Evening star., 1934-06-19
REFUSE TO STAMP
BOOTLEG LIQUOR
Officials Reject Plan to lie.
galize Supply of 50,-
100000 Gallons.
By the Associates Press.

Uncle Sam will not place his stamp
of approval on old bootleg liquor to
make it legal now. even though that
stamp would bring into the Federal
Till a tax estimated as high as $780,
100000.
Persistent attempts by lawyers and
lobbyists to legalize from 4o'ooo'oou
to $4,000, 900 gallons OF Illicit llquor'
to which they claim access, have been
rejected by the Government.
The stocks are said to be within
short distance of New York.
Secretary of the Treasury Morgen-
thau said there was no prospect for
such legalization, and added ne
hoped for the bootleggers' sake"
that the lawyers had been working
for them on contingent fees. thus i'm
plying that any sums paid them were
wasted.
Furthermore, he said. II the Gov
ernment could find where the liquor
was, it would be seized.
Began Campaign Early.
Representatives of the holders be-
gan their campaign for compromise
with the Government even before re-
neal took place. Their principals are
understood to have powerful banking
connections in New York. The rep
resentatives have been New York ana
washington attorneys-some appar-
p emily of considerable prominence
who were reported to stand chance
8 of making 80 cents gallon on liquor
thus legalized. This alone WOULD run
into millions of dollars.
As early as last December. Presl-
1 dent Roosevelt said the Government
8 could not be party to the arrange
ment. He spoke after consultation
with Attorney General Cummings ana
! others. but his view did not discourage
the compromise seekers.
They kept pressing the case before
a number of Government departments
Z and agencies. The argument that was
even taken to some officials at the
White House was substantially this:
( The liquor was produced without
violation of any law now in force.
The holders were ready to submit to
! sny test by the Government to estaD-
lish the liquors high quality. The
& Federal Government would benef1t
z by swelling revenues, amounting TO
1 50 a gallon tax or nearly 100000, 900;
/ the supply of good domestic liquor
would be increased and prices to the
consumer reduced, discouraging con-
tinued bootlegging.
1 Would Affect Market.
1 The effect on the market of such
transaction may be calculated on
the estimate of DR.. James M. Doran,
Z one-time chief of the TreaSury's in
dustrial alcohol unit and now head
< of the Distilled Spirits Institute. He
said the present consumption OF legal
s liquor in this country only runs to
10000 900 or 35,o00,000 gallons a
3 year.
The President was understood to
have two chief reasons for rejecting
Z the plan:
Legalization of the bootleg would
necessarily result in large profits for
those who had, in the first instance,
an illegal connection with it, and the
( Government would put itself in po-
sition. morally if not technically
analogous to that of one who COM
F. pOuIluS d lclOlIy.
E The fabulous bootleg supply is said
1 to have been produced in plants hold
( ing Federal alcohol permits and di-
verted. Doran's office has consist
( emily ridiculed this, maintaining it
would have been impossible, with the
many checks put upon legal distil-
leries, to get away with such enor-
. nous quantities.
Expected Heavy Profit.
The original distillers supposedly
have not figured at all in the nego-
tiations with the Government for, as
the tale was told, the stocks were as
sembled and hidden out by persons
with access to plenty of cash, who
saw an opportunity to profit heavily
Morgenthau's closing remarks on
, the subject today were made after an
nouncement that he had halted all
sales of seized illicit liquor, to allow
time for a proper "stocktaking" by
the Government of the entire bootleg
situation.
Until now, he said, every two weeks
or so the Government has auctioned
off raid takings of the Coast Guard
or its revenue officers, but the legal
and moral status of these sales will
now be examined thoroughly.
The coded liquor groups have be-
gun a series a conferences with the
Federal Alcohol Control Administra-
ton, looking toward improved man
agement.
The code authority, handling dis
titled spirits, wines and beer, meeting
to adopt code regulations and elect Of
ficers received letter from Joseph H
Choate, jr., director of the control ad-
ministration, urging them to show
"how honest self policing, by an in
dustry. can accomplish results which
cannot be compelled by Government