Prohibition: Thirteen Years That Changed America (15 page)

This in no way, however, prevented him from prospering. From the profits of his first shop, he bought a second drugstore near Milwaukee Avenue. He also became a certified optometrist, and his examining panel also noted that he “indulged in the practice of medicine in connection with his drug store among the people of his neighborhood.” The practice was common among pharmacists; doctors were expensive, and there was no social security. Among his clients was a neighbor, Lillian Kraus. They fell in love, married, and had a daughter, Romola. In the somewhat dated jargon of the times, the panel noted that “his sexual life showed no perversities.”

George Remus, in his twenties, found time not only to run two drugstores, write out prescriptions for glasses, act as an unlicensed doctor, and raise a family, but to study law at night school. At age 24 he was admitted to the Illinois Bar, and started his own practice. From the very start, he was successful. He specialized in criminal law, but also actively represented several Chicago labor unions, and made quite a name for himself as a divorce lawyer. A well-known local figure, with many Democratic connections, Remus was several times approached and asked to stand for local political office. “I could easily have become a District Attorney,” he told the panel. “I was prominent enough politically to secure public office, but have never wanted to take the prosecutor’s side in my life.” In light of his many achievements, it is somewhat surprising that at the time of his murder trial, when they submitted him to various tests, including those standard 1920s examinations the Stanford Revision of the Binet-Simon Scale and the Otis Self-Administering Test of Mental Ability, the psychiatrists examining him found George Remus to be “of only average adult intelligence.” They did add that “the possibility that this record may have been lowered by mental distraction at the time of the examination should not be overlooked.”

Remus hired a legal secretary, Imogene Holmes, a young divorcée with a small daughter, Ruth. Imogene, a remarkably strong, graceful swimmer, was a voluptuous woman with somewhat extravagant tastes in clothes and unusual hats. Little is known of her family background, though she boasted to George Remus that she came “from the top drawer.” Remus divorced Lillian in 1917, but continued to support
her, remaining on good terms with her and their daughter, Romola, who adored him.

Chicago became dry in 1918. In this hugely corrupt city, where underworld characters immediately became bootleggers, Remus, the criminal lawyer they knew and trusted, was much in demand. Among his clients was Johnny Torrio, a nightclub and brothel owner, and one of the first Chicago bootleggers and speakeasy kings. Torrio, himself a straitlaced family man and practicing Catholic for all his many brothel ownerships, summoned one of his distant New York relatives, Alfonso Caponi, to assist him in his operations. Remus knew Capone, too, but only slightly. His acquaintanceship with the Chicago underworld was strictly professional: many of its minor members had visited his office at 167 North Clark Street, on the Chicago “Loop,” some of them on murder charges. It was because as defense counsel he had been compelled to witness the capital executions of some of his clients (in the electric chair) that he came out strongly against the death penalty. Clarence Darrow, the best-known criminal lawyer in America, also a Chicago colleague, spoke highly of his abilities.

As a brilliant lawyer, and an ex-pharmacist, Remus was uniquely qualified to make a fortune out of the Volstead Act. In a series of articles about him in the St. Louis
Post-Dispatch
(“The Inside Story of the Amazing Career of George Remus, millionaire bootlegger and his band of rumrunners,” St. Louis
Post-Dispatch
, January 3-20, 1926), Paul Y. Anderson wrote:

If there has ever been a bigger bootlegger than Remus, the fact remains a secret. . . . Remus was to bootlegging what Rockefeller was to oil. In the sheer imagination of his plan, in the insolent sweep of his ambition and power with which he swept upward toward his goal, Remus can bear comparison with the captains of industry.

Remus told Anderson how the idea came to him. If gangsters of limited intelligence could make a fortune, “Remus could surely do better than they.”
¹

His first step was to sell his law practice (though he remained a member of the Bar Association). He then moved, with Imogene, to Cincinnati, where they got married. It was a shrewd move: most of America’s whiskey distilleries were within 300 miles of the town, and Remus knew that despite the wartime ban on grain supplies, the
distilleries operating in America and producing an annual output of 286 million gallons had virtually limitless bonded stocks at their disposal. He also knew it was a seller’s market: in 1917, the last “normal” year before Prohibition became law in several major states, Americans had consumed two billion gallons of hard liquor. Although some distillers sent their liquor stocks abroad before 1920, hundreds of millions of gallons remained in distilleries and government-bonded warehouses, most of them within easy reach of Cincinnati. In addition, because of Prohibition, “whiskey certificates” were worth next to nothing.

Entirely legally, using his life savings ($100,000), Remus started buying up certificates. His operations became lucrative quickly, and he was soon able to acquire entire distilleries, complete with offices, machinery, furniture, and even abandoned corner saloons, for which he did not have the slightest use. In time, Remus became the largest owner of distilleries in America, his properties including famous brand names: Fleischmann, Old Lexington Club, Rugby, Greendale, and Squibb, the largest in the country. The Fleischmann Distillery, which cost him $197,000, came with 3,100 barrels of prime rye whiskey.

The next step was to get official permission to remove the whiskey and — again quite legally — sell it to drug companies licensed to sell medicinal whiskey. “I started out buying a retail drug store in Cincinnati and converting it into a wholesale drug company,” Remus told the
Post-Dispatch
. “As soon as that company had withdrawn as much liquor as possible without attracting undue attention, I organized another wholesale company, closed up the first one, and shipped the stock of drugs off to the second one. We made that carload of drugs serve as the stock for three or four wholesale companies.” Surplus nonalcoholic stocks were “fired off into space” (Anderson’s words) to fictitious buyers, eventually sold off as unclaimed freight. In the first few months of Prohibition, Remus set up over a dozen drug companies, closing them down when they began attracting the curiosity of enforcement agents and inventing new ones. When the regulations changed, as they soon did, to limit liquor acquisitions on the part of drug companies to 10 percent of their business, Remus simply cooked the books, showing a huge imaginary turnover.

Once in the hands of the drug companies, some of the whiskey duly ended up in pint bottles labeled “medicinal whiskey,” but
most of it ended up elsewhere, in the hands of bootleggers, nightclub owners, middlemen, and in exceptional cases a carefully vetted private clientele. Only a small proportion ended up as “straight” medicinal whiskey — the bootleggers and private customers a far more lucrative market. Anderson wrote that “Once out from under the eye of the government, the disposal of whiskey at fabulous prices became a simple matter. The whiskey market is always a seller’s market. The supply never equals the demand. Remus’s associates already had made contacts with retail bootleggers who would snap up all the good liquor that could be furnished, and would pay $80 a case and upward. There are 12 quarts, or three gallons, to a case. Remus paid from 65 cents to $4 (per case) for the certificates.”

“What was wrong with that?” George Conners, Remus’s closest associate, asked Anderson. “If anything was wrong it was wrong for the Government to destroy the value of those people’s property without compensating them for it. If the Government wanted to abolish whiskey drinking, why didn’t it buy all this whiskey and dump it in the river?” Conners told Anderson he had not intended to get into the whiskey business, “but after several of these fellows came to me, I asked Remus what he would charge me for liquor in 15 or 20 case lots.” Remus suggested he think big, and quoted a price for 250-case lots. This was the start of the Remus-Conners bootleg operation on a grand scale, with Conners handling sales on a commission basis and drumming up business all over America.

“We never poisoned anybody. We sold good liquor and didn’t cut it,” Remus told Anderson. This and his meticulously run operation — involving shippers, drivers, bodyguards, and accountants (at his peak there were 3,000 people on his payroll) — went far to explain Remus’s meteoric career. Within a few months of Prohibition, he was depositing tens of thousands of dollars a day into various bank accounts both in his own name and under aliases.

Remus had one innocuous weakness: he wanted to become a respected member of Cincinnati society. He set about it with his usual thoroughness. First he bought a huge property on Price Hill, overlooking the town, at Eighth and Hermosa Avenue, in what was then its most desirable suburb. Then, regardless of expense (it cost him $750,000, or close to several million dollars today), he had the place remodeled, furnished in somewhat garish taste, and on its extensive
grounds built a greenhouse, a racing stable (he soon owned a string of racing thoroughbreds), a landscaped garden, and a series of outhouses. All but one were for his many servants, chauffeurs, and their families, but the largest housed a specially built, Olympic-size indoor swimming pool. This alone cost him another $100,000 (1920).

Much later, when Remus’s mansion was demolished, two tunnels were discovered. Remus had had these built to store whiskey for his parties and as a possible getaway. “We found many empty bottles there,” said Jack Doll, who, as a child, and neighbor, had played in Remus’s garden, used the pool, and later was present when the mansion was pulled down. Doll would remember Remus with affection: he was friendly, welcomed poor children on his premises, and, though the property was surrounded by a chain link fence to keep the racehorses from straying, instructed his gardener to leave a space so that the local kids could squeeze under it to come and play. Doll remembers Remus playfully pushing a ten-year-old into the pool fully clothed, and then giving him a $10 bill “to buy a new suit.” “You could buy a whole boy’s outfit for a dollar in those days,” Doll noted.

As soon as the house was ready, Remus started giving lavish parties. While Cincinnati “old money” either stayed away or made snide remarks behind his back while enjoying his hospitality, almost all found his invitations irresistible. At formal dinners (the dining room table was big enough to seat twenty in comfort), Remus slipped $100 bills under his guests’ plates. On March 21,1921, at a party staged to celebrate the completion of his swimming pool, he presented all of his guests with gold-engraved Elgin watches, as well as photographs of the occasion, taken by a specially hired photographer.

Two years later, in July of 1923, Remus, though by this time in serious trouble with the Justice Department, staged what was even by his standards an extraordinarily elaborate dancing and swimming party. The hundred guests were entertained by a fifteen-piece orchestra and a water-ballet, with Imogene Remus, herself a talented swimmer, making a guest appearance in a daringly cut swimsuit. Remus had bought up the stock of a bankrupt Cincinnati jeweler for $25,000, and upon arrival, all of the female guests got rings, and the males diamond tie-clasps. On leaving, in the early hours of the morning, there was another surprise waiting: each female guest (there were fifty in all) was presented with a brand-new 1923 Pontiac. The descendant of one of
the assiduous party-goers recalled his parents saying that on these occasions Remus himself was a discreet, almost invisible host. Exploring the mansion during the 1923 extravaganza, they came across him in his library, alone, reading a book and reluctant to be disturbed.

This quest for social respectability at almost any cost was shared by many leading bootleggers elsewhere. “Lucky” Luciano (in his posthumous memoirs) recalled with obvious pride how he had mingled with Wall Street tycoons such as banker Julie Bach, attended lavish parties given on the estate of the famous Whitney family, and ingratiated himself with over a hundred top socialites, police officials, and politicians by providing them, at huge cost, with black market tickets to the 1923 Jack Dempsey-Luis Angel Firpo fight at the New York Polo Grounds.

Remus did not confine his parties to his home. There were elaborate lunch parties in his downtown Cincinnati office (on the corner of Race and Pearl Streets), with a butler and chef in constant attendance. Also in 1923, he gave a memorable birthday party for Imogene (also attended by hundreds of guests) in the ballroom of one of its most famous hotels, the Sinton.

Some of Remus’s social activities were chronicled in the Cincinnati papers (though the 1923 swimming pool party was not), and he became a household name so quickly that F. Scott Fitzgerald may well have been inspired by him. In many respects, the real-life Remus and the fictional Gatsby were similar. Both, were self-made men, both gave lavish parties, both despised their guests’ venality, and both were low-key hosts, observing rather than dominating the party scene. There was, however, a major difference between them. Remus, in 1923, was happily married — an adoring husband and doting father who lavished every type of expensive gift on Imogene’s daughter Ruth, including a gold-plated grand piano — whereas Gatsby was a loner, at heart an unrequited romantic.

It was while looking for a suitable house that Remus first met Conners, then a real-estate agent. Conners failed to sell Remus a house, but was hired by him — first as a gofer, then as a minor bootlegging partner before becoming Remus’s fanatically loyal “number two.” A compulsive horse-racing gambler, Conners was soon able to afford this expensive habit: working on a percentage basis, as he did from the beginning, he became a wealthy man.