Empire of Deception

by Dean Jobb

  Heinrich Koretz changed his first name to Henry, landed a job as an insurance agent, and settled his family in a German enclave north of the city center. North Town, as it was known, was Leo’s neighborhood until he was sixteen. The Great Fire had leveled most of its homes and churches, but it had been rebuilt into a thriving suburban community. The neighborhood’s German heritage was proclaimed in street names—Goethe, Schiller, Wieland—and celebrated in taverns that offered oompah bands as well as steins of beer. Tall townhouses of brick and stone lined the streets, tastefully trimmed with Italianate and Queen Anne flourishes. The horse-drawn pump wagon of Engine Company No. 27 was stationed just up the street from Leo’s home on North Wells Street, ready to battle the next conflagration.

  North Town was a place where shrewd businessmen were building empires. In 1883, Oscar Mayer, a young butcher from Württemberg, opened the sausage shop that would make him a household name. Western Wheel Works, the world’s largest bicycle maker, chose North Town as the site for a towering factory erected in 1891. The son of a German cobbler would soon rent space in the factory to make custom shoes to ease the pain of people with foot conditions; his name was Dr. William Scholl.

  In astonishing Chicago, ambition knew no bounds. In 1893, in the midst of one of the worst depressions in American history, the city defied economic gravity and staged the World’s Columbian Exposition to mark the four hundredth anniversary of the discovery of America. A palatial city of domes, arches, and spires sprang up on the lakeshore; at night everything was bathed in electric light, a showcase for the incandescent bulbs that were replacing the gaslight of the waning century. To one newspaperman, at a loss for meaning if not for words, the fair was “an immense epitome of what is prominently valuable in modern progress.” The Koretzes undoubtedly joined the millions who strolled the grounds, explored pavilions brimming with the latest inventions and displays from exotic lands, and marveled at the midway and its showpiece ride, George Ferris’s twenty-six-story wheel.

  Back in North Town, Leo could see the skyscrapers of downtown Chicago poking their heads above the hazy horizon. His older brothers had left school and gone to work, and he would soon be old enough to find a job, perhaps earning a few dollars a week at the bicycle factory. He could make footwear for Dr. Scholl or sausages for Oscar Mayer. Or maybe, like them, he would find a way to build a business empire of his own.

  Few of Chicago’s young people stayed in school for long; only two-thirds were still in class at age twelve, complained one educator of the era, and barely one in a hundred completed high school. Leo was among the ambitious 1 percent. Education would be his ticket out of North Town.

  LAKE VIEW HIGH SCHOOL on Chicago’s North Side was housed in three stories of Victorian overkill, with a central bell tower looming over a redbrick facade topped with gables and balustrades. The school set high standards for its students: Ad astra per aspera was its motto—“Through hardships to the stars.” Future graduates would include politicians, scientists, business leaders, and the movie icon Gloria Swanson. Leo entered ninth grade in the fall of 1894, a few weeks after his fifteenth birthday. Like other kids from neighboring suburbs, he had to score well on an entrance exam to win one of the fifty or so places in the first year of the four-year program.

  Leo excelled in pursuits not found in the curriculum. One was separating people from their money. He was “the great money-raiser of the school,” by one account. “When any good cause came up Koretz was the collector for the fund.” He would be remembered as someone who “could get blood from a turnip.” Years later, classmates asked to describe him offered the words “idealistic” and “scrupulous character.” His other talent was persuasion. He joined the debating society and became Lake View’s go-to guy in matches against other schools. In his graduating year he teamed up with another student to win a debate held downtown in the eight-hundred-seat Steinway Hall, a contest that attracted several column inches of press attention.

  On a mild, damp June evening in 1898, Leo and ninety-four classmates collected their diplomas at a church auditorium trimmed in flowers and the class colors. Historians would come to regard that year as a pivotal one for the United States, marking its transformation from young nation to global superpower. The United States had been at war with Spain since April, to avenge the sinking of the battleship Maine in Havana Harbor and to support Cuban rebels fighting for independence. Underlying these lofty goals was a strategic motive: banishing the last European colonial power from the Western Hemisphere. After the valedictory address, Leo was one of four students invited to speak. His address, “For Conquest or for Humanity,” explored the double-edged rationale for war. Days later a fearless cavalry officer named Theodore Roosevelt led his Rough Riders through a hail of bullets in the famous charge up San Juan Hill.

  As the twentieth century dawned, the Chicago Daily Tribune paused to remember the advances of the previous “century of usefulness”—the telegraph and the telephone, electric light, railroads, steamboats, even everyday items such as kitchen stoves and postage stamps—and predicted that an artistic and cultural renaissance lay ahead. “The purely material may claim less attention,” its editorial writer opined, “and Mammon come to be less regarded.”

  But for Leo Koretz, a young man starting his career in lockstep with the new century, money and the purely material sounded just fine. All he needed was to find a profession that would make it easy to get his hands on both.

  PATRICK CROWE, THE MAN in charge of lighting the gas lamps that cast a pale glow over the streets of Peoria, Illinois, was one of the British government’s most implacable foes in America. In the early 1880s, a band of Irish extremists, popularly known as the Fenian Brotherhood, launched a campaign of terror to free Ireland from British rule. Bombings rocked London, Glasgow, and other British cities; assassins ambushed and killed the chief secretary for Ireland in a Dublin park. Irish Americans were behind many of the plots, and Crowe was a key figure in the Fenian movement. Described as “a man of small stature, with a dark, intellectual countenance,” he advocated the use of force to win independence for his homeland. He even claimed to have put his words into action. In 1881 he made headlines by boasting he had built some of the bombs wreaking havoc on the other side of the Atlantic. Follow-up reports of Crowe’s arrest for illegally exporting explosives proved unfounded, and some newspapers dismissed his statements as fearmongering and bravado. No true terrorist, one editor noted, would attract such attention to his nefarious work.

  While his bomb-making claims may have been bogus, Robert Crowe’s father had reason to hate the British. Patrick and his wife, Annie, had been born in County Galway in the 1840s, the hungriest years of the Great Famine. They joined the exodus to America—Patrick was granted citizenship in his early twenties—and lived in New York and Missouri before settling in Illinois. Peoria was a steamboat stop on a waterway linking Chicago, about 150 miles to the northeast, to the Mississippi River. Abraham Lincoln stood on the steps of Peoria’s courthouse in 1854 and made his first speech demanding an end to slavery, setting America on the path to civil war. It was a city of distilleries and farm-machinery factories considered so typically American that it became a truism of the entertainment industry that if an act was a hit in Peoria, it would be a hit everywhere. Patrick Crowe was a jack-of-all-trades, identified in the city directory over the span of a few years as a grocer, a contractor, and a plumber as well as superintendent of streetlamps. The last of Patrick and Annie’s eleven children, Robert Emmett, was born in Peoria on January 22, 1879.

  By the time Robert was old enough to attend school, his family had moved to Chicago and settled at 365 West Congress Street, on the West Side. It was the heart of one of the city’s poorest areas, the Nineteenth Ward, soon to be the site of Hull House, the civic reformer Jane Addams’s pioneering community center. Being Irish gave the Crowe family a leg up, since the Irish were one of the larger ethnic groups in the city and punched above their weight in local politics. They dominated the
police and fire departments and doled out coveted jobs on the public payroll. In the 1890s they controlled a third of the seats on the city council and elected John Patrick Hopkins, the son of immigrants from Ireland’s County Mayo, as mayor.

  By one account, Patrick Crowe had another leg up. A man who had managed “to momentarily terrorize and paralyze the great United Kingdom” was welcomed as a hero. And a man who had named his son after a freedom fighter—Chicago’s Irish community gathered each March to mark the birthday of Robert Emmet, executed for treason in 1803—had his pick of government jobs. Cook County hired Patrick as a clerk, and he was promoted to court bailiff and deputy sheriff. There was enough money to propel the family into the middle class; one of Robert’s brothers trained as a lawyer, another studied to be a bookkeeper, and a sister became a teacher.

  Robert Crowe inherited his father’s distaste for Britain. “I never had any liking or respect for her laws as they applied to my ancestors,” he once noted. As a child he became a fan of pulp-fiction novels, devouring everything from French police procedurals to the exploits of the thief-turned-detective Arthur J. Raffles. And he was among that 1 percent of young Chicagoans to finish high school, graduating from West Division High in 1898, the same year Leo addressed his own graduating class at Lake View.

  Like Leo, Crowe was well spoken and persuasive; he was a “fluent talker,” as one newsman later put it. And like Leo, he was eager to make his mark.

  3

  THE LAW

  AMERICA, THOMAS MORAN assured seventy-six new additions to Chicago’s legal fraternity, needed more lawyers. “As the country grows older and richer there always will be an increase in demand for attorneys,” the dean of Chicago-Kent College of Law said, his voice filling Steinway Hall just as Leo’s had during his high school debates. “The prospects of success in the profession,” Moran predicted, “were never as bright as they are at present.” Among the members of the class of 1901 assured a bright future in the lawyer-friendly twentieth century was Leo Koretz.

  After graduating from Lake View, Leo had landed a job as an office boy at Moran’s law firm. Adolph Kraus, a founding partner in Moran, Mayer, and Meyer, had been born in Rokycany, and that hometown connection may have helped Leo to land the clerking job. But once he was there, it was probably Moran who encouraged him to take advantage of evening lectures at Chicago-Kent, which was housed in a downtown building not far from the firm’s offices. The school, created through a merger of Lake Forest’s law school with the upstart Kent College of Law, prided itself on accepting students “without distinction as to sex or color.” Three women earned degrees in 1899, and Ida Platt, who graduated with honors in 1894, was only the second black woman to practice law in the United States. The faculty and guest speakers included judges and former judges who hammered home a message that lawyers must conduct themselves with honesty and integrity. “In the practice of law,” the former judge Simeon Shope reminded Leo’s graduating class in June 1901, “it is stalwart manhood and rugged honesty that wins.”

  While Leo was working around the clock to earn his degree, Robert Crowe had the luxury of studying law as a full-time student at Yale. One of the oldest law schools in the country, Yale had yet to gain national prestige—one historian dismissed it as “a local school with pretensions”—but its distinguished alumni included congressmen, ambassadors, and justices of the United States Supreme Court. Enrollment stood at about two hundred when Crowe was admitted in the fall of 1898, after passing an entrance exam that gauged his knowledge of grammar, history, and the US Constitution.

  Yale was on a mission to do more than merely train lawyers; professors sought to instill “the principles and rules of legal science.” Crowe and his classmates gathered at long oak tables in the library to plow through thick textbooks, then gathered in the classroom to discuss leading cases. Arthur Corbin, a future Yale professor who was two years ahead of Crowe, remembered being surrounded by classmates “docile enough and lazy enough to desire to be ‘told’ the law,” not to question the validity of those timeworn legal principles. Corbin found the workload light and so did Crowe. “I paid more attention to Raffles,” Crowe admitted, “than I did to real property.”

  Despite Yale’s narrow, black-and-white view of the law, Crowe was exposed to the wider world. A young British member of Parliament named Winston Churchill visited in 1900 and, the New York Times reported, “spoke feelingly of the bonds between England and America.” Bourke Cockran, a former congressman, echoed the optimism of Chicago-Kent’s Thomas Moran and told Yale students that their profession offered unlimited opportunities for “the capable man.” President William McKinley’s attorney general, John W. Griggs, agreed to deliver the keynote address to Crowe’s graduating class.

  The Republicans, the party of McKinley and Griggs, were a political force on campus, claiming the allegiance of most of the student body. Crowe was among hundreds of students who gathered in the fall of 1900 to form a Republican club. They “marched in company formation” to the meeting hall, a newspaper reported, with a regimental band and Yale’s football and baseball stars leading the way. Crowe, now in his senior year, was elected treasurer. A band and drum corps was formed, and members donned uniforms to parade at Republican rallies in New Haven and neighboring cities. New York’s popular governor, Theodore Roosevelt, who became McKinley’s vice president that fall, was invited to address the club.

  By the time Crowe heard Attorney General Griggs, one of his new heroes, speak at his graduation exercises, he had a law degree and a track record as a leader in Republican politics. He returned to Chicago to make good use of both.

  THE FIRM OF MORAN, Mayer, and Meyer was founded in 1881 when two lawyers, Adolph Kraus and Levy Mayer, squared off over the sale of a horse. Their courtroom showdown forged a partnership that grew into one of the city’s leading law firms, with a roster of big-business clients that included many national firms.

  Kraus had left the firm by 1901, when Leo and Crowe began to work alongside some of the wealthiest and most powerful lawyers in Chicago. The firm’s leader was Mayer, the son of German immigrants and a prodigy who had graduated from law school at eighteen and, like Crowe, was a Yale man. Mayer was “a martyr to his work” who “gave the very best that was in him to every case he worked on,” noted one of his partners, Alfred Austrian. By the turn of the century, Mayer was one of the most prominent corporate lawyers in America and a specialist in mergers and acquisitions.

  Mayer acted for the powerful trusts that were consolidating their grip on the country’s major industries, from distilling and brewing to sugar refining, banking, and natural gas distribution. A vocal opponent of antitrust legislation, he defended corporate takeovers in the pages of the New York Times in 1902 and accused courts and lawmakers of stunting economic growth. “The so-called trust,” he wrote, was a corporate version of that most American of ambitions—“the ambition of the individual to accumulate wealth.” Fighting antitrust laws made Mayer enormously wealthy. He was reputed to have billed more than $1 million in a single year and, when he died in 1922, left an estate then valued at $8.5 million.

  For two years, Leo and Crowe helped to solve the legal problems of Moran, Mayer, and Meyer’s business clients. They learned the intricacies of corporate law. They were at the table when Levy Mayer and other legal heavyweights cut deals and outwitted opponents. Crowe saw how powerful men controlled people and events. Leo realized that a savvy lawyer could make a fortune. Both had left the firm by 1903 to set up their own law practices, but their paths would cross again.

  4

  THE GAMBLE

  LEO’S FRIENDS LOVED to tell a story about one of his first legal clients, an elderly woman who directed that her entire estate be used to care for her dog after her death. She had bequeathed the beloved pet to Leo, who was to hold her money in trust and look after the dog for the rest of its life.

  The tale, for the most part, was true. Wills became one of Leo’s specialties after he struck out on his own
, and when Mrs. Alwin Schaeffer died in 1908, Leo was named sole trustee for her $30,000 estate. Schaeffer left small amounts to brothers and nephews in her native Germany, but she directed that much of the money be used to hold picnics twice a year for Chicago’s orphaned children of Bohemian and German descent. Leo’s job was to organize the picnics and to ensure the epitaph “Here Lies Sleeping Beauty” was inscribed in German—in gold letters—on her gravestone. His final duty was to find a new home for her poodle, Lottie, with “one of the richest families in the city” and to draw a hundred dollars a year from the estate for the dog’s maintenance.

  But there was more to the story. “Leo took the dog home. But poor doggie died suddenly one night,” one friend explained. “And then, of course, all the money went to Leo. That was Leo’s first adventure with somebody else’s money.”

  AFTER LEAVING MORAN, MAYER, and Meyer, Leo set up his own law practice downtown—in the Loop, as everyone called it, because the tracks of streetcar lines and elevated railroads encircled the city’s core in a band of steel. For a time he worked in partnership with Daniel Belasco, who was building a lucrative practice suing railroad and tram companies on behalf of those killed and maimed trying to traverse level crossings or navigate Chicago’s clogged streets. Leo, though, for all his charm and debating skills, had no interest in cross-examining witnesses or scoring points in the courtroom. He stayed in the background and pushed paper, preferring to handle divorces, draft wills, and settle the financial affairs of deceased clients.

  A friend of Leo’s from their school days who also became a lawyer, Maurice Berkson, never thought Leo was cut out for a legal career. “He always had ambitions to be a business success,” recalled Berkson. Leo himself soon realized that practicing law was not the ticket to easy wealth he had expected. “I was a very poor, struggling young lawyer, hungry for anything in the way of a client,” he would recall. “I needed money badly.”