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Member of Congress, Washington, D. C.: The wholesale industry of Indiana heartily endorses the proposed floor tax as incorporated in House Joint Resolution No. 683. No tax can be considered just which shows favor to the wealthy. All should stand equal before the law. Failure to enact a floor tax will permit those with large buying power to purchase large stocks in anticipation of the tax and then use such merchandise in vicious competition against competitors less fortunate. To avert this competition, every retail permittee would extend his credit to the limit. The receipt and issuance of such credits runs contrary to the spirit of the Federal Alcohol Administration Act. Note current proposal of Federal Alcohol Administration to regulate credit between wholesaler and retailer because of “tied houses” created thereby. Since the tax is certain, let it be equal and fair to all. It is certainly just as fair for monopoly States as private enterprises.

If private capital is willing to go down in its pocket for money necessary to pay such floor tax because of the common good and to avert injury to any citizen, certainly any State or subdivision thereof whose only excuse for existence is service to its people with a cardinal duty of protecting the rights and interests of the weak against the strong, and owing that duty not only to its own citizens but to the citizens of sister States, should be in a most embarrassing position in raising voice against this proposal so fundamentally equitable to all persons involved.

LENHARDT F. BAUER, Executive Secretary, Indiana Wholesale Liquor Dealers Association.


Indianapolis, May 19, 1938. Hon. Emmet O'NEAL,

House of Representatives, Washington, D. C. DEAR Sır: We who are closely in touch with the liquor industry are very sincere in believing that House Joint Resolution No. 683 should be passed. Without a floor tax being levied on the floor stocks of all manufacturers,

wholesalers, and retailers (excepting 50 gallons for retailers) as of July 1, the Government would not realize any revenue from this tax for at least 6 months in that, first, the manufacturers would immediately tax-pay and place into a free warehouse all the whisky that they were financially able to handle; second, the wholesaler would purchase up to the very limit of his credit with all producers; third, the retailer would follow the example of the wholesaler, the obvious result being no revenue for the Government for at least 6 months, accounts receivable on both the manufacturer's and wholesaler's books stretched beyond all reasonable amounts.

There are many, many important reasons why House Joint Resolution No. 683 should be passed, which I will gladly forward to you in detail if requested.

I urge you to endorse this resolution.
Respectfully submitted.

President, Indiana Wholesale Liquor Dealers Association,

National Liquor Corporation.


LOUISVILLE, Ky., May 16, 1938. Representative EMMET O'NEAL,

Washington, D. C.: As secretary of the Independent Distillers Association of Kentucky, I am instructed to convey to you the association's earnest request that the increased Federal tax apply to floor stocks. Failure to take this action will completely demoralize the industry.

R. N. Wathen, Bardstown Distillery Co.; Loretto Distilling Co.;

James B. Beam Distilling Co.; Tom Moore Distillery Co.; Burks
Spring Distillery Co., Inc.; Old Heaven Hill Springs Distillery;
Churchill Distilling Co.; Old Joe Distilling Co.; Dant Distilling
Co.; Ripy Bros., Distillers; John P. Dant Distilling Co.; T. W.
Samuels Distillery; Fairfield Distillery, Inc.; K. Taylor Dis-
tillery Co.; Hoffman Distilling Co.; Wathen_Bros., Distillers;
Independent Distillers of Kentucky; John A. Wathen Distillery
Co.; The Willett Distilling Co.

LOUISVILLE, KY., May 13, 1938. Hon. EMMET O'NEAL,

Member of Congress, Washington, D. C.:
On behalf of the wholesale liquor industry in the State of Kentucky, we strongly
urge the adoption of a provision taxing floor stocks of distilled spirits on hand as of
July 1. You are earnestly requested to deliver this telegram to Chairman
Doughton, of the Ways and Means Committee.

M. J. GREEN, Executive Secretary.



Mr. CULLEN. Congressman Andresen, we shall be very glad to hear you at this time.

Mr. ANDRÉSEN. Mr. Chairman and members of the committee, I am not here representing any distillers or package dealers or liquor dealers of any kind. But I am here interested in the resolution that is being considered by the committee, because it is a tax bill.

What I particularly want to call the attention of the committee to is an amendment that I would like to see adopted to the bill that deals with the 25 cents additional tax which was placed on distilled spirits in the recent tax bill. I would like to see an amendment adopted here that would eliminate that 25 cents tax on all alcohol used for nonbeverage purposes; that is, for medicinal purposes, and in the use of preparations, extracts, and those things that are outside of the bever

age line.

Mr. BUCK. Do you have a copy of the resolution before you?
Mr. ANDRESEN. No; but I am familiar with it.
Mr. BUCK. What is it that you suggest?

Mr. ANDRESEN. I want the 25-cent tax eliminated. Instead of having a $2.25 taš, to have only a $2 tax on alcohol used for nonbeverage purposes. I think that would be germane to the bill.

The gentleman representing the Department said that it would be difficult to administer such a provision. I take it that it is within the province of the committee and Congress to determine what the policy shall be, and if this committee sees fit to put in such an amendment to this bill, there is no doubt but what the Treasury Department could handle the administration of it.

It is not necessary for me to go into a detailed discussion of the costs of medicines and preparations and extracts, and how common they are in use by everybody in the country.

I do not suppose there was any intent, when Mr. Robertson's amendment was offered, that the tax should be placed on alcohol used for medicine and nonbeverage purposes.

Mr. DINGELL. There is nothing to indicate anything to the contrary as to the opinion of the author of the amendment, however.

Mr. ANDRESEN. I have talked with him about it. I know that the amendment came in hurriedly in the House as a substitute, to get some additional revenue. I have talked with him and with several members of the Ways and Means Committee, and I am certain that there was no intent to impose the tax on these products.

Mr. DINGELL. You will grant that there is nothing in the record on that?

Mr. ANDRESEN. There probably was not. There was not much of a record made on it. I want to urge the committee in behalf of the rank and file of the people to approve an amendment to this resolution so as to eliminate that 25-cent tax on nonbeverage alcohol.

Mr. Buck. Will the gentleman yield?

Mr. Buck. Have you received any requests from manufacturers of these extracts to offer such an amendment?

Mr. ANDRESEN. I have some in my congressional district that are interested in this proposition. They have contacted me and that is one reason I am here today. They are not appearing personally.

Mr. Buck. I thought I had received a pretty complete file of telegrams from all over the country in connection with this resolution, but I have not had any suggestion such as that made yet.

Mr. ANDRESEN. The reason for it is this. Many of them were led to believe that this matter that I have brought up would not be germane to the bill and no hearings would be held on it. But I thought, as a Member of Congress, I might have the privilege of bringing this suggestion to you.

Mr. Buck. I think you are quite within your rights. But I have not any information at the moment that anybody in the manufacturing line is asking for it.

Mr. REED. I have had letters that I can put in the record, in that connection.

Mr. CULLEN. Of course, the gentleman is within his rights so far as suggesting an amendment to this resolution is concerned.

Mr. Buck. Certainly.

Mr. CULLEN. He might submit his proposed amendment to the committee.

Mr. KNUTSON. Answering Mr. Dingell, I am frank to say that it is my understanding that the Robertson amendment only had reference to alcohol that was to be consumed as a beverage.

Mr. CULLEN. Distilled liquor only.
Mr. Buck. It did not say that.

Mr. KNUTSON. That was my understanding. But it was done so hurriedly, none of us had an opportunity to make it clear.

Mr. ANDRESEN. May I add this? It was my impression that the committee did have under consideration a resolution here that might remove that tax from nonbeverage alcohol.

Mr. CULLEN. So far as the chairman's memory goes, we had no request or even a suggestion of an amendment. We had no resolution. I think we did discuss it.

Mr. ANDRESEN. Perhaps I was in error in saying there was a resolution. I understood it was discussed. If necessary, we can have plenty of witnesses here from the people to whom I have referred.

Mr. REED. If the chairman will remember, you called an executive session when the matter was brought up.

Mr. CULLEN. Yes; it was discussed.

Mr. BUCK. I think we discussed it only with reference to the floor tax, Mr. Chairman.

Mr. CULLEN. No, if my memory serves me correctly, we did discuss something about nonbeverage alcohol.

Mr. Knutson. I recall Mr. Cooper mentioning that some companies of that kind were in his district.

Mr. CULLEN. We discussed it and came to no conclusion whatever

on it.

Mr. Buck. Mr. Chairman, I am very much interested in the gentleman's suggestion but, so far as I am concerned, the recommendation is new to me.

Mr. ANDERSEN. It is an important proposition. I think there was no intent on the part of the Congress to levy a tax on alcohol used for medicinal purposes.

Mr. COOPER. May I ask you a question there? What does the present $2 tax on liquor cover?

Mr. ANDERSEN. That covers everything. They are all now paying the $2 tax.

Mr. COOPER. My understanding of Mr. Robertson's amendment was that its purpose was to add 25 cents to the present $2 tax. And that is what it did.

Mr. ANDERSEN. I thought that what we had in mind in particular was putting a 25-cent extra tax on alcohol used for beverage purposes.

Mr. DINGELL. I want to call the gentleman's attention to the fact that I was perhaps the only one who made a speech against the Robertson amendment on the floor of the House at the time.

Mr. ANDRESEN. Well, you were not the only one to vote against it. I did.

Mr. COOPER. There was a roll call on it and it is a matter of record.

Mr. ANDRESEN. Yes. May I leave this suggestion with the committee, and I thank you for giving me this opportunity to appear.

Mr. Cullen. We have been delighted to hear you. Thank you for your statement.

Mr. ANDRESEN. It has been an illuminating hearing today. I have learned all about

the whisky business. Mr. DINGELL. Mr. Chairman, I would like the privilege of inserting in the record a few telegrams and communications which I have received that are brief and pertinent.

Mr. COOPER. Mr. Chairman, before we adjourn, it might be well to inquire if there is anybody else present besides those for whom Mr. O'Neal was speaking, who want to be heard on this resolution.

Mr. Cullen. No one else has requested to be heard, and I will announce that these hearings are closed.

Mr. Buck. I move that we adjourn subject to the call of the Chair. (The motion was agreed to.) (Whereupon, at 5 p. m., the committee adjourned.)


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