Evening star., 1943-12-16
Liquor
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plies had not come from regular
wholesalers, but from brokers and
others who had purchased the re-
ceipts, then drew on the whisky.
He explained that In order to
finance the aging Of their whisky
many distillers had In effect sold
part of it by issuing warehouse re-
ceipts. While this liquor remained
lin distillery warehouses it belonged
in fact to purchasers Of receipts
and could be withdrawn and resold.
Mr.. Lentz said that after the State
decided to relax its rules, some bar
operators made purchases OF ma
tionally known brands from whole
salers outside of Ohio. When the
State protested to distillers who
could not supply the State all 1t
wanted, he said, the distillers cut OF
this source Of supply by threatening
to cancel contracts with the whole
salers.
Ferguson Questions Witness.
Subsequently, the witness said
most Of the whisky obtained outside
the State was In le-known or new
brands
Senator Ferguson, Republican. Of
Michigan asked why the State could
not make purchases from whole
salers or others outsi6e the State
Mr.. Lentz said that OPA regula-
tions prevented this.
What OPA regulations?" de-
manded Senator Ferguson.
Mr.. Lentz seid TIE OPA price cell
ings precluded the States from
making purchases from small dis
tillers because "the State couldn't
profitablv purchase outside"
Was the State interested in max
ing a profit or in supplying the
people of Ohio7' Senator Feguson
asked.
ITS my opinion" the witness re-
piled. that the State was interested
in the profit angle to the extreme"
Hotel Bought Direct.
Mr.. Lentz said the State had
knowledge OF one purchase by
large Cleveland hotel, which he did
not name. OF 500 cases Of Scotch
whisky direct from a distiller. With
the exception of tbs and the pur-
chase OF some Schenley rum by a
Cincinnati hotel. he said most of the
outside buving was~from jobbers and
wholesalers.
Mr.. Lentz said he believed the
disappearance Of many standard
brands from the market was done
in many cases very definitely to
eyade OPA price ceilings"
BY disseminating established
brands the manufacturers were able
to do upsradins on the product" he
said.
Don't you mean 'up-pricins?'"
asked Senator Kigore, Democrat, Of
West Virginia.
TITS called up-gradins in the busi-
ness, I believe" the witness replied.
Senator Kilgore asserted the out
of-State purchases resulted in
black market in Ohio because
loboers and purchasers could "cetour
the State monopoly and do business
outside the State at higher prices"
even thcuch the whisky was re-
turned to Ohio for sale by the drink.
Tax PROPOSAL Debated.
Meanwhile. the Senate Finance
Committee today debated whether
to reduce the tax-free period for
liquor in bonded warehouses from
eight to four years, put more whisky
on sale and add nearly billion
dollars tc tax collections in 1914.
Industry Fights Tax Plan.
A group Of distillery spokesmen
went before the Finance Commit
tee late yesterday to oppose use
Of the taxing power to speed up the
sale of the liquor that was on
hand when manufacture Of bever-
age alcohol stopped in October.
l942 The committee probably will
decide that issue today.
Subpoenas for the grand jury
inquiry were issued for records Of
the Big -Four" distilleries, Hiram
Walker d Sons, Inc: Joseph E.
Seagram e. Sons. Inc; National
Distillers Products Corp. and Schen-
ley Distillers Corp. returnable
January 6 to the District grand
jury.
The distilleries named in the sub
poenas were singled out recently
by Senator Van Nuys during hear
ings by his committee.
Senator Van Nuys said his COM
mittee especially wanted to flnd
out If there were monopolistic prac-
tices by the Big Four" There
were contentious that the larger
distillers were buying up small con-
Germs.
The grand jury action contained
indications that these angles were
in the Justice Departments mind.
The subpoenas called specifically
for the four dis.illeries to produce
records showing:
Ownership of stock in, the COM
panies as we'll as in subsidiaries, in
cluding wineries and breweries;
transactions involving purchases Of
corporations, partnerships and busi-
nesses; acquisition Of stocks OF
whisky and wines; Withdrawals.
vithholdinos or private rationinr of