STILL REMAINS

Evening Post, Volume CXXI, Issue 3, 4 January 1936, Page 24

STILL REMAINS

BOOTLEGGING IN U.S.A.

HUGE PROFITS MADE

WINGED PATROLS

Aerial rum patrols thunder high above the Canadian border, soar over the Rio Grande. At sea, on dirty nights, unlighted rum craft slide past coastguard cutters that plunge and pitch in angry t spume along 10,000 miles of coastline. Deep in the pine woods of New Jersey thousands of gallons of molasses mash, bubble, and boil in giant vats. Over back roads huge trucks, and trailers loaded with bootleg goods lumber towards New York, Newark, and Philadelphia.

The nation is still leaking at the seams, and the leaks are costing the Government somewhere between 30,000,000 dollars (£6,000,000) and 50,000,000 dollars (£10,000,000) a year in revenues, not counting the tremendous cost of maintaining an army of land and marine patrols in a futile attempt to plug the holes in the dike. All this after two years of repeal, writes Meyer Berger in the "New York Times."

President Roosevelt and other public officials predicted recently that the 50 per cent, cut .in high-grade whisky duty, provided for in the new reciprocal treaty with Canada, would stop the bootleggers to some extent. But there are many administrators of State liquor control systems who cannot see it that way. They know it will take something far more drastic than the new rum duty pact to discourage the bootlegger. FAKING ON A LARGE SCALE. Mr. D. Frederick Burnett, New Jersey's Commissioner of Alcoholic Beverage Control, who' was recently elected head of the National Association of State Liquor Administrators, has a neat-ly-framed panel in his office that is decorated with counterfeit labels and revenue stamps of almost every description. They are used by the "booties" on very impressive bottles of charged water that reach the night club tables as 13-dollar (£2 10s) champagne, and on "non-refillable bottles" containing murderous substitutes for respectable brands of Scotch and rye. And they are not even good counterfeit. So gullible is the drinking public that the inspection is never very critical. It is impossible to guess with any accuracy how much of the stuff sold today as standard is bootleg' One of Mr. Burnett's assistants thinks it might be as much as one-half. Other experts • think it is somewhat less than that. One can check the figures in Commissioner Burnett's office for some indication of the great volume of bootleg output. During the first ten months of 1935 his men seized* in New Jersey 389 stills, with a capacity of 161,385 gallons; 10 cleaning" plants (where denatured alcohol is "washed" with ether, chloroform, and caustic soda); 7 rectifying plants; 58,540 gallons of alcohol (which the bootlegger would expand into 234,160 gallons for the drinking customers): 15,383 gallons of wine; and 1,643,176 gallons of alcohol mash. Those figures merely indicate how much was seized. It is altogether fair to assume that an infinitely larger amount of liquor got through to the ultimate consumer, both by land and from sea. Mr. Joseph Choate, jun.. Federal Alcohol Administrator, guessed | that 50,000.000 gallons slipped through, untaxed, during the first year, of repeal. At that time only a few motherships lurked on the tide outside the 12-mile limit. Last spring there were between 40 and 50, loaded to the gunwales with stuff ready to be transhipped to the swift runners. ■ Recently a dispatch from London to the "New York Times" carried the heading, "Vast Liquor Flood is Smuggled Here from Belgian City." It told how a Norwegian tramp steamer left Antwerp with 21,000 six-gallon cases of pure alcohol on October 23. The casual' consumer may get some of it. out of the 500,00 quarts that will result from that cargo when" the "booties" have cut it, labelled it, and coloured it for the Christmas mar-' ket. And even if one misses that consignment there is always more from the Barbados, Cuba, and Holland. Or the molasses stills in the .woods. The identity of the heads of the great bootleg syndicates remains hidden. In the first place, those dignitaries never put out to sea to fetch in the cargoes; that would be too risky. They leave it to impoverished fishermen who know every tide, every inlet, and every safe spot on the coast. Nor do they go near the great vats in the woods; they pay a force of hardworking labourers to do that. All they do is see that the graft gets Into the proper hands so that production will not be stopped or the trucks confiscated. One New/Jersey official has figured that they spend from twothirds to three-fourths of their gross income in graft—and still make a staggering profit. It is believed fairly certain that none of the major racketeers of the Prohi- . bition era are in on the repeal bootlegging: They have gone respectable, and quite a few have invested their Prohibition era profits in honest whisky firms. ~,'•■ There have been considerable improvements in bootleggers' equipment. New, false-tanked trucks with ingenious taps that really yield whatever the sign on the truck calls for—milk, or oil, or whatever—are popular now. But behind the honest commodity lie bigger and larger tanks filled with coloured or "washed" alcohol that will go into respectable bottles behind the counters of supposedly honest bars. Or, if the stuff is low-grade, it .will find its way into the speakeasies that still exist. For speakeasies do still exist, despite the fact that many of the hipflask generation mourn them as for / ever gone. TIPS ON THE ROAD. Night diners along the road are signal stations for the driver of the bootleg truck. He knows where to drop off for a hamburger and the latest information as to what roads to take with his load. Drivers rarely use the same road two nights running. They are a bit canny about their vat operations around this time of year, too, because the woods are filled with hunters and game wardens. They pick up tremendously when the hunting season ends. And there's still another source of supply ,a newer and politer form of bootlegging. Under this plan a philanthropic "bootie" sends some friend of his with wife, three children, and nurse,on a free trip to Bermuda, paying 50 dollars (£10) each (minimum fare) for the adults and half-fare for the children. Each member of the group can bring in 100 dollars (£2O) worth of the best liquor in the world, duty free. The market price on the stuff here is almost three times the purchase price in Bermuda. i

The remedy for all this? Not, exaprts declare, the new 50 per cent, duty cut in the reciprocal agreement. Commissioner Burnett advocates sweeping tax reduction, strict enforcement, and public co-operation. "As it stands," he said, "the Federal tax is a protective tariff for the bootlegger. Alcohol costs the legitimate dealer only 20 cents a gallon to produce because he produces in great bulk. But it bears a Federal tax of 2, dollars

and a State tax of 1 dollar per gallon— a tax of 1500 per cent. Add to this the expense of distribution and the reasonable profits of the distiller, the wholesaler, and the retailer, about 1 dollar 27 cents, and the minimum price at which legitimate alcohol may reach the consumer is 4 dollars 47 cents. The bootlegger sells it for 2 dollars 50 cents a gallon.

"Fair competition is out o£ the question. As long as these high taxes remain the differential between legitimate and illicit industry is a standing invitation to violate the law."