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Tom MOORE DISTILLERY Co.,
Bardstown, Ky., May 21, 1938. Mr. R. N. WATHEN, Secretary and Treasurer,
Independent Distillers Association of Kentucky, Louisville, Ky. DEAR MR. WATHEN: As a member of the above association, we sincerely trust that every effort will be put forth so that the increased Federal tax will apply to floor stocks. Yours very truly,
Tom MOORE DISTILLERY Co.,
Ripy BROS. DISTILLERS,
Lawrenceburg, Anderson County, Ky., May 21, 1938. Mr. R. N. WATHEN, Secretary, Independent Kentucky Distillers Association,
Louisville, Ky. DEAR SIR: Our company urges that the floor stock provision be included in the revenue measure on distilled spirits. If the floor stock provision is omitted it will work a great hardship on all whisky people that haven't funds to tax-pay and hold until whisky is used, and it certainly would be an unfair condition, the wellfinanced firms would benefit, and the weak ones suffer. Please do all you can to include the floor-stock provision in the revenue measure. With best wishes, Very truly yours,
RIPY BROS. DISTILLERS,
John A. WATHEN DISTILLERY Co.,
Louisville, May 21, 1938. Mr. R. N. WATHEN, Secretary, Independent Kentucky Distillers,
Louisville, Ky. DEAR MR. WATHEN: We are anxious that you do all possible toward impressing on everyone the great need we have, in view of the increased tax on whisky effective July 1, for a floor tax of an equivalent amount on all stocks of goods wherever located.
It is our understanding that Representative Emmet O'Neal has prepared such a bill, and it is our further understanding that such bill is exactly what the industry needs.
I sincerely hope that the Association of Independent Distillers will be untiring in their efforts to make it known that it is the unanimous desire of each member of this association that such bill be passed, for, without a floor tax, there will be a demoralization throughout the entire liquor industry. With the sincere hope that this floor tax bill will be passed, I remain, Very truly yours,
A. J. HARRIS, President.
STATEMENT OF THEODORE JAFFE, REPRESENTING NATIONAL
RETAIL PACKAGE STORES ASSOCIATION, PROVIDENCE, R. I.
Mr. JAFFE. Mr. Chairman, my name is Theodore Jaffe and I represent the Rhode Island Package Stores Association and have been authorized by Mr. Michael F. Constello, chief of the Intoxicating Beverages Division of the State of Rhode Island, to state that he feels that the floor tax bill should be passed, and our association feels likewise.
STATEMENT OF A. L. WALDRON, REPRESENTING THE NATIONAL
RETAIL PACKAGE STORES ASSOCIATION, CAMDEN, N. J.
Mr. WALDRON. Mr. Chairman, my name is Augustin L. Waldron. I represent the National Retail Package Stores Association, Camden, N. J. At a joint meeting of the Tavern Keepers Association as well as the Package Stores Association, we went on record 100 percent in favor of the floor tax.' We would be indeed grateful to you gentlemen if you saw fit to give us the 500-gallon exemption.
STATEMENT OF JEROME B. MCKEE, REPRESENTING THE NA
TIONAL RETAIL PACKAGE STORES ASSOCIATION, WASHINGTON, D. C.
Mr. McKEE. Mr. Chairman, my name is Jerome B. McKee. I am president of the District of Columbia Liquor Dealers Association. We favor the floor tax.
STATEMENT OF THEODORE I. TAYLOR, REPRESENTING THE
NATIONAL RETAIL PACKAGE STORES ASSOCIATION, NEW HAVEN, CONN.
Mr. TAYLOR. Mr. Chairman, I am executive director of the Connecticut Retail Package Stores Association. We have 636 out of a possible 900 membership in the State of Connecticut. We are in favor of the floor tax 100 percent.
STATEMENT OF ROLAND JONES, REPRESENTING THE NATIONAL
ASSOCIATION OF RETAIL DRUGGISTS, WASHINGTON, D. C. Mr. JONES. Mr. Chairman, my name is Roland Jones. I represent the National Association of Retail Druggists, Washington, D. C. We favor the floor tax as incorporated in this bill.
(Mr. Jones submitted the following brief:)
BRIEF OF THE NATIONAL DRUG TRADE CONFERENCE
To the COMMITTEE ON WAYS AND MEANS,
House of Representatives, Washington, D. C. The National Drug Trade Conference, representing all branches of the drug industry, desires to make known its unqualified approval of House Joint Resolution 683 as it applies to the principle of recognizing a differential between ethyl alcohol for beverage and nonbeverage use embodied in the language of this joint resolution.
The constituent members of the National Drug Trade Conference are as follows: National Association of Retail Druggists, American Pharmaceutical Association, American Drug Manufacturers Association, American Pharmaceutical Manufacturers Association, National Association of Boards of Pharmacy, American Association of Colleges of Pharmacy, Federal Wholesale Druggists Association, National Wholesale Druggists Association, The Proprietary Association.
Attention is called to the fact that the language of the joint resolution provides a floor tax of 25 cents per proof gallon on distilled spirits on hand on July 1, 1938, exempting such spirits where intended for nonbeverage or industrial use.
This exemption is in line with the long-held view of the constituent members of the National Drug Trade Conference that provision should be made for the exemption of ethyl alcohol, used for the manufacture of drugs and medicines and in the compounding of physicians' prescriptions, for the high excise taxes now in effect on distilled spirits for beverage use.
The conference submits that the whole theory underlying and justifying the high taxes on beverage spirits is on the basis that they are luxuries and nonnecessities and as such should be used as a source of lucrative revenue to the Government without accompanying undue hardship upon consumers of beverage spirits.
Distilled spirits for medicinal uses obviously do not come within the luxury classification and the imposition of these high taxes on distilled spirits for such uses is a great burden upon the sick who must have drugs and medicines, a large proportion of which, of necessity, contain ethyl alcohol. Such high taxes greatly increase the cost of such medicinals, the tax bill just passed providing for a tax slightly in excess of $4.50 per wine-gallon.
The only objection which has been made to such an exemption has been from the Treasury Department on the ground that it would present difficult administrative and enforcement problems.
The National Drug Trade Conference is of the opinion that such objections are not tenable or justified when the burden upon unfortunate people is considered and believes that the additional burden upon the Treasury is not out of proportion when the end in view is considered.
Therefore, the National Drug Trade Conference urges the retention of the exemption provided in House Joint Resolution 683. In addition, the conference urges that the Ways and Means Committee give attention to the possibility of at least a partial exemption of ethyl alcohol for such uses when the excise tax is again before the committee during the next session of the Congress. Respectfully,
ROWLAND JONES, JR., Secretary-Treasurer, National Drug Trade Conference.
STATEMENT OF HARRY L. LOURIE, EXECUTIVE SECRETARY,
NATIONAL ASSOCIATION OF ALCOHOL BEVERAGE IMPORTERS, INC., WASHINGTON, D. C.
Mr. LOURIE. Mr. Chairman, my name is Harry L. Lourie. I am executive secretary of the National Association of Alcohol Beverage Importers. Our association adopted a resolution unanimously in favor of the floor tax.
Mr. Chairman, I would like to file for the record a telegram from a group of wholesalers in Massachusetts which was sent to me for presentation to this committee.
Mr. CULLEN. Without objection, the telegram will be made part of the record. (The telegram referred to is as follows:)
Boston, Mass., May 19, 1938. Harry LOURI,
National Press Building, Washington, D. C.: Please record the following wholesale liquor dealers of New England who are members of the Taste Masters Institute as in favor of a floor tax on distilled spirits as of July 1938. Floor tax will protect small wholesaler who cannot finance large withdrawals of distilled spirits prior to tax becoming effective. Floor tax will equalize competition between large and small business and result in tax burden being distributed equally among all dealers.
Taste Masters Institute, Adams Mitchell Old Customs House in Boston; Coleman & Keating Co., Boston; Diamond Ginger Ale, Waterbury, Conn.; Pastene Wine & Spirit, Boston; Curran & Joyce, Lawrence Eddy and Fisher Co., Providence, R. I.; Reardon Importing Co., Lynn; United Wholesale Grocery, Worcester; Wm. Less Co., North Adams; Mooney Co., Fall River. STATEMENT OF WILLIAM MARGOLIS, REPRESENTING THE AMER
ICAN WINE AND LIQUOR JOURNAL AND RETAILER, NEW YORK CITY
Mr. MARGOLIS. Mr. Chairman, my name is William Margolis and I am the publisher of two trade magazines in this industry, the
American Wine and Liquor Journal and the Wine and Liquor Retailer. I have a statement which I beg leave to file with the committee, favoring the floor tax.
Mr. CULLEN. Without objection, the statement may be filed. (The statement referred to is as follows:)
I am the publisher of two trade papers in the wine and or industry, one the American Wine and Liquor Journal, circulating among the distilleries and the wholesalers throughout the country, all of them, both large and small. The other Wine and Liquor Retailer, circulates among the package stores throughout the country having almost 100 percent coverage of this division of the industry consisting mostly of small merchants.
I feel very strongly that Congress can avoid a situation which would give the financially strong factors in the industry a decided advantage over the financially weaker members by imposing a floor tax on merchandise not in bonded warehouses on the effective date of the new tax act. I have no ases to grind as my papers undertake to represent the entire industry and not any particular member or members of it.
May I for a moment analyze the plight of the small and medium size wholesaler if there is no floor tax provision enacted prior to July 1? Of a total for the entire United States of approximately 3,000 active wholesalers, easily 2,800 would fall in the category of small business. Their entire profit, by and large, does not run as high as 75 cents per case, which is the amount of the increase in tax. The few powerful wholesalers in each territory could well afford to stock up a 4 or 5 or 6 months' supply and sell at a normal profit goods which the smaller wholesaler would have to sell at cost, because he has not been able to stock up before the effective date of the tax.
In the case of the retailers, the large operators with ample finances would have a tremendous advantage over the small independent merchant who must necessarily buy on a hand-to-mouth basis because of restricted credit facilities under State regulations. The small independent distillers, too, would be at tremendous disadvantage as against the half dozen large distillers who could use their bank. ing facilities to the utmost to withdraw from bonded warehouses large stocks of whisky at the $2 per gallon rate whereas the small distiller would have to sell $2.25 taxed whisky.
STATEMENT OF I. STROUSE, VICE PRESIDENT, BALTIMORE
PURE RYE DISTILLING CO., DUNDALK, MD.
Mr. STROUSE. Mr. Chairman, my name is I. Strouse. I am vice president of the Baltimore Pure Rye Distilling Co., Dundalk, Md.
As an independent distiller, we are in favor of the floor tax,
STATEMENT OF FRANK L WHITE, REPRESENTING FRANK L.
WHITE DISTILLING CO., LORELEY, MD.
Mr. WHITE. Mr. Chairman, my name is Frank L. White, of the Frank L. White Distilling Co. We are in favor of the floor tax, We are in favor of the small independent distiller.
STATEMENT OF I. J. SESKIS, REPRESENTING THE OLD TIME
Mr. SEskis. Mr. Chairman, my name is I. J. Seskis, representing the Old Time Distillers, producers of Green River. I would like to make the statement for the record that the price of Green River now is $11.40 a case.
STATEMENT OF FELIX GOLDSBOROUGH, BALTIMORE, MD. Mr. GOLDSBOROUGH. Mr. Chairman, my name is Felix Goldsborough. I represent Records & Goldsborough, Baltimore, Md. I am president of the Maryland Wholesale Liquor Dealers Association, which takes in in its membership the wholesalers and rectifiers of our State. They have gone on record unanimously in favor of this floor tax.
Mr. O'NEAL. Mr. Chairman, I want to thank the committee for the attention that it has given to this matter. And I would like to ask permission to file a few telegrams.
I should also like to state that, with reference to Mr. Fuller's telegram, from the Arkansas Dealers, may I say that those dealers were represented here today by this national association. And the statement has been made to this committee that the Arkansas Dealers were in favor of the bill.
I again want to thank the committee for their patience.
Mr. CULLEN. Without objection, the telegrams filed by Mr. O'Neal will be made a part of the record. (The telegrams referred to are as follows:)
McCook, NEBR., May 24, 1938, Representative O'NEAL, Chairman of Ways and Means Committee,
Washington, D. C.: Regarding House Resolution 683 we believe in the interest of the industry that the floor stock tax should apply without exception to stocks in possession of distillers, wholesalers, and retailers alike. In this manner it will be impossible for larger operators to place the smaller operator at decided disadvantage.
STEVENS WHOLESALE LIQUORS.
LINCOLN, NEBR., May 24, 1938. Representative O'NEAL,
House of Representatives, Washington, D. C.: Relative to House Resolution No. 683 we wish to urge your honorable body to have this tax effective to all floor stocks of distillers, wholesalers, and retailers for the reason that it will not only increase the revenue for which the bill provides, but will tend to eliminate a hectic situation very unfavorable to our trade as the big operators buy heavy to avoid the new tax to the detriment of the small dealers not so fortunate, but who must do the best they can on small capital and avoid the element of class legislation which would be involved in the absence of a universal floor stock assessment.
Tom MOORE DISTRIBUTING Co.,
Wholesale Liquor Dealers.
INDIANAPOLIS, IND. Hon. Emmet O'NEAL: Will appreciate your supporting House Joint Resolution No. 683.
FRED A. BECK LIQUOR Co., INC.
Hon. EMMET O'NEAL,
Member of Congress:
Louis R. MARKUN, United States Wholesale Co.