The Mob and the City

by C. Alexander Hortis

  Prohibition agents, and some local police, arbitrarily enforced the federal law just enough to keep the liquor trade underground.25 By the late 1920s, the NYPD was still making over eight thousand arrests a year for violation of the National Prohibition Act. Manhattan speakeasies were especially vulnerable to shakedowns from corrupt cops. A report on Prohibition noted the NYPD's peculiar practice of wholesale arrests of “bartenders in speak-easies and waiters in night clubs, cabarets, and so-called restaurants.”26 It was in this environment that gangsters thrived.

  2–2: Deputy police commissioner and agents dump illegal beer during Prohibition, 1921. (Courtesy of the Library of Congress Prints and Photographs Division, New York World-Telegram and Sun Newspaper Photograph Collection)

  MOONSHINERS AND BASEMENT BREWERS

  Moonshining and basement brewing was a phenomenon common in immigrant neighborhoods. “I think that about twenty minutes after Prohibition started, my father made a deal with the tinsmith to make him a still,” recalled Tom Geraghty, who grew up in Hell's Kitchen.27 In the South Village, Italian immigrants had long produced homemade wines. Now that it became a premium product, Italian grocers and barbershops sold it out the back door. When mafiosi started converting their basements into distilleries, they looked no different than the innumerable other makeshift stills throughout Italian neighborhoods.28

  Over time, bootleggers built large and sophisticated brewing operations. Gangsters learned that they could increase profits by producing quality beer and achieving economics of scale. “I set out to make a superior product,” said Roger Touhy, a Chicago bootlegger who sparred with Al Capone. “At peak production, we had ten fermenting plants, each one a small brewery in itself.”29 The Irish gangsters William “Big Bill” Dwyer and Owney “The Killer” Madden operated secret breweries in buildings on the West Side of Manhattan.30

  The Italian gangs were an emerging force in bootlegging during Prohibition. A study of New York's top bootleggers in the late 1920s found that about 50 percent were Jewish, 25 percent were Irish, and 25 percent were Italians. Most were young and ambitious. They scrambled to make it in the cut-throat world of bootlegging.31 In Williamsburg, Brooklyn, future mob boss Joe Bonanno and his relative Gaspar DiGregorio started out with a basement distillery. They had a tunnel to a garage where they loaded their booze onto delivery trucks. Bonanno later went to work for a major bootlegger named Salvatore Maranzano, a Sicilian mafioso who like Bonanno came from Castellammare del Gulfo (“Castle by the Sea”) in northwestern Sicily. Barely in his twenties, Bonanno was an overseer of Maranzano's huge brewery operations in upstate New York.32

  Gangsters made money in related businesses, too. Mafioso Nicola Gentile sold raw materials to bootleggers. Gentile conspired with Italian barbershops to divert their licensed supplies of alcohol meant for perfumes. He later ran a general store to supply “bootleggers with corn sugar for alcohol distillation and the jars and tin for the contraband of alcohol.”33

  RUM RUNNERS

  “Rum runners” smuggled name-brand liquors from foreign countries into America. While bathtub gin was (usually) drinkable, Manhattan's connoisseurs started clamoring for the finest brand liquors from Europe and the Caribbean. Gangsters circulated “flyers and price lists with recognizable brands—Johnny Walker scotch, Martell cognac, Booth's gin, Bacardi rum, and Veuve Cliquot champagne—catering to customers who refused to settle for anything else,” explains historian Michael Lerner.34

  Rum running involved sophisticated smuggling operations. Rum runners would purchase crates of liquor from foreign ports like London then travel across the ocean, stopping just outside a three-mile perimeter of the East Coast (the United States Coast Guard agreed not to search British ships outside three miles). Speed boats then smuggled the crates to clandestine landing points on Long Island or the New Jersey shore. There, the crates would be loaded onto waiting trucks. So many boats were anchored off the coast that it came to be known as “Rum Row.” Although Jewish and Irish gangsters had the biggest rum-running operations, there were major Italian smugglers, too.35

  FRANK COSTELLO, BUSINESSMAN SMUGGLER

  The leading Italian rum runner was Frank Costello. Born Francesco Castiglia in a mountain village in Calabria, Italy, he grew up in a ghetto in Italian East Harlem. “It is important, very important, to put in evidence the education received by Frank in the streets of 108th and 109th,” said a lifelong friend. “There is Frank, a very intelligent boy, whose aim was to arrive higher, to get revenge.” He took on the Irish surname of Costello to try to gain more respect. But like Joe Masseria and Salvatore Lucania, he struggled to make it on petty crimes. In 1915, the newly-wedded Costello was sentenced to a year in prison for illegal possession of a revolver.36

  2–3: Frank Costello, 1915. (Courtesy of the New York Police Department)

  Then came Prohibition. Costello learned that he was very good at bootlegging and rum running. He soon opened a “real estate” front office at 405 Lexington Avenue, from which he managed sophisticated smuggling operations with employees responsible for police payoffs, logistics, and distribution. He did business with such luminaries as Arnold Rothstein, the Jewish gangster, and Samuel Bronfman, the Canadian owner of the Seagram's liquor conglomerate. As we will see, Costello gained additional street protection under a new Mafia family.37

  In 1926, Frank Costello was indicted along with sixty other defendants of a conspiracy to smuggle liquor from Newfoundland, Canada, in boats to Rum Row off the coast of New York. Among those indicted were Irish gangster William “Big Bill” Dwyer and thirteen sailors of the United States Coast Guard. While William Dwyer was convicted of the conspiracy at trial, a hung jury could not reach a verdict on Frank Costello. Observers believed that the involvement of Coast Guard sailors turned the case into something of a referendum on Prohibition.38

  Frank Costello later admitted to the New York State Liquor Authority (NYSLA) that he had, in fact, imported foreign whiskey during Prohibition:

  NYSLA: What years were you engaged in bootlegging during prohibition?

  Costello: From 1923 to 1926.

  …

  NYSLA: You brought whisky into the United States?

  Costello: That is right.

  NYSLA: From places outside the country?

  Costello: That is right.39

  Costello admitted making at least $305,000 during Prohibition (about $5.2 million in 2013 dollars). He invested his bootlegging profits in slot machines and real estate, and he became a powerbroker in Gotham, finally getting the respect he had so badly wanted.40

  LIQUOR DISTRIBUTION

  The most dangerous part of bootlegging was not making beer, or even smuggling in foreign liquor, but distributing it without getting robbed or killed. Much of the violence associated with Prohibition was due to truck hijackings and territorial disputes.

  Bootleggers had to move high-premium, illegal goods on back roads and through dark alleys. Liquor trucks became prime targets for hijackers. “Four armed ‘hijackers’ yesterday morning forced four truckmen waist deep into the [water canal], and then sped off with two trucks containing 320 cases of whisky, valued at about $30,000,” reported a typical news story from August 1924.41 “A common occurrence was the hijacking of delivery trucks by rival bootlegging groups,” recounted Joe Bonanno. To protect Maranzano's operations, Bonanno began carrying a pistol and hunting down stolen liquor trucks.42

  Rival bootleggers fought fiercely over territories around the city as well. Bootleggers would muscle in on neighborhoods and require all the speakeasies to buy booze only from them. “There were guys going around selling beer, and you had to buy it. You just couldn't switch outfits. They may blow you away,” explained John Morahan, who ran speakeasies in Hell's Kitchen. “Owney Madden's beer would come and the guy would say, ‘You take this beer,’ and you didn't have much choice.”43 Arthur Flegenheimer (a.k.a. Dutch Schultz) had fleets of trucks shipping beer from the Bronx down to areas of Harlem he had taken over. He did battle with Jack �
��Legs” Diamond and his lieutenant Benjamin “Bugsy” Siegel over beer territories. A neighborhood study of the South Village found that while alcohol makers were plentiful during Prohibition, “selling liquor was still a rough proposition” and the “deliveries were a dangerous business.”44

  Since their product was illegal, bootleggers could not resolve their disputes by calling the police or bringing a civil suit in court. This added up to an extremely dangerous business: roughly one thousand bootleggers would be killed on the streets of New York City during Prohibition. “The scramble for bootlegging revenue was far more vicious and complex in New York than in any other American city,” concluded historian Humbert Nelli.45 It was within this violent context of Prohibition that many mafiosi made their names.

  THE MAKING OF “JOE THE BOSS” DURING PROHIBITION

  Joe Masseria had perhaps the most dramatic reversal of fortune during Prohibition.46 When Masseria got out of Sing Sing prison a couple years before Prohibition, he went back to his sister's saloon on Forsythe Street. Masseria was in the right place at the right time: he was working at the Forsythe Street saloon just before Prohibition went into effect. The saloon was located near the Curb Exchange, an underworld marketplace for illicit alcohol wholesaling on the Lower East Side. Masseria's traits of aggressiveness, fearlessness, and persistence found an outlet as a leader of bootleggers in Prohibition New York. Masseria and his men could assure that shipments of whiskey and other spirits made it through to the thirsty residents of Gotham. His underworld reputation grew amid wild shootouts in 1922.47

  MONDAY EVENING, MAY 8, 1922, GRAND STREET, MANHATTAN: THE STREET SHOOTOUT

  Around 5:45 p.m. on Monday, May 8, 1922, three well-dressed Italian men were milling in front of a cheese dealer's shop on Grand Street in Little Italy, a block east of the headquarters of the New York City Police. The sidewalks were bustling with people returning from work on the Lower East Side. Joe Masseria and his partner were among those walking up Grand Street. Spotting Masseria, the three men pulled out semiautomatic handguns and fired at their targets.48

  With bullets flying at him, Masseria grabbed his .32 caliber Colt pistol and returned fire. Pandemonium ensued as sixty bullets crisscrossed the air. Masseria stood firm on the street, pushing back his would-be killers with his gunfire. As the gunmen ran off, Masseria realized police were now on the scene. Masseria tossed his Colt and tried to disappear into Little Italy, but he was apprehended. Even though five innocent passersby had been shot, Joe Masseria escaped unscathed. Masseria had a gun permit, and there was no proof he shot any pedestrians: steel bullets were found in the wounded, while his gun was loaded with lead bullets.49

  TUESDAY AFTERNOON, AUGUST 8, 1922, SECOND AVENUE, MANHATTAN: DUCKING BULLETS

  Joe Masseria's rivals were still lurking. On Tuesday, August 8, 1922, a Hudson Touring car dropped off two men at a restaurant across the street from Masseria's brownstone at 80 Second Avenue. At 2:00 p.m., they saw Masseria leave his front stoop and walk north on the sidewalk.

  This time, Masseria was unarmed and defenseless. Spotting the gunmen, he made a dash for his home, but they cornered him on the sidewalk. As Masseria dodged and weaved at point-blank range, “four bullets passed through his straw hat and two passed through his coat” yet none struck his head or torso. The police found a stunned Masseria “sitting on the edge of his bed, shot-punctured hat still on.” Newspapers reported how Masseria's “astonishing agility in ducking bullets from automatics saved his life.”50

  These shootouts enhanced Masseria's standing in the underworld. But he had enough near-death experiences. As an insurance policy, he built an armored sedan with steel plates and inch-thick windows. He would later have a penthouse on the Upper West Side, too. Within a decade, he would go from staring at grey prison walls in Ossining, New York, to a view of Manhattan's Central Park.51

  2–4: Giuseppe “Joe the Boss” Masseria, ca. 1922. (Courtesy of the New York Police Department)

  A NEW MOB: THE MASSERIA FAMILY

  Giuseppe “Joe the Boss” Masseria's real innovation was creating a mob meritocracy in his new Masseria Family. Rivals such as the Castellammarese clan of Brooklyn limited their membership to men who came from the town of Castellammare del Golfo on the northwestern coast of Sicily. By contrast, Masseria did not particularly care if his men were from his village or were even Sicilians. Rather, Joe the Boss recruited the best bootleggers and racketeers he could find. Masseria was aided by his consigliere (counselor) Giuseppe Morello, the former capo di capi or “boss of bosses,” who had been released in 1920 after a decade in Atlanta federal prison. Joe the Boss benefitted from Morello's deep experience and connections. The remnants of the old Morello Family were reconstituted as part of the Masseria Family. Masseria also recruited young new talent like Charles Luciano, who proved himself to be a savvy and cool-headed bootlegger on the Lower East Side.52

  Along with able Sicilians like Morello and Luciano, Masseria welcomed into his ranks Neapolitans like Vito Genovese and Joe Adonis; Calabrians (from mainland Italy's southernmost province) such as Frank Costello and Frankie Uale; and American-born men like Anthony “Little Augie Pisano” Carfano. Although Charles Luciano is often said to have “Americanized” the Mafia, the seeds were actually planted by his boss Joe Masseria.53

  By the late 1920s, the Masseria Family became a thriving, multifaceted crime syndicate. By swallowing or forcing out competitors, it became the “A & P of bootleggers” in New York. And the Masseria Family was not limited to bootlegging. Masseria's broad confederation held interests in everything from the Italian numbers lottery to the Brooklyn waterfront labor-union locals taken over by mobsters Vincent Mangano and Albert Anastasia (see chapter 1). New York police detectives identified “Joe the Boss” as the gangster who was “the biggest of ’em all.”54

  THE END OF PROHIBITION

  Prohibition officially ended with ratification of the Twenty-First Amendment on December 5, 1933. It was a major blow to bootleggers. “We made $400,000 in one year, and we thought we had something going on forever,” said an Irish bootlegger. “But when Prohibition ended, that was the end of the empire. We had to go to work and find a way to make a living.”55

  The thirteen-year boom of Prohibition masked longer-term trends among the gangs. The Prohibition era would be the swan song for the Irish gangsters, the high point for the Jewish syndicates, and the coming-out party for the Italian Mafia. The following sections examine other trends fueling the rise of the modern Mafia.

  TRENDS IN THE 1920s: ITALIAN IMMIGRATION, MAFIA FRANCHISES, AND NEW TECHNOLOGIES

  Prohibition was not the only factor behind the ascent of the Cosa Nostra. Throughout the 1920s, others forces were having transformative effects on the New York underworld. These included south Italian immigration to New York, Mafia family franchising, and new technologies like the telephone and automobile.

  DEMOGRAPHY AS DESTINY: IMMIGRATION TO NEW YORK CITY

  “Demography is destiny,” is a truism of population experts.56 In the early twentieth century, New York City was not so much a giant melting pot as a series of overlapping, immigrant enclaves. In 1910, 41 percent of its residents had been born outside America. While Germans and Irish were the largest immigrant groups in the 1800s, Jews and Italians were the largest groups by the early 1900s. “Within the brief span of less than a generation the ethnic composition of the metropolis altered radically,” explains demographer Ira Rosenwaike. “Persons of Jewish and Italian background had become numerically superior to those of Irish and German descent.”57

  In chapter 4 “The Racketeer Cometh” we will see how these demographic trends bolstered the Mafia's labor racketeering. Now, let us look at their social effects on the underworld.

  THE SOUTH ITALIAN COLONIAE IN NEW YORK CITY

  South Italians especially favored living among fellow paesani. “No other nationality in New York City is so given over to aggregation as the Italians,” observed a writer. Settlement patterns bear out this observation
. Gotham was home to large-scale Italian enclaves. The two largest were Italian East Harlem and the Little Italy along Mulberry Street; each was home to about 110,000 Italians. There were also major settlements in the South Village (70,000 Italians) below West 4th Street in Manhattan; in Belmont (35,000 Italians) in central Bronx; on the northern tip of Staten Island (15,000 Italians); and in Williamsburg (40,000 Italians), Bushwick (30,000 Italians), and Red Hook (20,000 Italians) in Brooklyn.59

  These were intensely insular, family-centric enclaves. “Our Italian neighborhood was a ghetto. Italian was the spoken language. People built this wall around them to keep the outside world from coming in,” said Jerry Della Femina.60 Italians from the same regions, and even same villages, flocked to the same streets. “Most people from Sicily settled on Elizabeth Street, the people from Mott Street were from mixed cities in Italy, and the people from Mulberry Street were mostly Neapolitans,” recounted a man who grew up in Little Italy.61 Italians married fellow Italians, too. As late as 1920, only 6 percent of south Italians married outside their national origin, rarer than every major immigrant group except Jews.62

  THE CORNER WISEGUY AND THE CONNECTED UNCLE

  Only a tiny fraction of the residents of these neighborhoods were ever involved with the mob, and many more resented the gangsters. At the Mafia's height, it constituted less than one-half of one percent of New York's Italian population. Nevertheless, the creation of south Italian enclaves around New York indirectly facilitated the emergence of the Cosa Nostra.63