CHAPTER III

PROHIBITION THAT PROHIBITS

That which governments have not yet been equal to has been accomplished by the private co-operation of a few citizens. They decree at their pleasure that in this town or that State no one shall manufacture alcohol, and they enforce the decree. Theirs is the only prohibition that prohibits.

From the famous whiskey ring of 1874 to the pool of 1881 and the trust of 1887, and from the abandonment of that "trust" dress and the reorganization into one corporation in 1890 down to the present, this private regulation of the liquor traffic has gone on. It is a regulation of a good deal more than the liquor traffic. Through its control of alcohol it is a power over the arts and sciences, the manufacture and the preparation of medicines, and a power over politics. More than one chapter of our history exhibits the government itself holding to these rectifiers relations suggestive of anything but rectification. The report of the investigation by Congress in 1893 notes the fact that on the strength of a rumor that the internal-revenue tax was to be increased by Congress, the Trust raised its prices 25 cents a gallon. This would amount to a profit of $12,500,000 on its yearly output.

By February, 1888, all the important distilleries in the Northern States--nearly eighty--were in the Trust, excepting two, the larger of which was in Chicago. The cases of these irreconcilable competitors were set for consideration, according to the _Chicago Tribune's_ report, at a private meeting of the trustees February 3d. In April the Chicago distillery firm published the fact that they had caught a spy of the Trust in their works. He had given them a confession in writing. In September it was discovered that the valve of a vat in this distillery had been tampered with in such a way as to have caused an explosion had it not been found out in time. The next month its owners made known that they had been offered and refused $1,000,000 from the Trust for their works. In December the country was startled by the news that this distillery had been the scene of an awful explosion of dynamite. All the buildings in the neighborhood were shaken and many panes of glass were broken. A jagged hole about three feet square was torn in the roof. There were 15,000 barrels of whiskey stored under the roof that was torn open, and if these had been ignited a terrible fire would have been added to the effect of the explosion. A package of dynamite which had failed to explode, though the fuse had been lighted, was found on the premises by the Chicago police.

The Chicago representative of the whiskey combination ridiculed the idea that the Trust had had anything to do with this. "Such a thing," he said, "is contrary to the genius of a trust."

The wholesale liquor-dealers threatened, at a conference in 1890 with the president of the Trust, to manufacture for themselves, to escape the advance which had been made in the price of high-wines. The president said, as reported in the _Wine and Spirit Gazette_:

"I do not believe there is a spirits distillery in the country that you can buy. We own nearly all of them, and have at present seventy-eight idle distilleries."

February 11, 1891, the explosion of December, 1888, was recalled by the unexpected arrest of the secretary of the combination in Chicago by the United States authorities. The Grand Jury of Cook County found an indictment, February 17th, against the prisoner. April 20th he was indicted by the Federal Grand Jury. The crime of which he was charged was attempting to bribe a government gauger to blow up the troublesome distillery. The gauger whom the secretary endeavored to enlist had been loyal to his trust, the government, and had made known to his superiors the offer and purpose of the bribe.

If the explosion had been carried out 150 men at work in the distillery would have been destroyed. The evidence given Congress afterwards tended to show that part of the plan was that the bribed gauger who was to set and explode the infernal-machine was not to be allowed to survive to claim his reward and perhaps repent and tell. The fuse was fixed so that the explosion would be instantaneous instead of giving the time promised him to get out of the way.

In a statement to the press, February 15th, the president of the Trust said, as the result of a conference of the trustees:

"We have unanimously agreed to stand by the secretary."

Early in June rumors were in circulation in New York that the Chicago independent had sold out; and soon after the confirmation of the report, with full details, was authoritatively published.

June 8th the judge of the United States Court in Chicago quashed the Federal indictment, on the ground that it is not a crime under any of the United States laws for an internal-revenue officer to set fire to a distillery of his own volition and impulse, and that it is not a crime against the United States for another person to bribe him to do such an act. He held that the offender could be punished only through the State courts. The United States had property in the distillery to the extent of $800,000 due for taxes, which was a legal lien on the property; but the United States District Attorney and the judge could find no Federal law under which, for the gauger to destroy this property of the United States, or for the Whiskey Trust to bribe him to do so, it was a crime. When the indictments framed by the State Attorney of Chicago came before the State courts, three of the four were found defective and were quashed. The Chicago correspondent of the New York _World_ telegraphed that he had been told by the State Attorney, at the time the Federal proceedings were quashed, that of his four indictments he relied most upon that for conspiracy; "but in court yesterday the State Attorney let the charge of conspiracy fall to the ground because, as he said, there was not evidence enough to secure a conviction."

"We haven't the evidence of the gauger; I don't know where he is," the State Attorney said.

But this witness declared in a public letter in February, 1893, "Myself and others with positive evidence were always ready to testify, and I have the facts to-day."

The judge of the State court held the motion to quash until July, and then announced that he would make no decision until August. He withheld his ruling until October. Then he held the secretary for trial on two counts, charging conspiracy to bribe the gauger and destroy the independent distillery; but remarked "informally," the newspapers said, that conviction would be difficult.

When the case was called March 22, 1892, a delay was granted "until next Monday," to enable the prisoner's counsel to read the "bill of particulars" to find out what he was charged with. The secretary did not trouble himself to attend court. His case was not heard of again until June 24th, when he was released on a nolle prosequi entered by the State Attorney because the evidence was insufficient, and became a free man. That was the end.

Owing to this success of State and United States attorneys in being unsuccessful, the people have never had an opportunity of hearing in court the evidence on which the Government acted in making the arrest, and on which the grand juries found the indictments. But the gauger through whom the secretary of the Trust had attempted to execute his plans was called as a witness before the Committee of Congress which investigated the Trust in 1893, and he told again the story of the infernal-machine. It was as follows, in his own words, omitting names and unnecessary details:

"I was United States internal-revenue gauger from 1879 until after Mr. Cleveland's election, and I was reappointed in 1889, and have been continuously since that time. Late in December, 1890, I received a letter from the secretary of the whiskey combination at Peoria, telling me that he would like to meet me at the Grand Pacific Hotel on New-year's Day. I met him. He said, 'You may be able to do considerable good here; not only for us, but of considerable advantage to yourself. Your $1500 a year is nothing to what you would get by helping us. You can get $10,000 by assisting us in this thing; in fact, to make matters right, you could get in three months $25,000.'" The gauger reported this to his superiors, who told him to go on. "Be particular, and after every interview with him make a note of everything that passes between you while it is fresh in your mind." "I did that," the witness continued, "and I have the original notes in my pocket. There are the original notes," exhibiting them to the committee. "They have never left my possession. I have kept them on my person right along." After some correspondence and another interview, he met the secretary again January 25th. "Now," said the latter, "I can give you something which, if put under a cistern, will in three or four hours go off, and no person know what it was or who did it, and all the trouble that has been caused us will be stopped at once, the sufferings of many people stopped, and no loss to those folks, as they are well insured." "When I recovered from my surprise I asked if it was an explosive. He replied, 'No; a simple but effective thing which would shoot a ball into a tub through the bottom. You will have $10,000 for your work of placing this under a cistern of high-proof, either alcohol or spirits, or what is better than cash, 200 shares of stock.' I asked at what they sold. He said, 'Forty-seven, but it would be up ten points at once,' and I could profit by the raise. 'This will raise a big row.' 'Yes,' he said, 'one cistern well caught, all would go, and it would be right into the warehouse and stop everything at once. It is the most effective way to help us and make a clean job, and you having access to all parts of the distillery and unsuspected is why you could do it so easily.' He had then, in room 35, powder and four steel elongated balls, solid, turned, and with long points. The principal article, however, was a kind of yellowish liquid, which when exposed to sixty-five degrees temperature would produce a flame caused by evaporation. I remarked that there was probably no hurry about this thing, and he said, 'The sooner the better; you may be ordered away from here, and I am come all prepared; everything is ready to load, and that can be done quickly.'"

The gauger reported all this to his superior and told him that "I proposed to take the infernal apparatus." His superior said, "Of course." "I then returned to Grand Pacific, room 35; found loading just completed and much material scattered about, oakum in can saturated slightly with kerosene and alcohol to give good start. The secretary said that three fuses were attached to the gun, one of which would go off under water. He had one steel shell which had been shot through three inches of wood in experimenting. He showed me particularly how to place can; to feel underneath for timbers; put it where ball will enter tub. Also, that in stopping over to meet the president of the combination to-morrow he would have a chance to buy up stock reasonably before our work caused the raise. He expected to buy 1000 shares. Friday, the 30th of January, I rather anticipated a visit from the secretary at my hotel, but I received a letter from him instead of a visit, and Judge Hart, the solicitor of the Internal-Revenue Department, who was there in Chicago, when he read the letter thought that the evidence was certainly conclusive." On Sunday, the 8th, the gauger surrendered the box containing the infernal-machine, which was sealed, to a high official who had come on from New York. "The reason why he came on is that the authorities would not believe my testimony. They did not think it was possible a gentleman in the secretary's position would undertake so heinous a crime, and they did not know but what I was a crank. On Monday, the 9th, I was instructed to write a letter. The thing was to arrest in a proper way. The next day I received a despatch: 'Will be at Pacific to-morrow (Wednesday) morning.'

"Wednesday morning the secretary was arrested, as he was about to enter the hotel, by a deputy marshal, and conducted to the Marshal's office in the Government building. There was a bottle of this composition found in his grip. He had told me it would go off in three or four hours. I was in the anteroom of the city grand jury after the chemist had given his testimony. The chemist said that it was his opinion it would have or might have gone off in three seconds. Fire would cause the shooting of the ball, and the ball making a hole in the tub--alcohol or high-proof spirits--coming down, of course all would have gone up. It could not have helped it, and the explosion would have followed at once, not from the machine, but from the contents of the cistern. They are very explosive indeed, alcohol and high-proof spirits."[26]

What the Government authorities thought of all this is shown in a letter which is spread upon the records of the Treasury Department. It is addressed by the Commissioner of Internal-Revenue to the gauger. After thanking him for his "highly commendable" conduct in relation to the bribe the Commissioner says to Mr. Thomas S. Dewar:

"While your rejection of the offer was just what was expected from you, considering your official and personal standing, yet I realize that you have done more than simply reject the offer. You so conducted the affair as to place the guilty party, it is hoped, in a position in which he will be punished for this violation of law. The proposition was not only to attempt to corrupt an honest officer of the Government, but was to induce you, by the offer of a large sum of money, to commit a most heinous and inhuman act."

No attempt was made by the representatives of the Trust before the committee to deny this testimony. They simply disclaimed any responsibility for what their associate and employé had done. "Whatever there was in that," testified the president of the Whiskey Trust, "was with the former secretary of this company, if there be anything of it."[27]

The Trust increased the number of plants under its control from "nearly eighty" to eighty-one or eighty-two, the number reported by the investigation of Congress in 1893. Its annual production was then 50,000,000 gallons; about 7,500,000 gallons of it alcohol, 42,500,000 spirits. It is evident, says the report, that the company will soon have within its grasp the entire trade, and be able to dictate prices to consumers at pleasure.

"How do you account for spirits going up and corn going down at the same time in two or three instances?" the treasurer was asked.

"Simply because the distillers were getting in a position whereby they ran less than their capacity."[28]

The experience of mankind has always found, as Lord Coke pointed out, that monopoly adulterates.

The report of Congress states that unquestionably the largest part of the product of the combination finds its way into the open markets in the form of "compounded"--or artificial--bourbon and rye whiskeys, brandies, rums, gins, cordials. The testimony establishes the fact that about one half of the whiskey consumed in the country is of this compound product. These compounded liquors are supplied from the drug-stores to the sick as medicine. One of the expert witnesses summoned to explain the process of this adulteration appeared before the committee with two demijohns, one containing pure alcohol and the other spirits, and a number of bottles containing essential oils, essences, etc., with which he proposed to make some experiments. "The basis here, this white product, is what is known as 'spirits' in the trade. With the use of these essential oils and essences now before you any kind of imitation liquor can be produced at almost a moment's notice. My first experiment will be with Jamaica rum. I put a drop of Jamaica-rum essence into this white spirits, a few drops of coloring matter, and some sugar syrup. Try of it and smell of it. Does it smell like rum and taste like it? If they want to make it cheaper, they reduce it with water. I will reduce it with water, and you will now notice that the bead has disappeared from it. I will reproduce the bead by the use of bead oil. I put one drop in, and here is the result. Now, using rye-whiskey essence instead of Jamaica-rum essence, I will flavor this spirits. I will now put some prune juice into it to tone it. I will put some raisin oil in it to age it, and I will now commence to color it. This first exhibit" (holding it up before the committee) "is about the color of one-year-old whiskey that has been properly bonded. I will now color it so it will imitate a two-year-old whiskey. This is about the three-year-old now" (exhibiting it). "I will now give this the color of 'velvet whiskey,' which is sold as high as $4 a gallon" (exhibiting it). "The present price of spirits, to-day, I think, is $1.30 a gallon. The utilization of any of these essential oils and essences and coloring matter to make the transfer does not exceed a cost of one and a half cents a gallon. I am prepared to make imitations of any of these liquors at any time with this spirits basis--all the different whiskeys, Scotch and Irish whiskeys, the foreign gins and rums and brandies, after-dinner cordials and liqueurs. These materials as you have them exhibited before you of essential oils and essences are part and parcel of the stock in trade of every man in the United States of America who has got a rectifying license as a wholesale liquor dealer.... They are very generally and extensively in use throughout our entire country, in every hamlet and village, in all the branches of trade, the wholesale liquor dealer, the grocer having a liquor dealer's license, and retail druggists.... When a doctor prescribes French brandy, he expects to get a production which is a distillation of wine made from the grape. In that imitation brandy made from spirits and cognac oil he gets a crude product of corn, defeating entirely his purpose in the prescription. The same applies to gin, rum, and other articles wherever the imitations are found."[29]

Some of the substances named by witnesses as occurring in the oils and essences used for this adulteration are sulphuric acid, prussic acid, fusel oil, creosote, nitro-benzol--all poisons, and some of them so virulent that a teaspoonful would kill.

"I have been warned when in the employ of these people not to take the crude material into my mouth," said one of the witnesses. Another witness denied that there was any danger in the infinitesimal portions used of the flavoring matter.

"The only result," said one of the members of the committee, "of the testimony and hearing of the committee will be to educate the public to the Trust methods. It will have no effect on the Trust."