Financial Inclusion and Crime in Saint Pierre and Miquelon: A Forgotten Chapter in Prohibition History
The Rise of Liquor Smuggling in Saint Pierre and Miquelon
A string of tiny islands off the coast of Newfoundland, Saint Pierre and Miquelon was a French territory that experienced a period of unprecedented economic prosperity during the 1920s and early 1930s. The archipelago’s unique geographical location and favorable laws made it an attractive hub for smuggling liquor into North America.
A Prime Destination for Bootleggers
With the United States enacting prohibition in 1920, Saint Pierre and Miquelon became a prime destination for bootleggers and suppliers. The territory’s deep-water ports allowed boats to dock year-round, and its proximity to Canadian shores made it an ideal location for exporting Canadian whiskey to the US.
Favorable Laws and Regulations
Canadian distillers took advantage of the favorable laws, which included a low import tax of just four cents per bottle. This was less than one-tenth of the import tax in other offshore competitors, such as the Bahamas. The ease of acquiring international landing certificates required by Ottawa also made it an attractive location for liquor kingpins.
Key Benefits
- Low import tax
- Easy acquisition of international landing certificates
- Proximity to Canadian shores
Economic Boom and Gangsters
The colony’s economy flourished as a result of the liquor trade. The French government spent close to 20 million francs to improve its harbor and storage facilities, which accommodated over 1,000 ships per year. Despite low import duties, income from customs was three times the operating budget of Saint Pierre and Miquelon before prohibition.
Famous Bootleggers
Gangsters and bootleggers flocked to the territory, with some even having private residences on the island. One famous bootlegger who visited Saint Pierre and Miquelon frequently was Bill McCoy, known as “The Real McCoy.” He battled high-speed pursuit boats and potential hijackers while transporting liquor from the islands to the US.
Locals’ Benefits
Locals also benefited from the rising economic tide, with many making a living by transporting liquor or working in the storage facilities. The construction boom led to the conversion of refrigeration plants used for storing fish into liquor warehouses.
The End of Prohibition and Economic Downturn
However, the bubble burst when the Eighteenth Amendment was repealed in 1933, and the demand for liquor dried up almost overnight on the islands. This led to a massive depression that lasted for years, as both gangsters and Canadian bankers left the territory for greener pastures.
Modern Economy
Today, Saint Pierre and Miquelon’s economy is more diversified, with tourism and oil and gas exploration contributing to its revenue. However, it has never experienced another boom like it did during those 13 years of prohibition. As historian Peter C. Newman wrote, “Saint Pierre was buried in an avalanche of freight, pungent with the smell of superior liquor … so strong that at times the fog that rolled up Saint Pierre’s steeply inclined streets with the nightly tides would carry a distinct Scotch flavour.”