Cut Throat competition in Speakeasy Business Ventures
The speakeasy, that little business bonanza of the early Volstead era, has run foul of the usual economic difficulties of merchandising. At least that is the situation in Detroit, where ten to twenty thousand speakeasy proprietors have found competition seriously cutting profits. Unable to afford to pay for protection, these latter-day tradesmen have now resorted to disguise.
IN THE same block as my office building, an ancient rookery adjacent to the financial district, there are seven blind pigs; not an unusual circumstance and one that may be observed in almost any large American city. Occasionally I look down into the alley and see a truckload of Canadian beer being transferred, case by case, into the emporium of Mr. Joseph Schultz, a modest shop in the corner of the building directly beneath my quarters. I know Mr. Schultz and hence am not deceived by the camouflage under which he conducts his business. To the general public, he represents himself as agent for the Acacia Tool & Machine Company. There is a sign over his door to that effect, and gold lettering on the plate-glass window. Mr. Schultz or one of his lieutenants sits at a desk near the door, ostensibly to welcome prospective purchasers of Acacia tools. The Acacia Tool & Machine company is a purely mythical corporation, but occasionally some guileless citizen insists upon buying mechanical equipment from Mr. Schultz. Such customers are politely informed that the company is neither marketing its product nor taking orders at the present time, and speedily shown to the door. Clients known to Mr. Schultz, and others presenting the proper identification and credentials, are ushered through a sliding panel in the rear of the office into a commodious apartment where the Acacia Tool & Machine Company supplies anything from a brandy straight to a hot Tom and Jerry.
Across the street from my office and two flights up is the plant of the Nixon Lamp Company, makers of assorted chandeliers and fixtures. There is no sign on the door, and you may wander in vain up and down a dismal corridor searching for it. Sitting in a chair at the end of the hall, you will discover a burly gentleman of evil countenance which even a pink silk shirt, gray fedora hat and flawlessly tailored black and white checks cannot offset. You ask him the whereabouts of the Nixon Lamp Company. If he knows you, he smiles amiably, and unlocks a heavy metal-sheathed door which you may have passed without noticing, and there you are in the Nixon Lamp Company's plant, with bottles everywhere but not a lamp in sight. If you are a stranger with honest commercial intentions, he will insist that you have come to the wrong address.
Three of the dispensaries in my immediate vicinity are cigar stands which make no attempt to deceive even the most unpracticed eye. One of them is so brazen that its proprietor actually refuses to sell tobacco to unsuspecting customers. A woman of my acquaintance naïvely visited this establishment and requested a carton of cigarettes. The man behind the counter seized her by the arm and led her to the door. She protested, but in vain. "Listen," said the proprietor, "you look a lot like a lady dick and we don't want none of your kind round here."
One of the remaining speakeasies is a self-service lunch where strong potions are supplied to trustworthy customers in opaque mugs; the other masquerades as a fountain pen repair shop where never pen has been repaired or ever will be. I cite these instances, several out of hundreds, to illustrate some of the wiles of the retail bootlegging trade. Unquestionably, the majority of them are very transparent and fool nobody, but many, of the devices employed by contemporary saloonists to conceal the real nature of their business are so fantastic as to present an interesting study, leaving aside, of course, any moral or legal considerations.
BOOTLEGGING, notably the retail end of things, has undergone one of the processes to which virtually every form of lucrative commercial enterprise is subject; that is, the sources of distribution to the ultimate consumer have increased to the point where the profit of the individual distributor is greatly lessened. The result is fierce competition and nowhere is competition fiercer than in the retailing of bootleg liquor. In my own city, for example, the number of blind pigs has been variously estimated at from 10,000 to 20,000. I should say the former was a conservative figure. There is, in other words, one speakeasy to every 150 inhabitants, and obviously any retail enterprise with so limited a clientele can hardly be termed a bonanza, even though it does dispense whiskey at fifty cents a drink and beer at seventy-five cents a glass. The overhead involved in operating a blind pig is really appalling. Since a speakeasy proprietor is an unreliable tenant who may be compelled to vacate without warning, he must pay a ruinous rental, and in advance; no refund is forthcoming should the law force him to flee the premises. My friend Joe Schultz assures me that before he can open a new establishment he must "make connections" to the tune of $8,000 or $10,000, or things will be very uncomfortable for him. Mr. Schultz's arrangements are such that he is never personally apprehended in the event of a "pinch"; one of his satellites, usually the barman, bears the brunt. But Joe does not escape all responsibility, for he must pay his employee's fine (it has amounted to $3,000 in a single year) and if the man is sent to jail, he is obliged to continue his salary plus $300 a month and a bonus of $300 when he is released.
These figures are typical and represent the experience of a number of saloonists with whom I am acquainted. Joe informs me that his present business has actually netted him less during the past two years than the modest tavern he operated in the pre-Volstead era did over a similar period. Excessive overhead and diversion of business by more speakeasies than the traffic will bear, he cites as responsible. That running a blind pig is not as profitable an enterprise as generally supposed is born out by the fact that an astonishing number of bootleggers have withdrawn from the field solely because the rewards are not consistent with the risk and investment involved. If prices to the ultimate consumer are high, so are the costs of beverages to the distributor, and if the speakeasy owner would continue in business with even the slightest assurance of security, he must "come across" to the proper persons on a most exorbitant scale.
To the most casual observer, it must be quite evident that the retail branch of the bootleg industry is overmanned in almost every large American city, with consequent distress to the individual proprietor. The result, as I have said, is fierce competition. Not enough speakeasies are eliminated by the Federal agents to lessen the congestion and benefit the business as a whole, and hence it devolves upon each saloonist to fight his own battle as best he can.
This overcrowding of a once enormously profitable field makes the returns of the average speakeasy proprietor comparatively modest. Since he cannot afford the necessary protection money, he must resort to strategy. Generally speaking, it is very inept indeed, but even so it adds a picturesque note which otherwise might be lacking to many a drab metropolis.
A certain blind pig proprietor in my own city, doubtless inspired by the success of the chain store system, conceived the idea of applying similar tactics to retail bootlegging. He rented several small shops in the downtown' area and fitted them out to resemble laundry agencies; a tiny office in front with a counter and shelves where the "lookout" was stationed, and in the rear a commodious bar screened from the public's gaze by deal paneling. The windows were decorated with broad bands of blue bearing a hand laundry sign, and so realistic was the general effect that unsuspecting customers proved a source of considerable embarrassment. It became necessary to accept laundry as a regular adjunct of bootlegging, and almost before he realized it, the proprietor had a thriving side-line on his hands. He farmed out the laundry concession, and even the fact that numerous patrons entered his establishments to re-appear several hours later with a decided list seemed to arouse no troublesome suspicions. Within several years, the originator of this scheme has expanded his interests, until the blue hand laundry sign that signifies good cheer to the knowing ones has become something of a civic landmark.
A chain of speakeasies camouflaged as drug stores also flourished for a considerable period. These institutions carried a remarkably complete line of drugs and sundries, and to all intents and purposes, the manager of each was a competent pharmacist. Clients in good standing were accustomed to ask for a prescription, whereupon they were admitted to the dispensing laboratory in the rear. This scheme worked admirably until sounds of merriment issuing from the prescription room gave it away and the authorities promptly padlocked several of the city's most popular pharmacies.
Some time ago, an acquaintance of mine applied to his purveyor for a brand of liquor not easily obtainable even in pre-prohibition days. The bootlegger in question could not supply it, but he kindly offered to introduce his client to fellow tradesmen who might have the desired article in stock. They set forth together, and in the course of two blocks visited no less than fifteen speakeasies. It was a novel experience for my friend and he made a mental note of each successive port of call. His itinerary included three radio stores, two barber shops, a cleaning and dyeing establishment, a harness maker's, a bowling alley, a fruit stand, two tobacco shops, a beauty parlor, a tire repair shop, a photographer's studio and a second-hand bookstore. I believe that he ultimately secured the necessary beverage from one of the tobacconists, but the conspicuous feature of his excursion lay in the fact that it involved calling upon the supposed representatives of eleven different trades and professions.
Two swarthy and very dapper gentlemen noccupied chairs next to mine at a lunch counter the other day. I could not help overhearing their conversation.
"It's one of the nicest little stores downtown," said one of them, "right on the corner of Maxwell and Dane. The alley runs up to the back door and we can unload easy. Everything wil, be jake."
A week or so later, I stood on the corner of Maxwell and Dane Streets and looked at the "little store" in question.
Once a shoe-shining stand, it had been converted into a wall-paper shop. A solitary roll of hideous flowered pattern was carelessly unfurled in the window, and save for an empty showcase, the interior of the establishment was as bare as Mother Hubbard's cupboard.
I told the proprietor I was interested in looking at wall-paper samples. "G'wan," he said, "quit kiddin' me. Step inside and get what you want. You look all right." He unlocked a narrow door in the tell-tale pine paneling.
The teaming and trucking business seems to be a favorite disguise for retail liquor shops. I do not know why, unless this particular type of saloonist was originally recruited from the dray-men's ranks and entertains tender sentiments toward his erstwhile profession. Radio stores abound in which there is much more than meets the eye; in examining some twenty of these, I have discovered the average stock in trade to consist of one loudspeaker of ancient and obsolete design, half a dozen vacuum tubes, and several coils of copper wire. Sound business policy would dictate a generous assortment of salable radio supplies, if adequate camouflage is the object in view, but it is too expensive. If a blind pig operator cannot afford the price of protection from the powers, neither can he afford the cost of elaborate deception.
WITHIN a half mile of my home I have run across more than twenty speakeasies wholly by accident. They operate under an engaging variety of disguises; a bakery where one may obtain a superb glass of lager, a dry cleaning and pressing establishment where a solid phalanx of garments in the window effectively conceals the festivities within, a dozen or so cigar shops where cigars are grudgingly sold, a vegetarian restaurant, and a real estate office. Once, when in distress, I visited a tire shop, and was told to be on my way; and there is a gasoline station in my neighborhood dispensing other volatile distillations besides petroleum products.
I doubt whether the merchandising activities of any commercial enterprise involve such extraordinary practices as those of the retail bootleg industry; it is a fascinating and colorful picture, and disregarding its moral and legal aspects, something for the observant citizen to contemplate. These are bitter days for the average retail bootlegger compared to the prosperity which he once knew; the ranks are overcrowded, and like the corner groceryman and the neighborhood hardware dealer, he sees competition grow keener year by year. His only hope, if he cannot arrange for consideration at the hands of the law, lies in subterfuge. It is, as I have suggested, very clumsy in nine cases out of ten, but once in a while there are flashes of genius. I have in mind the gifted saloonist who attracts the more perceptive customers to his emporium by this modest sign above his door: "Plastering Neatly Done Here."
Source: The Outlook and Independent for March 13, 1929
1920's PROHIBITION RESOURCES
Prohibition Increased Alcohol Related Deaths
Increased deaths caused by drinking bootleg beverages
Keeping Prohibition out of Party Platforms - 1927
Article discussing problems of Political Parties in relation to Prohibition
Repeal of Prohibition - 1933
Survey of current state of Prohibition Repeal Votes
World Prohibition - 1923
Most of the World was considering Prohibition in 1923
Prohibition Killings - 1927
Killings by Federal Agents Enforcing Prohibition
Prohibition in Belgium - 1927
A European Approach to Prohibition
Prohibition Category Page at 1920sEra.com