PART ONE — MANHATTAN SEEKS A SAVIOR
Beginning the Saga of a Young Crusader and a Great City's Revolt — The True Story at Last of the Dewey Investigation and the Capture of "Lucky" Luciano
Racket-ridden New York City in the spring of 1935 existed literally under a reign of terror.
An invisible government of organized crime reached out steel fingers and took its toll of lives and profits from a silently suffering populace.
Tribute was demanded — and taken — at the point of a gun. Gangdom fought bitterly for control and gang bullets mowed down criminals and innocents alike. In Harlem a baby died in its carriage of machine-gun bullets that missed the target for which they had been intended.
Racketeers sought to invade honest industrial unions. Theaters were bombed, windows smashed, foods poisoned.
Life became the cheapest thing in an unsafe city.
Business men were slugged, crippled. If they sought to complain, they found that the racketeers who attacked them were allied with political leaders. They learned to keep still — and pay.
Loan sharks preyed on the poor, loaning them money readily, torturing, kidnaping, even murdering them when the interest charges left them penniless.
Every one paid tribute. Not a man, woman, or child of vast New York's seven million escaped.
The greatest city in America was on its knees before a handful of ex-convicts, ex-petty thieves, ex-pimps, and ex-murderers.
As this story unfolds, that whole execrable crew will defile across these pages before your eyes.
Here you will see, plainly as they see one another, the dominating handful, the overlords, the big shots. Like "Dutch" Schultz. Or like "Lucky" Luciano.
Here you will size up their cheap forerunners who are now their henchmen — the "booker" czars of the vice racket's crude beginnings. Nick Montana. "Cock-Eyed Louis" Weiner and "Dumb Al," his son. The Jack Ellensteins. The Pete Harrises. The Dave Marcuses.
You will take the measure of the loan-shark racket's bloodsuckers. Sam Faden. Joe Allen.
You will gaze down upon a procession of those strongarm terrorists who cow — or smash — commercial vice's women and girls into doing the overlords' will. Such gorillas as Abe Wahrman. Such suave thugs as "general manager" Jimmy Frederico. Such gangsters as "Little Dave" Betillo and "Tommy the Bull." Such graft-or-else parasites as "Cut-Rate Gus." Such whole-sale procurers as "Jerry the Lug" and "Max the Barber."
And upon a procession of these males' and their masters' female victims. Joan Martin. "Jennie the Factory." "Sadie the Chink." "Hungarian Helen." And many, many more....
Crime had not merely been put on a business basis. Crime was the biggest business in Manhattan. The police department was neither organized nor financed to cope with the situation. The office of the District Attorney was not coping with it.
New York, to sum it up, was badly in need of a savior.
A committee of six serious-faced men sat in the New York City home of His Excellency Herbert Lehman, Governor of the State of New York.
All six were straight-thinking business men, intensely interested in the welfare of the great city in which they lived. All were members of the March, 1935, Grand Jury of the County of New York. As such they had come into firsthand contact with the invisible government of crime. They had learned with amazement the whole incredible and rotten setup. Angered and appalled, they had tried as Grand Jurors to fight back at the empire of crime.
On May 13, 1935, the Grand Jury definitely broke with the District Attorney's office. Exercising one of their rights, they excluded Assistant District Attorney Maurice Wahl while they listened to witnesses.
The next day they were dubbed by the press the "runaway" Grand Jury.
On this afternoon, destined to become a momentous one, their committee of six sat patiently awaiting the Governor who had granted them a conference.
One of the six was the foreman of the "runaway" Grand Jury, Lee Thompson Smith. He was a powerfully built middle-aged six-footer — a native New Yorker, a realtor. Curiously enough, he was diffident, shy. It was only when he was extraordinarily aroused that his shyness fell from him. He was not shy this afternoon.
A door opened and the Governor entered the library.
"Well, gentlemen?"
"Your Excellency," Smith began, "New York City is a racket-ridden city today. If the grip of racketeering is to be broken in New York, immediate and drastic action is indicated. If it is not taken, New York City will become a place that is unfit to live in."
"I believe we have agencies appointed to deal with crime."
Smith shook his head. He did not mince words.
"They are useless. The situation has gone too far. We, as Grand Jurors, have done what little we could, but every conceivable obstacle has been put in our paths. Unless the request we have come to make of you is granted, no real progress can be made."
"And that request, gentlemen?"
"The appointment of a special prosecutor to investigate racketeering and vice in New York City. The uncovering of organized crime, Your Excellency, is not a mere police routine but a major undertaking. It requires a prosecutor of unusual vigor and ability, free to devote his entire energy and skill to it.
"Small business men in this city, taxed by racketeering, go bankrupt daily. Yet, just the other day, we had before us a man who casually — casually, if you please — gave us to understand that one single racket, the policy game, nets the small group of racketeers who control it fifteen million dollars a year. Gambling, narcotics, all manner of shady enterprises are racket infested.
"But that is not the worst aspect of the situation. The racketeer is rapidly gaining control of legitimate business in New York City."
Silence fell in the room. The Governor's face was serious. These men were not alarmists. They were men of the highest type he had ever seen on any Grand Jury. Their startling appeal deserved consideration.
"You have, of course," he said, "set forth the situation, as you have found it, in your Grand Jury minutes?"
"We have, Your Excellency."
"I want to see those minutes. You will have my answer after I have studied them."
The minutes were forwarded to Governor Lehman. The committeemen felt confident that their request would be granted, for those secret minutes contained dynamite.
The committee conferred with the Bar Association and prepared a list of six names. Those names represented some of the finest experienced legal talent in the city.
It was nearly midnight. A young man came out of the building at 120 Broadway. He had the face, the poise of an aristocrat. His dark-brown mustache was close-cropped, like his hair. His eyes, alert and penetrating, were brown also.
At a corner newsstand he bought copies of the New York Times, the Daily News, and the American. Then he signaled a cruising cab and gave the driver his home address.
His voice was a rich clear baritone, the voice of a singer. He had indeed shown rare promise as a singer years before when he had been graduated from the University of Michigan. His voice had won him a scholarship, and it was with serious aspirations toward an artistic career that he had come to New York from his you all say he's the man for the post, then he must be. He is less well known than each of you and, frankly, that is why I had hesitated. You may be sure that he will have my complete confidence and support."
Thomas Dewey at the moment was aboard a train en route to Boston, to give away in marriage a charming young cousin of his.
Outside her Mount Vernon Street home a band of reporters lounged, awaiting him.
When he arrived, they informed him that he had just been recommended by Governor Lehman of New York for the post of special prosecutor in the impending probe of vice and rackets in Manhattan.
Though the Governor's recommendation amounted to appointment, and though it came to him as news, Dewey characteristically refused to comment, since he had received no official notification. Inside the house, he dismissed the matter just as casually. He had no intention of letting it intrude upon his cousin's wedding day.
On the train back that night, he decided to accept. This was too excellent an opportunity for a fighter to pass up. It might be a losing fight — but what a fight it would be! If he succeeded, he would be performing the greatest possible public service. If he failed —
He was young. He did not let himself think of failure. He turned to a consideration of the problems with which he would be faced. Complete independence, sufficient funds, an honest staff without political affiliations — these three things he would insist upon.
He fully intended, too, to steer clear of the perils that had beset previous investigations in New York. Charles S. Whitman's campaign against gambling and police corruption had made Whitman a target for abuse. Hiram Todd and Samuel Seabury had demanded fees for their investigations. The results had not been pleasant. Seabury had been vengefully dubbed "Hundred-Thousand-Dollar Seabury" and Todd had been forced to sue to collect even partial payment.
Thomas Dewey was not going to conduct his investigation on a fee basis. He would request an appropriation to cover the entire investigation. As to his own compensation, he would sacrifice his own income and accept a straight annual salary of $16,695, the identical sum that was being paid to District Attorney Dodge, whom he was virtually superseding.
There were ironical aspects of the situation. By title, Deputy Assistant District Attorney Dewey would be the lowest ranking member of Dodge's staff!
His most complex job would be selection of a staff of his own. He would need an undercover squad of investigators, of course. But he would likewise need competent legal aid and skilled accountants. One tremendous problem became obvious immediately. Lawyers cost money. Though his investigation would have a broad scope, his finances would be limited. Any veteran lawyer accepting the modest salary Dewey could offer would do so only because he was a failure in his profession.
Young men were his answer. And Dewey knew where to find them. There had been forty-eight of them in the United States Attorney's office during his term there. They were honest, capable, hard-working. From among them he would choose four as his chief assistants.
He thought of Murray I. Gurfein, who as an Assistant United States Attorney had handled both criminal cases and important constitutional appeals. He had been in the prosecution of most of the racketeering and incometax cases in the Southern District. He had helped send to jail Castaldo; Patrick Commerford, labor leader; MeCormick; and Waxey Gordon. After his resignation, he had written the article on Racketeering for the Encyclopedia of Social sciences, outlining in it his own theories of the basic causes of industrial racketeering. He was now engaged in private practice.
William B. Herlands was another. An honor graduate of the City College and a former editor of the Columbia Law Review, he had established his reputation as a trial lawyer. As Assistant United States Attorney he had smashed the alien smuggling and naturalization rackets and had sent to jail both Democratic and Republican election officials. At the moment he was holding a highly responsible position in the Corporation/Counsel's office of the City of New York.
Jacob J. Rosenblum had been associated with Medalie, former United States Attorney, for thirteen years, in both private and public practice. He had acted as Special Assistant Attorney General of the State of New York and as a special assistant to the United States Attorney General. He had sent to jail Joseph W. Harriman, bank president; had convicted thirteen defendants of defrauding stockholders of the National Diversified Corporation; had convicted Richard H. Brown, president of the Manhattan Electrical Supply Company, and Charles H. McCarthy for running a crooked pool on the New York Stock Exchange — the first conviction of its kind.
Barent Ten Eyck was a capable young man of high social standing and a good trial lawyer. He had been Dewey's personal assistant in the United States Attorney's office. They had worked side by side on the Waxey Gordon case. Ten Eyck as assistant had never lost a case, and he was now trying difficult cases for the city in the Brooklyn office of the Corporation Counsel.
All four of these men were in their thirties except Gurfein, who was twenty-nine. To each of them acceptance of Dewey's invitation would mean a financial loss. Dewey phoned them frankly:
"It's going to be a tough job. Do you want to drop all your other work and come with me? There are only three things I can promise you: a modest salary, plenty of hard work, and a good fight."
Every one of the four eagerly accepted.
Busy days followed. Dewey wanted sixteen lawyers other than his chief assistants. It was necessary to examine more than four thousand applicants. Any politically active were rejected.
A staff of ten accountants, under Abraham Gutreich, was picked. Nine experienced investigators — six of them former G-men — were chosen, under Wayne Merrick, for Dewey's undercover squad. Their first assignment was to make a thorough check of the background and personal relationships of every appointee in the Dewey organization, from the humblest office boy to Dewey's own chief assistants. They were in turn investigated by detectives assigned by the New York Police Department.
The Amsterdam News, a Negro newspaper of New York, petitioned for the appointment of a Negro to Mr. Dewey's legal staff. Dewey realized that Harlem was one of the principal victims of policy and other rackets. He realized, too, that he would need one woman lawyer. He appointed Mrs. Eunice H. Carter, a young colored woman with an immaculate and shining record. She was a graduate of Smith College and of Columbia and Fordham Universities. Part of her education had been obtained in Europe.
Though he realized, when he appointed her, that he had obtained the services of a brilliant young woman, Dewey had not the faintest idea, then, of the tremendously important part she was to play in the investigation.
On one point the Special Prosecutor was adamant. This investigation was not going to fizzle damply into the usual crusade against vice.
As Dewey bluntly told the newspapermen:
"I am out after the big fellows, the bosses of the under-word. I would be mad if I thought I could smash prostitution. I did not quit a good practice to chase prostitutes."
On another point, too, he was firm. The investigation's headquarters would not be in any city or county building. He knew that the corridors of these buildings were literally cluttered with the spies of the underworld. Witnesses brought in were seen by those spies. Result: The witnesses "forgot" what they had come to tell.
Dewey obtained quarters in the Woolworth Building. He spent hours, with blueprints before him, converting those quarters into a leak-proof citadel of thirty-five separate rooms. Waiting rooms adjoining the offices of his legal staff were enclosed. They had frosted-glass partitions. They were soundproof. Immediately upon entering the Dewey headquarters, a witness was installed in a private waiting room until he could be interviewed.
The doors of the private offices bore no names. Private elevators were available. Outside windows had Venetian blinds. Special "untappable" phone cable was installed, connecting via eleven trunk lines directly to the main office of the telephone company. No one could make an outgoing call unless Dewey or an assistant first approved of it.
Every bit of stenographic work was done in one large room under special supervision against leaks.
There was always a patrolman on duty in the intercommunicating private halls, and before anybody could reach a witness room he had to pass two desks connected by phone to the inner offices of Dewey's staff.
With his headquarters selected and planned, the Special Prosecutor was almost ready to begin. The newspapers, friendly but a trifle skeptical, put his chances of success at 40-60.
Police Commissioner Lewis Valentine offered the services of the New York Police Department. Dewey promptly asked that Acting Deputy Chief Inspector John A. Lyons be assigned to his staff to head a police department undercover squad. He and Inspector Lyons had worked together before. They liked each other and were in many ways alike. The Inspector, a slender graying man of fifty, was spare of words, gruff of voice, death on publicity, and a strict disciplinarian — who was, nevertheless, beloved by those who worked under him.
Since the Special Prosecutor maintains his policy of secrecy, conversations reported in this narrative are reconstructed from court records and other official reports. He took Inspector Lyons to lunch. Over the table he asked him, "How many men can you get/me? Straight-shooting honest men. Utterly trustworthy young cops."
"How many do you need?"
Dewey told him.
"I'll get 'em."
It was a month before Inspector Lyons had them all. Only six were veteran detectives. The rest were young patrolmen taken off beats. Their training began immediately.
The Inspector had told Dewey: "They're good clean boys, and they want to come with you. There's just one condition they want to make. They'll be with you to the hilt. But they've seen other investigations and they haven't liked some of the messy angles.
"They want your promise that they won't have to arrest prostitutes. Anything else, and they're with you. But they balk at jailing a lot of women."
Prosecutor Dewey laughed softly.
"Good! So do I. I said so when I took this job, and I meant it. You go back and tell your lads they have my word of honor that not one of them will have to arrest a single prostitute."
In the dingy basement of a restaurant in New York's Chinatown, three men and a woman sat at a table.
The woman was Cokey Flo. She conducted a house of prostitution.
Beside her sat a huge swarthy man with slicked hair and the neck and shoulders of a stevedore. His name was James Frederico. Cokey Flo was his mistress.
The second man at the table, "Little Davie" Betillo, had sharp features and a face as dead-white as a dead fish's belly.
The third man was the most striking-looking of any of them. Low on his forehead curly brown hair started, falling back in thick waves. His swarthy face bore scars like pockmarks. His lips were wide, in a cruel straight line. Incongruously, he had dimples.
His eyes, set under bushy dark eyebrows, were the most arresting feature of a face that was definitely sinister. One was wide open, alert. The other — his right eye — drooped, giving him a singular appearance of sleepiness.
He was known in the underworld as "the Boss."
His lips twisted open as he spoke.
"I don't like the racket," he said. "What the hell! There's not enough dough in it for the risk we take."
The man with the dead-white face spoke pleadingly:
"Try it a little while longer. We can make it go. There's big money in it, if we handle it right."
The Boss shook his head. "Maybe we'll only be sticking our necks out. This Dewey investigation is coming on. That may make it tough."
"What's that to be scared of? You know how those things go. He'll grab a bunch of prossies and a couple of bondsmen. And that'll be all."
The Boss considered this silently, then nodded. "All right, Davie. Let it go for a couple of months. I'll see what happens. But you haven't got the racket set up well enough to make it worth while. Here's what we'll do: We'll put all the madams on a salary. No more fifty-per-cent stuff. We'll syndicate every house in New York. We'll run them like chain stores. We'll — "
A Chinese waiter padded over toward their table. Cokey Flo beamed on him. "Chicken chow mein, son," she said. "A whole flock of it."
On July 29, 1935, Thomas Dewey and most of his assistants were sworn in. On the following day he moved with his skeleton staff into headquarters in the Woolworth Building.
That night he made a radio broadcast. His voice went into a million homes of New York citizens. "This is the first and, I hope, the last time," he told his listeners, "I shall make a public address during the course of this criminal investigation. There is today scarcely a business in New York which does not somehow pay its tribute to the underworld — a tribute levied by force and collected by fear. There is certainly not a family in the city which does not pay its share of tribute to the underworld every day it lives and with every meal it eats.
"If you will come to my offices you will be seen by a responsible member of my staff. He will welcome your help. He will respect your confidence. He will protect you. There is not the slightest excuse for any honest person to pay tribute to racketeers."
The young Special Prosecutor meant what he said. It was the only public address he was to make in the hectic months ahead.
He had flung a challenge into the teeth of the underworld. He was ready now, at thirty-three, to pit his own skill against the rich and powerful forces of firmly entrenched organized crime.
His office was open. He and his staff were ready and eager.
The Dewey Investigation was officially under way.
The flood of crackbrained responses to Dewey's radio appeal — and the few different ones that vitally aided him; Mrs. Carter's clear-eyed study of the vice super-racket, which made possible his plan of attack upon it; the inside story of his sudden avenging crack-down on the loan-shark racket's leeches — these are mere samples of what is coming next week! "Dutch" Schultz and "Lucky" Luciano will appear. "The Boss's" murky figure will loom larger; who can he be? You will watch the super-racket's strong-arm men at their cruel work, and watch one stubborn vice proprietress make a stand against them at risk of her life.
Publication Date: October 31, 1936