SHAKEDOWN

BLAIR FRASER November 15 1945

SHAKEDOWN

BLAIR FRASER November 15 1945

SHAKEDOWN

"This year an old racket hit a new high...not in the memory of the oldest tavern keeper had they gone through such a wringer."

BLAIR FRASER

Maclean's Ottawa Editor

PEOPLE in the liquor business are used to political interference. A permit to sell liquor is a political favor; recipients of political favors are seldom allowed to forget Israel Tarte’s famous remark: “Elections are not won with prayers.”

But this year, in the Province of Quebec, an old racket hit a new high. Not in the memory of the oldest tavern keeper, they say, had they gone through such a wringer as was arranged for them last spring.

Take the case of the tavern keepers in Quebec City, for example. There are about 60 of them, and after 50 years of almost unbroken Liberal rule in Quebec it’s not surprising that they’re mostly Liberals. This spring, about the time that licenses which expire April 30 are normally renewed, the executive of the Tavern Keepers’ Association was approached by one of the Association’s members, an adherent of l’Union Nationale. This man informal he said,

for Quebec tavern keepers to contribute to the Party fund.

The Association executive was taken aback. Traditionally, those who hoped to get new licenses were expected to sweeten the Party pot, for a new license is a political plum. Many established places, too, had the habit of keeping on the good side of their favorite Party, or even of both Parties, and they were used to being nicked for small sums by ward heelers and hangers-on. But this kind of approach was something new.

So the Tavern Keepers executive called meetings of its members in different parts of town, each attended by 12 to 15 taverniers. The situation was explained and the tavern keepers were advised: “We think it is

in your interest to pay the $500.”

One of the men at the first meeting was an old-line Conservative who had supported l’Union Nationale, and he didn’t believe it. “I’m going to take this up with my father-in-law,” he said. So he got his fatherin-law, who happens to be a member of the Legislative Council, Quebec’s Upper House, and together they went off to consult the Powers That Be.

When they came back the doubting member had nothing to report except, “We’d better pay.” The tavern keepers hesitated no longer. They rushed to make their payment. 1 talked to several of them and they all confirmed this account.

Not all license holders paid in this manner, though.

I found a number who for one reason or another hadn’t paid, and who no longer had licenses.

The Man Who Couldn’t

T HERE'S a middlc-ag'd couple who oWfl a little café in east-end Montreal. Over their couni er a sign still reads, ``Rü~ri' ci tin,'' and the shelves tire stacked with glasses, but they stuck no lscr or wine now. (Con1iiue on page 6)

Continued from page 5

‘They told us they wouldn’t renew our licenses,” the hostess said. “Then, after, they told us we could have it back again if we would pay. But we couldn’t pay as much as they wanted, so we didn’t get it.”

Legal fee for a café license in Montreal is $500, but that wasn’t what she meant.

“After we lost our license people used to come here, and say, ‘You want your license back? Gonna cost you money.’ We’d say, ‘Who are you?’ and they’d give some name, and we’d say, ‘Who do we pay?’ and they’d say, ‘You can pay me now.’ Ha, we’re not so crazy like that. Pay them money we’d never see them again, or license either.

“But one day the real man came, the man from the Party.”

How did she know he came from the Party? “Because he told us exactly how we would get our license. We would not pay any money until the license was given. My husband would take the money and go with this man to the bank. They would deposit the money so it would need both their names on a cheque to take it out again. Then they would go together and my husband would get his license, and then the other man would take the cheque and get the money from the bank.”

How much were they supposed to pay?

“We asked him that, and he said, ‘How much can you give?’ I took the bankbook and showed him we’d saved $1,000, and I said we’d give that to have our license.

“He said, ‘I don’t think that’s enough. I’m supposed to ask everybody $3,000. But I’ll ask them anyway.’ So he went away, then he came back and said no, $1,000 wasn’t enough, it would have to be at least $3,000. We didn’t have it, so we still don’t have our license.”

The Case of the Army Officer

IN ADDITION to those who couldn’t or wouldn’t pay, there were some who weren’t allowed to pay. One such is a young Army officer in Quebec City, who inherited a prosperous tavern when his father died three years ago.

“I was offered $60,000 for it last year,” he said, “but like a fool I turned it down. Last spring I heard about tavern keepers having to pay $500 apiece, so I went down to pay my $500 too. The man who was supposed to be collecting it sent me to the president of the Tavern Keepers’ Association, the president sent me back to the first man, and finally I caught on—I was being frozen out.

“I went right down to the Liquor Commission and I saw one of the big shots there, a man I knew. I asked if there was any complaint about my place, and he said no, there was no reproach against me from anyone. ‘Well,’ I said, ‘why am I losing my license?’ He said, ‘You know, we have to look after our friends.’” (When I recited this to the “big shot” in question, later, he said, complacently, “Exactly, we have to look after our friends.” But he said all this talk about paying money was “nonsense.”)

Not long after the young Army officer lost his license, the two Party “friends” who had got it came round to see him. They wanted to know if he’d rent them his tavern—they had a license but no place to use it. He told them to jump in the lake. Next day one of them came back alone, offered to ditch his partner and go in with the officer on a 50-50 basis. He, too, was instructed to jump in the lake. So the partners went off and found another tavern, and the original place is still empty.

Even where a license isn’t actually cancelled, there are other ways of getting into trouble.

One Montreal tavern keeper applied for, and got, a transfer of his license from one address to another. He showed me a letter from the Liquor Commission, dated September, 1944, telling him the transfer had been approved. Accordingly he let the lease on his old place go, and it was rented to another tenant as a dry restaurant.

About 10 days after the first letter, another came from the Liquor Commission, saying the transfer was cancelled. His license was good only for the old premises, which he no longer held; in his new premises he couldn’t operate.

At this point, he says, the tavernier was offered $40,000 for his license, lease and business. He claims the place with license was worth $80,000. After thinking it over for a few days he decided to accept. But when he went to close the deal he found the price had changed.

“It’s gone down to $20,000,” the buyer told him, “and if you don’t take it you’ll lose your license altogether.” He took it. Continued on page 59

Continued from page 6

There were some cases where license holders defied the shakedown with impunity, by sticking together and fighting it out. Montreal tavern keepers got off pretty lightly, by all accounts. But the most successful battle of all was waged by the hotelkeepers of Quebec City.

Hotelmen Fought

Quebec City’s licensed hotels are mainly old-established places run by leading citizens, quite different from so many of the fly-by-night clubs that operate on the edge of the law in Montreal. They weren’t approached for tribute as were the tavern keepers— but month after month went by and their notices of renewal, which they applied for in December and usually got in mid-January, didn’t come. January went by without a sign, and February and March.

About the third week of April some of the hotelmen were visited by a man they knew. He let fall some remarks about going to see Mr. Blank or Mr.

Dash, Party officials, and about sums that license holders were expected to disgorge.

“We’ll pay nothing,” the hotelmen told him. “We’ve been in business here for years and we won’t be blackmailed.”

The visitor departed. Came April 30, and still no licenses; the old ones would expire that evening. Six hotelmen held a council of war, decided to go down to the Liquor Commission and have the thing out.

They saw first an official who’d been there for years, and whom they described as “an honest man and a gentleman.” He looked uncomfortable when they mentioned licenses, and he asked them, they told me, whether they’d been to see the same Mr. Blank and Mr. Dash who had been named a week or two before.

( ‘I wouldn’t remember saying any such thing” was the official’s comment when queried )

But as the hotelmen remember it, they answered: “Now look here, you

know us and we know you. We want our new licenses. We understand very well that we are being expected to pay something. But I would remind you that in the application we sign there is a clause declaring we have not paid and do not expect to pay for this privilege. Does anyone suggest we should make a false oath?”

The official said, “You’d better see the boss.” After a while the boss came in, the aide talked to him privately for a minute, then the office door opened and the boss beamed out at the hotelmen.

“Come in, gentlemen,” he said. “You will receive your licenses tomorrow morning before opening time.” Sure enough, the licenses arrived.

When I asked “the boss” about this incident, he said, “I wanted to make them come down and ask for their licenses. They’re all Li lierais. They thought they were entitled to get their licenses, but they are not entitled, they must come and ask that favor. We are in power now.”

Night Club Squeeze

Hotelmen were in a strong position because they were able to obey the law Montreal’s café and cabaret owners are in a weaker position because, under Quebec’s liquor law, as now drafted and administered, it’s not so easy for them to operate strictly within the law.

Liquor in certain places may be sold to “any traveller”—how is the bartender to know who’s a “traveller” and who isn’t? But he’s liable to $500 to $1,000 fine for selling “to any person other than those to whom his permit of this act authorizes him to sell.”

Café licenses permit the sale of liquor with meals only. In practice this restriction is not always enforced. You can get a drink in dozens of cafés without buying the 40-cent meal the law requires. The café owner’s side of the story is that if he observed the law strictly, and served no customers who were thirsty but not hungry, he would find himself up against stiff competition from other cafés which would.

Perhaps because they felt vulnerable, Montreal café and night club owners paid substantial amounts in “contributions” this spring. Exactly how much he paid is each man’s .secret, but one of them told me he “hadn’t heard of anybody” who paid less than $3,000.

These men said, though, that this year was not the first time they had paid. Before the Quebec election last year, they said, some Liberals got the idea of replenishing Party coffers from the war-swollen profits of the metropolitan night club industry.

“I thought first it was just a crook

racket,” one club owner said. “I’d never been shaken down before like that. So when this guy came around telling me to pay to the Party fund, I went to see Joe—and he named a highly placed Liberal whom we both knew.

“I said to him, ‘Look, Joe, I’m being held up.’ He answered, ‘So what?’ So then I knew it was official, and I paid up.”

I put this charge to several prominent Liberals and they admitted it was true, but they said it went no farther than Montreal. They said that as soon as Adelard Godhout, Quebec Liberal leader, heard what was going on he put a stop to it.

I didn’t see Premier Maurice Duplessis for his comment. I had an appointment with him, requested by letter and confirmed with his office by long-distance phone, and I went down to Quebec to keep it. The interview was for 3 p.m. When I left his office at six I hadn’t seen him. The dozen people who had sat in his waiting room all afternoon included two delegations who’d had appointments for the previous day.

But I did talk with a number of Union Nationale people, some of them in high places. Except at the Liquor Commission I got no denials. One said, “It’s just as well you didn’t see the Chief, because he doesn’t know all that goes on.” Another’s comment was, “When your story comes out a lot of people are going to lose their licenses ”

Glasgow Didn’t Like It

In September Adelard Godhout produced photostats of cables and letters between Whyte & Mackay, Glasgow distillers, and their Canadian agent, a man named Blair. The documents in the case were obtained overseas Mr. Blair says he knew nothing of the intention to publish them, and all he’ll say to reporters is, “I don’t know anything about it.”

The Whyte & Mackay correspondence alleges that the distillers offered 1,000 cases of Scotch to the Quebec Liquor Commission at 55 shillings a case, and that the Commission was willing to buy—but only at 69 shillings. The extra 14 shillings were to be refunded to the Party treasury.

“I am required to obtain your cabled agreement to refund extra 14 shillings,” Blair cabled on May 2. “This only way to obtain business from present Government.” And in a following letter, May 4, he added, “It was made quite plain to me that the Party fund had to receive 14 shillings a case.”

John Mcllraith, a director of Whyte & Mackay, replied, on June 5, “On consideration we decline to work for the Party fund.” So the Scotch was never bought.

Aside from contributions allegedly made to Party funds, exactions have been made by individuals for private gain. One that you hear a great deal about is the so-called “forced sale” of a number of Montreal night clubs. At least three of them have changed hands since the 1944 election, and the vendor’s consent appears to have been something less than spontaneous.

One ex-owner explained philosophically, “They knew I was a Liberal, and I expected to lose my license outright. Instead this guy offers me $25,000. It’s true I didn’t want to sell; I’d refused the same offer before the election. But without a license the place wouldn’t have been worth a dime, so when he offered again after the election I took it.”

Montreal grocers have also been targets. In some wards, at least, they paid amounts ranging from $150 to Continued on page 62

Continued from page 60 $1,000 this spring, in the hope of protecting their beer licenses or of restoring those already cancelled. Whether they really needed to pay this money is a question. One Union Nationale man, who readily admitted that clubs and cafés had been shaken down, assured me that not a cent from the grocers ever reached the Party coffers.

Grocers, however, claim that the threats to the licenses were by no means idle, whether the Party ever got the money or not. They cite the case of certain ones who lost their licenses and got them restored. The procedure was to go to a lawyer known to be a Union Nationale supporter. He would get the license fixed, and bill them for legal services. All quite legitimate — each Party lawyer, one of them told me, was allowed so many “requests” for clients.

Grocers have a strong organization which, under ordinary circumstances, might have been able to fend oft political blackmailers. But this year there’s a difficulty. Some among them have skeletons in their own cupboards, to the detriment of the whole trade.

Beer is scarce in Montreal just now, and the scarcity has been a gold mine to those who cared to take illicit advantage of it. On a case of beer, selling a bottle at a time at ceiling price, a grocer’s profit is 89 cents. He can, and many do, boost that to $1.89 by charging an extra dollar a dozen—the customer is glad to pay for a generous supply of beer. And if the grocer wants to run an only slightly greater risk, and sell out the hack door to the night clubs and the blind pigs, he can get even more and make a profit of up to 100%. If he sells 100 dozen a week at that rate, he’s doing all right.

Grocers who are selling to the clubs and blind pigs have no beer, or very little, for the ordinary customer—they tell him they’re “sold out.” One night not long ago a Montreal grocer’s shop was burgled, and the thieves got away with 40 cases of beer. The victim got very little sympathy from his customers—he’d been telling them all afternoon that he had “no beer left.”

But, of course, licenses aren’t cancelled because of such misbehavior. Some of the worst offenders, not only in grocery shops but in cafés and night clubs too, are still operating full blast, the cafés selling after hours with impunity, and so on. Misbehavior by some merely provides a convenient screen behind which any licensee, however honest and scrupulous, may be shaken down with impunity. They’re licked, not for lack of virtue, but for lack of political friends.

Honest men in the hotel and entertainment business, and the supplying industries, too, are thoroughly sick of the situation and would like to see it cleaned up. ‘*I’m getting out of this racket,” one of them said bitterly. “I’ll get into something like collars and ties, where nobody can come into my office and blackmail me.”

And this man told me about another worry that’s eating at him: “You

know, political contributions aren’t deductible for income tax purposes. All these payments are part of your overhead in this business, but you can’t put them down. Ask the collector how to account for the money and he says, ‘That’s your problem, not mine.’ So the only way you can do it is to cook your accounts.”

But in spite of a sincere desire for a cleanup, they haven’t succeeded so far in getting anything done. In the course of working on this story I found out why.

“I’d like to help you,” said a leading citizen, a man who knows as much about the whole mess as anyone living, “but I can’t. Frankly, I’m afraid to.”