SAYS BEER AND WINE IS SHUNNED–blared the headlines under the banner of the Gettysburg Times on a hot summer day in 1922. Backing the blaring was Wayne B Wheeler, the Harry Anslinger of the 1920s whose Anti Saloon League drummed up votes against any politician who sided with Satan against the Godly initiation of force rallied to crush the narcotic evils of the Demon Rum, Warlock Wine and Beelzebub Beer.
By mid-1922, the U.S. economy was a shambles not to be seen again until after the Jones Five and Ten Law of March 1929 again put the fear of the Lord into the myrmidons of Mammon. Federal wartime and Constitutional Prohibition had wrecked the economy despite the influx of money as war loans arrearage was dragged out of Europe. America’s reaction was to ignore the dry laws, buy off the fanatics with bribes, and churn out beer and bootleg gin from corn sugar glucose and Fleischmann’s yeast from Portland to Portland. It was a standoff between politicians & lobbyists versus red-blooded Americans, with freedom or coercion in the balance.
Politicians of the Methodist White Terror, drawn from Republican, Prohibition and Democratic parties were convinced that lax enforcement was weakening the economy, and that with enough guns, padlocks, prison time, lynchings, murder and confiscations, the economy would be up and running again in no time. Two theories of prosperity competed toe-to-toe. Religious fanatics shouted from the rooftops that coercion by deadly force was the key to a healthy economy. James A Reed, the wet senior Senator from the Anheuser-Busch State of Missouri, argued for freedom of trade and production and repeal of cruel dry legislation grounded in superstitious myths.
This was the very same wet Senator who, three years later, would send young Robert Anson Heinlein to the Annapolis Naval Academy. (link) Heinlein’s TANSTAAFL is the banner for the 2020 Libertarian Party Convention in Austin, Texas. (link)
The same page recounts some symptoms of that relatively brief economic collapse. A photo of a morgue containing the bodies of 18 of 22 mostly immigrant workers executed by union goons at a Herrin, Illinois coal mine, showed things were not as rosy as the Anti-Saloon League lobbyist preached. Wheeler assured the Sunday School meeting that: “Over $2,500,000,000 wasted for drink has been turned into useful channels. Bank deposits and savings have increased, and the net increased wealth of the country last year was $8 billion.” In fact, bank suspensions way more than doubled in the liquidity crisis from 1920 to 1921, and stood at twice the 1920 figure in 1922. Asset forfeiture was a blunt instrument for enforcing prohibition even back then. So the search was on for something else to blame for Prohibition’s economic damage. Exploiting the Herrin massacre, labor unrest was blamed and a business “revival” invented–same newspaper. (link)
Below this cartoon, the US Shipping Board was forbidden to serve wine even off the coast of France. This because August Busch of Missouri had denounced the government’s floating bars as hypocrisy after Anheuser Busch beer was banned. But what about Congressman Kelly–the Pennsylvania Dry Hope Wheeler bragged about?
Fast forward to June 23, 1930: PENNSYLVANIAN IS SOUGHT FOR TARIFF BOARD… Congressman Kelly was shoved forward to represent his state on the federal Tariff Board even as those opposed to the increase in the tariff on sugar were blamed for the Crash and Depression! (link)
By then only repeal could end the Depression, and 4 months earlier a new political party was being formed. The news story ran:
WET THIRD PARTY IDEA FROWNED ON IN CONGRESS‑‑Even Liberals Call it Impracticable‑‑by Arthur Crawford‑‑Washington DC, Feb 5‑‑Supposed formation of a new “liberal” party attracted widespread attention today as a possible development in the controversy over prohibition, but leaders in both Republican and Democratic parties were inclined to ridicule the suggestion. The proposal was made by Samuel Hardin Church of Pittsburgh, president of the Carnegie institute, at last night’s dinner in New York of the eastern directors of the AAPA (Association Against the Prohibition Amendment) (CT 2/6/30 8) More to come on how this party saved America from the Great Depression just as nullification saved us from the earlier prohibition Crash and depression…
Get the complete story in Prohibition and The Crash on Amazon Kindle in either if two languages for the price of a craft pint. After this you’ll be able to explain to economists exactly how fanaticism and loss of freedom wrecked the U.S. economy.