Evening star., 1933-12-14
Door Opened to Worse Condi.
tions Than Prohibition,
0'Connor Asserts.
SCANDAL0US SITUATION
REPORTED AT HEARING
Whisky Trust Charges Aired as
Group Prepares to Hear
Morgenthau.
BY the Associated Press.

BY the Associated Press.
The opinion that strict Federal and
State regulation of the liquor traffic
since repeal had opened the door
to more opportunities for enforcement
graft and political influence than ever
existed under prohibition" was voiced
today by Representative O'Connor
Democrat, of New York. at joint con-
gressional hearing on liquor taxation.
O'Connor said there was a scandal
GUS situation" in the liquor industry
and supported a charge made earlier
by Harvey H. Smith, representing in
dependent Kentucky distlilers. that a
whisky trust was in existence.
The New Yorker recommended IS
a gallon tax on liquor, the highest
levy any witness had proposed.
Smith gave his testimony as the
Joint Congressional Committee con-
cluded its hearings on liquor taxation
so the House Ways and Means Com
mittee tomorrow could hear the views
OF Acting Secretary Morgenthau on in
come taxes.
Morgenthau said he would testify
on the recent report of the Ways
and Means Subcommittee which, among
other things, recommended higher sur
taxes on incomes.
win Analyze Report.
The Treasury head said his testi-
mony will be purely an analysis of
the subcommittee report from the ad-
ministrative point of view"
1t was considered unlikely he would
volunteer any statement on rates. He
said his testimony would not approach
the subject from the point of view of
budgetary needs. but deal rather with
administrative revisions.
Proposals for the Federal Govern
ment to collect all the gallonage taxes
and divide them with the States were
considered impractical by many men,
bers OF the two committees, in view OF
taxes already put into effect in some
States.
There also was a wide division of
opinion about how much of the taxes
should be apportioned to the States.
Despite the difficulties, however
Chairman Doughton of the House Ways
and Means Committee said he was
inclined to favor the co-operative
method reeonm ended by several groups
including the Interdepartmental Com
mittee appointed by President Roose-
welt.
Federal Levy Suggested.
The Interdepartmental Committee
recommended tax of $3.50 per gallon
on liquor to be collected by the Federal
Government. with 20 per cent of it 60
ing to the States AS result of the
differences. several members of the
Senate Committee indicated they con-
sidered the cooperative plan impracti-
cal and suggested the Federal Govern
ment levy tax of SITS to 50 and let
the States take care of themselves
Coupled with this. they were re-
ported to be inclined favorably toward
the recommendation of the Interde-
partmental Committee. named by
President Roosevelt, that the Chief Ex-
ecutive be given broad powers to nego-
tiate reciprocal trade agreements with
liquor exporting countries.
Meanwhile. State Department repre-
sentatives were talking with ENJOYS
from other countries about future
agreements
A number of other nations already
had been told they could ship 5,595.l3
gallons of hard and soft liquors into
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