Bottleneckers. William Mellor

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СКАЧАТЬ movement.¹³ In the early nineteenth century, physicians, ministers, and employers had grown increasingly concerned about the drunkenness of workers and servants. Throughout the first half of the century, this concern mushroomed into a mass movement, encompassing more than a million people across a broad spectrum of the middle class who committed themselves to complete abstinence from alcohol.¹⁴ The 1840s saw the first state attempts at prohibition, followed in the 1880s by a second wave of attempts. Although most of these laws were overturned, a few survived into the early twentieth century as a new prohibitionist organization—the Anti-Saloon League—came to dominate the movement.¹⁵

      The league operated with a level of sophistication not known before. It hired lawyers to write model laws, built up a war chest of funds, and collected political favors subsequently used to expand the number of elected officials beholden to it.¹⁶ First working state by state, the movement wielded those resources to achieve prohibition of alcohol in twenty-three states by 1916 and seven more by 1919.¹⁷ It also came out for a federal constitutional prohibition in 1913, working to achieve it in Congress in 1917, and then achieved a final ratification in Nebraska in 1919. The Eighteenth Amendment—commonly called Prohibition—went into effect a year later.¹⁸

      Throughout this period, the league’s efforts were bankrolled by Rockefeller—a lifelong teetotaler—and fellow industrialists. Like early temperance adherents, they believed alcohol undermined the morals of their workers and hampered productivity.¹⁹ Moreover, the league thought that by enacting Prohibition, saloons would become unavailable as meeting and recruiting places for unions and socialist organizations, and social blight in the form of crime, poverty, insanity, disease, and urban disorder would come under control.²⁰

      At first, Prohibition seemed to work. In the early years, alcohol consumption appeared to decline, and police, social workers, ministers, and journalists reported reductions in problems associated with alcohol abuse.²¹ But these effects—to the extent that they actually resulted from the Eighteenth Amendment—were fleeting and never entirely successful. The drinking of alcohol continued, especially in large cities, and, as the 1920s progressed, additional negative effects of Prohibition materialized and metastasized—alcohol was illegally produced and distributed, organized crime flourished, bribery and corruption of public officials prevailed, cases of alcohol poisoning arose, and there was a widespread violation of the law. It was particularly this last problem that prompted Rockefeller and others to begin rethinking their support of Prohibition.

      Although the “lawlessness” associated with Prohibition is sometimes thought to describe organized crime, it actually refers to the disrespect for all law, and the law’s loss of legitimacy, resulting from the mass disobedience of Prohibition. This lawlessness was aggravated by the looting, rioting, and mass demonstrations that grew out of the Great Depression.²² By 1932, such lawlessness had sealed the fate of Prohibition: John D. Rockefeller Jr. announced his support for repeal, the momentum for which had been building for some time, and other industrialists followed suit. As Rockefeller explained,

      In the attempt to bring about total abstinence through prohibition, an evil even greater than intemperance resulted—namely, a nation-wide disrespect for law, with all the attendant abuses that followed in its train. That this intolerable situation should be done away with has seemed to me even more important for the moment than the promotion of temperance.²³

      On November 16, 1932, the US Senate submitted the Twenty-First Amendment, repealing the Eighteenth Amendment, to state constitutional conventions for ratification. On December 5 of the following year, Utah became the thirty-sixth and deciding state to ratify the amendment, putting repeal into immediate effect.²⁴

      In the minds of Rockefeller and others, however, repeal was no solution to the root problem. Rockefeller warned, “As Senator Capper has aptly said, ‘We may repeal Prohibition, but we cannot repeal the Liquor Problem.’ If carefully laid plans of control are not made, the old evils against which prohibition was invoked can easily return.”²⁵ Among other things, the Twenty-First Amendment left such control to the states, but legislators—most of whom had little personal expertise in the complexities of liquor regulation—were ill equipped to navigate the difficult policy and political choices that accompanied it.²⁶ Into this vacuum stepped Rockefeller; this time with a highly influential study that produced model legislation for the states.

      Toward Liquor Control,²⁷ a book bankrolled by Rockefeller and written by two of his close and trusted advisors, Raymond Fosdick and Albert Scott, outlined the details of two post-Prohibition systems of regulatory policy: one that the authors greatly preferred and another that they included for pragmatic purposes. The first, which they strongly recommended, was a monopoly approach, in which states would allow individual sales of alcoholic beverages in restaurants and hotels while maintaining a public monopoly on the sale of packaged goods. The second was a licensing system under the auspices of a state board that would ideally be as far removed from politics as possible. Critical to the success of the latter scheme was the control of the number of businesses allowed to sell liquor and the complete elimination of the “tied-house system.”

      Tied houses were taverns owned by or under exclusive contracts with alcohol manufacturers.²⁸ Prior to Prohibition, alcohol was not transported across the country as it is today. Instead, there were many breweries and other producers operating in cities and counties that were engaged in aggressive competition to exclusively sell products. They did so through a combination of manufacturer-owned taverns and independent establishments that agreed to sell only a certain brand of beverage. To compel such loyalty, producers sold to taverns on generous credit terms, provided them with equipment and supplies, and paid rebates. This tied-house system was widely believed to be a principal cause of excessive alcohol consumption and related social ills.²⁹ The licensing system described in Toward Liquor Control called for the decoupling and separation of the producer and retailer “tiers” to avoid control or coercion. Newspapers, magazines, and prominent leaders hailed the book, and elected officials turned to it and the model legislation that stemmed from it to create new state alcohol laws. In the months that followed the ratification of the Twenty-First Amendment, states in quick succession adopted alcohol-control policies patterned after those recommended in Toward Liquor Control.³⁰ Today, those same policies largely govern the alcohol industry: seventeen states operate under monopoly control and thirty-three states plus DC operate with licensing systems.³¹

      As part of their licensing systems, states interposed a required third tier—the distributor (or wholesaler)—to place a separation between the manufacturer and retailer tiers. At the outset of the three-tier system, producers could only sell to and retailers could only buy from distributors. Firms in one tier could not hold ownership in companies in another. Nothing of value could be given to induce sales. All businesses across the levels were licensed by the state to operate only in their specific tier.³² In other words, lawmakers created a bottleneck. All alcohol sales flowed through, and only through, distributors—the quintessential “bottleneckers.”

      It is these licensing systems that sixty years after their creation ensnared Juanita and David. If manufacturers like them wanted to sell their products to consumers in a given state, they had to find a distributor willing to carry their product. Yet the bottleneck created by the three-tier system provided little incentive for distributors to deal in specialty products from small manufacturers like Juanita and David, particularly if they were out of state and essentially unknown. Instead, the distributors’ preference was, and remains today, for well-known brands that sell easily and in greater volume.³³

      The effects of the bottleneck were predictable, and, in fact, predicted. The authors of Toward Liquor Control warned,

      Any licensing system tends to project the whole question into politics and to keep it there. Indeed, it compels the traffic to be in politics of self-protection. The licensing body becomes a powerful political engine. Every licensee СКАЧАТЬ