Chapter 1: Scheme to Defraud
Read Chapter 2: A Nation of Petty Gamblers
Read Chapter 3: Larceny in Laramie
As if he didn’t know it, J.M. Pattee learned again in June of 1873 just how hard it is to do good in the world.
The aging rogue had taken it upon himself to raise money for the Nebraska State Orphan Asylum. He started a lottery, his fourth in Omaha, and staged a gala prize drawing at Redick”s Opera House, with music by a German band.
Joined onstage by some of the city’s finest men as such things went in Omaha, Pattee exulted in the fact that he had pulled it off. “Notwithstanding the false stories that have been put forth, I have succeeded, and am able to go forward and fulfill my contract with every patron and purchaser of tickets,” he told the crowd.
But the ingrates who ran the town showed little appreciation. They issued a warrant for his arrest, accusing him of “obtaining money under false pretenses,” and Pattee was served with it the day he arrived in Leavenworth to start a similar lottery. Now he was back in Omaha, standing before the very man who had sworn in the officials at the drawing—Judge John R. Porter.
Pattee was a man of “common size and ordinary mould,” and his beard was frosted by 50 winters, as one biographer wrote. He looked scared as the judge examined the evidence: An affidavit stating that he had sold “duplicate and in some cases, even triplicate tickets,” signed by one of his clerks.
So what if justice in Omaha was usually open to bid? There was no telling what Porter would do. But there was no need for concern: Pattee was free on bond within minutes, and on his way to New York within hours. And not being a man of idle nature, as a reporter put it, he used the trip to revaluate his business plan.
For example, he asked himself: Why hold drawings in public? It would be safer to conduct them in a back room, or not at all. And why stick to lotteries when there were other things to offer people who wanted money without working for it? The same rubes would invest in nonexistent real estate and mines, and he knew who they were because he had their names on his mailing list.
Which led him to a related question: Why advertise in newspapers when there was a more hidden medium, one that would render him “hard to arrest for the deeds of the present, and harder to locate for the deeds of the past?”
That would be what is now called junk mail.
Pattee had already sent a great deal of it. He had that winter mailed thousands of one-sheet circulars for the “noble charity.”
This practice did not yet have a name. But it was the precursor of all forms of personal marketing, from telemarketing to spam.
It was crude by today’s standards—Pattee sent simple prize sheets. And there was no way to classify people by their characteristics. Still, early junk mailers had little trouble targeting their customers. They referred to them, simply, as “the fools.”
It was all they needed. For the real pioneers were grifters of whom little good can be said except that they were less likely than train robbers or other postal felons to be tattooed.
Next Page: More on James Monroe Pattee
James Monroe Pattee, a member of this confederacy, was born in New Hampshire in 1823. He worked on the family farm as a youth, then “injured himself by over exertion so as to unfit him for manual labor.”
From there the path led straight to mail fraud. At 21, he joined an itinerant writing teacher named Professor D.W. Lowell, and from him learned how to take the measure of almost any crowd. But it was a brief apprenticeship; a larger talent than the professor, Pattee toured on his own, then set up practice in Boston as a “writing master.”
That lasted five years, long enough for Pattee to accumulate $6,000. He then sought his fortune out West—in Omaha, an outpost with a handful of cabins and “few residents of European ancestry,” and many other towns. He sold land, and for the first time enabled his customers to be robbed without leaving home. As one report said of an Illinois development, "The lots were disposed of at the East by Pattee, in a manner altogether too sharp to be honest."
Pattee spent years in the West, showing the “ring of true metal” as he bragged. But he needed a base on the Eastern seaboard, and he found it in Philadelphia, where McElroy’s City Directory carried this listing in 1861: “The Philadelphia Weekly Union, J.M. Pattee, 334 Walnut.” (The newspaper was doubtless an advertising vehicle for Pattee’s schemes.) Two years later, he was listed as a “printer,” and a year after that as a “banker.” In 1865, he appeared in New York as a “broker.”
The public knew little of him at this point. But he gained some notoriety in Nevada City, a mining town in the foothills of the Sierra Nevadas. The exact nature of his business is unclear—he probably sold shares in nonexistent mines. But it was there, in 1870, that he ran his first lottery—for the bankrupt town school system. He raised enough to donate $500 to the schools and realize a profit for himself.
In this way he found a new source of income. But he needed a bigger venue, and he found it in Omaha, the terminal of the Union Pacific Railroad, the transcontinental railroad completed in 1869. The town now had a roundhouse, a pork-packing plant and an opera house that few people entered. But it didn’t have a library, and Pattee decided it was his job to get it one. He started a lottery to raise the money, and by his own account, spent $6,000 on advertising.
There were delays and shakedowns, but he paid off the right people and held the drawing on Nov. 7, 1871. “It gives me great pleasure to meet so large and fashionable an audience,” he said. “I pledge my honor as a man that I have done everything in my power to build up such a library that the people of this city may hereafter remember and respect me.”
But the drawing went on for days, and while some people said Pattee would “blessed forever,” for it, others wondered how much he had skimmed off the top. These doubts grew during his second lottery in the spring of 1872—for a hospital. “We hope the (winner) will make himself known, and give this city a visit and not remain at home like that Boston bookkeeper who, it is claimed, drew the large prize in the library scheme,” one critic wrote.
Meanwhile, Pattee made some bad real estate investments. He acquired John Redick’s Opera House, a music hall featuring a painting of a flimsily clad woman riding a goose, offered it as a lottery prize, then “repurchased” it from the winner. But he ran out of money, and politicians who had supported his earlier schemes decided they couldn’t “countenance anything of a like character.”
They did have other things on their minds in the winter of 1873. Newspapers had reported that Credit Mobilier, the financing arm of the Union Pacific, had bribed several Congressmen, and that they had winked at cost overruns. Congress held daily hearings on the scandal, and some of the names mentioned, like the railroad’s founder Thomas C. Durant, were well-known in Omaha.
Whether influenced by this or not, local politicians decided that town should be cleaned up. The first arrest was of the bunco artist Canada Bill. Then they turned their attention to the Lottery King. The Omaha Republican complained that bank deposits had closed “all mouths that were disposed to open against the swindling enterprises of Governor Pattee.” He was arrested in June, then hit with several lawsuits.
All of which served to prove to Pattee that his real business was not in Omaha. Like most lottery operators, he needed the backing of a municipality, but his sales came from people who lived far away and had little clue as to his reputation.
And he knew how to get to them. One method was to advertise in newspapers throughout the country. This could be done with the help of New York ad agencies like George Rowell’s. Rowell had advertised in the Omaha Herald that winter, offering “unequaled facilities for procuring the Insertion of advertisements in all newspapers and periodicals at lowest rates.”
Preceded in the agency business by Volney Palmer and Samuel M. Pettengill, Rowell offered no creative help and didn’t care if an ad was legitimate. “It was a theory with me in the early days that we stood in a position between advertiser and publisher, taking no responsibility for the thing advertised,” Rowell later wrote. Thus, he had few qualms about placing ads even for the worst of the lottery outfits. “I was too proud and too good to solicit the patronage, and not proud enough nor good enough to decline the orders when they came to me,” he said.
But Pattee had another means of selling, and he didn’t need Rowell’s help (in fact, Rowell wouldn’t have helped—he didn’t approve of it). He had built a mailing list with hundreds of thousands of names—of suckers and of people who had done as instructed in the ads: “For balance of Prises send for Circular.”
To these souls he sent a steady stream of mail.
Pattee hired the Omaha Herald to print his circulars, and his clerks inserted them into hand-addressed envelopes. They were delivered to the post office—in a storeroom on 15th St.—and from there they were carted to the Union Pacific terminal on 10th. Then they were loaded into mail cars, and transported west through the Platte River Valley, or east over the new Missouri River Bridge. (No wonder Pattee had designated Omaha, a national railroad hub, as the “great head centre of his financial operations.”)
What happened to them next was something that even Pattee didn’t understand. Some letters were destined for rural post offices, unlit general stores with tools and bacon hanging from the ceilings—farmers picked them up in person. Others went to cities, and were delivered to private mailboxes by uniformed postmen.
These audiences were separated by geography, economics and way of life, but they shared one thing: That they wanted something for nothing. And Pattee was happy to offer it to them, as hucksters had been doing from the earliest days of the Republic.
NEXT WEEK: A Nation of Petty Gamblers
Copyright 2008 by Ray Schultz
