HEARINGS BEFORE THE COMMITTEE ON WAYS AND MEANS SEVENTY-SECOND CONGRESS 9.0.2.1/18/33 MODIFICATION OF VOLSTEAD ACT WEDNESDAY, DECEMBER 7, 1932 HOUSE OF REPRESENTATIVES, COMMITTEE ON WAYS AND MEANS, Washingtor, D. C. The committee met at 10 o'clock a. m., Hon. James W. Collier (chairman) presiding. The CHAIRMAN. The committee will come to order. Gentlemen of the committee, we have assembled here to hold hearings on H. R. 13312, being a bill to provide revenue by the taxation of certain nonintoxicating liquor, and for other purposes. Before we go into the hearings, I want to make a brief statement. The bill provides for a tax of $5 a barrel on all beer, lager beer, ale, porter, and other similar fermented liquor, of not more than 2.75 per cent of alcohol by weight. Both of those figures are arbitrary and were put in by the author of the bill in order that we might have something before us. The purpose of this hearing is to determine the tax and the alcoholic content, which, of course, will be determined by a committee of 25 and not by the author of the bill. I want to emphasize that fact, that both the alcoholic content by weight and the tax are purely arbitrary figures, put in there in order to complete the bill. At this point I will ask that the bill be inserted in the hearings. (The bill is as follows:) [H. R. 13312, Seventy-second Congress, second session] A BILL To provide revenue by the taxation of certain nonintoxicating liquor, and for other purrceES Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That there shall be levied and collected on all beer, lager beer, ale, porter, and other similar fermented liquor, containing onehalf of 1 per centum or more of alcohol by volume, and not more than 2.75 per centum of alcohol by weight, brewed or manufactured and, after the effective date of this act, sold, or removed for consumption or sale, within the United States, by whatever name such liquors may be called, in lieu of the internalrevenue tax imposed thereon by section 608 of the revenue act of 1918, a tax of $5 for every barrel containing not more than thirty-one gallons, and at a like rate for any other quantity or for the fractional parts of a barrel authorized and defined by law, to be collected under the provisions of existing law. Nothing in this section shall in any manner affect the internal-revenue tax on beer, lager beer, ale, porter, or other similar fermented liquor, containing more than 2.75 per centum of alcohol by weight, or less than one-half of 1 per centum of alcohol by volume. SEC. 2. Wherever used in the national prohibition act, as amended and supplemented, the following terms shall, so far as relating to beer, ale, porter, or similar fermented liquor, have the following meanings: (1) The term "one-half of 1 per centum or more of alcohol by volume" shall mean "more than 2.75 per centum of alcohol by weight." 1 (2) The term "less than one-half of 1 per centum of alcohol by volume" shall mean "not more than 2.75 per centum of alcohol by weight." (3) The term "more than one-half of 1 per centum of alcohol by volume" shall mean "more than 2.75 per centum of alcohol by weight. (4) The term "below such one-half of 1 per centum" and the term "below such one-half of 1 per centum of alcohol" shall mean "to 2.75 per centum or less of alcohol by weight." SEC. 3. Subdivision (1) of section 1 of Title II of the national prohibition act, as amended and supplemented (relating to the definition of liquor and intoxicating liquor), is amended by striking out "and is otherwise denominated than as beer, ale, or porter," and by striking out the period at the end thereof and inserting in lieu thereof a colon and the following: "Provided, That the terms 'liquor', 'intoxicating liquor', 'beer', 'ale', and 'porter' as used in this act shall not include beer, ale, porter, or similar fermented liquor, containing 2.75 per centum or less of alcohol by weight." SEC. 4. The manufacturer of any beer, ale, porter, or similar fermented liquor containing one-half of 1 per centum or more of alcohol by volume, shall for the purposes of the internal revenue laws be considered a brewer. Before engaging in business he shall, besides qualifying as a brewer under the internal revenue laws, also secure a permit under the national prohibition act, as amended and supplemented (including the amendments made by this act), authorizing him to engage in such manufacture, which permit shall be obtained in the same manner as a permit to manufacture intoxicating liquor, and be subject to all the provisions of law relating to such a permit. No permit shall be issued for the manufacture of such fermented liquor in any State, Territory, or the District of Columbia, or political subdivision of any State or Territory, if such manufacture is prohibited by the laws thereof. Whoever engages in such manufacture without such permit, or in violation of such permit, shall be subject to the penalties provided by law in the case of similar violations of the national prohibition act, as amended and supplemented. SEC. 5. Nothing in section 1 or 4 of this act shall be construed as in any manner authorizing or making lawful the manufacture of any beer, ale, porter, or similar fermented liquor, which at the time of sale or removal for consumption or sale contains more than 2.75 per centum of alcohol by weight. SEC. 6. In order that beer, ale, porter, and similar fermented liquor, containing 2.75 per centum or less of alcohol by weight, may be divested of their interstate character in certain cases, the shipment or transportation thereof in any manner or by any means whatsoever, from one State, Territory, or District of the United States, or place noncontiguous to but subject to the jurisdiction thereof, or from any foreign country into any State, Territory, or District of the United States, or place noncontiguous to but subject to the jurisdiction thereof, which fermented liquor is intended, by any person interested therein, to be received, possessed, sold, or in any manner used, either in the original package or otherwise, in violation of any law of such State, Territory, or District of the United States, or place noncontiguous to but subject to the jurisdiction thereof, is hereby prohibited. Nothing in this section shall be construed as making lawful the shipment or transportation of any liquor the shipment or transportation of which is prohibited by the act of March 1, 1913, entitled "An act divesting intoxicating liquors of their interstate character in certain cases." SEC. 7. Any offense committed, or any right accrued, or any penalty or obligation incurred, or any seizure or forfeiture made, prior to the effective date of this act, under the provisions of the national prohibition act, as amended and supplemented, or under any permit or regulation issued thereunder, may be prosecuted or enforced in the same manner and with the same effect as if this act had not been enacted. SEC. 8. This act shall take effect on the expiration of thirty days after the date of its enactment except that permits referred to under section 4 may be issued at any time after the date of enactment. SEC. 9. Nothing in the national prohibition act, or acts amendatory or supplementary thereto, shall hereafter be construed as prohibiting the manufacture, transportation within the United States, exportation therefrom, possession, sale, or use, where not contrary to the laws of the State, Territory, or the District of Columbia, of nonintoxicating vinous liquors made by the natural fermentation of grape juice and without the addition of distilled spirits. SEC. 10. Whenever any of said liquors shall hereafter be sold or removed for consumption or sale, in lieu of the internal-revenue taxes now imposed thereon by law there shall be levied, collected, and paid thereupon 20 cents per gallon under the provisions of existing laws. Mr. TREADWAY. Mr. Chairman, have you completed your statement? If you have, I would like to ask one question before we begin. The CHAIRMAN. We are always glad to hear from the gentleman from Massachusetts. Mr. TREADWAY. Of course, I realize that the jurisdiction of this committee over this bill is in the feature that you just referred to, the tax; otherwise it probably would not be a Ways and Means Committee matter. Now, the question that I would like to propound is this: In case we find that the committee is favorable to a revenue measure of this kind, is it expected that this bill, or whatever bill of this nature may be finally agreed upon, will be reported separately, or is this to be a portion of the entire taxation measure that may eventually be reported out of the committee at this session? The CHAIRMAN. The gentleman has asked a question that I think I can answer. As far as any other reveneue measure is concerned, I have none in mind at this time, but with a deficit of over $800,000,000 confronting us, it will be necessary for us to bring in more revenue than is contemplated here. Mr. TREADWAY. Is it likely to be brought before the committee for action, and, when considered, considered independently of the measure before us? The CHAIRMAN. Yes. Mr. TREADWAY. This stands by itself, then, as an independent measure? Mr. HAWLEY. This measure is to have preference, and given expeditious treatment? The CHAIRMAN. Yes, and it is hoped it will be determined and under way before the holidays. The Chairman, as you know, has promised to recognize the gentleman from Chicago, Judge Sabath, for a brief statement. STATEMENT OF HON. ADOLPH J. SABATH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS Mr. SABATH. Mr. Chairman and gentlemen of the committee, I am indeed gratified and immensely pleased to-day that after these many years the committee has finally consented and agreed to give real and serious consideration to this important legislation, to the revenue measure. I congratulate the chairman of the committee for having introduced the bill, although I am not ready to say that I am in position to agree with all of its provisions, but I hope that in the near future, or before the hearings will be concluded, I shall have an opportunity to make a few observations on the bill itself. I notice that there are a great many gentlemen here, including some of my colleagues, who are desirous of being heard. In view of the large number of men here who desire to give you evidence in regard to the many points that will have to be considered by the committee in arriving at a conclusion as to the alcoholic content and also the amount of revenue that should be raised by this bill, I will forego to-day the pleasure of proceeding with my evidence and will gladly give way to those who are here from out of the city. |