I haven't seen the most recent episode yet (so no spoilers please!), but I have a feeling that they're alluding to the race riots that happened in August of 1900. African-American laborer Arthur Harris stabbed Policeman Robert Thorpe in the stomach over a disagreement regarding Harris' female companion; Thorpe died from his wounds the next day at Roosevelt Hospital. As mourners assembled outside of Thorpe's house, a scuffle broke out and soon the situation rapidly deteriorated. A mob formed (with dozens of policemen in its ranks) and set off to ransack the Tenderloin district and try to find Harris. Many in the crowd called for him to be lynched, and at one point rioters strung up rope on the streetlights of Eighth Avenue. African-Americans barricaded themselves in their apartments, warned to stay out of the streets. Some began to throw furniture and bricks at the rioters, and the police fired on them. By the time the riot was over, after an entire day of violence and unrest, two people were dead and dozens of African-Americans were arrested (of these, many were subjected to vicious beatings in the station houses).

In the aftermath of the riots, over eighty African-American witnesses reported instances of brutality from the mob and the policemen who joined it. Policemen were heard threatening African-Americans, saying things like "you god damn black bitch, get back where you belong, or I'll club the brains out of you" and "if you move, I will shoot you like a dog." At one point, an estimated ten thousand rioters were in and around the Tenderloin, destroying property and committing acts of violence. Some policemen had cleared a few streets of rioters, but most stood by and left the mob alone. It took a tremendous thunderstorm (after almost 24 hours of rioting) to disperse the mob and drive the rioters away.

The Police Chief and Commissioner claimed that they didn't see any instances of violence at all from the police, just from the rioters. The only way that any policemen would be disciplined would be if any "citizens" (whites) made a formal complaint directly to the Chief; despite the later testimonies of violence and police brutality, no one complained to the Chief about police action during the riots, and no police were disciplined. In this riot, no one was lynched, but in the event that someone was and it was proven that there was a police officer involved, they may have been dismissed but it is highly unlikely that they would have even been charged for such an act (remember that only forty years before this, during the Draft Riots, mobs openly lynched African-Americans and torched their homes, so that kind of horrific violence was well within the realm of possibility).

I'll probably watch the new episode of The Knick tomorrow, so I'll update my answer based on what happened in the show. I'll give it to the team behind The Knick, they really went above and beyond with their nods to New York City history, which is such a joy to see.

Edit: Holy cow that was a great episode. They really nailed it! Kudos to them, they find a way to pleasantly surprise me every time I watch the show.