The Jews in America Trilogy (151 page)

It has often been said of Lansky that, had he chosen a more legitimate enterprise, he could, with his business genius, have run General Motors. In 1925, Lansky himself boasted that his business was probably bigger than Henry Ford's, and he may have been right.

His profits, by the mid-1920s, were enormous, but then so were his expenses. Approximately a hundred thousand dollars a week—or over five million dollars a year—went for bribes and “grease” for city officials and for other forms of protection. In New York City alone, the payoffs to police ran ten thousand dollars a week, paid all the way down the line from precinct captains to patrolmen on the beat. Still, Lansky and his partners were dividing a net income of over four million dollars a year, while enforcement of Prohibition by law went out the window. During the decade and a half that Prohibition was in effect, federal agents arrested 577,000 suspected offenders, confiscated
over a billion gallons of bootleg liquor, seized 45,000 automobiles and 1,300 boats assumed to be involved in the illicit trade. And yet the assistant secretary of the U.S. Treasury, Lincoln C. Andrews, who was in charge of enforcing the Volstead Act, estimated that less than five percent of the liquor traffic was being stemmed. Looked at another way, bootlegging had become the most cost-efficient business in the world.

In 1925, Lansky had another money-making idea. He was always being drawn back to his first love, gambling, and now, though he had always preferred doing business with well-heeled customers, he had a notion for making money from the poor. The idea occurred to him at the posh Beverly Hills Supper Club outside Newport, Kentucky—a wide-open little city across the Ohio River from Cincinnati. Newport, favored by a laissez-faire and bribable city government, had turned Cincinnati into something of a tourist attraction, so close was it to a place where illegal gambling parlors operated openly, while prim and proper Cincinnati looked the other way. Watching the white-coated waiters and black-tied croupiers of the Beverly Hills serve their well-turned-out clientele, Lansky wondered aloud if the same kind of gaming pleasure could not be offered to those at the other end of the economic scale. Italy, he pointed out, and other Latin countries had their national lotteries. The Irish had the sweepstakes. In all these games, for a few pennies a day a workingman could take a chance at winning a huge pot. At first, when Lansky explained that he was talking about betting pennies, his associates were skeptical. But the more he explained his idea, the more their cars pricked up. He and Lucky Luciano sat up all night working out the details.

The idea was simple. Every day, the customer would buy a three-digit number—from 000 to 999. The winning number would come from a supposedly unriggable source that would be published in every newspaper—the last three figures of the total sales on the New York Stock Exchange, for instance, or the betting totals at a particular racetrack. This way, no bettor who lost could claim to have been cheated. The winning number would pay at odds of six hundred to one, which would make it attractive, and since the actual chance of winning was less than one in a thousand the profits could be enormous. Thus the numbers game, or policy game, was invented. Lansky
suggested that the game be introduced in Harlem, where a great many poor southern blacks had migrated after the war in search of better jobs. It was immediately a hit in Harlem, as it remains to this day, and the numbers game was quickly introduced in other urban ghettos—Cleveland, Detroit, Chicago, and on and on.

As though such schemes as this were not enough, Lansky would also develop what he wryly called “my laundry business.” Again, it was brilliantly simple. Funds were skimmed off the profits from the illicit operations and shipped to Switzerland, where they were deposited anonymously in numbered accounts. Then Lansky would arrange for some of his legitimate businesses—real estate, warehousing, and so on—to borrow that money. The interest on these perfectly legal loans was then paid right back into the pockets of Lansky and Company. These interest payments, furthermore, were a tax-deductible business expense. As Lucky Luciano explained, “It was like we had a printin' press for money.”

Up in Canada, meanwhile, Sam Bronfman seemed to have discovered a similar printing press. And as his comings and goings between the United States and Canada accelerated with his expanding business, he had to keep careful track of his whereabouts, because if he had spent as much as six months' time in the United States in any given calendar year he would have been subject to American income taxes. He was also becoming an expert on, and outspoken advocate of, American and Canadian blended whiskeys. He had developed an interesting theory: that the congeners, or chemical aldehydes or esters, that were retained in blended whiskeys were of such a nature that they made blended whiskey not only a smoother but also a “safer” drink. That is, if a drinker sipped a blend all evening he would enjoy the pleasant euphoria that drink induces, but was less apt to get drunk. Also, he was less apt to suffer the unpleasant hangover effect on the morning after.

A finding by the Pease Laboratory seemed to bear Bronfman out, and the Pease Report suggested that blended whiskeys, being lower in congeners, were better for you than straight whiskeys. Excitedly, Sam Bronfman hired a psychologist to conduct a series of tests on drinkers in upstate New York. The
tests lasted several weeks, and responses were measured between men drinking straights and men drinking blends. Not surprisingly, perhaps, considering who was paying him, the psychologist's conclusions confirmed the boss's hunch. Blends were more reliable. A “doctor” had proved it!

Blends, Sam was convinced, could be made more palatable to women. The very word
blend
had a softer, cozier, more reassuring sound than the harsh
straight
. Gin, he was convinced, turned a drinker mean and quarrelsome, and he argued that gin “stayed in the system longer,” thereby increasing the chance of a hangover. Brandy was “an alcoholic's drink,” and whenever he encountered a man who drank nothing but brandy, Bronfman was convinced that skid row lay right around the corner. His personal drink was always blended Canadian whiskey, taken in a tall glass topped with water or soda, and to demonstrate the superiority of blends—that they could be “trusted”—Mr. Sam, as he was now universally called, sipped on his whiskey throughout his business day and on into the evening, and it had to be admitted that no one ever saw him drunk. His own personal tastes, of course, did not deter him from also dealing in gins and brandies.

By 1925, Sam Bronfman was one of the richest men in Canada, but the one thing he could not seem to buy was
yikhes
—status, respectability, legitimacy. In Montreal, status was conferred by membership in the Mount Royal Club, by a directorship of the Bank of Montreal, by being named a governor of McGill University. But all these honors somehow managed to elude him. In fact, after he was taken to lunch at the Mount Royal Club by one of its members, the member was requested not to invite Sam Bronfman to the club again. It was not just that he was Jewish, exactly, and that made the snubs all the more galling. Sir Mortimer Davis, another Montreal Jew, not only belonged to all the best clubs—the Mount Royal, the Saint James's, the Montreal Hunt, the Montreal Jockey, the Royal Montreal Golf, and the Forest and Stream—but was on the board of the Royal Bank of Canada and had been knighted by George V in 1917. Sir Mortimer was in the tobacco business. Was tobacco more respectable than liquor? In prim and proper Canada, yes, and for all he might protest that he was just another honest businessman, Sam Bronfman could not shake the “bootlegger” and “rumrunner” labels that had been attached to him.

Part of the problem, too, was Mr. Sam's personality. He could be charming and congenial, but he often had trouble concealing his rough underside. He was known to have a violent temper, and when crossed, he would explode with four-letter epithets that would make even a Montreal stevedore blush. With underlings, he was as autocratic as the Bourbons of old, while with higher-ups or those he wanted to impress he was fawning and obsequious. The man whose staff lived in terror of their boss's displeasure was also a man who, in a gathering of people over whom he had no personal control, seemed uncertain, shy, frightened, unable to think of a word to say. The best that could be said for Sam and Saidye Bronfman, socially, was that they tried—giving lavish entertainments at their Westmount castle—but that they tried too hard; too defensively. They let their hands show too much—always a fatal error in the art of social climbing. Their insecurity was too apparent. At a party, the short, plump, balding figure of Mr. Sam Bronfman would be seen standing at a little distance from the center of things, frowning, shoulders hunched as though to ward off real or imagined snubs that were bound to come.

Worst of all, Sam Bronfman had arrived in smart and civilized Montreal—a city that liked to think it combined the best attributes of Paris and London—from the wilds of western Canada, and with very little history, not to mention education. Furthermore, what was known of his family's history had its untidy chapters. In 1920, his brother Allan had been arrested for trying to bribe a Canadian customs official who had stopped three improperly registered cars heading for the border filled with Bronfman liquor. Then, in 1922, Sam's brother-in-law Paul Matoff, who was married to Sam's sister Jean, was murdered with a sawed-off shotgun in a Canadian railroad station while paying for a shipment of liquor. The family immediately declared that the motive was simple robbery, and Mr. Matoff's murder was never solved, leaving the distinct impression that the family wanted it that way, with no further questions asked.

But in 1928 an event occurred that would supply Sam Bronfman with the history he needed, even though it would be a borrowed one. That was the year he acquired the firm of Joseph E. Seagram and Sons, Ltd. Seagram's was a fine old Canadian distilling firm, and bore a fine old Christian name. Now that the Bronfman distilling business could use the name
of Seagram, Sam Bronfman could incorporate Seagram's respected history into his own, and soon, in a very much laundered corporate history, Sam would be able to declare, “Our company had its origin in 1857 in Canada, when Joe Seagram built a small distillery on his farm and sold its products in the surrounding area.”

The familiarity with which Mr. Sam would treat “Joe” Seagram, or “old Joe”—as in “old Joe would be proud of us today”—made it sound as though old Joe had been Sam Bronfman's grandfather. But in fact even the “old Joe” story was not quite correct. It was true that the Seagram business could be traced back to 1857, when a small distillery had been built on the banks of the Grand River in Waterloo, Ontario. But the builders had been two men named William Hespeler and George Randall; in 1857, Joseph E. Seagram was still a sixteen-year-old Ontario farm boy with no connection to the Hespeler-Randall distillery. That connection did not occur until 1869, when Seagram married William Hespeler's niece, Stephanie, and went to work for his wife's uncle. A year later, he bought out Hespeler's interest in the company, and changed its name.

In acquiring the Seagram name, Sam Bronfman, as the saying goes, “tried to become instant Old Money.” But still the invitations to join the clubs and to adorn the boards of the banks did not come.

The timing of the Seagram acquisition, however, could not have been better. The noble experiment of Prohibition—doomed to failure from the beginning—was coming to an end. Everyone knew it, and it was only a matter of time before the Eighteenth Amendment would be repealed. Seagram's gins and whiskeys were well known and popular in the United States. The interim between the Seagram-Bronfman marriage and Repeal would give Mr. Sam just time enough to gear up Seagram's for its reentry'—legitimately at last—into the American market.

Yikhes
—it was something all the immigrants from Eastern Europe wanted. But, confronted abruptly with a different culture and set of values in the capitalist democracies of North America, each Russian Jew, in trying to adapt to and assimilate in the New World, interpreted
yikhes
differently. Though Sam Bronfman saw
yikhes
as being attained through memberships
in the right clubs and corporate boards, in the old country his aspirations would have been sneered at as trivializing a very complicated concept.

In Russia, the word
yikhes
had carried connotations of “pedigree,” “genealogy,” or “family prestige,” but it went even farther than that, for
yikhes
must be rightfully earned, honestly deserved, as well as inherited from one's ancestors.
Yikhes
has nothing to do with wealth, fame, or even personal achievement, though it does have a good deal to do with what an aristocracy consists of—an aristocracy of learning, rather than (as Americans have) an aristocracy of money. In Russia, there were levels of
yikhes
. The highest degree of
yikhes
was awarded to the scholar of the Talmud, the man of God, and a
shadchen
, or matchmaker, would carefully cite the list of scholars, teachers, or rabbis in the family pedigree of the marriage candidate, whether male or female. The longer the list, the loftier the
yikhes
. A rich Jewish family would far prefer that its daughters marry rabbis, however poor, than merely rich men. Similarly, it would seek out rabbis' daughters as its sons' wives.

From godly learning, next down on the
yikhes
scale came virtue, or conformity to moral rectitude as to a divine law. Next came philanthropy, then service to the community through good works. But having generations of
yikhes
in one's family tree was no guarantee of
yikhes
. He who failed to live up to his family's standard and record was quickly stripped of his
yikhes
.

Rose Stokes, among others, strove for
yikhes
. Having failed to achieve it through her marriage, she sought it through work for her Communist workers' cause. But the trouble was, in the gloriously prosperous 1920s, nobody much wanted to hear about the woes of downtrodden workers, about exploitation of the poor. Her audience had shrunk, and her cause had gone out of date. The passions of Jewish radicalism that had first moved Rose to action had died down, had been channeled elsewhere, and Rose herself had been nearly forgotten, though her passions still burned as fierily as ever.