From a small northwestern observatory…

Finance and economics generally focused on real estate

Cuba, part 1

Lots of Americans have been to Cuba of late, and lots of them have sailed.  That said, had a wonderful opportunity to combine two of my favorite hobbies (exploring and boating) by sailing the top-sail schooner Wolf as part of the multi-day, multi-race Conch Republic Cup races this year, January 28 – February 6.  I was fortunate to spend a few days in two different Cuban ports — Varadero and Havana.  While the thoughts are fresh, I’ll share my observations, particularly about the economy of Cuba and where I think they are headed.  Note that this is part 1 of at least 4 parts (probably more).  Here, I’ll introduce you a bit to the Conch Republic and the history of these races.  In the next part, I’ll focus on the Schooner Wolf, which is the flagship of the Conch Republic Navy and which leads the battle each year in the Independence Days Celebration.  In part 3, I’ll talk about the sail itself, and in parts 4 and beyond, some of my impressions as an economist.

To understand the races, you have to understand a bit about the Keys and particularly the Conch Republic.  Despite rumors to the contrary, Key West was not a haven for pirates back in the 1800’s.  The wealth of Key West — and at one time it was one of the wealthiest cities in the U.S. — came from salvaging operations, known locally as “wrecking”.  The Straights of Florida (the body of water between the Keys and Cuba) can be treacherous with shoals, and in the days of sail, many vessels en route from the Gulf of Mexico ran aground.  Wreckers from Key West were obliged to save the passengers first, and then by virtue of the laws of salvage could save the cargo and sell it back to the insurers or vessel owners.  Naturally, the insurers and boat owners felt that the wreckers should have saved them for free!  Nonetheless, the rules of the game in the 1800’s were not very different from the salvage rules of today.  (Run your boat aground anywhere in the world, even in a protected harbor like Seattle, and find out just how big the salvage bill is if you don’t have insurance!)

These wreckers were fine seamen, and the tradition of ‘wreckers races’ is still with us today.  Indeed, the wreckers race series this year will be held on January 24th, February 28th, March 27th, and April 23rd this year, leading up to the Conch Republic Independence celebrations during the last week in April.

But, on to the Conch Republic — “we succeeded were others failed,” “a farce to be reckoned with,” and “a sovereign state of mind” are the governing adages, although the protests which gave rise to the founding of the republic were very real indeed.  As a snippit of history, it’s helpful to recall the Mariel BoatLift which occurred across the summer of 1980.   Mariel, Cuba, is near the western end of the island and if one drifts with a southern summer breeze and the normal flow of the Gulf Stream, it’s an obvious spot to launch a raft toward Florida.  Indeed, that’s what 125,000 Cubans did that year in about 1,700 boats until the Cuban government cracked down.  Unfortunately, the flood of Cubans gave cover to drug smuggling, and so in 1982, the U.S. government set up road blocks near Homestead, Florida (a choke-point for all vehicles coming to or from the keys) under the guise of inspecting for illegal aliens.  With that, the traffic was nearly choked off, and tourism (the mothers milk of the keys) was likely to die an ugly death.

Mayor Dennis Wardlaw of Key West flew to Miami to request an injunction in Federal District Court.  As he was leaving the Courthouse, a reporter stuck a microphone in his mouth and asked, “What will you do if you’re not successful?” to which he off-handedly replied, “I guess we’ll have to succeed from the union.”  In the eyes of the locals, since the U.S. had set up a border patrol station and treated the keys like a separate nation, they should become one, and on April 23, 1982, the city council declared the city to be an independent nation, with Wardlaw proclaimed as Prime Minister.  The republic then declared war on the U.S., and after one minute of conflict, surrendered and demanded one billion dollars in war reparations.

Various other actions ensued.  For example, the Conch Republic was officially recognized and invited to send a representative to the 1994 Summit of the Americas (held, ironically, in Miami).  In 1995, the U.S. Army 478th Civil Affairs Battalion was slated to conduct a “mock invasion” of Key West and set up a mock government.  However, no one from the Army bothered to inform the actual government of Key West.  Seeing a wonderful opportunity for publicity, Mayor / Prime Minister Wardlaw mobilized the island for a full-scale war (armed with fire hoses and loaves of stale cuban bread).  The U.S. Army submitted to a surrender ceremony on September 18, and announced publicly that it “…in no way meant to challenge or impugn the sovereignty of the Conch Republic.”

During the U.S. Government budget crisis and shut-down of 1995-96, the Park Service operation of Ft Jefferson (about 60 miles west of Key West, and only accessible by boat or float plane) was halted.  The Concn Republic sent a flotilla of Conch Navy and Fireboats, inspired by the efforts of the Smithsonian to keep its museums open with private funds.  Indeed, the closure of the park had serious implications for many tourist-related businesses in Key West.

The key elements of this are re-enacted and celebrated every April.  The epicenter for the Conch Navy, Conch Races, and various celebrations are the bars on the waterfront, particularly the Schooner Wharf.  In my next posting, I’ll introduce you to the Schooner Wolf, the flagship of the Conch Navy, and her Captain, Finbar Gittleman, who is also the First Sea Lord of the Republic.  It was this 74 foot top-sail schooner that I had the honor to help crew to Cuba last month, and it’s story is a fascinating one.


Written by johnkilpatrick

February 16, 2016 at 11:58 am

%d bloggers like this: