The History of Tammany Hall
The Sway of Bribery and Honest Graft
GRAFT of all kinds was rampant, as later official investigation showed, in Tammany-controlled departments, but in the public mind the question of this form of graft was vastly overshadowed by the revelations of the New York legislative committee investigating the great life insurance companies.
The disclosures showed that Republican legislators as well as Democratic were bought; that enormous corruption funds had been contributed to both political parties, and that one political machine was no better than the other.
Bribery expenditures, the committee reported, were classified on the various insurance companies books as legal expenses. The committee described the amounts as extraordinarily large. In the year 1904 alone, the Mutual Life Insurance Company thus disbursed $364,254.95; the Equitable Life Assurance Society, $172,698.42, and the New York Life Insurance Company, $204,019.25.
Andrew C. Fields, long engaged by the Mutual Life Insurance Company to manipulate legislation at Albany, lived there in a sumptuously furnished house jocosely styled the House of Mirth. The expenditures were charged to legal expenses. The Mutual thus expended more than $2,000,000 in legal expenses from 1898 to 1904. And from 1895 to 1904, the total payments made by the New York Life Insurance Company to Andrew Hamilton, its chief lobbyist at Albany, amounted to $1,312,197.16, all of which sum was soberly entered as legal expenses. A present of nearly $50,000 was contributed in 1894 by the New York Life Insurance Company to the campaign fund of the Republican National Committee, and similar amounts in 1896 and 1900 to the same recipient. All of the large insurance companies regularly contributed funds not only for national political campaigns, but for those in the States; the Equitable, for example, gave $50,000 in 1904 to the Republican National Committee, and had also, for many years, been giving $30,000 annually to the New York State Republican Committee. The legislative investigating committee found it impossible to trace all of the directions of this continuous great corruption. Enormous sums, the committee stated, have been expended in a surreptitious manner.
Under the pressure of public opinion, District Attorney Jerome finally caused the Grand Jury to proceed against a few of the figureheads involved; the great magnates who had profited so enormously from the huge frauds, were, so events proved, left untouched. Although it had been clearly proved by the testimony that the frauds and corruptions consummated were gigantic, not a single one of those of great wealth implicated was ever sent to jail or even incommoded by the formality of a trial.
In the face of such disclosures, the opponents of Tammany could not well point to Tammany corruption as an exclusive product. It was a time, too, when what was termed muckraking was almost at its height; magazines and newspapers were filled with articles exposing in detail the corruptions and colossal manipulations and spoliation done by great corporations and other vested interests, and the close connection between these and the bosses sand machines of both old political parties. Public attention was concentrated more upon these nationwide scandals than upon local graft petty, indeed, in some respects, compared to the great extortions of trusts and other industrial, transportation and financial corporations.
These factors had their influence in developing in New York City a powerful movement called the Municipal Ownership League, later passing under the name of the Independence League. The head of this organization was William R. Hearst. He had inherited a large fortune from his father, United States Senator George Hearst. The estate comprised a San Francisco newspaper; and William R. Hearst had come to New York, where he now had a morning and an evening newspaper. Of a sensational order, yet written in popular style, these newspapers had an extensive circulation, and their agitational matter were in reality the mainstay of his movement. Two of the local objectives of this agitation were the scandalous overcrowding of the street car system and the methods by which the subway system in New York City, built by the citys credit, had been turned over to the profit of private interests. At the same time, no means was neglected to awaken popular resentment against the plunderbund fattening on the people, and to arouse indignation against the bossism of Tammany Hall. Day after day effective articles, editorials and cartoons were published; written in a simple style, understandable by the crudest intelligence, they produced a great effect among the voters. Nothing quite like this original kind of political journalism had ever been known in New York City.
The operations of the New York Contracting and Trucking Company, in particular, supplied facts which were used effectually by newspapers and civic organizations to show the new methods by which Tammany leaders were gathering in millions from contracts. This company, as we have seen, was headed by John J. Murphy, brother of the Tammany Hall chief, and by Alderman James E. Gaffney.
Its transactions revealed the great difference between Tweeds methods and those of the later leaders of Tammany Hall. Under the Tweed regime tens of millions of dollars were stolen outright. The lesson of the overthrow of the Tweed ring was not lost on his successors. Mr. Croker refused to countenance such outworn, discarded and dangerous methods of theft. They had resulted disastrously to Tammany in Tweeds day. In place of direct thieving methods of getting rich, indirect methods, surrounded with secrecy and every possible precaution against detection, were developed. Some Tammany district leaders became opulent on blackmail and extortion, the circuitous route of which it was most difficult to trace (in a legal sense) to its final destination. As for Mr. Croker himself, the question was frequently put to him, Where did you get it ? He could reply that his operations in amassing his wealth were entirely legitimate; inside real estate speculations, connections with trust companies and other corporations and stock transactions. Knowing him to be the source of much legislation and administrative favors worth tens, if not hundreds, of millions of dollars to corporations, his opponents were by no means wholly satisfied with such an explanation, but whatever their suspicions they could never prove that he had personally profited from selling legislation. Essentially, however, Mr. Croker never posed as a business man; he was a politician.
But by the period when Charles F. Murphy became chief, the business-man type of leader had evolved. Under this plan a plan that afforded the most plausible opportunities for explaining the sudden acquisition of wealth Tammany men became open or secret partners in contracting firms, using the pressure of political power to have large contracts awarded to their concerns. It was not necessary for these leaders to know anything of contracting; they could be ignorant of every detail; their one aim was to get the contracts; the actual skilled work could be done by hired professional men. No law penalized such methods, respectable in every appearance. At the same time, inasmuch as speculating in the stock market was legitimate in law, fortunes could be made in acting upon advance information of legislative or other official means concerning certain corporations.
The first large contract obtained by the New York Contracting and Trucking Company was a $2,000,000 contract for excavating the site for the new Pennsylvania Railroad Station in New York City.
For a long time, notwithstanding reiterated protests from the press and public organizations, the Board of Aldermen, controlled by Tammany, had obstinately refused to vote for the franchise giving the Pennsylvania Railroad power to use streets for its tunnel approaches and terminal in Manhattan, New York City. Reports were circulated that the sum of $300,000 had been demanded by the Aldermen, and that until that sum was produced they would not vote for the franchise. It was noted that it was Big Jim Gaffney, outside man for the New York Contracting and Trucking Company and Alderman from Leader Charles F. Murphys district, who, together with Little Tim Sullivan, Tammany leader in the Board of Aldermen, took a leading part in persuading the Aldermen to hold out against giving the franchise for the Pennsylvania tunnel. The newspapers unanimously described the Aldermanic action as a holdup. Likewise, it was also noted that when from some mysterious quarter orders reached Tammany Aldermen to vote for the franchise, it was Alderman Gaffney who took the lead in rallying the Aldermen to vote it through.
This sudden change of front after a protracted hold-up, puzzled the public exceedingly, and sinister imputations were made. Not until months later did the public begin to see illumination; it was then announced that although the New York Contracting and Trucking Company had not been the lowest bidder (its bid, according to report, was $400,000 more than that of a competitor), nevertheless it had been awarded the $2,000,000 contract for digging the Pennsylvania Railroad site.
In the case of the awarding of a contract covering several million dollars in February, 1905, to the New York Contracting and Trucking Company for the six-track local improvement of the New York, New Haven and Hartford Railroad, the circumstances were much the same.
A franchise had been asked for a project called the New York, Westchester and Boston Railroad Company. At the same time, another company calling itself the New York and Port Chester Railroad Company, made a similar application and opposed the other company. Both companies, as subsequent developments showed, were in fact owned by the New York, New Haven and Hartford Railroad; the opposition of one to the other was evidently for mere effect.
For three years the Board of Aldermen refused to give the franchises, either one of which would give the New York, New Haven and Hartford Railroad its own independent entrance into New York City. Somehow and from somewhere the announcement was now made that unless the Board of Aldermen acted, a law would be passed by the Legislature stripping it of all power of granting franchises. This threat was executed; the Legislature passed an act vesting franchise-granting power in the Board of Estimate and Apportionment. It may here be parenthetically noted that with the great powers increasingly vested in it the Board of Estimate became the most compact and powerful instrument of government that had ever been developed in the government of New York City. This body is composed of eight officials. Of these, three officials, the Mayor, the Controller and the President of the Board of Aldermen, have, by reason of a greater vested plurality of votes, the dominance of power. The other five members are the Borough Presidents.
The first point passed upon by this Board was the question of whether or not the New York, Westchester and Boston Railroad Company was or was not a defunct corporation. On March 30, 1904, Corporation Council Delany (elected by Tammany Hall) reported to the Board of Estimate and Apportionment that the Board had no jurisdiction to examine the legal capacity or incapacity of the company.
On June 24, 1904, the company received its franchise. The company was really an adjunct of the New York, New Haven and Hartford Railroad, and its franchise gave it the right to operate more than sixteen miles of four-track line within New York City; the company secured practically all the available routes for entrance and exit to and from New York City by way of the Bronx. It was the $6,000,000 contract for constructing this railroad improvement that the New York Contracting and Trucking Company secured.
The declaration was made that no other contractor had ventured to compete for this work; and the explanation was offered in some quarters that inasmuch as a large part of the work was located inside the city limits and as an unfriendly city administration might do much to hamper the carrying out of the contract, the New York, New Haven and Hartford officials, with a cautious eye to the railroads interests, were willing to award the contract to the Tammany firm and pay higher prices. Mr. Gaffney asserted that politics had nothing to do with the obtaining of the contract and that his company had bid with other contractors and won out, but politicians did not take this statement seriously. In February, 1907, the New York Contracting and Trucking Company surrendered its contract for a consideration of $500,000 to another company, the Holbrook, Cabot & Daly Company, which had previously done much of the New York, New Haven and Hartford Railroads construction work. It was not until seven years later that the fact, originally suspected, as to why the contract had been given without competition to the Gaffney-Murphy company, was authoritatively stated. On May 20, 1914, Charles S. Mellen, long president of the New York, New Haven and Hartford Railroad, testified before the Interstate Commerce Commission that the contract had been turned over to that Tammany concern to avoid friction with the city, meaning that by giving the contract to the Tammany company, city officials would attempt no hold-up, such as placing obstacles in the way of carrying the construction work through.
Further disclosures strongly indicated that during the time when the Westchester franchise was acquired by the New York, New Haven and Hartford Railroad, certain powers in Tammany Hall had to be taken care of, and that they benefited financially.
After being looted of large sums in financial jugglery, the New York, New Haven and Hartford Railroad had been thrown on the verge of insolvency. It was revealed in 1913 that a certain $12,000,000 of New York, New Havei and Hartford Railroad money put into the Westchester project had mysteriously vanished in unexplained directions. The Interstate Commerce Commission, in 1914, conducted an investigation to find out specifically, if possible, what became of those missing millions.
On April 24, 1914, Oakley Thorne, a New York banker, who had been the agent of J.P. Morgan & Company in handling the $12,000,000 for the purpose of secretly purchasing the Westchester and the Portchester franchises for the New York, New Haven and Hartford Railroad, gave certain testimony before the Interstate Commerce Commission. He averred that he had burned the books containing the particulars as to how he had spent at least $8,000,000; he explained that he therefore could not give names, amounts and dates. A letter written by Mr. Thorne in October, 1906, to C.S. Mellen, president of the New York, New Haven and Hartford Railroad, was produced. In this letter Thorne wrote that there are people in Fourteenth Street who are very strongly in favor of Westchester and others in favor of Portchester, and suggested that both sides will have to be taken care of. Asked what the reference to Fourteenth Street meant, Thorne replied, Why, I believe, Tammany Hall. Mr. Thorne testified that he could not possibly remember the names of any individuals in Fourteenth Street who had to be taken care of, but he admitted that he knew that Big Tim Sullivan was friendly to the Westchester enterprise and owned stock in it; at the time this testimony was given Sullivan was dead.
Mr. Thorne asserted that he could not recall definite particulars, but he could vaguely remember that there were persons in Fourteenth Street who had, at the time, been interested in the Westchester City and Contract Company, the New York Development Company and other concerns that subsequently formed a part of the Westchester combination turned over to the New Haven [the New York, New Haven and Hartford Railroad Company] through Morgan & Company. Certain persons in Fourteenth Street, Mr. Thorne further testified, had to be bought off because of their nuisance value, but precisely what was the nature of that nuisance value was not explained. In the disposition of the many millions of dollars placed in his hands, Mr. Thorne was not required to make any accounting or give any vouchers. Further details of later developments were given in the testimony of Charles S. Mellen, president of the New York, New Haven and Hartford Railroad during the years when the above franchises were acquired.
On May 14, 1914, Mr. Mellen testified, at a hearing before the Interstate Commerce Commission, that the directors of that railroad set aside a fund of $1,200,000, the value of 8,000 shares of New York, New Haven and Hartfort Railroad stock, which sum was distributed among people of influence in the politics of New York City for the procuring of certain much-desired changes in the charter of the New York, Westchester and Boston Railroad Company. Mr. Mellen further testified that Inspector Thomas F. Byrnes, who, for many years, had been head of the New York Police Department (and who was deceased at the time of this hearing) had acted as the go-between in this transaction; that Byrnes agreed to obtain thirteen different modifications or amendments to the New York, Westchester and Boston Railroad charter from New York citys officials; and that to bring about these results stock, or its equivalent in cash, to the sum of $1,200,000, was given to Byrnes for distribution among Tammany politicians whose identity Mr. Mellen declared that he did not know. Mr. Mellens testimony revealed that some of these persons accepted stock made out in the names of dummies, but that the majority demanded and received cash for their services. All but $50,000 of the $1,200,000 was distributed.
The records of the Board of Estimate in 1908 and 1909 bear out Mr. Mellens testimony; they show that nearly every request for alterations of the charter or extensions of time made by the New York, New Haven and Hartford Railroad was granted. The Board of Estimate during the years in question consisted of Mayor McClellan; Controller Herman A. Metz; Patrick F. McGowan, President of the Board of Aldermen; John F. Ahearn, President of the Borough of Manhattan; Bird S. Coler, President of the Borough of Brooklyn; Louis F. Haffen, President of the Borough of the Bronx; Lawrence Gresser, President of the Borough of Queens, and George Cromwell, President of the Borough of Richmond.
Continuing his testimony, Mr. Mellen stated, on May 20, 1914, that upon further recollection he found that the amount distributed to politicians in connection with securing the Westchester franchise and alterations to the charter, really totaled $1,500,000 or $1,600,000. Much of this amount was presented in the form of due bills sent in by Tammany politicians by means of messengers; Mr. Mellen personally handed over cash for the due bills, but the names of the recipients he said he could not remember. Do you know, Mr. Mellen was asked, what all this Westchester and Portchester stock was doing in Tammany Hall ? I know, he replied, what it was doing to me when I took it on. It was costing me lots of money. Do you know how all this stock reached Tammany Hall ? I have not the slightest idea. I could suppose a lot of things, but I do not know anything about it.
Submitting, on July 11, 1914, the results of its investigation to the United States Senate, the Interstate Commerce Commission reported that the facts as to the New York, Westchester and Boston Railway transaction constituted a story of the profligate waste of corporate funds. The fullest details are set forth in that report of the magnitude of the corruption used. Commenting upon Mr. Mellens testimony, the report declared: The testimony is somewhat occult, but the character of the transaction is no less certain. This money was used for corrupt purposes, and the improper expenditures covered up by the transfer to the New Haven [New York, New Haven and Hartford Railroad Company] of these worthless securities.... It seems very strange that Mr. Mellen was not able to identify with any particularity any one with whom he had these transactions except the late Thomas F. Byrnes. No comment is necessary to make clear to the mind the corrupt and unlawful nature of this transaction, and it would seem that the amount illegally expended could be recovered from Mr. Mellen and the directors who authorized it....
There is now pending (1917) a suit in the United States District Court brought by the stockholders against the former directors of the New York, New Haven and Hartford Railroad Company and against the company for the return of $165,000,000 alleged to have been lost to the treasury of that railroad in various ways.
To return, however, to the operations of the New York Contracting and Trucking Company: Another contract secured by that concern was a contract from the Consolidated Gas Company for grading the site for the Astoria gas plant; the franchise for the Astoria Gas Grab had been supported by Tammany.
By 1905 it was estimated that the New York Contracting and Trucking Company or its offshoots had received contracts aggregating $15,000,000 all contracts from corporations and interests benefiting from the city government or depending upon favors from it. Yet two years previously this very company was a nonentity as far as securing large contracts were concerned, and none of its heads had any experience in the contracting business. Now in a certain well-understood field, it was virtually free from competition.
None could now fail to note the great transition from the Tweed period when Tammany leaders used only the vulgar and criminal methods of stealing money out of the city treasury. Under Murphys leadership the obvious methods used were those of honest graft the making of millions from contracts with public service corporations, and this was represented as legitimate business. Fully six Tammany district leaders were members of or interested in large contracting firms, although the heads of these, often of a nominal character, were not known as Tammany leaders. These concerns employed a total of many thousands of men, all of whom were expected to be useful at the primaries and elections.
At this time there was discernible the beginnings of a growing feeling that reform officials, while prosecuting gamblers and comparatively petty offenders of all stripes, somehow were singularly ineffective in bringing about the prosecution of corporation magnates charged with looting on a large scale. This feeling had not crystallized as yet, but it was felt in some quarters.
Some of District Attorney Jeromes former supporters were impressed by the fact that despite his campaign promises, he had not caused the indictment or other prosecution of the men who had looted the Metropolitan Street Railway Company. James W. Osborne, a noted attorney, had declared in open court in 1903, that the insiders had, by means of duplicating of construction accounts, manipulation and in other ways, stolen $30,000,000. Mr. Amory declared and specified that an additional $60,000,000 had, by various processes of devious manipulation, gone to enrich the insiders a total of $90,000,000.
On April 25, 1903, Mr. Osborne gave out this statement : We have produced evidence before Magistrate Barlow which shows a crime has been committed, and now it is up to the District Attorney to say whether he will avail himself of that evidence and proceed against those who have committed the crime. We have charged in open court that $30,000,000 has been stolen, and that [statement] never has been disproved by the Metropolitan Company or its counsel. I told Mr. Nicoll, counsel for Mr. Vreeland [president of the Metropolitan Street Railway Company] openly he would not be able to disprove my charges.
Mr. Amory openly declared that Mr. Jeromes investigation of the matter in 1903 was not undertaken in good faith. It was, he wrote, a deliberate whitewash. I have documentary evidence to prove it. Mr. Amory charged that of the twenty-seven distinct written charges filed with Mr. Jerome against the Metropolitan management, Mr. Jeromes accountant reported on only seven, and these latter were of minor importance, involving chiefly technicalities of accounts and not serious crimes. Yet Mr. Jerome, was Mr. Amorys indignant comment, represented that the accountants report was very clear and full and takes up every charge and that Mr. Jerome had reported that the specific charges so far as they involve criminal wrong-doing are entirely without foundation.
While thus declaring that he could find nothing on which to base prosecution of the Metropolitan Street Railway Company magnates, District Attorney Jerome showed by other acts, it was complained, that petty criminals would be prosecuted to the limit of the law. He was charged with discriminating between rich and powerful business offenders, on the one side, and on the other, poor and relatively uninfluential violators of the law.
On one occasion Mr. Jerome appeared before labor unions, delivered homilies on the virtues, and warned them that he would make short shrift of labor grafters. This lecture had reference to the case of Sam Parks, a labor leader, charged with grafting on employers and receiving money for prompting or calling off strikes. District Attorney Jerome waited for no elaborate formal investigation; he immediately started the machinery of his office against Parks and caused him to be convicted. Already a dying consumptive, Parks was sentenced to prison, where he died shortly after. But no action, it was pointed out, was taken against powerful construction companies that had bribed Parks and other labor leaders to declare strikes on buildings for which competitors had the contracts. Another much-discussed incident was the result of a collision of railroad trains in the Park Avenue tunnel a collision maiming and killing many persons. The obsolete and dangerous condition of this tunnel had long been known. It was commented that District Attorney Jerome did not make the slightest move against the railroad directors; he hurriedly caused the indictment and arrest of Wisker, a railroad engineer, as the sole culprit and proceeded with despatch to his trial. The jury, however, refused to convict the engineer.
Considering that Mr. Jerome was a leading reformer, such contrasts were gradually calculated to make the very mention of reform odious to the observing of the working people. The complaint was generally heard that the big grafters were safe and immune, while petty offenders were dealt with rigorously. Nevertheless, a large number of voters, influenced by a stream of praise from the press, still believed in Mr. Jeromes promises and motives, and his action in 1905 in not securing a renomination from political bosses but procuring it independently by means of a petition circulated among electors, strengthened the old belief that he was sincere and was independent of political and other domination. Much was made of the fact of his independent renomination. The Republicans withdrew their candidate for District Attorney and nominated Mr. Jerome, and the press in general enthusiastically supported him. He was reelected. It was not until some years later when the full effects of his administration could be popularly realized in perspective, that Jerome fell into general disfavor with the voters.
As an instance of the methods of contractors under the Tammany régime during this time, it is only necessary to mention the facts, later disclosed in an investigation by John Purroy Mitchel, Commissioner of Accounts, as to how in 1904 defective hose was sold to the Fire Department. The Windsor Fire Appliance Company (of which the president and chief stockholder was Michael F. Loughman, later appointed- Deputy Commissioner of Water Supply) sold 25,000 feet of hose to New York City for $23,410.25. Although this hose did not answer the specifications of the contract, it was accepted. The consequence was that it burst many times at fires, some of them serious. The same was true of equally worthless hose supplied by other contractors.
The municipal election in 1905 was a triangular contest. Tammany Hall did not fear the Republican ticket headed by William M. Ivins for Mayor. But it did have intense uneasiness over the possibility of Mr. Hearst triumphing; his movement was too plainly making inroads among large numbers of voters that ordinarily would have voted the Tammany ticket. Tammany was particularly bent upon winning inasmuch as by the provisions of the revised charter the term of the incoming Mayor and other officials had been changed to a four-year incumbency. Hearst was the Municipal Ownership Leagues candidate for Mayor, and Tammany renominated Mayor McClellan. So effective were Hearsts onslaughts on Boss Murphy and the elements represented by him that during the campaign Mayor McClellan repeatedly made promises that he would thereafter pursue an independent course, should he be reelected.
Mr. Hearsts vote returns came in so heavily after the polls were closed that it looked as though he were certainly elected. That very night there was a strange interruption, lasting about an hour, in the public giving-out of the returns. Then as the returns were resumed, it appeared that although the vote between McClellan and Hearst was extremely close, McClellan had a little the better of it. The next day it was announced that Mayor McClellan was reelected by a close margin. Mr. Hearst and his followers declared that manifest fraud had been committed, and took steps to have a recount. Meantime while this process was dragging along, Mayor McClellan was widely criticized for his action in immediately claiming his reelection, opposing a recount, and not showing faith in the legitimacy of his claims by waiting with dignity until there had been a careful official recount.
The final official recount gave this result: McClellan, 228,407 votes; Hearst, 224,929 votes; Ivins, 137,184 votes. It may be added here that in the very next year in 1906 Hearst accepted a Tammany indorsement when he ran for Governor, but he was defeated by Charles E. Hughes, who, as counsel for the Legislative Insurance Committee, had achieved wide popularity for his exposure of the insurance company iniquities
With the reelection of Mr. McClellan, Tammany Hall confidently looked forward to four more years of unquestioned control of the immense budget and enormous opportunities embodied in the rule of New York City.
1 Report of the New York Legislative Insurance Committee, 1906, Vol X, p. 16.
3 Ibid., p. 50.
4 Ibid., pp. 69 and 398.
5 Ibid. p. 10.
6 Mr. Croker, in 1900, had admitted his liability to an English tax on a yearly income of $100,000.
7 The company had filed articles of incorporation in 1872, but was charged with being an abortive corporation in that it had never completed the necessary formalities required by law.
8 As we shall see later, the political composition of the Board of Estimate was at this time considerably mixed; during his second term Mayor McClellan was fighting Mr. Murphy, leader of Tammany Hall, and had the backing of Senator McCarren and of McCarrens lieutenant, Controller Metz. Mr. McGowan, president of the Board of Aldermen, was supposed to be a Tammany man, but was not on good terms with the Organization and was credited with being aligned with McClellan and Metz.
9 Interstate Commerce Commission Report No. 6569, In re Financial Transactions of the New York, New Haven and Hartford Railroad Co., July 11, 1914, pp. 35, 38, etc. The above are but a few extracts from this comprehensive report.
10 The Truth About Metropolitan, by W.N. Amory, pp. 60-64.
11 In an effective article in McClures Magazine, Mr. Ray Stannard Baker showed how one of these big companies bribed walking delegates to declare strikes on buildings being put up by rival contractors in order that it the briber might be able to get a reputation for building within contract time, and thus exclude competitors from getting further contracts.