Gangs have divided Chicago in 2-- the northside is run by the Bertshce mob, the southside by the Viale brothers, Augie & Vito. The line of demarcation being Madison Street. At the news office, Jake Lingle phones in a story to the front desk: gang war has erupted on the near northside, 2 hoods with machine guns smashed the liquor supply at Bertsche's Club Chapeau, in retaliation for Bertsche's mob raiding a Viale warehouse. Jake Lingle gets shot in the back at the subway station. The public turns out by the thousands for his funeral. It was the first time in history that a newspaperman was killed by the mob. Publicly, Augie Viale says Bertsche killed him; Bertsche says Viale did. The newspaper puts up a $25,000 reward for the capture of the killer. Former hood Bill Hagen meets with Ness. He says he'll give Ness information about the booze racket, if Ness finds out who killed Jake Lingle and tells him first, so he can get the reward money. Ness reminds him the Lingle killing is not a fed