By Fred L. Reed III, Bank Note Reporter March 02, 2010

Part 57

During the U.S. Civil War, the federal government grabbed a monopoly on the money-issuing power within the United States issuing legal tender Treasury notes, which the U.S. Supreme Court initially found to be unconstitutional. Congress also grabbed control over bank circulation by establishing federally regulated national currency (National Bank Notes) and heavily taxed non-federal bank circulation. It also outlawed money issue by municipalities, corporations and individuals. When the Supremes danced on the head of a pin and changed their minds by finding room under the Constitution for the greenbacks, the central government had a headlock on the nation’s finances and a clear field to churn its money mills with impunity.

The important consequence of these machinations was an influx of capital into the U.S. Treasury, permitting the successful prosecution of the Civil War, but it brought unintended consequences that nearly swamped in the U.S. Ship of State. Counterfeiting of the new standardized currency burgeoned. TWICE in the first decade of this unfolding drama, the feds had to recall its greenback tender because it couldn’t keep it safe from the predations of midnight, bogus currency mills, and the clever—if felonious—entrepreneurs, who engraved, printed, and circulated their own brand of illicit paper money on the community.

As we have shown repeatedly, for those following these columns over the past months, federal interdiction efforts were spectacularly ineffective over a long period of time. I believe the root of these failures was in the persons and methods employed ostensibly to defeat this menace. Col. William P. Wood, the chief federal lawdog and his minions were not just ineffectual, but culpable in the proliferation of fake notes. One of the worst of their practices was coddling criminals. Kickbacks and other corrupt practices only exacerbated the existing problem.

Free from close supervision and apparently also free to employ whatever methods he chose, Wood and the operatives employed methods both illegal and counterproductive. Under Wood, his bureau consistently dropped the ball on eradicating bogus notes in circulation. Outrage over this situation caught up the press, other federal and local law enforcement officials, and the public alike in a backlash against the federal law enforcement operations.

At length U.S. District Court Judge William D. Shipman had proven to be an effective antidote, as we have seen (see BNR January 2010), to Col. William P. Wood’s reign of terror running roughshod over the Constitution and civil liberties, and playing fast and loose with the law and justice while feigning to enforce the U.S. anti-counterfeiting statutes following the U.S. Civil War.

Shipman lectured Wood from the federal bench on his unholy interrogation practices, and illegal movement of persons to New Jersey, threw out an illegally obtained confession, and negated Secret Service “get-out-of-jail free cards” by which Wood and his operatives sought to manipulate criminals into serving their own personal aspirations.

Wood’s practices also came in for opprobrium in newspaper editorials, and garnered Wood’s anti-counterfeiting division the rancor of U.S. marshals, local law enforcement officers, and the public generally. If Wood’s promises to felons were in vain, it might also be supposed he was losing leverage over the criminal element, too.

The New York Times, particularly, leveled large guns at the bureau and Col. Wood, specifically. In addition to reporting at length in great detail judicial censure of Wood and others, it took direct aim at him and his methods in its editorial columns.

The New York Times editorial chastising the Secret Service, “Counterfeiters in the Employ of the Government,” mentioned earlier in this series, evoked a stiff defense from Col. William P. Wood, which the Times also published.

“The dealings of the Government with counterfeiters have long been a mystery to the common mind,” editor Henry Raymond had written. Recounting the facts of Brockway’s conviction, and his bragging that his counterfeit fractional currency “was the best ever manufactured.… In a very few days he turned up in the employ of the Government, as was also another named Spike who had spent two years in State Prison for counterfeiting. Brockway was taken into Government employ after his establishment had been broken up, by W. P. Wood, who is described as being at the head of the Special Detective Service, under authority of the solicitor of the Treasury, and who had known Brockway as a notorious and dangerous counterfeiter for over two years.

“Brockway…was not arrested but escaped from the house. No effort was made subsequently to arrest him; his counterfeit plates were given to two of the party that broke up the establishment as reward in part for their services; he was at once taken into the employ of the Government and having, in some unexplained way, been finally put upon trial, has Detective Wood by his side as volunteer counsel, suggesting points for his defense and doing all in his power to secure his acquittal against the efforts of the regular Government officers to convict him!”

“What does this mean?” the newspaper had asked. “Why are counterfeiters thus made special exceptions to the ordinary process of punishing crime?” the Times reiterated. “In the absence of explanations on this subject, we suggest it as a proper field for Congressional inquiry,” Raymond, himself a former congressman, had written.

As might be expected Raymond’s charges raised hairs on the back of Col. William P. Wood’s neck. The stiff-necked law dog dispatched his answer in a letter to the editor that may be unprecedented in the history of federal law enforcement.

This lengthy missive was dashed off the same day as the Times editorial June 28, 1867. It was published in the same issue of the Times and in fact on the same page of the newspaper which contained federal judge Shipman’s parallel blast at Wood’s “unseemly appearance” at counterfeiter Brockway’s side during his trial, July 2, 1867.

It was labeled inconspicuously “Note from Mr. Wm. P. Wood,” but from the outset lawman Wood was in a combative mood. He charged the editorial with containing “errors, which I desire to correct.” Wood’s refutation is nit-picky. He doesn’t address the main thrust of the newspaper’s charge: Why is he employing law breakers instead of busting them? Instead Wood refutes the report that the plates were handed over to Marshal Murray by the parties making the arrest in Mount Vernon. “However,” Wood counters, “these plates were obtained after the arrest by myself.”(1) The Brockway situation was this, he contends: “Every possible effort was made to arrest Brockway after the Mount Vernon affair, without success; and while he was at large he made propositions which, if executed, would be of much benefit to the Government; also stipulating that he should not be arrested until he was permitted an opportunity to execute his propositions, the faithful performance of which it was understood would end to a degree of clemency in his behalf.

“The propositions were considered and agreed to, upon which he surrendered himself, and was employed as conditioned, but no promise was ever made by me that he should not be prosecuted for the offence committed at Mount Vernon,” Wood continued.(2)

“I did suggest interrogations to be put to one of the witnesses of the Government by the counsel for the defense, to enable the exposure of a ‘mystery to the common mind,’ thus showing that the descent on the counterfeiting establishment in Mount Vernon was concocted and consummated by one set of counterfeiters to rob the persons and obtain the counterfeit plates belonging to another set of counterfeiters. This fact was exposed by these interrogations, and was, I believe, clearly established on the trial of Brockway.”(3)

Furthermore, in Wood’s opinion “there is…no parallel between this case and that of Nelson Stewart, who was tried and convicted in Brooklyn some time since, as I am satisfied no person will more cheerfully testify than the United States District Attorney to the earnest, faithful and successful manner all my duties have been performed in connection with his office. I am confident of a like testimony from the United States Marshal,” Wood opined.(4)

Wood then claims unprecedented success for his methods, resulting in arrests, convictions, and seizure of contraband. “These successes have resulted in the almost total suppression of the manufacture of counterfeit money in New York and vicinity,” he boasted, “when it is well known that this same locality at one time produced more counterfeits of our national currency than all other parts of the United States combined.”

Wood may have satisfied himself with his explanations, but he certainly did not satisfy U.S. Marshal Murray, who six weeks later arrested agent Abner C. Newcomb on “a charge of having accepted a bribe, and in consideration thereof obstructed the ends of justice by allowing a notorious counterfeiter to escape from his custody.”(5)

In reporting the mess, the Times harkened back to its earlier accounts. “Those who read the remarks of Charles O. Brockway, the convicted counterfeiter, just pior to his sentence to the State Prison for fifteen years, will recollect his animadversions (critical censures) upon certain officials—Newcomb among the rest—whom, he alleged, were guilty of bribery.

Soon Newcomb, Wood’s trusted lieutenant, was arraigned on charges of having conspired with Chas. O. Brockway to obtain the release of Wm. W. Dow from an indictment of counterfeiting in Maine in consideration of a money payment of over $700. To accomplish this, it was alleged that they took rooms in Bleecker Street, fitted them up with a press and plates, and all the machinery for counterfeiting, printed off a few sheets of spurious 25-cent notes, and then made a seizure of the premises they themselves had fitted up, alleging that Dow had given them the information on which they had acted, and hoping thus to secure his release.

“Brockway’s wife, determined upon revenge, followed the matter up, after her husband’s imprisonment, and lately took legal proceedings which brought about the arrest of Newcomb,” the Times reported. The newspaper then printed Caroline Brockway’s affidavit setting forth “the details of the crime alleged against the accused.” These are the facts according to Mrs. Brockway:

She had known Newcomb for 14 months, during which time her husband had frequently gone out with him. She said she had offered Newcomb $200 “if he would get things arranged for her husband, Charles O. Brockway, and that Newcomb told her that he would try. Several days later Newcomb called on her and “told deponent to have her husband write a letter to Col. Wood and state he would have three men arrested and given them to him for Col. Wood.

Later Newcomb told her that he had given the letter to Col. Wood and that her husband Brockway could return home, but that she must give him $200 but that it must be paid to Mr. Stuart for him, after which she did indeed pay said sum to Mr. Stuart on Newcomb’s behalf. Newcomb had told her that he would give to her the hat and coat belonging to her husband that had been taken from Mount Vernon at the time of the bust. Her husband then returned home, and Newcomb “often came to see him.”

Part of the pay off to Newcomb had been a U.S. $100 bond. Mrs. Brockway also said that she had likewise handled a payment from William Dow to Newcomb of $690 after which Dow too had been released.

Newcomb, both a Secret Service operative and special assistant in the U.S. Marshal’s Office, was taken before commissioner Osborn and held on $2,000 bail, which was paid by a Mr. Harry Hill. In open court Secret Service operative Newcomb charged his boss Wood, chief of the U.S. Secret Service “with having influenced the complainants to prefer charges against him.”

Immediately after being released Newcomb went to the sheriff and “surrendered Col. Wood, for whose bail in the civil suit of Savage vs. Wood Newcomb was surety. So the sheriff arrested the chief of the U.S. Secret Service. The “Colonel” was only detained in custody for a few minutes, when new bail was offered and he was released. Newcomb’s examination was continued over, i.e., postponed to a later date.

Details of the case against Newcomb were repeated in the Times the following week with additional information taken from an affidavit by William W. Dow.(6) According to that corroborative witness, Dow had been indicted at Portland, Me., for forgery in September 1865, after being arrested by two Secret Service operatives Horace Kent and J. H. Wesson under the direction of Wood. The indictment was still standing, but he had been released on bail of $1,500 and had come to New York City where he became acquainted with Charles O. Brockway.

After being asked by Brockway “what he would give to settle his case in Maine,” Dow and Brockway settled upon $750, after which Dow accompanied Brockway to Capt. Thomas Reeves’ Billiard Saloon.(7) Then and there he had an interview with Newcomb, at which Newcomb (acting in his dual capacity as a U.S. Marshal and Secret Service agent), said any agreement made with Brockway would satisfy him and will be carried out. Then Dow had agreed with Newcomb to meet him again at Mrs. Brockway’s. At the subsequent meeting they shared a bottle of champagne and discussed the particulars of the agreement. They agreed that Dow would surrender a plate and press and to meet him the next time at U.S. Marshal Murray’s office at which time Murray would back up the deal.

When they met at Murray’s office, Murray reiterated to Dow the terms of the agreement that Dow would give up a plate and a press and a counterfeiter to satisfy his own case.

Dow further stated that he had sent for the $750 agreed upon, and Newcomb told him to cash the draft and deposit the money with Mrs. Brockway. After this Brockway had rented a room to set up a counterfeiting operation so that Dow could give up a counterfeiter and so furnish Col. Wood and the government with “important information,” according to their agreement.

Dow said that they then purchased a press and outfitted the room, and Mrs. Brockway informed Dow that she had paid Newcomb $690 out of the $750 that he had left with her for that purpsoe.

Mrs. Brockway’s affidavit corroborated the details of the transactions. The Times goes on to report that Newcomb’s case had been postponed due to the absence of witness Dow.

After a two-week delay, commissioner Osborn resumed the case against Deputy U.S. Marshal Abner B. Newcomb, charged by Col. Wood, chief of the U.S. Secret Service Department with obstructing the officers of the Secret Service in the execution of their duty by accepting bribes on Sept. 12, but Wood and his witnesses failed to show up.(8)

So the DA asked for another adjournment. Newcomb’s counsel said he was ready to proceed and “argued that the prosecution, under these circumstances was not entitled to an adjournment. He understood that Col. Wood was “a very cunning man,” and probably he wanted to put the examination off, and then rush it before the Grand Jury.”

The DA said that was not his plan, and “nothing of the kind should be done.” Commissioner Osborn told the DA “to instruct Col. Wood that he must fix a time when his witnesses would be ready. The case must be proceeded without delay, or the complaint would be dismissed.”

The investigation was indefinitely postponed. More than a month later, the case finally was resumed in commissioner Osborn’s court room.(9) It reconvened on Tuesday Oct. 22 and continued on Oct. 23.

Dow was brought into court under the charge of a New Hampshire police officer. Testimony set forth that Dow had been arrested for passing counterfeit money and was under indictment for same, but had subsequently come to New York and accompanied by Brockway had gone to Reeves’ Billiard Saloon and there met defendant Newcomb, and told Newcomb he was there under an appointment made by Brockway to try and get his case settled. He further had said to him: “I have made arrangements with Brockway to pay $750, and furnish a plate and press” to which Newcomb replied “Any arrangements you make with Brockway will be right.” Subsequently they had many meetings together, most of them at Brockway’s house.

Testimony confirmed the facts of outfitting the room and setting up the bust. Dow said he had been told by Newcomb and Wood and Murray that he would be released of his counterfeiting charge in Maine if he followed through with the deal. He said that he had done so, and had also paid Newcomb the money, but here, he complained, he was now brought into court still under the indictment.

Nearly another month later, on Nov. 18, the case resumed before Commissioner Osborn. Wood, himself, was on the stand this time. According to Wood when Newcomb arrested Dow on April 30 last, he went with the parties to the U.S. District Attorney’s office. Newcomb “expressed a desire for the prisoner’s release, but he (Wood) would not consent to it, and Dow was sent to jail.” Newcomb’s reports to Wood on the case were then submitted into evidence. These included a report on the information derived from Dow, and the seizure.

“The latest report stated that Newcomb had given Dow the assurance that a certain criminal charge then pending against him would be withdrawn and the bail discharged in consideration of valuable services rendered. This assurance, Newcomb reminds Col. Wood in the report, was given by his (Wood’s) authority.”(10)

In his testimony Wood explained that “he did promise Newcomb that if Dow ‘turned up a nest’ of counterfeiters and cause their arrest and conviction, he (Col. Wood) would write a letter to the District Attorney requesting him to enter a no. pros. (nolle prosequi, i.e. to be unwilling to prosecute, as when a government drops prosecution of a case) in his (Dow’s) case.”

Wood continued: “Upon Newcomb’s application, the Secret Service Department appointed Chas. F. (sic) Brockway to assist him in working up the case in which Dow was to be the informer. After Brockway’s arrest, and prior to his conviction, he informed Col. Wood of the fact that the Bleecker-Street seizure was a sham affair, gotten up between Brockway, Dow and Newcomb for Dow’s benefit. Brockway informed Wood that the presses and other implements were purchased by Newcomb and placed in the house.”(11)

Direct examination having been concluded, an adjournment was ordered until Saturday morning following.(12)

The wheels of justice continued to grind slowly. It wasn’t until Jan. 8 before anything else in the case turned up.(13) When the case resumed on Jan. 8, Newcomb’s boss at the U.S. Marshal’s Office showed up as a character witness. Marshal Murray was examined. He testified that Newcomb had worked for him for six years, and that he had been placed “in many positions of great trust, and that he had always served him and the Government faithfully; that the arrangement with Dow was made with himself (Murray) as United States Marshal, and with Col. Wood as Chief of the Secret Service Division, and that the defendant (Newcomb) had acted under their joint directions throughout.”

The case was then adjourned to Saturday following but was not taken up on schedule once again. Part of the reason for these endless delays may have been the contemporaneous plight of the main witnesses (see following).

In early January the defense called seven witnesses in the Newcomb bribery case.(14) On Jan. 4, 1868, four witnesses swore “to the disreputable character of the complainant Mrs. Brockway.” Three others (deputy marshals) testified that the descent upon the Bleecker Street counterfeiting establishment by Newcomb was a bonafide affair not the sham seizure as sworn by the prosecution. The investigation was continued again to Wednesday next.

However, it was nearly two weeks later when the case was resumed Jan. 17 in Commissioner Osborn’s courtroom.(15) Defendant Newcomb’s counsel John Sedgwick contended the statutes did not apply to the facts before the court. He attempted to impeach the witnesses against his client and turn the case back on Newcomb’s Secret Service boss Col. William P. Wood. Dow had testified, Sedgwick stated, “to save himself from prison and in fear of THREATS (emphasis added) from Col. Wood” and Mrs. Brockway “to abridge the term of her husband’s imprisonment. “Both witnesses were of “bad character and unworthy of credit, and had repeatedly contradicted each other on material points, and further contended that the conduct of Col. Wood, as shown by his own testimony, was more objectionable than the conduct of the defendant was alleged to be.”(16)

The DA responded by affirming that the statute amply covered the charge, the substance of which was that the defendant had deceived his superior officer (Wood) for the purpose of rescuing Dow from the penalty for his crimes; that the witnesses for the government, though confessedly of bad character, corroborated each other, and that their testimony was consistent with the circumstances and probabilities of the case.

The commissioner reserved his decision. After six months of hearings, I could not find any Times report on the disposition of the case, but apparently the government found in Newcomb’s favor and against the machinations of Wood and Brockway’s wife. Newcomb continued in high positions in federal service. He was still a deputy marshal in April when the counterfeiting case of A.L. Levin was heard before Commissioner Betts.(17) (18)



To be continued…



A Personal Note

As always, I welcome feedback from BNR readers. We cover a lot of ground in this column, and it’s surprising what sparks the interest of individuals. Questions, comments, cheers or jeers are welcome. You can contact me at fred@spmc.org or by mail at P.O. Box 118162, Carrollton, TX 75011-8162. If you write and wish a reply, please include a self-addressed stamped envelope, but please be aware that if your subject is of interest generally it may be addressed in a future column instead.



End Notes



1. “Note from Mr. Wm. P. Wood,” New York Times, July 2, 1867. 2. Ibid. 3. Ibid. 4. Ibid. 5.“Law Reports. United States Commissioners’ Office Before Commissioner Osborn. Alleged Corruption in the United States Marshal’s Office,” New York Times, Aug. 17, 1867. 6. “United States Commissioners’ Office Before Commissioner Osborn. The Newcomb Alleged Bribery Case,” New York Times, Aug. 27, 1867. 7. As an aside, Tom Reeves Billiard Saloon had issued three numismatically important Civil War 25-cent stamp envelopes during the small change crunch in summer-fall 1862, Reed Nos. PE-585, 587, 589. Reeves is one of 118 known issuers of 409 varieties of these stamp envelopes which will be definitively cataloged and described in this author’s forthcoming new book Civil War Stamp Envelopes: the Issuers and Their Times. 8. “United States Commissioners’ Office. Before Commissioner Osborn. The Case of Deputy Marshal Newcomb,” New York Times, Sept. 13, 1867. 9. “United States Commissioner’s Office. Before Commissioner Osborn. The Abner B. Newcomb Case,” New York Times, Oct. 24, 1867. 10. Ibid. 11. Ibid. 12. “United States Commissioners’ Office Before Commissioner Osborn. The Newcomb Case,” New York Times, Nov. 19, 1867. 13. “United States Commissioners’ Office Before Commissioner Osborn. The Newcomb Case, New York Times, Jan. 9, 1868. 14. “United States Commissioners’ Office Before Commissioner Osborn. The Newcomb Case,” New York Times, Jan. 5, 1868. 15. “United States Commissioners’ Office Before Commissioner Osborn. The Newcomb case,” New York Times, Jan. 18, 1868. 16. Ibid. 17. “United States Commissioners’ Office Before Commissioner Betts. An Interesting Case,” New York Times, April 3, 1868. 18. In November 1865, Newcomb had been appointed as an operative in the U.S. Secret Service Division. One source (Burnham) states that Newcomb left the Secret Service in 1867 to accept a position in the Second Auditor’s office as a special agent investigating bounty fraud cases. After two years service at that post, that source states, Newcomb once again accepted a position as operative in the Secret Service under new chief Col. H.C. Whitley. He was then appointed head of the bureau’s New York district. However, it is readily apparent that Newcomb continued to function under both U.S. Marshal and Secret Service direction. For more, see George Pickering Burnham, American Counterfeits, How Detected, and How Avoided, Boston: A.W. Lovering, 1879.

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