Fifty-eight minutes after the 18th Amendment took effect on January 17, 1920, the first violation of Prohibition had already been documented. Less than an hour after the Volstead Act banned the manufacture, sale and distribution of “intoxicating” liquors, armed robbers stole a shipment of medicinal whiskey from a freight train.
It wouldn’t be long before flouting the law for profit would become a billion-dollar nationwide business, and bootlegging illegal booze was a line of work that proved quite attractive to mobsters such as Al Capone, Dutch Schultz, Bugsy Siegel and more who used violence to gain market share. Federal officers tried their best to keep up with the criminals, celebrating with photo ops showing them hacking away at beer kegs and whiskey barrels, but no law could keep Americans from enjoying a drink. Bootleggers were more than happy to supply it.
You can debate whether America’s 14-year-long “noble experiment” achieved its intended effect: to reduce alcohol abuse and its associated social ills. During Prohibition, rural consumption did tend to decrease, while it flourished in urban areas. But what’s inarguable is that Prohibition’s unintended consequences were catastrophic. The attempt to legislate morality made lawbreakers out of ordinary people, turned gangsters into urban folk heroes—as well as millionaires—and had seismic effects on the American liquor industry. Prohibition shut down most of America’s distilleries and breweries, but it also built up some of the most prominent names the spirits industry had ever seen.
The allure of high profits from a crime that seemed innocent to many was irresistible to people who would otherwise have been law-abiding citizens. Mob activity, which had been a patchwork of gangs in urban slums, burgeoned under Prohibition to include most areas of the country. As bootleggers collided in turf battles, violence escalated and created a separate horror. Hoodlums armed themselves with submachine guns and rode in armor-reinforced cars as they hijacked liquor shipments from each other and eliminated competition. The attacks were carried out on city streets—especially in the hotspot of Chicago—as gangland murders escalated to the thousands per year. The infamous Saint Valentine’s Day Massacre of 1929 (allegedly planned by Al Capone) was one of the bloodier examples of bootleggers at war.
While the public often thrilled to the press descriptions of grisly Mob-on-Mob killings, violence would sometimes sweep up innocent bystanders in its brazenness. Ultimately, attempts by gangsters to quell rifts—as well as bad publicity—resulted in a system of organized crime that would encompass the entire country. It still exists today, even while the amendment that led to it has long been repealed. In a short span, the Mob garnered a great deal of sophistication. Fixed with deep pockets, gangsters not only armed themselves with weapons that often outgunned the police, but hired lawyers and paid off corrupt officials to protect themselves legally.
The days of bootlegging also had another unintended consequence, one that utterly reshaped the U.S. spirits industry. Fortunes were made by foreign producers, and their serendipity continued long after as they had established inroads into the American market. Prohibition was a boon for offshore liquor producers because legitimate domestic production was almost nonexistent. Bootleggers looked abroad for quality distilling products—what would be termed “the good stuff.” Rum and Scotch arrived by sea, with secretive exchanges outside the 10-mile limit. Some simply dropped their casks in the water and let them wash ashore. Tequila, which hadn’t been seriously imported into the U.S. before Prohibition, began to appear along the southern border.
By far the largest boon was felt by Canadian distillers as their product was easily smuggled into America, either directly across the border or by water routes. Canadian Samuel Bronfman was a liquor entrepreneur who already had experience selling spirits to Canadian provinces that had gone dry before Prohibition. His Distillers Corporation Limited (DCL) used a complex series of transshipments to put alcohol in the hands of bootleggers in Newfoundland, who then smuggled it to the United States. Bronfman even had an American distillery dismantled and shipped to Canada to keep up with demand. In 1928, DCL bought Seagram & Son and later acquired importing rights for prestigious Scotch brands like Haig & Haig and White Horse.
Hiram Walker was a 19th century American entrepreneur who built a distillery in Canada before Prohibition, across the river from Detroit in a model community he built in Walkerville (now part of Windsor, Ontario). At the time, the plan avoided stiff regulations in Michigan and took advantage of cheap land and labor in Canada. He died in 1899, but his company Hiram Walker & Sons was perfectly sited to profit when the state of Michigan went dry in 1918. Thousands of cases of its top brand, Canadian Club, moved across the Detroit River and Capone was said to be the company’s biggest client. One rumor, most likely apocryphal, said that a tunnel was built under the river to simply pipe the booze into America.
In the United States, a few visionaries positioned themselves to profit on what they saw as the coming end of Prohibition. Lewis Rosenstiel went bullish on booze when the rest of the country was shunning it. He purchased distilleries, including Schenley in Pennsylvania, which had a license to produce alcohol for medicinal purposes. Supposedly acting on the advice of Winston Churchill, Rosenstiel also bought up storehouses of liquor, including Dewar’s, anticipating the reopening of the market. Seton Porter, of U.S. Food Products, in turn changed the company’s name to National Distillers, sold its yeast-making division and proceeded to stockpile about half of the country’s pre-Prohibition whiskey. He knew that even after Repeal most distillers would need years to mature their whiskey before it was ready to market, giving him a sizable head start. The company went on to acquire many stalwart brands of the time, including Old Grand-Dad, Old Crow, Old Taylor and Gilbey’s gin.
Foreign-made booze was a wellspring for the Mob during Prohibition, and given the content of many of the Mob movies today, it’s easy to imagine that bootlegging was the exclusive purview of Italian-Americans. In truth, the game was more of a melting pot. Gangs often grew out of ethnic ghettos and as such reflected their neighborhoods. New York was originally a mix of Irish, Jewish and Italian gangs. Chicago followed suit, but included its share of eastern Europeans. The Purple Gang of Detroit was largely Jewish. Philadelphia was dominated by a Polish mob. Ecumenical Cleveland did not divide gangs by ethnicity. Asian gangs had long been active on the Pacific coast. The allure of fast cash from bootlegging was also not lost on long-term American citizens. Atlantic City’s Nucky Johnson was an Episcopalian from an established family. Bill McCoy was a yachtsmen of Scottish descent who used his boat to smuggle from the Bahamas. Much of the Kansas City mob was made up of farm boys who had migrated to the big city. One Nebraskan moved to Seattle and ended up controlling most of the alcohol there: Roy Olmstead. George Remus was a German-American lawyer who saw the flaws in Prohibition law and came to buy up oceans of legally made medicinal whiskey and became for a time the country’s biggest bootlegger.
Much of the blame for the failure of Prohibition can be laid to the haphazard way it was instituted. The Volstead Act, which spelled out the provisions of the vaguely worded amendment, was at once overly strict and misapplied. For instance, “intoxicating liquor” was interpreted as any beverage with more than half a percent alcohol. Thus it outlawed wine and beer, which many of the supporters of Prohibition had assumed would be legal. If the aim of the law was to eliminate public drunkenness and family strife, it also corralled occasional drinkers in its wide noose. As a result, the attempt to legislate morality was broadly ignored by the general public, especially in urban areas.
The Volstead Act was also grossly underfunded. It fell mainly to such federal agencies as the FBI and the Treasury’s Secret Service to battle the Mob. Images of Eliot Ness and his Untouchables crusading against the forces of the Mob aside, the Act provided for a force of but 1,500 agents, many with no training, in a country of 106 million. Their few victories came often in relatively minor convictions such as income tax evasion or carrying a concealed weapon. Vicious multiple murderers often served a decade instead of being handed the life sentences they deserved. If authorities had assumed local enforcement would take up the slack, they were wrong. In urban areas, police often regarded bootlegging as a victimless crime. At the same time, gangsters were well funded enough to keep much of the police force on their payrolls. While the popular image of speakeasies is one of secretive places that required passwords to enter, cities were full of bars that operated almost in the open as corrupt cops were on the take to ignore them.
Corruption was so profuse that kingpins spent lavishly to buy not only police, but judges and other elected officials to keep themselves from jail. When juries couldn’t be bought, gangsters resorted to intimidation. Earnest witnesses who persisted in their intention to testify often disappeared before trial. Capone’s payroll was so vast that for a time he owned the mayor of Chicago: “Big Bill” Thompson. In the state of New Jersey, which was known for lax enforcement, the Atlantic City resort was wide open for most vices and even hosted a convention of national Mob bigwigs. Corruption hardly stopped on the local level. Many congressmen received regular deliveries of alcohol to the Capitol building. Under Warren Harding, the attorney general’s office was known to sell permits for dealing in medicinal whiskey. People with means simply laid up vast wine cellars and liquor lockers before the law took effect. The poor were reduced to rooting out illicit booze.
At the same time that the Volstead Act was rigid in many ways, it also contained loopholes. Alcohol for medicinal purposes was allowed and the number of prescriptions for whiskey skyrocketed. Wine was also legal for religious rites and church-going rose during Prohibition. While beer remained strictly illegal, families were allowed to make their own wine and hard cider for personal consumption. Clever grape growers sold dehydrated grape bricks with tongue-in-cheek warnings like: “After dissolving the brick in a gallon of water, do not place the liquid away in the cupboard for 20 days, because then it would turn to wine.” Former brewers took a similar tack by selling malt extract that could be made into beer.
Rather than disappearing as planned, the health problems associated with abuse often increased. Consumption increased as nightlife began to center on the naughty titillation of illegal drinking and raucous times. Moreover, moonshine libations were typically less than top quality. Often adulterated with lethal additives or simply made poorly, drinks like bathtub gin could be quite dangerous. The government itself even added poisons to industrial alcohol, thinking that it would keep people from drinking them. It didn’t. The term “jake leg” (for a partially paralytic condition that affected drinkers of tainted rum concoctions) arose during the period. As amateurs rushed to make their own hooch, drinking them in cocktails became more popular as it was a method to kill the bad taste.
By the 1930s, the public, now weary of violence and corruption and stung by the effects of the Great Depression, had swung far in the direction of repealing the 18th Amendment. Many felt that Prohibition was robbing brewing and distilling jobs from legitimate citizens and giving them to crooks. Piecemeal changes in the Volstead Act (such as legalizing low-proof beer) didn’t slake the general thirst, and on December 5, 1933, the 21st Amendment brought the 18th to an end, making it the only Amendment ever repealed.
By that time, the American alcohol industry had experienced deep setbacks, and the landscape of legal distilling in the United States would be forever changed. An industry that had included thousands of distilleries would greatly consolidate, and it took years for them to recover. While some distillers had been kept alive by making medicinal spirits, others limped along marketing soft drinks. Or they closed altogether. Straight rye whiskey was almost totally supplanted by Canadian whisky, a blend.
Among producers’ biggest problems was the lag time for bringing products to market. While Jim Beam, the namesake of the Bourbon, famously brought what had been his family’s distillery up and running in just 100 days, it would take years before the whiskey had aged enough to compete with foreign brands that were available immediately. Meanwhile, Seagram, Hiram Walker, Schenley and National Distillers prospered and were dubbed “the Big Four” in the liquor industry for years following Prohibition. Divestiture would later split up Seagram’s many brands among other liquor conglomerates. Hiram Walker is now part of Pernod Ricard. Schenley is owned by Guinness. National Distillers folded into the Jim Beam brands, itself now merged with Suntory.
The mobsters that Prohibition had enriched did not skip a beat upon repeal. They simply moved to new ventures: prostitution, loansharking, protection rackets, the number games, drug dealing and the like. The noble experiment that was meant to cure all America’s ills had created only more strife.