Section 10.qxd - Saskatoon Health Region

10.1177/0096144203253888 ARTICLEJOURNAL OF URBAN HISTORY / July 2003Cohen / THE RACKETEER’S PROGRESS

THE RACKETEER’S PROGRESSCommerce, Crime, and the Law

in Chicago, 1900-1940

ANDREW W. COHENSyracuse University

This article considers urban crime and the origins of the term racketeering in the United States during the1920s. The etymology of this muddled concept can help historians separate facts from the ideologicallycharged rhetoric of that period. The noun racketeering emerged in Chicago amidst Prohibition-era debatesabout gang violence, labor unions, and competition. In 1927, Gordon Hostetter, an antiunion activist, pro-moted the term to describe unions and associations in trades like construction, laundry, and kosher foods,which governed prices and wages through strikes, boycotts, and violence. He sought not to expose gang in-fluence in the labor movement but rather to direct public concern about bootleggers like Al Capone againstorganizations he saw as extortionate. Union officials fought this definition, eventually convincing the publicthat they were victims of blackmail, not its perpetrators. But Hostetter’s language significantly shaped thelegal status of collective action before and after the New Deal.

Keywords: racketeering; organized crime; Alphonse Capone; Chicago; labor unions; criminal law

Criminals have played a significant role in the history of American cities,yet most histories of urban crime remain either anecdotal or literal, suggestingthe need for a reconsideration of the field’s basic suppositions. Popular authorswrite volumes about Chicago gang boss Alphonse Capone, the beer wars of the1920s, labor violence, and corruption but seldom analyze the social and intel-lectual context for these people and their behavior. Academic historians aremore rigorously analytical, but few investigate their own language andassumptions. Scholars often use ideologically charged concepts, such as“organized crime” and “racketeering,” unconscious of how these ideas them-selves played an active role in the past. To separate the history of crime fromthe rhetoric of the sources, historians need to study the etymology of such keywords and phrases.1

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AUTHOR’S NOTE: I thank George Chauncey, Kathleen Conzen, Daniel Ernst, Carol Faulkner, MichaelGrossberg, Timothy Gilfoyle, Rebecca McLennan, Bill Novak, Mark Schmeller, Allen Steinberg, DavidTanenhaus, Joel Tarr, Chris Tomlins, and Michael Willrich for their insightful comments. I am also indebtedto Phil Costello, Jeannie Child, and Tom Sobun of the Cook County Circuit Court and to Martin Tuohy of theNational Archives. This piece is dedicated to the memory of my late mother, Marilyn Wender Cohen.

JOURNAL OF URBAN HISTORY, Vol. 29 No. 5, July 2003 575-596DOI: 10.1177/0096144203253888© 2003 Sage Publications

The term racketeering in particular demands historical analysis. One of themost powerful concepts in modern criminal law, the concept has long stymiedthose who sought to define it. In 1945, Harry Millis, a University of Chicagoeconomics professor and later the chair of the National Labor Relations Boardcomplained, “Racketeering has developed in labor organizations as well as inbusiness and political affairs. The expression ‘racket’ is used so loosely as toinclude a great variety of things one does not like—graft, violence, monopolis-tic exactions, etc.”2 Little has changed over the past six decades. For the public,racketeer is a general synonym for gangster. Historians and economists usu-ally use racketeering to refer to criminal exploitation of presumably legitimateinstitutions like labor unions. And neither of these interpretations reigns in thecourts. In recent years, both state and federal juries have applied civil and crim-inal antiracketeering laws to characters as varied as Olympic figure skatingconspirator Jeff Gillooly and antiabortion activist Randall Terry.3

Racketeering’s muddled definition stems from the circumstances of its ori-gin. Since the mid-nineteenth century, people in the United States and Englandhave used the word racket to suggest an illicit form of business. But during theearly twentieth century, the term allegedly developed the connotation of extor-tion that probably stemmed from a particular brand of urban politics. Party fac-tions, beneficial societies, and unions required their members sell tickets todance parties. Because of the noise they produced, these boisterous fundraiserswere allegedly called “rackets.” Since members sold tickets either by pro-claiming a charitable purpose or by threatening buyers with harm, the wordracket came to refer to an exploitative organization that masked its selfishnessbehind a facade of benevolence.

The idea of racketeering emerged in Chicago only in the 1920s, at the inter-section of Prohibition Era debates about gang violence, the legitimacy of laborunions, and the morality of competition. Between 1924 and 1926, Chicagonewspapers occasionally used the word racketeer to refer to beer runners,blackmailers and gunmen. In 1927, an antiunion activist named Gordon L.Hostetter advanced the term to describe the patterns of craft governance foundin trades like construction, laundry, and kosher foods, where unions and asso-ciations enforced standard prices and wages through strikes, boycotts, and vio-lence. Hostetter promoted the idea of racketeering to direct growing publicconcern about bootleggers like Al Capone against officials of these organiza-tions. He sought not to expose the power of men like Capone in the labor move-ment but rather to advance a corporate model of association by accusingorganized tradesmen of practicing extortion. Though a definition of racketeer-ing somewhat friendlier to labor unions eventually replaced this interpretation,Hostetter’s rhetorical innovation significantly shaped the changing legal statusof collective action in the United States during the New Deal and after.4

576 JOURNAL OF URBAN HISTORY / July 2003

SOCIAL CONTEXT

The history of racketeering is rooted in the experience of urban craftsmen inthe decades before the New Deal, a topic that arouses some disagreementamong scholars. Some, like John Commons call craft workers’combination ofconservatism and militancy “business unionism,” arguing that tradesmenaccepted capitalism and obtained modest material gains through contractualarrangements with employers. Others, such as David Montgomery, see skilledworkers as vehemently defending their autonomy within the workplaceagainst management until forced by the state to accept the employers’ author-ity. Michael Kazin notes the political progressivism of some craft workers.And some authors condemn these same men for opposing social insurance, anindependent labor party, industrial unionism, and the employment of womenand people of color.5

Though all these interpretations contain some truth, they fail to appreciatethe craftsmen’s preoccupation with governance, a fascination that definedtheir worldview and granted them some measure of control over Chicago’sfuture. Craft unions were consumed with enforcing rules governing wages andproduction, with controlling entry into the labor market, and with pressuringthe rank and file to obey union discipline. Often in alliance with their ownemployers, craft workers established informal but fairly stable systems of pri-vate regulation that deflected corporate economic development and main-tained their position in the city’s commercial life. Tradesmen wereconservative, but they were also ambitious, asserting total authority over manyurban industries. In doing so, they challenged not only the right of wealthybusinessmen to operate unfettered in the city but also the supremacy of thestate.6

Craft governance depended upon a web of agreements and associations.Consider the dry cleaning trade. When the chemical laundering of delicate gar-ments became both technologically possible and popular in the 1910s, unionsand local trade associations swooped in and established regulatory systems inthe new industry. In Chicago, four groups controlled cleaning—the MasterCleaners’ Association (MCA), the representative of the plant owners; theRetail Cleaners and Dyers Union Local #20077 (later known as #17792), anAFL union of the storefront tailors who took in dirty clothing; the LaundryDrivers’Union, Local #712; and Cleaning and Dying House Workers #17742,a union for the men and women who actually cleaned and pressed the clothing.Strict rules bounded the expansion of this trade, forcefully setting wages andthe terms for competition. If, for example, a new chain store opened near anestablished firm, deviated from the standard price, or refused to pay dues, thenthe retail cleaners picketed that store until it joined the association and abidedits rules. If a plant reduced its wholesale rates or solicited clients (called“stops”) away from MCA members, then the teamsters refused to cart that

Cohen / THE RACKETEER’S PROGRESS 577

plant’s clothes or the cleaners walked off the job. In exchange, employers guar-anteed workers a “closed shop”; that is, they employed only union members.7

Such arrangements were common in local, labor-intensive trades that, notcoincidentally, still share unsavory reputations. By 1920, unions and associa-tions had almost total control over certain building trades: bricklaying, carpen-try, electricity, steam fitting, and plumbing. Likewise, craft unions formedamong the men responsible for the management and maintenance of buildings,including flat janitors and stationary engineers. Shopkeepers—small manu-facturers like butchers and bakers; service providers such as barbers, tailors, orlaunderers; and retailers such as tailors, grocers, coal dealers, andsaloonkeepers—were all well organized by the 1920s. Finally, the Chicagoanswho loaded and carried goods throughout the city, such as teamsters and team-ing contractors, built strong and enduring trade agreements governing everyaspect of their trade.8

The craftsmen sought to maintain their own distinctive political economy inthe face the transformation of the demography, technology, and geography ofproduction. Between 1914 and 1929, new workers—often immigrants,women, or African Americans—challenged the dominance of white crafts-men.9 The reconstitution of the labor force accompanied the emergence of acorporate, mechanized, national economy. The 1920s was the decade of HenryFord, a man who made his fortune by standardizing the mode of production,the producer, and the product. Ford envisioned a mechanized corporation,employing thousands of relatively well-paid, semiskilled workers to manufac-ture complex but identical products for a global market. In hiring theseemployees, Ford considered race and ethnicity less significant than habits suchas thrift, sobriety, patriotism, and obedience.10

These changes terrified Chicago’s craft workers and employers, whofavored an economy composed of many local producers; employing skilled,white men; and governed by homegrown organizations. While corporationsdominated manufacturing by 1920, new national firms were only beginning toseek entry into Chicago’s construction, transport, retail, and service trades.The small and relatively weak producers in these trades felt high wagesdepended not on sales volume, productivity, and the beneficent patronage ofthe employer but on standard prices, scarce talents, unique products, and craftsolidarity. And both craft workers and employers were willing to fight to retaintheir small, local, and labor-intensive world against men like Ford and theforces of competition.11

Craft unions and trade associations responded to these challenges first bykeeping their numbers small and their membership homogeneous. Somecharged extraordinarily high admissions fees that discouraged all new appli-cants. In the mid-1920s, Maxie Eisen, the head of the Wholesale and RetailFish Dealers, allegedly demanded a widow pay the association the immensesum of three thousand dollars for permission to open a fish market. Still othersexplicitly refused to admit the fastest-growing populations in the city,


especially African Americans and women. As many scholars have noted, suchrestrictions pushed black and female workers into the most poorly paidemployments. For example, dry cleaners hired African American women, butonly to perform traditional tasks such as washing, drying, and ironing. Thewell-paid laundry drivers were almost exclusively white and male.12

Opposition to new workers was one component of a broader attempt to con-trol the local market and forestall the rise of a corporate order. Craft unions bat-tled new and potentially popular consumer products that altered habitual workpatterns. In 1929, Julius Rosenwald, a noted philanthropist and the presidentof Sears and Roebuck, America’s foremost mail-order house, built a modeltenement that he hoped would set the standard for reasonably priced housing inthe city. One of the key features of the four hundred apartments in the $2.5 mil-lion building was the introduction of electric refrigerators, machines replacingiceboxes that required both daily ice delivery and drains to collect the waterproduced by melting. When Rosenwald informed the plumbers that he did notneed them to build drains, a job that had provided many hours of labor, theydemanded that he pay them anyway. The philanthropist declined, so theplumbers union initiated an unsuccessful two-week strike.13

Building tradesmen were more effective in opposing the installation of pre-fabricated building materials that undermined their skills and shifted jobs out-side the city. In 1927, a number of out-of-state firms, such as the WasmuthEndicott Co., began manufacturing “built-in” kitchen cabinets with hardenamel finishes, created by mechanically spraying paint on the surface andbaking the finished product. These cabinets were in demand because of theirsmooth, ornamental finish and low cost. Yet members of Painters’ DistrictCouncil #14 of Chicago saw them as a terrible threat, for they replaced thelabor of local painters with the out-of-state labor of factory workers and, worseyet, machines. The painters determined not to work on building sites wherecontractors installed the finished cabinets unless either the manufacturershipped the cabinets with only a coat of primer (creating work for painters butdestroying the appeal of the product) or the contractor paid the union two dol-lars per kitchen and employed union members to stand and watch the installa-tions. Needing to complete the other necessary painting work, the localcontractors agreed to these terms, severely increasing the cost and decreasingthe success of the cabinets.14

Opposition to mechanization worked hand in hand with localism. Journey-men controlled mechanization by closing the city to nonunion, out-of-statemanufacturers. Contractors had obtained the right to use prefabricated stone,electrical fixtures, doors, and windows during the pivotal building trades lock-out of 1900, but around 1910, the two sides achieved a new compromise. Thecontractors gave the unions exclusive contracts, and in exchange, the workerspromised to protect their employers from competition with national firms.Contractors, manufacturers, and workers in plumbing, steam fitting, terracotta, and sheet metal established rules limiting the employment of nonunion


workers, the operation of independent contractors, and the use of out-of-statematerials. As they had for decades, the participants enforced self-styled lawsthrough a series of interlocking boycotts. Local sheet metal manufacturersagreed to hire only union workers, and sheet metal workers passed rules ban-ning materials produced out of state by corporations like Carrier Air Condi-tioning of Buffalo, New York. The Chicago Master Steam Fitters’Association,a group of local contractors and suppliers, granted the Chicago JourneymenSteam Fitters’Protective Association a closed shop. In return, union membersrefused to work for contractors who were not association members. Firms likeSears and Roebuck that tried to sell steam equipment in the city found thatnone of the city’s craftsmen would buy their wares.15

Associations and unions maintained older methods of distribution, fore-stalling the transformation of consumption habits in goods such as milk andlaundry. Before the 1920s, Chicagoans purchased food, coal, and clothes fromcommission salesmen who traveled door to door, and these tradesmen fearedthe advent of direct retailers, who shucked older purchasing patterns andattracted consumers through advertising and price competition. But the Chi-cago Milk Dealers Association; the Milk Producers’Association; and the MilkDrivers’ Union, Local #753, worked together to maintain tradition. Inexchange for a closed shop and massive wages increases (163 percent between1914 and 1929), the teamsters boycotted and threatened any retail distributorwho declined to join the Milk Dealers’ Association. Freed from competition,the dealers raised prices from eight to fourteen cents per quart between 1914and 1927. By refusing to cart for dairies that sold milk to groceries, and byharassing retailers who sold milk directly to the consumer, the teamsters suc-cessfully maintained door-to-door milk delivery for many decades to come.16

Unsurprisingly, the city’s corporations objected to rules restricting theirautonomy, and they pressed the state to guarantee the free operation of the mar-ket. In 1903, a group of corporate executives affiliated with the Chicago Asso-ciation of Commerce founded the Employers’Association of Chicago (EA) inresponse to the growing organization of the teaming trade. By the 1920s, theEA was the city’s foremost advocate of the open shop. Proponents painted anopen shop as a business whose employer hired and fired workers without con-sidering their affiliations, while labor leaders saw it as a coded expression forreactionary antiunionism. In fact, the open shop was a theoretical workspaceconceived by corporate attorneys to make the individualistic values of the latenineteenth century palatable to a public weary of class warfare. It allowedmembers of the EA to claim to tolerate unions themselves while still attackingunion authority over the workplace. Groups like the EA saw themselves asreform associations bent on eradicating alleged labor monopolies withoutdenying workers their freedom to associate with whomever they chose.17

The EA successfully convinced the courts to defend their values. Indeed,early-twentieth-century judges barely acknowledged the right of workers toorganize. Before the bar, unions were mere voluntary associations of


individuals with no official legal standing. They could negotiate a contractwith the employer, but this was the limit of their formal authority. The law pre-scribed that each individual worker should sign his or her own agreement andensure the employers’ obedience to its terms. Some unions gained officialcapacity by obtaining corporate charters from the state, but most declinedbecause this required they grant politicians power over the creation of neworganizations and subject themselves to judicial supervision.18

Furthermore, the courts aggressively pursued craftsmen who assertedpower over the economy. According to common law, two or more individuals,acting in concert, pursuing an illegal end or achieving a lawful end by unlawfulmeans, made up a criminal conspiracy. Though Cook County judges sawstrikes as a lawful form of protest, they condemned other forms of enforce-ment, such as pickets, boycotts, and violence, as illegal means justifying a con-spiracy indictment. They also ruled the closed shop to be an illegal end, thusbanning all strikes seeking this goal. During the first decade of the century,prosecutors charged barbers, bakers, brewers, printers, and others with con-spiracy to restrain trade, to interfere, to boycott, to assault, to damage property.The courts also restrained trade associations that engaged in collective bar-gaining, charging local businessmen with conspiracy to restrain trade, to formpool trust agreements, and to injure the business of a competitor.19

Given this hostile climate, craftsmen unsurprisingly preferred to enforcetheir rules and agreements outside of court through pickets, boycotts, and vio-lence. In doing so, they asserted the supremacy of their organizations withinmany trades. In 1925, Morris Becker, the owner of a chain of dry cleaningshops, complained that Retail Cleaners Union (RCU) president Samuel Rubinhad threatened to injure him if he continued undercutting the RCU’s standardprice. When Becker protested that the U.S. Constitution guaranteed his free-dom to operate his business without interference, Rubin allegedly thundered,“To hell with the Constitution. I am a damned sight bigger than the Constitu-tion.” Whether Rubin believed this or merely hoped to frighten the shopkeeper,he expressed a sentiment common among tradesmen, who believed their orga-nizations, not the state, had jurisdiction over specific areas of the economy.20

The problem of corruption undermined such claims to authority. Like policeofficers and politicians of this time, union administrators found themselvescontinuously tempted by the cash that flowed into their organizations. Someofficials resisted the lure of easy money, but many supplemented their $40 perweek salaries by appropriating the fines they collected from rule violators asso-called “strike insurance.” Michael “Umbrella Mike” Boyle of the electricalworkers was famous for sitting in Johnson’s Saloon with his umbrella hangingfrom the bar. Contractors seeking to adjudicate disputes dropped cash into theumbrella, thus allowing Boyle to deny in court that he had knowingly receivedany money. “Umbrella Mike” invested cash left in his parasol in businessesthat could profit from his connections: a real estate firm and a valve


manufacturing company. As early as 1914, Boyle had allegedly accumulated$350,000; by 1927, this had grown to a cool million.21

Also, maintaining control without the assistance of the state was difficult,and craft governance became increasingly violent in the 1920s. During theProgressive Era, administrators enforced craft rules by smashing windows andassaulting bodies. Though so-called “sluggers” injured some of their victimsfor life, they seldom killed except by accident. Beginning around 1912, theassassination of labor leaders had become more common, and by 1920, bomb-ings, shootings, and murder were almost routine. Picaresque Gas Workers’Union official “Big Tim” Murphy noted this escalation upon his release fromjail in 1920: “This Union has been run on a Sunday school basis where theygive out stogies and punch the bag and don’t accomplish anything. . . . A manthat can’t fight don’t amount to much. They don’t use boxing gloves in thelabor movement, they use Smith and Wessons.”22

This growing violence had many contexts. One was an overall explosion inhomicide rates during Prohibition. Another was increasing business competi-tion, which tested the limits of the craftsmen’s regulatory schemes. Bloodyprice wars gripped the cleaning trade, for example, as producers tried desper-ately to control wages and prices in the rapidly expanding economy of the1920s. As the market for the service grew and hundreds of firms scrambled forbusiness, the governing associations resorted to ever more extreme measuresto maintain their authority. For example, in 1921, an independent company,Eagle Cleaning and Dyeing, charged its competitors with hiring a group of“thugs, sluggers, and gunmen” to force it to join the MCA, a group represent-ing the wholesalers. Conditions worsened as the decade wore on. NicholasGeorgson, a disabled veteran who owned a South Side cleaning shop, testifiedthat the association had fined him for rules violations, then broken his win-dows, and finally “wrecked” his store. In 1928, the cleaning interests targetedthe Central Cleaners and Dyers, a nonunion plant. The MCA allegedly paidSamuel Weiss to secure a job at Central and put acid in its cleaning solution.The associations sent suits for cleaning with hidden explosives sewn into thehems, allegedly causing Central fifteen thousand dollars in damage. Again, theviolence escalated. Later that year, men in the association’s employ stoppedone of Central’s trucks, beat its drivers, and set their cargo aflame, seriouslyburning one driver.23

Similarly, in 1926, the Chicago Association of Candy Jobbers hired VincentPastor, an Italian American, as business manager on the stereotypical pre-sumption that he had underworld friends who might help him suppress rene-gade candy wholesalers. The association gave Pastor fifteen hundred dollarsfor “educational work,” expecting him to rough up the price cutters. Pastorturned out to be a reluctant enforcer who inspired little fear in his constituents.The frustrated president of the jobbers, Albert Hoffman, allegedly told thebusiness manager, “The only way to get the bastards is bust their windows,cripple them or something.” Pastor hired men to smash windows and throw


stink bombs but grew nervous about the escalating violence. So Hoffmanreplaced him with John Hand, an officer of Laundry Workers’ Union No. 32and a protégé of cleaning industry administrator Simon Gorman. Well knownfor his skill with a pistol, Hand promptly began assaulting candy jobbers whorefused to join the association, to pay dues or to charge standard prices. Hecontinued in this role until 1929, when police found him in the nearby town ofCicero, sitting at the wheel of his car, shot to death.24

A cycle of competition, collusion, and violence led organizations to hiremore gunmen like Hand in administrative roles. For instance, “Big Tim”Murphy was a former state legislator from the Irish Back-of-the-Yards district,who became a union official by organizing the men laboring for the city orlocal utilities, including gas workers, bridge laborers, street cleaners, streetforemen, asphalt layers, garbage handlers, bootblacks, and window washersduring World War I. Politics in the Packinghouse district was rough and tum-ble, and Murphy brought this forceful style with him. In 1920, Murphy wasindicted for the murder of his former mentor, Maurice “Mossie” Enright, andin 1922 he stood trial for the killing of a policeman named Thomas Clark. Thatsame year, he was convicted of robbing a mail shipment at Dearborn StreetStation and sentenced to six years in Leavenworth Federal Penitentiary. Therehe met Nicky Arnstein, the infamous gambler and husband of singer FannyBrice. Later, the two men opened a Gold Coast casino.25

Despite his illicit moonlighting and regular incarcerations, Murphy was apopular leader. While his contemporaries denied his status as a “legitimatetrade unionist,” “Big Tim” apparently forged a strong bond with the rank-and-file workers, who protected him against prosecutions by threatening to cripplethe city with strikes. When he evaded prison, the workers celebrated. Afterprosecutors dropped Murphy’s indictment for the 1920 Enright murder, a“troop of admirers” greeted the “hero to thousands” at City Hall. DuringMurphy’s six-year term in Leavenworth Federal Penitentiary, the gas workersrepeatedly elected him union president every year and paid his one hundreddollar per week salary to his wife Florence. When Tim was assassinated onJune 26, 1928, his wake attracted multitudes, forcing the city to station policeat either end of his street to direct their cars.26

Craftsmen ironically depended upon characters like Murphy and John Handto protect them against a class of particularly violent men who gained promi-nence selling illegal alcohol during the Prohibition Era. For example, in 1928,famed bootlegger Al Capone set his sights upon the city’s annual $35 milliondry cleaning trade. Capone’s passkey was a stubborn and idealistic cleaningtycoon named Morris Becker who refused to bow to the rules of the organizedcleaners. Becker innovated by introducing cash-and-carry service, whichallowed him to forgo door-to-door salesmen belonging to the teamsters union.He also vertically integrated his firm, obtaining a plant to serve his retail chainof storefronts. By cutting out the teamsters and the wholesale cleaners, Beckerlowered his costs while also insulating himself their discipline.


But by upsetting conventional business methods and defying price regula-tions, Becker made himself a principal target for his peers. One day, SamRubin, the president of the Retail Cleaners Union, came to Becker’s facilityand demanded he raise his prices. Becker refused, and three days later, hisplant was bombed. When Becker refused to budge, Benjamin Abrams, thepresident of the cleaning workers union, informed him that he would be“bumped off” if he did not raise his rates. He still demurred. Then Arthur Berg,the president of the MCA, approached him; Becker still declined.

Instead, Becker searched for protection, first from the state, then from apowerful corporation, and finally from Capone. Becker’s testimony led thegrand jury to indict the cleaners for conspiracy to restrain trade. Unenthusiasticabout prosecuting the well-connected businessmen, State’s Attorney RobertCrowe called few witnesses, allowing the cleaners attorney, Clarence Darrow,to swiftly secure an acquittal. In 1927, Becker decided to merge his firm with anational corporation, Baxter Laundries, Inc., which claimed to be large enoughto resist the MCA. But when Baxter caved in to the masters and raised prices, afrustrated Becker ended his relationship with the chain. On May 28, 1928, heannounced that he had made Capone a partner in his new firm, SanitaryCleaning Shops Inc., stating, “I could get no help from the police, the courts orthe state’s attorney. Now I have the best protection in the world.” With thefamous bootlegger beside him, Becker proceeded to lower cleaning prices 25percent.27

For perhaps the first time, Chicago’s daily newspapers praised Capone, andfor many years after, the infamous bootlegger bragged about his defending theplucky Becker and the consumer’s right to low prices. Capone’s real ambitionswere hardly so noble. He used his position as Becker’s bodyguard to blackmailthe organized cleaners. A wave of deaths and assassinations followed in theseven months after Capone’s self-styled philanthropy: first Tim Murphy, thenRetail Cleaners’ Union president Sam Rubin, then beloved Laundry Drivers’Union officer John Clay, and finally laundry workers union official and candyindustry enforcer John Hand. The terrified cleaners had three options: disbandtheir associations, pay tribute to Capone, or fight. Many cleaners scrambled tofind their own “protection,” forging an alliance with North Side bootleggerGeorge “Bugs” Moran that drew them into the broader gang wars of thisperiod. Meanwhile, cleaning prices returned to their earlier level, but with theproceeds flowing to Capone and Moran rather than to craftsmen. Becker hadnot freed the market; he had merely given it a terrifying new master.28

SHIFTING LEGAL PRIORITIES

Becker’s story suggests not only how gangsters insinuated themselves intocraft governance but also the limitations in the law that eventually inspired theinvention of the term racketeering. Progressive Era prosecutors had proved all


too willing to enforce criminal conspiracy laws barring craftsmen from variousforms of collective action such as the boycott. Though such cases largely failedto uproot craft governance, public officials themselves were dedicated to theopen shop and its individualistic assumptions. But during the 1920s, Chicago’scriminal justice system retreated from this position. Of at least 133 indictmentsissued against craft unionists between 1920 and 1929, only 12 ended in convic-tion or a guilty plea, and some were property crimes largely unrelated to thequestion of craft governance, such as robbery and petit larceny. With each year,the numbers grew starker. Jurors granted prosecutors victory in only 4 cases—the candy jobbers, bootblacks, bakers, and the machinery movers—out of 39indictments issued between 1925 and 1929. Many times, the state’s attorneysdeclined to prosecute union officials, fearing the wrath of their constituents. In11 cases between 1921 and 1929, cleaners, machinery movers, teamsters,garage workers, and other tradesmen won their freedom, largely because of thesympathy that some jurors felt for unions. Many of those convicted success-fully obtained pardons from Illinois Governor Lennington Small.29

Speeding the shift in criminal justice priorities was the 1920 prohibition ofalcoholic beverages. Gangs had provided residents of the city of Chicago withgambling and prostitution since the nineteenth century, but the giganticdemand for illegal alcohol during the 1920s created heated competition amongunderworld factions. This competition grew violent, leading to a series of luridmurders. Moreover, the desire to evade the law inspired wholesale politicalcorruption. In this context, the citizens of Chicago unsurprisingly pushed thestate’s attorney to use his resources to pursue gangsters, drawing energy awayfrom the employers’ complaints about coercive and collusive dry cleaners.30

Businessmen initially saw bootlegging as a distraction, a moral issue pull-ing the state’s attorney’s attention away from real (i.e., property) crimes. But asthe decade wore on, corporations began constructing a politics that addressedthe problem of gang violence without neglecting their older concerns. In 1928,Sears and Roebuck chairman Julius Rosenwald threatened to withdraw finan-cial support from the Chicago Crime Commission (CCC) unless that organiza-tion took a stronger stand against organized crime. Following Rosenwald’slead, the wealthy members of the CCC overwhelmingly elected a new presi-dent—Frank Loesch, a corporate attorney—who promised to fight Al Capone.The concern about bootleggers was undoubtedly sincere, yet it also reflectedthe elite desire to recapture public opinion and use it to crush craft gover-nance.31

Within the elite itself, faith in a narrow individualism was crumbling. Cor-porations of the 1920s created their own versions of industrial governance. Inthe years surrounding World War I, encouraged by federal officials like Secre-tary of Commerce Herbert Hoover, corporate executives established nationalassociations to administer prices and share information. Though many corpo-rate executives still favored the open shop, many others formulated a moreconcrete vision of appropriate labor organization: so-called “company


unions,” benefit associations, baseball teams, and bowling leagues. Corporateexecutives conceived of these groups as a way of allowing workers to organizewhile maintaining their subordinate status and denying their independentinterests.32

As corporations abandoned the free market for managed competition, theideological assumptions underlying their legal assault on local craftsmen grewincreasingly strained. If conspiracy laws restricted building contractors, teamowners, barbers, and butchers from forming associations, then the same rulesmight implicate organizations of steel manufacturers, meatpackers, and rail-roads. As corporate executives experimented with private regulation, theysearched for a legal regime that distinguished their associations from thoseestablished by craftsmen during the previous decades.

Arthur Jerome Eddy, the intellectual progenitor of the national trade associ-ation movement, showed businessmen how opposition to craftsmen mightrationalize the corporate governance. A Harvard-educated Chicago attorney,sportsman, and art collector, Eddy began as a critic and novelist before becom-ing a business guru. In 1912, Eddy published his most famous work, The NewCompetition, which encouraged corporations to manage competition throughnational trade associations. But Eddy expressly contrasted his ideal of cooper-ation against the craftsmen’s alleged immorality in an earlier, less well-knownnovel, Ganton & Co. (1908). This piece of realist fiction, based upon the Chi-cago packinghouse teamsters strike of 1903, painted craft workers as racist,corrupt, and brutal agents of unscrupulous merchants. His hero was the edu-cated son of a rough-and-tumble meatpacking magnate who stockpiles meat,bribes teamsters’ officials to order a citywide strike, and creates an artificialshortage that ruins his competitors. The protagonist (with his less intellectualbut more physical brother) remedies this situation by defending African Amer-ican strikebreakers, defeating the unions, and befriending the other packers,placing his father’s business on a modern, ethical footing. Eddy’s works illus-trated a new corporate view of association, one that balanced contempt forlocal craft organizations with faith in corporate governance, rejecting olderindividualism in favor of principles that distinguished good forms of associa-tion from bad.33

THE INVENTION OF RACKETEERING

Responding to these trends, Gordon Hostetter, the secretary of the EA,invented the criminal category of racketeering in 1927. Public concern aboutgang violence had pushed union coercion off the front pages. Even business-men, who once staunchly defended the principle of individualism, were devel-oping their own versions of associational governance. To reclaim publicopinion and adapt to new corporate values, Hostetter conceived a rhetoric thatappealed to this mixture of tolerance and fear. He argued that many unions and


associations were rackets, criminal organizations akin to gangs, that exploitedthe public for the benefit of their officers. He defined these rackets against thenew trade associations being organized by the wealthier elements of the busi-ness community. Hostetter invented the term not to staunch the growing influ-ence of gangsters in unions but instead to implicate entrenched forms ofcommercial governance that raised prices and wages and deflected corporatecompetition.

In a series of promotional writings, including a monthly newsletter and apopular book titled It’s a Racket, Hostetter advanced a new word—racketeer-ing—seeking to equate certain local unions and trade associations with crimi-nal gangs. The EA secretary defined a racket as a “scheme by which humanparasites graft themselves upon and live by the industry of others, maintainingtheir hold by intimidation, force and terrorism.” Acknowledging that the pub-lic used the term to describe varied forms of illicit enterprise such as bootleg-ging, prostitution, and gambling, Hostetter purposefully added anothercategory: organizations that set prices and wages in trades like laundry, drycleaning, barbering, construction, and trucking.34

Hostetter expressed the militant antiunionism of the nineteenth centurywhile bowing to both Progressive Era critiques of collective bargaining and theelite associationalism of the 1920s. Hostetter strongly opposed unions; underhis stewardship, the EA offered low-cost strikebreakers as a perk for its mem-bers. Though he described himself as an “industrial relations engineer,” sug-gesting a scientific approach to labor, his training came not from any universitybut rather from his experiences as a manager at mining firms in West Virginia,Kentucky, and Illinois. Unlike most college-educated professionals, he sawworker organizations as a threat to labor peace rather than the basis for stabil-ity. For example, Hostetter was more truculent than the Harvard-educatedWalter Gordon Merritt, the elite attorney who turned the once militant Ameri-can Anti-Boycott Association into the more moderate League for IndustrialRights. Merritt was no friend to labor, but he accepted the need to deal withunions. Though twelve years Merritt’s junior, and thus more likely to embracenew values, Hostetter preferred conflict to conciliation.35

Hostetter’s definition of racketeering revived the Progressive argumentsmost inhospitable to collective bargaining. He identified two categories ofrackets. One was the “Collusive Agreement,” a compact between a local busi-nessmen’s association and a union allowing it to administer rules regulatingprices and wages. Hostetter’s primary example was dry cleaning, the so-called“ ‘Daddy’ of Them All.” Here various unions and associations conspired tocontrol competition in the cleaning business, using threats and violence toforce compliance among the plant owners and retail shopkeepers who made upthe trade. Such portrayals evoked the articles of turn-of-the-century journalistRay Stannard Baker, who lambasted exclusive closed shop agreements in Chi-cago’s teaming and construction trades, only without Baker’s ambivalent sym-pathy for workers.36


Yet Hostetter’s conception of racketeering also accommodated the emerg-ing corporate faith in association and managed competition. Hostetter named asecond type of racket—the “Simon Pure Racket”—which referred to a phonyunion or association established by a criminal solely for the purposes of brib-ery. He argued that nefarious individuals masqueraded as labor leaders todemand cash from workers and employers. His best example of a Simon PureRacketeer was “Big Tim” Murphy, who, he argued, saw unions as nothingmore than a useful vehicle for graft. Implicit in this notion of fraud was theassumption that unions and associations could be legitimate. Thus, while thedoctrine of criminal conspiracy broadly forbade the enforcement of tradeagreements, the idea of racketeering attacked specific organizations as fraudu-lent and extortionate, creating room for a supposedly pure, legitimate, and cor-porate form of association.37

By comparing craft administrators to mobsters, Hostetter denied thatunions and associations had any ideological rationale beyond criminal intentof their officers. This diverged sharply from current rhetoric. Progressive Eracritics charged craftsmen with political crimes such as “conspiracy,” “monop-oly,” and “tyranny,” implying a threat to the commonwealth. Muckrakerscalled building trades unions “corrupt machines” or “trusts” administered by“bosses.” But while some newspapers compared union officials to so-called“Black Hand” extortionists, few writers likened craftsmen to ordinary crimi-nals before 1927. By using the gang as a metaphor for illegal collective action,Hostetter argued that the governance of the laundry trade was a form of orga-nized crime, not unlike running a speakeasy. As such, Hostetter contended thatdry cleaners like Simon Gorman deserved no more sympathy from prosecu-tors, judges, and juries than did Al Capone.38

Nonetheless, Hostetter did not see racketeer as a mere synonym for gang-ster. Such an interpretation would have located the problem as external tolabor, as a problem of gang incursion. And this view would have presentedunions as victims of murderous thugs, granting them a sympathy and legiti-macy that Hostetter sought to prevent. Rather, he saw the racketeer as a newand distinct type of criminal, worse than the “hoodlums” with whom he associ-ated. Racketeers were union officials who hired gunmen to administer vio-lence; they were not gangsters themselves. Hostetter did not accept thepossibility that craft unions were targets for bootleggers seeking access to trea-suries, dues, and bribes.39

Hostetter’s belief in the distinction between racketeers and gangsters wasevident in his retelling of the story of Morris Becker, the dry cleaning executivewho bucked price agreements for years before seeking the protection of AlCapone. In It’s a Racket, Hostetter defended Becker’s alliance with “ScarfaceAl.” He excoriated State’s Attorney Robert Crowe for failing to protect thesmall businessman and praised Capone for his patriotic defense of individualliberty. Hostetter’s support for Becker shows that he saw the officials of theRetail Cleaners Association, not gunmen like Capone, as the problem.


Hostetter was trying to convince the public to shift its gaze away from bootleg-gers and toward the potent organizations governing the local economy.40

In the short term, Hostetter was successful. By bringing Chicago’s tradeassociations and unions into the media spotlight, the word racketeeringrecemented the usually close relationship between the EA and Cook CountyCriminal Court. A wave of prosecutions followed the invention of racketeer-ing, as the grand jury indicted teamsters, bootblacks, florists, candy workers,circular distributors, dental technicians, bakers, pop peddlers, garage workers,glaziers, meat cutters, and waitresses between 1927 and 1929. In 1929, HarryOlson, the chief judge of the Municipal Court of Chicago, founded a special-ized “racket court” with special trial judges and prosecutors to handle cases ofgang violence.41

The EA also drove federal prosecutions, pushing the U.S. Attorney GeorgeE. Q. Johnson to indict local associations engaged in protective forms of collu-sion. For example, in 1928, special assistant district attorneys Mary G. Connorand William R. Benham successfully prosecuted the Chicago Association ofCandy Jobbers for conspiracy to violate antitrust laws, charging the candy job-bers with assaulting candy dealers, smashing store windows, and throwingstink bombs in an effort at enlisting members, setting prices, and excludingsome manufacturers. While the judge dismissed charges against well-connectedassociation official Simon Gorman, the jury convicted sixteen of the otherthirty-five defendants. Five were sentenced to prison, including Gorman lieu-tenant John Hand and Albert Hoffman, the president of the association.42

But almost immediately after his introduction of the term, various groupsbegan challenging Hostetter’s understanding of racketeering. For example,functionalist social scientists accepted Hostetter’s basic definition, but theycheered the craftsmen’s attempts at governance and used their violence to jus-tify the liberalization of labor law. John Landesco, the University of Chicagosociology graduate student who authored the seminal Organized Crime in Chi-cago (1929), called for the legitimization of trade agreements. Landescobelieved that restraint of trade laws prevented craftsmen from enforcing theiragreements in the courts, forcing them to turn to gunmen for help. In 1930,Columbia University political science professor Raymond Moley argued thatcraftsmen merely sought to stem “cut-throat competition,” resorting togunplay only because they were prohibited from maintaining prices contractu-ally. In 1931, University of Wisconsin economist John Commons similarlyasserted the positive effects of racketeering in The New Republic, suggestingthat Hostetter’s “collusive agreements” were bulwarks for worker rights. Ineffect, these scholars inverted Hostetter’s purpose by calling for the contrac-tion, not the expansion, of criminal law.43

The Chicago Federation of Labor also redefined racketeering, seeing theproblem as one of harassment, robbery, and outright conquest of labor unions.Officials argued that they were the victims of racketeers like Capone, whoassaulted, kidnapped, and murdered those who declined to give them access to


union treasuries. They pointed to the 1928 murder of John Clay, the belovedsecretary of the Laundry Drivers Union, who died for refusing to turn his well-funded union treasury over to unknown gunmen. They even rejected JohnLandesco’s depiction of racketeering, chiding the sociologist for believinglurid tales of collusion, violence, and corruption concocted by Hostetter andstaunchly antilabor newspapers such as the Chicago Tribune.44

New contexts validated the redefinitions of union officials and social scien-tists. First, a series of well-publicized murders and assaults after 1930 seemedto bear out labor’s claims to victimization. A steady stream of labor leadersdied violently, and less serious incidents also received significant attention. In1931, Capone associate Murray “The Camel” Humphreys targeted the milkwagon drivers’ treasury. Stealing from the drivers was easier said than done,for while officers Steve Sumner and Robert G. Fritchie were old (eighty-fiveand sixty-five, respectively), they were both hardened veterans of industrialwarfare. After Humphreys riddled their headquarters at 220 S. Ashland St.with bullets, the milkmen turned their office into a fortress, complete withmachine gun turrets, and Sumner purchased an armored car from bankruptutilities executive Samuel Insull. But Humphreys persisted, kidnappingFritchie and forcing the union to pay a fifty thousand dollar ransom. Readingthese stories, people began to believe unions when they claimed to be victimsrather than perpetrators.45

Second, economic conditions after 1929 transformed the nation’s basicpolitical assumptions and the laws governing the market. The stock marketcrash and the subsequent decline in production reconfigured American atti-tudes toward competition, causing many people to abandon their faith in theindividual and the free market. Belief in cooperation as the remedy for thenation’s woes lent legitimacy to the organizations that Hostetter called rackets.The EA and the CCC responded to the changing political landscape, protestingthat Capone’s rampage had left him in control of the unions, but with little suc-cess. Between 1930 and 1932, the people elected a new Congress and presi-dent, Franklin Roosevelt, partly because they favored collective bargaining.Roosevelt brought with him social scientists committed to industrial gover-nance, including Raymond Moley.46

The history of racketeering thus suggests an alternative angle from which toview the New Deal. In 1933, Moley himself wrote the National IndustrialRecovery Act (NIRA), which mandated workers and employers establishindustrial codes and legitimized the forms of craft governance found in tradeslike construction, trucking, and dry cleaning. Previous authors have seen theNew Deal and particularly the NIRA as extensions of corporateassociationalism of the 1920s. But the fact that an expert on criminal law withstrong views on craft governance and racketeering created the NIRA implies


an additional source for that legislation: the construction sites, stables, and drycleaning stores of America’s cities.47

More obviously, the New Deal radically overturned criminal law and espe-cially Hostetter’s notion of racketeering. NIRA gave credibility to agreementsthat had been criminal just a few years before. Cook County grand juries stillindicted craftsmen, but local juries refused to convict them, seeing them aslawful components of the recovery effort. At the same time, NIRA greatlyincreased the importance of keeping gunmen out of labor unions. The first fed-eral antiracketeering law, also passed in 1933, proposed to protect collectivebargaining from exploitative criminals like Murray “The Camel” Humphreysrather than to discourage trade agreements. In essence, the New Deal made theword racketeer synonymous with gangster, validating the views of social sci-entists and union officials. Racketeering became a crime perpetrated uponorganizations by evil individuals rather than a crime committed by those samegroups.48

CONCLUSION

Racketeering gained significance in the years that followed, spurring thecareers of politicians like Republican presidential candidate Thomas Deweyand becoming a major area of American criminal law.49 Racketeering becamefor the New Deal period what conspiracy had been for the Gilded Age: an ideaof criminality that accommodated the broader political ideology of the era.Nineteenth-century liberalism privileged the individual, and so the criminallaw of that period rejected collective action. During the Great Depression,Americans wanted unions and associations to administer the economy, andMoley’s redefinition of racketeering gave them a criminal law designed to pro-tect presumably legitimate organizations from men like Capone. This was avictory for the craftsmen, as it freed them from an outlaw status that Hostetterhad hoped to perpetuate. Though the new law contained many pitfalls, thelegitimacy of collective bargaining itself was fairly secure.

An appreciation for this history allows scholars to reevaluate the crafts-men’s experience, labor violence, and the role of gunmen in urban life by strip-ping away assumptions produced in the 1920s and 1930s. To note thatracketeering is a historical artifact is not to say that Gordon Hostetter fabri-cated everything he wrote about assault, bribery, and price fixing. Rather, it isto appreciate his stories as subjective interpretations that shaped public atti-tudes and affected the legal status of labor unions and collective bargaining. Itis to understand that the history of crime is inseparable from the history ofideas about crime.


1. John Kobler, Capone: The Life and World of Al Capone (New York: Fawcett Crest, 1971); AndrewSinclair, Prohibition: The Era of Excess (Boston: Little, Brown, 1962), 225-9; Mark Haller, “Urban Crimeand Criminal Justice: The Chicago Case,” Journal of American History 57, no. 3 (December 1970), 619-35;Humbert Nelli, The Business of Crime: Italians and Syndicate Crime in the United States (Chicago: Univer-sity of Chicago Press, 1981); Irving Bernstein, The Lean Years: A History of the American Worker 1920-1933 (Boston: Houghton Mifflin, 1960), 338-41; Philip Taft, Corruption and Racketeering in the LaborMovement, bulletin number 38, 2d ed. (Ithaca, NY: New York State School of Industrial and Labor Rela-tions, Cornell University, 1970); John Hutchinson, The Imperfect Union: A History of Corruption in Ameri-can Labor Unions (New York: Dutton, 1972); David Scott Witwer, “Corruption and Reform in theTeamsters Union, 1898 to 1991” (Ph.D. diss. Brown University, 1994). As Timothy Gilfoyle has shown, theexpression “organized crime” became a catchall term for a variety of politically protected urban criminalactivities during Charles Parkhurst’s reform crusades in 1890s New York. Timothy J. Gilfoyle, City of Eros:New York City, Prostitution, and the Commercialization of Sex, 1790-1920 (New York: Norton, 1992), 300,418 ft. 2.

2. Harry Millis and Royal Montgomery, Organized Labor (New York: McGraw-Hill, 1945) 670.3. “Progress Made in Kerrigan Case, the Police Say,” New York Times, January 13, 1994, p. 13;

“Gillooly Sentenced to 2 Years in Jail,” New York Times, July 14, 1994, p. 17; Dirk Johnson, “Abortion FoesAre Held Liable for Harassment,” New York Times, April 21, 1998, p. 1; “Jury Hits Abortion Protest ‘Rack-ets,’ ” New York Post, April 21, 1998, p. 21.

4. Oxford English Dictionary, vol. 13 (Oxford: Clarendon, 1989), 80-1; “Gangland Calls Truce Whileit Buries Caponi,” Chicago Tribune, April 6, 1924, p.1; U.S. Senate, Hearings before a Subcommittee of theCommittee on Commerce United States Senate Investigation of So-Called “Rackets” (hereafter, RacketHearings), vol. 1, parts 1-6 (Washington, DC: Government Printing Office, 1934), 244. For other origins ofthe word racket, see Murray Gurfein, “Racketeering,” Encyclopaedia of the Social Sciences, vol. 13 (NewYork: Macmillan, 1934), 43-50.

5. John Commons et al., History of Labor in the United States, vol. 4 (New York: Macmillan, 1935);Ruth L. Horowitz, Political Ideologies of Organized Labor: The New Deal Era (New Brunswick, NJ: Trans-action Books, 1978); Leon Fink, “Labor, Liberty, and the Law: Trade Unionism and the Problem of theAmerican Constitutional Order,” Journal of American History 74 (December 1987): 905-25; WilliamForbath, Law and the Shaping of the American Labor Movement (Cambridge, MA: Harvard UniversityPress, 1991); Victoria C. Hattam, Labor Visions and State Power: The Origins of Business Unionism(Princeton, NJ: Princeton University Press, 1993); David Montgomery, Workers’ Control in America:Studies in the History of Work, Technology, and Labor Struggles (New York: Cambridge University Press,1979); Montgomery, The Fall of the House of Labor: The Workplace, the State, and American Labor Activ-ism, 1865-1925 (New York: Cambridge University Press, 1987); Michael Kazin, Barons of Labor: The SanFrancisco Building Trades and Union Power in the Progressive Era (Chicago: University of Illinois Press,1989); Georg Leidenberger, “ ‘The Public Is the Labor Union’: Working Class Progressivism in Turn of theCentury Chicago,” Labor History 36, no. 2 (spring 1995): 187-210; Philip Foner, History of the Labor Move-ment in the United States, vol. 3, The Policies and Practices of the American Federation of Labor, 1900-1920(New York: International Publishers, 1964), 136-366; Dana Frank, Purchasing Power: Consumer Orga-nizing, Gender, and the Seattle Labor Movement, 1919-1929 (New York: Cambridge University Press,1994), 167, 200-4, 224-7. For a discussion of academic attitudes toward craft unions, see RichardHofstadter, Anti-Intellectualism in American Life (New York: Knopf, 1963), 284.

6. For analysis of the AFL’s belief in private governance, see Christopher L. Tomlins, The State and theUnions: Labor Relations, Law, and the Organized Labor Movement in America, 1880-1960 (New York:Cambridge University Press, 1985), 74-82.

7. Some members of the Master Cleaners’Association (MCA) objected to Cleaning and Dying HouseWorkers #17742, and they tried to destroy that union in 1929. But once local #17742 was established, theMCA asked them to help enforce prices. Morrison Handsaker, “The Chicago Cleaning and Dyeing Industry:A Case Study in ‘Controlled Competition’ “ (Ph.D. diss., University of Chicago, 1939), 102-73, esp. 115-20; “Cleaners and Dyers Are Still Locked Out,” Federation News, November 16, 1929, p. 14; “AgreementSigned by Cleaners and Dyers,” Federation News, January 4, 1930, p. 10.

8. Carroll Lawrence Christensen, Collective Bargaining in Chicago: 1929-30: A Study of the EconomicSignificance of the Industrial Location of Trade-Unionism (Chicago: University of Chicago Press, 1933).


9. James R. Grossman, Land of Hope: Chicago, Black Southerners, and the Great Migration (Chicago:University of Chicago Press, 1989), 98-160; Alice Kessler-Harris, Out to Work: A History of Wage EarningWomen in the United States (New York, Oxford University Press, 1982), 219-30.

10. Allen Nevins and Frank Ernest Hill, Ford: Expansion and Challenge 1915-1932 (New York:Scribner, 1957); Daniel Nelson, Managers and Workers: Origins of the Factory System in the United States,1880-1920 (Madison: University of Wisconsin Press, 1975), 140-64; Olivier Zunz, The Changing Face ofInequality: Urbanization, Industrial Development, and Immigrants in Detroit, 1880-1920 (Chicago: Uni-versity of Chicago, 1982); Antonio Gramsci, “Americanism and Fordism,” in Gramsci, Selections from thePrison Notebooks, Quintin Hoare and Geoffrey Nowell Smith, eds. (New York: International Publishers,1992), 286.

11. For a more thorough examination of the relations between the craft and corporate economies, seeAndrew Wender Cohen, “The Struggle for Order: Law, Labor, and Resistance to the Corporate Ideal in Chi-cago, 1900-40” (Ph.D. diss. University of Chicago, 1999), 14-133.

12. John H. Lyle, The Dry and Lawless Years (Englewood Cliffs, NJ: Prentice Hall, 1960), 189;Grossman, Land of Hope, 217; William M. Tuttle, Race Riot: Chicago in the Red Summer of 1919 (NewYork: Atheneum, 1970), 111, 142-56; Herbert Hill, Black Labor and the American Legal System: Race,Work, and the Law (Madison: University of Wisconsin Press, 1985), 237-9; Theresa Wolfson, The WomanWorker and the Trade Unions (New York: International Publishers, 1926), 69, 75, 77-8; Dorothy Sue Cob-ble, “ ‘Drawing the Line’: The Construction of a Gendered Work Force in the Food Service Industry,” in AvaBaron, ed., Work Engendered: Towards a New History of American Labor (Ithaca, NY: Cornell UniversityPress, 1991), 224-5; Handsaker, “The Chicago Cleaning and Dyeing Industry.”

13. Typescript on the building trades (n.d. [1932?]), 1, in Gerhard Franz Meyne Papers, Folder 6, Chi-cago Historical Society (hereafter, CHS). This unidentified “model tenement” was almost certainly theMichigan Boulevard Garden Apartments, which Rosenwald built for African American migrants to the city.Peter Dreier, “Philanthropy and the Housing Crisis: The Dilemmas of Private Charity and Public Policy,”Housing Policy Update 8, no. 1 (1997): 242.

14. Petition, August 22, 1928, US v. Painters District Council No. 14, United States District Court,Northern District, Eastern Illinois (hereafter, USDC, ND, E. IL), Case no. 8556 in National Archives, GreatLakes Division, Chicago (hereafter, NARA-GL); Typescript on the building trades (n.d. [1932?]), 1, inGerhard Franz Meyne Papers, Folder 6, CHS.

15. United States v. Chicago Mosaic Tiling Co. et al., USDC, ND, E. IL, Criminal Case no. 6068 inNARA-GL (1917); United States v. James Clow & Sons et al. (plumbing suppliers), USDC, ND, E. IL,Criminal Case no. 7788 in NARA-GL (1921); United States v. Louis Biegler Co. et al. (sheet metal contrac-tors), USDC, ND, E. IL, Criminal Case no. 7901 in NARA-GL (1921); United States v. Chicago MasterSteam Fitters’Association et al., USDC, ND, E. IL, Criminal Case no. 7902 in NARA-GL (1921); UnitedStates v. Lehigh Portland Cement Co. et al. (Portland cement mnfrs.), USDC, ND, E. IL, Criminal Case no.9312 in NARA-GL (1922); United States American v. Terra Cotta and Ceramic Co. et al. (terra cotta mnfrs.)USDC, ND, E. IL, Criminal Case no. 9333 in NARA-GL (1922).

16. True Bill, December 21, 1907, People v. Ira J. Mix, Criminal Court of Cook County (hereafter,CrimCC), Case no. 86389, Indictment Record Volume (hereafter, IR) 149, 131-7; “No ‘Milk Trust’ Seen,”Chicago Record-Herald, March 4, 1909, p. 16; “Defi for ‘Milk Trust,’ ” Chicago Record-Herald, February8, 1910, p. 3; Christenson, Collective Bargaining in Chicago, 178-83; Bill for Injunction, April 6, 1916,Borden’s Condensed Milk v. Milk Producers’Association, USDC, ND, E. IL, Equity Case no. 636 in NARA-GL (1916); “Milk Producers Ask Charge Be Explained,” Chicago Daily News, April 21, 1919, p. 4; JohnLandesco, Organized Crime in Chicago, Part III of the Illinois Crime Survey, 1929 (Chicago: University ofChicago Press, 1929), 141, 144; Declaration, November 22, 1932, Meadowmoor Dairy v. Chicago MilkDealers Assn. et al., USDC, ND, E. IL, Equity Case no. 41533in NARA-GL; Bill of Complaint, January 29,1934, Meadowmoor Dairy v. Borden Farm Products, USDC, ND, E. IL, Equity Case no. 13697 in NARA-GL.

17. Employers’News, April 1928, p. 6; Harold Barton Myers, “The Policing of Labor Disputes in Chi-cago: A Case Study” (Ph.D. diss., University of Chicago, 1929), 440, 561; Daniel Ernst, “The Closed Shop,the Proprietary Capitalist, and the Law,” Sanford Jacoby, ed., Masters to Managers (New York: ColumbiaUniversity Press, 1991), 132-48, esp. 136.

18. Louis Brandeis, “The Incorporation of Trade Unions,” Green Bag 15 (1903): 11; Carroll Wright,“Consolidated Labor,” North American Review 174 (1902): 30-44, esp. 44; Daniel Ernst, Lawyers againstLabor: From Individual Rights to Corporate Liberalism (Chicago: University of Illinois, 1995), 147-64;Ruth O’Brien, “ ‘Business Unionism’ v. ‘Responsible Unionism’: Common Law Confusion, the American


State, and the Formation of Pre-New Deal Labor Policy,” Law and Social Inquiry 18, no. 2 (spring 1993):255-96; Herbert Hovenkamp, “Labor Conspiracies in American Law, 1880-1930,” Texas Law Review 66,no. 5 (1988): 958-62. For labor’s opposition to incorporation, see Industrial Commission, Report of theIndustrial Commission on the Relations and Conditions of Capital and Labor Employed in Manufacturesand General Business Including Testimony with Review, vol. 7 (hereafter, IC, Reports, v.7) (Washington,DC: Government Printing Office, 1901), 600-4. Samuel Gompers, “Address before the National Civic Fed-eration, New York City, published in the American Federationist, February 1903,” in Hayes Robbins, ed.,Labor and the Employer (New York: Dutton, 1920), 276-7. For unions that did incorporate, see List of Illi-nois Corporations (1903); IC, Reports, v.7, 803-4, 820-7.

19. For a fuller discussion of the role of the criminal courts in Chicago’s economy, see Cohen, “Strugglefor Order,” 134-98. Most scholars discuss conspiracy as grounds for injunction rather than as a basis forcriminal prosecution. Edwin E. Witte, The Government in Labor Disputes (New York: McGraw-Hill, 1932),46; Daniel Ernst, “Free Labor, the Consumer Interest, and the Law of Industrial Disputes, 1885-1900,”American Journal of Legal History 36 (1992): 19-37; Hovenkamp, “Labor Conspiracies in American Law,1880-1930,” 919-65.

20. Landesco, Organized Crime, 157; Cohen, “Struggle for Order,” 79-95.21. Boyle had become famous as early as 1914, his exploits landing him in the New York Times.

“Umbrella His Graft Bag,” New York Times, July 5, 1914, p. 6; William Z. Foster, Misleaders of Labor (Chi-cago: Trade Union Educational League, 1927), 165-71, 176-7; Roger Touhy, The Stolen Years (Cleveland,OH: Pennington Press, 1959), 84-8. Judge John Lyle claimed the milk wagon drivers’ treasury held morethan $2 million. Lyle, Dry and Lawless Years, 194-6. One union held $34,000 in a safety deposit box, nearly$10,000 of it in cash. Chicago German Hod Carriers Union v. Security Trust, 315 Ill. 204 (1924). It is possi-ble that unions held cash because they believed that bank accounts were more vulnerable to the interferenceof courts and of financiers. First Trust and Savings Bank v. Brotherhood of Painters, Superior Court of CookCounty (hereafter, SupCC) Case no. 278195 (1910).

22. Before 1910, the most sensational murder trial involving Chicago unions occurred when a “slug-ging” accidentally turned deadly. After 1910, the number of planned assassinations grew with each decade.Shields v. People, 132 Ill. App. 109 (1907); People v. Enright 256 Ill. 221 (1912); “Kikulski, Labor LeaderShot by Sluggers, Dies,” Chicago Tribune, May 22, 1920, p. 3; Foster, Misleaders, 174.

23. For a sense of the extent of violent crime in the 1920s, see Landesco, Organized Crime, 98-147. Bill,October 5, 1921, Eagle Cleaning & Dying v. Master Cleaners & Dyers, SupCC, Case no. 370500 (1921);Amended Bill for Injunction, September 12, 1921, American Ideal Cleaning v. Master Cleaners & Dyers,SupCC, Case no. 369807 (1921); Handsaker, “Chicago Cleaning and Dyeing Industry,” 51-2; Landesco,Organized Crime, 157.

24. The Black Hand was a form of extortion brought to the United States by Sicilian immigrants.Landesco, Organized Crime, 108-20; Records and Briefs, James Boyle et al. v. United States, United StatesCourt of Appeals (hereafter, USCA), 7th Circuit, Case no. 4207 (1928), 61, 73, 77-8, 84, 167-72, 264-9 inNARA-GL; “John Hand Slain; Police Hunt Bootlegger Foes,” Chicago Daily News, May 21, 1929, p. 1;“Woman Hunted in Slaying of Racket Leader,” Chicago Daily News, May 22, 1929, p. 3.

25. Lyle, Dry and Lawless Years, 54-69; Landesco, Organized Crime, 137-40; Foster, Misleaders, 171-5.26. “Seek Murphy Slayers,” Federation News, June 30, 1928, p. 1; Lyle, Dry and Lawless Years, 57, 62;

Foster, Misleaders, 171-5; Landesco, Organized Crime, 134-40, 203-4. Murphy actually called city workerson strike while sitting in jail awaiting trial for the Enright murder. “ ‘Tim’and ‘Mike,’in Cells, Call Strike onCity,” Chicago Tribune, May 18, 1920, p. 1.

27. Under the agreement, Morris Becker became owner-manager of a dozen Baxter storefronts and sentall clothing to Baxter’s plant, which would be run by Morris’s son Theodore. The Beckers signed anoncompete agreement, under which they promised to stay out of the business for five years. When Baxtercapitulated to the MCA, the arrangement fell apart. Theodore Becker refused to charge higher prices, soBaxter fired him. And Morris Becker began constructing his own plant on the South Side, at 63rd and Prairie,in violation of his contract. In 1928, Baxter unsuccessfully petitioned the federal court for an injunctionblocking Becker from building this facility. Gordon L. Hostetter and Thomas Quinn Beesley, It’s a Racket!(Chicago: Les Quin Books, 1929), 37-41; Handsaker, “Chicago Cleaning and Dyeing Industry,” 125-8;Landesco, Organized Crime, 157-9; Briefs for Baxter Laundries Inc., v. Morris Becker, Cases no. 8578 and9078, USDC, N. IL, E. Div., in Box 37, Folder 4, Ernest Burgess Papers, University of Chicago Special Col-lections (hereafter, EBP).

28. It is nearly impossible to trace who killed whom in this roundabout. The New York Times stated thatmembers of the Moran gang murdered Clay. Both Murphy and Hand had many enemies, and union officials


denied their connection to the labor movement. But it is clear that the dry cleaning dispute drew tradesmeninto a broader gang war. Al Weinshank, a cleaner allied with Moran, was one of the seven men murdered byCapone in the infamous St. Valentine’s Day Massacre. “Seek Murphy Slayers,” 1; “Will Hold Memorial Ser-vices for Samuel Rubin of Cleaners,” Federation News, October 20, 1928, p. 1; “Mourn Killing of RacketeerVictim,” Federation News, November 24, 1928, p. 1. “Deplores Besmirching of Organized Labor,” Federa-tion News, June 1, 1929, pp. 5, 17; “Link Moran Killing to Murder of Yale,” New York Times, March 6, 1929,p. 20; Lyle, Dry and Lawless Years, 65-6; Landesco, Organized Crime, 157-8; Philip Hauser, “Materials Re:Funerals of St. Valentines Day,” 4, in Box 131, Folder 2 in EBP.

29. Untitled list of criminal records of union officers, n.d., Folder 6, Gerhardt Meyne Papers, CHS;Landesco, Organized Crime, 127, 158-61, 164-6. Conviction rates for conspiracy were generally low. Dur-ing that period, conviction rates only rose above 30 percent once, falling as low as 9 percent in 1927. SeePolice Department of Chicago, Annual Reports, 1926-1931. For the political pressures on prosecutors, seeHostetter, It’s a Racket, 10, 37, 41, 168-9; Carroll Hill Wooddy, The Chicago Primary of 1926: A Study inElection Methods (Chicago: University of Chicago Press, 1926), 18, 137, 176, 181-2; “Chicago GanglandCelebrates Victory,” Lightnin’2, no. 8 (July, 1928): 8; Harold F. Gosnell, Machine Politics: Chicago Model(Chicago: University of Chicago Press, 1937), 10-1; Gosnell, Negro Politicians (Chicago: University ofChicago Press, 1935), 180-1. The cases that ended in pardons were People v. Walsh, 322 Ill. 195 (1926); Peo-ple v. Walczak, 310 Ill. 441 (1923); People v. Quesse, 310 Ill. 467 (1923); “Justice or Politics,” Employers’News, November 1928, p. 1; “Information Wanted,” Criminal Justice 54 (Sept.-Oct. 1927): 8-9; Foster,Misleaders, 180; “Brave Leader of Strike Is Dead,” Federation News, November 26, 1938, pp. 1, 3.

30. Landesco, Organized Crime, 97-106, 169-90; Sinclair, Prohibition: The Era of Excess. For mediaconcern about bootlegging and gang violence, see Daniel McDonough, “Chicago Press Treatment of theGangster, 1924-1931,” Illinois Historical Journal 82, no. 1 (1989): 30-2.

31. Dennis E. Hoffman, Business vs. Organized Crime: Chicago’s Private War on Al Capone, 1929-1932 (Chicago: Chicago Crime Commission, 1989), 9-11; David Johnson, “Crime Fighting Reform in Chi-cago: An Analysis of Its Leadership, 1919-1927” (M.A. thesis, University of Chicago, 1966); AndrewWender Cohen, “The Chicago Crime Commission: Business Reform, Business Philanthropy, and SocialScience in the 1920s” (manuscript in author’s possession, 1991); Michael Willrich, City of Courts: Social-izing Justice in Progressive Era Chicago (New York: Cambridge University Press, forthcoming).

32. Gerald Berk, “Communities of Competitors: Open Price Associations and the American State,1911-1929,” Social Science History 20, no. 3 (fall 1996): 375-400; Ellis Hawley, “Herbert Hoover and Eco-nomic Stabilization,” in Ellis Hawley, ed., Herbert Hoover as Secretary of Commerce, 1921-1928: Studiesin New Era Thought and Practice (Iowa City: University of Iowa Press, 1981), 43-79. For welfare capitalismand company unions in Chicago, see Lizbeth Cohen, Making a New Deal: Industrial Workers in Chicago,1919-1939 (New York: Cambridge, 1990), 159-211.

33. Arthur J. Eddy, The New Competition: An Examination of the Conditions Underlying the RadicalChange That Is Taking Place in the Commercial and Industrial World, the Change from a Competitive to aCooperative Basis (New York: Appleton, 1912); Eddy, Ganton & Co.: A Story of Chicago Commercial andSocial Life (Chicago: McClurg, 1908), esp. 216-7; A. N. Marquis, ed., Book of Chicagoans (Chicago: A.N.Marquis, 1917), 207. Lest one imagine Eddy a prophet of racial equality, see Carter H. Harrison, GrowingUp with Chicago (Chicago: Ralph Fletcher Seymour, 1944), 188-90, 194, 196-7.

34. Hostetter, It’s a Racket, 4-5, 9. Thomas Quinn Beesley was vice president of a publicity service whoworked for the Employers’Association (EA) for only two years. In his previous career as a successful jour-nalist, Beesley never wrote about crime, labor, or racketeering. Thus, I credit Hostetter with the innovationsin It’s a Racket. Who’s Who in Chicago, vol. 5 (Chicago: A.N. Marquis Co., 1931), 77-8.

35. Employers’News, April 1928, p. 6; Ernst, Lawyers against Labor, 214-35, Who’s Who in Chicago,vol. 5, 77-8.

36. Ibid., vol. 5, 476; Hostetter, It’s a Racket, 29-44.37. Ibid., 15, 42, 129-56; “The Plain Truth,” January 18, 1928, p. 3.38. “Kikulski, Labor Leader Shot by Sluggers, Dies,” 3.39. Hostetter, It’s a Racket, 215.40. Ibid., 37-41, 167-87, esp. 176, 257-8, 204-12.41. Ibid., 188-203, esp. 199-200.42. Boyle et al. v. U.S., 40 F.2d 49 (1930); Boyle v. U.S., USCA, 7th Circuit, no. 4207 (1928) in NARA-

GL. For evidence of the connection between the EA and U.S. Attorney George E.Q. Johnson, see Hostetter,It’s a Racket, 267-76.


43. Landesco, Organized Crime, 150-2, 167; Raymond Moley, “Behind the Menacing Racket,” NewYork Times Magazine, November 23, 1930, pp. 1-2, 19; John Commons, “Stabilization through Racke-teering,” The New Republic 68 (September 30, 1931): 183.

44. “Seeks to Expose Racketeer Bodies,” Federation News, July 7, 1928, p. 2; “Robber Barons,” Federa-tion News, January 28, 1928, p. 4; “Accuse Employers’ Association of Extortion,” Federation News,November 10, 1928, pp. 8, 11; “Press Endorsed Racketeers Stick,” Federation News, March 23, 1929, p. 3;“G.L. Hostetter Dives into Literary Art,” Federation News, April 27, 1929, p. 3; “Mourn Killing of Racke-teer Victim,” Federation News, November 24, 1928, pp. 1,3,5; “Laundry Drivers Defy Racketeers,” Federa-tion News, December 8, 1928, p. 3; “Truth Clears Labor” (editorial), Federation News, March 30, 1929, p. 4;“Organized Labor Again Proves Innocence in Gang Killing,” Federation News, February 23, 1929, p. 6;Landesco, Organized Crime in Chicago, 149.

45. The murdered labor leaders include Ely Orr of the newspaper drivers (1931), Timothy Lynch (1931),Patrick Burrell (1932), William Rooney (1931), Dennis Ziegler (1933), Louis Alterie (1935), ThomasMaloy (1935), and Michael Galvin (1936). David Witwer, “The Columnist and the Labor Racketeer” (Paperpresented at the Gotham Conference on New York City History, October 6, 2001), 18-9, 32 ft. 50; Touhy,Stolen Years, 84, 88; Lyle, Dry and Lawless Years, 194-6; Racket Hearings, 416-7.

46. This shift in attitudes during the Depression is well known. For Chicago, see Cohen, Making a NewDeal, 251-89. For a national overview, see Melvyn Dubofsky, The State and Labor in Modern America(Chapel Hill: University of North Carolina Press, 1994), 107-11; Robert Himmelberg, The Origins of theNational Recovery Administration: Business, Government, and the Trade Association Issue, 1921-1933(New York: Fordham University Press, 1993), 110-50. Corporate efforts at controlling new definitions ofracketeering accelerated in 1932. See U.S. Congress, Hearings before a Subcommittee of the Committee onthe Judiciary United States Senate Seventy-Second Congress First Session on the Nomination of James H.Wilkerson to be United States Circuit Judge Seventh Circuit (Washington, DC: Government Printing Office,1932), 294; Gordon Hostetter, “The Growing Menace of the Racketeer,” New York Times Sunday Magazine,October 30, 1932, pp. 3, 17.

47. Ellis Hawley, The New Deal and the Problem of Monopoly: A Study in Economic Ambivalence (NewYork: Fordham University Press, 1995), 23-5; Peter Irons, The New Deal Lawyers (Princeton, NJ: PrincetonUniversity Press, 1982), 17-34. With the notable exception of Christopher Tomlins, historians agree thatcorporate associations and industrial unions—not craftsmen—inspired New Deal recovery statutes.Himmelberg, Origins of the National Recovery Administration, 181-218; Colin Gordon, New Deals: Busi-ness, Labor, and Politics in America, 1920-1935 (New York: Cambridge University Press, 1994); Steve Fra-ser, “Dress Rehearsal for the New Deal: Shop Floor Insurgents, Political Elites, and Industrial Democracy inthe Amalgamated Clothing Workers,” in Michael Frisch and Daniel Walkowitz, eds., Working-Class Amer-ica: Essays on Labor, Community, and American Society (Urbana: University of Illinois Press, 1983), 212-55; Tomlins, The State and the Unions, 99-129.

48. Handsaker, “The Chicago Cleaning and Dyeing Industry,” 227-42; “Labor Blasts Courtney,” Feder-ation News, May 12, 1934, p. 7; Congressional Record, Senate, March 23, 1934, p. 5735; Racket Hearings,142-3; Cornelius W. Wickersham, “The NIRA from the Employers Viewpoint,” Harvard Law Review 48(1935): 954-77. “Rackets and Recovery,” Business Week 207 (August 19, 1933): 17. For a fuller discussionof the relationship between the New Deal and racketeering, see Cohen, “The Struggle for Order,” 238-92.

49. Mary M. Stolberg, Fighting Organized Crime: Politics, Justice, and the Legacy of Thomas Dewey(Boston: Northeastern University Press, 1995), 162-92.

Andrew W. Cohen is an assistant professor of history at Syracuse University’sMaxwell School of Citizenship and Public Affairs. He has published previously inLaw and Social Inquiry and The Middling Sorts: Explorations in the History of theAmerican Middle Class, edited by Johnston and Bledstein (New York: Routledge,2000). He is currently finishing a manuscript on criminal law and the contested rise ofthe modern economy in Chicago from the Progressive Era to the New Deal.


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