Saturday, November 17, 2012

Three Gilded Age Crimes

The Gilded Age, so named by Mark Twain, was a time in the last quarter of the 19th century in America when the economy staggered back and forth between depression and weak recovery. At the same time wealth was increasingly concentrated in the hands of a small number of Robber Barons -- businessman-thieves like Vanderbilt, Rockefeller, and Carnegie who became obscenely wealth exploiting cheap labor and stealing from corrupt governments.

The Murder of Jubilee Jim Fisk
Jim Fisk was a fat, coarse popinjay. As a New York financier he loved to manipulate markets. In 1869 he tried and nearly succeeded in cornering the market of gold at the risk of destroying the nation's economy. In 1872, Fisk's paramour and her lover (Fisk's business partner Edward Stokes) tried to blackmail Fisk. Unfortunately for the blackmailers, Fisk didn't give a rat's ass for his reputation. Frustrated and bankrupt, Stokes shot Fisk on a hotel stairwell. Fisk was so poorly thought of in New York that Stokes got away with serving only four years for manslaughter.

Crédit Mobilier Scandal
The federal government was committed to building a transcontinental railroad connecting the wealth of California with the rest of the nation. Actually, the Union Pacific Railroad bribed Congress into voting massive appropriations for constructing the rail line. Thomas Durant formed a phony company, Credit Mobilier, with himself, his friends, and corrupt politicians as stockholders. The federal government funneled hundreds of millions of dollars (back in the time that was a lot of money) in to the project, most of it went to Durant and his buddies. The scam was discovered in 1872 and while there was a huge hubbub Durant was so politically protected (he owned President James Garfield) he never saw the inside of a jail.

Boss Tweed
William Tweed was the most thoroughly corrupt politician in American history, and that's saying something given the competition. For almost 20 years Tweed ruled New York City through Tammany Hall as a kleptocracy where even criminal gangs would pay tribute to him to allow free range for their activities. Listing all of Tweed's crimes would be impossible, there is not enough bandwidth on the internet. I shall pick just one, the construction of the New York County Courthouse.

Designed to cost $350,000 the actual cost ended up over $13 million (a quarter of a billion dollars in today's money). Most of the money ended up kicked back to Tweed and his compatriots. Examples of the cost overruns -- $200,000 for two tables and a couple dozen chairs, A carpenter charged $400,000 for woodworking that was never done. That one courthouse ended up costing twice as much as all of Alaska. After the scandal broke, Tweed had himself paid by the city to publish a report clearing him.

All totaled, Tweed stole some $200 million ($3.5 billion in 2012 dollars) from New York City.  Tweed ended up in chains because he managed to piss off Irish Catholics. That was followed by NYC approaching bankruptcy causing the monied elite who had all profited from Tweed reign to turn on the Boss. Tweed was arrested, tried, tried again, convicted, escaped, captured in Spain, deported, and jailed again. He died in the prison, living in the warden's parlor for $75 a week.

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