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  1. #1
    Colada Colada is offline

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    An open letter to David McWilliams re Aer Lingus

    [FONT=Times New Roman][SIZE=3]Dear Dave,[/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3]I think you are a reader of this website, so I'm hoping you read this response to your recent Indo comments on Ryanairs renewed bid to take over Aer Lingus.[/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3]I have copied your article in full below and added my own comments where appropriate.[/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3]Lets get started..................................[/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3]Dave speaks.......................[/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3]"She must have got it from her mother, who in turn got it from her mother, otherwise, she’d never have delivered the immortal lines with such certainty. When my mother pronounced, as she did on numerous occasions, the favourite put-down of the Irish Mammy, “she’s far too good for him, you know”, it seemed she was saying something so self-evidently obvious that it couldn’t be challenged.[/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3]Such confidence could only have come from the secure knowledge that summing up potential suitors for their daughters was something Irish mammies were bred to do. It was in the genes; without any doubt, they were always right.[/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3]With the Irish Mammy setting such a high bar for their daughters, it’s no wonder that up to the 1960s, Ireland had the highest number of bachelors and spinsters in the western world. Even as the “Mammy Fatwa” on suitable boys wavered in the 1980s, the idea that “no one was good enough for our darlings” still endured in the background. The fatwa condemned me — as a teenage younger brother — to the prospect of unfeasibly straight older sisters’ boyfriends with a penchant for al fresco, Mammy lick-arsery.[/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3]Everybody knows that if you are a teenage boy with no older brothers the only thing an older sister’s boyfriend is good for is giving you fags, buying you drink and taping music for you.[/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3]Once they deliver the above, as far as you are concerned they are free to debase your sister however they please because the other rule of growing up is that lack of experience ensures younger brothers are never as protective as older ones.[/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3]So you can imagine my horror when the Mammy Fatwa funnelled a series of Leo Sawyer- loving “charismatics” in cords to our front door. Thankfully, the Mammy Fatwa couldn’t hold and as my sisters revolted, fags, booze and rare Japanese imports of B-sides, came cascading into my lap in return for my conspiratorial silence." [/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][COLOR=red]This stuff is straight out of the Jeremy Clarkson handbook of journalism. Lots of guff to fill out the boring ‘factual’ bits and entertain a disinterested audience. Nothing to say really.....[/COLOR][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][COLOR=red][/COLOR][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3]Yesterday I heard a financial version of the Mammy Fatwa. These days, Aer Lingus is the over-protected daughter and Ryanair is the predatory gurrier forcing itself upon our national damsel. Such self-righteous tripe![/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][COLOR=red]Self righteous indeed David. Self deluding also! Where did you dream this angle up?[/COLOR][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][COLOR=#ff0000][/COLOR][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3]Listening to the comment from all quarters, I can hear the Mammy Fatwa once more. Aer Lingus, our loss-making little princess is “far to good for that O’Leary fella”. O’Leary is being painted as a man who knows nothing; a fella who will defile the virginal Aer Lingus and who is only after one thing.[/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][COLOR=red]You can hear it? Funny, I can’t. In fact I’ve never heard anyone suggest O’Leary is not wanted at Aer Lingus because anyones mammy said so. Nor even because anyone ever said ‘he’s not good enough’. WTF does that really mean David? Is it really of any relevance? I think not.[/COLOR][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][COLOR=#ff0000][/COLOR][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3]Let’s get real, like him or not, Michael O’Leary is not only the most successful aviation businessmen in Ireland, he is the most successful operator in the world, bar none.[/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][COLOR=red]Wrong David. Are youy talking about his money making abilities? I ask you – is he more profitable than Warren Buffet? In the airline industry, is he more profitable than Herb Kelleher (from whom he copied the model)? No David, he is NOT the MOST successful bar none.[/COLOR] [/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][/SIZE][/FONT]
    [SIZE=3][FONT=Times New Roman] Far from being the upstart, Ryanair is the peerless leader in European aviation, having being built from nothing on a model that has democratised air travel, opening it up to almost everyone.[/FONT][/SIZE]
    [FONT=Times New Roman][SIZE=3][COLOR=red]Ah – European aviation? I thought we were talking ‘the world’ just a few lines ago. Fine, that narrows it down somewhat.[/COLOR][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][COLOR=#ff0000][/COLOR][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3]Yes his style is confrontational, but don’t let that disguise the fact that the man behind Ryanair knows how to run airlines. [/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][COLOR=red]An Airline Dave. Singular. ONE TYPE of airline.[/COLOR][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][COLOR=#ff0000][/COLOR][/SIZE][/FONT]
    [SIZE=3][FONT=Times New Roman] The company employs nearly three times more than Aer Lingus, flies five times more passengers and is an airline that has always expanded in adversity. [/FONT][/SIZE]
    [SIZE=3][FONT=Times New Roman][/FONT][/SIZE]
    [SIZE=3][FONT=Times New Roman][COLOR=red]Ryanair employs three times as many as Aer Lingus Dave? Does Mick know this? He constantly tells us he employs fewer staff than Aer Lingus and is proud of it! Yet here you go tripling his personnel at the flick of a pen.[/COLOR] [/FONT][/SIZE]
    [SIZE=3][FONT=Times New Roman][/FONT][/SIZE]
    [SIZE=3][FONT=Times New Roman] Its cost per passenger, at €55, is three times lower than Aer Lingus. [/FONT][/SIZE]
    [SIZE=3][FONT=Times New Roman][/FONT][/SIZE]
    [SIZE=3][FONT=Times New Roman][COLOR=red]Depends how you calculate that number Dave. Are you including all his contractor staff? The ones he keeps ‘off the books’? If his costs are at all lower Dave, its thanks to the barrel scraping pay rates he foists on his east European slave labour.[/COLOR][/FONT][/SIZE]
    [FONT=Times New Roman][SIZE=3][COLOR=#ff0000][/COLOR][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3]And, more importantly, it has Boeing where it wants it, cutting a deal which sees Ryanair pay close to 40pc less for new planes than its rivals. [/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][COLOR=red]Your 40% figure is speculation. Nobody knows what discount O’Leary got, and it’s commercially sensitive knowledge that will never be in the publiuc domain. Actually Dave, at this juncture its Boeing who have Micko over a barrel. Whatever deal he did get required him to make a very large order. Those aircraft are being delivered apace – about 30 per year – and O’Leary doesn’t know what to do with them. He’s parked 12 Boeings over winter in Stansted, and he’s laying off pilots. Not the behaviour of someone eager to receive a bunch of ‘bargain’ aircraft.[/COLOR][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][COLOR=#ff0000][/COLOR][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3]O’Leary is a maverick, but a straight, successful one. [/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][COLOR=red]STRAIGHT??? Dave are you in noddy land? Are you referring to his sexual preferences? Is this the ‘straight’ man who said ‘I wouldn’t touch Aer Lingus with a barge pole’ right before jumping in with both feet? Succesful, yes. Straight? No way Dave. Well, except sexually, perhaps. Who knows?[/COLOR][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][COLOR=#ff0000][/COLOR][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3]When he says he wants to double Aer Lingus’s size to 66 aircraft and will keep the slots at Heathrow, he will do it. [/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][COLOR=red]Because he’s STRAIGHT Dave, right? Because YOU trust him? Gimme a break. The man will lie to achieve whatever outcome he requires. Some call that unethical, others call it good business – like lying about Aer Lingus and barge poles. You seem naive now Dave, don’t you agree?[/COLOR] [/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][/SIZE][/FONT]
    [SIZE=3][FONT=Times New Roman] He sees value where others don’t, opportunity where others see threats. When everyone else was cutting back, O’Leary was doing the opposite. When everyone else was hedging oil, O’Leary was doing the opposite and now, when everyone else is consolidating, O’Leary is trying to grow. [/FONT][/SIZE]
    [SIZE=3][FONT=Times New Roman][/FONT][/SIZE]
    [SIZE=3][FONT=Times New Roman][COLOR=red]He has no choice but to try to grow Dave because all these aircraft are coming. He Hedged the wrong way and got it wrong, and later admitted it – your memory is short Dave.[/COLOR] [/FONT][/SIZE]
    [SIZE=3][FONT=Times New Roman][/FONT][/SIZE]
    [FONT=Times New Roman][SIZE=3]But in Ireland this is not enough. We disposed of the moral and, frankly, socially insecure Mammy Fatwa of the 1960s and 1970s but have replaced it with a new commercial Mammy Fatwa. One of the central planks of this is the man who revolutionised air travel in this country is not worthy of the company that did everything in its power to stop him, and failed. [/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][COLOR=red]Rather like O’Leary is trying to now stop it – and failing? That’s business Dave, don’t get too wound up over it.[/COLOR][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][COLOR=#ff0000][/COLOR][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3]The financial Mammy Fatwa only makes sense, in the face of a dwindling number of suitors, if it can answer the question, what or who is the alternative? [/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][COLOR=red]There are indeed alternatives Dave, but again, that’s commercially sensitive info. If I told you-I’d have to kill you.[/COLOR][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][COLOR=#ff0000][/COLOR][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3]So let’s ask the question, what is the Aer Lingus alternative? What other airline is going to secure Aer Lingus’ future and a national brand and a viable airline? In case you hadn’t noticed there is a massive contraction going on in the airline business and the European airline industry is now one huge consolidation play. Sure Aer Lingus has plenty of cash on its balance sheet, but what is its future as an independent airline? [/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][COLOR=red]Possibly that, or possibly merged. But not with Ryanair. Nothing to do with Mammys or Fatwas. Everything to do with finding a viable partner wishing to maximise the synergies of a merger with a world famous brand, rather than surrendering to an asset stripper.[/COLOR][/SIZE][/FONT]
    [SIZE=3][FONT=Times New Roman] [/FONT][/SIZE]
    [SIZE=3][FONT=Times New Roman][COLOR=red]Now for some boring economist waffle….[/COLOR] [/FONT][/SIZE]
    [SIZE=3][FONT=Times New Roman][/FONT][/SIZE]
    [FONT=Times New Roman][SIZE=3]Let us cut to the chase, we are now in a period of massive consolidation in every industry. This is a result of where we find ourselves in the business cycle. [/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3]All economic cycles have their proliferation phase and their consolidation phase. Put simply, booms are characterised by proliferations and busts by consolidations. The proliferation phase comes when money is cheap and credit available, economies are growing strongly, asset prices are inflated, all forecasts are exuberant and companies expand rapidly. This period sees new entrants into the business, chasing a customer who is now perceived to have near-mythical buying power. Then comes recession and proliferation gives way to consolidation. The consolidation phases see money become tight, banks share prices fall and they stop lending. This sends shares down, unemployment up, and companies that thought that they could weather the storm find themselves in difficulties. They cut back, as Aer Lingus did, with massive rationalising plans, and that makes them look more vulnerable.[/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3]In short, these companies get caught, they can neither expand dramatically nor contract sufficiently. Ultimately, mergers with bigger suitors become one of the few logical ways for these companies to grow. Aer Lingus finds itself in this position.[/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][COLOR=red]……..End of boring economist waffle.[/COLOR][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][COLOR=#ff0000][/COLOR][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3]Despite all the talk of a national carrier and national pride, it pulled out of Shannon when Ryanair remained there. [/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][COLOR=red]Aer Lingus pulled out of Shannon when they realized that Shannon had given Ryanair discounts they’d never offered them! Shannon have come to regret that I believe, and O’Leary is turning the screw. He is threatening to pull out too. What he wants is a subsidy to fly there, like he gets at most of the bogger airports he flies into around Europe.[/COLOR][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][COLOR=#ff0000][/COLOR][/SIZE][/FONT]
    [SIZE=3][FONT=Times New Roman] Indeed, Ryanair reduced prices further out of Shannon. Why wouldn’t O’Leary buy the asset, keep it as a mid-price range airline and expand its operations using the UK or the continent as new hubs, alongside Dublin? [/FONT][/SIZE]
    [SIZE=3][FONT=Times New Roman][/FONT][/SIZE]
    [SIZE=3][FONT=Times New Roman][COLOR=red]Because DAVE it would go against his cost cutting religion. And because it makes no commercial sense – you just spent 1,000 words telling us why Aer Lingus won’t work as a mid price airline, yet now you suggest the arch-cost-cutter O'Leary will tolerate a 'mid price airline' in his hands? Do you think he’ll subsidise its losses? He wants to rape it, and sell off the bits. It’s a no-brainer, why can’t you see that Dave? Its worth far more broken up and sold off - and he needs to eliminate it to grow. Removing it kills two birds with one stone. He gets the routes and passengers he needs for his unwanted and empty aircraft, and the money from the assett stripping will finance their purchase![/COLOR][/FONT][/SIZE]
    [FONT=Times New Roman][SIZE=3][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3]There is no business case to answer. Ryanair has proved that it can win in the airline business and, more importantly, adapt to most situations. Of course there will be a monumental row with the unions and the Aer Lingus management. But we should put this down to the inevitable row between teenagers and the Mammy, when the Mammy Fatwa is invoked.[/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][COLOR=red]Ryanair is facing a huge challenge. It is running up against a brick wall in growth. There are fewer and fewer profitable routes in the ‘bog airport’ class to exploit, and some of his current routes are proving uneconomic in the downturn and he’s pulling out – like Newquay. He needs to kill, to feed and grow. That’s the game.[/COLOR][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3]Ultimately the question is what is Aer Lingus’s alternative? In the consolidation phase, there can be movement on the price, but the eventual buyer is reasonably obvious. Is O’Leary that buyer? The answer is yes. Is he a suitable boy? Much as he himself would hate to be termed that, his business record makes him just that, a suitable boy![/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][COLOR=red]This takeover bid was discussed on Q&A last Monday. None of the panel (a mix of politicians and businessmen) considered it a good idea. Bowman threw it out to the floor, asking how many of the 80 or so strong audience supported a Ryanair takeover. Not a single hand went up. He posed the opposite question – who thought it a bad idea? Every hand went up.[/COLOR][/SIZE][/FONT]
    [FONT=Times New Roman][SIZE=3][COLOR=red]Sure, you can dismiss it as an unrepresentative sample – but even you should be amazed that a straw pole of the Irish public produced not one single vote in favour of your proposition. [/COLOR][/SIZE][/FONT]
    [SIZE=3][FONT=Times New Roman][COLOR=red][/COLOR][/FONT][/SIZE]
    [COLOR=red][FONT=Times New Roman][SIZE=3]The ultimate question you have to answer Dave is – WHY are you so angrily against choice? Against competition? [/SIZE][/FONT][FONT=Times New Roman][SIZE=3]Why do you wish to see a monopoly imposed on the Irish people? Why do you think every Irish passenger MUST fly cattle class?[/SIZE][/FONT][/COLOR]
    [FONT=Times New Roman][SIZE=3][COLOR=red]Didn’t your mommy teach you – don’t get caught out and forced into a shotgun wedding? Marry in haste, repent at leisure Dave.[/COLOR][/SIZE][/FONT]
    [SIZE=3][FONT=Times New Roman][COLOR=red][/COLOR][/FONT][/SIZE]
    [FONT=Times New Roman][SIZE=3][COLOR=red](PS I’d write this into the Indo but they’d never print it).[/COLOR] [/SIZE][/FONT]
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  2. #2
    JumpedTheShark JumpedTheShark is offline

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    zzzzzzzzzzzz

    was reading the first sentence on my laptop at DUB but had to run, my RYAAY flight arrived and was departing on time . . .
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  3. #3
    Colada Colada is offline

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    Safe flight now!
    Rather you than me!
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  4. #4
    JumpedTheShark JumpedTheShark is offline

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    Quote Originally Posted by Colada View Post
    The man will lie to achieve whatever outcome he requires.
    O'Leary
    wants to rape
    Colada, the above are your nasty words, you had better have a big bank account, barristers can be quite expensive.
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  5. #5
    garlandgreen garlandgreen is offline

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    Quote Originally Posted by JumpedTheShark View Post
    Colada, the above are your nasty words, you had better have a big bank account, barristers can be quite expensive.
    It's a US based site. It would be through the US courts and legal system that he would have to be pursued. Besides I think O'Leary would laugh that kind of aimless venting off
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  6. #6
    southwestkerry southwestkerry is offline
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    Who gives a flying banana if Mick gets his paws on Air-Bug-us... after all its not the end off the world if [when] they do
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  7. #7
    garlandgreen garlandgreen is offline

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    The airline is now for the second time in less than a decade having questions about going under being asked. It must be clear by now that one disaster or another is eventually going to take it down as an independent airline. It only has to happen once. It needs a backer and I don't see anyone else coming to it's rescue
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  8. #8
    Colada Colada is offline

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    Quote Originally Posted by JumpedTheShark View Post
    Colada, the above are your nasty words, you had better have a big bank account, barristers can be quite expensive.
    What happened? Did they cancel the flight - or just dream up another ingenious reason to offload you unless you coughed up some new 'fee'?

    Sue away my son.
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  9. #9
    Colada Colada is offline

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    Quote Originally Posted by garlandgreen View Post
    The airline is now for the second time in less than a decade having questions about going under being asked. It must be clear by now that one disaster or another is eventually going to take it down as an independent airline. It only has to happen once. It needs a backer and I don't see anyone else coming to it's rescue
    Who's asking that question?
    I've heard losses mentioned - but don't lets exaggerate!

    Any constructive comments on the actual subject of the thread? Y'know....the McWilliams letter thingy?
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  10. #10
    SPN SPN is offline

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    Could one of the Mods put the initial post into a more readable format - things like [quote ] tags and such.



    RyanAir are just protecting their stake in Aer Lingus by making this move. The Unions were unlikely to accept the rationalisation plan before, but now they have a second option - accept the rationalisation plan, or become a subsidiary of RyanAir.


    The Government should sell off Aer Lingus ASAP. We have no need for a business that has no future in the 21st Century.

    Sell it off, buy Gold with the proceeds, and maybe, just maybe, we'll come through the Depression with the resources we need to get started again.

    ..
    .
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