26 Mar Unfortunate, but Enduring Consequences of Prohibition
What would Chicago look like if Prohibition had never been enacted? Quiet, boring even? Maybe. The intended consequences of Prohibition were, like most incomplete laws, righteous in nature and surely the solution to all of America’s societal ills. The crime, murder, and enduring fascination with alcohol remains and makes us what we are today.
In a rush to return American cities to moral purity and cut back on alcohol-induced crime, Prohibition created machine gun-toting, money laundering gangster networks that spanned the nation. Before all of you Prohibition-lovers jump all over me, yes, gangs and gangsters did exist prior to the moment Prohibition went into effect. It took exactly one hour, though, before gangsters fell in love with the new game in town—illegal alcohol.
On January 16, 1920, exactly one hour after Prohibition became the law of the land and the nation declared itself dry, it’s believed that six armed gangsters stole $100,000 worth of medicinal whiskey from a train in Chicago. Prior to 1920, loosely affiliated gangs, more like mobs of mean guys than what we think of as “gangs,” ruled certain localities where gambling and prostitution were prevalent. In news that will surprise no one, in Chicago the gangsters were looped into the business of providing votes for politicians. Whether it was prostitution or politics, though, gangsters had no reason to extend their reach beyond city and state lines. Prohibition, though, impacted the entire nation, necessarily requiring groups to make alliances to transfer alcohol from Canada across multi-stat lines.
Unlike politics and prostitution, alcohol was big business before and during Prohibition. Gangsters had to become savvy businessmen of the sort that would make a Fortune 500 company blush. They hired lawyers and accountants and joined forces to ensure that ships carrying alcohol across the Great Lakes made it safely to their preferred speakeasies. Layers and accountants taught those involved in an illegal, multi-million dollar cash-only industry how to launder their money. It’s believed that perhaps the most infamous gangster of all, Al Capone, made upwards of $100 million each year ($1.4 billion in today’s money) and paid out half a million each month to police and politicians to ignore the heavily populated gin joints. It’s impossible to verify, though, because he forgot to file his taxes!
Although lacking the name recognition that Capone brings, nefarious operative, Arnold Rothstein may have been the first ever Prohibition gangster when he began running liquor through a complex, interconnected shipping network on the Great Lakes. Rothstein, still high on his 1919 World Series fixing scheme involving the Chicago Black Sox continued building his ill-gotten gains during Prohibition.
Capone, meanwhile, was terribly unlucky after his initial rise to wealth and fame. He completed his federal grand jury testimony on the tax evasion charges on Mach 27, 1929. Jailed on and off for other small-time offenses, he eventually pled guilty to the tax evasion charge on June 16, 1931 and was convicted on October 18, 1931. In a strange twist of history, Nevada legalized gambling on March 19, 1931, allowing cash-heavy gangsters to launder cash through the gambling industry, perhaps saving many other gangsters from similar tax related offenses with legitimate investments in Vegas.
Written by Amy Williams