While Auto Ordnance Corp. was selling the TSMG on the open market in the 1920s, it was uncomfortably aware of what its guns could do if placed in the wrong hands. It relied on its dealers to restrict sales based on an agreement that stated Thompson Guns are for use by those on the side of law and order, and the Auto-Ordnance Corporation agents and dealers are authorized to make sales to responsible parties only. Unfortunately not all of its dealers would abide by this agreement.
January 16, 1920 marked a turning point in American history. With the enactment of the Volstead Act, the United States government made it illegal to import, manufacture and sell alcoholic beverages. It wasnt long before criminals realized that immense profits could be made by providing the public with the alcohol it wanted. So, like a carpenters hammer, the Thompson Submachine gun became a tool of the trade, employed by many of the bootleggers and gangsters of the 1920s and 30s.
To John Thompson's distress, his namesake Submachine gun turned out to be the perfect weapon for gangland murders. Being compact and easily hidden, and possessing tremendous firepower, it could easily kill one or more targets without requiring the gunman to get close enough to be exposed to return fire - which usually wasnt a problem because anyone near the intended victim was either also killed, or diving for cover. Even heavy doors and automobile bodies could not shield a victim from a TSMG firing armor piercing ammunition. It was these fearsome qualities that inspired the nicknames bestowed on it. Chopper, Gat, Chicago Typewriter and Tommy Gun all became popular terms used by criminals and the public at large. Eventually, individuals like Al Capone, John Dillinger and Machine Gun Kelly became permanently associated with the gun.
Interestingly, even though Thompsons could be legally sold to anyone on the open market, in the underworld they commanded exorbitant prices ranging from $1,000 to $2,000 apiece. This phenomena was attributed to the eventual crackdown on the many dealers who were more than happy to sell machineguns to known gangsters. One dealer in Philadelphia, Edward Goldberg, would oblige his gangland customers by grinding off the serial numbers before delivery.
Ironically, it was during this same time period that the TSMG was finally adopted for service by an official military branch of government. The United States Coast Guard began issuing Thompsons to patrol boats along the eastern seaboard. The guns proved to be very effective for boarding parties inspecting watercraft suspected of rum-running. Shortly after that, another government agency purchased 250 Thompsons. The United States Post Office, responding to attacks and robberies of mail trucks, purchased the guns to be used by United States Marines assigned to guard the mail. In 1927, these same Post Office guns would be used successfully by Marines fighting in the jungles of Nicaragua; prompting the Corps to order 200 more. The popularity of the Thompson with the troops, and its successful role in close quarter fighting led the Marines to officially adopt the Thompson in 1930, years ahead of the Army.
In 1928, at the same time the Marines were fighting in Nicaragua, the Navy had re-evaluated the Thompson and decided to adopt it for use on Naval Gunboats. Deciding that the rate of fire was too fast, and that the Tommy Guns trademark vertical foregrip was too delicate, the Navy agreed to adopt the Thompson if these issues would be addressed. Auto Ordnance agreed, and replaced the foregrip with a horizontally mounted one. The rate of fire was reduced by replacing the Thompsons actuator with a much heavier unit. This increased the mass of the bolt, and reduced the cyclic rate down to an acceptable 600 rounds per minute. The new Navy model of the Thompson was released as the U.S. Navy Model of 1928. The number 8 being stamped over the number 1 on the Model 1921 guns used to build the order.