Not surprisingly, the two men decided nothing that evening, and the meeting ended with Pecora no closer to inspecting the bank’s records than he was before. The lines were drawn, and Pecora had no reason to believe that Mitchell or City Bank had any intention of cooperating. Now it was Pecora’s turn to turn up the heat. He immediately notified Mitchell that his appearance before the committee on February 21 was “imperative.” Il Duce was simply going to have to wait for Mitchell’s advice on the lira. The next day he told the press: “[T]he committee staff has encountered certain recalcitrants who are attempting to obstruct the inquiry. . . . I shall not hesitate to employ every legal means to ascertain all facts essential to the investigation.” There was little doubt who Pecora was referring to.38
Pecora was still pursuing evidence from other sources, things like Mitchell’s tax returns and other documents in the hands of federal agencies, but he wasn’t going to get very far without the bank’s documents. And it wasn’t just documents relating to City Bank transactions. John Marrinan suggested getting “a line on salaries and bonuses paid to officers of the National City Company.” Cary and Garrard Winston clearly weren’t going to let them see those documents without a fight—even shareholders didn’t know what the officers made. On Saturday, Cary and Mitchell continued to duck Pecora’s calls, perhaps thinking that he, like Gray, would give up in the face of their stonewalling. They didn’t know Pecora very well.39
Pecora asked Norbeck to issue a new set of subpoenas requiring the bank’s employees to produce everything in Washington the following week. If they failed to show or failed to bring all the documents, they would be held in contempt and thrown in jail until they complied. Norbeck readily agreed to issue the subpoenas. In truth, he was likely in a sour mood, particularly unwilling at that moment to be conciliatory toward a bunch of New York bankers. Not when the news from home was so disturbing. Protesting farmers in Sioux City had just shot and killed a sixty-eight-year-old man who had tried to run their blockade.40
The subpoenas went out on Tuesday, February 8, and City Bank caved the next day, agreeing to give Pecora and his staff complete access to its books and records. Cary’s argument for limiting the scope of the committee’s inquiry didn’t prevail, but he bought his client a week. Now Pecora had only twelve days to get through City Bank’s documents while simultaneously trying to conduct an inquiry into the Insull utility collapse. To forestall any other attempted delays, Pecora would go to City Bank’s headquarters himself.41
Chapter 6
A MINE OF INFORMATION
February 9 was brutally cold in New York City. The temperature hovered in the mid-teens, but the windchill made it feel below zero as Pecora made his way down to Wall Street. He traveled through a city devastated from three years of depression. “No one can live and work in New York this winter,” Rexford Tugwell, a member of the Roosevelt Brain Trust, wrote, “without a profound sense of uneasiness. Never, in modern times, I should think, has there been so widespread unemployment and such moving distress from sheer hunger and cold.” Pecora didn’t have to look far to see it. Beginning just below his Riverside Drive apartment was a massive encampment of squatters that stretched nearly forty blocks north. Pecora could watch the crowds gathered at the dumps that lined the Hudson, waiting to scavenge bits of food from the next load off the garbage trucks. President Hoover said that no one was starving, but he was wrong; New York hospitals reported more than thirty starvation deaths in 1933.
That kind of hunger certainly wasn’t limited to New York. In Chicago, crowds fought over the garbage bins behind restaurants. In the coal fields of Appalachia, miners were earning less than $2.50 a day and were lucky if they could work three days a week. Hunger was a constant presence, with most diets consisting of little more than beans and bread. When one schoolteacher in an impoverished mining camp told a faint young girl to go home to eat, she replied, “It won’t do any good . . . because this is my sister’s day to eat.”
As Pecora made his way farther downtown, he would have passed the empty hulks of half-finished office buildings. Foreclosure sales were now a daily occurrence; three weeks earlier the Pierre Hotel had been sold off to the highest bidder. Bryant Park, the once trim little square of green just around the corner from his office, was choked with weeds. To the west were Army and newspaper trucks pressed into duty as soup kitchens in Columbus Circle and Times Square. There, men in what were once fashionable suits and hats, long since tattered and frayed, stood with their collars turned up against the cold, burlap wrapping their shoes, their eyes fixed on the sidewalk. They waited patiently in lines that wrapped around the block—the columnist and Algonquin Round Table member Heywood Broun called the lines “the worm that walks like a man.” When they accepted the bread or thin soup or just coffee and doughnuts, they would shuffle silently away, their faces “flat, opaque, expressionless.”
For all the unfocused anger at the financial community, this was still the heyday of rugged American individualism; success and failure were supposed to be about personal character, not broad economic forces. Business leaders were frequently heard blaming the poor for their plight, accusing them of failing to practice “habits of thrift and conservation” and of foolishly gambling “their savings in the stock market.” Many of the jobless blamed themselves as well. They were failures and they were ashamed.
The homeless weren’t just along Riverside Drive; they were everywhere, in missions and municipal shelters, in subways and bridge abutments, on park benches and in doorways, and even in the cheap speakeasies, where for the price of a single drink you were welcome to sleep on the sawdust-covered floor. On the Lower East Side there were so many evictions that you couldn’t walk down the street without seeing furniture on the sidewalk. In Queens, foreclosed home-owners barricaded their front doors with barbed wire and sandbags, daring the sheriff to try to evict them. In Central Park, hard behind the Metropolitan Museum of Art, were two hundred scrap-wood-and-tin shacks, their occupants often seen roasting the birds they managed to catch in the park. “Jungletown,” the New Yorker reported, was on the corner of West and Spring streets, “a whole village of shacks and huts . . . made of packing boxes, barrel staves, pieces of corrugated iron, and whatever else the junkman doesn’t want.” Everywhere people were afraid, afraid of the unknown, afraid that this skimping and saving, this perpetual gnawing uncertainty and hunger might be the norm for the rest of their lives.1
Mitchell, luckily, was able to avoid the brutal cold of that February day. He and his wife had decided to take a short trip to Bermuda now that the Italy trip was off. The fall and winter had been quite busy socially for the Mitchell family. Mitchell’s daughter, Rita, came out that year, one of the honored debutantes at Tuxedo Park’s lavish Autumn Ball. The debutante season ended just after Christmas with a supper dance at the Mitchell home on Fifth Avenue. The Mitchells struck a holiday theme for Rita’s party, bedecking the house in evergreens, poinsettias, and holly. Rita greeted her nearly four hundred guests (it was a small party because only her friends were invited) in a traditional white lamé gown augmented with a corsage of white orchids. The Mitchells, of course, did their part for charity as well. That winter, for example, they attended a performance by the Italian marionette troupe Teatro dei Piccoli, the proceeds of which benefited the Italy America Society and the Italian Welfare League.2
Pecora may not have known much about corporate finance and stock and bond offerings, but he was on familiar ground when he reached Wall Street that morning. When he quit St. Stephen’s and his pursuit of the Episcopal ministry in 1896, Pecora had quickly landed his first legal job just down the block from where he now stood. At fifteen, he signed on as a law clerk for a “kindly . . . single practitioner” named J. Baldwin Hands.
Hands’s office was at 18 Wall Street, catty-corner from J. P. Morgan’s famous one at 23 Wall, and Pecora quickly developed a fascination for Wall Street celebrities. Pecora had, of course, heard of the famous financier—everyone had—and his boy
hood curiosity led him to keep his eyes peeled for a glimpse of Morgan as he went to and from his job. One morning soon after Pecora started working for Hands, Morgan pulled up in an open carriage attended by his uniformed driver and footman. Like everyone else, Pecora was taken aback by the glowering financial tycoon’s appearance. “He was, to a certain extent, an impressive-looking man, but to me his general appearance was of a forbidding nature,” Pecora remembered. “He looked grim. He looked something more than merely human.”3
Pecora’s curiosity and reaction were natural. The portly Morgan had fierce eyes, a wicked temper, and a grotesque, bulbous nose hideously transformed by rhinophyma. By 1896, Morgan had also reached a pinnacle of power and wealth unsurpassed in the country. To a boy who quit school to support his family, whose mother worked in a sweatshop, whose father was crippled in an industrial accident, and who had just moved out of a dank basement, Morgan must have seemed like a being from another planet. Pecora’s brief glimpse of Morgan on Wall Street was not the only time their paths crossed. Pecora’s love of great oratory led him to attend Sunday services at churches that “had eloquent preachers,” including on several occasions St. George’s Episcopal Church, where Morgan was a warden. Pecora was always sure to get a seat on the center aisle. He knew that Morgan carried the collection plate there and it amused the impoverished teenager to hand out money to the plutocrat.4
Landing the job with Hands offered Pecora much more than proximity to a financial legend. Hands had a general practice and Pecora was his only employee. Pecora helped with everything, including accompanying his boss on trials, and he quickly began to learn about practicing law. Hands immediately liked his earnest young clerk and took “almost a paternal interest in” him. In fact, after a year, Hands convinced Pecora that it was time for him to move on. Hands’s practice was simply too small and too limited to give Pecora the breadth of experience he needed if he really wanted to become a successful lawyer. Soon, with Hands’s help, Pecora was the managing clerk in a larger practice just down the block. By 1902, he was earning $25 a week, enough for his mother to quit the sweatshop.5
He also started studying at New York Law School, just around the corner on Nassau Street. The school was one of an emerging crop of night law schools and, for Pecora, it was the only practical choice. He had the brains for Columbia or Harvard, but those schools were full-time only and he couldn’t very well quit his job and send his mother back to the sweatshop. Both schools also required a college degree. Ostensibly the degree requirement was designed to raise the standards of the bar, but in reality it was intended to weed out the immigrants who were then flocking to law school.6
Like Pecora, other immigrants, especially eastern European Jews, saw a legal career as a path to financial security and social mobility. Many members of the established bar, however, were not nearly as open-minded as J. Baldwin Hands. For the most part, they reacted to the influx of immigrants in much the same way as the broader society. Elite lawyers complained about the “pestiferous horde” of immigrants seeking to become lawyers, “boys . . . [who] can hardly speak English intelligibly and show little understanding of or feeling for American institutions and government.” The best law schools adopted strict quotas on “foreign lawyers,” on the theory that foreigners were intellectually and morally inferior. The result, according to Jerold Auerbach, who chronicled turn-of-the-century discrimination in the bar, was that a “poor deserving” Jewish boy had a small chance of getting into Harvard. “If he was Italian, Polish, or Greek—or a black American,” Auerbach concluded, “his chances were virtually non-existent.”7
So it was New York Law School for Pecora, and for the first time in his life, he was not the model student. He was bored and disappointed with the lectures, which were geared toward giving students just enough information to allow them to pass the bar. “They sought,” he later complained, “to teach the principles of the law without giving any thorough consideration to the philosophy that underlay . . . those principles.” By his second year he never bothered attending class, and he appears not to have been officially enrolled. Pecora never graduated from the school’s two-year law program. A law degree was not required for bar admission, but he still had a long way to go before he could practice.
The delay was again the product of the bar’s antagonism toward this influx of budding immigrant lawyers. New York lawyers complained the state had become “the dumping ground of the world,” and that it needed to adopt more stringent standards for bar admission than those of “more favored states” with fewer immigrants. Although New York City had created its first public high school only a few years earlier, the state now required a high school diploma or a so-called law student’s certificate, a sort of high school equivalency diploma. Portrayed as a way of ensuring that only men (it was almost uniformly men at the time) of the highest quality were permitted to practice law, the new standards, bar leaders concluded, meant that only “morally weak” candidates or “the idle, the lazy, and the unprepared” would be excluded. In truth, the burden of these admissions standards fell predominantly on the urban immigrant poor like Pecora. The credits Pecora had accumulated in grade school and in his brief stay at St. Stephen’s, he soon discovered, didn’t cover all the courses he needed to get his certificate.8
As managing clerk, Pecora’s workload was becoming heavier, making it that much harder for him to satisfy those course requirements. He soon, however, had another motivation for getting it all done. In the summer of 1906, Pecora needed a break from working and studying and, along with hordes of other New Yorkers, he fled the steamy city for Long Island. Pecora headed for Sea Cliff, one of the island’s most popular summer destinations. Situated on the North Shore and reasonably close to the city, the town’s travel posters boasted: “Beautiful Sea Cliff 250 Ft. Altitude No Mosquitoes.” What more could a New Yorker in those pre-air-conditioned days ask for? Pecora and his friends were short on cash, so they got permission to pitch a tent in a vacant lot, and they spent the summer weekends there, hopping on the Long Island Railroad after they finished work. It was there that Pecora met Florence Louise Waterman, also twenty-four years old. Florence lived on the Waterman family farm in Evans, New York, on the shores of Lake Erie south of Buffalo. The family was apparently reasonably well-off, because they summered in Sea Cliff in a cottage that just happened to be across the street from the vacant lot where Pecora was camping.
Florence was beautiful; he later described her as a “Gibson girl, [who] has had offers to pose for artists.” The two courted and seemed to quickly fall in love, but Pecora told her he was not wealthy—a fact that must have been painfully obvious when she saw his tent across the street—and that he was continuing to support his parents and younger siblings. They could not marry, Pecora insisted, until he was making enough money for them to set up their own household. The only way to do that was to finally start practicing law. With that additional spur, Pecora buckled down and, after four years, completed the requirements for bar admission. Ferdinand and Florence were married on November 30, 1910. A few months later, at age twenty-nine, Pecora finally became a lawyer.9
Pecora, it quickly turned out, wasn’t much of a family man. He poured himself into his work, hustling for fees representing property owners in Brooklyn and Queens who were suing the city in eminent domain cases. A judge involved in those proceedings reported that the neophyte lawyer handled them “magnificently.” When he wasn’t working, he was building his political career, taking care of matters for the local bosses, giving speeches, and attending numerous dinners and events. It left him little time for Florence or his son, Louis, born in 1915. In fact, Pecora never matched the rectitude he showed in his legal career in his private life. He was reportedly a notorious womanizer who had a string of extramarital affairs. According to one story, Pecora had taken “one of his darlings” to a camp in Pennsylvania when “his family happened to walk into the camp.” Pecora caught sight of them before he was spotted and sneaked away. During the Wall St
reet investigation, Pecora was allegedly involved with Frieda Hennock, a former law partner of his assistant, Julius Silver. In those days philandering was subject to a double standard. Rumors of the affair never affected Pecora, but they likely cost Hennock, the first woman named a commissioner of a federal administrative agency, a later nomination for a federal judgeship.10
Despite the widely held notion of immigrant lawyers flocking to the bar en masse, Pecora remained a rare bird. In 1900, around the time he started law school, New York had about 15,000 lawyers; only 39 of them were Italian Americans. There were surely more than the records show; many Italians anglicized their surnames to escape the bigotry of the day. Lawrence Richey, then a Secret Service agent and later Hoover’s appointments secretary, started life as Lawrence Ricci. Nobody would have been fooled, however, if Pecora became Peck. As the Christian Science Monitor would later put it, his “personal appearance is somewhat singular, and bespeaks his ancestry.” He was stocky and under five and a half feet tall, with dark eyes and jet-black hair just beginning to gray, which he wore swept back in a slick pompadour; Time magazine described him as a “kinky-haired, olive-skinned, jut-jawed lawyer from Manhattan.” If it weren’t for his dapper suits and his impeccable English, nearly everyone would have pegged him as one of the millions of Italian laborers who had flooded New York and other Northeast cities.11
The Dillingham Commission—a congressional committee formed to study immigration—had just concluded that those millions posed a severe threat to American society. Southern Italians, the government reported in 1914, three years after Pecora became a lawyer, were “revengeful . . . excitable, impulsive, highly imaginative, impracticable; as an individualist having little adaptability to highly organized society.” Perhaps, the sociologist Edward A. Ross wrote that same year, these character traits were due to the “distressing frequency of low foreheads, open mouths, weak chins, poor features, skew faces, small or knobby crania, and backless heads. Such people lack the power to take rational care of themselves; hence their death-rate in New York is twice the general death-rate.” Italian immigrants, “chiefly the undersized, illiterate overflow from half medieval Naples and Sicily,” were a “direct menace to our Government because they are not fit to take part in it.”12
The Hellhound of Wall Street Page 12
