-Caveat Lector-
an excerpt from:
Mellon's Millions
Harvey O'Conner�1933
Blue Ribbon Books
New York, N.Y.
--[14]--
14
The Mellon Machine in Politics
THE "Mellon machine" whose $2,000,000 primary in Pennsylvania in 1926 set new
values in American politics, dated from March 4, 1921. No one in Pittsburgh,
before Andrew Mellon joined Harding's Cabinet, had envisioned the secluded,
taciturn banker as a political leader. The very idea would have brought
smiles to the lips of Max Leslie, Joe Armstrong and the younger Magee.
The financier, as a matter of fact, had little time to spare for politics in
his native city. Although students of municipal governments pronounced
Pittsburgh's as bad as any, if not the premier in its toleration of vice, its
encouragement of corruption, its neglect of the hundreds of thousands of
underpaid residents, such merely local phenomena did not touch Andrew Mellon.
True, it meant a somewhat higher tax rate, due to the slovenly administration
of city affairs, but the reformers who impotently challenged the city hall
and courthouse bosses would probably have succumbed to the same lures, or
embarked on some semi-socialistic program of parks and public welfare which
would have lifted the tax rate even higher.
The Smithfield Street banker had wider horizons in politics. His main concern
was to see that men with a sound understanding of the tariff and governmental
economy were elected to the U. S. Senate, and that the Governor at Harrisburg
appreciated the value of a low tax rate for Pennsylvania's industrial
supremacy. Inasmuch as this was also a main concern of the Pennsylvania
Railroad and U. S. Steel, little remained for Mellon except to back his
convictions with his money. His relations with politicians were on a
cash-and-carry basis. Boies Penrose confided his troubles to the head of the
Mellon National Bank, and rarely had occasion to complain that be was
unheard. Joseph G. Rodgers, sergeant at arms of the House of Representatives
and 4 political associate of Penrose, tells an anecdote concerning one of the
state boss's visits to Pittsburgh.
"We've got to have $250,000 to make this fight," Senator Penrose told Mellon.
"Can't you get along with $150,000?" the banker asked. "Oh, I suppose I can
if I have to," the political leader answered. Thereupon Mellon wrote him a
check for $150,000 and remarked later to a friend, "Well, I just made
$100,000."
The younger Smithfield Street Medici patronized the MageeFlinn machine in
Pittsburgh during its long life from the eighties down to the turn of the
century. Judge Mellon, as a member of Select Council from the silk-stocking
East Liberty district, had fought the two rising young political leaders
tooth and toenail for what he termed their raids on the city treasury,
unneeded bond issues, and corrupt traction franchises. His son, however, saw
the futility of the fight, and made peace.
The technique of the Magee-Flinn machine, which grew up with Andrew Mellon,
has been described by Harold Zink in his City Bosses in the United States.
"With control established in city and county," he writes, "it yet remained to
secure such dominance by welding the interests of important business and
commercial concerns with those of the bosses. In this matter Senator Magee
and his associates proved themselves adepts, for they studied the peculiar
needs of such concerns so carefully that they met with little difficulty in
convincing them that they could manage their political business with a
minimum of expense and publicity and a maximum of efficiency. By placing
public securities and monies expeditiously in banks and brokerage firms, the
financial world joined with the bosses to guarantee their dominance.
Privileges in crossings and trackage rights won over the steam railways to
such an extent that the Pennsylvania Railroad is reported to have made Mr.
Magee its agent in Allegheny County and later in the entire state. Similarly
franchises of one kind and another won over the street railways and many of
the public service corporations to the support of the Magee-Flinn
organization. Not only did this community of interests minimize the danger of
a fatal revolution, but it opened thousands of jobs to be used as fuel for
the political organization."
Senator William Flinn was partner in the contracting firm of Booth & Flinn,
and political partner of Chris Magee. He handled most of the paving and
erection of public buildings in Pittsburgh under an ordinance which called
for awards to the lowest responsible bidder. Flinn underscored the word
"responsible." "In the construction of public buildings," writes Zink, "the
bosses had the specifications so minutely set down that no one, except Booth
& Flinn, could hope to build such structures for lack of proper materials."
Booth & Flinn paving cost $1 to $1.80 a square yard more than other paving.
Although it was the highest bidder, the firm nevertheless received all of the
$3,500,000 in paving contracts in Pittsburgh in one nine-year period, except
a $33,000 job.
Flinn was a business associate of Andrew Mellon, and a chief stockholder in
the Sharon Steel Company when it was merged with Union Steel in 1903 a month
before the company was sold to U. S. Steel. He was a director of Gulf Oil and
Pittsburgh Coal, and of Manufacturers Light & Heat, a merger the Mellons put
through about 1900. Magee was president of Consolidated Traction, owned the
Pittsburgh Times and was associated with Joshua Rhodes, chairman of the board
of National Tube. Both Flinn and Magee were members of the same faith as the
Mellons and other leading citizens in Presbyterianism's capital.
Others sprang up to succeed Magee and Flinn after the combination was broken
by Magee's death in 1901, but none reigned so surely and firmly. In any event
their activities no longer concerned Andrew Mellon when his main interests
shifted from their original base in Pittsburgh real estate, traction and
finance, into the world-wide functions of an aluminum, petroleum and steel
magnate. In state and national affairs his own intervention was made
unnecessary by Frick's keen political activity. At the helm of state affairs
was Quay or Penrose, whose firm hand relieved Pennsylvania manufacturers and
bankers of immediate political worries.
But shortly after Mellon went to Washington, he found himself burdened with
the cares of state politics. Senator Knox, who represented the steel and
financial interests of the western end of the state, died in 1921. A year
later followed Penrose, master of Philadelphia elections and conductor of the
Keystone political symphony. For a while confusion prevailed. Gifford Pinchot
slipped into the Governor's chair at Harrisburg while bosses in Philadelphia
and Pittsburgh wrangled. Bill Vare came to the fore in the Quaker City as a
wringing wet. Joe Grundy, brains of the Pennsylvania Manufacturers
Association, kept his hand on rural legislators by his unflinching advocacy
of low taxes, prohibition and blue laws. Pittsburgh fell prey to warring
factions.
Who could bring harmony out of such discord but Pennsylvania's most
distinguished citizen-now Secretary of the Treasury? Ile construction of the
Mellon machine began as soon as his fellow-citizens recovered from their
astonishment at seeing the quiet Pittsburgh banker suddenly in the national
limelight. As Mellon's prestige rose throughout the country, Pittsburgh
politicians realized that his name was the one rallying point for
Republicanism in western Pennsylvania.
The austere Secretary however was too far removed both in spirit and flesh
from the scene of action and the demands made upon a local political leader
to satisfy the immediate exigencies of the Pittsburgh situation. His mantle
therefore dropped upon the most likely member of the family to assume the
duties of state and local leadership. That indubitably was William Larimer
Mellon, head of Gulf Oil. His name combined the magic of his uncle's and that
of General William Larimer, the dashing canal and railroad builder, banker
and politician of Thomas Mellon's early days. He heard the call gladly. He
had reached that stage in business life when details can be shifted to able
subordinates and some time and ability given to public affairs.
The Senatorial quandary was settled to the Mellons' satisfaction. David Aiken
Reed, their attorney, was appointed to the Senate a few months before the
fall election of 1922, and then elected for a full six-year term. General
Atterbury and the eastern wing of the party were pleased by the appointment
of George Wharton Pepper to succeed the late Penrose. Both men were
distinguished lawyers and thoroughly sound in their economic views. By their
appointment, Governor Sproul justified the confidence placed in him by
Pennsylvania's leading citizens.
But Sproul's successor was a gadfly. Gifford Pinchot roamed up and down the
state, particularly in the rural counties, telling audiences that the
Secretary of the Treasury was a distiller who should not be entrusted with
prohibition enforcement. The Governor's bonnet was buzzing with presidential
bees. Mellon was willing to placate him, in October, 1923, by a deal in which
Pinchot would withdraw his sting in return for the Pennsylvania delegation's
vote for him as a favorite son on early ballots in the Republican convention
in 1924. When Pinchot declined, the Secretary temporized no more. Senators
Reed and Pepper and W. L. Mellon, conferring in the Secretary's office,
adopted his suggestion that the Pennsylvania delegation be left uninstructed.
The Secretary was in no hurry to indorse Coolidge, who had just succeeded
Harding. He would have to meet the rigid Mellon test before the all-powerful
Keystone state block was swung to him.
Pinchot's presidential ambitions were smothered under a flank movement. On
January 7, 1924, it was announced that Pinchot and Hiram Johnson had fused
forces to oppose Coolidge and Mellon in the national convention. Four days
later it transpired that Pinchot would not concern himself with the matter at
all. Joe Grundy liked the Mellon Plan of tax reduction and did not propose to
let Pinchot, dependent on him for farm and financial support, upset the
applecart.
The Mellon-Grundy alliance controlled the Pennsylvania delegation to the
Republican convention in 1924, and thereupon W. L. Mellon proceeded to weld
the warring bosses of Pittsburgh behind his choice for mayor, judge Charles
H. Kline. William L. Smith, a North Side high school principal, led the
independents, who accused the new Mellon machine in 1925 of perpetuating the
worst practices of the Flinn-Magee machine. Kline triumphed by 70,000 votes
to 20,000 for the reformers.
The local fight was merely a preliminary to the main event of the decade in
Pennsylvania politics, the 1926 primary election. Ile campaign was
criss-crossed by the rivalries of contending machines over the two leading
positions to be filled�Governor and Senator. W. L. Mellon had been unable to
subjugate the unruly Bill Vare, boss of Philadelphia. He insisted on
stressing the prohibition issue, much to the distaste of the Mellons, who
found themselves between the crossfire of the dry Pinchot and the wet
Philadelphian. The campaign was to be an object lesson in what happens when
the irresistible force of the Mellon millions meets the immovable body Of
400,000 solid Vare votes in the City of Brotherly Love.
The Mellons wanted George Wharton Pepper, appointed to succeed Boies Penrose,
confirmed by the electorate for a six-year term, and John S. Fisher, later to
head their insurance company, elected Governor. Across these plans lay the
shadow of Vare's own pretensions to mantle his ample form in the Senatorial
toga, and to place his friend, Edward F. Beidleman, in the Governor's chair.
Beidleman's aspirations brought Joe Grundy and his eastern manufacturers into
the fight on the side of the Mellons. Beidleman, in an effort to intrigue the
vote of the powerful anthracite coal districts, had promised to replace the
$25,000,000 state tax on anthracite with a levy on manufacturers. That was
high heresy to Grundy.
It was a tight race. Vare made menacing inroads on the Mellons' own preserves
in Pittsburgh by his enmity toward prohibition. Mayor Kline responded by
threatening to fire every city employee regardless of civil service-who did
not work for the Mellon ticket. Police Superintendent Walsh-former
superintendent of the Jones & Laughlin coal and iron police�threatened
similar penalties against his underlings. On election day, he announced, the
customary roll call would be omitted and all detectives would report for
election duty "to complete the returns from their districts."
Alarmed by the prospect that if Vare and Pepper weakened each other too much,
Pinchot might walk away with the Senatorial nomination, Secretary Mellon
himself went to Pittsburgh, flanked by Senator Reed and Secretary of Labor
Davis, to make his sole political oration of the campaign.
When the votes-or whatever it was that the political machines counted-were
finally assembled, it was found that Vare's wetness had defeated the
aristocratic Pepper. On the other hand, Mellon and Grundy had carried Fisher
to victory in the fight for governor. The vote of pliant Pittsburgh districts
was withheld for several days until the Mellon machine found out just how
many votes were needed to count out Beidleman.
The primary over, the Mellon-Grundy forces met to consolidate their state
victory by making William Larimer Mellon chairman of the Pennsylvania
Republican Committee. To signalize the new harmony, W. L. Mellon visited
Philadelphia and proclaimed that that city was "satisfied" under the
ministrations of Vare. The independent uprising now led by J. Hampton Moore
was "hardly worth noticing." In view of the tremendous majorities Vare rolled
up regularly in the Quaker City, that statement could scarcely be disputed.
Mellon promised him the state's loyal support in November.
The nation watched both the primary and final elections in Pennsylvania. They
were classic examples of the functioning of democracy in the nation's premier
industrial state. Rumors of lavish expenditures by the Mellons, Grundy and
Vare to educate the electorate reached the ears of U. S. Senators. Inasmuch
as Bill Vare was assured elevation to the Senate by virtue of the primary
results, the Senate, by a vote of 59 to 13, authorized an inquiry into
campaign expenditures. Senators Reed, Deneen, La Follette, Bayard and Reed of
Missouri were named. Reed of Pennsylvania, emphatic in declaring that the
country was sick of such investigations, resigned, with Bayard and Deneen.
The reconstituted Senate committee begged State Chairman Mellon to explain
the peculiarities of Pennsylvania politics. He admitted that $306,000 had
been spent on the Pepper-Fisher ticket in Pittsburgh. Senators remarked that
Newberry had been denied a seat in the Upper House for spending $195,000 in
all of Michigan.
Pressed for further information, the younger Mellon said he had given $25,000
to the campaign, both Uncle Andrew and Uncle Richard matching him. Lesser
Mellon executives also gave in accordance with their means. Although he was
chairman of the Allegheny County campaign committee, he did not just know how
the money was spent. Those mercenary details were left to others; as a matter
of fact he had never visited headquarters of the campaign he was directing.
As state chairman, would Mr. Mellon suggest a limitation of such campaign
expenses? "That would depend on circumstances," he replied. "It would depend
on whatever was the necessity."
The Senatorial committee ferreted out only part of the primary expenses.
According to reports to the Pennsylvania Bureau of Elections, the Senatorial
and allied campaign expenses of both sides totaled $2,500,000.
When the committee totaled expenditures admitted by the chiefs of the
Pepper-Fisher campaign, they found that at least $1,000,000 had been spent
for the ticket. It approached the Democratic National Committee's
expenditures on its nation-wide campaign in 1924.
,Joseph R. Grundy had advanced $300,000 on behalf of his manufacturers "to
keep Andrew W. Mellon in the saddle," as he put it. "You wanted Mr. Mellon to
hold the crown of authority?" he was asked. "That is exactly right. We felt
that because of his accomplishments as Secretary of the Treasury and as
leader of the Republican Party, he should be sustained in Pennsylvania. . . .
We look upon Mr. Mellon as our first citizen in Pennsylvania, certainly since
he has been in the Treasury, and I think long before it."
Why was it worth $300,000 to his manufacturers to have Pepper and Fisher
nominated? Senators inquired. The manufacturers' tax proposed by Beidleman
and Vare, he explained patiently, would have violated a long-established
principle responsible for making Pennsylvania the keystone state. He was
concerned strictly with "the ethics of the situation" and not actuated by
"selfishness," he assured the committee. He admitted raising $700,000 for the
Coolidge campaign in 1924
Reminded that the salaries of U. S. Senator and Governor amounted to only
$25,000 a year, Grundy was asked why it was worth a million dollars to elect
them. "I don't think the salaries have anything to do with it," he replied.
"We always talk issues. Candidates are by way of accessories after the fact."
The Secretary of the Treasury himself was summoned. Yes, he conceded, there
had been a lot of money spent, but the direct primary, as contrasted with the
former system of electing Senators in the State Legislature, was a costly
matter. Why, it cost $42,000 to make one appeal by mail to the voters of
Pennsylvania. Watchers paid $10 for their activities at the polls and
elsewhere, had earned their pay, he said, by hard work for the ticket. They
were certainly not bribed.
C. C. McGovern, later to be an Allegheny County commissioner, testified that
$494,000 had been spent by Mellon and Vare for watchers, at $10 apiece, in
Allegheny County. Each Pepper watcher had been good for 2.5 votes, and each
vote had cost $4.14. "It was pure purchase of votes," he said. More than
20,000 Pinchot votes, he estimated, had been credited to the Mellon candidate.
The treasurer of the Pepper-Fisher forces in western Pennsylvania asserted
that W. L. Mellon had guaranteed the $83,000 deficit outstanding at the end
of the campaign. A Vare manager said his people had used cash alone because
the Mellon people would have known all of their expenditures if the money had
been put through the banks.
Harry A. Mackey, Vare campaign manager and later mayor of Philadelphia, was
quizzed by Reed of Missouri on vote stealing in his city. "Haven't you heard
of boxes with no ballots at all?" Reed asked. "Oh, no," was the quick answer,
"you've got the wrong end of the state in mind. That must have been
Pittsburgh."
Chairman Oldfield of the Democratic Congressional Committee surveyed the
results of the investigation and declaimed: "Tne Pennsylvania Republican
primary is plutocracy gone mad. It is the negation of every conception of
popular government and political. morality. It is about the limit that great
wealth can go in prostituting the means and methods adopted by the people for
selecting their public officials. That one of the highest of these public
officials should attempt to legitimatize it and hold the corruptionists
blameless ought to be and doubtless is almost as great a shock to the moral
sensibilities of the people, as the original offense."
Perhaps in Arkansas, but not in Pennsylvania. The state quivered not an
eyelash. It had seen too many campaigns in the Keystone manner to be aroused
by the latest Mellon-Grundy-Vare election. Indeed, did not the august
Secretary of the Treasury remark that he considered his $25,000 donation to
the Republican campaign much the same as a contribution to the Presbyterian
church?
In the November election Vare was triumphant over William B. Wilson,
former Democratic Secretary of Labor. That was of course to be expected. The
Democrats protested that the una-nimity of certain wards in Philadelphia and
Pittsburgh for Vare was suspicious, in view of affidavits from Democratic
voters. But that too was to be expected. In the Pittsburgh "Strip" districts,
election officials found themselves handicapped in mathematics bytheir meager
schooling. They usually cast the precinct's registration for their favorite
candidates and let it go at that.
William S. Vare was not admitted to that choice club which holds
forth in the north wing of the Capitol. That did not par-ticularly displease
Andrew Mellon. Vare, after all, was a dema-gogue who was willing to throw
sand into a well-oiled machine just to advance his own interests and cater to
the Philadelphia, mob. More important, Vare's rejection by the Senate in 1929
threw the choice of his successor into the hands of Governor Fisher, who
selected Joe Grundy. But when Grundy later faced the voters for election, not
all the resources of the Mellon machine could lift him into office against
the Vare-like James J. Davis, Big Moose-man and Secretary of Labor.
Pincbot, yielding his position to Fisher in 1927, read a Farewell Address to
the Pennsylvania Legislature which grated harshly on the ears of the regular
Republican majority. In the course of his address, he analyzed politics in
his state. "The spe-cial interests who buy votes with excessive expenditures
for cam-paign funds, and politicians who steal votes in elections, have
combined," he said, "to bring upon Pennsylvania dishonor which it will take
years to live down. . . . For many years politics in this state has been run
as a part of the business of certain moneyed interests. These interests
invest in politics as they do in mills or mines or banks, and for the same
purpose�to make money. But instead of property, they buy men and votes,
favors and legisla-tion. What these interests buy is non-interference, tax
exemption,, extortionate rates allowed public utilities and other special
privileges for themselves at the expense of the people. Any such machine must
include a body of the lowest politicians, such for example as the Mellon
machine in Pittsburgh and the Mitten machine in Philadelphia actually do
control-men who depend for their living and their power on liquor, crime and
vice." Such a machine, he added, is made up partly of "such of the
ostensibly respectable elements, of the community as are willing (in
Pittsburgh for example) to shut their eyes to make common cause with
gangsters, vote thieves, dive keepers, criminals and harlots, because of the
social and financial eminence of the Mellon name."
To keep up harmony between the two ends of the state, Chairman W. L. Mellon
was in Philadelphia again in 1927. "The huge majority of the regular
organization in Philadelphia County," he told reporters, "is really an
accomplished fact. Such majorities are only achieved through clean and
efficient administration. The people of Philadelphia know that the present
administration has done for them exactly what they expected and are therefore
satisfied." This praise, if somewhat ambiguous, satisfied Vare even if it
aroused protests from Hampton Moore that it was a "defense of traction grabs,
City Hall Annex grabs, Sesquicentennial extravagance."
W. L. Mellon ignored Moore and returned to Pittsburgh to oversee the
functioning of the well-oiled Republican machinery in western Pennsylvania.
The national campaign of 1928 offered him few problems; even with the
formidable Al Smith tearing away huge blocks of wet votes in Philadelphia and
Pittsburgh, it was not likely that Republican supremacy could ever be
challenged successfully so long as ward captains and precinct workers were
satisfied.
Between elections he continued educational work in behalf of sound ideas in
government. A Senate committee looking into lobbies in Washington discovered
his interest in the American Taxpayers League. His interest was measured by
$1,000 a year contributions. Pittsburgh had six such supporters of the
league, whose purpose was to educate taxpayers in the correct principles of
taxation. Among them were H. B. Rust of Koppers, George S. Davison of Gulf
Oil and Arthur V. Davis of Aluminum. Minor Mellon executives, impressed by
the enthusiasm of their chiefs in political education, also gave
proportionately.
The Mellons were noted as generous philanthropists in political matters.
Boies Penrose never had cause for complaint. Andrew Mellon helped to
underwrite the 1920 campaign deficit and in 1923 gave Will Hays, Republican
treasurer, $50,000 outright, even though he was offered $50,000 of Sinclair's
Liberty Bonds in return. In 1922 Richard B. Mellon was listed as the
country's most liberal contributor to the 1922 Republican Congressional
campaign committee, when he gave $25,000 to John D. Rockefeller's $15,000 and
his son's $10,000. The Mellon brothers continued their regular contributions
and were listed as donors of $5,000 each for running expenses of the
Republican National Committee during the first two months of 1932.
Pittsburgh political needs were not neglected. W. L. Mellon led there in
contributions to the Allegheny County Republican Committee. In the county
election of 1932, he gave $6,000, Uncle Richard gave $3,000 and President
Drake of Gulf Oil $1,000.
In politics Andrew Mellon was fortunate in that he saw no evil, heard no
evil, spoke no evil-and better yet, never suspected any. It was hard for such
infallible detectors of public corruption as Senators La Follette and
Caraway, or Congressman Oldfield, to understand. They held that Mellon, as a
conscientious Republican, high in the counsels of his party, should have
cried out against Elder Will Hays when he proposed that the Secretary take
$50,000 of Harry Sinclair's Liberty Bonds, in exchange for a $50,000 cash
offering to the Republican war chest. Instead Mellon gave the $50,000,
returned the bonds and kept silence.
This all happened in 1923, but not until 1928 did Senator Walsh, tireless
prosecutor of the Teapot Dome scandal, unearth the details of Sinclair's
"loan" of $185,000 to the Republican National Committee. Will Hays bad
prudently refrained from telling about Sinclair's loan in his previous
testimony concerning the oil man's financial relations with Albert Fall and
the Grand
Old Party. He bad not been "asked about any bonds," he explained.
Senator Walsh summoned the cashier of the late John T. Pratt, Standard Oil
man, to tell about the $50,000 of Sinclair bonds left with him, to be held
against a $50,000 cash donation to the party. The cashier presented a card in
evidence signed by Pratt and carrying a notation in one corner:
$50,000
Andy Weeks
Du Pont
Butler
"I can make out 'Weeks,"' commented Walsh, scrutinizing the barely legible
notation, "and I can make out 'Du Pont,' and 1 can make out 'Butler,' but
what is this other name? It looks like 'Andy.' "
The cashier (using a magnifying glass): It's Weeks, Du Pont, Butler, and the
other name must be Candy. . . . Yes, it might be Andy.
Senator Nye: And who is Andy?
The cashier: I have no idea who Andy can be. I can think of no one known as
Andy.
Nobody else in the committee room shared the cashier's bewilderment.
Irreverent laughter broke out. Senator Walsh asked "Andy" to come over and
tell what he knew about Will Hays, the Sinclair Liberty Bonds and the bright
galaxy of $50,000 donors.
Secretary Mellon obliged. The $50,000 in Liberty Bonds had been delivered to
his office late in 1923, with a note from Hays saying he would explain later.
He took the bonds home because he had forgotten the combination to the office
safe. After Hays had explained, he gave the bonds to S. Parker Gilbert to
take to the Republican treasurer in New York.
Hays told Mellon that he had received $300,000 in bonds from Sinclair and did
not want it to appear on the campaign books as one donation. Did the
Secretary suggest to Hays that Sinclair should make his contribution in his
own name, instead of using the circuitous method evolved by Hays? "It was
none of my business," replied Mellon. "He was a man, a wealthy man, who had
made a subscription, a large subscription, to the committee. It was not any
of my responsibility to run the affairs of that committee."
Did the Secretary realize at the time that these Sinclair bonds might have
been part of the Continental Trading Company's bonds, part of which had been
used to corrupt a fellow-Cabinet officer? He replied that he might have had
that impression.
For five years the Committee had been trying to trace these bonds, Senator
Walsh reminded him. For three years Government counsel appointed by President
Coolidge had been trying to solve the mystery of the disposal of the
Continental Trading Company's securities. And here the Secretary of the
Treasury had known all the time. Why hadn't he stepped forward, at least to
help the Government's counsel who were prosecuting Fall, Sinclair and Doheny?
The matter, Mellon said, had no public importance, after he returned the
bonds to Hays.
But hadn't the connection been obvious between the Teapot Dome investigation,
started October 2, 1923, and the Hays visit with the embarrassing Liberty
Bonds a month later? "That may well be, but I do not follow all the
investigations that are started," the Secretary replied. "I have plenty of my
own troubles there to keep me busy. . . . I had no knowledge of it personally
at the time."
Walsh reminded Mellon that when Wheat Gambler Patten was approached by Hays
on the same mission, he became incensed at the proposal. "Did it affect you
pretty much the same way?"
"I do not know that," responded Mellon. "I am not of that temperament and do
not become incensed. If you take things in this world as they are and
according to your own conscience, I do not see that there is much use in
getting incensed."
But why, persisted Senator Wagner, did he not volunteer information about the
Hays bond offer needed so badly in the Government case against Fall and his
oil cronies. "Was it my responsibility? " he asked in return. "I was not
connected with the national committee."
The New York Times was loyal. "He has made a complete explanation," it
editorialized.
Mellon executives were important cogs in the Mellon machine. Their $500 and
$1,000 checks accompanied the $5,000 to $50,000 checks of their superiors;
and a bevy of understrappers in the widespread Mellon organizations
contributed in more modest amounts. Junior executives who noted that the
heads of their corporations invariably followed the proprietors' lead in
political questions, readily took their cue. At times, it became apparent
that gentle moral suasion was used to reach further down in the ranks toward
loyal stenographers, clerks and other lesser fry filled with ambition.
Leading Mellon executives, for example, supported with enthusiasm the
Ex-Servicemen's Anti-Bonus League when they read that the Secretary of the
Treasury believed there was an irreconcilable conflict between lower taxation
and the payment of the bonus to veterans of the World War. The League was the
happy idea of "Senators and other prominent interests leading the fight
against the bonus," according to Knowlton Durham, its New York director, in a
letter to Vice President James S. McCulloh of the New York Telephone Company.
These leaders believed, he added, that "no greater support could be given
them than the development of an organization of veterans opposed to such
legislation. We are going to provide it."
Among the "providers" were Elbert H. Gary, Hornblower & Weeks, Ralph
Pulitzer, Harold S. Vanderbilt, Cleveland H. Dodge, Stuyvesant Fish, Paul M.
Warburg�and President George S. Davison of Gulf Oil Corporation and President
H. B. Rust of Koppers Company. President Rust wrote to Captain Durham: "I
heartily approve of what you are doing in this matter and my first impulse
was to send you my personal check, but I took the matter up in a quiet way
and found out that my friend, Mr. George Davison, was raising some funds for
you and he wanted me to make my contribution through him. I saw Mr. Davison
again last night and told him I felt that time was the. essence of this plan
that he should hurry his contribution to you. I am going to see him again on
Monday and hope to make through him a substantial contribution to your cause,
in which-as I have said above�I am most thoroughly in sympathy. I think you
are doing a great work for the country and for all the world. I agree with
your position in the matter 100 per cent."
Thus fortified, the "great work" went forward with 25 experienced organizers
searching highways and byways for veterans willing to oppose the bonus and
for business men willing to help a good cause along. The Koppers Company was
galvanized into action. Its Chicago By-Products Coke Company, among others,
advised its employees that company stenographers would gladly write letters
for them on the bonus question to Senators and Congressmen, on plain
stationery.
"Now, gentlemen," summed up Commander Quinn of the American Legion,
addressing a Congressional committee, "I do not know whether Andrew W. Mellon
has full knowledge of everything that is being done by his various
corporations with which he has been associated. But don't you think that the
clear evidence shows pretty conclusively that the Secretary of the Treasury
is not only supporting political propaganda in opposition to adjusted
compensation, but also that employees in his interests are being coerced into
writing letters to their Representatives in Congress?"
Mellon, of course, said he had no knowledge whatever of the activities of
Koppers and Gulf executives and had never authorized them to raise a $20,000
fund to be used against the bonus.
John Thomas Taylor, vice chairman of the Legion's legislative committee,
charged that Mellon, in "his anxiety for the big financial interests," had
miscalculated the Government's fiscal operations in 1922 by $959,000,000 in
order to defeat the bonus.
In 1921 he had prophesied a deficit when the bonus was under consideration,
but actually there had been a $300,000,000 sur-plus. Likewise in the fiscal
year ending June 30, 1924, he had predicted a deficit, instead of the actual
$300,000,000 surplus.
Taylor estimated that the tax reductions of $85,000,000 in the upper brackets
proposed in the Mellon Plan would pay the bonus.
Notwithstanding the best efforts of the Ex-Service Men's Anti-Bonus League
and of Mellon executives, the adjusted compensation law was passed over
President Coolidge's veto and despite the Secretary's prediction of dire
results upon the budget.
pps 256-271
--[cont]--
Aloha, He'Ping,
Om, Shalom, Salaam.
Em Hotep, Peace Be,
Omnia Bona Bonis,
All My Relations.
Adieu, Adios, Aloha.
Amen.
Roads End
Kris
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