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CONTENTS

Statements of -

Pago

Hon. Emmet O'Neal, a Representative in Congress from the State of

Kentucky--

3

Hon. Stewart Berkshire, Deputy Commissioner, Bureau of Internal

Revenue, Treasury Department.

5

Hon. J. Harry Covington, representing Hiram Walker & Sons Co.

and others distillers--

20

F. P. Hankerson, representing the Associated Cooperage Industries

of America, St. Louis, Mo..

25

Paul Scharrenberg, National Legislative Representative, American

Federation of Labor..

27

I. J. Rosbeck, representing the J. G. Pierce Co.

28

Felix V. Goldsborough, president and general manager, Records &

Goldsborough, Baltimore, Md.,

34-98

M. J. Green, executive secretary, Kentucky Wholesale Liquor Dealers

Association, Louisville, Ky-.

38

Hugh J. McMackin, executive secretary, Massachusetts Wholesale

Liquor Dealers' Association, Inc., Boston, Mass.

42

Julius H. Soble, counsel, Massachusetts Wholesale Liquor Dealers'

Association, Inc., Cambridge, Mass

48

Millard Cox, Counsel, Kentucky Distillers' Association -

51

George Myer, representing the Hambuger Co., Chicago, Ill.

54

Harry Boyer, president, United Liquor Package Dealers of Massa-

chusetts

56

Joseph A. Hines, executive secretary, United Liquor Package Dealers

of Massachusetts, Inc.

60

William Steinberg, president, National Retail Package Stores Associa-

tion, New York City-

66

Matthew Patterson, executive director of the National Retail Package

Liquor Stores Association, and chairman of the executive committee

of the Metropolitan Boston Package Stores Association.

73

Julian Van Winkle, president, Stitzel-Weller Distributing Co., Louis-

ville, Ky.

74

John H. Higgins, treasurer of the Readville Distilleries, Inc., Boston,

Mass.

81

James J. Doyle, president of the Coopers International Union of

North America -

89

Theodore Jaffe, representing National Retail Package Stores Associa-

tion, Providence, R. I..

94

A. L. Waldron, representing the National Retail Package Stores As-

sociation, Camden, N. J--

95

Jerome B. McKee, representing the National Retail Package Stores

Association, Washington, DC

95

Theodore I. Taylor, representing the National Retail Package Stores

Association, New Haven, Conn...

95

Roland Jones, representing the National Association of Retail Drug-

gists, Washington, D. C..

95

Harry L. Lourie, executive secretary, National Association of Alcohol

Beverage Importers, Inc., Washington, D. C..

96

William Margolis, representing the American Wine and Liquor Journal,

and Retailer, New York City -

96

I. Strouse, vice president, Baltimore Pure Rye Distilling Co., Dun-

dalk, Md.

97

Frank L. White, representing Frank L. White Distilling Co., Loreley,

Md.

97

I. J. Seskis, representing the Old Tyme Distillers.

97

Hon. August H. Andresen, a Representative in Congress from the

State of Minnesota..

100

FLOOR TAX ON WHISKY

WEDNESDAY, MAY 25, 1938

HOUSE OF REPRESENTATIVES,
COMMITTEE ON WAYS AND MEANS,

Washington, D. C. The committee met at 10 a. m., Hon. Thomas H. Cullen presiding.

Mr. CULLEN. The committee will please come to order. The purpose of the hearing today is to take testimony on House Joint Resolution 683, introduced by Mr. O'Neal of Kentucky. A copy of the resolution will be made a part of the record at this point. (H. J. Res. 683 is as follows:)

(H. J. Res. 683, 75th Cong., 3d sess.) JOINT RESOLUTION To provide for an additional tax on whisky Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That there shall be levied, assessed, collected, and paid a floor tax of 25 cents on each proof-gallon and a proportionate tax at a like rate on all fractional parts of such proof-gallon upon all distilled spirits, except brandy, produced in or imported into the United States upon which the internal-revenue tax imposed by law has been paid and which, on July 1, 1938, are held by a retailer in a quantity in excess of fifty gallons in the aggregate or by any other person, corporation, partnership, or association in any quantity and which are intended for sale for beverage purposes or for use in the manufacture or production of any article intended for sale for beverage purposes.

Each retailer and each person required hereunder to pay the floor tax shall within thirty days after July 1, 1938, make return under oath in such form and under such regulations as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, shall prescribe. Payment of the tax shown to be due may be extended to a date not exceeding seven months after July 1, 1938, upon the filing of a bond for payment in such form and amount and with such surety or sureties as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may prescribe.

All provisions of law, including penalties, applicable in respect of internalrevenue taxes on distilled spirits shall, insofar as applicable and not inconsistent with this section, be applicable in respect of the floor tax imposed hereunder.

Mr. COOPER. Mr. Chairman, if you will permit me, I think inasmuch as Mr. O'Neal is the author of the bill it would be proper to hear from him briefly, first.

Mr. Cullen. That is what I had in mind. But before we hear Mr. O'Neal, I want to direct the attention of the witnesses that are listed here today on this bill, both for and against the bill, that there are on the calendar a large group of witnesses representing apparently the same interests, the National Retail Package Stores Association of various cities.

Gentlemen, may I say that we expect to conclude this hearing today, within 3 or 4 hours. I think each group should be represented by one individual who will express the opinion of the group. I do not think it wise for us to sit here and listen to a duplication of argument.

1

more, Md.

hope the group represented by the first speaker for the National Retail Package Stores Association, Mr. William Steinberg, will have his group select a spokesman, so that we may hear him for the group.

Mr. McCORMACK. Mr. Chairman, there are some members of the group who may have different views, I suppose.

Mr. CULLEN. Of course that is true. According to the calendar, this group is as follows:

Mr. William Steinberg, president, National Retail Package Stores Association, New York.

Mr. Matt Patterson, National Retail Package Stores Association, Boston, Mass.

Mr. A. L. Waldron, National Retail Package Stores Association, Camden, N. J.

Mr. Ted. Jaffee, National Retail Package Stores Association, Providence, R. I.

Mr. Theo. Taylor, National Retail Package Stores Association, New Haven, Conn.

Mr. Jerome McKee, National Retail Package Stores Association, Washington, D. C.

Mr. Waggoner, National Retail Package Stores Association, BaltiMr. COOPER. Mr. Chairman, may I ask, is Mr. Steinberg present? Mr. STEINBERG. I am Mr. Steinberg, Mr. Chairman.

Mr. COOPER. In view of the chairman's suggestion, is there any reason why that procedure cannot be followed by you gentlemen?

Mr. STEINBERG. Mr. Chairman, I think we can do that. May I suggest that I be permitted to bring these gentlemen forward, because in their respective States certain conditions prevail, which may be different from conditions in other States. Their testimony would take only about a minute, at the most.

I should like to bring out certain types of operation that exist in certain States amongst chain stores, for instance, that may not exist in some other State.

If we may have your permission to bring them forward, I assure you that their testimony will take not more than 1 minute

Mr. COOPER. The whole point is this: We have been told by the people interested in this legislation that it should be expedited; that prompt consideration should be given to it. It was the understanding, as I conceived it when the hearings were called, that the hearings would be brief. If we are going to hear a dozen men representing the same group of organization, saying substantially the same thing, neither of those purposes can be accomplished.

For my part, I feel you gentlemen owe it to us to try to cooperate with us and help us make the hearing as clear and as concise and as much to the point as possible.

You may present the names of any other witnesses who may be present who would like to corroborate what your main spokesman has said. But I think in the interest of orderly procedure, the suggestion of the chairman should be followed.

Mr. O'NEAL. Mr. Chairman, I would like to say on that point that the gentlemen whom I have consulted have met with the idea of expediting the hearing and saving the time of the committee. We will present this problem to you in a concise way and those who want to be heard, who would, if heard, merely restate what has been said before, will instead either file a statement for the record or merely make an appearance.

I am quite sure that the 3 or 4 hours will give us plenty of time to present the case as we care to present it.

Mr. CULLEN. With that understanding, we will proceed and hear Mr. O'Neal, the author of the resolution.

Mr. McCORMACK. Mr. Chairman, Congressman O'Neal says that 3 or 4 hours is plenty of time to present their case. What about the opponents, if there are any?

Mr. O'NEAL. As a matter of fact, it will not take us that much time; I am speaking from the standpoint of those who favor the bill. We will be glad to give part of that time, if they want it; a large part of that time, to the opponents of the bill.

Mr. McCORMACK. I assume that there are some people here in opposition to the bill.

Mr. O'NEAL. Not many.

Mr. COOPER. Mr. Chairman, if I may be permitted: The whole point is, we want to do as we have always done, give everybody a fair and reasonable chance to be heard, but we do not want to go over the same thing time after time and encumber the record unnecessarily.

Mr. O'NEAL. We are prepared to present our proposition in a very concise way, Mr. Cooper. I will state that.

Mr. TREADWAY. Mr. Chairman, in view of Mr. McCormack's suggestion of the possibility of opposition to the resolution, would it not be well to determine that now, so that we may properly allocate the time?

Is it known whether any of these gentlemen present are in opposition to the resolution?

Mr. CULLEN. I do not know whom they represent or whether they are for or against the resolution. Are there any opponents of this resolution?

Mr. McMACKIN. Mr. Chairman, my name is Hugh I. McMackin. I represent some wholesalers and retailers. There are four of us here on the same side.

Mr. Thompson. I wonder if those gentlemen can tell us how much time they will require to present their side of this issue, in a concise way?

Mr. McMACKIN. I do not believe it will take us over 20 or 30 minutes, at the most.

Mr. CULLEN. We will now hear Mr. O'Neal, the author of the resolution.

STATEMENT OF HON. EMMET O'NEAL, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF KENTUCKY Mr. O'NEAL. Mr. Chairman and gentlemen: Carrying out the wishes of the committee, I am going to be very brief and not discuss the bill to any extent, because there will be others who will discuss it.

I will take this opportunity, however, of thanking the committee for granting this hearing.

I realize that when the tax bill passed through the House and you gentlemen finished that question of taxation, you were like a school. boy being let out of school. You did not want to discuss the taxes at

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