by Edward Behr
It was while he was in jail that this syndicate not only tricked him out of any return on his investment but behaved so ineptly that they would later be arrested, charged, and convicted. Against Remus’s advice, instead of paying expensive intermediaries for withdrawal permits, and proceeding by stealth, a few cases at a time, they simply emptied the Jack Daniel’s distillery of its 31,000 gallons of whiskey, replacing the barrels with water and wood alcohol. Then they committed what Remus regarded as the most unpardonable crime of all: before selling the Jack Daniel’s whiskey to private customers, they watered it down — to such an extent that the purchasers demanded their money back. The case went against them, and the sensational trial that followed (Remus was originally slated to be a prosecution witness) was probably triggered by furious customers in high places.
Remus’s departure from Cincinnati to an Atlanta jail was one of the highlights of the social season. Remus, in pearl-gray suit, spats, and diamond tiepin, and Imogene by his side, turned the trip into yet another party. Accompanied by federal marshals (whom he treated like honored guests), Imogene, George, Conners, and the eleven other sentenced men boarded a specially hired luxury railroad car, hitched to the regular Atlanta train. On board was a specially hired chef. Waiters served gourmet meals. On his arrival, knowing he would have to wear prison garb, Remus presented the porter with his silk shirts and reporters and photographers were on hand to interview the “Bootleg King.” Remus told them he hoped to lose weight in prison.
By this time he had put his affairs in order. Imogene got a huge check to cover all expenses for the next two years. Remus also gave her power of attorney, so that she could run his business for him while he was in jail. That was to prove his biggest mistake — and the cause of even greater problems.
10
THE ADVENTURERS
Coast Guard to Long Island fisherman: “See you tonight, Charlie.”
Fisherman to Coast Guard: “Not if I can help it!”1
While George Remus was taking advantage of loopholes in the Volstead Act to build his bootlegging empire, others, more adventurously, became smugglers — and folk heroes. The very history of the United States gave them considerable legitimacy: as lawyers constantly reminded the courts, John Hancock, a founder of the Republic and one of the signatories of the Declaration of Independence, had himself been a smuggler, openly defying the British and their hated Stamp Act at the start of the Revolutionary War. He soon became the rumrunners’ patron saint. Lawyers also used to compare their clients to those heroes who had patriotically challenged the pre-Civil War Fugitive Slave Act, smuggling runaway slaves out of the South and into Canada.
In actual fact, importing liquor into America during Prohibition involved more than rum-running. It required considerable complex advance planning, usually in more than one continent, in a pre-satellite era when transatlantic communications were far more easy to monitor. Just as present-day drug traffickers constitute only part of a sophisticated organization with international ramifications — involving networks of farmers, middlemen, and money launderers from as far away as Afghanistan, Lebanon, Myanmar (ex-Burma), and Pakistan — so the rumrunners, from 1920 onward, were only bit players in a series of complicated, often European-based, operations.
But the forerunners of today’s drug barons and money launderers were not underworld figures but respectable merchant banks and brokerage houses in Paris, London, Bremen, Hamburg, and Kiel, with equally respectable commission agents in Africa, Canada, Latin America, the West Indies, and the French islands of St. Pierre and Miquelon, off the Canadian coast, where liquor was exceptionally cheap (a quart of gin cost 25 cents, rum 50 cents a gallon, and a bottle of champagne $1 ). Prohibition would give St. Pierre and Miquelon a level of prosperity that is still remembered there with nostalgia. They are the one place in the world where their benefactor, Al Capone, even at this remove in time, remains a hero. Many of the houses still standing there are made out of the wooden cases the champagne bottles originally came in.
Increasingly, U.S. diplomats abroad were enlisted in the war against bootleggers — so much so that they began complaining that they were spending more time on anti-bootlegging activities than on their regular duties. Washington received a constant stream of information from U.S. consulates around the world relaying details of suspect ships’ departures, cargoes, and probable destinations. A report from the U.S. Consulate in Copenhagen is typical of many. “The German steamer Apis has sailed from Copenhagen with 437,000 liters of liquor,” it informed the State Department in 1923. The cargo was “falsely billed as destined for Africa but the intent is to smuggle the cargo into the United States.” The reluctance of America’s allies to help stamp out the liquor traffic caused diplomatic rifts similar to those that would later plague America’s relations with her Latin American partners over drugs.
America’s neighbors all profited from Prohibition — to the extent that European shippers of gin, whiskey and champagne began shipping stocks previously sent directly to the United States to convenient relay stations such as Mexico, Canada, and St. Pierre and Miquelon. Export records from the famous French champagne firm Moet et Chandon show that its champagne consignments to Canada increased more than tenfold from 1922 to 1929. After the end of Prohibition, exports to Canada dropped dramatically.2
The Bahamas became a privileged halfway house — the Medellin of the Prohibition era. Sir Harry Cordeaux, governor of the Bahamas, in a speech in Montreal in 1921, openly acknowledged that “the healthy condition of the island’s finances is largely due to its liquor traffic” — so much so that 250,000 pounds were spent on harbor improvements. In the House of Commons, some teetotaling Scottish MPs criticized the British government’s passivity. W. G. A. Ormsby-Gore, Colonial Office under-secretary, told the House that “practically the whole of the large increase in imports of wine and spirits into the Bahamas last year [1922] was due to Prohibition in America.” Asked whether, “for the sake of friendship with America,” these colonies could be rationed, Ormsby-Gore was brutally frank. “No,” he said, for the traffic “would only go to Haiti or some other convenient island belonging to another nation.”
To the law enforcers’ fury, many prominent Americans openly aided, abetted, and praised the lawbreakers. Prohibition had only been in force eighteen months when Democratic Senator Owen Stanley broke into song on the floor of the Senate, reading into the Congressional Record the popular “Song of the Moonshiners” (to the tune of “My Country, ‘Tis of Thee”):
My country, ‘tis of thee,
Land of grape juice and tea,
Of thee I sing.
Land where we all have tried
To break the laws and lied!
From every mountain-side
The bootlegs spring. . . .
Roy A. Haynes, the first Prohibition commissioner, wrote, in his book Prohibition Inside Out,3 that “rum and narcotics smuggling, evasion of the immigration laws, and diamond smuggling run hand in hand,” but that liquor was by far the most lucrative cargo. Over fifty ships of 5,000 tons and over operated out of the Bahamas in 1922, “the shippers of their lawless fleets drawn chiefly from the scum of the American waterfronts.” As would be the case later with narcotics, some investments were virtually risk-free, on a “forward buying” credit plan. “If the runner is known, the local liquor importer will trust you for as many cases as you care to gamble on at $5 a case. You pay him the cost price per case until the vessel returns with the money — one of them cleared $200,000 in a few months.”
Investors found as many ways of circumventing the law at sea as Remus did on land, and the methods used were strikingly similar to those used by embargo-evading arms dealers today. A Bahamian shipping owner got clearance to ship liquor to a fictitious British, Canadian, or French port. If apprehended within territorial waters, reduced in 1923 from twelve miles to three, the ship’s captain simply claimed this was merely an innocent voyage between two foreign ports. After disposing of the cargo, he entered a
U.S. port for clearance “on ballast,” to refuel, pick up a legitimate cargo, and go on his way.
Because the U.S. Coast Guard had the right to board and search suspect vessels flying the American flag, even on the high seas, there was a rush to switch to flags of convenience — a standard procedure to get around the law. “A British merchant institutes libel proceedings against a certain (American) yacht owner who has defaulted on stores or debt, and claims he can’t pay. His boat is sold. The British merchant buys it. It is now a British ship, rum-running with the same crew.” Once at sea, it also became common practice to alter ships’ names after a few round trips, to confuse the Coast Guard.
After the 1929 Wall Street crash, bootleggers had a huge choice of luxury yachts — the former toys of once-wealthy speculators. As Sally Rand, later the famous “fan dancer” star, recalled,
These beautiful yachts that cost half a million dollars were sitting around (on the West Coast) with barnacles on them. These are the people who jumped out of windows. Who’s gonna buy a yacht? A man came up to me and said, “Hey, any of these yachts for sale?” I said: “Are you kiddin’? They’re all for sale.” The guy was a bootlegger. So I sold half-million-dollar yachts to bootleggers. For five or ten thousand dollars. And took my six percent commission on them. Beautiful.4
The bootleggers, she said, “decorated them with pretty girls in bathing suits, like going out for a little sail. Load up and come back. . . . The interiors were done in rosewood, gold handles on the toilets and all that jazz, great oil paintings in the salons. They’re now jammed up with loads and loads of wet alcohol... the interiors of them were gutted and ruined.”
There were still easier ways of circumventing Prohibition. Just as Remus legitimately obtained B Certificates (permits) to withdraw liquor from distilleries for medicinal purposes, American distillers could, just as legitimately, export their own liquor in bulk for so-called “medicinal use” abroad. Hundreds of thousands of gallons of whiskey thus purchased, on paper at least, by businessmen in Scotland, British Columbia, New Brunswick, Germany, Cuba, and even Tijuana never reached their fictitious destinations.
If we believed the tales of all who apply for liquor permits [wrote Haynes], we would naturally come to the absurd conclusion that the whole world is sick and desperately in need of distilled spirits. . . . Does anyone believe that Scotland, home of whiskey, is really in need of 66,000 gallons of American whiskey for non-beverage purposes? ... It is the irony of ironies, a wet world, come to dry America to beg for liquor.
As with the later war on drugs, the goal of the law enforcers was to catch the truly major operator. “The conviction of one such,” Haynes wrote, “is worth the conviction of twelve small operators. Their identities are mostly well known — but they have to be caught in the act, to establish evidence which will prove guilt in the courts.” As the recent BCCI scandal showed, current drug operations have also involved at least one established bank, but during the Prohibition years the list of prestigious British and American banks providing services to rumrunners, knowingly or unknowingly, was huge. In operations involving major players, by no means confined to the underworld, money was deposited in banks in advance, held in trust, and only remitted after shipments were completed, the transactions invariably referred to as “unspecified goods or commodities.”
Haynes wrote that “one finds names that once epitomized honor and power and community esteem steeped in the same befouling brew with names of thieves, thugs and murderers.” Joe Kennedy, father of President John F. Kennedy, was one of those “epitomizing honor and power” who could not resist an occasional risk-free flutter, though he was careful to hide behind a screen of dummy companies.
While bankers and entrepreneurs on both sides of the Atlantic got rich on the proceeds, a new mythical hero emerged as part of Prohibition folklore: the risk-taking, devil-may-care rumrunner, even though reality seldom measured up to the legend. At least one of them was a woman. “Spanish Marie” assumed command of the boat she renamed Kid Boots when her husband and ship’s captain fell overboard after a surfeit of cargo sampling (rumor had it that she may have given him a final push).
She strutted about with a revolver strapped to her waist, a big knife stuck in her belt and a red bandanna tied round her head. Legend had it that she was about as tough as she looked. She was captured in March 1928 while unloading liquor at Coconut Grove, and was released on five hundred dollars bail on the plea that she must take care of her babies. The bail was increased to $3,500 when investigators found the children at home with a nurse and Spanish Marie at a speakeasy.5
Although millions of gallons of liquor ended up on American shores, rum-running expeditions all too often came to grief as a result of incompetence, communication failures, greed, and mutual mistrust, with expeditors and ships’ captains sharing the blame.
In America’s National Archives are records of several instances of undercover penetration wrecking otherwise perfect plans. Everett S. Allen, in The Black Ships, tells the story of a somewhat boastful London entrepreneur, Thomas Godman of the Schooners Association of London, who bragged of his unique relations with corrupt American officials. He claimed to have access to detailed Coast Guard surveillance schedules. But his letters were intercepted and his operations went terribly wrong. In 1927, he reported “a rush of orders from my friends for whiskey to meet the Christmas trade” and made plans for a $488,700 cargo to unload off Montauk Point, at the extreme tip of Long Island — a favorite landing place. But crew members deserted, fought one another, got drunk on pilfered cargo, and almost ran their boat, the Tom August, aground. Others went on strike or jumped ship when they learned that their wives had not been paid as promised. Godman’s cargo failed to meet up with its expected customers either at sea or on shore until the crew members who remained on board began taking cases ashore themselves — and not returning. Profits on a successful run were huge, but only if it did not take too long, and the Tom August, cruising up and down the Long Island coast for weeks, cost Godman far more than he could afford to lose. He retired from the game a near bankrupt.6
Although rum-running ships such as the Tom August feared pirate hijackers far more than the Coast Guard, ships’ officers seldom trusted even their own crews. There was always the possibility they would be tempted to themselves hijack the ship and sell the liquor. Rival syndicates also represented a constant threat. The potential rewards made for a climate aboard of distrust and permanent, brooding violence. The rumrunner Mulhouse was owned by a powerful French company that maintained a permanent sales representative in New York during the first few Prohibition years. It was boarded at gunpoint in Sheepshead Bay. Of its cargo of 23,000 cases of liquor, 7,000 were transferred aboard the hijacking schooner, the remaining 16,000 cases sold off to unidentified buyers in powerful speedboats as the French crew was held hostage below decks. The French syndicate’s sales representative had been set up by rivals posing as respectable wholesale buyers. A mysterious bootlegger known only as “Big Eddie” was suspected of masterminding the scam.
Norwegian crews had an exceptionally bad reputation. The Coast Guard cutter Seneca boarded the Norwegian merchant ship Sagatind off the East Coast. The ship was found to be carrying 43,000 cases of liquor and $26,000 in cash. “All of Sagatind? s crew were stupefied with drink except for three whose jaws were broken. One man had a broken leg and many had black eyes.”7
Although the East Coast — especially the Hamptons, Nantucket, and Martha’s Vineyard — were favored off-loading areas, Puget Sound was also a favorite bootleggers’ haunt, being convenient for smuggling operations initiated either in Mexico or elsewhere in the Pacific. Liquor cargoes ended up in Oregon, Washington State, and California. In some cases, Coast Guard crews responsible for policing the area actually did some rum-running themselves.
Increasingly, as the rumrunners stepped up their activities, their predators did likewise. A new breed of pirates, preying on officially commissioned smuggling ships, began intercepting car
goes, killing crews, and either sinking the vessels or leaving them disabled and motionless in the water — twentieth-century equivalents of the mysteriously abandoned Marie Celeste. Pirate ships operating out of Nova Scotia were particularly feared.
As with later drug operations, law enforcement agencies managed, with some success, to infiltrate the bootlegging world. One undercover agent (code name: London) surfaced in Bremen, posing as a member of a European consortium eager to invest in a rum-running operation, and managed to convince one Wilhelm Huebers, of the respectable German Products and Trade Corporation, that he was a bona fide speculator. The German firm lost its entire shipment.
The Prohibition Bureau also made considerable use of informers. Agents were authorized to pay snitches two dollars a day for information. The newly formed FBI was more generous, but the smugglers, like drug dealers later, were often one step ahead of them — they too adept at disinformation. Haynes cites the example of “Hippy” Werner, a well-known bootlegger, who told the FBI that the British trawler Minerva, out of Barbados, was about to land 4,000 cases of Scotch whiskey at Warwick Beach in the middle of the night, and that the landing operation would be protected by three Coast Guard boats in the smugglers’ pay. A major operation was mounted, and the cargo was seized. But the Minerva turned out to be a decoy boat with a cargo of cheap methyl alcohol flavored with fusel oil. While the FBI and reliable Coast Guard units were busy with the Minerva, other boats unloaded huge amounts of valuable Scotch whiskey further down the Rhode Island coast.