The Year of Fear

by Joe Urschel

  Hoover was orchestrating the hunt from his desk in Washington, showering his field offices with telegrams and memos. He sent copies of the massive list of the ten thousand serial numbers on the $20 bills used in the ransom to dozens of Bureau offices, and the staff from those offices got the serial numbers to hundreds of federal and local banks, advising them to be on the lookout for the bills and to notify the Bureau immediately if any were discovered. “Wanted” posters, descriptions and photographs of the Kellys and Bates also went out. Hoover alerted the Bureau offices in New York, Detroit and Portland, instructing them to cover the ports in case Kelly and company attempted to flee to Canada.

  When agents got to the Cleveland dealership, they learned they had just missed the Kellys. The dealership’s owner told them that Kelly had come in on August 10 to pay off the balance on the sixteen-cylinder Caddy. Kelly was considering the twelve-cylinder coupe, but ultimately decided against it. He also revealed that when the Kellys purchased the car on June 3, they invited the salesman to a party back at their hotel. The salesman returned with wild stories about the party, including the fact that Kelly had $36,000 in cash in his pocket and that his wife had “a large number of Persian gowns designed by Chanel.” He said when Kelly left the dealership on August 11 he was wearing “octagonal shaped rimless glasses” and that his wife was sporting a “beautiful Martin diamond dinner ring which was quite noticeable.” He said they were planning to drive to Chicago.

  The night before, the Kellys had received a telegram from Bates in Minneapolis. It read: “Deal has fell through. Jack and Tom have left. Communicate with me at box 631.” It was code for “trouble.”

  * * *

  After releasing Urschel, the Kellys had gone to George’s old base of operations in St. Paul, where he went to work getting his money laundered at 20 cents on the dollar and Kathryn went on a shopping spree, adding another fur coat to her wardrobe, along with about $2,000 worth of diamond rings and bracelets. Kelly took his cash to the Green Lantern tavern to get Dutch Sawyer’s help getting it cleaned. Sawyer sent Kelly to one of his confederates, casino owner Jack Peifer, who took $7,000 of the Kelly loot. He then pedaled it to a group of his minions, who went to work exchanging it through a half-dozen friendly banks.

  Bates alerted the Kellys to the fact that several people in Minnesota had been arrested while trying to pass the ransom money. They were being held by police and it was unknown what—if anything—they’d said about the money.

  The Kellys then headed to Des Moines, Iowa, to lie low and try to figure out what was going on. They were staying at a motor lodge outside the city when news of the raid on Paradise finally hit the papers on August 14.

  The Dallas papers applauded the daring capture and news accounts throughout the region were crowing that Hoover’s men had not only nabbed the Urschel kidnappers, but one of the men responsible for the Kansas City Massacre, as well, the infamous Harvey Bailey, who was also being portrayed as the brains behind the kidnapping. The Dallas Morning News had the biggest story in the nation breaking in its own backyard and they played it to the fullest. The headlines screamed across their front page:

  FIVE HELD FOR URSCHEL CASE AND KANSAS CITY MASSACRE

  GANG CAUGHT AT POINT OF MACHINE GUN

  HARVEY BAILEY AND FOUR MEMBERS OF SHANNON FAMILY SURPRISED IN WISE COUNTY

  DENVER LANDS ONE

  ONE MORE MEMBER OF GANG,

  GEORGE KELLY, SOUGHT IN BIG CAR

  The severe penalties of the new Federal Lindberg [sic] kidnapping law Monday afternoon hung over Harvey Bailey, notorious outlaw and escaped convict, whose capture by Federal Agents here caused them to claim solution to the Urschel kidnapping case and capture of the principals in the outrageous Union Terminal Massacre at Kansas City.

  Bailey was lodged in the Dallas County Jail as “Jones, hold for Federal authorities” Saturday along with four others taken in a surprise sunrise raid on the little cottage they occupied in Paradise, Wise County.

  The others in jail R. G. Shannon, on whose place the raid was made; Ora L. Shannon, his wife; Armon Shannon, this son and Oleta Shannon, Armon’s wife.

  Late Monday afternoon, Albert Bates alias George Bates, was reported captured at Denver. He was one of the gang wanted with Bailey in the Urschel kidnapping. Federal agents continued their search of George Kelly, another of the gang who was known to be traveling over the Middle West in a sixteen-cylinder Cadillac sedan, 1932 model with a large black trunk.

  All law enforcement agencies in the country were warned to apprehend Kelly on sight and police radios in cities over the Nation Monday afternoon carried descriptions of him and warnings to notify authorities if he is seen.

  A second front-page story focused on Bailey.

  BAILEY CAPTURE SEEN AS TEN-STRIKE IN WAR ON CRIME

  ATTORNEY GENERAL SAYS PRISONER IS LEADER OF DANGEROUS GANG

  The arrest of Harvey Bailey in Texas was regarded Monday night by Federal officials as a ten-strike in the Government’s war against gangsters and racketeers.

  Details of Bailey’s capture in a before-dawn raid on a remote farmhouse near Paradise, Texas, were announced Monday by Attorney General Cummings who paid highest praise to the Department of Justice agents responsible.

  Bailey, in Cumming’s [sic] opinion, is the leader of one of the most dangerous criminal gangs in the country. The arrest was made only a few days after President Roosevelt had taken personal direction of the Government’s anticrime campaign in conference at Hyde Park.

  Cummings said Bailey had been identified as the operator of a machine gun which killed five men in Kansas City June 17, and disclosed also that marked ransom money paid in the kidnapping of Charles F. Urschel at Oklahoma City July 22 had been found on the fugitive.

  In a paragraph that could have been crafted by Hoover himself, the paper applauded the work of the Bureau:

  Incensed over the killing of one of their own Federal agents and three peace officers at the Kansas City Union Station on June 17, all of the energies of the Bureau of Investigation have been centered on solving that crime since then. Officers here early suspected that the Urschel kidnaping tied in with the same group of outlaws, and for the last six weeks Agents Frank J. Blake of Dallas, R. H. Colvin of Oklahoma City and Gus T. Jones of San Antonio have gone without sleep in their efforts to apprehend members of the suspected gang.

  From Washington, Attorney General Cummings applauded his team and the Urschel family, noting that the Urschel family did not hesitate to call in the government and local authorities, and that this should be the reaction in all kidnapping cases. Unlike so many in the past, Urschel had stood up to the kidnappers’ threats of retribution and had not only called in the feds, but helped them find his captors and build the legal case for prosecution.

  Listening to the radio and reading the papers, Kelly learned just how dangerous a criminal he really was. The headlines screamed and the radio waves blasted. The nation’s new Public Enemy Number One was a man known as Machine Gun Kelly.

  The august New York Times claimed, “Kelly and his gang of Southwestern desperados are regarded as the most dangerous ever encountered.”

  The Bureau released a wanted poster of Kelly describing him as thirty-five years old, 5′9,″ 177 pounds and “muscular,” a ruddy-complected “expert machine gunner.” Kathryn’s publicity efforts had found a remarkably accepting audience.

  A similar poster was issued for Kathryn using stats acquired from her arrest in 1929—which she must have hated—describing her as twenty-eight (though looking much older), at 5'9'' and “weighing 140 (though probably heavier) with a ruddy complexion and a proclivity for expensive jewelry.”

  Meanwhile, while on the run, George and Kathryn were incredulous that they had been identified as Urschel’s kidnappers. Urschel had double-crossed them. He’d gone straight to the authorities. The threats of retribution had been ignored.

  Kathryn was especially furious. She ranted at Kelly. If they’d killed Urschel, they wouldn’t
have any of this trouble. A dead man could not have gone to the authorities. A dead man could not have led the feds back to the farm in Paradise. How had that happened? Somebody had screwed up big time, and it hadn’t been her. What had her loudmouthed husband let slip? What about Bates? Had he screwed up? Maybe it was Armon, that dim-witted fool. What had he said to Urschel that made it possible for that ungrateful bastard to lead the feds back to her father-in-law’s farm?

  Now Kathryn’s mother was in jail. She was apoplectic. She had to do something. Her mother must be cleared. What had she done? She wasn’t guilty of anything. All she’d done was cook a decent meal for that ungrateful captive and make sure his stay at her farm wasn’t life-threatening. She pleaded with Kelly to do something. Her mother was being held on $50,000 bond. They needed a lawyer. Somebody connected. Somebody fast. Kathryn would not let her dear mother sit in some loathsome jail cell.

  Despite their threats of retribution, Urschel had not only gone to the feds, he had written a story about his ordeal that moved on the wires and appeared in numerous papers around the country. This incensed the Kellys. They had made it plain what would happen to him if he went to the police, if he helped others pursue them. George was beginning to rethink his decision to let the fool live, and Kathryn was berating him for it.

  In his account, Urschel had written that “everything the federal government can do to put an end to kidnappings in the United States is an imperative necessity.”

  But the most galling account came a day later, on August 15, when the Oklahoma News broke the story of Urschel’s involvement in leading the agents to the Shannon farm in a front-page, double-deck, boldfaced headline:

  DEPUTY TELLS HOW URSCHEL MOVED

  ON SHACK WITH SAWED-OFF SHOTGUN

  The reporters at the News had tricked the sheriff into confirming the story by telling him that the Associated Press was moving the details.

  With his name in headlines in every paper on the street, and radio newsmen declaring his Public Enemy status nationwide, Kelly could not stay in one place for too long. He’d already been tagged in the Union Station shootout and that was bringing heat, but now he’d pulled off a record-setting snatch job and the feds were crawling all over the usual safe houses and hideouts and making things miserable for anyone with known connections to criminal activity.

  So the Kellys packed up their clothes, their liquor and their hot money and took to the road, hoping to disappear in the backcountry George knew so well. They hid out in tourist motels in Illinois, Indiana, Iowa and Missouri—all over the Midwest—and fought bitterly. Kelly blamed Kathryn for talking him into the kidnapping and she blamed him for getting her mother thrown in jail. The smoldering Kathryn hatched a plan to save her skin. She told George that if they were to get caught, he should take the blame and say she had nothing to do with it. She hadn’t been seen or heard at any time during the job. There were no eyewitnesses to her involvement. Why should the two of them go to prison? She would need to stay on the loose so she could get help for her mother. She couldn’t bear to see her locked up.

  Kelly could never say no to a lady, especially one as persuasive as Kathryn, who quickly fired off a letter to Joseph B. Keenan, the Department of Justice’s Special Agent in Charge of the Criminal Division who was in Oklahoma City to oversee the trial of Bates, Bailey and the Shannons. It was postmarked from Chicago on August 18:

  The entire Urschel family and friends, and all of you, will be exterminated soon. There is no way I can prevent it. I will gladly put George Kelly on the spot for you if you will save my mother, who is innocent of any wrongdoing. If you do not comply with this request, there is no way in which I can prevent the most awful tragedy. If you refuse my offer I shall commit some minor offense and be placed in jail so that you will know that I have no connection with the terrible slaughter that will take place in Oklahoma City within the next few days.

  Gus Jones had been monitoring the mail going to the Kellys’ house in Fort Worth and to the Shannon farm. In addition to Chicago, Kelly had sent letters from St. Paul and from Madison, Wisconsin. He’d also picked up information indicating that Kelly would be traveling to Indianapolis to pick up a package at the general delivery window of the post office.

  Hoover dispatched a team of agents, and with the help of Indianapolis police, they laid a trap to nab him when he did. They would grab Kelly if he showed up to get his package. But if Kathryn or another of Kelly’s associates appeared, they were to drop back and follow the pickup, who they hoped would lead them to Kelly.

  But plans went awry. And, worse, the agents’ failure was described to the press. The Bureau’s ineptitude went on display in the headlines of the Indianapolis Star on August 17.

  “DUMMY” SEIZED AS HE ASKS FOR FUGITIVE’S MAIL

  KELLY ESCAPES TRAP SET HERE

  George R. Kelly, suspected Kidnaper and one of a gang who is believed to have escaped in a fusillade of bullets from a police dragnet in Chicago Tuesday, yesterday was believed to have eluded Federal agents in Indianapolis.

  Anxiety of Department of Justice agents to capture Kelly was said to have resulted in a “tip off” to him and his subsequent flight.

  The story later noted that Kelly was wanted for the Urschel kidnapping and for “killing five persons in an attempted delivery of Frank Nash, convict in the Kansas City Union station several weeks ago.” Over a picture of handsome Kelly with his slicked-back dark hair ran the headline:

  GETS AWAY AGAIN.

  Kelly had hired an itinerant kid who’d been hanging out in a nearby park to go in and pick up his mail. Thinking the kid was actually Kelly, the agent on the scene detained him, and Kelly got spooked and fled.

  The agents in the field had a hard time determining whether Hoover was angrier that they had missed Kelly or that their failure had appeared in the press. His agents were under a strict admonition to keep all information about the case confidential.

  In their memo back to headquarters they noted that the reporter who filed the story, Robert Early, worked out of police headquarters and not the federal building, which indicated to them that the leak had come from the Indianapolis police. They also suspected that someone on the Indianapolis police force might have tipped Kelly about the trap.

  The agents on the scene wrote back to Hoover:

  In conformity with your instructions on Aug 17, 1933 I conferred with [the] Chief of Detectives and the Chief of Police and advised them of the fact that the publicity emanated from the Police Headquarters and that same had resulted in possibly frightening Kelly away from Indianapolis. I also advised them that we would not use the Indianapolis Police further in this inquiry and they were relieved from the assignment on the afternoon of this date.

  But though they were losing ground in their efforts to control the press and manage the information from the investigation, Hoover’s efforts were receiving a considerable boost from the editorial writers of the nation’s press. Under the headline U.S. Police Efficiency, the Washington Herald published the following editorial:

  This crime-ridden country regards with astonishment and admiration the brilliant exploits of Federal operatives aided by police of three cities in running down and capturing the gang deemed responsible for the $200,000 Urschel kidnaping in Oklahoma and the brutal Kansas City massacre of five men last June.

  Climaxing the achievement three hundred Federal State and local officers guided by army airplanes, waylaid and waged a machine gun battle late yesterday afternoon in the outskirts of Chicago against still another group of suspects.

  Harvey J. Bailey, ringleader of the Urschel kidnaping outfit [,] appears to be as ruthless, daring and resourceful an outlaw as this generation has known.… The police characters of the men implicated, the nature of the crimes under scrutiny, and the dramatic completeness of the law officers’ coup ought to be the final victorious argument in favor of an American “Scotland Yard,” as advocated by the Hearst newspapers and by many eminent penologists.

  A grateful H
oover immediately penned the following note to the legendary editor of the Herald, Eleanor Patterson:

  My dear Mrs. Patterson,

  I wanted to write to you to express my sincere appreciation of the commendatory editorial appearing in the Washington Herald of August 17, 1933, entitled “U.S. Police Efficiency.”

  It is a source of deep gratification to me that the efforts of the Division of Investigation of the Department of Justice in bringing about the apprehension of Harvey J. Bailey, notorious criminal, were such as to merit the approval of the Editor of the Washington Herald. The editorial in question evidences such a keen understanding of the handling of the cases referred to and the organization of the Division of Investigation that I would appreciate it very much if you would express my thanks to the writer of this editorial. I am highly pleased that the work of the Division of Investigation in dealing with the criminal element, and particularly in recent kidnapping cases, has been such as to warrant this editorial consent. I believe that editorials of this kind serve an extremely helpful purpose in acquainting the reading public with the strength of the Federal Government in dealing with the lawless element.

  Sincerely yours,

  J. Edgar Hoover

  The day after the Herald editorial, Hoover and Cummings got a similar boost from The Washington Post, which reprinted an editorial that had earlier appeared in Louisville’s Courier-Journal. It ran under the headline: