The Man Who Saved New York: Hugh Carey and the Great Fiscal Crisis of 1975

By Seymour P. Lachman and Robert Polner

Hugh L. Carey’s grandparents raised two daughters and two sons in Park Slope. The older boy, a gifted athlete, died tragically as a teen from a misdiagnosed case of peritonitis. The younger one, Denis J. Carey – Hugh’s father – attended Public School No. 9 in the same neighborhood; his formal education ended in the ninth grade. Once out of school, he worked any job he could find to help support his parents and sisters. Energetic and resourceful, he worked as an oil hostler at the Tidewater Oil depot near the family home, servicing trucks and rail engines at the end of their run. With a friend, he established a motor fuel distribution business in the 1920s, calling it Eagle Petroleum. Once he had married and his sons were arriving, he spent his days and nights focused, even fixated, on building up the company.

At home, the Careys didn’t subscribe to popular general-interest publications such as the Saturday Evening Post or Colliers, but to the National Petroleum News and Journal of Commerce. Home was office, and office was home, Hugh remembered. The nightly dining room table talk was peppered with stories of fuel deliveries, tank trucks, expenditures, and revenues, and when the Great Depression arrived and deepened in the 1930s, the living room discourse was edgier, revealing the pressures and tactics exerted by Eagle’s creditors. The story of how Carey’s parents met is intertwined with Denis Carey’s desire to succeed in the oil business, in an era when the automobile was becoming more familiar and kerosene-fueled heaters would give way to basement oil-burning boilers and furnaces. Margaret Collins – Hugh’s mother – was the youngest of five children and the daughter of immigrants from County Tyrone, Ireland, and when she married DJ Carey, she not only became his wife but also his unofficial lifetime associate and assistant throughout his business career. At Erasmus Hall High School, a public school in Flatbush, she did so well that she continued her education in stenography and typing and became a valued employee at the Battery Place home-office of the American Steel Barrel Company, as the assistant to the owner, Elizabeth Cochran Seaman, otherwise known, nationally and internationally, as Nellie Bly, the untiring adventurer, daredevil, social reformer, and pioneering woman reporter who covered World War I, defended poor and exploited children and women, and who, at her death in 1922, was described by the New York Journal as “the Best Reporter in America” for her expose on the appalling way the mentally disturbed were treated in state insane asylums. While working for the New York World, Bly had posed as a mental patient at the Woman’s Lunatic Asylum on Blackwell’s Island in New York City, later called Welfare Island and now Roosevelt Island, and wrote about her experiences in Ten Days in a Madhouse, published in 1887, which detailed the degrading and tragic indifference she observed first-hand, scenes similar to those which Hugh would find at [The] Willowbrook [Development Center in Staten Island] almost 90 years later.

As a prominent businessperson in her own right, Bly would regularly depart for globe-trotting jaunts, entrusting “Miss Collins” to serve in her stead at the American Steel Barrel headquarters in lower Manhattan. Soon, Collins became so integral to the day-to-day functioning of the company that its owners named their petite 15 gallon barrel after her – the “Collins Barrel” – one of which Carey and his brothers were delighted to see washed up on the shores of Long Island when Hugh was still in parochial school.

With petroleum use increasing, steel barrels were in demand. The more steel barrels a striver like Denis “DJ” Carey could get his hands on, the more fuel he could decant from railroad tanker cars and deliver to corner filling stations. So DJ decided to see if he could get to know the reserved but sociable Margaret Collins; he arranged to invite her to a formal evening ball. Denis’s business was going well, growing so reliably that within a matter of four or five years it would monopolize the back page of the indispensable Red Book directory with a prominent display advertisement. As fate, or luck, would have it, Bly’s assistant agreed to go on a date with the confident Denis. In the full measure of time, their attraction grew, and the “the oil man” and “the barrel lady” eventually married.

Carey’s parents started out in downtown Brooklyn as newlyweds. Gradually, they moved up the avenues and acquired social status. The most prosperous proceeded “up the hill,” reaching out of the lower strata toward Third, Fourth, and the even more socially elevated Fifth Avenue, with its stately homes filled with fine silverware, grand pianos and lace curtains. From roughly the time their boys were out of diapers, the business-minded couple, who ultimately resided on Park Place – but not the crest, Prospect Park West – dreamed of starting a series of modest petroleum delivery businesses for the boys to one day operate. Margaret, with her serious disposition and withering and wise delivery, commanded her children’s march toward straight A’s (or nearly so) on their report cards, while insisting that they maintain a respectful presence before their elders. But it was his father who, Hugh remembered, looked out one sunny Saturday over their dining room table as the kids pored over their homework, and commented on the attractiveness of a tin container marked Peerless Pepper.

“That’s a good name for a company,” he mused. “Peerless.”

Eventually, the Peerless Oil Company was born, to be followed by the Remington Oil Company, named in honor of the Remington typewriter Hugh’s mother used to type up the business records. The Peerless and Remington companies advanced from their beginnings at the dining room table – led by eldest brother Ed. At first, Ed worked closely with his father and brothers, but, inclined more to giving orders than taking them, he broke off to form his own series of oil companies, for which Hugh worked. By the late 1960s, Ed was on his way to becoming one for the richest individuals in America, and by 1960 was in a position to help Hugh launch his political career.

But Edward M. Carey’s phenomenal success was unimaginable when the Great Depression descended, bringing traumatic and demoralizing years that weighed heavily on Denis and Margaret Carey, their business, and the family. Margaret struggled to keep up appearances of middle-class prosperity, never letting her husband leave the house without a derby, smartly atilt on top of his head, and a pristine starched white shirt. As the family’s finances tightened, she also took to inserting cardboard cutouts in the worn-out shoes worn by her sons, as there was never enough money for new shoes. She sent the children to school after serving them a watery gruel for breakfast; the days of waking up to the smell of bacon sizzling on the stove were, if not completely over, then quite out of the ordinary.

Denis Cary’s Eagle Petroleum faced crushing and eventually insurmountable obstacles when the stock market crashed. As American laissez-faire capitalism teetered on the brink of collapse, Denis’s modest enterprise suffered a staggering blow—the denial of credit by the giant oil companies with which he did business. Eagle functioned by decanting fuel from freight cars into 55 gallon steel barrels and loading the barrels onto its delivery trucks and then delivering them to gas stations. It depended on 30 days’ credit from the sellers, roughly the amount of time the corner stations (Eagle’s customers) needed to pump enough gas to pay for the bulk fuel deliveries.

Eagles wings were clipped by the monopolistic bond forged by the Seaboard Midland Railroad Company and Standard Oil, both owned by John D. Rockefeller. Trampling over all small competitors in their path, in ways documented earlier in the century by progressivism’s fearless muckraker, Ida Tarbell, the behemoths simply stopped extending credit to tiny, local distributors like Eagle, which lacked cash up front to pay for its principal product. When the Rockefellers, through their corporations, determined that they would not accept credit as payment, it was only a matter of months before they controlled the petroleum industry to an even greater extent, and Denis J. Cary’s trucks were driven away empty from the rail depots of Queens and Brooklyn. His company survived in name only under a pile of debts and creditors’ demands for repayment.

In spite of it all, the Carey family managed to remain somewhat better off than most of the city’s desperate unemployed, keeping their heads above water with the modest rents Denis Carey collected each month on a few small parcels of land he’d bought when he was better off (the telephone company rented one of the properties to store its poles). But Eagle’s creditors kept the pressure on, for Hugh’s father refused to enter a claim of bankruptcy to preserve the few remaining assets of Eagle Petroleum. Long after it stopped doing business, Denis showed little patience when friends suggested he get out from under his company’s debts by declaring it insolvent. Bankruptcy was a condition he viewed as shameful, akin to reneging on a promise or shirking responsibilities to one’s loved ones and community.

“It was just anathema to my father,” Hugh said years later. “He considered bankruptcy a stigma, or simply, a disgrace to the family name.”

Robert Polner is a public affairs officer at New York University and former reporter for Newsday based in New York City. Seymour P. Lachman is Distinguished Professor in Residence at Wagner College of Staten Island and directs the college’s Hugh L. Carey Institute for Government Reform. He previously served five terms in the New York State Senate. The above is excerpted from the first chapter of their book by the same title, out now with SUNY Press.