Arnold Rothstein, Dark Genius of the Mob

Opium based narcotics and cocaine flowed freely in this country until the first two decades of the 20th century. The first attempt to regulate drugs came with the Pure Food & Drug Law of 1906, but few restraints were imposed. In 1916 the Harrison Act was passed and while it was enacted to control the narcotics traffic it was mainly a revenue measure. However, it was effective enough that by 1921 there was for the first time a demand for illegal drugs.

Rothstein was not a pioneer in the field of dope peddling, instead he was introduced to the big money potential by both Lucky Luciano and Waxey Gordon. By the mid-1920s many of Rothstein's income producers had gone by the wayside. The bucket shops were gone, the stolen bond market had ceased, he no longer owned gambling houses, and he had retired from rum running. Rothstein was still collecting money from all the people he had backed and bankrolled in illegal activities. His bail bonding and insurance companies were still thriving as well as all of his legal enterprises. Several individuals who had entered the rum running and bootlegging market after him were becoming millionaires many times over. Rothstein's only influence over them was with his connections to Tammany Hall.

It was during this time that Rothstein decided to devote his efforts to organizing the drug trafficking in this country. His interest was in wholesaling, not the street pushing of narcotics. Entering at this level, his only competition came from unscrupulous members of the medical profession. Rothstein's goal was higher as he set out to regulate supply and demand and organize the drug trade on an international basis.

Rothstein employed several men to do his overseas bidding. Among them were Harry Mather, "Dapper Dan" Collins, Sid Stager, George Uffner, and Jacob "Yasha" Katzenberg. Rothstein then purchased the well-known importing house "Vantines." The establishment had a legitimate reputation and shipments arriving from China and the orient received only a cursory inspection. Rothstein made sure that when he got word someone was furnishing a home that Vantines received part of that business. It was reported that Fanny Brice "was made" to purchase thousands of dollars of furnishings and bric-a-brac from Vantines to adorn a new apartment. In addition to Vantines, Rothstein purchased several antique shops and art galleries to serve as legitimate fronts for his drug business.

As waves of narcotics began to permeate the city and create a new generation of drug pushers and addicts, Rothstein's bail bond business kicked into high gear following increased arrests. Nat J. Ferber, the American journalist who had earlier exposed the bucket shop rackets, was instrumental in revealing the narcotics epidemic. Ferber wrote, "Rothstein established himself as the financial clearing house for the foreign dope traffic...He was the only man in the United States who could, and did, establish a credit standing with the foreign interests sending drugs into this country."

Leo Katcher informs us, "Of all Rothstein's enterprises, this had been the most carefully developed. He had given it time, effort and all his intelligence. Yet, it was the most costly business that ever occupied his time, his interest and his money."

Ironically, Rothstein never made a cent from his narcotics ventures. Every dollar he received was put back into the operation and he died while the business was moving forward — at full steam.