Cutting Down the Competition And the “Dutch” Shultz Problem

With the end of prohibition and the rise of the depression, the organization and influence of the Commission was spreading it wings into other areas. The experience in the liquor business and trucking provided the background needed to assume positions of control in both areas. The numbers racket was producing large amounts of cash and the empire of gambling was expanding. Efforts were even made to look for new areas for business interests and Lansky paved the way for expansion into Florida and into the tropics. The Bahamas displayed some potential, but it was Cuba that appeared to be a future gold mine for mob expansion. Lansky had found a friendly government that was willing to do business with organized crime and allow for a major foothold outside of the control of the Federal Government. Mob interests would continue to grow in Cuba until the fall of the Batista Government in the late 1950's. Frank Costello was not sitting idly by during this same period, and traveled throughout the country seeking areas to expand the power of the Commission. His connection with Huey Long led to an invitation to move slot machines and gambling into the state of Louisiana. The "Kingfish" was willing to look the other way so long as he received his share of the profits. The power of the Commission was expanding and increasing, but some competition still was viewed as a threat. It seems ironic that most of the men viewed as too much of a competitive threat had been involved in the campaign that aided in the formation of the Commission. Oh well, a good businessman must take advantage of his opportunities to eliminate the competition in one way or another.

Waxey Gordon had helped the Luciano Gang to assume an active and profitable role in the bootlegging industry. The two organizations had worked side by side throughout the period of prohibition. However, Gordon felt that he could maintain a level of independence since he still had a large control over both foreign and domestic liquor businesses. His dealing with members of the Commission, in particular Lansky, had degenerated over time and no great love existed between Gordon and Commission members. His ongoing war with Dutch Shultz over control of breweries in New York and New Jersey was also going against the policies of the Commission to limit the amount of warfare between rival gangs. Some members of the Commission felt that perhaps the solutions to their problem could be the murder of Gordon by Shultz. However, since Shultz was unable to carry out the elimination of Gordon, the rumor that the Federal Government was collecting information related to violation of tax laws by Gordon, could provide another avenue to dispose of the "Waxey" problem. Information somehow was passed to a new hotshot prosecutor, in the person of Thomas E. Dewey. Dewey had gained some notoriety in his conviction of "Legs Diamond", alas, Diamond never served any time due to his murder while awaiting appeal. Dewey was successful in his prosecution of Gordon for a ten-year sentence. Dewey, feeling he was on a roll, began to search for a new headline grabbing crime lords to prosecute. The Seabury Investigations, into crime and its connection to political corruption had helped make the name of Dutch Shultz a prime candidate.

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