Rackets and Labor

I

A RACKET is a specific social phenomenon. It is a form of parasitism, for the racketeer does not produce goods or services; rather, he exacts a tribute from those who do provide goods and services; he lives upon both the employer and the employee by intimidation. He permits them to pursue their normal economic functions on condition that they recognize his right to levy upon them.

The racketeer is no new social phenomenon. Racketeering organizations seem always to have existed. The best example in history is the cult of assassins in the mediæval Moslem world. In old China, such groups occupied trade routes through which goods passed from province to province. The ‘bandits,’ as they were termed, maintained agents in the principal trading cities to whom a merchant had to go to buy protection. Having paid for the right to move his goods into the robbers’ territory, he could be sure that he would not be robbed.

The racketeer has existed on his own, and in modern times he has been used by employers and by labor unions. He has always sought to make such employment permanent, either by blackmail or by murder.

A racket can never exist in any area where the law is enforced. A racketeer thrives on the cupidity of politicians and the weakness of law enforcement agencies. There are ample laws on the statute books of every state to make racketeering difficult, if not impossible, should the police and other law enforcement authorities wish to end the practice.

It is, therefore, an axiom that if a racket exists officials are lax. A single law enforcement officer can smash a racket by mere exposure, but it requires organized society to break down the entrenched power of the racketeer and the politician, for the latter often makes it impossible for the decent public official to punish the former.

Industrial racketeering, like ‘numbers’ (policy), slot machines, or any other racket, only appears when officials are willing to let it appear. Such characters as Gurrah and Lepke could not have lived upon the Jewish needle trades in New York if employers, labor-union leaders, police, and other officials did not find it less troublesome to let them alone than to prosecute them. In any understanding of the problem of industrial racketeering it is important to grasp this essential. The racketeer pays for his right to mulct others, not only of their money and possessions, but also of their legal rights. He is a protected person. He is always protected in his privilege to violate the law and the rights of others. It must be assumed, even where it cannot be proved, that he pays for such protection. Whether he splits with politicians or works under some other arrangement, the racketeer is responsible to the politician. The man higher up in every racket is a politician.

Even where racketeers have been caught and convicted, as under the Dewey prosecutions in New York, rarely, if ever, are the political protectors of the racketeers apprehended. They are hardly ever bothered, because the tie-up is remote and generally unprovable. Everybody in New York thought that he knew who the top politician was in most rackets during the past decade. Until recently no one attempted to prove it.

It is an error, however, to assume that the current phase of labor racketeering exists only because of a tie-up between the criminal classes and the politicians. That is an over-simplification of the fact. Labor racketeering exists essentially because a chaotic margin exists between economic reality and the law. In that marginal area the racketeer may appear as a stabilizing agent who charges for his services.

Business men and labor unions are sometimes compelled to devise extralegal means to accomplish what they regard as economically desirable in their field of trade, particularly when the law forbids practices which have already come into existence.

Take, as an example, price fixing. That is forbidden by the law and is a dangerous practice for either the business man or the labor union, for it may, under the Sherman Antitrust Law, become a conspiracy in restraint of trade. But price fixing may, in certain industries, be desired by both the business men and the labor unions — by either or by both of them in combination. The racketeer then becomes available for this objective. He spoils the commodities of those who cut prices; he beats up workers who are willing to work for lower wages; he intimidates and frightens those who have ideas of their own.

Imagine, for instance, a large city where four restaurants are catering to the same general type of patronage within the space of one block, and a fifth appears. The four believe that the fifth will reduce the earnings of all of them so that no one will make a profit. Or perhaps a waiters’ union objects to the fifth from their point of view — namely, that the wages plus tips, in the original four, will be so reduced as to make work uneconomical. In come racketeers to ‘muscle’ the newcomer out of existence. Acid may be poured on his windows; stink bombs may be thrown into his premises during the lunch hour; food for delivery may be diverted; a labor-union violation may be discovered and his place may be picketed; or, in a final disciplinary effort, he may be beaten up, or his wife and children threatened. He gives up his business.

In industries where the worker receives a commission either as full or as partial pay, the union has a direct interest in prices and in the extent of competition. For if prices are too low the net return to the worker may be too low. On the other hand, unlimited and unrestricted competition may result in reduced pay for the worker who depends on commissions. In such instances the union itself may take on the characteristics of a racketeer. The objective is to maintain prices, to restrict competition, to limit the numbers of individuals who engage in the industry.

In such a case the union may determine economic laws for itself. An electrical union goes so far as to establish a Zollverein around the city of New York, seeking to keep out of the city equipment wired elsewhere, and thus limiting competition. Secondary picketing is a strong weapon in the hands of such organizations, but often other methods are employed.

In short, the inadequate definition of current economic relationships by law not only has served to give the racketeer a wide field for activities, but has encouraged some labor unions to take on activities which to the ordinary citizen, at any rate, look very much like racketeering.

II

There is little question that a large number of business firms have left New York City because they were unable to cope with labor racketeers. Charles E. Murphy, special representative of the Department of Finance of the City, in a report published in 1937, indicated that 140 firms which his investigators had studied had left New York because of ‘human parasites in the persons of outsiders who illicitly and perniciously attached themselves to a given business and so distorted the normal functioning and relationship of employer and employee that both became dissatisfied and disgruntled.’

Thomas E. Dewey, the New York prosecutor of rackets, in an address before the Citizens Committee on the Control of Crime in New York, said:—

The investigations conducted by my office during the last twenty-one months definitely indicate that a large proportion of the industries in this city are either victimized or affected by racketeering. Furthermore, this has been true for at least ten years. Even those of us who have become accustomed to the daily recital of shakedowns, stench bombings, and destruction of property are repeatedly shocked. I shall not even attempt to estimate the amount of the direct and indirect taxes thus levied and collected from New York and the other large cities of this country.

After describing how the restaurant racket was worked, Mr. Dewey showed what could happen to a business man who tried to be a good citizen. He said:

A business man chose to resent this practice, and haled the business agent of one of these unions into a magistrate’s court. There the facts were set forth, but in due course the case was dismissed and the business man had to pay more on worse terms. Already, to him and to those who heard of the case, it was apparent that it was advisable to pay up and shut up.

III

In what follows I wish to identify the various types of racketeer and to show how each operates in our greatest municipality. The outstanding contribution of Prohibition to American sociology is the organization of crime as a big business. Such a criminal as Al Capone operated on such a wide scale, his interests were so diverse, that he was forced to take on a large organization, he was forced to maintain a large payroll. He had to departmentalize his operations. He required such specialists as go-betweens, muscle men, machine-gunners, guards; and, on the other hand, he required the unskilled mob who collected and distributed both alcohol and women, to refer to only two of his commodities.

Such an organization required a special type of lawyer. As the enterprise functioned altogether outside the law, the lawyer had to be one who was willing and who found it profitable to assist in the success of the process.

In a criminal organization of this type, discipline and honesty can only be maintained by force. For instance, the collector who purloins the funds of a racketeer cannot he arrested for embezzlement, and therefore he must be murdered as an example to others. The racketeering lawyer inevitably becomes a partner to the general procedure, which must include murder, and therefore he is conscious of the danger — an industrial hazard to him — of getting caught with the other boys.

He might innocently do one job for such a man as ‘Dutch’ Schultz, but he will soon enough discover, if he is not overscrupulous, that he has become part of a racketeering outfit and must do the chief’s bidding in all matters.

The returns from organized crime have been astonishingly high, particularly during the Prohibition period. A young lawyer, who has probably had his shingle out in some courthouse district waiting for a client to come along, finds that by associating with racketeers he can become wealthy quickly. A huge number of lawyers come out of the law schools each year for whom business is bound to be scarce. Such a young lawyer may ‘hang around’ a Tammany or Republican Club, waiting for free or lowfee’d cases which the district leader may throw to him. He wants these cases, because he wants practice. He does not want to grow rusty; he wants a chance. For many such lawyers only politics, racketeering, or poverty may be available for many years. Some choose racketeering, hoping to become decent after they have established themselves. But the racket never lets a man become decent once he is in it. Salesmen and collectors (but not the bankers) were constantly being arrested and brought before the Harlem Magistrate’s Court. The banker (chief racketeer in the enterprise) had to provide a lawyer to handle the case in court. The fee was $15 to $25. If you could get enough of this business, there was a fortune in it. ‘Dixie’ Davis went after it.

‘Dutch’ Schultz’s lawyer was ‘Dixie’ Davis. As I write this, Davis, who was a fugitive from justice for a time, is about to stand trial. He maintains his innocence. As much of his life as I give in this account is, I believe, factually established.

From the standpoint of the racketeers, he was a brilliant ‘mouthpiece,’ but as a lawyer he made the mistake of laying himself open to the charge of being his own client. For what undoubtedly will be charged at his trial will be that ‘Dixie’ Davis not only represented ‘Dutch’ Schultz and other racketeers, but got in on the racket himself. To prove that will be Thomas Dewey’s task.

J. Richard Davis, the son of a PolishJewish tailor, was born in New York City in November 1904. When Richard was eight, his father moved to Tannersville, New York, which is the centre of the ‘Borsht Belt’ of the Catskills — an area of Jewish summer resorts which have become permanent settlements for the lower middle class of New York’s Jewry. In Tannersville, Max Davis, the father, ran a combination poolroom, cigar and candy store. On the whole, from what I know of this environment, I would say that the atmosphere was not unfavorable to a growing boy. It was not of the best; but it was also not slummy.

‘Dixie’ Davis (the ‘Dixie’ being a superlative diminutive of Richard) was known to be a quiet, studious boy with a talent for music. He was taught the violin by the local Presbyterian minister and became violinist in an orchestra which played in churches and schools.

In 1920 the family returned to New York, where Davis went to high school and Syracuse University, studied law, was admitted to the bar. While he was studying law he clerked in a bank. His grades were high; his standing was good.

His task was to earn a living. Clerking, even in a reputable law firm, is a slow business. It may bring its compensations later in life, but the immediate prospects for the young lawyer are few. Marriage is out of the question; the gay life of Broadway is out of reach. Unquestionably, with ‘Dixie’ Davis flashy clothes were close to a mania. Some men take to liquor; others to the foibles of Beau Brummel. Davis was of the latter group. And he could not buy expensive suits on a law clerk’s salary.

On the other hand, the Harlem Magistrate’s Court was the scene of a constant flow of lucrative business. ‘Numbers’ had by this time become a vogue. This is a gambling game in which a bet is made that the purchaser of a number (the original sucker) can guess the combination of numbers in three digits in some published tabulation — say the last three numbers of the amount of stock sold on the stock exchange on a particular day. The sellers of numbers might be apartment-house elevator boys, vegetable-shop merchants, candy-store keepers, anyone. There is a collector who works a district, gets the money, and gives the salesman slips (policies). The collector works for a banker. The bets are small — ten cents or a quarter — and the gains may run as high as 500 or 600 to 1. Although ‘numbers’ is an old game and is played in many parts of the world, in New York State it is gambling and is a crime. Whenever a crime is popular, the racketeer steps in to regulate it and take the cream.

It was obvious to him that those who were running the racket were ‘smalltimers.’ They lacked progressive ideas. In time Davis attracted the attention of ‘Dutch’ Schultz, who was the principal Prohibition racketeer in New York, and they are said to have formed a partnership to stabilize this particular form of illegitimate pleasure.

The essence of Schultz’s relationship to the industry was his ability to handle the police, the judges, the politicians, and any recalcitrant or obstreperous competitors and renegades in his way. Davis would monopolize the legal work, making it prudent for all bankers to retain him. When Davis first got into the policy business, he took cases for the lowest figure, $15. Now he raised the fee to $50, paying smaller lawyers to do the work. He thus enticed a number of young and poor lawyers to become his satellites, and some of them he used in the restaurant labor racket, when he and Schultz graduated into that.

IV

In New York City, restaurants (which name will be used to denote all eating places except hotels) do an annual business of about $400,000,000 and employ about 85,000 workers. The industry ranges from small coffee shops and diners to high-grade, expensive restaurants and night clubs. Some are attended only by the owners or by a casual, unskilled helper; others employ numerous and specialized skilled workers. There are unions and employers’ associations in this industry.

When, in search of diversity of enterprise, the Schultz-Davis combine entered this huge industry, their immediate task was to take over both the union and the employers’ association. The Metropolitan Restaurant and Cafeteria Association was the employers’ group, and the union officials of Local 16, Hotel and Restaurant Employees International Union, and Local 302, Delicatessen, Countermen and Cafeteria workers, operated in collusion with it. Recalcitrants were handled by strong-arm methods, fake strikes, stink bombs, and so forth, but the really effective weapon was the use of Schultz’s name, because that name meant murder.

The principal union and employer association officials were Harry Vogelstein, a lawyer; Paul N. Coulcher, secretary-treasurer of Local 16, secretary of the New York State Culinary Alliance and Bartenders’ League, and an upcoming labor leader; Philip Grossel, secretary-treasurer of the Metropolitan; and Abraham Cohen, the employers’ association lawyer. These and their satellites really became the henchmen of the Schultz-Davis control of the restaurant industry. Jules Martin, who has since been killed, was the subexecutive who directly handled the racketeers’ interests. It is estimated that the racket took $2,000,000 annually from the industry to permit it to exist in New York.

Thomas Dewey once, in discussing Abraham Cohen in court, said of him: —

He was placed in the Metropolitan as the personal agent of the gangsters. He was the most active contact between the gangsters and the labor leaders. This man has carried on one of the greatest conspiracies in subornation of perjury that I ever have experienced. His latest exploit was to call the members of the association together last week and attempt to bludgeon them into furnishing his bail. I also will prove that he conspired in the murder of certain members of the organization.

Yet, Cohen was only a satellite of ‘Dixie’ Davis, one who acted before the ‘Big Shot.’ like a veritable stooge, holding his coat and laughing at his jokes. There were several murders in connection with this racket. For instance, among the organizers were Schultz, Jules Martin, Harry S. Koenig, and Abe Borson. Borson became secretary of Local 302 in 1932, but in 1933 he was ‘taken for a ride’ and killed in Armonk, New York; Koenig was chief of Local 16, but he was killed in Rochester, New York, in 1936. Jules Martin operated the racket for a while, but when he objected to the amount of Schultz’s split he was murdered in Troy, New York. Schultz himself was killed in Newark for an accumulation of reasons.

This racket was smashed by Thomas Dewey. William B. Herland, Mr. Dewey’s chief assistant in this case, said of it: —

Of course this is not a labor case. It is an extortion case. These paid officials were on the job every day to tend to the business of the union; and all their powers to call or call off strikes, to raise or reduce wage rates, were perverted to the furtherance of this racket.

And he is right. The worker who joins a union does not expect to engage in or become involved in a racket. He wants to improve his wages, hours, and working conditions. Unless unions are democratically managed and all collections and disbursements made public at stated periods, rackets are liable to develop.

V

Orthodox Jews insist upon eating kosher chickens. This sets up an economic process that definitely runs counter to the general trends in mass distribution. Kosher chickens must be brought alive to the consumers’ market. They must be slaughtered ritually, not by butchers, but by a religiously designated individual known as a shochet, who is subject to rabbinical supervision. Not more than three days may intervene between the killing of the animal and its actual consumption. Refrigeration is prohibited. Cold storage is forbidden. Thus, an industry exists which involves special problems and special techniques. Chickens are consumed by orthodox Jews in huge quantities. On Fridays the sale of the fowl is particularly large, because it is customary for Jews to eat chicken soup and boiled or roasted chicken at the festal Friday night meal and at the important Saturday midday meal. The number of chickens consumed in New York amounts to 60,000,000 a year. They come into the city from all parts of the United States in specially constructed freight cars. The business amounts roughly to $100,000,000 a year at the New York outlet.

The labor racketeer found this intricate field valuable. He came in as a ‘stabilizer.’ Led by Charlie and Arthur Herbert, racketeers gained control of this business by the usual device of taking over the labor union in the industry and using it as a weapon of coercion. The racket was not new to the business. Joey Wiener, as far back as 1909 or 1910, was operating a racket in it. His agency was the Metropolitan Feed Company, which forced chicken dealers to buy cracked wheat and farina at prices high above the market price.

But the genius in kosher chicken racketeering was ‘Tootsie’ Herbert, who comes out of the slums of the East Side of New York — specifically from Orchard Street. This particular street, although it is narrow, is lined by pushcarts selling food, and is peopled by a tough, foul-speaking breed of food vendors who fight to capture customers. Many stores are devoted to the sale of live poultry.

‘Tootsie’ was given this nickname because he is diminutive, uses perfumes and pomades, and was generally regarded as a slick dresser. His brother Charlie, as a youth of seventeen, was sent to the Elmira Reformatory for larceny, having taken the blame when another boy was caught rifling the pockets of bathers at Coney Island. Tootsie remained on Orchard Street learning the chicken business. He joined the wagon drivers, porters, and salesmen’s society in 1914, but it was not until 1919, during the organizational drive of the American Federation of Labor of that year, that he became active in the poultry branch of the international Brotherhood of Teamsters, Chauffeurs, Stablemen and Helpers — generally known as the Teamsters Union. Tootsie’s local was No. 167, and it included all workers in the live-chicken industry except the shochtim (Hebrew plural for shocket) — those designated to do the slaughtering — and the rabbis. Judge Rosalsky, in September 1934, drew up an agreement by which these seventy-two men were to be admitted into the union and their jobs restored to them. Tootsie, when he got out of prison and was back on his old job running the live-chicken industry, sought to break this agreement. He now took over control of both unions in this industry; the seventy-two shochtim were stricken from the rolls of the union, and the Rosalsky Agreement became a mere scrap of paper because a racketeer objected to it.

The shochtim were organized into Local 440 of the Amalgamated Meat Cutters and Butcher Workmen of North America, which Joey Wiener managed. Tootsie’s job was to establish a modus operandi between the teamsters and the shochtim. This was accomplished by the racketeers in both unions by the simple device of a personal alliance, and by the establishment of all the principal racketeers in the industry as partners in the Metropolitan Feed Company. In fact, when Tootsie was finally exposed it was found he was a factor in the New York Live Poultry Trucking Company and the New Jersey Coop Company, as well as in the Metropolitan Feed Company. He was a labor leader, a transportation contractor, and a feed supplier at the same time. And wholesalers and dealers who refused to do business with him found that he could easily destroy their enterprises.

In 1929 the live-chicken racketeers ran afoul of the Federal Government, after District Attorney Samuel J. Foley of the Bronx had obtained the conviction of Joey Wiener and had him sentenced to three years’ imprisonment.

It is interesting to note how lightly these men got off, in spite of the crimes which they were proved to have committed and the murders which had occurred during their reign of terror in this industry. Tootsie got eight weeks in the Federal House of Detention; his brother Charlie, who had succeeded Joey Wiener in the Shochtim Union and who was now a Number One Racketeer, got four weeks, but the sentence was suspended. In 1933, however, Tootsie got six months in the Federal Penitentiary at Lewisburg, Pennsylvania, for contempt.

In the 1933 case a curious incident occurred which sheds light on the public reaction to racketeers. It was shown that Joey Wiener never earned more than $10,000 a year. Yet philanthropic organizations in the Bronx appealed to the judge to be lenient in his case because he contributed $50,000 a year to charity, which was proved from the books of the charitable organizations. The racketeer was not regarded as a criminal in his environment; he was only a smart fellow who beat the law. Thus, when Tootsie came out of prison, he was greeted at the railroad station in New York by a sixtyfoot sign bearing the slogan: ‘Welcome Home, Tootsie!’ And he was provided with ample funds.

Meanwhile, Jewish communal leaders were becoming concerned over the scandals in an essentially ritualistic industry. Judge Otto A. Rosalsky, a highly respected orthodox Jew who was senior judge of the Court of General Sessions in New York, was invited by Mayor La Guardia to try to find a solution to this live-chicken problem. One of the difficulties he faced was that seventy-two shochtim had consistently refused to join the union on religious grounds. They feared that racketeer control would result in a slackening of religious prohibition. The union had been forcing them out of their jobs, no matter how long they had held them.

In all these malefactions, Tootsie found assistance in the American Federation of Labor’s policy of the autonomy of each international union, and the Teamster and Meat Cutters internationals were satisfied with conditions as they found them. The A. F. of L. could not discipline officers of an autonomous union.

The ramifications of this $4,000,000 a year racket are endless, with their trickeries, machinations, political arrangements, and the concomitant brutality toward workers and employers. Thomas Dewey, in pressing charges against the Herberts, said: —

The domination by Tootsie Herbert of the poultry industry was assured when Herbert procured his election as business agent of the union for life. The constitution and bylaws of the union required election of officers each year, but only two elections have been held in the last seven years, each time when forced by members.

Herbert’s salary is $10,400 a year from the union.

In the trials which followed, Tootsie and his brother both pleaded guilty to embezzlement charges and were sentenced to long-term imprisonment.

VI

Gurrah and Lepke were typical smalltime racketeers who developed a big business. Gurrah gave himself up recently; Lepke is still at large.

Louis Buchalter (Lepke) and Jacob Shapiro (Gurrah) were ‘gorillas’ apparently employed by unions to use strong-arm methods against ‘scabs’ and bosses who were ‘unfair to organized labor.’ They naturally took advantage of the employment in their own interest.

Starting as petty gangsters on the East Side of New York, they first achieved distinction as extortionists who forced pushcart peddlers to pay them small fees for protection. The pushcart peddler who refused to pay would find his cart overturned and his apples, bananas, handkerchiefs, or whatever he sold, thrown into the mud of an East Side street and ruined.

From this miserable business these two racketeers graduated into union strong-arm men who beat up scabs. In time they were undoubtedly able to make arrangements with employers not to beat up scabs. That provided another lucrative income. Working in various branches of the garment industry, Gurrah and Lepke found it most profitable to specialize in furs.

The fur industry is situated in a congested area in New York. It is operated by small business men, and the workers are principally Jews and Italians. The industry is thoroughly unionized, but there is a conflict between a Communist and an anti-Communist element within the union.

Furs are perishable. They can easily be destroyed by acids, fires, rough handling, or other sabotage methods. A racketeer could ruin a stock of furs in no time.

Whereas the Herberts resorted to finesse and schemes, Gurrah and Lepke were just ‘tough babies,’ who collected tribute by force. They beat men up, destroyed their stocks, and gathered about them a gang who preyed upon industry. Thomas Dewey spoke of these activities as follows: ‘I have satisfied myself that this situation in the fur industry presents a case of organized violence; I consider it my business to prosecute every case of this kind.’

VII

By legal definition, a racket is ‘an organized conspiracy to commit the crimes of extortion and coercion.’

A labor racket is organized not only to commit the crimes of extortion and coercion, but also to use the normal procedures of labor unions — such as strikes, picketing, and so forth — to effect the purpose of the racketeer. Until all unions are prepared to accept full responsibility for their conduct, to open their accounts, and to force their leaders to submit to democratic controls, racketeering will flourish. For secrecy breeds racketeering and makes the money prize in American labor-union activity too tempting for weak men in possession of great power.

According to this definition, the labor racketeer is usually an outside gangster who organizes a bogus union or comes into control of a bona fide union that he uses for his own purposes. Labor-union officials have tended to encourage the racketeer by denouncing his opponents as Communists, Fascists, ‘anti-laborites,’ and so forth. It is important, however, to note that when the first effective onslaught on labor racketeering was made in New York City many labor leaders, particularly such men as David Dubinsky and Matthew Woll, are reported to have given Mr. Dewey their strongest support.

The Norris-La Guardia Act, which limits the authority of the Federal Courts to grant injunctions in labor cases, serves as a specific aid to the racketeer, for the labor racketeer, disguising the crime of extortion as a labor problem, finds protection under this act. When local officials protect the labor racketeer, the employer or merchant is at his mercy unless the courts intervene, and in many states even state legislatures and courts follow the theory of the Norris-La Guardia Act. Thus the labor racketeer is free to pursue his course unmolested. Granting that this act was passed to lessen evils which arose from excessive use of the injunction in labor cases, currently the law serves to assist labor racketeers in acts of intimidation and coercion. Similar laws, designed to benefit labor, have played into the hands of the labor racketeer.

It is important to remember that no labor racketeer could function at all if employers resisted coercion and blackmail, and if public officials strictly and impartially enforced existing laws. In nearly every instance some group of employers are in partnership with the racketeers, benefiting by special privilege and placing their competitors in an unfavorable position. The union of corrupt labor leaders with tricky and corrupt employers places not only the worker, but industry, the employer, and the public at the mercy of these racketeers.

There are, of course, many instances when an employer fears to testify against a racketeer, who threatens to destroy his business, kidnap his child, or take his life. But too often the employer is not only timid but corrupt. Such an employer finds the corruption beneficial to his business, and therefore he does not assist the public authorities when they seek to smash the rackets. He stands in the way of getting at the facts.

The principal impediments to the ousting of the racketeer are the irresponsibility of labor unions under the law, and the full autonomy, I repeat, of each particular international union within the American Federation of Labor. Most American labor unions are unincorporated mutualbenefit societies which perform their functions according to their own rules without any public responsibility or any regulation under the law. That is not true of all labor unions. Many of the Railway Brotherhoods are incorporated. So far as I know, all of them issue full and conclusive annual reports and none of them have been known to harbor a racketeer.

Many unions issue annual reports, and many unions voluntarily accept full public responsibility for their conduct. No better example of such practice can be offered than the annual report of the International Ladies’ Garment Workers’ Union, of which David Dubinsky is president. Not only are the receipts and expenditures of the parent organization audited and published, but also of all locals, joint boards, and affiliates.

The second weakness — namely, the structure of the A. F. of L. — is an even greater factor in racketeering than the irresponsibility of unions under the law. For, even against their own desires, national officials of the American Federation of Labor protect labor racketeers who are actually in control of unions. The autonomous character of each International forces the Federation to refuse to go beyond the chosen officials of that union. Mr. Green, for instance, could not suspend Tootsie Herbert. That was for the Teamsters to do, and they were unwilling to do it. Herbert was reëlected to office after he had been exposed as a racketeer and even convicted in a court of law, and his International recognized and protected him. This evil must be corrected if the more influential American trade-unionism is to prevail.

Agile minds have turned to various forms of racketeering because it is a swift way to make money in new fields. The opportunity existed and the men turned to it. It seems like a far cry from overturning pushcarts because peddlers refused to pay a few pennies for protection to the great realm of labor racketeering which Gurrah and Lepke developed. The principle is the same — they took their opportunities when they saw them.

What makes the opportunity? Political connivance, civic corruption, chiseling in business, dishonesty in labor organizations, chaos and confusion in the law, the desire for stabilization of trade and industry at a certain level.

The racketeer knows that everybody, in bad times, is afraid to lose what he has, and therefore depressions are particularly good times for racketeers. The business man knows that it is often cheaper to pay the racketeer than to fight a combination of politicians, union officials, and gangsters. So he pays and he obeys.

I once discussed this with a house painter who complained bitterly of what the racketeer had done to his industry. His answer was succinct but tragic: —

‘Mister,’ he said, ‘I have a wife and three children. I should start an argument!’