The boom in sly grog trading continued for almost a decade after the war. Continuing beer shortages and 6 p.m. closing regulations perpetuated some of the conditions which had made illegal liquor operations so lucrative during the war. Finding enforcement of sly grog laws enormously unpopular and difficult, some senior police officials leased their services to the leading sly grog traders with an openness that became a public scandal. Seeking an end to the controversy surrounding sly grog trade, the New South Wales government formed a Royal Commission under Mr Justice A.V. Maxwell in 1951 to probe the problem and recommend solutions.
Justice Maxwell systematically exposed the essential components of the sly grog trade: diversion of alcohol from licensed hotels to illegal venues, illicit sales through the city’s nightclubs, ‘dummy’ ownership of regular hotels, and systematic police corruption at the highest levels. To profit from the higher blackmarket rates, a number of licensed hotel owners and wholesale vendors diverted part of their brewery quotas to the sly grog operators for bounties of up to £2 per dozen bottles of beer. A number of after-hours clubs prospered — Abraham Saffron’s Roosevelt Club, Sammy Lee’s Nightclub, the Ziegfield Cafe in King Street, and the Riverview Restaurant. Despite the openness of their operations, the sly grog traders, with one notable exception, seemed nearly immune to all but purely nominal police enforcement.
Justice Maxwell concluded that police officials had ‘fallen short of the duty imposed on them’, a considerable understatement in light of the evidence he gathered. The counsel for the N.S.W. police testified that ‘the obvious lack of success in policing restaurants and night clubs is due to bribery of police officers’. Such bribery involved protection money for advance notice of impending police raids, or payments to ignore the operations of illegal nightclubs.In sharp contrast to the Black Tulip Club on George Street which was raided twenty-six times in a thirty-three month period from January 1949 to October 1951, most Sydney clubs were visited only once and Saffron’s Roosevelt Club was the scene of only two arrests during the same period. Concluding that there was no discernible reason why the other clubs should not have received the same attention as the Black Tulip, Justice Maxwell blamed senior police at several levels for the failure to enforce the liquor laws. Testimony taken by the Commission established that there was widespread police corruption. Some club employees alleged there was collusion between vice squad officers and night club operators. The Metropolitan Superintendent of Police in 1948-50, Mr Sweeney, stated that he did ‘not even suspect’ that the law was being broken and another superintendent blamed the situation on a ‘deliberate policy of toleration by the late Commissioner MacKay’.
According to the Commissioner’s findings, the quality of police enforcement was epitomized by two public rituals enacted in 1950. Retiring from the N.S.W. police in August 1950 after two and a half years as Metropolitan Superintendent, Sweeney was the recipient of a farewell dinner attended by 200 to 300 people ‘connected with nightclubs, hotels, bookmaking’ at Sammy Lee’s Theatre Restaurant, described by the Commissioner Mr Maxwell as ‘one of the most notorious offenders against the liquor laws’. Attending the fete in person, Sweeney received a cheque for £600 from a grateful clientele. One month earlier, Inspector Noonan retired after four and a half years as Metropolitan Licensing Inspector and was feted at a similar function at the prestigious Australia Hotel where he was presented with a cheque for £1,000. ‘I have no doubt’, said the Royal Commissioner, ‘that they give rise “to suspicion and criticism”.’ While it was not illegal for retiring officers to receive such testimonials, the Commissioner felt that it was ‘indiscreet, to say the least’.
Among the eight leading nightclubs identified as major suppliers of after-hours liquor, Mr Justice Maxwell singled out Abraham G. Saffron’s Roosevelt Club as perhaps the main violator. The Royal Commissioner’s conclusions about the club’s operations — made after testimony by Saffron, his employees and associates — was unflattering in the extreme:
This place illustrates a practice by which so-called night clubs, unable to dispose of huge quantities of bottled beer received, has in turn been the medium of supplying outside sly grog places. I should add that the figure of 250 dozen [bottles of beer received] per week is admitted by various witnesses from the Roosevelt. In view of the unsavoury reputation of such witnesses, I have little doubt that they admitted to minimum amounts only, and that the fair inference is that they got more than 250 dozen a week.
In the course of its investigations, the Commission gathered considerable information on the career of the man it identified as one of the city’s main sly grog traders, Abraham G. Saffron, and chronicled his rise from petty criminality to a status as one of Sydney’s leading liquor retailers within less than a decade. Born in Australia on 6 October 1919, Saffron was raised in Bondi’s Jewish community. Arrested for the first time in September 1938, Saffron was convicted of having ‘used a place for betting’ and was fined £5. Charged again at Sydney’s Central Court of Petty Sessions in January 1940, he was convicted of receiving stolen car radios worth £20 each and sentenced to six months’ imprisonment, then suspended upon agreement to a good behaviour bond for two years. Some months later Saffron became involved in Sydney’s flourishing wartime nightclub trade and began his rapid rise to wealth. In partnership with his long-time associate Hilton Kin-caid, Saffron opened the Roosevelt Club and operated it successfully until 1943-4 when it was closed by court order. Moving north to the Newcastle industrial area for the remainder of the war, the partnership acquired the licence at the Newcastle Hotel for some £3,000 in 1944 and Saffron became a registered bookmaker at the Newcastle Jockey Club. Questioned by the Royal Commission into Liquor Laws some six years later about the source of his capital for acquisition of the Newcastle Hotel, Saffron chose not to divulge its source.
Commission: Of course, when you were applying for your licence at Newcastle, you said that you were buying the licence with money which you had saved?
Saffron: That is correct.
Commission: Saved from what?
Saffron: Just saved.
Commission: What were you doing to earn the money to save it?
Saffron: Various things.
Commission: You run a baccarat school, do you not?
Commission: Not at the moment, but you did?
Saffron: Never ever.
Commission: Know nothing whatever about the existence of one on any of your premises or your company’s premises?
Saffron: No, I do not.
Commission: Not at the Roosevelt?
Saffron: Not at the Roosevelt.
Commission: Or anywhere else.
Saffron: Or anywhere else.
Commission: You do not suggest you would save, thousands of pounds, in the short time you operated as a bookmaker in Newcastle?
Saffron: I operated as a bookmaker after I was in the hotel.
Returning to Sydney at the end of the war, Saffron re-opened the Roosevelt Club and began a remarkable series of business acquisitions which eventually brought him to the attention of the Liquor Royal Commission. Saffron presented himself as a retail merchant with a half interest in his father’s clothing store and was awarded a licence for the West End Hotel at Balmain in January 1946. Indicative of the familial style of his business operations, Saffron told the Licensing Court that his mother would be residing at the West End Hotel as housekeeper. After two months Saffron transferred the West End Hotel licence, worth about •5,300, to his brother Phillip Saffron and became licensee of the Gladstone Hotel in William Street near central Sydney. As he finally admitted, brother Philip was little more than a ‘dummy’, a procedure that was concealed from the Licensing Court and violated its regulations.
With his financial position now ‘improved’ by these and other business activities, Saffron in partnership acquired the freehold to the premises occupied by his Roosevelt Club in 1947 with a deposit of £2,500 on a total investment of £19,000. Using family and close friends as ‘dummies’, Saffron acquired licences to another five hotels in the next four years. Through his ‘great personal friend’ Harold Taylour, a public servant and former New Guinea miner, Saffron acquired an interest in the licence for the Civic Hotel at Pitt and Goulburn Streets worth £17,000. In testimony before the Royal Commission Saffron admitted having loaned Taylour £4,000 ‘without a scratch of the pen by way of security’. Through another ‘friend’, Emil Kornhauser, Saffron gained an interest in the Cumberland Hotel at Bankstown whose licence was valued at £15,000. But his siblings were his most important instruments and through them he gained control of another three hotels: brother Henry was licensee of the Albert Hotel in North Sydney worth £7,500; sister Beryl managed the Mortdale Hotel with a £14,000 licence on a simple salary basis; and brother Philip was licensee of the Philip Hotel in King Street whose acquisition cost £13,000.Saffron also tried to acquire another hotel licence in his wife’s name but Tooth’s Brewery refused to entertain the application. The total value of these hotel and nightclub interests amounted to some £84,500 by October 1951, a remarkable fortune for a man who had risked prison for the sale of £80 worth of stolen car radios only ten years earlier.
His sister Mrs Beryl Frack admitted that she had no share in the £14,000 hotel investment and was in reality her brother’s resident manager. Conceding that his ‘little brother’ Abraham was ‘more brilliant at figures than I am’, Philip Saffron confessed that ‘I told lies, I suppose’ in statements before the Licensing Courts about hotel investments which were in fact his brother Abraham’s and not his own. In its report the Royal Commission on Liquor Laws summed up its findings about Saffron’s hotel licence operations: ‘A. G. Saffron ultimately admitted his beneficial interest in a number of hotels using different persons as “dummies”. These interests were successfully concealed from the Licensing Court; and before this Commission he engaged in systematic false swearing’.
During this same period in which Saffron acquired these licences, some of his employees, according to Royal Commission evidence, were involved in liquor trading violations. Aside from the obvious investment potential of these hotel licences, the Commission concluded that Saffron used them to supply the Roosevelt Club and ‘sly grog’ shops selling illicit after-hours liquor.
Commission: The Gladstone [Hotel] is conveniently situated in relation to the Roosevelt Club. Is it easy to move supplies from one place to another?
Saffron: If one had that in mind, yes.
Commission: For instance, if you were short of a chicken or two at the Gladstone it is very easy to run down from the Roosevelt?
Saffron: If I were short of a chicken, yes.
Commission: And similarly, if they were short of beer at the Roosevelt, it would be easy to run it from the Gladstone?
Commission: And you swear to this court it never happened?
Saffron: Not to my knowledge.
The Commission, however, reported a number of liquor law violations it found significant. In August 1947 Saffron was fined £5 and a barmaid in his employ £15 for selling beer ‘at an excess price’; in 1948 a waiter at the Roosevelt Restaurant was fined £75 for illegal sale of beer and wine; and on 28 December 1950 a Saffron employee named Hall ‘was apprehended by police and charged with a breach of the Liquor Act’ while driving a Saffron truck loaded with sixty dozen bottles of beer from the Cumberland Hotel to an uncertain outlet. In 1948, moreover, 42,000 illicit American cigarettes were discovered under the bandstand and the club was fined £30. Based on the evidence gathered, the Commission concluded that Saffron’s licensed hotel network served as a source of scarce, rationed alcohol for diversion into the profitable ‘sly grog’ blackmarket:
It will be recalled earlier, Kornhauser (Cumberland Hotel), Mrs Frack (Mortdale Hotel), Taylour (Civic Hotel), all supplied one of the most infamous nightclubs, the Roosevelt, with regular large quantities of bottled beer, always at blackmarket prices. As appears above, the clearly established figures show that this nightclub, so called, received from six separate sources, four of them being hotel licensees, 250 dozen bottles a week. This particular place has been declared a ‘disorderly house’ under section 3 of the Act No. 6 of 1943, on a number of occasions. There is no other conclusion than that the amount of liquor received by the various proprietors, for they changed hands (at least ostensibly) following declarations, could not possibly be disposed of by them by merely supplying those who resorted to the premises. . . It is equally clear that the beer sold on the premises must have been sold always at extortionate prices.
Almost simultaneous with his appearances before the Royal Commission, Saffron became embroiled in the ‘housie scandal’, and the combination served to establish him as a major media personality. Beginning in January 1951, the Sunday Sun ran a series of exposes alleging that Abraham Saffron was managing a series of charity housie, or bingo, games in Bondi in a manner that seriously violated the law by gambling for profit.. One of the Sun series was illustrated dramatically with a photograph of ‘£5 in an envelope received by the Sunday Sun reporter at a Bondi housie game this week’. Prompted by these reports, the N.S.W. Chief Secretary, Mr Clive Evatt, ordered police to investigate housie operations. Visiting the Bondi housie variation called ‘Fascination’, the Herald team found advertising and large cash prizes had attracted regular crowds of up to 400 nightly and yielded operators a profit of £915 per week.
Soon after the Sun’s initial exposes finished in January, Saffron issued a writ against the newspaper but lost the case months later when the Supreme Court ruled in favor of the Sun and ordered Saffron to pay costs of £89 16s. The Sun continued its campaign, charging that Saffron was paying cash prizes and that the total payments to the three charities was only £68 over four weeks’ operation, during which hundreds of pounds changed hands every night.
Continuing its attack on Saffron, the Sunday Sun kept the issue alive and forced the government to take action. In January 1952 charges were finally filed against Saffron at Paddington Court alleging violations of the Lotteries and Art Unions Act. Delayed in its deliberations by Saffron’s Tahiti vacation, the court found him guilty in June 1952 of failing to produce a balance sheet of the charity housie games as required under law. Apparently accepting his explanation that the sheets were lost when a car was stolen, the magistrate ordered Saffron to pay £11 2s. costs, but refused to punish him, saying ‘I deem it unexpedient to impose any penalty’.
Charges arising from Saffron’s appearance at the Royal Commission on Liquor Laws kept him before the courts and in the newspapers for almost two years. In October 1952 the Crown indicted Saffron for having knowingly given false testimony before the Royal Commission, something the Commissioner himself stated emphatically in his final report. Skilfully represented by Mr J.W. Smythe, QC, the defence raised a number of obscure technical objections — arguing, for example, that the Royal Commission was not legally valid since its documents had not been properly imprinted with the Great Seal of State — and won an acquittal in December when the court ruled that Saffron’s testimony before the Royal Commission was not admissible as evidence about that same testimony.
While Saffron successfully defended himself from charges of perjury and false swearing, his appearance before the Royal Commission stigmatized him as a man unfit for supervision of a public hotel. Acting on the Commission’s evidence, the N.S.W. Police Commissioner petitioned the courts to declare Saffron’s Roosevelt Club a ‘disorderly house’ and in January 1951 Mr Justice Richardson of the Supreme Court issued the order effectively closing the business. Saffron’s attorney later appeared before the Supreme Court pleading for annulment of its order on the grounds that the Roosevelt Restaurant was now being managed by a new company and ‘Abraham Gilbert Saffron, former part owner of the Roosevelt, would have no control in the running of the place by a new company which had taken over last month’. The Crown opposed the application on grounds that the new company was a ‘sham to keep the Roosevelt open’ and the various companies were ‘the same horse under different names’. Noting that the only charges against the club were for seven illegal liquor sales between 1947 and 1952, Mr Justice Brereton rescinded the ‘disorderly house’ declaration on condition that the Vice Squad must be notified of any change in occupancy.
For the next decade the N.S.W. Licensing Court automatically barred Saffron, his relatives or any known associates, from acquiring a liquor licence. Ruling, for example, that Saffron was of ‘low morality, debased, and not a fit and proper person to be connected with a liquor licence’, the Metropolitan Licensing Court denied Mrs Florence B. Hawkins a liquor licence for the Napoli Restaurant at 44 Macleay Street, Kings Cross in November 1957 on grounds that ‘Saffron was a substantial shareholder in the company which owned the premises’. The court based its judgement on disclosures about Saffron’s activities before the Liquor Royal Commission and his ‘recent misconduct’, which culminated in his indictment under the Obscene and Indecent Publications Act. The court’s ban remained in effect until 1966 when Saffron, denied a liquor licence for his Lodge 44 Motel at Edgecliffe by a lower court, successfully appealed against the judgement.
Although Saffron and his associates were forced out of the liquor trade by these and other court decisions, and Sydney’s sly grog trade largely ended with the repeal of 6 p.m. hotel closing in 1955, Saffron’s name continued to make headlines in connection with a variety of vice offences. Appearing before Central Court on 25 October 1956, Abraham Saffron, his partner Hilton Kincaid and ‘a coloured girl’ were charged with ‘scandalous conduct’. Police alleged that the trio had engaged in ‘lewd, obscene and disgusting exhibitions’ at Bondi and Palm Beach and had ‘willingly exposed themselves in the presence of diverse persons for a long space of time’. Saffron, moreover, was charged with having obscene photographs at his premises in Kings Cross. Committal proceedings attracted enormous media coverage, interest that was heightened during the coming weeks when police alleged that female witnesses were receiving threats that ‘go directly to Abraham Saffron’. Convicted and fined £10 on the obscene publications charge, Saffron won a reversal on appeal and was not tried on some of the other charges.
Despite some wartime harassment, New South Wales’ SP phone networks emerged from World War II stronger than ever before and survived into the 1970s as one of the largest and most constant sources of income for organized crime. Although there have been eight identifiable police ‘crackdowns’ on SP betting since 1945 — each heralded as the final blow to the business — and at least two premature announcements of the industry’s demise, turnover by illegal off-course bookmakers has increased steadily and operators have never been seriously hampered by the various police campaigns. The survival of SP bookmaking can be reduced to two factors of paramount importance. First, the SP operators provide a betting service which is superior, from a customer viewpoint, to those available at the course or from the N.S.W. State betting shops. Second, leading illegal bookmakers have shared their proceeds with influential members of the police and political parties, thereby insulating themselves from police pressures.
Throughout the 1950s and 1960s the leading SP bookmakers remained largely apart from the violent world of the Sydney criminal milieu. Professional standover merchants collected an unofficial tax on their earnings, but the SP operators remained informal members of the racing fraternity. Following the consolidation of organized crime under several dominant syndicates in the late 1960s, however, there were indications that the SP networks were increasingly controlled by professional criminals with diverse backgrounds that did not include racing. The establishment of the state’s off-course betting corporation, the N.S.W. Totalisator Agency Board (TAB), in 1964 and the increase in police pressure on illegal bookmakers forced many smaller SPs out of business. While illegal betting at hotels and ‘special shops’ stagnated or declined in the late 1960s, new telephone networks grew rapidly and SP turnover expanded steadily.
The SP industry became the province of professional criminals heavily involved in violence and race fixing, and began to serve as merchant banking to organized crime. Despite the effective ‘criminalization’ of SP bookmaking, the myth persists that SP is an innocent Australian pastime devoid of serious implications for the society which supports it.
When the wartime and postwar betting booms faded in late 1946, the N.S.W. police launched the first of its postwar crackdowns on SP. By the early 1950s, however, the SP business had recovered from the disruptions of the immediate postwar period and began a steady increase in turnover largely unrestrained by police enforcement. In 1950, for example, the PMG located the office of an illegal agency that was providing SP operators with ‘markets’, or betting trends by on-course bookmakers, three times before each race and disconnected its twenty-five telephones, an indication of extensive SP networks. A year later New South Wales racing officials calculated the State’s annual illegal SP turnover at £180 million, twice that of Victoria which was estimated at £90 million divided among 30,000 to 40,000 illegal bookmakers.
Despite occasional arrests, SP phone networks continued to grow without any significant impediment throughout the 1950s. Police, media and the courts did not raise strong objections to SP. Indicative of the judiciary’s attitude towards illegal betting, a New South Wales magistrate announced his sympathy for an SP operator liable for six months’ imprisonment and reduced the sentence to a £25 fine after hearing testimony from a police inspector that the offender was a ‘quiet, decent citizen’ who was by no means a ‘welsher’. As SP betting in New South Wales boomed in the early 1950s with the advent of illegal phone betting on Melbourne races, strong elements within both political parties came to favour some sort of legalization.
Influential sectors of the Sydney media profited considerably from the illegal SP business through the newspaper sales generated by the publication of racing forms and results. While the mass circulation Truth, Sun and Daily Mirror made sales by publishing racing forms for SP betters, the conservative, establishment-oriented Sydney Morning Herald enjoyed an added boost to its Monday and Thursday circulation as the ‘official’ final odds sheet for pay-out by SP bookmakers. Apparently aware of its dependence on being ‘the Bible of illegal betters’ for some of its circulation, the Herald in the 1940s tended to favor the SP bookmaker over the punter in its reporting of the final odds. In a famous media battle in late 1945, the Herald was challenged by the Daily Telegraph which accused it of an open bias in favor of the SP operator. Arrayed against this powerful alliance of media, corrupted police, political parties and the New South Wales betting public were the anti-SP forces comprised of the racecourse owners and the Protestant churches — an uneven balance of opposing forces which allowed SP to flourish.
[Late in the 1950s] Deputy Opposition Leader Robert Askin, MLA, asked the Labor Premier Cahill whether the same conditions [of police corruption] alleged in Victoria could be found in New South Wales. Although Premier Cahill tried to quieten the uproar with flat assertions of his government’s competence and a recitation of police statistics, a reporter challenged the premier by asking whether he considered £65,574 in betting fines substantial compared to an annual SP turnover of £100 to £200 million. At a meeting of the State Labor Caucus in November 1959 Mr A.R. Sloss, MLA moved formally that the government should consider legalizing off-course betting. Explaining why the State Labor government did not act, the Sydney Morning Herald noted that ‘SP operators are in a position of influence in many local ALP leagues’.
from Drug Traffic by Alfred McCoy