The two investigators said they did not know “how far in reality Mr. Kingsley was interested in any stock besides that which appears in his name,” but their impression was pretty far. This, they agreed, was not as it should be and they said that “a mere partnership between the public and private individuals who have the expenditure of the money is not sufficient to protect the public interests.” So they concluded with two specific proposals.
First, that Alexander McCue, as counsel for the Bridge Company, draw up for approval by the Board of Directors an amendment to the original charter authorizing the cities of Brooklyn and New York a vote on their stock. The cities would also decide on the choice of directors, “taking care, so far as may be practicable, that the private stockholders are represented in the Board in proportion to the stock held by them.” In short, the two cities would henceforth control the bridge and the power enjoyed by the private stockholders—as granted by Murphy’s charter—would no longer be absolute.
The second proposal was to continue to employ a General Superintendent (no name specified), but at an annual salary not to exceed that paid the Chief Engineer, which by this time had been raised from eight to ten thousand dollars.
Demas Barnes, however, insisted on submitting his views separately. The criticism in the majority report he found too mild and generalized; the recommendations made fell far short of the mark, he said. So as a minority of one Chairman Barnes presented his own report, which was twice the length of the other one and infuriated nearly everybody who had had anything to do with the business management of the bridge. It was a remarkable document.
Barnes’s basic contention was that since the bridge was being built with public money, its managers ought to be accountable to the public, which they were not. He said that the original charter provided the people of Brooklyn and New York with no adequate protection against fraud; that the business side of the bridge had been carried on in much too much secrecy; and that certain members of the company were benefiting personally more than was proper. He reported that the Finance Committee kept no records, that there was no record of a minority motion ever voiced at a meeting of the Executive Committee, or of any substantive debate on any question. He noted that Kingsley, the largest stockholder, was not a director or on any of the committees, so he could not be held responsible for anything decided on by the board or by the committees. And yet: “While no restriction appears limiting his discretion, there is no act or recommendation of his which has not the unqualified approval of the Committee.” No part of the material purchased thus far had been advertised for. There was no indication of who opened bids, if indeed any of them had ever been submitted sealed.
Kingsley’s arrangement for a percentage of expenditures Barnes found to be the most reprehensible irregularity and he was puzzled why the various alterations in the agreement made the previous November had been done without any explanation. And it was Barnes who totaled up all the money paid out to Kingsley’s Saw Mill & Lumber Company or to its treasurer, A. Ammerman.
Barnes also reported that checks seemed to be handled in a rather peculiar fashion. When most organizations deposited checks in the bank, he said, it was customary to record the name of the drawer on the check in the margin of the checkbook. But, he went on, “The following credits are given for money received April 12th, 1870: Five parties, $23,000. The amount did not reach the bank until June 3rd, and only one check was deposited instead of five. The name of the drawer of the check deposited has been erased and the word ‘check’ inserted. The same circumstances (erasures, etc.) occur several times.” The procedure struck Barnes as most mysterious.
But this and one or two other things in his report struck some of the other directors as nit-picking, and for all the rather fishy-looking inconsistencies in the record books, Barnes had in fact found precious little proof of foul play except, again, for Kingsley’s $125,000.
Still the report wound up as a rigorous indictment of the private corporation as a means of building such an important public work and a strong endorsement for an immediate change in that policy:
The Company is under no financial restriction, and is accountable to no authority. It may do its business in private; its members may furnish any part of the supplies; it may pay such prices for the supplies, labor, superintendence, etc., as it chooses. The company violated no law in agreeing to pay fifteen percent on its total disbursements…Neither would it have done so had it paid fifty per cent or one hundred per cent. There are men in this city who will pay for all the private stock, and give one million dollars for the privilege of completing the Bridge under the existing charter.
Kingsley, he said, might even be commended for taking only what he did, considering the opportunities available. The miracle was, in Barnes’s view, that more money had not been stolen. He left little doubt that he thought Kingsley was profiting handsomely, but he had no solid facts and figures and so never condemned the man outright. All Barnes could conclude in print was that Kingsley was doing no more, in fact a good deal less, than the law permitted him or any other big stockholder to do. The man was not crooked, or at least Barnes could not prove him so, but the law was and something could be done about that.
Unlike Hewitt and Schroeder, Barnes was not willing to leave any changes in the charter to the Board of Directors. He wanted such changes agreed to and approved by an impartial conference of responsible citizens, none of whom had had any previous connection with the bridge.
He also wanted further investigations conducted and he made no mention of keeping Kingsley on. “The people need the Bridge,” he concluded; “make them realize that when they have expended ten or fifteen million dollars on a bridge [he was not ready to accept Roebling’s latest figure apparently] that they will have ten or fifteen million dollars’ worth of bridge, and they will be ready to furnish the money.”
In the months to come, Barnes would argue for a long list of commendable amendments to the charter. He wanted all meetings of the board open to the public, all supplies in amounts over a thousand dollars advertised for, all bids to be opened by the secretary of the company and in the presence of the board. He wanted the records of all committees open for inspection by any director at all times.
When the Executive Committee filed its report, in answer to the Committee of Investigation, its defense would be that the stockholders were doing only what was within their rights. Barnes would be chastised for quoting from the records only those references that supported his own arguments and for filling his report with “disingenuous insinuations against the Executive Committee.” The arrangement with Kingsley was defended on the grounds that it covered only the building of the foundations, that such work was highly precarious, and as a man to take charge of such an unprecedented effort Kingsley had been the ideal choice. That Kingsley expected to make money out of the arrangement was not denied. “It is, no doubt, true that Mr. Kingsley, in connecting himself with this great work, looked to some pecuniary advantage. It is hardly to be supposed that anyone would spend so much time and labor and incur such pecuniary liability as he had done without some expectation of remuneration.” The Executive Committee claimed Kingsley’s 15 per cent was no more than the federal government allowed contractors furnishing stone for the new Post Office in New York. (The situation was not quite the same clearly, but that was overlooked.) And finally, argued the committee, if Kingsley had not put up the money he did, when he did, the bridge would not have been built, and nobody could say the job had not been handled superbly in all the time he had had anything to do with it.
What exactly his duties were, how much of his time he was giving to the bridge and how much to his other business and political interests, were never explained.
Why he had agreed to the ceiling of $125,000 and had returned the $50,000 when he did was explained, however. He had agreed “on the condition that he should be relieved of a certain portion of the stock of the company he was carrying, which we agreed to do in our individual capacities
, with the assistance of two other members of the Board, at our request, by purchasing from him and paying him for $130,000 of the stock at its par value, taking the consequences of our act upon ourselves.”
In other words, by returning $50,000, Kingsley got back $130,-000 that he was in the hole for. So, in actual fact, instead of returning $50,000, he was really having $80,000 returned to him, and if that plus $125,000 he had been paid for his services did not add up to the $250,000 he claimed to have spent—but was never able to itemize to anyone’s satisfaction—it was a tidy sum nonetheless.
As for the purchases made from his Saw Mill & Lumber Company, the defense was that since the Bridge Company got everything at a good price, then no damage had been done. That the Saw Mill & Lumber Company and Kingsley may also have benefited by the business was apparently not considered a pertinent issue.
The Executive Committee was able to report, however, that the money paid to Mr. Ammerman, treasurer of the Saw Mill & Lumber Company, should not be viewed as payments to that firm. Mr. Ammerman, it was explained patiently, had been paid some $84,000 not as a representative of the Saw Mill & Lumber Company, but as the representative of mill owners in Georgia (the same Georgia firm perhaps from which Kingsley had bought the $46,-000 worth of lumber back in 1869).
But the real issue, in the view of the Executive Committee (then composed of Murphy, Slocum, Stranahan, and Husted), was not Kingsley’s innocence, but whether or not the Bridge Company had been run according to the accepted practices and ethical standards of a private corporation, and in their unanimous opinion it most certainly had. The purchasing of materials, for example, was, they said, conducted as it would be by the officials of a railroad company or a private citizen building a house; such people, it was reasoned, ask bids for the work from whichever builders and dealers they choose, whichever “they think best for their interest, without deeming it necessary or advisable to make public advertisement of them.”
“This Company was chartered as a private company,” they reminded everyone, “and although the cities of New York and Brooklyn subscribed to its capital stock, that fact did not change its character. There were scores of railroad corporations in this State to whose stock towns and cities have subscribed under authority of law, and which retain their private character. We refer to this fact merely for the purpose of showing how natural, right and proper in itself it was for the Executive Committee, in the absence of all legal provisions to the contrary, to exercise their discretion in this respect in the same manner as other private corporations.”
So for all the talk of the bridge as a noble public work, the men who had the power saw it as a business proposition.
This particular document was signed on the last day of December 1872. On January 11, 1873, the Board of Directors convened. A committee of five was named to consider how the charter ought to be amended. The five were Hewitt and Schroeder, William Marshall, Judge McCue, and James Stranahan. Murphy, the man who wrote the original document, was not chosen to participate, nor was Demas Barnes, its severest, most conscientious critic.
Then it was resolved by the board that the Executive Committee be directed to appoint “Mr. Wm. C. Kingsley…General Superintendent at a salary of $10,000.” This was done by the Executive Committee later the same day on a motion by Hewitt, which included the provision that Kingsley’s pay be effective as of the previous July 12, when his “former appointment” had terminated with the completion of the tower foundations up to high-water mark. The motion was carried. The management would remain precisely the same as it had been all along.
Kingsley, who was present for this little ceremony, accepted his “new” appointment gratefully, then remarked that his physician had advised “some recreation from his labors was absolutely necessary” and with that in view he was forced to ask for a six-week leave of absence. This request was granted unanimously.
Hewitt had been convinced somehow. He was the key man now, clearly enough, the one known voice of reform on the Executive Committee, the one new face, the one and only representative for the city of New York. And apparently his own examination of the Bridge Company, plus explanations offered by the others on the Executive Committee—not just in their formal rebuttal to Barnes, but in personal conversation—had been enough to satisfy Hewitt that there need be no shake-up in the over-all method of operation or in the principal members of the cast.
Hewitt still wanted the charter changed, but he was in no hurry about it and he had concluded that for the time being there was no reason why things could not continue as before. So as far as the bridge management was concerned the crisis had passed, the case was closed. Nothing was ever said to that effect, but that was the situation. No one on the Executive Committee would oppose changing the charter, then or later, but there would be no great rush to see it done either.
For anyone else who had troubled to follow the situation as it had evolved over the past year and a half, and who had been able to keep it all straight, things did not seem all that tidy, however. Quite a little had been left unsaid, several very important questions had been left unanswered.
Kingsley had still not explained how he spent a quarter of a million dollars prior to the start of construction. (Barnes had been able to justify slightly over $59,000, but that included the early lumber purchase of $46,000, for which Kingsley & Keeney had already been reimbursed. The Executive Committee in its answer to Barnes had not bothered with an estimate of Kingsley’s early expenses or even a suggestion of what they might have involved. Kingsley was simply credited with putting up a large sum of money “at risk,” for which he rightfully deserved to make a profit.)
Nobody said why Kingsley’s agreement had been changed so suddenly after the Tweed Ring’s defeat at the polls or why an erasure had been made in the records instead of simply amending the agreement in the usual fashion.
Kingsley’s duties were still unexplained. In all that had been said in the man’s defense or to justify the peculiar privileges he enjoyed, no one had bothered to mention what his responsibilities were or how much of his time he was expected, or requested, to devote to them. His presence was vital according to the members of the Executive Committee, but just why that was so none of them ever said. Moreover, it seemed curious that whenever the management of the Bridge Company wished to present an authoritative, reliable opinion on the status of the work, Kingsley was never quoted—it was always Roebling. The bridge was always progressing under Roebling’s direction, never under Kingsley’s, according to Bridge Company pronouncements. Unfortunately Roebling himself had not been very clear about what Kingsley contributed to the job; in the two annual reports he had prepared thus far, Roebling cited various members of his staff by name, going out of his way to credit them for this accomplishment or that, which, as he said, often involved “a certain amount of risk to life and health.” But Kingsley he mentioned only in passing—as having made some contracts.
If Kingsley had spent $100,000, $200,000, $250,000, whatever, before the bridge began, then where did he spend it? In Washington? Albany? Or if he had spent no such sums, but more like the sixty thousand that seemed a reasonable figure for the sort of initial expenses such a work customarily entailed, then why was he entitled to such a disproportionately high compensation for his services?
How much had his Saw Mill & Lumber Company profited from the bridge business he had arranged for it? In how many other firms doing business with the bridge did he have an interest? How much of the stock owned by the members of the Executive Committee had he made it possible for them to own? Why had he been so very eager for this bridge in the first place and how many other bargains had been agreed to privately with politicians and contractors? These were the obvious questions and there were still no answers for them. Nor would there ever be from those in a position to know.
Hewitt would staunchly contend that nothing improper had occurred. The others would simply not say anything more, except to deny the charges that came along. How much Roeblin
g knew of what went on behind the closed doors of the Bridge Company was very hard to surmise. But the impression was that anything undeniably dishonest could have been kept from him and would not have been an especially difficult thing to do. Roebling was not a stockholder and so was not eligible to attend directors’ meetings or meetings of the all-powerful Executive Committee, except when specifically invited. And the record revealed that he had been invited very seldom and only when engineering matters were to be discussed.
Why he owned no stock was never explained. It had been his father’s practice to invest in the bridges he built, whenever possible. And surely if Kingsley and the other Brooklyn people were as anxious for private capital as it appeared they were in the earlier days, then the wealthy John Roebling should have been a prime prospect. But the elder Roebling had not invested in the bridge, nor would his son.
Perhaps Kingsley and the others discouraged John Roebling from coming in with them, preferring to keep the imperious old man and his unbendable integrity at a safe distance. More likely, both Roeblings, knowing something of the other stockholders, and suspecting more, decided they wanted nothing to do with that side of the bridge. The answer will never be known.
Washington Roebling was a very sick man by the time the reports from the Committee of Investigation were issued. One day he would say something of what he knew about the alleged bridge scandals, but that would be many years later.
For the moment, even to those willing to give Kingsley the benefit of the doubt, it seemed obvious that if he had not gotten rich on the bridge, he certainly had been nicely set up to do so. Furthermore, he had managed it all in such a way that it had cost him virtually nothing. Neither he nor any of the others had lost a cent for their efforts.
Indeed, it seemed terribly naïve, quite unrealistic really, considering Kingsley’s basic nature and the ground rules of the political and business circles he customarily operated within, to conclude anything other than this: Kingsley had passed out money liberally in New York, perhaps in Washington, but most certainly in Albany. In Washington there had been comparatively little resistance and Demas Barnes, never a friend of the Brooklyn Ring, was probably not a likely candidate for bribery in any event, nor a safe confederate in any such dealings. But in Albany, support could be extremely dear, as everyone who read a newspaper knew perfectly well by this time, and especially for a charter that was virtually a license to steal, if anyone wanted to view it that way. It was even suggested by one New York paper that if Henry Murphy was the man doing all the work in Albany, writing the legislation, “lobbying” with Tweed, and so forth, then just maybe Henry Murphy had exacted his own large fee for services rendered, and that that had accounted for a substantial part of the money Kingsley “invested” earlier on. If this were so, then perhaps some of the “facts and figures” put forth by Kingsley beside Murphy’s fireplace that fateful winter night in 1866 were not quite what Alexander McCue implied in his account of the scene.
The Great Bridge Page 31