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The Righteous Bosses of the New Deal

Mises Daily: Friday, October 07, 2011 by

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"Among the warriors of the New Deal were many whose presence in the army against sin was a little surprising."

There never has been in American politics a religion so expansively and luminously righteous as the New Deal. From the beginning to the end it was constant in one heroic enterprise — war to the death upon evil, upon greed, poverty, and oppression. It had, in fact, one monstrous enemy against which it tilted its shining spear seven days a week and that was sin. If you criticized the New Deal, you were for sin.

Yet it must be conceded that among the warriors of the New Deal were many whose presence in the army against sin was a little surprising. One such collection of men were those who are called "leaders" by their friends and "bosses" by their enemies in the big cities. What were the leaders of these great grafting organizations doing on the side of the angels?

In New York City, Tammany Hall was the organization that managed the Democratic hosts of the city. It had a long and at times unsavory existence. Its motto was "To the victor belongs the spoils," and the spoils consisted not merely in jobs that went to the party workers, but those great enterprises that feed upon the state and that are included under the name of graft. Illegal graft was the levying of extortion upon contractors, gambling houses, commercial prostitution, commercial vice of all sorts. There was, however, an area known as legal graft that consisted in various kinds of profits that organization leaders and favorites made out of ordinarily legal business but that they were able to collect because of political power and pressure.

For instance, a Tammany leader might have a silent partner in some firm handling contracts with the city. In cities, the bonding and insuring business is an important element in all kinds of activities — bonds in the courts, bonds of office holders, insurance and bonds of city contractors, and the insurance business of large firms that depend heavily upon city business or the favor of the administration in power. Always there were Tammany leaders with an interest in an insurance firm either directly or through their relatives.

With the advent of Charlie Murphy as the leader, there was a marked moral change. Murphy, like many of his contemporaries, was a good family man and a steady church member. He began as a saloon owner but left that and as he grew older became aware of the vicious aspects of organized vice and its partnership with machine politics. When John Hylan became mayor of New York, strongly under the influence of his religious wife he made up his mind to end the toleration of commercial vice in New York City. Murphy supported him in that and whatever critics may say of Hylan and Tammany, he put that policy into effect and drove these industries out of New York City into New Jersey, where they found a hospitable welcome.

I do not mean that the leaders of Tammany Hall put on wings. There remained always a few leaders who resented this flight to grace and there were areas of so-called legal graft that were extensively cultivated. But another factor had intruded upon the scene. Al Smith loomed as a candidate for the presidency. Murphy nursed the ambition of electing an authentic Tammany man to the White House, and as part of that plan he began to enforce a more exacting code of good conduct on Tammany leaders, some of whom, to be sure, chafed under it. But Murphy said Tammany could not afford a bad name to stain the good repute of Al.

One other point about Tammany must be noted. It was primarily a political organization, but one activity of the organization was social welfare. Tammany lived on the support of the masses of voters. In each city district was a Tammany club. It was the headquarters of the political life of the district, but it was also the center of certain social services. Every night the boss was there, surrounded by numerous city employees from the various departments of the city — school board, magistrates' courts, public works, health, etc. — and to this club every evening came a steady stream of people in the district looking for aid — a woman who wants her teacher-daughter brought to a school nearer home; another who wants help in the magistrate's court for her erring son; a whole collection of victims of the eternal traffic-violation ticket who want it fixed; a poor woman who wants a little coal or a few dollars or a word to the commissioner of welfare for a relative; and various others seeking many other kinds of help.

"If you criticized the New Deal, you were for sin."

The cost of all this so-called social welfare to the district boss was not very great. The personal services were performed by the faithful on the city payroll and the actual money outlay was modest and met out of the boss's own funds and funds levied on city employees and contractors and others who enjoyed the favor of the leader. But it was the most powerful source of the hold that Tammany Hall and its affiliated organizations in the other boroughs of the city had upon the people of New York.

The worst of these city machines were the Kelly-Nash machine in Chicago, the Hague machine in Jersey City, and the Pendergast machine in Missouri, although there were many others in the great industrial cities. When Roosevelt was a candidate for the nomination in 1932 all these machines were opposed to him. They continued to sneer at him after he was elected and he continued to snipe at them. He directed Farley, for instance, to fight the nomination of Ed Kelly for mayor of Chicago. In New York he committed against the Democratic organization that had helped elect him the unpardonable political offense of promoting the candidacy of LaGuardia for mayor, who was elected on a Republican ticket supported by disaffected New Deal Democrats.

When Roosevelt became president, as we have seen he began spending vast sums of money on relief and public works. Into a Tammany district, for instance, now flowed not a few thousand dollars passed around in the methodical and economical manner of the boss, but hundreds of thousands, even millions, of dollars for all kinds of aid including jobs for those who wanted work and generous handouts from relief agencies. The handouts, of course, were coming from New Deal agents. The Tammany chieftain in the district could no longer compete with the extravagant hand of Roosevelt's dispensers of bounty. The only hope of the Tammany leader to hold his place in the district was to do business with the man in Washington who commanded these golden streams. He had to be the agent in the district for controlling the flow of this money or he was out, because the national government could install in every district a benefactor who could outspend the boss not ten to one but a hundred to one.

Roosevelt did not do business with leaders directly. They had to do business with Roosevelt's man in Tammany, and, as it turned out, he was probably the worst of all the leaders in that organization. Tammany men knew all about him and he became after that the model and pattern to which Tammany conformed. He was Jimmy Hines, the leader of the Eleventh District.

Prohibition in its way had done something to Tammany as it had to everything in America. It had brought the speakeasy, the illegal liquor business, and the criminals and gangsters who preyed on them. With the appearance of Jimmy Walker as mayor of New York the organization began to sink back again into its old frailties. Graft upon all sorts of commercialized vice got to be big business again. More than one district fell into the hands and under the control of men who were leagued with these enterprises. Jimmy Hines was the worst of them all. He had a partnership with Dutch Schultz, a notorious gangster and murderer.

How he became Roosevelt's right-hand man in New York is not difficult to understand. Years before, a young man out of law school, wishing to get along, decided to become a Democrat. His name was Samuel I. Rosenman. After he graduated from Columbia, he went to Mr. Hines and told him of his ambitions — he wanted to go to the legislature. Hines sent him to one of his trusted advisers, an old Tammany judge, for examination. The judge found that Sammy knew his lessons and so Rosenman went to the legislature and in good time wormed his way into the good graces of Franklin Roosevelt as governor and became the first member and the last survivor of his Brain Trust. He remained always one of the close political friends of his sponsor, Jimmy Hines, while he lived in the spotlight of the purity and holiness of the New Deal, and he was able to make Hines Roosevelt's right-hand man among the bosses of Tammany.

In 1933, LaGuardia came into power in New York City, and for the next ten years Tammany lost its hold upon the political machinery of New York save through some of the borough governments, and by 1942 lost its hold in the state when Dewey became governor. Tammany was now strictly on the outside. It had lost the jobs and the rich perquisites of office. Many of the club houses were closed or became the cold and dreary haunts of men who no longer attracted the hungry, the poor, and the dispossessed in search of help. Tammany had sold its famous old hall in 14th Street and had built a new Tammany Hall on Union Square near 14th, but after a few years of struggle it was no longer able to maintain itself there or pay the interest on the mortgage and had to sell out. Old Tammany sachems and other devout members of that dwindling congregation took refuge in tears over at Luchow's Restaurant the day Jimmy Walker, representing Tammany hall, stood on the stage of the hall and handed the deeds to the new purchaser — David Dubinsky, head of the International Ladies Garment Workers Union, a socialist-dominated labor organization that strung along with Roosevelt.

Little by little the Tammany leaders who were growing older were being succeeded by newcomers who were ready to scream their heads off for Roosevelt and the New Deal. There is no vast sum of money in holding office. The riches are in the perquisites, the graft, legal and illegal, often collected by men who do not hold office but who do business with those who do. Some Democratic chieftains of the newer stripe began to drift into vice rackets of various sorts. Frank Costello, the most notorious racket manager in the country, became the most powerful factor in that once-proud organization. Many district leaders were running night clubs and hot spots, and little by little large sections of Tammany fell into the hands of criminal or near-criminal elements.

It was this Tammany at its lowest level that surrendered to the New Deal and became finally the political tool of Mr. Roosevelt in New York. From an old-fashioned political-district machine interested in jobs and patronage, living on the public payroll and on various auxiliary grafts, sometimes giving a reasonably good physical administration of the city government, sometimes a pretty bad one, sometimes very corrupt, sometimes reasonably honest, it became a quasi-criminal organization flying the banner of the Free World and the Free Man.

"Little by little the Tammany leaders who were growing older were being succeeded by newcomers who were ready to scream their heads off for Roosevelt and the New Deal."

In 1932, Illinois sent a delegation to the Democratic convention headed by Tony Cermak, a crude political genius who had emigrated from Bohemia, started with a pushcart, became a precinct captain, grew rich on graft, organized the Poles, Czechs, Lithuanians, and Slovenes in Chicago into a powerful racial bloc called the United Societies, became boss of the Twelfth Ward, rounded up the underworld for Brennan when he was boss, and when Brennan died, succeeded him as Democratic leader and became mayor of Chicago.

Cermak fought Roosevelt's nomination at Chicago, and went to Miami in February 1933 to make his peace with Roosevelt where the bullet intended for Roosevelt killed him. Ed Kelly, Cermak's chief aide and the chief engineer of the Sanitary District in Chicago, became mayor, and thereafter Ed Kelly and old Pat Nash became the twin bosses of Chicago and of Illinois Democrats.

The story of the next eight years was an incredible one. The Capone gang, robbed of their Prohibition racket, had gone into business — horse parlors, gambling houses, bawdy houses, with special rackets in barber shops and other places. The Capone rackets were operated by Jack Gusik; Chew Tobacco Ryan; Loudmouth Levin; Harry Greasy-Thumb Gusik; Frank Diamond (Capone's brother-in-law); Charles and Rocco Fischetti (Capone's cousins); Eddie Vogel, slot-machine czar; and Billy Skidmore, with whom everybody had to do business in Chicago to keep out of jail. There were crooked labor rackets on an unbelievable scale. At one point a rumor got around that some important person had been nailed for a $100,000 income-tax evasion. It turned out to be Kelly, the mayor. Roosevelt had tried to prevent his nomination but didn't succeed. In the three years that Kelly had been Sanitary District commissioner he had failed to report $450,000 in income. The Treasury went after him but allowed him to settle. He refused, however, to divulge where the income came from. He settled for $105,000.

Like the Tammany Hall machine, the Kelly-Nash machine was subdued to the Roosevelt power and the countless millions it dispensed in Illinois. And as the time for the third-term movement came along, Ed Kelly was one of its principal leaders, beating the drum for "Roosevelt and Humanity."

Nowhere in America was there a political ring more widely known for its brash defiance of law, decency, and principle than the notorious machine of Frank Hague in northern New Jersey. Hague ran up his career from janitor of the city hall to mayor in ten years. In 1932 he had been mayor for 14 years. He was the undisputed boss of the state and he carried its national convention delegates around in his pocket, all of which he was able to do because of a reliable 100,000 plurality he could run up in Hudson County — enough to swamp any hostile majority for his candidates in the rest of the state. Hague grew in arrogance. He bullied, bellowed, and bawled out his critics as well as his opponents at the polls. He didn't like Roosevelt. He didn't like the New Dealers around Roosevelt, and above all he hated the pinks and the Reds.

The year 1938 was, as we have seen, a disastrous one for the Roosevelt New Deal. The national convention was only a year and a half away. In this year Judge William C. Clark, an authentic New Dealer, became the subject of Hague's concern. Clark had put the brakes on some of Hague's more blatant and offensive attacks on freedom of speech in his bailiwick. In 1938, Clark was the judge of the US District Court in Hague's district and in that year was elevated to the US Court of Appeals in New Jersey. That suited Hague fine. He had a candidate for the place left vacant by Clark and the appointment was in Roosevelt's hands. His candidate was T.G. Walker who had been elevated from a seat in the assembly to be a judge of the highest court in the state — the State Court of Errors and Appeals. Hague wanted Walker appointed to succeed Clark in order to make room for his son in Walker's place. It took a good deal of maneuvering but Hague, with Roosevelt's aid, worked it out. He got his enemy Clark from the spot where he was most offensive, put Walker into that place and young Hague, who had failed to graduate from law school, on the highest court in the state.

Hague had got what he wanted from Roosevelt. Later Roosevelt wanted something from Hague. Secretary of the Navy Claude Swanson, who had held that post since 1933, had for years been in a state of great feebleness. Charles Edison was assistant secretary of the Navy and, because of Swanson's illness, actual secretary. When Swanson died, Edison rated the promotion, but Roosevelt for some reason didn't want him. He urged Hague to make Edison governor or senator from New Jersey. Hague agreed to do so. Then Roosevelt appointed Edison secretary of the Navy and later Hague nominated him for governor of New Jersey. It was a bad day's work for Hague, as Edison after election got the notion that he and not Hague was governor, which precipitated a long and bitter fight between these two men, one representing bossism, machine politics, and political corruption at its lowest level, the other representing the spirit of rational and democratic reform and honesty in elections and government. In this battle, which came after the election of 1940, Roosevelt threw his influence and power on the side of Hague.

These were three of the most notorious of the big-city bosses, but there were similar smaller bosses of the same type all over the country. In 1939, although most of them hated Roosevelt, they had been completely subjugated to his will by the great sums of money that he was able to either spend or withhold from them in their respective districts. And they continued to play an increasingly important role in this righteous thing known as the New Deal. By 1940 they were among the most ardent Roosevelt men.