Public highway construction enriched politicians through contracts and insider land speculation

Evidence

The construction of parkways—like the construction of conventional highways—was a potential source of great wealth to politicians. Parkways meant construction contracts. Politicians who had a say in which firms received those contracts could expect financial remembrances from a successful firm, if indeed they—or a relative or a trusted associate known in political terminology as a “bag man”—did not actually own a piece of it. Parkways meant real estate transactions, generally either purchase or condemnation, both methods under which landowners could expect to do well financially; state public works officials, anxious to begin construction and not too concerned about price because the money they were offering was not their own, were traditionally more generous than private buyers. If politicians were the landowners—if they bought the land at pre-parkway prices, from owners who didn’t know the parkway was coming, and then sold it to the state at right-of-way prices—they could expect a large profit. It took longer to get one’s money through condemnation, but the rewards could be even greater; the success of politically well-connected attorneys in winning high condemnation awards from Court of Claims judges who also had risen through the ranks of political machines was an open secret in legal circles in New York State during the 1920’s—as it would be in the 1960’s. And parkways meant development: sleepy countrysides long static because of their inaccessibility suddenly became desirable locations for factories and housing developments when a parkway brought them close to a city or large town. Land in these areas became suddenly valuable. Land near the parkway’s exits, automatic focal points for development, became particularly valuable. The politician who bought this land at pre-parkway prices and sold it as or after the parkway was being built could reap great profit, and the politician who bought the land but instead of selling it developed it himself, building himself the houses and factories, could reap a fortune. Moreover, in terms of development, the impact of a parkway spread in ever-widening ripples: stores and laundries and gas stations and insurance brokerage firms for the residents of the houses, subcontractors and material-supply houses for the factories. This meant a burgeoning in land sales, insurance premiums, legal fees—in all the areas in which politicians grow fat. It meant as well an intangible, but intense, additional attraction for politicians: in a dormant area, opportunities were limited because everything was cut and dried, prices for land, for instance, being well known and firmly established; in an area opened by a road, everything was changing almost on a day-to-day basis; opportunities were wide open. — Robert A. Caro, The Power Broker, 911

Categorization

• XREF: Connects to public-works patronage and infrastructure politics common in what I’ve read about machine politics (e.g., the Courthouse ring, Tammany Hall style graft). — connects to: Road-construction politicians profited by trading approval votes for advance route knowledge — Robert A. Caro, The Power Broker: Robert Moses and the…, 912
• SEED: Angle: how major public infrastructure decisions are structurally rigged toward insiders because of land-value knowledge asymmetry before any overt corruption occurs.

Broader Connections

• Road-construction politicians profited by trading approval votes for advance route knowledge #expands (0.95) — Robert A. Caro, The Power Broker, 912