How Manhattan made a mockery of Prohibition
Drinking was a normal daily activity for many city dwellers. The poor drank in rough taverns and the working classes in beer saloons. The rich and learned had opulent clubs like the Union Club (est. 1836) and Century Association (est. 1847) where they could knock back Madeira, Champagne and anything else their bellies desired.
When Prohibition first hit the city in 1920, Mayor John F. Hylan shrugged. “I have never been a drinker or a smoker,” he told a crowd. “But that does not mean I am for Prohibition. I believe in personal freedom.”
Voters replaced Hylan in 1925 with a boozier pol. Jimmy Walker was a carouser and a drinker, whose nocturnal gallivanting earned him the moniker “the night mayor.” Walker advocated policies to make some drinking licit. When that failed, he ignored Prohibition and shamelessly hung out in speakeasies, celebrating the night. But it wasn’t all fun and games during the time of teetotalism. Prohibition unleashed mayhem in Manhattan, as Lawson richly details in “Smugglers, Bootleggers, and Scofflaws” (SUNY Press).
To understand why, one need only consider the basic economics of the matter. Outlawing the supply of goods and services does not demand for those things disappear. Supply instead shifts from licit producer and sellers to illicit ones, who will fight among themselves for market share. The quality of the product may decline, as firms can’t be held unaccountable by either the government or customers.
So it was that the city became riven with gangs, who formed complex syndicates that trafficked in smuggled, illicitly produced and often toxic alcoholic beverages. With 30,000 speakeasies operating and millions of bottles and kegs of drink being consumed, one can only imagine how immense was the untaxed wealth flowing into the pockets of thugs like Big Bill Dwyer and Lucky Luciano.
Manhattan and its fellow boroughs — Brooklyn, Queens, Manhattan, the Bronx and Staten Island — are surrounded by water. Massive amounts of liquor and other strong drinks slipped into the city via ships like the Mazel Tov, which deposited lord-only-knows-how-much liquor. The tugs, barges, tankers and speedboats were joined by trucks and automobiles, which hauled hooch over the spans of new bridges built in the previous few decades. Trains also brought intoxicating drinks to town. Surveying the insanity in 1932, abstemious titan John D. Rockefeller, wrote:
When Prohibition was introduced, I hoped that it would be widely supported by public opinion and the day would soon come when the evil effects of alcohol would be recognized. I have slowly and reluctantly come to believe that this has not been the result. Instead, drinking has generally increased; the speakeasy has replaced the saloon; a vast army of lawbreakers has appeared; many of our best citizens have openly ignored Prohibition; respect for the law has been greatly lessened; and crime has increased to a level never seen before.
New York City was greatly relieved in 1933. Prohibition was abolished, in part, due to the machinations of President Franklin D. Roosevelt (a New Yorker). Legal drinking establishments rapidly opened across the city and the speakeasies died off. The hoodlums shifted into other rackets, with so little moonshine in demand. The prices for drinks went down and the quality went up. People were happy.
The 21st Amendment, to its credit, carved back the federal government’s role in alcohol policy. Its major downside was that it immensely empowered states to regulate the trade of alcohol, an arrangement that runs headfirst into the Constitution’s Commerce Clause. (Article 1, Section 8, Clause 3). Like most states, New York erected all sorts of protectionist, anti-trade and often corrupt policies that inhibit the free trade of alcohol among the states, to say nothing of within them. That, however, is a subject for another day.