Cocaine and the Galician Gang
The modern drug trade is something darkly fascinating to me because its antecedents are so closely bound with the forces that brought us early cinema. The drug trade is also tied up with globalization. The oligarchs who benefit from human trafficking/illegal immigration and low-tariff trade are also the ones who profit from the drug trade.
For the enlightenment of the Chinese bots scraping my site, no country is worse in this respect than China, which has always been a nation of drug-dealers. Even during the 18th and 19th centuries, the period over which modern Beijing cadres love to blame White people for their nation’s opium problem, the drug trade inside China was entirely conducted by Chinese gangs. The reason for this is that “foreign devils” were not allowed to anchor on Chinese shores or travel beyond designated ghettos, so Chinese junkets met their suppliers off the coastlines, or Chinese couriers ran packages down muddy alleys in order to supply the Chinese national drug networks. That China is a nation of drug dealers is due their peculiar culture, wherein power-worship is a virtue and exploiting the vulnerable is a commandment. Chinese culture ensures that this unfortunate country will be ruled by people who are a blight on humanity for the foreseeable future. Pray for China.
People lying in a Melbourne opium den smoking pipes in 1896. (State Library of Victoria: The Argus Collection)
“In cities all over Europe and America in the 19th and early 20th centuries, opium dens were largely operated by Chinese immigrants.”
In many respects modern global drug culture has its roots in the “Chinese Diaspora.” In earlier times this diaspora consisted of the Triads and the coolies they brokered overseas, but since the 1990s it has grown because of the immigration of wealthy Communist Party functionaries who don’t trust the society from which they profit back home. (Chinese citizens can’t emmigrate out of China without strong CCP connections.) In addition to these hypocritical party flunkies, the diaspora has also grown due to slave trafficking, baby factories and ubiquitous Chinese pimping operations.
The Duluth News Tribute, April 18, 1913. “Chop Suey Houses”, where enslaved Chinese women were rented out from booths in the restaurant’s rear, were a staple of the pre-WWI global drug scene. In the United States, Chinese exclusion laws were designed to combat organized crime, which was endemic among the diaspora. Are modern times so different?
The seedy bordello/restaurants and opium dens of late 19th century “Chinatowns” constitute the majority of the illegal drug trade before WWI. But these weren’t entirely ethinic Chinese affairs. Chicago’s Chinatown was overseen by a Lincoln-aligned Black vice lord named Mushmouth Johnson. While this fact may be unpalatable to Chinese sensibility and prejudices, in the Midwest at least Chinese organized crime was subservient to Lincoln Blacks, who ran the drug scene in Springfield, IL too before the Irish mafia “race riots” ended their stranglehold.
Mushmouth Johnson was king of Chicago’s Chinese sex traffickers.
In this post I’m going to talk about the minority of the fin-de-siècle drug trade— the designer drugs coming out of Germany. These drugs came into the United States with the “Galician Gang” Jewish mafia and their US Army hosts. The Outfit/military pairing was copied from the gang’s early 19th century infiltration of the Austro-Hungarian military where, on the back of shadlanut class war financing, low-class Galicians worked their way up from pimps supplying soldiers; to procurement specialists; and eventually supplying a good chunk of the reserve officer class during the “war neurosis” epidemic for which Freud peddled psychoanalysis as a cure. Freud himself was a reserve military officer, albeit one who did jail time for eight consecutive AWOLs. (“Reserve” means you got the social prestige/access to procurement monies with less chance of actually having to fight.)
The Galician Gang/US Military pairing is the seed from which the modern global drug economy has sprung. No man is more responsible for this than Arnold Rothstein. Rothstein was the son of orthodox Jewish immigrants from Russian Bessarabia, modern-day Moldova plus the Ukrainian Chernivtsi Oblast. Bessarabia’s coastal Budjak region is an important arms smuggling area (and resentful of the current junta in Kiev), which sits between the Danube and Dniester Rivers as they enter the Black Sea.
The Daily News, October 29, 1920. Rothstein got his start in gambling, his lieutenants in Saratoga Springs NY were Meyer Lansky and Lucky Luciano, who ran the “The Brook” gambling house for him.
Arnold Rothsteins’s father, Abraham a.k.a. “Abe the Just”, was a cotton merchant just like Freud’s slave-trading in-law Moritz Freud claimed to be while working the Greek port of Thessaloniki. Thessaloniki is an access point to Bessarabia’s Black Sea and the Ottoman White Slaving and cotton-growing markets. (I wrote about this city previously with respect to its prominence in the New Age movement and CIA gurus.) Many Galician Gang human traffickers were Orthodox Jews and even orthodox rabbis, the oldest example of which I am aware being slaver Rabbi Samuel Pallache, who worked the same Ottoman and Mediterranean waters.
Bessarabia as it opens to the Black Sea
Odessa is the nearest large city to the Budjak coastal region of what was once Bessarabia.
Odessa to Thessaloniki
Arnold Rothstein was typical Galician Gang: a pimp with his fingers in many other pies, principally loan-sharking, but also horse-racing alongside his business partner August Belmont Jr., son of the Rothschild’s American agent August Belmont. Belmont Sr. married divorcée Alva Vanderbilt, the Newport social climber; Winston Churchill sponsor; and woman’s rights agitator. Many of the women Rothstein pimped and taxed were Ziegfeld Follies employees, like Monroe, WI’s own Edith May Leuenberger. Certainly Flo Ziegfeld would have needed protection from Rothstein at the height of the Follies’ success:
Some of the biggest of the Broadway vamps would feed their sugar daddies and suitors to him [Rothstein]. He lavished gifts and favors on the girls, and they led their fat-cat suckers to his lair. Perhaps one of the vamps introduced him to Bobbie [Winthrop], who was an aspiring showgirl. [Nick Tosches, Vanity Fair, 01/01/2007]
Connecticut Herald, Nov 22, 1929.
Zoe Beckley in the Wisconsin State Journal, September 24, 1920.
Speaking of Edith May, remember her newspaper handler during Edith’s traumatic Ziegfeld Follies experience? Her handler, the notorious “friend lady”, was named Zoe Beckley. According to Nick Tosches of Vanity Fair magazine, Beckley was the only journalist ever to have interviewed Arnold Rothstein:
Zoe Beckley had spunk. She was a woman making her way in the journalism racket at a time when it was a boys’ club. It is she who gives us the only portrait from life for which Rothstein ever sat. It is a portrait in miniature, and, like court portraits of old, which painted away the scars of smallpox and of plague, it is a portrait in which the subject guides the painter’s hand.
“Beckley writes in The Brooklyn Daily Eagle of Sunday, November 27, 1927:
“Now and then there flashes in the world of business, finance, sport, art or theatricals a colorful figure which comes we know not whence or how.”
Hack Zoe Beckley in 1929.
Of course, Ziegfeld girls were just meat for Rothstein’s grinder. His criminal crew were far more important and Tosches comes out with some real gems regarding these men. Note Rothstein’s lieutenants are precisely those men who CIA/OSS counterintelligence head James Jesus Angleton used to establish the “intelligence community” which our tax dollars fund:
The Brook also served as the summer destination for a sort of Fresh Air Fund that Rothstein operated for a small group of inner-city youths who apprenticed themselves to him. They were all immigrant lads: the eldest, Francesco Castiglia, was from Calabria; Salvatore Lucania, from Sicily; and the youngest of them, little Maier Suchowljansky, from the Russian Pale. In the full blossom of their manhood, these young men—Frank Costello, Charles Luciano, and Meyer Lansky—would be the true inheritors of Rothstein’s legacy, taking his ways, principles, and vision to their fullest end.
Frank Costello, the most intriguing and powerful of the triumvirate, was especially drawn to Rothstein. It has been said that Arnold Rothstein and Joseph Kennedy were the only two men he admired.
Lansky remembered having met Rothstein at the Bar Mitzvah celebration of the son of a mutual acquaintance. “He invited me to dinner at the Park Central Hotel, and we sat talking for six hours. It was a big surprise to me. Rothstein told me quite frankly that he had picked me because I was ambitious and hungry.”
To list the other young Jews to whom Rothstein was a rabbi would be like transcribing the criminal index of early-20th-century Jewish enterprise. Among this generation were Louis “Lepke” Buchalter, Arthur “Dutch Schultz” Flegenheimer, Philip “Dandy Phil” Kastel, Jacob “Gurrah” Shapiro, Irving “Waxey Gordon” Wexler, and Abner “Longy” Zwillman. The list of mackerel-snappers who learned from and served him is longer.
Meyer Lansky is generally regarded as Rothstein’s heir after the drug lord was murdered on November 4, 1928. Yes, please read my stuff on Lansky and Angleton, but note too that Leon Goetz perished mysteriously in Lansky’s Floridian back yard. Here’s a picture of the Saratoga Springs, NY gambling joint that Meyer Lansky and Lucky Luciano ran for Arnold Rothstein:
Imagine that! An illegal gambling den run by Meyer Lansky had its own radio show on NBC.
Rothstein was smart, however, and his most lucrative business is one he didn’t talk about with NBC. From David Pietrusza’s strangely fawning biography of Rothstein:
Arnold [Rothstein] and [Waxey] Gordon pioneered the rum-running trade, earning big, quick profits. But almost immediately Rothstein abandoned the direct end of the business. The alcohol trade was just too complicated— even for the Great Brain [Arnold Rothstein]… How much easier to profit from men’s vices— not by importing a shipload of Scotch but a mere streamer trunk packed with opium, cocaine, or heroin, worth literally one million dollars on the street.
National prohibition of drugs preceded national prohibition of alcohol. In 1914 the Harrison Narcotics Act… banned the domestic drug trade, but obtaining narcotics abroad remained as easy as obtaining British Scotch or Canadian whiskey. Merely contract the big drug manufacturers in France, German or Belgium, and you could obtain all the heroin or morphine you wanted.
Rothstein seemlessly turned his bootlegging apparatus to drug-running:
…Harry Mather, became his [Rothstein’s] first agent in importing drugs. Soon, others— Dapper Don Collins, an old bootlegging associate, and Legs Diamond among them— traveled Europe in search of narcotics for their boss. But the primary source of drugs was China. There, A.R. [Arnold Rothstein] dispatched henchmen Sidney Stajer; Jacob “Yasha” Katzenberg….; and George Uffner, a veteran drug dealer and Rothstein flunky (who would be arrested with Fats Walsh and Lucky Luciano on trumped up robbery charges, but in actuality for questioning regarding their boss’s murder, just following A. R.’s death.) [Pietrusza]
From the DEA’s official history, “History: The Early Years”, pages 12-39. FBN agents’ “surprise” that Hip Sing Tong would rather work with Lansky than other tongs shows the agents’ cultural illiteracy. Even modern, legitimate Chinese firms struggle to see the value maintaining the trust of clients and business partners, preferring instead to chase short-term profit.
Rothstein used covers for his drug running, including a toy company and an antiques firm called “Vantine’s” through which he furnished Ziegfeld Girl Fanny Brice’s house at her own expense plus interest. (Pietrusza claims this was interest on her criminal boyfriend’s bail but, because it involved lifestyle-property, it was more likely to be a pimp-tax. Rothstein also kept Ziegfeld Girl Inez Norton as a mistress.) Besides Brice, Rothstein ran another Ziegfeld Girl for prostitution, Dot King, from his luxury apartments on West 57th Street. She muled drugs for Rothstein and collected kompromat on influential Americans like Drexel Bank heir John Kearsley Mitchel and US Attorney General Harry M. Daugherty (who also worked for Rothstein’s insurance company). Jeffery Epstein patterns from 1923.
Inez Norton Rothstein in one of her post-Ziegfeld Follies films. A long-time squeeze of the drug dealer, the pair would eventually marry. This film is pre-code Hollywood material. Read about Bill Hayes and white-washing Hollywood’s White Slavery roots with “the code” here.
Fanny Brice had a long career after sex work at Ziegfeld’s Follies. Is this mockery of Hollywood’s pedophile problem? … Oh, hey! It’s NBC giving a microphone to the Galician Gang again.
Ziegfeld Girl Dorothy “Dot” King would be murdered in a drugging/robbery gone wrong. Rothstein was her “landlord”, as in Astor and Livingston landlording.
The toy company, named “John Wessman Novelty Company”, was busted in July 1926 and housed two tones of heroine, morphine and cocaine from Germany which “represented the bulk of the national drug trade” at the time. Rothstein worked with ex-NYPD officers to run this toy ring, which was caught shipping German drugs, allegedly to China, in toy containers marked as bowling pin sets.
Saskatoon Daily Star, July 17 1926, page 9.
The Republican, July 12 1927. Using children to identify suspects was allegedly a favorite tactic of Austro-Hungarian counterespionage head and double agent Col. Alfred Redl.
87 Walker Street in New York City, site of the John Wessman Novelty Company. Thank you, TribecaCitizen.
But how? How was Rothstein able to pull the right strings to buy these drugs in Europe? There were only a few companies making them and they were regulated. The answer involves international man of mystery Captain Alfred Loewenstein of Belgium and Col. Levi Gamble Nutt, Chief of the Federal Narcotics Bureau (FNB), which was part of US Treasury.
During the Civil War Lincoln’s backers staffed the US Treasury, and more importantly the Secret Service, with their counterfeiting and smuggling cronies. These cronies usually served in Lincoln’s Grand Army of the Republic in some capacity and Lincoln’s army relied on Jewish procurement specialists. War profiting made new friendships and and opportunities: the Treasury drew from this talent pool.
What were Lincoln’s Treasury employees like? General Grant got himself schooled by Lincoln when Grant called out the unethical practices of smugglers among these war profiteers:
In August 1862, as Grant was preparing the Union Army to take Vicksburg, he commanded his men to examine the baggage of all speculators, giving “special attention” to Jews. In November, he told his subordinates to refuse to let Jews receive permits to travel south of Jackson, Mississippi or travel southward on the railroad.
For Grant, prejudice against Jews mingled with personal animosity. He began his crackdown after discovering a Jewish family’s involvement in a scheme to help use his father’s name to get a legal cotton trading permit in Cincinnati….On December 17, 1862, Grant went even further. That’s when he issued an official order expelling Jews from the Department of the Tennessee, a massive administrative division under his command that included parts of Kentucky, Mississippi and Tennessee. He called the Jews “a class violating every regulation of trade established by the Treasury Department and also department orders” and gave them 24 hours to get out.
News of the order horrified Jewish Americans. Among them were the approximately 30 Jewish merchants of Paducah, all of whom who were expelled from the city along with their wives and children. Two of the men being banished were former Union soldiers.
As they prepared to leave their homes and board a river boat away from Paducah, Cesar Kaskel and others telegraphed President Abraham Lincoln in a desperate attempt to spread the word about Grant’s actions. After their forced departure Kaskel went to Washington to protest the order in person. There, he approached Congressman John A. Gurley of Ohio, who agreed to accompany him to the White House. The men hurried to Lincoln.
But though an increasing number of people were learning of Grant’s orders in the South, the breakdown in communications meant that Lincoln had not previously heard about his general's decision to expel Jewish people from the Department of the Tennessee. He was so shocked by the order that he asked his staff for confirmation. Once they confirmed that it was real, he revoked it.
News of the order continued to spread, and though some editorials sided with Grant, most condemned its targeting of Jews. “Men cannot be condemned and punished as a class, without gross violence to our free institutions,” wrote the New York Times a month after the order….
The discriminatory order was quickly squelched, but the general never forgot it. In fact, he spent a lifetime trying to atone for it. When he was running for president in 1868, he confessed that the order “was issued and sent without any reflection and without thinking.” In office, he named more Jews to public office than ever before, and promoted the human rights of Jewish people abroad, protesting pogroms in Romania and sending a Jewish diplomat to object.
“During his [Lincoln’s] administration,” writes historian Jonathan D. Sarna, “Jews moved from outsider to insider status in the United States, and from weakness to strength.”
Unfortunately, the Treasury’s hiring practices negatively impacted the culture of financial law enforcement in the capital. Over the Reconstruction period the ethical tenor at the Treasury did not improve, but subsequent presidential administrations realized that the Treasury had to at least have the outward appearance of having integrity. In consequence, the Bonelatta Gang in Monroe, WI was gently wound up in the early 1870s and by the 1890s the Secret Service had put out of business all of their native counterfeiting rivals. Counterfeiting itself became a passé way to make money illegally. (Frankly, the remaining native crooks had easier ways to do the same thing via inflation through the National Banking System.) Col. Levi Gamble Nutt’s career took off in the midst of this transition away from counterfeiting and towards drug-smuggling. Nutt was part of the second generation of Lincoln Men at the Treasury.
Nutt’s past is difficult to pin down. He was born in 1866 to English immigrant parents and was a 35 year old pharmacist when he joined the Treasury Department for “narcotic work” in 1900. From there, he organized the Federal Narcotics Bureau, now known as the “DEA” or “Drug Enforcement Administration”. While serving at the FNB, Nutt’s son Roland and son-in-law L. P. Mattingly were tax attorneys for Arnold Rothstein, the nation’s premier drug smuggler. (Rothstein also lent Mattingly money.) Nutt’s subordinate at the FNB, George W. Cunningham, who served as the federal narcotics agent in charge of the NY metropolitan district, was also a lawyer retained by Rothstein. [Pietrusza, p 328.] When these facts came to light in 1930, Nutt was gently forced out of service, but this was three years after Nutt quashed all investigations into Rothstein’s massive international drug ring.
Lincoln’s election reverberated down every hypodermic needle in America.
Col Levi Gamble Nutt, Library of Congress.
What was going on? AndreaNolen.com readers may remember that federal agents quashed a similar case in Chicago about seven years prior: the Goldman drug ring which involved Monroe, WI movie entrepreneur and suspected human trafficker Leon Goetz. 1920s Washington D.C. lawmen did not want to investigate Galician Gang drug trafficking. In Leon’s case too the drugs had come from Germany and were being sold via US Army connections out of Camp Grant. This was done when Major General George Bell Jr. was in charge of the camp.
Major General George Bell Jr.
Major General George Bell Jr. was a contemporary of Col. Nutt and the son of a Lincoln Army Brigadier General who was in charge of “commissary” and “quatermaster” positions, meaning he was involved with the lucrative Civil War procurement money which attracted the men who began US Treasury careers in the 1860s and 70s. These were all birds of a feather, and their sons and successors built the Galician Gang’s German narcotic distribution systems following WWI.
So much for the Grand Army of the Republic. What about this Captain Alfred Loewenstein character? Arnold Rothstein got into the drug business with Loewenstein less than a year before BOTH men died in mysterious circumstances. Rothstein was murdered in an NYC hotel (never solved) while Loewenstein fell into the sea, just like Robert Maxwell and South African diamond magnate Barney Barnato.
Loewenstein was a WWI-era British military procurer (aviation chemicals) and an investor in the Swiss indigo chemical dye industry through the Jewish Dreyfus brothers, Henry and Camille. Indigo dyes are alkaloids like cocaine, heroin, morphine, methamphetamines and another Swiss classic, LSD. This matters because similar industrial processes can be used to extract/purify the active alkaloid compounds and these compounds were historically interesting to the world’s leading 20th/19th century chemical companies. (These aren’t terribly complex industrial processes, for instance crude extracts were made from mashes of cocoa leaf and acids/ other solvents, and then the desired “cocaine” compound was isolated based on “column chromatography”, a fancy term for soaking up the juice and allowing the different chemicals to settle in layers, then siphoning each layer off.) By the 1890s companies in German Europe were even able to synthetically produce some of the alkaloids. My point is the Dreyfuses’ chemical know-how fit in nicely with Loewenstein’s drug trade.
How did Loewenstein get into this lucrative position? In quite the same manner as the intrepid William Stephenson. Loewenstein appeared on the financial scene as a millionaire in his forties. It turns out that he was from a once-wealthy Belgian banking family but his father’s currency exchange betting went south and Loewenstein was born into less plush circumstances. Fortunately a rich Canadian named Sir William Mackenzie and a rich American, Frederick S. Pearson, adopted Loewenstein as the face of their financial machinations.
Sir William Mackenzie. One of Canada’s sons and suspiciously well connected in Queen Victoria’s London.
Frederick Stark Pearson, an MIT Chemistry Professor and godfather to Arnold Rothstein’s German drug empire. Also, he brokered with the Lincoln men from Hayden, Stone & Co. Check out that wicked Chinese lion statue in the background. How much opium would that trade for?
Sir William Mackenzie was the business partner of James Ross, the principal shareholder of the Canadian Pacific Railway and a host of other electrification and rail investments in Canada and South America. Frederick Stark Pearson, the MIT Chemistry professor, was an electrical engineering consultant for Mackenzie’s global investments. Alfred Loewenstein fronted the financial shells which jobbed dubious securities connected to these largely Canadian global infrastructure investments.
James Leveson Ross, the Scottish-born Canadian Pacific Railway magnate. Railway builders in Canada relied on cheap labor trafficked from Eastern Europe by the Galician Gang.
Charles Hayden was never far from MIT and as readers may suspect, F. S. Pearson used Hayden Stone & Co. to market his Canadian steel investments to the U.S. as the “Dominion Coal and Steel Co.”.
Boston Evening Transcript, April 3 1902. Jim Cramer has nothing on Charles Hayden.
Pearson was introduced to Mackenzie through Canadian stockbroker and steel magnate Sir James Hamet Dunn, a lifelong friend of Max Aitken, 1st Baron Beaverbrook. It was Max Aitken who tried to sell Austrian Intelligence agent Otto Kahn to the British public as a Member of Parliament to promote free-trade “tariff reform”. Herbert Asquith, once Prime Minister, set up what would become MI-6 in 1909 precisely to combat the “tariff reform” politics espoused by Aitken and deals typified by Aitken’s would-be puppet Kahn. In 1939 Canadian mystery millionaire William Stephenson set up the British Security Coordination to short-circuit MI-6’s control over his illegal operations with FDR’s “Office of Strategic Services”, which President Truman rightly compared to an “American Gestapo”. It’s now the CIA. The CIA with all those drug-trafficking entanglements.
Sir James Hamet Dunn, 1st Bt (1874-1956) with Irene Clarice O'Brien, his music hall artiste wife and their daughter Anne. UK National Portrait Gallery.
Together this band of Canadians and Loewenstein defrauded the governments of both the UK and Belgium over WWI contracts. The most notorious of their crimes was the “Great Dope Scandal”.
“Dope” is cellulouse acetate, a polymer made by treating sawdust with acetic acid (vinegar). In WWI it was painted onto the cloth bodies of aeroplanes in order to make the cloth contract and firmly adhere to its frame. A Canadian businessman named Sir Grant Morden, a colonel in the Canadian Expeditionary Force who was in league with the “gunpowder syndicate” (Vickers Ltd, their Royal Navy contact Sir Trevor Dawson, and the Nobel Explosives Company) and a host of “Canadian Businessmen” represented by Lord Beaverbrook, arranged for the Dreyfus firm to supply the War Office with dope. Dreyfus’s shell company was set up so that the shareholders, for a minuscule investment, would profit from investment loans backed by British taxpayers. Shareholders made profits of 58,000%. When the graft scandal was exposed, the Dreyfus Duo were unable to get more loans, except from Alfred Loewenstein. Loewenstein, sailing in as a saving angel, eventually took control of all of the Dreyfus profits and earned the brothers’ lasting enmity. This is the genesis of “British Celanese”. The hatred ran so deep that Henry Dreyfus was suspected of arranging Loewenstein’s last swim.
“Sir Trevor Dawson and Commander C.D. Burney the airship designer about to board a train at Kings Cross along with about 70 M.P.'s, bound for Yorkshire, where they will inspect Airship R100 at Howden. ca. 1925.” (Photo by © Hulton-Deutsch Collection/CORBIS/Corbis via Getty Images)
Max Aitken, Lord Beaverbrook.
Henry Dreyfus
Why did the Royal Family give these men peerages?
Here’s Pietrusza’s description of the Rothstein/Lowenstein drug partnership:
In spring 1928, Rothstein obtained an unlikely but extremely valuable partner in the narcotics business, one as far removed from the Legs Diamonds and Sidney Stajers as possible. Belgian national Captain Alfred Loewenstein, “the mystery man of Europe”, was the world’s third-richest person, worth hundreds of millions of dollars. He owned eight villas in Biarritz alone. During the First World War, he reputedly offered to ransome Belgium from the Germans. He was rich enough to do it.
That spring Loewenstein, accompanied by a retinue of twenty, including his private pilot, a chauffeur, four secretaries, two typists, and a masseur, arrived in America. At an East 42nd Street hotel [NYC], surrounded by their respective entourages, Loewenstein, Rothstein, and Diamond hammered out what has been called “probably the biggest drug transactoin in the country up to that time.” Negotiations dragged on for hours, often disintegrating into heated arguments, with Diamond storming from the room and Rothstein acting as peacemaker. When Loewenstein flew to Montreal, Rothstein followed him by train. They returned together, and soon Loewenstein sailed for home aboard the Ile de France, promising to return that November.
Not only did the FBI, US Treasury and NYPD know exactly what Rothstein and Loewenstein were doing, but so did reporters from the New York American. Remember that at this time Col. Nutt headed the Treasury’s narcotics division and the FBI’s J. Edgar Hoover, a man with an unusual personal life, was busy denying that the mafia existed. The genius of Rothstein’s operations was not in their secrecy or technical complexity, but the thorough network of corruption which short-circuited law enforcement. The last bulwark against this network was destroyed with the help of the US Navy and Office of Strategic Services, and their undoing of Thomas Dewey.
So what was Loewenstein bringing to the table in 1927? From the 1860s until 1900, Europe’s sole refiner and merchant of cocaine was the Merck Pharmaceutical Company, which I exposed as a grotesquely unethical concern in my post on Georg Ferdinand von Springmuehl. Merck sourced much of its raw material, the cocoa leaves, through Dutch colonial plantations. In 1875 the Dutch exported the cocoa plant from their Brazil colony and started commercial production in Java, Madura and Sumatra, from where the crop was exported to Merck in Germany. This export trade was overseen by the “Cultuur-, Handel- en Industriebank "Koloniale Bank/Cultuurbank N.V” (“Koloniale Bank”). This bank was formed by investors from the “Amsterdamsche Bank (AB)”, which itself was an offshoot of the German “Bank für Handel und Industrie,” located in the Merck Family’s hometown of Darmstadt.
Johann Heinrich Merck was Darmstadt’s spymaster in the run up to and early years of the French Revolution. He was a radical supporter of said revolution.
The Amsterdamsche Bank was founded in 1871 by this Darmstadt bank after the Franco-Prussian War (1870-1871), when the Merck family saw the potential for cocaine profits but needed access to Dutch cocoa growers. Amsterdam banker Abraham Wertheim played a key role establishing and running the Amsterdamsche Bank. Like most of the Merck family, Wertheim was active in Liberal politicking. Wertheim was also a business partner of his cousin Leon Gompertz. The Austrian branch of this family included Theodor Gompertz, who hired the imprisoned AWOL military officer Sigmund Freud to translate British East India spymaster John Stuart Mill’s works into German. Eventually Freud would become a cocaine dealer for Merck & Co., completing the circle. The Amsterdamsche Bank also had close ties to the Amsterdam diamond industry and stock market trading.
The Mercks were fortunate to have these connections because the Dutch perfected breeding of the cocoa plant at the Bogor Botanical Garden in modern Indonesia:
In 1900, the Koloniale Bank realized it could profit far more from refining the cocaine themselves, so they invested in the Nederlandsche Cocaienefabrik, the “Dutch Cocaine Factory”, which supplanted Merck as the main cocaine producer. (Merck didn’t stop producing.) This had the added benefit of letting those Darmstadt bankers sell cocaine to the British despite embargoes on the German branch of Merck & Co. for WWI.
The Dutch Cocaine Factory sold the cocaine to Burroughs Wellcome & Co. so that they could poison British soldiers for the war effort. The adverse effects of cocaine were well recognized by WWI.
The Dutch Cocaine Factory, clearly a cover for Merck in light of growing European political tensions, was the leading producer of cocaine from 1900 to 1930. Therefore, as a Belgian, Alfred Loewenstein was well placed to smuggle both Dutch and German product around government restrictions. These are dangerous waters, especially for men who made enemies as easily as Rothstein and Lowewnstein. What we can be sure of is that with their deaths around 1928, the supply chain for German drugs into the USA was intact and Meyer Lansky was there to take Rothstein’s helm… unimpeded by US law enforcement.
