THE WALL STREET JOURNAL. Monday, October 7, 2019 |A
Street-Corner
Capitalists
Crying the News
By Vincent DiGirolamo
(Oxford, 698 pages, $35)BOOKSHELF| By Edward Kosner
T
homas Edison was one. So were Harry Houdini,
Herbert Hoover, W.C. Fields, Walt Disney, Benjamin
Franklin, Jackie Robinson, Walter Winchell, Thomas
Wolfe, Jack London, Knute Rockne, Harry Truman, John
Wayne, Warren Buffett and many more familiar names.
Besides being illustrious Americans, these men shared a
calling—growing up, they were newsboys, delivering news-
papers to subscribers or, more colorfully, hawking them on
the streets for a couple of pennies, real money in those days.
In their time, newsboys (girls were rare) were American
icons—symbols of unflagging industry and tattered, bare-
foot, shivering objects of pity. They had their own argot and
better news judgment than many editors, because they had
to size up the appeal of every edition to determine how
many copies to buy from the publisher. Some used hawking
as a cover for picking pockets, but most were as honest as
they could afford to be.
Even the most scrupulous
could goose trade by juicing
the news they peddled:
“McKinley dead!” (not just
shot).
These waifs, urchins, street
Arabs, ragamuffins, gamins,
juvenile delinquents and
guttersnipes, as they were
called, now have their Boswell
in Vincent DiGirolamo, a former
reporter and documentary
filmmaker who teaches history
at the City University of New
York. His “Crying the News: A History
of America’s Newsboys” is an encyclopedic
account of these heralds of the golden age of newspapers in
America. They were essential contributors to the newspaper
economy and ink-smudged secondhand witnesses to history.
The author has done prodigious research, and it’s hard
to imagine what, if any of it, he has left out. Did you know
that Sandy Fowler, a 9-year-old newsboy, was run over in
Salt Lake City in June 1904? You do now. Mr. DiGirolamo is
a fluent writer, however, and “Crying the News” is really a
social history of the American press from the 19th century
to World War II. Its 566 pages have their share of
interesting nuggets and observations.
The book also draws a compelling picture of the squalid
lives of the American poor in the 19th and early 20th
centuries—stories that make today’s accounts about the
economically deprived read like fairy tales. Newsboys rose
long before dawn to fetch their papers from the press, then
trudged the icy or steaming streets for 10 or 12 hours to
bring home bags of change, the equivalent today of $40 or
$50 a week. They were often the main support for widowed
or sick mothers and siblings and drunken or disabled
fathers. Many essentially lived on the streets, curling up to
sleep on steam grates or boxes near the hot presses of the
papers they sold. They were beaten up, robbed of their
coppers and preyed on by perverts.
Ever resourceful, they rode the expanding railroads to
flog papers. During the Civil War, daredevil newsboys
skittered around the battle lines selling papers to news-
starved soldiers. Their street names told their stories—
“Rockaway,” “Memphis Kid,” “Jimmie Runaway”—and
sometimes their disabilities: “Leggy,” “Handy.” One wore a
hat reading “The Dumb News Boy.”The early newsboys as we now think of them appeared
on the streets of lower Manhattan in September 1833,
when 23-year-old Benjamin Day hired them to hawk his
revolutionary new paper, the Sun, whose motto was “It
Shines for All.” It was priced at a penny and covered crime
and popular entertainment—the first paper aimed at the
working class. It was promptly joined by James Gordon
Bennett’s rambunctious Herald and more. Soon, New York
and other growing cities teemed with flamboyant dailies
and Sunday papers and tens of thousands of clamorous
children competing with one another to sell them.
“They carried vital intelligence to a young nation of
readers,” Mr. DiGirolamo writes, “bamboozled them if
opportunity arose, received unwanted attention from
authorities, and met violent rebuke from those who disliked
their message...retailing the breaking news that would
become America’s history.”
The early patterns recurred over the decades. Most of the
newsboys were immigrants or children of immigrants—first
Irish and German, later Italians and Eastern European Jews.
Girls and African-Americans were generally driven off the
corners. Newsboys were hailed by the newspapers they sold
as model young capitalists-in-training and beatified by
reformers as viciously exploited child labor. Do-gooder
groups like the Children’s Aid Society looked out for them,
and newsboy refuges with dormitories and hot meals were
established all over the country. Still, time and again,
municipal authorities and church groups harassed them
over their “vices”—truancy, smoking, drinking, gambling,
swearing, taking discounts from prostitutes, even spitting.
They were hostages and sometimes casualties in newspaper
circulation wars. Cities tried to license them with badges,
and circulation managers constantly squeezed them by
raising the wholesale price of the papers they peddled by
half a cent, enough to undercut their meager profits. This,
in turn, provoked incessantnewsboy strikes and fruitless
efforts to unionize them.
Mr. DiGirolamo has chosen to tell his story chrono-
logically, and his penchant for excruciating detail results in
repetition of the same sort of material with different names
and dates. Still, the gray text is punctuated with dozens of
vintage cartoons and photographs that reanimate the times
often better than his facts.
Newsboys, as it happened, were early adopters of fake
news, not only with their own embellished cries of
“Assassination of President Johnson!” and “Murder of
General Grant!” around the Civil War but also with the
doozies published by their papers. As street sales drove
profits, editors and publishers came up with fresh tricks to
lure readers. At the height of the Spanish-American War,
Pulitzer’s New York World and its competitors splashed
“Havana Shelled” across the front page. Only readers with
eagle eyes noticed the words “to be” in tiny type in between.Mr. Kosner is the former editor of Newsweek, New York,
Esquire and the New York Daily News.The newsboy doggedly hawking papers for
pennies on city streets was once a staple of
American life, an icon of unflagging industry.Insanity and the Supreme Court
J
ames Kraig Kahler inten-
tionally shot and killed his
wife, their two teenage
daughters and Mrs. Kahler’s
grandmother in 2009. Now
he’s going to the Supreme
Court. At his Kansas trial, the
defense psychiatrist testified
that Mr. Kahler had lost touch
with reality due to a serious
mental disorder. But the de-
fendant couldn’t offer an in-
sanity defense, because Kansas
passed a law abolishing it in
1995.
Some form of an insanity
defense has been part of Eng-
lish law since the late Middle
Ages. It was recognized in ev-
ery jurisdiction in the U.S. un-
til the last decades of the 20th
century, when Kansas and
three other states (Idaho,
Montana and Utah) abolished
it. InKahler v. Kansas,the jus-
tices should hold that defen-
dants have a constitutional
right to claim insanity.
The court is rightly wary of
imposing constitutional re-
quirements on how states de-
fine crimes and defenses. But
it has often recognized that
fundamental principles of An-
glo-American law are neces-
sary for due process. The Con-
stitution, for instance, doesn’t
explicitly mention the criminal
standard of guilt “beyond a
reasonable doubt.”Most insanity defenses fail,
but it’s unfair to convict some-
one who can establish that he
was insane when he commit-
ted a crime. Kansas does allow
evidence of mental disorder to
cast doubt on whether the de-
fendant formed a “guilty”
mental state. But mental disor-
ders seldom prevent people
from being aware of what they
are doing, forming an intent to
do it and carrying out their in-tentions. Rather, a psychotic
mental disorder typically gives
them deeply irrational reasons
for forming those intentions.
The test of insanity in such
cases typically asks whether
the defendant was able to
know or appreciatewhythe
conduct was wrong. Because
Kansas doesn’t give a defen-
dant a chance to show that
mental illness gave him “in-
sane” reasons for his conduct,
Kahler’s trial was fundamen-
tally unfair.
Some critics of the insanity
defense argue that the defen-
dant’s mental illness should be
taken into account in determin-
ing the sentence rather than
guilt. But a lenient sentence
doesn’t justify a wrongful con-
viction. What’s more, judges
may not mitigate sentences—
or may even increase them—
because they consider the de-
fendant to be dangerous.
Yet there’s no reason to
fear that if defendants are ac-
quitted by reason of insanity,
they will go necessarily go free
and be a danger to the com-
munity. In every jurisdiction,legally insane defendants are
placed in secure nonpenal fa-
cilities for treatment and may
be kept in custody or under
community supervision until
they persuade a court that
they no longer pose a danger
to society.
There is no acceptable al-
ternative to the insanity de-
fense. It alone provides jus-
tice to defendants who were
severely disordered at the
time of the crime, weren’t re-
sponsible for it, and there-
fore don’t deserve blame and
punishment.
Mr. Kahler may ultimately
be convicted even if the jus-
tices order a new trial and he
offers an insanity defense. But
all defendants should have a
fair chance to establish that
they were not responsible by
reason of insanity.Messrs. Morse and Bonnie
are law professors at the Uni-
versities of Pennsylvania and
Virginia, respectively. They
filed a friend-of-the-court brief
on behalf of 290 law profes-
sors in Kahler v. Kansas.By Stephen J. Morse
And Richard J. Bonnie
The defense may
be unpopular, but
it’s a fundamental
part of due process.OPINION
Here’s an en-
during lesson
about invest-
ment. In the
mid-1990s,
well before
streaming
(2007) or Blu-
ray (2003) or
even DVRs
(1999), I was
convinced
that every television would
someday have an attachment
to record and play back shows
digitally. Digital videodiscs
were available and personal
computers had only expensive
read-only drives. But I figured
drives that also let users burn
DVDs would soon take off, so
my partner, Fred, and I
started scouring Silicon Valley
for technology that would
benefit.
In the small city of Milpi-
tas—ZIP Code 95035—we
stumbled upon a company
named Elantec Semiconductor,
which had gone public in 1995
at $7 a share. Cowen Inc. and
Hambrecht & Quist were the
underwriters, for those who
remember those days. Don
Valentine of Sequoia Capital
and Apple Computer fame was
the (pedigreed) chairman. It
had $30 million or so in reve-
nue but wasn’t really growing.
When Fred and I found it, the
stock was broken, trading
around $3. It had 10 million
shares, so it was trading at a
lowly one times sales.
We started visiting the
company, meeting the CEO and
CFO once a month. They told
An Investment Tip From Mr. ZIP
us they had developed a little
$2 laser-diode driver that
could allow a compact-disc
drive to burn data onto a blank
disc. Lights flashed in my mind
when I heard this: Could their
laser driver do the same thing
for DVD drives? Someday, I
was told, but it would be really
expensive. Even so-called CD-R
drives for PCs were still $500.
Gut check—time to move on?
Nah.
We weren’t discouraged.
Everything that comes out of
Silicon Valley starts out ex-
pensive, then sells like hot
cakes as costs decline. We
were long-term investors—pa-
tience was our middle name.
So we started buying stock at
$3. It started ticking up: $3.13,
$3.25, $3.50. We were ge-
niuses! Then we got too busy
to buy more shares for a few
days and the stock slid back to
$3. Turned out we were the
ones driving up the thinly
traded stock!
So we slowly kept buying
shares and continued to visit
the company for updates.
Elantec’s only competitor for
laser-diode drivers was
Toshiba, and because Toshiba
also sold CD drives, every
other Japanese CD company
bought from Elantec.
Around the same time, mu-
sic was becoming available
online through MP3 down-
loads, which Napster had
made easy. There wasn’t any-
where to play these files ex-
cept on your PC—the iPod
didn’t come out until 2001.
About 95% of PCs from Delland Hewlett-Packard came
with read-only CD drives stan-
dard. The “attach rate” of
drives for recordable CDs was
only 2% or 3%. Over six
months, we kept buying the
stock as it rose to $4, then fell
to $3.50, until we owned close
to 10% of the company. We
had to file Schedule 13D own-
ership forms with the Securi-
ties and Exchange Commis-
sion—a huge pain andneedless legal expense. I
wanted to sell at $6, but I
asked Fred if he thought it
could go to $10. He smiled and
said, “At least.” We could stay
patient for years, but it didn’t
take that long.
A company named Roxio
started selling software to
write music to CDs so you
could play downloaded music
in a car or on a portable disc
player. MP3 players started
arriving. And the price of
writable CD drives started
dropping: $300, then $
and then quickly piercing $99.
In a flash, the attach rate for
these drives went from 5% to
85%. Elantec’s stock took off.
Momentum investors in mu-
tual funds clamored for it as
their earnings took off. We
sold our entire position in twoafternoons in 1999 for be-
tween $175 and $200.
Believe me, I’ve had plenty
of awful investments, includ-
ing more than a few zeros.
And I was wrong about what
would make this stock work:
There never was a market for
rewritable DVD drives for TVs.
DVRs with hard drives ended
up filling that role. I was look-
ing too far into the future. But
the investment worked be-
cause we had the concept
right, and we were in the right
neighborhood when things
took off. The simple lesson:
You don’t need to know the
address if you’re in the right
ZIP Code.
The same strategy can help
you navigate today’s tech
world. Think augmented real-
ity will be everywhere? Three-
dimensional printing? Drones?
Great. Look up and down the
supply chain until you find
protected pieces of key tech-
nology. You don’t have to be
100% right, only close. Maybe
those will be keys for other
markets as well. How about
smart cities? Facial payments?
Gene therapy? Think machine
learning is the future of com-
puting? Fine, start finding all
the new chips and architec-
tures needed. Will it affect re-
tail? Design? Communicating
with animals?
The future is always fuzzy.
Like horseshoes and hand gre-
nades, you only have to be
close. Get in the ZIP Code
where the wind’s blowing, and
watch things fly.
Write to [email protected].Spot a coming trend
and buy something
close. No one knows
exactly what’ll take off.INSIDE
VIEW
By Andy
Kessler
Eyeing the
ruin of Vene-
zuela under
21st-century
socialism, one
can easily for-
get that Hugo
Chávez came
to power in
1999 on a
pledge to root
out corrup-
tion. Forty years earlier Fidel
Castro’s Cuban revolution de-
rived much of its popular sup-
port from widespread disgust
with the corruption of the Ba-
tista regime.
This might seem like an-
cient history, but it helps ex-
plain why the unconstitutional
dissolution of the Peruvian
Congress by President Martín
Vizcarra last week has the re-
gion’s democrats on edge.
Peru was a left-wing mili-
tary dictatorship until 1980,
and its young democratic insti-
tutions are frail. But it has
made substantial economic
progress in recent decades.
Real growth in gross domestic
product has averaged better
than 4.7% annually since 1999,
and the percentage of the pop-
ulation living in poverty has
fallen to below 22% in 2018
from 59% in 2004. Infant mor-
tality declined to 11 per
100,000 births in 2018 from 35
in 1998. Nontraditional exports
have boomed in the past two
decades, and the middle class
has doubled as a percentage of
the population.
These gains have come as
Peru opened markets and en-
hanced competition and re-
spect for private property and
foreign investment. Because
The President of Peru Stages a Coup
Mr. Vizcarra’s putsch puts
Peru’s political institutions in
jeopardy, it also threatens the
economy.
Vizcarra supporters see it
otherwise. In their view, the
president’s shutdown of a co-
equal branch of government—
which will allow him to rule by
decree for the next four
months—is justified because
the democracy had become
dysfunctional. In July he called
for early general elections,
which Congress rejected. Last
month he proposed a reform of
the process by which Congress
chooses Constitutional Court
justices.
When center-right busi-
nessman Pedro Pablo Kuczyn-
ski was elected president in
2016, Mr. Vizcarra was his
running mate. Mr. Kuczynski
resigned under allegations of
corruption in 2018, and Vice
President Vizcarra succeeded
him. He has since accumulated
most of his support from the
left.
It is important to under-
stand that, under the constitu-
tion, the elected government
has the power to dissolve
Congress only after two no-
confidence votes. There was
one vote of no confidence un-
der Mr. Kuczynski in 2017.
Congress has passed most
of Mr. Vizcarra’s proposals
since he came to power. Last
Monday the government asked
for a vote of confidence and
linked it to the reform of the
naming of Constitutional Court
justices. But before taking up
debate on the president’s pro-
posal, Congress appointed a
new justice. It then gave the
president a vote of confidence,suggesting, based on its voting
record, that it would later ap-
prove his proposal. It never got
the chance.
Angered by the naming of
the new justice, Mr. Vizcarra
dissolved Congress without
the second vote of no confi-
dence that is required. He also
set new legislative elections
for Jan. 26. The opposition-
controlled unicameral legisla-
ture was having none of it. Itcalled Mr. Vizcarra’s move a
coup. It suspended him from
the presidency and swore in
his vice president, Mercedes
Aráoz, as the country’s acting
chief executive. On Tuesday,
Ms. Aráoz resigned as both
interim president and vice
president.
That resignation was a nod
to the military’s decision to
throw its weight behind Mr.
Vizcarra. Rumors quickly
spread that a new government
contribution to the military’s
retirement fund, granted the
following day, was linked to
the decision. But Mr. Vizcarra
seems to have popular sup-
port, and the military likely
was reading public opinion
and placing a bet that he will
prevail.
The public is angry about
corruption. In Congress the
Popular Force party, founded
by Keiko Fujimori, the daugh-ter of former President Al-
berto Fujimori, has a plurality.
Thefujimoristashave earned
a reputation for recklessly
wielding their power. Keiko
Fujimori is in preventive de-
tention on allegations of
money laundering.
Mr. Vizcarra’s supporters
also complain that the new
justice is the cousin of the
Congress president, Pedro
Olaechea. Yet Mr. Olaechea
isn’t a member of the Fujimori
party and wasn’t involved in
the nomination process.
Mr. Vizcarra appears se-
cure, but the matter may go to
the constitutional tribunal.
Even if he respects the law
that allows Congress to name
the new justice, it isn’t clear
how the court will rule. What
is clear is that the separation
of powers so crucial to democ-
racy is in danger.
Many of Mr. Vizcarra’s sup-
porters on the left want to re-
write the Peruvian Constitu-
tion. Gregorio Santos, an
admirer of Hugo Chávez,
tweeted on the Friday before
Mr. Vizcarra used the police to
close Congress: “Let’s prepare
a great popular meeting for
the new Constitution.” He
knows this is how Chávez con-
solidated power in Venezuela.
Mr. Vizcarra’s new prime min-
ister (who is part of his cabi-
net, not a legislative leader)
also demonstrates sympathy
for the extreme left.
A strongman who consoli-
dates power is rarely good for
the long-term prospects of a
nation. Trampling the rule of
law and undoing an election is
no cure for corruption.
Write to O’[email protected].He dissolves Congress
after it delivers a vote
of confidence. That’s
unconstitutional.AMERICAS
By Mary
Anastasia
O’Grady