Prohibition: A Short History of The Noble Experiment
By Jimmy Quaille, Certified Sommelier
The 18th Amendment to the Constitution prohibiting the sale of alcohol became the law of the land for 13 years starting at 12:01 am on the 17th of January, 1920. Some states refused to appropriate funds to enforce it and other states, like Maryland never enacted the code in the first place…but not for the reasons you may think. Alcoholism certainly was a problem. The average American drank 27 bottles of hard liquor per year; that’s 14 times more than today! Amazingly, anyone over 15 could drink. However there were other social problems that Prohibition intended to fix. Child labor laws, poverty and even anti-immigrant views all had a part in the “Noble Experiment”. Whether for or against the movement, the vast majority of the public following World War I was uneducated and falsely believed the Volstead Act (named after the sponsor Andrew Volstead) would still allow lower alcohol drinks like beer and wine. Realization that the new law forbade the manufacture, sale and transportation of liquor and not their consumption started a buying frenzy that guaranteed that no one who wanted a drink did without. A staggering 141 million bottles of wine were sold during the three months prior to the starting date. In addition, It was (and still is!) legal to produce up to 200 gallons of wine per year for personal use, which comes out to a little more than two and a half bottles per night, per household. To make the process easier, enterprising winemakers made and sold a wine “brick” of concentrated grape juice, which came with the following “warning”: “After dissolving the brick in a gallon of water, do not place the liquid in a jug away in the cupboard for twenty days, because then it would turn into wine.” Ironically, U.S. consumption of wine rose during prohibition from 70 million gallons per year to 150 million gallons per year.
Although most proponents were initially optimistic about the prospects of the legislation they soon realized that Prohibition allowed businesses and criminals to exploit loopholes in the law. Drug stores were allowed to sell “medicinal” whiskey to treat even the most common ailments…like a toothache! Walgreens, a drug store founded in 1901 took full advantage of this and grew from 20 locations to over 500 stores. There was well over 30,000 illicit establishments known as “speakeasies” (so called because of the practice of speaking quietly so as not to alert the police) in New York City alone. It was said that for every legitimate bar that closed during Prohibition, six speakeasies opened in its place.
A few wineries, including Louis M. Martini, Beaulieu Vineyards, Concannon Winery, and Beringer Winery stayed open citing sacramental wine for Catholic Mass as their sole purpose of production.
Prohibition came to an end on December 5th 1933 when the 21st amendment was ratified. The 18th Amendment was the fastest US amendment to be created and repealed. There were as many reasons for its repeal as there were for its ratification. Sometimes overlooked as a contributing factor was the nationwide shock at Chicago’s Saint Valentine’s Day Massacre in 1929, when prohibition was supposed to reduce crime. But the most powerful argument for repeal was the stock market crash and the Great Depression that followed. Legalizing the booze business was an obvious opportunity to collect taxes. Curiously, some regions of the country maintained a ban on alcohol even after repeal. Oklahoma remained dry until 1959 and Mississippi was alcohol free until 1966.
In the years following the Volstead Act American wineries were forced to ramp up production beyond their capabilities. They were also trying to supply varietals of wines that were familiar to the soldiers returning from war, like Burgundy, Chablis, and Champagne…which the U.S. could not produce. American barrels at the time were made of redwood rather than oak, which had atrophied during 13 years of non-use. They leaked and oxidized the juice and produced terrible wine. So when entrepreneurs like Ernest & Julio Gallo started producing wines of better quality, Americans drank away and jug wines became the norm. But the main and lasting effect of Prohibition is what is called the “Three Tier System“. During the 13 years, distribution of alcohol was handled by the criminal underworld. Elected officials understood that they would be putting the fox in charge of the henhouse if there wasn’t a system put in place to ensure orderly market conditions and control taxes. The resulting system mandated that alcohol manufacturers could not sell directly to the public. They must sell to a middle man, the distributor
Here’s how it works to this day:
1st tier — The supplier/producer
- Makes the product.
- Pays Federal Excise Tax
2nd tier — The distributor/wholesaler
- Purchases the product from the supplier then sells it to retailers.
- Pays State Excise Tax
3rd tier — The retailer
- Sells alcohol “on premise” (bars) and “off premise” (liquor stores).
- Pays State Sales Tax
Even after over 80 years the unintended consequences of prohibition is hard to quantify. In monetary terms, Prohibition cost the federal government an estimated 11 billion in lost tax revenue and cost over $300 million to enforce. In addition it all but created organized crime in America and made folk heroes of gangsters like Al Capone, Lucky Luciano and Bugsy Siegel. On a social level, it gave rise to mass disobedience and mistrust of the federal government that stands to this day.
WINE GUY FUN FACT!
Not as well known as Andrew Volstead were the sponsors of repeal, Senator Pat Harrison and Representative Thomas H. Cullen. The passage of the Cullen–Harrison Act ending prohibition is celebrated every year on April 7 as National Beer Day.