The Fur Dressers Case
Combating
The Rackets
The Protective Fur Dressers Corporation and the Fur
Dressers Factor Corporation
Prosecutive Action Against the Protective And Fur Dressers
Factor Corporation
Jacob "Gurrah" Shapiro
surrendered to Federal authorities on April 14,
1938, in New York, after being a fugitive from justice
for less than a year. During that time every known
associate and contact was investigated to determine
if they were in communication with him. Relentlessly,
the forces of law and order were seeking to drive
him out into the open. Shapiro stated the Federal
Bureau of Investigation (FBI) was hunting him wherever
he went and under the circumstances it was like
being
in jail, thus he surrendered. On May 5, 1944, Shapiro
was sentenced to 15 years to life after being found
guilty of conspiracy and extortion.
His associate of many years, Louis "Lepke" Buchalter,
was going to see how he made out, Shapiro related
to Special Agents of the FBI, before he
decided to surrender. Sixteen months later Buchalter followed suit, bringing
to a close a manhunt that covered the continental United States and extended
into Mexico, Costa Rica, Cuba, England, Canada, France, Puerto Rico, and Germany.
Over
a period of years, the activities of this gang had
been the subject of headline after headline in the
Metropolitan dailies. Industrial racketeers, never
hesitant to enforce their mandates with lead pipes,
stench bombs, brickbats and bullets, brutality and
vandalism equaled that of the Huns of old. Millions
of dollars were exacted as tribute by the paid enforcers
of Shapiro and Buchalter. Both had a flair for organization,
combined with considerable business acumen, rivaling
that of big business and industrial executives. Their
underworld empire extended from coast to coast. Associates
occupied pinnacles of authority in various sections
of the country, while others, hiding behind the garb
of pseudo-respectability, nurtured their egos with
their ill-gotten gains.
The
FBI began inquiring into the racketeering tactics
of Buchalter and Shapiro in 1932, which led to the
indictment of one hundred and fifty-eight individuals,
by a Federal Grand Jury in the Southern District
of New York, on November 6, 1933. The majority of
the persons indicted subsequently entered pleas of
guilty.
Combating
The Rackets
The FBI first began landing blows on far-reaching, well-organized interstate
rackets, through the penal provisions of the antitrust laws. Gradually, public
resistance to racketeering stiffened as case after case was successfully prosecuted
by the federal government, indicating that racketeering eventually could be
combated once law enforcing agencies were armed, properly qualified, and divorced
from the vagaries of political domination. Experience has demonstrated that
no racket can long exist without:
- political
affiliation and protection;
- terrified
witnesses who, although willing to do their duty,
are confronted with the fact that duty performed
is meaningless and an open invitation to terrorism
and brutal retaliation; and
- lackadaisical,
haphazard, inefficient, and apathetic law enforcement.
To
invoke the federal antitrust laws the racketeering
activity must be of such a character as to interfere
with and restrain interstate commerce generally through
the following methods:
- (a)
creation of monopolies, through the acquisition
or merging of competing entities;
- (b)
maintenance of monopolies over competing entities
with:
- price
agreements;
- limitation
of production by agreement;
- allocation
of territories by agreement;
- maintenance
of black lists;
- the
establishment of retail prices through agreements
with jobbers and dealers;
- furtherance
of the above-mentioned items by agreements
between trade associations; and
- agreements
between labor unions and between labor unions
which interfere with interstate commerce.
Each
individual violation of the antitrust laws is punishable
by a fine not to exceed $5,000 and imprisonment not
to exceed one year. Ordinarily the big racketeering
cases will involve several separate violations. Two
cases are particularly significant as the forerunners
to racketeering activities and which were to culminate
in the smashing of the underworld empire created
by Buchalter and Shapiro.
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The
Protective Fur Dressers Corporation and the Fur
Dressers Factor Corporation
The Protective Fur Dressers Corporation consisted of seventeen of the largest
rabbit skin dressing companies in the country. The membership of the Fur Dressers
Factor Corporation was comprised of forty-six of the largest dressers of furs
other then rabbit skins. Both were created early in 1932. The purposes and
functions of these two combinations were to drive out of existence all non-member
dressing firms; to persuade all dealers to deal exclusively with members of
their combinations and prevent them from doing business with dealers who were
non-members; to eliminate competition; to fix uniform prices by agreement;
to set up a quota system whereby each of the different members received a certain
percentage of the entire business handled by the members of the combination;
to provide a credit system enforcing periodic statements; and effectively blacklisting
any dealer who for any reason would not pay on settlement day. The objectives
of this combination, naturally, were effected by intimidation and violence
of the most vicious character directed toward both the dressers who would not
join the combine and the dealers who insisted on doing business with non-members.
The
fur dressers openly competed for business prior to
the formation of these two corporations. The dealers
and manufacturers could choose their own dressers.
However, with the organization of the corporations,
each of the dealers and manufacturers was notified
of this formation and informed in no uncertain terms,
by committees or individual members of the Corporation,
that they would have to give all their business to
a member firm to be designated by the Corporation
for each order. They were also notified that, effective
immediately, prices would be increased and all accounts
would have to be settled in full each Friday. Naturally,
some of the dealers and manufacturers continued to
give a portion of their business to the independent
dressers, some openly and others secretly. Often
they would route the skins to one or more intermediate
warehouses or have them hauled in private trucks.
In nearly all instances, these shipments were detected
by spotters for the Corporation. Then these individualistic
dealers were the object of stronger solicitation
for their business. This solicitation was frequently
reiterated and emphasized through the medium of anonymous
warnings over the telephone. If the calls did not
have the desired effect, then the individualistic
dealers were certain to be visited by strong-arm
squads, armed with lead pipes and blackjacks. They
became the victims of personal assaults or their
goods became the targets of corrosive acids or stench
bombs which were thrown into their plants. Usually
these tactics brought the recalcitrant dealers into
line and the Corporation had no further trouble from
them.
The
independent fur dressing establishments in some instances
were ordered to get out of business. The orders were
followed by explosive bombs. An investigation conducted
by the FBI revealed that Buchalter and Shapiro furnished
the strong-arm squads and directed their campaigns
of depredation and violence, for both the Protective
Fur Dressers Corporation and the Fur Dressers Factor
Corporation. Buchalter and Shapiro had little contact
with the members of the combine, ordinarily their
contacts were limited to one key member in each group.
Buchalter and Shapiro had reached the position in
life where they could depend upon hired thugs to
do their dirty work for them. In the Fur Dressers
Factor Corporation the contact was with its general
manager, Abraham Beckerman, who had formerly been
the manager of a joint council of the Amalgamated
Clothing Workers of America, where he had made the
acquaintanceship of Shapiro and Buchalter. Prior
to his association with the Fur Dressers Factor Corporation,
he had never been in the fur business. Samuel Mittelman
was the president of the Protective Fur Dressers
Corporation. He was also president of the Queens
Fur Dressing Company.
The
individual members of the Protective, when it was
first organized, standardized the price for dressing
the cheapest rabbit skins at five cents each. Later
the price was raised until no skin was dressed for
less than seven cents, with prices ranging up to
ten cents. It was established by the investigation
that the Protective controlled from eighty to ninety
percent of the business in 1932 and approximately
fifty percent in 1933. It is estimated that 10,103,827
skins were dressed during the last eight months of
1932, and 8,541,255 of the skins were handled by
members of the Protective. In 1933, the members of
the Protective dressed 10,736,874 of the 22,127,740
skins handled.
Shapiro
and Buchalter became active in the fur industry in
April, 1932, and continued their activities until
the summer of 1933. In April of 1932, they were contacted
by Abraham Beckerman, who had just become general
manager of the Fur Dressers Factor Corporation and
the Associated Employers of Fur Workers, Inc. "For
about one and one-half years previously," Beckerman
told Special Agents of the FBI, "I had been
personally acquainted with Louis Buchalter, alias
'Lepke,' and with Jacob Shapiro, alias 'Gurrah,'
and, accordingly, I called one of them on the telephone
and went up to see them. I explained that there was
a certain amount of organization work, meaning rough
stuff, that would have to be done and inquired whether
they were in a position to undertake it . . . They
told me that they would take care of me."
Beckerman
then informed them that prior to his association
with the Fur Dressers Factor Corporation this organization
had entered into an arrangement for the employment
of muscle men to enforce the mandates of the combination.
The arrangement had been made with Jerry Sullivan,
a lieutenant of the Owney Madden gang. Subsequently,
the organization decided they had made a mistake
and accordingly, had asked Beckerman to get him out.
Beckerman then related to Special Agents of the FBI
that in conference with Buchalter and Shapiro, "They
said they thought that Jerry Sullivan would probably
give a lot of trouble -- that they didn't think I
could handle him but that they themselves would try
to straighten the matter out with Sullivan some other
way. A few days later, I met both Buchalter and Shapiro
again in a hotel and they told me that they had straightened
the matter out with Jerry Sullivan by agreeing to
pay him a certain proportion of the first money which
was to be paid to them by me. If they had not undertaken
to eliminate Sullivan from the picture, I should
not have undertaken the job because it would have
meant that I myself would have gotten in trouble.
So far as the pay which Buchalter and Shapiro were
to receive was concerned, they stated that they would
start working on a piecework basis but that afterwards
they would want to work steady and be paid on an
annual basis. When I first talked to them, I explained
that there would be different special jobs. At this
first meeting, Buchalter and Shapiro suggested that
they would expect to receive about $50,000 a year.
As a matter of fact, after Buchalter and Shapiro
started to work for us, they were not paid on either
a piecework basis or on an annual basis, but they
were paid in varying amounts from time to time whenever
the funds were available. Usually they were paid
about $2,000 or $2,500 at a time. The total amount
which was paid them for this violence from the Fur
Dressers Factor Corporation was approximately $30,000.
This money was paid to them in two ways: first, by
over-payments which were made by the Fur Dressers
Factor Corporation to the National Fur Skin Dressing
Company, Inc. and second, by direct payments from
the Fur Dressers Factor Corporation."
Shapiro
and Buchalter were informed by the contact men as
to which fur dressers, dealers, manufacturers, and
union officials were not cooperating with the combination.
Then these two saw to it that their men subjected
the recalcitrant individuals to the intimidation,
coercion, and violence necessary to bringing them
in line. In all, there were more than fifty anonymous
telephone threats, twelve assaults, four stench bombings,
ten explosive bombings, one kidnapping, three acid
throwings, and two cases of arson included in the
special service which Buchalter and Shapiro rendered
to the two combinations. A similar program, of course,
was carried on in behalf of the Protective Fur Dressers
Corporation. Shapiro and Buchalter, as previously
indicated, did not personally participate in any
of these acts but directed their operations like
generals behind the scenes. Shapiro, the cruder of
the two, who has been likened by some of his associates
to a "bull in a china shop," did stumble
over the scenery on one occasion when in a discussion
with Irving Potash, then secretary of the Needle
Trade Workers Industrial Union, fur department, said "Potash,
you'll have to deal with me, whether you like it
or not."
The
Needle Trade Workers Industrial Union was known at
the time as the left wing, while the Lamb and Rabbit
Workers Union was known as the right wing, the latter
union later becoming an amalgamation of the two organizations
who employed the services of Buchalter and Shapiro.
The Needle Trade Workers Industrial Union had as
its objectives (in 1932 and 1933) the complete unionization
of shops of fur manufacturers, dressers, and dyers.
Naturally, some conflict was bound to arise between
the Protective and the Needle Trade Workers. Then
too, the Associated Fur Trimmers and Coat Manufacturers,
Inc., advocated its members employ only duly signed
members of the American Federation of Labor, thus
bringing this Association into direct conflict with
the Needle Trade Workers. The following statement
of one manufacturer reflects the terrorism that was
typical of the unrest and strife that existed at
that time:
"We
are fur manufacturers and employ on the average
from six to eight workers. On the fifteenth day
of February, 1933, at about one o'clock, a man
walked into our place and said he was a worker
and was sent to us by a man by the name of . .
. We asked him what kind of work he wants to do
and he said he was an operator. I thought it was
very strange that he should come to us at that
time. He looked rather suspicious and he looked
all round the place and acted strange, but we paid
no attention to him and he walked out.
About
twenty minutes or a half hour afterwards, ten strange
men walked into our place of business. One man
walked straight to the telephone; another man stood
by the door in the showroom and four men walked
into the factory. We had at that time about five
workers working. Another man walked to myself and
my partner with his hand in his right-hand pocket,
pointed at us as if there was a gun in it. Both
myself and my partner were at the table standing
up cutting and this man said, 'put down your knives
and walk into the stock room quietly and don't
make any noise' and at that time he was pointing
his hand at us, although it was in his pocket,
as if he had a gun in it. We couldn't understand,
but we did as we were instructed. Then the rest
of the men went into the shop to the workers and
took from them all the tools and then they started
with the tools to cut up all the skins that they
were working on. Every skin that they could see
and garments that we made were cut up into pieces
and then they took some acid and threw it upon
the skins. All of this we saw them do. They even
left the bottle that contained the acid in the
place.
The
workers were chased in with us into a stockroom
and this man with, presumably, a gun in his pocket,
said 'you better stay quiet and not make any noise
if you know what's good for you,' and he said 'remember
not to say anything about what we did here, for
if you should recognize us and point us out at
any time, we will come up and finish you.' After
they destroyed everything in our place, the leader
ordered his fellows to walk towards the stairs
and he told us to stay quietly for about five minutes
until they got away, for if we did not, they would
come up and hammer us to pieces and he said, 'if
you say anything, you know what is waiting for
you' and then he went away."
".
. . I got in touch with the Communist leader and
I asked him what he meant by sending people to
destroy my merchandise. He came up to see me about
four days after that and he said he was sorry that
it was done but that he was in court and didn't
know anything about it. I told him that this is
a dastardly thing for him to do and I am not going
to keep quiet about it and he said, 'if you do
have any of the union people arrested, you will
have the union around your neck.' I told him that
the union people did not do that but it was a lot
of gangsters with guns and knives and that I certainly
could not afford to lose the damage that they have
done. I asked him what his reason was to send such
people up to me. What did I do to have him send
such gangsters to my place and all he said was
that 'if you are quiet about it, they won't come
again and you will be able to work in peace.' He
said he was going to make good for the machinery
and merchandise but they never did.
I
did nothing to justify the workers or any gangsters
to come up and destroy my place. The gangsters
that visited me, I am sure, are not fur workers.
They looked and acted just like a lot of gangsters.
Every machine was broken, so that we couldn't work
and every piece of merchandise was cut up and acid
spilled on it."
The
following incident is also typical of the operations
of the Protective. This incident has also been summarized
in the press. Mr. Joseph Joseph, of J. Joseph, Inc.,
New York City, had been doing a million dollars worth
of business a year since 1918, by importing rabbit
skins from Australia and New Zealand. He first encountered
difficulties in the fur business in the summer of
1932 when the Protective Fur Dressers Corporation
was organized. At the time the Protective was formed,
Mr. Joseph was giving some of his work to the Waverly
Fur Dressing Company, in Newark, New Jersey, which
he continued to do until that place was bombed. He
had also received several communications from the
Protective. On May 14, 1933, while he was at home,
sitting on a bench, an unknown individual approached
him at about 11 a.m., and without saying anything,
tore off a newspaper which he had wrapped around
a bottle of acid and threw the acid into Mr. Joseph's
face, stating, "Now you've got it." Mr.
Joseph was unable to apprehend his assailant, who
was able to make a getaway by jumping into a car
driven by a confederate.
Mr.
Joseph was considerably burned by the acid and his
face was seriously scarred.
On
May 17, 1933, Mr. Joseph received a telephone call,
during which the following conversation took place:
Man: "Is
this Joseph?"
Joseph: "Yes,
who is this?"
Man: "A
friend of yours. You got burned with acid."
Joseph: "I
know it."
Man: "That
comes from the Protective. The next is . . ."
Joseph: "Who
are you?"
Man: "Goodbye."
With
reference to the Waverly Fur Dressing Company, Newark,
New Jersey, which plant was bombed in the Spring
of 1932, investigation revealed that this concern
was experiencing no trouble whatsoever and, at the
time, negotiations were pending whereby the Waverly
Fur Dressing Company was to join the Protective Fur
Dressers Factor Corporation. The Waverly Company
did all its operations for one customer, handling
approximately thirty thousand skins a week. Under
the agreement whereby it was to become affiliated
with the Protective, it was to be limited to the
handling of fifteen thousand skins a week. Because
of this arrangement, the Waverly Company had withheld
the actual consummation of the agreement to join.
Shortly thereafter, two individuals who were identified
as members of the Zwillman gang in Newark, appeared
at the office of the Waverly plant and informed the
manager that he had better join the Association.
Later, they repeated their visit and urged the manager
to call Mr. Balk, of the Protective Fur Dressers
Corporation, and advise him they would join.
On
the afternoon of the day the bombing took place,
these individuals had again called at the Waverly
plant and informed them in no uncertain terms that
they had better call Mr. Balk and join right away.
This was not done and that night a bomb was thrown
into the window of the Waverly Company, resulting
in considerable damage. The Strand Fur Dressing Company,
a fancy dressing shop which occupied half of the
ground floor and all the second floor of the building
occupied by the Waverly Company, was also bombed.
The two individuals who had called were immediately
arrested and charged with the bombing and the Secretary
of the Protective Fur Dressers Corporation was arrested
as a material witness.
On
April 24, 1933, hirelings of Shapiro and Buchalter
staged an armed attack on the headquarters of the
Needle Trade Workers Industrial Union. During this
attack, two men were killed and many injured. Several
of the attackers were so badly injured that they
were unable to escape. On November 1, 1933, they
were prosecuted and convicted of felonious assault,
in the state courts. One defendant jumped his bail
of $10,000, which was forfeited.
Investigation
into this instance of mob violence reflected that
a few days before April 24, 1933, a large group of
men met at a hotel suite maintained by the gang.
They were told to raid the left wing headquarters
and break up the meeting. Everyone seemed to know
that they were working for Buchalter and Shapiro.
These individuals were furnished with iron pipes
wrapped in newspapers and some were armed with guns.
There were between twenty and thirty in the group.
After
leaving the hotel they separated into two groups,
one squad proceeded by way of Seventh Avenue and
the other by Eighth Avenue, meeting in front of the
headquarters of the Needle Trade Workers at 131 West
28th Street. There they rushed the meeting and despite
their iron pipes, although they did succeed in breaking
up the meeting, the two squads of hoodlums came out
second best. This incident revealed that Buchalter
and Shapiro's headquarters were maintained in the
hotel where the gangsters had met and where they
had a credit account, known as the "Solomon" account.
It appeared that whenever anyone came to the hotel
and said they were with "Solomon" a room
would be given them and the clerk would usually sign
the register himself.
Morris
Langer was in charge of the organizational activities
of the fur workers for the Needle Trade Workers Industrial
Union. In February, 1933, he attended a conference
between representatives of the Needle Trade Workers
Industrial Union and the Protective Fur Dressers
Corporation. At this time a representative of the
Protective stated that three shops would have to
be put out of business if the Protective was to control
prices; that the Needle Trade Workers Industrial
Union would have to cooperate. This they refused
to do because the three shops were union shops, whereupon
a representative of the Protective took representatives
of the Needle Trade Workers Union aside and stated
they should withdraw the workers from these shops
or they would have to close, otherwise they would
bomb the place and make the union pay the expense.
On this occasion Morris Langer spoke very strongly
against the Protective and within a month, on March
23, 1933, Langer was killed , as the result of a
bomb having been placed in the hood of his automobile,
after having in the meantime received many threats.
At
a subsequent meeting, a representative of the Protective
referred to one bombing which was unsuccessful and
again stated the Needle Trade Workers Union must
withdraw its men to put the shops out of business
and this time the representative of the Protective
insinuated by his statements that Langer had been
put out of the way because he was stubborn and then
the representative of the Protective gloated over
the fact "that 'Lepke' and 'Gurrah' were back
of their organization."
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Prosecutive
Action Against the Protective And Fur Dressers
Factor Corporation
On November 6, 1933, the Federal Grand Jury returned two indictments, each
in four counts, one charging the Protective Fur Dressers Corporation and thirty-three
individuals and corporations and the other charging the Fur Dressers Factor
Corporation and ninety-four individuals and corporations with violating the
Sherman Antitrust Act. Both Shapiro and Buchalter were named as defendants
in these indictments. On November 8, 1936, following the trial of the Protective
Fur Dressers Corporation, Shapiro and Buchalter were convicted on all four
counts and on November 12, 1936, each received sentences of two years imprisonment
and fines of $10,000. On December 3, 1936, both Buchalter and Shapiro were
released upon $10,000 cash bond, pending appeal.
On
March 8, 1937, the judgement against Shapiro was
affirmed, while Buchalter's conviction was reversed
by the Circuit Court of Appeals. On June 5, 1937,
the United States Supreme Court denied Shapiro's
application for review and on June 14, 1937, he failed
to surrender to the United States Marshal, whereupon
a bench warrant was issued for his arrest and his
bail of $10,000 was forfeited on June 15, 1937.
On
July 6, 1937, when the case of the Fur Dressers Factor
Corporation and others was called for trial, Shapiro
and Buchalter failed to appear and their bails, in
the amount of $3,000 each, were ordered forfeited.
Bench warrants were issued and Buchalter and Shapiro
were declared to be fugitives. On September 28, 1936,
seventeen defendants entered pleas of guilty. On
October 16, 1936, six additional defendants entered
pleas of guilty, and on October 26, 1936, an indictment
against two defendants was dismissed.
In
the Fur Dressers Factor Corporation case, fifty-two
defendants entered pleas of guilty on November 8,
1937, and on December 16, 1937, after a trial before
United States District Judge John C. Knox, New York
City, nine defendants were found guilty.
Shortly
after he surrendered on August 24, 1939, Louis Buchalter
was sentenced to prison on antitrust and narcotics
charges. He was later tried and convicted on a state
charge of murder. On March 4, 1944, he was executed
at Sing Sing Prison.
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