Through the criminal experience gained and the political connections established in gambling and prostitution rackets in the early 1900s, gangsters had become well prepared for the exploitation of Prohibition, which was ratified as the 18th Constitutional Amendment in 1919. Illegalizing the production, distribution, and consumption of alcoholic beverages - all of which were corollaries to the amendment - did not curb the desire of Chicagoans for liquor or beer. This great demand for and simultaneous illegalization of alcohol opened up a new illegal market for the gangster to develop and monopolize. As Al Capone put it, "All I do is to supply a public demand … somebody had to throw some liquor on that thirst. Why not me?" (Sullivan, 111).

This thirst repeatedly seen in the literature pertaining to Chicago's early 1900s (Prohibition - Literature Analysis).

Since all of these activities were deemed illegal under Prohibition, Capone bought legal immunity by administering bribes to police and politicians. He practically paid off every law enforcement agent and politician in the districts in which he operated his illegal businesses. These bribes, although sometimes on the order of a quarter of a million dollars, were relatively easy for Capone to dish out considering that he was earning over 100 million dollars per year (Sullivan, 149).

Profits of this magnitude are not surprising for several reasons. Firstly, upon the initiation of Prohibition, Capone essentially took over the business of the nation's thousands of breweries and distilleries. Since Capone was more than willing to disobey the law and had control over hundreds of professional criminals, he was, in effect, handed a monopoly on alcohol production by the ratification of Prohibition. Also, "there was no let-up in the demand [for alcohol] at any time" (Sullivan, 94). These massive profits, which enabled the payoff of even the highest state governmental officials, revolutionized organized crime with respect to the number of individuals involved, the level of complexity of political alliances, and intertwinement with normal, everyday life. The profits also allowed Capone to construct more speakeasies, gambling joints, whorehouses, breweries, and distilleries within the city, and even in the suburbs of Chicago.

The idea that money can buy power was lucidly verified by gangsters such as Capone: bootlegging funds led to both political and violent physical power. This power enabled gangs to find new avenues to exploit, as well as new ways to run old types business, such as gambling.

Labor Racketeering

A profitable and common business of the organized criminal appearing after the start of Prohibition was labor racketeering. This type of crime involved the infiltration of gangsters into legitimate business; commonly workers' unions. The power of gangs such as Capone's, which was achieved from their successes in bootlegging, enabled them to make and back up the violent threats necessary to push their way into legitimate business. Anybody who was confronted by a gangster wanting in on their business knew they must yield in fear of being executed.

A typical example of labor racketeering would be where a gangster poses as a member of a specific union with the intent of taking it over and collecting money from the salaries of the legit members of the union, or by pilfering fractions of the members' monthly dues. The gangster would often hire substitute union members, pay them less than what they would normally be paid for their work, and pocket the difference. Because it was "nearly impossible to differentiate among the partners - the businessman [was] a politician, the politician [was] a gangster, and the gangster [was] a businessman" (Demaris, 3), it was very difficult to detect and prosecute criminals involved in this type of activity. This activity was also difficult to stop because it provided the involved gangster with the front of being a legitimate worker, and served as a plausible explanation for a source of income. Additionally, any opposition - including witnesses planning to testify against gang activities, and enraged union members - was immediately killed by the gangsters.

The involvement of gangsters with legitimate business was not always done against the will of the businesses they infiltrated, and in some situations, the labor racketeer was called forth to improve business. This was the case for businesses and companies trying to control their competition while still circumventing the Sherman Anti-trust Act and injunctions of courts that prohibited collective bargaining and price fixing. These businesses desired a stable market, and they wished to establish this through raising and fixing the prices of their products or services. Labor racketeers were 'hired' by legitimate businesses to do this, and to raise the wages earned by their workers and the prices of the products they produced through threats of violence. The power of the mob was evident by the numbers of people who yielded to its requests, and by the fact that the non-compliant were ruthlessly murdered. For his services in helping these businesses, the racketeer earned a portion of the profits.

The number and types of different labor unions, insurance agencies, and businesses that labor racketeers extorted is quite amazing. Unions ranging from the Chicago Restaurant Association to the Landry, Cleaning and Dye House Workers International Union had been taken over by gangsters. Mobsters such as Joseph "Joey" Glimco were involved with and profited from companies such as Yellow Cab, Checker Taxi, and various Jaguar automobile dealerships in the Midwest. Through corrupt means, Glimco became a trustee of the funds of the Occidental Life Insurance Company, and was on the payroll of Paolo Salce Incorporated, a road paving company employed by the city of Chicago itself, which received $4 million contracts each year. Through these and other similar illegitimate sources of money, Glimco was estimated to earn $840,000 per year (Demaris, 38). Although he had to hand most of this over to his superiors, he still had enough left "to keep him in silk underwear, Cadillacs and mistresses" (Demaris, 36).

According to Landesco, there were two main reasons why such labor racketeering prevailed: because of "a situation of cutthroat competition among small business enterprises", and secondly because of "a tradition of lawlessness and violence in Chicago" (Landesco, 167).

The Racketeering of other Gangs

Racketeering did not stop with infiltrating only legitimate businesses. Often, powerful gangs would terrorize other inferior gangs in order to steal a certain percentage of their profits. The inferior gangs found themselves faced with the proposition of either being killed and having their businesses destroyed by means such as bombing, or 'donating' some of their proceeds to the superior gangs. Again, as in racketeering in legitimate businesses, these types of threats were validated through the power granted by financial success and a high degree of organization resulting from income gained from bootlegging alcohol.

Capone's gang, the mob, was notorious for this type of coercion. "To [his] syndicate every gambling house keeper, handbook owner, vice resort keeper, and beer runner had to contribute a percentage of the income derived from their enterprises, or risk being blown up or 'taken for a ride'" (Landesco, 80). These violent acts and threats usually could be carried out without any legal consequences, for the mob was practically immune to the law as a result of the bribery of police and politicians alike. See the page titled "The Law - History and Background" for further description of the corruption of the law that was invoked by Chicago gangsters.

The mob also conducted complete takeovers of the business of rival gangs. Capone stripping the gambling business away from Mont Tennes serves as an example. With the profits Capone enjoyed from his bootlegging activities, he could afford to pay out over half a million dollars a month to politicians for the protection of his properties (gambling joints, breweries, etc) across the city of Chicago (Landesco, 81). By bribing government officials, Capone could also order his competitors' breweries, gambling joints, and other illegal establishments to be raided and destroyed by his crooked law enforcement agents. One key politician who received part of this was Mayor William Hale Thompson. By manipulating the government in this fashion, Capone was rarely troubled by police raids of his gambling establishments, and succeeded in making Chicago "the center of race track gambling in the nation" (Sullivan, 183). Capone's gambling business was so closely affiliated with the law, which also benefited financially from his business, that police 'overlooked' his slot machines which were found in places as blatant and public as drug stores.