BOSS TWEED: The Corrupt Pol who Conceived the Soul of Modern New York (27 page)

CHAPTER 12

PANIC

“Compare A. Oakey Hall and William M. Tweed with General Grant and Tom Murphy [Grant’s New York customs collector]! A. Oakey Hall is a gentleman who never takes a bribe. Not so with General Grant. They (the Grant officeholders) all take bribes—they are rotten with corruption.…

“Grant will not appoint a man to office without a bribe. Not so with William M. Tweed and A. Oakey Hall. Grant appointed an illegitimate son of [Mormon polygamist leader] Brigham Young to West Point—appointed a young man who does not know who his father is…. It is bad taste for such men to accuse our Democratic city authorities of thievery, when they are all such thieves themselves.”

—James Lynch, New York assistant district attorney, addressing a pro-Tweed rally shortly after the
Times
’s Secret Accounts story.
New York Sun
, August 8, 1871.

A
few days after the
Times
finished running its Secret Accounts expose, the local Citizens Association for the Twelfth and Nineteenth Wards (today’s upper East Side and Harlem, sparsely-settled areas in 1871) called a public meeting to denounce the Tammany frauds. Dozens of neighborhood people came to the group’s new building on Third Avenue at 86th Street to hear speeches and pass resolutions. Respectable gentlemen in suits and top hats filled the front rows; workmen with muddy pants and torn shirts crowded the back. When the chairman called for order, though, he quickly discovered that most of the crowd, especially the workmen, took the wrong side—they’d come to blast the newspapers, not the politicians. They hissed and groaned and started making a ruckus.

As the first few speakers demanded reform and called on Mayor Hall to quit, cheers for the
New-York Times
became mixed with cheers for the Tammany Bosses. A pro-Tweed man mounted the podium and denounced the
Times
’ charges as “buncombe.” Another leader demanded order but the squad of club-toting policemen brought for protection stood aside as the room degenerated into pushing and shouting, hooting and hollering, the speeches lost in the free-for-all. “Curses and indecent language followed,” one newsman wrote.
¹

The Secret Accounts had stirred the city’s passions—and a copy of the
Times’
“
How New York is Governed
” sat on most every Manhattan kitchen table—but feelings differed as day and night over what they meant.

“[A]ccusations are not proof,” fumed James Gordon Bennett’s
New York Herald
, one of George Jones’ neighbors on Park Row. “If the city’s credit will be destroyed… [a] great scandal will work a great injury.”
²
Manton Marble’s
World
dismissed the whole expose as “a reckless attempt to shake and undermine the city credit, block the wheels of municipal machinery, and introduce a reign of anarchy.”
³
For every supporter like U.S. Senator Roscoe Conkling who called the
Times’
stories “the most brilliant dashing foray seen in the American press in my memory,”
⁴
another saw them as demagoguery, character assassination, and politics.

Only in one place in New York did the message meet a unified response: on Wall Street. The city’s elite class of merchants and speculators who ran the Stock Exchange, the Gold Exchange, the Produce Exchange, and the hundreds of banks, brokerages, and retail houses, the capitalists who enjoyed the city’s finest luxuries, dinners at Delmonico’s, cigars at the Union League or Manhattan Club, musicals at Booth’s theater or the Grand Opera House, all recognized their immediate stake in the affair. As property owners and taxpayers, they’d been cheated. And worse, if the
New-York Times
stories proved true and if Tammany mismanagement were to cause the city’s fiscal house of cards to collapse, they stood to lose millions.

All through the Tweed years, New York banks and brokers had bought oceans of city debt, bonds and stock issued by Connolly’s Comptroller Office. Now, the city had bonds coming out its ears: Croton Aqueduct Bonds, Central Park Improvements Bonds, four classes of County Court House stock, Bonds for Repayment of Taxes, Assessment Fund Stock, Park Improvement Bonds, Street Improvement Bonds, to name a few. Total city and county debt had exploded from $36.3 million in January 1869 to over $97 million by the summer of 1871; at that rate it would reach the billions in another few years.
⁵
Interest payments alone approached $10 million per year.

If credit dried up and the city defaulted on its debt, the impact on New York’s wealthy would be devastating. Beyond wiping out their bulging bond portfolios, it would cripple their standing in Europe—still a principal source of capital for American finance. British and German investors had been burned before by American investments, particularly railroad stocks whip-sawed by Wall Street manipulators. Many had purchased New York bonds as a safe haven and, if this too became a lawless frontier, their money might flee the country altogether.

In fact, as the
New-York Times
had printed its disclosures that summer, bankers had begun cutting off credit to the city. In late July, the city put $40,000 in bonds up at auction one day and failed to receive a single bid. A few days later, fears spread that a major Savings Bank might buckle because it held millions in city debt that depositors now distrusted.
⁶
The respected
Commercial and Financial Chronicle
warned of a panic and, in Europe, the Berlin Stock Exchange banned New York city and county bonds from its official trading list. Worse still, the city had looming in its future an interest payment of $2.7 million due on its securities on November 1, just three months away. If its agents, Seligman, Belmont, and the rest, could no longer raise money in world markets, meeting it would be impossible.
⁷

“They distrust our securities in London,” one unnamed broker told the
Tribune
just days after the Secret Accounts appeared.
⁸
New York stock exchange president Henry Clews warned of catastrophe: “[I]f our local government cannot be reformed, the credit of the metropolis will be gone and … the standing of every large [banking and brokerage] house will be more or less affected.”
⁹

Not surprisingly, an “insurrection of the capitalists” quickly organized itself in the financial neighborhoods. Some 1,000 merchants rushed to sign a petition refusing to pay any more property taxes until city officials gave a full account of their spending and another group filed a lawsuit to block the Broadway widening job.
¹⁰
“[W]e want to know where the money goes,” an unnamed banker explained.
¹¹

Suddenly, the free ride of Tweed economics had taken a frightening turn. By mid-August, calls went out for city leaders to convene publicly at the Academy of Music on September 4—after wealthy men had returned from their summer holidays—to consider their options.
¹²
Politics was one thing, but trifling with the flow of international money could not be tolerated.

-------------------------

The Honorable A. Oakey Hall tried to act as if things were normal after Orange Day 1871, going about his usual duties: As mayor, he laid the cornerstone at Turner’s Hall on July 17 and kept all his City Hall appointments; he even tried his hand at humor: “Shocking levity,” he wrote in the
Leader
, “the lightship at Savannah has gone astray. Counts at Newport are at a discount.”
¹³
But behind the scenes, he quivered at the unfolding disaster. With Tweed mostly off enjoying the sea breezes at Greenwich and Sweeny unreachable at his summer retreat by Lake Mahopac in upstate New York, Hall found himself alone in New York as the Ring’s public voice against the avalanche of charges from the
New-York Times
.

As a first step, Oakey Hall met privately with Connolly, the comptroller, and they brought in some of the large city contractors fingered by the
Times
in its Secret Accounts expose, but the session sank into finger-pointing. Within hours, John Keyser, one of the major contractors, told reporters he planned to publish his own expose of his city dealings and “indicate where the fraud really was.”
¹⁴
Others, including plasterer Andrew Garvey, iron merchant Barger, and stationer Edmund Jones, feared that some malcontent might sue to block their getting paid on legitimate work they’d done for the city. Garvey remembered bumping into the mayor scurrying across the rotunda of the Courthouse that week and telling him his concern. “Is there any danger of [their] tying up our property,” he asked.

“Who is going to do it?” Hall responded,
^F
OOTNOTE
dismissing the threat as nonsense. Instead, he suggested that Garvey and the others themselves file lawsuits against the city to demand their pay.
¹⁵

Garvey especially bristled at the public humiliation he’d taken over the disclosures. “Prince of Plasterers?” “Look at that wall, gentlemen,” he told a group of friends while leading them through the new Courthouse’s rotunda one day, pointing to the ceiling like a proud Michelangelo. “Garvey the plasterer. My God! Do they call that plastering? See that inimitable wall, those
bas reliefs
, those figures, those frescoes, those gorgeous paintings—Justice with the sword and blind as a bat—and this fine imitation of bronze, showing the law books laid out. … Not in the Vatican in Rome, the Tuileries in Paris, anywhere in Europe can anything be found like it,” he insisted. “I earned my money for this work, and I’ll keep it.”
¹⁶

Even without the contractors’ help, Oakey Hall and Richard Connolly decided to defend themselves by producing their own account of city spending, a step required by law in any event, to demonstrate that the
Times’
“secrets” were only routine public information. But the process would take at least ten days to complete.

This wasn’t enough for Oakey Hall, though. The mayor decided it would be a mistake to sit silently in the face of accusations. He considered himself among the city’s top
literati
, an accomplished author, playwright, and poet; they didn’t call him “Elegant Oakey” for nothing. Facing the worst crisis of his career, he decided to take pen in hand and turn the tide. The same Saturday morning as readers awoke to the
New-York Times’
opening salvo in its Secret Accounts expose, they also saw in the
Leader
—Tammany’s own tabloid newspaper—a long, rambling column written by the mayor. At its heart, it made a simple point: He, the mayor, as a gentleman, had been badly mistreated, all because
New-York Times
publisher George Jones was trying to squeeze him for money.

Casting himself in the third person, Hall recounted his long personal tie to the newspaper. “[H]e [the mayor] had been a twenty-year friend of the living proprietor of the
Times
[George Jones], equally long an intimate associate with the deceased partner [Henry Raymond], and one of the latter’s pall bearers, [he’d] once been regarded as a valued correspondent of the paper,… had penned, at the request of its editors, through a long series of years, literary criticisms and editorial paragraphs [and] had received pleasant and often undeserved praise in its columns for oratory and published volumes.”
¹⁷

Now, he lamented, all this had changed—all because George Jones, the publisher, was sore over a $13,761 advertising bill that the city had refused to pay the year before. Up until then, the
Times
had accepted over $94,000 in city and county advertising during the 1860s and rarely complained about Tammany abuse, but “During the summer of 1870 the city authorities withdrew advertising from the
Times
. Immediately its tone toward them changed.”
After that, “he, the once-be-praised Mayor, began, … to grow daily into a monster.”
¹⁸
The problem was greed: not Oakey Hall’s or Boss Tweed’s, but George Jones’.