COME THE TROUBLED AUTUMN THAT YEAR, DUTCH Schultz could no longer say that "there ain't no wars around." There was a war: the Kingdom of Italy, Mussolini's Italy, against Ethiopia. On the very day we're concerned with here, October 23, 1935, IL Duce's son-in-law, Count Galeazzo Ciano, proudly announced to the world that his aerial squadrons were dropping nothing heavier than ten-pound bombs on the tiny country of Emperor Haile Selassie. "We are anxious to do nothing to irritate the peaceful population," Count Ciano said. On the domestic scene that day, President Roosevelt was coming ashore at Charleston, South Carolina, refreshed by a three-week voyage in Pacific and Atlantic waters abroad the cruiser Houston. Across the depression-scarred landscape, there was relative tranquility.
The New York Stock Exchange was coming off a 3-million-share day, the heaviest trading in 15 months. Washington reported strong gains in the export sales of such items as cotton, metal and chemicals (Mussolini's purchases were way up). New York was cracking down on the loan-shark fraternity, waxing richer on the patronage of WPA workers whose checks were too slow in coming. The New Haven Railroad, in trouble then as now, filed a petition in bankruptcy. In Hollywood, Jackie Coogan was three days away from his 21st birthday and the $1 million fortune stored away for him during the 17 years since he had starred in The Kid with Charlie Chaplin, and there was mingled wonder and concern out there because the Charles Laughton-Clark Gable Mutiny on the Bounty had chalked up a final production cost of nearly $1.5 million ($20 million for Barbra Streisand's Hello, Dolly! in 1969). On the Broadway movie marquees, there were names like Richard Dix, Joan Crawford, Dick Powell, Ruby Keeler and Basil Rathbone. On the stage, Lunt and Fontanne were in The Taming of the Shrew and Beatrice Lillie and Ethel Waters were co-starring in At Home Abroad, while Jimmy Durante was coming in with Billy Rose's Jumbo, Gershwin's Porgy and Bess was starting its infinite career, Three Men on a Horse (revived in 1969, again with Sam Levene) was sending us all away laughing, and the Maxwell Anderson drama, Winterset, was tearing at our insides.
In the high drama at hand, a real-life affair opening on and off-Broadway on the same night, the assorted stars and supporting players assembled slowly over a period of six hours.
The headliner in the cast, Dutch Schultz, born Arthur Flegenheimer, came on stage first. It was six o'clock on an uncommonly warm and pleasant evening when the Dutchman, sole owner and proprietor of New York's biggest single policy combination, a $20-million-a-year operation, strode into the Palace Chop House and Tavern on East Park Street in Newark flanked by two of his bodyguards, Bernard (Lulu) Rosenkrantz and Abe Landau. Frank Fredericks, the bartender then on duty in the reformed speakeasy, said that the Dutchman and his helpmates walked the length of the 60-foot bar and went directly to the round table in the right-hand corner of the back room. None of the eight booths was occupied, and none of the other tables.
Herbert Green, the waiter, had the drinks served in about the time it took the three men to doff their topcoats and hats and sit down. King Lou, the chef, put up the steaks and French fries without waiting for Green to come into the kitchen with the order. The Chinaman had been on the job only three days but already knew the ritual that followed the arrival of the Schultz trio.
Now the other players started to drift into the Palace.
Michael (Mickey the Mock) Marks, a minor hanger-on of the mob, said he had come all the way from the Grand Concourse in The Bronx just to see Lulu Rosenkrantz about some walking-around money. There may have been a more pressing reason for this long excursion, however, because Marks left after a while and returned to the tavern sometime before 8:00 P.M. with a slender little auburn-haired item who was wearing heavy glasses. This was Frances Flegenheimer, born Frances Geis but known as Frances Maxwell in 1932 when she went to work as a hatcheck girl in New York's Maison Royal, one of the red-carpet speakeasies, and met the imposing Dutch Schultz. She was 18 then and a still-blooming flower out of Hell's Kitchen, daughter of a machinist. Now she was the Dutchman's wife of sorts and mother of his two known children. She had come to Newark from her apartment in Jackson Heights, Queens. The bartender, Fredericks, had seen her in the tavern four or five times in the past week but never knew who she was. On this night, in any case, Schultz spent the best part of an hour alone with the girl, who was modestly dressed in a brown velvet suit topped by the most expensive thing the Dutchman had ever bought for her, the silver fox neckpiece that marked her 21st birthday. The pair had to break off at one point when the Dutchman had a visitor.
The new arrival was Max Silverman, a prosperous bondsman known to the New Jersey police because he had four arrests between 1922 and 1928 deriving from a certain sloppiness in his financial dealings. He was deposited at the Chop House at 7:40 by his Negro chauffeur, Alfred. Schultz, in a wrangle with the law over his carelessness about filing income tax returns in the time when he was the Beer Baron of The Bronx, recently had surrendered on a long-standing fugitive warrant out on him in New York and Silverman had posted his $50,000 bail.
Now the bondsman had come to the Palace, he would confide to the police later, to pick up some installment payments due on the fees of the Dutqhman's high-priced New Jersey legal battery--$6,000 for Harry H. Weinberger, $2,500 for George S. Silzer, only a former Governor of the Garden State, and $2,000 for State Senator John E. Toolan. Silverman's mission, though, was something more than that of an errand boy. "I have been in constant contact with Arthur Flegenheimer," he would say when the detectives started talking tough. "I done this as my duty as a bondsman for several reasons, one of them being that Flegenheimer feared being kidnapped by federal men, in which event my bond would be declared forfeit." Besides, there was an equally pressing matter of "some money for myself, which Flegenheimer owed me." This item involved $3,500, but the chunky 43-year-old bondsman always insisted that he had departed the tavern without any fresh rolls of green. He said the Dutchman, an acquaintance for 17 years, had told him that he wouldn't have any cash until later that night or the next morning. He said this intelligence was so disappointing that he left the Palace in short order.
On the way out, Silverman bid a passing good-by to the only two people seated along the long bar--Beatrice, the rnanicurist from the barber shop in the Public Service Bus Terminal across the street, and a man he knew only as "Mikie" and had seen in the tavern on some of his earlier business visits there with the Schultz party. Silverman said he whistled for his limousine, parked near the terminal, at 8:10, and had Alfred drive him over to a night club on nearby Clinton Avenue.
Benny Birkenfeld, the night waiter, arrived at 8:00. Two new faces joined the round table after a while and Birkenfeld served them dinner. One of these men would never be identified. The other, already enshrined in literature and thus something of a celebrity in his own right, was the roly-poly funnyman of the Dutchman's circle, Otto Berman. Real name Biederman. Nicknamed Avisack by the gambler-financier of the underworld, Arnold Rothstein, when a thoroughbred of that name helped him put over a couple of betting coups. Called Abbadabba by his own preference because that had a spookier sound about it and he was not only one of the premier handicappers of his time but also a mathematical wizard with a computer where his brain was supposed to be. In Damon Runyon's Little Miss Marker, the movie that helped five-year-old Shirley Temple shove aside such grownup female box-office draws of the Thirties as Greta Garbo and Janet Gaynor, there was a kindly horseplayer modeled after Abbadabba Berman. Runyon called the round man Regret in his chronicles of Broadway, naming him after the filly that astonished the racing world and ran off with the Kentucky Derby for the Whitney Stables in 1915.
But Abbadabba wasn't quite the lovable oaf that Runyon made out of Regret. He was in the Palace Chop House on that October night, the last night of his laugh-a-minute, bet-a-minute 46 years, because he was drawing a cool $10,000 a week to rig the pari-mutuel figures at select race tracks with last-minute bets so that the poor people of Harlem wouldn't take too much money out of the Schultz policy banks. Abbadabba had flown in with a delicious set of figures showing that in the preceding six weeks, with his split-second calculations shutting out the most heavily played numbers on any given day, the banks had taken down bets of $827,253.43 and paid out winnings of only $313, 711.99--a magnificent house percentage for any gambling operation.
The Dutchman needed this kind of good cheer.
His overall take from policy and such relatively minor absorptions as the restaurant shakedown racket had dwindled alarmingly during his enforced absentee administration. The problem was even clearer than the needle beer that had launched his fortune: he had been operating more or less in the underground since January 1933, when the government first indicted him on taxes, and had been out of New York since his surrender in Albany late in November 1934 for the first of his two trials (one hung jury and one easy acquittal). Now the bookkeeping sheets spread on the gravy-stained white tablecloth in the tavern dining room showed a growing imbalance in income and cash outlays (among them an item of $9,000 a month listed as "ice" for the friendly policemen of New York) which would have produced a screaming panic in the board room of any legitimate enterprise. The six-week net that showed on the tapes from the mechanical adding machine, almost as good as the one Abbadabba had in his chunky head, projected a rather gloomy annual take for policy even with the game rigged: $6 million for a racket which was then raking in $65,000 a day, every day but Sunday, or more than $20 million for the year. Beyond the mob force and the inside help and the shares drawn by the army of runners and controllers on the streets of Harlem; simply listed as "niggers" by Massa Schultz, there was too damn much coming off the top. Thus there never was any question about the agenda for the Palace summit.
Jacob Friedman, co-owner of the Chop House with Louis Rosenthal, arrived at 8:50 to relieve Fredericks at the bar, and by then there was no one in the front at all and the party in the back had reduced itself to the four principals--Schultz, Rosenkrantz, Landau and Berman. Whether the fifth man left the scene altogether or withdrew to patrol duty outside the tavern would never be known for certain, although it would have made very good sense for Arthur Flegenheimer to have an extra gun or two on hand that night. He was in trouble.
Apart from his legal difficulties with the Federal Government, the Dutchman was at that moment badly out of favor with the more formidable shooting mobs. In his time of travail, he had turned into something of a wild man, sending shivers down the collective back of the underworld by openly announcing that he was going to kill Thomas E. Dewey, recently named by the Democratic Governor, Herbert H. Lehman, to supersede the policy mob's own handpicked District Attorney, William Copeland Dodge, and to do something about the city's rampant crime.
Dewey, a Republican and an ex-choir singer out of Owosso, Michigan, was a relatively recent but fierce antagonist. As Chief Assistant United States Attorney for the Southern District of New York, he had drawn up the tax indictment against Schultz, who would thereafter be very careful about surrendering for trial while his tormentor was still in that office. Now in his new role Dewey was beginning to poke around in the lush policy preserve after having built up a solid case in the restaurant racket which the Dutchman had set up back in July 1932 with an assortment of crooked union leaders and such strong-arm men as Jules Martin, Sam Krantz and Louis Beitcher. The take was estimated at $2 million a year, and it was pretty easy money.
This Schultz subsidiary sold both "protection" and sweetheart contracts. From the one-armed joints to such Manhattan establishments as Jack
Dempsey's (well, the ex-champ couldn't take on the whole mob, could he?), Gallagher's, Lindy's, The Brass Rail and Rosoff's, the eateries were given a simple choice by the Dutchman's Metropolitan Restaurant and Cafeteria Association. They could pay "dues" to the
MRCA, the scale varying according to what the traffic would bear, or certain bad elements in the town might drop stinkbombs on their premises during peak hours, such as lunch or dinner. That's how the "protection" worked.
On the labor front, the choice was just as straightforward. The MRCA could help its members negotiate "reasonable" contracts with Local 16 of the Hotel and Restaurant Employees International Alliance and Bartenders Union, more commonly known as the Waiters Union, or with Local 302 of the Delicatessen Countermen and Cafeteria Workers Union--or they could watch their receipts dip while picket lines kept the customers away. The MRCA happened to have three of the top leaders in each of these American Federation of Labor unions in its hip pocket, so there never was any difficulty arranging contracts that could be beneficial all around--except to the restaurant workers themselves, for they drew pitifully low wages in the process and also would find in time that $1 out of every $ 3 of their dues was finding its way into the mob's pockets instead of their own locals' bank accounts.
Dewey had William B. Herlands looking into the situation over a period of 14 months in an investigation that kept getting more intriguing all the time as Herlands began to hear more and more not only about Dutch Schultz but even about Jimmy Hines, the most powerful of the Democratic district leaders. The references to the Tammany wheel, whose name was being used by the Dutchman's plug uglies in the MRCA whenever anybody started talking back, furnished one of the early tips on the most absorbing of the city's underworld- political marriages. This one was going to get a lot more explosive as new sources opened up in later years. In the restaurant case, which put an assortment of crooked union leaders and Schultz muscle men behind bars, it was just an item of tantalizing interest.
The Hines-Schultz alliance really flowered in the policy racket, of course, and the first tentative peek into that festering sore had come about while the restaurant investigation was under way. What happened was that in either late August or early September of 1935 a son-in-law of a Harlem policy banker named Wilfred Brunder decided to drop in on the Special Prosecutor and tell him how the Bronx mob had muscled in on the numbers game. Dewey put Victor J. Herwitz on it, teamed with another helper of the racket buster's, Mrs. Eunice Hunton Carter, the only woman on the staff. Pretty soon Herwitz and Mrs. Carter, a Negro, were prowling around Harlem--and just as soon, naturally, the word went back to Schultz. It was then that the Dutchman started saying things like "Dewey's gotta go" or "We gotta knock off Dewey."
The roster of the more thoughtful Schultz contemporaries who did not like that kind of talk included some impressive figures: Louis (Lepke) Buchalter and Jacob (Gurrah) Shapiro, the Garment Center racketeers operating a national sideline which would come to be known as Murder Inc.; Charles (Lucky) Luciano, nee Salvatore Lucania, of the Unione Siciliana or the Mafia or the Cosa Nostra, pick your name; the Bug & Meyer mob of Meyer Lansky (from Suchowljansky) and Benjamin (Bugsy) Siegel; and New Jersey's Abner (Longy) Zwillman. This was the Big Six or the Syndicate--again it was a matter of taking the name you liked the best--and this loosely organized but harmonious conglomerate wasn't too crazy about the kind of heat that might develop if the independent and overly excitable Dutchman put the peerless Special Prosecutor on the spot.
For that matter, Schultz had problems with the hoodlum empire apart from his mind-blowing assassination plot. What with his tax troubles and all, he had been in the public prints too much; he was calling needless attention to the trade. Beyond this, there was a question in some of the better underworld minds whether he would stand up or start blabbing if Dewey nailed him. And finally there was a suspicion abroad that Schultz had done in his own long-time first lieutenant, the massive Abe (Bo) Weinberg--an item that would have made at least one Big Six dignitary most unhappy for a rather selfish reason. Weinberg, brooding about the way the policy racket's proceeds were being drained off to defray the Dutchman's extraordinary legal expenses, had been talking to Lucky Luciano about retiring his old buddy to some other field, possibly even a field of lilies. Schultz found out about this act of ingratitude and, fearing that the covetous Lucian might well be able to take over the lush Harlem game with Bo's help, reacted badly. In any event; Bo hadn't checked in with his beautiful blonde showgirl bride, Anna May Turner, since leaving their hotel room on September 9. "He must be dead," Miss Turner observed, "for nothing would keep him from coming to see me or letting me know where he is." She was so right; Bo must have been very dead indeed.
With all these minor irritations on his mind now in October, it follows that any table the belabored Dutchman occupied in any restaurant would have to face the door. The round table in the Palace could not have been more ideal for this safety-first purpose. The chair against the wall--always occupied by the boss himself--faced the narrow passageway from the bar. The chair to the left of that faced the swinging doors of the kitchen, which had an entrance from an alley outside. The chair on the right faced the window on the tavern's west wall, and the one opposite Schultz looked squarely into a rectangular mirror and thus commanded a second view of the opening into the room.
Out front, as the evening wore on, Jack Friedman had nothing but his housekeeping duties to keep him occupied. He said he didn't even know about the party in the back, a curious item at best since the waiter had been hustling drinks from the bar. One wonders if it hadn't occurred to Friedman after a while that the Palace Chop House and Tavern had fallen on evil times again just as the country, with the pump primed by the $5 billion WPA program and a host of other New Deal devices, made its upward turn from the recession that followed Franklin Delano Roosevelt's initial efforts to restore the economy shattered on Wall Street's Black Tuesday of 1929. Surely Friedman had to think back with some longing to the days, just two years before, when the place enjoyed a thriving trade as one of Newark's handier speakeasies. Consider the location: The Palace, facing the north side of the Public Service Bus Terminal, was just a couple of blocks from bustling Broad and Market Streets and no more than a brisk walk from Newark's Penn Station. And it was far, very far, from the nearest Prohibition agent. In those days, that long bar never seemed long enough.
Now it was a lonely oasis indeed.
Friedman ran a damp rag over the mahogany, adjusted three or four liquor bottles that seemed out of place to him, checked the register idly, and then started to walk to the back to settle down with a cup of coffee which the waiter, Birkenfeld, had brought out for him from the urn sitting ingloriously alongside the men's toilet in the back. Birkenfeld also had picked up some coffee for King Lou and now he was back in the kitchen.
Once Friedman glanced out the narrow window into Park Street, wondering where the people were. He said he didn't see anything, but there was a man in a green suit outside, perhaps out of the innkeeper's view. This man was leaning against the tavern and twirling a key chain with the figure of a white horse--from the whisky of the same name--on the end of it, or so the police were told later. The street was quiet, in any case, except for the scratchy sounds of the trio in the cabaret the Palace operated on the floor above the bar in the two-story building. It was pretty dead up there, too; the three-piece symphony happened to be entertaining a grand total of two couples, easily outnumbered by the help in the place.
It was about 10:15 when the 44-year-old Friedman got to the end of the bar and started to stir that coffee, and at that moment the high drama began.
"The front door opened suddenly," Friedman said later, "and a heavy-set man walked into the barroom and I heard a voice order, 'Don't move, lay down.' I could hardly discern his face as he pulled his topcoat up to hide it. I saw him place his hand on his left shoulder and whip out a gun from a holster. I didn't wait any longer. I dropped to the floor and lay behind the bar."
The heavy-set man, who had curly black hair and piercing brown eyes, packed 185 pounds of muscle on a wide five-foot-seven-inch frame. He was in his early thirties and good-looking in a tough kind of way. He was not alone. Right behind him--there was no way for Friedman to miss this dark and menacing presence--came a slightly taller man, obviously older, who kept his overcoat drawn around him but not buttoned.
This was a pair of skilled and sure journeymen in a trade which had attracted ever-increasing recruits going back to the bootleg warfare of the Twenties and was still luring them into the fold as Repeal kept turning the underworld down all those other rich streets.
The gunmen didn't need any directions from the terrified bartender.
They headed straight for the dining room.
For they had come to kill the Dutchman, once a package thief and burglar, then a helper on a beer truck, then a sometime shooter for Jack (Legs) Diamond, then a partner in a two-bit speakeasy in The Bronx, then the Beer Baron, then overlord of the Harlem policy racket, then Public Enemy Number 1 on the private list in J. Edgar Hoover's Federal Bureau of Investigation--and now, at the tender age of 33, evidently Public Enemy Number 1 on an even more formidable list.
