Industrialists and businessmen who contributed heavily to the temperance movement later became Prohibition’s most important opponents, primarily because of a rise in crime and hostility toward authorities and threats of increased taxation.
By 1920, more than half of the residents of American cities with populations of 100,000 or more were foreign-born, Catholic or Jewish, or children of foreign-born parents. These immigrants were feared by people living in rural Protestant areas, where public hysteria was heightened by the anti-German prejudices of World War I. For immigrants and other workers, saloons, however shabby, offered companionship but, it was feared, might also generate interest in labor unions, socialism, and
Prohibition officers raid a lunch room on Pennsylvania Avenue in Washington, D.C., in 1923.
The Volstead Act allowed Americans to buy, store, and serve liquor to friends in their home or homes; the well-to-do could afford expensive, smuggled premium liquor. America’s tax loss benefited Canada, Mexico, Cuba, the French Miquelon Islands near Newfoundland, and the Bahamas, as storing and smuggling became major industries; the lines formed by boats off U.S. coastal waters, waiting for liquor to be picked up, were called Rum Row. In the Bahamas alone, liquor imports rose from 27,427 gallons in 1918 to 567,940 gallons in 1921, raising government liquor revenue from $44,462 to $984,732. British liquor exports to
Workers, especially immigrants, deeply resented Prohibition, especially because it accompanied other repressive actions directed against the poor, such as U.S. attorney general A. Mitchell Palmer’s 1919 attempted arrest and deportation of thousands of immigrants without due process. Workers lacked money for liquor and homes to store it in. They could not afford overseas travel, imported liquor, or the better speakeasies. They drank moonshine or illegal wine and beer, produced under unsanitary conditions with questionable ingredients that sometimes caused blindness, nerve damage, and death. In Chicago, the Genna brothers (Angelo, Sam, Pete, Tony, Mike, and Jim) obtained a license to deal in industrial alcohol, redistilled it to make it drinkable, and found such demand for their product that they installed stills throughout Little Italy, paying workers $15 a day, then a high wage. Such decentralization of moonshine, beer, and wine production made Prohibition enforcement and quality control virtually impossible.
Opposing Prohibition were organizations such as the American Bar Association, the American Federation of Labor, and the American Legion. Most important was the
The AAPA methodically compiled its own statistics. Official Prohibition expenditures were $3.5 million in 1920; these were to rise to $44.0 million by 1930. In the AAPA’s widely reported 1929 Cost of Prohibition and Your Income Tax, the association estimated that, without Prohibition, federal liquor taxes would have exceeded $850 million, with cities, states, and counties receiving another $50 million. The AAPA combined lost revenue with growing enforcement costs, and estimated Prohibition to have cost $936 million in 1928 alone. Moreover, the National Commission on Law Observance and Enforcement, appointed by President Herbert Hoover, issued the 1931 Wickersham Report, showing that the working classes had not become compliant consumers and employees but were bitterly resentful.
The Great Depression, which began with the financial crash of October, 1929, created millions of newly unemployed workers while tax revenue fell. On taking office in 1933, President Franklin D. Roosevelt urged modification of the Volstead Act to allow the immediate sale of beer and wine, thus defusing some working-class tension while providing some jobs and tax revenue and, above all, hope for the future. Repeal followed, backed by businessmen who otherwise foresaw catastrophically increased personal and business taxes.
Behr, Edward. Prohibition: Thirteen Years That Changed America. 1996. Reprint. New York: Arcade, 2006. Readable, comprehensive history. Bibliography. Kobler, John. Ardent Spirits: The Rise and Fall of Prohibition. 1973. Reprint. New York: Da Capo Press, 1993. General history. Separate bibliographies cover books and pamphlets, periodical literature, and some fiction, plays, and poetry. Kyvic, David E. Repealing National Prohibition. 2d ed. Kent, Ohio: Kent State University Press, 2000. Detailed study of repeal movement. Bibliography. Nishi, Dennis, ed. Prohibition. San Diego, Calif.: Greenhaven Press, 2004. Excerpts from documents, including Wickersham Report and 1991 essay by anti-Prohibition economist Mark Thornton. Sinclair, Andrew. Era of Excess: A Social History of the Prohibition Movement. New York: Harper & Row, 1962. Detailed history emphasizing excesses of both Prohibitionists and anti-Prohibitionists.
Alcoholic beverage industry
Corporate income tax
Racketeer Influenced and Corrupt Organizations Act
U.S. Department of the Treasury