Evening star., 1943-12-11
Senate Group Weighs
Slash in Tax-Free
Period on Liquor
- J. A. O'LEARY

- J. A. O'LEARY
Confronted by testimony tn,
liquor industry withdrew from
bond less than half as mucf
liquor during August, septem.
ber and October as in the sam,
period a year ago. Senators to.
day were considering cuttin,
the tax-free warehouse perioe
from eight to four years to enc
the shortage they believe ha.
created a widespread blacl
market.
Decision to shorten the warehous.
period would rest with the Finance
Committee, now rewriting the ia,
DILL or could be proposed when the
revenue bill reaches the Senate floor
Chairman Van Nuys of the Senate
investigating Committee drew from
stewart Berkshire, deputy commits
sioner OF internal revenue, the esti-
mate that 117,000,000 gallons O,
liquor would have to be withdrawn
from bond by July /, or be taxed
while held in warehouses, if the tax.
free aging period was reduced tc
four years
Big Revenue Source.
Senator Van Nuys also developed
that, whether the, liquor was with
drawn or not, the four-year limit
would bring into the Treasury early
In 1914 more than billion dollars
OF additional revenue, at the pro-
posed new tax of SO a gallon.
The committee chairman asked
Mr.. Berkshire If he did not think
that step, coupled with a brief re-
spite in the ban on manufacture of
beverage alcohol would not end the
shortage and the ACCOMPANYING
black market.
1T would help If, after they make
1t. they'll sell It," Mr.. Berkshire re-
piled.
In suggesting that distilleries be
permitted to make beverage alcohol
f1ve days month, Senator Van Nuys
said he understood some such leeway
Is being allowed in Canada.
Canadian government officials de-
cnned to comment, according to the
Associated Press, but in Montreal an
official of a major distilling company
said that both United States and
Canadian distilleries had govern
ment permission to make whisky
during any intervals when they have
caught up with the wartime demand
for industrial alcohol. He told the
Associated Press the quantity pro-
duced in Canada under this ar
rangement was so small as to be
almost minute" In the United
States, he said, wheat was not avail
able for beverage alcohol.
Senator Wherry, Republican, of
Nebraska agreed with Senator Van
Nuys on the advisability of taxing
warehouse liquor after four instead
Of eight years. The Nebraskan also
said executives Of the big four"
distilling firms would be called later
In the inquiry.
Mr.. Berkshire had testified earlier
that the distillers began voluntarily
to ration the output of liquor before
the War Production Board ordered
their supply OF bottles cut to IS per
cent OF former requirements.
Shortage of Bottles.
Senator Murdock, Democrat, of
Utah, had just read letter from
his States liquor commission, call
ing the shortage OF bottles the bot
tle-neck" in the liquor business. Mr..
Berkshire said that Is not exactly
correct"
Senator Ferguson, Republican of
Michigan. asked the witness if the
So-called big four" distilling COM
panies own about so per cent of the
whisky on hand, and Mr.. Berkshire
said approximately that amount.
Tables placed in the record by Mr..
Berkshire at the request of Floyd
Mattice, committee counsel, dis
closed that during the period be-
tween May, 1912 and September;
l943, the "big four" bottled 10o,143,-
600 gallons. and all others 77,1e4 900.
Answering questions by Mr.. Mat
tice, the deputy commissioner de-
scribed the big four as: National
Distillers' Products Corp, Schenley
Distillers' Corp, Distillers' Corp
Seagram, Ltd, and Hiram Walker
Gooderham & Worts, Ltd. Mr..
Berkshire listed the subsidiaries of
these companies.
Bonded Withdrawals.
Mr.. Berkshire gave the withdraw
ais from bonded warehouses at TO-
100000 gallons each in August and
September, 1912. In October last
year 1t went up to 11,5O0,000 GAL
Ions. Then Withdrawals took a
sharp drop to 5,5O0,000 last Novem-
Der, and 100000 last December.
In 1943, he said. Withdrawals have
declined from 100000 gallons in
January to 100000 gallons in May.
1t varied only slightly from then
until October, when it went up to
100000.
If the 117O00,O00 gallons more
than years old became taxable and
was withdrawn in the next six
months, 1t would amount to 49,
100000 gallons a month. II this
supply should be turned into blends
Of 86 proof with neutral spirits, it
would amount to 136,000,0O0 gal
Ions.
To a question by Senator Fergu-
son, Mr.. Berkshire said there were
26,643,165 gallons of neutral spirits
in storage on October 81, available
to be added to whisky in blending.
Mr.. Berkshire told the committee
neutral spirits are produced at 100
proof, and that distilled water Is
used to bring the whisky down to
the desired proof.
Remarks on Labels.
Senator Murdock observed that
labels never indicate use of distilled
water to bring down the proof of
the spirits.