Prohibition Part II

The Dark Years

By the early 1930s, Prohibition had been in effect for more than 10 years. The late 1800s had been the golden age for American breweries with close to 4,000 breweries in operation across America. Through the first two decades of the 1900s, the machine gun rat tat tat of the march toward Prohibition mowed down breweries like the St. Valentine’s Day massacre. By 1918 there were about 1,000 breweries left and by the time Prohibition took effect, just two years later, there were half that many.

The remaining breweries survived mostly by making near beer, soft drinks or yeast. For the most part, though, surviving breweries had diversified their holdings and investments prior to Prohibition and they had a cushion of cash. Many of the larger breweries had vast real estate holdings, especially in the form of taverns that they sold off. Anheuser Busch used the refrigerated trucks they had invented for transporting beer to transport ice cream, which they manufactured. Pabst made malt syrup, which was widely purchased in super markets to make homebrew.

Then the crash. In the three years following the great stock market crash of 1929, four thousand banks shut their doors, 100,000 business filed for bankruptcy and eleven million adults lost their jobs. By 1932, there were fewer than two hundred breweries remaining in America and they were fighting for their lives.

A Light at the end of the Tunnel

But there was a light at the end of the tunnel. As the 1920s wore on, the rampant lawlessness spawned by the traffic in illegal booze caused many former supporters of Prohibition to begin to call for repeal. In 1931, the Wickersham Report, commissioned by President Hoover to study the impact of Prohibition, was released. It concluded that the Great Experiment had been a failure and left a nation of drunkenness, crime and outlaws in its wake. Because distilled spirits were so much cheaper to manufacture and especially to transport, people turned to hard liquor like never before. Because the enforcement arm of the Volstead Act (the outline for implementing the 18^th Amendment—Prohibition) was woefully understaffed, incompetent and corrupt, people not only resented the law, but they soon learned that the chances of being caught breaking it were slim to none. After the great crash, the calls for repeal became louder, often under the argument that jobs and vast amounts of tax revenue were being lost. In August of 1932, Democratic Presidential nominee Franklin Roosevelt told a crowd that it was time to correct the stupendous mistake that was Prohibition.

We Want Beer!

Getting the required number of states to ratify an amendment to the Constitution would take time. But Congress realized there was something they could do immediately to stop putting alcohol profits and potential taxes into the pockets of the gangsters and instead put them back into government coffers.  The Volstead act had defined an intoxicating beverage as one with an alcohol content of greater than 0.5% alcohol. Congress simply had to modify this definition to get the beer flowing. On March 22, 1933, President Roosevelt signed the modification that legalized 3.2% alcohol beer, and at midnight on April 7^th, beer flowed again.

On the evening of April 6^th, the line of cars and trucks waiting for fresh, legal beer outside the Anheuser-Busch plant stretched for a mile. At midnight, trucks loaded with beer literally choked the nation’s streets. President Roosevelt was hand delivered the “first case of real beer” by a police escort. Within 48 hours, brewers had infused local, state and federal coffers with $10 million in taxes.

By August of 1933, federal taxes on beer had become the U.S. government’s number three revenue producer (after income tax and cigarette tax). And on December 5, 1933, Utah, that great bastion of alcohol tolerance, ironically became the thirty sixth state needed to ratify the 21^st Amendment, and Prohibition was over.

Regaining the Glory

Prohibition dealt a fatal blow to the craft breweries of America. Per Capita beer consumption, despite the population growth, did not reach pre-Prohibition levels until 1970. Virtually all of the small, neighborhood breweries had been wiped out and didn’t begin to reappear until the 1980s. New state laws that differed from state to state made it difficult for small breweries to open and to distribute their beer. A culture had been destroyed.

We opened the 21^st Amendment Brewery in 2000 in a historic neighborhood of San Francisco. A neighborhood that had been home to one of the largest breweries on the west coast in the late 1800s (the Philadelphia Brewery on 2^nd and Harrison streets). A neighborhood that gave rise to the first indigenous American beer style (Steam Beer). A neighborhood where we could begin the climb back to re-establishing the essence of the local brewery—a place for unique, local, hand-crafted beer, quality food and good conversation.

A special shout out to Maureen Ogle, author of the greatest book on beer, “Ambitious Brew” from which I liberally stole for this post.