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16 December 2020

From the NS Archive: The Rackets of Chicago

3 May 1930: Chicago cracks down on its gang crime

By Anonymous

By 1930, president Hoover’s mission to sort out Chicago’s gang problem — primarily that led by boss Al Capone — was beginning to pick up pace. Here, in May 1930, our anonymous correspondent outlines the state of organised crime (or racketeering, as it was known), something that had grown rapidly in the past few years. There were still 60 rackets at work in Chicago in 1930, each of which would attempt to monopolise a certain trade and offer illicit protection to its people. But the problem, our writer thinks, was gradually being tackled: not least because Bill Thompson, “the racketeers’ mayor” and still the most recent Republican to serve as mayor of Chicago, was coming to the end of his tenure.


A few days ago the Chicago Crime Commission, which is a body of citizens presided over by Mr FJ Loesch, a public-spirited lawyer holding the office of special prosecutor, proclaimed a select number of the city’s prominent racketeers and gang leaders. They were gibbeted as “public enemies” and the law-enforcement officials were urged to treat them accordingly. Alphonse (Scarface) Capone was the most renowned name on the roll. His brother Ralph was also on the list, together with Frank Rio, a member of Scarface’s regular bodyguard, lately released, with his chief, from prison in Pennsylvania, where he had served 12 months for the (to such men) ludicrous offence of carrying firearms. Among the remainder there was one known as “Machine-gun Jack,” another as “King of bombers,” a third as boss of the Middle West white-slave traffic, while to a fourth, George (Bugs) Moran, belongs the distinction of having made a formal peace with Scarface Capone after the murder of their most formidable rival, Dion O’Bannion, and two other leading racketeers. One particular point is worth noting as to the names in this amazing roster of public enemies. The majority are Italian, and next in number come the Irish. In Chicago, as in other American cities preyed upon by the most atrocious species of modern bandits, men with Anglo-Saxon names seldom stand out, although inquiries have shown that the American-born is no less likely than the immigrant to be found in the criminal records.

An incident highly typical of Chicago’s “racketeer underworld” befell in March of this year, when, as it happened, the present writer was travelling through the Middle West. A notorious young racketeer, John Oberta, known as “Dingbat,” 26 years of age, had been taken for a ride and done to death in the customary fashion on the open road. He was described as “gangster, hoodlum, beer-runner, cheap politician, Robin Hood of Back o’ the Yards” (that is, the immense west-side quarter beyond the stockyards). Dingbat’s funeral was a scene over which the “sob-sister” reporters of the Chicago papers enjoyed themselves to the limit. The police struggled unavailingly with a vast crowd straining to get a glimpse of the silver-bronze coffin, valued at $15,000, under its blanket of orchids. It was followed by the widow, who had married Oberta after her first racketeer husband, Big Tim Murphy, had been slain with a machine-gun on the lawn of his own house, two short years before. The cortege was two miles in length. The two heroic husbands of Mrs Oberta lie side by side; and in due course, no doubt, Scarface Capone and Bugs Moran will attain a similar apotheosis.

[See also: From the NS archive: Conflict thoughts]

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The criminal gang is, of course, a very old institution in the American city; but the racket as it flourishes today is a special product of the past decade. Indeed, most authorities would agree that it has grown up within the very short period of six or seven years. Mr John Gunther, an able member of the Chicago Daily News staff, to whom all students of this unexampled anti-social growth are indebted (see his article in Harper’s Magazine, October, 1929), says that the word racket has come to be synonymous with any game for making easy money, and that “a racket may be defined as any scheme of exploitation by which criminal conspirators live upon the industry of others, maintaining their hold by intimidation, terrorism, or political favouritism”. And such a system of criminal exploitation, he adds — “based on extortion, controlled by hoodlums, and decorated with icy-cold murder” — has recently arisen in Chicago and has spread over an enormous area of the city’s business life. It should be remarked that when the Scarface and Moran gangs were first heard of, delimiting the battlefields and operating with the aid of machine-guns and bullet-proof cars, the public assumed that rum-running accounted for the whole thing. Hence the curse of gang robbery and murder, in their most shocking forms, was attributed to Prohibition. Today, however, it is realised that, while the liquor gangs do undoubtedly provide the most spectacular examples of violence and corruption and secure the biggest prizes it is the business racketeer and his abominable tactics which in Chicago and numberless other cities, not by any means confined to the largest, make the most baffling problem for the civic reformers to grapple with.

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The racket system is not easy to describe within a short space, but one may supply a few examples. The racketeer works by the method of exacting tribute from all the members of a given trade or occupation and it would seem that at an early stage he found the laundries, the dyers and cleaners, the jobbing tailors, and the garages an easy field. He forms a gang of hoodlums, with the aid of a few local politicians and not seldom one or two crooked labour leaders, and proceeds to lay siege to the business of his choice. He asks the individual owners to join his organisation and thus be protected from police or other interference and from competition, since, the illicit protection being paid for on a heavy weekly or monthly scale, there must be a rise in prices. The laundryman, the pressing tailor, or the garage-keeper is in no position to resist the demand. Should he be rash enough to attempt it, his premises will be bombed, himself or his employees assaulted, his supplies cut off, his market destroyed. Every annalist of Chicago racketeering has a store of illustrations. Mr Gunther tells of one Simon Gorham, a village blacksmith now in jail, who built up a series of successful rackets among the Chicago laundries, moving on from the large steam concerns to a round-up of some 240 small hand laundries. His net tribute from the first was said to be $1,000 a week, from the second about $700, This meant incidentally that the laundry bill of every household in Chicago went up materially, just as, similarly, the tailoring racket involved a doubling of the standard charge for sponging and pressing a suit.

[See also: From the NS archive: Entente Fluviale]

Here is a further specific instance, cited by the same authority. Maxie Eisen has been indicted 28 times in the past 12 years, and continuing good luck in the courts has earned for him the nickname of Maxie the Immune. His first racket was the Retail Fish-dealers’ Association, consisting of the Jewish hawkers of Chicago. No man could sell fish in the Ghetto without paying tribute to Maxie Eisen. A dealer named Walkoff, who had been viciously assaulted by the racketeer, told his miserable story to the public prosecutor. It was to this effect, that Eisen came to him in the company of four sluggers. They forced him to close his shop on the plea that it was too near the shop of another man protected by the racket. A month later Walkoff was allowed to re-enter the trade, and the association, at the price of $800 to Eisen. Thrice afterwards he bought and sold a shop, paying each time $800 to Eisen on account of the racket and 10 per cent commission on the transaction for the racketeer himself.

According to the records of the State’s Attorney, or public prosecutor, there were in Chicago recently more than 90 rackets at work, and, despite an energetic public campaign since 1928, it is believed that at least 60 of them are still in full cry. The Employers’ Association estimates that the sum-total of tribute paid by the people of Chicago is not less than 186 million dollars a year, or, say, $45 for every man, woman and child in the city. The figure sounds incredible; but we must bear in mind that the racketeers made a conquest of the field that was extraordinarily swift and complete. A list of the 60 or more businesses believed to be subject to racketeering includes the larger portion of the trades directly affecting the average household, from janitors and taxi-drivers to carpet-layers and undertakers, while it is noteworthy that no small percentage of the occupations involves workmen of the sort that are peculiarly at the mercy of corrupt Union officials. The garage racket is believed to cover nearly all the 10,000 garages in the Chicago area. It is so prosperous that it has been “hi-jacked” — that is, made the battleground of contending gangs of the incumbents and various usurpers. The shoeblacks pay a heavy entrance fee and submit to a monthly levy. The barbers likewise are in servitude. The building trades are a welter of rackets, while the exactions of the ruffians disguised as the Electric Sign Club have become a popular legend touching the limitless opportunities afforded by the theatres and movie palaces, the restaurants and cabarets.

[See also:  From the NS archive: Masochism for the masses]

Needless to say, no great city could become the racketeers’ paradise unless it were already a theatre of lawlessness and social anarchy. In recent years the annual average of murders in Chicago has been nearly 400, while the average of convictions has been less than 80 and the number of executions not worth mentioning. In 1928 there were 899 recorded murders and 77 convictions, with not a single execution. In one recent period of four years, 215 gangsters were killed and not one man punished. Chicago people, nevertheless, are accustomed to affirm that their city is no worse than any other great centre inhabited by unassimilated communities; that Boston end Philadelphia are at least as bad, and that New York is demonstrably worse. Chicago suffers in repute, it is contended, by reason of its centrally exposed position and its reckless delight in publicity. “It does not matter what they say,” the Chicagoan is understood to declare, “so long as they say it”. And there is something in this; even Mayor Bill Thompson, now drawing ingloriously to the end of his grotesque reign, was exploited as an advertisement for the city, the argument being that Chicago was great enough, rich and adventurous enough, to suffer even a Thompson without losing any of its power and prosperity. The price, however, has exceeded even the extremest estimates of those who, at the end of the last mayoral campaign, forecast a four-years’ triumph of brutality, graft, and all the newest crimes of racketeering. But Thompson is finished, and history will probably repeat itself in Chicago at least to this extent, that the departure of the racketeers’ mayor will be followed by the most rigorous house-cleaning the city has ever known.

There remains one practical consideration to which the governing citizens will not be indifferent. Chicago is to celebrate its centenary three years hence with an exhibition that will be infinitely more ambitious than the World’s Fair of 1898, which is recalled as the event that revealed the potentiality of the city to the outside world. Long before 1988, we may be quite certain, Chicago will have worked out a plan of dealing with its racketeers, if only under the compulsion of the necessity of turning the attention of the United States and Europe to the positive achievements of the Middle Western metropolis. And those achievements, it cannot be denied, are in themselves not remarkable only, but stupendous.

Read more from the NS archive here and sign up to the weekly “From the archive” newsletter here. A selection of pieces spanning the New Statesman’s history has recently been published as Statesmanship” (Weidenfeld & Nicolson)