Prohibition: Thirteen Years That Changed America (21 page)

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 Prohibi
tion 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 cargoes, 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.

The best-known, most revered rumrunner of all time was Bill McCoy, who gave rise to the well-known expression “the real McCoy,” which originally referred to the high quality of his liquor. A former merchant navy first mate — who, with his brother, opened his own boatyard in Jacksonville, Florida, after the First World War, custom-building luxurious speedboats for millionaires — McCoy became a bootlegger for the money, but also out of a passion for sailing. He was fonder of the
Arethusa
, the spectacularly beautiful sloop he was able to buy with the profits of his first few runs, than he was of money, even though his returns were considerable.

McCoy made the Bahamas, where whiskey cost a mere $8 a case, his base. Total expenses for a run from the Bahamas to Martha’s Vineyard and back amounted to $100,000 ($40,000 for the whiskey, $60,000 for the crew and the ship’s running expenses), the average net profit per trip amounting to $300,000. The
Arethusa
(like most rum-running vessels in the West Indies area, it flew the Red Ensign)
was not only a beautiful ship to look at, but was better equipped, and better run, than any other bootlegging boat. McCoy ran a tight ship. Although a reporter who went aboard later wrote that “the crew resembled as wicked a gang of cutthroats as ever bade a victim to walk the plank,” they were intensely loyal to him. Pay was good, discipline stern, drinking aboard forbidden, and sales techniques highly sophisticated. McCoy’s motto was “We do business day and night.” Because storage space was at a premium, he packaged the liquor in pyramid-shaped, six-bottle burlap-wrapped packs rather than in wooden cases, and these were then wrapped in container-size gunnysack bales.

Others imitated him, and such was his reputation that all over America, unscrupulous domestic moonshiners, pretending that their whiskey was “straight off the boat,” wrapped
their
inferior, adulterated liquor in similar burlap bags, often soaking them in salt water to give them an authentic “McCoy” appearance.

The
Arethusa
was a floating liquor store, with shelves of samples for visitors. Tasting was encouraged, but only two prospective buyers were allowed aboard at the same time — not so much to prevent law enforcement raids as to deter the hijackers, almost as numerous on the high seas as they were outside Remus’s Death Valley Farm. On deck, a swiveling machine-gun emplacement was prominently in view, and every time an unidentified speedboat hove to alongside the
Arethusa
, it remained trained on the visitors throughout their shopping expedition.

Despite his precautions, McCoy’s luck did not hold. He had to abandon the
Arethusa
to subordinates for a while, living as a fugitive from justice with friendly, discreet Indians on remote reservations because “they don’t ask questions, they haven’t any particular regard for the law.”
⁸
Eventually his luck ran out altogether. In November of1924, the Coast Guard cutter
Seneca
fired on the
Arethusa
off Seabright, New Jersey, and rather than risk losing his boat, McCoy surrendered, was charged, and went to jail.

Another bootlegger who achieved mythical status was Seattle-based Roy Olmstead. When Prohibition was introduced in Washington State (ahead of the Volstead Act), he was the youngest lieutenant on the Seattle police force. His superiors were unaware that their most promising detective was moonlighting as a bootlegger, using his police connections across the Canadian border to buy his supplies from trusted middlemen, some of whom were also serving or retired police officers.

He first came to prominence in March of 1920 when Prohibition agents staged an ambush on Brown’s Bay, near Meadowdale, and seized a huge cargo of Olmstead’s liquor. Fined and dismissed from the force, he immediately became a full-time operator, the head of an eleven-man syndicate running an operation that included not only navigators, delivery crews, and salesmen, but bookkeepers, many of them serving police officials.

The Canadian government cynically exploited the Volstead Act, officially imposing an export duty ($20 a case) on all liquor destined for the United States. Olmstead arranged for his consignments to be shipped (on paper) to Mexico, avoiding the levy. This made it possible for him to undersell his competitors, and he boasted that his brand-name Scotch and Canadian whiskey was barely more expensive in dry Seattle than in Canada. The
New York Times
described Olmstead as “the king of one of the most gigantic rum-running conspiracies in the country.” The scale of his operations was huge. In 1922, the Prohibition Bureau estimated that 1.5 million gallons of bootleg whiskey came from Canada.