Although captioned "The Famous Armstrong Committee," the picture doesn't depict the committee's counsels, Charles E. Hughes and James McKeen; or the associate counsel, Matthew C. Fleming. As for Hughes, by the time this image was published he had already been elected governor of New York State due to the "fame" he'd accrued as the beneficial blow-back of the committee's work.
Instead, posed in the image are found Ernest H. Wallace and William Blau, described as New York assistant attorney-generals, and O. R. Hotaling, a "sergeant-at-arms, New York State senate." Sources say Wallace and Blau worked in the State Attorney General's Manhattan office, while Hotaling was, presumably, stationed at the capitol in Albany.
In describing the committee, Current Literature writes"
"This Armstrong Committee consists of eight members of the State legislature comparatively unknown to fame. Six of them are up-State lawyers, one of the others is a Tammany politician who is in the real-estate business, and another has no reported occupation. Not a likely lot of men, at first thought, to frame a new structure for such vast interests as are represented in the insurance system. And yet these men, with the assistance of three other lawyers—Charles E. Hughes and his two associates—and an actuary, Mr. Dawson, who is admitted to stand high but is charged with a fondness for "impracticable theories," have evolved a report and a series of recommendations which have elicited a chorus of applause from conservatives and radicals alike, such as no other similar document has perhaps ever elicited."What is being described here of the committee report is a classic, albeit singularly highly positioned, example of a "limited hangout," whereby leaking industry-wide word-of-mouth is combined with the sporadic criticisms previously published in the press into an officially sanctioned version of events that gives the appearance of revelation, while likely keeping deeper secrets safely in check. It defines the dividing line between the reality of business and government, with the soap-opera construction fed the public as truth.
CAPTION: Of this committee and its work a leading daily says: "For the months of arduous toil which these gentlemen have devoted to informing the public what has been going on in the insurance companies, and in informing the Legislature what laws ought to be passed, they have received no compensation save their regular salaries as members of the senate and assembly. It is a distinction quite beyond price, however, to have been a member of a committee that did its work so well."
The members are as follows: IN FRONT ROW (from left to right) Senator Daniel J. Riordan, Senator William J. Tully, Senator William W. Armstrong, chairman; Assemblyman James T. Rogers, and Assemblyman Robert L. Cox. Back row, (from left to right,) Assemblyman John McKeown, Ernest H. Wallace, assistant attorney-general; Assemblyman William W. Wemple; William Blau, assistant attorney-general; and O. R. Hotaling, sergeant-at-arms, New York State senate.
In a second photograph of the Armstrong Committee, shown apparently at work, which appeared in the April, 1906, The World's Work, Volume 11, we see one of the most awkward dais seating arraignments ever devised. This depiction highlights the supernumerary quality of the legislative figureheads, who in the public's imagination at least, comprise the men who are making the laws, and governing all, including their own counsels.
Caption: The Armstrong Committee of the New York Legislature Holding the Insurance Investigation Last Winter
Mr. Charles E. Hughes, the Committee's Counsel, in the lower right-hand corner
January, 1906, Current Literature, Vol. XL. No. 1, Edward J. Wheeler, Editor, page 27, The Seamy Side of Life Insurance,
Page 27
THE seamy side of life insurance has continued on exhibition in New York during the month and the feeling of public indignation and disgust still finds abundant expression. But there are also evident a growing conviction that the worst has been told and a disposition to get comfort out of the fact that the situation might have been even worse than it is. No company, so far as has yet transpired, has been looted to the point of insolvency and no death-claims have gone unpaid, as the cartoonists might lead us to think, in consequence of the "grafting" that has gone on for thirty years or more. The system of straight life insurance has not been discredited. Such at least is the conclusion the Kansas Capital draws. It says:
"In condemning the outrageous misuse of their trust funds and abuse of their character as trustees by the managements of the 'high finance' companies, it should be repeated over and over again, lest the public get an utterly misleading notion about what has been proven in the investigation, that life insurance itself comes out of the fire unscathed as a device for the protection of dependent families which is deserving of all praise. Even the worst abused companies are perfectly solvent, indeed rich. And it should be remembered that in all the panics of fiftv years not an old line life insurance company of prominence has ever gone down. So much can not be said of any other, business in the land, and it leaves no warrant whatever for suspicion of the solvency of the life insurance companies doing a general business over the United States."
OTHER forms of consolation are available at the present moment. "It is doubtful if a more thorough investigation was ever known in this country," says the New Orleans Times-Democrat; and "it is clear no investigation ever made will have more beneficial results." The Springfield Republican gets encouragement by contrasting the deferential and teachable spirit of some of the directors who have recently testified before the committee, notably Senator Depew, with the "brazen defiance" exhibited earlier in the investigation. And expressions of satisfaction are general over the recent resignations that have been made. Referring to the retirement of President McCurdy from the New York Mutual, The World (New York) says:
"To the erstwhile dummy trustees of the Mutual is due the ousting of the McCurdys. Those trustees were not thick-skinned hypocrites. The perjury was none of theirs. The policy-holders were not robbed for their profit. Their names and their reputations were a cloak, but when what had been concealed was disclosed they recognized that the duty was theirs to act, and they acted. The dummies of the New York Life are now responsible for the continuance of McCall and Perkins [the latter has since resigned]. They have the power. They are in law the trustees of the policy-holders."
The reorganization of the Equitable, the retirement of McCurdy (succeeded by Charles A. Peabody, an attorney of William Waldorf Astor, at a salary of $50,000) from the Mutual, and the resignation of Vice-President Perkins from the New York Life, leaves President McCall, the president of the latter company, as the chief target now for the press. The Cleveland Leader appeals to his directors:
"Is it possible that McCall, of the New York Life, can cling indefinitely to his place of power and his huge salary? What are the trustees of that corporation doing for their policyholders? When do they propose to show that they are fit for the responsibilities with which they are entrusted? If McCall will not let go he should be kicked out."
Two other resignations that are clamored for are those of Senators Depew and Piatt from their seats in the upper house at Washington. The Journal of Commerce (New York), not a political paper, referring to Senator Depew's record as a director of the Equitable and to Senator Piatt's admissions as to his constant receptance for years of campaign contributions from the life insurance companies, says:
"Both Senators should resign. Neither has been, is or can be a good and faithful servant of this great State, and their presence in the Senate covers it with confusion and humiliation. It is many years since the Empire State has had a worthy representation in that august body, and to-day it can only be regarded with mortification and shame. Nothing in the political life of either Senator would so become him as the leaving it."
POINTS in the testimony during the last few weeks that have elicited most comment have been the story told by Mr. Ryan of Mr. Harriman's attempt, by threats of the adverse use of his political power, to secure a participation in the purchase made by Mr. Ryan of Mr. Hyde's stock in the Equitable; Senator Piatt's acknowledgment that he received many contributions from the Equitable and other companies for the Republican State campaigns; and Mr. Hyde's testimony to the effect that Governor Odell used his political power to compel the Mercantile Trust Company (one of the Equi table's organizations) to make good the loss he incurred on the stock of the "shipbuilding trust" which he purchased through the Mercantile. The bearing upon politics and politicians has, indeed, been the most sensational feature of all the more recent disclosures. In addition to these major charges, a series of minor disclosures have been made, such as the payment by the Mutual Reserve of $3,500 to W. H. Phelps, of St. Louis, before a license to do business in Missouri could be secured ; the payment by the Prudential of considerable sums to "Judge" Hamilton, the legislative lobbyist at Albany; and the payment to an attache in the State insurance department at Albany of a salary of $500 a year by a Binghamton company. The New Orleans Times-Democrat describes the situation as follows:
"The companies, or rather the officials of the companies, appear to have had two grand outlets for money. What funds were not diverted into their own pockets or those of their relatives, seem to have been given freely to support a crowd of representatives of the class whose malodorous activities are sufficiently well known around legislative halls and the offices of public officials. Men have been paid money on all sorts of grounds: for aiding and for refraining from doing anything to the injury of the companies. Were it not proved beyond question that many leading insurance officials are simply grafters of a larger growth,' one would be tempted to sympathize with the way in which they were apparently held up by Tom, Dick and Harry with some sort of pull with a^ Legislature or an insurance commissioner or someone."
DISCUSSION of remedies for the life insurance evils has not, so far, been very general, except on the one suggestion of Federal supervision, which is arousing very considerable opposition. A series of suggestions for legislative remedies has been made to the investigating committee by Gage E. Tarbell, of the Equitable, which has been favorably received. It includes "complete publicity," with various changes in bookkeeping to facilitate such publicity; political contributions from life insurance funds to be made a misdemeanor; no officer in a life insurance company to be allowed to accept a salaried office in any other corporation; no life insurance company to be allowed hereafter to hold more than 20 per cent of the capital stock in any bank, trust company or other corporation. A more elaborate series of reforms is proposed by Louis D. Brandeis, in an address before the Commercial Club of Boston. Mr. Brandeis is the counsel for the Protective Committee of policyholders in the Equitable. After a very lucid statement of the situation, arraigning the officials of the big companies for selfish and dishonest abuse of power and gross inefficiency, he presents a list of ten reforms, including the following: Issuance of deferred dividend policies to be discontinued; the forfeiture of policies to be prohibited; investments restricted as in the case of savings-banks; officials to be debarred from engaging in other business; the size of companies to be limited. Mr. Brandeis considers that the present evils must be prevented in the future or we shall soon find the people resorting to State insurance. This he would consider "at the present time highly undesirable" ; but he faces the possibility as follows:
"If our people cannot secure life insurance at a proper cost and through private agencies which deal fairly with them, or if they cannot procure it through private agencies except at the price of erecting financial monsters which dominate the business world and corrupt our political institution they will discard the private agency and resort to State insurance.
"Despite your or my protest, the extension of Government activity into fields now occupied by private business is urged on every side. Of all services which the community requires, there is none in which the State could more easily engage than that of insuring the lives of its citizens. The business of life insurance is one of extraordinary simplicity. To conduct it successfully requires neither energy nor initiative, and if pursued by the State does not even call for the exercise of any high degree of business judgment^ The sole requisites are honesty, accuracy and economy."
FEDERAL supervision of insurance is, how- ever, the most discussed of the remedies so far proposed. It is recommended by the President in his recent message, and has already aroused some discussion on the floor of the Senate. Mr. Brandeis is very positive in his oppositon to it. He says in the address already quoted from:
"Doubtless the insurance departments of some States are subjects for just criticism. In many of the States the. department is inefficient, in some doubtless corrupt But is there anything in our experience of Federal supervision of other departments of business which should lead us to assume that it will be freer from grounds of criticism or on the whole more efficient dian the best insurance department of any of the States? For it must be remembered that an efficient supervision by the department of any State will in effect protect all the policyholders of the company wherever they may reside. Let us remember rather the ineffectiveness for eighteen long years of the Interstate Commerce Commission to deal with railroad abuses, the futile investigation by Commissioner Garfield of the Beef Trust, and the unfinished investigation into the affairs of the Oil Trust, in which he has since been engaged. Federal supervision would serve only to centralize still further the power of the Government and to increase still further the powers of the corporations."
THE demand for Federal supervision seems to The Sun (N. Y.) "only a symptom of the general but perhaps temporary mania for reforming everything that ought to be reformed by increasing the powers of the government. Federal, State or municipal." The Detroit News, however, thinks that this movement which the Sun calls a "mania" is destined to increase and to enlist in its behalf not only the owners of insurance companies but of railway corporations and others. Speaking of insurance business it says: "Thousands of men who have spent years in working up a business and establishing a reputation find themselves handicapped because the central coterie which juggled the funds and misused public confidence has been exposed." It is no wonder, the News thinks, that such men now demand Federal control as a matter of self-protection. Two interesting bills have been introduced in Congress which are desigfned to give Federal supervision of insurance in a way that avoids most of the objections raised on constitutional and other grounds. They provide merely for inspection by a Federal department of all insurance companies seeking to do business in the District of Columbia, in the territories and in our insular possessions. It is contended that any company seeking extended public confidence would have to submit to such inspection, and that thereby all the practical results of Federal supervision would be obtained without impairing in any way supervision by the various State departments. This plan is said to have the President's endorsement. The New York Times thinks it would be constitutional but ineffective as a means of checking the present forms of evil.
WANTS THOROUGH REFORM IN THE MUTUAL LIFE
Stuyvesant Fish resigned from a committee appointed by the trustees and will head an international policy-holders committee. The subsequent fight by Harriman to oust him from the presidency of the Illinois Central hasaroused deep interest. His father was Grant's Secretary of State.
April 1906, Current Literature, Vol. XL, No. 4, Edward Wheeler, Editor, page 350, Reconstructing the Life Insurance Companies
WHAT is to be the fate of our vast insurance societies? One person out of every four in the United States is directly interested in that question, and thousands of policy-holders in every continent share in that interest. In the capitals of the Old World policy-holders' organizations have been formed to look out for their members in themidst of the turmoil that was precipitated less than one year ago, and the recommendations of the Armstrong Committee may be said, therefore, to be almost an international affair. The report of that committee would fill about 150 pages of this magazine. In addition to the report, the committee has drawn up twentyfive bills embodying theresults of its deliberations, which are to be presented to the legislature. Already Ohio and Pennsylvania papers are urging their legislatures to pass the same bills. The period of agitation and sensational revelations is apparently about over and the period of reconstruction has begun in earnest. The latter is never so dramatic as the former, but it is what really counts.
THE FAMOUS ARMSTRONG COMMITTEE
Of this committee and its work a leading daily says: "For the months of arduous toil which these gentlemen have devoted to informing the public what has been going on in the insurance companies, and in informing the Legislature what laws ought to be passed, they have received no compensation save their regular salaries as members of the senate and assembly. It is a distinction quite beyond price, however, to have been a member of a committee that did its work so well."
The members are as follows: IN Front Row (from left to right)—Senator Daniel J. Riordan, Senator William T. Tully, Senator William W. Armstrong (chairman), Assemblyman James T. Rogers, Assemblyman Robert Lynn Cox. In Back Row (from left to right)—Assemblyman John McKeown, Ernest H. Wallace (assistant to Attorney-General), Assemblyman William W. Wemple, William Blau (assistant to Attorney-General), Assemblyman Ezra P. Prentice, C. R. Hotaling (sergeant-at-arms of State senate).
THIS Armstrong Committee consists of eight members of the State legislature comparatively unknown to fame. Six of them are up-State lawyers, one of the others is a Tammany politician who is in the real-estate business, and another has no reported occupation. Not a likely lot of men, at first thought, to frame a new structure for such vast interests as are represented in the insurance system. And yet these men, with the assistance of three other lawyers—Charles E. Hughes and his two associates—and an actuary, Mr. Dawson, who is admitted to stand high but is charged with a fondness for "impracticable theories," have evolved a report and a series of recommendations which have elicited a chorus of applause from conservatives and radicals alike, such as no other similar document has perhaps ever elicited. Of course, there are criticisms, especially from insurance officials; but even they almost uniformly treat the report with respect, and are careful to avert any impression that they are opposed to it as a whole. The New York Times, as it peruses the report, finds reason for renewing its confidence in popular government. It says:
"No one can read the report of the Armstrong Committee, or contemplate the transformation which the insurance business in this city hasundergone during the past year, without reaching the deep conviction that in this country there are no great wrongs that public opinion cannot right, that no dangers threaten the people against which they have not in their own hands ample powers of defense. The immediate consequence of the differences that arose between Mr. Alexander and Mr. Hyde a little over a year ago was the disclosure of unsound and dangerous con" tions, ofunlawful practices, and of gross abuses of trust in the great insurance companies. For the cure of these evils no new and untried remedies were administered. The aid of no swashbuckling crusader in the work of reform was invoked. There was nothing unusual, nothing at all out of theordinary in the methods resorted to to root out evil and restore wholesome conditions in the life insurance business. . . . These reforms have beenwrought by public opinion made effective through use of the ordinary machinery by which the interests of the Commonwealth are safeguarded."
THE above is from a conservative paper. But the radical and conservative press are at one in commending the report. The World (New York) trains with the radicals, and it insists that "the Armstrong bills should not be amended to the extent of a punctuation mark without the consent of thecommittee and Charles E. Hughes, whom the people trust." Another paper of a distinctly radical character is the Philadelphia North American. It says:
"The report of the legislative committee which investigated the three corrupt life insurance companies in New York is a great document, which, not improbably, marks the beginning of the removal of all the abuses from which American life insurance business generally has suffered...It is quite safe, we think, to say that all the things which this report declares should be forbidden to life insurance companies in New York State should be prohibited to life insurance companies everywhere. The law in each State should narrow down their opportunities for wrongdoing, just as it has done in the cases of savings funds and ordinary trust funds."
Nothing less than the superlative degree contents the New York Sun in speaking of the report and of the debt of gratitude which the public owes to Charles E. Hughes. It remarks:
"In thoroughness, impartiality, and generally in fearlessness in the statement of facts ascertained and the conclusions therefrom, the report submitted yesterday to the Legislature will rank at the head of all similar documents in the literature of investigation. Perhaps nothing of the sort ever published before contains so much matter of vital interest to so many people."
And The Tribune (New York) speaks with almost equal enthusiasm:
"The all but universal acceptance by public opinion of the suggestions of the Armstrong committee is an impressive testimonial not merely to thezeal and ability with which the investigation was conducted, but to the conservative wisdom with which remedies have been advised. Senator Armstrong, Mr. Hughes, Mr. McKeen and their coworkers have done what even the most sanguine would not have dared to predict six months ago. They have solved the problem of reforming abuses without disturbing properties; of satisfying a critical and perhaps somewhat hysterical public of the thoroughness and sufficiency of their measures and at the same time commending themselves to the good opinion of the judicious. The most radical are satisfied and the most conservative find little or nothing of which they can justly complain."
"It is conceded," says the Boston Herald, "to be one of the ablest, most comprehensive and courageous documents that ever emanated from an investigating committee in this country. There is not a streak of whitewash in it."
HOSTILE criticism of the report as a whole is almost entirely lacking; but there are numerous criticisms of specific recommendations. One of these recommendations, if enacted into law, will make it illegal for any society hereafter doing business in New York State to write more than $150,000,000 of new insurance in any one year. This would mean probably a positive decline in the size of the largest companies. In the three largest companies in1904 the amount of insurance that expired from death, lapses, maturity of contracts, etc., was an average for each of $175,000,000. If the new business were, therefore, limited to $150,000,000, the amount of the outstanding insurance of these companies would contract each year—an event which was probably foreseen and desired by the committee.
This provision, together with other provisions recommended by the committee, to abolish bonuses to agents and prizes for new business andrenewal commissions after a certain period, and to keep expenses for getting new business within the amount of the total loadings upon thepremiums, will, it is thought, hit a large number of the agents very hard and drive many out of the business. Two companies, the Mutual Life and theEquitable, have 5,000 agents each and the New York Life has considerably more. On this subject of agents, a British expert, Charles D. Higham, ex-president of the Institute of Actuaries, had some interesting things to say recently in an interview:
"I'd stop hunting for new business if I were at the head of your big companies. I'd adopt the method we follow in this office. If a man wants to be insured in our company he comes here and tells us so, and we examine him carefully to see whether we shall take him in as a partner in our mutual company. We do not pay anybody a farthing to get us new business—not a farthing. I would establish that same rule in the New York company.
"It's of no advantage to one of those great companies to get in millions on millions of new business-—if the company is to be managed in theinterests of the policy holders. The very best thing that could happen to any one of the companies which has been going wrong would be to haveits management announce it had no further use for agents, and would sell its insurance over its own counter, and be extremely careful to whom it sold it."
ANOTHER recommendation made by the Armstrong Committee is to deprive insurance companies of the right to invest their funds in stocks of any kind, and requiring them to dispose of all that they now have by the end of five years. The main purpose of this is to check the tendency to make useof the big insurance companies and their vast surplus funds to gain control of other corporations, such as railroads and trust companies, by obtaining possession of the stock. This recommendation, according to the New York Tribune, "goes to the heart of all speculation in insurancefunds and the misuse of those funds to serve ulterior purposes...So long as insurance companies are permitted to hold corporation stocks which carry the control of banks, trust companies and railroads, so long will they be involved in the exploits of the Street, and the interests of their policy-holders may be sacrificed to the ambitions of captains of industry and commerce."
A THIRD recommendation which the committee makes is the abolition of the deferred dividend policies, a recommendation so important, in theopinion of the Toledo Blade, that even if all the other recommendations are rejected and this one alone enacted into law, "the result will be well worth the committee's efforts and a monument to its sound judgment." Other provisions embodied in the committee's report are for thestandardization of policies, for prohibiting campaign contributions, for a much greater degree of publicity in the affairs of the companies, for themutualization of the stock companies and a clean sweep of all trustees now holding office, policy-holders to elect entire new boards November 15 next. Two defects the Springfield Republican finds in the report: it would achieve nothing directly and certainly in the way of reducing the cost of insurance to where it ought to be; and "in confessing an utter inability to meet the particularly crying evil involved in so-called industrial insurance, the committee is inferentially obliged to admit a failure to rise to the full demands of this whole great life insurance problem."
October 13, 1911, New York Times, page 6, 'Wide Open' Albany Exposed At Inquiry,
Agent for Osborne Opened a Resort Under the Protection of Republican Leaders.
Lincoln League Officers
Names of Barnes Men Who Rule the Club Given for the First Times---Testimony of Members.
ALBANY, N.Y., Oct. 12. -- Considerable progress was made to-day by James W. Osborne, chief inquisitor of the Senate Committee, which is investigating the affairs of Albany City and County, in fastening on the local Republican organization, of which Republican State Chairman William Barnes, Jr., is the head, responsibility for the "wide open" conditions and the vice that have existed for years in the capital city.
In the course of to-day's hearing before the committee these facts were established:
That the officials of the Lincoln League, the organization through which it is said unlawful toll to the extent of three percent of their salary has been extorted for years from city and county employees for the benefit of the local Republican organization are all men holding prominent positions in the Barnes machine and that the "dues" exacted were paid at the rooms of the Unconditional Republican Club, Mr. Barnes organization.
That the Republican leader in the district within which nearly all of the illegal resorts of Albany segregated had to be "seen" by the promoters of such enterprises; that he received them in the most friendly manner and gave them practical aid in establishing vicious resorts as well as protection from interference by the police.
In connection with this there were collateral disclosures indicating that keepers of disorderly houses were compelled to buy the beer dispensed in theri establishments without license from a bottling concern, controlled by Emil C. Rosche, former County Treasurer, and Republican leader of the Second Ward, and that the cigars sold in the disorderly houses were supplies by a firm in which members of Mayor McEwan's family are financially interested. It was also shown that the disorderly houses about election time harbored "floaters," a large majority of whom voted the Republican ticket.
Osborne Springs a Surprise.
To establish the connection between the vice resorts and the local Republican organization, Mr. Osborne had conceived the plan of letting an investigator of the committee go through all the motions of establishing a disorderly house with the active aid of the Republican leader of the district in which it was located, The plan was entirely successful despite the fact that it was not set on foot until after it had become well known that a most thorough investigation of conditions in Albany's Red Light district woud be undertaken as part of the Senate Committee's probe of Albany city and county affairs.
The dramatis personae in the sordid comedy staged by Mr. Osborne were Robert S. McClelland, a private investigator whose name is well known to most New Yorkers from the days of the Lexow and Mazet investigations and the subsequent Parkhurst Society and Jerome raids, and three private woman detectives. The frequenters of Albany's Red Light zone were preparing for the opening of the prospective establishment which had already been inspected and pronounced O.K. by the Republican district boss, when the chief actor took the stand to-day and told his story before the Senate Committee and a large number of spectators.
Mr. McClelland not only told of his own mimic Red Light venture, but of visits to more than a score of disorderly houses for the purpose of gathering evidence for the committee. All of these resorts, the witness declared, were running wide open and with the knowledge and apparent sanction of the police. Most of the testimony regarding these visits is unprintable, and women spectators were invited to leave the Senate galleries before it was given.
Mr. Barnes Protests.
Mr. Osborne said to-day that he would call William Barnes, Jr., as a witness before the investigation is over, though he had not decided upon the exact time. Leader Barnes feels keenly the reflections cast on his leadership, especially in connection with the improvement at city's expense of Western Avenue, the approach to his bungalow beyond the city limits, as was shown to-day when he sent a letter to Senator Howard R. Bayne of the committee protesting against the "insinuations" made by Mr. Osborne that while he did not take the title to the property until after the road had been improved, the negotiations leading up to the tranfer of the property had been entered upon before the road improvement was undertaken.
"There wa no verbal or written agreement or negotiation of any kind between the former owner and me prior to the Fall of 1908," wrote Mr. Barnes. "At the time the road was built, in 1907, I had no idea of acquiring any property in its neighborhood.
"I therefore express the hope that your committee, actuated by a sense of justice, will spread this communication upon the record and give it as wide a circulation as was permitted your counsel in making his unfounded charge."
"Nobody has accused Mr. Barnes of anything," said Mr. Osborne, after Senator Bayne had read the letter and ordered it entered upon the record. "Why Mr. Barnes should suspect himself I don't know. When men who are not accused rise up to defend themselves it's pretty good evidence that they have done something calling for a defense."
McClelland's Story.
Investigator McClelland said he called on E. C. Rosche, the politician-bottler, and opened negotiations with him for a supply of beer, telling him that he intended to open a disorderly resort in the Red Light district.
Rosche told him that before he did anything he must see Edward C. Coons. Mr. Coons is a jailer in the Albany County Jail and a Republican leader of the Fourth Ward. Rosche gave the detective a card to Coons. McClelland, who used the name McWilliams in the mentime had received a letter from a local real estatwe firm to inspect two houses which were for rent in the district. When McClelland saw Coons he told him about this. "Throw those cards away," Coons told the witness. "A friend of mine has got just what you want in the way of a house, and he will treat you right. I'll take you over to his place and he wil fix you up all right."
Coons took the witness over to the nearby saloon of a man named McNamara, on Hamilton Street. When they stated their business they were told that a party from Hudson had been looking at the house McNamara had for rent. This was at 49 Division Street, in the heart of the Red Light district.
"We don't want any parties from Hudson here," Coons retorted, according to the witness. "We had one party from there, and she turned out a squealer, and we had to get her out of town."
A deal was finally arranged. The detective agreed to buy the furniture already in the house from McNamara for $1,000, to be paid in installments. The bill of sale was introduced in evidence. It contained also a written agreement, in which the detective bound himself to pay $60 a month for rent of the house.
The witness afterward told how, when he went to Coons and told him he needed some new furniture and that he needed plumbing and painting and cleaning done, Coons sent him with written introductions to various business people in the district, who charged three prices for the supplies and the work.
Plenty of Protection.
"I want to keep all the business in the district," Coons explained.
"How about police protection?" the detective said he asked Coons.
"If any one interferes with you just come and see me," the politician replied according to the witness. "I wil see that you are not disturbed. And if the cops come in and get fresh, just kick them out or send them to me. I wil take care of them."
By one pretense or another, the detective said, he met the urgings of the leader that he open up. McClelland pleaded that extensive repairs must be made. Coons even offered to "stock" the house for him, but McClelland declared he wanted some "new faces," and that he would get them from New York. Finally Coons agreed that this was a good idea. The detective made a trip to New York and brought back with him three women detectives. When these had been duly installed and the stage set, first McNamara and then Coons, according to the witness, called and "looked the layout over." Both congratulated him warmly on the arrangements.
"Trim 'em good and hard: that's what you are in business for," the detective said the ward boss told him.
"What have I get to give up to do business down here?" McClelland testified he asked Coons when he visited the place.
"You needn't give the cops a cent," the leader replied. "When I became a leader here the toll was from $1,500 to $2,000 before anybody could do business. I cut all that out. You needn't pay a cent, so don't worry. If I want money I'll come down and see you."
Officiers of Lincoln League.
For the first time the list of officers in the Lincoln League became public to-day. The President of that mysterious organization is County Treasurer William P. Hoyland. Luther C. Warner, former Chairman of the Albany County Committee, is its Secretary. George Haswell, a dealer in contractors' supplies, is its Treasurer. The Directors are William Leroy of Cohoes and Charles R. Hotaling, former Sergent at Arms of the Senate and one of the political lieutenants of William Barnes, Jr.
The names were furnished by Mr. Hoyland, who was called as a witness before the committee. George Haswell, its Treasurer, is under subpoena and was to have been examined this afternoon. He asked to be excused long enough to get the books of the league. He had not returned up to the time the hearing was adjourned.
"Joe" Girvan, a rodman in the city engineer's office, to whom Jermaine C. Graham, the City Inspector, testified yesterday that he ahd paid the "dues" for the Licoln League, was called to-day and testified that he had taken the Graham contribution to the headquarters of the Barnes "Unconditional Republican Club," and handed it over there to a man whose name he didn't know. Mr. Girvan testified that he himself was taxed $30 annually on a $1,000 salary. He professed complete ignorance as to who the nofficers of the league were or the purpose for which the dues were demanded.
Article PreviewWIDE OPEN' ALBANY EXPOSED AT INQUIRY; Agent for Osborne Opened a Resort Under the Protection of Republican Leaders.Special to The New York Times. ();October 13, 1911,, Section , Page 6, Column , words
ALBANY, N.Y., Oct. 12. -- Considerable progress was made to-day by James W. Osborne, chief inquisitor of the Senate Committee, which is investigating the affairs of Albany City and County, in fastening on the local Republican organization, of which Republican State Chairman William Barnes, Jr., is the head, responsibility for the "wide open" conditions and the vice that have existed for years in the capital city.
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April 22, 1907, New York Times,
Infernal Machine For Lawyer Blau;
Box of Black Powder and Matches Sent to Julius Mayer's Former Deputy. MEANT AS A JOKE, HE THINKS Inclosure Said: "For Him Who Sent Us to Prison" -- Mr. Blau's Parents Alarmed.
Lawyer William Blau, who was a Deputy Attorney General of this State under Attorney General Julius Mayer, had an "infernal machine" sent to him yesterday at his home, 325 East Fourth Street, and the entire East Side for a while was in a ferment over the incident. The machine is supposed to have been sent to Mr. Blau by some person with a cross-eyed sense of humor, who thought that it would be funny to scare the wits out of Mr. Blau. It failed in this, but Mr. Blau's aged father and mother were very much alarmed. Detectives from Police Headquarters are looking for the supposed funny man....While acting as Assistant to Attorney General Mayer, Mr. Blau had but little to do with the prosecution of men charged with crimes against the election laws, and he understood immediately that he was the subject of a practical joke. But both his father and mother believed that the machine was real and had it immersed in the bath tub.
February 14, 1916, New York Times, Hotaling Indicted For Biltmore Bill,
Sergeant at Arms of Thompson Committee Audited False Claim, Is Charge. DISCREPANCY OF $1,562.42 District Attorney Swann Will Send Evidence Against Senator Thompson to Albany County.
After an investigation lasting nearly three weeks the Grand Jury yesterday returned an indictment against Charles R. Hotalling, Sergeant at Arms of the State Senate and of Senator Thompson's legislative committee, charging him with wrongfully obtaining and converting money of the State by willfully auditing and consenting to the payment of a false and fraudulent claim.
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