Dealing With the Competition, the Schultz Way

The Dutchman began to form an organization of his own. As his operations expanded he made efforts to move into Manhattan and soon came into competition with an ex-associate, "Legs" Diamond. Both the Dutchman and Diamond were seeking control of beer and other enterprises. Both had a preference for the use of violence to settle differences and very quickly the use of gunfire was filling the area as the levels of competition rose. Schultz's close friend and bodyguard was shot down by some of Diamond's gang. The response of Schultz was swift and inflicted on Diamond and his close associate, Arnold Rothstein, with the gun. Rothstein served as the moneyman for many of the crime operations that arose; much like Meyer Lansky would in the future. He was shot in the Park Central Hotel and died two days later. While the most common theory for the murder was that Rothstein had welshed on a gambling debt to George McManus, it was rumored that Schultz may have been involved because of Rothstein's friendship with Diamond. Diamond would soon join Rothstein when he was gunned down by some of the Dutchman's men. With the competition removed Dutch felt he now had time to settle in and organize his organization.

Schultz had advanced his organization to a point in which the future founders of the Organization included him in their planning sessions. By the late 1920s his influence became so great that he was invited to meetings called by Lucky Luciano and his associates as they began to build a national organized crime structure. In May 1929, Schultz participated in the Atlantic City Conference. The meeting was attended by dozens of mobsters of various ethnic and religious backgrounds from around the country. The main topic of the conference was cooperation between the gangs and the cities they represented, and to discuss plans for the day Prohibition was repealed. Schultz already had his eye on the large sums of money that could be gained through control of the numbers racket. To aid in the process of expanding his organization, the Dutchman began an association with Vincent "Mad Dog" Coll. The association did not go well partly because both were so prone to violence and found it difficult to work with and trust others. Coll decided he wanted a more important role in the gang and told the Dutchman he wanted to be taken on as a full partner. Schultz rebuffed him and Coll split from the gang and branched out on his own, taking some of Dutch's underlings with him. Dutch, who was noted for his unwillingness to part with money, was also upset with the fact that he had put up bail money for Coll and when Coll failed to show up for his hearing Dutch lost $ 10,000.

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