The Old Lady Moves On

"The Old Lady of Kearny Street" went out of business last week. Closed was the powerful bail-bond firm of McDonough Bros., which had flourished for 50 years in San Francisco. The building--in the shadow of the Hall of Justice (police courts)--still has the cupid-festooned ceilings, mahogany woodwork and silver spittoons of the days when it was a saloon. San Franciscans believe it was the first bail-bond firm in the U.S. It was without a doubt the most notorious business house in San Francisco.

The Old Lady helped San Francisco be what many a citizen wanted it to be--a wide-open town. She furnished bail by the gross to bookmakers and prostitutes, kept a taxi waiting at the door to whisk them out of jail and back to work. But she was also a catalyst that brought underworld and police department into an inevitably corrupt amalgam. At her retirement the San Francisco Chronicle waxed nostalgic: "The Old Lady . . . will take to her rocking chair, draw her shawl about her. . . ." But many a citizen thought simply: "Good riddance."

McDonough Bros, was founded as a saloon by Patrick McDonough, a retired police sergeant. His two sons, Pete and Thomas, tended bar. The McDonoughs began writing bail bonds as a favor to lawyers who tippled at their bar. When they learned that the lawyers were charging their clients for these bonds, they began charging too. After old man Mc Donough died, Pete ripped out the bar, dealt solely in bail bonds, soon became a millionaire.

A grand-jury investigation of police graft in 1937 showed what the Old Lady was up to. Investigator Edwin N. Atherton reported that McDonough Bros, controlled men all through the police department, was "a fountainhead of corruption, willing to interest itself in almost any matter designed to defeat or circumvent the law." No one could open a bawdy house or gambling dive without Mc-Donough approval, and a McDonough okay was insurance that the police would rarely drop around except for a payoff. The payoff ran into staggering figures. San Francisco's 135 "regular, old-established" brothels and its hundreds of freelance tarts paid $400,000 a year for protection, its bookmakers $180,000; total take from all forms of vice was about $1,000,000 a year.

The Atherton report produced only two concrete results: dismissal of 13 policemen who were embarrassingly rich and passage of a California law requiring bail-bond firms to be licensed by the State Insurance Department. Brassy Pete McDonough who well knew that the law was directed against him, tried three times to get a license. At the last hearing, in March, he produced as character witnesses Police Chief Charles Dullea, the State Highway Commission chairman, two police commissioners, three city supervisors--all of whom called him a gentleman and a scholar. Only effect of this testimony was to move Insurance Commissioner Anthony Caminetti to irony: "If you precede me to the Pearly Gates, Mr. McDonough, will you say a good word for me?"

Thrice denied a license, McDonough Bros, gave up, moved to a 12-by-15-ft. office to start a new real-estate firm. But San Francisco was not sure but what the Old Lady of Kearny Street might have a reincarnation. In charge of the building remained one Howard Newport, former night clerk for the old firm, who has applied for a bail-bond business license in his own name.

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