NCJ Number
74705
Date Published
1980
Length
13 pages
Annotation
Changing patterns in markets for illegal enterprise are examined with a focus on three areas of criminal entrepreneurship: gambling, loansharking, and activities related to morality.
Abstract
During the nineteenth century, many cities tolerated parlor houses which functioned as small businesses for the efficient provision of prostitution services. During the period leading up to the first World War, however, social morality changed and the parlor houses could no longer rely on police protection. Also, widespread use of telephone systems made other forms of prostitution practical, safe, and efficient, and parlor houses disappeared. Track betting on horse racing represents another form of illegal activity which disappeared because it was without police protection, vulnerable to suppression. Off-track betting flourished within communities because it was closely tied to the community political system in that and to the local economy. The use of the automobile and the centralization of political power changed neighborhood structures. Using the telephone, gamblers developed alternate methods of operating which were based on the extension of credit. Social disapproval of borrowing and the use of credit resulted in the development of loansharking activities in the early 20th century. Reformers recognized that a legitimate market existed for loans to consumers and eventually changed laws to make provision of small loans a profitable activity. Loan sharks subsequently lost much of their leverage over borrowers. Licensing of borrowers denied loansharks access to court. Unlike modern loansharking, which gained prominence in the 1960's and which was attacked through the criminal justice system, these early loansharking activities were eliminated without the intervention of the criminal justice system.