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Castle Dobbs

Posted on November 7, 2018 in Uncategorized

Architectural Schizophrenia

Castle Ward is Northern Ireland’s most famous case of two architectural styles clamouring for attention in the one building: neoclassical versus gothick. Castle Dobbs has a less extreme but still surprising dual personality: Georgian versus Italianate. More of that later.

“For its date, 1750 to 54, it is quite without an equal in Ulster, while its perfect Palladian plan with flanking wings… is hard to match in a house of this scale anywhere in Ireland.” Prof Alistair Rowan

Set in a secluded walled and wooded demesne, Castle Dobbs is an amazing survival, untouched by the orange glow of spreading suburbia and still owned by the family from whom its name is derived. The present High Sheriff of County Antrim is Nigel Dobbs. His ancestor Richard Dobbs became High Sheriff of County Antrim in 1664. Its ethereal postal address is 74 Tongue Loanen.

The estate was established in the 16th century when a young John Dobbs accompanied Sir Henry Dockwra to Carrickfergus in 1596. Dobbs subsequently became Dockwra’s deputy as Treasurer of Ulster. John Dobbs was the grandson of Sir Richard Dobbs, Lord Mayor of London in 1551 and a founder of Christ’s Hospital London. A title would never appear in the Dobbs lineage again.

Seven years later John Dobbs married Margaret Dalway, the only child of John Dalway, a landowner granted estates in Kilroot and Ballynure in 1601 by James I. Dobbs presented the newlyweds with a freehold lease of a portion of his lands in Kilroot. The couple proceeded to build the first Castle Dobbs. It was recorded in 1610:

“One John Dobb buylte a fayre castle within two myle of Knockfargus called Dobbes Castle about w’ch he entends to buylde a bawne of stone… This Castle is buylte upon parte of Ensigne Dallawayes lande.”

Dalway had come to Ireland in the 1570s as an officer in the Earl of Essex’s army. In 1606 he built a bawn (a stone enclosure for cows) on his newly acquired land. The bawn consisted of four 10m high towers with a 13m long curtain wall between each one. He built his house in the middle of the bawn.

Over the entrance to the bawn is a gallows for unwelcome visitors. The towers had three floors fitted for firing cannons. Three of the towers remain. Originally the bawn would have held 200 cows. Dalway was Mayor of Carrickfergus in 1592 and 1600. The last of the Dalways, Marriott Dalway, left with his family for Australia in 1884.

Back to the Dobbs family. John and Margaret had two sons with the great names of Foulk and Hercules. Dalway naturally nominated his grandson as heir since he was the elder son. But a family row was to erupt over the Dalway estate.

On the death of his first wife, Dalway married Jane Norton who couldn’t stand the sight of her step daughter-in-law. Norton persuaded her new husband to make a will in favour of his nephew instead. All hell broke loose in 1618 when Dalway died. John and Margaret began a protracted legal battle to claim the estate for Foulk’s sake.

At the first hearing the court ruled in favour of the Dobbs family but the elected heir challenged this ruling. Not one to give up easily, John Dobbs set off with his son to London to petition the king. He succeeded in obtaining His Majesty’s Grant to the lands of the late John Dalway.

However their triumphal return was not to be. Both Dobbs senior and junior drowned when their ship was wrecked off the Cheshire coastline in 1622. Hercules continued the legal confrontation with all his strength. The law suit was finally settled with a compromise when referees appointed by the Lord Chancellor ruled that Hercules be awarded lands at Castle Dobbs and Ballynure as well as rights to tenement in Carrickfergus. The remainder of the estate was awarded to Dalway’s nephew. The ruling must have made for awkward neighbourly relations – Dalway’s Bawn is a stone’s throw from the entrance to the Castle Dobbs lands.

Hercules married Magdalene West of Ballydugan in 1633. They had one son, Richard, born in 1634. Hercules died the same year, aged 21. At just three months old, Richard Dobbs inherited Castle Dobbs along with land at Ballynure.

Richard was reared by his mother’s family in County Down around Downpatrick and Saul. Aged 21 he married Dorothy Williams, daughter of Bryan Williams of Clints Hall in Yorkshire. After his marriage, Dobbs returned to Castle Dobbs. In 1683 he wrote,

“My house, which is a plantation and improvement of my own time (tho’ descended from my great Grandfather)… is called Castle-Dobs from a small castle here, built by my Grandfather.” Richard set to work improving the castle and gardens. The ruins of this castle lie beside the current house. Dalway’s Bawn is still intact although the house it once surrounded has disappeared into the mists of time.

On settling at Castle Dobbs he soon became involved in civil affairs. In 1671 Dobbs was elected Mayor of Carrickfergus, an honour bestowed on him on four later occasions. Carrickfergus was one of the four most important towns of late 17th century Ireland. Perks of the job included the requirement that tenants would “furnish the Mayor with a number of fat hens at Christmas or a specified sum in lieu”. Dobbs described improvements to his town:

“The way out of the north street was first paved; the walls that bring the water through the churchyard were built, and the town pump was set up by benevolence. The Sword and Standard in the church was refurbished, and money was ordered for recasting the bell.”

Also in 1683, Dobbs began his record A Brief Description of County Antrim. It has become an invaluable source for local historians. The original manuscript is in the Northern Ireland Public Records Office and a copy is held in the library of Trinity College Dublin. As well as descriptions of the built and natural environment, he recounts tales of folklore and social activities such as hunting with the Earls of Antrim at Glenarm Castle.

Richard and Dorothy Dobbs had two sons and three daughters. The eldest son John was educated at Eton College because his father had aspirations for him to join the church. However the young John went to a Quaker meeting in Carrickfergus and joined that sect. He returned to England to study medicine and eventually settled in County Cork where he worked as a doctor. His father was not impressed and it was another case of altering a will. John was bequeathed a measly 10 per annum while his younger brother Richard inherited the family estate.

Richard junior enlisted in the Duke of Schomberg’s army to fight in the Williamite Wars. So these were the progenitors of the illustrious Dobbs family. A distinguished line of politicians, statesmen, churchmen, barristers and soldiers was to follow.

The present Castle Dobbs was built by Arthur Dobbs, Surveyor of the Irish Works and later Governor of North Carolina. The travel writer Richard Pococke recorded in 1752, “Mr Dobbs is now building on a very fine spot on rising ground.” The surrounding oak trees predate the house. Arthur’s descendent, Captain Dobbs, writing in the 20th century notes,

“The old castle probably fell into disrepair – or as family legend has it: was sacked by pirates, and the present house has been added to, since it was built. The writer can remember that when alterations were made to the upper part of the present castle the inner walls proved to be made with turf.”

As successor to the acclaimed architect Sir Edward Lovett Pearce, Arthur Dobbs acquired a distinguished library for his role as Surveyor of the Irish Works. He is known to have owned James Gibbs’ A Book of Architecture, dated 1728. Plate 64 was for a ‘Draught done for a Gentleman in Essex’. Probably never built, this plate illustrates a sturdy Palladian country house like a smaller version of Ditchley. The plate is missing from Dobbs’ copy.

Sir Charles Brett believed Castle Dobbs to be loosely based on Gibbs’ design and it seems a reasonable presumption. There are some major deviations, though. Castle Dobbs has a raised, not sunken, basement, lending it an elevated and more impressive front than the original design. In place of Gibb’s columned colonnades are courtyard quadrants with paired oeil-de-boeufs. I would go even further than Charlie Brett and suggest that Arthur Dobbs himself directed the final design with lots of help from Pearce. A meeting of three great minds?

Arthur Dobbs was a multifaceted gentleman – an agriculturalist and organiser of expeditions to discover the North West Passage from Hudson’s Bay to the Pacific. While a member of the Irish Parliament, he purchased 400,000 acres of land in North Carolina from the McCulloch family in 1745. Dobbs was later granted another 60,000 acres in New Hanover County. His 5,000 acres at Castle Dobbs was positively small fry in comparison.

In 1795 Dobbs died while he was preparing to return from his new home at Cape Fear, North Carolina (also called Castle Dobbs). Another facet of his life had been organising Scotch-Irish immigration to America. The first tenants Dobbs brought over from Ireland sailed in 1751.

He set sail with “my tenants and their neighbours and friends” from Ballycarry, Kilroot and Carrickfergus. In 1766 Dobbs organised the emigration of another batch of Scotch-Irish. The contingent bound for North and South Carolina included Andrew and Elizabeth Jackson. They had moved from their family farm beside Dalway’s Bawn to Boneybefore near Carrickfergus in preparation for their departure. Their son Andrew Jackson would become 7th President of the United States.

Anyway back to Castle Dobbs. The house as built comprises a seven bay two storey double-pile main block over a substantial basement with five bay two storey projecting wings without basements. The two storeys of the wings are the same height as the basement and piano nobile together. Two quadrants link the three distinct parts of the building to create an impressive entrance front which embraces the visitor like the wings of a vast eagle ready to engulf its prey. The windowless elevations of projections the same height as the main block project to the rear of both wings.

The piano nobile is accessed by a 19th century double staircase of reddish stone with carved balustrades and piers. The whole arrangement is supported by two Greek Ionic columns flanked by plain pilasters which form a portico to the basement entrance below. A sense of arrival is guaranteed by this triumph in stone.

The basement entrance contains a double leaf timber panelled entrance door surmounted by a cornice on consoled brackets. Upstairs, the piano nobile has a pair of timber glazed entrance doors and a window on either side set in a slight three bay projection. The seven first floor windows all have a plain surround and key block.

Walls are ruled-and-lined render with – deep breath – chamfered vermiculated rusticated stepped quoins and plain raised quoins to the top floor and south elevation. A modillioned eaves cornice to the wings continues as a string course to the central block. Windows are timber sliding sashes, with exposed boxes to the entrance front, and masonry cills.

Now the wings. The west wing is detailed like the main block with vermiculated rusticated quoins and plain banded rustication to the basement. Its elevation overlooking the forecourt has five 12 pane windows at first floor with moulded lugged architraves. A central timber panelled door with plain raised stepped quoins with two plainly detailed nine pane windows to each side on the ground floor. The west elevation comprises seven bays slightly irregularly placed. A recessed section at the corner of this wing and the south elevation has stairs leading to the piano nobile with a door surmounted by a jaunty leaded corner canopy. Access to the basement is through a timber panelled door below the stairs. The gable end of the west wing is blank.

The east wing is faced with ruled and lined render similar to the west wing. A five bay elevation overlooks the forecourt. This five bay elevation is like an inverted view of the west wing with larger 16 pane sliding sash windows on the raised basement and smaller eight pane sliding sash windows above. The rear elevation is also similar to that of the west wing.

The south facing garden elevation has a more two dimensional quality with no projections. Instead, 13 bays stretch below a centrally placed plain pediment over the middle three bays. Plain solid parapets surmount the elevations and bracketed cornices finish the wings. Four ruled-and-lined rendered chimneys with square terracotta pots rising from the natural slate roof complete the picture.

And so for a century Castle Dobbs remained pretty much an executed variation of Gibbs’ plate. Castle Dobbs was exquisitely restored in the late 20th century and now glistens. It is the antithesis of the crumbling Irish country houses beloved by coffee table book publishers. Incidentally Castle Dobbs is one of the few country houses of the British Isles never to have been published in Country Life. But in the early 19th century, it wasn’t quite so pristine. In 1839 James Boyle said,

“The house is a spacious old fashioned mansion, the entrance front presenting in its central building and two projecting wings a somewhat Elizabethan appearance. It is three storeys high and presents a plain roughcast and whitened front – plantations, grounds and house are in a very neglected state.”

The building appears with an additional extension to the west elevation on the first edition OS map of 1832. Valuations show the extension to have been farm buildings which were pulled down between 1857 and 1859.

It is likely that contemporaneous with this demolition was the restoration and remodelling of Castle Dobbs. On the south elevation, Italianate architectural dressing creeps like ivy across the two lower storeys. Meanwhile the top floor and its plain pediment look down in severity at the interloping detail. The fully vermiculated rusticated basement treatment dates from this time. Surely this hints at the author being Sir Charles Lanyon, king of rustication (think Crumlin Road Gaol which he rusticated to within an inch of its existence). Similar rusticated details were applied to the west wing but not to the east wing of the entrance front.

The windows of the piano nobile on the south front were embellished with entablatures on console brackets. The thick glazing bars of the multi paned Georgian windows were replaced with idiosyncratic fenestration comprising two vertical panes in the upper sash and a single pane in the lower sash. That’s as far as the remodelling went, for whatever reason now lost in the sands of time.

A neoclassical rendered three bay gatelodge on the quiet Tongue Loanen marks the entrance to this piece of paradise. Built in 1875, unlike the house, its architect is known – S P Close. It has been restored. The same architect’s gatelodge on the busy Carrickfergus to Kilroot road is also three bay but is faced with uncoursed squared quarry-faced basalt with limestone dressings and quoins. Tudor label mouldings to the windows, a door set between classical columns in antis and a polychromatic chimney on the hipped roof give it an eclectic appearance. It lies vacant and its avenue overgrown. Two earlier 19th century gatelodges have disappeared.

The house is approached by a gravel lane past a lake with a cascade and over a bridge. The demesne contains fine mature trees grouped in shelter belts, parkland, woodland and avenues. Informal glen side walks have been augmented with recent planting. The walled garden to the west of the house was redesigned in 1989 to commemorate the 250th anniversary of Arthur Dobbs’ birth. Dobbs was a plantsman and noted for providing the first written reference to the Venus fly-trap (Dionaea muscipula) while Governor of North Carolina. The potting sheds are back in use along with a remaining glasshouse.

A series of two storey outbuildings forms a courtyard to the east of the house. Walls are random rubble with brick dressings and eaves course; roofs are pitched and slated; windows are timber casements and doors are timber sheeted. Together, the house grounds and associated buildings form an estate of great beauty and integrity.

History of Previous European Currency Unions

Posted on November 6, 2018 in Uncategorized

The Euro feels like a novelty – but it is not. It was preceded by quite a few Monetary Unions in Europe and outside it.

To start with, countries such as the USA and the USSR are (or were in the latter’s case) monetary unions. A single currency was or is used over enormous land masses incorporating previously distinct political, social and economic entities. The American constitution, for instance, did not provide for the existence of a central bank. Founding fathers, the likes of Madison and Jefferson, objected to its existence. A central monetary institution was established only in 1791 (modelled after the Bank of England). But Madison (as President) let its concession expire in 1811. It was revived in 1816 – only to die again. It took a civil war to lead to a budding monetary union. Bank regulation and supervision were instituted only in 1863 and a distinction was made between national and state-level banks.

By that time, 1562 private banks were printing and issuing notes, some of them not a legal tender. In 1800 there were only 25. The same thing happened in the principalities which were later to constitute Germany: 25 private banks were established only between 1847 and 1857 with the express intention of printing banknotes to circulate as legal tender. In 1816 – 70 different types of currency (mostly foreign) were being used in the Rhineland alone.

A tidal wave of banking crises in 1908 led to the formation of the Federal Reserve System and 52 years were to elapse until the full monopoly of money issuance was retained by it.

What is a monetary union? Is it sufficient to have a single currency with free and guaranteed convertibility?

Two additional conditions apply: that the exchange rate be effective (realistic and, thus, not susceptible to speculative attacks) and that the members of the union adhere to one monetary policy.

Actually, history shows that the condition of a single currency, though preferable, is not a sine qua non. A union could incorporate “several currencies, fully and permanently convertible into one another at irrevocably fixed exchange rates” which is really like having a single currency with various denominations, each printed by another member of the Union. What seems to be more important is the relationship (as expressed through the exchange rate) between the Union and other economic players. The currency of the Union must be convertible to other currencies at a given (could be fluctuating – but always one) exchange rate determined by a uniform exchange rate policy. This must apply all over the territory of the single currency – otherwise, arbitrageurs will buy it in one place and sell it in another and exchange controls would have to be imposed, eliminating free convertibility and inducing panic.

This is not a theoretical – and thus unnecessary – debate. ALL monetary unions in the past failed because they allowed their currency or currencies to to be exchanged (against outside currencies) at varying rates, depending on where it was converted (in which part of the monetary union).

“Before long, all Europe, save England, will have one money”. This was written by William Bagehot, the Editor of The Economist, the renowned British magazine. Yet, it was written 120 years ago when Britain, even then, was debating whether to adopt a single European Currency.

Joining a monetary union means giving up independent monetary policy and, with it, a sizeable slice of national sovereignty. The member country can no longer control its the money supply, its inflation or interest rates, or its foreign exchange rates. Monetary policy is transferred to a central monetary authority (European Central Bank). A common currency is a transmission mechanism of economic signals (information) and expectations, often through the monetary policy. In a monetary union, fiscal profligacy of a few members, for example, often leads to the need to raise interest rates in order to pre-empt inflationary pressures. This need arises precisely because these countries share a common currency. In other words, the effects of one member’s fiscal decisions are communicated to other members (through the monetary policy) because they share one currency. The currency is the medium of exchange of information regarding the present and future health of the economies involved.

Monetary unions which did not follow this course are no longer with us.

Monetary unions, as we said, are no novelty. People felt the need to create a uniform medium of exchange as early as the times of Ancient Greece and Medieval Europe. However, those early monetary unions did not bear the hallmarks of modern day unions: they did not have a central monetary authority or monetary policy, for instance.

The first truly modern example would be the monetary union of Colonial New England.

The New England colonies (Connecticut, Massachusetts Bay, New Hampshire and Rhode Island) accepted each other’s paper money as legal tender until 1750. These notes were even accepted as tax payments by the governments of the colonies. Massachusetts was a dominant economy and sustained this arrangement for almost a century. It was envy that ended this very successful arrangement: the other colonies began to print their own notes outside the realm of the union. Massachusetts bought back (redeemed) all its paper money in 1751, paying for it in silver. It instituted a mono-metallic (silver) standard and ceased to accept the paper money of the other three colonies.

The second, more important, experiment was the Latin Monetary Union. It was a purely French contraption, intended to further, cement, and augment its political prowess and monetary clout. Belgium adopted the French Franc when it attained independence in 1830. It was only natural that France and Belgium (together with Switzerland) should encourage others to join them in 1848. Italy followed in 1861 and the last ones were Greece and Bulgaria (!) in 1867. Together they formed the bimetallic currency union known as the Latin Monetary Union (LMU).

The LMU seriously flirted with Austria and Spain. The Foundation Treaty was officially signed only on 23/12/1865 in Paris.

The rules of this Union were somewhat peculiar and, in some respects, seemed to defy conventional economic wisdom.

Unofficially, the French influence extended to 18 countries which adopted the Gold Franc as their monetary basis. Four of them agreed on a gold to silver conversion rate and minted gold coins which were legal tender in all of them. They voluntarily accepted a money supply limitation which forbade them to print more than 6 Franc coins per capita (the four were: France, Belgium, Italy and Switzerland).

Officially (and really) a gold standard developed throughout Europe and included coin issuers such as Germany and the United Kingdom). Still, in the Latin Monetary Union, the quantities of gold and silver Union coins that member countries could mint was unlimited. Regardless of the quantities minted, the coins were legal tender across the Union. Smaller denomination (token) silver coins, minted in limited quantity, were legal tender only in the issuing country.

There was no single currency like the Euro. Countries maintained their national currencies (coins), but these were at parity with each other. An exchange commission of 1.25 % was charged to convert them. The tokens had a lower silver content than the Union coins.

Governmental and municipal offices were required to accept up to 100 Francs of tokens (even though they were not convertible and had a lower intrinsic value) in a single transaction. This loophole led to mass arbitrage: converting low metal content coins to buy high metal content ones.

The Union had no money supply policy or management. It was left to the market to determine how much money will be in circulation. The central banks pledged the free conversion of gold and silver to coins. But, this pledge meant that the Central Banks of the participating countries were forced to maintain a fixed ratio of exchange between the two metals (15 to 1, at the time) ignoring the prices fixed daily in the world markets.

The LMU was too negligible to influence the world prices of these two metals. The result was overvalued silver, export of silver from one member to another using ingenious and ever more devious ways of circumventing the rules of the Union. There was no choice but to suspend silver convertibility and thus acknowledge a de facto gold standard. Silver coins and tokens remained legal tender.

This became a major problem for the Union and the coup de grace was delivered by the unprecedented financing needs brought on by the First World War. The LMU was officially dismantled in 1926 – but died long before that. The lesson: a common currency is not enough – a common monetary policy monitored and enforced by a common Central Bank is required in order to sustain a monetary union.

As the LMU was being formed, in 1867, an International Monetary Conference was convened. Twenty countries participated and discussed the introduction of a global currency. They decided to adopt the gold (British, USA) standard and to allow for a transition period. They agreed to use three major “hard” currencies but to equate their gold content so as to render them completely interchangeable. Nothing came out of it – but this plan was a lot more sensible than the LMU.

One wrong path seemed to have been the Scandinavian Monetary Union.

Sweden (1873), Denmark (1873) and Norway (1875) formed the Scandinavian Monetary Union (SMU). The pattern was familiar: they accepted each others’ gold coins as legal tender in their territories. Token coins were also cross-boundary legal tender as were banknotes (1900) recognized by the banks of the member countries. It worked so perfectly that no one wanted to convert the currencies and exchange rates were not available from 1905 to 1924, when Sweden dismantled the Union following Norway’s independence. Actually, the countries involved created (though not officially) what amounted to a unified central bank with unified reserves – which extended monetary credit lines to each of the member countries.

The Scandinavian Kronor held well as long as gold supply was limited. World War I changed this situation as governments dumped gold and inflated their currencies, engaging in competitive devaluations. Central Banks used the depreciated currencies to buy gold at official (cheap) rates. Sweden saw through this ploy and refused to sell its gold in the officially fixed price. The other members began to sell large quantities of the token coins to Sweden and use the proceeds to buy the much Stronger Swedish “economy” (=currency) at an ever cheaper price (as the price of gold collapsed). Sweden reacted by prohibiting the import of other members’ tokens. Without a fixed price of gold and without coin convertibility, there was no Union to talk of.

The last big (and recent) experiment in monetary union was the East African Currency Area. An equivalent experiment is still going on in the Francophile part of Africa involving the CFA currency.

The parts of East Africa ruled by the British (Kenya, Uganda and Tanganyika and, in 1936, Zanzibar) adopted in 1922 a single common currency, the East African shilling. Independence in East Africa had no monetary aspect because it remained part of the Sterling Area. This guaranteed the convertibility of the local currencies into British Pounds. Regarding this a matter of national pride (and strategic importance) the British poured inordinate amounts of money into these emerging economies. This monetary union was not disturbed by the introduction (1966) of local currencies in Kenya, Uganda and Tanzania. The three currencies were legal tender in each of these countries and were all convertible to Pounds.

It was the Pound which gave way by strongly depreciating in the late 60s and early 70s. The Sterling Area was dismantled in 1972 and with it the strict monetary discipline which it imposed – explicitly and through the free convertibility – on its members. A divergence in the value of the currencies (due to different inflation targets and resulting interest rates) was inevitable. In 1977 the East African Currency Area ended.

Not all monetary unions met the same gloomy end, however. Arguably, the most famous of the successful ones is the Zollverein (German Customs Union).

At the beginning of the 19th century, there were 39 independent political units which made up the German Federation in what is today’s Germany. They all minted coins (gold, silver) and had their own standards for weights and measures. Labour mobility in Europe was greatly enhanced by the decisions of the Congress of Vienna in 1815 but trade was still ineffective because of the number of different currencies.

The German statelets formed a customs union as early as 1818. This was followed by the formation of three regional groupings (the Northern, Central and Southern) which were united in 1833. In 1828, Prussia harmonized and unified its tariffs with the other members of the Federation. Debts related to customs could be paid in gold or silver. Several currencies were developed and linked to each other through fixed exchange rates. There was an over-riding single currency: the Vereinsmunze. The Zollverein (Customs Union) was established in 1834 to facilitate trade and reduce its costs. Most of the political units agreed to choose between one of two monetary standards (the Thaler and the Gulden) in 1838 and nine years later, the central bank of Prussia (which comprised 70% of the population and land mass of the future Germany) became the effective Central Bank of the Federation. The North German Thaler was fixed at 1.75 to the South German Gulden and, in 1856 (when Austria became associated with the Union), at 1.5 Austrian Florins (this was to be a short lived affair, because Prussia and Austria declared war on each other in 1866).

Germany was united by Bismarck in 1871 and a Reichsbank was founded 4 years later. It issued the Reichsmark which became the legal and only tender of the whole German Reich. The currency Union survived two world wars, a devastating bout of inflation in 1923 and a collapse of the currency after the Second World War. The Reichsmark became the solid and reliable Bundesbank. The Union still survives in the Deutschmark.

This is the only case of a monetary union which succeeded without being preceded by a political arrangement. It survived because Prussia was sizeable and had enough real power and perceived clout to enforce compliance on the other members of the Federation. Prussia wanted to have a stable currency and introduced consistent metallic standards. The other states could not deprive their currencies of their intrinsic values. For the first time in history, coinage became a professional economic decision, totally depoliticized.

In this context, we must mention another successful (on-going) union – the CFA Franc Zone.

The CFA (French African Community) is a currency used in the former French colonies of West and Central Africa (and, curiously, in one formerly Spanish colony). The currency zone has been in existence for well over three decades and comprises diverse ethnic, lingual, cultural, political and economic units. The currency withstood devaluations (the latest one of 100% vis a vis the French Franc), changes of regimes (from colonial to independent), the existence of two groups of members, each with its own central bank, controls of trade and capital flows – not to mention a host of natural and man made catastrophes. What makes it so successful is maybe the fact that the reserves of the member states are hoarded in the safes of the French Central Bank and that the currency is almost absolutely convertible to the French Franc. Convertibility is guaranteed by the French Treasury itself.

France imposes monetary discipline (that it sometimes lacks at home!) directly and through its generous financial assistance.

Europe has had more than its share of botched (the Snake, the EMS, the ERM) and of successful (ECU, the United Kingdom and Ireland) currency unifications.

A neglected one is between Belgium and Luxembourg (BENELUX is the political alignment which includes the Netherlands).

There is no real currency union here. Both maintain separate currencies. But their currencies are at parity and serve as legal tender in both countries since 1921. The Belgian Central Bank controls the monetary policies of both countries, with the exception of exchange regulations which are overseen by a joint agency. In both 1982 and 1993 the two countries considered dismantling the union – but this was not serious talk, the advantages being so numerous (especially to the smaller partner).

These three currency unions have all survived due mainly to the fact that one monetary authority has been responsible, at least de facto, for managing the currency.

What can we learn from all this (not insubstantial) cumulative experience?

(A) A dominant country is required for a Union to succeed. It must have a strong geopolitical drive and maintain political solidarity with some of the other members. It must be big, influential, and its economy must be intermeshed with the economies of the others.

(B) Central institutions must be set up to monitor and enforce fiscal and other policies, to coordinate activities of the member states, to implement political and technical decisions, to control the money aggregates and seniorage (=money printing), to determine the legal tender and the rules governing the issuance of money.

(C) It is better if a monetary union is preceded by a political one. Even so, it might prove tricky (consider the examples of the USA and of Germany).

(D) Wage and price flexibility are sine qua non. Their absence is a threat to the continued existence of any union. Fiscal policy (money transfers from rich areas to poor) are a partial remedy. They can mitigate and ameliorate problems – but not solve them. Transfers also call for a clear and consistent fiscal policy regarding taxation and expenditures. Problems like unemployment plague a rigid, sedimented union. The works of Mundell and McKinnon (optimal currency areas) prove it decisively (and separately).

(E) The last prerequisite is clear convergence criteria and monetary convergence targets.

Judging by these requirements, the current European monetary union did not sufficiently assimilate the lessons of its ill begotten predecessors. It is set in a Europe more rigid in its labour and pricing practices than 150 years ago, it was not preceded by serious political amalgamation, it relies too heavily on transfers without having in place either a coherent monetary or a consistent fiscal policy.

This monetary union is, therefore, likely to join its forefathers and remain a footnote in the annals of economic history.


Lure of the Beach

Posted on November 5, 2018 in Uncategorized

Paul and I are reaching down from Herring Bay aboard Petrel, bound for Chesapeake Beach, Md., a community that lines a sandy strip of waterfront on the Western Shore, just below Holland Point. Behind us the whitecaps are scribbling haiku stanzas across the water and gulls skim the waves like so many scholars trying to decipher the words. The late winter sky is flat and blue. The air is cold. I had promised Paul a short sail, and he’s grumbling about the definition of the word “short.”

“It’s more of a concept than an exact measurement,” I say. He remains unconvinced that winter sailing is worth the effort.

Now we can see a couple of high-rise buildings-the Chesapeake Beach Resort & Spa to the south, a pink beach condo to the north-and between them a row of waterfront houses strung like beads. Farther up the shoreline, we can just make out the fishing pier and half-mile-long boardwalk at North Beach. The two towns, which run together, are like the Minneapolis-St. Paul of the Bay-one boasts a big hotel and charter-fishing fleet and the other a boardwalk and public beach.

We pick up the marker due east of Fishing Creek and come about, dropping sail and hoping that Bubba, our cranky engine, sees fit to take us the rest of the way in. We’re heading for the Rod ‘N’ Reel’s marina basin. It’s the only place in town that can handle masted vessels, like Petrel, and other tall boats. A fixed bridge with a 10-foot clearance blocks the rest of the way into Fishing Creek, where more slips are available for boats able to negotiate the clearance and bulkheads and finger piers offer shelter to one of the largest charter-fishing fleets on the Bay.

Most people will tell you that they come to Chesapeake Beach to fish, either off their own boat or aboard one of the four dozen or so charterboats that routinely operate from the Rod ‘N’ Reel or Abner’s Crab House, just up Fishing Creek. But there’s another source of silver to be had hereabouts. Slot machines of one sort or another have been a focal point at the “Beach” (as it’s invariably called by locals) for nearly a century, drawing avid and casual gamers alike to this tiny Bayside resort. Of course, Paul and I wouldn’t know about any of that. We come here for the food-today that means a plate of ribs at Smokey Joe’s Grill. Sometimes you just gotta have ’em.

We tuck Petrel into a slip and step ashore. To say that the Rod ‘N’ Reel anchors the town of Chesapeake Beach is no stretch. It occupies the Bay front on the south side of Fishing Creek, as well as a good portion of the creek front inside the bridge. The family-run complex offers world-class dining, over three hundred protected slips, a launch ramp-and now a hotel, the Chesapeake Resort Hotel & Spa. The marina office does the booking for most of the independently owned charter-fishing boats that run in and out of the creek. The Rod ‘N’ Reel restaurant, overlooking the marina, offers an enticing menu of fresh seafood and stages lavish weddings and gala fundraisers in opulent splendor. Next door, Smokey Joe’s serves up saucy barbecue ribs and chicken. A casual dock bar straddles the waterfront between the restaurant and the hotel. Patrons of the latter have a sweeping view of the Bay, as well as access to a state-of-the-art exercise room, an indoor pool and sauna, and a fully staffed health spa that includes massage and rejuvenating facials. They also have ready access to over two hundred instant bingo machines, a traditional bingo hall and Keno.

“Imagine that,” says Paul. We’ve poked our heads into the hotel lobby, where the siren call of a massage has caught Paul’s attention. Working Petrel’s tiller can be such labor, he tells me. “I think a nice massage would soothe my soul, don’t you?” he directs this question to the attractive hotel receptionist, who assures him that marina guests are welcome to partake of the spa facilities. Wouldn’t you know, there’s an immediate opening for a half-hour massage, if Paul would be inclined to pony up the required $50. Before I can say, “Whose wallet?” Paul has been whisked away into a lush little chamber for a rejuvenating rub down. When he reemerges, he’s downright radiant. “How’s the shoulder?” I ask. “Ka-ching!” he says, pulling the arm of an imaginary slot machine.

Some would say that slot machines built this little town. That’s not true. Chesapeake Beach is the culmination of a series of resort-development schemes in the latter part of the 19th century. In the shadow of the new hotel sits an old railway station, the terminus of the original rail line that brought the first visitors from the summer swelter of Washington, D.C. Otto Mears is credited with laying the tracks and conjuring up the waterside amusement park that went with them. In 1900, when his railroad opened for business, families could enjoy the healthy Bay breezes and partake of a variety of attractions, including a large bathing beach and a small-scale seaside train. By 1916, the death-defying Great Derby roller coaster was soaring over the heads of terrified parents, offering cheap thrills to all comers. They apparently came in droves.

The resort town that sprouted from the surrounding dunes saw plenty of traffic. Tourists filled the luxurious Belvedere Hotel and nearby boarding houses. Soon, the new prosperity spread to the newly platted town of North Beach, where hundreds of small vacation houses offered cooling Bay breezes and plenty of entertainment to big city residents eager to escape the summer heat. A few visitors built year-round residences and decided to stay put, creating a pair of permanent beach-side communities. But eventually the charms of a rickety wooden roller coaster and a netted swimming area (that could never be entirely free of stinging jellyfish) began to peter out.

The Great Depression no doubt contributed to the towns’ decline, as did the increasing availability of automobiles. Car ferries crossing the Bay put the jellyfish-free Atlantic beaches within relatively easy reach. Compounded by dwindling regional revenues from tobacco and seafood, the financial decline of Chesapeake Beach and North Beach was sobering. When slot machines took hold in the 1930s, they seemed like a godsend to the strapped communities.

Paul and I stand on the dock, looking out across the Bay. I can just imagine the parade of boats roaring over the water into town back in its gambling heyday. I had hoped to find people who remembered that period and could tell me about Chesapeake Beach’s days as “Little Atlantic City,” but most of those people are, one way or another, gone now. Indeed, the closest I came was Little Buddy Harrison of Tilghman, Md.

“We swapped fishing captains back and forth,” Harrison told me. “Big fishing fleet over there. Played ’em in baseball. And plenty of folks went there to party. Easier to get there by boat than by car. The kids went to the amusement park while their parents played the slots. I remember that big old roller coaster from when my dad took me there some-time in the early sixties.” I told Harrison that I could remember one waterman telling me that he learned how to drive a boat by ferrying his parents home from their nights on the town. “Don’t know who that would be in particular,” Harrison said, “but I imagine it could be true of any number of fellows.”

The party traffic slowed considerably in 1968 when slot machines were out-lawed in Maryland. Then in 2001, as a result of a challenge by Rod ‘N’ Reel’s owner Gerald Donovan, the court ruled that the business’s Lucky Tab machines were legal because they used pre-printed cards that mirrored the mechanics of a bingo game-a perfectly legal church-sanctioned way to part people from their money-even though they were nearly indistinguishable from slot machines. Unlike a traditional game of bingo, however, these instant bingo machines-also known as pull-tab machines-gave players the results instantly and spit out paper receipts instead of coins to winners. Pretty soon hundreds of the pull-tab instant bingo machines were helping to attract thousands of visitors back to the Beach.

Now all of that seems about to change. Last year, Maryland voters approved a new gambling law that allows state-controlled slot machines in a few locations. Ironically, though, that same law may put an end to gaming in Chesapeake Beach by outlawing instant bingo machines, which would be competition to the state-sanctioned slots. Pull tab and instant bingo proponents of course lobbied to keep the machines legal, but ultimately they failed-at least for now. Barring the passage of a bill introduced in February that would give instant bingo machines an extension until 2010 in Anne Arundel and Calvert counties (the only two counties that allow commercial bingo), the machines will become illegal statewide in July. Traditional bingo will continue, but that’s no comfort to the city of Chesapeake Beach, which stands to lose a significant source of tax revenue. And two Beach businesses-Rod ‘N’ Reel and Traders Seafood, Steak & Ale-of course will lose one of their major draws.

Paul and I decide to take a walk to build up an appetite. I offer to buy him a beer at Abner’s Crab House, which is not too far from the Rod ‘N’ Reel dock. We head inland and cross Bayside Road, which runs north-south through town.

Bobby Abner started catching and selling crabs when he was a kid. He ultimately ratcheted his crab-catching acumen into a thriving business that today employs nine family members, who keep the steamers full at the waterfront crabhouse and bar that backs up to Fishing Creek. Dockage is available on a first-come-first-served basis, but there always seems to be room for everyone. Alas, Paul and I are ahead of the season, and Abner’s isn’t open yet. We can see workers scrubbing table tops and mopping floors. We are a weekend too early, they tell us. “I told you it was too cold to go sailing,” Paul says.

We backtrack and head north on the main road. Traders is on our left. “They have beer here, too,” I say. A small bank of instant bingo machines sits on one side of the bar, and folks are already planted in front of the them. “Oh they’re a draw, all right,” says Traders’ hostess when we ask about the popularity of the machines. “If you win, you take the tab up to the bartender and he’ll cash it out for you.” Paul and I watch for a bit. Every now and then someone gets up and saunters over to the bar.

“At least with the slot machines you got some exercise pulling down the handle to play,” says “Uncle Roy” Leverone. The only exercise instant bingo players get is feeding in coins-and occasionally walking up to the counter for a pay-out. Leverone is a retired charter-fishing captain who’s been hanging around the Beach most of his life. Rod ‘N’ Reel’s assistant dockmaster Darrell Noyes had suggested we look him up if we wanted to talk to one of the old-timers, which is how we found ourselves in Leverone’s workshop, up the road from the Beach and not far from the water.

Leverone’s never been convinced that gambling is such a good idea. But the bottom line is he’s seen the machines come, and he hopes to see them go. For him, it’s the Bay that makes the town what it is. That’s the real draw, and fishing is the common denominator. “This is probably the biggest fishing fleet on the Bay that operates out of one place, under one umbrella,” he says. “Up there in Deale [Md.], you’ve got plenty of charterboats, but they’re all independent. Down here everyone works together, and it’s all coordinated by the Rod ‘N’ Reel.”

Last year, Leverone sold his boat, Uncle Roy, but he still works occasionally as a relief captain on other boats. When he’s not on the water, he’s in his workshop crafting furniture. A newly finished cherry table gleams in the sunlight that slants through the windows. Nearby, another side table stands on graceful tiptoe legs. Children’s rockers sit atop a cluttered table-one is in the shape of a wooden airplane, with a spinning propeller. On another table lie boxes filled with fishing reels. “I’m sorting through these,” Leverone says. “Getting ready for the flea market. Every year I get rid of more stuff. No sense hanging on to it. I don’t use it.”

Leverone starts talking about life on the water, sharing stories of his chartering days. “I spent summers here when I was a kid,” he says, waving a hand generously toward the water. “I had a construction company for a while, then I sold the business and moved here permanently about thirty years ago. Ran fishing charters.” A lot of day-trippers came to Chesapeake Beach, drawn by the water. Sometimes they’d climb aboard one of the head boats or sign up for a private charter. Sometimes they’d rent a little skiff and go off on their own.

“Some of them didn’t know what they were doing. . . .” Leverone leans forward, for emphasis and settles into a story about a man and his young daughter who were caught too far offshore in their rented rowboat by a summer squall. Leverone and a friend, who were out fishing, had been caught in the storm too, but rode it out easily. The man and his daughter were not as fortunate. After the storm had blown through, Leverone and his friend spotted the pair, clinging to their overturned boat and shouting for help. They pulled them out, retrieved their boat and set them back on land. The man was so upset, Leverone says, that he made a dash straight for his car, completely forgetting his daughter until the watermen shouted after him. “No telling about people sometimes,” Leverone concludes.

“No telling,” Paul says.

It’s late afternoon and Paul and I have wandered back to the Rod ‘N’ Reel. The wind is cold. Even the sun, falling fast now, is cold. We tuck into Smokey Joe’s and wedge ourselves into a booth near the bar. Paul begins to flirt with the waitress. Smokey Joe’s waitresses are delightfully sassy, and Paul just loves that. We order ribs.

Later, licking sticky bits of barbecue sauce from our fingers, we head back to the dock. A crowd has gathered in front of the pull tabs in the Rod ‘N’ Reel. Come July, they’ll be gone, and fishing, food and fun will be all Chesapeake Beach has to offer, with a little wholesome sass on the side. Treasure enough in my book. As far as I’m concerned, baiting up and dropping a line overboard is as much gambling as I can handle, and from the look of things in Chesapeake Beach, there will still be plenty of that going on. Paul says he’d come back just for the back rub. I’ll have to try that next time.