Banks were having miserable public relations problems during the Depression. Many of them failed, sweeping away the life savings of millions of hard working people. Those that stayed in business foreclosed on people's homes, farms and businesses as the economy went from bad to worse.
So bank robbers were not particularly viewed as terrible criminals by the average American. There was even a touch of Robin Hood when bank robbers destroyed all of the mortgage records at the banks they hit. The daring daytime robberies and skillful getaways were glamorous and exciting, especially if the robbers were handsome, polite and photogenic.
And so, John Dillinger and Harry Pierpont, Baby Face Nelson and the rest of the Dillinger Gang were celebrities whose exploits were followed closely by a Depression-weary American public that followed their every adventure like a running television series.
Not everyone was entertained by America's new folk hero outlaws who sprang up during what would come to be known as the Mid-West Crime Wave. In Washington, D.C., J. Edgar Hoover and his fledgling Bureau of Investigation were outraged that American citizens had come to idolize the new breed of outlaw — Dillinger, "Pretty Boy" Floyd, "Machine Gun" Kelly, Bonnie and Clyde and others — and became vicariously absorbed in their lawlessness.
Harry Pierpont's self-serving rationale — "I stole from the bankers who stole from the people" — did not go over at Mr. Hoover's straight-laced FBI. Hoover saw Dillinger and his gang as a threat to the national morals. Quickly enacted new anticrime laws made bank robbery, the transport of stolen goods or flight of a felon over state laws to avoid prosecution a federal crime which came under the enforcement jurisdiction of the FBI.
Hoover's big chance came in early March of 1934 when Dillinger broke out of an "escape-proof" jail in Indiana, stole the sheriff's car and drove across the Illinois state line, putting himself in the jurisdictional sights of the FBI. Hoover mounted a special operation to capture Dillinger.
Young Melvin Purvis, the son of a well-connected wealthy southern aristocrat, was in charge of the Chicago office of the FBI. Dillinger became his project. What "Little Mel" lacked in height and weight, he made up for in ambition and intelligence. But Purvis was up against a wily group with the Dillinger Gang. These men were real professionals.
For more than a month, Dillinger escaped the traps that were set for him. In April of 1934, the gang needed a place to hide out. One of them suggested a summer resort in northern Wisconsin called Little Bohemia. The lovely lodge had been built a few years earlier by Emil Wanatka, an emigrant of Bohemia, who had become friendly with bootleggers and gangsters during Prohibition.
On April 20, Dillinger and his gang, along with wives and girlfriends showed up at the lodge. It was off season and rooms were available. After dinner, Wanatka sat down with his guests to play cards. It was then that he noticed the guns and the shoulder holsters. He and his wife Nan figured out who the guest really were and they were terrified.
Finally, Wanatka confronted Dillinger, who did what he could to put his host at ease.
"Don't worry," Dillinger told him. "I want to sleep and eat a few days. I want to rest up. I'll pay you well and then we'll all get out."
Every time the phone rang, one of the gangsters eavesdropped. Every time a car came, Wanatka had to explain who it was. Every time someone from the lodge went into town, a gangster went with them. He was afraid for Nan and his ten-year-old son. "Baby Face" Nelson was a really dangerous psychopath and made Wanatka particularly afraid for his family and staff.
Wanatka had enough. He wrote a letter to a man he knew in the U.S. Attorney's office in Chicago. Nan slipped the letter into her corset and got permission from Dillinger to go to her nephew's birthday party. Dillinger, surprisingly, didn't insist that a gang member go with her.
Intensely relieved, Nan and her son got into the car and drove away. Then she noticed that a car was following her. When she slowed down, she almost panicked — the most frightening man in the gang, Baby Face Nelson, was following her.
John Toland in his book The Dillinger Days tells the story of her daring plan. Nan drove slowly up to the S curve in the road before her brother's house. As soon as she was out of Nelson's sight, she raced into her brother's driveway and picked him up and got back on the highway before Nelson knew what she had done. She gave the letter to her brother and pulled the same trick at the next S curve where she dropped off her brother, just outside the town of Mercer.
She went to a grocery store in Mercer and bought some candy. Nelson pointed his finger at her as a warning. Nan saw her brother, who had mailed the letter, picked him up and the three of them drove to her older brother's birthday party in Manitowish Waters, Wisconsin. There she confided in her family about the Dillinger Gang at Little Bohemia.
They came up with a plan. Realizing that the sheriff's office was not up to handling the Dillinger crowd, they would contact the Chicago office of the FBI. This was the chance Melvin Purvis was waiting for. Unlike other FBI agents, he liked publicity.
Toland describes the hard-working young bachelor: "He was a small man with bright, alert eyes who dressed fashionably and was so fastidious he often changed shirts three times a day. A law graduate of the University of South Carolina, he spoke with a polite, pleasant drawl. One might have thought he was a successful young bond salesman perhaps — but certainly not a G-Man. He was a competent executive, a man of unquestioned courage despite his excitability, and was well liked by those who worked under him."
As soon as he got the news about Little Bohemia, he called Hoover who promised to fly in reinforcements from the St. Paul office.
Along with them came Assistant FBI Director Hugh Clegg. Clegg, an FBI superstar, would be first in command, Purvis, second. The agents from Chicago would meet them at the airport in Rhinelander, Wisconsin, which was the nearest airport to Little Bohemia.
Just as the federal forces were gathering for the attack, Dillinger and company were getting ready to move on. Dillinger asked for an early dinner so that they could all get on the road. It was a Sunday afternoon and the bar was filled with patrons. Upstairs, Dillinger was studying a road map.
Around 4 P.M., Nan's sister, Mrs. Voss, drove up to tell her sister that her husband Henry had gotten in touch with the FBI. Nan whispered that the gangsters were leaving early that evening. Mrs. Voss left soon after to relay the information to her husband who was going to meet the FBI forces at Rhinelander airport.
The FBI got an unexpected break due to Dillinger's cautiousness. Earlier in the day Dillinger sent Pat Reilly, described as a gang-hanger-on, to St. Paul to purchase more ammunition. He took one of the gang's girls with him. While he was gone, Dillinger moved the other two cars out of sight into a garage. Dillinger and the rest of the gang were waiting for the two to return so they could leave. However, when Reilly pulled into the driveway and didn't see the other cars, he got spooked.
Thinking the gang had left or, worse, had been captured and the authorities were lying in wait, Reilly backed out and decided not to return until after dark.
It was past 6 P.M. when the FBI agents landed at Rhinelander. They had planned to conduct the raid at 4 A.M. the next morning, but now everything changed and the attack had to proceed immediately.
The agents commandeered five cars. Along the way, two of the vehicles became disabled on the severe winter pocked roads. Eight agents were forced to ride on the running boards of the three remaining automobiles, wind whipped by the icy northern Wisconsin coldness. Clegg and Purvis formulated a plan, "Three agents wearing bullet-proof vests would storm the main door of the lodge. A group of five would flank the lodge on the left in a line all the way to the lake and intercept anyone who tired to break through. A similar group would do the same on the right. Thus the gang would be trapped on three sides. The fourth side, the lake, was impassable.
"The plan was good but it did not take into consideration three key terrain factors, all missing from Voss's map: a ditch on the left of the lodge, a barbed-wire fence on the right, and the steep bank near the lake which could mask an escape along the shore. Nor did it occur to Voss to warn Purvis about Wanatka's two watchdogs." (Toland)
As the agents quietly approached the brightly lit lodge, they got a real surprise. The two watchdogs barked furiously. The agents ran to their positions, believing that the element of surprise was gone. But as it turned out, the dogs had barked so frequently that the gang members were used to the noise.
Three of the bar's customers chose that particular moment to pay up and go home. At the same time, two bartenders went out on the porch to see what was bothering the dogs. The three customers walked to their car in the parking lot.
Inside the car were John Hoffman, a gas station attendant and two CCC workers from a nearby camp — John Morris and Eugene Boiseneau. As Hoffman started the automobile, the radio, which had been left in the on position, blared loudly. Clegg and Purvis, believing the three men to be members of the gang attempting to flee, ordered the agents to shoot out the tires. Numb and nervous, the agents blasted away at the automobile, hitting all three occupants with their fire. Hoffman ran bleeding from the car into the woods. Morris staggered back into the lodge. Boiseneau was going nowhere — he was killed instantly.
If the dogs didn't alarm the Dillinger gang, the gunfire surely did. Return fire from the lodge was instantaneous, but lasted for only a few seconds. The gang had laid out a careful escape plan the day they arrived. Dillinger and gang members Homer Van Meter, John "Red" Hamilton and Tommy Carroll followed the plan to perfection, running down to the back of the lakeshore and turning right. "Baby Face" Nelson turned left. The agents, trying to execute their plan, fell into the drainage ditch on one side or became entangled in the barbed wire on the other side.
Meanwhile, the injured John Morris crawled across the lodge floor to the telephone and picked up the receiver. Alvin Koerner, the local exchange operator came on the other end. Morris said, "Alvin, we're at Emil's! Everybody has been knocked out!"
Nelson would soon arrive at Koerner's. Ironically, so would Wanatka, along with the two bartenders, after escaping from his own lodge. Nelson, Wanatka and Koerner left and got into an automobile just as a vehicle containing FBI Agents W. Carter Baum and J. C. Newman, and local constable Carl Christensen arrived. Nelson stepped out of the car and moved toward the one with the lawmen.
"I'm looking for Mr. Koerner," Newman stated unaware of the carnage that was about to be unleashed.
Nelson aimed his automatic at the men and ordered them out of the car. "I know you bastards are wearing bulletproof vests so I'll give it to you high and low."
With that he shot Newman in the forehead. Miraculously, the agent lived. Baum wasn't as fortunate. He was killed instantly and Christensen was wounded eight times, but would survive.
Hoover had promised the newspapers something special. It was special all right. It was one of the worst public relations fiascoes in FBI history. The FBI had killed an innocent man and wounded two others, while one agent was killed, one wounded and a third lawman seriously injured. Will Rogers summed it up: "Well, they had Dillinger surrounded and was all ready to shoot him when he came out, but another bunch of folks came out ahead, so they just shot them instead. Dillinger is going to accidentally get with some innocent bystanders some time, then he will get shot."