He started out during Prohibition as "The Beer Baron". He had an unerring ability to find new sources of income. Unlike Al Capone, he beat a tax case. He was part of one of the most notorious gang wars in New York history. And he was killed by his fellow gangsters when he went against the Commission. His name was Arthur Flegenheimer, Jr. But he has come down to us in history as Dutch Schultz.
The Dutchman, as he was known, started out in Prohibition, like many other of his ilk, in bootlegging. But Schultz was known for three things. His operation was run from the Bronx. His specialty was brewing beer. And the Dutchman worked alone. No partners, no alliances. And he was highly successful, in part because he had some truly brilliant underlings. His accountant/ bookkeeper, "Abba Dabba "Bermann could do complex figures in his head [he was the basis for Damon Runyon's 'Nathan Regret' in "Guys and Dolls"]. His lieutenant and hit mean "Lu Lu" Rosenkrantz could kill with the best of them. And Schultz himself was hot tempered, and a stone cold killer, if need be.
Schultz's operations were recognized and sanctioned by the Commission when it was formed. But by then Schultz had moved into a BIG moneymaker, which was based in Harlem, the numbers racket. Based on the numbers of the first three finishers in a specified horse race, or the winners of three different horse races, people would bet on that number, either 'straight', or 'combination'. The bets could be for nickels and dimes, and the return made betting worthwhile. And while the individual bets were small, the aggregate being betted was worth millions. And Schultz took it over. And to increase profits, Berman figured a way to minimize the winning numbers on any given play. Life was good. and then it wasn't.
First up was the embarrassment of a 'gang war' with a disgruntled former underling, one Vincent "Mad Dog" Coll. Coll was a minor hood, but his nickname said it all. He was the go to guy Salvatore Maranzano contracted to kill Lucky Luciano [Luciano got Maranzano first]. Coll then became a Schultz employee, but somewhere along the way, he developed a grievance that flared into open war, in all senses of the word 'open'. Coll, who never really stood a chance of toppling Schultz, topped a crescendo of violence with a drive-by aimed at a Schutlz associate in a crowded street in Manhattan. One of the results was a dead baby in a carriage, hit by Coll's machinegun fire. The outrage was palpable. The publicity was worse. The Commission stepped in. Coll was caught in a phone booth and machinegunned to death.
But while free of Coll, Schultz wasn't out of the woods. Special prosecutor Thomas Dewey was after him. But in a series of trials [the last two were conducted in upstate New York], Schultz beat the rap. Unfortunately, Dewey refused to let go, and the Dutchman's temper heated up. He went before the commission [he wasn't a member], and requested that a contract be taken out on Dewey. A feasibility study was approved, and the Murder, Inc. boys reported they could do the job in a store Dewey stopped in every morning for a newspaper.
But cooler heads prevailed. Both Luciano and Lepke Buchalter assumed the heat from killing a prosecutor like Dewey would be intense, and bad for business. They told Schultz, "No". Schultz then declaimed he'd do it himself, storming out of the meeting. At that point new business was tabled...
Because of the heat from Dewey and Mayor La Guardia, Schultz had re-located his headquarters to the Palace Chop House, in New Jersey. And it was there one evening, that Mendy Weiss and Charlie 'The Bug' Workman showed up. The first victims were Berman, Rosenkrantz and a third associate in the dining room. Workman, living up to his name, entered the men's room, saw a man, and shot him. Turned out it was Schultz.
Schultz lingered in the hospital, with peritonitis. A stenographer sat in the room, taking down his ravings [A memorable line was : "A boy has never wept, nor dashed a thousand kim"]. But Schultz gave them nothing. Converted to Roman Catholicism on his deathbed, Schultz passed soon after.
Luciano and the five families took over the Numbers, adding millions to their own bulging coffers, and expanding the game's market. But Dewey soon sent Luciano upstate for 30 years on a prostitution conviction. And somewhere the Dutchman laughed his ass off.