Fight Against Fear

Fight Against Fear (See front cover) Jack Dempsey had screwed up his courage for a fight last week. Bright & early one morning he turned up at the State Supreme Court building in downtown Manhattan, prepared to testify that once he had been afraid to fight, had paid to be let off. Old Champion Dempsey's reputation for ferocious pugnacity remained unblemished. But as proprietor of big, flashy Jack Dempsey's Restaurant, across the street from Madison Square Garden, he had, according to the courtroom story of a State prosecutor, encountered an enemy more formidable than any Firpo or Tunney. It had appeared in the persons of hard-faced men who accosted him, snarled that it would be "healthier" for his restaurant if he joined their "association." A healthy restaurant, Proprietor Dempsey knew, was one whose waiters and cooks were not called out on strike, which was not stink-bombed, did not have its windows smashed, its food doped, its patrons annoyed. Jack Dempsey could have trounced any two of his extortioners singlehanded.

But behind them was something that could not be reached with fists, something huge and vague and sinister. He dodged that fight, paid his forfeit. Jack Dempsey was ready to fight last week because a dauntless little man with a brown mustache had come forward to champion him and thousands upon thousands of reputable New York businessmen who had been similarly terrorized and mulcted. The new champion was Thomas Edmund Dewey, 34, for 18 months the head and heart of New York City's famed Dewey racket investigation. Tweed to Walker, Ever since the State Legislature in 1853 stripped police-appointing powers from the city's Common Council (called "The Forty Thieves") and set up a Board of Police Commissioners, the history of New York City has been studded with drives against crime and corruption. In 1871 it was Samuel Tilden versus Boss Tweed, in the early 1900's Rev. Charles Parkhurst versus Boss Richard Croker, in the late 90's Theodore Roosevelt versus gamblers and scofflaw saloonkeepers, in 1902-09 William Travers Jerome versus vice and gambling, in 1905 Charles Evans Hughes versus insurance companies. Charles S. Whitman's sensational exposure of official corruption in his prosecution of Police Lieutenant Charles Becker for the murder of Gambler Herman Rosenthal in 1912 put Whitman in the Governor's chair. In 1930 Judge Samuel Seabury exposed the magistrates' courts and the next year started the disclosures which ran Mayor Jimmy Walker out of town. Despite these periodic spasms of civic indignation, crime marched on, burgeoning throughout the null into a new kind of super-crime, the racket, which no state or city authority seemed able or willing to attack. "Runaway" Jury, In March 1935 a New York County (Manhattan) grand jury assembled which was to become famed in the press as the "runaway" jury. Honest citizens, its members were appalled by the tales of racketeering terror and extortion which witnesses told them, infuriated by their failure to get action from the district attorney, Tammanyman William C.

Dodge. They set up a public furor, got the city's newspapers solidly behind them. In May, convinced that they were being deliberately impeded, they took the extraordinary step of barring an assistant district attorney from their proceedings. After this clean break with local officialdom, their next move was to plump their rage and scorn and indignation square on the doorstep of New York's Herbert H.

Lehman, demanding that the district attorney be superseded by a special prosecutor of rackets. Impressed, Governor Lehman named four well-known lawyers, including Charles Evans Hughes Jr., asked that one of them take the job. Unanimously they turned it down, unanimously told the Governor that the man he wanted was one the grand jury wanted, young Thomas Edmund Dewey. Governor Lehman hesitated. Lawyer Dewey had made a brilliant crime-fighting record as Chief Assistant U. S. Attorney, capped when he sent notorious Irving ("Waxey Gordon") Wexler to prison for ten years on income tax charges. But he had since retired to private practice; the Governor doubted whether his name was big enough to head the investigation. Finally, however, the Governor was convinced, and athletic, 33-year-old Lawyer Dewey, whose favorite indoor sport is squash racquets, found himself in a posi-tion to become the biggest racket-squasher in the U. S. Thomas Dewey's handsome, foxy face has grown familiar to New Yorkers, but when it appeared in the newspapers in June 1935 few would have recognized it without a caption. An Owosso, Mich, boy whose grandfather was second cousin to the Admiral, he had grown up in his father's newspaper and print shop, studied at the University of Michigan, with singing lessons on the side. When he migrated to Manhattan in 1923 he was not sure whether he wanted to be a lawyer or a singer. For two years he studied law at Columbia, sang as paid baritone soloist at St. Matthew's & St. Timothy's Church on West 84th Street. Ending up with an LL. B., he chose the Law.

Brilliant, likable, a courtroom virtuoso, he had built up a prosperous practice by the time Governor Lehman's call came, and he hated to give it up. But as Assistant U. S.

Attorney he had acquired a passionate hatred of and contempt for racketeers. The chance to fight them was too good to miss. Big-Game Hunt-Prosecutor Dewey made one thing plain at the outset. His investigation was going to be unlike any other in the city's history. He was not going to head one more futile roundup of criminal small fry--petty thugs, prostitutes, gamblers and crooked policemen. He was out, he announced, to get the bosses. For his big-game hunt, Special Prosecutor Dewey sought a staff of assistants, young, fervent, able, fearless. He found his chief assistants in four of his onetime colleagues in the U. S.

Attorney's office. They were William Bernard Herlands, 30, chunky, pink-cheeked, piano-playing Columbia graduate who VT?.S to become his right-hand man; suave Jacob Joseph Rosenblum, 38, who sent Banker Jo- seph Harriman to jail and might have convicted the late Racketeer Arthur ("Dutch Schultz") Flegenheimer if he had been allowed to conduct his prosecution in 1935; Murray Irwin Gurfein, 30, brainy onetime Editor of Harvard's Law Review; Barent Ten Eyck, 34 only gentile of the lot, a suave, bald Princetonian socialite, translator of two Scandinavian novels. Fifteen men and one woman rounded out the Dewey legal staff. The woman, Mrs. Eunice Hunton Carter, a young Negro lawyer and social worker schooled by Smith and Fordham and married to a Harlem dentist, was to prove one of his ablest trackers of prostitution and policy racketeers. Ten crack accountants were picked to search racketeers' bank records and the books of their reluctant victims. Prosecutor Dewey's second prime requisite was the wholehearted backing of top local officials. He got that from the Reform Administration of Mayor Fiorello H. LaGuardia. Tammany was unable to keep the Board of Estimate from appropriating his expenses, which have run to $280,000 per year. Police Commissioner Valentine gave him a special squad of policemen and detectives too young to be tainted by corruption or disillusionment. Third, he needed an honest, fearless judge to arraign and try his prisoners. Such a man was State Supreme Court Justice Philip James McCook, who was assigned to conduct a special trial term for his cases, has since been continued for two more terms. A scholarly jurist whose off-bench fun is farming at Niantic, Conn., Justice McCook has a kindly face and manner which belie the fighting spirit that won him a D. S. C. in France at 45, and a fight with Tammany for his seat on the bench. Last week when defense attorneys in the current restaurant racket trial suggested that he disqualify himself from presiding because he had shown "unconscious or subconscious" prejudice in favor of Prosecutor Dewey, the rubicund justice smilingly consulted his "moral conscience," declined.

Prosecutor Dewey got another judge of the calibre he likes when Supreme Court Justice Ferdinand Pecora, famed counsel of the Senate banking investigation, was appointed last July to a special term running concurrently with Justice McCook's. With satisfactory staff, support and court, Prosecutor Dewey's final need was for a very special kind of headquarters. No official building, open to spying, would do. He established his staff on the 14th floor of the Woolworth Building, with private elevator, intricate soundproof and frosted-glassed offices, tamper-proof telephone connections, a policeman outside and detectives downstairs to scan lobby loiterers. Fear v. Fear-His headquarters pre- cautions had been inspired by fear. That fear was not, however, in the hearts of Thomas Dewey and his men. It was in the stomachs of his prospective witnesses. The same terror which makes their victims pay tribute to racketeers also makes them reluctant to complain. Prosecutor Dewey began with a radio appeal guaranteeing victimized businessmen complete secrecy and protection if they would come in and disclose their persecutors. None came. Their would-be deliverer had to subpoena their books, wring explanations of unexplained expenditures out of them.

Some-times persuasion worked. More often Dewey had to fight fear with fear, making threats--which he sometimes carried out --of prosecution for such offenses as State income tax evasion or contempt of court if they refused to talk. Best proof that Prosecutor Dewey has also put fear of the law into racketeers is that he can now boast that he has "never lost a witness"-- not one has been visited by a stroke of criminal vengeance. Loan Sharks-First Dewey crackdown was on the loan shark racket. Human leeches were lending money to small and ignorant folk who knew no other way to get it, then keeping them perpetually in debt by charging up to 1,040% interest, which they collected by threats, beating, torture. Their estimated profits were $10,000,000 per year. Since usury is only a misdemeanor, Prosecutor Dewey bided his time until he had piled up several counts against each leader in the racket. Then he pounced. Terrorized debtors lined up behind a Venetian blind to identify their tormentors. Of 28 loan sharks brought to trial, all were sent to prison for terms ranging up to five years.

Prostitution & Super-Boss. As his investigators inched along the trails of scores of rackets, Mr. Dewey made a surprising discovery. He had said that he was not interested in prostitutes. Now, however, he was informed that since 1933 New York City bawds and brothels had ceased being independent, had been organ-ized on a chain-store basis by a single syndicate. This revelation was confirmed by 70 prostitutes and madams who, taken into custody, were persuaded to talk when Mr. Dewey had his lawyers and policemen daze them by calling them "miss" and saying "please," soothing their jitters with liquor as required. Pursuing the heads of the syndicate, Prosecutor Dewey made an-other discovery which was to lead to the greatest triumph of his crusade to date. After Dutch Schultz was riddled with bullets in a Newark barroom (TIME, Nov. 4, 1935), his reputed successor as New York's No. i racketeer was a shadowy in- dividual named Charles ("Lucky") Luciano. The Dewey investigators wanted him, badly, as operator of a nation-wide string of handbook houses and a national narcotics ring, boss of the city's policy gambling and of at least two of its business rackets. But Boss Luciano had learned from the examples of Al Capone and Waxey Gordon. He paid up his Federal income taxes, kept his identity and activities so well hidden that the respectable Waldorf-Astoria Hotel permitted him to occupy one of its residential suites. The Dewey staff could uncover no evidence to connect him with his known rackets. Great was Prosecutor Dewey's joy, therefore, when frightened "bookers" informed him that the organizer and tycoon of Manhattan's wholesale whoredom, known to most of his hirelings only as "The Boss," was Luciano. Extraditing the grim-lipped, droop-eyed Sicilian from his refuge in Hot Springs, Ark., Mr. Dewey brought him and nine of his lieutenants to trial on 90 counts of compulsory prostitution, got them prison sentence^ ranging from seven and a half years for lesser gangsters to 30-to-50 years for "The Boss" (TIME, May 25, June 15). By this coup the young prosecutor was satisfied that he had broken New York's worst mob, put away the nearest thing to a Capone that the City had ever had. Up to last week Mr.

Dewey's further racket strokes had been less spectacular and conclusive. He had kept his trial record perfect: 52 indictments, 52 convictions. Proceeding with extreme secrecy and caution, refusing to strike until he felt sure he had enough evidence to convict, he had made public beginnings against rackets in the trucking, garment, used-brick and poultry industries. Finding the notorious poultry racket apparently impregnable, he had succeeded in indicting its reputed boss, Arthur ("Tootsie") Herbert, and two of his lieutenants on charges of embezzling from the labor union which they controlled. Policy-Week before last the patient Dewey researches bore fruit in three moves characteristic of his methods and purposes. The policy racket (numbers game), by which small New York City betters are mulcted of some $50,000,000 per year (TIME, Jan. 4), was once a Dutch Schultz monopoly. It passed on his death to Luciano and has since been divided among several large rings, hundreds of small independent "bankers." Setting up temporary headquarters one evening^ in upper Riverside Drive's historic, city-owned Claremont Inn, now closed for the winter, Mr. Dewey sent 70 detectives swarming over Harlem after the city's biggest known policy ring, run by two West Indian Negroes named Pompeii and Ison. Bankers, slip girls, runners, collectors were carted to the Inn for examination in a nightlong stream. By morning 70 of them, including Ison but not Pompeii, were in hand, plus the ring's "take" for the previous day: $14,136.

Except as a huge source of criminal funds and as a possible lead to some su-per-boss like Luciano, Prosecutor Dewey was no more interested in policy gambling than he had been in prostitution. But though he never expected to wipe out prostitution, he did announce that he might abolish policy in the only way it ever could be abolished--by showing betters what a "crooked gyp racket" it is.

Contracting-Day before his policy raids Prosecutor Dewey made his first public move, after a 13-month investigation, against an electrical contracting racket. Subpoenaed were the books of city power companies, of three trade associations, private contractors, and of a local of International Brotherhood of Electrical Workers (an A. F. of L. affiliate). A Dewey aide charged that the leaders of the union had, by violence aided a monopoly of electrical contracting which cost New York citizens $10,000,000 per year. Baking. Two days later Mr. Dewey closed in, after more than a year of sleuthing, on a baking racket. He arrested a lawyer, the owner of one of the city's largest cake & pastry bakeries, and the president and business agent of a local of A. F. of L.'s International Brotherhood of Teamsters, Chauffeurs, Stablemen & Helpers, whose President Daniel J. Tobin was chairman of the Democratic Labor Committee in last year's Presidential campaign. His electrical and baking cases, along with his moves against poultry, trucking, garment and used-brick rackets, typified the kind of thing that Prosecutor Dewey is really after--the racket that preys on law-abiding businessmen. But not until the restaurant racket trial began last week did he enter in open court the kind of battle whose outcome would indicate eventual success or failure for his whole crusade. Labor Cancer, Imbued as a boy with the doctrines of a union printer in his father's shop, Thomas Dewey professes himself a true friend of Organized Labor. As such, he views with sorrow and anger the growth of the labor union as the prime tool of industrial racketeers. The technique of industrial racketeering, he has discovered, is simple, standardized. A racketeer gets control of a union, or a union leader turns racketeer. In such highly-organized industries as New York City's, a strike is a paralyzing weapon. After a few samples, the mere threat of strike is usually enough to keep businessmen in line. The racketeer employs sluggings, bombings, window-smashings as supplementary discipline. But he shrinks from murder, resorts to an occasional killing only to prove that he means business. Hand in glove with the corrupt labor union usually works a "trade association." Sometimes it is organized by racketeers who force reputable businessmen to serve as a front.

Sometimes, as was indicated in the arrest of the bakery owner last fortnight, businessmen who want to keep competition down and prices up in spite of anti-trust laws organize it themselves, take racketeers as partners. Last week, well aware of the significance of his mission, Dewey Assistant Herlands set out to give the nation its first complete courtroom exposition of the way such a racketeering outfit works. Restaurants, On trial before Justice McCook were three officials of the "Metropolitan Restaurant & Cafeteria Associa- tion," three of a local of A. F. of L.'s Hotel & Restaurant Employes International Alliance ("waiters' union"); two of a local of A. F. of L.'s Delicatessen & Restaurant Countermen & Employes ("cafeteria workers") Union. Nine others had been named in the indictment. Three of them were fugitives. Four more were Dutch Schultz, reputed founder of the restaurant racket, one of his henchmen and two union leaders--all dead by violence. An eighth was the late president of the Cafeteria Workers local, dead by his own hand last December while awaiting trial. The ninth, reputed collector and No. 2 man of the racket, pleaded guilty on the first day of the trial. The defendants were accused, in the opening speech delivered by Chief Assistant Herlands, of having operated a Manhattan restaurant racket along strictly conventional lines. Their Association charged a $250 initiation fee, $5 per month dues. Its terrorized members--in-cluding such famed restaurants as The Hollywood, Lindy's, Brass Rail, St. Regis and Jack Dempsey's--were additionally shaken down for whatever they were worth. One chain paid $17,000. Jack Dempsey got off with $285, possibly because he gave the Association prestige by posing before newscameras with two of its operators. Profits from the racket were $2,000,000 per year--all of which, by regular racket custom, was presumably paid by patrons in the shape of higher prices for food and drink. Union members were victimized no less than proprietors and patrons. Their racketeering officers called strikes solely for shakedown purposes, after which strikers were sent back to work usually with their pockets empty, no benefits won. All these charges, the prosecutor promised, would be detailed and proved by first-hand testimony. Assistant Herlands did not deliver his charge until week's end. Rest of the week had been devoted to picking a jury, a process laboriously protracted by the twelve defense attorneys. This battery, which included such well-known Labor lawyers as John F. Finerty of Washington and New York's onetime (1932) Socialist candidate for Governor, Louis Waldman, exhaustively questioned every prospective juror about his Labor views, peremptorily challenged everyone who confessed to the slightest prejudice against unions or their activities. Time & again Prosecutor Dewey leaped up to protest that no union was on trial. At week's end 500 A. F. of L. unionists rallied to a meeting of the city's Central Trades and Labor Council, denounced Prosecutor Dewey as "Union Buster No.

i," empowered a committee to defend Labor against him.

"Seventy per cent of Dewey's activities are in behalf of Big Business," roared the President of the Electrical Workers. Tammany, First hint of politics entered the Dewey investigation last week when, in questioning prospective jurors, Mr. Dewey announced that James J. Hines, most famed and influential of Tammany district leaders, would be mentioned during the trial. Hines' friends were warned off the jury. Also last week City Commissioner of Markets William Fellowes Morgan Jr. publicly asserted that potential witnesses to food racketeering were withholding information from Prosecutor Dewey because racketeers had threatened revenge "when Tammany gets back" in next year's Mayoral election. Super~Mob, After 19 months of grueling public service at a district attorney's salary of $16,695 per year, young Thomas Dewey longs to get back to his private practice, to making more money for his wife and two small sons, to leisure for sailing a yawl again on Long Island Sound. But he intends to see his job through. Last week he was only in midcourse, with many a suspicion still to be confirmed, many a yet undisclosed racket and racketeer still to be struck down. To him, his job meant even more than a chance to rid the nation's biggest city of its outlaw parasites. He has long since been convinced that what thriller-writers are scoffed at for imagining is substantially true of racketeering--the whole U. S. is victimized by a supermob, loosely knit but internally harmonious and cooperative. From the outset he has hoped that capture of Manhattan bosses might lead to allies elsewhere, that other cities might be spurred to action by his example. Already other public prosecutors have asked his advice. If his crusade fulfills the promise of its first 18 months, no U. S. city can remain unconvinced that it need tolerate rackets no longer than it wants to.

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