FIFTY-FOURTH ANNUAL CONVENTION

of the

United States Brewers' Association

HELD IN NEW ORLEANS, NOVEMBER 18-21, 1914

ADDRESS OF PRESIDENT EDWARD A. SCHMIDT,

THURSDAY MORNING, NOVEMBER 19, 1914.

I will not encroach upon your time and patience in reviewing the happenings of the past year, which, in various degrees, affected the Brewing Industry, as they will be covered in extenso by the complete reports of the Board of Trustees, the Standing Committees and the Secretary; but I will digress for a moment to express my personal disappointment in not being able to report the defeat, at the hands of Congress, of the pending legislation, which has for its object the utter elimination of the Brewing Industry in the United States of America. However, it is my firm conviction that this is only a pleasure deferred.

The critical revenue situation, which developed as the result of the outbreak of the great European War, now raging, has forced our government to recast the Internal Revenue Laws, so that the shrinking in incomes, caused by a practical cessation of all imports for the time being, could be overcome. In looking for items that would yield the necessary revenues promptly, so that the various governmental departments might run along in their customary channels, our industry, as was the case during the Spanish War, was selected as one that would instantly yield a large revenue without the necessary delays in organizing machinery for its collection. Our industry rallied to the support of the government and accepted the new burdens with its usual patriotism.

An industry represented by such a high type of patriotism should not, and, in my judgment, will not be destroyed by the lawmaking power of our country..

In the face of the unjust and unfair attacks of Prohibitionists and the Anti-Saloon League before the Congress and the State Legislatures of the country, and while the extravagant claims of the Anti-Saloon League and other prohibition organizations have led the public to believe that the whole country is rapidly going dry, it is a matter of congratulation that the Brewing Industry can again record an increase, although a small one, in the sales of beer, for the fiscal year ended June 30, 1914. This in spite of the great shrinkage in business, which has manifested itself in so many branches of industry employing large numbers of men. The American Grocer states, in its recent study of the beverage business of the past ten years: "The figures show that in spite of the adoption of prohibition in some States and local option in others, the per capita consumption of alcoholic drinks has increased nearly three gallons."

It is of course true that there has been a considerable reduction in the number of legalized drinking places, due to a number of causes, such as the adoption of statutory limitation in many States and weeding out of retail dealers through the imposition of higher license fees, but the territorial claims made by the Anti-Saloon League, to show the spread of prohibition, must be taken with a good deal of reservation. The foolish physiology of many of the so-called temperance associations is a matter of general comment among professional educators, and their geography will not stand the test of analysis either.

Not a single city of the first class is included in the dry territory. The no-license vote in many municipalities does not represent prohibition sentiment, but simply betokens proximity to some city under license, which will supply all wants.

In view of the consumption statistics it is evident that the large gains of prohibition territory represent to a large extent paper values. During the ten years ended June 30, 1910, the urban population increased from 30,797,185 to 42,623,383, or 38.3%. In the same period the beer sales increased from 39,330,849 to 59,485,187, or 51.2%. Probably 9/10 of the beer is consumed by the adult male population in urban communities.

Prohibition in effect has never sustained the claims of its ad

vocates; it is contrary to the true, principles of human government. The best government is that which conforms to the old Democratic theory, "Give a maximum of Liberty with a minimum of Law." This conforms to the plan of the Creator, who evidently intended that man should work out his own destiny by the exercise of his intelligence and the strength of his will power.

A true man uses the good things of life with perfect control of his appetite. Use without abuse, appetite subject to reason, is the highest rule of living. The aim of civilization is to make man better and stronger by enlightenment and development of the will, and not by the imposition of arbitrary rules.

The liquor business in all its branches has been so perpetually harassed by legislative bodies, acting under the impulsion of so-called temperance organizations, that we have been forced to watch pending legislation with the utmost vigilance. At the same time the licensing laws and local option laws, and recently the initiative and referendum systems, have been taken advantage of, not only by political parties and individual politicians, great and small, but by bodies of prohibition crusaders, to such an extent that we have become the football of political contests from one end of the country to the other. I am firmly of the belief that we must so order our affairs as to rise above questions of political expediency and that our aim must be to take at least our part of the liquor business entirely out of politics.

Recent elections indicate that in some of the States opposition exists apparently in the public mind to the saloon as a medium for the distribution of our product; the type of saloon which is objectionable in some of the cities and rural communities can, undoubtedly, be reconstructed along lines that would remove the objec- tionable features complained of, and I would suggest that steps be taken to the end that the brewers of the various States appoint committees to co-operate with all legally constituted bodies having for their object the creation or reconstruction of the saloon or tavern along lines that will obviate objectionable features and at the same time supply a recognized need for a clean, well-conducted, hygienic place for refreshment and social gathering for all classes, such as obtain in all cities of Continental Europe. I am confident, if co-operation along these lines can be brought about, our people will welcome it and contribute their full share of effort and energy to reach a solution of this question and remove it as a disturbing

factor in the political battles of which it has been made a part in the last ten years.

During the past year a Department of Publicity has been organized in a modest way by your Board of Trustees, the wisdom of which has already shown itself by the appeals of our membership for assistance and advice, which, unfortunately, could only be extended in a very limited way. I am firmly convinced that the work of this department will have to expand and grow to very large proportions during the ensuing year, as it is clearly indicated that only through educational and publicity channels can we look for permanent success in winning the good will of the people of this country. Let us put the facts before them plainly and fairly without prejudice or animosity, resting our case upon its merits in the light of accumulated knowledge and experience. An enlightened public sentiment depends upon full information, which must be made accessible to the mass of the people. If we would build upon a sure foundation, we must take this task upon us with an eye single to the truth, and must show our willingness to co-operate in any measures of constructive reform that are of a practical character.

REPORT OF THE BOARD OF TRUSTEES

For the last four months the eyes of the world have been focused on the War of the Nations. Many years may pass before its causes and effects can be told with full justice. To-day we know only that human isolation is impossible, and that no people is so wise or so superior as to be able to separate its interests from those of other nations. While our country has been spared the physical horrors of the conflict, our lives have been touched in a hundred ways by it and we have been made to realize our relation to the other peoples of all sorts and conditions. In such a time as this we rise above the limitations of trade and circumstance. Our hearts throb and our minds march in time and sympathy with the brave fellows who are in the ranks, and the members of the brewing industry have responded generously to the appeals that have been made for the wounded of all nations, and for the relief of the families who have been impoverished by the loss of their bread-winners.

The whole fabric of international commerce and finance has broken under the strain. Values have become so intangible that they can only be guessed at, and the helpless Bourses of the world

were forced by their own futility to stop business and shut their doors. In this crisis the Government of the United States has had to face the question of financing its own maintenance. We can perhaps imagine the Secretary of the Treasury stating the problem to the Committee on Ways and Means in some such way as this:

"Gentlemen: Congress has made appropriations on a liberal scale, based on our expected receipts from customs duties, internal revenue taxes and the income tax. But the war has robbed us of a hundred million dollars of import duties. How shall we make it up? We cannot raise the tariff rates-that wouldn't do any good. The income tax and the corporation tax are levied upon the people who have been hit hardest by the industrial depression, and we cannot squeeze any more out of them; to tax the incomes of the smaller fellows would be most unpopular. We cannot tax our exports, and the Treasury experts tell us that if we increase the tax on whiskey it will invite wholesale moonshining and that the tax would be uncollectable."

And so by the process of elimination, the Government finally falls back upon beer as the one item which is sure to make good, and the brewing industry is called upon once again to bear the burden of supporting our Federal Government in its great crisis. With the increased tax the United States Government will get three times the revenue from the brewing industry that the brewers themselves get! When you take into account the state and local taxes for the manufacture and sale of beer, the real estate taxes, the corporation and income taxes, and all the other items of direct and indirect taxation, it is evident that beer is bearing a greater public burden than any other commodity. It is a mistake to suppose that American brewers will benefit by the possible shortage in imported beers. Our total imports of beers and ales from all the countries of the world average only a quarter of a million barrels, whereas we produced ourselves in the United States last year sixty-five million barrels.

It is worth noting that the only organized opposition to the extra tax on beer has come from the various Methodist Conferences, and from the Women's Christian Temperance Union, the AntiSaloon League and other prohibition bodies. It will be remembered that the present system of collection of the beer tax was adopted originally by Congress upon the recommendation of the American brewers of the country, who had studied the matter thoroughly