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Copyright 1996-2014, Spybusters, LLC (140209)

Saturday, May 20, 1916


Police Head’s Testimony:
Wire Spying a Necessity to Detect Crime Here, he says.

Mayor Charges Treachery
Accuses Thompson Committee of Harassing Federal Authorities by Disclosures.

Day-Marked by Wrangles.

Corporation Counsel Joins in Demand That Legislative Body Cease
Exposing Secrets.

The controversy over the right of the police to tap private telephone wires and listen to conversations was waged with great bitterness yesterday. It led to many clashes between Senator Thompson, Chairman of the Legislative Committee, and city officials, headed by Mayor Mitchel. Among the many developments of the day these were the most important:

Senator Thompson emphatically asserted that no evidence had been produced to show that the United States Government was in any way involved in the tapping of the wires of the law firm of Seymour and Seymour, which precipitated the present trouble, and that he did not believe the Government’s interests were involved.

Mayor Mitchel, Police Commissioner Woods and Corporation Counsel Hardy asserted just as positively that the Government’s interests were involved, and that this was one of the reasons why the law firm’s wires were tapped, the Mayor branding as “cumulative treachery” the efforts of Senator Thompson and his committee to make the matter public

National Issues Involved.

United States District Attorney H. Snowden Marshall took a hand in the proceedings by issuing a statement later in the day declaring that the Seymour case is one which he knew had been of interest to the Federal authorities for some time. He said it involved “national issues.” The recent work of the Police Department, he said, had been of great benefit to the Federal authorities.

It was shown that five men connected with the Seymour office, one being Frederick Seymour, conducted a war brokerage business and sold to American manufacturers of munitions information obtained through a “grapevine” process in Wall Street. Letters that passed between some of this group and a firm in Tennessee were produced by District Attorney Swann, who said that one of the group represented himself as a confidential agent of J.P. Morgan and Co.

Additional information as to how the wires of the Seymour firm were tapped and two dictaphones installed there was given to the Thompson committee by employees of the Equitable Building and others. It was shown that William J. Burns had charge of the job, and Senator Thompson declared that in his opinion the detective had violated the fourth amendment of the United States Constitution. The committee made an ineffectual effort to subpoena every member of the Burns Detective Agency.

Congress May Investigate.

Representative George W. Loft, (Democrat,) introduced a resolution in Congress for an investigation by a House Committee of five members of the tapping of wires by New York City authorities. Senator Thompson said he would gladly turn over the whole matter to this committee. It was rumored that Senator Thompson had been called on the long distance telephone from Washington by United States Senator James W. Wadsworth, (Republican,) and informed that the inquiry should go no further.

Police Commissioner Woods went before the committee and told in detail of his connection with the case and hotly defended the police practice of listening in on telephone wires. He asserted that the practice was done only in cases of suspected crime, and that he personally gave the order in every case.

District Attorney Swann said he was making a careful investigation of the Seymour case and the charge that the private correspondence of the Morgan firm had been stolen. Mayor Mitchel also announced that he would go before the Thompson Committee and tell all about the tapping of the telephone of Father Farrell of Brooklyn. He said the truth of this case has never been revealed.

The day’s proceeding started with a war of words between Senator Thompson and Corporate Counsel Hardy. The Senator called his committee to order in the Coroner’s room in the Municipal Building, which was packed to the doors, and announced that the committee would go into secret session

Protest from Mr. Hardy.

Mr. Hardy elbowed his way to the front and said to the Chairman: “I wish to protest in behalf of the city against any further examination into the Seymour case because of the national questions involved. Commissioner Woods is ready and anxious to go on the stand and tell you the manner in which telephone wires were tapped.”

“I will say,” replied the Senator, “that there is no national question involved and there never has been.” “In answer to that,” retorted Mr. Hardy hotly, “I say there is a national question involved and I defy you to show the contrary.”

“I don’t have to,” came back Mr. Thompson, “but I will say that this committee is able to handle the case and make its investigation and can be depended upon to do the right thing. There should be no insinuation from any quarter regarding the carrying on of this investigation because of Government or national questions, especially since there are no facts to warrant the insinuation. We will take up things as they come along, but it’s a funny thing to me that no Government official knew anything about this matter until the last few days.”

The Senator had previously made practically the same statement to reporters at the Biltmore Hotel.

Another Secret Session.

With this Senator Thompson brought his gavel down with a bang and took his witnesses into the private session room. These included John S. and Frederick Seymour, Ozra B. Phillips, Mortimer Sultzer, William Hills, Jr. and William De Witt, who had desk room in the Seymour offices. District Attorney Swann also was present during the examination which lasted most of the afternoon.

In the meantime, Mayor Mitchel, over in the City Hall, was getting wroth when he learned that the committee had gone into another secret session without calling his Police Commissioner, as Senator Thompson had promised to do the night before. It was then that the Mayor made the statement about cumulative treachery Commissioner Woods was present and remarked: “It seems that Senator Thompson casts doubts on my statement of yesterday that important Government matters were involved here in the listening over the Seymour wire. No matter what any one else may say in this question to cause further serious embarrassment to the United States Government in the conduct of the affairs of the nation – and this has caused it already, and the longer this sensational agitation is kept up the more the embarrassment will be – I am not going to be a party to this unpatriotic conduct, and shall refuse to say anything more on the subject, except to assert again the fact that vital interests of the Government were connected here in this case; that we have been working with the Government; that I have been in consultation this morning again with high Government officials who have urged that everything shall be done for the sake of the national good to prevent this great harm being done by further delving into Government affairs.”
The Mayor’s Statement.

Calling to a stenographer, the Mayor made this statement:

“I simply want to add to what the Police Commissioner has said. As he has told you, the District Attorney of this county, who is the responsible law officer for the prosecution of crime, has stated that in his judgment the police were fully justified from the point of view of the commission of crime as he knows it in this case. Now his opinion is valuable on that question. “The opinion of the Chairman of the committee is not valuable on that question, nor is it authoritative. The Police Commissioner has told you that there is a national element that entered into this Seymour case. The Police Commissioner has told you that the work in the Seymour case was in co-operation with representatives of the national Government – that gives the flat lie to what has been said in that statement from the Biltmore.

“Now, in order that the public may understand the recklessness with which this matter has been treated by the Thompson Committee up to the present time and the disregard shown for national interests, I wish to tell you this:

“Senator Thompson has been warned by representatives of the national Government that Government interests are vitally concerned in these cases of telephone supervision. That warning I, myself, supplemented in an interview with Senator Thompson about a week ago and again yesterday, and pointed out to him that these cases handled by the local police force in many instances have this national significance."

Treachery, He Says.

Now, treason to a Government is defined in the law as giving aid and comfort to the enemies of a Government or a nation. To deliberately destroy one of the most powerful weapons in the hands of Government to detect and prevent the operations of public enemies I brand as treachery. Every repetition of these attempts to disclose the operations of the city police force and of the Government made in the interest of self-advertisement constitutes a cumulative act of treachery toward the United States.

“The Police Commissioner was informed last night that he would be placed on the stand today and accorded the opportunity of explaining to the people of this city how the Police Department operates in supervising telephones for the detection and prevention of crime. Despite the fact that he has been waiting that call and has left instructions with his secretary to notify him the moment the committee is ready to hear him, no call has come until this moment, (12.06 p.m.,) when I am informed that the Chairman announces that the Seymour & Seymour witness will be examined in executive session and that the Police Commissioner will not be called before 2:30 p.m.

Now on behalf of the city and the people, I demand that this committee desist in its attempt to suppress and pervert the truth in this matter, and that the Police Commissioner be given the opportunity that he is entitled to, to state the facts so far as they relate to the local situation and the detection and prevention of local crime.

He Hired A Hall.

When Senator Thompson was told of this statement he remarked that when the Mayor of his town (Middleport, N.Y.,) got into “a nasty quarrel” he hired a hall and told people about it. This information was conveyed to the Mayor and it did not improve his temper.

The Thompson Committee, he remarked has been going along blatantly for several months, assuming it was the only agency through which truth could be disclosed. They have been wanting to have all the facts made known, and now, when we are willing to
have them made known, they close the door. But the facts will come out, if not through one door, then through another.”

“Have you facts to show that the national Government is involved?” the Mayor was asked. “It certainly is involved,” he replied.

“Did you include Senator Thompson in your statement about cumulative treachery?” “I will be more direct,” said the Mayor. “Any person connected with the committee who continues to asseverate that the national interests are not involved, after being warned by me a week ago that they were, makes it increasingly difficult for the Government to carry on the works its agents are doing. The Government officials warned them on their own initiative and asked me to do so.”

Privacy Invaded, They Said.

The Mayor was asked if the whole investigation had not grown out of the disclosures of the charities investigation, and he replied: “It had began with a certain small group of people who contended that their privacy was invaded. They made this muss, just as Mr. Seymour did before the Thompson Committee when he made it appear that the only motive for being spied upon was a commercial one. There was a crime in both cases. The Seymour matter has been cleared up, but the facts in the other case will come out, if not before the Thompson Committee, then by some other way.” “When you go on the stand?” “Yes.”

The Mayor was told that Senator Thompson had remarked since the wire-tapping matter came up that he was “back again on the front page.” “There are a great many ways of getting on the front page,” said the Mayor with a laugh. “One way is to stand out there in City Hall Park and let the people throw rotten tomatoes at you.”

After the examination of the witnesses at the committee’s secret session had continued about two hours, District Attorney Swann came out and told something above what had happened. He said it had been found that O.B. Phillips had written a letter to the Humboldt Fibre Company of Humbolt Tenn., with a view to making a contract for cotton fibre In this letter, he said, was quoted a cablegram from Paris, dated Feb. 1, 1916, which had been received at the Morgan offices on February 2, and signed by the French Minister of Finance. The Phillips letter was dated Feb. 4. The cablegram Mr. Swann asserted, was genuine and must have been obtained from the Morgan offices.

A Letter and Contract.

Through the letter a contract was made with the Humboldt Company by which it was to pay one-fourth of 1 per cent commission to Phillips. The contract he said, was signed by Seymour & Seymour lawyers. Phillips, when questioned, the District Attorney said, declared that he could not remember if he had written this letter, but De Witt, one of his associates, who also was examined, testified that Phillips had dictated it and that he, De Witt, had written if for him. When the Humboldt company in corresponding with Morgan & Co., found that the latter did not know Phillips, Mr. Swann said, it repudiated the contract.

Mr. Swann made the letter public as well as one from the Humboldt Company addressed to Frederick Seymour under date of March 22. The letter offering the commission of one-quarter of 1 per cent was addressed to Seymour & Seymour under date of March 8, and signed by C.T. Jarrell, President of the Humboldt Company. This was Phillips’s reply:

Dear Mr. Jarrell: It occurred to me that you would like to hear the latest from the “Grapevine” and beg to quote from their letter as follows:

“The latest information we have regarding cotton liners offered by the Humboldt Fibre Company is that the Government have requested samples, and they are inclined to accept the offer, provided quality suitable.

They are also asked to cable at once how the Humboldt samples compare with a previous sample sent them, and a reply to this was sent out last night, recommending that they make the purchase, that the samples were of better quality that the previous samples submitted.” O.B. Phillips

A Morgan Cablegram.

A copy of he cablegram received by Morgan & Co. also was given out, and it showed that Mr. Phillips had followed the wording closely. In the March 22 letter, President Jarrell wrote in part:

As Mr. Phillips is now signing the letters personally, we must have a statement from you that settlements are to be made with him if they are to go to him direct. When the negotiations began with you it was clearly understood that you were the confidential representatives of J.P. Morgan & Co. and that that company did not care to enter into negotiations direct in a preliminary way, but that final negotiations would be direct with them. If you are acting or have acted as the confidential representative of J.P. Morgan & Co. we would be glad if you would so state to us.

Later Mortimer Sultzer came out of the committee room and explained how he and his associates acted as war brokers. “Frederick Seymour and the others,” he said, “have a sort of a partnership. There is nothing to the story that we were in collusion with anyone in Morgan’s office. The only information we got was through our familiarity with war orders and through having acquaintances in Wall Street. “You can always find out there what orders the Morgan firm has. We never represented ourselves as being agents of the Morgans, but acted on the knowledge that 90 per cent of the war orders went to Morgan & Co.

We would get in touch with the out-of-town manufacturers after judging when an order was likely to go out, and tell them what we knew about it so that the men on our list would be the first ones to make bids. The we would collect a commission.”

Admits Letter Was Sent.

Frederick Seymour admitted that the Phillips letter had been sent, but said they never represented themselves as being agents of Morgan. He explained his contract with Humboldt & Co., which was for the delivery of fibre in two parts. Humboldt & Co., he said was now trying to repudiate the second part of the order, but he wouldn't’ state the reason. He said he never missed any of his papers and didn’t know anything about the alleged theft of correspondence from Morgan & Co.

“The grapevine route,” he said, “is a route of information from mouth to mouth. It is gossip – a tip in Wall Street.”

It was 5 o’clock when the secret session ended and Senator Thompson called a regular meeting of the committee. Clarence T. Coley, operating manager of the Equitable Building in which the Seymour offices are located, was the first witness. He said he was introduced some time last March to William J. Burns by George T. Mortimer, head of the Equitable Building Company. He said Burns told him that he wished to investigate one of the tenants of the building.

“Burns asked me if I would allow him to enter the office that night. I did and the next day I gave him a key. I also gave him the key to the room next door. I introduced him to Mr. Kalb, the electrician and told Mr. Kalb to do what he could for Burns. Mr. Kalb never reported to me and I never paid any more attention to the matter. Both Burns and his son were at the office.”

He said he had sold seventy-three preventaphones to the Burns agency. He said he also sold the agency a telephone tap, an instrument to tap telephones without a connection being made at the switchboard.

Bartlett Smith of 42 Broadway, a manufacturer of dictaphones was the next witness. He said he had sold seventy-three preventaphones to the Burns agency. He said he also sold the agency a telephone tap, an instrument to tap telephones without a connection being made at the switchboard. He said Burns did not tell him what the instrument was to be used for but he accompanied the preventive to the Seymour offices. Sherman Burns, the preventive’s son, and James Lynch, a stenographer, were with them.

He said they used the room of the Belgian Relief Fund, next door to the Seymour office. He said they all went in the Seymour office about 9 o’clock one night and installed the preventaphone. Next night he went again to the Seymour office with Sherman Burns and tried to bore another hole through the wall.

Searched Seymour Office.

“Did you see Burns do anything when he was in the Seymour Office?” asked Frank Moss, chief counsel to the committee. “Yes,” said the witness. “He opened a desk in the furthest room, searched it, took out some papers, and dictated the contents to the stenographer.”

At this point, Senator Thompson made a statement of what had occurred at the secret session of the committee. He said the Seymours had two munitions contracts, one with the Canadian Car Wheel Company and the other with the Humboldt Company. The munitions, he said, were to be supplied through J.P. Morgan & Co.

“In no way,” said the Senator, “could this firm figure in any foreign complications, and they couldn’t have at the time.”

The Senator explained what the witnesses had said about the “grapevine route.”

“We now feel,” Senator Thompson continued, “that Commissioner Woods is entitled to make his statement. He was not called before because we wanted to get at all the facts. The only criticism of the Commissioner I have to make is that he has been a little impatient.”

Commissioner Woods Called.

Commissioner Woods then took the stand, and for more than an hour made his defense of the practice of wiretapping by the police. he said he wished to make it plain that law-abiding citizens need have no fear that their wires will be tapped by the police. He had found the system in vogue when he entered the office, he said, and the same picked men in charge of it then are in charge now.

“The practice,” he said, “is one we all instinctively object to. No one likes the idea of spying or being spied upon, but there has been no spying without justification, and only in cases where we have been after criminals. In my judgment the method is not only justifiable, but a duty when it is used to protect law-abiding citizens from crooks. It is my duty to defend honest men.

“The questions came up if it was lawful for us to use this method. The Corporation Counsel and the District Attorneys of New York and Kings told me it was. One went so far as to say that if a telephone company refused to co-operate with the police in the prevention of crime it would be unlawful.

“No wire was ever listened in on except to help in the discovery of a crime and to protect law-abiding citizens. The Inspector of the Detective Bureau stated to me that it was one of the most valuable methods we had. One important case we had was that of Hans Schmidt, the murderer.

“It is clear that it is lawful to do this work and this it is of the utmost value. The question is if it can be done in such a way as to avoid all reasonable chance of doing harm to law-abiding citizens. I talked with the manager of the Telephone Company and told him I was going to approve personally of every case, and this has been done.”

Mr. Moss brought up the case of the tapping of Father Farrell’s wire, but the Commissioner said he had told all about it to the Kings County Grand Jury and didn’t think he should discuss it now. Senator Thompson backed him up in this. Mr. Moss then alluded to the Seymour case.

“Our practice from the beginning,” went on the Commissioner, “was to take the most scrupulous care to see that no improper use was made of the tapping. As soon as the information we obtain is acted on the paper containing it is destroyed. We never use the matter thus obtained as evidence in a case, only to prevent or prevent crime. We will not even use a stenographer who gets the evidence as a witness. The conversations taken over the Seymour wires was listened to only by police officials, and what they got was used only by the Police Department. Deputy Commissioner Lord handled that case.

“We found that Burns was on the case and we used him in any way we could. We may have told him certain leads we got, but I tell you flatly and emphatically that Burns or no outsider got any information unless we felt that we could use them as an aid to the Police Department to run down crime.”

There was a discussion as to proper legislation to cover the matter, and Senator Thompson said he though the best thing that could be done was to have wiretapping done only by the police and all records of conversations kept.

“There is no question in my mind that the evidence of the witness who preceded you,” said Senator Thompson, “that William J. Burns violated the fourth amendment to the Constitution.”

No Kid-Glove Detectives.

Mr. Moss asked the witness if it wasn’t true that wires in the homes of many innocent persons had been tapped. Mr. Woods thought the percentage was very small. Later he said:

“You know, you cannot do preventive work in a high hat and kid gloves. We have got to use the methods of the crook and speak the language. There is too much snappy talk about the rights of the crook. He is an outlaw and defies the authorities. Where do his rights come in? If people spent less time talking about the dear criminals and more time helping the police to run them down we would have fewer criminals.”

The Commissioner then went on to tell of the good that had been accomplished in the use of preventaphones and wiretapping. He mentioned the saving of St. Patrick’s Cathedral from a bomb, the Borden holdup, the Baff murder, and the Gorndorff wiretapping case.

“Under no circumstances,” he went on, “would I consider a complaint a sufficient cause to tap wires. I use my best judgment after considering all the facts.

“But here is a citizen, Mr. Seymour, who has been honored by the Government, and you cut in on him because you suspect he was about to commit a crime” said Mr. Moss. The witness made no reply, as Senator Lawson broke in with a question. Mr. Moss then asked:

“Is it a fact that a person of unblemished character and spotless reputation may have his telephone wire cut and his conversation listed to?"

Any Wire Liable to Tapping.

“If he is in collusion with criminals, yes.” was the reply. “But no one in this town need have any fear that his conversation will be listed to unless he is a crook. We will not listen in on any wire except we are convinced that a crime has been committed or that there is a good chance to prevent crime. The whole conduct of the Police Department is to conceal nothing except where it is of interest to the public to have it concealed. We take pride in letting every one see what’s going on. This weapon we have has been seriously damaged, if not destroyed, by all this publicity.”

“Pretty nearly everybody here believes that his telephone has been taped,” said Senator Thompson. “I want to say that that is not true. The percentage of wires tapped, compared to the population of the city, is very small.”

That ended Commissioner Wood’s evidence and he was succeeded by Charles M. Kalb, the Equitable Building electrician. He told of installing the preventaphone in the Seymour office at the request of Burns and how the wires were concealed in the electric light wires. The preventaphone was placed in the electric light fixture in the ceiling. Two preventaphones, he said, were installed.

George T. Mortimer, head of the Equitable Building Company, was then called. He said a Mr. Egan of J.P. Morgan & Co. introduced Burns to him and asked him to give what help he could. he said Burns had first suggested that a preventaphone be installed in the Seymour offices. Senator Thompson then announced an adjournment until Monday morning.

Raymond J. Burns, son of William J. Burns made an emphatic denial last night that the Burns Agency had tapped the telephone wires of Seymour and Seymour. He said the Burns Agency never had tapped any telephone wires, unknown to a subscriber. He said he would refuse to obey a subpoena of the Thompson Committee because he believed it had no right to summon him to testify along the lines of the investigation. He did not deny that he had purchased the wiretapping contrivance which Bartlett Smith testified about, but did deny that it had ever been used. He said it was used only in the office of a business man who suspected an employee, and with this man’s knowledge and at his request.

“Smith could not have testified that it was used on the Seymour wires.” said Burns. “Smith is now employed by the O’Farrell Agency and we have reason to believe that it was partly through the Smith agency that the fact that Seymour’s wires were tapped and a dictaphone installed first became public. We told our story to District Attorney Swann in full. He knows we did no wiretapping. It was the police that tapped the wires of Seymour and Seymour, and Senator Thompson knows it. We never have tapped a telephone wire, we wouldn’t dare. It is a felony in many States.

“The Burns Agency had no cut-in on the police tap. At the time it was tapped we got no reports from the police or any other source of what was said over that wire.

Burns would not deny that his agency had knowledge of what had been said over the wire while it was being tapped.

- - - - - - -


Washington, May 19.–

Congressman George W. Loft of New York City offered a resolution in the House today asking for an investigation by a select committee of five members of the House into the “wiretapping” controversy. Mr. Loft in a Democrat. The Loft resolution refers to an alleged “gigantic scandal;” growing out of the tapping of telephone and telegraph wires in the metropolis. The resolution was referred to the House Committee on Rules. No plans have yet been made for its consideration. The resolution reads:

Whereas, It has been stated in the press that there has developed a gigantic scandal growing out of the practice of tapping telephone, telegraph, and cable wires in the City of new York, and whereas, it has been stated on high authority that this practice has grown to become a menace to international relations, and, as stated, “It had to do with important matters affecting the National Government.”

Be it resolved. That the Speaker appoints a select committee of five members of the House, and such committee be instructed to inquire into all facts connected with this matter and report its findings and recommendations as soon as practicable to the House of Representatives; and the committee is authorized to subpoena witnesses and administer oaths and send for persons and papers in prosecution of said investigation.

No Request from Washington

At the Department of Justice it was said that no request had been made through that department that the Seymour wires be tapped. It was indicted there that if anybody connected with the Federal Government knew anything on the subject the proper place to inquire was the office of the Federal District Attorney in New York, but it was explained that this was a mere suggestion not
based on any definite knowledge. All the information on the wiretapping case that appears to be available here leads to the belief that the Federal Government did not officially ask the New York authorities to do the wiretapping.

National Issue Involved, Says Marshall

United States District Attorney Marshall made the following statement yesterday:

I have made inquiry into the circumstances concerning the investigation now going on into the listening on the wire of Messrs. Seymour & Seymour, and find that the case which the Police Department referred to as having to do with the Federal authorities is a case which I know about which has been on interest for some time to the Federal authorities and which involves national issues. Any publication of the facts in this case at the present time would be most regrettable from the standpoint of the administration of Federal justice.

The works of the Police Department during the recent strenuous times has been of the utmost benefit to the Federal authorities. I could cite one case after another to which they have devoted the greatest energy and the most clear-headed intelligence. The Federal and city authorities work in entire harmony and, which I do not feel myself free to deal with names and cases, I can state most positively that the Federal Government is indebted in a great number of important cases to the Police Department for most valuable and efficient assistance.

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