For the 200^th Anniversary of the United States a history of all the states was commissioned and recently the book about the state of Louisiana was read. The book was written by Joe Gray Taylor published by W.W. Norton & Company, New York, 1976. The author focuses his work on the politics and economic development of the southern state whose cities include New Orleans and Baton Rouge. The state was a colony of France, Spain, back to France and sold to the United States along with all the lands the Mississippi River watershed encompasses in the Louisiana Purchase. The early life of the colony is a buffer for other lands controlled by France, Spain or the British, as a buffer there were few riches being sent back to the homeland. Until oil was discovered in the state, much of it was agricultural over time the three biggest crops were corn, sugar cane and cotton. By the 1850’s the biggest production farms were called plantations which were working farms. If the plantation focused on sugar, because of the more capital required a typical sugar plantation with an investment of $200,000 was making 9% of their investment. If the plantation was cotton there was less capital required, just land for a $100,000 1500 acre farm the return was about 7%. In both cases, the farmer grew the crop and sent the crop to New Orleans to a factor who sold the crop for a 2.5% commission. The invention of the telegraph with more instant communication meant the farmer did not need the factor. They could sell the crop themselves. Given agricultural crops, the prices fluctuated with the weather, pests, floods, and normal everyday events.

Louisiana had its share of timber operators cutting down great forests including cypress trees which take 100 years plus to grow, but the state is known for its politics. It seems there is ethics in the political sense, but not the economic one. Most politicians left office wealthier than they came in, but were thrown out because they were politically unethical. A couple really bad stories were to limit voting of the people the politicians thought who would vote against them? the legislators passed a law saying to vote one needed a high school graduation and proof of 2 years of paying real estate tax. This had the effect of limiting the voter turnout for 90% of Louisiana’s population did not have high school grades, unfortunately given the really low teacher’s salary most were lucky to have a public school. Another awful story is one of the parties ran a lottery which gave 50% away in prizes, the other 50% went to “grease” the decision making process and the lottery ran for over 30 years. The state is known as there is corruption in politics and Louisiana style corruption. Although, maybe things have changed since the book was written?

Linking to dividend paying stocks, not matter what era you look at, there are always constants with the system we are in. People need to generate income to live and eventually as money grows you need to look at alternatives. In the case of plantations, the farm needs to generate a reasonable return on investments although to decrease taxes it was possible to buy state bonds at 50% discount (due to state debt issues) and redeem them to pay taxes. Whether you are on the farm or in the city, you are essentially performing similar functions.

There are more questions than answers, till the next time – to raising questions.