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The Capone Connection
An excerpt from Crossing the Line

The Bronfman brothers of Seagram Distillers fame made their fortune selling booze to American gangsters during the U.S. Prohibition years. In this excerpt from “Mobsters and Rumrunners of Canada,” author Gord Steinke recounts a meeting between the Bronfmans and the notorious Al Capone at a hotel in the small Saskatchewan town of Bienfait.

Hat

Sam Bronfman met Capone, Schultz, McGurn and Accardo in the White Hotel lobby the afternoon after the three arrived.

“Nice to meet you, gentlemen, “Sam said, extending his hand. “This is my brother Harry. Welcome to Saskatchewan, home of the best whiskey this side of the St. Lawrence.” Capone shook Sam’s hand. The steely-eyed gazes of the other gangsters sent a chill down Sam’s back. He wondered if he’d made a mistake cutting a deal with these hardened criminals.

Sam and Harry drove the gangsters out to one of their three Boozoriums south of town. Capone couldn’t believe his eyes. Here, in the middle of nowhere, 1000 miles from Chicago, was a warehouse filled with hundreds of barrels of whiskey. For three days, Capone and Bronfman talked business. Sam promised he could deliver as many cases of whiskey as Capone wanted to buy. Capone agreed to purchase the highly prized Canadian whiskey. Twenty-four four-quart bottles of booze were packed in burlap sacks stuffed with straw and then packed in barrels. Each barrel cost the Bronfmans $24 to make, and Sam sold a barrel to Al Capone for $140.

Capone bought a carload of 14 barrels and agreed to buy a similar amount weekly. An instant bond forged between the two men. They had similar rags-to-riches stories, and both were feared for their violent tempers. Each came from dirt-poor immigrant families. Capone’s mother and father came from Italy to the United States, and in 1889 Bronfman’s parents had fled Russia, where making whiskey was a way of life. The name “Bronfman” literally means “whiskey man” in Yiddish, and so the brothers simply continued the cultural and family tradition.

Bronfman and his brothers had started from scratch in Yorkton, Saskatchewan, making whiskey in a warehouse. They were soon making a healthy profit selling liquor across Canada. But their business really boomed when they began selling whiskey to American bootleggers during Prohibition in the 1920s. The Bronfman empire was born and continues to flourish today under the Seagram’s name. It’s not known exactly how much the Capone-Bronfman deal was worth, but by today’s standards it was likely in the millions. The two formed a partnership and a friendship that lasted more than 10 years.

But illicit dealings inevitably come with violence. One incident that happened in the area four years earlier highlights the ruthlessness and lack of respect for human life that these 1920s pirates showed for anyone who got in their way. The brutal murder shocked the small prairie town and led to a frustrating series of dead ends for the RCMP.

On October 4, 1922, the body of Paul Matoff was found on a back road about two miles south of Bienfait. He’d been killed with a single shotgun blast to the chest. Matoff was the Bronfmans’ brother-in-law and family business partner. It was Matoff who often conducted the business meetings with the mob and then arranged the booze exchange with the American gangsters. His murder was never solved, but the talk around town was that a Chicago gangster gunned him down over a booze deal gone bad.

Flapper Girl

A Roaring Twenties "Flapper Girl" removes a flask of liquor from her Russian boot. It's believed that the term "bootleg" originated from the practice of concealing a flask in high-top boots. U.S. Library of Congress

But there was no violence when Capone and Bronfman shook hands and sealed their deal on that warm summer night in a field south of Bienfait. It looked more like a gentleman’s agreement than a ruthless negotiation for an illegal operation that could put them both behind bars. Capone could now run imported and locally distilled booze from the Boozorium in Saskatchewan to Minneapolis and then to his home base in Chicago using cars, trucks and the Soo line. The gangsters celebrated the new transaction with their Canadian hosts that night in the hotel bar, toasting their continued good health.

The next evening, Dutch drove the gangsters and their luggage back to the Estevan station. At midnight, they boarded the train and carried on west to Moose Jaw. Capone hoped to strike an even bigger booze-smuggling deal there in the booming prairie town with the help of his friend Diamond Jim Grady.

It was just after midnight, and the rail cars were dark as the weary passengers tried to sleep. As the dark, prairie towns rolled by—Milestone, Rouleau, Regina and Briar Crest—the three men said goodnight, settling in for some sleep on the final leg of their journey on the Soo Line through Saskatchewan on The Mountaineer #998.

“That son of a bitch better be there when we pull in.” Capone struggled to get his suitcase out of the luggage rack above his seat as The Mountaineer arrived at Moose Jaw station just as dawn was breaking on the morning of July 1. They’d been on the train for more than five hours, and Capone was sick and tired of being treated like a second-class citizen. While his fellow Americans were getting ready to celebrate July 4 as best they could without any legal booze, Tony and Jack were getting their gear out of the luggage racks and preparing to get off the train.

The “son of a bitch” Capone was referring to was Diamond Jim Grady, whose diamond smile shone in the bright prairie sun. Every two-bit huckster, moonshiner and five-and-dime hood knew he was a member of the Chicago mob, but they never really expected to see the big boss in town. Grady was responsible for single-handedly running the bootlegging business in the Moose Jaw area. He made sure hundreds of gallons of booze made it to the train station via the underground tunnels and then on to the U.S. He’d had his run of the town for the past five years and walked around as if he owned the place, but even he never expected to see Al Capone.

Diamond Jim Grady used to be one of Capone’s top triggermen in Chicago but got into some trouble with the boss when he started dating one of Capone’s ex-girlfriends. When Al found out what was going on, he sent the pretty boy to the regions, as far north as the Syndicate’s influence would take him. It was either that or risk torture (usually by a lit cigarette), a bullet in the stomach and to be left bleeding to death on some Illinois back road. Diamond Jim was flattered, but he was nervous and afraid now that Scarface was in town.

Diamond Jim was no lightweight gangster. He’d been accused of 11 murders, five in Canada from 1922 to 1924 and six in Chicago in 1919. Rumors circulated that he’d pistolwhipped a man to death in a bar fight in Minneapolis for cheating at cards. But it had been years since Diamond Jim had seen Al Capone face to face, and the man he watched step off the train looked nothing like the man he remembered.

This Al Capone looked like a vicious bulldog dressed in the height of fashion. He wore brown and cream patent leather shoes, and his coat was open with the collar up and his fedora pulled low. Jim could see a diamond and gold stickpin clasped to a yellow and green checked tie. The Big Fellow stepped lightly off the train and looked directly at Diamond Jim, who was standing on the platform. Two goons quickly stepped down behind Al and looked around at the wooden buildings and unpaved roads. They were a long way from home.

Before any formalities could be exchanged, Diamond Jim quickly ushered his visitors to the west side of the platform. An old Asian man and his teenage son were waiting for them. They grabbed the gangsters’ bags and opened a door to what looked like an old coal chute. The six men stepped in and walked into a damp tunnel lined with pitted cement. The old wooden stairs were dimly lit by a single light bulb hanging from a frayed electrical cord. About 15 steps down, they stopped, and looking up from the dirt floor, they saw a long, dark brick-lined tunnel ahead.

“Welcome to The Jaw,” said a nervous Diamond Jim with his best smile, as he stuck out his hand. “Nice to see you guys.” Tony and Jack could have cared less, but Al greeted him warmly. “I hear you’re doing a great job here, Jim,” Capone said, pumping his hand, “but I want you to do more. We need to double the whiskey coming out of here.”

“We’ll talk, Mr. Capone. Right now, follow me. These old Chinamen tunnels will take us to any hotel in town.” The Moose Jaw tunnels were built in the late 1800s by Chinese people who lived under the stores and hotels illegally. Many worked on the CPR. It was the time when many western Canadians were afraid of what was known as the “yellow peril.” Ottawa had brought in restrictions on the number of Chinese immigrants that were allowed into the country so as not to take away too many jobs from Canadians. The government even imposed a head tax on every Chinese immigrant.

Many of these workers were unable to afford the tax, so they went underground to hide from the authorities. Eventually, many of the immigrants smuggled in their wives and even raised families in the dark secret tunnels under Moose Jaw.

Tunnels of Moose Jaw

History comes alive in the Moose Jaw tunnel tour. Actors in period costumes take you on a journey back to a time when Moose Jaw was known as "Little Chicago." The Tunnels of Moose Jaw

However, by the 1920s, decades after the railroad was completed and the workers long gone, the tunnels took on an entirely different purpose. With Prohibition firmly enacted in the U.S., Moose Jaw became an American gangsters’ haven. The Moose Jaw CPR station was a major stop along the Soo Line that linked Canada to the U.S., and it quickly became the perfect place for mobsters and rumrunners to smuggle alcohol onto the trains and ship it south of the border.

Jim warned the men to watch their heads as they made their way down the long, dark tunnel. They walked for a least a city block before they heard music and laughter.

“We’re under the Royal Hotel; our stop is just under the street at the Brunswick,” said Grady, as they walked. “How long ya in town for?” Diamond Jim had to duck his head to direct his question back at Capone.

“Long as it takes,“ was the only reply he got, as the tunnel took a sharp left, and they trudged through the dim light.

“We’ve got 23 hotels and nightclubs in town. We like to call The Jaw “Little Chicago.” We’ll have a good time.” The two triggermen looked at each other and rolled their eyes. Once they were under Royal Street Jim stopped at an alcove and banged on a heavy wooden door. It swung open without a sound, and the four men climbed stairs that led them to a door in the Brunswick Hotel’s kitchen. The hotel would be home for the next few days. Grady took his American visitors up the backstairs to their rooms. When Capone got to his door, he said he wanted to get cleaned up, take a nap and relax for the rest of the day.

Town of Moose Jaw

"Little Chicago," as Moose Jaw, Saskatchewan was know when bootlegging, prostitution and gambling thrived in the prairie town during Prohibition. The Tunnels of Moose Jaw

The next morning, the Chicago mob boss got right to work. Grady met him at his room and took Capone down the backstairs, into the tunnels and to a meeting room in the basement of the Royal Hotel. The six Canadian thugs who ran the bootlegging operation for Diamond Jim rose out of respect when Capone entered the room. They were surprised by how short and pudgy the legendary gangster was. Nonetheless, they knew that they were in the company of a living legend and paid him the utmost respect.

“Welcome sir.” A wiry Irishman stepped forward. “It’s an honor to have you in our town. My name is Darcy, but they call me Shorty.”

“Why don’t you introduce the guys to Mr. Capone, Shorty?“ Grady said, as he poured a couple of drinks. “Anything you need you just—” Capone cut him off.

“Lookit. I’m not here on a pleasure trip. The reason I’m in Moose Jaw is simple,” Capone told the Grady Gang. “I need you to double the amount of liquor you’re sending stateside.” The awestruck hoods nodded in agreement. They knew that getting the many bootleggers in and around town to increase production was going to be an easy sell. In these tough times, they were more than willing to take Capone’s money. The men shook hands, and the deal was done.

From “Mobsters and Rumrunners of Canada”, © 2004, Folklore Publishing. Used with permission. Media wishing to use this excerpt are asked to contact our for permission. Thank you.