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From the NS archive: The rackets of New York

6 December 1930: No one in the city is safe from the blackmailers and extortionists.

By New Statesman

In 1930, the US’s big cities were in disarray. The gangsterism of Chicago, with Al Capone at its head, was no longer confined there but had spread, most notably to New York. No business or trade was safe – protection money needed to be paid by everyone or the consequences would be dire. Assault, firebombings and the destruction of stock were the fruits of refusal to bend the knee. In this piece, our correspondent laid out the problems, from corrupt police and “bought” judges to the inability of the ordinary citizen to stand up to the racketeers’ menace. Musicians and morticians, tailors and construction workers were all victims. A new district attorney in New York had set out to combat the evil but it would take more than just one man to make a difference.


A long-continued custom, or conspiracy, of the American press and the comic stage has established the belief that Chicago is the unchallenged metropolis of crime, the worst of all great cities, possessing in its bootleg gangs, its hijackers and racketeers, three special kinds of banditry unknown on anything like the same scale in other cities or regions of America. This belief, in which Chicago itself appeared to acquiesce, pleasantly or with indifference, has been destroyed by the recent exposures in New York and the general admission that all the larger American cities are groaning under the outrageous oppression of gang rule, while there is evidence enough that during the past few years the racketeer has been extending his conquests over the smaller cities throughout the country.

The critics of American democracy have always contended that, glaring as are the defects and misdeeds of municipal and State administration, the outstanding evil of the United States has been, and is, the “invisible government” of political bosses and financial rings. This has been so since the first half-century of the Republic’s history. But the dominance of the blackmailing racketeer, at present the worst menace of American urban society, would seem to be a relatively new form of terror. The whole country has lately been awakened to it and, as always, appeals for help are being sent up to the White House in shoals. In acknowledging Mr Hoover [the then president] finds himself obliged to point out that the Washington Government is limited in its powers. He will mobilise the resources of the Federal departments against the blackmailing racketeers, but the American people must work out their own deliverance.

It happens that since last summer New York has provided the most sensational news of the racketeer evil. A series of municipal scandals, the worst for some years and connected with the character and conduct of magistrates and judges appointed at the dictation of Tammany Hall, were followed by the resignation of the District Attorney – or, as we should say, Public Prosecutor – who became the Republican candidate for the governorship of New York State. He ran his campaign almost entirely on the corruption of the Democratic regime in New York City; but as it happened the electorate was voting under the cloud of business depression. It would not allow itself to be deflected, and the Democratic Governor, Mr Franklin Roosevelt, was more than safe; he was, indeed, given a triumphant victory.

In the meantime a new District Attorney had been appointed, and this official, Mr Thomas Crain, immediately signalised himself by declaring war on the gangs and racketeers and calling upon a representative body of New York citizens to lend him their aid in the good work. The racketeers, he declared, were everywhere in the city. They had their hands in everything “from the cradle to the grave – from babies’ milk to funeral coaches”. One estimate places the number of rackets now being worked in New York at about 230 – which means that there is virtually no trade or occupation which has not been brought within the scope of this abominable species of blackmail. Its technique is of amazing simplicity and barbarity. A class of dealers, of stores or workshops, is marked off by one of the gangs, whose gunmen call upon the prospective victims. These are offered protection from local competition, or in the case of a regulated trade from the interference of inspectors. Prices are fixed, and tribute is demanded. If it is refused, the racketeers set about their peculiar process of coercion. The unwilling shopkeeper or craftsman suffers personal assault, his stock or machinery is destroyed, his premises bombed or set on fire. He must either surrender or disappear. It is useless for him to call in the police; the assumption is that they are in league with the racketeers. He dare not complain to the higher authorities; his life would be in danger. Hence he submits and pays; the tribute is levied and all prices are raised to the public.

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The entire milk supply of Greater New York is believed to have been brought within the orbit of the racketeers. The laundries have long been at their mercy. Such businesses as those of the dyers and cleaners or the repairing and pressing tailors are a very easy prey. They are in the hands for the most of immigrants from Central and Southern Europe, or of Jews, the predestined prey of the exploiter. The undertakers, who as “morticians” play an important part in pageantry of American city life, must pay up in order that the coaches may be left alone, and their “funeral parlours” safe from desecration. The musicians – a sadly diminished tribe, driven into destitution by the machinery of the sound film – must spare a dollar a night to escape the bludgeons of ruffians lying in wait.

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Pugilism, dog racing, and the new miniature golf make a very rich province. The food markets are a regular field for the racketeer, whose ingenuity in destruction is not unduly strained when he is dealing with perishable goods. The workman is as helpless as the owner of a small business. There is, moreover, unlimited loot for the racketeer in the building trades. The man at work on the roof of a skyscraper or wielding a pneumatic drill below is probably paying a dollar a day for the privilege of remaining in his job. Nor does anyone in New York pretend that the greater public or private enterprises of the city are outside the realm of the racketeer. Contracts and corruption notoriously go together, and if the truth could be told about the docks and riverside services of New York we should doubtless have a story that would stagger humanity.

The District Attorney of New York, needless to say, has public opinion with him, and he is piling up an immense amount of material for his campaign, while in Washington all the Government departments concerned are described as being deluged with evidence and appeals. But it is not easy to see how such activity as this can lead to a movement of general reform or even to the effective breaking up of the rackets in New York or any other great city. For the terror is monstrously real and extraordinarily widespread, and the victims who furnish the evidence are compelled to do it under cover.

The Public Prosecutor is so far successful in that he has induced a certain number of racketeers to appear and divulge some of their secrets, but he can hardly hope for many captures of that kind – the risks are too great. Nor can he expect the plundered citizens to come forward openly, unless there should be sufficient force of public indignation to make people believe that the balance of power has been altered and that the New York authorities are at last able to protect both life and property. They certainly cannot hold that belief in the presence of the revelations of the past half-year, which have resulted, among other things, in the farcical disappearance of one judge, the sentence upon another of six years’ imprisonment, and the indictment of a magistrate on the charge of buying his office from a Tammany official at the price of $10,000.

Scandals such as these are being treated in some quarters as the special responsibility of the present Tammany Mayor, Mr James Walker; but, as the more critical American papers justly argue, they are inseparable from a system which makes the local courts the playground of ward politicians and fills the county bench, and even the higher benches, with judges of the poorest character and no knowledge of law.

Between New York and Chicago, in this matter of gang rule and racketeering, the only difference worth noting is this: that New York could not under any conditions be the scene of machine-gun battles between the rival gangs. A generalissimo of the underworld such as Scarface Al Capone is a product of Chicago, which for geographical and other reasons is the one city in North America capable of being made a theatre of gang warfare. It is possible that a Jack Diamond may be comparable in some respects to a Scarface, but at present we have no statistics which would enable us to draw the parallel. One official estimate of Al Capone’s operations is that they bring in a total annual revenue of $105 millions – roughly 60 per cent coming from liquor while the remainder represents the yield from racketeering in vice and gambling, sport and trade.

The subject, we may say, is now open for discussion. For many months to come the press will teem with revelations, and there will be unlimited debate upon possible methods of eradicating the evil. President Hoover says the Federal Government cannot undertake the whole task, and he is manifestly right. The principal portion of the work must fall upon the State governments and the cities. Three months ago the American Legion offered to begin by raising a veterans’ volunteer force for wiping out the gangs. The offer certainly carried a measure of temptation, for the traditional American expedient is always the violent restoration of order by Vigilantes or Ku-Klux-Klan. One thing is indisputable. The police and the courts cannot do it, no matter how powerful the tide of public anger and resolution. The American cities may be driven to tackle the forces of disorder by means of a special citizen constabulary.

Read more from the NS archive here. A selection of pieces spanning the New Statesman’s history has recently been published as Statesmanship (Weidenfeld & Nicolson).

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