Sydney is the birthplace of organized crime in Australia. It has had all the requisite elements for the formation of a professional milieu: a colonial legacy of strong anti-police sentiment, a weak port economy producing prolonged periods of insufficient employment, impoverished slum dwellers for whom crime was an economic necessity, and a police force often incapable and sometimes unwilling to check the growth of organized crime.
In Sydney, therefore, there has been no artificial restraint on the process which has transformed petty criminality into organized crime. In the years following World War I, the combination of narcotics, sly grog, SP bookmaking and prostitution created an enormously profitable illegal sector within the city’s economy and allowed the formation of a professional criminal class.
THE AUSTRALIAN LABOR PARTY
The fundamentally different character of crime in the 1920s, concealed in the sparse statistical reports of the N.S.W. police, is revealed in the changing position of the state’s Labor Party towards the crime issue. During the debates on an omnibus crime bill, the Police Offences (Amendment) Bill, introduced into the N.S.W. Parliament by the conservatives in 1908, the Labor Party legislators attacked almost all of its provisions for the punishment of prostitution, gambling, and betting. The conservative government proposed to make all of these activities illegal and criminal, and the Labor Party objected strongly, arguing that they were social problems and their perpetrators were not criminals but victims.
Apparently representing the views of their working-class constituents, individual Labor members made a plea for social reform. On the issue of prostitution, for example, Labor was particularly sympathetic to the economic plight which drove women to work the streets. Criticizing the class bias of the bill, Mr Meehan declared: ‘As regards the unfortunate women in the streets, I say they are driven there by some of the pillars of the society and the church, who rob and sweat unfortunate women and children, and drive them out into the streets, where any person who likes can come along and make use of them. . . The bill is aimed at poor unfortunate wives, sisters, and daughters of the workers.’ Another opposition speaker, Mr Beeby, rejected the idea that prostitutes were criminal in his rebuttal of a government speaker: ‘In very rare instances is the woman who is concerned in this traffic a woman of abnormal sexual desires. The abnormal woman is the exception. Ninety or 95 per cent of the women engaged in this traffic are engaged in it as the result of outside pressures of different kinds.’ Attacking the Premier for his unwillingness to face the cause of the problem, Mr Dooley predicted that the outcome of the bill would be to force independent street walkers into criminally controlled brothels.
In challenging the government’s intention to suppress illegal gaming, the Labor Party took a similar line, arguing that it was gross class discrimination against the poor residents of Surry Hills and Woolloomooloo. Denouncing the hypocrisy which allowed betting on-course but outlawed it off-course, Mr Holman, later a N.S.W. Labor premier, stated: ‘The honourable gentlemen opposite know that the racecourse is not the resort of the poor man who wants to gamble’. Again, Meehan pointed out the class bias of the bill: ‘As regards amending the Gaming and Betting Act, I ask the Premier is he going to apply it all round: to the people at Darling Point and Potts’ Point, and down the street here, where, at some of the clubs, there is more money lost in five minutes at bridge . . . than is lost by all the Woolloomoolooites and Surry Hillites put together’. Continuing his argument, Mr Meehan aspired to eloquence: ‘I understand that out at Randwick there are gentlemen who occupy various stands . . . Sweeps go on amongst these people — Angelina, Lady Betty, Montmorency, and others who have their little half-sovereign sweeps. Will this law apply to them, or will it apply only to the flat, where Tom and Susan of Woolloomooloo have their “bob” sweeps?’
The member for the working-class district of Balmain, Mr Storrey, also opposed the bill’s ban on shilling race ‘sweeps’, some 200,000 of which were sold every week in Sydney: ‘Because a man happens to be a worker, and is unable, by reason of unfortunate position, to pay 3s.6d to enter the leger at Randwick, and makes a bet elsewhere, he is designated a criminal’.
Broadening his attack to include anti-gambling statutes already passed under the Amended Vagrancy Act of 1905, the MLA Mr Nielsen suggested that the law should be reformed to make two-up legal. Two-up, he said, was ‘one of the fairest games that could be played’, and its inclusion in the Vagrancy Act with the Chinese games ‘fan tan’ and ‘pak-a-pu’ was entirely unjust. Strengthening the laws against two-up would simply make it ‘one of the widest means for blackmailing in the hands of unscrupulous members of the police force’.
Some Labor members carried the logic of the argument to its fullest by speaking on behalf of the petty thief. Distrusting the discretionary powers given police under the law’s vagrancy provisions, Mr Meehan asked: ‘Would this clause affect the well-dressed, long-coated, top-hatted thief from Potts’ Point, or would it affect only the poor unfortunate thief from Woolloomooloo or Surry Hills? Was the clause going to affect only the unfortunate fellows who were knocked out of work by the sweating and thieving big employers who owned their motor-cars and racehorses?’
From Labor’s perspective the bill was treating only the manifestations of the problem and was ignoring its causes. Mr Dooley suggested that: ‘The Government should submit an extensive scheme for housing, so that we might be able to remove the slums and opium dens, and give the people a little more air and light’.
Twenty years later, in the midst of the gang violence of the 1920s, the attitude of the N.S.W. Labor Party changed in a manner that reflected the public’s concern over organized crime. While the innocent SP better dragged before a magistrate was still viewed as a victim, the new criminal entrepreneurs, cocaine dealers and razor-wielding standover merchants, were deemed exploitative predators. With only slight reservations, Labor joined with the conservatives to pass vagrancy provisions far harsher than those they had opposed in 1905 and 1908. The Lang Labor government of the late 1920s, moreover, expanded police powers to deal with the drug traffic and the use of pistols by ‘habitual’ criminals.
Labor still had a sympathetic ear for the working-class better and the working prostitute, but now made a clear distinction between them and the powerful criminals who controlled the vice trade. Alliances between Labor politicians and leading criminals, born of common residence and associations, remained. But party policy adjusted to the new reality of organized crime and Labor demanded its suppression. An apt illustration of Labor’s changed policy was its position on the amendments to the Vagrancy Act. Although Labor members had fought the original 1905 bill as discriminatory towards tramping rural workers and Sydney streetwalkers, they supported the 1929 consorting clause which was aimed at Darlinghurst razor gangs and cocaine syndicates. Speaking in support of the bill, the Labor member for Redfern, Mr McKell, praised the state police as ‘highly efficient’, a sharp contrast with the earlier Labor characterization of the force as corrupt blackmailers, and showed his awareness that there was now a class of professional criminals worthy of suppression: ‘That is an amendment which the House might accept, because it will help the police to get rid of an undesirable criminal element which the city would be better without’.
THE INNER CITY
Sydney experienced a ‘crime wave’ in the years following World War I, and a similar combination of cocaine, sly grog, gambling and prostitution laid the economic base for the growth of organized crime. Sydney’s crime quarter sprawled across the arc of slums that flanked the city on the south and east: Surry Hills, East Sydney, Darlinghurst, Kings Cross and Woolloomooloo. As the trams, electric railways, and suburban building boom of the 1920s pushed those who could afford it outward to a fringe five to twenty kilometres from the GPO, the proper if not prosperous terrace houses of these inner city districts were abandoned to the poor. While Sydney’s metropolitan population soared during the decade, the inner city’s declined by over 10 per cent from 103,000 to 91,000, leaving a surplus of low rental terrace houses which were gradually occupied by brothels, sly grog shops, shifting poor, SP shops, and the growing class of professional criminals.
Within these slums, the brothels became centred on that section of Palmer Street between William and Oxford Streets. There, in more prosperous times, queues of working-class males could be seen on Saturday afternoons spilling out of the doorways into the streets. Some of these brothels became Sydney institutions. Tilly Devine’s Palmer Street house operated for over forty years. SP bookmaking shops, streetwalkers, and smaller brothels comprised another zone further to the east of King’s Cross. And dotting the entire slum area were the cocaine runners following the prostitutes and SP runners seeking clientele wherever they could be found. Surry Hills was the bedroom community for the illegals and shifting poor, and contained a considerable number of SP and sly grog shops for the local community’s needs. Taking the name of the police division responsible for most of the area, the arc of slums became known as Darlinghurst. The mass-circulation weekly newspaper Truth, which chronicled the zone’s fortunes in considerable detail, dubbed it ‘Razorhurst’ during the gang wars of 1927-8 and summarized its decline in one memorable sentence: ‘Razorhurst, Gunhurst, Bottlehurst, Dopehurst — it used to be Darlinghurst, one of the finest quarters of a rich and beautiful city; today it is a plague spot, where the spawn of the gutter grow and fatten on official apathy’.
Outside of this area was a small illegal sector in the other working-class communities like Glebe, Balmain, Redfern, and Newtown, involving SP bookmaking and sly grog selling. These neighbourhood illegals were separate from the gangs who dominated Darlinghurst, and the failure of the professionals to capture the suburban trade was a measure of their weakness in comparison to American Mafia of the 1920s and the Sydney syndicates of the 1970s. As organized crime became established, the suburban illegals began to provide recruits for the Darlinghurst gangs. By the 1940s it was common for body-guards and professional standover men to have begun their careers as boxers. After a victory in a turnaround fight, the young boxer would return home to Redfern or Newtown with a reputation and a £10 or, at best, £50 purse to a hero’s reception and a job opening as ‘muscle’ at the local SP or sly grog shop. From there the ambitious fighter could graduate to employment with the city’s leading criminals, who, even today, regard a good boxing record as an excellent reference.
Sydney’s milieu developed somewhat more slowly than Melbourne’s during the early 1920s. The first sign of its growth was the wave of cocaine and sly grog selling in the years following World War I. In 1920 police launched a ‘crusade’ against the sly grog trade which had, according to a report in Truth, ‘increased tenfold since the early closing of hotels came into force’. During a series of raids in East Sydney, police discovered the ‘worst class of thieves and prostitutes’ drinking illegally. From its earliest days, the sly grog trade was subject to standover payments. Shortly after his arrival in Sydney in 1921, for example, the Melbourne standover merchant ‘Long Harry’ Slater formed a gang and began making regular collections from shops in Surry Hills. Characteristically, Slater used considerable violence in his operations. When the Monaghan family’s shop in Campbell Street refused to meet his demands, Slater’s gang stormed the premises and murdered the proprietor’s son. Tried three times for his role in the murder, Slater was freed and quit the city for work in the country. Despite sporadic police efforts, the sly grog trade flourished for the next thirty-five years, remaining an important source of criminal income and police corruption.
The growth of the cocaine traffic paralleled the sly grog trade. Extensive cocaine use was reported in Sydney as early as 1916, but it was not until 1922 that police and the public became aware of the traffic. In September Truth reported that Sydney ‘has its brigade of “sniffers”, who deal in “C” and “H”; also its devotees of the hypodermic needle, who will lie, cheat, and steal to obtain cocaine to satisfy the abnormal craving which obsesses the “dopes” ‘. Offering an interesting analysis of why Sydney’s drug users preferred cocaine to heroin, the report said heroin was more expensive and difficult to obtain. One woman addict allegedly interviewed expressed a cultural distaste for the stronger heroin: ‘When you get your first sniff of heroin it frightens you. Some never take a second sniff. For the minute you can’t stir hand or foot, and your thoughts are a frightful nightmare.’ The same source, however, found cocaine a delight.
The largest single group of cocaine users was prostitutes. In a series of sensational but generally accurate articles published in 1924, the Truth reported that morphine had declined in popularity and nine out of ten Sydney addicts were using either heroin or cocaine, of which the last was by far the cheapest. Seventy-five per cent of Sydney’s prostitutes were ‘cocaine addicts’, and shilling packets were being offered to passers-by in areas frequented by streetwalkers. While chemist shops were still the main source of cocaine, some was evidently being smuggled in from Chinese ports. Prostitutes were being supplied from night cafes run by known criminals, street pushers and a number of chemists.
While some chemists and dentists were simply selling to syndicate buyers without making proper inquiries, a few were actively pushing cocaine on the streets. At the trial of Thomas M. Burgess, a chemist with a shop at 556 Crown Street, Surry Hills, Sergeant Tom O’Brien testified: ‘We allege that agents who are supplied with cocaine by Burgess sell it to addicts about the street in different areas of the city’. The disastrous effects of boracic acid and other impurities used to adulerate cocaine were evident in the appearance of a once attractive prostitute arrested in Surry Hills: ‘Her eyes were sunken far into their sockets, the bridge of her nose had disappeared, leaving the nostrils distended. Her skin was parchment-like’. The traffic was one of the most lucrative available to criminals. Cocaine purchased from chemists for £l 2s. could be retailed at £62 10s. on the streets for a profit of 5,580 per cent.
Prodded by the press and parliament, N.S.W. police invaded the Pharmacy Board’s preserve in 1924 and in the next four years broke three major criminal groups involved in the cocaine traffic. Almost all of the cases investigated involved known criminals selling to prostitutes. In December 1924, for example, N.S.W. police made their first arrest of a street trafficker and charged one Lottie Stewart, ‘well known court habitue’, with selling ‘dope’ to prostitutes in Surry Hills. Although Sergeant O’Brien, the tabloid hero of the anti-cocaine campaign, testified that he had observed Stewart selling to prostitutes at that location every night over a period of several weeks, the court dismissed the case for lack of evidence.
Three months later O’Brien made his next case, this time against Charles Passmore, fifty, a tall, well-dressed man with a long criminal record. In his testimony the sergeant condemned Passmore with exceptional eloquence and provided some significant facts about the scope of his operations: ‘This man is the representative of all things evil. He is lord and master of a “dope combine” and has waxed fat and flourishing through the agency of his hopeless clients. You can see him any evening about 11 o’clock standing at the corner of Woolcott and Craigend Streets, Darlinghurst and its environs, handing out the deadly contents of an innocent looking package — cocaine — to scores of addicts.’ The court fined him £50, one of the harshest penalties then available under the Poisons Act. After paying his fine, Passmore walked out of court and for the next three years continued to serve as the ‘mastermind’ of the Darlinghurst cocaine trade.
N.S.W. police uncovered a cocaine importing network for the first time in August 1925. In a series of combined police and customs raids, authorities arrested its members, four Anglo-Irish Australians, and seized eighteen tins of opium, thirty-one bottles of cocaine, and a letter of introduction to a Chinese. Profits were apparently high since the opium could be purchased in China at£l per tin and sold in Sydney for £10. At the trial Customs officials testified that two of the suspects were long-time associates of opium smugglers but had recently moved into cocaine trafficking. Under the current drug laws, which carried no prison penalties, the court awarded maximum fines totalling £420, and released the four with a grace period to earn that amount — most probably by returning to the cocaine trade.
THE DRUG ACT
But the police anti-cocaine campaign was doomed to failure. Under the weak drug laws of the day, police could only arrest a suspect caught in the act of selling cocaine. Since possession of illicit drugs was not a crime, police could not arrest dealers apprehended holding cocaine. Police were forced to spend countless hours observing the street pedlars to make a single arrest and, even when successful, could only apprehend low-level dealers who usually walked out of court after paying their fines. The logic of the situation was not lost on the N.S.W. Parliament, and in 1927 legislators passed the Drug Act providing prison terms for simple possession of illicit drugs. To enforce the new law, police formed the Drug Bureau and staffed it with two experienced CIB detectives, Sergeant Thomas Wickham and Constable Wharton Thompson. For the next four years they swept the streets, making hundred of arrests of drug dealers and users. Although successful against street pedlars, the police still lacked the manpower and legal backing to apprehend the major distributors — something they would not get until the passage of a new Vagrancy Act in 1930.
After passage of the 1927 Drug Act, N.S.W. police launched a major offensive against the cocaine trade. During the week of 18 August 1929, for example, police secured convictions against ten traffickers and in six cases the court awarded the maximum penalty. Police also renewed their campaign against Charles Pass-more. In a raid on his flat in November 1928, police caught him in possession of cocaine and he was sentenced to six months’ gaol. Police said the flat was used solely for drug sales and Passmore’s considerable clientele consisted mainly of prostitutes. In a case more typical of the police campaign, Sergeant Wickham of the Drug Bureau kept the home of one Francis M. Moyes at the heart of the Palmer Street brothel area under surveillance for three months and raided it seizing twenty-one cocaine packets. He was receiving his supplies from ‘one of the principals in the cocaine in Sydney’ — a distributor named ‘Darby’ Lloyd, who was later slashed in the razor gang battles for control of the traffic.
As narcotics arrests mounted to almost 150 per annum, police acquired greater expertise and began to move against the larger distribution syndicates. After three years of investigation police arrested the man they identified as ‘King of Sydney’s dope traffickers’, one Harry ‘Jewey’ Newman, and the history of his organization is revealing of the traffic’s increasing sophistication. Police first became aware of his operations after a raid on the home of one Mary Edwards in Pelican Street, Surry Hills on 30 April 1925 which uncovered thirty street packets of cocaine she was holding for Newman. Arrested himself later that year with several packets of cocaine powder in possession, Newman postponed court hearings for two years and then paid the nominal fine. Profiting from that experience, he began to insulate himself by working through a network of six known street pedlars. . One of the most visible was Lilian Sproule, a woman Truth called a ‘human vulture’, who was arrested by police for cocaine selling in 1928. At her trial, the police presented packets containing 70 per cent cocaine and 30 per cent boracic acid seized in her flat.
For the next six months police continued to arrest his runners — Rosie Steele, ‘Botany May’ Smith, and James ‘Jock’ Delaney — but Newman himself was always clean when police stopped him. Drug Bureau detectives observed him making frequent visits to dentists’ surgeries in the city and suburbs, and concluded that he was taking advantage of their Customs’ allotment of 2 ounces of cocaine per annum to secure his supplies. Called into Central Police Court on 18 February 1929 for an identification, Newman accosted Sergeant Wickham and made an offer which was the genesis of his undoing: ‘I am taking over Bobbie Carr’s fish shop in Goulburn Street, and if I had you fellows [the police] in with me I could corner the cocaine market, and we could make a packet out of it. These _____ women must have it you know. In a couple of years you could retire. You’d make a “bonzer” publican.’ Newman shifted his operations from Paddy’s Market to Carr’s Fish Shop at 98 Goulburn Street, Surry Hills, and police kept him under surveillance, until 23 February 1929 when Sergeant Wickham observed several women known to be cocaine addicts entering the shop. Police raided the premises and discovered eighteen packets of cocaine hastily concealed in a drain pipe. The Court sentenced Newman to nine months’ imprisonment and levied a fine of £200.
Police and press hyperbole notwithstanding, neither Passmore nor Newman were the most important narcotics dealers in the Darlinghurst area. Despite three years of arrests and seizures, the drug traffic had actually increased. Almost all of those arrested before 1930 were lowly street pedlars or relatively minor independent dealers. Insulated from direct contact with the street trade, Sydney’s three major cocaine distributors were immune to arrest under the 1927 Drug Act. However, as competition for control over the lucrative traffic intensified among the milieu, violence erupted into the ‘razor gang’ wars of 1927-30.
From Drug Traffic by Alfred McCoy