Day 77: The Criminal Mind of Dutch Schultz

originally published March 17, 2012

Dutch Schultz. The name just oozes gangsteriness. So did the man.

Born in 1902 with the decidedly less menacing name of Arthur Flegenheimer, Schultz was traumatized by his father’s departure when he was fourteen. He left school to find work, hooking up with Schultz Trucking in the Bronx. At the time, young Arthur was apprenticing under a few low-level mobsters, and with this he found his life’s calling.

Nabbed for burglary, Arthur did some time on Blackwell’s Island until the guards found him ‘unmanageable’, and sent him out to an upstate work farm. He came back to work, and accompanied his co-workers at Schultz Trucking on routine runs up to Canada to snag some liquor for re-sale in NYC. As Boardwalk Empire taught us, Prohibition-era liquor was good business.

Arthur decided to take the truck company owner’s son’s nickname as his own: Dutch Schultz. The company owner wasn’t pleased with this (especially since Arthur killed a guy in Canada while he was using this name), and Schultz left him in order to work with his Italian competition. I think we all know that, between the Italians and the Germans, there was really no question who would come out on top in the New York crime scene.

The Italians had better hats.

Dutch and fellow gangster Joey Noe set up their own speakeasy, but wisely figured they’d make more money selling booze to the other joints in the city. They’d push out the competition with their savvy business strategy: buy from us, or we’ll hurt you.

The Rock Brothers, gangsters in the Bronx, weren’t about to let these young hoods step on their turf. They refused the Schultz/Noe liquor and subsequently paid a price for doing so. Joe Rock was kidnapped by Schultz’s crew, then (and you may want to skip the rest of this paragraph if you’re squeamish) hung up by his thumbs on a meat hook, while his assailants wrapped a strip of gauze covered in a smearing of discharge from a gonorrhea infection over his eyes. His brother paid a $35,000 ransom, young Joe went blind, and the Schultz/Noe booze train faced little competition after that.

Their gang became the one non-Italian mob family in the up-and-coming, tommy-gun sporting, fedora-wearing crime world of New York City. Expansion meant overcoming more competition though, and by 1928 gangster Legs Diamond was getting a little irked at the Schultz/Noe crew. It was war. Mob war, and that meant blood in the streets.

Actual photo of the Lower East Side, summer of 1928.

Joey Noe was the first to go (probably not with such a catchy rhyme, I’m sure). He was gunned down outside the Chateau Madrid on 54th street in Midtown Manhattan. In October 1929, Diamond and his mistress were dining in their Hotel Monticello room when gunmen burst in and shot up the place. Legs was hit five times but survived. Rather than pursue the war though, he jetted off to Europe to recover, then returned to set up shop in Albany. Dutch won the turf.

Schultz had his own way of doing business. He didn’t pay out in percentages, but guaranteed a flat weekly rate to his crew. Some didn’t mind this, but in 1930 one of his enforcers, Vincent “Mad Dog” Coll, was displeased. He formed his own crew with full intent on murdering Schultz and taking over. This got ugly: Coll’s brother was killed, an innocent child bystander was taken out, and Coll was no closer to power. In February 1932, Coll wandered into a drug store phone booth, and was machine-gunned to death in plain view. Dutch wins again.

“Hey! Accept THESE charges, Vincent! It’s a collect COLL!” – assassin, probably.

With Prohibition over, Dutch needed new streams of income. He turned to the numbers racket, which is like a 3-digit daily lotto in which the number is determined by some confusing math at the race track. His accountant, Otto “Abbadabba” Berman, who spent his life probably a little disappointed with his silly nickname, came up with a system by which Dutch could manipulate the numbers to guarantee he’d keep rolling in cash.

If that wasn’t enough, Dutch trod out the old reliable restaurant-owner extortion scheme. He was being investigated for tax evasion (that wonderful old stand-by we all learned about from The Untouchables), but this was an effective racket. Nothing like a good shake-down.

Around this time, Schultz noticed a $70,000 hole in his books. He confronted Julie Martin (a guy-Julie, not a gal-Julie), the man who was running the extortion business for him. Martin finally admitted to stealing a mere $20,000, but insisted he was entitled to it. Schultz quietly pulled his pistol out from his belt, shoved the barrel in Martin’s mouth and pulled the trigger.

When they found Martin’s body, the coroner was more concerned about the multiple stab wounds in his chest. Where Dutch had cut out his heart.

“So what? I needed a backup.”

Thomas Dewey, the man who would go on to defeat Truman (and then not) in the 1948 presidential election, was a young prosecutor in the early 1930s. He was working on the Schultz case, trying to put the gangster away for tax evasion. It didn’t work. Dutch was acquitted in 1935, prompting NYC mayor Fiorello La Guardia to issue an order that Schultz be arrested if he ever return to New York (the tax trial had been held outside the city). So Dutch set up shop across the river in Newark. He wins again.

Every winning gangster tends to hit a losing streak at some point – usually around the end of the story. Dutch was in financial trouble due to his staggering legal costs (the lawyers are always the real gangsters in these stories, aren’t they?), and he was paying his people less and less. What’s worse, he was furious at Thomas Dewey, and he had a sit-down with the Italian honchos (including Lucky Luciano) to ask permission to clip Dewey, fit him for cement slippers, introduce him to the bottom of the Hudson… you get the idea.

Luciano and his associates said no – such a killing would bring a lot of heat into their world. Schultz wasn’t happy. Luciano, figuring that Schultz would just carry out the hit anyway, ordered his own hit. Dutch Schultz was going down.

And down he went – in a blaze of gunfire at the Palace Chophouse in Newark New Jersey in the evening of October 23, 1935. He was murdered along with two henchmen and Abbadabba Berman.

Is the lesson here that crime doesn’t pay? Probably. But maybe the real lesson is that one should always carefully consider one’s last uttered words, lest they come out sounding like Dutch’s:

“A boy has never wept… nor dashed a thousand kin.

You can play jacks, and girls do that with a soft ball and do tricks with it.

Oh, oh dog Biscuit, and when he is happy he doesn’t get snappy.”

Heavy stuff.

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