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During the late 1920s in Detroit, the Canadian boundary becomes a hub of activity for liquor smuggling. In the nearby slum of Hastings Street, juvenile delinquents run in gangs, the most violent of which is called The Purple Gang. When some boys attack an elderly couple, Lt. Bill Harley of the juvenile division is called in to investigate. He immediately questions the couple's grandson, William Joseph "Honeyboy" Willard, whom Bill jailed months earlier for robbery. Although Honeyboy feigns innocence, as soon as Bill leaves, he plans with his cohort, Hank Smith, to coalesce all of the small gangs under his tutelage. Meanwhile, Bill rounds up a group of boys in the police station, and when one tries to run, Bill slaps him. Visiting welfare worker Joan MacNamara, horrified, complains to the chief of police, who calls in Bill. There, Joan explains that the youths need therapy rather than punishment, and describes Honeyboy as sensitive, intelligent and suffering from claustrophobia. Bill replies that it is too late to reform these boys, all of whom were carrying cash, a sure sign that they are now aligned with mobsters. Soon after, Honeyboy demonstrates the strength of his new gang, called The Purple Gang, by holding up the most infamous rumrunners on the river, the Olsen brothers. The boys hijack the Olsens' freight and breaks bottle after bottle until the brothers, Eddie, Al and Tom, agree to pay them for "protection." Impressed by Honeyboy's audacity, Eddie invites him to survey their whole operation and then hires him to provide enforcement for their expanding liquor distribution business. An era of increased violence begins as the Olsens, aided by The Purple Gang, become involved in prostitution, gambling and theft. One day, Joan is on Hastings Street when gang member Joe Milford assaults her, and knowing she can identify them, Honeyboy coldly orders her execution. Bill, who is now an inspector in the homicide department, begins an investigation and soon arrests Joe. Although Joan's coworker, Dr. Riordan, argues that Joe is still underage, Bill points out that the already hardened criminal will be twenty-one by the time of his trial, and advocates sentencing him to life in jail. Despite this victory, however, the gang violence persists, until one day Honeyboy kills a corrupt policeman. Although Bill, urged on by his pregnant wife Gladys, was planning to retire, the chief appeals to his love of the city and offers him complete control over the case to bring down The Purple Gang. When Bill informs Gladys, she is heartbroken but still supportive. At the Olsens' office, New York mobster Killer Burke applies to work with them, and after Al Capone vouches for him, Honeyboy happily accepts Killer's gift of a machine gun. He uses the new weapon to massacre a group of St. Louis mobsters who are trying to take over Detroit, and when all the witnesses prove too frightened to identify any of The Purple Gang, Bill is forced to allow the crime to go unpunished. Bill tries to slow their progress with a series of nuisance search warrants, but the gang has informants in the legal system and so has forewarning of every raid. One day, Bill confronts the Olsens, vowing to stop at nothing to bring them down. Realizing they can neither bribe nor scare the policeman, Eddie decides to run his liquor smuggling business from out of the state. The arrogant Honeyboy announces that he will stay on and control the city with his gang, certain that he can use psychology to find Bill's "weak spot." To that end, he and his boys sneak into Gladys' room one night and terrorize her. Only weeks away from giving birth, the panicked Gladys struggles to get free, breaking through the glass door. When she dies three days later in the hospital, a devastated Bill yearns to seek revenge, but heeds the words of a nun who warns him not to place himself above the law of either man or God. Soon after, Honeyboy begins a racket extorting the city dry cleaners and dyers, uniquely vulnerable because they deal directly with consumers' possessions. When the gang charges huge premiums not to destroy their stock, the cleaners, led by Laurence Orlofsky, hire the Chicago Mafia to retaliate. Gang warfare breaks out, and as the underworld grows stronger, the public becomes more apathetic. In response, the governor creates what he calls "the one-man jury," allowing Judge Stone to grant any injunctions, arrests or searches he deems necessary. With the bureaucracy removed from the process, Bill is able to jail many of the gangsters. However, he recognizes the necessity of capturing the gang leaders, and so is pleased when he discovers that Hank has been arrested for loitering in Hastings Street. Knowing that Hank must have been visiting his mother, Bill appeals to the young man's desire to please his mother, urging him to provide information about either of the gangs. Hank agrees, but when he tries to pass information to Bill about the Mafia, Honeyboy catches him and, assuming he has betrayed The Purple Gang, has his best friend buried in cement. Bill has managed to intercept Hank's message and so is able to raid a flower shop that is actually a front for Mafia dope dealers. Although the shop manager is shot before he can give information, the past months' receipts reveal multiple deliveries to the same apartment, and Bill deduces that the Mafia leaders are stationed there. Honeyboy's informers notify him of the apartment address, and not knowing that Bill has posted undercover officers outside, he and three goons arrive there to kill the Mafia dons. As Honeyboy enters and shoots up the apartment, Bill's men surround the building and arrest the gang members. When Bill corners Honeyboy, the claustrophobic gangster tells Bill he killed Gladys, and the lawman barely contains himself from killing him. As an hysterical Honeyboy is led away, Bill muses that only an aware and active public can put an end to "rat-pack terrorism."