call it bootlegging. Some call it racketeering. I call it a business."
~ Al Capone
Versus Al Capone
When Al Capone
rushed back to the court room from his hotel headquarters just in
time to hear the jury's verdict, his bald head was sweating as he
put on his loud, green suit jacket to accompany his green suit (one
of the $135 ones, a New York Times journalist wrote at the time,
worth about $2,000 in todays terms). Judge Wilkerson walked
gallantly to his seat and faced the jury.
he said, "have you reached a verdict?"
sir," said the foreman in a hardly audible voice.
written on a court form, was handed across the bench. The clerk
cleared his voice quietly and read:
jury find the defendant guilty on counts 1, 5, 9, 13, and 18 in
the second indictment, and not guilty on counts 2, 3, 4, 6, 7, 8,
10, 11, 12, 14, 16, 17, 19, 20, 21, and 22."
meant that Capone would be brought to Alcatraz not for murder, extortion,
or bootlegging, but for not paying his income tax. Alas, Capone
would be brought down by the eventual last gang in town, the US
government, for failing to pay off the mafia enterprise known as
By 1928, Capones
businesses were grossing approximately USD $105,000,000 ($1,532,008,696)
a year. Ending Capones reign was obviously not a mission of
the US government, as ending prohibition and destroying the bootlegger's
profit base would have done that. But, Capone in particular was
unregulated, uncontrollable competition for the state-mafia, and
so had to be destroyed.
and Good Times at the Mercy of the State
not think of himself as a criminal leader, but as a public
benefactor. Ive given people light pleasures,
he said, shown them a good time.
In 1930, Capones
tax attorney, Lawrence Mattingly, contacted the Treasury and expressed
the desire to have his client meet with agents so as to settle his
indebtedness with the government. (If only Capone had the option
of Bitcoin back then!)
But the federal
government, namely the Internal Revenue Department, was hungry to
bring down a high-profile gangster, and Capone offered
the feds the perfect opportunity to demonstrate that nobody gets
away with failing to file an income tax.
After the verdict
was read, the fifty or so persons in the court room, including Judge
Wilkerson, looked puzzled. Al Capone, although he would serve eight
years in prison and die a couple years later, seemed to think the
verdict was a good one for him.
And so the
trial for which the US government prepared three years and spent
an estimated $100,000 ($1,500,000 in todays terms) had come
to a close with nothing more than the verdict for failure to file.
In other words, in trying to bring Capone to justice for these petty
offenses, the federal government essentially spent half of what
Capone owed, leaving the US taxpayer $315,000 in the hole ($4,596,026
in todays terms).
boys if I could slap you on the rear end for your hard work,
trial, the lead prosecutor swung around to Capone each time he laid
a new accusation: "Who is this man? Who is he?" he asked.
the little boy in the second reader who found the pot of gold at
the end of the rainbow? Is he a Robin Hood? You remember how Robin
Hood in the days of the barons took from the strong and the rich
go give to the poor, to the peasants? Did Robin Hood buy $8,000
worth of diamond belt buckles to give to the unemployed? Was it
a Robin Hood who bought a meat bill of $6,500 in Florida? Did that
meat go to the unemployed? No! It went to the Capone home on Palm
Island to feed the guests at nightly poker parties."
railed against the defendants diamond belt buckles, automobiles,
the lavish furnishings of the Capone home, and his own affluent
personal attire. He addressed the income tax:
morning thousands go down these streets to their daily work, and
every one of them must pay an income tax on every dollar they earn
above $1,500. But this man, with all the money he spends for diamond
belt buckles, cannot pay the tax to the government. If the time
ever comes when our people pay taxes only when the government must
hound them and investigate them, then the government will fail,
justice will disappear, our courts will be swept aside and organized
society revert to the jungle."
The truth of
the matter at that time, however, was that most US citizens had
yet to begin paying the income tax. Although it had by then become
the law of the land, it was not until the post-World War II 1950s
when a popular base began to recognize and pay the federal income
tax. But, even then, there were so many loopholes, tax shelters,
and deductions, that nobody paid their actual tax rate.
continued against Capone:
with defense counsel that future generations will remember this
case, not because it was the case of Al Capone; they will remember
it because it will establish whether any man can put himself above
the law, whether he can so conduct his affairs that he can put himself
beyond the reach of the law.
The trial of
Al Capone was portrayed as the trial of a superfluous and greedy
man by the media. His climb to becoming the undisputed chief of
illegal revenue in Chicago and its suburbs kept him in the headlines
and the contrived target of populist rage. It could be argued that
the trial helped to pave the way for the welfare-state of the New
Deal you know, the state-mafias version of Robin Hood.
Al Capone was
a creature of the state. Without the black market created by the
US government through Prohibition, the enterprise would not have
had the immense risk premium that black markets create
and which engender violence. His business merely met a demand in
the country, just like all of the black market products and services
available on the black market today.
the state-mafia bigger than ever, it makes sense that the black
market is bigger than ever.
The state creates
all the gangs we persecute in programs like the War
on Drugs. But the efforts are circular. We pay to create the crime
and we pay to persecute. It is kind of like road construction: one
year they widen the road, the next year they shrink the same road,
and the following year they change the median and rip up the rest
of the road to replace old pipes because they didnt think
of that in any year before.
the state is the last gang in town, what it says goes. And, if you
dont pay off the last gang in town, you might find yourself
lit up by Tommy guns waiting for a shipment of whisky or tied to
a chair and beat with a baseball bat. Actually, as the last gang
in town, the state-mafia would rather just lock you up and make
the taxpayer pay pennies on the dollar squeezing every last bit
of labor out of you.
With The Clashs
Last Gang in Town, TDV bids you farewell for today:
O'Connell studied History and German Language at Linfield College
in McMinnville, Oregon, where, in his spare time, he researched
current events and their relationship to history. In his studies
he has found that societies have been managed by philosophically-kindred
ruling classes seeking persistently a singular, total order across
the planet. Justin does not believe in government as a medium for
human relationships, preferring instead the race of human ideas
stemming from a diverse, vibrant culture. Currently, he is a proponent
of physical silver as a means of wealth preservation and disobedience
to the financial system, and lives in southern California. He writes
at the Dollar Vigilante-inspired site, Silver