(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.

We feel that too much emphasis cannot be given to the Federal alcoholic tax box score. After repeal the tax was:

No other taxes have shown the proportionate increases in the last 10 years than the burden placed on beer and distilled spirits. This of course has been an open invitation to the bootlegger, he has lost no time in making it big business, until today the number of stills seized by the Federal and State officers compares favorably with the number taken at the peak of bootlegging during national prohibition.

We sincerely hope that you and your committee will give favorable recommendation to legislation that will relieve this situation, redeem a promise written into the law in 1944 and deal a smashing knockout to the bootlegger.

The CHAIRMAN. The next witness is Mr. Raymond Koth. Mr. Koth, will you give your name and the capacity in which you appear?

STATEMENT OF RAYMOND KOTH, EXECUTIVE SECRETARY, OHIOKENTUCKY STATE COUNCIL OF BREWERY, YEAST, SOFT DRINK, AND DISTILLERY WORKERS, CIO

Mr. KоTн. My name is Raymond Koth, executive secretary of the Ohio-Kentucky State Council and I would like to file this for the record.

The CHAIRMAN. Without objection it will be made a part of the record. We thank you for your appearance.

Mr. KоTH. Thank you.

(Mr. Koth's prepared statement follows:)

STATEMENT SUBMITTED BY RAYMOND KOTH, EXECUTIVE SECRETARY, ON BEHALF OF THE OHIO-KENTUCKY STATE COUNCIL OF BREWERY, YEAST, SOFT DRINK AND DISTILLERY WORKERS, CIO, FOR THE REDUCTION OF EXCISE TAX ON LICENSED BEVERAGES

Mr. Chairman and members of the committee, the Ohio-Kentucky State Council of Brewery, Yeast, Soft Drink, and Distillery Workers, CIO, have instructed me to present the following statement in behalf of that organization, urging that the House Ways and Means Committee recommend to the Congress legislation to reduce the high, discriminatory excise taxes placed on distilled spirits and malt beverages (beer).

This high Federal tax does more than increase the burden of the distiller and the brewer. It does more than take money from the Federal Treasury, from the taxpayer, and the consumer, it also eliminates jobs in the legal licensed beverage industry. This high tax is creating a new era in America. It is an era that is marked by crime, by violence, by racketeering, and a mushroomlike growth of a privileged outlaw class.

The bootlegger is back. The patent of prohibition is back-prohibition by taxation. You must not be misled about the character of today's traffic in bootleg alcohol. This is no mere mountain moonshine, rather, what we are faced with today is a highly organized criminal conspiracy, The conspirators

are tax thieves, they prey on the American public. Their territory is America's 3,200,000 square miles. Their product is raw, and impure whisky-bootleg whisky. Last year, Federal, State and local enforcement officers seized over 20,000 stills. It is said that these stills had a daily producing capacity far greater than the daily production of the legal industry. How many illegal stills are not seized? No one knows, but it has often been said that for every one seized, five escape. These illegal producers hire nonunion help, they package their whiskey in used containers of every description. These employees of the illegal producers pay no income tax, social security, or other taxes that the union men and women employed in the legal beverage industry pay.

I sincerely urge that you give this matter your earnest consideration and recommend to the Congress that the present high excise tax on distilled spirits of $10.50 per gallon be rolled back to the prewar level of $6 per gallon, and that the present tax of $9 per barrel of beer (31 gallons) also be reduced to the prewar level of $7.

On behalf of the Ohio-Kentucky State Council of Brewery, Yeast, Soft Drink, & Distillery Workers we thank you for giving us the opportunity to present our statement.

The CHAIRMAN. The next witness is Mr. Ludwig Boch of Pennsylvania.

STATEMENT OF LUDWIG BOCH, EXECUTIVE SECRETARY, PENNSYLVANIA STATE COUNCIL OF BREWERY, SOFT DRINK & DISTILLERY WORKERS

Mr. Bocн. Mr. Chairman, my name is Ludwig Boch, executive secretary of the Brewery, Soft Drink & Distillery Workers Council of Pennsylvania. I respectfully ask to submit my statement for the record.

The CHAIRMAN. We thank you for your appearance, and without objection your statement will be made a part of the record. (Mr. Boch's prepared statement follows:)

STATEMENT SUBMITTED BY LUDWIG BOCH, EXECUTIVE SECRETARY, PENNSYLVANIA STATE COUNCIL OF BREWERY SOFT-DRINK & DISTILLERY WORKERS, PHILADELPHIA, PA.

Mr. Chairman, my name is Ludwig Boch, executive secretary of the Pennsylvania State Council of Brewery, Soft-Drink, & Distillery Warkers, which represents approximately 10,000 workers in the malt beverage and distilling industries in the State of Pennsylvania. They have directed me to submit a statement in their behalf, urging that the House Ways and Means Committee, Senate Finance Committee, and Congress act favorably on legislation for reducing the high Federal excise tax, placed on the products of malt beverages and distilling industries.

Newspaper stories in the Philadelphia papers during the past several months have reported a large increase in moonshine and bootleg liquors; in fact 2 illegal distilleries were raided by the authorities in Philadelphia in the past 2 weeks, both in full operation, with a combined capacity of 1,000 to 1,500 gallons per day.

There is no question that this expanding illegal industry is responsible for the loss of jobs to thousands of members of our union that were employed in the legal licensed beverage and distilling industry here in Pennsylvania.

I urge that this committee recommend to the Members of the Congress, a cutback in the present excise tax of distilled spirits from $10.50 per gallon to $6 per gallon, and on malt beverages (beer) from the present $9 per barrel (31 gallon) to $7 per barrel (31 gallon).

By reducing these taxes back to the prewar level, I am sure it would take away the incentive for the producers and distributors of nonunion nonlicensed, and nontaxable products.

We are sure that with the lower tax, it will increase the purchase of legal made products, thereby bringing in a greater revenue to the United States

Treasury, as well as to increase employment of workingmen and women in the legal beverage industries.

Thank you.

The CHAIRMAN. The next witness is Mr. Ed S. Miller, general secretary and treasurer, Hotel and Restaurant Employees and Bartenders Union, A. F. of L.

Mr. SWEET. Mr. Chairman, my name is Frederick Sweet. I appear instead of Mr. Miller.

The CHAIRMAN. Very well, you may proceed.

STATEMENT OF FREDERICK SWEET, REPRESENTING THE HOTEL AND RESTAURANT EMPLOYEES AND BARTENDERS INTERNATIONAL, A. F. OF L.

Mr. SWEET. Mr. Chairman, my name is Frederick Sweet. My home is in Cincinnati, Ohio, where I am employed in the general headquarters of the Hotel and Restaurant Employees and Bartenders International Union, A. F. of L., as managing editor of The Catering Industry Employee, its official publication.

In addition to these editorial duties, I am also responsible for our research and public relations work bearing on the legal sales of licensed beverages, a subject in which you may be sure we have the liveliest interest. In both capacities I report to our general secretary-treasurer, Ed S. Miller, in whose behalf I appear here tonight, and who has asked me to thank you and this committee for the courtesy you have shown us in giving us this opportunity to speak our piece on this question.

We are here as part of an industrywide effort to convey to this committee and its technical staff in the clearest possible terms our strongly held view that it is high time the Congress rolled back excise taxes on the licensed beverages to levels far more fruitful, for Government, public, workers and industry, than the sky-high levels now obtaining. We are asking that distilled spirits be taxed at $6 the gallon, not the present $10.50; that the malt beverages be taxed $7 the barrel instead of $9; and that you reduce as well the rates on the various wines. We shall address ourselves principally to the tax on distilled spirits, since in our view this levy is the chief source of the several kinds of mischief now besetting not only our members, but the whole Nation in this field.

It is important that you understand the nature of our international union's concern in this matter of liquor taxes. To begin with, ours is by far the largest labor organization in the licensed beverage industry. We number 430,000 men and women, a very large proportion of whom are employed on licensed premises, and are by no means confined to the skilled craftsmen who tend bar. Waiters and waitresses, kitchen crews, hotel housekeeping and front service workers, yes, and dining car crews, are also at work in houses with liquor licenses to a degree which leads us to estimate that at least 80 percent of our members are deeply and directly concerned in the taxation of these products.

In addition to these we represent directly, we speak too for many, many thousands of fellow union members in other organizations whose people work in the production, transportation, distribution and sale of these goods, or in lines closely tributary to this industry. And,

I may add, at such times as this we do not hesitate to speak as well for the unorganized people in the public feeding and lodging industry, chiefly in the smaller towns and cities, who have none to come forward to such a forum as this to represent them. All told the hotel and restaurant industry employs some 2 million citizens according to the latest census figures.

From where we sit we see four main points to be driven home here tonight.

The first is that the present tax rates have already contributed directly to unemployment among our members, well as other craftsmen, and threaten to aggravate our employment problems further if consumption of legal, taxpaying liquor continues to decline as it has since 1946.

The second is that working people, including our members, are the major portion of the market for licensed beverages, and as consumers we resent a tax so high that it is beginning to produce what the Cincinnati Enquirer has called "prohibition for the masses but not for the classes.

The third is that our members, as good citizens, are disheartened at the growing number of stories in newspapers and magazines which leave no doubt that we are, with this tax structure, fostering a return to the American scene of the outlaws which brought shame to the Nation in the repudiated days when "Chicago" became synonymous with "murder".

And finally, we wish to call to your attention what we call the "mystery of the missing market."

Not long ago the Wall Street Journal published one of its excellent business roundups on trends in the tavern trade. Its writers found in spotchecks from Boston to the coast that unemployment had hit bartenders because of a decline in business, largely traced by tavern men, union officials and consumers to the high price levels imposed principally by high taxes.

In New York City our local 15 reported 5 percent of its members out of work. San Francisco's local 41 said 500 men of 3,000 were looking for jobs. In Boston the report was gloomiest: 30 percent of local 34's members were haunting the union hall in search of work at their trade.

The journal's report also bore out the Enquirer's warning of "prohibition for the masses, but not for the classes"; they found that the bitterest complaints were coming from the corner cafes in working class neighborhoods, while the plush spots catering to the heavy spenders found their bar sales were holding up fairly well.

There has been, highlighting this decline, a most interesting and, we think, significant switch in the pattern of buying liquor. Back in 1940, when the tax on whisky was $3 per gallon, consumers bought 65 percent of their spirits over the bar. Ten years later, when the tax had climbed to $9 only 35 percent of spirits were sold for consumption on licensed premises. This sharp drop has been found generally throughout the country, although there is some evidence, we understand, that the legal bar's share is now down to 30 percent with the tax at $10.50, and reports from our local unions bear out this view.

The direct cost in terms of jobs in the taverns themselves is clear enough to see. Not so clear is the cost of this trend to the hotel