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Monday, October 7, 2002

Have we come full circle? In March 1904 the muckracking magazine McClure's ran an article by investigative reporter Lincoln Steffens that resonates eerily a century later. Steffens focused on incidents in St. Louis to reveal the complex network of corrupt businessmen and politicians who were exploiting their city – and state and country – for their own benefit.

Enemies of the Republic, Part 3

The political leaders who are selling out the state of Missouri, and the leading business men who are buying it – business as treason – corruption as revolution 

By Lincoln Steffens

Such methods are corruption; not in law, not in business. “Seeing” a chemist and getting him “to change his mind” and give “something that will answer a purpose,” would be “fraud” and “pull” in politics; in business it is only a "trick of the trade.” Printing lies is “faking” when the newspaper itself does it; but to do it for a big advertiser is a common practice of every-day business. It pays, and what pays is right. In the years preceding the formation of the trust, the Royal company, capitalized at $160,000, made profits which rose from $17,647 in 1876, to $725,162, in 1887. In other words, the income in 1887 was more than four times the capital, and the largest item of expense was for advertising, which ran up from $17,647, in 1876, to $291,084, in 1887. As the Hoaglands swore; “the great value of the property, estimated at millions of dollars, consists not in goods, nor in factories, nor in substantial assets, but in the good-will and popularity of its name and trade-mark." In short, as I said before, in a capitalization of twenty millions, eighteen represented a “general impression” that “alum was bad” and that cream of tartar was “the best.”

But this was not enough. One year’s profits of a million and a half were made on only twenty per cent of the baking-powder business. If they could get the other eighty per cent, they could get the six and one-half millions a year. And why not? Alum had not been driven out of the trade; it made gains steadily. The royal had to keep up its fight. As Mr. Hoagland said: “A subtle tenure hangs upon its continued success (sic) which can be maintained only by the most unique and peculiar abilities, by the most cunning tact and long experience.” Since, then, they had to fight for life, why not fight for a monopoly? Ziegler was (and he is) for entirely driving alum out of use.

How? By legislation. But success would cost the consumer thirty millions a year. The consumer is the people, and legislators are representatives of the people. No matter. The representatives of the people must use the power of the people to build up a trust by compelling the people to use only trust baking-powder. Impossible? Not at all. Legislation favorable to the Royal has been enacted or offered in twenty-four states of the Union! How the trust worked in all these states I do not know. Ziegler charges the Hoaglands with having “paid money to influence legislators in the Legislature of the State (of New York) and paid the same out of the funds of the company.” I don’t know about New York. I must go by the experience of Missouri, and, while Attorney-General Crow charges Ziegler with bribery out there, all I can prove is that bribes were paid in the interest of the Royal. Besides, direct bribery by a captain of industry himself is not typical, and it is the typical that we want to understand. This commercial concern went into politics, and it applied to the politics of Missouri those “peculiar abilities” and the “cunning tact” which we know and which we see have met the supreme test of business-success. Now we can see what business methods look like in politics.

Ziegler becomes a mere shadow. Corrupt royal agents do the work. One of these was Daniel J. Kelly, publisher of the American Queen. Kelly organized, in 1890, the National Health Society, a “fake” as to national membership; just like fake political organizations. “Pure food” is the Royal’s platform, and Kelly made pure food his hobby. “I have made a study of the subject,” he said in an affidavit submitted to the United States Industrial Commission. “Such time as I have had free from the demands of my publishing business I have largely devoted… to furthering the passage of pure food bill or three years. My attacks… have been largely directed against alum baking-powder, and I have been interested in the movement that has spread through nearly all the states of the Union in favor of pure food laws, prohibiting the use of alum baking-powders on the ground that they are poisonous.”

To follow Kelly through “nearly all the states of the Union” would be interesting, but Missouri will have to do. In 1899 a bill was introduced into the Legislature of that state, prohibiting the use of poisons in food, “arsenic, calomel, bismuth, ammonia or alum.” “Or alum” was the point. Missouri is an alum state; $15,000,000 was invested there in the alum baking-powder industry, which was one of the largest in the state and represented all the capital and all the enterprise of many of its citizens. “Or alum” would drive them out of business and leave a foreign trust a monopoly. But those legislators, in this Democratic State, advanced that bill out of turn and passed it, without a hearing, without notice, in secret. And the alum men did not learn till August 14th, that after August 17th they could not continue in business, and then they heard of the law by accident.

This outrage aroused public opinion, and the alum men prepared a repeal bill for the next session, two years later. Meanwhile, however, Kelly and the National Health Society extended their organization. The Health Society of Missouri was formed and the founder thereof was that “friend of the people,” the Hon. William J. Stone, ex-Governor of Missouri, and then a candidate for United States Senator. Now, Stone is no boodler. He and Colonel Phelps, after a long political friendship, quarreled once, and Stone called Phelps a lobbyist. “Oh,” and Phelps, “we both suck eggs, Stone and I, but Stone, he hides the shells.” But I do not believe that Stone handles bribes. He is that other type, the orator of the people whose stock in trade is his influence; “an embezzler of power” Folk called him once. This anti-trust orator was hired by the trust to bring action under the trust’s “or alum” law against his fellow citizens and thus install the foreign trust in the field of a general local industry. “Ah, but he acted as a lawyer.” Do you know who said that? None other than William J. Bryan, arch-Democrat, arch-friend of the people, arch-foe of the trust, and that does excuse this political treason – in law and in business. I asked one of Folk’s confessed boodlers, once, whether, if he had it all to do over again, he would boodle again. “Yes,” he said thoughtfully, “but I would study law.” “Why?” I asked. “So as I could take fees instead of bribes,” he said, without humor. In other words, he saw, as Bryan saw, and Stone and the commercial world see, that what is boodling in politics is business in the practice of the law. And the practice of law is business.

When the alum men’s repeal bill was introduced in the session of 1901, Kelly’s plan to beat it was laid. Lieutenant-Governor Lee, who has told the story, referred the measure to a picked committee which was to have a hearing. The Hon. William J. Stone was to appear on the trust side, but not for the trust. There was no hearing, but Stone’s speech, full of the Royal expert’s chemical facts, in the Royal’s phraseology, was laid on the desks of the members, and this is the way it begins:  “I appear before you on the request of the Health Society of Missouri. This association is composed of a number of people – good people, both men and women – living in different parts of the State, with headquarters in St. Louis.” There was no such society. The “number” was three. They were not “good people,” not “both men and women”; they were Stone, his son, and one other man. And the headquarters in St. Louis was in the safe of Stone’s law office.

And this is a United States Senator! The Democrats of Missouri have sent him to Washington to do battle there for the “good people, both men and women,” against the Republican representatives of the Octopus. Well, we also are bound for Washington and we’ll be interested chiefly in the Republican Senatorial traitors, but we shall meet Stone there, too, and an introduction to a Democrat or two may help us. Let us turn now to an honest boodler, the Hon. John A. Lee, and hear how the “little alum fellows’” repeal bill was killed in 1901, and how again, in 1903, in the session which elected Stone United States Senator, it was beaten.

“When I was elected Lieutenant-Governor in 1900,” Lee says, “I was entirely unfamiliar with the ways of legislation. The Royal Baking Powder Company had been doing extensive advertising in the paper with which I was connected. I have known Daniel J. Kelly for some years and he has been ostensibly my friend. In the beginning of the session of 1901, I made no secret of the fact that it was my desire to defeat the repeal of the (anti-) alum law.

“One day Senator Farris came to me and said that it ought to be worth a good deal to the Royal Baking Powder Company to keep the anti-alum law on the statute books; and that the boys on the committee did not think that they ought to prevent its repeal without some compensation. I asked him what the boys wanted. He said they wanted $1,000 apiece for six of the committee, which was all of the committee except Senator Dowdall, and $1,000 for the Senator who introduced the bill. Unfortunately for me, Kelly called me up over the long-distance telephone from New York that same day, and I communicated to him the proposition made to me by Farris. He said he would see his principal and wire me the next day whether or not the proposition would be accepted. I received a telegram the next day from Kelly stating that the proposition was agreeable. This telegram I gave to Farris in Senator Morton’s room, who was ill at the time. The agreement was that the bill, in return for the money to be paid each Senator, would be killed in committee – that is, never reported from the committee. The committee did keep the bill, and though there were various protests all over the State demanding a report from the committee, none was made.

“I have since learned that the chairman of the committee, in order to escape the pressure being brought upon the committee, left Jefferson City with the bill in his pocket, not returning until the closing day of the session, and that the report of the committee on the bill was filed by the chairman after the session adjourned, and the journal falsified, so as to have it appear that the report was made during the session of the Senate on the last day. This report made by the committee on the bill was written in New York and sent to me by Kelly. I turned it over to Farris, and this report was made a report of the committee, I believe, without any change.

“On February 28, 1901, I received a check from Kelly for $8,500, being the $7,000 for the seven Senators mentioned and $1,500 for myself. On march 19, 1901, the day after the adjournment of the Legislature, I met Farris by appointment at the Laclede hotel and settled with him and his associates in accordance with his proposition. I went to the bank and drew $7,000, leaving $1,500 for my share, went to Farris’s room, and there handed the money to Senator Farris. He divided the $7,000 into seven different packages or envelopes. While I was in the room Senator Mathews and Senator Smith came in, and to each of these Senator Farris gave one of the packages. The $1,500 was to go to me, and was used by me in a trade paper.

“Just prior to the last session (1903) Kelly sent for me to come to the Planters’ hotel. I went to his room, found Senator Farris there, and Kelly told me in the presence of Farris that he had $15,000 for the Senators to defeat the repeal of the alum law of this session, and that $1,000 was for me. I told him I could not take it. He communicated with me at various other times, that he had $1,000 for me in return for what I should do for him, etc., but I was determined to take no more money in that way, and refused. Finally, it seems he sent for my brother and gave him a check for $1,000, telling him to give it to me, tendering it as payment to me for my official influence.”

Poor Lee! The miserable bribe-taker is disgraced and abandoned. He might have been governor. The alum people were for him in the last session; he had promised them a fair committee, and he hoped not to have to vote himself. But Senator Farris was against him, and Farris arranged it so that, when the measure came up, there was a tie in the Senate. At the close of the roll, when the clerk turned to the chair for the deciding vote, Farris rose in his place. The chamber was still; everybody was aware that a weak boodler “wanted to reform,” and that the “game was to show him up.” Lee hesitated.

“Mr. President,” said Farris, pointing his finger at Lee, “we are waiting for you.”

“Nay,” Lee voted, in a whisper, and the trust was left in control for tow years more.

Even then Lee’s hopes were not dead, nor his chances. He “peached” and that ended Lee. He is a traitor-to the System.

But what of the captain of industry? What of the Royal Baking Powder Company, what of the Gould railroads, what of the breweries? What of Ellis Wainwright and George J. Kobusch and John Scullen? What of all the rest of the big business men? They are the sources of our political corruption. What of the System back of the corrupt rings? That is the sustenance of our political degradation. Ellis Wainwright, a fugitive from justice, dines in Paris with the American Ambassador, who is negotiating a treaty for the extradition of bribers. A group of the ablest criminal lawyers in New York, at a hearing before Governor Odell at Albany, could not speak of John A. Lee without twisting their faces into ludicrous scorn; but they were defending William Ziegler from extradition to Missouri. And John Scullen! – I cited once, as an example of the shamelessness of St. Louis, the fact that Turner, the State’s witness in the boodle cases, was still president of his trust company. When I returned to the city, some honest business men told me triumphantly that Turner had had to resign.

“Is John Scullen still a director of the World’s Fair?” I asked.

He was, they said. “Then why has Turner been punished?” I inquired. “Was it because he boodled, or because he was a traitor to the system and peached?”

“Because he peached, I guess,” was the answer, and there lies the bitter truth. There is no public opinion to punish the business boodler, and that is why Joseph W. Folk had to go into politics and run for Governor out in the State with “boodle” for the sole issue. He is laying down as a political platform the doctrine of the new patriotism, that corruption is treason; that the man who, elected to maintain the institutions of a government by the people, sells them out, is a traitor; whether he be a constable, a legislator, a judge, or a boss, his act is not alone bribery, but treason. His appeal is to the politician, the people, and the business man, all three, and there is hope in all three. The politician is not without patriotic sentiment: Ed Butler does not mean harm to his country; he is only trying to make money at his business. And as for the business man – –

One night, at a banquet of politicians, I was seated beside a man who had grown rich by unswerving loyalty to a corrupt ring – “the party organization,” he would have called it – which had done more permanent harm to his country than a European army could do in two wars. He was not a politician, but a business man; not a boodler, but the backer of boodlers, and his conversation was a defense of “poor human nature,” till the orchestra struck up a patriotic air. That moved him deeply.

“Isn’t it beautiful!” he exclaimed; and when the boodlers joined in the chorus, he murmured, “Beautiful, beautiful,” then leaned over and with tears in his eyes he said:

“Ah, but the tune for me, the song I love, is ‘My country ‘tis of thee.’”

I believe this man thinks he is patriotic. I believe H. O. Havermeyer thinks his success is success, not one kind of success, but success, not alone his but public “prosperity.” And William Ziegler, who is spending millions to plant the American flag first at the North Pole, I am sure he regards himself as a peculiarly patriotic. American – and he is. They all are, according to their light, honorable men and patriotic citizens. They simply do not know what patriotism is. They know what treason is in war; it is going over to the enemy, like Benedict Arnold, and fighting in the open against your country. In peace and in secret to seize, not forts but cities and states, and destroy, not buildings and men but the fundamental institutions of your country and the saving character of American manhood – that is not treason. That is politics, and politics is business, and business, you know, is business.

“Do you really call it wrong to buy a switch?” asked a St. Louis business man. “Even if it is necessary to your business?”

“Say,” said a politician, “if a rich mogul comes along and shakes his swag in your face and asks for a switch that he has a right to get, because he needs it in his business, wouldn’t you grab off a piece? On the level, now, wouldn’t you?”

They answer each other, these two, and each can judge the other, but neither can see himself as he is or the enormity of his crime. And “that man Folk,” rising out of the wrecked machinery of justice in Missouri, may lead his people to see that the corruption of their government is not merely corruption, but a revolutionary process making for a new form of government; and the people of Missouri, rising out of the wrecked machinery of the government of Missouri, may teach their politicians a lesson in liberty and honor. But that is not enough. That will reach neither the source nor the head of the evil. Some power greater than Folk, greater than that of the people of Missouri, must rise to bring home to the captain of industry the truth: that business, important as it is, is not sacred; that not everything that pays is right; that, if bribery is treason, if the corrupt politician is a traitor, then the corrupting business man is an enemy of the republic. No matter how many bonds he may float in war, or how much he may give for charity and education, if he corrupt the sources of law and of justice, his business is not success but – treason and a people’s failure.