Canadian Prohibition Loophole Fuels Roaring Twenties in United States

Model T stake truck breaks through Detroit River ice with overload of Canadian liquor

During the United States Prohibition period, the majority of liquor passing through Windsor, Ontario and the Border Cities into the United States came across the Detroit River. The United States Customs Department estimates that 80% of all illegal spirits brought into the country during Prohibition originated in Canada--our neighbor to the North. This "Detroit Funnel" as it became known in the press supplied liquor to Chicago, Lansing, Toledo, Cleveland, St. Louis, Kansas City and all points in between.

When Ontario passed the Ontario Temperance Act in 1916, the province closed the bars, clubs, and liquor stores until the end of World War I. The government needed the grain for the war effort. But with the end of the war, the Canadian government repealed wartime Prohibition and liquor began to flow again in the Dominion.

Meanwhile, the United States Congress passed the 18th Amendment--otherwise known as the Volstead Act--on October 28, 1919. The act banned the manufacture, transport, sale, import, export, and delivery of alcohol spirits within its borders. The bootlegger, rum runner, and flapper were born. The easy market and close access to Detroit became the focal point for shipping illegal booze into the United States from Canada. Historians labeled the age The Roaring Twenties--when organized crime flourished on both sides of the International Border.

Under pressure from vocal Temperence groups on both sides of the International Border, Ottawa passed Bill 26 decreeing that each province could prevent the importation of liquor by holding a referendum vote. The rest of Canada voted dry leaving Ontario to stand alone. The province did vote to approve the Sandy Bill on July 19, 1921 which disallowed the movement of liquor within Ontario without an order of the Board of License Commissioners.

Jim Cooper--Belle River and Walkerville roadhouse owner and illicit liquor dealer--figured out that if he set up an export business in Detroit, he could circumvent the Ontario law. Canadians would place an order through a Detroit telephone number. The purchased goods were not imported into Ontario. The liquor was already in Windsor and Walkerville warehouses. Because the purchase was made out of the country, it was perfectly legal to be delivered within Ontario.  

During Prohibition, six distilleries and twenty-nine brewers operated within Ontario all licensed by the federal government. It is estimated that forty million dollars of booze illegally crossed the border every year. At first, there was a lot of small-time suitcase smuggling for personal use. All manner of devices were contrived to conceal bottles. Some people strapped bottles under their clothing, pints were slid into high boots, and cars were fitted with hidden compartments.

After organized crime wrestled control of the river from small-time operators, much of the liquor was smuggled in by the boat load. In the winter, old jalopies, trucks, and sleds scurried across the frozen river to engage in the illegal trade. When the U.S. Coast Guard built up their fleet with 200 h.p. patrol boats hoping to dominate the river traffic, the Purple Gang's Little Jewish Navy bought specially outfitted speed boats and mounted small cannons on their bows with Tommy Gun-toting crews to harass the authorities leveling the playing field. The Purple Gang laid claim to the Detroit River as their territory. Any freelance bootleggers unlucky enough to be caught smuggling by the gang lost their booty and often their lives. The Purple Gang alone is credited by police with the murder of over 500 people during their bloody reign of the Detroit underworld.

Earning the big money became possible because of a gaping loophole in the Canadian law. Large quantities of liquor could be bought from Canadian distilleries for export purposes if purchasers or their agents carried a Canadian Customs B-13 export clearance document certifying that the buyer was exporting liquor anywhere but a country where Prohibition was the law. Shipments were marked for Europe, Cuba, and South America. But once a boat left the loading dock, the Canadian government was unconcerned where it actually moored and unloaded. The burden of enforcing this American law fell squarely upon the United States, and the Dominion felt no obligation to enforce the laws of their sovereign neighbor.

The boxes and barrels of liquor were distributed to Ontario Border City export docks strung out along the length of the Detroit River. Rum runners from Detroit would cruise across, load up their boats, and make their river runs--mostly at night. In the winter, the shipments were loaded on the frozen Canadian river bank awaiting their mass exodus across the International Border.

Some of the diverted illegal liquor stayed in Canada by sailing directly into slips behind Ontatio's chain of roadhouses stretching from Windsor to Niagara Falls offering dining, drinking, dancing, gambling, and adult entertainment. Americans flocked to Ontario to patronize the Border Cities thriving vice economies.

For its part, the Canadian Government levied a nine dollar tax per gallon on all liquor sales. This export tax was returned when the customs department received a certificated receipt from the country where the shipment was imported. Since most of the liquor landed in America, those receipts were never redeemed. By 1928, Canada earned up to thirty-million dollars per year this way.

With the New York stock market crash on October 29, 1929 and the onset of the Great Depression, many people lost everything. Jobs were scarce and money was tight. The drunken revel was all but over. Then on December 5, 1933, the United States government passed the 21st Amendment repealing Prohibition. The bill landed on President Franklin Delano Roosevelt's desk and he signed it. The boom times of Prohibition ended on both sides of the international border. It would take another World War to turn the economies around for both countries.

The Rise and Fall of the Purple Gang: 
https://fornology.blogspot.com/2018/03/the-rise-and-fall-of-detroits-purple.html