Prohibition and the Great Depression: Echoes

Even French wine was bad in 1931. A poor vintage capped a pretty miserable year around the world. Of course, you couldn’t get Burgundy or Bordeaux legally in the U.S. -- Prohibition was the law of the land. Still, those with friends and contacts could find their way to bottles (and cases) from the legendary 1929 harvest and the excellent 1926.

Prohibition is going through something of a renaissance in today's popular culture, from Ken Burns’s terrific PBS series to the riveting HBO show "Boardwalk Empire," with its savagely charismatic crime boss, Nucky Thompson.

Getting government out of the liquor business is popular again, too. As Peter Robison and Duane D. Stanford reported for Bloomberg News on Nov. 7, there's a growing push among lawmakers in the 18 states that still control booze to loosen their rules. Those efforts are reviving some familiar arguments from the 1930s -- with public-health analysts arguing that privatization increases alcohol consumption by nearly 50 percent and deregulation advocates saying that a freer liquor trade can increase tax revenues and reduce cross-border smuggling.

Revisiting liquor control in 1931 offers some interesting insights. The numbers, first of all, are remarkable. New York City’s federal courts recorded more than 10,000 convictions for liquor violations in 1931. But fines averaged just $40, big money for a taxi driver but not for a large bootlegging operation. Despite widespread seizures, Americans were drinking steadily, heavily and dangerously, given the terrible quality of most of the available rotgut.

This was big business. In May 1931, Manhattan federal agents “pressed a button in a garage on E. 55th St., and opened a brick and steel wall into one of the largest distilleries ever seized. In it were almost one million gallons of alcohol and fermenting molasses,” altogether worth $750,000, according to the New York World Almanac of 1932. The plant’s output of 25,000 gallons daily would be missed by thirsty New Yorkers.

Investigating Newark’s “old Hensler Brewery,” agents discovered a pipeline under the street to a garage holding four trucks and 314 barrels of beer. New Jersey’s prohibition administrator, John Pennington, would later say that resistance to the liquor laws was “leading to almost open insurrection.” The state's brewing was “protected by an espionage system, controlled by racketeers, gunmen and the underworld, guided by disreputable attorneys" and "protected in many instances by corrupt Federal and State officials," according to the New York Times of Nov. 1, 1931. What a surprise!

Equally shocking, in December of that year a Santa Monica, California, court acquitted Cornelius Van Ness Leavitt, President Herbert Hoover’s brother-in-law, of possessing illegal whiskey -- “19 pints in a sack.” Judge Charles Spencer accepted Leavitt's testimony that “he was asked to hold the sack and did not know what was in it.” Leavitt had been in the rear of his friend Cliff Dailey’s grocery store, “taking a drink,” as he often did.

Plainly, in most cities, prohibition was toast by 1931. But in America’s rural center and south, it was far from dead. Indeed, it never quite died.

(Philip Scranton is a Board of Governors Professor of the History of Industry and Technology at the University of Rutgers at Camden and the editor-in-chief of Enterprise and Society. He writes "This Week in the Great Depression" for the Echoes blog. The opinions expressed are his own.)

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

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