At the First Ward Social Club headquarters (a smoky pool hall den), Tony Camonte (who accompanies Johnny Lovo) throws a spittoon through the glass entry door-window (painted with Louis Costillo's name as President) - shattering his name and signifying the change of leadership. Tony bursts through and announces: "Just changin' the name on the door. Meet your new President, Johnny Lovo." Lovo, the new president of all the gang leaders in town, describes changes in the 'running' of beer on the South Side - the entire area will be efficiently organized as Lovo's territory:

You can still stay in, but from now on, you're operating the way I say...We're gonna get organized and I'm gonna handle the works. It's gonna mean twice as much dough for everybody and half as much trouble...Running beer isn't a nickel game anymore, it's a business and I'm gonna run it like a business...There's three thousand saloons on the South Side and half a million customers. Figure that out! Add up what they're gonna lay on the line every year for drinks and nobody in charge.

When one of the hoods objects to Lovo's control of the bootlegging racket ("I don't have to go into business with nobody") and attempts to leave the meeting, he is confronted by Tony and beaten up: "You sit down here, and don't interrupt the president no more." Gang warfare between unwilling rival leaders over the bootlegging business threatens to erupt as predicted, making the South Side "a shooting gallery."

Therefore, Tony is commissioned as a "good salesman" to "stick his neck into those joints and get the orders" - using strong-arm tactics to convince beer customers to order only from the united front of Lovo's bootlegging outfit. Tony's comic, bumbling social 'seck-a-tary' Angelo ("Dope") (Vince Barnett) sharpens a lead pencil between his teeth so that Tony can take orders from South Side bar owners.

A montage of sequences illustrates how Tony (with Guino) campaigns through the South Side to increase customers for Johnny Lovo's booze with strong-arm tactics. In the first saloon as the camera moves from left to right, Tony arm-twists the owner's arm behind his back, propels him into the back-office, and then intimidates and forces him to buy large quantities of Lovo's swill at higher prices. In a second joint where beer overflows a beer stein and runs down the drain, Tony commits another owner (with an injured left eye after a beating) to Lovo's delivery. In a third recalcitrant bar, they throw a bomb into the storefront. At The Shamrock cafe, Tony and his gang enter while the camera remains outside. Gunfire rakes the interior as they flee the scene.

Camonte reports to Lovo on his preferred and successful methods of securing business cooperation: "Lots of orders. They all buy from us. All we have to do is fill 'em...We have your South Side all nailed up in a box." However, a bold headline in the evening newspaper reports that one of their rivals is still alive:

2 MORE SHOT DOWN
Meehan Riddled with Bullets, Will Live, Hospital
Authorities State. Police Expect Clue
Berdini Dies Instantly. Last of "Hold-outs" in South
Side Beer Ring Cornered in Shamrock Cafe.

Tony's gang immediately visits the hospital to finish off their wounded rival who lies in his hospital bed - behind which is a curtain with an X on it. With large flower arrangements in their hands, they scare the cowering hospital attendants as they search the rooms and murder Meehan in his bed.

A machine-gun is super-imposed above pages of a wall calendar. Blasts of violent gunfire rip away the pages as time advances from October 5th through August of the next year.

When Tony, wearing an outlandish suit, meets Poppy again, she asks him (with a straight line) about his jewelry. His slow-witted, ignorant, subhuman response is interpreted as "a funny mixture" when she patronizingly brushes him off. With his increasing wealth, he has improved his wardrobe, bought a custom-made, bullet-proofed car, and a new house (also with protective steel shutters installed on all the windows and doors):

Poppy: I see you're goin' in for jewelry. It's kind of effeminate, isn't it?
Tony: Huh? Yeah. I got it in an auction. A bargain.
Poppy: (She laughs at him) You sure are a funny mixture, Tony.
Tony: The first time you smiled.
Poppy: Yeah?
Tony: How do you mean you think I'm funny?
Poppy: You just are, that's all. What else are you doing with all your money? I hear you're gettin' a new car.
Tony: Hm, hmm. It's different. It's got bullet-proof glass and a steel body. And I got myself a new house, too. Come up sometime?
Poppy: Yeah, and bring my grandmother.
Tony: No kiddin', you come up?
Poppy: Why don't you get yourself a girl, Tony?
Tony: I'm workin' on that now.
Poppy: Yeah? Well, don't tire yourself out.

Lovo is angered and furious that Camonte is overexpanding into the North Side, jeopardizing their entire bootlegging racket by encroaching into O'Hara's territory - and slowly (and ambitiously) wresting control:

Lovo: What do you use to think with? An empty beer keg? Just when you get this territory lined up and running smooth, you step out and gum up the parade.
Tony: How do you mean, Johnny? I just sell a little more beer. Aw, don't worry.
Lovo: Don't worry? You know what O'Hara's liable to do now? He'll send his guns down here to the South Side. They'll move around like hummingbirds. You're liable to get it and I'm liable to get it...He's tough, see?
Tony: Aw, he ain't so tough. Hangin' out in a flower shop. You afraid of a guy like that?
Lovo: I ain't afraid of anybody.
Tony: Sure you're not. That's a crazy question, hey Johnny?

Out on the street, a careening automobile dumps a corpse toward Lovo's gang - it has a warning note (with a small white flower from O'Hara's flower shop) pinned to its clothing: "KEEP OUT OF THE NORTH SIDE."

As Tony's dumb, inept, illiterate secretary, Angelo's job is to answer Tony's phone, but (for comic relief) he doesn't know how to correctly master the telephone, hold the receiver, politely answer, remember a caller's name, or write and take down somebody's name. Tony corrects his incompetent assistant's pronunciation, etiquette and brusque manners toward someone on the other end of the line: "Sec-re-tary, you dope. Sec-re-tary...That's no way to talk! Talk nice. Tell him to state his business...A secretary must be able to write. He must be educated, get education." Projecting his inadequacies onto an inanimate object, Angelo blames the phone receiver: "That's your fault," and when the frustrated caller calls back, he draws his gun and threatens to shoot.

Guino Rinaldo steps into the apartment with a white flower in his boutonniere - an indication of another killing. Tony, wearing a striped lounging jacket, plays with the flower for a moment. He doesn't have to be explicitly told that Guino has just murdered their rival O'Hara in his flower shop on the North Side: "It was easy...He was alone." Soon after, Poppy pays a visit to Tony's new apartment. She is intrigued by his new-found wealth, and rumors that Tony's brutality has reached into the North Side:

Tony: How do you like this place?
Poppy: Kinda gaudy, isn't it?
Tony: Ain't it, though? Glad you like it.

He proudly shows her his "own idea" - steel shutters with peek-hole slots on all of his windows ("In case you have visitors you don't like"), and he beams as he shows her a flashing sign across the street that promises ascendancy in the world:

THE WORLD
IS YOURS
COOK'S TOURS

With little-boy wonder, naivete, megalomania and bravado, he tells her, with an unintended double entendre:

Tony: Some day, I'll look at that sign and I'll say, 'OK, she's mine.'
Poppy: You think so.
Tony: Yeah, I got a purty good idea.
Poppy: (She notices his silky robe) That's-a purty hot. Expensive, eh?
Tony: (He laughs heartily) Yeah, come here. I show you some of what's purty hot.

He leads her into his bedroom suite, to show off extravagant piles of new dress shirts that reflect his rising status in the gangster world: "What I'm gonna do is wear a shirt only once and then give it right away to the laundry. A new shirt every day." Although unwilling to be visibly impressed, Poppy realizes that she values his newly-acquired possessions: "You're just gonna drive the women mad, aren't ya?" When he makes a pass at her, she tentatively stands her ground, refuses to date him, and inquires: "I thought you were Johnny's friend." Tony is single-mindedly attracted: "Sure, I like Johnny, but I like you more." When they are on the verge of kissing, Tony is interrupted with the arrival of the police who are there to arrest him.

Tony is hauled into the Chief's office by officer Guarino on suspicion of murdering O'Hara. Presumably, he is soon released once again, because Epstein secures a writ of habeas corpus for him. Meanwhile, one of the last members of O'Hara's gang - the murdered gang member's successor named Gaffney (Boris Karloff, playing the part as a gangsterish-like Frankenstein, one year after his role as the Monster in Frankenstein (1931)) - opens imported crates marked STAR PINEAPPLES BRAND. They prepare for war with the contents of the crates - light-weight portable tommy guns. Speaking with a British accent and a lisp, Gaffney seeks revenge toward Camonte with the 'bootlegged' weapons ("There's no law against manufacturing them, just having them"):

He won't get any bigger. We'll take him before he finds out about these guns. (He fondles the sub-machine gun.) 300 slugs a minute.

Gaffney sets up an ambush after Tony leaves the police headquarters and dines in the Columbia Cafe-Restaurant with Guino, Angelo ("Dope"), and Poppy. Acting like a "big-shot," Tony flirts with Poppy: "I'm not hungry - except for you. You got something I like...Say, I've been waiting a long time. I'm crazy about you...I've got everything BUT what I want. Ya understand?" Just before Gaffney's attack, an anonymous caller phones to try and lure Tony into the open. Tony directs "Dope" instead to answer and "get a name." Suddenly, O'Hara's slow-moving hearse followed by other black cars (in a fake funeral procession) drive by the window-fronted restaurant and spray it with gunfire from their repeating tommy guns. Tony and Poppy duck as other bystanders scurry for cover. Oblivious to the entire fierce and noisy gun battle around him, "Dope" remains on the phone in an inaudible conversation, asking "What's your name?" Scalding hot water from a bullet-punctured coffee urn behind him literally 'pisses' on him and wets his pants.

Impressed by the new style of machine gun ("If I had some of them, I could run the whole works in a month"), Tony convinces his lieutenant Guino to volunteer to capture one after gunning down one of the gangsters during the lethal battle. Unruffled, Guino retrieves a tommy gun from a dead rival for Tony. With the new gun in his hands, Tony is ecstatic, gleeful, and regards it as a new toy: "Hey, that's swell." Back at Lovo's place that has also been assaulted by O'Hara's gang, Tony is even more thrilled and childishly delirious with his first machine gun. As tension mounts between Lovo and Tony, he confronts his crime boss with plans to conquer the North Side (against Lovo's orders):

Hey Johnny, look what I got!...Lookit, Johnny, you can carry it around like a baby...We don't give 'em time. We go after them. We throw them micks up for grabs...There's only one thing that gets orders and give orders. (He taps the gun) And this is it. That's how I got the South Side for ya and that's how I'm gonna get the North Side for ya. Some little typewriter, eh? I'm gonna write my name all over this town with it in big letters...Get outta my way, Johnny, I'm gonna spit!

His shouted words, "I'm gonna spit," sound sexual in their delivery. In a primal, monkey-like way, he grabs the gun into his arms and empties a steady round of 'spitting' bullets into the wall where a whole rack of pool balls, powder and cues 'dance' and splinter into hundreds of pieces from the gun's action. With a crazy grin on his face, Tony's eyes widen with delight and exhilaration at the sight of destruction. Poppy, who has been loading a revolver in the background, supportively tosses it toward Tony - just in case he needs it against Gaffney: "Take this along in case that bean-shooter doesn't work."

In the next sequential montage of helter-skelter murders - a careening automobile with smoky gun blasts shatters glass and kills a rival gang member in the front window of the Cambridge Hotel. Tony's henchmen wage all-out war against Gaffney's gang - murdering other bad boys around the North Side of town. A camera, mounted in the back seat of a police car with a whining siren, follows a motorcycle cop to the site of the latest killings.

With new weapons infiltrating into the hands of criminal gangs, cop Guarino confirms that the violence will escalate:

Chief: These fellas bootleg machine guns like they bootleg booze.
Guarino: Yeah, they'd better do something about that, because with these toys to play with, what happened before will look like a tea party.

They prepare to "put the screws" on the 22nd Street freight house where deliveries of guns are being made in "fruit-boxes."

In an additional montage, more gunfire during the spectacle of all-out gang warfare is delivered from moving vehicles on dark, wet streets. A woman's scream punctuates the quiet of the night as glass shatters. Bullets spit from weapons and murder a man as he is thrown from a car - the body lands under a circular spot of light on the sidewalk beneath a X-shaped street sign (UNDERTAKERS) and in the cross-hairs of an "X" shadow. Another murder occurs under a trolly-car X.

More crosses signal death. A reconstructed "St. Valentine's Day Massacre" scene is prefaced with a closeup of a trellis of seven X criss-crossed beams in the ceiling above the seven victims. The camera slowly pans down to black silhouettes of seven of Gaffney's gang members (only Gaffney is absent due to a twist of fate). The outlines of figures are ordered to line up against a wall - where they are "mowed down" and slaughtered with machine gun fire. Clouds of smoke from the firearms billow up and conceal the murders from the gun-shy (and modest) camera. A dog is heard whimpering.

(Later when the crime is being investigated, a bright white cross marks the pile of bodies on the garage floor.)

Forced into hiding after turning "yellow," Gaffney remains as Camonte's only significant enemy ("I'm the only one left") and next target. His days are numbered - a white cross of light behind him marks his upcoming death. Guarino realizes that Tony's trigger-happy obliteration of the O'Hara gang also threatens to displace Lovo as crime boss:

Lovo is practically out. He's as scared as Gaffney.

[The next scenes were clumsily inserted by the demands of censors and watchdog groups.] The city's Chief of Detectives denounces the public's interest in the glorified gangster Camonte - depicted as a "colorful character". He also condemns lawlessness. To turn the public against the violence, he even claims that "kiddies playing hop-scotch on the sidewalk" are being killed:

Colorful? What color is a crawling louse? Say listen, that's the attitude of too many morons in this country. They think these hoodlums are some sort of demagogues. What do they do about a guy like Camonte? They sentimentalize, romance, make jokes about him. They had some excuse for glorifying our old Western badmen. They met in the middle of the street at high noon and waited for each other to draw. But these things sneak up and shoot a guy in the back and then run away....Colorful? Did you read what happened the other day? A car full of 'em chasing another down the street in broad daylight. Three kiddies playing hop-scotch on the sidewalk get lead poured in their little bellies. When I think what goes on in the minds of these lice, I wanna vomit.

A door leading to a newspaper publisher's office ("The Evening Record, Mr. Garston, Publisher") opens the next scene - [another one that was later added to the film to appease state censor boards and pressure groups]. A conversation is in progress inside between a group of reform-minded, concerned citizens and the publisher (Purnell Pratt). The newspaper publisher decries gangsterism, calls for the public to counter gang violence by passing laws to outlaw guns, and blames gangsters as unwelcome foreigners who need to be deported. But he still defends his right to publish the gangland murders as headlines and "as front-page news":

Male Citizen: Our organizations are opposed to your policy, Mr. Garston. Your paper could be an influence against the gangster, yet you keep right on playing up his activities as front-page news: murders, gang-war, killings - that's all we read about. You're glorifying the gangster by giving him all this publicity.
Garston: You're trying to tell me you can get rid of the gangster by ignoring him, by keeping him off the front page. That's ridiculous. You're playing right into his hands. SHOW HIM UP! RUN HIM OUT OF THE COUNTRY! That'll keep him off the front page.
Female Citizen: In the meantime, you expect our children to read of nothing but outrage and murder?
Garston: That's better than their being slaughtered. The city is full of machine guns, gang war in the streets. Kids aren't even safe to go to school. You want that to go on.
Another Male Citizen: Certainly not, but what can private citizens do? Even our police force can't stop it.
Garston: Don't blame the police. They can't stop machine guns from being run back and forth across the state lines. They can't enforce laws that don't exist.
Male Citizen: Then it's up to the federal government to do something about it.
Garston: You're the government - all of you. Instead of trying to hide the facts, get busy and see that laws are passed that'll do some good.
Male Citizen: For instance?
Garston: Pass a federal law that puts the gun in the same class as drugs and white slavery. Put teeth in the Deportation Act. These gangsters don't belong in this country. Half of them aren't even citizens.
Third Male Citizen: (with a heavy ethnic accent) That's-a true. They bring nothing but disgrace to my people.
Garston: All right, I'll tell you what to do. MAKE LAWS AND SEE THAT THEY'RE OBEYED - IF WE HAVE TO HAVE MARTIAL LAW TO DO IT...Surely gang rule and wholesale law defiance are more of a menace to the nation than the regulation of oil or a bullfight. The Army will help. So will the American Legion. They offered their services over two years ago and nobody ever called on them. Let's get wise to ourselves. We're fighting organized murder!

Displaying his taste for Italian theatre, Tony and his goon-buddies are fashionably dressed in fancy tuxedoes and sitting in the theatre audience for a "serious" and "fine show" - a performance of Somerset Maugham's Rain. Feigning cultural aspirations, Tony regards the play's main character, prostitute Sadie Thompson, as "a pretty smart girl" but "disillusioned," although Dope and Guino have other opinions:

Guino: What's a girl wanna hustle in a place like that for?
Dope: Yeah, it's rainin' all the time.

As Tony leaves his seat for intermission before the last act, an armed entourage of other bodyguards rise in unison and they move as a block to the outside for a smoke. Dope complains that the show lacks humor: "I like a show with jokes." They are advised by Johnny Lovo to knock off Gaffney at Frank's bowling alley where their remaining lethal rival ("the last one") has been spotted. Reluctantly, Tony agrees to leave the play at intermission, but orders Dope to watch the remainder of the show and report on its outcome: "I gotta know which fella this girl Sadie she take. You stay here and find out and then come tell me." As Tony's henchmen prepare to snuff out Gaffney, Angelo arrives with the plot's outcome - ("She [Sadie Thompson] crawled back in the hay with the Army") and Tony crudely concedes his delight that she rebukes the clergyman character ("That's-a fine, she's a smart girl.")

The scene of Gaffney's death is artfully photographed as a whistling Tony strolls into the bowling alley and cases the joint. A scorekeeper marks an X - strike - on Gaffney's scoresheet - hinting at his impending death. During his next turn, Gaffney approaches the line and squats down to hurl his bowling ball. As he releases the ball, loud and rapid gun-fire rakes his body and mows him down. The camera follows the ball he's thrown - it's another strike. The metaphor of the pins falling symbolizes Gaffney's own death. The ball knocks down all the pins except one - symbolically, the remaining pin spins and whirls, stubbornly teeter-totters for a second longer, and then finally topples over.

Tony and his gang enter the PARADISE No. 2 restaurant and dancing night-club where Tony and his men are treated as upper-class clients. The maitre d'hotel has them escorted to a table, but Tony's attention is diverted toward a table where Lovo and Poppy sit across from each other. He sits between them and hints about the recent North Side murder, and flirts (with a wink) at Poppy: "I just finished up tonight. Now I play a while." Rather than accept Johnny's cigarette lighter for a light for her cigarette, Poppy turns to Tony's match instead and leaves Johnny's flame in mid-air. And she also changes her mind about dancing and consents to dance with Tony. The deserted and upset Johnny is left alone at the table to ponder his multiple rejections - he restlessly plays with a silver-plated salt-shaker in his hands, grabbing it like a miniature pistol with a trigger. [He subconsciously has strategically decided how to take care of his main hit man - he intends to murder him.]