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A temporary cab war truce coincided with the start of Al Capone’s reign
as head of the Chicago underworld. However even Capone’s influence couldn’t
stop the violence and during the second week of December, 1926 the brother
of the current president of the Checker Cab association was implicated in
the shooting death of its former president. On December 10, 1926 the
Associated Press reported:
“FORMER HEAD OF CHECKER TAXI COMPANY SHOT
“Chicago, Dec. 9.—(AP)—Joseph Wakril (Wokral), 48, former president of
the Checker Taxi company here, was shot three times and probably fatally
wounded tonight as he was preparing to enter his car, in front of a friend's
house.
“Wakril (Wokral) told police he recognized one of the assailants as
Eugene McLaughlin, brother of the present president of the taxi company,
Robert McLaughlin.”
John H. Lyle, a Chicago attorney, Judge and Alderman was directly
involved in incident which is detailed in his 1960 memoir, ‘The Dry and
Lawless Years’:
“There was strife between the Checker and Yellow Cab companies. Drivers
fought in the street and the battle had seen sluggings and several murders.
Adding to the disorder was an internal struggle within the Checker
organization that had resulted in thugs gaining control. At breakfast I had
read of the arrest, the previous evening, of taxi gunmen outside the Great
Northern Hotel. I knew the prisoners would be arraigned before me. When
Wokral identified himself I cut him short.
“‘Anything you have to say must be said in court,’ I warned. His hands
were trembling. ‘I didn't know that coming here was wrong,’ he pleaded.
‘I've got to have help. They're going to kill me . . . and nobody is
stopping them. I’ve read about you. I was glad when I heard it was going to
be in your court. They've got everybody on their side.’ His abject misery
stirred my sympathy. ‘Mr. Wokral, if you are in the right you will get
justice in my courtroom.’
“I walked away a few steps and then I heard his tremulous voice calling:
‘If those fellows go free I'll be a dead man in 30 days.’
“Wokral and three other ousted officials were conferring in the hotel on
legal action to regain their positions. A friend telephoned that rivals were
waiting on the street. Wokral phoned the Detective Bureau.
“A squad appeared commanded by Sgt. Ray Crane, a fine officer who rose to
chief of the uniformed force. At one entrance they found the McLaughlin
brothers, Gene and Bob, with sawed-off shotguns under their coats. Two men
similarly armed were arrest at the other entrance.
“The hoodlums had two cars. In one a mobster waited with a sub-machine
gun. The set-up suggested an intention to take Wokral and his associates for a
one-way ride.
“The McLaughlins were redheads, young men of good appearance, smart and
articulate. Outwardly they did not at resemble gangsters. Gene, a thoroughly
vicious outlaw, was the driving force behind the plot that had ousted Wokral
and installed Bob as Checker President. The other prisoners, all with police
records, were among the new officers of the company.
“Gene had killed two men, one a police officer, and had been the
ringleader in two kidnappings for ransom. He had been arrested for these crimes but
managed to evade imprisonment.
“The five were released in $10000 bonds. This was not cash bail. A
professional bondsman posted real estate valued supposedly at $50,000.
“Several nights later Workal’s home was bombed. He and his family had to
find lodging elsewhere. Not long afterward his auto was curbed by another
car and he was shot four times in the back. He signed a deathbed statement
that he recognized Gene McLaughlin as one of the gunman. Within an hour his
struggle with gangland was over. Joseph Wokral had been optimistic in the
prediction he had made to me. He did not live 30 days.”
Eugene ‘Red’ McLaughlin was well-known to Wokral and had worked as a
Checker cabbie after being released from a Pontiac, Michigan prison.
Although McLaughlin and Robert “Frisco Dutch” Schmidt, both known
associates of Al Capone and Bugs Moran, were indicted for Wokral’s murder in
April of 1928, both were acquitted as the only evidence against them was
Wokral’s deathbed accusation.
“Frisco Dutch” Schmidt was a Minneapolis-based enforcer connected with
the Karpis-Barker (Alvin Karpis –Barker Bros.) and Keating-Holden (Francis
Keating & Thomas J. Holden) gangs whose actual name was Robert Jones. Known
primarily by the moniker “Frisco Dutch”, he also went by Robert Schmidt and
Robert Steinhardt and later worked at White Bear Lake Minnesota’s Plantation
night club, a favorite mob hangout.
Despite the fact that his brother was directly implicated in the murder
of his predecessor, Robert McLaughlin remained in charge of Checker Chicago
operations into the early thirties. As Markin was heavily invested in the
association it’s presumed he was aware of the character of those in charge,
but likely found it in his best interests to accede to their management
decisions. It’s unknown if the Chicago mob had any influence on Markin’s
Kalamazoo operations, but it’s likely they got a commission (kickback) on
sales made to members of the Checker taxicab association.
One benefit of having the mob in charge of Checker Taxi was a noticeable
decline in cab driver violence. McLaughlin managed to stay out of the papers
for almost 18 months, but in May of 1928 he was indicted for jury tampering:
“Report Four Named As Jury Tamperers
“Robert McLaughlin, Head of Checker Cab, Brother of Convicted Robber,
Among Quartet.
“Chicago, May 18, 1928—(A P.)—A true bill was reported to have been voted by a
grand jury today naming four men in connection with jury tampering at the
trial of Eugene (Red) McLaughlin, convicted of highway robbery. The charge
was conspiracy to obstruct justice and to do an unlawful act, and was said
to cover the bombing of the home of one of the jurors, Fred W. Eicke.
“Named with Eugene were his brother Robert, president of the Checker Cab
company, Gus Steinweg, an official of the chauffeurs and teamsters union,
and John Donohue, said to have attempted to influence Eicke.”
The original charges against Eugene McLaughlin stemmed from his robbery
of New York jewelry salesman Walter J. Neumann which netted him $85,000, a
substantial take for that time.
On May 14, 1928 Eugene McLaughlin was put upon trial based upon an
indictment charging him with assault with intent to commit robbery. Two days
later the jury returned a verdict of guilty and McLaughlin was sentenced to
1 to 14 years.
That evening, May 16, 1928, the home of Fred W. Eiche, one of the
McLaughlin jurors, was bombed:
“Bomb Tears McLaughlin Juror’s Home
“Occurs While Owner Is Identifying Bribe Attempter
“Chicago, May 17, 1928 – (AP) – The home of Fred W. Eiche, one of the
jurors who convicted Eugene (Red) McLaughlin of highway robbery two days
ago, was bombed last night.
“Eiche himself was not at home. His wife, their three children, a sister
and six guests at an informal party being held in the two-story frame
structure were severely shaken.
“The bomb, which was no. 36 since Jan. l. was tossed on the Eiche front
porch, just below a bedroom window. No one was in the room, a wall of which
was torn away by the explosion.
“Shortly after the bombing, Eiche was at the Detective Bureau identifying
Gus Steinwick, secretary treasurer of the chauffeurs and teamsters Local No.
742, as one of two men who last Monday attempted to bribe him. Steinwick and
another man, according to Eiche, came to him with a request that he ‘give
Red a good break.’
“Steinwick's companion was introduced to Eiche as Robert McLaughlin,
brother of Red and president of the Checker Cab Company. When confronted by
McLaughlin in court yesterday, however, Eiche said he could not be sure if
it was the same man.
“Eiche was positive in his identification of Steinwick. Although the
bombing of the Eiche home occurred shortly before Steinwick was brought in,
the news was kept from Eiche for fear it might influence him against
identifying the prisoner.
“Actual damage done by the bomb was about $500. The explosion was felt
for several blocks around.
“The bombing was the second evidence of intimidation in the McLaughlin
case. A few hours earlier police had learned that Walter J. Newman
(Neumann), the New York diamond salesman who was the chief witness against
McLaughlin had disappeared. Newman (Neumann) in court yesterday had told
Judge McGoorty that the defendant’s brother, Robert, had urged him to
testify falsely.
“Red McLaughlin has been a thorn in the side of Chicago police for
several years. He was arrested in Hayward, Wis. Several weeks ago after
being shot down by the mayor who commented afterward that ‘he may be tough
in Chicago, but he can; get tough here.’
“One of the charges on which Red was sought was the slaying of Joseph
Wokral, former president of the Checker Car Company. The charge was later
dismissed for lack of evidence. His conviction for highway robbery by the
jury of which Eiche was a member carries a sentence of one to 14 years.”
Judge John P. McGoorty was outraged, and the following morning called for
an investigation into McLaughlin’s arsenal of intimidation:
“Chicago Lawlessness Denounced by Judge
“Aroused by Bombing of Jurist's Home He Orders Gathering of Intimidation
Evidence.
“CHICAGO. May 17, 1928—(AP)—An ominous echo to the bomb that wrecked the
home of Fred W. Eicke, one of the jurors who dared gangland by voting to
send Eugene ‘Red’ McLaughlin to the penitentiary, was heard today in the
court room of Judge John P. McGoorty.
“Aroused by what he termed a ‘ruthless and fiendish assault.’ on his
court, the judge ordered assistant state's attorneys to gather all evidence
of intimidation and present it to the grand jury.
“‘Chicago is confronted by a new battle,’ he declared as he climbed to
the bench to hear the state's petition to increase McLaughlin's bond and to
hear arguments for a new trial Saturday instead of May 26. ‘We must
determine whether law or lawlessness is to be supreme. The situation at
present seems to this court to be unprecedented in the history of
Cook county.'
“McLaughlin was convicted of highway robbery two days ago and the bomb,
tossed on the front porch of the Eicke home last night, tore away part of a
bedroom wall. No one was injured.”
Later that day McGoorty issued orders of protection for himself, Eicke
and his family, and for Frances Hedy, attorney for a jeweler’s association.
He also quadrupled McLaughlin’s bail to $100,000. It had originally been a
reasonable $5,000, but during the first day of testimony the Judge had
raised it to $25,000.
“Judge, Juror Guarded In Gang War
“Chicago Pair Protected By Police After Approach by Alleged Gangster
Seeking Verdict To Free Pal
“CHICAGO, May 18, 1928 - (AP) – A judge and a juror slept last night
under protection of the police department after each had challenged the
power of gangland to subvert the law.
“John P. McGoorty of the criminal court was the judge. It was in his
court that Eugene (Red) McLaughlin was convicted of highway robbery earlier
this week. Fred W. Eicke was the juror. He was one of 12 who found
McLaughlin guilty.
“The hidden acting in McLaughlin’s behalf already had struck at Eicke,
bombing his home Wednesday night. The bomb followed a few hours after Eicke
had told Judge McGoorty that two men had sought to influence his verdict in
favor of McLaughlin.
“Police Called In
“Eicke said that one of the men who visited him in the defendant’s behalf
was Robert McLaughlin, brother of Red and president of the Checker Cab
Company.
“Judge McGoorty called upon police for protection for Eicke after
uncovering evidence which convinced him the lives of several persons
involved in the McLaughlin case were endangered. Patrolman were assigned to
accompany the three Eicke children to and from school, to watch the Eicke
home and to act as a personal guard to the juror himself.
“Fear of gang reprisal was the reason police assigned for the
disappearance of Robert Newmann (Neumann), New York jewelry salesman, who
was the principal witness against McLaughlin. Newmann (Neumann) also
testified that Robert McLaughlin had attempted to influence him to change
his testimony.
“Fear For Lawyer
“Frances Hedy, attorney for a jeweler’s association, was another for whom
fears were expressed. Police said Hedy had been ‘put on the spot’ by one or
Red McLaughlin’s friends who pointed out to several gangsters as ‘the man
responsible for all this.’
“In view of the developments Judge McGoorty ordered McLaughlin’s bond
increased from $25,000 to $100,000 – a record high figure for such a case,
lawyers said.”
Although Robert McLaughlin was subsequently found guilty of contempt by
Justice McGoorty, the decision was reversed on appeal due to a technicality.
Although McLaughlin was found in contempt for threatening a witness, the
ruling was discharged by the Supreme Court on the basis of his sworn denial
of the incident. The unusual Illinois law allowed that in a criminal
contempt committed outside the presence of the court, a sworn answer under
oath denying the alleged incident is sufficient to dismiss the charge.
In less than a year Robert’s brother Eugene was released from prison
under a $15,000 bond on a writ of error obtained from the Cook County
Supreme Court Chief Justice Cyrus Dietz. The May 1, 1929 Chicago Tribune
reported:
“Chief Justice Cyrus Dietz of Moline ‘In Bad’ for Freeing Notorious
Convict
“Attorney Cyrus Dietz of Moline, who some months ago was elected a member
of the Illinois supreme court, succeeding Floyd Thompson who resigned to
enter the campaign for governor, is "in bad" with the good and law abiding
citizens of Illinois for his action in freeing ‘Red’ McLaughlin, a notorious
criminal, on $15,000 bonds. His action is also severely condemned by the law
enforcement bodies of the state.
“Censured by Crime Commission.
“The Chicago Crime commission yesterday detailed the circumstances under
which Eugene (Red) McLaughlin, notorious gangster, has gained his liberty
from the Joliet penitentiary on $15,000 bail. Henry Barrett Chamberlin,
operating director of the commission, in a report to its president, Frank J.
Loesch, described these circumstances as ‘scandalous.’
“‘McLaughlin, indicted and tried for murder, gunman, jewel robber,
ex-convict, fugitive from justice, bail jumper, and one of the most
dangerous criminals in the United States, is again at liberty to menace
society,’ said the Chamberlin letter. ‘He was released by order of Justice
Cyrus Dietz, of the Illinois supreme court following the issuance by that
jurist of a writ of error and the fixing of bail at $15,000.’
“Clerk Called From Home
“‘It is interesting to note that the bond was presented at the clerk’s
office of the supreme court at 7:30 o’clock on Saturday night, it being
necessary to ask the clerk to go to his office from his home. This bond was
signed by Robert E. McLaughlin (president of the Checker Cab Company), a
brother of the defendant, who claims to possess property of the value of
$18,000 with a mortgage of $3,000; Victor Cozzi, who claims to own $22,000,
with a mortgage of $1,500, and Jacob N. Schwartz, claiming ownership of
$30,000 realty with a mortgage of not more than $12,000.’
“‘I am unable to find any schedules in the office of the clerk of the
supreme court,’ Mr. Chamberlin continued, ‘and as far as I know the bond was
accepted on affidavits only.’
“Jenkins McLaughlin’s Lawyer.
“‘It is of continuing interest to know that the attorney representing
McLaughlin in this matter is Chauncey Jenkins of Springfield, former
director of public welfare during the administration of Governor Small and
concerning whom the executive committee of the Chicago crime commission said
in a statement to the governor in 1926 that he was unfit for his position
and that he had forfeited the confidence of the public and should be
removed.’
“‘Of further interest is the fact that the papers were rushed thru and
McLaughlin released from the penitentiary at about 8 o’clock Sunday morning.’
“Denied Bail Twice By Court
“‘It is difficult for me to understand why
this procedure should have been stage at Springfield at a time when the
chief justice of the court was in Chicago where the trial occurred and who
was entirely cognizant of all of the circumstances pertaining to this
matter, and after the supreme court had twice denied bail to McLaughlin.’
“‘McLaughlin was received at the
penitentiary on June 29, 1928, having been sentenced for a term of one to 14
years for assault with intent to commit robbery, a crime committed on March
22, 1926. The history of the case is a record of bond forfeitures,
judgments, vacation of judgments, bombing of a juror’s home, new bail,
evasion of arrest, perjury, jury tampering, and intimidation.’
“Bond Raised To $100,000.
“‘On June 15, 1928, the supreme court
refused to release McLaughlin on bail pending a supersedeas and on June 18
it refused to reconsider its decision. Judge John McGoorty raised
McLaughlin’s bond from $5,000 to $100,000.’
“‘McLaughlin forfeited one bond of $50,000
and another of $5,000 in Cook county and a bond of $10,000 in Philadelphia,
where he was arrested for robbery, burglary, and assault to kill.’
“‘Indicted for murder in Chicago, wanted for murder in Detroit, involved in
the Omar Fitch murder in 1924 and the shooting of Harry Morely, a Checker Cab
superintendent, the same year, suspected of robbery of $100,000 diamonds in
1926 – his release at this time on a $15,000 bond after conviction and while
serving a term in the penitentiary is something that I am unable to understand.’”
Despite the ‘mysterious’ circumstances surrounding McLaughlin’s release
he remained a free man. Six months later the high court remanded McLaughlin
for a new trial, but it never came to pass. Prosecutors appearing at the
February, 1930 hearing stated they had insufficient evidence and requested
the case be dropped.
On June 16, 1928 Checker Cab Manufacturing issued new stock that was
underwritten by the NY banking and brokerage house of J.A. Sisto & Co., 68
Wall St., one of Manhattan’s most respected brokers.
Just as the memory of Checker’s internal cab war had faded, the original
Yellow vs. Checker battle resumed in September of 1928:
“ONE SHOT DEAD IN TAXICAB WARFARE
“Gun-Play Concludes Free-for-all Participated in by Chicago Drivers
“CHICAGO, Sept. 22, 1928—(AP) Taxicab warfare which police say has been
brewing for several days broke out today at a cab stand at Cottage Grove
avenue and 68th street, near the Granada cafe. Eugene Thivierge, 35, a
driver for the Checker Cab company, was shot dead.
“Bernard Reishter (Reister), a Yellow Cab driver, was arrested shortly
afterward. His face and body bore the marks of recent battle, police said.
He told officers he had seen the fight but had no part in the gunplay.
“Word reached Checker Cab company headquarters last night that some of
their drivers had been threatened when they attempted to park their cabs at
a stand near the cafe. Several drivers, armed with automobile nacks, went to
the scene, police were told. The dispute continued until there was a general
fight, terminating only when Thivierge had been shot down.
“Police Lieutenant Dubach said the first indication of trouble between
the cab drivers came a week ago when several drivers of the Checker company
were arrested after a pistol fight with police who had sought to question
them. Three drivers were arrested and charges of assault with intent to kill
were placed against them.
“The trouble is attributed by police to the desire of rival cab drivers
to keep to themselves cab stands advantageously located.”
Within the week Checker henchmen retaliated by dynamiting two Yellow Cab
garages:
“Chicago Taxicab War Is On
“SHOOTING OF CHAUFFEUR ENDS IN BOMBED GARAGES
“Chicago, Sept. 30, 1928— (AP)—Two Yellow Cab company garages were bombed
simultaneously tonight. Police fear the outrages are reprisals for the fatal
shooting last week of a Checker taxicab driver by a Yellow cab chauffeur.
“No close approximation of the damage could be obtained from the Cab
Company, the explosion of the bomb at the garage in the 5400 block of
Broadway was heard as far north as Evanston and shattered windows in nearby
buildings. Guests at the Edgewater Beach Hotel, three blocks away, were alarmed
by the detonation. Several cabs stored in the garage were damaged though Company
officials said the loss would not be considerable, only a few employees were in
the building when the dynamite, placed at the rear entrance, exploded, and none of them
was seriously hurt.
“It was 15 minutes later that a bomb exploded at the rear of the Yellow
Cab Company's garage and repair shop at 3300 North Halstead Street. Police
believe the same hands that placed the Broadway Garage bomb, hurled the dynamite that damaged
the building on Halstead Street. Two men were seen to run from both places
and drive away in a roadster.
“Thomas Hogan, vice president of the Yellow Cab company, immediately
issued a statement denying the report that the bombing indicated a renewal
of the taxicab war which swept Chicago four years ago. "Absolutely nothing to it," said
Hogan. "I haven't any idea of the reason for those bombings. We have no
labor troubles and there's no reason to suspect business rivals. As a matter of fact, the only damage
done was the shattering of the glass in four or five cabs."
“Score of Cabs Wrecked.
“Police, however, reported that 17 cabs were wrecked, and detective
bureau squads were dispatched to search for friends of Eugene Thieverge, 35,
Checker taxi driver, who was fatally shot September 21 in a row over parking
space on the south side.
“Following the shooting, Bernard Reichter, a Yellow Cab driver, was
arrested and charged with the crime. Reichter admitted being in a fight at
the scene of the shooting but denied firing the shot. Police were seeking
Robert Mooney, another Yellow Cab driver, in connection with the affair.
“Only a portion of the dynamite placed at the Broadway garage exploded.
Two bundles of the explosive, one containing 16 sticks, and the other 18,
were found in the alley. A sputtering fuse attached to them was stamped out
by a company employee.”
Unfortunately Checker’s henchmen didn’t know when to quit and on the
night of October 3, they bombed John D. Hertz’ prized stables in suburban
Cary, Illinois, destroying 11 of his wife’s prized racehorses.
Checker attorneys put the blame for the Yellow bombings on “race track
rivals of Hertz”. Hertz was not amused and soon after Robert E. Crowe of the
Illinois attorney general’s office announced an official inquiry into the
affairs of Checker:
“CHARGES MADE AGAINST CROWE
“Checker’s Concern Says Attorney Unqualified to Conduct Cab Inquiry.
“CHICAGO, Oct. 4, 1928- (AP) — Charging that Robert E. Crowe, state's
attorney, is unqualified to conduct an inquiry into a taxicab war here
because he is a stockholder in the Yellow Cab company, officials of the
Checker Taxi company today appealed to Judge John L. Sullivan, chief justice
of the criminal court, for a special grand jury and a special
prosecutor to investigate the trouble.
“The Checker company acted after Mr. Crowe yesterday ordered all its
records seized and its officials to appear before the grand jury following
two bombings of Yellow Cab company garages and the burning of the racing
stables of John Hertz, head of the Yellow company, with a loss of more than
$200,000 through the death of 11 race horses.
“Charles Dougherty, assistant state's attorney, told Judge Sullivan that
neither Mr. Crowe nor any members of his family owned Yellow Cab company
stock. The hearing was continued until tomorrow. Checker company lawyers
said they expected to present evidence of graft and corruption on the part
of the public officials, aimed, they declared, at destroying all rivals of
the Yellow company in Chicago.
“The petition charged that many public officials owned Yellow Cab company
stock. Trouble between the two companies came to a head a week ago, when a
Checker driver was shot to death during a quarrel over cab stand privileges. A Yellow
driver was arrested for the shooting.
“Judge Harry Fisher ruled today that seizure of the Checker company's
books and records by the state's attorney constituted virtual "theft and
larceny" and said he would instruct attorneys what steps to take to regain
possession of them if the records were not returned by tomorrow.”
Checker’s henchmen clearly didn’t know when to quit and midway through
October Hertz reported that his life had been threatened:
“Yellow Cab Head Threatened With Death, He Says
“CHICAGO, Ill., Oct. 17, 1928 (AP)—John Hertz, president of the Yellow
Cab Company, reported to police today that his life had been threatened and
that he had been warned his grandchild would be kidnapped.
“Acting State's Attorney George E. Gorman, following the complaints of
Hertz, prepared subpoenas for Robert McLaughlin, head of the Checker Taxi
Company, and attorneys Arthur Albert and Edgar Cook, representing the
Checker Company.
“Two weeks ago Yellow Cab garages were bombed and racing stables of Hertz
were burned, destroying 31 thoroughbred racehorses at a loss of $200,000.
The trouble was described as outgrowth of a taxi war after a Checker driver
was shot and killed.”
The very next day subpoenas were issued to Checker Cab’s president,
Robert McLaughlin:
“'Bomb Trust' Under Probe; Checker Taxi Head Summoned by Jury
“Chicago Oct. 18, 1928 (AP) —A threat against the life of John Hertz,
president of the Yellow Cab Company, has stimulated Grand Jury action to rid
Chicago of its "bomb trust" and taxicab war.
“Hertz told police yesterday he had received warnings that his life would
be taken. Subpoenas were prepared at once for Robert McLaughlin, president
of the Checker Taxi Company, and two Checker Company attorneys.
“A Grand Jury will question them concerning alleged disputes between
employees of the two companies. Following the fatal shooting of a Checker
driver, two Yellow Cab garages were bombed three weeks ago.
“A few days later the Hertz racing stables at Cary, Ill. were destroyed
in a $200000 fire in which 11 thoroughbred horses were burned.
“The Grand Jury, whose work is to begin tomorrow, will investigate not
only the reputed taxicab war, but all bombings of the past few weeks. An
appeal has been made to inaugurate a drive to curb outbreaks or violence,
which have included 73 bombings so far this year.”
Checker Cab’s henchmen responded by placing a bomb in front of a Hertz’
subsidiary:
“FIND BOMB NEAR TAXICAB OFFICE
“Chicago ‘Warfare’ Continues; Takes New Angle.
“CHICAGO, Oct. 18, 1928 (AP)—An unexploded dynamite bomb was found today
in an alley back of the Chicago Motor Coach Company offices. The Motor Coach
Company is affiliated with the Yellow Cab Company of Chicago, of which John
Hertz is the head.
“Police expressed the belief an attempt had been made to blow up the
offices.
“Mr. Hertz yesterday reported that threats had been made against his life
and that he had received warnings his grandchild would be kidnapped.
“A grand Jury investigation has been ordered into an alleged taxi war
between the Yellow Cab Company and the Checker Taxi Company of Chicago, as a
sequel to the bombing of two Yellow Cab garages and the burning of racing
stables owned by Mr. Hertz. The bombings followed the slaying of a Checker
Taxi driver.”
Three days later Checker’s attorneys withdrew a motion to investigate
Yellow Cab’s alleged scheme to put Checker out of business:
“Checker Company Withdraws Motion for Investigation In Chicago
“CHICAGO Oct. 21, 1928 (AP) —An investigation of rivalry between the
Yellow Cab Company and the Checker Taxi Company of Chicago by the grand jury
was dropped Saturday when attorneys for the Checker Company withdrew the
motion before the chief justice of the criminal court asking for the
inquiry. The chief justice John J Sullivan said there was little evidence
that could be presented to the jury falling within its jurisdiction and
advised the Checker Company to wait until the states attorney had been
elected next month before going ahead with any inquiry.
“The Checker Taxi Company charged attempts were being made to force it
out of business. A Checker driver was shot to death and subsequently two
Yellow Cab garages were bombed and racing stables owned by John Hertz, president of the
Yellow Cab Company were burned and 11 race horses valued at $200000 were
destroyed, but the stables were located outside Cook county and an
investigation of the fire would not come under the jurisdiction of the Cook
County grand jury.
“It was at first reported the grand jury would investigate reported
threats on the life of Mr. Hertz but no steps were taken to do so.”
Within the week Checker’s attorneys were back in court asking for an
investigation into the misappropriation by City officials of $6,000 paid in
1926 as the Checker company's vehicle license fees. Chief Justice John J.
Sullivan responded by impounding Checkers books:
“Records of Checker Cab Are Impounded
“Chicago, Oct. 30, 1928—(AP)—Books and records of the Checker Taxi
company showing its business transactions since 1925 were impounded by Chief
Justice John J. Sullivan of the criminal court as evidence in the grand Jury
inquiry into the company's charges of corruption in the city government.
Attorneys of the company had accused city officials of diverting $6,000 paid
in 1926 as the Checker company's vehicle license fees. The grand Jury
subpoenaed the books last Friday.”
On June 16, 1928 Checker Cab Manufacturing issued new stock that was
underwritten by the NY banking and brokerage house of J.A. Sisto, 68 Wall
St., New York.
On December 26, 1928 Checker Cab Manufacturing purchased their New
York-based distributor, the Checker Cab Sales Corp., the successor to the
Mogul-Checker Cab Sales Co. a firm organized by the firm’s original
Manhattan distributor on September 22, 1922. Included in the December
acquisition was the Fisk Discount Corp, a Manhattan-based taxicab finance
company.
Markin’s acquisition coincided with the ousting of McLaughlin and his
henchmen from the Checker Cab Company. At the association’s December board
meeting McLaughlin voluntarily stepped down as president and was replaced by
a less newsworthy replacement, Thomas J. Healey. The official announcement
was made on December 29, 1928:
“Thomas J. Healy, south side banker and political leader, will today
become the czar of the Checker Taxi company by action of the concern's board
of directors, it was announced yesterday by Arthur F. Albert, general
counsel for the company.”
Healey was an attorney who helped found Chicago’s Southwest Trust and
Savings Bank in 1912, serving as its first president. From 1910 he was a
member of Illinois’ Republican Central Committee, and served as an Illinois
delegate to the 1912 and 1928 Republican National Convention.
Healey only remained as president until the heat surrounding McLaughlin
had died down and at the association’s December 1929 board meeting
McLaughlin and company were re-elected to their previous posts.
In 1928 Ernest H. Miller, president of Yellow Taxi Corporation, New York,
which operated Yellow Cabs in New York City, initiated negotiations which
led to Parmelee’s formation. These negotiations, commencing in 1925, took
place against a background of voluntary withdrawal commencing in 1925 by
substantial interests of the Yellow organization in Chicago. He entered the taxicab business in 1919 by organizing the
Yellow Cab Company of Newark, N. J. serving as it president for the next
decade. In 1921 Miller helped organize the American Yellow Taxi Operators
Inc. a Manhattan operator which was subsequently merged into the Yellow Taxi
Corporation in 1922. Fifteen months later (November 9, 1923), the Yellow
Taxi Corporation was merged into a new firm, the Yellow Taxi Corporation,
New York whose capital stock was issued through the Seaboard National Bank
of New York. In 1926 Miller was elected president of the Yellow Taxi
Corporation, New York. He was also a director of the Alamo Coal Co. as well
as the Reliance Casualty Insurance Co., a Newark, N.J., firm that
specialized in automobile liability and commercial insurance.
In 1925 Hertz sold the Yellow Cab Manufacturing Company to General Motors
Corporation, who merged it with their truck manufacturing operation and
reorganized them as the Yellow Truck & Coach Corp. Although its corporate
headquarters remained in Chicago, all manufacturing was subsequently
relocated to Pontiac, Michigan.
The sale to General Motors did not involve the Chicago Yellow Cab
Company, nor the Yellow Taxi Corporation of New York, two totally separate
firms controlled by Hertz that operated taxicabs in their respective
communities.
The Yellow Cab Company of Chicago was a subsidiary of the Chicago Yellow
Cab Company, a public holding company that also included a maintenance
subsidiary and insurance company. The shares of Chicago Yellow were equally
divided amongst Hertz, Parmelee and a small group of other investors.
For a number of years Ernest H. Miller had been partners with Morris
Markin and two others in a scheme to slowly take control of the
independently-owned Checker Taxicab Company of Chicago.
1928 Autobody Magazine:
“Yellow Taxi Corporation, New York, has changed the seats of more than
200 of its 1200 cabs to cane seats, instead of the leather or plush which
has heretofore been used. This change was made because the cane seats are
both cool in appearance and in fact. The company has just ordered 100 new
Model O6 cabs from General Motors Truck Company to replace some of their
present cabs.”
By 1928 Hertz had grown tired of having to deal with Chicago mobsters and
wanted out of the taxi business. He was aware that Markin was interested in
acquiring it and as Miller was a friend of Markin’s he asked him to try and
put together a deal. Chicago attorney Paul C. L'Amoreaux, a business partner
of Miller and Markin’s, was asked to come up with a business plan that would
suit all interested parties which would have to include Charles A.
McCulloch, the head of the Parmelee Transfer Company. (Although their last
names were similar, Parmelee’s McCulloch was unrelated to Checker Cab’s
criminally-minded McCullough brothers.)
While L’Amoreaux worked out the details, Markin began looking for the
money that would be required to finalize the transaction. He turned to the
New York investment firm of J.A. Sisto & Co., the underwriters through whom
Checker Cab Manufacturing had recently effected its second public issue of
stock.
After weeks of preparation L’Amoreaux presented a complicated plan that
was eventually approved by all three principals. It involved a carefully
planned sequence of events whereby the minority shareholders of the four
firms wouldn’t be alerted to the ultimate goal of the transaction until
after it had occurred, thereby keeping the value of the various shares as
stable as possible.
Hertz and McCullough were longtime friends and business partners. Both
were early investors in the Chicago-based Balaban and Katz movie theater
chain and in 1929 had helped form the Manhattan-Dearborn Corp., a real
estate investment firm. McCulloch was also an early Yellow Cab investor and
John D. Hertz had similarly invested in Parmelee stock.
At the time of the acquisition, McCulloch was vice-president of Chicago
Yellow Cab and both men owned approximately 30% of each other’s shares.
McCulloch was also friends with Markin and had been investing in shares of
Parmelee’s preferred stock since the mid-twenties.
L’Amoreaux presided over lengthy private negotiations amongst Miller
(representing Hertz), McCulloch, Markin, and J.A. Sisto & Co. and it was
decided that the first transaction would involve the sale of Hertz’ share of
Yellow Cab to McCulloch, whereby McCulloch would become Yellow’s chief
stockholder. That transaction didn’t take place until April 12, 1929 but was
publicly announced on January 7, 1929 in the hopes of ending the violence
that had recently been directed towards Hertz:
“TAXICAB KING TO PLAY FOR AWHILE
“JOHN HERTZ SELLS INTEREST IN YELLOW TAXICAB
“Organized Business In Chicago in 1915 Which Has Brought Him Immense
Wealth
“Chicago, Jan. 8, 1929 (AP) — John Hertz, who was peddling papers not so
many years ago, has retired from business, his wealth rated in millions. His
retirement from the chairmanship of the Yellow Cab company board yesterday
was accompanied by announcement that his control of that organization had
been sold to another one time newsboy — Charles A. McCullough, president of
the Parmelee Transfer company.
“Hertz disposed of his entire holdings in the cab company. Those that did
not go to McCullough were either given to about 60 employees who started in
business with him or sold to them under an arrangement of deferred payments.
“Plans Few Years of Play.
“Still under 50, Hertz plans to cap years of work with play. A few months
in Florida then a summer in Europe are among his immediate plans. In England
Mr. and Mrs. Hertz will watch their horse, Reigh Count, winner of the
Kentucky derby, in competition with the best thoroughbreds of the old world.
Hertz, who was born in Ruttka, Austria (now Czechoslovakia), founded the
Yellow Cab company of Chicago in 1915. The Chicago Motor Coach company and
the People's Motorbus company of St. Louis followed in the next seven years.
Later he effected the merger of the Yellow Cab Manufacturing company and the
truck division of General Motors.
“Started with Old Cars.
“It is related that after a varied career selling papers, driving a
delivery wagon, promoting events and writing of sports for newspapers. Hertz
became an automobile salesman. During his first year Hertz made $15,000 in
commissions. Only about $800 of this was in cash, however, the remainder
being taken out on old limousines. These automobiles, his friends said
today, were the nucleus of the company which for the year just closed had
net earnings of approximately $1,825,000, equivalent to $4.56 a share of the
capital stock.
“Stables House Famous Horses.
“Many famous runners are housed in the Hertz racing stables near Cary,
Ill. Several months ago the stables were swept by fire which destroyed
horses valued at $200,000. The fire, presumably of incendiary origin, was
blamed upon a ‘taxicab war’ in Chicago.”
Checker Cab Mfg. also acquired control of Checker Cab Sales Corp. in New
York in January of 1929. This company handled all the Checker business in
and around the New York City area. By the end of January, 1929 there were
21,000 taxis in New York City, and, of this total, over 8,000 were Checkers.
By April J.A. Sisto & Co. had finished arranging for the financing of the
Yellow-Parmelee deal and in conjunction with L’Amoreaux had finalized the
financial and operating structure of Parmelee.
One of the subscribers to Checker’s 1928 stock offering was John J.
Raskob, the current head of the Democratic National Committee and the
financial chairman of DuPont and General Motors. Raskob had been an early investor in General Motors and had engineered
DuPont's ownership of 43% of GM, purchased from the financially
troubled William C. Durant.
Raskob had supported Democratic presidential candidate Al Smith in the
1928 election, and Smith invited him to become chairman of the Democratic
National Committee. Sloan, a supporter of Herbert Hoover, insisted Raskob
resign either from GM or the DNC. He left GM after the board supported
Sloan, sold his GM stock, and used the proceeds to build the Empire State
Building.
Raskob began acquiring stock in Checker Cab Mfg. in 1928 and by 1930 he
held a reported 200,000 shares. Although he claims he acquired Checker
stock as an innocent personal investment, as early as 1930 Business Week
reported that skeptics believed that he was trying to force Markin out.
Raskob sold DuPont 8,000 shares of Checker Cab Manufacturing Co. stock on
December 12, 1929. DuPont confirmed the sale in a letter to Raskob on
January 6, 1930 (8000 shares Checker Cab at 31 = $248,000). Dupont had
recently purchased other shares of Checker stock on November 15, 1929
through a broker.
Ernest H. Miller was elected president of the newly organized Parmelee
Transportation Co. (aka Parmelee System) in April of 1929, serving as
President for the next two years. He retained his interest in Newark’s
Yellow Cab Co. until February 20, 1930, when he sold his majority share of
the firm to the Public Service Co-ordinated Transport Co.
Miller passed away on December 24, 1932, and was succeeded as Parmelee
president by attorney Paul C. L'Amoreaux, the architect of Markin’s takeover
of Parmelee and Yellow Taxi. Unfortunately L’Amoreaux served less than a
year in office, passing away the following September (September 2, 1933).
Levin Rank, Parmelee Transportation’s secretary and treasurer, became its
next president.
“TOWN CAR TYPE IS CHECKER TAXI
“New York, Mar 10, 1929 - The latest Checker taxicab, reported to be one of
the newest taxicab models and a precedent for luxury in this type of conveyance.
It is a long black town car, finished in nickel and silver, and presenting a
most dignified, yet strikingly smart note.
“‘Two hundred and fifty-one of them have already been delivered," Mr.
Weiss, president of the Checker Cab Sales Company, revealed in an interview
at the sales office yesterday.’”
Three weeks before the upcoming
Parmelee - Checker Cab Mfg. merger was publicly announced the AP reported:
“Taxi Cab Merger Seen
“Chicago, March 13, 1929—(AP)—A merger of the Chicago Yellow Cab Co., the
Parmelee Transfer company of Chicago and the Yellow Taxi corporation of New
York, possibly involving a working agreement with the Checker Cab
Manufacturing of negotiations under way and likely to be completed shortly.”
The second phase of L’Amoreaux’ plan was publicly announced on April 5,
1929, although the Checker Cab Manufacturing’s involvement was significantly
overstated:
“EASTERN BANKERS PLAN CAB MERGER
“Checker Cab to Take in Yellow Cab and Parmelee Transfer Company.
“New York, April 5, 1929—(INS) - Taxicab operating interests of Chicago
and New York are to join with the Checker Cab Manufacturing corporation In
the largest merger in the history of the business. An official announcement
of the deal probably will be made within the next few weeks.
“According to the plans as revealed today, New York banking interests,
representing Checker Cab, have arranged to acquire the Chicago Yellow Cab
company, the largest operator in that city, and the Parmelee Transfer
company, which has the concession for handling baggage between the many
railroad terminals there. The purpose of the merger is said to transfer
replacement business to Checker Cab.”
The Parmelee Transportation Company, a Delaware corporation, was
organized in 1929 to acquire a controlling interest in the shares of the
Parmelee Company, similarly a Delaware corporation doing business in
Chicago.
On April 12, 1929, a new corporation was organized under the name of
Parmelee Transportation Company and its common stock and debenture bonds
which were later listed on the New York Stock Exchange were sold to the
public. All of its preferred stock was sold to Checker Cab Manufacturing
Corporation. With the funds provided by the sale of these securities the
Parmelee Company, then operating, was purchased as a nucleus of an
integrated transportation system to furnish taxicab and limousine service in
some of the larger cities. In 1934, Chicago’s Parmelee Company was
liquidated into the Parmelee Transportation Company.
The Parmelee Transportation Company was formed April 12, 1929, with a
capitalization of $10,600,000, consisting of $5,000,000 of debentures,
$1,000,000 of preferred shares and 250,000 common shares of the value of
$4,600,000. Only the common shares possessed voting power. The $5,000,000 of
debentures and the 250,000 common shares were publicly issued through J. A.
Sisto & Co. and White Weld & Co. as underwriters. The $1,000,000 of
preferred shares were purchased by the Checker Cab Manufacturing Co.
In purchasing the $1,000,000 of Parmelee preferred shares, Checker Cab
Manufacturing hoped to receive, in addition to a profitable investment, the
continuing good will of Parmelee as a potential customer for cabs. Checker
Cab declined, however, an offer to purchase common voting stock rather than
the non-voting preferred shares because they desired a safer investment.
The formal announcement was made in a short press release on April 18,
1929:
"The financing of the new Parmelee Transportation company, holding
company for a corporation which will operate some of the principal motor
transport and cab companies of the United States, was announced last night."
Since Parmelee’s first incorporation in 1919, McCulloch had been
investing his profits into a large number of transportation businesses
outside of Chicago. He owned the Motor Cab Transportation Co. of New York,
which operated about 2,000 in an around Manhattan. He also held a
controlling interest in the Transportation Management Corp., a holding
company whose subsidiaries included the Deluxe Cab Co. of Cleveland, the
Yellow Cab Co. of Pittsburgh, the Yellow Taxi Co. of Minneapolis, and the
Pittsburgh Transportation Co., a transit bus operator. McCullogh also
supplied his own fuel through the Parmelee Motor Fuel Co., and self-insured
all of his vehicles through the Transportation Adjustment Co.
Shortly after its formation, Parmelee acquired 26 per cent of the stock
of Chicago Yellow, 68 per cent of the stock of Yellow Taxi Corporation, New
York, and 96 per cent of the stock of the Parmelee Company. In connection
with Parmelee’s formation and the preceding negotiations, Markin, aside from
discussions concerning Checker Cab Mfg. Co.’s purchase of Parmelee’s
preferred shares, acted in his personal capacity. Markin personally bought
for himself and an associate 6 per cent of Parmelee’s common shares. He also
entered into an employment contract with Transportation Management
Corporation, a newly formed and wholly owned subsidiary of Parmelee, to act
as an advisor to Miller, president of Transportation Management Corporation.
Markin’s salary as such adviser was $25,000 per year and Miller’s salary as
such president was $50,000 per year.
Subsequent to Parmelee’s acquisition of stock of Yellow Taxi Corporation,
New York, and Chicago Yellow, Parmelee acquired the stock of two Pittsburgh
taxicab operating companies, and later organized as a wholly owned
subsidiary a Minneapolis taxicab operating company. These Pittsburgh
acquisitions occurred in 1929 and neither Markin nor Checker Cab Mfg. Co.
participated in them. The organization of the Minneapolis taxicab operating
company occurred in 1931 and followed the receivership of a prior
Minneapolis taxicab operating company owned by a local street railway
company. Parmelee supplied $16,305 to purchase the receivership assets which
subsequently were transferred to the Minneapolis corporation organized by
Parmelee.
Parmelee held control of Chicago Cab Company, the Parmelee Company and
the Yellow Taxi Corporation of New York. It later acquired interests in the
Yellow Cab Company of Pittsburgh and the Pittsburgh Transportation Company.
In 1930 the New York law firm of Cravath deGersdorff, Swaine & Wood
represented it in a transaction under which control of its stock was
acquired by the Checker Cab Manufacturing Company, which in turn transferred
to Parmelee Transportation control of companies operating taxicabs
innumerous cities, including Motor Cab Transportation Company, operating
more than 2,000 cabs in New York City.
“Yellow Cab of Chicago has placed an initial cash order for 1000 taxis
with Checker Cab Manufacturing corporation.”
“CHECKER CAB SPENDS MILLION IN KALAMAZOO
“KALAMAZOO, April 24, 1929 (AP)—The Checker Cab Manufacturing corporation
has announced a million dollar expansion program in this city. A new
structure containing 260,000 square feet of floor space is to be erected
immediately adjoining a present main assembly building. The new structure
will be devoted to body manufacture and will permit of sale of the old body
unit.”
Parmelee’s ambitious plans for expansion were announced two weeks later:
“New Taxicab Fleets Result of Merger
“Chicago. April 30, 1929 (AP)—New fleets of taxicabs for Chicago, New York
and other cities will result from the recent merger of the Chicago Yellow
Cab Company, Inc., the Yellow Taxi Corporation of New York, and the Parmelee
Company of Chicago, officials of the Chicago Yellow Cab Company have
announced.
“Montreal, Pittsburg, Washington and Cleveland are among the cities in
which the Parmelee Company plans to establish taxicab concerns in the near
future. Thomas B. Hogan, vice president and general manager of the Chicago
Taxi company, said.
“One thousand new taxicabs for Chicago and 1,300 for New York are planned
immediately. After that Montreal probably will be the first city entered by
the Parmelee Company, it was said.”
Although the third and final step of L’Amoreaux’ plan was slated to take
place in the fall of 1929, the stock market crash postponed the merger until
the following September.
For close to a decade Yellow and Checker Cab and their affiliates held a
vast majority of the Chicago taxicab licenses. Of the 5289 licenses
outstanding in the City of Chicago on January 1 1929, Yellow held
2,335 (44%) medallions and Checker 1,750 (33%). A third Markin controlled
firm, the DeLuxe Motor Cab Company, held approximately 400 (7½ %) licenses.
In September, 1929, the City of Chicago adopted an ordinance to the
effect that no more licenses should be issued, except for renewals, unless
it should be found that the public convenience and necessity required
otherwise. The ordinance was reaffirmed by the City Council in 1934.
“CHECKER CAB CORP. REPORTS RECORD YEAR
“New York, June 7, 1929 (AP)- The Checker Cab Manufacturing Corporation reports 1928 the most
profitable year in its history, with net profits of $816,809, or $2.18 a
share on the outstanding common stock. Morris Martin, president, said that
earnings for the first 1929 quarter were at the rate of $4.18 a share,
compared with 54 cents a share for the same period last year.”
“New York, June 14, 1929 - Checker Cab Manufacturing company has
sufficient unfilled orders to take care of entire production until about September 30,
says Morris Markin, president. Orders now on hand will force the company to increase by 30 per
cent its original program for the year, which called for 7500 units.”
“New York, July 20, 1929 - Morris Markin, president of the Checker Cab
Manufacturing company said at the annual stockholders meeting today that the directors
were studying a dividend policy, He reported earnings for the first six months of 1929 at
$2,270,067.”
“New York, Aug. 1, 1929 - The Philadelphia Rapid Transit company has ordered 500 taxi cabs from
the Checker Cab Manufacturing company.”
Between October, 1929, and June, 1930, Parmelee acquired all the taxicab
companies operating in Pittsburgh; it now operates the cabs through two
wholly owned subsidiaries. Early in 1931, Parmelee formed a company to
operate cabs in Minneapolis; a wholly owned subsidiary now operates 125 of
the 214 cabs licensed in that city. Beginning early in 1929, Parmelee
acquired certain companies operating cabs in New York City; it later
consolidated them in a wholly owned subsidiary now holding 2,000 of the
13,000 licenses outstanding in that city.
When the heat died down in Chicago, Robert A. Mclaughlin returned as president
of Checker Cab.
The violence returned as well, although this time it appeared that it was
directed at Checker Cab Co.’s officers, rather than instigated by them. On
January 30, 1930 the Associated Press wire service reported:
“CHICAGO UNDERWORLD COMBED FOR PERPETRATORS OF THREE CRIMES IN REIGN OF TERROR
“Chicago, Ill., Jan. 30, 1930 (AP).—The underworld was searched today for
the perpetrators of three crimes which left two men shot, to death, another
dying of bullet wounds, and a mass of debris to mark the place where a
powerful bomb played havoc with a wholesale grocery firm.
“The slain men were Barney Mitchell, treasurer of the Checker Taxi
Company, and George Jackson, a Checker cab driver. Both were found dead in
Jackson's bullet-splintered cab.
“As the slayers of the taxi company official and cab driver, Police
suspect a gang of hoodlums who had served as bodyguards for the taxi
officials during recent troubles. When federal receivership proceeding's
placed the taxi company under the supervision of a lawyer, the hoodlum
bodyguards were cut off the pay rolls. Police said it appeared the hoodlums
shot Mitchell because he refused to meet their demands for money.
“Robert McLaughlin, president of the taxi company, was sought for
questioning, but police could not find him and thought perhaps he had gone
into hiding in fear of his life. Max Raifman, secretary of the cab company, also was sought after
Deputy Police Commissioner Thomas Wolfe announced he had learned that the
cab in which Mitchell's body was found had called at Raifman's home.
Mitchell and Jackson were found in the cab with, nearly a dozen bullet
wounds in their bodies. The killers apparently had been passengers in the
cab since all the shots appeared to have been fired within the taxi.”
“PARTY BEFORE MURDER OF CAB HEAD GIVES CLUE
“President and Secretary of Checker Taxi Company Missing
“REVENGE MOTIVE
“Treasurer of Chicago Concern Was Killed on Tenth Wedding Anniversary
“CHICAGO, Jan. 31, 1931 — (AP)—A party at the home of Robert McLaughlin,
president of the Checker Cab Co., 15 minutes before the company treasurer,
Barney Mitchell, and a company driver, George Jackson, were killed early
yesterday, has given detectives a new but meager lead in their investigation
of the double slaying.
“Everyone at the party is to be questioned. McLaughlin was missing early
today as was Max Raifman, secretary of the company and neighbor of
McLaughlin's, police believe he may have gone into hiding, fearing death
from the same source responsible for the killing of Mitchell and Jackson.
“The two men were found shot to death in Jackson's cab in Rogers park
early yesterday. The party was held in observance of McLaughlin's birthday and also of the
tenth anniversary of the wedding of Mr. and Mrs. Mitchell. Just before party
time, however, Mitchell telephoned his wife, suggesting that she remain home
as he would not reach the party until late. Mrs. Mitchell wanted to go ahead, with her husband
joining the party when he could, but Mitchell vetoed this.
“When the party broke up, Mitchell phoned for a cab and Jackson's cab
answered. Mitchell entered the cab alone, police were told. Ten blocks away
he and Jackson were killed.
“Police today sought Robert Schmidt, known as "Frisco Dutch." Schmidt who
with Eugene (Red) McLaughlin was tried and acquitted of the slaying of
Joseph Wokral, former president of the cab company and the man "Red"
Mclaughlin's brother, Robert, succeeded.
“Wokral's dying statement named Schmidt and "Red" McLaughlin as his
attackers.”
Formed in 1929, the Black Beauty Cab Corporation was a short-lived
Parmelee System subsidiary headed by Samuel Katz (unrelated to John D.Hertz’
Chicago business associate, Samuel Katz, president of Paramount Publix
Corp.) Their fleet of 250 jet-black taxis featured a red speed stripe down
the side and Black Beauty Cab Co. lettered in red on the door. Black
Beauty’s Manhattan garage was located at 613 East Thirteenth Street, New
York, NY.
Another little mentioned Parmelee subsidiary was the Hamilton-Peters
Operating Company, Inc., a New York City-based firm that operated
approximately 250 cabs in and around Harlem. The firm catered to well-to-do
African-Americans and was staffed by 750 African American employees.
Hamilton-Peters dates back to 1916 when William H. Peters and Samuel
Hamilton started a taxicab and car rental company, beginning with two
Packard automobiles, one for rental and one for taxi service. By the mid
twenties Hamilton-Peters was credited as being “the largest Negro taxi-cab
operators in the United States” and employed “a working force of more
than 550 persons” who operated “around 150 specially built taxi-cabs”.
The entire operation was purchased by Parmelee in 1930 and reorganized as
the Hamilton-Peters Operating Company, Inc. At that time it was reported
that ‘Their business is said to represent a half million dollars investment.
The firm has 250 special built taxi cabs and a working force of more than
750 persons.’
A period account describing the dinner given by Parmelee in honor of the
event follows:
“The business acumen and energy of two young colored men of Harlem, W.H.
Peters and Samuel Hamilton has been rewarded by the incorporation of the
taxi cab company which they founded into the great nationwide Parmelee
System. At a dinner in honor of the event great figures in America’s taxi
cab industry were present, including; E.S. Higgins, vice-president and
general manager of the Parmelee System and A.W. Moore, president, Chicago
Yellow Cab Company. The Hamilton-Peters Taxi Cab Company employs 1000 men,
all of whom are Negroes. The new company announces there will be no change
in the personnel.”
Hamilton-Peters survived the early stages of the Depression but was
forced into bankruptcy in March of 1937. Black Beauty had been long out of
business by that time.
“New York, Feb. 14, 1930 - Checker Cab Manufacturing Corp. has obtained a five year contract from
Checker Taxi company of Chicago for the latter's cab requirements.”
“CAB STRIKERS TO VOTE ON PEACE PROSPOSALS
“PITTSBURGH, Feb. 27, 1930 —(AP)—A secret ballot by Pittsburgh's' striking cab
drivers tomorrow will determine whether the seven weeks old strike will be
ended or will continue. The strikers are to vote on proposals for settlement
offered by the Parmelee Transportation company, owner of the Yellow, Green
and Checker Cab companies. There was no hint as to what the proposals were.
Representatives of the company and of the strikers said they pledged
secrecy. A vaudeville show was given for the benefit of the strikers tonight
in a downtown theater.”
“Checker Cab and Parmelee May Merge
“NEW YORK, March 14, 1930 — Asked concerning reports that negotiations for a
merger were under way between Checker Cab Mfg. Co. and Parmelee Transportation Co.,
Francis L. Haveron, a director in both companies and treasurer of Parmelee, said
the question of merging the two companies has never been officially
considered. There has been some informal consideration of possible benefits
of such a merger but not official action has been taken.”
Haveron, a trained accountant was also a director of J.A. Sisto &
Co.
“BODY OF MCLAUGHLIN IS FOUND IN A CANAL
“Chicago, June 7, 1930—(AP)—Passing tugboat churned up the beaten
bullet-punched body of Eugene "Red" McLaughlin from the Chicago drainage
canal today, and newspaper files turned up the revelation that the sixth of
Margaret Hamilton's sweethearts has graced gangster's graves.
“Feet and hands bound with wire and head tied in a sack, the corps of the
nationally notorious gunman kidnaper, robber and killer was dragged from the
water where he had apparently lain about two weeks and was taken to the morgue to be
identified by "Red's" brother Robert McLaughlin, president of the Checker
Cab company of Chicago.
“Murder of Bates
“And then came word from police, hunting a motive, that underworld gossip
blamed McLaughlin for the killing of Earl "Jew" Bates in Cincinnati about
two months ago. Delving into their records further they found that Bates and
McLaughlin — once pals — had quarreled over the Hamilton girl known also as
Collins and referred to grimly by hoodlums as the "Death Lily of Gangland."
“He held up Walter J. Nuemann New York Jewelry salesman, and took
$85,000. He was tried and sentenced to 1 to 14 years, but after serving less
than a year, was released under $15,000 bond on a writ of error from the
supreme court. Civic organizations complained bitterly — said ‘one of the most
dangerous criminals in America’ had been turned loose ‘to murder rob and extort.’
After six months of consideration, the high court remanded McLaughlin for a new
trial—hut it never came to pass. Prosecutors appeared in February — said they
had insufficient evidence — asked and obtained, a nolle prosse.
“Jumps Bond
“Bonds meant little to McLaughlin —he jumped a $50,000 bond once in
Chicago and one for $10,000 in New Jersey in 1927.”
At the time McLaughlin was associated with George ‘Bugs’ Moran’s gang and
it’s believed he was killed by gangsters associated with Al Capone, who had
recently severed ties with Moran. Red was also romantically linked with
Margaret ‘Mad Meg’ Collins’ (aka Hamilton) the debutante of gangland
Chicago, whose great beauty was thought responsible for the death of at
least six mobsters.
In 1926 Robert McLaughlin, the surviving McLaughlin, had succeeded Joseph
Wokral to the presidency of the Chicago Checker Cab Company after Wokral was
shot in the head while seeking re-election. Wokral survived for a few days,
naming Red McLaughlin as his slayer. In April, 1928, Red was indicted for
Wokral’s murder but was eventually acquitted on the charge.
In an interview with the retired mobster Doc Graham, Chicago historian
Studs Terkel uncovered the reason for McLaughlin’s rise to power at Checker:
(Terkel) “I once asked a casual acquaintance, the late Doc Graham, for a
resume. Doc was, as he modestly put it, a dedicated heist man. His speech
was a composite of Micawber and Runyon:
(Doc Graham) “The unsophisticated either belonged to the Bugs Moran mob
or the Capone mob. The fellas with talent didn't bother with either one. We
robbed both.”
(Terkel) “Wasn’t that a bit on the risky side?
(Doc Graham) “Indeed. There ain’t hardly a one of us survived the
Biblical threescore and ten. You see this fellow liquidated, that fellow —
shall we say, disposed of? Red McLaughlin had the reputation of being the
toughest guy in Chicago. But when you see Red run out of the drainage canal,
you realized Red’s modus operandi was unavailing. His associates was
Clifford and Adams. They were set in Al’s doorway in his hotel in Cicero.
That was unavailing. Red and his partners once stole the Checker Cab
Company. They took machine guns and went up and had an election, and just
went and took it over. I assisted in that operation.
(Terkel) “What role did the forces of law and order play?
(Doc Graham) “With a $10 bill, you wasn't bothered. If you had a speaking
acquaintance with Mayor Thompson, you could do no wrong. (Laughs.) Al spoke
loud to him.”
Aside from the McLaughlin brothers, a handful of other Chicago mobsters
were associated with the city’s taxicab operators. Daniel Stanton, an early
twenties Checker “slugger” rose through the ranks of Chicago’s underworld as
an enforcer for John Torrio and later Al Capone. Frank Nitto, Al Capone’s
second in command, was a large Yellow Cab stockholder and it is alleged he
supplied them with “enforcers” to help keep competing Checker drivers in
line.
“Parmelee-Checker Cab Merger Rumored in N. Y.
“NEW YORK, Sep. 7, 1930—(UP)—Acquisition of Parmelee Transportation company by the
Checker Cab Manufacturing corporation, to form the world's largest maker and
operator of taxicabs with assets of $30,000,000 was rumored here today.
Reports that the companies would merge have been current since March when
officials of both companies intimated that informal discussion concerning
the proposed merger had taken place.”
“Checker-Parmelee Merger Discussed
“CHICAGO. Sept. 8, 1930—A proposed plan by which Raskob interests, who control
a majority of the 375,000 shares of Checker Cab Manufacturing Corp. Stock,
proposed to acquire control of the Parmelee Transportation Co., may meet opposition
from Parmelee bondholders as well as from minority stockholders of Checker
Cab according to a report in local circles.”
9-8-1930 NY Times:
CHECKER CAB SEEKS PARMELEE CONTROL; Raskob Concern Plans to Get 60%
Interest in Transportation Company. ACTION LIKELY TOMORROW. Corporation to
Be Acquired Has Subsidiaries Operating 7,500 Taxicabs, Buses and Trucks.
“The Checker Cab Manufacturing Corporation, in which John J. Raskob owns
about 200,000 out of 375,000 shares outstanding, is planning to acquire a
controlling interest in the Parmelee Transportation Company, in which it
already owns an important interest, it was learned yesterday.”
“Control of Parmalee To be Taken Over by Checker Cab Company
“NEW YORK. Sept. 10, 1930—(AP)—Directors of both companies have agreed upon a
plan for acquisition of control of Parmelee Transportation Co. by the
Checker Cab Manufacturing corporation, in which John J. Raskob is one of the
largest single stockholders.
“The transaction also contemplates acquisition of the capital stock of
Motor Cab Transportation Co. operating 2,050 cabs in New York City in
exchange for 58,447 shares of Checker Cab Manufacturing common stock.
“Checker Cab already owns 1,442,000 of outstanding debentures of
Parmelee Transportation, all of the $l,000,000 of preferred stock, 23,000
shares of common stock and warrants for the purchase of 93,425 additional
shares of common,
“It is planned to transfer the stock of Motor Cab Transportation, as well
as debentures, preferred stock and warrants of Parmelee which Checker Cab
now owns, to Parmelee in return for 422,787 shares of common stock of Parmelee.
“Such a transfer would reduce Parmelee's outstanding debentures of
$3,389,000, with a consequent reduction in annual interest and sinking fund
charges; retire all its preferred stock and increase the common to 721,905 shares.”
9-11-1930 NY Times
“CHECKER-PARMELEE MERGER APPROVED; Directors of Both Companies Endorse
Plan Involving Exchange of Securities. MUTUAL BENEFITS SEEN Transportation
Unit Will Have 10,000 Taxicabs--Larger Outlet for Manufacturing Concern.
“The directors of the Parmelee Transportation Company and the Checker Cab
Manufacturing Company have approved the plan under which Checker will obtain
control of the majority of the stock of Parmelee, while the latter company
will…”
“TAXI FIRMS IN AGREEMENT ON HUGE COMBINE
“NEW YORK, Sept. 11, 1930—(AP) —Directors of both companies have agreed upon a
plan for acquisition of control of Parmelee Transportation Co. by the
Checker Cab Manufacturing Corp. in which John J. Raskob is one of the
largest single stockholders. The transaction also contemplates acquisition of the capital stock of
Motor Cab Transportation Co., operating 2,050 cars in New York City, in
exchange for 58,447 shares of Checker Cab Manufacturing common stock.
Checker Cab already owns 1,442,000 of outstanding debentures of Parmelee
Transportation, all of the $1,000,000 of preferred stock, 23,000,000 shares
of common stock and warrants for the purchase of 93,425 additional shares of
common.”
The September 22, 1930 issue of Time Magazine reported:
“In Parmelee, Checker has long had a large investment through debentures
and preferred stock. Last week it was arranged to return these holdings to
Parmelee in return for sufficient common stock to give Checker control.
Likewise, Parmelee will be given control of New York's Motor Cab
Transportation, operating 2,050 taxis. Altogether, the fleet under Checker's
control will now come to 10,000 taxis (operated by Parmelee), one-tenth of
the total in the U. S., enough to insure the company of a large replacement
business.”
In the latter part of 1930 Markin’s ownership of Parmelee shares declined
to less than 1 per cent and his ownership of Checker Cab Mfg. Co. shares to
5 per cent, which contrast with an ownership of Checker Cab Mfg. Co. shares
of more that 34 per cent by the Raskob-duPont group.
The Checker-Parmelee acquisition was one of the last offerings
underwritten by J.A. Sisto & Co. before they declared bankruptcy on
September 30, 1930. Emil C. Walzer, financial reporter for United Press
reported:
“Failure of the firm of J.A. Sisto and Co. announced from the rostrum in
the afternoon caused an avalanche of unloading just at a time when the list
had steadied from an early bear drive. This is the first major failure since
the market crashed a year ago, and it brought excited trading into the
market.
“Traders throw their shares overboard.
“Prices crashed 1 to 10 points. Sisto sponsored shares gave way first and
then the whole list on the Curb and Stock exchange followed. Tickers were
hard pressed to keep pace.
“The Sisto company
“The Sisto company did a banking and brokerage business in New York city.
Among the issues which the company has been connected in the past five years
are Parmelee Transportation. Checker Cab, Hygrade Food Products company, Sisto
Financial Corporation, Cuneo Press, National Rubber Machinery. These shares
broke sharply.
“In connection with the Checker Cab sponsorship, Morris Markin, president
of Checker Cab Manufacturing company, stated that J.A. Sisto & Co., have not
been bankers for the company for several months.”
As a direct result of the depression that followed the October 1929 stock
market crash, J.A. Sisto & Co. was in serious financial difficulties and was
left holding $1,442,000 of Parmelee debentures plus some Parmelee common
shares and warrants. As the sale of the securities to an outside investor
was unlikely, it sold them at a discount to the Checker Cab Mfg. Co.
The Parmelee story is continued
here.
© 2004 Mark Theobald - Coachbuilt.com
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