The origins of the Mob and the Atlantic City Conference
By John William Tuohy
In 1927 Atlantic City, New Jersey, was New York's playground, the sands were bleach white and great hotels lined the seemingly endless Boardwalk. The perfect place for the first major Mob conclave in American history.
The newly married Meyer Lansky was there. It wasn't where he had planned to spend his honeymoon, but his boss and sometime partner Lucky Luciano needed him at the meeting, so ever the loyal corporate man, he was there.
Since Meyer and several other members of the party were Jewish, Nucky Johnson, the crime boss of Atlantic City, had reserved rooms for the group in Anglo sounding names, at the exclusive Breakers Hotel, which restricted Jews. That part of the plan worked well, but when a cigar-chopping Al Capone, clad in a purple jacket and white pants and surrounded by a small army of thugs, trumped into the lobby, they were promptly barred from the place. The convoy of limousines drove away from the front of the Breakers to the less constricted, President Hotel.
Nucky Johnson, wearing his ever-present red carnation in his lapel, joined the cavalcade. Capone, who virtually ran Chicago and couldn't understand being barred from anything or anyplace, spotted Johnson and brought the parade to a halt in the middle of the street.
Luciano said, "Nucky and Al had it out right there in the open. Johnson was about a foot taller then Capone and both of them had voices like foghorns. I think you could have heard them in Philadelphia, and there wasn't a decent word passed between them.
"Johnson had a rep for four letter words that wasn't even invented and Capone is screamin' at me that I made bad arrangements. So Nucky picks up Al under one arm and throws him into his car and yells out, 'All you fuckers follow me.'
"They all wound up at the Ritz Hotel, right behind Johnson's own mansion. Capone stormed into the lobby and started ripping pictures off the wall and throwing the mat at Johnson. And that is how our convention got started."
For the first few days of the meeting, there were a round of parties, good food, the best hookers and liquor available. Each morning the delegates would breakfast in their suites, and then drive along the Boardwalk in canopied promenade roller chairs for two pushed by a strapping Black attendant, which prompted Luciano to say, "How the hell could we talk about anything with those niggers breathing down our necks?"
At the end of the Boardwalk, near the suburb of Chelsa, they stepped out of their chairs, rolled up their pants to their knees and waded into the ocean to discuss business. It was here, according to Luciano, that all of the big decisions were made.
Formal meetings were held in a large conference room, a crystal chandelier dangling above the rich mahogany table, all of it gleaming from the recent polishing.
Sitting around the table was Owney Madden, Frank Costello, Buchalter, Joe Adonis, Frank Erickson and Dutch Schultz. The boys would later meet and agree to the hit on Schultz.
From Brooklyn there was Albert Anastasia, Vincent Mangano and Frank Scalise. With Capone was his business manager, Jake Guzak, bodyguard Frankie Rio, underboss Frank Nitti, and a young thug bodyguard named Tony Accardo. During a break in the meeting, Meyer Lansky watched as Accardo returned from the Boardwalk and showed off a tattoo of an eagle that expanded its wings when he closed his fist. He proudly showed it to Capone who remarked, "Kid, you're gonna regret get'n that thing for the rest of your life."
Capone also brought along a heavy set, very tall and distinguished-looking man named Moses Annenberg. Annenberg wasn't a thug, not exactly. He began his career as a lowly circulation booster for the Chicago Tribune and eventually became the paper circulation manager. In 1904, he left the Tribune for William Randolph Hearst's operation, The Examiner, where he headed a small army of goons that included Dion O'Bannion, Bugs Moran, Frankie McErlane, Hymie Weiss, James Ragen, Walter Stevens, Tommy Maloy and Mossy Enright.
Their job was to beat up anyone who sold the opposing side's newspapers and the group committed several murders during the bloody circulation wars of 1910-1911.
In 1922, Annenberg borrowed money from mob boss Johnny Torrio to buy the Daily Racing Form, and with profits from that, he purchased other publications, including his own newspaper, the Philadelphia Inquirer. But, Annenberg's main income was from the Nationwide News Service, which provided the results of racetracks across the country, the perfect mechanism for organized crime to control the results of every racetrack in America.
Capone took the floor at the meeting and introduced Annenberg, and pointed out that millions could be made by subscribing to his news service, Nationwide, and turn it into a horse racing announcement service, thereby allowing the mob to control every gambling outlet in America. The bosses listened, they liked what they heard and within a year, Nationwide became the biggest gambler's outlet in the history of the world.
Capone, only 29 at the time, had another suggestion too. He wanted the various mobs to pool some of their money and jointly support a national discipline squad, a hit squad, who would enforce the syndicate's will. At the time, the bosses shrugged it off, but ten years later, the New York families did get together and financed just the type of thing Capone had been talking about, Murder Incorporated.
Meyer Lansky, the smartest man in the room, liked Capone, for if nothing else, Capone could be likable, charming even. But Meyer's boss Luciano, had a low opinion of Capone. Lucky, always on the lookout for the angle in every sentence, figured Capone was a braggart and a loud mouth who spent too much time trying to position himself within the national syndicate. On the other hand, Capone thought Luciano was an insane killer who was too eager to send a man to his grave during one of his all to frequent temper tantrums.
Lansky's sharp eyes roamed the rest of the massive and regal room,straining to match the names with the faces he was now forgetting. There, sitting just right of Capone and the Chicago boys, was Charlie "King" Solomon, from Boston. Then came Max Hoff, Waxey Gordon, the narcotics king who would one day become his own best customer.
Next to Gordon sat Harry Stromberg, "Nig Rosen," Sam Lazar, Charlie Schwartz from Philadelphia. At the end of the table, seemingly out of place was young Moe Dalitz. It was his first time out of Cleveland, and the first time he had ever seen the ocean.
Next to Dalitz sat Lou Rothkopf and Leo Berkowitz and Abe Bernstein, the leader of the Purple gang out of Detroit. To his right, sat Johnny Lazia, who had come as a representative of Tom Pendergast and his political-criminal organization. The national syndicate would later use the Pendergast contact to work its way into Harry Truman's White House.
Lansky's eyes caught a familiar face, Longy Zwillman out of New Jersey. Zwillman was an interesting man. He moved into New Jersey and opened the syndicate's gambling and vice rackets and it was Zwillman who directed the hit on Dutch Schultz on October 23, 1935, after the Dutchman demanded that the syndicate kill New York's District Attorney, Tom Dewey.
After the Dutchman was killed, Zwillman reigned supreme over the Jersey rackets. He was one of the first hoods to discover Hollywood, and he was said to have financed Jean Harlow's initial trip to Hollywood. Harlow fell deeply in love with the rugged and personable Zwillman, and he with her. He probably would have married her had she not succumbed to such an untimely death.
Over the next two decades that followed the Atlantic City Conference, Zwillman pounded every cent out of the rackets that he could find, hoping to retire early to the life of country gentleman. When he earned his fortune, Longy had decided not to live in two worlds. He quit the mob and lived off the millions he had plowed into legitimate enterprises, married a socialite and moved into a thirty room, $200,000 house in West Orange, New Jersey.
It was a completely different life. His wife was a member of the Junior League, the daughter of wealth and with her help, Zwillman spread word around the country club that he had earned his fortune as a self-made man who struck it rich in steel investments, and in fact, his name was on a list of stockholders of the Pittsburgh steel plant. He even donated 250,000 to a slum clearance project.
However, his Mister Clean image fell apart after he appeared before the McClellan committee, which pasted his name on the headlines for weeks. The Outfit bosses figured that Zwillman would get hit with an IRS audit. In fact, most newspapers later wrote that it was the pending IRS audit, and the exposure of his alternate life as a hood that led Zwillman to suicide on February 27, 1959.
Supposedly, he hung himself with a plastic cord in the basement of his mansion, just before dawn. The FBI didn't buy the suicide story, largely because they had information that Meyer Lansky had advocated killing Zwillman, he said, to ensure his silence.
Sitting next to Zwillman at the conference was the always smiling Willie Moretti, then Danny Walsh and Frank Zagarino were there, along with Johnny Torrio. Lansky remembered the old days, back before prohibition, when Luciano was a gofer in Torrio's outfit before Johnny moved out to Chicago to work under his uncle, Big Jim Colosimo. That was in 1907. Twelve years later, Al Capone went west to the Windy City too, but he went to blow Colosimo's brains out of the back of his head with a .32.
"I hate this hellish business of ours," Lansky was fond of saying.
Now, in 1928, Torrio was living in New York and working with Frank Costello. Capone had muscled him out.
It was Torrio who had had planned the meeting, so he was the first one to take the floor. "The reason we called this meeting," Torrio said, "is that we have to get organized. Everybody's working on his own, we got independent guys muscling in, and that's got to stop. What we need is a combination around the country, where everybody in charge of his city is the boss, but we all work with each other."
Then he introduced Frank Costello, the Boss in Manhattan under Luciano. Frank stood and made a short speech which was pointed at Capone. "The reason we got to get organized is that we put ourselves on a business basis. We got to stop this sort of thing that's going on in Chicago right now. You guys are shooting at each other in the streets and innocent people are getting killed and they're going to start to squawk. And if they start squawking loud enough, the feds get off their tails and start cracking down, and you know what that means. We got a thing where millions of dollars can be made just getting people what they want.
"When I was on trial three years ago on that whisky deal, all the people were behind me and I was able to stay in business. But if you make people afraid of you, they're going to turn the other way and start yelling at the government to clean us up. That means the internal revenue boys, the FBI, the Narco's and every DA in the country and that ain't worth it.
"From now on, nobody gets killed without the commission saying so. Johnny and I have a little piece of paper we want to show you. We're going to have a national commission with every family represented, twenty-four by our count. No boss will be attacked unless the commission says he has to go… And no button man gets hit without a hearing from his own boss."
It made sense. Costello always made sense. There were nods of approval. Then, Capone took the floor and called for dividing up of the gambling, labor rackets, extortion and drugs businesses between the various gangs and asked the bosses to consider forming a nationally controlled hit squad. He also wanted to form an alliance that would swap prostitutes across state lines and called for more open communications between the New York and Chicago mobs. He also declared that in the future any major dispute would be settled by a conference of the national syndicate leaders, and called for an expansion of the narcotics business, which he suggested would be run out of Cuba, where labor was cheap and the laws were lax.
The bosses agreed to all of Capone's plans. Moe Dalitz took the floor and told the bosses that there should be an end to the cutthroat underbidding on liquor from Canada and Europe. If that happened, he said, prices would drop and they would all make more money.
Again, the bosses agreed. He was a smart kid, this Dalitz kid.
They talked about what to do when prohibition ended, about whichlegitimate business they would take over, and most decided that they would stick with the business they already knew, booze. They would open distilleries and breweries.
But Lansky saw the future in gambling. He talked about a worldwide venture that would operate casinos in areas that would permit them, like Las Vegas, Cuba, Central America and the Bahamas. Maybe Asia.
The Bosses smiled politely. He was a smart kid, this Lansky, but, they thought to themselves, he was a dreamer.
Mr. Tuohy can be reached by writing to MobStudy@aol.com
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