PROHIBITION THAT PROHIBITS
That which governments have not yet been equal to has been accomplished
by the private co-operation of a few citizens. They decree at their
pleasure that in this town or that State no one shall manufacture
alcohol, and they enforce the decree. Theirs is the only prohibition
that prohibits.
From the famous whiskey ring of 1874 to the pool of 1881 and the
trust of 1887, and from the abandonment of that "trust" dress and
the reorganization into one corporation in 1890 down to the present,
this private regulation of the liquor traffic has gone on. It is
a regulation of a good deal more than the liquor traffic. Through
its control of alcohol it is a power over the arts and sciences,
the manufacture and the preparation of medicines, and a power
over politics. More than one chapter of our history exhibits the
government itself holding to these rectifiers relations suggestive
of anything but rectification. The report of the investigation by
Congress in 1893 notes the fact that on the strength of a rumor that
the internal-revenue tax was to be increased by Congress, the Trust
raised its prices 25 cents a gallon. This would amount to a profit of
$12,500,000 on its yearly output.
By February, 1888, all the important distilleries in the Northern
States--nearly eighty--were in the Trust, excepting two, the larger of
which was in Chicago. The cases of these irreconcilable competitors
were set for consideration, according to the _Chicago Tribune's_
report, at a private meeting of the trustees February 3d. In April
the Chicago distillery firm published the fact that they had caught a
spy of the Trust in their works. He had given them a confession in
writing. In September it was discovered that the valve of a vat in this
distillery had been tampered with in such a way as to have caused an
explosion had it not been found out in time. The next month its owners
made known that they had been offered and refused $1,000,000 from the
Trust for their works. In December the country was startled by the
news that this distillery had been the scene of an awful explosion of
dynamite. All the buildings in the neighborhood were shaken and many
panes of glass were broken. A jagged hole about three feet square was
torn in the roof. There were 15,000 barrels of whiskey stored under
the roof that was torn open, and if these had been ignited a terrible
fire would have been added to the effect of the explosion. A package of
dynamite which had failed to explode, though the fuse had been lighted,
was found on the premises by the Chicago police.
The Chicago representative of the whiskey combination ridiculed the
idea that the Trust had had anything to do with this. "Such a thing,"
he said, "is contrary to the genius of a trust."
The wholesale liquor-dealers threatened, at a conference in 1890
with the president of the Trust, to manufacture for themselves, to
escape the advance which had been made in the price of high-wines. The
president said, as reported in the _Wine and Spirit Gazette_:
"I do not believe there is a spirits distillery in the country that you
can buy. We own nearly all of them, and have at present seventy-eight
idle distilleries."
February 11, 1891, the explosion of December, 1888, was recalled by
the unexpected arrest of the secretary of the combination in Chicago
by the United States authorities. The Grand Jury of Cook County found
an indictment, February 17th, against the prisoner. April 20th he was
indicted by the Federal Grand Jury. The crime of which he was charged
was attempting to bribe a government gauger to blow up the troublesome
distillery. The gauger whom the secretary endeavored to enlist had
been loyal to his trust, the government, and had made known to his
superiors the offer and purpose of the bribe.
If the explosion had been carried out 150 men at work in the distillery
would have been destroyed. The evidence given Congress afterwards
tended to show that part of the plan was that the bribed gauger who
was to set and explode the infernal-machine was not to be allowed to
survive to claim his reward and perhaps repent and tell. The fuse was
fixed so that the explosion would be instantaneous instead of giving
the time promised him to get out of the way.
In a statement to the press, February 15th, the president of the Trust
said, as the result of a conference of the trustees:
"We have unanimously agreed to stand by the secretary."
Early in June rumors were in circulation in New York that the Chicago
independent had sold out; and soon after the confirmation of the
report, with full details, was authoritatively published.
June 8th the judge of the United States Court in Chicago quashed the
Federal indictment, on the ground that it is not a crime under any of
the United States laws for an internal-revenue officer to set fire to
a distillery of his own volition and impulse, and that it is not a
crime against the United States for another person to bribe him to do
such an act. He held that the offender could be punished only through
the State courts. The United States had property in the distillery
to the extent of $800,000 due for taxes, which was a legal lien on
the property; but the United States District Attorney and the judge
could find no Federal law under which, for the gauger to destroy this
property of the United States, or for the Whiskey Trust to bribe him
to do so, it was a crime. When the indictments framed by the State
Attorney of Chicago came before the State courts, three of the four
were found defective and were quashed. The Chicago correspondent of
the New York _World_ telegraphed that he had been told by the State
Attorney, at the time the Federal proceedings were quashed, that of his
four indictments he relied most upon that for conspiracy; "but in court
yesterday the State Attorney let the charge of conspiracy fall to the
ground because, as he said, there was not evidence enough to secure a
conviction."
"We haven't the evidence of the gauger; I don't know where he is," the
State Attorney said.
But this witness declared in a public letter in February, 1893, "Myself
and others with positive evidence were always ready to testify, and I
have the facts to-day."
The judge of the State court held the motion to quash until July, and
then announced that he would make no decision until August. He withheld
his ruling until October. Then he held the secretary for trial on
two counts, charging conspiracy to bribe the gauger and destroy the
independent distillery; but remarked "informally," the newspapers said,
that conviction would be difficult.
When the case was called March 22, 1892, a delay was granted "until
next Monday," to enable the prisoner's counsel to read the "bill of
particulars" to find out what he was charged with. The secretary did
not trouble himself to attend court. His case was not heard of again
until June 24th, when he was released on a nolle prosequi entered by
the State Attorney because the evidence was insufficient, and became a
free man. That was the end.
Owing to this success of State and United States attorneys in being
unsuccessful, the people have never had an opportunity of hearing in
court the evidence on which the Government acted in making the arrest,
and on which the grand juries found the indictments. But the gauger
through whom the secretary of the Trust had attempted to execute his
plans was called as a witness before the Committee of Congress which
investigated the Trust in 1893, and he told again the story of the
infernal-machine. It was as follows, in his own words, omitting names
and unnecessary details:
"I was United States internal-revenue gauger from 1879 until after
Mr. Cleveland's election, and I was reappointed in 1889, and have
been continuously since that time. Late in December, 1890, I received
a letter from the secretary of the whiskey combination at Peoria,
telling me that he would like to meet me at the Grand Pacific Hotel on
New-year's Day. I met him. He said, 'You may be able to do considerable
good here; not only for us, but of considerable advantage to yourself.
Your $1500 a year is nothing to what you would get by helping us. You
can get $10,000 by assisting us in this thing; in fact, to make matters
right, you could get in three months $25,000.'" The gauger reported
this to his superiors, who told him to go on. "Be particular, and
after every interview with him make a note of everything that passes
between you while it is fresh in your mind." "I did that," the witness
continued, "and I have the original notes in my pocket. There are the
original notes," exhibiting them to the committee. "They have never
left my possession. I have kept them on my person right along." After
some correspondence and another interview, he met the secretary again
January 25th. "Now," said the latter, "I can give you something which,
if put under a cistern, will in three or four hours go off, and no
person know what it was or who did it, and all the trouble that has
been caused us will be stopped at once, the sufferings of many people
stopped, and no loss to those folks, as they are well insured." "When I
recovered from my surprise I asked if it was an explosive. He replied,
'No; a simple but effective thing which would shoot a ball into a tub
through the bottom. You will have $10,000 for your work of placing
this under a cistern of high-proof, either alcohol or spirits, or what
is better than cash, 200 shares of stock.' I asked at what they sold.
He said, 'Forty-seven, but it would be up ten points at once,' and I
could profit by the raise. 'This will raise a big row.' 'Yes,' he said,
'one cistern well caught, all would go, and it would be right into the
warehouse and stop everything at once. It is the most effective way to
help us and make a clean job, and you having access to all parts of the
distillery and unsuspected is why you could do it so easily.' He had
then, in room 35, powder and four steel elongated balls, solid, turned,
and with long points. The principal article, however, was a kind of
yellowish liquid, which when exposed to sixty-five degrees temperature
would produce a flame caused by evaporation. I remarked that there
was probably no hurry about this thing, and he said, 'The sooner the
better; you may be ordered away from here, and I am come all prepared;
everything is ready to load, and that can be done quickly.'"
The gauger reported all this to his superior and told him that "I
proposed to take the infernal apparatus." His superior said, "Of
course." "I then returned to Grand Pacific, room 35; found loading just
completed and much material scattered about, oakum in can saturated
slightly with kerosene and alcohol to give good start. The secretary
said that three fuses were attached to the gun, one of which would go
off under water. He had one steel shell which had been shot through
three inches of wood in experimenting. He showed me particularly
how to place can; to feel underneath for timbers; put it where ball
will enter tub. Also, that in stopping over to meet the president
of the combination to-morrow he would have a chance to buy up stock
reasonably before our work caused the raise. He expected to buy 1000
shares. Friday, the 30th of January, I rather anticipated a visit from
the secretary at my hotel, but I received a letter from him instead
of a visit, and Judge Hart, the solicitor of the Internal-Revenue
Department, who was there in Chicago, when he read the letter thought
that the evidence was certainly conclusive." On Sunday, the 8th, the
gauger surrendered the box containing the infernal-machine, which was
sealed, to a high official who had come on from New York. "The reason
why he came on is that the authorities would not believe my testimony.
They did not think it was possible a gentleman in the secretary's
position would undertake so heinous a crime, and they did not know
but what I was a crank. On Monday, the 9th, I was instructed to write
a letter. The thing was to arrest in a proper way. The next day I
received a despatch: 'Will be at Pacific to-morrow (Wednesday) morning.'
"Wednesday morning the secretary was arrested, as he was about to enter
the hotel, by a deputy marshal, and conducted to the Marshal's office
in the Government building. There was a bottle of this composition
found in his grip. He had told me it would go off in three or four
hours. I was in the anteroom of the city grand jury after the chemist
had given his testimony. The chemist said that it was his opinion
it would have or might have gone off in three seconds. Fire would
cause the shooting of the ball, and the ball making a hole in the
tub--alcohol or high-proof spirits--coming down, of course all would
have gone up. It could not have helped it, and the explosion would
have followed at once, not from the machine, but from the contents of
the cistern. They are very explosive indeed, alcohol and high-proof
spirits."[26]
What the Government authorities thought of all this is shown in a
letter which is spread upon the records of the Treasury Department. It
is addressed by the Commissioner of Internal-Revenue to the gauger.
After thanking him for his "highly commendable" conduct in relation to
the bribe the Commissioner says to Mr. Thomas S. Dewar:
"While your rejection of the offer was just what was expected
from you, considering your official and personal standing, yet I
realize that you have done more than simply reject the offer. You so
conducted the affair as to place the guilty party, it is hoped, in a
position in which he will be punished for this violation of law. The
proposition was not only to attempt to corrupt an honest officer of
the Government, but was to induce you, by the offer of a large sum of
money, to commit a most heinous and inhuman act."
No attempt was made by the representatives of the Trust before
the committee to deny this testimony. They simply disclaimed any
responsibility for what their associate and employé had done. "Whatever
there was in that," testified the president of the Whiskey Trust, "was
with the former secretary of this company, if there be anything of
it."[27]
The Trust increased the number of plants under its control from
"nearly eighty" to eighty-one or eighty-two, the number reported by
the investigation of Congress in 1893. Its annual production was then
50,000,000 gallons; about 7,500,000 gallons of it alcohol, 42,500,000
spirits. It is evident, says the report, that the company will soon
have within its grasp the entire trade, and be able to dictate prices
to consumers at pleasure.
"How do you account for spirits going up and corn going down at the
same time in two or three instances?" the treasurer was asked.
"Simply because the distillers were getting in a position whereby they
ran less than their capacity."[28]
The experience of mankind has always found, as Lord Coke pointed out,
that monopoly adulterates.
The report of Congress states that unquestionably the largest part of
the product of the combination finds its way into the open markets in
the form of "compounded"--or artificial--bourbon and rye whiskeys,
brandies, rums, gins, cordials. The testimony establishes the fact
that about one half of the whiskey consumed in the country is of
this compound product. These compounded liquors are supplied from
the drug-stores to the sick as medicine. One of the expert witnesses
summoned to explain the process of this adulteration appeared before
the committee with two demijohns, one containing pure alcohol and the
other spirits, and a number of bottles containing essential oils,
essences, etc., with which he proposed to make some experiments. "The
basis here, this white product, is what is known as 'spirits' in the
trade. With the use of these essential oils and essences now before
you any kind of imitation liquor can be produced at almost a moment's
notice. My first experiment will be with Jamaica rum. I put a drop of
Jamaica-rum essence into this white spirits, a few drops of coloring
matter, and some sugar syrup. Try of it and smell of it. Does it
smell like rum and taste like it? If they want to make it cheaper,
they reduce it with water. I will reduce it with water, and you will
now notice that the bead has disappeared from it. I will reproduce
the bead by the use of bead oil. I put one drop in, and here is the
result. Now, using rye-whiskey essence instead of Jamaica-rum essence,
I will flavor this spirits. I will now put some prune juice into it to
tone it. I will put some raisin oil in it to age it, and I will now
commence to color it. This first exhibit" (holding it up before the
committee) "is about the color of one-year-old whiskey that has been
properly bonded. I will now color it so it will imitate a two-year-old
whiskey. This is about the three-year-old now" (exhibiting it). "I will
now give this the color of 'velvet whiskey,' which is sold as high as
$4 a gallon" (exhibiting it). "The present price of spirits, to-day,
I think, is $1.30 a gallon. The utilization of any of these essential
oils and essences and coloring matter to make the transfer does not
exceed a cost of one and a half cents a gallon. I am prepared to make
imitations of any of these liquors at any time with this spirits
basis--all the different whiskeys, Scotch and Irish whiskeys, the
foreign gins and rums and brandies, after-dinner cordials and liqueurs.
These materials as you have them exhibited before you of essential oils
and essences are part and parcel of the stock in trade of every man
in the United States of America who has got a rectifying license as a
wholesale liquor dealer.... They are very generally and extensively in
use throughout our entire country, in every hamlet and village, in all
the branches of trade, the wholesale liquor dealer, the grocer having
a liquor dealer's license, and retail druggists.... When a doctor
prescribes French brandy, he expects to get a production which is a
distillation of wine made from the grape. In that imitation brandy made
from spirits and cognac oil he gets a crude product of corn, defeating
entirely his purpose in the prescription. The same applies to gin, rum,
and other articles wherever the imitations are found."[29]
Some of the substances named by witnesses as occurring in the oils and
essences used for this adulteration are sulphuric acid, prussic acid,
fusel oil, creosote, nitro-benzol--all poisons, and some of them so
virulent that a teaspoonful would kill.
"I have been warned when in the employ of these people not to take
the crude material into my mouth," said one of the witnesses. Another
witness denied that there was any danger in the infinitesimal portions
used of the flavoring matter.
"The only result," said one of the members of the committee, "of the
testimony and hearing of the committee will be to educate the public to
the Trust methods. It will have no effect on the Trust."