Isaac Laquedem

R. Lee Johnson: legislator, attorney general, judge, and admiral of the Oregon Navy (1930-2009)

During World War I, the federal government formed a corporation to log and mill spruce for the war effort, calling it the United States Spruce Production Corporation.  In 1920, a transplanted New Yorker named Clarence D. Johnson, who had done well in the timber business in Louisiana, came to Toledo, Oregon, bought the Lincoln County holdings of the federal business, and started doing business as C.D. Johnson Lumber Corporation.  The new company prospered.  When C.D. Johnson died, the business was successfully carried on by his three sons, C.D. (called Dean), Ernest, and Robert.

On August 24, 1951, a United Airlines plane crashed on approach to Oakland Municipal Airport, killing all aboard, including the brothers Dean and Ernest Johnson, who were returning from a business trip east.  A few months later the surviving family members sold the enterprise to Georgia-Pacific.  The surviving brother became a director of Georgia-Pacific and the other family members retired from the timber business.

This left Dean Johnson's sons without a family business to join.  Dean's son Lee, a college senior at the time of the tragedy, finished college and went to law school.  He returned to Oregon, practiced law for a few years, and as other men of means have done, decided to enter public service, winning election to the Oregon House as a Republican in 1966.

Lee Johnson, who died this Sunday at 79, wanted to accomplish more than he could as one of the 60 house members.  A staunch Republican, in 1968 he challenged the longtime incumbent Democratic attorney general, Robert Y. Thornton, in a campaign that set an Oregon record for spending in a statewide race.  A bitter election resulted in a solid victory for Mr. Johnson, but Mr. Thornton challenged the election on the ground that Mr. Johnson had spent too much of his own funds on the campaign and had filed a false report of his campaign expenses.  A trial panel barred Mr. Johnson from taking office, but the Oregon supreme court reversed the decision and allowed Mr. Johnson to take office in May 1969, five months after his term was to have started.

Despite this awkward start, he easily won re-election four years later.  In his two terms as attorney general, he modernized the office and reworked it to operate it much like a private law firm.  His staff started to keep time records and to bill other state agencies for their advice.  He played an active part in implementing Oregon's early public records laws and in general made the office more efficient and responsive to the state agencies that were its clients.  He also had the confidence to keep his address and home telephone listed and available to the public, at least to that portion of the public who knew that the "R." in his name stood for Robertson.

At the end of his second term as attorney general, he was elected to the Oregon court of appeals.  He served part of a term, resigning to become Governor Atiyeh's chief of staff.  Governor Atiyeh later appointed him to the Multnomah County Circuit Court, where he served until retiring in 1995.

He occupied his offices in an unconventional order, and this led to some unexpected rulings.  One day he was hearing a matter involving the public records law, with the contestants arguing about what the legislature intended the law to mean.  His ruling was swift:  "When I drafted that law, this is what I meant."  Later the chief judge assigned him to the probate court, which to that time had been mostly a dreary procession of attorneys coming to the courthouse with routine procedural motions, each of which required a courtroom, a hearing, and a court reporter.  He saw no reason to sit in court for hours to listen to this, and he didn't see why probate lawyers should have to take every motion to court in person, wait for a turn, and then drone into the record, all with their meters running.  So he instituted probate-by-mail, directing lawyers to mail uncontested motions and orders to the court, for him to read and approve or reject.  Other county courts quickly adopted the Johnson system, and it's a rare probate lawyer in Oregon today who actually goes to the courthouse.

His most interesting public office was awarded as a sort of jest.  In 1974 Governor McCall looked into buying a destroyer to enforce the exclusive fishing zone off of Oregon's coast.  When the news broke, Mr. Johnson (then the attorney general) wrote to the governor, asking to become an admiral of the Oregon navy.  (I think he had in mind something like the military duties of a Kentucky colonel.)  "I am frankly tired of being called general," he wrote, "but Oh, to be an admiral of the Oregon navy!" he wrote.  Two months later, at the Republican party's Dorchester Conference in Seaside, he was -- to his surprise and great delight -- informally commissioned as an admiral of the Oregon navy, the first and so far the only.

Lee Johnson didn't get enough credit for what he accomplished, but then he didn't ask for any.  Somewhere among the icons of that lost era of bipartisanship -- McCall, Straub, Hatfield, Redden (and in an impish way, E.D. Potts) -- there should be a little room to remember Lee Johnson also.

Ashland burglars have different priorities

Early Monday morning a burglar alarm sounded near an Ashland bank.  A police officer came, circled the bank, and (as best as a watcher could tell) concluded that the bank was safe.  The alarm was coming not from the bank, but from a bookstore across the street.  This is, after all, Ashland, home of the Oregon Shakespearean Festival, where even the criminal classes pass up money in favor of culture.

Hallowe'en intersects the world of commerce

The dozens of trick-or-treaters at Laquedem Manor on Saturday included not only the usual assortment of tramps, princesses, astronauts, and cartoon characters, but also a girl who came as Ayn Rand and a boy who came as the FDIC.

The leading purpose of the federal economic stimulus contracts is . . . Hanford?

Today's Whimperer carried a chart of  figures, taken from www.recovery.gov (the federal government's website that tracks where the federal economic stimulus money is going), showing where the economic stimulus dollars have gone so far.  About 1.13% of the money dispensed so far has gone to Oregon.  This is $1.8 billion, of which $1.7 billion was grants, $122 million was contracts, and $27 million was loans.  The table also showed how many jobs were created by the money in each category.  In Oregon, each job created by grants cost $187,000; each job created by contracts cost $224,000; each job created by loans cost $3.8 million.  It's reasonable enough that contracting jobs cost more, because contracts typically involve purchasing materials as well as labor. It's reasonable also that the loan jobs cost much more, because the borrower is supposed to pay the money back with interest.

I noted two oddities: as I said, Oregon jobs created by grants cost $187,000 per job; the national average was $230,000 per job, or about 20% more than Oregon's average.  We may have lower labor costs than the average grant recipient (California, a high-cost state, got more than its proportionate share of the loot).  Oddly, the national average for contract jobs is $582,000, more than 2-1/2 times the cost of Oregon's contract jobs.

How can this be?

I think I have the answer, which I gleaned from digging around the government's website.  It lists the top ten contracts, the top ten grants, and the top ten loans.  The largest contract to date -- $1.4 billion -- went to a coompany that's decommissioning two federally-owned nuclear reactors and cleaning up the contamination at the Savannah River nuclear facility, owned by the Department of Energy.  The second-, third-, sixth-, and ninth-largest contracts, totaling $2.35 billion, are also to clean up the government's radioactive messes. (Nos. 2, 6, and 9 are for Hanford.) That's $3.75 billion out of the $18 billion contracted so far, or more than a fifth of the contract dollars.  The labor for these dangerous projects is likely high-cost.

I'm delighted to see the government pick up after itself; however, I can't help thinking that a significant chunk of the funds being classified as stimulus funds are for projects such as these that the federal government would be doing anyway.

Parisians adopt a Portland attitude toward the bicycle

Do you recall Portland's experiment with placing yellow bicycles around town, available for anyone to ride free from place to place?  They didn't last very long.

The New York Times reports that an entrepreneur tried a similar idea in Paris, placing rental bicycles around town, available for one euro (about $1.40) per half-hour, in exchange for being permitted to erect billboards and rent them out.  The Parisians aren't treating their bicycles much better than we treated ours.  Vandals have bent and broken some.  Others get fished out of the Seine, and a few have been found on ships bound for North Africa.  Our old yellow bicycles led more humdrum lives, but they were also a lot less expensive than the Parisian versions.

Isaac saves money on his mortgage, and the bank does also

Grandfather and Grandmother Farmer's last home mortgage, something they took out in the late 1950s and paid off in 1975, was at 4-3/4%, fixed for 20 years.  I equalled that in 2004, but with a 5/1 adjustable loan, not a fixed-rate loan.

Last week came the bank's letter with the first adjustment.  I opened it with all the enthusiasm that my friends applied to unsealing their letters from the Selective Service Administration during the Vietnam War.

To my surprise, my rate is going down, to 3-1/2%.  I don't know how my lender can make a profit at this rate, but my lender doesn't care; it's undoubtedly packaged this loan and many others into mortgage-backed securities, sold its interest, and recouped its capital with a profit, and now acts merely as a servicer.

Even now, several days later, I still beam when I read the letter, much as I do when I reread Mrs. Laquedem's first letters to me.  I'm tempted to frame the bank's letter, but it's printed on very cheap paper.  At 3-1/2% I shouldn't expect anything finer; but if next year my rate jumps into the sixes, I'd like the notice to come on cotton bond, with some gilt if the rate's seven percent or higher.

Stanford's says it was the cheese bread. Isaac says it was the mints.

The October 25 Sunday Oregonian carried a story about the company that two years ago bought the Stanford's restaurant chain and the others under common ownership, including the Portland Steak and Chop House, Manzana, and Newport Bay restaurants.   The gist of the story was that the buyer (a private-equity firm and not a restaurant company) has at last figured out that it drove away the loyal customers by jacking up the prices and changing the menu.  The author says that Stanford's removed from its menu the cheese bread, the house salad, and the prime rib sandwich, favorites of its regular customers.

I hadn't noticed those changes, but I had noticed one other that irritated me: they changed the mints.  The hallmark of the restaurants in the Stanford's group was their after-dinner mints: not the little disc-shaped peppermints that have the peppermint color but not much flavor, and not the even smaller things that are so small as to be barely noticeable, but stout barrel-shaped red and green mints that no other Portland restaurant served.  Stanford's and the Chop House kept them on display in gargantuan brandy snifters, and I never left the restaurant without pocketing three or four for later. They were the best restaurant mints in town; no one else came close.  And they were famous: if I put one or two on my desk, my co-workers would nod knowingly and say, "Stanford's for lunch again?"

With the buyout went the barrel mints, replaced by the smaller and presumably cheaper little discs.  It was a little thing, but enough to tell me that the new management cared about cost and not about value.  I went from 15 visits a year (always with guests) to one.

The lesson for restaurateurs, and in some form for anyone in business, is that if you become known for doing something (in this case mints) better than all of your competition, don't change it just to save a few cents.

"Seven at one blow!" Grimm news from the FDIC

Thus does the Federal Deposit Insurance Corporation (FDIC) emulate the Grimm tale about the gallant tailor who killed seven flies with one blow and embroidered a boast on his belt.  The FDIC closed seven banks on Friday, October 23, which for those familiar with the stories of the Brothers Grimm gives a new and playful meaning to the phrase "they're dropping like flies."

The Laquedem Made In Oregon Landmark Sign and Lottery Plan

I don't remember when the "Made In Oregon" sign in downtown Portland advertised White Satin Sugar (here's an image of it that the University of Oregon found), but it was then a plain outline of the state with a White Satin logo in the center.  The building beneath later became the property of Hirsch-Weis Co., an old-line manufacturer of work clothing and ship sails that started a line of skiwear in 1930, which it called "White Stag," the translation of the company's name.  Under the leadership of Harold S. Hirsch (1907-1990), a jovial Oregonian who brought back the idea from his years on the Dartmouth ski team in the 1920s, the White Stag line of skiwear grew to be the largest part of the company.  The company changed its name to White Stag in 1956.  When it bought the building, it added a white stag to the sign (it's still there today) and changed the text to read "White Stag," in the font that it used to label its clothing.  Here are photos of the White Stag sign and the sign as it is now.

After White Stag was sold to a conglomerate, the building became the property of the Naito family, owners of the Made in Oregon retail stores, who changed the sign text to "Made In Oregon" and the footer from "Sportswear" to "Old Town."  The University of Oregon now owns the building.  It very reasonably doesn't want to pay to advertise the Naitos' stores, and wants to put its own text on the sign.  The hitch is that the sign is a designated landmark, and can't be changed without the City's approval.  The City won't approve.  The University also doesn't want to pay the cost of lighting the sign unless the sign advertises the university, so it's gone dark.

Ramsay Signs, the company that owns the sign itself, proposes to solve the conundrum by taking the sign down.  That would be a shame.  That, combined with the City's reputation for being anti-business (something that part of the city council would like to change), led me to the Laquedem Made In Oregon Landmark Sign and Lottery Plan.

I recall reading that the sign costs about $20,000/year to maintain.  I don't know what it costs to light it up, so I'll guess that it's another $20,000.  That's $40,000/year.  Let's imagine that ten civic-minded businesses with significant operations in Portland would each pay $5,000 toward the cost to maintain and light the sign, and commit to do that for ten years -- or just pay $50,000 each up front.  That covers the cost to maintain and light the sign for ten years.

Each year, a lottery selects one of the businesses to be on the sign for the year.  At the end of 10 years, each business has had one year of being the icon in front of downtown Portland, inexpensive publicity for the $50,000 it would cost.  A plaque near the building would honor all ten donors.  The surplus covers the cost to rework the sign each year with the name of the lucky winner.  The City's part is to approve all ten designs at once through design review, so that the civic-minded businesses don't have to slog through Portland's land use process every year simply to update the sign.

Not every business would be able to buy a Laquedem Light-It-Up Lottery ticket.  To qualify, a business must have its headquarters within the City of Portland, be a for-profit enterprise (this prevents Duck boosters from buying all ten tickets), and employ at least X people within the city limits (perhaps 50).  If the tickets could be sold for more than $5000/year, some of the surplus would go to the University of Oregon for tolerating the sign on its rooftop.  If the tickets sell for less, the City would kick in the deficit and proudly point to its subsidy as evidence that it's open for business.

One variation on this would be for the City to pay the cost of the sign, and offer it free of charge for one year to any business that moves its head office to Portland with at least 100 workers, or opens a factory or office in Portland with at least 100 workers, as a sort of thank you for coming to Portland.  In years without new businesses, the City could draw lots and give the year's worth of advertising to an existing business that's been here for X years or more.  That's promoting business, in grand style.

From the lowest hills to the highest valley...

It struck me as odd today, driving east on Beaverton-Hillsdale Highway toward Scholls Ferry Road, that the Valley Plaza is higher up than the most prominent intersection in Raleigh Hills.  I don't know how the valley ended up higher than the hills, but my bemusement increased when I passed an apartment house named Raleigh Heights, located down low near Fanno Creek.

Metro and the convention center people could learn from Western Airlines

Once upon a time the federal government regulated the price of air travel.  Airlines had to file their rates with the Civil Aeronautics Board and show that their proposed fares were high enough to earn a profit.  It was hard to lose money in the airline business, because there was little price competition.  Airlines could, however, compete on schedule, service, and comfort.

Western Airlines, a carrier based in Los Angeles with the cheerful slogan "The o-o-o-only way to fly!", tested the limits of CAB regulation by offering free champagne to every adult passenger, differentiating itself from its competitors and elevating its image to the traveling public.  Its competitors complained, but they quickly figured out that although they couldn't compete on price (the CAB did not start to lose its ratemaking authority until 1978), they could compete on freebies.  Soon everyone was offering something extra: alcohol, playing cards, maps, junior pilot wings, and so on.

Western's champagne came to mind today when I read something about the ongoing battle over whether the public should subsidize a hotel across the street from the convention center.  The argument went like this: we needed to expand the convention center because other cities were expanding their convention centers.  We need a headquarters hotel because other cities have headquarters hotels.  We need X because other cities are building X. 

The result is that after all the cities have expanded their convention centers and built headquarters hotels, they are all in the same place, relative to each other, as they were to begin with.  It's a zero-sum game.  Building more hotels in 200 convention destinations doesn't create more conventions, and it shuffles them only slightly from city to city.  Like Western and the champagne, if one offers it, then the others have to offer something to, resulting in everyone spending more money but no one getting more business.

Here's a method of analysis I'd suggest to the convention center boosters:  Identify the 100 most significant convention cities in the United States.  Rank Portland as honestly as possible on that list.  Now assume that Portland has a convention center hotel of 600 rooms.  How many places up the list does Portland move?  If the answer is smaller than 10, then the hotel will be a waste of the public's money.

$2000 for a dog, but no money for the bank

Back on June 22, I wrote that if I had pleaded guilty to a mail fraud in a case that cost investors $355 million, I'd be embarrassed to have the Wall Street Journal report that my family spent $2000 to buy a dog.  I'd be even more embarrassed if it were reported (as the Oregonian did on Saturday) that although we could spend $2000 to buy a dog with a pedigree, we were now 10 months behind on our mortgage payments for our house in Green Hills.  Admittedly, those mortgage payments are $33,000 a month, so the dog (a purebred something-fancy-or-other) cost only about two days' worth of that family's mortgage payments.  The one pet I have was free, a gift from Youngest Sister, but then my mortgage payments aren't anywhere near $33,000 a month either, and I'm current.