Mornings on Horseback

by David McCullough

The case can be summarized briefly as follows: Phelps, Dodge and Company, importers of copper, lead, zinc, and other metals, was among the most respected firms in New York. It was headed by William E. Dodge, Sr., and by his son, William E. Dodge, Jr., Theodore’s lifelong friend. In 1872 the senior Dodge was summoned to the office of a special agent at the Customhouse, a man named Jayne, and was informed privately that by undervaluing certain shipments his firm had been defrauding the government. Dodge, who had been an outspoken critic of Customhouse mores, was impressed with the extreme seriousness of the situation and given a choice. He could either settle out of court for the amount owed to the government, all of which had been figured down to the penny ($271,017.23), whereupon the case would be closed, or he could face a lawsuit and whatever costs and publicity that might entail, in addition to an ultimate fine that conceivably could exceed a million dollars. Never bothering to question the authenticity of the charge, Dodge paid up, only to learn that in actual fact the government had been cheated of nothing. The few undervaluations committed by his firm had been minimal, less than its errors of overvaluation. He had been the victim of an extortion. He spoke out at once, a congressional investigation resulted, and in 1874 Congress put an end to the moiety system. But the money paid by Dodge had been divided up meantime. The Collector, the Naval Officer, and the Surveyor...