Ulysses S. Grant, continued to pour huge amounts of greenbacks into reconstruction projects. The greenbacks were basically promissory notes. Backed by the “full faith” of the government, they would one day be redeemable for precious metal-backed currency. But by 1869, the value of the greenbacks had fallen to the point where people started to panic over the true worth of their savings and investments.

We're In The Money

Enter Jay Gould and James Fisk. Gould was a railroad tycoon and a financial speculator. Fisk, known as “Diamond Jim,” was a stockbroker and ruthless businessman. In 1868, the pair had used stock fraud and bribery to prevent Cornelius Vanderbilt from taking control of the Erie Railroad, which they owned. Now they set out to corner the gold market and cheat investors. They saw how the U.S. Treasury had been increasing the supply of gold to the market to regulate its price. Gould and Fisk figured they could buy massive quantities of gold, drive up its value and then sell it off for a huge profit.

To ensure their scheme didn't go awry, Gould and Fisk recruited another financier, Abel Corbin, who happened to be married to Virginia Grant, the President's sister. This allowed Gould and Fisk to meet Grant on several social occasions, which they used to argue against the sale of government gold. Grant listened politely, but didn't take them seriously. Corbin further exercised his insider status to influence Grant to appoint former Union army general Daniel Butterfield as assistant Treasurer. It would be Butterfield's job to manage the government's buying and selling of gold. With Corbin's help, Gould and Fisk bribed Butterfield to provide advance notice of any large government sell-off of gold.

As Gould and Fisk's scam continued, gold prices rose and stocks fell. By September 1869, the premium on gold was 30 percent higher than when Grant took office. Soon, bank runs were breaking out across the country, with depositors demanding gold on their greenbacks and threatening to hang bank managers if they didn't get it. In some cases, the army had to be called in to suppress violence. Grant had become increasingly suspicious of Corbin's interest in the gold market, but when he discovered a letter from his sister to his wife that mentioned the gold market, he realized he was being conned. He ordered the Treasury to immediately release large amounts of gold from the reserves.

Black Gold

Initially, it was announced that $4 million worth of gold reserves would be sold. But the government didn't actually have that much. Later, the Treasury Secretary claimed that he meant to say $400,000, but added an extra zero by accident.

On September 24, 1869, later dubbed “Black Friday,” the gold hit the market. Within minutes, the value of gold plummeted. Desperate investors scrambled to sell their holdings and many, including Abel Corbin, were ruined. The fall in gold prices led to a huge dip in the market, which then rippled its ill effects into the national economy.

There was a congressional investigation into the scandal, and Butterfield resigned. Although Grant was not involved, his personal association with Gould and Fisk tainted his reputation.

As for Gould and Fisk, they managed to sell their gold before the bottom dropped out. Gould continued his financial power plays, eventually gaining control of the Union Pacific Railroad and Western Union Telegraph Company. Fisk was shot and killed by a fellow financier a few years later, after an argument over the affections of a Broadway showgirl.

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Pop Culture
Fumbled: The Story of the United States Football League
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There were supposed to be 44 players marching to the field when the visiting Los Angeles Express played their final regular season game against the Orlando Renegades in June 1985.

Thirty-six of them showed up. The team couldn’t afford more.

“We didn’t even have money for tape,” Express quarterback Steve Young said in 1986. “Or ice.” The squad was so poor that Young played fullback during the game. They only had one, and he was injured.

Other teams had ridden school buses to practice, driven three hours for “home games,” or shared dressing room space with the local rodeo. In August 1986, the cash-strapped United States Football League called off the coming season. The league itself would soon vaporize entirely after gambling its future on an antitrust lawsuit against the National Football League. The USFL argued the NFL was monopolizing television time; the NFL countered that the USFL—once seen as a promising upstart—was being victimized by its own reckless expansion and the wild spending of team owners like Donald Trump.

They were both right.

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Spring football. That was David Dixon’s pitch. The New Orleans businessman and football advocate—he helped get the Saints in his state—was a fan of college ball and noticed that spring scrimmages at Tulane University led to a little more excitement in the air. With a fiscally responsible salary cap in place and a 12-team roster, he figured his idea could be profitable. Market research agreed: a hired broadcast research firm asserted 76 percent of fans would watch what Dixon had planned.

He had no intention of grappling with the NFL for viewers. That league’s season aired from September through January, leaving a football drought March through July. And in 1982, a players’ strike led to a shortened NFL season, making the idea of an alternative even more appealing to networks. Along with investors for each team region, Dixon got ABC and the recently-formed ESPN signed to broadcast deals worth a combined $35 million over two years.

When the Chicago Blitz faced the Washington Federals on the USFL’s opening day March 6, 1983, over 39,000 fans braved rain at RFK Stadium in Washington to see it. The Federals lost 28-7, foreshadowing their overall performance as one of the league’s worst. Owner Berl Bernhard would later complain the team played like “untrained gerbils.”

Anything more coordinated might have been too expensive. The USFL had instituted a strict $1.8 million salary cap that first year to avoid franchise overspending, but there were allowances made so each team could grab one or two standout rookies. In 1983, the big acquisition was Heisman Trophy winner Herschel Walker, who opted out of his senior year at Georgia to turn pro. Walker signed with the New Jersey Generals in a three-year, $5 million deal.

Jim Kelly and Steve Young followed. Stan White left the Detroit Lions. Marcus Dupree left college. The rosters were built up from scratch using NFL cast-offs or prospects from nearby colleges, where teams had rights to “territorial” drafts.

To draw a line in the sand, the USFL had advertising play up the differences between the NFL’s product and their own. Their slogan, “When Football Was Fun,” was a swipe at the NFL’s increasingly draconian rules regarding players having any personality. They also advised teams to run a series of marketable halftime attractions. The Denver Gold once offered a money-back guarantee for attendees who weren’t satisfied. During one Houston Gamblers game, boxer George Foreman officiated a wedding. Cars were given away at Tampa Bay Bandits games. The NFL, the upstart argued, stood for the No Fun League.

For a while, it appeared to be working. The Panthers, which had invaded the city occupied by the Detroit Lions, averaged 60,000 fans per game, higher than their NFL counterparts. ABC was pleased with steady ratings. The league was still conservative in their spending.

That would change—many would argue for the worse—with the arrival of Donald Trump.

Despite Walker’s abilities on the field, his New Jersey Generals ended the inaugural 1983 season at 6-12, one of the worst records in the league. The excitement having worn off, owner J. Walter Duncan decided to sell the team to real estate investor Trump for a reported $5-9 million.

A fixture of New York media who was putting the finishing touches on Trump Tower, Trump introduced two extremes to the USFL. His presence gave the league far more press attention than it had ever received, but his bombastic approach to business guaranteed he wouldn’t be satisfied with an informal salary cap. Trump spent and spent some more, recruiting players to improve the Generals. Another Heisman winner, quarterback Doug Flutie, was signed to a five-year, $7 million contract, the largest in pro football at the time. Trump even pursued Lawrence Taylor, then a player for the New York Giants, who signed a contract saying that, after his Giants contract expired, he’d join Trump’s team. The Giants wound up buying out the Taylor/Trump contract for $750,000 and quadrupled Taylor’s salary, and Trump wound up with pages of publicity.

Trump’s approach was effective: the Generals improved to 14-4 in their sophomore season. But it also had a domino effect. In order to compete with the elevated bar of talent, other team owners began spending more, too. In a race to defray costs, the USFL approved six expansion teams that paid a buy-in of $6 million each to the league.

It did little to patch the seams. Teams were so cash-strapped that simple amenities became luxuries. The Michigan Panthers dined on burnt spaghetti and took yellow school buses to training camp; players would race to cash checks knowing the last in line stood a chance of having one bounce. When losses became too great, teams began to merge with one another: The Washington Federals became the Orlando Renegades. By the 1985 season, the USFL was down to 14 teams. And because the ABC contract required the league to have teams in certain top TV markets, ABC started withholding checks.

Trump was unmoved. Since taking over the Generals, he had been petitioning behind the scenes for the other owners to pursue a shift to a fall season, where they would compete with the NFL head on. A few owners countered that fans had already voiced their preference for a spring schedule. Some thought it would be tantamount to league suicide.

Trump continued to push. By the end of the 1984 season, he had swayed opinion enough for the USFL to plan on one final spring block in 1985 before making the move to fall in 1986.

In order to make that transition, they would have to win a massive lawsuit against the NFL.

In the mid-1980s, three major networks meant that three major broadcast contracts would be up for grabs—and the NFL owned all three. To Trump and the USFL, this constituted a monopoly. They filed suit in October 1984. By the time it went to trial in May 1986, the league had shrunk from 18 teams to 14, hadn’t hosted a game since July 1985, kept only threadbare rosters, and was losing what existing television deals it had by migrating to smaller markets (a major part of the NFL’s case was that the real reason for the lawsuit, and the moves to smaller markets, was to make the league an attractive takeover prospect for the NFL). The ruling—which could have forced the NFL to drop one of the three network deals—would effectively become the deciding factor of whether the USFL would continue operations.

They came close. A New York jury deliberated for 31 hours over five days. After the verdict, jurors told press that half believed the NFL was guilty of being a monopoly and were prepared to offer the USFL up to $300 million in damages; the other half thought the USFL had been crippled by its own irresponsible expansion efforts. Neither side would budge.

To avoid a hung jury, it was decided they would find in favor of the USFL but only award damages in the amount of $1. One juror told the Los Angeles Times that she thought it would be an indication for the judge to calculate proper damages.

He didn’t. The USFL was awarded treble damages for $3 in total, an amount that grew slightly with interest after time for appeal. The NFL sent them a payment of $3.76. (Less famously, the NFL was also ordered to pay $5.5 million in legal fees.)

Rudy Shiffer, vice-president of the Memphis Showboats, summed up the USFL's fate shortly after the ruling was handed down. “We’re dead,” he said.

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The Time Douglas Adams Met Jim Henson
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On September 13, 1983, Jim Henson and The Hitchhiker's Guide to the Galaxy author Douglas Adams had dinner for the first time. Henson, who was born on this day in 1936, noted the event in his "Red Book" journal, in characteristic short-form style: "Dinner with Douglas Adams – 1st met." Over the next few years the men discussed how they might work together—they shared interests in technology, entertainment, and education, and ended up collaborating on several projects (including a Labyrinth video game). They also came up with the idea for a "Muppet Institute of Technology" project, a computer literacy TV special that was never produced. Henson historians described the project as follows:

Adams had been working with the Henson team that year on the Muppet Institute of Technology project. Collaborating with Digital Productions (the computer animation people), Chris Cerf, Jon Stone, Joe Bailey, Mark Salzman and Douglas Adams, Jim’s goal was to raise awareness about the potential for personal computer use and dispel fears about their complexity. In a one-hour television special, the familiar Muppets would (according to the pitch material), “spark the public’s interest in computing,” in an entertaining fashion, highlighting all sorts of hardware and software being used in special effects, digital animation, and robotics. Viewers would get a tour of the fictional institute – a series of computer-generated rooms manipulated by the dean, Dr. Bunsen Honeydew, and stumble on various characters taking advantage of computers’ capabilities. Fozzie, for example, would be hard at work in the “Department of Artificial Stupidity,” proving that computers are only as funny as the bears that program them. Hinting at what would come in The Jim Henson Hour, viewers, “…might even see Jim Henson himself using an input device called a ‘Waldo’ to manipulate a digitally-controlled puppet.”

While the show was never produced, the development process gave Jim and Douglas Adams a chance to get to know each other and explore a shared passion. It seems fitting that when production started on the 2005 film of Adams’s classic Hitchhiker’s Guide, Jim Henson’s Creature Shop would create animatronic creatures like the slovenly Vogons, the Babel Fish, and Marvin the robot, perhaps a relative of the robot designed by Michael Frith for the MIT project.

You can read a bit on the project more from Muppet Wiki, largely based on the same article.


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