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Whiskey and the Repeal of Prohibition in the United States

Posted by Colonel Bourbon on

On December 5, 1933, the 18th Amendment was repealed with the ratification of the 21st Amendment to the United States Constitution.

The 18th Amendment constitutionally had banned the sale of most alcohol throughout the U.S., with the Volstead Act subsequently making the rules that prohibited production, importation, transportation, and sale, with a few exceptions including medicinal liquor and wine for religious purposes

Whiskey and the Repeal of Prohibition in the United States

(America rejoices with the end of alcohol prohibition in 1933.)

Today, with the benefit of hindsight, Prohibition is remembered as a particularly unfortunate time in American history, a misguided attempt to wean the country off of drink. The result was an age of organized crime, when gangsters made fortunes by quenching the thirst of folks for the next 13 years. It was also, the counter-culture period of the Greatest Generation, with its speakeasies and assorted shenanigans. 

Whiskey hangover and bye bye tax revenue

Also, the nation shot itself in the foot with the passage of the 18th Amendment. Whiskey was an integral part of the American economy. Bourbon and other American whiskeys are intertwined with the country's history and finance. It's not an exaggeration to say whiskey was (is) as American as mom and apple pie.  Whiskey was (is) about rugged individualism and capitalism, very much the heart and soul of the republic. 

Whiskey could provide a lot of tax revenue for the young country -- and it did. The Whiskey Rebellion was a rebellion against the tax that was implemented to help pay for the cost of the American Revolution. None other than George Washington led an army into the rural land, looking for those who were none too happy to have the government from the east invade their land and rob them of the fruits of their distilled labor.

As we wrote in our blog on the rebellion:

"Whiskey has been part of American culture and commerce from the beginning. Americans did not just drink the spirit; it was used as money, to barter; it was used as medicine...

Turning a portion of their crops into alcohol was a good way for farmers to preserve their grains into a product that did not spoil and could be better stored or transported. Corn is the primary grain in bourbon, a crop that dominated fields in the new world. Farmers and others could barter what they needed with whiskey. The value could often be more stable than the Continental Dollar. Tensions over the tax were thus further inflamed that this was a tax on income and currency."

So in 1920, instead of having the continued tax revenue from bourbon, rye, and other American spirits, the U.S. government --  "with a 68 percent supermajority in the House of Representatives and 76 percent support in the Senate" (The New York Times)  -- handed the money to criminal enterprise."

Gangsters, tommy guns, speakeasies, bathtub gin -- not exactly what the Anti-Saloon League, the Woman's Christian Temperance Union -- and indeed the entire country -- had intended.

In the TV series Boardwalk Empire, Nucky Thompson (played by Steve Buscemi) toasts the dawn of Prohibition and the new nefarious opportunities:

"As you know, in less than two hours, liquor will be declared illegal by decree of the distinguished gentlemen of our nation's Congress. To those beautiful, ignorant bastards!"

 The following is the opening credits to Boardwalk Empire, with Nucky looking at an apparent bootleg operation gone wrong washing ashore

Enough was enough

Americans began to tire of this prohibition.

On March 22, 1933, President Franklin Roosevelt signed an amendment to the Volstead Act, allowing for beer with 3.2% alcohol by weight (under the original Volstead language, an intoxicating beverage was considered greater than 0.5% 

Roosevelt quipped, "I think this would be a good time for a beer."

FDR on amending the Volstead Act in Mach 1933 "I think this would be a good time for a beer.""

(FDR on amending the Volstead Act in March 1933 "I think this would be a good time for a beer.")

The U.S. was suffering from the economic depression and Prohibition had robbed about 15% of federal, state, and local tax revenues.

Utah became the final state to ratify the 21st Amendment, putting the repeal over the needed threshold in voting.

America celebrated the end of a dry 13 years. Not all Americans immediately approved. During the 1930s, about two-fifths preferred a return to banning alcohol, but it was not to be. 

The Aftermath

Besides lost  tax revenue, Prohibition decimated the legitimate  liquor industry. Except for a half dozen distilleries that were granted a license for medicinal whiskey, the distilleries shuttered, Many American businesses failed. (*Old Forrester was one of those six companies to continue, when its parent Brown-Foreman was given one of those medicinal licenses. As a result Old Forrester is the longest, continuous manufacturer of bourbon.)

After repeal, the business had to start over. Since bourbon and other whiskeys are aged spirits, in barrels, the startup took some extra time. America, having shot itself in the foot, would need a few years to recover. Further, the decade-plus long Prohibition was long enough for folks to forget what the spirits should even taste like. The expertise would have to be re-learned.

Today, the 1920s speakeasy theme is part of the marketing for many bourbons: Heaven Hill's Larceny, for example. The Evan Williams Experience tour in Louisville, Kentucky ends in a tasting room designed as a classic speakeasy. And here at Colonel Bourbon, our catalog of tshirts and tees includes a Speakeasy Collection, celebrating that moment in time when the fuddy-duddys who, not approving of the culture, inadvertently, gave it center-stage.



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