Evening star., 1952-10-21
Liquor Dealers
Political Gifts
Under Fire Here
Kronheim, Donohue
Mentioned in Report
Of CheIf Group
BY james (. Roper

py JoUeS {. NOpet
A House subcommittee today
asked the Justice Department to
use the antitrust laws to keep big
liquor companies from crushing
their competitors.
The subcommittee hinted that
the Justice Department already
would have moved against the Big
Four" of the liquor trade, if the
liquor officials had not made polit-
ical contributions, primarily to the
Democratic Party.
The subcommittee, headed by
Representative Chelf, Democrat. of
Kentucky. cited Milton S. Kron-
helm, District whisky wholesaler,
as one of the men active in getting
contributions for Democrats.
The committee view was con-
tained in the latest installment of
the report on its investigation Of
Justice Department operations.
Preliminary Survey in '49
The Justice Department made a
preliminary survey of liquor trade
practices in 1949 but let the in
quiry drop. The subcommittee
said this was mot only an error in
Judgment. but an indication of a
definite lack of enthusiasm to ex-
Iplore the matter fully"
while the evidence is not con-
elusive" the subcommittee said.
there is an inference that there
was a connection between the po-
Ilitical contributions of the liquor
companies and the tapering of
the antitrust investigation Of
1949."
Since 1949, the subcommittee
said, there has been increasing
evidence that the big Four" liz
quor companies have restricted
the sales outlets of independent
distillers.
If at all possible" the SUBJ
committee said. action should be
taken before a practice which
will crush competition has ach-
ieved its results. so those against
whom a practice is directed
will be protected rather than
avenged.
Based On Testimony.
These conclusions were based
on testimony the subcommittee Of
the House Judiciary committee
heard in public this spring. The
subcommittee started investigat-
ing, after receiving complaints
that independent distillers were
being smothered illegally by the
industry's Big Four"-Joseph E.
Seagram and Sons, Inc; Schen-
ley Industries, Inc. National Dis
tillerS Products Corp, and Hiram
Walker-G -Gooderham and Worts.
Ltd.
Last year. these four firms mar
keted 83 per cent of all the
whisky in the United States and
received 88 per cent of the net
income of the industry.
The subcomittee also noted
that, in 1910, there were 10 inde-
pendent distillers; last year. only
38.
Acknowledge Economic Forces.
The subcommittee acknowledged
that many small distillers went
out of business or sold out to the
big Four" because of natural
economic forces operating during
the war, and because of Govern
ment price control regulations
that were harder on the inde-
pendents than on the big firms.
The subcommittee. however.
noted evidence that big firms
sometimes refuse to let their
wholesalers handle independent
brands of liquor.
AT least some members Of the
Big Four have exercised their
power to cut off independent
brands from market outlets" the
subcommittee said.
Points To Groups Function.
1T is not the function Of
this subcommittee to determine
whether violation of the antitrust
laws exists on the part of mem
bers of the Big Four. We feel,
however. that the Antitrust Di-
vision should have made investi-
cation to determine whether such
violations exist"
The Justice Departments 1949
inquiry turned up no evidence of
collusion among the Big Four. The
subcommittee emphasized, how
ever, that Justice. in 1949, studied
only material already in Govern
ment files. The subcommittee said
it Is difficult to condemn Justice
for not acting on the evidence it
saw. The subcommittee, however,
attacked Justice for failing to
collect readily available evidence
from independent distillers.
The subcommittee tried to
smooth over row between Ernest
L. Branham, Justice Department
attorney, and the men who were
his superiors in 1949. Mr.. Bran
ham wanted to prosecute larger
(See CLEANUP. Page A-4)