No criminal proceedings, however, were brought against Mr. Ryan. In a statement published on May 26, 1909, Col. Amory averred that when a Grand Jury was called in 1907 to investigate the acts of Ryan and associates of the Metropolitan Street Railway Company, the foreman of the Grand Jury was a director in Mr. Ryan’s Equitable Life Assurance Society. Col. Amory also made the accusation that in April, 1903, Daniel Mason, Mr. Jerome’s former law partner, and William H. Page, Jr., another of the Metropolitan’s lawyers, had attempted to bribe him (Amory) while a State’s witness, with $200,000, to withdraw the charges that Amory had filed with Jerome against the Metropolitan Street Railway Company. On January 27, 1908, Judge Rosalsky, in the Court of General Sessions, severely arraigned District Attorney Jerome, declaring that Jerome had so conducted the examination of Thomas F. Ryan before the Grand Jury as probably to invalidate any indictments which that body might have found against Ryan. Paul D. Cravath, Governor Hughes’s former law partner, was now Ryan’s astute attorney.
Governor Hughes appointed a Commissioner to hear the evidence upon which the charges against Mr. Jerome were made. Jerome admitted that when Ryan, Brady and Vreeland were before the Grand Jury he had put leading questions to them. Further he testified that he had not asked the Grand Jury to indict Ryan in the matter of the Wall Street and Cortlandt Street Ferries Railway transactions. Interrogated as to a certain contribution made to his campaign fund by Samuel Untermeyer, counsel for Mr. Hyde of the Equitable Life Assurance Society, Mr. Jerome denied that any ulterior purpose was behind it. Mr. Ryan admitted on the witness stand that he (Ryan) had contributed heavily to the national fund of the Democratic party in 1900.
The Commissioner’s report exonerated Jerome, and Governor Hughes dismissed the charges, saying, “Nothing has been presented which furnishes any just ground for impeaching the good faith of the District Attorney in connection with any of the transactions set forth, nor has anything been shown which would justify his removal from office.” The outcome was severely criticized by some of the very newspapers which had once enthusiastically supported Mr. Jerome. Col. Amory wrote that there were other bribes than money bribes, and that he did not believe Mr. Jerome capable of doing a corrupt act for money.[16] Whatever the fundamental facts, the consequences were clear: great sums of money had undeniably vanished, a group of magnates had become additionally enriched, the street railway system was wrecked and thrown into bankruptcy, the statute of limitations had meanwhile been interposed, and nobody had been prosecuted.
These were the essential facts, and they were facts that, after all explanations, could not be evaded. Mr. Jerome himself was forced to recognize them in his own defense; in his public speeches he took great pains to assure his hearers that acts might be wrong and yet not criminal, but it was an explanation not favorably received in general. The great change in public opinion was forcibly shown, when, at a meeting in Cooper Union, on May 26, 1909, Mr. Jerome was badly heckled and asked the most pointed questions as to why he had not prosecuted the traction magnates.
The city finances during these years were in a bewilderingly deplorable state. On December 31, 1907, the total amount remaining uncollected from the tax levies covering the years 1899 to 1907, inclusive, was $90,545,000. In addition, a sum of $12,289,000 remained uncollected from the tax levies prior to the year 1899.[17] Notwithstanding these actual enormous deficiencies, the amounts placed in the tax levies, from the years 1899 to 1905 inclusive, to provide for possible deficiencies in tax collections, was only $11,719,000. During that very period the amounts in discounts, remissions and cancelations amounted to $12,477,000, which was more than $758,000 in excess of the amount placed in the tax levies to provide for deficiencies in collections. “In other words,” reported a Select Legislative Committee, “the amounts placed in the tax levies during those years to provide for deficiencies in collections, did not even equal the discounts, cancelations and remissions, and made no provision whatever for failure or inability to collect taxes levied.”[18]
By October 31, 1908, uncollected taxes due the city (including $9,324,000 personal taxes for years previous to 1898, which had been written off as uncollectable), amounted to $84,506,000. Despite the fact that this huge sum had not been collected, the city officials spent the greater part of it as though it had been collected; of the $84,506,000 uncollected, the sum of $76,266,000 had, by October 31, 1908, been expended by the city in appropriations included in budgets which, in reality, ought to have been defrayed by these uncollected taxes.[19]
Basing their action on these uncollected taxes, the city officials had issued, from time to time, large amounts in revenue bonds with which to get money to pay the appropriations in the yearly budgets. On October 31, 1908, there was outstanding against these arrears of taxes $40,606,000 of revenue bonds. This left a balance of $35,660,000 which had been expended by the city for current expenses, but which had neither been collected nor procured by revenue bonds.[20] The Select Legislative Committee commented upon the fact that although the evidence proved conclusively that not more than 65 per cent. of personal taxes were collectable, yet the city budget had nearly equaled the entire levy in each year.[21] Furthermore, the sum of $24,521,000 in special franchise taxes had not been collected by December 31, 1907.
The sources of a certain $33,000,000 which had been spent by the city puzzled the Select Legislative Committee. Just how this money was obtained the Committee was not able to ascertain.
But, the Committee added, it was shown that the assessment account for local improvements was depleted to the amount of $1,900,000. There should have been a sum of $600,000 comprising trust funds, various bequests, intestate estates, etc., but it could not be found. Also, there should have been in the city treasury $3,800,000 more as a special account including deposits made with the city against contractors’ liability for restoring and repaving streets and the unliquidated balance of the Brooklyn fund. But this $3,800,000 “did not exist.” The accounts of the various boroughs revealed a shortage of $1,500,000; excise funds were short $5,100,000; the account of unexpended proceeds of the bond account disclosed a shortage of $7,200,000, and the account of that part of the unexpended bond accounts which had not been allotted was short $8,250,000.[22] making “The Controller’s office,” the Select Legislative Committee reported, “was unable within any reasonable time to determine from what funds the remaining $4,000,000 had been taken, up the total shortage of $33,000,000. But the net result is certain, that for the payment of running expenses over a long period of years, the City has taken the total amount of $29,000,000 from specific funds set apart for other purposes, shifting the resulting deficits from one fund to another as occasion required.”[23]
Large issues of corporate stock were also made for other than permanent improvements.[24]