A Meeting with the Brain

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Arnold Rothstein before his death, 1928
To the members of the early 20th century underworld he was known simply as A.R. or the "Brain". His name was Arnold Rothstein and in the years before Prohibition, he was arguably the most important and powerful gangster in the United States.

Rothstein was a gambler and a deal maker and the man to see in New York City. He cavorted with killers and politicians alike and there was probably nothing he couldn't fix -- including reportedly the 1919 World Series. It is a testament to Rothstein’s influence that in reality he had nothing to do with the fix, but the gamblers who did used his name to impress the players involved.

A.R. made his fortune by making deals and finding opportunities. Like a modern venture capitalist, A.R. bankrolled others who came to him with risky propositions. He also had the gift of being able to smell a good bet, whether it was at the gaming table or on the street, and an eye for young hoods with potential.

Rothstein was inspirational to many people, not just young gangsters like Lansky: A.R. provided the basis for the character of Meyer Wolfsheim in F. Scott Fitzgerald’s masterpiece The Great Gatsby, and was Damon Runyon’s inspiration for Nathan Detroit and the character known simply as "The Brain" who appeared in some of his plays.

In early 1920, A.R. knew an easy way to make a lot of money.

In January, the18th Amendment to the U.S. Constitution became law, ushering in the great American social experiment known as Prohibition. Like so many others, the Brain knew that a constitutional amendment wouldn't keep people from drinking, it would only serve to drive the drinking underground. The law of supply and demand, therefore, dictated that the price of liquor was going to go through the roof and the Brain was determined to be in charge of supply.

But A.R. was not the type of hoodlum who got his hands dirty. He needed partners. The Brain was looking for men who were smart enough to realize that there was still a market for high class, expensive liquor and who were tough enough to survive in the rough-and-tumble, dog-eat-dog world of bootlegging. Rothstein knew where to find just such men: he looked to a pair of up-and-coming gangsters from Manhattan: Meyer Lansky and Charlie Luciano.

Rothstein met Lansky at the Bar Mitzvah of the son of a mutual friend, and the Brain told Meyer he was impressed with the young man. He invited Lansky to his exclusive apartment at the Park Central Hotel where the men had a six-hour conversation about the future. A.R. wanted Lansky to go into business with him running booze.

"Rothstein told me quite frankly that he had picked me because I was ambitious and hungry," Lansky recalled later, still somewhat in awe of A.R.

The Brain held a similar meeting with Charlie Luciano and would be a profound influence on the Sicilian.

"He taught me how to dress, how not to wear loud things but to have good taste," Luciano recalled in his autobiography. "He was the best etiquette teacher a guy could ever have – real smooth."

Unlike other bootleggers who were interested in making a fast buck selling bathtub gin, Rothstein was intent on building a network of bootleggers who would only sell the best booze money could buy.

"If they know we are selling quality," he told Lansky and Luciano, "they will pay for it." A.R. developed contacts with distilleries in Scotland who would sell him grade A scotch which he then transferred to another minion, Irving "Waxey" Gordon in Philadelphia.

"He went to Waxey Gordon to arrange for distribution of the liquid gold, with the condition that I should have first call on the buy," Luciano wrote. "Naturally, I bought every drop of it."

Rothstein refused to allow his minions to cut the scotch with cheaper booze and forbid them from ripping off each other. To defy A.R. meant courting death. Rothstein, Lansky, Luciano and Gordon developed a distribution system that made them all very rich men. A fifth of scotch on the boat cost the bootleggers $2.20 and easily sold on the street for 15 times that.

"We made what we called ‘Scotch right off the boat," Luciano said. "and that original scotch would bring us as high as a thousand bucks a case. That case cost us, if you forget the danger part of it, only around twenty-five bucks."

The economics of bootlegging were actually a little more complex than Luciano remembered. The supply of scotch and other whiskey had to be regular, so customs and federal agents had to be controlled. That cost money. There had to be plants to cut the whiskey in, so Lansky and Luciano went into the real estate business. They needed bottles that looked like the originals, so they bought a bottling company. They needed labels that looked exactly like the Johnny Walker, Haig & Haig and Dewers labels, so Lansky bought a printing operation complete with color presses. And trucks. Lots and lots of trucks.

1. The Mythical Meyer

2. A Fortune Found

3. Bugs & Meyer Mob

4. Meeting with the Brain

5. Italian and the Jew

6. The Carpet Joints

7. Havana

8. Vegas

9. Israel

10. Lansky's Legacy

11. Bibliography

12. The Author
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