Evening star., 1943-11-18
Liquor Industry
Probe byU.S
Is Revealed
Inquiry Parallels
Senate Plans for
Investigation

Investigation
The Justice Department has.
begun an investigation of the
liquor industry, it was revealed.
today, as the Senate prepared to
open it's inquiry this afternoon
when the special Judiciary Sub
committee meets to select an
attorney and two investigators.
Disclosure of the Justice Depart
ment investigation came from Wen-
dell Berge, Assistant Attorney Gen.
eral in charge of the antitrust di-
vision. He said his Office has set
out to determine if there has been
any price-fxing activities or with
holding of supplies from the market
in order to create an artificial short
age and increase prices.
Mr.. Berge told reporters he had
assigned special men to the inquiry
and instructed them to push it."
Will Map Scope Today.
Chairman Van Nuys of the SUBJ
Rcommlttee said the scope of the Sem
ate inquiry also will be mapped out
at the afternoon executive session.
The staff appointed probably will be
given a week to gather information
on the current whisky shortage be-
fore public hearings begin, he added.
Mr.. Berge said his department was
in full sympathy" with the Senate
investigation and that his staff
would follow it for evidence bearing
on any monopoly or restraint Of
trade angles.
The Berge announcement followed
an assertion by Senator Scrugham,
Democrat, of Nevada, whose resolu-
ton set off the Senate Investigation,
that there is enough whisky in
bonded warehouses to provide every
American citizen with more than IL
quarts.
George Plan Favored.
Secretary OF the Treasury Nor.
genthau told a press conference,
meanwhile, that proposal by Sem
ator George, Democrat, of Georgia
to halye the time liquor may be kept
in the warehouses without payment
Of taxes would solve the current
retail whisky shortage overnight"
and the black market in liquor" at
the same time.
Senator George has a good idea
and I'm for it," Mr.. Morgenthau
said.
Mr.. Berge said the Justice De.
partment inquiry thus far had re.
suited in strong suspicion" Of mo-
nopolistic practices in the industry
asserting, 1T looks like a fertile
field
Outlines Inquiry.
The investigation, Mr.. Berge add
ed, is to find out if there has been !:
Any deliberate monopolization Of
existing supplies through a purchase
OF warehouse receipts. purchase Of
actual inventories and purchase Of
capital stock and assets of other
corporations in order to obtain the
liquor supplies of those corporations.
Any monopolization of distilling
facilities through acquisitions Of
competing plants.
Any monopolization of imported
liquors and franchises for exclusive
distribution of imported liquors.
Any monopolization Of channels Of
distribution.
ANY price fixing activities: With.
holding of supplies from the market
IN ORDER to create an artificial short
age and thus enhance prices, the
introduction of new brand names as
a possible means of getting around
OPA ceilings, the withholding of
standard brands from the market
and reducing the proof content Of
spirits offered for sale in the market.
Acquisition by distillfng companies
OF interest or control of companies
engaged in the manufacture and
distribution of domestic wine.
VIII Study Stock Dividends.
MI. Berge said he doubted that
the distribution of whisky by some
companies to their stockholders AZ
dividend had antitrust implica-
tlons, but it is the kind of thing
we look into because We want to
know all the facts about the in
dustry."
Mr.. Morgenthau also said in re-
sponse to question that he was
looking into" the whisky dividend
recently declared by the American
Dlstllling Co.. Baltimore, but de-
clined to discuss the matter further,
Asserting the rate of withdrawal
from warehouses has dropped by
half since last year, Senator Scrue-
ham said internal revenue officials
told him the bonded stocks stand
roughly at 4oo,000,00O gallons.
There is no way of telling, he
added, how much will be sold
straight and how much will be
blended with neutral spirits and COL
oring matter for sale under new
brand names.
Senator Overton. Democrat, OF
Louisiana said that if analysis OF
such blends showed them to be
deleterious the Pure Food and DRUG
Act should be invoked.
Senator Scrugham likewise be-
lieved taxes might be the key to the
scarcity problem, which the Office
OF Price Administration said was
complicated by a growing "gangster
element"
OPA officials said they were work.
ing secretly on program designed
to combat hijacking and illegal
lliOuOr traffic.