The Victorian concept of vice accepted that men were imperfect creatures and that gambling, prostitution, and liquor could never fully be eliminated from society. Therefore, it was best that these "social evils" be segregated into a restricted area of the city, where they could operate outside and apart from decent society.
This doctrine was implemented in Chicago throughout the 19th and early 20th century. Although prostitution and gambling were de jure illegal under city and Cook county ordinances, their practice in segregated vice districts was de facto tolerated. Major attacks on vice districts only occurred when city boundaries or neighborhoods changed, as was the case with the Custom House Place vice district when streetcars began bringing residents into downtown along Clark Street in 1903.
The Third Great Awakening upended the Victorian view of vice, and ended forever Chicago's toleration of its open practice. This upswing in religious fervor started after the Civil War, and included a strong paternalistic impulse, in which the poor and downtrodden were thought to be uplifted by driving saloons and pimps out of their neighborhoods by force of law.
By 1910, social and religious pressure had mounted to a degree that even Chicago's relatively lax politicians felt impelled to eliminate the open vice districts. Attention naturally focused on the 22nd street Levee, the wildest and most open segregated vice district the world had ever seen. The federal Mann Act was passed in 1910, based on a purported case of white slavery in the Levee. Even the Levee's lords and protectors, the first ward aldermen, Michael Kenna and John Coughlin, played along, feigning outrage at police indifference to unlawful saloons and brothels, and promising to act. At the same time, they convinced former Mayor and "wet", Carter Harrison Jr., to return from California to again seek the city's mayorship, which he did.
But even Mayor Harrison was eventually forced to accept the will of the city's moral majority. He forced the closure of the Everleigh Club in 1911, and in 1913, formed the city's first specialty police vice squad, led by Major Metellium Funkhouser and Inspector William Dannenberg.
These two incorruptible crusaders for the public weal aggressively pursued vice in the Levee throughout 1913 and 1914, forcing the final end of open vice districts in Chicago. First, old-time saloon keeper Andy Craig and his gang of pickpockets were rounded up. Then, in January, 1914, raids on a wide variety of Levee bars and hotels began, including one on Jan. 8 at the Rhinegold Saloon and Cafe, a bar and house of ill repute at 1939 S. Dearborn (pictured above) owned by vice king "Big Jim" Colosimo, was raided by Funkhouser and Dannenberg's morals unit. Twelve women were arrested for vagrancy, plus the saloon's keeper, Johnny "the Fox" Torrio (or "John Turio", as the newspapers called him) -- who was later to take over the gang from Colosimo and lead it into the bootlegging era of Prohibition.
Colosimo and other vice entrepreneurs attempted to bribe Funkhouser and Dannenberg, they tried to obstruct their work, they even brought a lawsuit against them -- all to no avail. By the end of 1914, all major vice operations either moved into the suburbs or underground, where they remain to this day. The closure of the Levee eliminated advertisement of liquor, drugs and prostitution, but of course, did not eliminate these evils. Outside the realm of the courts, vice entrepreneurs turned to violence to settle disputes and enforce contracts -- thus, the murderous 1920s under the leadership of Torrio and Al Capone.
Most of the Levee is gone today, with even the streets vacated. The South Loop School's Early Childhood Center, a Chicago Public School, sits on the spot where the Rhinegold once stood.