Credit Mobiliar scandal

Face it, people who have a lot of money like to be around other people who have a lot of money. So they congregate in wealthy enclaves, whether year-round or seasonally. Those places then tend to attract scandal.

There are no shortage of these wealthy enclaves in New England. Here are six of them, and stories of the hijinks, scandal and outright odd behavior that helped make them famous.

Squam Lake

The Shepard Hill Historic District in Holderness, N.H., is one of a number of wealthy enclaves on Squam Lake. Made up of 17 summer retreats built between 1870 and 1921, it was one of the first developed as a summer colony. Those first summer cottagers consisted of wealthy alumni of Yale University. Over time many wealthy Massachusetts and New Hampshire families came to prefer Squam.

In July of 1947, Squam became the center of national attention. Harry Ellis Straw owned a cottage on the lake. Straw was a wealthy Manchester, N.H. banker, grandson of New Hampshire mill owner and Governor Ezekial Straw. His adopted daughter Anne was a senior at Smith College.

Missing

On July 21, 1947 Anne disappeared from the Straw summer cottage. Anne was beautiful and, what’s more, rich. Due $7 million, the heiress’ disappearance shocked the state and the country. Police first suspected the obvious. A boat that Anne had been using was found adrift. Police called in a team from the U.S. Navy. Boats crisscrossed the entire surface of Squam for signs that she had drowned. Divers searched the bottom. But they found nothing and police announced they had ruled out drowning.

Anne had high spirits, and friends suggested she might have eloped or simply run away on a lark. Police theorized she might have been kidnapped. On July 28, police took a call: “I am Anne Straw. I am not dead or missing and I do not want to be annoyed by any further publicity,” the caller said.

Police tried to keep her on the phone to trace the call. She needed to contact her parents, the police told the caller. “All right. Goodbye,” she said, hanging up.

The search for Anne would continue far and wide until August of 1948 when two boys fishing snagged their line on a piece of red and black cloth. It was the pajamas Anne Straw had been wearing when she disappeared. Police recovered the body and learned the obvious truth. She had simply drowned a year earlier.

Manchester Village

Vermont’s Manchester Village dates to 1761, and early on it served as a crossroads town for travelers. Manchester Center replaced the village as the focus of economic activity following the American Revolution. Charles F. Orvis, however, saw potential for the village as a destination for vacationing New Yorkers. In the late 1800s it developed a thriving collection of cottagers.

Then (and now) the Equinox House served as a centerpiece for much of the village summer activity. Among the many people who stayed there was New York Congressman Adam Clayton Powell, Jr. Powell was black, but with light skin (the relevance of that will become apparent). He worked there in the summer of 1926 as a bellhop.

His memoir paints pictures of the colorful hotel scene. Among the regulars in the dining room was Robert Todd Lincoln who maintained a mansion at Hildene up the road. He wrote:

The son of Abraham Lincoln, Robert Todd Lincoln, drove up to the Equinox House nightly for dinner. He hated Negroes, and whenever a Negro put his hand on the car door to open it, Mr. Lincoln took his cane and cracked him across the knuckles. The manager asked me if, at a special increase in salary, I would take care of Mr. Lincoln’s car each night when it arrived. So promptly every day, when Robert Todd Lincoln’s chauffeured car rolled up with the son of the former President of the United States, I, whose father had been branded a slave, would open his door. And Mr. Lincoln, looking at my white hand, was satisfied. For this service I received $1 a day and $10 a week from the inn’s management.

Daddy Browning and Peaches

Powell was fortunate to be working at the Equinox when two more notorious guests arrived: Daddy Browning and Peaches.

Daddy Browning was 51-year-old New York developer Edward Browning. Peaches was 15-year-old Frances Belle Heenan. Daddy and Peaches met at a sorority meeting for girls in New York. In addition to being a millionaire, Daddy had a wide reputation as a pervert with an interest in young girls.

Peaches’ parents encouraged her daughter’s relationship with Daddy, and the two began dating all over New York City. The story prompted outrage. With decency leagues hot on their tracks, Peaches (with the blessing of her parents) married Daddy. The two lived with Daddy’s pet duck and Peaches’ mother.

Good for a C-Note

In 1926, the pair came to Vermont to avoid some of the mobs who had set on them in New York. Powell recalled it took an entire day for him and another bellhop to unload and unpack the four trunks and 26 pieces of luggage that the two brought with them.

For their trouble, Powell recalled, Daddy had given Peaches a $100 bill to tip the bellhops with when they were done. Peaches tried to distract the boys by opening her robe and flashing them while she passed them a $10, but they insisted on the full $100.

Nevertheless, Powell recalled that they were good guests on the whole:

Sometimes he would give me $20 to get him cigarettes and sometimes $1 for working all night, serving at a party. But I never minded his capriciousness because at the end of the week he was always good for about $100.

By October their relationship had soured and they appeared in court for separation (divorce was only allowed in cases of infidelity). Peaches lost her bid for alimony, though she did develop a stage career. Two husbands later she finally got her due when Daddy died in 1934, and she won an interest in his estate.

Bar Harbor

Harbor Lane-Eden St. Historic District is one of the remaining wealthy enclaves belonging to Bar Harbor, Maine. It consists of 10 properties, nine of which include a surviving estate house and a historic wharf. The College of the Atlantic owns four buildings, now part of its campus.

In its heyday, Mount Desert in Maine boasted hundreds of “cottages.”  The island developed its reputation as a destination for the wealthy in 1840s when artists began visiting to paint its lofty peaks and scenic ocean vistas.

You’d need a book to tell all the scandals that touched on the tiny Maine peninsula ,home to the Acadia National Park and Bar Harbor. But one scandal played out at the mansion known as Anchorage (later Anchorhold) that dates to 1885 in the Harbor Lane Historic District.

Two Wealthy Enclaves

Rotten Row, the coach road in Hyde Park in London reserved for royalty, was the nickname given to High Street in Bar Harbor because J.P. Morgan – America’s answer to royalty – kept several of his mistresses there over the years.

Morgan inherited a small fortune from his father and turned it into an enormous fortune. His wealth placed him notoriously above the rules that governed most people. Bar Harbor and Newport, in their heydays, attracted much the same crowd. But they were very different places. In a nutshell, the summer guests at Newport cleaved closely to the traditions of society in New York and Philadelphia. Love was more openly in the air in Bar Harbor.

Edith Randolph

In 1890, Edith Randolph was Morgan’s primary lover. She also needed a husband — a  wealthy one. Newspapers described Mrs. Randolph, who would soon own the Anchorage, as “popular in society.”

Lacking money of her own after the death of her first husband, she had started a flirtation with William Whitney, former secretary of the Navy. His wife, however, put a quick end to that. And so she strayed over to Morgan.

Edith insinuated herself into Morgan’s circle, even accompanying the family to his son’s funeral. But generally Morgan kept the Atlantic Ocean between Edith and his wife. While his wife was in Europe, he would visit Edith in New York or Bar Harbor and vice versa.

“About Mrs. R”

But Morgan had gotten lax, and Edith was hanging around while his wife was in town too often. Hence the wife’s notation in her diary:  “Spoke to P. about Mrs. R.”

Morgan would have to break away from Edith. Edith needed a husband – a wealthy one. But fortune finally smiled on this unhappy threesome. It came in the form of the death of William Whitney’s complaining wife.

One day, J.P. Morgan, William Whitney and Edith Randolph sailed off Acadia. Somewhere along the line Morgan passed the widow back to Whitney. The two married in St. Saviour’s Church in Bar Harbor in 1896. One gossip columnist reporting on the wedding noted, with some snark, that he was surprised to see Mr. and Mrs. Morgan not on the guest list.

Edith would suffer an unfortunate fate. Just two years after her marriage to Whitney, Edith was riding a horse in a fox hunt in South Carolina when she misjudged the height of a bridge. Her horse thundered under the bridge and bounced poor Edith’s head off the undercarriage, costing her both any chance at victory in the hunt and the use of her extremities.

Nook Farm

Nook Farm in Hartford is one of those wealthy enclaves that once attracted creative types. A neighborhood in the Asylum Hill section, it developed into a sort of colony for well-to-do writers beginning in 1858. John Hooker and Isabella Beecher Hooker, the founders, built a house there. And so did Harriet Beecher Stowe, Mark Twain as well as journalists, feminists, spiritualists, painters and activists.

With the houses’ doors open to all, the community percolated with political discussion and, occasionally, scandal.

Harriet Beecher Stowe, of course, wrote the 1852 novel Uncle Tom’s Cabin. For all the fury and social change that book helped cause, another book dragged Stowe personally into scandal.

Lady Byron

In the 1850s, Stowe had gotten acquainted with Anne Isabella Byron — Lady Byron — who had been married to British Poet George Gordon Byron. Lord Byron’s poetry was well-known and celebrated. Less spoken about was his proclivity for having sexual dalliances with anything that moved — including his half-sister.

In 1869, Lady Byron, who had died in 1860, had been cast in a recent book as cold and calculating. Before her death, Lady Byron had unburdened herself to Stowe, telling all about her husband’s abusive and lying ways and his vast sexual indiscretions.

Stowe decided to set the record straight. She penned a defense of Lady Byron and submitted it to the Atlantic. With its level-headed editor away in Europe, and after much deliberation, the magazine published the article. The issue sold out, but the magazine’s readers left in droves.

They were shocked the magazine would print such filth, and disgusted with Stowe for producing it.

Undeterred, Stowe turned the article into a book: Lady Byron Vindicated. She claimed not to have read all the condemnations she received in the press, though she certainly knew of them.

Hunnewell Estates

In Wellesley, Mass., the Hunnewell Estates Historic District is one of those family-style wealthy enclaves. The Hunnewell and Welles families built the properties, and their descendants still occupy many of them.

Horatio Hollis Hunnewell did much to establish the district. He married into the wealthy Welles family, and then increased its wealth as a railroad man in the 1800s.

He was a great benefactor to the town of Wellesley and many institutions. As his wealth and family expanded, he built enormous homes for many of his children so his family would surround him.

HH’s namesake son, Hollis Hunnewell, livened up the family story. His life’s adventure carried an object lesson: If you intend to sleep around, better not marry a woman who enjoys punching people in the face.

Young Hollis lost his parents at a relatively young age. His father died when he was 14 and his mother when he was 20.

Armed with a Harvard degree, a sizeable fortune and connections throughout Boston, Newport and New York, young Hollis stole the heart of Maud Somerville Jaffray. Though not as wealthy as the Hunnewells, Maud’s family was well-to-do, and they encouraged their iconoclastic daughter in her wide range of athletic pursuits. At six feet tall, she could play tennis, ride horses, fence and box — and she could do them all well.

Marriage(s)

The couple married in 1891. The marriage then blew up 10 years later when Maud filed for divorce. She didn’t do it quietly. Newspapers repeated the charges against Hollis: infidelity, continual drunkenness and abusive behavior.

Maud had moved out. Newspapers uncharitably described her as “an Amazon.” In 1903, divorce secured, Maud married John Stansbury Tooker in Newport. Society raised its eyebrows, and one observer noted: “It was not a surprise.” Hollis, for his part, declined comment on his wife’s living arrangements during the divorce.

Newspapers again took note of Hollis’s second rush down the aisle at the end of 1903, commenting on the odd mating habits of the wealthy. Less than 50 minutes after learning that her divorce was final, Mrs. Arthur T. Kemp married Hollis and rushed from Newport to Wellesley. The news accounts noted that despite the divorce, Arthur and Hollis remained friends.

For his second wife, the press noted, Hollis had chosen a much smaller, demure woman.

Peace Dale

Peace Dale in South Kingston wasn’t so much about a group of families as it was about one family: the Hazards. South Kingston industrialist Rowland Hazard founded the village around 1800 and named it in honor of his wife, Mary Peace Hazard. For four generations, the Hazards made Peace Dale a harmonious and attractive community largely supported by the Hazards’ woolen mill and investment prowess.

Rowland’s son Rowland and his brother Isaac took over the mill, and leadership of the town, by the 1840s. Rowland, Jr., was probably best known for his political pursuits. A vehement opponent of slavery, he saw no reason not to mix politics and business.

In 1865, Rowland and Isaac invested several hundred thousand dollars in a finance company called Credit Mobilier of America. The company was an ingenious instrument established to finance the construction of the Union Pacific Railroad from Missouri to California.

At its heart, the arrangement was a simple scam. Union Pacific sought bids for work on the railroad paid for by taxpayers. It then hired itself to perform the work at inflated prices. Credit Mobilier and its investors provided the financing and were paid back from the overpriced contracts. If the Union Pacific failed, the railroad defaulted on its payments to the government. Its investors were shielded.

Credit Mobilier Scandal

This system worked fine for all involved, until a sudden shift occurred. To make up for a shortage of funds, the Credit Mobilier bank was asked to take shares of the railroad in lieu of payment. Now, suddenly, the investors in Credit Mobilier had an interest in the railroad’s eventual viability. Led by the Hazards and Massachusetts Congressman Oakes Ames, the bank forced out the president of Union Pacific on the basis that he was crooked, and the matter was at loggerheads.

Union Pacific refused to give Credit Mobilier another contract and the bank refused to advance any money to Union Pacific. Faced with the scheme imploding, the two sides – after much arguing – agreed to put aside their differences for the greater profit and begin working together again. Ames was elevated to head the operation and was to hand out stock to fellow congressmen to keep the federal funds flowing.

Ames was inundated by members of Congress eager for a piece of the action. An investment would double their money with no risk. In one ironic side note, James G. Blaine, Maine’s notoriously corrupt representative in the House and later Senate, apparently saw how many ways this deal could go wrong. He passed up the chance to buy in. But it did him no good. He was erroneously accused of being an investor when the scandal flew apart in a long and painful congressional investigation.

In Defense

For his part, Hazard managed to avoid further disasters by refusing at one point to accept the role of president of Credit Mobilier himself.  He published a long defense of his involvement; his arguments boiled down to several key points:

• Bribery to obtain government support was never proved.
• He personally entered into the bank after the bid rigging had taken place
• The financing of the railroad was no dirtier than any other
• The profits, while generous, were over stated by the critics of the scheme. And profitability didn’t equate to immorality.
• The bank would have been a whole lot better off if it hadn’t adopted a scary-sounding, foreign name and instead retained its original name of: “Pennsylvania Finance Company.”

This story about historic wealthy enclaves was updated in 2022. 

Images of wealthy enclaves: Equinox Hotel By Rolf Müller (User:Rolfmueller) – Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=1352242. Hildene By Rolf Müller (User:Rolfmueller) – Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=1352185. Bar Harbor By Brian W. Schaller – Own work, FAL, https://commons.wikimedia.org/w/index.php?curid=85560366. Peace Dale Congregational Church By JacobKlinger – Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=21811504.