JoshuaAndAndrew: February 2009

I let Andrew handle the money, because money is in his genes, not mine.

I’ve never been good with money, but then I’ve never had any money to practice with.

My parents paid for my undergraduate education, which cost them a fortune, but which allowed me to receive my Baccalaureate free from student loans.

Andrew is paying for my law school education, which has been costing him a fortune, but which will allow me to receive my Juris Doctor free from student loans.

Of course, the downside, for me, is that I have to be nice to Andrew since he’s footing the bill. I have to pretend that I like the atonal, modernist music with which he tortures me, I have to pretend that the Big Ten Conference is on a par with the vastly superior Big Twelve Conference, and I have to pretend that I like his cooking, including that shrimp-tomato-rice dish Andrew’s father warned me about.

To be serious, we have a gentlemen’s agreement about my law school expenses. If things do not work out between us, I will pay Andrew back my law school tuition over a ten year period of time, with that obligation ending ten years after I graduate from law school.

In any case, I never worry about money as long as I have food on the table and a warm place to sleep. I leave all such worries to Andrew.

We never spend money. We don’t spend a dime on ourselves. We are not wasteful, we never buy foolish or frivolous things, we are not interested in technological gewgaws. We live very simply.

That will not change—even though $412,000 in option profits was assigned (and actually turned over) to me in December and January.

I take no credit for this maneuver, and I take no credit for my good fortune. The windfall was thrown into my lap.

Simply put, when oil was $160 a barrel in July, Andrew’s father and Andrew’s brother had Andrew and me buy six aggressive option contracts, effectively betting that the price of oil would decline sharply from then-current levels.

We were not alone. Hundreds of thousands of other Americans did the same thing at the same time.

Everyone who did so made out like bandits.

Our options were not naked options—at risk, and only at risk, was the tiny amount of money we put forward to buy the option contracts, which cost us a relative pittance—and the purpose of the options was to hit a home run or lose the entire (but insignificant) premiums paid. Nothing in-between was ever contemplated.

We did hit a home run. In fact, we hit six home runs, one for each of the option contracts we bought.

By September, the price of crude was dropping like a stone, and we knew that we had hit pay dirt—but that was only the beginning of the oil price collapse. The price of crude continued to slide, dramatically, until December. It was a staggering, brutal decline, but for Andrew and me it was a beautiful decline.

Our problem was taxes. Our gains would be short-term gains, half of which would be taxed at Andrew’s highest marginal rate. Further, an enormous amount of tax-planning had already been done for Andrew for 2008, tax-planning that did not take into account the prospect of an options payload at year-end.

The solution: the original option premiums were gifted to me, and I, in turn, immediately gifted one-third of the premiums to my sister and another one-third to my brother. All of this was accomplished by early October, more than eleven weeks before we started closing out the option contracts. It involved mountains of paperwork shipped back and forth, overnight express, between Minnesota, New York, Boston, Tennessee and Oklahoma.

Three of the option contracts were closed out in December and the other three option contracts were closed out in January. (Of course, this was done so as to spread reportable gains over two tax years.)

The proceeds from the option contracts are now held jointly by me, my sister and my brother. We will, of course, have to pay taxes on the gains, but all three of us are currently full-time students, without additional taxable income. We will never be in lower tax brackets than we are right now.

The money will be used to pay for education expenses. After taxes, my share will more than cover my final two years of law school tuition. After taxes, my sister’s share will cover most of her expenses for her next three years at Vanderbilt. After taxes, my brother’s share will cover much of the cost for his approaching four years at Southern Methodist.

Most of all, this windfall is a giant break for my parents, who otherwise would be footing the bill at two very costly universities beginning next year. A burden has been lifted from their shoulders.

Andrew gets to participate in the windfall, too, since a significant portion of his salary will no longer have to go toward paying my law school tuition. That money can now be devoted to atonal, modernist music scores, scores Andrew can use to torture me.

As for me, I’ve never had $412,000 in a checking account before.

I guess I’ll have to continue to be nice to Andrew, much as it hurts me.

The best general-interest museum we visited in Hamburg was The Museum For Hamburg History (“Museum Fur Hamburgische Geschichte”), one of the world’s very greatest history museums.

The photo above shows the entrance to The Museum For Hamburg History, visible only once the visitor enters the front courtyard from the street.

The museum was constructed between 1914 and 1922, one of many large-scale civic projects in Germany initiated with the imprimatur of The Kaiser in the period immediately prior to the First World War, a period in which a unified Germany—and an emerging world power—was beginning to flex its muscles on the international stage.

The photo below shows the building during its long construction phase and provides some idea of the scale of the museum edifice.

The building was designed by architect Fritz Schumacher, a master of the modern Hanseatic style as practiced in Hamburg from the late-19th-Century through the 1930’s. The style calls for dark brick and intricate stone moldings, and pays tribute to traditional Hanseatic architecture by borrowing Northern European design elements from the Medieval, Renaissance and Baroque periods.

Bremen-born Schumacher (1869-1947) spent eight of his formative years in the United States, only returning to Germany in his late teens. He devoted the last 24 years of his working life (1909 to 1933) to the design of buildings for The City Of Hamburg.

Hamburg underwent a construction boom from the 1850’s until the onset of World War II, a period in which the city saw its population grow from 50,000 persons to over two million persons. The city’s population peaked in 1943, the year of the firestorm. The city was evacuated after the 1943 firestorm, and—like so many German cities—The City Of Hamburg was never to see its population return to pre-war levels.

Even during World War I, when the city’s adult male population was largely serving in the trenches of France, major civic construction projects continued to fruition in Hamburg (and in the rest of Germany, too). Although the population of Germany was near starvation from 1916 on (a result of the British naval blockade), and although Germany’s heavy industry was devoted primarily to the production of armaments, major construction projects continued throughout the duration of the war.

Schumacher designed literally dozens of important buildings in Hamburg, many of which survived the Second World War or were reconstructed after that war in their pre-war forms. Schumacher buildings may be seen throughout the city of Hamburg to this very day. He was a master architect.

The Museum For Hamburg History is enormous. From the street façade, the visitor has no idea how vast is the museum structure, primarily because the street façade is what turns out to be merely a small wing of the museum, designed to serve as an elegant welcome portal. The bulk of the museum building lies behind the dignified entrance, concealed from the street via trees, brick walls, and skillful landscaping. Only after the visitor enters the building and passes through the beautiful multi-storied entrance hall—with its grand stone vaulting, statues and banners—and enters the museum proper does the visitor begin to realize what a giant building the visitor has entered.

In the photograph below, the museum’s entrance wing is the near-insignificant appendage located at the far upper right of the photograph (visitors enter through the courtyard, the only portion of the building that faces the frontage street, albeit at a distance). The photograph amply demonstrates how the building is many times larger than it appears to be from street level.

The museum building features large glass-roofed inner courtyards, magnificent stairwells and foyers, and installations of key public rooms from ancient Hamburg buildings of prominence.

Most of these historic interiors were the result of preservation efforts after The Great Fire Of 1842 caused much of the city to be destroyed. After The Great Fire, pre-1842 buildings, by and large, were not reconstructed in their old forms. Instead, salvageable portions of the old buildings were placed into storage and entirely new buildings, to new designs, were erected on the same sites.

Much of the interior fabric of The Museum Of Hamburg History was specifically designed to incorporate great halls and notable public rooms dismantled from landmark Hamburg buildings after the 1842 fire. These interiors were preserved, for decades, by The City Of Hamburg until such time as they could be reinstalled in a purpose-built building devoted to the city’s history. Preparatory plans for a city history museum were in place as early as 1839, seventy-five years before construction of the museum finally got under way.

The Museum For Hamburg History is truly a history museum beyond compare. I have never visited Musee Carnavalet in Paris, but from its reputation Musee Carnavalet is supposed to be one of the world’s very finest museums devoted to the history of a single city. Alex and Andrew have visited the Carnavalet exhaustively, and they have said that The Museum For Hamburg History is finer even than the Carnavalet, which truly must signify something about the Hamburg museum’s quality.

We spent two full (non-consecutive) days visiting The Museum For Hamburg History, arriving both times as the museum opened for the day and remaining both times until it closed. Despite devoting two full days to the museum, we nonetheless did not have an opportunity to see everything in the museum.

The extensive collection ranges from the city’s founding in the Middle Ages to the present. The main subjects covered are the Hamburg Harbor—and associated transport and trade—and the political, social and cultural history of the city. The Great Fire Of 1842 is documented in an informative and evocative way, as is the virtual ruin of the city during World War II. There are numerous models of the city, its churches, railways and ships disbursed throughout the museum. Many of these models are of amazing quality, complexity and beauty.

The first day we visited the museum, we toured the “basement”, which actually is above ground level and which actually is composed of two floors. It took us an entire day to get through the “basement”.

The “basement” contained exhibits addressing the history of costume, music, art, theater, science and religion in Hamburg. One of the most interesting of these rooms was a large room devoted to historic musical instruments: string instruments, keyboards, and bizarre brass and wind instruments the likes of which I had never seen.

The main exhibit in the “basement”, however, involved a detailed, exhaustive and dramatic sweep of rooms covering the history of Hamburg from the onset of The Wilhelmine Era through the late 20th Century. For me, these rooms were the heart and soul of the museum, covering, as they did, the emergence of modern Germany and its eventful, tragic history.

I learned, for instance, that Hamburg suffered through what amounted to several revolutions in all but name in the late 19th and early 20th Centuries. The city was gripped with prolonged periods of social unrest from approximately 1880 until the onset of World War I.

The decade of economic crisis in the 1920’s was also covered in depth, as was the incorporation of surrounding towns and cities into Hamburg proper during the 1930’s, the decade in which Hamburg became a true metropolis.

Numerous rooms addressed the World War II years, although surprisingly little attention was paid to the horrific 1943 firestorm that destroyed much of the city. Enlarged photographs of the burned-out city, without more, were allowed to tell the whole story of the city’s destruction—there was very little additional information, and no artifacts, to place the photographs of the burned-out Hamburg into some kind of context. There was also no criticism of the Allied bombing campaigns against the city, which slightly surprised me.

The World War II rooms made no acknowledgement of Neuengamme, the Hamburg concentration camp, and no mention of the inhuman way in which Hamburg city officials arranged for the brutal murder of all Neuengamme inmates shortly before the camp was overrun by Allied soldiers in the final days of the war.

In similar fashion, there was no mention of the horrific murders in Hamburg of the victims of Nazi medical experiments. Such persons, along with their keepers, had been transferred to Hamburg and were killed in a city high school (still in use) only two or three days before their potential rescues by Allied forces. These grotesque killings were not included in the museum’s exhaustive presentation of city history.

The post-War years, full of privation, were also addressed in depth, as was the 1962 flood that ravaged the center of the city, covering all ground, high and low, between The River Elbe and The Alster Lakes. The Hamburg Flood Of 1962 was one of the most destructive floods, anywhere, of the past 200 years.

Hamburg was in the British zone of occupation in the immediate post-War period, and to this day Hamburgers insist that the British were incompetent and malevolent administrators. The British were indifferent to the food and shelter needs of the Hamburg populace, indifferent to the preservation of Hamburg landmarks, and indifferent to criminal activity occurring under British jurisdiction. As a result, the city did not begin to recover from the war until 1951, the year the British occupation ended. An entire section of this portion of the museum was devoted to troubles during the period of British occupation.

Throughout this grand sweep of rooms, one of the constant display themes was the presentation, at ten-year intervals, of fully-furnished living quarters for a typical middle-class Hamburg family, complete with dinnerware, tableware, appliances, window dressings, and even books and magazines from the period. It was fascinating to see how domestic life in Hamburg changed, decade-by-decade, from the 1870’s through the 1990’s.

One fact we found intriguing was that the average middle-class Hamburg family employed numerous servants all through the First World War and well into the decade of the 1920’s. It was only with the rapid economic deterioration that began in Germany in 1923—the period of hyperinflation, which wiped out generations of accumulated wealth—that the era of servants for the middle class began to end, a victim of hard economic times. Between 1923 and 1928, all but the very wealthiest of Hamburgers were forced to lay off their staffs of servants, never to reengage them.

Our second day at the museum was devoted to the “first” and “second” floors, although these actually were the third and fourth floors of the building. Most of the exhibits on these floors were devoted to Pre-Wilhelmine Hamburg.

Hamburg’s key role in The Reformation was covered exhaustively, as was the city’s history as a founding member of The Hanseatic League. The city’s centuries-long trouble with piracy was also the focus of several rooms.

An amazing amount of attention was paid to Hamburg’s Stock Exchange, including vast numbers of artifacts from the original 1558 Exchange. One of the most elaborate installations in the entire museum was the original Merchants Hall of the old Stock Exchange, with shields and banners and numerous life-size stone statues of both historic and mythic figures, all portrayed as guardians of the economic interests of what for centuries was Germany’s most important commercial city. All such items were original.

Many displays were not what one would usually expect to find inside a history museum.

Most surprising for us was the presence of a 19th-Century steamer that plied the waters of The River Elbe. The steamer had been moved from The River Elbe to the construction site on which the building was erected and incorporated into the building fabric. We toured the entire steamer, climbing up and down ladders and narrow stairwells, until we had seen everything onboard the steamer.

The upper floors included restorations of important public rooms from significant Hamburg residences of the Baroque period, complete with period furnishings, textiles, paintings and silver.

Historic archways from old Hamburg buildings were incorporated, to great effect, into the exteriors and interiors of the entire building. Examining the array of old archways was one of our greatest pleasures while touring the museum.

The most important of these archways was an elaborate 1605 portal from Saint-Petri-Kirche, one of the largest and most important surviving portals from the Baroque era.

An incredible number of Baroque archways survived over the centuries, and several of these archways were erected in a beautifully-landscaped park situated alongside the museum building. A few of the archways mounted outdoors were stand-alone objects, placed above pathways, while others were used as entrances and exits for different sections of the park. The most beautiful of all Baroque archways we saw in Hamburg had been placed in the park. It was taken from a private mansion, with the family name still visible on its carvings. The date was 1611.

One of the most popular attractions at The Museum For Hamburg History was an enormous model railway. The railway recreated all of Hamburg’s many rail stations and rail lines. Four times a day, museum personnel activate the railway, by far the largest and most complicated model railway I have ever seen. During the railway demonstrations, visitors may observe numerous trains operating on numerous tracks for twenty minutes at a time. It was very impressive.

During the two days we visited the museum, the museum was practically empty of visitors. We were often the only visitors in each room we explored. We visited the museum on weekdays and, at the very least, we had expected to encounter school groups. We saw none.

On both visits, we ate lunch at the museum café, a full-service restaurant of some quality. Despite a proliferation of wait staff, we were among only a handful of diners on both occasions. I suppose the museum receives the bulk of its visitors on weekends.

The museum was partially destroyed in 1944—bombings of Hamburg continued to the very end of the war, despite the fact that the 1943 firestorm had wiped out much of the city—but city officials determined that The Museum For Hamburg History would be the first museum to be rebuilt and reopened after the war. Portions of the museum re-opened as early as late 1945, only months after the cessation of hostilities.

No other museum in Hamburg was to reopen until the following decade.

JoshuaAndAndrew

Tuesday, February 17, 2009

Windfall

Saturday, February 7, 2009

Yet Another List

The Museum For Hamburg History

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