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Rum-runners — three cars heading south to U.S. with liquor stopped in Manitoba by customs agent
Sep 18, 2014

by Bruce Cherney (part 3)
In 1921, liquor bound for the U.S. may have been subject to seizure under an interpretation of the terms of the Manitoba Temperance Act, but by 1924 buying liquor in the province for export was a legal activity, according to a court ruling.
“No offense is committed when liquor is legally purchased through the Manitoba Liquor Commission for export purposes to the United States,” reported the Winnipeg Tribune on June 17, 1924, “even though at the time of seizure it is found in a place ‘other than a private dwelling place’ contrary to the provisions of the Manitoba Temperance Act.”
The ruling was made by Judge Cory of the County Court in the case of P.J. Chapman, an American who had been convicted and fined $200 under the act in the Winnipeg Police Court. Chapman, a resident of California, freely admitted to Manitoba Police Court Magistrate Hugh John Macdonald that the 44 cases of liquor he purchased in Manitoba were bound for the U.S.
When Macdonald originally levied the fine and seized the liquor, he claimed rum-running in Manitoba had to be stopped because it would lead to hold-ups as had occurred in Saskatchewan.
“While I am empowered to take steps against liquor running,” the magistrate said, “even though I know and the police know that it is being taken across the border, whatever measures there are possible for me to take to lessen the practice, I certainly will take.”
After Chapman won his appeal of Macdonald’s penalties, Judge John Garrett Cory ordered that the fine be returned to him as well as the $2,000 worth of liquor that had been seized.
“In effect the ruling means there is no need for an underground system to obtain ‘booze’ by rum-runners taking it to the United States.
“It can be purchased openly, and provided it is a bona fide transaction, and the purchaser can show it was bought for export purposes, he cannot be touched under the M.T.A.”
In 1923, the Government Liquor Control Act was passed in the Manitoba Legislature, allowing the purchase of beer, wine and liquor, although the Manitoba Temperance Act was still in effect.
The County Court judge was merely confirming what was common practice, but while buying booze in Manitoba may have been legal, it’s actual transportation across the border was not under American law. While the 18th Amendment established prohibition in 1920 (it took two years for all the states to ratify the amendment), the U.S. National Prohibition Act, commonly referred to as the Volstead Act, established how prohibition was to be enforced. The Volstead Act was more stringent than the Manitoba Temperance Act, although it shared some aspects. The American version stated that “no person shall manufacture, sell, barter, transport, import, export, deliver, or furnish any intoxicating liquor except as authorized by this act.”
It wasn’t illegal for people to consume liquor in their homes, but they still needed a readily available source — doctors willing to fill liquor prescriptions were not always on-hand and access was restricted — and that was provided by the nation’s gangsters, who also ran most of the speakeasies that slaked the thirst of “Roaring Twenties” Americans.
What the Manitoba government discovered and what the rum-runners already knew is that selling booze was highly profitable. During just the first month of Manitoba liquor control, a profit of over $41,000 was realized based on a quarter of million dollars ($51,000 of that through drug stores) in sales. There were about 15,000 permit holders registered with another 500 a day applying to the Manitoba Liquor Control Commission (Free Press, October 27, 1923). 
Permit holders placed an order for beer, liquor or wine with a government store in Winnipeg or communities outside the city, which was filled and sent by express to rural customers, while Winnipeggers could place an order in the morning and expect delivery by the evening of the same day — all Manitoba permit holders paid a fee for delivery of alcoholic beverages. Beer could also be sold by local breweries, although individuals could purchases no more than 24 quarts of beer a week or 72 quarts a month. 
Liquor had to be consumed at the home address of the permit holder, but a permit holder listing a hotel as a temporary residence could have liquor delivered to his room for consumption there.
“The elasticity of the law is shown by the shipment to one hotel-keeper in the course of a single month of 22 barrels of beer,” according to a Free Press, August 7, 1924, editorial. “Presumably the brewer’s authority for shipping this beer to him was the possession by him of a permit permitting him to buy beer ‘for his personal use.’ Nor did the possession by the hotel-keeper of this quantity of beer on his premises consist a breach of law.”
The editorial claimed the barrels of beer were always intended to be sold over-the-counter to customers and not for personal use — “anyone who has the price can get a drink” — which was quite true.
It wasn’t until the passage of the 1928 Manitoba Liquor Act that hotels were allowed to sell beer by the glass (beer vendors in hotels weren’t permitted until 1934).
Before the changes to the liquor laws of the province, international bootlegging was blamed for a series of robberies in Manitoba, Saskatchewan and Alberta, since they needed money to buy booze in Canada and to bribe officials south of the border to turn a blind eye to their trafficking. Seven banks in Cylon, Moosomin and Carnouff, Saskatchewan, and in Elie, Macgregor, Killarney and Melita, Manitoba, netted thieves $60,000 between 1921 and 1922.
The Manitoba Free Press on August 30, 1922, reported that the Banque D’Hochelaga in Elie was twice the victim of cross-border bank robbers. While the first robbery on October 12, 1921, gained the thieves $1,200, the robbers on August 29, 1922, left without any loot.
The most violent of the robberies was at the Union Bank in Melita in the early hours of September 23, 1922. 
The September 23, Winnipeg Evening Tribune reported that Thomas Beveridge, the editor of the Melita Enterprise, was shot in the foot when he approached the bank to investigate explosions coming from inside the bank — the robbers had blown the safe with dynamite. 
Even before the bank was robbed, several men entering the town on foot — they left their cars on the outskirts — overpowered Thomas Trotter in the community’s power plant and bound and gagged him. They then cut telephone and telegraph lines and made their way into the bank. “The bandits called out to E.W. McKerlie, the teller of the bank and Fred Watts, a confectioner, who were sleeping in the room above, to ‘come down and come down mighty quick,’ adding that they were there to rob the bank and would stand no fooling.”
Attired only in their nightshirts the two men were taken outside and covered by an armed guard.
To open the safe, the bandits exploded eight charges that when exploded arouse the residents of the community.
“The door of one main compartment of the safe was blown clear and from this compartment the $7,700 in cash was taken, also a large number of unregistered Victory bonds. The fully registered bonds were left untouched showing that the bandits understood their business thoroughly.”
It was later reported that the thieves had made off with $108,000 in cash and bonds.
After the robbery, the bandits fled in their vehicles toward the American border.
A police official interviewed by the Tribune (published September 28, 1922) said: “The bootlegger of today is the bank robber of tomorrow ... These bootleggers, it was inevitable, would graduate into precisely this sort of thing. They have corruption of officials south of the border easy and on this side more or less tolerance by the public of their rum-running. It’s a state of mind, the legitimate result of the condition surrounding the liquor traffic.”
Corruption of a Canadian official was allegedly on the mind of Harry Bronfman when he encountered customs inspector Cyril Knowles on November 8, 1920. Knowles, who was based in Winnipeg, took to the field with RCMP Constable A.G. Pyper to stop those who were illegally bringing goods into Manitoba from the U.S. without paying customs duties. They were particularly on the look out for cigarette and cigar smugglers.
The nature of the events that then ensued was hotly disputed during 1927 Customs Royal Commission hearings and numerous court trials over the course of a decade.
The men spotted three cars heading south to the U.S., which they intercepted. In the cars, driven by three unemployed painters from St. Paul, Minnesota, Knowles and Pyper found dozens of cases of liquor. They questioned the drivers, who said they had crossed the border into Canada without reporting and without visitors’ visas.
The three rum-runners told Knowles they became lost and didn’t know they had strayed into Manitoba. At the time of being stopped, they thought they were still in Saskatchewan where they had bought the liquor at Bronfman’s Gainsborough boozorium (liquor warehouse).
(Next week: part 4)