Liquor Tax: Beer vs. Kasippu – Learning From The Moonshine Menace Of The USA
By Tharosa Missaka Rajaratne –December 4 2017
The Budget-2018 has proposed revision of liquor tax based on alcohol content and thus beer and Wine prices come down significantly against the hard liquor. Two schools of thoughts have arisen in this phenomenon. First one is that the well-known Sri Lankan illegal brew ‘Kasippu’consumers would shift to beer which is good for health. The other is that the youngsters would become alcoholic due to cheap liquor like beer and wine avail. As each theory has its own merit and demerit the debate continues interestingly without seeing an end to it. The ‘moonshine’ phenomenon of the USA in 1920s is a case in point for Sri Lanka in this context.
‘Moonshine’ is an equivalent to the well known Sri Lankan illegal brew ‘Kasippu’. Moonshine was first spotted in the 1920s in consequence of the prohibition of liquor in the United States. Household violence had direct connection to alcoholism and thus it had become a widespread issue in the society. This was first brought to light by religious movements and soon it snowballed as many groups put their strength together to support ‘an alcohol-free America’. As a result, the National Alcohol Prohibition act of 1919 was passed and the entire nation went out of liquor by January 17th, 1920. The ban seemed successful at the beginning but before long it produced evils.
While the prohibition was effective on the working class poor, the well-to-do class carved their ways around the law. The rich started stockpiling alcohol for ‘legal home consumption’ before the act went into effect. The Act allowed the doctors and pharmacists to prescribe ‘medicinal alcohol’ to their patients. During the first six months of prohibition, over 15,000 doctors and 57,000 pharmacists obtained license to prescribe medicinal alcohol. Grape juice was not restricted as it did not contain alcohol naturally by the time it was produced. However, farmers later learned how to ferment their grape juice for sixty days, which turned the juice into wine with a12% of alcohol content. Many people followed this rule and as a result the grape juice production during the prohibition era quadrupled.
Since the alcoholic beverage production totally paused due to ban, the supporters anticipated a significant drop in criminal activities. Yet, quite contrarily, an entirely new spree of crimes started to haunt the streets of the USA due to prohibition and prevalence of illicit liquor such as moonshine, bathtub gin and smuggling such as bootlegging, rum-running and speakeasy clubs etc. The working class that were not in a financial position to afford to get around the law often ended up brewing illegally by themselves or showing up at ‘speakeasy clubs’ which were illicit establishments where alcoholic beverages was sold during the prohibition era. These clubs were mostly operated by the mafia. During the pre-prohibition era the mafia was only limited to prostitution and gambling. After understanding the exponential growth of demand for alcohol and its value in the black market, the mafia initiated ‘bootlegging’ (smuggling over land) and ‘rum-running’ (smuggling over sea). Initially, rum-runners smuggled cheap Caribbean Rum to Florida speakeasy clubs. The low price of liquor soon convinced them to smuggling even expensive alcohols such as Canadian Whiskey, French Champagne, and English Gin into major cities such as Boston, New York, and Chicago.
The government established the Bureau of Alcohol Prohibition in order to deal with the new waves of criminal activity. Just in the first six months of 1920 the federal government opened around 7,000 cases against the violation of the Act. By the end of 1921 fiscal year, the figure quadrupled and the figure continued to rise dramatically over the next 13 years. The complexity of the smuggling grid rose higher in response to each raid. In order to prevent ‘bootleggers’ from producing alcohol from industrial use ethanol, the federal government ordered the industrial alcohols to be poisoned. In response, within a very short period of time the ‘bootleggers’ hired chemists to detox the alcohols. The Treasury Department then ordered the industrial alcohols to be poisoned with methanol, a move which endangered lives of the people and ultimately killing at least 10,000 people before the prohibition was rescinded.
The prohibition fueled criminal activities to rise to never foreseen levels. Frequent outbursts of gunfire between gangs and the police and sometimes between gang rivals caused massive damage to the nation. Chicago was the most affected area from criminal activity. Gang leaders such as Al Capone, who was the leader of organized crime in Chicago, took the ‘bootlegging’ business to the most violent extents. After one year since prohibition, a study of more than 30 major U.S states revealed that the total crime rate had increased by 24%, theft and burglaries by 9%, homicides by 12.7%, assaults and battery by 13%, drug addiction by 44.6%, and cost to the Police Department by 11.4%. Even though the failure of the Prohibition Act was learned by as early as 1925, the ban was lifted only in late 1933 to control illicit liquor after experiencing a loss of millions of dollars in tax income and thousands of lives. The National Prohibition Act marked itself in the history as one of the most controversial acts ever passed in the United States.
