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June 10, 2024

— Warren Buffett

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Slater the Traitor

Yesterday was a big day in the life of Warren Buffett, and I'll bet he doesn't even know why.

The reason? A birthday: In Belper, Derbyshire, England, 256 years ago, a woman named Elizabeth Slater gave birth to her fifth child, a boy named Samuel.

Samuel's father died when he was 14, and his family indentured him as an apprentice to a mill owner. This was cutting edge technology at the time, and by the time Samuel was 21, he knew as much as anyone about the trade.

British law strictly prohibited the export of any information at all about mill technology, but the temptation was strong. If Slater could somehow get detailed plans out of the country -- taking them, for example, to the recently independent United States -- he'd have a very valuable asset.

So, he smuggled the plans the only way possible: by memorizing them.

In 1789, the month after his indenture expired, Slater boarded a ship to New York City. There, he linked up with an investor named Moses Brown, and over the next three years they worked together to build a British-style spinning mill in Rhode Island.

The British called him Slater the Traitor for this, and I don't mean to suggest everything he did was an unbridled good for America. In fact, maybe God has a linguistic sense of humor since "Slater" is only one letter off from "slaver."

(He didn't own slaves, but Moses Brown's money, which funded the whole thing, came from the slave trade. Also, it would have been impossible to run a mill in the U.S. back then without a steady supply of cotton processed by slaves on Southern plantations.)

Still, that's not really where we're going with this story. Instead, we'll bring another character in: Oliver Chace, who had been born a year after Slater in Massachusetts, and who went to work for Slater as a carpenter.

Eventually, Chace took what he'd learned from Slater and launched his own mill. For the rest of his life, he basically started mills and then either sold them or merged them into bigger companies.

This culminated in 1839, when Chace, who was 70 years old by then and very wealthy, built and acquired several mills into a business he called the Valley Falls Company, located partially in Cumberland, Rhode Island (where your humble author grew up).

Chase died in 1852, but the Valley Falls Company grew and thrived for another century, ultimately merging first with a company called Berkshire Cotton Manufacturing Company in 1929, and second, with a company called Hathaway Manufacturing Company in 1955.

The ultimate name of the combined entity that Samuel Slater's carpenter first founded all those years earlier? Berkshire Hathaway.

Now Buffett enters the story: In 1962, he started buying shares of Berkshire Hathaway (which was still 100% in the textile business), and in 1965 he bought the company outright after a dispute with the then-CEO—mainly so that he could fire him.

Buffett replaced that CEO with Ken Chace, who I'm confident is a descendant of Oliver Chace but I've not been able to find out exactly.

Of course, Berkshire Hathaway went on to become a holding company with a market cap hovering around $900 billion, that is in completely different industries than it originally was: insurance, of course, along with utilities, manufacturing, retailing, financial investments, and massive shares of publicly traded stocks from other companies, like Coca-Cola and Apple.

I've always admired the idea that despite the fact that the textile industry was clearly dying, Buffett and Chace worked to keep the mills running for another two decades -- finally giving up in 1986 -- since so many workers depended on them for jobs to feed their families.

Buffett is one of the most quotable people in modern life, and there are so many choices for the quote of the day. But I think I've found an apt one, and it's about building and planning for the future even if you're not sure whether you'll actually reap the benefits of what you sow:

All right, y'all. Let's get out there and plant some trees. The future might be counting on us.

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Here are some other things ...

• How Israel Pulled Off a High-Risk Hostage Rescue: Noon raid sparks joy in Israel, fury in Gaza: The searing midday sun afforded the Israeli commandos the element of surprise. The daylight raid was an unusual tactic, and risky. The fear, Israeli military officials said, was that Hamas guards would kill the four hostages as soon as they detected the specialist Israeli counterterrorism teams approaching. But if they could pull it off, it would give Israel a big psychological boost in a war that has been turning into a quagmire while steadily isolating the country from the rest of the world. (WSJ gift link)
• Supreme Court Justice Clarence Thomas has accepted more than $2 million in gifts over the last 20 years, according to a new analysis, far eclipsing the value of those received by his fellow justices. A report released Thursday by the advocacy group Fix the Court said the value of 93 gifts to all of Thomas’ fellow justices between 2004 and 2023 totaled $248,000, while Thomas alone received 103 gifts worth $2.4 million. After the report was released, Thomas belatedly acknowledged that Republican billionaire Harlan Crow paid for Thomas’ accommodations during trips in 2019 to Bali and Sonoma County. (USA Today, Politico)
• After enjoying a pandemic-era boom where many a weary northerner packed up and moved to the Sunshine State, in 2024, apparently, it’s all about the Carolinas — their coast, their mountains, their more temperate climate and — most importantly — their affordable cost of living, say the moving pros at PODS, who’ve analyzed heaps of customer data to identify the latest trends. (NY Post)
• Former President Donald Trump is scheduled to sit for a virtual interview on Monday with a New York City probation officer from his home at Mar-a-Lago with his attorney Todd Blanche at his side after he was found guilty on all counts in the hush money trial against him last month. The probation interview is required by the court as part of the former president’s pre-sentencing report. (NBC News)
• The discovery of a mysterious network of hidden tunnels beneath a Florida city has sparked wild theories about their origin. The passageways under Ybor City, a suburb near downtown Tampa, remained hidden for decades before a string of discoveries revealed the subterranean network. Historians have since speculated widely over their use, from moving moonshine, human trafficking and cash smuggling to simply "as a sewer." (Daily Mail)
• A large chunk of a twisting mountain pass road collapsed in Wyoming, authorities said Saturday, leaving a gaping chasm in the highway and severing a well-traveled commuter link between small towns in eastern Idaho and the tourist destination of Jackson. (AP)
• You know you have a credit score. Did you know that you might also have a driver score? The score reflects the safety of your driving habits — how often you slam on the brakes, speed, look at your phone or drive late at night. While you can see your credit score, you will have a harder time finding out what your driving score is. But auto insurance companies can get it — and that could affect the rate you pay. Experts say most people have no idea the insurance industry can track them this way. Among the smartphone apps cited in this article: One, Life360, used by parents to keep track of their children; MyRadar, which offers weather forecasts; and GasBuddy, that helps people save on fuel costs. (NY Times)