Our membership, gentlemen, is deeply troubled by these clear signs of a breakdown in the commonsense methods of liquor control envisioned when the people voted an end to the era of rotgut by repealing the 18th amendment.

We are disturbed over the loss of jobs already reflected in the legal plants. We are disturbed over the fact that the present scale of taxes is a special burden on the men and women, working people, who are 85 percent of the market for these products.

I am reminded, when I speak of this tax and its effect on consumers, of an editorial some time ago in the Cincinnati Enquirer which described the $10.50 tax as leading to prohibition for the masses, but not for the classes.

And that is a fact. Legal liquor is so high in cost now that men and women on smaller incomes are placed in the position of denying themselves what is rightfully theirs, or of finding it in some alley pouring spot where the consumer tax is not imposed.

And let it be noted here, that the men who operate that pouring spot, have no scruples. The illegal producers and bootleggers of moonshine liquor, either straight, mixed, cut, dirtied, or poisoned, have no scruples and will sell to anyone from 8 to 80, so long as they have the money. They observe no health regulations. The hire no legitimate craftsmen behind their bars. They operate as parasites, outside the law, but within easy reach of the consumer, their victim.

Speaking for the members of my international union, I wish to make clear the fact that we stand solidly behind all those who are representing all levels of the industry here tonight, in urging that your committee roll back these taxes.

We ask that the present tax of $10.50 per gallon on distilled spirits be restored to the prewar level of $6 per gallon. We ask that the present tax of $9 per barrel on beer also be restored to the prewar level of $7 per barrel of 31 gallons.

We feel strongly that by taking this course you will not only bust the bouncing bootleg boom, but that you will halt a marked trend toward unemployment in the industry, and that you will, as well, restore the bloom to tax collections on these products.

I thank the committee for this opportunity to present our views and for your indulgence in listening to me.

The CHAIRMAN. The next witness is Mr. Joseph E. Brady, coordinator of State councils of United Brewery and Distillery Workers, International Unions.

Mr. Brady, you may give your name and the capacity in which you appear and we will be very glad to hear you.

STATEMENT OF JOSEPH E. BRADY, CORRDINATOR OF STATE COUNCILS OF UNITED BREWERY AND DISTILLERY WORKERS, INTERNATIONAL UNIONS

Mr. BRADY. Joseph E. Brady, coordinator of State councils of United Brewery, Flour, Cereal, Soft Drink, and Distillery Workers of America.

Mr. Chairman, I am not going to make any oral statement but I have been delegated here to submit this statement for the record for the United Paperworkers of America, CIO.

The CHAIRMAN. We thank you, sir, and without objection it will be made a part of the record.

(Statement referred to follows:)

STATEMENT OF HARRY D. SAYRE, PRESIDENT, UNITED PAPERWORKERS OF AMERICACIO, RE TAXES ON ALCOHOLIC BEVERAGES

Gentlemen, the United Paperworkers of America-CIO represents some 50,000 workers in the paper, paperboard, and paper-converting industry of the United States. Our organization discovered long ago that the interests of these members are directly affected by conditions and employment in corelated industries. For this reason we have developed a program of mutual interest and cooperation with other organizations and industries because of these interrelated problems. Our concern with the alcoholic-beverage industry is an outstanding example.

The products of many paper companies manufactured by thousands of paperworkers are consumed by the beverage industry. Many tons of paper and paperboard converted into labels, display cartons, bottle and can carriers, corrugated cartons, fiber cases, and packing are used by the legitimate-beverage industry every day. Statistics are no doubt available on the extent of this annual consumption of paper products but we believe it sufficient to say that it is a significant factor in employment, wages, and profits of the American paper industry. For these reasons we join with other interested parties in requesting consideration of the tax problem of the alcoholic-beverage industry and the workers of that industry and the paper industry who are thereby affected. Prohibitive taxes which encourage consumption of illegally produced alcoholic beverages will in the long run benefit no one in legitimate industry. Bootleggers use no labels, cartons, cases, or other products of the paper industry or its related industries, nor are their products produced under wages and conditions tending to support the American standard of living as established in legal industry.

Briefly, and in conclusion, we request that the committee give careful consideration to the impact of excessive alcoholic-beverage taxes on the prosperity of the paper industry and other industries directly related to the beverage industry as well as to the welfare of the thousands of workers also directly affected by this question.

Mr. BRADY. On your list of witnesses, Mr. Chairman, beginning with No. 12 through No. 14, the labor representatives would like also to submit their statements for the record but would like to be called separately to identify themselves before this committee, in order to cooperate with you, sir.

The CHAIRMAN. We thank you very much.

I call Mr. Joseph Kunz, Coopers' International Union.

STATEMENT OF JOSEPH KUNZ, FIRST VICE PRESIDENT, COOPERS' INTERNATIONAL UNION, BOSTON, MASS.

Mr. KUNZ. Mr. Chairman, my name is Joseph Kunz. I represent the Coopers' International Union and I would like to submit this statement in behalf of that union.

The CHAIRMAN. Without objection it may be made a part of the record.

(Mr. Kunz' prepared statement follows:)

STATEMENT OF JOSEPH KUNZ, FIRST VICE PRESIDENT, COOPERS' INTERNATIONAL UNION OF NORTH AMERICA, AFFILIATED TO THE AMERICAN FEDERATION OF LABOR, ON REDUCTION OF THE ALCOHOLIC BEVERAGE TAX

My name is Joseph Kunz. I am first vice president of the Coopers' International Union, with headquarters at room 345, Park Square Building, Boston 16, Mass. My home is Baltimore, Md.

This statement is made in behalf of our members who manufacture and recondition barrels for the distilling and wine industry. Our organization is one with

a long and tragic history. We survived wars, panics, depressions, and recessions. But we were almost completely destroyed during the years of the "noble, experiment," the 18th amendment.

After the repeal of that monstrosity, that breeder of crime and corruption, the cooperage industry rapidly recovered. Many new cooperage plants started production and prospered. Thousands of workers were steadily employed up to a few years ago when the effect of this excessive alcoholic-beverage tax began to cut sales which resulted in curtailed production and consequently few barrels were made. As time goes on we are experiencing a form of creeping prohibition, the net result of this present excessive, oppressive tax.

The demand for distillery and winery cooperage is at an alltime low. Naturally, bootleggers do not purchase new white-oak charred barrels such as are used by licensed distilleries.

The Coopers' International Union represents approximately 95 percent of the workers engaged in the manufacture and reconditioning of distillery and wine cooperage. However, there are several thousand unorganized workers in the sawmills which produce rough staves and heading. Most of these mills are located in the South where organizing is difficult due to antilabor laws. In some instances this work is performed by small groups, or farm labor between crops. Of course we are not speaking officially for these groups or individuals. However, we are positive they will not object because most of rough heading and stave sawmills are shut down for an indefinite period. The reason for this deplorable situation is simply that there is no demand for their product.

Many of the members of our union, which union is intimately related to the distilling and wine industry, are unemployed due primarily to the decrease in the production of alcoholic beverages. We are of the opinion this curtailment of production is due to the continued imposition of excise-tax rates adopted during World War II. We do not propose to submit statistics covering the damage to our industry from the effects of this tax because others present here today will cover that phase quite thoroughly.

When the tax was raised from $6 to $9, then to $10.50 per proof gallon on distilled spirits, no protest was raised by the Coopers' International Union. We considered such increases as just another burden incidental to world conflict. Now many workers are unable to purchase a good grade of whisky on account of high retail prices. We, therefore, request that the war increase per proof gallon be eliminated and return to the excise tax on distilled spirits of $6 per proof gallon.

With the price of legal tax-paid distilled spirits manifestly being driven by high taxes beyond the purchasing power of the average consumer, moonshining and bootlegging are on the increase. Sales of legal liquors are falling while the sales of the illegal article are going up.

Consumer resistance and resultant slackening in consumer purchase of legal tax-paid distilled spirits are becoming more evident. Federal, State, and local governments have been suffering diminution in liquor receipts for some time past. We, therefore, respectfully request that the wartime excise tax on distilled spirits, wine, and beer imposed by the Revenue Act of 1943 be revoked and that such tax revert to the level in effect before the imposition of these war-emergency taxes.

The CHAIRMAN. Mr. Paul Maxwell, West Virginia Glass & Pottery Workers Protective League.

STATEMENT OF PAUL E. MAXWELL, EXECUTIVE SECRETARY, WEST VIRGINIA GLASS & POTTERY WORKERS PROTECTIVE LEAGUE

Mr. MAXWELL. Mr. Chairman, my name is Paul E. Maxwell. I am executive secretary of the West Virginia Glass & Pottery Workers Protective League. I speak officially for a membership of some 8,000 in West Virginia. I want to thank you for this opportunity of putting our organization on record as being fully behind the argument put forth for a substantial reduction in the excise taxes on liquors, wines, and beer.

With your permission and to conserve time, I would like to file a brief to that effect.

The CHAIRMAN. Without objection, it will be made a part of the record.

(Mr. Maxwell's prepared statement follows:)

STATEMENT ON LIQUOR TAXES BY WEST VIRGINIA GLASS & POTTERY WORKERS PROTECTIVE LEAGUE

Mr. Chairman, my name is Paul E. Maxwell. I am executive secretary of the West Virginia Glass & Pottery Workers Protective League. Officially, I speak for our membership of some 8,000 in West Virginia. Our legislative program is also supported by many thousand glass and pottery workers in other States. Unofficially, but accurately I assure you, they are in full accord with our stand on excise taxes.

For sensible, revenue-producing purposes the present excise tax on distilled spirits and malt beverages is suicidal; from other viewpoints, grossly unjust and ill advised. Other evidence in abundance has been presented here, proving beyond a shadow of a doubt that the reduction in Federal income from these industries, and the increase in illegal moonshine traffic, stems directly from the excessive tax burden placed upon it. It is not my intention to discuss these facts further.

The one point I would like to make most impressive to this committee and the entire Congress is this. Our people are fully aware of, and aroused by, the hypocrisy and sham that has been so apparent in the recent formulating of tax laws for the legal beverage industry. Twenty years ago, after 13 disgraceful years of national prohibition, the American people overwhelmingly rejected the false doctrine thrust upon them by the prohibitionists of that day, and still advocated by the dry forces of today.

In rejecting the farce that was prohibition, they adopted a constitutional amendment as a guaranty that it would never again happen. Blocked by the Constitution, the drys sought other avenues for attack and taxation seemed the most promising. The last several tax increases on the legal beverage industry has been a struggle by the industry to preserve an American heritage against an underhanded attack by the drys to return prohibition by taxation. Yielding to dry pressure, Congress has contributed largely to the conspiracy to again place the American people at the mercy of moonshiners, prohibitionists, and racketeers. The wisdom of a general reduction in excise taxes before Federal expenditures can be curtailed is questionable. In the event Congress rules that the present level of revenue is necessary, they cannot consistently refuse to adjust a tax that admittedly is destroying a most lucrative source of revenue, not only by the direct tax upon the product but indirectly on incomes, employment, etc.

I am quite grateful to this committee for the opportunity to put our organization on record as favoring a substantial reduction in the Federal excise tax upon liquors, beer, and wine. We earnestly entreat you that the due and deliberate consideration it merits, apart from the general tax picture, be given this tax, and that a recommendation for relief come out in your report for the return to $6-perproof-gallon tax on distilled spirits.

The CHAIRMAN. The next gentleman is Mr. Roland Hidde, of Wisconsin. Mr. Hidde, if you will just give your name and the capacity in which you appear.

STATEMENT OF ROLAND J. HIDDE, EXECUTIVE SECRETARY, WISCONSIN STATE COUNCIL OF BREWERY AND SOFT DRINK WORKERS

Mr. HIDDE. Mr. Chairman, I am Roland J. Hidde. I am executive secretary of the Wisconsin State Council of Brewery and Soft Drink Workers. I would like to submit this statement for the record.

The CHAIRMAN. Without objection, it will be made a part of the record. Thank you very much for your appearance.

(Mr. Hidde's prepared statement follows:)

STATEMENT OF ROLAND J. HIDDE, EXECUTIVE SECRETARY OF THE WISCONSIN STATE COUNCIL OF BREWERY AND SOFT DRINK WORKERS

Mr. Chairman and members of the committee my name is Roland J. Hidde, and I am the executive secretary of the Wisconsin State Council of Brewery and Soft Drink Workers, whose membership approximates 12,000 workers in the brewing, malting, soft drink, and allied industries.

I have been instructed by my members to solicit your support in securing a reduction of excise taxes on distilled spirits, beer, and wine to the end that we as workers in the alcoholic-beverage industry may again enjoy full and regular employment. We have found that employment among our members has decreased proportionately to the various increases in excise taxes imposed by the Federal Government since 1940. We strongly urge you to seek the passage of such legislation that would roll back the present $10.50 tax on distilled spirits and the $9 tax on beer to a more realistic level of $6 and $7 tax, respectively, and a proportionate reduction on wine.

Another point I may bring out is the fact that since the latest increase of excise taxes on distilled spirits the size and number of seizures of moonshine stilis has also increased proportionately.

While we in Wisconsin enjoy reasonable but strict enforcement of the law in regard to the sale of alcoholic beverages there is a strong feeling of resentment among the retailers against the high excise tax on their products and some of the fringe elements are seriously considering the purchase of tax-free liquor if they have not already done so.

We feel that if these excessive excise taxes are rolled back to the prewar level, the industry as a whole will enjoy a period of prosperity and the volume of taxes collected will more than make up for the rollback of these excise taxes, and in addition will also return the retail sale of alcoholic beverages to legal channels where it belongs.

The CHAIRMAN. The next witness is Mr. James O'Neill, of Michigan. We are glad to see you, Mr. O'Neill. Will you give your name and the capacity in which you appear?

STATEMENT OF JAMES O'NEILL, EXECUTIVE SECRETARY, MICHIGAN STATE COUNCIL OF BREWERY WORKERS, CIO

Mr. O'NEILL. Mr. Chairman and members of the committee, my name is James O'Neill. I am the executive secretary of the Michigan State Council of Brewery Workers, CIO. I would like to place my

statement on record.

The CHAIRMAN. Thank you, sir, for your appearance. Without objection your statement will appear in the record. (Mr. O'Neill's prepared statement follows:)

STATEMENT OF JAMES O'NEILL

Mr. Chairman, my name is James O'Neill, executive secretary of the Michigan State Council of Brewery Workers, CIO. We have a membership of approximately 10,000 workers in the alcoholic beverage industry in this area.

This membership is wholeheartedly in favor of a Federal alcoholic excise tax rollback from $9 to $7 on the barrel of beer; from $10.50 to $6 on the gallon of whisky and a proportionate reduction on wine.

The Michigan State Council in Convention, February 1, 1953, at the Tuller Hotel, went on record unanimously in support of legislation to accomplish this rollback. You, Mr. Chairman, and all the members of your fine committee were notified of our action at that time.

The Michigan Legislature, in its 1953 session, considered a bill to raise alcoholic beverage taxes, including a 60 percent increase on beer. After due deliberation, this bill was killed. Most important reason, because it wouldn't be in the public interest-taxes being already too high.