Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-06-30
BUSINESS LINKED
WITH BRACKETS"
Practice Characterized as
Partnership With Gangsters
by Institute Speakers.
BY THOMAS r. HENRY,
STAFF Correspondent OF The Star.

UNIVERSITY OF VIRGINIA. June
30.-The racket" as 1t operates in
Americas two largest cities, was char
acterized as g partnership of business
and the gangster by speakers at the In
stitute of Public Affairs here today.
New York's "rackets" were described
by George 2. Medalie. United States at
torney for the southern district Of New
York. The criminals who conduct these
schemes, Mr.. Medalie said. "are fire.
quently in partnership with perfectly
reputable members Of the community,
who often are forced to submit. but not
infrequently seek the assistance Of the
criminal classes to carry out what other
wise might be. in part at least. legiti-
mate purpose"
Robert I. Randolph. chairman Of the
Citizens Committee for Law Enforce
ment in Chicago. described the most
widespread form of racket" in that city
as "a combination of business. labor
unionism, politics and the criminal I'M
derworld. the purpose Of which is ex-
ploitation through circumscrising the
right to do business and work." He esti-
mated that the combinations OF this
kind now are costing the city approx
mately $145,000. 900 each year.
Both speakers emphasized the re-
sponSibility Of otherwise legitimate bust
ness in allowing themselves to get into
the grip of the underworld because OF
their avidity in trying to curb COMPETE
ton.
Merchants Use Gangsters.
The racket" Mr.. Medalie said, prob
organizations selling tickets to mer-
chants with the implied threat Of with
holding patronage. This proved such
profitable source of revenue that
gangsters began forming fictitious or
CARNATIONS for the sole purpose Of COL
lecting from the merchants through
ticket selling. Here the implied threat
was of violence. The next step lay In
making use of the gangster organiza-
tons by the merchants themselves to
put rivals out of business.
"Racketeering exists today" he said
sin the form Of large-scale operations.
Business has grown enormously and
racketeering has followed in tempo and
volume. Its personnel has been able to
match in understanding Of human ma
ture, energy and craft the best that has
been produced in legitimate business.
Various forms of business have been
found to be apt subjects. The collection
of laundry, for instance, is a matter Of
truck delivery. Competition is keen and
price cutting is factor. The lone
truck operated by a driver and helper
Is an easy subject for gang attack. A
group of laundrymen start with a view
to controlling competition. The rack
eteer gangster is called in to help the
good cause The otherwise honest bus
mess people who employ him in turn
become mis- victims. He sells them pro-
lection thereafter upon the threat that
II they will have none Of 1t they face
personal violence.
Flour Racket Costs $780, 200.
THE -four racket is another example
of large scale operation. An organiza-
ton Of -four truckmen was formed by
the man who appropriated this field as
his domain. They raised the cost of
trucking -four Is cents a barrel. which
amounts to charge of $l,50O,000 a
year on the business.
II do not classify ordinary profit from
crime and lawbreaking as racketeering.
I am not treating racketeering as inclu-
sive Of burglary, larceny. robbery. boot
logging or dope peddling. However,
within bootlegging and dope peddling
activities there are rackets. in the sense
of an ALLEGATION by the successful Grim
IAldl Va dLlO CuSIOtHCLo DCIWCCI
himself and the rest OF the law-break-
ing world. If intrusion is attempted
there is gang warfare. There is the
same selling of protection as that sold
to laundries and icemen."
There is no one cause for the exist
ence Of rackets Mr.. Medalie said, but
the blame must be distributed on the
cut-throat competition Of business
gangs and politics. Likewise, there is
no single remedy.
II think that in a large measure the
remedy lies in the hands of business
and particularly in the hands of oul
business leaders. 1t lies also in part
with the municipalities in the creation
Of police and detective forces adequate
ly organized to meet the threat o.
time that it shows ITSELF"
Divided Into Two Glasses.
Mr. Randolph divided Chicago's
racketS into two classes, the most i'm
portant of which was the "collusive
agreement" racket, which works in 6
definite way from business downward
to the underworld. First. he said
comes the business man who seeks to
maintain a monopoly by agreements
with political leaders to paralyze the
hand of the law and with union lead
ers to withhold labor from his rivals
Both the politician and the union
leader need terrorists to carry out their
part of the program. The business
man may never come into contact with
the criminals. but is directly respon-
sible for their employment.
'Racketeering," he said. always
presents itself under the cloak of re-
spectability. No racket has yet been