K STREET - CHAPTER THREE

 

“I can take care of my enemies all right. But my damn friends, my God damn friends...they're the ones who keep me walking the floors nights.”

Warren G. Harding.

On the night of 31 October, 1918 crowds jammed the restaurants and bars along 9^th Street in Washington, D,C, to share a final drink. Then, at midnight, One November, 1918, by Federal fiat, the District of Columbia went bone dry.

It had been the pro-prohibition states which had re-elected Democrat Woodrow Wilson as President in November of 1916. The imposition of prohibition in the one place on earth he could dictate it, was their  reward.  Opponents tried to give the local residents a vote on the issue, but Wilson complained, “There is no voting machinery in the District of Columbia. Such a machinery would have to be created.”  

Still the option of giving democracy a chance inside the district was only defeated because the vote was tied – 43 pro and 43 con - and Vice President Thomas Marshall (above), a reformed alcoholic, refused to cast the deciding vote. 

That opened the door to the Sheppard Act, sponsored by Senator John Sheppard from East Texas, which allowed the politicians to assure their moralistic supporters back home (in places like Texas) that they were being morally pure in far off Washington, D.C.  Like bad fish,  the situation reeked with hypocrisy from the head.  

Now, when Democrat Woodrow Wilson vacated the White House in March of 1921, he had the residence's extensive liquor closet (above) shipped to his new private home across town. It was not a behavior which should have inspired confidence in the national prohibition act which would take effect in July. 

- sung to the tune of “My bonnie lies over the ocean” -

My father makes book on the corner,
My mother makes illicit gin.
My sister sells kisses to sailors,
My God how the money rolls in.

(Chorus)

Rolls in , rolls in,
My God how the money rolls in, rolls in.
Rolls in, rolls in,
My God how the money rolls in.

The incoming President, Ohioan Warren G. Harding (above right), ordered his Attorney General, Harry Daugherty (above left), to replace the White House booze supply. And being a practical crook at heart, the new AG simply instructed his newly appointed Prohibition Commissioner,  Roy Asa Haynes, to load Wells Fargo wagons with seized “illegal” booze and several times a week to transport this forbidden aqua vitae,  guarded by armed IRS agents, to various locations inside the district for the consumption by privileged public servants. 

One of those locations was the second floor of the White House on Pennsylvania Avenue. Another was the “little white house” on H Street where Harding himself relaxed with alcohol and female companionship away from the prying eyes of the press and Mrs. Harding. Yet another was the little green house on K street, where something much more carnal than extramarital sex was going on.

My mother asks home politicians
To play in a night full of sin.
My father pops in with a camera.
My God, how the money rolls in!

The tailored Howard Mannington was almost fifty when he arrived in Washington to work with the Harding administration. He was described as “jowly, square-headed, heavy-lidded, thick lipped with a pug nose.” He was a close friend of Attorney General Daugherty, and had been involved in Ohio Republican politics for more than twenty years, making him a charter member of what became known as The Ohio Gang. 

His partner was Mr. M.P. Kraffmiller, treasurer of the General American Tank Car Company, out of Chicago and Warren, Ohio. General American not only built railroad tank cars, but financed the purchase of them, providing another source of profit. And it was that skill which Kraffmiller brought to the table for the Ohio Gang - managing large sums of cash. 

Kraffmiller and Mannington started out sharing a room in the Lafayette Hotel (above), at 16^th and I streets in Washington. But that was too visible a location. As of 1 May, 1921, they signed a lease on the house at 1625 K street. It was perfect for their needs.

My mother's a bawdy house keeper,
Every night when the evening grows dim.
She hangs out a little red lantern,
My God how the money rolls in.

What Federal Agent Gaston Means liked about the house at 1625 K Street was that it had both a front and a rear exit. A gate in the backyard fence gave access to a twisting ally which led directly to the Justice Department, and the offices of both Attorney General Harry Daugherty and his flunky, Jess Smith., Two blocks south of the house on K Street, and a short walk across Lafayette Park, was the White House.

The first floor front room of the Little Green House (above) was a parlor. Beyond was Howard Mannington's office and conference rooms. On the second floor was a bar and poker rooms, and an office for Mr. Kraffmiller. On the third floor were the bedrooms, both public and private. In the basement, Agent Means had his office, filled with files and maps of ports and highways, used for the distribution of once legal and now illegal liquor. Means' office was adjacent to a dinning room that seated 20, a kitchen with 3 stoves, a bathroom, and a laundry room. And in the back yard was, according to Agent Means,  "the safe".

My sister's a barmaid in Boston,
For a dollar she'll strip to the skin.
She's stripping from morning to midnight,
My God how the money rolls in.

The problem was Gaston Means (above) was a liar and a "con" man. Before joining the FBI in 1921, he had worked as a private detective in New York City, under former Secret Service agent William J. Burns.  Burns recognized Means had a talent for extortion. While working for Burns, Means was assigned to protect Maude King, a wealthy Chicago widow, from a gang of grifters, Means did that, but only while cleaning out Maude's  bank account for himself. 

Then, in 1917,  Means took Maude on a North Carolina duck hunting trip, during which she accidentally shot herself in the back of the head. The local authorities indicted Means for murder, but he managed to beat the rap, even though, during his trial,  it was revealed that Means had sold information to German spies during World War One.  It was Burns who recommended Means to Attorney General Daugherty. 

Agent Means claimed to have constructed the K street back yard safe himself. The back gate was “as strong as the door on a bank vault”, Means testified later. “Entering this gate (with a special key), one was then inside a steel cage-confronted by another gate, equally as strong and opened only by another special key.” Beyond, in the very center of the yard, Agent Means claimed he had dug a square, several feet wide. “After getting down a couple of feet or so, I had a wooden platform built...with an open space in the center....I lowered into this...a terracotta pipe about eight inches in diameter....I had a small steel box, which I kept lowered into this pipe by a strong rope."  It is a convincing description, in its details. And yet, I doubt it was actually there.

My father makes rum in the bathtub

My mother make two kinds of Gin

My sister makes love for a living

My God how the money rolls in

In that steel box Howard Mannington (above) claimed he  kept between $50,000 and $5,000,000 in cash. The source for all this was the Withdraw Permits sold by the Ohio Gang.   Two or three times each week Daugherty's sycophant Jess Smith would drop by the little green house to meet in private with Mannington in his first floor office, to check the books. Then he would go downstairs to receive a briefcase loaded with the cash, supposedly from the back yard bank. So much money was passing through Gaston Mean's (above) hands every day, he admitted to often humming a tune to himself. The tune was “My God, how the money rolls in”.

I’ve tried making all kinds of whiskey

I’ve tried making all kinds of Gin

I’ve tried making love for a living

My God the condition I’m in

(Chorus)

- 30 -

LITTLE GREEN HOUSE; Chapter Three

I do not find it surprising that at midnight on 17 January, 1920 -  less than an hour after prohibition became the law of the land - 6 armed men stole $100,000 worth of “medicinal whiskey” out of two box cars parked unguarded on a Chicago railroad siding. Even at that early moment America's dream of becoming a more moral nation, drunkenly stumbled over the sobering reality that alcohol has never been a mere beverage.

In 1920, the first year of national prohibition,  35,000 doctors were granted permits to prescribe various potable forms of alcohol for their patients. That same year the company which distilled “Old Grand Dad” reorganized itself as The American Medicinal Spirits Company and kept right on distilling  “Old Grand Dad Whiskey” . In fact the distilling business was suddenly booming. In the first five years of prohibition, the distillation of hard liquors in America more than doubled.

As an article for “The Nation” magazine lamented in 1921, “In the U. S. are 27 warehouses in which 15,000,000 gallons (at a time) of liquor are stored. The liquor is private property held for legal sale as medicine..A system of permit withdrawals was devised by the enforcement officials..for each case (3 gallons) of liquor. It very soon became apparent that a vast amount of fraud was being perpetrated.” It was this fraud that filled the backyard bank of the Little Green House on K street. The author of that article was Roy Haynes.

Roy Asa Haynes (above) was the Prohibition Commissioner for the United States government, appointed by the brand new President, Warren Harding. And each  “Withdraw Permit” to release distilled liquor had to be signed by the Commissioner, Roy seemed the perfect choice for the newly created job, and was well known  in anti-saloon league politics. Except he was also a crook. And the process to corrupt prohibition began even before Harding left Ohio for Washington, D,.C.

"The Ohio Gang" set the price for each Withdrawal Permit at $15.00, per case. And the very first permit, for the withdrawal of some 2,000 cases of alcohol, was issued to the General Drug Company of Chicago, for which J.B. Kraffmiller, a railroad tank car builder,  was paid $20,000, cash.  He kept $6,500 and passed on the rest to Howard Mannington, Harding's secretary,  at 1625 K Street. Mannington then divided it amongst the rest of the Ohio Gang, each member getting $2 per case. Even the General Drug Company got a dollar kickback, for the use of their good name. 

What General Drug did not get was the booze. That was unloaded from government warehouses by the "bootleggers" who had actually bought the liquor and paid the bribes. They passed along this overhead to their customers,  who happily paid a dollar for a drink which the year before had cost them a quarter. And as Agent Means, in the basement of 1625 K street sang, my God, how the money rolled in. The very first year of prohibition, it is estimated, bootleggers made about $100 million dollars in profits. K street was not guilty of bootlegging. They were merely the facilitators.

The bag man in this facilitation was Jess Smith (above, right),  Attorney General Daugherty's (above, left)  “jovial, rotund, combination confidant and valet.” Agent Means described him this way; “Poor Jess, he was a typical city department-store floor walker, transplanted into alien aisles....at a complete loss. And how he loved clothes. He worshiped Daugherty with a dog-like devotion.” 

This seedy looking man in expensive suits was the go-between, shuffling between his boss and idol, Attorney General Harry Daugherty and the triumvirate at the little Green K Street house.  Two or three times each week Jess would arrive at the Little Green House to deliver instructions and collect payoffs. He would then deliver the cash to an Ohio bank  owned by AG Daugherty's brother Milo. There the money would be laundered, Jess Smith kept everything straight in meticulous notebooks he carried on him, the “who”, the “how much”, the “for what”, and the “for whom.”

It was the sweetest deal in the history of K Street, and you just knew some schmuck was going to screw it up. The schmuck turned out to be the keeper of the backyard bank, Federal Agent Gaston Means (above). For him bountiful was never enough. In the winter of 1922 Means got his hands on several blank Withdrawal Permits. He forged Haynes' signature, and started selling them on his own.  It took very little time for word to get back to Daugherty. In February Daugherty suspended Means from the Bureau. .But Daugherty dare not fire Means or remove him from the Little Green House, because Means had all those file cabinets in the basement, stacked with names, dates and amounts.  

In the mid-term elections of November, 1922 the Republicans lost five seats in the House. The following January of 1923, the Democrats began to percolate over Republican scandals as a 1924 campaign issue. So in the spring of 1923 Daugherty was forced to go to President Harding and tell him of the trouble Means was causing. It was decided a sacrificial lamb would have to be offered up to the Democrats, and since it could not be Means, the clothes horse “poor Jess”, was tailor made for the role. "Poor Jess", with his notebooks might have also been a threat, but because of his devotion, Daugherty  was certain he could control him.

On Tuesday morning, 29  May, 1923 Jess Smith played golf with Attorney General Daugherty, and while walking the course was informed that he had to leave Washington the next day, permanently. Jess did not take it well. Daugherty then proceeded to the White House, where he phoned another associate, Warren Martin, and ordered him to go Jess' apartment at the Wardman Hotel and stay with Jess until the lamb was out of town. At six the next morning, Martin was suddenly awakened by a gunshot. He found the 61 year old Jess Smith, in his pajamas and a dressing gown, lying on the floor of Daugherty's bedroom. Smith's head was inside a wastepaper can, a bullet through his brain. The weapon lay on the floor, inches from his fingers. There was no autopsy. His death was ruled a suicide by a friendly doctor. His meticulous notebooks and personal correspondence then mysteriously disappeared.

Sixty four days later, on the second of August, President Warren G. Harding died of a heart attack in a San Francisco hotel. For a time the fact that "Silent Cal" Coolidge was now President made little difference to the business of K Street. But inevitably, when dealing with crooks, somebody eventually screwed things up, again.

This time it was Jess Smith's ex-wife, Roxy Stinson (above).  Cheated out of what she thought was her share of Jess' share, Roxy spilled her guts to a Senate committee investigating the Attorney General. On 28 March, 1924  - a presidential election year -  President Coolidge demanded Daugherty's resignation. Daugherty said, “ "I wouldn't have given 30 cents for the office of Attorney General, but I won't surrender it for a million dollars." Then he added, “I have no personal feeling against the President. I am yet his dependable friend and supporter." And then he resigned.

In June of 1924, Gaston Means (above) was sentenced to four years for perjury. Once out of prison he wrote a book, “The Strange Death of President Harding”. It was an instant best seller, a well written inventive concoction of half truths and fantasy. Still desperate for money, in 1932 Means claimed to have been contacted by the kidnappers of the Lindbergh baby.  He was arrested after stealing the supposed $100,000 ransom, and sentenced (above) to fifteen years.  He died of a heart attack in Leavenworth Prison, in 1938.

Howard Mannington died in 1932, at the age of 64, of a "lingering illness". Henry Daugherty (above) was indicted in 1926 for accepting bribes. The jury deadlocked, 7-5 in favor of conviction. His second trial ended in another hung jury, this time 11 – 1 for conviction. But then the government gave up. In 1932 Daugherty published his own book, “The Inside Story of the Harding Tragedy.” It did not sell well. In October of 1940 Henry suffered two heart attacks which left him bedridden. He died in his own bed on 12 October, 1941, a very rich man. And that was the point..

Now, the Little Green House on K Street was vacant again. The graft it had contained certainly did not end. It just got bigger and more professional.

                                       - 30 - 

LITTLE GREEN HOUSE, Chapter Two

 

“I can take care of my enemies all right. But my damn friends, my God damn friends...they're the ones who keep me walking the floors nights.”

Warren G. Harding.

On the night of 31 October, 1918 crowds jammed the restaurants and bars along 9^th Street in Washington, D,C, to share a final drink. Then, at midnight, One November, 1918, by Federal fiat, the District of Columbia went bone dry.

It had been the pro-prohibition states which had re-elected Democrat Woodrow Wilson as President in November of 1916. The imposition of prohibition in the one place on earth he could dictate it, was his reward for them. Opponents tried to give the local residents a vote on the issue, but Wilson complained, “There is no voting machinery in the District of Columbia. Such a machinery would have to be created.” Still the option of giving democracy a chance inside the district was only defeated because the vote was tied – 43 pro and 43 con - and Vice President Thomas Marshall refused to cast the deciding vote. That opened the door to the Sheppard Act, sponsored by Senator John Sheppard of Texas, which allowed the politicians to assure their moralistic supporters back home (in places like Texas) that they were being morally pure in far off Washington, D.C.  Like bad fish,  the situation reeked with hypocrisy from the head.  

Now, when Democrat Woodrow Wilson vacated the White House in March of 1921, he had the residence's extensive liquor closet (above) shipped to his new private home across town. It was not a behavior which should have inspired confidence in the national prohibition act which would take effect in July. 

- sung to the tune of “My bonnie lies over the ocean” -

My father makes book on the corner,
My mother makes illicit gin.
My sister sells kisses to sailors,
My God how the money rolls in.

(Chorus)

Rolls in , rolls in,
My God how the money rolls in, rolls in.
Rolls in, rolls in,
My God how the money rolls in.

The incoming President, Ohioan Warren G. Harding (above right), ordered his Attorney General, Harry Daugherty (above left), to replace the White House booze supply. And being a practical crook at heart, the new AG simply instructed his newly appointed Prohibition Commissioner,  Roy Asa Haynes, to load Wells Fargo wagons with seized “illegal” booze and several times a week to transport this forbidden aqua vitae,  guarded by armed IRS agents, to various locations inside the district for the consumption by privileged public servants. One of those locations was the second floor of the White House on Pennsylvania Avenue. Another was the “little white house” on H Street where Harding himself relaxed with alcohol and female companionship away from the prying eyes of the press and Mrs. Harding. Yet another was the little green house on K street, where something much more carnal than extramarital sex was going on.

My mother asks home politicians
To play in a night full of sin.
My father pops in with a camera.
My God, how the money rolls in!

The tailored Howard Mannington was almost fifty when he arrived in Washington to work with the Harding administration. He was described as “jowly, square-headed, heavy-lidded, thick lipped with a pug nose.” He was a close friend of Attorney General Daugherty, and had been involved in Ohio Republican politics for more than twenty years, making him a charter member of what became known as The Ohio Gang. His partner was Mr. M.P. Kraffmiller, treasurer of the General American Tank Car Company, out of Chicago and Warren, Ohio. General American not only built railroad tank cars, but financed the purchase of them, providing another source of profit. And it was that skill which Kraffmiller brought to the table for the Ohio Gang - managing large sums of cash. He and Mannington started out sharing a room in the Lafayette Hotel, at 16^th and I streets in Washington. But that was too visible a location. As of 1 May, 1921, they signed a lease on the house at 1625 K street. It was perfect for their needs.

My mother's a bawdy house keeper,
Every night when the evening grows dim.
She hangs out a little red lantern,
My God how the money rolls in.

What Federal Agent Gaston Means liked about the house at 1625 K Street was that it had both a front and a rear exit. A gate in the backyard fence gave access to a twisting ally which led directly to the Justice Department, and the offices of both Attorney General Harry Daugherty and his flunky, Jess Smith, worked. Two blocks south of the house on K Street, and a short walk across Lafayette Park, was the White House.

The first floor front room of the Little Green House (above) was a parlor. Beyond was Howard Mannington's office and conference rooms. On the second floor was a bar and poker rooms, and an office for Mr. Kraffmiller. On the third floor were the bedrooms, both public and private. In the basement, Agent Means had his office, filled with files and maps of ports and highways, used for the distribution of once legal and now illegal liquor. Means' office was adjacent to a dinning room that seated 20, a kitchen with 3 stoves, a bathroom, and a laundry room. And in the back yard was, according to Agent Means,  "the safe".

My sister's a barmaid in Boston,
For a dollar she'll strip to the skin.
She's stripping from morning to midnight,
My God how the money rolls in.

The problem was Gaston Means (above) was a liar and a "con" man. Before joining the FBI in 1921, he had worked as a private detective in New York City, under former Secret Service agent William J. Burns.  Burns recognized Means had a talent for extortion. While working for Burns, Means was assigned to protect Maude King, a wealthy Chicago widow, from a gang of grifters, Means did that, but only while cleaning out Maude's  bank account for himself. Then, in 1917,  Means had taken Maude on a North Carolina duck hunting trip where she accidentally shot herself in the back of the head. The local authorities indicted Means for murder, but he managed to beat the rap, even though, during his trial, it was revealed that Means had sold information to German spies during World War One. It was Burns who recommended Means to Attorney General Daugherty 

Agent Means claimed to have constructed the back yard safe himself. The back gate was “as strong as the door on a bank vault”, Means testified later. “Entering this gate (with a special key), one was then inside a steel cage-confronted by another gate, equally as strong and opened only by another special key.” Beyond, in the very center of the yard, Agent Means claimed he had dug a square, several feet wide. “After getting down a couple of feet or so, I had a wooden platform built...with an open space in the center....I lowered into this...a terracotta pipe about eight inches in diameter....I had a small steel box, which I kept lowered into this pipe by a strong rope."  It is a convincing description, in its details. And yet, I doubt it was actually there.

My father makes rum in the bathtub

My mother make two kinds of Gin

My sister makes love for a living

My God how the money rolls in

In that steel box Howard Mannington claimed he  kept between $50,000 and $5,000,000 in cash. The source for all this was the Withdraw Permits sold by the Ohio Gang.   Two or three times each week Daugherty's sycophant Jess Smith would drop by little green house to meet in private with Mannington in his first floor office, to check the books. Then he would go downstairs to receive a briefcase loaded with the cash, supposedly from the back yard bank. So much money was passing through Gaston Mean's (above) hands every day, he admitted to often humming a tune to himself. The tune was “My God, how the money rolls in”.

I’ve tried making all kinds of whiskey

I’ve tried making all kinds of Gin

I’ve tried making love for a living

My God the condition I’m in

(Chorus)

- 30 -