Before the First World War, both alcohol and drugs were more or less freely available for sale in both Britain and the USA, and the former generally caused more concern than the latter. Thus, John Stuart Mill ("On Libery") discusses at length whether alcohol should be banned (he thinks not), but does not discuss drugs at all, and there was a strong overlap between the temperance movement and the Labour Party in its early days. In the early Sherlock Holmes stories, Holmes is shown injecting himself with cocaine, while Dr Watson makes little more than a token protest (Imagine the furore if a modern popular fictional hero, such as James Bond, was portrayed taking cocaine!). After the war Britain banned drugs but not alcohol: America, more logically but disastrously, banned both. Under the Volstead Act and the 18th Amendment to the Constitution, the manufacture, transportation and sale (though not the consumption) of alcohol became illegal throughout the United States. This law came into force on January 1st 1920. The first booze-related crime occurred within hours.
It ts amazing that anyone imagined the law could be enforced. Hatred of alcohol was an ideology of small-town non-immigrant Protestant America, where the campaign for Prohibition had originated; but the cities were full of immigrants, and who was going to persuade the Italians to give up their wine, the Germans their beer, the Irish their whiskey? Would a mere law make them change their habits of a lifetime? Of course not! Furthermore, a great many respectable Protestant Americans approved of the law in general terms, but felt that somehow it should not apply to them (an attitude well illustrated in Sinclair Lewis's "Babbitt"). From the start the law was openly flouted, even in the very highest circles, right up to President Harding himself, who announced, "I'm as wet as the middle of the Atlantic ocean!" Many judges and policemen continued to want a drink. America's vast frontiers with Canada, Mexico and the oceans could never be adequately patrolled against smugglers. There were never enough Prohibition agents to enforce the law, they were not well paid, and being answerable to the federal government in Washington they often faced non-co-operation or even outright obstruction from the local authorities. The main outcome was that anyone who wanted a drink would now have to buy it from criminals. It was the greatest bonanza the gangsters ever enjoyed.
One of the first to benefit was a very un-gangster-like lawyer called George Remus. By using his connexions and distributing $20 million in bribes, he was able to obtain legally-produced alcohol from government bonded warehouses and then distribute it as drinks, supplying even the White House. He made a gross profit of $35 million before in 1927 he murdered his wife and was judged to be insane. But more typical, and much more important for the history of organised crime, was Arnold Rothstein, "Arnold the Brain", from New York.
Rothstein was a well-known figure in smart society. He appears in Scott Fitzgerald's "The Great Gatsby" as "Meyer Wolfsheim", and in Damon Runyon's Broadway stories simply as "The Brain". From a respectable Jewish background but with underworld contacts, always impeccably dressed, he was a highly successful gambler and, it was believed, a fraudster who had fixed the 1919 Baseball World Series by bribing the favourites to lose. Two Jewish crooks, Maxie Greenberg and Irving Wexler (alias "Waxey Gordon") first interested him in bootlegging, and the potential for making huge profits captured his interest. But Rothstein despised the rotgut homebrew produced by lesser criminals; his vision was on an altogether greater scale, involving only top-class products; and he had the money and the organisational ability to realise this. In 1920 Rothstein's agents in Britain bought 20,000 cases of Scotch whisky and put them to sea. According to the Bills of Lading the shipment was bound for the West Indies, but in fact anchored off a lonely beach in Long Island, New York. With the help of a team supplied by "Big Bill" Dwyer's Dockworkers' Union, it was taken ashore by fast speedboats, loaded onto trucks and driven into central New York. Rothstein had paid off the cops all the way along the route.
Paying off the cops was the easy part: it was much more difficult to prevent lesser criminals from raiding his distribution points or hijacking his shipments (The word "Hijack" was coined at the time to describe this sort of operation). So for protection Rothstein turned to the street gangs: to Owen Madden of the Gophers, to Benny Siegel and Meyer Lansky of the Broadway Mob, to killers like Legs Diamond and Dutch Schultz, to rising young stars of the Mafia like Lucky Luciano, Frank Costello and Joe Adonis. A whole generation of gangsters learnt their trade working for Rothstein: they provided him with muscle, he arranged political protection, showed them how to make serious money and even taught them some social graces. Meanwhile the older generation of criminals who were too inflexible to grasp the new possibilities were simply rubbed out if they got in the way; like Monk Eastman, boss of the prewar Jewish gangs, or the old Mafia leaders, nicknamed the "Mustache Petes".
After making eleven successful booze runs, Rothstein decided the field was getting too crowded and he diversified into heroin and diamond smuggling. In 1928 he was shot dead, probably in a dispute over a gambling debt, but by then organised crime in New York had been changed for ever. Not for nothing has Arnold Rothstein been dubbed "The Moses of the underworld".
(For Rothstein, see Rich Cohen's "Tough Jews". There is a good fictional portrayal of Rothstein and his relationship with Lucky Luciano in the movie "Mobsters". Rothstein's death is described in a Damon Runyon short story: "The Brain goes home")
My next chapter will be about the gangs of Chicago.