Since before the birth of the United States,
alcohol, sex and gambling have lurked in every dark corner.
Every city has neighborhoods that are offering leisure
and vice and sometimes seediness.
I'll make it worth your while.
America's really fertile
for these types of sin industries.
You just gotta pick your poison.
At the turn of the 20th century,
visionary entrepreneurs, Buck Duke,
Jack Daniel, and Adolphus Busch,
have turned small regional indulgences
into powerful national brands.
Hedonism is in the grasp of every American.
♪ I can dance with the devil ♪
Now, the temperance movement is battling back.
Who's Carrie Nation?
A problem.
If they wanna ban the sale of cigarettes,
let them.
They'll only make the rest of the country
want them even more.
And protection
from sexually transmitted diseases.
Condoms, rubber condoms.
Is outlawed.
While one woman's underground numbers racket
will give rise to the state lotto system.
You're light.
You think you can come in here and intimidate me?
As a battle for America's soul erupts.
You are under arrest
for violating Section 37, Article 2 of the penal code.
America will never go dry.
You'll never get away with this.
Get out!
♪ Aye aye ♪
♪ I did it and aye aye ♪
♪ I proved it and aye aye ♪
♪ I finished, I came and I saw ♪
♪ I gave it my all ♪
♪ I changed the game ♪
♪ I made it a boss ♪
♪ Yeah ♪
The Gilded Age,
it's remembered as a time of wealth, opulence and glamor,
but a closer look reveals another side.
It was an age of excessive aggression and business.
The wealth was extraordinary
and the poverty was absolutely brutal.
What we don't realize is there was no social safety net.
So you literally could starve to death.
You had to go beg in the street.
Mark Twain describes it as an age,
where on the surface, everything is gleaming with gold.
But underneath that surface, it's rotten at the core.
You see that in the proliferation of vices.
Alcohol and tobacco
are becoming easier to find than ever.
While they're still prevalent
in sketchy saloons and back alleys,
now they're showing up in local shops, the general stores.
Driven by the first national brands of their kind,
Jack Daniel's, Budweiser, and American Tobacco.
Anheuser-Busch in the Midwest,
they're able to adopt refrigerated carts.
They can send their products to Los Angeles,
to Texas, to New York.
You can have somebody smoking a cigarette
that has tobacco that was cultivated in the south.
You could be in a town that has no distillery,
and you could get your hands on a bottle of Jack Daniel's.
Americans sucked down almost 24 gallons of beer
each year, more than double the amount
of just a few years before,
and Adolphus Busch's signature Budweiser
sells more than a million bottles a year.
These innovators, people like a Henry Ford,
a Adolphus Busch, a Bill Gates and a Elon Musk,
all are gamblers.
And they're willing to gamble on their own ability,
their own vision.
Busch took that ambition
and was able to succeed at wild levels.
This one.
Now, Busch is trying to groom
his eventual successor, his son, August.
This is you.
Sit,
watch,
learn.
August had grown up in the brewery,
but he simply did not want anything to do with it.
And just not particularly interested
in having somebody else, especially his father,
tell him what to do all the time.
He was used to doing whatever he wanted.
Instead of learning the ropes,
August spent years
running a failing cattle ranch in Montana.
Before being forced back by his dad.
I'm here.
You look ridiculous.
Take that off.
Sit down.
Now, he's second in command
at the biggest beer company in the country.
When August came back from being a cowboy,
and he came back to St. Louis
and rather grudgingly settled in
at the brewery with his father.
The timing couldn't be worse.
The biggest obstacle Anheuser-Busch has ever faced
is quickly gaining power.
Who's Carrie Nation?
Ugh.
A problem.
Nicknamed a bulldog for Jesus,
Carrie Nation is the radical face
of the temperance movement.
And she spread her anti-vice rhetoric
from a small church in Kansas, all across the Midwest.
Carrie Nation or Hatchet Granny,
was part of the women's Christian temperance movement.
Carrie Nation looked like your grandmother or your aunt.
She was this small woman, but she was fierce.
And she was famous or infamous
for going to saloons in Kansas and chopping 'em up.
She has a way that she goes about her business.
Serious woman.
And goes out and attacks.
I mean, you have to think about it,
you had to be pretty committed to your work to do that.
You could think of American history
as being this long kind of struggle
between forces of modernization
and forces towards, what we would think of today,
as like traditional family values.
But they really take an intense form
around the turn of the 20th century
because society was changing so rapidly.
Nation's been arrested more than 30 times.
And her 20 year crusade
is grabbing headlines across the country.
Now, after years of targeting liquor,
the movement is coming for brewers as well.
They want to go after the distillers, fine.
But there's a difference between whiskey and beer.
So why don't you say that?
Liquor's the problem, not beer.
To fight Carrie Nation,
Adolphus Busch spends $100,000, 2.6 million today,
to advertise beer as a healthy alternative to liquor.
♪ Dangerous, in control ♪
♪ I'm cuffing it, I know ♪
Busch systematically and intentionally
set out to distinguish the beer industry and beer
as a very different product than hard liquor.
♪ Here I go ♪
The ads pitch beer as a beverage of moderation,
focusing on its lower alcohol content
and nutritional benefits.
Anheuser-Busch's ads,
there was always like a family scene.
Everybody is sitting there drinking Budweiser.
If that was gin,
like this scene wouldn't look quite the same.
At least it wasn't whiskey.
It wasn't vodka.
It was wholesome for wholesome Americans.
Busch's campaign
is a direct assault on distillers.
As prohibition fever became more intense,
the brewers just aggressively pushed the idea
that they're not distillers,
which, no surprise, was infuriating to the distillers.
Including the most famous whiskey brand
in the country, Jack Daniel's.
Anheuser-Busch is railroading us.
Last thing we need right now
is to go to war with the brewers.
Jack Daniel's
sells over half a million bottles a year,
and his nephew, Lem Motlow, helps run operations.
But now, temperance is threatening to tear it all down.
Jack Daniel didn't marry, didn't have any kids.
He really didn't have anybody to pass his legacy down to.
Jack and Lem are facing a growing crisis.
They may haven't always seen eye to eye.
Lem sort of presented himself to the world
in a different way from Jack Daniels.
I'm a outlaw, a renegade,
I don't follow the rules kind of thing.
Just inspecting the barrels.
They are old.
Now we say aged.
They are in need of replacement.
I don't want you trying to reinvent the wheel here.
We'll continue this later.
Already under attack
from the temperance movement,
and now from desperate beer brewers,
Jack and Lem need to get on the same page
if they're going to weather the storm.
Maybe consider putting out a peach brand.
No.
Just hear me out.
No, it's out of the question.
Nothing is out of the question.
It's my name on the bottle.
Slap somebody else's name on the label.
Hell, put mine on.
Lem really wanted to build a brandy distillery
'cause brandy was a lower proof than whiskey.
Jack was like, "No, no, no.
We're just gonna do this thing
and we're just gonna do this thing great,
and that's what we're about."
So long as we keep making the best whiskey in the world,
I suppose everything else will work itself out.
Just thinking about what's best for the company.
The product is the company.
You know, it's not personal.
It's just business.
By 1903, the growing storm of temperance
continues to build.
Soon, three states have gone dry,
and the rest of the country begins to take notice.
Individual states were putting in their own prohibitions
well before prohibition itself actually hit.
And sometimes it even went down to county to county,
Jack Daniel's, where it's made, Lynchburg,
even today is a dry county.
And so you could buy at the distillery,
but you can't buy in the rest of the county.
Now, reformers are targeting tobacco
and gambling too.
Part of the issue
is how much pleasure are we allowed to have
that is acceptable to society.
Some individuals say the best thing you can do for society
is to eliminate these sources of ill health.
And other individuals are gonna say,
"But I'm an American and I have my freedom.
And if I wanna smoke, I'm gonna smoke.
And if I wanna drink, I'm gonna drink."
And there is no easy answer to that.
Be therefore perfect, even as your Father,
which is in heaven, is perfect.
Anti-vice crusaders
are also cracking down on pornography,
which is transformed from sketches and drawings
to photographs and even moving pictures.
And thanks to their lobbying,
all forms of contraception are virtually illegal.
If you were caught
manufacturing and selling condoms,
you could be fined or sent to prison.
So in some ways,
buying a condom in the late 19th and early 20th century,
would've been similar to buying marijuana in the 1990s.
No one knows the consequences better
than Julius Schmid, the former factory worker
who was busted selling illegal condoms
he made out of sausage casings.
Schmid was bailed out and then a month later,
the judge gave him a fine of $50
and seized and destroyed the 700 condoms
that were collected in that September raid.
Undeterred,
Schmid jumps right back into the game.
I mean, it was kind of crazy.
In spite of getting arrested,
he's determined to still fulfill the demand for condoms.
He realizes that there's still money to be made.
But while he was out of commission,
other illicit dealers have muscled in on his turf.
What's going on?
You disappeared.
I've made other arrangements.
Now, he's looking for a new weapon
to take it back.
A lot of these early condoms
were made out of intestines, linen or fish skin.
I can only imagine it might not be as romantic.
So Julius Schmid knows what needs to happen.
Schmid wants to transform the condom entirely,
and to do it he looks to a technology
used in industrial manufacturing.
We tailor it to your exact specifications.
Called vulcanized rubber.
Pioneered by Charles Goodyear in 1839,
vulcanized rubber is treated with heat and sulfur
to make it stronger and more elastic.
Now it's used to make everything from raincoats and galoshes
to industrial gaskets and tires, but not condoms.
I don't believe you mentioned,
what exactly are you manufacturing?
Rubber caps.
Vulcanized rubber
enables the rubber to be manufactured much thinner
and also much more elastic.
And obviously these are two characteristics of condoms
that are gonna make them much more comfortable
and much more effective.
Even though
it could land him right back in jail,
Julius Schmid wants to bring the condom
into the industrial age.
Just a few miles uptown,
without regulation to stand in his way,
Buck Duke has turned America Tobacco
into one of the most powerful conglomerates on the planet,
making him the third richest man in the world
behind only Andrew Carnegie and John D. Rockefeller.
We deem the Carnegie's and the Vanderbilt's
and the Rockefeller's as legitimate enterprise,
but we have a harder time with people
or organizations that are engaged in vice.
But Buck Duke is in many ways the same as Henry Ford
or Carnegie,
they are just different sides of the same coin.
Duke is the biggest buyer
of raw tobacco in the world.
By the 20th century, American Tobacco
sold 90% of the tobacco products
that were sold in the United States.
And he's used his leverage
to bully growers into accepting rock bottom prices.
Couple of farmers outta Kentucky and Tennessee
wanna renegotiate the price
of the tobacco leaf they sell us.
Farmers were outraged about the low prices
that they were receiving for their tobacco.
And they blamed the tobacco monopoly,
which had all the power to set low prices
that farmers were obliged to receive.
Price is already set.
They want to sell to someone else,
good luck to them.
So farmers in Tennessee and Kentucky
form the Planters' Protective Association,
essentially a cooperative marketing society.
Farmers would come together
and pledge to withhold their crop
from the marketplace until prices rose.
Should we make them a counter offer?
We're American Tobacco.
We do not negotiate.
As a businessman, one of Duke's premier qualities
was a ruthlessness that went hand in hand
with a disdain for labor organizing.
Soon, tensions begin to rise
along the fertile tobacco growing portion
of the southeast,
known as the Black Patch.
And in 1905, it turns violent.
And Buck Duke doesn't know that a vicious paramilitary group
is about to wreak havoc and take aim squarely at his back.
Conglomerates are growing to dominate
the US economy.
Andrew Carnegie's US steel
is worth over $34 billion in modern money.
John D. Rockefeller's standard oil
brings in nearly a billion dollars a year.
Buck Duke's American Tobacco is worth over 7 1/2 billion.
You have a couple of successive
presidential administrations
that are all about laissez faire economics.
And the idea is if the market is allowed to do its thing,
that then you will be even
a pretty strong place economically.
So this kind of like anti-regulatory sentiment
contributes to the consolidation of great power
in several monopolies.
These big businessmen
who are able to control entire industries.
Got a minute?
What is it?
There's legislation on the books
to fight monopolies, but it's never enforced.
And for years, Duke has used his corporate power
to bully farmers into taking pennies on the dollar
for their tobacco leaf.
Tobacco farmers could not sell their tobacco
for a price that allowed them to have a decent living.
Monopolies have such an economy of scale
that they can really piss off a lot of people.
You control the market and they have to sell to you
at the price that you determine, not the price they want.
So there's gonna be problems.
These farmers gather together
and they agreed amongst themselves
that they would not sell their tobacco
below a certain price.
And then they went around
and encouraged their neighbors to participate
and to join this association.
Not everybody agreed.
In response to Buck Duke's
hardball buying strategy,
by 1906, the Planters' Protective Association
has 30,000 members that won't sell to American Tobacco,
and they develop a paramilitary wing
called the Night Riders to intimidate anyone who will.
The Night Riders borrow tactics
from a brutal terrorist group active at the time.
Night Riders are terrifying,
riding their horses into town,
setting things on fire,
cutting communication with the outside world,
often in disguise.
It's not that different from a Ku Klux Klan.
They would trample on somebody's crop
if they had sold to the American Tobacco Company,
or they might burn their barn at night.
The Protective Association
is learning techniques from the Klan.
It's got code words, the hooded garb.
It does its work at night.
And over time, disproportionately,
African American farmers
become the victim of this vigilantism.
The press dubs the conflict,
the Black Patch Tobacco Wars,
and they dominate headlines from coast to coast.
Coverage includes scathing rebukes
of the most powerful tobacco magnate in the world,
Buck Duke, who continues to buy tobacco
outside the association,
which some see as provoking the violence.
We need to issue a statement.
It's best to stay ahead of this,
make sure we control the narrative.
No.
I don't think it was really ever a question
whether or not to negotiate with the association.
There was simply no reason to, from a business perspective.
Farmers were in debt.
Farmers were desperate.
We can't let these farmers keep terrorizing each other.
They want to burn each other's farms down,
let them.
Just a few miles away,
in the Tenderloin district,
Julius Schmid has been hard at work,
trying to develop a brand new kind of condom
made of vulcanized rubber.
We're still mostly talking about very old fashioned
technology involving sewing together
bladder from goats or sheep.
But then we get into manufacturing using rubber.
When we think about these early used condoms, right?
It was thick.
It was kind of heavy.
And one size, well, it doesn't necessarily fit all.
You actually had to measure it to your penis
and cut it to the right size
before actually adding the ribbons and tying it on.
These older condoms were reusable.
So you would wash them and you would let them dry out
and reuse them, put them in a box,
and then you would use them again until they disintegrated.
At the time,
rubber condoms are virtually unknown.
So instead of putting them in plain paper packaging,
he brands them and he uses a symbol of power and virility
taken from ancient Egypt.
The Pharaoh, Ramses.
Julius Schmid was very clever at marketing
and selling his condoms.
They also had extremely appealing graphics.
Westerners had begun to do archeological excavations
in Egypt, and this had sparked a real Egyptology craze.
And so when Julius Schmid created the Ramses condom,
he was really buying into a bigger trend.
At the beginning of the 19th century,
Napoleon's forces brought back a treasure trove
of Egyptian relics, including the famed Rosetta Stone.
It unlocked translation of ancient hieroglyphs in 1822,
igniting a craze called Egyptomania.
It influenced everything, from art to architecture,
and interest remains high well into the 20th century.
When we look at the early names for these condoms,
they're really projecting onto non-White
non-Christian people, an unbridled sexuality.
So people are reading stories.
They're seeing burlesque sketches
and early films in which people are wearing turbines
and there's harems, and basically this idea of orgies,
and all this kind of fun.
Branding and marketing is critical
because when that consumer thinks about your business,
you wanna have one thought coming to their mind.
So for example, Apple computers, it's about innovation.
For UPS, it's about being on time.
You gotta have that one thing
that consumers will remember you by
in a very crowded market.
To avoid being busted again,
rather than selling his Ramses condoms out of his apartment,
Schmid decentralizes,
selling them out of a network of apartments,
hotel rooms and back alleys, all over the city.
Julius Schmid saw an opportunity
and he took advantage of the opportunity.
His condoms tended to be even more reliable.
So if you were looking to buy a good condom,
you bought one of his products.
He came to the United States from Germany
and like many immigrants,
he built a business from the ground up
and he was an incredible success story,
an innovator and an entrepreneur.
Soon, Schmid is selling nearly 100,000 condoms
a day, but still working outside the law,
there's no way he can expand for now.
Condoms have been illegal for decades.
Now booze seems headed that way too.
And Jack Daniel's brash nephew, Lem Motlow,
wants to implement a risky new strategy.
Currently our warehouses are stocked at 65%.
Now I wanna get that to 95% by the end of the year.
Most distillers didn't think,
well, the temperance movement,
if it was actually going to stick.
Lem Motlow saw it coming, and so he ramped up production.
But we're already producing
as much as this distillery can handle.
Which is why I started next week,
we'll begin diluting the mixture by 5%.
Customer won't know the difference.
But the quality of the production started to suffer.
Did you run that by your uncle?
Lem was a little less brand protective.
Lem was more, "How do we make money off of distilling?"
And Jack Daniel was more,
"How do we make the best whiskey that money can make?"
My uncle put me in charge.
From here on in, y'all report directly to me,
and only to me.
Uncle Jack is many things,
but he is a man living in the past.
I am thinking about the future.
From here on, our top priority is expansion.
Get out.
Now.
You too, George.
Okay, let me make this crystal clear.
Quality is our top priority.
You're excused for the day.
Get out.
Come on Jack, let's be a little bit-
Get out!
By 1908, six states
have banned the sale of alcohol.
On one part it's fear of alcohol
as a essentially sinful thing.
But also we are experiencing the Industrial Revolution
and new ways of working are being developed.
And some of the biggest enthusiasts
behind the temperance movement are employers
who want workers that are showing up on time,
and that's a whole new concept, right?
You don't just show up at work at dawn.
Now we have this thing called the clock.
Half the workers don't show up on time,
the other half sort of trickle in by lunchtime.
They kick off and go have a couple beers at noon.
And so there's a real incentive among employers
to promote temperance as the something
gonna get you into heaven,
but it's also gonna make you a more productive citizen
in this new industrial economy.
In 1909, North Carolina goes dry too,
then Tennessee.
And the changes pour fuel on another movement
gaining steam across the country.
Fighting for a temperance was kind of the first time
that a lot of women enter the quasi political realm
of organizing for a social cause.
The argument was really that alcohol ruins homes,
and we women are the guardians of the home
and of morality and virtue,
and so you should give us the vote.
Because those are the kind of causes
that we're gonna vote for.
So women's suffrage is definitely tied to temperance.
Lem Motlow pushes to sell as much Jack Daniel's
as he can before any more states go dry,
but his uncle has been holding him back.
Lem, can I speak to you a second?
It's important.
What?
Then, on October 9th, 1911.
Your uncle passed away last night.
Jack Daniel dies unexpectedly
of blood poisoning.
I'm sorry.
Thanks for letting me know.
Forged with the help of his friend and mentor,
Nearest Green, Jack Daniel's legacy
is the best selling American whiskey in the world,
available in over 170 countries.
And it helped transform distilling
from barnyard moonshine to a respected American tradition.
Jack Daniel's makes things cheaper and more available.
You don't have to go out to the juke joint
or to wherever, to get a whiskey.
You get it in your store and it looks legitimate,
just as legitimate as your tomato soup.
Now, the threat of prohibition
is looming closer than ever.
Lem Motlow is in charge, and he's prepared to risk anything,
including the brand's quality and reputation,
to cash in while he can,
desperate to keep the company alive.
While anti-alcohol further rises,
the Black Patch Tobacco Wars
have now dragged on for four years.
All right, what else we got?
And Buck Duke's refusal to negotiate
has put him and his American Tobacco empire
under a microscope.
Clear the room.
What is this?
We've been indicted
for violation of the Sherman Antitrust Act.
The Sherman Act is designed to keep companies
from manipulating or fixing prices.
It was sponsored by Senator John Sherman,
all the way back in 1890.
But after years of not enforcing it,
a new wave of progressive politicians
are using it to go after monopolies.
With the presidency of Teddy Roosevelt,
who saw himself as a progressive and a trust buster,
the federal government began to turn its attention
to what people saw as the abuses
of these giant corporations.
Monopolies come to be seen,
particularly by progressive and federal reformers,
as harming consumers, as harming workers,
as preventing the competition
that the American economy would need
to grow in a robust way
and really to concentrate the spoils of industrial activity
in the hands a select few.
The government is suing us.
While the government cracks down
on American Tobacco,
Julius Schmid dodges anti-vice laws
tied to the temperance movement.
His rubber condoms are spreading like wildfire,
but selling them is illegal.
And he's already been arrested once.
I think to be the type of person
to run an illegal business,
you really have to be driven by this belief
that your product or service is so needed
or desired by a community or a population,
that it's worth it to run this illegal enterprise.
Production management will go here, by the windows.
Makes sense.
Despite keeping a low profile,
Schmid is determined to bring his condoms
into the industrial age,
with a brilliant plan to cover his trail.
And, as requested, the...
specialty items
will be produced solely down here,
on the basement level.
Schmid invests all his ill-gotten gains
into a state-of-the-art factory
that'll produce rubber gaskets used to seal perfume bottles.
Don't show these to anyone.
Understood.
With a secret facility for producing condoms.
Schmid is certainly a great example
of an American entrepreneur, innovator,
who combines this spirit of capitalism
with willingness to try new things.
Schmid opens his factory
in Little Falls, New Jersey,
and begins advertising his condoms
as French goods and medicines.
Someone like Julius Schmid,
who is marketing and selling condoms,
he could have argued that he was doing a public service
for Americans by protecting them against disease.
When you think about how a factory,
employing hundreds of people, making an illegal object,
manages to stay out of the courts, out of the newspapers.
There is really only one answer
and that's, they're clearly very popular.
Schmid can now supply all the condoms
New York City needs 10 times over,
if he could keep skirting the law.
Despite his best efforts, Adolphus Busch's attempt
to differentiate beer from liquor is failing.
It was already definitely affecting the business.
It was affecting every brewery.
Some breweries were shutting down.
I'm sorry, son.
Temperance is not going away.
It's inevitable.
Come on, America will never go dry.
Don't be so sure.
At a time when the life expectancy rate was 44,
and years of hard work and no doubt drinking
had taken its toll, his health began to fail.
11 states have now banned the sale of alcohol
and Anheuser-Busch is forced to close down warehouses
and saloons in every one of them.
Drink up
while you still can.
Prohibition is threatening
to bring the entire company crashing down.
Nearly a dozen states have gone dry,
with more threatening to ban alcohol every day.
Anti-vice crusaders are calling for national prohibition,
which would be a disaster for Anheuser-Busch.
You have to think beyond just one person
and the brand itself,
these employ literally the entire town.
And so they were very nervous
as to how prohibition was going to shut that down
because it essentially would kill the economy
for their communities as well.
So great pressure.
And I can't imagine how stressful that might have been.
I can't imagine being in the shoes of someone
who put your blood, sweat, and tears into building a company
and the government changes the rules midway
and it all might be taken away.
That is a whole added pressure
that most entrepreneurs, fortunately,
don't have to deal with.
Have you seen my father?
What?
What is it? - Son,
I'm sorry.
He passed.
On October 10th, 1913,
the man who revolutionized the American brewing industry,
dies of a heart attack.
Memorials are held
at all 36 remaining Anheuser-Busch facilities
across the country,
with countless mourners in attendance.
How Adolphus Busch is not spoken in the same realm
with all of those other business titans
of the late 19th, early 20th century, is beyond me.
He was employing thousands of people
in the city of St. Louis and across the country.
His payroll was huge and it wasn't just in the brewing.
It was in the bottling, it was in the driving,
it was in the design, it was in farming.
It was in manufacturing railroad cars and other machinery.
Will it be long enough to keep the beer fresh?
He just, across the board, had this vertical integration
that other giants of the day have.
When he dies, Adolphus Busch
leaves behind a personal fortune of nearly $60 million,
the equivalent of 1.6 billion in today's money.
We are talking about thousands of bottles a day.
The reason that Adolphus Busch probably isn't studied
with the great captains of industry of his day,
like Rockefeller and Carnegie,
is simply because of the product he produced.
Steel and oil themselves are uncontroversial,
even if some of the business methods used
by the tycoon's work.
Here was a product that had a social stigma,
and it's probably not an easy sell
for the textbooks or the teachers of the land
to teach youngsters about somebody who made beer
as somebody that they should emulate.
August Busch is suddenly on his own.
And the wave of nationwide prohibition
is getting stronger every day.
He took the company
at a moment where his father had built it up
to one of the two largest breweries in the world,
and then this monster, this barbarian at the gate shows up,
and its August's responsibility to try to usher the company
through these really treacherous waters.
While anti-vice crusaders
lobby to shut down the brewing industry,
American Tobacco is fighting federal regulators
on a different front.
Duke's monopolistic practices culminate in a suit
brought by the Department of Justice,
and American Tobacco's lawyers
basically say that American Tobacco Corporation is a person
and as such, it ought to have all of the rights
that an individual does to be free of state regulation.
Buck Duke has fought the case tooth and nail,
all the way to the Supreme Court.
Just tell me.
The Supreme Court confirmed the American Tobacco Company
was in violation of the Sherman Antitrust Act
and engaging in restraint of trade
and non-competitive monopolistic behavior.
And that meant that it was going to be broken up
into its constituent parts.
That will ultimately result
in the dissolution of American Tobacco,
incidentally, on the very same day
that Rockefeller's standard oil monopoly is also dissolved.
Duke is obviously quite upset and in response,
he basically turns his back on the US tobacco industry.
American Tobacco is split into three companies,
Liggett and Myers, Lorillard, and R. J. Reynolds,
which will eventually produce Paul Malls,
Newports and Camels.
Duke devotes the rest of his life
to other ventures and to philanthropy.
He buys Trinity College and endows it as Duke University.
He also starts the firm, Duke Energy,
which provides hydroelectric power
to North Carolina and Virginia.
For better or worse,
Buck Duke is the father of the modern cigarette,
transforming it from a novelty
into the dominant form of tobacco.
And by the time of his death on October 10th, 1925,
he's the third richest man on the planet.
You can't be too sympathetic, because when he dies,
he is one of the wealthiest men in the world.
So if there's compensations for having been broken,
he can cry all the way to the bank,
as the expression goes.
Jack Daniel's
is one of the biggest distilleries in the country
and Lem Motlow's using all its manufacturing might
to crank out whiskey while he still can.
Lem Motlow saw the temperance movement coming,
and he didn't think it was actually going to stick.
There's no way the United States
was going to cut out that much of their budget
by eliminating liquor sales.
And so he ramped up production.
He thought, "There's no way we are going to get shut down."
You wanted to see me.
Days of the five-day work week are over.
I need you and everyone else to work around the clock,
at night's, weekends, whatever.
It's a lot of overtime.
I'll pay.
You can take a calculated risk
when you really know your market.
You need to be decisive.
And I think the best entrepreneurs
really have a fire inside of them,
and I think that fire
can get a person through all the adversities
and all the setbacks that can happen.
It does take a special kind of risk taker
because you never know
when the government's gonna come in to shut you down.
Can I ask what this is about?
Temperance.
Prohibition, going dry, whatever you wanna call it,
it's coming, and when it does, no going back.
You need to increase production.
Push the men as hard as you need to.
If they complain?
Fire 'em.
Even though Carrie Nation's crusaders
are pushing to ban alcohol nationwide,
Lem starts pumping out 300 gallons of Jack Daniel's a day
and adds new brands to the line.
Lem was always a strategic business minded person.
Hey, walk with purpose.
Don't saunter.
It was his idea to go into brandy.
He did release a kind of lower tier brand of whiskey.
Lem selling his own name brand whiskey
and a new peach brandy to maximize sales
while liquor's still legal.
Then, on June 18th, 1914,
a chain of events in Europe leads to a conflict
that'll erupt into the First World War.
Into that!
Move, move.
Go!
Gas!
They don't know it yet,
but it'll be a turning point
for the battle for America's soul
and an opportunity for a whole new empire of vice.
After three years of fighting in Europe,
on April 4th, 1917,
the United States finally enters World War I.
Soon, over 4 million troops are headed overseas,
but they're missing a key piece of equipment.
The irony of it all is when you think about war,
we wouldn't send our troops into battle
without armor, gear, bulletproof vest.
And the condom was like the very first bulletproof vest,
if you know what I'm saying.
The truth is people have always had sex,
people will always have sex.
The goal should have been to provide these men
with protection, but there were concerns
about the morality of young men
engaging in sex outside of wedlock,
especially with women who engaged in sex for pay,
who might infect them with syphilis or gonorrhea.
And so they emphasized the idea of abstinence
or continent, as they called it.
Now, Julius Schmid sees an opportunity
to finally sell his revolutionary
product above board.
Hi, yes, is this the office of the quartermaster?
I manufacture a highly specialized life-saving product
that can protect our troops in Europe.
Condoms, rubber condoms.
Yes, this is a serious inquiry.
Americans, in the early 20th century
have their own cultural and religious and moral frameworks
for thinking about sexuality.
So the idea that they would supply soldiers
with this device
that would enable them to have sex
is really out of the question.
The US isn't willing
to buy Schmid's illicit goods,
but he realizes there are over 25 other countries
sending troops to the battlefield.
Want you to find out which of those countries
are supplying condoms to their troops.
The British were engaged in this war
for a much longer period than the Americans.
And so they actually saw the impact
that venereal disease had on their troops,
and the consequences
of not providing your troops with condoms.
Julius Schmid was willing to provide condoms
to the other countrymen that were fighting in World War I,
and he was really able to grow his business
while he waited for the United States to catch up
with all these other countries.
Gonorrhea and syphilis
are the most common sexually transmitted diseases
in World War I.
The first results in a painful infection,
but the second could be fatal.
And while they're both treatable,
recovery could take weeks,
keeping soldiers on the sidelines.
At any given time,
there was about 15% of our soldiers
who had a venereal disease.
That's something like 18,000 men on any given day.
Now, if you consider
that if United States had just embraced condoms,
perhaps World War I could have been over sooner
because we would've had more men on the battlefield.
By 1918, more and more American troops
are shipping out to the front lines,
causing a major shift at home.
There are suddenly work shortages
in major cities across the north
and African Americans flock to fill the void,
touching off the Great Migration.
The Great Migration is a period of time,
really from World War I to 1970,
in which millions of African Americans
are moving to northern cities and western cities.
The African Americans dreams of migrating,
going to new places, are fueled by economic conditions.
The situation in the south has really deteriorated
in the first decades of the 20th century.
You still got the horrific experience
of African Americans or sharecropping
and tenant farmers.
You have the reemergence of the second Ku Klux Klan.
And then you've got voter restrictions,
which are really tightening it down
on the ability of African Americans to vote in the south.
And so African Americans are just fed up and they leave.
During World War I, factories need laborers
because during a war, immigration slows down,
those jobs are available for African Americans,
really for the first time.
During World War I alone,
nearly half a million African Americans move north
and a million more follow over the next decade.
By 1920, New York's black population will increase by 66%,
with 200,000 people settling in the neighborhood of Harlem.
And in one tenement, a recent immigrant
from the West Indies named Stephanie St. Clair
is struggling to make ends meet.
Hey, hey.
That's it you're out.
I paid my rent.
Not on time.
Stephanie St. Clair is born in the 1890s
in the French Caribbean in Guadeloupe.
She makes her way to New York City
with dreams of economic stability.
She's really ambitious.
You can't do this.
Hey, hey, get away from that.
She is working as the domestic worker or as a seamstress.
And this is not the type of job that any black woman wants.
This is an occupation that you can barely make rent.
Where am I supposed to go?
It's not my problem.
Already destitute,
St. Clair is now homeless as well.
- All right. - All right.
Next.
Then we get 4-5-6.
4-5-6, uh-huh.
Then you get 6-2-2.
6-2-2, okay.
She doesn't know it yet,
but a game she discovers in Central Park
will make her one of the richest women in America,
and eventually, give rise to an industry
worth $105 billion, the state lotto system.
But it'll also put her on a collision course
with the New York mafia.
It's the 1910s.
The Yankees have just moved to town.
Motor cars compete with horses for space.
It's the industrial capital of the nation.
But in Harlem, there's an underground,
hidden in plain sight.
Give me 500, will you?
You want 500?
Harlem becomes a kind of vice zone,
whether it's alcohol, prostitution, gambling.
Some of that is the result
of the practices of the New York Police Department.
Sort of letting the city know that certain things
will be tolerated in Harlem
that won't be tolerated elsewhere.
And in fact, in many instances,
local police are collecting bribes
from illegal activities that are going in Harlem.
New York City was overrun with corruption.
For instance, you wanted to leave your push cart
on the lower east side,
technically only supposed to keep it there for 15 minutes,
they paid a 25 cent bribe to keep it there all day.
There was no overnight parking allowed in New York City
because people would use the bathroom underneath it.
You bribed a cop to park.
You bribed a cop to keep your saloon open after midnight.
You bribed a cop to look the other way
at the door of your brothel.
It's a lawless world, fraught with danger,
and full of possibilities.
So, because people don't have access
to opportunities in the aboveground economy,
a lot of residents of Harlem
seek out economic mobility in an underground economy,
doing things outside of the law.
How you doing, brother?
Can I get a 7-1-9?
Okay, 7-1-9.
That's it? - Yeah, that's it.
Okay, cool.
Appreciate you.
The heartbeat of Harlem's illicit economy
is an illegal lottery game known as a numbers racket.
People can play for as little as a penny,
and almost everyone in town does.
The game is also known as the poor man's lottery.
Players selected three digits between zero and 999.
The winning three digit number
is selected from each day's newspaper,
randomly pulled from published interest rates,
stock market closing numbers,
even the results of horse races.
And the numbers racket isn't just the lottery,
it's Harlem's defacto underground bank.
You have it going, all right, buddy?
Thanks a lot, appreciate it.
It was difficult if not impossible
for Black arrivals in New York to access the banking system.
So if you want to start a business,
it is going to be very, very unlikely
that you're gonna get a bank loan.
So you need to turn to community sources
in order to gather up the money.
In some ways, this is both the stock market
and the banking system of Harlem.
Stephanie St. Clair has gone from homeless
to a steady job at a local numbers game
called a policy house.
I was wondering if you might be hiring?
I'm a quick learner and good with arithmetic.
$10, non-negotiable if you can start today.
Now, she doesn't just help run the game.
She also plays it.
How many today?
I'll take three.
And her fortunes really change
when her number hits.
And that resulted in $1,000,
which is a lot of money in 1923.
And Stephanie, she is a dreamer,
she's really ambitious and goes after what she wants.
For those who are living on the margins,
vices are a big part of their everyday existence,
and they also offer a pathway to economic success.
A criminal enterprise is a way
that people can achieve a part of the American dream.
There you go.
This is only half.
The numbers banker is also known as the policy banker
or if they're really big time,
meaning they have a large bank,
lots of money, lots of employees,
they're also known as the Kings of Harlem.
And the banker is really the central player
in the operation.
He is the one who puts up the capital,
to establish the bank.
You're the fourth one to hit today.
That's as much as I can give you.
You can't be serious.
It's the best I can do.
They're referred to by various names.
Sometimes they're called Policy King.
Sometimes they're called Numbers Barons.
And when they find themselves with too large a hit,
they'll end up not honoring every single winning bet
that has been placed with them.
I'm not leaving here without my money.
All of it.
What are you gonna do?
Go to the cops?
You bribed a cop to let your illegal numbers game go.
And that money was then given to the police captain
who gave it to the superintendent
who gave it to the local Tammany politician
and it got kicked all the way up to Boss Tweed.
Tammany Hall's like a synonym for corruption.
And you really think I'm gonna believe that you can't pay?
You can push around the other girls here.
Not me.
She is a risk taker and someone who is tough
and someone who just won't back down.
I don't think you hearing me.
Take it or leave it.
The experience lights a fire
in Stephanie St. Clair and her drive
will someday bring the numbers racket
out of the underground,
turn it into a government backed game
that generates over $100 billion a year.
But first she'll need to take over Harlem to do it.
For over 18 bloody months,
the US has been fighting in World War I,
and Julius Schmid is cashing in,
by supplying Allied troops with condoms.
While the other Allied forces were being provided condoms
to prevent sexual transmitted diseases,
Americans were suffering badly from it.
Then, on November 11th, 1918,
the war comes to an end
and over 2 million veterans return home to the US,
bringing new habits they picked up overseas.
While he was producing those condoms for other countries,
the other countrymen in that war
were teaching Americans about the benefits of condoms.
Thanks in large part of Julius Schmid,
the government is faced with overwhelming evidence
of condom success,
preventing sexually transmitted infections,
turning the tide in favor of birth control advocates
like Margaret Sanger.
Margaret Sanger was the first person
to open a birth control clinic in the United States.
She really believed birth control
should be the first route,
but the anti-vice movement was afraid of contraception
because they thought it facilitated vice.
They thought it would allow more men to go to more brothels
with less fear of VD.
And she and her husband both got hounded.
She was actually arrested.
The same year the war ends,
Sanger wins a landmark decision
in the New York State Court of Appeals.
Her clinic can now legally distribute condoms.
Condoms finally become legal with a catch.
Condoms are legal as a prevention against disease,
but they're not legal as a contraception.
Of course, that's a tremendously vague idea.
You can't tell if someone is buying the condom
to prevent disease
or they're buying the condom as a form of contraception.
So there tended to be a lot of moralistic discussions
about how people use the condoms.
That was really up to them.
Soon, nearly 30 states legalized condoms
and Julius Schmid's sales skyrocket,
generating $900,000 every year,
the modern day equivalent of 15 million,
Schmid's decades of work,
bringing condoms out of the shadows and into the light.
In the 1920s, the US birth rate drops by half,
preventing countless unwanted pregnancies,
saving thousands of lives each year
and earning him the nickname, the King of Condoms.
♪ It's the time of our life ♪
When you really think about condoms today,
this man played a huge role
in helping the United States as a society, as a nation,
understand the importance.
Condoms have created an opportunity
for people to make choices
about their bodies and their health.
I think that the condom
is actually a symbol of freedom in America.
Schmid's success propels condoms
to full nationwide legalization in 1965.
His business is eventually purchased by the Durex company.
And today the products he helped pioneer,
are part of a $10 billion industry.
While contraception is becoming more accepted,
the calls to ban alcohol are reaching a fever pitch.
Now the temperance movement saw an opportunity
during World War I to basically make sure
they not only delivered their message,
but now their message was wrapped
in a giant American flag.
Anti-German sentiment, during World War I
is converging with this prohibition sentiment
because as Germans are seen as kind of nefarious
and scary and anti-American, well,
they're connected in the popular imagination to beer.
That provides this basis for saying, "Well,
we need dry cities, this is a German thing,
and we've gotta stamp that out."
You have the push for constitutional limit
to outlaw alcohol consumption or out sale of alcohol.
And it's successful.
And then by 1918,
you had the formal passage of that amendment,
which becomes the Volstead Act.
On January 16th,
alcohol becomes illegal in the US,
and Lem Motlow's Jack Daniel's distillery grinds to a halt.
The strategy of ramping up backfired,
because he had now sunk all of his money into a product
he could no longer sell.
And so all of the capital that they had was in danger
and so Jack Daniel's started to really teeter on the edge.
Motlow has spent the last few years,
cranking out whiskey at a breakneck pace.
And he's sitting on 50,000 gallons of it in his warehouse.
That was kind of the moment
that everything sort of crashed in around him.
And at that point, he had no idea
how he was gonna run his business.
Then, he gets a visit
from an unscrupulous entrepreneur,
named George Remus.
Mr. Remus.
Come on in.
A pleasure to meet you.
Please.
There were some loopholes in the Volstead Act
where you can sell whiskey as long it was medicinal.
George Remus was a lawyer and a pharmacist,
so he could see both ends of the spectrum.
Oddly enough,
there were a lot more scripts being written for whiskey
as medicine, after prohibition hit.
So, what's your offer?
How much?
250 a gallon.
250?
You're kidding, right.
I can sell for five times that.
Well, technically you can't.
George said, "Let me buy a stake
in your Jack Daniel's warehouse
and I can deliver it as medicine."
I mean, the market's not what it used to be,
not the medicinal market anyway.
And this is all above board?
100%.
The only way this deal will work
is if you take the whole lot,
50,000 gallons, all of it.
I'll have the paperwork drawn up
and sent to you in the morning.
Motlow had no choice.
Nobody wanted that whiskey, going into prohibition.
So he did what he had to do.
Motlow can legally sell his whiskey
to George Remus, a licensed pharmacist,
but only at 50% less than the pre-prohibition price,
but it's better than nothing.
All across the industry, other companies aren't so lucky.
Clearly prohibition came
and that translated into the closure of thousands of saloons
and the shutting down
of hundreds and hundreds and hundreds of breweries.
You could look at a graph of breweries in 1900
and the number just goes straight down.
August Busch tries to pivot away from Budweiser
to stay afloat, but so far he's grasping at straws.
Once prohibition happened,
Anheuser-Busch ended up making everything
from boats, to ice cream, to soap.
I mean, anything to stay alive.
Just like Lem Motlow's got a stockpile
of Jack Daniel's in his warehouse,
August Busch has a surplus of hops and barley
gathering dust.
And so I can't manufacture it.
I can't sell it.
So I'm forced to sit on a stockpile of ingredients
I can't move.
There's gotta be some work around.
But that's it.
What if we just sold the ingredients?
It's not illegal.
Technically, no, it's not.
The constitutional amendment simply forbids the sale
and manufacture of alcoholic beverages,
but there was nothing to prevent someone
from going to a store and buying packets of yeast
or packets of malt and taking them home and making beer.
What Busch was hoping was
that they would be able to sell the ingredients
to consumers who were gonna go home and make beer.
August Busch may have figured out a way
to sidestep prohibition,
but it's a strategy that will soon draw the interest
of one of the most notorious gangsters in American history.
Prohibition's been in effect for more than a year,
at least according to the letter of the law.
You had people drinking in their homes.
You had speakeasies.
And there was also a lot of corruption there.
Cops were being paid off
to kind of let certain places operate.
The irony is that President Harding, who is a dry,
keeps this room in the White House for his cabinet
that's filled with liquor
that he's purchasing from a moonshiner,
and that's clearly illegal.
So he's pushing a national policy,
which is enforcing prohibition,
and yet the reality is that the moralism
that you hear political leaders preaching from on high,
in no way resembles what they were doing
in their private lives.
The government seizes 140,000 illegal stills
a year, and confiscates over a million gallons of alcohol.
But by the 1920s,
it's estimated that the most successful bootleggers
are raking in over $100 million a year,
the modern equivalent of half a billion.
Because you've now pushed it underground,
you have organized crime.
And you have a new group of leaders,
Lucky Luciano, New York,
Joe Bonanno, New York,
Al Capone in Chicago.
The suspicions are that almost half of the cops in Chicago
were dirty, 'cause you have so much money
involved in alcohol.
They're involved in the transport and the sale of,
and turning their blind eye to all of this stuff happening.
So it's creating criminal activity by the people
that are supposed to protect us from criminal activity.
August Busch is skirting the law,
selling brewing ingredients instead of beer,
but he's barely scraping by.
Can I bother you for a second?
We had a big order come in this morning, and I mean big,
That's the kind of order we want, isn't it?
The order's from an Al C. out of Chicago.
You follow me?
Al C.?
There are so many stories floating around
about breweries who were dealing with criminals
like Al Capone.
For me as someone who has spend a lot of time
thinking about the Busch family.
It's hard to imagine
that he would've risked the reputation of the company,
but it's entirely possible.
Some of the greatest mobster we've ever seen
had brilliant entrepreneurial minds.
Legal or not, when you're able to create that much wealth
and make that much money, you have to be smart.
Jeff Bezos found out what people needed
and what they wanted, and he came to them
with a solution that was very profitable to him.
Al Capone was no different, you know.
I mean, he was operating illegally and breaking the law,
but he was seeing the world
through the eyes of his customers.
And he was able to give them something that they all wanted.
I pretend like I never saw the order come in?
Fill the order.
Just don't mention this to anyone.
You can have Al Capone tell the American people,
"I'm just a businessman.
I give the public what the public wants."
But when that comes with corruption,
at it's core is this fundamental fear
about the very soul of America.
While August pushes the limits of the law,
George Remus has a deal to sell Jack Daniel's
as medicinal whiskey.
Now, that whiskey was being guarded
because you weren't allowed to just take barrels out
and sell it.
Hurry up, keep it quiet.
George Remus, he was going in and doing a strategy
that most teenagers do when they're kids,
which is take some of the whiskey, replace it with water
and then sell the whiskey that he was taking out.
Come on, let's go, let's go.
Remus drains 50,000 gallons of whiskey,
worth the modern equivalent of nearly 60 million bucks,
then fills the barrels with water
so authorities won't notice.
Then he doubles down, stealing his own dummy barrels,
and putting in insurance claims for the losses
and nobody's any the wiser.
His illegal hooch is part of a burgeoning prohibition era,
underground economy.
There's not just the consumption of alcohol
to profit from.
There's like this whole underworld of vices.
And so you see connected to drinking,
gambling rings and different kind of gaming houses,
prostitution, all of these vices.
And in Harlem,
Stephanie St. Clair wants her piece of the pie
and she's willing to make a huge bet on herself to get it.
There are a lot of women betting in the game.
Many, many women are working
as a kind of middle management in the game,
but it is very rare to see a woman who is banking the game,
who really rises to the top of a numbers organization.
St. Clair pours everything she earned
working for the policy kings into opening her own game.
And she incorporates modern technology, like phones
and adding machines,
making hers the most efficient place in town.
Stephanie St. Clair,
who was one of the first ones to embrace the telephone,
to collect customers bets for the numbers.
Instead of having a series of runners
go around to people's homes
to actually collect their bet for the day,
this was much quicker.
And plus it had saved her a lot of money
in having to employ runners.
The one thing that's clear is that she is innovative.
She really proves herself to be just relentless.
In some ways, her numbers operations
reflect accounting firm.
There's a lot of people tallying things up.
Within a year, St. Clair's policy house
is raking in the modern equivalent of
$4 million annually,
making her the first and only,
policy queen, in New York.
She is the numbers queen in Harlem.
You have a Black immigrant woman
who dominates a male dominated game.
Like this is someone
who is stepping outside of her place, right?
So in many ways she becomes this local celebrity.
Her fame is spreading.
Soon, the whole underworld will know her name
for better or worse.
A few hundred miles away,
Lem Motlow has agreed to a perfectly legal deal
with George Remus.
Exactly, that's what I told him.
Let me call you back.
Can I help you, gentlemen?
We're gonna need you to come with us.
What is all this about?
You are under arrest
for violating Section 37, Article 2 of the penal code.
What?
What are you talking about?
The federal agents guarding the Jack Daniel's warehouse
recently made a startling discovery.
All the barrels are filled with dirty water,
but the feds have no idea that George Remus is to blame.
Shut up and walk.
And on June 7th, 1926,
Lem Motlow is charged with violating the Volstead Act,
putting his legendary uncle's legacy in jeopardy.
In a time when women aren't welcome in
boardrooms and many minorities are shunned,
thanks to her wildly successful numbers racket,
Stephanie St. Clair is one of the richest,
most powerful people in Harlem.
Let's see what you have for me today.
She lived at 409 Edgecombe in Sugar Hill,
and this is a building where doctors, lawyers,
prominent race reform leaders like W. E. B. Du Bois lived.
So she definitely rubbed shoulders with those folks.
Stephanie St. Clair is someone
who is always dressed to the nine.
Fur coats, cars, property, the latest cloche hats,
all of that denotes a sign or symbol of wealth.
Don't tell me what they cost.
The really interesting thing about St. Clair
is that she crafted a narrative
that showed her as this kind of wealthy,
kind of badass business woman.
St. Clair isn't just rich,
she's also one of the biggest employers in the borough.
St. Clair's operations are very, very large,
hundreds and hundreds of people.
People working in the counting rooms
and those people are making a decent living.
And there has to be a degree of security
because you're handling large amounts of cash.
Some people need to coordinate political relations,
relations with the police.
You're light.
Excuse me.
Prices went up last month.
I didn't agree to that.
Greed and corruption is everywhere.
It's the local government.
It's judges.
It's the police.
You think you can come in here and intimidate me?
Here's my counter offer.
You can either take the money
I've been gracious enough to give you every week,
or I could contact my friend down at the Times
and tell him about your little extortion ring.
Wonder if he might be interested in a story like that?
Are you threatening us?
Don't tempt me.
St. Clair hatches a plan
to expose police corruption
by naming names to the press.
It'll make her a hero to the Harlem underground,
but put a target squarely on her back.
August Busch can't make his signature Budweiser
in the face of prohibition,
and he's barely keeping Anheuser-Busch above water.
Then, on October 24th, 1929,
after years of unchecked growth,
the stock market crashes, shedding 30 billion of value,
and throwing the United States economy into chaos.
In the 1920s crash of the stock market.
People are buying stocks
because they believe there's a way to make money, stocks.
You don't have to work, make your money work for you.
Americans have always been interested in this.
And I think in the kind of thrill of gambling,
the idea of quick money,
that there is a possibility that you can walk out of a room
in a much better economic state than you walked in.
Now that is not the truth for most gamblers.
Within a year,
12 million people are out of work
and 12,000 more are losing their jobs every day,
20,000 companies go bankrupt,
but where most entrepreneurs see disaster,
August Busch sees opportunity.
The Great Depression is compounding the pain
of prohibition and 1,200 of the 1,300
major American breweries have shut down.
But with 25% of the workforce unemployed,
income tax revenue is plummeting,
and August Busch sees a new angle to save his business.
Anheuser-Busch is an American institution.
And we pay more than $3 million in taxes every year.
Prohibition didn't stop people from drinking.
It made them just figure out other ways
to get their alcohol.
It wasn't regulated.
So the legal vendors got penalized, right?
The government doesn't get to tax it.
People who are drinking it
don't know whether it's safe to drink or not.
No one's winning, right, except for the criminals.
I mean, you wanna talk about finding tax revenue
to pull this country out of the depression,
legalize beer, regulate it,
tax it.
By 1932, the argument being made about beer
was that it would be better for the country
to end prohibition to bring the tax revenue back.
I'm just asking you to think about it.
You too.
I cannot stress how much revenue
alcohol brings to the Federal Treasury.
It is one of the most taxed products in the United States.
When you're drinking a bottle of beer,
you're drinking a lot of taxes.
Busch publishes a pamphlet
called "An Open Letter to the American People,"
claiming that repealing the 18th Amendment
would bring back 1.2 million jobs overnight.
Even people who had originally
funded the prohibition movement,
like the DuPont Brothers
and officials with big motor companies in Detroit,
were joining organizations
that were lobbying to repeal
because it had just become clear that it wasn't working.
It's also worth noting
a point that I think most Americans don't realize,
the prohibition amendment was never voted on by the voters.
All Busch could do now,
is hope his tactic works.
The man who runs the Jack Daniel's distillery,
Lem Motlow, has more to worry about than just prohibition.
After being arrested for violating the Volstead Act,
he's beaten the rap.
When George Remus was taken to federal court
to answer for all the bootlegging that he did,
he didn't name Lem.
But soon finds himself
right back in the middle of a court case.
Lem ended up getting in trouble
for shooting a conductor on a train.
So there was a Black conductor
saying, "Where is your tickets?"
Lem didn't feel that he needed to answer that question,
so another conductor came in and asked the question again.
This time he was a White conductor
and Lem pulled a weapon
and ended up shooting the White conductor.
♪ If you lock, a dragon in a cage ♪
♪ He'll do anything he needs to get away ♪
The fate of Lem Motlow
is now in the courts hands.
Stephanie St. Clair
blasted corrupt New York cops in the press.
Because St. Clair was really challenging police power
and authority, the cops had it out for her.
But despite her public fight,
she still relies on police looking the other way
to keep her business going.
Excuse me, ma'am.
I believe you dropped these.
My, my, my, what do we have here?
What is this?
Stephanie St. Clair, you're under arrest
for the possession of number slips.
Are you kidding me?
Despite having the cops on their payroll,
Stephanie St. Clair is arrested in December of 1929.
You'll never get away with this.
Who do you think a judge is gonna believe?
Several cops claimed that she has number slips.
I promise you'll regret this.
There was other people who saw what happened,
who said that they didn't see any number slips.
I never break my word.
Let's go.
Stephanie St. Clair's arrest
is meant to discredit her and reestablish police authority,
but instead of bringing the numbers racket in line,
it'll touch off a violent gang war
with the most dangerous mobsters in New York.
I can work with that.
Looks like-
They promised more next week.
The battle for the nation's soul
isn't over yet.
Legalize beer.
And a new era in American vice begins.
Deal me in.
You're over the limit.
I said, deal me in!
Excuse me.
A new kind of magazine.
Full nudes.
Have you lost your mind?
Completely changes the game.
I'll pay cash.
A new battle for tobacco supremacy.
What the hell is smoker's cough?
A public relations nightmare.
Gives rise to an American icon.
We call him the Marlboro man.
You gotta do what's best for you.
The future of the state lotto system.
Shot in the head, left out in the street.
Ends up in the hands
of a notorious New York mobster.
We're gonna shut 'em down.
And it all leads to a desert town
in the middle of nowhere.
Las Vegas.
What does that even mean?
No idea.
That will become known
as Sin City.
It's gonna be spectacular.