From Manhattan’s Cotton Club to Hot Springs

(September 5, 2018) Today’s post does not involve the Civil War but pertains to my most recent book, The Devil’s Town: Hot Springs During the Gangster Era.

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From 1934 to 1965 former New York mobster Owney Madden was the most notorious gangster living permanently in Hot Springs. Earlier he had arrived in the Hell’s Kitchen neighborhood along the west side of midtown Manhattan in 1903 as a twelve-year-old Welsh immigrant. He soon joined a local gang, became an expert mugger and was earning $200 a day before he was out of his teens. One of his childhood friends, George Raft, became a Hollywood movie star and adopted Madden’s mannerisms in his signature gangster portrayals.

When he was nineteen Owney murdered one victim merely because the youth had tried to date one of Madden’s girlfriends. Although the slaying took place aboard a public trolley among many witnesses, police could not persuade anyone to testify afterward, despite catching Owney in a daring rooftop chase.

Two years later in 1912 a rival gang tried to kill Madden. Despite absorbing eleven bullets he survived. He refused, however, to identify his attackers to the police. “It’s nobody’s business but mine,” he said. Instead his own gang retaliated and killed six of the assailants before Owney was even released from the hospital.

During his outpatient convalescence, however, a competitor within his own gang tried to assume control by arguing that Owney was permanently crippled and therefore unsuited for leadership. Although Owney later arranged for hired killers to murder his rival, three witnesses who knew of the pact violated their oaths of silence.  As a result Owney was convicted of manslaughter and given a ten-to-twenty year prison sentence. He remained in New York’s Sing-Sing prison for about a decade until released on probation in 1923 when he was thirty-one years old.

At the height of Prohibition he formed a new gang and went into bootlegging. Prohibition revolutionized crime because it was exceptionally profitable. Violating prohibition evolved into a type of sport for many Americans. New York Governor Al Smith served liquor at public receptions. New York City mayor Jimmy Walker seldom arrived in his office before noon because he spent most nights carousing at speakeasies. Since the national law was unpopular, some states adopted weak regulations that permitted their state police to avoid enforcing the federal law. New York state was among them.

Consequently, enforcement fell to the Treasury Department’s Prohibition Bureau. Notwithstanding the reputations of men like Elliot Ness, the Bureau was mostly staffed by politically appointed flunkies, incompetents and corrupt administrators. Owney thrived in such an environment. In order to maximize profits, Owney produced his own beer brand, Madden’s Number One. It cost about $5 dollars a barrel to make but sold to speakeasies for $36.

As indicated in the (occasionally inaccurate) nine-minute video below, Madden also operated some outwardly legitimate businesses including the famous Cotton Club where jazz greats like Duke Ellington performed and Lena Horne joined the chorus line at age 16.

When a younger trigger-happy hoodlum named Vincent “Mad Dog” Coll tried to muscle in on his rum-running business in 1932, Owney occupied Coll on a telephone conversation while the interloper was in a phone a booth. During the lengthy talk, Owney had the booth’s location call-traced and sent hired killers to gun down his enemy. The execution was ill timed because Owney’s probation board had been accumulating evidence that he was not giving up his wicked ways. The board threatened deportation or re-imprisonment. Simultaneously, Prohibition was ending and the Italians were taking control of the remaining rackets. Since the easy pickings of the Prohibition Era in New York were over, Madden was casting about for new business lines.

Professional boxing promotion was an early example of his diversifying efforts where he gained quick success. In one case he backed the giant six-foot-seven-inch Primo Carnera who won the 1933 World Heavyweight Championship title.  But Carnera was overrated and Owney may have helped him win his title by reason of a series of fixed fights in which some of the losers were paid to let him win. Nonetheless, Owney also had relationships with other fighters such as Max Baer and Rocky Marciano who became lifelong friends.

About a year before his probation board began questioning Owney about suspected parole violations, he took his first trip to Hot Springs in 1932. At the time, Las Vegas and Miami were practically wastelands. In contrast, Hot Springs was a wide-open town with a reputation for welcoming visiting mobsters as long as they behaved peacefully. Since Madden also still carried five of the eleven bullets he took in 1912, he may have also sought relief in the thermal waters. Contemporary mobster Dutch Schultz recommended that he visit the spa and make a point of meeting the young lady who worked at a gift shop near the town’s prime hotel, the Arlington.

Madden pulled up in an impressive Duisenberg and parked in front of thirty-year-old Agnes Demby’s shop. From Agnes’s viewpoint behind the counter the grand convertible filled both picture windows. After the well-dressed driver entered the shop, Agnes told another clerk that she would attend to the new customer. Owney looked around and talked with her as he gradually bought an increasing number of items. By the time he was finished he had spent about a thousand dollars, which was a huge amount in the depths of the Great Depression.  Thus, he felt justified in asking Agnes on a dinner date. But she modestly turned him down and went home where she lived with her widowed dad who was the town’s postmaster.

Since her father was not at home when Agnes arrived, she grew bored and walked over to the Arlington Hotel lobby where she found Owney sitting and talking with another guy. She walked up to the pair and asked Owney if he’d still like to have dinner. The generous mobster gave her a broad smile and said that he’d love to.

Madden stayed for two more weeks and spent most of his time with Agnes. The more familiar he became with Agnes and Hot Springs the more he envisioned a promising future for the two of them as well as the town. Agnes would become the love of his life and Hot Springs held potential to become his miniature New York with no rival big-time gangsters in permanent residence.

Later that year Agnes visited him in New York and Owney reciprocated by returning afterward for a second Hot Springs visit. But the parole board continued to hound him. Evidently, somebody—he never learned whom—wanted him returned to Sing Sing. During one hearing an inspector informed the board that Madden had been arrested 140 times but only convicted once, which was the 1912 manslaughter case.

In a bid to project a hard-on-crime image New York Governor and presidential hopeful Franklin Roosevelt put his weight behind the parole board. An investigative committee of the legislature had discovered problems not only with Madden, but also with other notables, including New York City Mayor Jimmy Walker. Only days before the Democratic presidential nominating convention, however, Roosevelt passed the basket of hot potatoes to the conflicted Mayor Walker.

Gangsters Myer Lansky, Charles “Lucky” Luciano and Frank Costello attended the convention as power brokers for the Tammany political machine. According to Madden biographer Graham Nown, the likely candidates could not gain the Democratic Party nomination without assuring Mayor Walker and his pals, including Owney, that the legal pressures against them would be lifted.   When Luciano told Al Smith that Tammany had decided to back Roosevelt, Smith replied, “Charlie, Frank Roosevelt will break his word to you.”

Smith was right. Once Roosevelt got the nomination Walker was forced to resign and everything fell apart for Owney. The parole board used a technicality to order him back to jail. His chauffer drove him to Sing Sing where a guard who doubted the unescorted Owney’s identity initially refused to admit him. But by sundown July 7, 1932 Madden was back in a prison cell. In November the board ruled that he must serve twelve months.

Since Prohibition had been abolished before he was released in July 1933 Madden turned his attention to the gambling rackets. Gambling casinos were illegal nearly everywhere but—as they did for the Prohibition Era speakeasies—authorities often winked at them. When stating his opinion about the desirability of peaceably dividing the gambling territories among the various Mafia families instead of fighting over them, the influential Lansky told other Mafia leaders that the country was big enough for everyone to have a piece of the action without fighting one another.

Except for his uncertain parole status, it looked like Owney could turn Hot Springs into his little corner of the game. Unfortunately, his parole required that he not leave New York State. Nonetheless, through mysterious negotiations his parole was eventually transferred to Hot Springs, conditional to his remaining in Arkansas.

Outsiders have never known why the New York parole board reversed its attitude toward Madden. Even after he was released from prison in 1933, investigations revealed probable corruption in his outwardly legitimate coal supply business. Board members may have been bribed, or they might just simply have decided that Madden was small potatoes after the end of Prohibition. One parole commissioner indicated that he approved Owney’s transfer to Hot Springs partly because the gangster was ill, perhaps because of the bullet slugs that remained in his body.  A future Hot Springs confidant later said that the process involved many months of negotiation and included participants who were among America’s most prominent leaders.

During the summer of 1934 Mob leaders met privately at New York’s Waldorf Astoria hotel to divide up the rackets controlled by Dutch Schultz who, they assumed, would soon be headed to jail for income tax evasion. During the meeting, Lansky awarded Owney Miami’s Tropical Park horse race track and told him that he could also be the Mob’s representative in Hot Springs.

Owney married Agnes in November 1935. The couple would live in Hot Springs for the rest of their lives. Madden generally kept a low profile during his thirty years in the town. The marriage ended at Owney’s death by natural causes in 1965. Agnes never remarried and lived until 1991 when she died at age 90.

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