200 Plus

Coast Guard Scandal Spreads on LBI

By THOMAS P. FARNER | Mar 21, 2017

The LBI Coast Guard scandal of 1926 was quickly becoming a symbol of the failure of Prohibition and the Volstead Act that enforced it. As the investigations grew, those opposed to the law argued that, instead of improving the nation’s morality, it was corrupting its most trusted institutions and the government was trampling on the Constitution in order to enforce it.

The Philadelphia Inquirer of July 23, 1926, ran a special report.

“Disclosures and confessions made during the last twenty-four hours will bring the entire Coast Guard patrolling Jersey waters under investigation, according to Superintendent M.W. Rasmussen, commanding the Fifth Coast Guard District.

“A number of towns along Beach Haven Inlet, including Beach Haven, Ship Haven, Ship Bottom, Harvey Cedars, Barnegat City and Beach Arlington, are involved in the investigation.

“Four captains and at least twenty enlisted members of the personnel have been on the carpet and either suspended from service or otherwise placed under arrest.”

Men who had routinely risked their lives to save others were now in a different kind of spotlight.

“Among the four captains implicated is Captain Edward Falkenburg, of the Ship Bottom station, who has confessed that in December, 1925, he transported eight cases of whisky across Barnegat Bay in a Coast Guard boat to the T.A. Wilson pier at Tuckerton.

“Captain Falkenburg admitted receiving $100. The affidavit also implicated Machinist mate Rider, of the same station, and two other members.

“Rider also confessed, but declared he was acting under the orders of his commanding officer.

“‘When I went on duty that night I was in charge of the engine and when I went aboard ship I noticed a number of cases covered by a piece of canvas.’

“‘Upon reaching Wilson’s pier I again came on deck and saw Captain Falkenburg carrying cases to a small motor truck.’”

It appeared there was no end to the corruption.

‘Captain Falkenburg is reported to have implicated others, including Captain Charles Rodgers, of the Bond station, at Beach Haven.

“Captain Rodgers’ wife is said to have acted as a go-between for her husband and the rum-runners, alleged to be an Atlantic City syndicate. She is said to have handled all telephone messages, and to have passed the money for distribution.

“How the entire personnel of the Ship Bottom station unanimously voted to allow rum to be landed on the beach near the station was disclosed by Rider, acting Captain of the station in the absence of Captain Falkenburg, who has been ill.”

The reaction of Coast Guard officials was swift, and the next day the Asbury Park Press carried, “Commander W.J. Wheeler of the coast guard today denied reports published here that he had suspended more than 20 coast guardsmen and officers along the Jersey coast. He also denied emphatically reports from Asbury Park, N.J., that the whole fifth district of the coast guard will be investigated as a result of disclosures during the recent investigation of charges of bribery among crews of coast guard boats along the New Jersey coast.”

When pressed on the scope of the investigation, “Regarding the reported wholesale investigation on the New Jersey coast, Commander Wheeler asserted that while he had no authority to give out details of the completed inquiry, he wished to say that ‘no commissioned officer was involved; that only one warrant officer and a limited number in lower grades were; that the amounts of the bribes alleged to have been given coast guard members was greatly exaggerated … that fifth district Commander Rasmussen had the situation entirely in hand, and that the report the whole fifth district is to be investigated is untrue.”

Unfortunately for Wheeler’s statements, his credibility was challenged by the next article on the same page.

“Additional evidence which he believes may result in securing further information regarding the operations of coast guardsmen with rum runners has been secured by Superintendent M.W. Rasmussen here. Superintendent Rasmussen is directing the coast guard inquiry. …

“Four men from stations in the fifth district were questioned at the district headquarters in the post office building here yesterday.

“The men were permitted to return to their stations after the quizzing. Coast guard headquarters both here and at Washington yesterday continued to veil the investigation with secrecy. Commander Yandell, executive officer at Washington, told The Press’ correspondent that coast guard officers here had been cautioned by him not to disclose names of those arrested or questioned, or details of the scandal.”

Keeping a lid on the story wasn’t going to be easy, and according to the Press, the investigation was expanding. “Investigation of the death of Lemuel Gale, a coast guardsman, to determine whether he was killed because he knew too much of rum runners, was started today by Ernest Burdge, chief of detectives of Ocean county.

“Gale left his station at Beach Haven Terrace, where he was No. 2 man, on June 26, and two days later he (was) found unconscious in the beach grass, dying next day. The theory now is that he was slain.

“Burdge said he would be able to present the results of his investigation to the Ocean county grand jury, which will meet Monday morning at 10 o’clock. The detective devoted today to going over the ground where Gale was found and in questioning friends of the dead man.”

The Inquirer explained, “Gale left his station at Beach Haven Terrace, where he was No. 2 man, on June 25, and two days later he was found unconscious in the lush beach grass, dying next day. Death was attributed to apoplexy. The information now is that he was slain by his mates, ten of whom have been arrested on charges of accepting bribes from rum-runners to wink at their activities. … One rumor is that Gale was disposed of because he knew too much about the run-running operations.”

At this point the Coast Guard did get some good news. The Brooklyn Eagle reported, “Gale was found unconscious in a patch of high grass and brush near his home. He died within a few hours. A physician diagnosed the case as apoplexy, and that was the cause of death given in the death certificate.

“‘We will investigate the case thoroughly,’ said Detective Burdge. ‘I shall talk it over, probably on Monday, with Prosecutor Wilfred H. Jayne. We have no evidence to disprove the apoplexy finding, but these rumors sometimes have some basis in fact and on that account have to be looked into. One of Gale’s relatives has asked for an inquiry.’”

As the scandal grew, the local Tuckerton Beacon of July 29 carried an editorial that urged calm.

“We will admit, it looks now as if some of our own men, born and bred within a comparatively few miles, have fallen victim to this lure of a ‘pot of gold.’ We are loathe to believe the stories in circulation and until it is proved, do not wish to publish the names of those under suspicion and so drag their names and reputations through this bootleg slime. It seems to be a part of human nature to spread this sort of thing and many newspapers revel in it, not giving a thought or caring about the probability of a mistake on the part of the investigators. It is much easier to besmirch a reputation than to clean and purify one.”

Over the next two weeks, there was silence from the government. As rumors continued, one of the accused told a reporter, “We may be sent to Atlanta for this little job. We were darn fools to get in it but what would you do if a $100 bill was smacked under your nose just to be blind for a little while? I’m only 22 and I still have my life before me, but I feel sorry for the old men whose lives will be ruined. This thing will nearly kill my wife. We didn’t have many good clothes and no holidays and this looked like easy money to me. I won’t cry but I’ll take my medicine like a navy man and try to live it down.”

Then on Aug. 16, the Press broke a startling story.

“Secret Trials of Accused Coast Guardsmen Are On at Ship Bottom.

“Trial of 11 coast guardsmen accused of conniving with rum runners has been in progress at the Ship Bottom station for 10 days, it was learned this morning despite efforts of officials to keep the hearings secret. The coast guardsmen are attached to stations between Barnegat City and Little Egg Harbor.”

The question now for the American people was to find out what was happening behind those closed doors in Ship Bottom, N.J.

Next Week: Transfer or prison?


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