Echoes Dispatches From Economic History
New York City Mayor Jimmy Walker. Source: AP Images
Corruption and Intrigue Grips New York
From Boss Tweed’s influence in the 1800s to political scandals during the Great Depression, New York City was a hotbed of corruption.
Theodore Roosevelt fought it as police commissioner in the 1890s, but when his reform efforts angered corrupt New York politicians, he left to become the assistant secretary of the Navy. A generation later, Governor Franklin D. Roosevelt also confronted New York graft in his efforts against its principal beneficiaries, Tammany Hall, the Democratic machine and New York City Mayor James Walker.
“Gentleman Jimmy” Walker was “an unself-conscious hedonist in a top hat and swallowtail coat” who embodied the indulgence of the 1920s and was hugely popular among New Yorkers, New York magazine reported.
When the markets crashed, Roosevelt appointed Judge Samuel Seabury to investigate the city’s rising debt. In 14 months’ work, the judge uncovered illegal payments for bus and taxi franchises, a quarter-million dollars in securities profits paid to the mayor and a sheriff who had accumulated $400,000 on an $8,500 salary, Time magazine reported.
The investigation also revealed $1 million handled by Walker’s banker friend, Russell Sherwood, for cash gifts to secure contracts. Called to testify, Sherwood vanished, later to be located in Mexico City, where he ignored a New York subpoena.
The committee investigating the case suggested Roosevelt remove Walker from office on June 8. But Roosevelt was waiting until the presidential national convention ended. In Chicago, unsurprisingly, Walker helped former New York Governor Al Smith deny Roosevelt delegates from Tammany Hall until the last minute, even as the political machine’s power and funding were at risk.
The mayor framed a reply to the charges against him, and Seabury drafted an 8,000 word analysis for the governor, refuting Walker’s claims, the New York Times reported. The mayor quickly delivered a rebuttal, and Roosevelt announced that hearings on his dismissal would commence Aug. 11.
Five thousand wild supporters cheered the mayor at his departure from Grand Central Terminal, and a mob organized by Albany’s Democratic bosses greeted his arrival in the state capital. Bands and banners proliferated, but “inside the Executive Chamber at Albany where the Mayor of New York was on trial for his official life, there had been no cheers, no applause, no bands, no roses,” Time magazine reported.
Sticking to his script, Walker nonetheless “wriggled painfully” when asked to document the sources of his considerable wealth and his apparent failure to pay taxes, the New York Times reported.
The case received extensive coverage. The Times printed complete transcripts of the eight hearings with more than 20 full pages of text. “The effect on the Mayor’s position was shattering,” the Economist concluded.
On Aug. 29, the next shoe dropped. Walker had petitioned the state Supreme Court, challenging the governor’s power of removal. The court, however, confirmed that authority and rejected a plea to halt the dismissal hearings. Three days later, Walker resigned, denouncing the proceedings as “a travesty, a mock trial,” but thereby ending the tumult, Time reported.
Seabury sailed for a long-deferred European vacation the next day. Walker soon did the same, accompanied by his valet and a cluster of New York reporters. Roosevelt resumed campaigning. Oh, and the crooked sheriff, fired, landed a job overseeing the city’s “racket-infested” cleaning and dyeing industry at a salary of $50,000 a year.
(Philip Scranton is a Board of Governors professor of the history of industry and technology at Rutgers University, Camden, and the editor-in-chief of Enterprise and Society. He writes "This Week in the Great Depression" for the Echoes blog. The opinions expressed are his own.)
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