The Day the Horses Stopped Running...

The Day the Horses Stopped Running...

Copyright, A. Allan Juell, 2019. Frist appeared in the October 16th, 1999 issue of Thoroughbred Times. All Rights Reserved.

  During the winter of 1909, the New York Jockey Club voted to cease racing operations for the 1910 season. Horse racing would no longer be conducted in the state of New York or, for that matter, most of the United States. New York Governor Charles Evans Hughes, son of a Methodist-turned-Baptist preacher and reformer, had finally prevailed in a four-year battle to outlaw gambling in New York.

Charles Evans Hughes

     While preaching the “Protestant virtues of integrity, sobriety and industry” in his campaigns against gambling, what Hughes really wanted was to dry up the enormous funds being diverted from gambling revenues to the political machine known as Tammany Hall, an organization affiliated with the Democratic Party that through graft and influence literally ran the city of New York unchecked.

     Not unlike some of the political conflicts of the 1960’s and 1970’s, this fight pitted oil-guard New York conservatives against the rapidly growing power of immigrant entrepreneurs men and women who took quite literally the principles of free enterprise and capitalism.

     It was a clash of two very different worlds and societies, and in the end money would determine which faction – the old or the new – would control power. Their confrontation foreshadowed even greater changes in American society, and Thoroughbred racing – as the result of a tragicomic dispute between racetrack owners and bookmakers – caught in the middle of the fray. In this case, the sport’s factionalism nearly led to its demise.

New York Racing in Another Era

 August 26, 1896: Gravesend racetrack opens; owners of the Brooklyn Jockey Club are Michael and Philip J. Dwyer.
1895: Gambling other than at racetracks outlawed in New York.
1895: Charles Evans Hughes appointed counsel to state Senate panel investigating New York City.
1906: Charles Evans Hughes elected governor of New York.
June 11, 1907: Agnew-Hart Racing Bill becomes law, outlawing gambling both on and off racetracks.
1909: The Jockey Club votes to cease operations.
1910: Racetracks close, owners ship horses out of state or out of country, sell them to the Remount Service, or have them euthanized.
April 10, 1910: Charles Evans Hughes nominated to United States Supreme Court.
1913: Racing resumes in New York without legal wagering.

Philip J. Dwyer in the May 28, 1910, issue of The Thoroughbred Record:

“Why should the racetrack officials close the gates” he asked. “The new bills refer to bookmaking and gambling. The Jockey Club and the Racing Association have not permitted any transactions of such character since the Ives Pool law was wiped out.”

Dwyer Brothers:

     The roots of the struggle reached back into the 19^th century. Enter the Dwyer brothers, Phil and Michael, Irish immigrants and butchers who managed to make a fortune in New York’s thriving meat-packing industry. Upwardly mobile and socially ambitious, they built Gravesend Racetrack in Brooklyn in the mid-1880’s, hoping to cash in on New York’s almost insatiable appetite for gambling.    

     However, they were far from being part of New York’s cultural elite. Phil, a pragmatic businessman, only felt “sporting” when the ink was black; Michael a hopelessly addicted gambler known for dropping huge sums of money on longshots. By 1900, the brothers had parted company, at least in a business sense, but both continued to hold court at the track.

     The brothers represented a sifting tide in the social demographics of Eastern cities. As early as 1855, 52% of New York City’s population was foreign-born, a result of the Industrial Revolution’s unending need for men, women and children to work in the textile factories and the new manufacturing plants.

     Immigration changed the face of American society and created a yawning social chasm never before witnessed in the young nation. Locked out of the more dignified professions and businesses, some of the newcomers made their livelihoods in gambling, which the New York Post described as “New York’s biggest business.”     

     In time, the social stratification neatly defined the gambling and antigambling camps. At first, the churches pitched their tents with the gamblers because the trickle-down theory kept the collection plates full.  The real split took place in Albany, New York’s state capitol, where gambling revenues began to upset the political status quo. In truth, reformers really wanted to turn back the clock, redistribute the wealth, and break the back of a new and menacing cartel composed of immigrants and primarily Irish Roman Catholics.

     The siren of social reform in New York wailed around 1860. New York’s population between 1840 and 1860 had increased by more than a half-million people, most newly landed immigrants.

     A few of these newcomers migrated toward illicit activities such as gambling because it offered them a degree of social mobility within their own group. Money from these activities provided a sense of self-esteem and a somewhat naïve confidence that these new Americans could indeed control their own environment. That was not the case. Over the next 50 years (until about1900), New York’s theme was the “rich get richer and the poor…more numerous.”  

City Services: 

     Most immigrant populations settled in ethnic neighborhoods, seeking comfort through the familiarity of mutual misery. City services such as gas, water and electricity were private enterprises, and many were controlled by the Democratic political bosses at Tammany Hall who traded votes (and political power), for the bare necessities of life.

     City services were lucrative ventures, and they were a steady source of patronage jobs. Apparently though, they not run particularly well. By the early 1900’s, conservative New Yorkers were shocked to see their community described as “the unhealthiest city in the world,” and the source of the criticism was their own New York Post.  

     Corruption was so rampant the word ceased to have any real meaning. If the Bronx wanted gas to light its street lamps, then it would have to accept four or five poolrooms and a house of prostitution to go along with it.

     Hughes, the future governor, was appointed to serve as counsel to a state Senate investigatory committee in 1905 to investigate New York city’s gas industry, and he got a good look at the tangled relationship between politics, business and gambling. Newspaper accounts of the hearings not only awakened the public to the degree of graft but also made it painfully clear on who was picking up the tab: the consumer.

     As the gubernatorial campaign of 1906 approached, Hughes entered the political spotlight. Incumbent Frank Higgins, wounded by the gas investigation of the previous year, was hammered for allowing New York City to operate like a medieval fiefdom. 

     He was being challenged by Democrat William Randolph Hearst, the millionaire publisher. Hearst, both courting Tammany Hall and simultaneously trying to distance himself from it, was known to have aspirations for the White House. Higgins was powerless to overcome Hearst’s manipulation of the New York press.

Hughes Elected:

     Anticipating a Democratic landslide, Higgins withdrew, passing the nomination to Hughes, who was running a reformist campaign under the banner of the Progressive Party. When the ballots were finally tallied, Hughes was the new governor, and he wasted little time in making good on his promise to clean up New York City.

     His first targets were the banking industries and public utilities, the same groups he had cut his teeth on in the Senate hearings. Included in this group were the telephone and telegraph companies, which were both heavily involved in his third target: gambling.

     In actuality, gambling had been outlawed since 1895, the result of a constitutional amendment that outlawed “lotteries, poolrooms and bookmaking.” The same year though, the New York legislature had passed the Percy-Gray Law legalizing racetrack gambling. The only problem was that most of the gambling was going on uptown in Manhattan poolrooms, far from the racetracks.

     Hughes first attempted to have the Percy-Gray Law repealed, arguing that it was in conflict with the 1895 constitutional amendment. However, the new governor was in for a fight. Racing interests were lining up in defense of their livelihood, and unlike their public personae as little more than seedy gamblers, the ranks also included New York social icons such as August Belmont and James R. Keene. 

     Financially, racing interests had deep pockets and were more than willing to use “their almost unlimited resources to maintain the security of their position.” Even the conservative-minded New York Times was skeptical about repealing the law, primarily because the statute guaranteed 5% of all racetrack receipts for the maintenance of agricultural fairs throughout the state.

:

How System Worked:

     How did the gambling system operate? Bookies were licensed at the various tracks by paying a flat fee through their respective syndicates (poolrooms), sometimes as much as $1000 a day for the privilege of accepting wagers both on and off the track. Odds, results and payouts were telegraphed back and forth between the racetrack and the poolrooms. 

 Not surprisingly, many racetrack owners had a financial interest in the gambling halls, and the borough bosses who controlled the police had many reasons to keep gambling businesses in operation as well. Thus, policemen focused on keeping the poolrooms open and controlling the competition, not enforcing the law. Michael Dwyer, the consummate gambler whose knowledge of horsemanship was highly suspect, nonetheless was listed as the official trainer for Boss (Richard) Croker, the Lord of Tammany Hall.

      As early as 1900, the proliferation of poolrooms in the city began to affect attendance at the racetracks. While these outside establishments continued to grow, the actual number of bookies paying tribute to owners such as the Dwyers remained about the same, with technology contributing to the efficiency of off-track operations.

     At the head of this new communication industry was Western Union, which by 1907 was processing more than 74-million messages a year in New York alone while posting profits of $5-million over the same period. The source: a vast network of wire services connecting racetrack bookies to the uptown poolrooms.

     Also vying for gambling revenues was the New York Telephone and Telegraph Co., the not-so-distant cousin of the modern-day AT&T. Both companies were highly private enterprises with their finances and operations completely outside state control. If a municipal authority questioned the nature of their business and/or clients, they either burned the ledgers or moved their operations offshore, quite literally relaying the information via wireless from ships stationed off the coast of New York, or in Chicago’s case, from the middle of Lake Michigan. 

     Fragmentation and competing interests have always been a part of horseracing; the interests of the racetrack owner and the bookmakers often collided then, just as racetrack and horsemen often disagree today on how to equitably distribute income from horse race wagering. The very public disagreements of 1906 certainly aided those who wished to shut down racing and its money machine.

     The Dwyers were not amused by the loss of revenues. Just prior to the spring meet of 1906, the brothers decided to raise bookmakers’ fees to $4000 a day. Naturally, the bookies and poolrooms balked, refusing to pay the significantly higher fee. Phil Dwyer, the far more aggressive of the brothers, then cut all the telegraph wires to the racetrack.

     With only two days to go before the Gravesend meet opened, Western Union responded by purchasing the defunct Sleight’s Hotel overlooking the track. Under contract with Peter DeLacy, one of New York’s gambling kingpins, Western Union was faced with the potential loss of a third of its income. Concerned, but undaunted, the telegraph company ran new wires from the hotel to DeLacy’s string of gambling halls.

     The only problem was that the view from the hotel included everything except the finish line. Western Union compensated for this inconvenience by hiring runners who raced back and forth from the track to the hotel with information on the finish of each race.

Pinkertons Lock Gates:

     When the Dwyers got wind of this activity, they hired 130 Pinkerton detectives under the command of Robert A. Pinkerton, who with his brother, “Big Bill,” headed the National Detective Agency. Once the 8,000 or so patrons entered the track, the detectives locked the gates. Their job: to patrol the grounds and eject anybody even remotely suspected of being a runner. 

     Not only did this action cause a great deal of indignation among the track’s patrons, but it also set off a journalistic frenzy. Typical was a headline in the New York World: “Track a Prison! Thousands Penned Up On Brooklyn Race Course. Pinkerton Sluggers Club Inoffensive Citizens!”

Pinkerton "Sluggers"

     The Pinkertons were labeled as “hybrid policemen” and “chuckleheads” by the New York press. Stories circulated of sick old men and women with babies being denied permission to leave the track. Newspapers let their biases be known too, with the Times and Sun leading the anti-gambling crusade, the Herald and World taking the opposite side. Reporters were at work on both sides circulating misinformation, unfounded speculation, and, in the spirit of the contest, outright lies. All of New York got caught up in the escalating war of words.

     With no real way to leave the track, Western Union’s operatives inside the track mimicked the real horses by wearing numbers on their backs corresponding to runners in the races. When the results were posted, these “human horses” would run their own race through the paddock, and the order of finish was duly recorded by telegraphers on the roof of the hotel. The Pinkertons began chasing the “horses,” who, in a panic to escape a clubbing, often fled the area in the wrong sequence, leaving gamblers like DeLacy with multiple results and dubious payouts.

     Runners also tried using hollowed-out wooden balls in which they had scribbled race results. These were tossed over the track fence to be retrieved by other runners who would sprint to the hotel to post the results. More often than not, the Pinkertons would intercept the balls, change the results, and leave the them to be discovered by unknowing Western Union employees. Occasionally, the balls would hit the wrong target, the Times reporting a story about one man “who was knocked senseless” by an errant ball.

     Western Union agents also smuggled in carrier pigeons in an effort to post results. Most ended up as target practice for the sharp-shooting Pinkertons. Like the wooden balls, some pigeons were captured, their messages changed, and they were freed to go on their way. It did not take DeLacy long to figure out that ten 40-1 longshots in one day lacked a certain degree of credibility.

Fencing Off Hotel:

     The racetrack was idle over the summer, but the Dwyers were busy just the same. They commissioned the construction of a 65-foot-high wooden fence facing the Sleight’s Hotel, effectively blocking the view to the track. Two days before Gravesend was scheduled to open its fall meet, carpenters showed up at the hotel and added a 42-foot tower to the top of the hotel’s cupola. The New York World reported that “no circus tent ever went up faster.” Opening day had the Dwyers’ carpenters adding ten feet to their wall, followed by an additional story haphazardly slapped on to the hotel. Both structures began to shake uncontrollably every time the wind blew. “The Brooklyn Jockey Club (the Dwyers), owned the race course," DeLacy boasted, “and has the right to withhold its news if it can. But I don’t think the effort will be a success. We need that information and we’re bound to get it.”

     Despite all the construction, telegraphers still could not get a clear view of the finish line. The track had also moved the odds and scratches board under the judge’s tent. Western Union went public, offering $25 to any patron willing to provide the necessary information to the hotel. DeLacy went so far as to rent two large locust trees from a neighboring farmer, posting his most agile agents in the uppermost branches. The Dwyers simply built another fence.

     Meanwhile, the Pinkertons were increasing their vigilance. They noticed a tall young man in a close-fitting gray coat behaving strangely near the paddock. He would button and unbutton his coat, raise and lower his hat, hold his pink sporting sheet at various angles, mop his brow, and bow in different directions. As suspected, he was signaling a man in one of the locust trees, who in turn was fanning himself with a large palm frond – Morse code, from track to tree to hotel.

     Women joined in as well. The World reported a case of the “most innocent looking woman in the grandstand” playing with a baby. She would open and close a parasol to the delighted amusement of the child – dots and dashes to the spotters in the trees. A rainstorm finally ended her correspondence.

     Another woman was arrested at the gate when it was discovered that she had a dozen carrier pigeons sewn inside her dress. Even women with babies were drafted, changing diapers after each race in a predetermined pattern. As a result, the finish results made their way to the gambling halls.

Off-track Crowds Decline:

     Bit by bit though, DeLacy was feeling the pinch. Crowds at the poolrooms were dwindling, and complaints grew more vocal. Often, horses would be announced “at the post,” but would fail to “be off” for a half-hour or more. Stretch runs could take as long as two minutes, and a two-minute race would require a half-hour or more before the results were posted.

     Both sides in the dispute had also reached their structural limits, at least as far as carpentry was concerned. Western Union erected a series of 90-foot tall poles. A wiry telegrapher in spiked boots scaled the mast, setting up his office and an American flag on the very top. Phil Dwyer erected his own 120-foot poles with giant cross-beams and canvas sheets to block the telegrapher’s view. Gravesend looked like a giant schooner ready to sail through Brooklyn.

     The Pinkertons were gaining notoriety as little more than paid thugs, which in reality they were. Confrontations grew more heated and violent, threatening to degenerate into a shoot-out like the one at a Chicago track where the local sheriff was shot dead by city police. Gambling aside, it was apparent that New York City was descending into anarchy and authority was being auctioned off to the highest bidder.

An Uptown Poolroom

     New Yorkers were incensed, even if somewhat confused over exactly what was going on. Many citizens as well as track patrons viewed the Dwyers’ locked gates as an affront to the democratic principles they cherished, not to mention abusive and overly greedy. The public fully expected New York’s finest to intervene, but they were having none of it. War was war, and for the most part the civilians were caught in the crossfire.

Hughes’s Coalition:

     New York City’s chaos played into Governor Hughes’s plans. Up in Albany, he was busy pasting together a coalition of lawmakers and civic groups to push through a new round of anti-gambling legislation. His main allies were Senator George Agnew and Representative Mervin Hart. Hughes was also able to get the clergy to forget their sectarian differences in favor of what he called “moral legislation.” Even the YMCA got involved, sending cadres of members throughout the state to lobby for a legislative proposal known as the Agnew-Hart Racing Bill – legislation designed to outlaw gambling both on and off racetracks.

     The first hearings were held on March 4, 1907. James R. Keene, acting as counsel for the Jockey Club, the de facto regulatory agency of American racing, concluded his extensive testimony by offering a moral lesson for the committee: “Racing enthusiasts are concerned with improving the breed of horses…My opponents are seeking to improve the breed of men.” His message did not fall on deaf ears. The debate raged in the Legislature for a month before the bill was finally placed before the full house. After four hours of acrimonious debate on April 4, it failed on a 25-to25 tie. The Legislature adjourned on April 23, but a determined Hughes called for a special session to meet May 11^th.

"Racing enthusiasts are concerned with improving the 

breed of horses...my opponents are seeking to improve

 the breed of men"  James R. Keene, counsel for The 

Jockey Club."

     In the interim, he once again stumped the state seeking support for the antigambling legislation. In an odd twist of fate, Senator Stanislaus Franchot, representing the Niagara-Orleans district, unexpectedly died, creating a vacancy in the Senate. Hughes focused all his energies in a campaign for a replacement favorable to his views. When the bill was reintroduced on the floor (on the final day of the special session, June 11), the Agnew-Hart Racing bill became law, passing by the single vote the governor personally delivered. 

Racing Stumbles On:

     Legally disconnected from gambling revenues, racing stumbled along for a few more months. During the winter of 1908-’09, leaders of the various racing associations in New York and the Jockey Club held heated meetings to debate the future of horse racing in the state. Facing the prospect of financial ruin for their industry, they still chose to go forth with the 1909 season. To their surprise, both Belmont Park and Gravesend opened to record crowds, primarily due to  loopholes in the Agnew-Hart bill.

1904 Brooklyn Handicap

     The legislature was quick to react, passing two amendments; one outlawing oral betting, which the New York appellate court had previously ruled legal, and the other a law making racetrack owners personally and criminally liable for activities that take place within their establishments. It was the second amendment that broke racings’ back. The Jockey Club voted to cease operations for 1910. Horse racing would no longer be conducted in the state of New York.

     Several of the most prominent owners and breeders exported their best horses to England and France. Fearing the loss of purses to American owners, France banned all but European-bred horses in its flat races. Many good American-bred racehorses ended up as cavalry mounts for French officers in World War I.

     New York was not the only state affected by the black-out. Similar statutes were passed in other states with a strange collection of repercussions. With New York effectively out of the picture, the Kentucky Derby by default ended up as the richest (and later, most prestigious), race in the United States.

     America’s leading owner, Samuel Hildreth, retained his title by campaigning his horses in Canada, even though the stable’s earnings had dropped 69% -- a good indicator of the economic impact of the ban. Racing also found a niche in Juarez, Mexico, where Pancho Villa was a frequent patron.

     A good many Thoroughbreds were simply auctioned off, although the glut of unemployed racehorses made them almost valueless. Some horses were exported while most were simply euthanized.

Threat of War:

     The trend was only reversed by the threat of war in Europe. The U.S. Army, through the Remount Service, was actively petitioning the White House to alleviate a service-wide shortage of horses. Thoroughbreds were still a necessary ingredient of the U.S. Cavalry. Even as late as 1918, the armed forces had as many as 5-million horses. The Remount Service needed Thoroughbred stallions for the Army’s breeding program. Even though the armed services were rapidly mechanizing, the Army attempted to maintain a similar inventory of horses up until the middle of World War II, long after the presumed obsolescence of the cavalry. Without horses (and mules), the campaigns in China and Burma would have failed.

     Many state governments were also feeling the economic pinch. In New York’s case, the 5% contribution to the agricultural sector evaporated, causing many rural New Yorkers to question the real value of gambling reform. State fairs were canceled or scaled back, while programs as innocent as 4-H or Future Farmers of America were chronically starved for funds. In New York City, the demise of the city’s “biggest business” left thousands unemployed.

     In New York, the political fallout could have easily toppled Hughes’s regime, but on April 10, 1910, he was nominated to the U.S. Supreme Court, thereby terminating his reign as New York’s leading reformer. The year also witnessed the failed re-election campaign of Senator Agnew, co-author of the anti-gambling legislation, and the sudden resurrection of Tammany Hall under old Boss Croker. The gambling prohibition experiment was faltering, perhaps foreshadowing the coming ban on alcohol and its ultimate failure.

     By 1913, racing resumed in New York but still without the benefit of legal wagering. Between 1913 and 1915, numerous states’ statutes against gambling were overturned by higher courts on the grounds that “one man gambling against another man was not illegal.” These rulings led to the national growth of the so-called Paris Mutuels System, a mechanized form of betting that pitted one patron against every other patron, thereby removing the middleman or bookmaker from the equation.

     The racetrack was guaranteed a percentage of total wagering but had no direct access or control of either odds or results. This effectively destroyed outside gambling interests and rendered irrelevant most arguments in the anti-gambling lobby. The Pari-Mutuel System, as it is known today, is the only system of wagering in use today at all North American tracks.

     The reform fights of the early 20^th century also had a profound impact on American business. Banking and financial institutions felt the first crunch of coming regulation. Utilities like Western Union were subjected to government oversight and later full regulation. Though real reform did not come until after both Prohibition and the Great Depression, the die had been cast.

     The Gravesend dispute was far more than a fight between two Irish butchers and the off-track bookmakers. Instead, it was a class struggle fought over who would control the American Dream within the borders of the country’s most populous state. In retrospect, the game was played to a draw.

     Did a moral question really exist? It is probably doubtful. But the battle did have its victims. Gravesend racetrack never reopened; the Dwyers decided to develop the property for real estate.

  Finite

Authors Note: World War I led to deaths of almost 28-million people; both soldier and civilian alike. The worldwide cataclysm also led to the deaths of well over 400,000 horses, many euthanized at the war's close. No one knows exactly how many American Thoroughbreds were lost -- the victims of domestic policies at home and the failure of a broader diplomacy abroad. But it would take decades for the sport to recover. 

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