Short Stuff: Milk Wars

The notorious American mobster Al Capone and his associates are known for their myriad criminal activities, and their influence extended into an unexpected sector: the dairy industry.

The mob saw the dairy industry as a lucrative opportunity after the repeal of Prohibition threatened their bootlegging revenue.

With the repeal of Prohibition, the mob faced a significant loss in revenue from bootlegging alcohol. This led them to seek new ventures, and the dairy industry appeared to be a promising alternative. Al Capone's proteges made a strategic move by acquiring a major dairy, Meadow More Dairies. Their aim was to infiltrate the dairy market, bypassing union workers, and significantly lowering prices to undercut their competitors.

Despite Al Capone's fame, he had little direct involvement in the "Chicago Milk Wars" as he was in prison during this period.

Although the Chicago Milk War is often linked to Al Capone's historical legacy, his direct involvement was nonexistent due to his incarceration in federal prison at the time. However, his lieutena ...

The dairy industry's conflicts and alliances are shaped by its many involved parties, including farmers, milk dealers, store owners, and delivery drivers, all woven into a complex web that easily lends itself to unrest and competition.

The dairy industry involved a web of farmers, milk dealers, store owners, and unionized delivery drivers, all with competing interests and uneasy alliances.

Josh Clark outlines the competing groups within the dairy industry, each with its own priorities and often at odds with each other. Farmers, aggrieved by the price-fixing set by milk dealers’ associations, took action by striking for better prices.

Farmers went on strike to demand higher prices from the milk dealers, who had formed an association to fix milk prices.

The milk dealers, who controlled the price paid to farmers, faced direct action as farmers refused to accept the unilaterally determined pricing, demanding a fair share of the industry's profits.

Store owners who sold milk directly could undercut the prices of companies that used unionized delivery drivers, leading to conflicts.

On the retail end, store owners, by skirting around the additional costs associated with delivery driver unions, were able to offer milk at lower prices. This underpricing inevitably led to competition, intensifying the unease among the industry's factions, whose interests were already at odds. The delivery drivers had contracts with their companies that ensured decent wages secured through union negotiations, ...

The mob, known for its ruthless tactics and criminal endeavors, employed a mix of intimidation, violence, and strategic undermining of competition to exert control over the milk industry.

Intimidation and Violence

Using tactics that were both aggressive and menacing, the mob targeted Steve Sumner, the head of the Milk Wagon Drivers Union Local 753, with threats of violence. They pressured him to capitulate to their demands to "lay low" and permit the use of non-union workers in the sale of milk. This move was essential for the mob's plan to sell milk at a lower price point.

Murray "The Camel" Humphreys, a notable associate of Al Capone, confronted Sumner with an offer disguised as a mutually beneficial arrangement. He suggested that by allowing non-union work, the mob would be able to undercut the competition through cheaper pricing. The implication was that following an initial period where the mob would dominate the market with low prices, they would then hike the prices back up. The so-called "protection" offered to the union in exchange was a thinly veiled threat of violence should they refuse to cooperate.

In a bold countermove, industry insiders retaliated against the mob's threats and attempts to coerce them into submission. This resulted in the bombing of the mob's own dairy establishment, a violent message that those within the industry would not comply qui ...

In 1939, the Department of Justice took action to dismantle a milk monopoly that was engaging in price fixing and anti-competitive practices, leading to the resolution of the "Chicago Milk Wars".

In 1939, the Department of Justice brought an antitrust case against the various unions and associations involved in the milk industry's price fixing and anti-competitive practices.

Chuck Bryant explains that when the Department of Justice brought the antitrust case, a district court judge initially dismissed it. However, the Supreme Court later reinstated the case, demonstrating the seriousness of the government's intent to address the anti-competitive practices within the milk industry.

To avoid going to trial, the government negotiated a settlement that required the farmers, unions, and distributors to abandon their anti-competitive practices and allow for more open competition in the dairy industry.

Rather than proceeding with a lengthy trial, the Department of Justice proposed a settlement. This settlement required that farmers and unions agree not to impede independent milk marketing, and it required that distributors stop fixing prices. Additionally, drivers' unions were instructed not to hinde ...