That was the last Rea heard from Schmitz on the subject. Rea testified before the Grand Jury that he still had the money Gallagher had paid him in the prize-fight and gas-rate cases.
Rea’s trip to Schmitz seems to have kept him out of the division of the Telephone and the United Railroads money.
The Telephone bribery was somewhat complicated by the fact that rival companies were in the field bidding for Supervisorial favor. It developed that eleven of the Supervisors[172] had accepted from T. V. Halsey, representing the Pacific States Telephone and Telegraph Company, bribes to block the granting of a franchise to the Home Telephone Company. On the other hand, the Home Telephone Company had paid Ruef $125,000[173] to be used in getting favorable action on its application for a franchise. Ruef gave Gallagher $62,000 for the Supervisors. Ruef states that he divided the remainder with Schmitz. In this way, the administration was bribed to grant the Home Telephone franchise, while eleven[174] of the Supervisors, a majority of the board, were bribed not to grant it.
The complications which this created almost disrupted the Ruef-Schmitz combine. The difficulty was threshed out in a Sunday night caucus. Those who had received money from the Pacific States people, with Supervisor Boxton at their head, insisted that the Home franchise should not be granted. On the other hand, Ruef and Schmitz, with the thousands of the Home Company in view, insisted that it should be. Both Ruef and Schmitz warned the Supervisors that they were perhaps at the dividing of the ways.
“Well,” replied Boxton significantly, “if men cannot get a thing through one way they might try and get it through in another.”
Mayor Schmitz demanded of Boxton what he meant by that. “Well,” Boxton replied vaguely but defiantly, “you know there are other ways of reaching the matter.”[175]
But Boxton was unable to prevail against the support which Ruef and Schmitz were giving the Home Telephone Company. Although eleven of the Supervisors had taken money from the Pacific States Company to oppose the granting of a franchise to the rival Home Telephone Company, all but four of those present at the caucus decided to stand by Ruef and Schmitz, and voted in caucus to grant the Home Company its franchise.[176]
The next day, in open board meeting, with Boxton still leading the opposition, the franchise was awarded to the Home Telephone Company.
The division of the money received from the Home Telephone Company people was one of the hardest problems in bribe distribution which Ruef and Gallagher were called upon to face.
The first plan was to pay the Supervisors who had at the last supported the Home Telephone franchise, $3500. At once those Supervisors who had, from the beginning remained faithful to the administration’s support of the Home Company and had refused to accept money from Halsey, pointed out that they would receive $3500 only, while the Supervisors whom Halsey had bribed would get in all $8500; that is to say, $3500 from Gallagher for voting to grant the franchise and $5000 from Halsey not to grant it. It was, those who had remained true contended, inequitable that Supervisors who had been faithful to Ruef and Schmitz from the beginning should receive only $3500; while those who had been temporarily bought away from the administration received $8500.