Historical Notes: The "POLICY" Era

 

1938: CRIME

Hines Trial

One of the most spectacular events of the year in the field of organized crime was the Hines Trial. James J. (Jimmy)Hines, the defendant, was one of the most powerful leaders of Tammany Hall. He was accused of "contriving, proposing or drawing lotteries" and of entering into a conspiracy with "Dutch Schultz" and "Dixie" Davis, George Weinberg, and other notorious characters, to violate the lottery laws. According to the prosecution, Hines' part in the conspiracy was to provide official protection for the "policy racket " or the "numbers game," which has flourished in Harlem and other sections of New York during the past few years. Hines was charged with influencing Magistrates Capshaw and Erwin to throw out policy cases in which the other conspirators had an interest, and to influence former District Attorney Dodge to "go easy" on policy prosecutions. In return for his efforts, Hines was alleged to have received a cut in the proceeds of the policy racket.

The chief significance of the Hines case is that it presented the unusual spectacle of one of the "higherups" in a racket being compelled to stand trial. For years it has been accepted as axiomatic that certain types of organized criminal activity, such as commercialized vice, gambling, illicit liquor traffic, etc., cannot flourish without official protection. Yet one rarely saw corrupt politicians or officials being brought to book for these crimes. Occasionally, it is true, a policeman might be indicted or even convicted for accepting graft from houses of prostitution, gambling houses or speakeasies. But criminal prosecution rarely reached higher than the individual policeman. In the Hines case, however, the prosecution touched what was alleged to be the very source of the official protection, namely, the politician from whom judges, prosecutors and policemen took orders. The trial had a very unsatisfactory outcome. A question by District Attorney Dewey which was put to a witness, tending to implicate Hines in other crimes than the ones with which he was charged, was considered so prejudicial by Justice Pecora, that he granted a mistrial. The case was to be retried early in 1939 (See below).

1939: CRIME

Some spectacular successes against criminals were also recorded in 1939. Outstanding was the surrender to Federal authorities of Louis (Lepke) Buchhalter, who had been the object of an intensive manhunt and who was described by New York's District Attorney Dewey as the "worst industrial racketeer in America" and the "most dangerous criminal in the United States." With his partner Jacob (Gurrah) Shapiro, Lepke headed a gang which was estimated to have taken a toll of $2,000,000 a year for several years from the smuggling of narcotics and from racketeering activities in connection with half a dozen major New York industries. Lepke was tried in the Federal Court on charges of conspiracy to violate the narcotics laws, and was found guilty. Lepke is wanted by District Attorney Dewey to answer charges arising from his racketeering activities.

Spectacular crimes in 1939 were not confined to professional "gorillas" like Lepke. The socially, politically and financially great and powerful, the "lords of creation," also contributed some outstanding instances of social demoralization. Chief among these were Judge Martin T. Manton, who, until his resignation, was the senior Federal justice of the Southern District of New York and the tenth ranking justice of the United States. Judge Manton was convicted of conspiring in the sale of justice, of dispensing favorable judicial decisions in return for substantial cash payments. He was sentenced to two years' imprisonment and fined $10,000!!!!!!; and his conviction and sentence were upheld by a specially convened Appellate Court. Judge Manton was not the only member of the judiciary who stood before the bar of justice in 1939. Magistrate Rudich of New York City was dismissed by the Appellate Division and later disbarred on the basis of charges that he accepted cash payments in return for approval of fake bail bonds.

Judge Martin of the Kings County Court was acquitted of charges of having received a bribe from an abortionist tried by him. The effort to remove him was also unsuccessful, since the New York Senate, the removal body, voted 28-19 to keep him in office.

But judges are not the only ones occasionally faithless to their trust. Even university presidents are not above making a dishonest dollar. This is illustrated by the adventures of Joseph M. Smith, former president of Louisiana State University. In June, Smith resigned his presidency and fled to Canada. He was returned to Louisiana when investigation revealed that he had indulged in widespread speculation with university funds and securities. He pleaded guilty to various Federal and state charges of forgery, using the mails to defraud and income tax evasion. He received a minimum sentence of 10 years' imprisonment. Several political figures were also involved.

One of the outstanding members of the financial fraternity who came before the criminal courts in 1939 was Stephen Paine, a member of the well known brokerage firm of Paine, Webber & Co. Paine was found guilty in the Federal Court, along with three codefendants, of conspiracy and using the mails to defraud three investment trusts of $1,000,000.

When judges, university presidents and bankers cannot resist the lure of dishonest dollars, it is not surprising that public officials and outstanding politicians also profit from their positions by illegal means. In New York, District Attorney Dewey brought to a successful conclusion the prosecution of James "Jimmy" Hines, the powerful Democratic district leader, which had been begun in 1938. On his second trial Hines was convicted of conspiracy and contriving a lottery. The jury believed the contention of the prosecution that Hines was a politician who had made crime safe for the racketeers controlling the policy game in New York. Originally appeared in Collier's Year Book

Bronzeville/Chicago Time Magazine 1938

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