Financial Crime Trends and Statistics in Saint Pierre and Miquelon: A Brief History of Prohibition and Smuggling

The Rise of a Liquor Hub

In the 1920s and early 1930s, Saint Pierre and Miquelon, a small archipelago off the coast of Newfoundland, transformed into one of the most lucrative real estate destinations on earth. This transformation was largely due to the United States’ flawed policies of prohibition, which led to the territory becoming a hub for smuggling liquor into North America.

A Strategic Location

The strategic location of Saint Pierre and Miquelon, situated just 15 miles off Canadian shores and close to the largest Rum Row that supplied the American northeast, made it an attractive destination for bootleggers and suppliers. Under French law, it was legal to produce, store, and transport alcohol on the islands, making them a prime location for those looking to capitalize on the lucrative liquor trade.

The Volstead Act and Its Consequences

The Volstead Act, which took effect on January 1, 1920, attracted attention from prominent figures such as Samuel Bronfman and Al Capone. Canadian whiskey distillers also saw the potential of the archipelago, with its deep-water ports allowing for year-round docking and a mere four-cent import tax per bottle.

A Hub for Bootleggers

Historian Daniel Okrent notes that Saint Pierre lay just 15 miles off Canadian shores but was considered foreign for duty purposes, making it an attractive option for Canadian distillers. The ease in acquiring international landing certificates required by Ottawa also made the archipelago an attractive destination.

Economic Boom and Consequences

The economic boom experienced by Saint Pierre and Miquelon during this period was unprecedented, with income from customs alone exceeding three times the operating budget of the territory. Gangsters and bootleggers flocked to the islands, including Al Capone, who allegedly had a private residence on the island. A branch of the Canadian Bank of Imperial Commerce was established on the territory, doing more business there than with Argentina, Australia, Ireland, or China.

Risks and Dangers

The rise of Saint Pierre and Miquelon as a prime liquor hub came at a cost, however. The illegal exportation of alcohol to the United States put rum runners at risk of arrest and seizures by American customs officers. Bootleggers like Bill McCoy, also known as “The Real McCoy,” battled high-speed pursuit boats and potential hijackers while transporting their illegal cargo.

Decline and Diversification

For the local population, the rising economic tide lifted all boats, with construction booms and lucrative jobs in the liquor trade becoming a new norm. However, the end of prohibition in 1933 marked the beginning of the archipelago’s decline, as demand for liquor dried up and a massive depression hit the territory.

Today

Today, Saint Pierre and Miquelon’s economy has diversified to include tourism and oil and gas exploration, but it will never again experience the boom that defined its history during those 13 years.