Saturday, May 22, 2010

Warren T. McCray: signing off

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Before he entered state government, Warren Terry McCray was known by a royal nickname: the "Hereford Cattle King." A Standard History of Jasper and Newton Counties, Indiana deemed him "the greatest breeder of Hereford cattle in the world." In 1919, news of his exploits made it as far as New Zealand, where the Poverty Bay Herald said that the sale of a five-pound bull raised by McCray earned him the equivalent of 10,000 pounds. It shattered the previous world record for the highest bull sale, which formerly stood at 6,200 pounds. Even after he was elected to office, McCray continued to breed cattle on his 1,600-acre farm in Newton County and win prizes for them. The animals sometimes sold for up to $10,000 apiece.

The farm, coupled with other ventures, made McCray a very successful man. Born in Kentland, Indiana in February of 1865, he finished school at age 15. He went into business for himself after spending some time as a clerk in the Discount and Deposit Bank, which was run by his father. He expanded his interests to include grocery stores and grain elevators, and began community pursuits as well. He joined the board of trustees for the Northern Indiana Hospital for the Insane in 1904 and stayed there until 1912. In that year, he joined the Indiana Board of Agriculture and stayed there for four years. During World War I, he chaired the Food Conservation Committee of Indiana and for two years he served as a trustee of Purdue University.

In 1920, McCray won the Republican nomination for governor. He went on to win the general election, and was sworn into office in January of 1921. According to his National Governor's Association profile, 87 public buildings were launched during his term, along with a budget law affecting state and local finances, a reformatory at Pendleton, a budget law affecting state and local governments, and a two-cent gasoline tax to benefit road maintenance and highway construction.

Early in his term, McCray took an action that may well have placated the labor unions in the state. In October of 1921, he refused a requisition by Republican Governor Ephriam Franklin Morgan of West Virginia to send David Robb of Terre Haute to the state. Robb, an organizer for the United Mine Workers came to Indiana after he and several other union men were given the choice of leaving the state or going to jail due to their violation of Morgan's martial law proclamation. He was also indicted in West Virginia's Mingo County for conspiracy to commit a felonious assault in relation to the murder of a man that May. McCray refused the request on the basis of "disturbed conditions" in West Virginia and his belief that Robb wouldn't get a fair trial there; the United Mine Workers agreed, saying Robb's safety would be in jeopardy.

His reluctance to send a union man into hostile territory did not extend to support from the miners, however. He condemned United Mine Workers leader John L. Lewis as "disloyal," and denounced Socialist head Eugene V. Debs as traitor several times. In July of 1922, he publicly supported the idea of a government takeover of Indiana mines to break a strike and produce enough coal to meet the state's needs. After he followed through on the threat to declare martial law to guard the mines, 4,000 striking miners called a public meeting to demand his impeachment.

McCray's real woes began in 1923. In August, the Discount and Deposit State Bank threw him out as president of the institution. A month later, he admitted at a meeting of creditors that he owed them $2,652,000. They agreed to put his property into trust until he could meet his obligations, and took over holdings valued at $3,323,417.90. Former Republican Governor James P. Goodrich, who contested McCray in 1920, tried to help minimize the meltdown to mitigate any embarrassment to the party. He grew quite upset when McCray's chief political adviser, John Moorman, suggested that Goodrich and Republican President Calvin Coolidge were conspiring to ruin McCray."I spent nearly three months in trying to untangle the governor's affairs and finally raised $350,000 to save him and some of his associates from the most serious personal consequences as a result of his own acts," said Goodrich, "and I deeply resent the efforts of Mr. Moorman or the governor, or anyone else, to reflect upon the good faith of the men responsible for the conduct of the affairs of the party in this state." McCray said the matter was less serious than it seemed. "Boiled down to one fact, you find a farmer, a landowner, who is caught after three disastrous years in the farming business. I could not collect my bills and found myself unable to meet some of my obligations," he said. "I happen to be governor of Indiana, but this is a private matter that has happened to other farmers. The state has not suffered. I do not see that the public should be greatly interested."

In October, the bank collapsed after he was unable to take up $290,000 in notes with his signature. That same month, a grand jury began a probe into his financial transactions at the request of the First National Bank of Marion, which held $22,000 in McCray's notes and was one of 200 creditors backing him up. Three Fort Wayne banks initiated a bankruptcy hearing against him, and in November he admitted that some of the notes he pledged as collateral to the state board of agriculture had no value besides his endorsement. McCray had taken out the notes on the misguided belief that his signature would make the notes good enough for distribution. In the midst of these financial difficulties, the Republican State Committee indicated that he should resign, but he refused. Impeachment was also impossible, since the state legislature was not scheduled to meet again until January of 1925. By that time, McCray would be out of office, and he alone could call an emergency session of the legislature.

On the last day of November, the court walloped McCray with an indictment charging embezzlement, grand larceny, forgery, obtaining money under false pretenses, and issuing false checks. The charges accused him of involving $155,000 of misappropriated state funds in his own financial shortcomings. He refused to resign. "I feel sure that if I had been permitted to appear and present the facts I could have helped the jurors reach a just and correct conclusion," he said. "I ask the public to suspend judgment until I have been given an opportunity to tell my side of the story." A Marion County jury couldn't agree on a conviction in a trial in April of 1924, but two months before he had been federally indicted on 28 counts of mail fraud and violation of banking laws. He tried without success to get an abatement because women were not permitted to serve on the grand jury.

McCray's trial lasted for seven days. The prosecution showed that the governor passed some some $1 million in worthless notes on the banks in Indiana and other nearby states in an attempt to regain his standing. McCray denied any intent to defraud the government, but also testified that he used his political standing to get money from the state board of agriculture and designate banks as state depositories to get loans. It took the jury only 13 minutes to return a guilty verdict on 13 counts of mail fraud. McCray resigned from office on April 29, and Lieutenant Governor Emmett F. Branch took over. The judge told him that McCray was guilty of more felonies than anyone he'd seen in his experience on the bench, saying, "The circumstances are enormously bad and wicked. He has shown an utter disregard for the right. It is my duty to show this man that, no matter if he is governor of Indiana and no matter if he has broad acres, he cannot escape the penalty that is customarily given to every criminal of low estate in this court."

Twenty minutes after leaving office, McCray was sentenced to 10 years in prison and a $10,000 fine. He opted not to appeal, and began his time behind bars in an Atlanta penitentiary. Friends of the disgraced governor began looking for a pardon soon after, basing their effort on McCray's poor health, but they did not meet much support. President Coolidge said he would abide by the rule requiring a prisoner to serve at least a third of their sentence before they were eligible for commutation; the prosecutor and judge had to sign off on such a deal as well. In one curious offer, McCray's friend and former Republican Governor Chase Osborn of Michigan said in January of 1926 that he would be willing to serve the remainder of McCray's sentence in his stead. He offered his skills as a plate printer and remarked, "I have no dependents and I am used to more hardships than a prisoner entails."

McCray left prison in August of 1927 after meeting the one-third mark, having served three years in prison. The release didn't come with a pardon. His friends came to his aid once more, financing the repurchase of his Orchard Lake Farm, which he'd lost after his bankruptcy. He devoted his time to re-establishing his reputation as a famous Hereford breeder.

At about the same time he was freed, the state was conducting another probe due to the accusations of D.C. Stephenson. The Grand Dragon of the state's Ku Klux Klan had been sentenced to life in prison for the murder of a woman, and chose to take down as much of the Indiana government as he could with revelations of just how deep the state's politicians were in the Klan's pockets. The largest target was Republican Governor Ed Jackson, who succeeded Branch and served as secretary of state under McCray. Stephenson charged that Jackson offered McCray $10,000 while he was in office to appoint James E. McDonald, a Klansman, as Marion County prosecutor. When McCray came under investigation for his own malfeasance, Jackson said he could sweeten the deal by offering him immunity from prosecution. McCray refused, instead appointing William H. Remy. "The whole affair teems with the vilest corruption that has come to light in years and will remain forever as a blot on the history of Indiana" the Sanford Herald opined in an editorial.

It wasn't the first time McCray had clashed with the Klan. The mine unions sought to ban participation in the Klan, but several members were still interested. After the Klan started up a membership drive, McCray wrote a letter to the editor of the organization's paper condemning their efforts to control the union. The Klan was unfazed, and Stephenson even made personal appearances at the mines to denounce "new immigrants" as inferior workers and call for immigration restriction.

McCray told reporters that he wanted to simply go back to his family and stay as far away from the Jackson scandal as possible. "I am out of politics for good and all," he declared. By that point, McCray's testimony wasn't really needed since the grand jury had concluded that portion of their proceedings. In September of 1927, Jackson and two associates (former law partner Robert I. Marsh and Marion County Republican boss George V. Coffin) were indicted on charges of bribery conspiracy. At trial, Stephenson confirmed the plot and said that he'd put aside $10,000 from one of his strongboxes if McCray agreed to the bribe. McCray was the star witness, testifying that Jackson had told him he would leave the money in the governor's office desk. As McCray had it, he replied, "Ed, I am amazed that you should make that kind of an offer to me. You evidently don't know me. It begins to look like I've lost my fortune that I've striven for for 35 years. My office is threatened, it looks as if they are threatening my liberty, but I'm not going to lose my self-respect."

Prosecutors also charged that McCray rebuffed a second attempt at a bribe, and that Jackson and Stephenson threatened to obstruct his parole if he gave them away. Jackson claimed that he had made the offer, but without bribery or coercion. In the end, judge Charles M. McCabe determined that since the state did not prove willful concealment of the bribe, there was no way to nullify the statute of limitations which expired two years before the indictment. McCabe was clearly disappointed that the case couldn't proceed, as he dismissed the matter by blasting the "slime and disgrace" of the KKK. Noting that the Klan used their power to threaten McCray in 1923, he said, "There is no more regrettable bit of history in Indiana than the organization and participation in politics of the Ku Klux Klan." Jackson refused widespread calls for his resignation, saying he wouldn't let the "malicious propaganda" affect his administration. He left office in disgrace in January of 1929.

The revelations significantly increased the sympathy for McCray. By appointing Remy, he had put a man in office who would take him to court on the embezzlement charges. Remy would also take on Jackson when those charges came up. In May of 1930, an odd case arose when McCray's former partner, grain broker William Simons, was found dead of a gunshot wound just below the heart and two more to the back of the head. The coroner ruled it a suicide, but family members demanded an investigation into the possibility of a homicide. Later in the year, just shy of Christmas, Republican President Herbert Hoover granted McCray a pardon.

In December of 1938, after about a year of poor health, McCray died of a heart attack at his Kentland home.

Sources: The National Governors Association, "Price For Bull Sets World Record" in the Poverty Bay Herald on May 3 1919, "Refuses Requisition For Mingo Mine Leader" in the New York Times on Oct. 6 1921, "Grand Prize To Missouri-Bred Hereford Bull" in the Nevada Daily Mail on Nov. 16 1921, "Indiana Threatens To Operate Mines" in the New York Times on Jul. 27 1922, "Unions Demand Impeachment Of Gov. McCray For Guarding Indiana Mine With Troops" in the New York Times on Aug. 10 1922, "McCray Estimates Debts At $2,652,000" in the New York Times on Sep. 1 1923, "Political Notes" in Time on Sep. 10 1923, "McCray's Creditors Accept Trust Plan" in the New York Times on Oct. 8 1923,"McCray Probe Still Secret" in the Southeast Missourian on Oct. 12 1923, "McCray Bank Shuts; Asserts Solvency" in the New York Times on Oct. 14 1923, "McCray's Name His Security To State, He Admits" in the Chicago Tribune on Nov. 21 1923, "Governor McCray Will Not Quit Office" in the Nevada Daily Mail on Dec. 1 1923, "Gov. McCray Is To Stay On The Job" in the Southeast Missourian on Dec. 1 1923, "Governor McCray Files Plea" in the Wall Street Journal on Feb. 6 1924, "U.S. Grand Jury Indicts McCray on 28 Counts" in the Chicago Tribune on Feb. 26 1924, "McCray Must Face Other Indictments" in the Christian Science Monitor on Apr. 12 1924, "Governor Of Indiana Put Behind Bars" in the Southeast Missourian on Apr. 29 1924, "10 Years For McCray" in the New York Times on May 1 1924, "McCray Pardon Movement Not Meeting Favor" in the Crawfordsville Review on Feb. 24 1925, "Offers To Serve Friend's Sentence" in the Times Daily on Jan. 5 1926, "McCray To Be Paroled From Penitentiary" in the Sarasota Herald on Aug. 31 1927, "McCray Out of Political Life" in the Sarasota Herald on Sep. 2 1927, "Political Notes: McCray Out" in Time on Sep. 12 1927, "Indiana Ex-Governor Permitted To Testify" in the Pittsburgh Press on Sep. 16 1927, "Problem Of Cleaning Politics" in the Miami News on Sep. 19 1927, "National Affairs: Indiana Scandals" in Time on Sep. 19 1927, "Trial Date Set" in the Pittsburgh Post-Gazette on Dec. 6 1927, "Jackson Trial Planned Feb. 7" in the Miami News on Dec. 6 1927, "Stevenson On Witness Stand" in the Southeast Missourian on Feb. 15 1928, "McCray Says $10,000 Was Jackson's Bait" in the New York Times on Feb. 16 1928, "Governor Jackson Acquitted" in the Sarasota Herald on Feb. 17 1928, "Corruption: In Indiana" in Time on Feb. 28 1928, "Ex-Governor Staging Comeback" in the Berkeley Daily Gazette on May 7 1929, "Gun Death Is Puzzle To Police" in the Times Daily on May 20 1930, "President Grants Pardon To McCray" in the Owosso Argus-Press on Dec. 24 1930, "Dies" in the St. Petersburg Times on Dec. 20 1938, Fragile Alliances: Labor and Politics in Evansville Indiana 1919-1955 by Samuel William White, James P. Goodrich: Indiana's "Governor Strangelove" by Benjamin D. Rhodes, A Standard History of Jasper and Newton Counties Indiana by Lewis H. Hamilton and William Darroch

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