Evening star., 1933-12-12
CH0ATE ADVOCATES
S2 TO s. TAX PER.
GALLON ON LIQUOR.
Alcohol Control Chief Sees
Low Levy as Death Blow
to BootIegger.
$3.50 BLENDED WHISKY
PRICE is POSSIBILITY
Roosevelt Represented as Placing
End of Illicit Sales Above
Income for U. S.
b. the Associated Press.

b. the Associated Press.
A liquor tax somewhere between So
and So gallon" and low enough to
squeeze out the bootlegger was advo-
Gated to a joint congressional commit
tee today by Joseph H. Choate, jr.,
chairman of the Federal Alcohol Con-
troll Administration.
He was followed by Edward G..
Lowry, jr., chairman of President Roose-
velt's Interdepartmental Committee, who
expressed the opinion that blended
whisky of rather low quality might
eventually be sold for $3.50 a quart
under a $2.60-a-gallon Federal tax. The
committee had recommended levy Of
this amount.
Choate did not mention a specific
figure, in line with the administrations
policy of leaving decision up to Con-
gress. A $220-a-gallon levy was fire.
quently mentioned as probable.
President Roosevelt was represented
as being more interested in driving the
bootlegger out of business than in boost
ing the amount of liquor revenues.
Lowry explained the Interdepart-
mental Committees recommendation for
a $3.50 tax was based on its accom-
panying suggestion that the Federal
Government take over the entire field
of gallonage taxation and divide the
revenues with the States.
Revenues Estimated.
He said if this suggestion was not
fAl1 hn 70 fol
was also left open to the States, the
Federal tax should not be more than
81 or $2.20 gallon.
He estimated revenues from 81 tax
would be S170,000,000 and from a SO
tax S218,o00,00
Questioned by Representative Nc
Cormack, Democrat of Massachusetts,,
Lowry agreed there was some doubt
in his own mind as to the possibility
of selling whisky for S150 quart with
q tax of $3.50 gallon.
Mccormack asked if it wouldn't be
better to fix the tax rate at SITS in
order to assure elimination of the boot
logger.
Lowry agreed the committee had kept
the tax as high as it could in order
to raise as much revenue as possible
and still permit the legal liquor in
dustry to outsell the bootlegger and
that it might have "Steered too close
to the line"
The witness said the committee, in
considering the differences in cost be-
tween the legal and illegal sellers, had
taken into consideration two factors
that the general public would rather
buy legal than Illegal liquor and that
the illegal operator must make wider
margin of profit.
Recommendation Is Compromise.
Lowry said $3.50 whisky probably
would not be possible in the first few
months, but would be feasible when an
adequate distribution system was set up.
In response to questions, he disclosed
that the Inter-Gepartmental Commit
tees recommendation was compromise
and that some of its members wanted
a higher levy while others wanted
lower one.
Choate was the first witness today
as the Senate Finance and House Ways
and Means Committees resumed its
hearings. He explained he did not have
any considered opinions on taxation"
because his organization had been over
whelmed with the task of getting under
way and allocating permits to import
erS.
II know we all share the view that
the tax has got to be kept low enough to
keep out the bootleggers," Choate said
He added that the report of the
Interdepartmental Committee con-
tanned valuable information and recon-
mendations worthy of consideration,
but said the tax figure it recommended
might be little too high.
Republican Opposed.
st am impressed with the desirable
ity of working toward the end that
the United States collect the volume
tax and the States the occupational
tax" Choate said, referring to the
committees recommendation for divi-
sion of revenues between the Federal
and State Governments.
The United States should collect
q kIalI a L