THE NATIONAL PROHIBITION LAW
HEARINGS before the SUBCOMMITTEE OF THE COMMITTEE ON THE JUDICIARY UNITED STATES SENATE - SIXTY-NINTH CONGRESS
April 5 to 24, 1926
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THE NATIONAL PROHIBITION LAW
WEDNESDAY, APRIL 7, 1926
UNITED STATES SENATE,
SUBCOMMITTEE OF THE COMMITTEE ON THE JUDICIARY,
Washington, D. C.
The subcommittee met at 10.03 o'clock a. m., in Room 224 Senate office Building, pursuant to adjournment on yesterday, Senator Rice W. Means (chairman of the subcommittee) presiding.
Present: Senators Means (chairman), Harreld, Reed of Missouri, and Walsh.
Present also: Senators Edge and Edwards, of New Jersey, and Representative Hill, of Maryland.
Senator MEANS (chairman of the subcommittee). The committee ill come to order. You may proceed, Mr. Codman.
Mr. CODMAN. Mr. Chairman, I should like very much to know, or my own convenience really, in order to assist me in putting in my case properly, as to whether the subcommittee is going to adjourn at 12 o'clock to-day or will go through the whole day.
Senator MEANS. Mr. Codman, there are only three members of he committee present at this moment, but as soon as the others come in we will discuss that matter and let you know.
Mr. CODMAN. I was just anxious to know as soon as I could.
Senator MEANS. Well, we wish to settle it as soon as we can, but until the other two members reach the hearing room I can not tell you.
Mr. CODMAN. Very good, but, Mr. Chairman, if you will keep my request in mind it will be of great assistance to me. You realize no doubt that I have had a number of witnesses here for days and that I am considerably behind in my schedule.
Senator MEANS. The committee fully realizes that, but there is business of the highest privilege on in the Senate. I should like now to run according to our schedule, but some of the members wish to participate in the debate, and others to listen to the debate. Of course, when the hours for the daily sittings of this committee were agreed upon we did not know that the Brookhart-Steck contest would be up in the Senate. But I will let you know just as soon as the other two members come and we can discuss it.
Senator HARRELD. I might explain that the difficulty I am laboring under is that I have not formed any opinion in the Brookhart-Steck contest, and I have to listen to the debate on the floor in order to be properly informed and form my opinion on the subject.
Senator REED of Missouri. I might suggest to the Senator from Oklahoma that I will tell him how to vote and save him that trouble.
Senator HARRELD. That is very kind of the Senator from Missouri, but I imagine he still
thinks for himself.
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Senator MEANS. You may go right ahead, Mr. Codman.
Mr. CODMAN. I should like to call Mr. Buckner.
Senator MEANS. Mr. Buckner, you will be sworn. Hold up your right hand, if you please. You do solemnly swear by, the ever living God that the evidence you will now give before this subcommittee in the hearing we are holding the truth, the whole truth, and nothing but the truth.
Mr. BUCKNER. I do.
TESTIMONY OF HON. EMORY R. BUCKNER, UNITED STATES ATTORNEY, SOUTHERN DISTRICT OF NEW YORK
Senator REED of Missouri. Let the record show that General Andrews is temporarily withdrawn in order to permit the examination of Mr. Buckner, who desires to return to his duties in New York.
Senator MEANS. Let the record also show, as in the case of General Andrews, that Mr. Buckner is here at the request of this subcommittee, he being a Government official. And he would no doubt wish me to state that he desires to give the facts he has in his possession for the benefit of the subcommittee.
Go right ahead, Mr. Codman.
Mr. CODMAN. Mr. Chairman, one minute. I found yesterday among my papers what appears to be one of the original requests for issuance by the subcommittee of subpoenas. I do not know how I got away with it, or how I failed to turn it over to the committee, but here it is.
Senator MEANS. Yes; it was not handed to me, I believe. It will be properly marked by the official reporter and made a part of the record.
The OFFICIAL REPORTER. We secured a copy of it on yesterday and on being informed that it should have been handed to the subcommittee, made it a part of the record.
Mr. CODMAN. Mr. Buckner, will you give your full name, residence and official position?
Mr. BUCKNER. My name is Emory R. Buckner. I reside at 30 East Sixty seventh Street, New York City. I am United States attorney for the southern district of New York and am here in response to a subpoena sent me by the Sergeant at Arms of the United States Senate.
Mr. CODMAN. Will you state how large your district is and the population of it?
Mr. BUCKNER. My district includes the county of Manhattan, the county of Bronx, the county of Westchester, and the eight contiguous counties running to a point just south of Albany, 11 counties in all. I regret to say that I do not know the population of my district, but I assume it is somewhere between 6,000,000 and 8,000,000 people.
Mr. CODMAN. That is near enough. Is it your duty as district attorney to enforce all Federal laws, including the prohibition law?
Mr. Buckner. Yes.
Mr. CODMAN. What success are you having at the present time in enforcing the national prohibition law?
Mr. BUCKNER. I can not answer that question unless you define the word success.
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Mr. CODMAN. Well, are you stopping the infringement of that law to a reasonable extent?
Senator REED of Missouri. Ask him what the condition of affairs in his district is.
Mr. CODMAN. Will you state, as Senator Reed suggests, what the condition of affairs is in your district at the present time?
Mr. BUCKNER. Do you mean with reference to the prohibition law, or with reference to
Mr. CODMAN (interposing). I mean with reference to enforcement of the prohibition law in your district.
Mr. BUCKNER. Shall I limit myself to the prohibition law?
Mr. CODMAN. Limit yourself, at the present time, if you please, to the enforcement of the prohibition law.
Mr. BUCKNER. It occurs to me, Mr. Codman, that I might possibly save your time and the time of the committee if I stated in a general way what seems to me matters in my district that might be of use to the committee; that I might thereby save your time and that of the committee, and then if questions are provoked by what I have to say you or the committee might interrogate me, and that the total net result might be a substantial reduction in the length of time that the committee will have to take in order to listen to my testimony.
Mr. CODMAN. I quite agree with you, Mr. Buckner, and suggest that you go ahead in your own way.
Mr. BUCKNER. Of course, if you care to have me do that.
Mr. CODMAN. Really I prefer that you should do that.
Mr. BUCKNER. And if at any time you think that I am getting in too much detail you will so indicate, and I feel sure that the committee will do it, I will be glad.
Mr. CODMAN. I have no doubt the committee will indicate that for themselves even if I should not. But go ahead with your testimony.
Mr. BUCKNER. If I may be indulged three or four minutes at the beginning, I think it would help what I have to say with reference to conditions in my district if I should make a preliminary statement of certain principles which appeal to me as sound and which have governed me for 13 months.
Not only in my study of the prohibition question in my district in New York City, but from talking with a very large number of people who have discussed with me the prohibition question and who come from other parts of the country, I reach the conclusion that the fundamental misconception of national prohibition is as follows: I regard the national prohibition law as a declaration of war against the liquor traffic. But it seems to me that altogether too many people regard it as a treaty of peace, in which a part of the country agreed to buy no more liquor, and a part of the country agreed to sell no more liquor, and then the war was over.
I mention that because I think it is very fundamental, and applies to the whole question and what machinery is required to enforce the law; one kind of machinery being involved in carrying on a colossal war, and an entirely different kind of machinery being required to carry on what is considered a treaty of peace.
I am repeatedly asked, and I presume I would have been asked by this committee, whether in my judgment the prohibition law could be enforced in my district.
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Senator MEANS. Will you differentiate between the eighteenth amendment of the Constitution and the Volstead law as to what you mean by national prohibition law.
Mr. BUCKNER. I mean the Volstead law, Mr. Chairman.
Senator MEANS. How was that?
Mr. BUCKNER. I say, Mr. Chairman, I mean the Volstead law.
Senator MEANS. I wanted you to separate the two, the amendment to the Constitution and the Volstead law.
Mr. BUCKNER. All right.
Senator MEANS. You are speaking now of the Volstead law, as I understand.
Mr. BUCKNER. Yes.
Senator MEANS. Go ahead with your testimony.
Mr. BUCKNER. My reply to the question I just mentioned has to be that I do not know, because in my judgment as a prosecutor the Prohibition law, by which I mean the Volstead law or cognate State law, which we did have for a time, has never been tried in New York City in a way which would make enforcement effective. It has never been tried by the Federal Government in my judgment in my district, not only during my term of office, but before my term of office, because of the kind of Federal courts which we have, namely, those requiring jury trial for the smallest offense, which are not the kind of courts by which police laws can be enforced in such a congested district as New York City.
Senator REED of Missouri. Won't you tell us what the present condition is and give your recommendations?
Mr. BUCKNER. Certainly. I have no doubt, personally speaking, that the law could be enforced in my district if we had the right kind of machinery
Senator REED of Missouri. Well, that is a question we will come to. But I want to know what the conditions are now and what they have been.
Mr. BUCKNER. All right. If it is satisfactory to you, Senator Reed, I can best answer the question as to what present conditions are in New York City with reference to the Volstead law by recounting just as briefly as possible the conditions I found 13 months ago and if I get too discursive I shall be only too happy if you will kindly direct my channels to something more wholesale instead of retail.
Senator REED of Missouri. All right.
Mr. BUCKNER. Before assuming office on March 2, 1925, I spent nearly a month making a survey of the situation in the Federal building. I found that a very large number of people were being brought into the Federal building for violation of the Volstead law.
I found that a great majority of these defendants were being brought in by members of the Yew York City police department. It is difficult to estimate, but after talking with the United States commissioner and other officials during my survey, I think it is not far wrong to say that close to 50,000 violators of the Volstead law were being brought into the Federal building in the course of a year, by both the city police and the prohibition agents.
I, myself, went up to the Federal Building and spent many days there. I found one United States commissioner, without a stenographer because none is provided, without court attendants because
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none are provided. I found the fifth floor of the Federal Building a seething mob of bartenders, peddlers, waiters, bond runners, fixers---
Senator REED of Missouri (interposing). What are "fixers"?
Mr. BUCKNER. The type of man, according to the testimony of the United States commissioner, whose word I have to take, the type of man who he says, and again I am quoting him, is openly trafficking with justice in the court or at the building.
The United States commissioner told me that a very large percentage of the cases brought to him he threw out for lack of evidence. It seems that when the officers testified before him the testimony they gave, not being taken down by a stenographer, and the witnesses therefore not being subject to any perjury charge in any effective manner, was not sufficient to show a violation of the law. Whether in fact it was an actual violation, or sufficient to be sent on, I am not prepared to say. Whether officers forgot during the night what the evidence had been or whether they had not properly made the arrest in the first place, I myself will not attempt to give any opinion.
Senator REED of Missouri. Or whether their memories appeared to be singularly defective.
Mr. BUCKNER. The United States commissioner said their memories appeared to be singularly defective or that there was no evidence in the first place. But a striking example of perjury could not be made because of lack of machinery, as I have stated.
I inquired not only from the United States commissioner but from the three assistant United States attorneys who were dealing with all kinds of prohibition matters, but only two for criminal cases, if in that vast horde of violators there were any of what I would call important defendants, or any violators on a large scale. I found there were none.
Federal judges have told me, and their names I can supply if required, that the whole atmosphere of the Federal Building was one of pollution, that the air of corruption had even descended into the civil parts of the court, and reports were made to the senior United States judge of attempts to bribe jurymen even in the toilets of the building.
I found out that the United States commissioner--- to use his own percentage and not mine--- was throwing out 85 per cent or 90 per cent of the cases that were brought before him in that way, and that the balance were held for trial. "Being held for trial means that the assistant United States attorney, whose duty it was to start the machinery for United States district court proceedings, bad to sign his name and write on two or three lines the name of the defendant, on a mimeographed complaint, to start proceedings in the United States court.
I hunted up this assistant United States attorney and asked him a question something like this: When a man is held to-day, Wednesday, how long is it before you start the machinery in the United States court proper for prosecution? And as you understand in the case of the Volstead law it is not done by indictment but by information. He told me that he was five months behind. In other words, he being on the fifth floor of the Federal Building and the United States court office being on the third floor of that same building, it took him five months to fill out two lines or three lines of a mimeo-
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graphed form, and send it down two floors in the building, the congestion of business was so great.
Not only that, but because of the class of these defendants being mostly bartenders, waiters, peddlers, and what would be called the immediate contact of the man who sells liquor--- and the were all selling cases--- they are people who are here to-day and gone to-morrow. When they were finally reached for trial, I found by inquiring of the assistant United States attorney in charge of the court cases, and of the commissioners, that there was no way at all of identifying these people. Very frequently the police officers who had made the original arrest could not be secured, and if they were secured they did not know whether a man was the defendant or not.
In the Federal system there is no fingerprinting arranged for as Is the case in the State system. The only time when the United States marshal in my district to-day has the right to take a fingerprint is not even after conviction but be must wait until after sentence. For instance, you can not get a man fingerprinted in my district after conviction by a jury and before sentence is pronounced in order to find out how long a record he has, because that is the regulation of the Department of Justice. You must wait until sentence is imposed before you can find out how big a crook he is. So, on the question of identification there was no way to tell five months or six months or eight months later, when these cases got on the calendar of the United States district court, where the man actually did appear, and so far as the men did appear, whether in fact they were the very waiters or peddlers or bartenders or fixers who had on a previous occasion or occasions been arrested.
In order to show this subcommittee that advantage is taken of the lack of Federal machinery for identification, I will say that we have had some striking instances of it. Federal Judge John C. Knox received a letter from a man in the Tombs, to whom he had given three days unexpectedly instead of a $100 fine--- and this was before I took office--- I say he wrote Judge Knox a letter in which he stated: "Now, my contract was to appear in court and answer the calendar and pay a $100 fine but not to go to jail. I was not the man at all. I was never arrested in my life."
Thereupon investigation was made by Judge Knox, and it was discovered that the man had in fact never been arrested, but I think he had been provided, and I am not certain whether by the bonding company or the principal, as it was before my time, to appear and answer the calendar.
And not only has that situation developed, but when I took office I found there were a very large number of defaults because of the mass of the business being done. I was told by the chief of my fiscal division that between $200,000 and $300,000 of bonds had been forfeited, and yet that the bonding companies had not paid up. I was furthermore informed that the calendar was so clogged and the office so undermanned that suits had not been brought and could not very well be brought without my staff being increased.
We immediately went after the bonding companies and they indicated that they had not understood they were committed except to try to bring the defendant into court, and one officer of one bonding company which was in bad financial condition had the temerity even to say to me, in an attempt to adjust his claim, that it was not
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understood at all at least by his company, that the bonding company would ever he expected to pay any defaults, but were rather assisting the Government in dealing with bootleggers by promptly giving bond for all people arrested under the prohibition law in order that the courts might be clear; otherwise the Tombs would be so full as to cause public scandal.
I told him that he had entirely misconceived the nature of the surety, and that he would either have to pay up or get out of the building and not write any more bonds.
That is rather a rough picture of the situation that presented itself to me, as to the amount of arrests, the kind of arrests--- which interested me, I might say, where 99 per cent or more of the people arrested were not the men who were making the money but the subordinates, the employees.
In analyzing the situation, trying to find out why that should be so, I came across this very surprising condition, which General Andrews promptly corrected upon taking charge some months later. I found that prohibition agents were being promoted, or were being rated by the number of arrests they made, not the number of convictions, not the quality of arrests, not the amount of liquor stopped, but by the number of people they arrested. A worse piece of, machinery, of course, for inefficiency could not well be devised.
Senator REED of Missouri. Who had made that rule?
Mr. BUCKNER. General Andrews's predecessor, I take it.
Senator REED of Missouri. And that had been in force for some time?
Mr. BUCKNER. I do not know.
Senator MEANS. You may go ahead.
Mr. BUCKNER. I then went to the police department; I thought possibly the police officers were simply making arrests a gesture as in response to some demand which might have been made for cooperation, although there was no State law covering the matter. I did not know what it was then. I was ignorant of the situation. My idea was that if these arrests were merely being made as a gesture to help prohibition. And I was so clearly of the opinion they were merely hurting prohibition enforcement, I wanted to see if the gesture could not be removed. So I went to the responsible officers of the police department--- very responsible officers, I might add. There found to my surprise this situation: The special police officers were making more of these arrests than prohibition officers, far more in fact; and more police officers were making such arrests during my term of office than prohibition agents.
I found that the police commissioner of the city of New York, 13 months ago when I took office, was receiving 15,000 complaints a month, or 180,000 complaints a year, of violations of the Volstead law in the city. Those, of course, were almost wholly speak-easy complaints or saloon complaints. They were complaints from neighbors and citizens made to the police commissioner. And he told me as police commissioner that he should be removed from office, in his opinion, if he did not attempt to do something in that situation, even without any help in the State courts and with only the Federal courts to go to. And even with the cases being thrown out as they were, yet receiving 180,000 complaints a year from citizens, he certainly could not sit idly by and do nothing.
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I told the police commissioner that I quite thoroughly agreed with him. We discussed the matter. Finally I asked him how using the padlock injunction against the owner of the speak-easy would compare to a fine and be more effective on the speak-easy. The proposal I made was very cordially received by him, and we immediately adopted it as a means of cooperation, because I did not want to stop him From making arrests, or I did not want to stop him in his work of helping us try to clean out these joints, dens, and rendezvous of crooks, which from a crime angle he was directly interested in, although he was not from that angle interested in the hotels and restaurants where there was no crime. He approached it only from the crime angle.
Mr. CODMAN. Mr. Chairman, might I interrupt right there to find out whether you will sit this afternoon or not, so that I may make my plans accordingly.
Senator MEANS. Mr. Codman, we will recess at 12 o'clock promptly to-day, and we will have a session this evening beginning at 7.30 and running, through till the committee gets too tired to sit any longer.
Mr. CODMAN. That is satisfactory to me. I should like to make an announcement.
Senator MEANS. You may make an announcement to any witnesses you want to.
Mr. CODMAN. I should like to make an announcement to any witnesses I have spoken to to-day about testifying before the committee, have decided that a recess will be taken at 12 o'clock, and that the hearings will be continued in this room at half past seven, and we will continue as long as the committee find it convenient to sit. I think that I may safely excuse the other witnesses until the evening session.
Senator MEANS. Certainly.
Mr. CODMAN. All witnesses, therefore, are excused, excepting Mr. Buckner, until the evening session at half past seven o'clock.
Senator MEANS. Proceed.
Mr. BUCKNER. With that survey of the amount of law business which I was expected to perform as to one law I then turned to see What my court and jury was for doing it. We have six district judges in New York. We have only one judge sitting in criminal term in New York in my district. Never more than one of the local six judges. The reason for that is that the other five are required for other parts of the Federal business, all of which are far behind, so that there is no slighting of the criminal work. Quite the contrary.
Senator REED of Missouri. You mean by that that they give the criminal work all the time that they can give and attend to other business?
Mr. BUCKNER. I figured out that with all the other laws and all the other business I found pending in my office 9,000 criminal cases, only 3,000 of which were prohibition cases.
Senator MEANS. When was this?
Mr. BUCKNER. When I took office. That means that in my office there were 6,000 criminal cases which were not prohibition cases running back 2, 3, 4, 5, 6, 7, and 8 and 9 years.
Senator REED of Missouri. Pardon me now. When you speak of these criminal cases you mean cases that had passed from the commissioner up to the Federal court proper?
Mr. BUCKNER. Yes, Sir; they were cases which never had been before the commissioner in all probability. They were indictments
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for using the mails to defraud, indictments for concealing assets in bankruptcy--- which is our major operation. I even found a counterfeiting case, where counterfeiters had been walking the streets for two and a half years, which was one of the first cases I dragged out and tried, after having been pending two and a half years.
Senator REED of Missouri. What I mean by that, Mr. Buckner is, that you do not include in those 9,000 this vast number of cases that you said came before the commissioner?
Mr. BUCKNER. No.
Senator REED of Missouri. They existed in addition to the ones you have spoken of?
Mr. BUCKNER. Yes.
Senator REED of Missouri. Very well.
Mr. BUCKNER. So many people assume that the congestion of the calendars in my district is due to the prohibition law that I want to point out that of the 8,000 or 9,000---nearer 9,000---criminal cases pending in my district, and which I have been whittling away at ever since, only some 3,000 were prohibition cases and the others, covering all the other laws of the United States, of which there are a very large number. So that on any fair, even radical, allocation of one Federal court judge and with the proportion of 3,000 prohibition cases to, say, 5,000 or 6,000 other cases, the most that I could possibly expect, and more than I have been able to have, would be one-third time of one judge if I did not get outside judges.
We have succeeded in getting a good many outside judges since I took office. At the moment, right to-day, we have two. Sometimes we have none for an entire month. It is a constant campaign that I make every six weeks to the chief justice, who has been highly cooperative, and the chief justice tells me that from all the districts he gets the same story, that the calendars are so congested that very little help could be extended to New York City. But without out of town judges I could only have one-third time of one judge.
And every case, under the Federal system, is a jury trial, which I will not elaborate. You gentlemen are lawyers. You know what that means. And I compared the amount of this machinery with the amount of my law business, speaking as a lawyer, to decide what I should do. The padlock was no invention of mine. I found pending in my courts when I took office hundreds of padlock cases. I have forgotten now, but I think on the calendar were 300 or 400 padlock cases.
Senator REED of Missouri. You mean injunction cases; to lock up?
Mr. BUCKNER. Yes.
Senator WALSH. Do those cases, Mr. Buckner, come before the judge sitting in the criminal court or before the equity judge?
Mr. BUCKNER. Equity. A padlock case is an equity case. The Government, of course, is simply the plaintiff.
Senator WALSH. I merely want to know which judge they come before.
Mr. BUCKNER. Equity. Now the trouble with that is that the filing of those padlock cases was absolutely meaningless, because the equity calendar in my district was some two years behind. And I had an examination made of these two or three hundred padlock cases, or even more, if there were more, and found they being were done as matter of routine when requests were made by the prohibi-
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tion director of New York City, and then filed in the court, but they, were absolutely meaningless because a padlock case, an equity case to abate a nuisance, of the very essence must be reasonably contemporaneous with the evidence showing the nuisance, and these cases on my padlock calendar were one, two, three, and four years old without trial.
The calendar itself was over two years behind at that point, at that time, and apparently other cases had not even been put on the calendar by my office, perhaps because of their age. So that the existence of that padlock calendar in my office was a further waste of time from an office which already could not do half its work.
It does no good to go into a court of equity and ask for a nuisance to be abated and put on a prohibition officer or a police officer who gives testimony as to something that happened two years ago, So I went to the district judges and I told them I could do nothing whatever on the padlock side, the equity side, of the prohibition law unless they would give me a special padlock court sitting one week a month. I would have to get alone with that, and in return for which I would to the utmost of my ability stop the arrest of the waiter and the bartender that worked for somebody else, and padlock the place of the man that they worked for. And in return for that I wanted a special padlock court one week a month and the Government given a preference in order to put the equity cases at the top on the calendar.
The result has been that all those old cases I could not try, of course. We have dismissed most of them. In fact, there are probably several hundred still that we just have not had time yet to dismiss, having so many new things to do. But of all new cases which I have made since I have been district attorney our padlock calendar result is right up to date, and we have padlocked in the course of 13 months over 500 places of all kinds.
My position on petty arrests has been entirely misunderstood, because our instructions to the police officers and the prohibition agents in Now York are not to grant immunity, to fail to arrest a man who sells a glass of beer or a glass of whisky across the counter, but to report that fact in affidavit form and we promptly bring padlock proceeding of against the owner. So that the particular spot, the particular unit of that violation, be it a cigar store, a hole in the wall, or the Hotel Brevoort, the place itself is attacked under the padlock law. It is only the waiter in the Brevoort, it is only the waiter in the cigar store, it is only the bartender in the saloon or the hole in the wall who is not arrested under the policy which I have done my best to put through, though I have not succeeded. There are petty arrests made. We disposed of some 5,000 cases the last 13 months. And this is as good a place as any to say why they are.
In the first place it is sometimes difficult to get across to the prohibition agents or the city police officers what you mean by your instructions. To send us an affidavit when you buy liquor, instead of arresting the man. Do not make a petty arrest. On the other hand, make every arrest of any substantial amount. With a changing and shifting personnel such as was described yesterday, that is somewhat difficult. Also the police administration was changed the first of the year, so we have complete cooperation. The machinery is entirely different.
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Right now, January, February and March of this year, although do not think it is in the interest of prohibition enforcement to have these petty arrests made, with all the cumbersome machinery on the criminal side as against the padlock side; we have had an average of more than 400 arrests a month, made largely, entirely, in fact, by the city police officers. And why? The reason that is true is this: Commissioner McLaughlin and the inspectors of police say that they want us to permit them to take these defendants when they bring them to our building, no matter what we finally do with them, and do the best thing we can with them, because the people that they are arresting--- and there are over 400 a, month, 5,000 a year at the present rate; it has gone up--- are so connected with crime, are so connected with the criminal problem, and they say that they want to clean out the gambling dens, the rendezvous of crooks, the rendezvous of thieves, where they congregate, but where they are not holding each other up, where they are not violating any State law, but where there are these sinks and these dens, these gambling places and rendezvous of thieves and crooks in and around New York in the underworld, and when they go in there and find liquor they want to make the arrests and bring them to the Federal building and have us do the best we can about them, even if we can not send them to jail; it gives them that much trouble. And I said, "Of course, when you put it on that basis you are entitled to the cooperation of the Federal Government as long as the law is on the books."
Senator MEANS. Then you mean whenever they find a den of thieves and crooks and law violators they there find liquor being dispensed illegally?
Mr. BUCKNER. Yes, sir.
Senator MEANS. Always in those cases?
Mr. BUCKNER. So they say.
Senator MEANS. And that is the element in New York City that is causing you the most trouble, is it?
Mr. BUCKNER. Well, it depends on what you mean by "trouble." Of course, the element that is causing us the most trouble in New York, from a prohibition standpoint, are the people that supply the liquor.
Senator MEANS. The traffic, you mean?
Mr. BUCKNER. Yes. After all, it will take a great many dens of thieves to have the same amount of liquor that would be represented in the case that some prohibition agent might let several thousand gallons of alcohol get out.
Senator MEANS. Correct.
Senator REED of Missouri. You do not mean to say that these dens of thieves are dens of thieves because they have liquor? You mean to say that dens of thieves usually have some liquor?
Mr. BUCKNER. Well, of course, that involves a research into criminology, in which I am not expert enough to answer. I do not know which is cause and which is effect.
Senator REED of Missouri. Well, you find plenty of liquor at places where there are not dens of thieves, do you not? Plenty of it?
Mr. BUCKNER. Yes; I should say so.
Senator REED of Missouri. Yes.
Senator WALSH. Let me inquire, Mr. Buckner. What do you find to be the principal sources of the supply? If I am not interrupting the thread of your discussion. Perhaps you will reach that.
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Mr. BUCKNER. I have marked for a rather lengthy discussion what I think is the biggest thing in the whole prohibition business, the Government controlled alcohol. I will take it up now if you prefer.
Senator WALSH. No; finish what you have to say.
Mr. BUCKNER. But I will come to it. If you object to my going into too much detail---
Senator MEANS. No; go ahead, Mr. Buckner.
Mr. CODMAN. I want to ask one question, Mr. Buckner. You stated that you thought the principal trouble was with those who sell alcohol, the alcohol traffic. Would you not go one step farther and say that the real trouble was the people who wished to buy it? Because I suppose there are no sales without a purchaser.
Mr. BUCKNER. I suppose there is no supply without a demand.
Mr. CODMAN. Then it is the demand that is the real trouble, is it not?
Mr. BUCKNER. Well, that is true.
Senator MEANS. Before you have completed, some time for my own information I wish you would recite what the part of the foreign element that you have in that big city might be in the matter of the prosecutions for criminal violations.
Mr. BUCKNER. Do you mean as to whether or not the foreign element are in bootlegging rather than---
Senator MEANS. Yes; what is your opinion? What can you give us with regard to the foreign element, whether it is as a class noticeable that that class is a violator of the Volstead Act, or whether it is not?
Mr. BUCKNER. When you speak of violator, do you mean as a bootlegger, a supply man, or do you mean as a consumer?
Senator HARRELD. Either.
Senator MEANS. Well, either. I had in mind the trafficking, but either, as Senator HARRELD says. What I personally had in mind was the traffic inasmuch as you said that that---
Mr. BUCKNER. Well, I do not believe I know, Senator.
Senator MEANS. Go ahead.
Mr. BUCKNER. It is certainly not so marked that it has become a matter of such comment that it has reached me yet.
Senator MEANS. All right.
Mr. BUCKNER. Now in looking over these two or three thousand prohibition cases that were already in the district court--- well, before I get to that. So you see I permit these petty arrests to be made by the police department, and we do our best, we do the best we can with them. I simply say to Police Commissioner McLaughlin, "All right, where the place is such that the padlocking of the place will not be effective, where it is the merest hole in the wall, where they can simply move into the next block, or in the cellar, or somewhere else, and where it is purely a question of putting down liquor, all right, go ahead, arrest the man, we will do what we can."
Of course we would like to put them all in jail. Take that intake right now of 400 a month, between 400 and 500, over 500 last month, all petty cases, every one of whom we would like to put in jail, because you will never enforce the prohibition laws in my district, gentlemen, until people begin to go to jail. I think it would be easily enforced if people did 'begin to go to jail in substantial numbers. And suppose by getting out of town judges I had not one-third of one
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judge but one judge all the time, with the utmost optimism you can only try two jury cases a day--- we very seldom can try two a day--- but suppose you could try two a day, and if I had one judge all the time, the only judge assigned to me for all criminal matters, suppose I took him entirely for prohibition and nothing else all the year around, every court day in the year, and relied on out of town judges or an increase in the bench for all my other criminal work, don't you see the utmost I could do on a jail basis, which is the only way to enforce the Volstead law, to make people to jail when they have been convicted of violating it--- it would take me one year to try on a jail basis, which means a jury trial, for in New York in the average petty case of course they will not plead guilty, they will come in and plead not guilty, as they think the chances are they might get off--- it is one year's work that is coming into my office right now from the police department alone on petty cases if I went in on the only basis I believe in, a jail basis, as a means of enforcing the prohibition law, and if I took my one judge and had him do nothing else whatever excepting try prohibition cases, and relied on outsiders to do the rest of the Federal work.
Senator REED of Missouri. You said "one year's work." To do what? You did not tell us what.
Mr. BUCKNER. It would take one judge one year at two Cases a day to try 500 cases.
Senator REED of Missouri. It would take him one year to try the cases that come in in one month?
Mr. BUCKNER. That come in in one month, that are coming in right now from the city police, and on my restriction to only arrest the man when it is so involved with crime that the police commissioner feels that he is entitled to the Federal cooperation.
Now that is to say nothing at all of the very much more important matter of the big bootlegger and the source of supply and the men that make the money, which are the people that I am after. But just on this one situation of helping the police commissioner just in the one problem there of using this law where no other law happens to be available to him for the immediate purpose that he wishes to accomplish.
Senator HARRELD. According to that then, it would take 12 judges sitting all the time to keep the docket clear?
Mr. BUCKNER. That is just that one docket. And of course that would be Police Commissioner McLaughlin's party. That is not my party. My party is the alcohol diverted, my party is the bootlegger, my party is the smuggler, my party is the conspirators that may make millions of dollars, or hundreds of thousands of dollars. You would have to add judges for that work.
Senator REED of Missouri. Yes; but this McLaughlin party that you speak of is confined to the arrest of men who are found in these limited places; that is, in the places where crooks are supposed to congregate?
Mr. BUCKNER. Right.
Senator REED of Missouri. That is 400 a month?
Mr. BUCKNER. That is right.
Senator REED of Missouri. Now, how many would it be if you turned loose and arrested everybody that is violating the law?
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Mr. BUCKNER. I don't know, because I don't know how many people violate the law.
Senator REED of Missouri. Well, now, what is your estimate? You have got a pretty good idea, Mr. Buckner.
Mr. BUCKNER. No; on the contrary, I have no idea.
Senator REED of Missouri. You have not been able to even form an idea of how many?
Mr. BUCKNER. No.
Senator REED of Missouri. Much less arrest them?
Mr. BUCKNER. The men told me when I made this survey of the Federal Building before I took my job that in round numbers about 50,000 people were being arrested a year, mostly by the police department, and it was my opinion, of course---
Senator REED of Missouri. That is all I am asking.
Mr. BUCKNER (continuing). That that is a mere fraction of the number of violators, when you get into the petty basis, when you get into the drink of whisky, instead of the diverted alcohol or the imported liquor.
Senator REED of Missouri. You say that 50,000 is a mere fraction?
Mr. BUCKNER. Of the petty violators.
Senator REED of Missouri. Of the petty violators?
Mr. BUCKNER. I have no doubt of it.
Senator REED of Missouri. Now what fraction would you say?
Mr. BUCKNER. I have no idea.
Senator REED of Missouri. Well, you mean it is a small fraction, do you not?
Mr. BUCKNER. Well, I should assume so.
Senator REED of Missouri. Yes. So there are probably millions of violations every year in New York City?
Mr. BUCKNER. I won't commit myself on that.
Senator WALSH. Mr. Buckner, these same dens of vice and crime from which these cases come reported by the city authorities, McLaughlin, would exist just the same, I suppose, if the prohibition law were not there?
Mr. BUCKNER. They did exist 15 years ago when I was assistant district attorney.
Senator WALSH. Yes. So that really then the prohibition law is just utilized by the city authorities for the purpose of helping them to break up these places?
Mr. BUCKNER. Correct. Correct.
Senator WALSH. If it were not for the prohibition law they would be practically immune from prosecution for want of specific evidence of their criminality?
Mr.. BUCKNER. Well, I judge so, because that is true if they are carrying out our instructions not to impede our work with this kind of cases to any extent, further than they find to be the only available source of at least annoying and troubling and putting nuisance and bother on these gangs that they want to break up.
Senator REED of Missouri. Do you mean to say Buckner, that there are gangs of thieves and criminals in New York City that, if it were not for this prohibition law, you could not do anything at all with? You do not mean to say that, do you?
Mr. BUCKNER. Oh, no.
Senator REED of Missouri. I thought that is what you said.
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Mr. BUCKNER. No; we are talking about the particular place. For instance, suppose that a police officer, a plain clothes detective gets into a speakeasy, a dump, and he finds people there that he is satisfied are crooks or gangsters. He has no evidence that this particular fellow committed a certain hold-up. He suspects him. He knows from the general set-up that this is a bad outfit. The police commissioner does not want that particular little nest of pus, functioning. He could not at the moment arrest those people there and get away with it, because he may not have any evidence on them. I assume that this is, from what he has told me, and particularly from what his inspectors have told my assistants, therefore, a quick method for causing some annoyance--- oh, they have to give bail, and they have to hire a lawyer, and they have to be brought to our building. All that we can eventually do, unless the court situation is changed and greatly enlarged, is to call the roll and charge an exit fee, sometimes do, but at any rate it breaks up the particular place, and for what it is worth.
Senator REED of Missouri. Now are those places where they sell? Do they sell in those places?
Mr. BUCKNER. Yes; I think some of them do sell, and some of them they may only get them for possession.
Senator REED of Missouri. Well, if they do sell, that could have been regulated under the old license. A license could not be issued to those places, and then if they existed without license and sold there, then they could be arrested.
Mr. BUCKNER. Commissioner Enright told me---
Senator REED of Missouri. That is the fact, is it not?
Mr. BUCKNER. I can tell you what he told me, because I must stick to my own story of what I know. Commissioner Enright told me when I discussed the whole situation with him, that the reason that he wanted our help on places of that type was because he said, "Before prohibition we had the right to inspect, we could always go in where they sold liquor, and we had some control over them, and now we have no control, and since the Federal Government is responsible for the prohibition law we want your cooperation for that type of offense." And I said, "You will get it." And he had it, and Commissioner McLaughlin has had it ever since to the extent that with our toy machinery we can give it.
Senator MEANS. This is the McLaughlin party that you referred to that you are discussing now?
Mr. BUCKNER. Yes.
Senator MEANS. Go ahead.
Senator HARRELD. Did McLaughlin succeed Enright?
Mr. BUCKNER. And cooperating with us in every possible way. The mere question of the type of machinery to co-operate with, and to the extent which he can go along lines which he is not especially interested in himself as police commissioner, have not yet been entirely worked out. We are in a state of transition now. But we do not have as many police working for us now as we had before McLaughlin came in, but the cooperation is there and the spirit is there, and it is all a question of technique.
Now in looking over all those prohibition cases I found very few cases that might be said to be against the men higher up, and practically none of those were triable. We dragged out one case of an
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alcohol diversion that was four and a half years old. Been in my office all that time. We tried that case and lost it. One of the reasons we lost it was because the defendant's lawyer taunted the Government with having waited four and a half years, and told the jury that if there was anything to it that it would have been long since tried.
Other so-called large cases, which were against the men higher up, which is the only way to strike this traffic effectively, were not triable either because the agents involved, that had previously testified had been discredited by verdicts of a jury, and we had no particular, appetite for an encore, or because agents had left the service or been discharged, and they did not seem to us to be the kind of cases, especially as they were one, two, three and four years old, that could be dragged out So as far as the important cases are concerned, those that we have since tried, notably in the last six or eight months, or secured pleas of guilty in, had been cases we had made ourselves.
Senator REED of Missouri. You said that you had no particular appetite for an encore? Did you say that?
Mr. BUCKNER. I said that we had no particular appetite for an encore where the principal witnesses for the Government would be prohibition agents who had previously testified, and whose testimony had been repudiated by a jury. It would mean that with the vast amount of business that we had confronting us that it was a very proper and sensible basis for me to take, that, with the Federal judges worth their weight in platinum to us, that we ought not to go in and attempt to try again cases where testimony of certain prohibition agents, although clear and direct, had been repudiated by a jury or two.
Senator WALSH. Mr. Buckner, before you proceed. You spoke about the failures to get convictions, and then about comparative successes in your more recent cases. Do you find the juries in New York City fairly responsive to the facts as developed?
Mr. BUCKNER This is the best opinion I can form of that now. We have only tried on the strictly criminal angle some thirty-odd cases. You will be surprised perhaps to know, however, that because of the type of cases that we have selected--- and it took me some months to get going; this has all been within the last six months, see--- that we have secured convictions by picking out the men higher up, and important people, we have secured jail sentences after trial, of about 15 years, the aggregate. Only the last six or eight months the average been a year, which is very high in the Federal courts, especially in New York. And we have received pleas of guilty in still cases, manufacturing cases where the defendants felt that we could convict them and could get a jail sentence--- not the average selling case. I have been wholly unable to wheedle a jail settlement out of a man who is only arrested for selling. Even there we have aggregate jail sentences of something like five or six years.
Senator WALSH. Mr. Buckner, of course the sentence is imposed by the judge, and not fixed by the jury.
Mr. BUCKNER. Of course, yes.
Senator WALSH. Yes. But I am simply speaking about whether you get convictions in those cases in which you feel that a good case has been made. Are the juries disposed to let the defendant off
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upon flimsy excuses, or do they usually convict where they ought to convict?
Mr. BUCKNER. I am glad you asked that, Senator, because it is so commonly said that New York juries won't convict anyhow, and there is no use to try to enforce the prohibition law. This is our best judgement after 13 months, or after 18 months. Probably prohibition convictions are more difficult in New York City than from what I have talked with out of town judges, it may be in Texas. We think that the strongest element that causes an acquittal in a prohibition case, where there ought to be a conviction, is where the defendant is a subordinate. An employee. And where the juries say, "Well, look at the men higher up; I guess they are being protected, and they are paying a lot of graft." That is human nature. We think that is the strongest. Not the feeling against the law.
We would rank as number two, the second element which causes acquittals where, strictly speaking, we would expect from a judge sitting in equity a conviction, a prejudice against a particular prohibition agent. Demeanor, manner, contradictions, overzeal and bad personal impression. We have had concrete examples of that where some trials have resulted in acquittals where certain agents testified and there is a prejudice against them, somewhat more of a prejudice, perhaps, than might exist in other departments of the Government.
And third--- and we put third and not first--- a feeling on the part of New York, New York being what it is, that the prohibition law you can not work up as much of excitement on the prohibition law as you can work up on a commercial fraud case. And I think that great injustice has been done prohibition enforcement by assuming that New York juries won't convict. We prosecuted Steinberg, a millionaire bootlegger, for defrauding in his income tax after he had been acquitted some two or three years before in a prohibition case. Now there is a prohibition case tried as a prohibition case, although under another law. No trouble about it. He was convicted and got five years.
Senator REED of Missouri. Was he convicted for violating the liquor law or for not paying his tax?
Mr. BUCKNER. For not paying his tax.
Senator REED of Missouri. Yes.
Mr. BUCKNER. On the other hand, within only a few weeks, Senator, just to show where the agents are a little better, to show what juries will do, only within a few weeks, we prosecuted one of these permittees, one of these alcohol diverters, that I will get into in a moment, for swearing falsely before a grand jury, but a prohibition case, of course, we were trying to find out where he was bootIegging, and the jury convicted in five minutes, a New York jury. The agents were impressive, carefully picked.
Senator REED of Missouri. That was a perjury case?
Mr. BUCKNER. Yes. Also, Senator Reed, to show you that we do try a prohibition case once in a while, the largest higher-up prohibition case was a mail-order concern distributing over 15 or 20 States, way out West and down South, showing that New York is not the only place where there is any demand for liquor, and these were bootleggers, and these were the bosses, two of them. An elaborate business that ran into a good deal of money--- I don't know how much. And on
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the fourth day, so impressive was our evidence, though not entirely depending on agents, of course, documents, etc., the case largely made by our own office, that the defendants pleaded guilty, and then took 18 months and 12 months, respectively, as punishment.
Senator REED of Missouri. That was under the Volstead Act?
Mr. BUCKNER. Yes. We believe that if the class of agents could be improved by paying living wages, and a sufficient length of time elapse to increase their morale and make the business dignified, as any public business ought to be dignified, we believe at least that we can bring the juries up to their solemn obligation as jurymen to prosecute--- to do their duty, whether they are wet or dry or whatever they are.
Senator REED of Missouri. Now pardon me, will you not go back and take up these conditions that you find? You have not exhausted that subject, have you?
Mr. BUCKNER. No; I have not. Now, if you do not feel that I have said enough with reference to the inadequacy of the court machinery to prosecute cases in large numbers, and therefore the justification of substituting the padlock for the owner instead of the arrest of the waiter, I will continue on that. Have I made that sufficiently clear?
Senator WALSH. I feel like saying, Mr. Buckner, that the committee has had the situation in New York under careful consideration and would have reported favorably upon bills to increase the number of judges in that city by this time except for the fact that there has been some delay in introducing the bills. Just how that came about I do not know.
Mr. BUCKNER. I take up at the close of my testimony, very concretely from my experience, what I think the number of Federal judges should be. I do not want to anticipate that now.
Now we get back to conditions. As I looked the picture over in March of last year, the thing which we now see to be extremely important, diversion of alcohol, so far as the functions in the office were concerned
Senator REED of Missouri. Mr. Buckner, there are two lines of thought here. You were put on the stand by Mr. Codman, I take it, to tell about conditions. That is one line of thought. Then you have a line of thought of your own of what you think would help to remedy these conditions. I wanted to keep the two, as far as am concerned as one member of the committee, as clearly separate as possible, and I wanted to exhaust, as far as we could, the present condition and then take up the matter of your recommendations, which I think the committee will want to hear you on.
Mr. BUCKNER. All right.
Senator MEANS. Unless it interferes with your presentation. We do not want to do that.
Mr. BUCKNER. Oh, no.
Senator MEANS. Go ahead.
Mr. BUCKNER. I just want to say what the committee wants. The two more or less run in together.
Senator REED of Missouri. Yes.
Mr. CODMAN. I understood that Mr. Buckner was really the committee's witness rather than mine, from the statement of the Chairman, and I have so assumed.
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Senator REED of Missouri. Go ahead.
Mr. BUCKNER. All right.
Senator MEANS. Well, I want you to assume this, Mr. Codman, that we understand that all witnesses are called for the sole purpose of giving information to the committee, and not your witnesses or somebody else's, except that in your judgement they maybe could bring information to the committee. Do not misunderstand, there is no trial here or no cross examination, except on the part of the committee, and it is solely to bring information to the committee, as I understand it, and that is the purpose of the hearing
Mr. CODMAN. That is my understanding also.
Senator MEANS. Yes. Go ahead.
Senator HARRELD. I think it should be said that Mr. Codman asked for this witness to be subpoenaed.
Senator MEANS. Yes.
Mr. CODMAN. My wish seems to have been justified, Senator.
Senator MEANS. Go right ahead, Mr. Buckner. We do not care about motive.
Mr. BUCKNER. May I now pass to alcohol, which we regard as a very major issue, indeed. As to conditions.
Alcohol, when I took office, was not in the picture particularly. We did not understand it. Such machinery as there was so exhausted by these petty cases that no one had--- General Andrews, of course, was not in office. He immediately seized on this thing, got going on it in the fall. But alcohol was not in the picture, except it seemed almost every day that some assistant district attorney had to go into court and fight in a court of equity some motion about some revocation of a permit.
In those days, until I got it better organized, and until General Andrews got his department better organized, I will say we lost about 50 percent of those permit cases. In other words, the revocations had been made arbitrarily, contrary to law, and could not be supported. And yet it exhausted what little toy machinery I had there.
Now, as months went on and we all began to study this thing, because I very greatly increased my prohibition department, we began to see the importance of alcohol, and General Andrews came in and put his finger on the softest spot there is in prohibition at the moment, and I think the most useful thing that I can do is now to tell you the conditions in New York on the alcohol situation, so much more important than the bartender that sells the synthetic liquor later.
Before I do that. The drugstores were not in the picture, and we got onto that only around Christmas, because one of my assistants took that up in a very vigorous way only as recently as Christmas and we have been working on that three months. They were not in the picture.
I will first now take up alcohol, and then I will take up drug stores. Although a little outside of my district, it seems to me a service to the committee if I give some rather startling figures. Take the official Government records for the fiscal year ending June 30, 1925. Take the official Government records for 1921 and back of 1921 clear before the war with reference to the distribution of industrial alcohol, the consumption of industrial alcohol, all theoretically legitimate. We find that before the war and before prohibition that apparently a million gallons a year increase marked the progress of industry. It
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was less than that, but I have said that suppose that that rate, with the increase in population and increase in business, continued. We would expect then after prohibition that about 1,000,000 gallons a year or so would be the increase. On that basis we find, assuming that only a million gallons a year increase is legitimate, that for the fiscal year ending June 30, 1925, apparently 60,000,000 gallons of industrial alcohol in the United States went into the bootleg trade.
Senator MEANS. Do you mean that was the increase?
Mr. BUCKNER. I mean to say that if you took the figures before prohibition, and you add a million a year, a million a year, a million a year, for legitimate uses, because that seemed to be the rate of increase before, you then have an unexplained 60,000,000 gallons unaccounted for that apparently went into the bootleg trade for the fiscal year ending June 30, 1925. That is speculative, of course.
Senator WALSH. Mr. Buckner, has there not been so much development in chemistry and industries depending upon chemistry that the increase would be not in arithmetical progression but almost geometrical progression since the war?
Mr. BUCKNER. It might be, it might be, Senator. And I say that this is argumentative. Although in a moment I am going to give You something that is not argumentative at all. But right on our thought, Senator, in other words, has not chemistry increased, have not the arts increased so that the million a year legitimate increase before prohibition and up to 1921 is perhaps an unfair factor in the situation. Now here is a very shocking thing. I say 60,000,000. But if you go back to 1924, June 30, 1924, the apparent leak is, I think, only 35,000,000 or 40,000,000.
Senator MEANS. Does that 60,000,000 cover one year?
Mr. BUCKNER. Yes, Sir.
Senator MEANS. Go ahead.
Mr. BUCKNER. Now, Senator, let us discard the million a year of legitimate increase and let us go to June 30, 1924, less than two years ago, on the basis that I postulated a moment ago the leak would be 40,000,000 gallons. Now, in the succeeding 12 months, from June 30, 1924, to June 30, 1925, the leak jumps from 40,000,000 gallons to 60,000,000 gallons. There is an increase of 50 per cent. I know of no revolution in the arts, I know of no revolution in chemistry in those particular 12 months which would account for an apparent discrepancy of 20,000,000, a jump from 40,000,000 to 60,000,000.
Senator WALSH. What are the aggregate figures for those years, Mr. Buckner?
Mr. BUCKNER. I have got them right here. In the fiscal year ending June 30, 1920, the distribution of industrial alcohol, according to the official figures, was 21,000,000 gallons, For the fiscal year ending June 30, 1925, the distribution of industrial alcohol is 8,000,000 gallons. Those are the Government figures. Now, without taking the time for computation---
Senator REED of Missouri. Have you the figures for the intervening years?
Mr. BUCKNER. No. I will procure them and file them with the committee.
Senator REED of Missouri. I wish you would.
Mr. BUCKNER. I rather think my assistant has them here in Washington, and perhaps we can file them before the evening session.<
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Senator REED of Missouri. All right.
Mr. BUCKNER. I brought along two lawyers to tell me what to say.
Senator REED of Missouri. You ought to know what the truth is, then, Mr. District Attorney.
Mr. BUCKNER. I myself am unable to appreciate the meaning of that 60,000,000 gallons as a factor in this war in which I am engaged unless I reduce it to bootleg whisky. General Andrews told you it was split four times. The basis on which I made all my calculations when I testified this morning, which is conservative, from what we hear from the bootleggers, is three times, and if you will dilute those 60,000,000 gallons of industrial alcohol three times, reduce it to quarts, and then add the very conservative figure of only $5 a quart, because if you buy it by the case and it is poor enough you can get it cheaper, and if you buy it by the bottle it is more--- $5 is very conservative.
Senator REED of Missouri. It is $10 out in my country.
Senator MEANS. You ought to know.
Senator REED of Missouri. I do.
Mr. BUCKNER. I think it is very important to find out what this traffic means in terms of gross business, of money, in order to devise means, if I am not impertinent, for carrying on the war. You get the shocking figure of $3,600,000,000 gross business involved in 60,000,000 gallons of industrial alcohol. Now, of course, that may not be 60,000,000. Maybe it is 50,000,000, maybe it is 58,000,000, maybe it is 57,000,000.
Senator HARRELD. Mr. Buckner, part of that is captured and destroyed, is it not, by the prohibition agents?
Senator REED of Missouri. How much?
Senator HARRELD. What part of it would you say?
Mr. BUCKNER. When I took office we had no alcohol cases pending on the calendar, and have only developed one or two since then which have involved indictments for conspiracies and a seizure of one truck or something of that kind.
Now I come to something that is not at all speculative. About September 1 General Andrews, who put his finger on this alcohol question, brought to New York John H. Foster, from Philadelphia, who had been, I think, 20 or 25 years in the Bureau of Internal Revenue, and not been in prohibition more than a year or two, and Foster attacked the alcohol problem in New York at its source, to the detriment of the day by day criminal work, because it was the most important, and after all, you have just so many men, and they can not do too many things.
Foster brought into New York, as I understand it, 21 men, 21 prohibition agents from Philadelphia, or people that he knew and he felt complete confidence in. He did not take men in New York, as I understand it. Those 21 men he stationed in 13 denaturing plants in New York City and Brooklyn. Those denaturing plants, of course, as you know, if you understand the system of the alcohol denaturing, buy the alcohol from the distilleries, under Government permits, are supposed to poison it, and are supposed then to sell it. He simply put the 21 men in those plants to inspect, which the law and the regulations provide can be done. Nose around in the books, hang around, stand around. Only 21 men to cover 13 denaturing plants. Without doing anything more than stand around. And
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without embarrassing the operations in any way except by observation.
The most shocking and astounding result happened in those 60 days, and that is this, that from September last, the next 60 days the output of those denaturing plants, 13 in number, in New York and Brooklyn, after 21 men stood around, the 21 selected by Foster instead of the 15 or 20 who had been previously doing it under the law--- for some singular reason the output of those denaturing plants decreased in 60 days 300,000 gallons a month. No interference with customers, nothing except just to stand there. Or 3,600,000 a year, Or split three ways; that is, 10,800,000 gallons a year. Which at $5 a quart is $216,000,000 of gross business stopped almost over night in New York City by the mere presence of 21 men which Foster put in there. Two hundred and sixteen million dollars of gross business in bootlegging alcohol, which means that that is about $10,000,000 an agent.
Senator REED of Missouri. Now, who had been there before Foster's men were put in there?
Mr. BUCKNER. Prohibition agents.
Senator REED of Missouri. How many?
Mr. BUCKNER. I do not know.
Senator REED of Missouri. Did you not say 15?
Mr. BUCKNER. I have no idea.
Senator REED of Missouri. But there had been agents of the department that could have been assigned there and the agents had been assigned to these plants?
Mr. BUCKNER. I know that alcohol inspection was part of the work that was carried on in New York. Whether it was 21, whether it was 15, whether it was 10, whether they had too much to do or whether there was something else happened, I know this, that the substitution of 21 men at $2,000 a year was responsible, each man, for stopping ten millions of dollars a year. Two hundred and sixteen million dollars distributed among 21 men means that those 21 men, at $2,000 a year, were each responsible for stopping $10,000,000 of gross bootleg business a year, which means at before they did it somebody else could have been responsible for stopping $10,660,000 a year, and this was just overnight. This was just shaking the tree to see how many fell without any effort at all.
Senator REED of Missouri. Maybe somebody else was shaking other trees. Go ahead.
Mr. BUCKNER. Now, the type of alcohol which that stopped was what is called the completely denatured alcohol. The denaturing Plants denature two kinds of denatured alcohol. One is called completely denatured alcohol, for which there are about five or six formulas, and it is supposed to be so powerfully poisoned that it is just sold in the open market for paints for automobiles, varnishes, etc. And it is that type, that took no regulation, no permits or anything of the kind, that apparently was the type that immediately disappeared, and our own grand jury investigation, and otherwise, has revealed the fact which throws some light on whether liquor is actually poisoned or whether it is not actually poisoned, that the means employed by at least some of the plants was that they never denatured the alcohol at all but they had people that you call "cover- houses" who colluded with fake invoices, and then the denaturing plants sold
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the pure alcohol to the bootleg trade and it never was denatured. Now, of course, there is lots of alcohol sold to the bootleg trade that is denatured, because our chemist in our Federal building says that out of 50,000 samples 98-1/2 per cent of those analyzed in two years show traces of denaturing.
Senator REED of Missouri. Now let me understand about this substitution. If I understand you, a denaturing plant in New York would secure, let us say, 10,000 gallons, for illustration, of pure alcohol which it was presumed to denature. Then it would go outside and secure 10,000 gallons of denatured alcohol and swap the alcohol, putting the denatured alcohol in the place of the pure alcohol?
Mr. BUCKNER. No. I have not made myself clear.
Senator REED of Missouri. That is what I understood.
Mr. BUCKNER. The denaturing plant buys from the regular distillery 10,000 gallons of pure alcohol. The distillery has the right to sell. It is a bonded distillery. The denaturing plant has the right to buy, because it has a permit.
Senator REED of Missouri. Certainly.
Mr. BUCKNER. The owner of the denaturing plant buys it. The theory is that he is going to poison it. He gets the 10,000 gallons. He writes on his books "10,000 gallons completely denatured alcohol." That is kerosene, that is the worst stuff they can put in for paints and varnishes, then they sell it right in the open market. Anybody can buy it--- all he wants. They write that on their books. They even get a man--- John Jones & Co.--- who pretends to buy 10,000 gallons of completely denatured alcohol and never buys a drop. He is simply paid for exchanging correspondence and sending an order in.
Then what the denaturing plant really does is to take the 10,000 gallons, does not put a drop of poison in it, and sells it to a bootlegger. The prohibition agent comes around to inspect. He says, "Have you sold this"? They say, "Yes, here is the invoice, John Jones & Co." The prohibition agent does not go to John Jones, does not bother with him, does not go to the district attorney, does not take it to the grand jury, because the whole inspection business is so woefully undermanned that nothing effective can be done more than this.
Senator REED of Missouri. Then instead of putting in the poison he makes an entry on his books?
Mr. BUCKNER. That is it.
Senator REED of Missouri. And the prohibition agent looks at the books, or used to look at the books, and if he found the books are all right, that settled it?
Mr. BUCKNER. That settled it.
Senator REED of Missouri. Then if you will pardon me, I do not see why it should be under those circumstances that you should find traces of poison in 98-1/2 per cent of all this material that you get. You will not have captured any of the good alcohol after it has gotten out?
Mr. BUCKNER. The way we account for that is this: The specially denatured alcohol, which is made for perfumes and hair tonics, etc., is comparatively easily cleaned or purified, or redistilled, depending on the conscience and the technique of the bootlegger. And of course we know from the samples in our building that a very large amount of denatured alcohol which is actually denatured and spe-
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cially denatured does get into the bootleg trade. Otherwise our chemist would not find these traces in these samples. How much is one, how much is the other, we do not know. But to redistill the completely denatured red alcohol is so much trouble, and was assumed to be impossible, until we got a case now on it--- it was assumed to be impossible, and they finally abandoned the favorite formula--- in any event it was one with a lot of difficulty, and that leads us from investigations which have been made by us, to assume that a good deal of alcohol that went on the books as completely denatured alcohol never was completely denatured at all, but was sold into the bootleg trade as pure alcohol, that is, of the supposed completely denatured alcohol.
Senator REED of Missouri. Now, those 98 per cent that you found comprised a denaturing substance, do you think that came from alcohol that had been not completely denatured or only partly denatured?
Mr. BUCKNER. Yes; that is right.
Senator HARRELD. Did you say 98 per cent?
Mr. BUCKNER. 98-1/2 per cent. The chemist in our building told me that analyses of 50,000 samples taken in 1924 and 1925 showed 98-1/2 per cent not to be liquor at all but to be synthetic liquor made from redistilled alcohol or alcohol cleaned of the denaturant, and that 98-1/2 per cent showed traces of the denaturant. I do not pretend to say that that is deleterious. I do not know whether it is poisonous or not. He is not a doctor. And I do not know anything about it except that certain traces of denaturant were found in 98-1/2 per cent of the samples, which shows that 98-1/2 per cent of the 50,000 samples brought into our building in two years from petty cases, which may not therefore be a cross-section of the city, was made from bootleg alcohol, which was allowed to got out because of improper inspection.
Senator REED of Missouri. You stated a moment ago that you had presumed until recently that completely denatured alcohol could not be used for beverage purposes. What have you found out about it recently?
Mr. BUCKNER. We learned in December, wholly by accident, when some of General Andrews's selected men, so-called undercover men, who were cooperating with us in New York, that there was a plant in New Jersey. They found out that situation, and I might add that we have just made a case against it, and just made an arrest.
Senator REED of Missouri. Do not you think you had better wait for the Senator from New Jersey to come in and hear this?
Senator MEANS. He is right here. Go ahead, Mr. Buckner.
Mr. BUCKNER. In the plant in New Jersey to which I refer we found a still and in mentioning that it is in New Jersey I might add that we have jurisdiction, because we have got some overt acts in our district, etc., and so on. Anyhow, just within a few weeks, almost two weeks ago I think it is, we found a still of the capacity of 4,000 gallons a day. The investigation in which we cooperated with General Andrews's men has been going on for three months. On February 1, for instance, the under cover man who was over there observing conditions, and we took plenty of time on this case, reported that on the railroad tracks were 10 carloads of denatured alcohol, completely denatured alcohol, which could be bought in the open market by you or me or anybody else until this particular
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formula was abandoned. In fact, it had been in use for years prior to that time.
Now, we have men who followed the trucks that were delivering this denatured alcohol, after it had been redistilled, and therefore we have the product of this particular still, where alcohol that was not supposed to be capable of redistillation at all has been redistilled.
And right there, if you will stop a moment to think about it, just this one plant, with one still of a daily capacity of 4,000 gallons, which was not theretofore in the bootleg picture at all, changes the situation very much. General Andrews's expert over there had never heard of this particular man who was running this plant and the still. And if you will picture 4,000 gallons being produced daily and figure it out you will see that $75,000,000 a year is involved in that. And you must remember that they were buying denatured alcohol in the open market just as you and I would buy sugar and tea and coffee.
Senator REED of Missouri. And did that plant turn out a pretty palatable product?
Mr. BUCKNER. I do not know. The particular assistant who handled that case is not present, and I could not tell you about that part of it.
Senator REED of Missouri. I am interested in understanding whether or not they were able to take out the denaturing substance.
Mr. BUCKNER. I think it was a pretty good job of distillation. That is my opinion. It seems to me if it had not been I would have heard something about that side of it. There was some little excitement in my office by my assistant because of the poison situation generally.
Senator REED of Missouri. It was a pretty good job, then?
Mr. BUCKNER. Yes.
Senator REED of Missouri. They can do a successful job in denaturing the stuff?
Mr. BUCKNER. Yes.
Mr. CODMAN. So it was not poisonous, do I understand?
Mr. BUCKNER. I think that is true. That is my information about it.
Senator MEANS. Are you assuming that alcohol is not poisonous; I mean alcohol of any kind?
Mr. BUCKNER. Oh, no; of course, Mr. Codman is talking about Government poison.
Senator MEANS. I wanted to differentiate.
Mr. BUCKNER. Not poisonous as to the contents, but poison to the Government. It would be my information that it was a good job of redistillation, because completely denatured alcohol is so vile, and it has been presumed to be so absolutely incapable of rescue for beverage purposes, that it was sold in the open market. I assume it was a good job.
Senator WALSH. I would naturally think these inspectors would trace from the denaturing plant such an extraordinary amount of stuff and could easily follow it to see where it was going, and whether it was actually going into legitimate industry or not.
Mr. BUCKNER. Well, I would think so too, but that assumes that you have enough, inspectors, that you have adequate personnel to do that work. It also assumes that they are being paid enough
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to make a living, and that the morale of the personnel corresponds to the morale of your Secret Service in the narcotic work. I think this whole question is dependent upon rigid inspection, which would mean an increase in both numbers and quality of the personnel.
Senator HARRELD. Mr. Buckner, do intend to make any suggestion as to how the Government can forbid or prevent this redistillation of the denatured product?
Mr. BUCKNER. Yes.
Senator REED of Missouri. Let us keep on this subject for the present, if you please.
Senator HARRELD. All right, but I just wanted to know if Mr. Buckner is going to make some recommendation along that line.
Mr. BUCKNER. Yes.
Senator HARRELD. That is all I wish to know at this time.
Mr. BUCKNER. I have the whole scheme at the end of my testimony, setting forth what if I were doing it I would want, if that will interest you.
Senator HARRELD. Yes, it will, and I should like to hear it, but I am willing to wait until you reach that point.
Senator MEANS. It will interest the committee very much, Mr. Buckner, but you can go ahead with your testimony and give us that suggestion when you come to it.
Mr. BUCKNER. So much for alcohol. I pointed out that the single plant we found in New Jersey if run to capacity would mean a liquor business of $75,000,000 a year; that is, if run to capacity, and if run to 50 per cent of its capacity would mean a liquor business of $37,500,000 a year. So that you can see what kind of a war this is.
Now, we get down to the drug stores. And I might say that they were not in the picture 13 months ago. Of course, occasionally a clerk in a drug store, as our records will show, was arrested and fined $100 along with thousands of others similarly fined. We padlocked a few places, and they have not come until recently. And of course the number of prohibition agents in New York City at this time is very inadequate indeed.
Senator REED of Missouri. How many drug stores did you padlock in New York City?
Mr. BUCKNER. I do not remember, but a few, two or three, perhaps.
Senator MEANS. You may proceed with your testimony.
Mr. BUCKNER. About three months ago a man was arrested by a prohibition agent when he was going into a speakeasy. The man arrested was searched. On his clothes were found prescriptions, which he obviously had no right to have. I rather think they were prescriptions in blank, signed by a doctor.
That prohibition agent brought the matter down to me, and I turned it over to one of my young men, who took the question up, and he has been working on it very industriously ever since.
Here in the last two or three months, which was our first introduction into the drug-store situation, we have found conditions to be, briefly stated, about as follows: In our district there are 1,200 drug stores having permits to sell liquor. There are 5,100 doctors having permits to issue prescriptions. The permit that the druggist gets to sell liquor is theoretically to enable him to distribute liquor that the doctor orders. There is a little extra there for compounding prescriptions, but I think we may disregard that.
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One of the first things that my assistant did when he took charge of this matter around Christmas of last year, and he went at it quite energetically, was to do what had never occurred to anybody to do before; or apparently at least it had not occurred to anybody, and it would naturally be a part of the job of the Prohibition Unit: He thought it would be interesting to compare the amount of liquor drawn by the drug stores and sold by them, with the amount which the prescriptions at maximum capacity would justify. In other words, the theory of the thing is that the drug stores have the permits in order to get legally the liquor which Doctor Jones and Doctor Smith and Doctor Brown may prescribe for their sick patients, and that amount ought to come out practically even, except for compounding, which amount I think would be negligible. That has only been done in the last two months, by one of my assistants, but with very interesting results. For instance, looking up the Government records he finds that the amount of liquor which the prescriptions would justify in our district would be 240,000 gallons a year. In other words, that the druggists should have drawn out 240,000 gallons of whisky in order to supply the very maximum amount that the doctors can prescribe for their patients under their prescriptions.
Senator WALSH. Right there, if you please: How do you figure out the maximum amount that a doctor can prescribe?
Mr. BUCKNER. There is a regulation, and I think it is a pint---
Senator WALSH (interposing). Yes; it is it pint each 10 days.
Mr. BUCKNER. Yes.
Senator WALSH. For each patient.
Mr. BUCKNER. Yes.
Senator WALSH. How can you figure how many patients a doctor may have?
Mr. BUCKNER. Well, a doctor is only allowed 100 prescriptions a quarter.
senator WALSH. Oh, I had overlooked that additional provision.
Mr. BUCKNER. And if a doctor had more than 100 sick patients in a quarter the man is out of luck and the next patient has to get a new doctor.
Senator HARRELD. What was the sum total you gave a moment ago?
Mr. BUCKNER. I was explaining to Senator Walsh the conditions surrounding prescriptions furnished by doctors by which we reached our result.
Senator HARRELD. Yes, I understood; but I wanted the sum total of it.
Senator WALSH. Each doctor can issue as many as 100 prescriptions a quarter, and you figure the amount of whisky that may be withdrawn by drug stores on that basis.
Mr. BUCKNER. Yes. You are probably not aware that not only is the amount per patient limited, but the number of patients for whom a doctor may issue prescriptions for whisky is also limited. That is for the purpose, very obviously, of preventing abuse as far as that may be possible.
Senator WALSH. Yes, I had overlooked that part that referred to the number of prescriptions each doctor might issue during a quarter.
Mr. BUCKNER. Yes. Therefore the amount of liquor that could legitimately be withdrawn by the drug stores in our district was
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240,000 gallons. Yet my young man within the past 60 days went to work on this matter in Is way: He said "I will see how much was withdrawn." He found that instead of 240,000 gallons being withdrawn by druggists that 480,000 gallons were in fact withdrawn, exactly two to one.
Now, gentlemen of the committee, this is something new, something we have just taken up, and all of which should have been regulated by a competent inspection. If you do not want liquor to leak out of legitimate sources in a volume which no amount of judges, policemen, and so forth, can prosecute without a radical reorganization of the machinery, there must be very careful inspection and checking up.
We have arrested and are in process of indicting some 40 physicians, and have many more under investigation; and some dozen or more drug stores, and have some 250 additional drug stores under investigation. That is now being carried on by the Prohibition Department and our own office.
Senator WALSH. Will you tell us how that is done? The physician gets his book of permits, and how can he issue more than 100 in any one quarter? For instance, are these additional prescriptions counterfeit prescriptions? That is, do they counterfeit the blanks and then them?
Mr. BUCKNER. Will you excuse me if I hold that in abeyance just for a moment?
Senator WALSH. Certainly.
Mr. BUCKNER. Let us look on the picture showing how the druggist gets his liquor from the distillery. The druggist applies for a permit. That permit does not say: I want a permit to fill the prescription attached, or which I will attach so they may be checked up. The druggist estimates the amount of whiskey he wants, and the permit to the druggist gives him permission to withdraw so much. And the Prohibition unit as a matter of administration have not articulated, have not coordinated the gross amount which any druggist can legitimately dispense with the gross amount which the permits themselves justify his withdrawing.
In other words, as an illustration, suppose you take 1,200 druggists and add the permits together and the prescriptions together. Each man has a permit to withdraw so much whiskey per quarter. We will say that he is a legitimate druggist, a man of good character, and he is asked at the present time "How much do you want?" His answer is "I want so much." The reply is "All right." They do not keep a map, as a general in war would, showing whether or not a man is getting more liquor in his drug store than the doctors can get out, with the situation as to all the drug stores and all the doctors. That is one of the weak points.
Senator REED of Missouri. I want to get this clear in my own mind, and it is not quite clear at the present time: You say if all the prescriptions that were filled at the drug stores had been filled to their maximum the druggists would not have been entitled to have dispensed more than 240,000 gallons of liquor in one year.
Mr. BUCKNER. That is right.
Senator REED of Missouri. And yet you say they did actually acquire for dispensation 480,000 gallons?
BUCKNER. That is right.
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Senator REED of Missouri. So that there ought to be on hand in the drug stores the other 240,000 gallons?
Mr. BUCKNER. Yes.
Senator REED of Missouri. But it is not there?
Mr. BUCKNER. No; it is not there.
Senator REED of Missouri. More than that, and while on that subject, if the druggists get 100 proof whisky, or 110 proof whisky at the distillery, and when they fill prescriptions they fill them with whisky that has been watered down to 60 per cent proof or 70 per cent proof, there would be that much more whisky on hand, and they would have distributed that much less of the actual whisky on their prescriptions.
Mr. BUCKNER. Well, if he is a conservative pharmaceutical bootlegger say he splits only two to one, then it is double, and if he splits three to one it is three times, and if four to one it is four times. General Andrews said on yesterday four, but in my own figures here, in order to bring home what inspection means, I am very conservative, because bootleggers charge more for rye which is supposed to come from a drug store. I have been very conservative, and I only cut it once. In other words, I just multiplied it by two, and then instead of putting down $5 I put down $8, which is very conservative for rye gotten out of a drug store.
In order to get at the volume of business which a small group of $2,000 inspectors are supposed to stop, it works out that the volume on that average, that excess is $15,600,000. There are in our district 17 agents whose duty it is to examine the 1,200 drug stores and check up the 5,100 physicians. Therefore, the business which we find has been bootlegged, the business which they are expected to stop, amounts to practically $1,000,000 per man.
Senator REED of Missouri. How much was that?
Mr. BUCKNER. The retail price of this excess liquor sold to drug stores by bonded warehouses, which they had no right to receive and dispense, was $15,600,000 if you only cut it once, if they only make two blades of grass, as it were, grow where one grew before, the total volume is about $1,000,000 per man drawing $2,000 a year. In other words, a $2,000 man is expected to stop an illicit business that amounts to $1,000,000.
Senator REED of Missouri. And if you cut it three times of course you have three times $15,600,000.
Mr. BUCKNER. No; you have not got three times that, but about $22,500,000, and if you cut it four times you have about $30,000,000.
Senator WALSH. An inspection of the druggists' books will show the total amount they could have dispensed under the prescriptions received by them, and the withdrawals will show the total amount they actually got. So an inspection of the druggists' books would actually disclose the amount that they had legitimately dispensed.
Mr. BUCKNER. If they put it on the books. But the point is that if they do not put it on the books they have to produce the whisky. You see what we have done is this---
Senator WALSH. Wait one minute, if you please. You have the amount a druggist actually withdrew from the distillery?
Mr. BUCKNER. Yes.
Senator WALSH. And you have the actual prescriptions which he got?
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Mr. BUCKNER. Yes.
Senator WALSH. And getting the total amount shown in the prescriptions you have the amount he actually dispensed without any regard to his books.
Mr. BUCKNER. That is right.
Senator WALSH. So that an inspection of the drug stores by an adequate force would actually disclose the situation?
Mr. BUCKNER. Why, of course. But I would want more than a $2,000 man to be responsible for stopping a business of $1,000,000 a year.
Senator MEANS. Further along that line when you have the amount a druggist received of high-proof whisky, if he was a diluter he would still have more to dispense by the amount of the dilution.
Mr. BUCKNER. Yes.
Senator MEANS. And would still have a product for bootlegging over and above that?
Mr. BUCKNER. Yes.
Senator MEANS. So you would have to carry your inspection still further. You would have to see that the amount that he did dispense or sell was of the same quality that he received from the distillery.
Mr. BUCKNER. Yes.
Senator MEANS. Or otherwise he could immediately dilute that by half, and would then have half of the original amount to bootleg.
Mr. BUCKNER. That is right.
Senator REED of Missouri. So then, following Senator Means's question one step further: If a druggist got 10,000 gallons of 100 proof whisky, and he had prescriptions to show for 10,000 gallons of whisky properly dispensed, he ought to have no whisky at all on hand, if you would take that from his books. But if he had taken that whisky and made twice the amount of original whisky by putting in one-half of water or other substance, then he would have an additional 10,000 gallons of whisky to distribute illegally, is that right?
Mr. BUCKNER. Yes.
Senator REED of Missouri. Now, then, the only way you can tell whether or not he has distributed to each customer the pure liquor instead of liquor that has been diluted is to have Government inspectors to test out the liquor that he actually delivers on his prescriptions.
Mr. BUCKNER. Yes; like in the case of Coco Cola or where any corporation follows up the purity of its product, as far as that is concerned.
Senator REED of Missouri. Yes; but say I am a druggist and you want to catch me.
Mr. BUCKNER. All right.
Senator REED of Missouri. You have got to get the liquor, under the illustration I put to you, that I deliver to some person on a prescription.
Mr. BUCKNER. All right.
Senator REED of Missouri. In other words, you have got to catch me selling illicitly, of course, without a prescription.
Mr. BUCKNER. Yes.
Senator REED of Missouri. If you come in with a prescription and I fill it, and fill it with whisky 50 per cent proof instead of 100 per cent proof, the Government in order to catch me on that has to get
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hold of that particular bottle of whisky and analyze it and find that it is not the same kind of whisky that I got from the distillery.
Mr. BUCKNER. Yes.
Senator REED of Missouri. That would take a lot of inspectors, would it not?
Mr. BUCKNER. Yes. Of course, you are talking now, you and Senator Means both are talking, about what you might say should be, done toward the druggist bootlegger. I did not get into that. I just took the service. At least, you would think it reasonable that the administration should be so worked out--- and General Andrews is right after it now, because General Andrews is the best thing prohibition ever had, and we could not have carried on our war without some help.
Don't you see it is reasonable, at least, to think that somebody ought to take an adding machine and see to it that the permits issued to drug stores do not at least exceed the amount that can be legitimately dispensed?
Senator HARRELD. Mr. Buckner, the figures that you gave were that this excess of 240,000 gallons of whisky that the druggists in your district sell--- and did you say it amounted to a million gallons to each inspector?
Mr. BUCKNER. It amounts to $1,000,000 to each inspector. In other words, it is $1,000,000 worth of business that each agent is supposed to stop.
Senator HARRELD. That is based on the assumption, however, that every bit of whisky will be split once, twice, or three times.
Mr. BUCKNER. Oh yes; but you understand then---
Senator HARRELD (interposing). Is it not right to assume that some of the druggists in your city will sell the whisky in its original shape?
Mr. BUCKNER. Oh, yes.
Senator HARRELD. You want to indict the whole druggist trade?
Mr. BUCKNER. Oh, no. Let us assume that the druggist does not put a drop of water or anything else into the whisky that he draws from the distillery, and then we will put the value at $500,000 for each agent. That will illustrate my point that a $2,000 man ought Dot to be asked to stop $500,000 worth of business a year.
Senator HARRELD. Your first statement was, then, based on the assumption that every druggist was guilty of diluting the amount of whisky that he got.
Mr. BUCKNER. Just to reach an average.
Senator HARRELD. Is it not true that it is only the exceptional druggist who dilutes his whisky; that only a few druggists do in fact dilute it?
Mr. BUCKNER. As to that I do not know.
Senator HARRELD. Are there not figures showing that you are basing your figures on a wrong assumption?
Mr. BUCKNER. No. Senator Harreld, for the purpose of making my point, I am willing to accept your amendment, and say that there has never been one single case of a druggist diluting rye whisky, and then it illustrates my point just as well.
Senator, HARRELD. All right, suppose you do that and tell us about it.
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Mr. BUCKNER. That would make $500,000 worth of business to be handled each year by a $2,000 man.
Senator HARRELD. That would only be 240,000 gallons, because that is only the excess.
Mr. BUCKNER. All right.
Senator HARRELD. It is only the excess above the legitimate amount.
Mr. BUCKNER. Well, it would then be 240,000 gallons instead of the 480,000 gallons that I gave you.
Senator HARRELD. That would be only how much to each of them?
Mr. BUCKNER. It would mean $500,000 worth of business a year to be stopped by a $2,000 man.
Senator HARRELD. That is somewhat different.
Senator REED of Missouri. For the enlightenment of myself and Senator Harreld I wish to ask you as a man experienced in handling criminals, do you think it likely that a gentleman who would violate the law by withdrawing twice as much whisky as he could pass out legitimately, and therefore passing out one-half that he did not need illegitimately, which would appear to be the case, that such a gentleman would hesitate to put a little water in the whisky to increase the amount?
Mr. BUCKNER. Well, Senator Reed, there is no chamber of commerce among bootleggers, and there is never any ethics in an outlaw trade. There are not those standards that we find in merchants' associations or something of that kind. I have heard repeatedly and I do not know, and to test it we would have to send out and get samples--- but I have heard repeatedly that practically all the liquor now sold in my district is cut. People keep telling me that.
Senator HARRELD. Is not the druggist that violates the law an exception?
Mr. BUCKNER. It may be, Senator Harreld. I do not know.
Senator HARRELD. What percentage of the druggists that you have been dealing with--- and how many did you say there are in your district?
Mr. BUCKNER. Twelve hundred.
Senator HARRELD. Twelve hundred druggists in your district that have permits?
Mr. BUCKNER. Yes.
Senator HARRELD. What percentage of those druggists are violators of the law?
Mr. BUCKNER. We are now investigating 250, and it would be too early for me to say without perhaps doing an injustice to the rest of them.
Senator HARRELD. You have no figures now upon which to base a statement as to what percentage of those druggists are probably dishonest in the handling of liquor?
Mr. BUCKNER. No; and I think I made clear that the observations which I refer to have only been in progress for 60 days, and I do not feel that I could properly answer your question.
Senator REED of Missouri. But in the short time you have been at work on this proposition you have had practically 25 per cent of the number of druggists under suspicion, and you have just started?
Mr. BUCKNER. Well, I will say that I am just investigating.
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Senator REED of Missouri. But you do not investigate unless you suspect.
Mr. BUCKNER. We do not.
Senator MEANS. You may go on with your testimony.
Senator HARRELD. But as a usual thing you only convict about one-third or one-fourth the number you suspect; is not that so?
Mr. BUCKNER. Oh, yes. And I do not think I want to commit myself on that proposition. I do not even know that it is fair to say that we do not investigate unless we suspect. I really think that was an unfair statement, and I wish to withdraw it. We investigate wherever we think an investigation should be made. That will apply to druggists or any other persons or trades or professions.
Senator HARRELD. I have been a prosecuting officer myself, and so have you. Do you usually convict one-fourth of those you suspect?
Mr. BUCKNER. Well, that depends upon the situation, as to how suspicious you had the right to be, for instance.
Senator REED of Missouri. So far as suspecting people is concerned, do not you think that you suspect half of the people are guilty?
Mr. BUCKNER. Well, we often suspect them.
Senator MEANS. Oh, well, Mr. Buckner, they are just going into the realm of conjecture now. Let us get some facts for the benefit of this committee.
Senator WALSH. Oh, yes; what we want are facts.
Mr. BUCKNER. I have so much that I can defend that I do not want to get into the soothsayer business.
Senator WALSH. Oh, yes; and very wisely so.
Senator MEANS Go right ahead with your testimony.
Mr. BUCKNER. So much for the druggists. Now, as to smuggling, the ship seizures brought into our office have very greatly decreased.
Senator REED of Missouri. What was that?
Mr. BUCKNER. The ship seizures that have been brought into our office have been very greatly decreased. I would say that for the first six months of my 13 months' term of office we have about 2 boats a week. We then for a while had about one boat a week. Now we do not have as many as one boat a week. Within the last four weeks we have picked up two boats, one made by the police department entirely, and those were simply tugs that came in from Rum Row--- and the other I believe was seized by the police and the customs officers in collaboration.
Both seizures were made on anonymous tips telephoned to me. The value of the liquor in each boat was probably $100,000.
I do not know whether there is much smuggling going on or not at this time. That is a Coast Guard proposition. I am just telling you about the matter so far as regards cases being brought into our office; they are very greatly decreased. And it is my opinion that there is very much less smuggling of liquor since the Coast Guard has been rendered more efficient than there was before. Of course it must be very much less.
Senator WALSH. Do you think the seizures and confiscations have made the business so unprofitable that it has been abandoned to some extent?
Mr. BUCKNER. Well, I do not know.
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Senator WALSH. Or whether they are still there but find it impossible by reason of the diligence of the Coast Guard to land.
Mr. BUCKNER. I Suspect so. Now, if I am going to give my personal opinion I will say that I would not be a bit surprised if the ease with which these millions upon millions of gallons of presumably Government-controlled alcohol have been secured without expense, and of course because of lack of conscience on the part of the bootlegger, who, generally speaking, is a ruthless fellow and will sell to his customers synthetic liquor, because we are continually finding labels and corks and all the apparatus for the deception of customers--- I say, I would not be surprised if perhaps not only has the Coast Guard grown some in efficiency, as certain major boats were added to it along last fall or summer some time, and the ease with which they can get liquor or alcohol and make fake liquor more cheaply and then sell it to their customers with foreign labels on the bottles may have been an assistance to the Coast Guard in stopping smuggling. Or, putting it in another way, I would not be surprised if the inefficiency of the general alcohol inspection, before General Andrews took it by the throat, which was only in September or October, has in a way cooperated with the Coast Guard to build up, according to the American system, the home product as against the imported article.
And lest I forget it, here is a mass---
Senator MEANS. There is the bell announcing a quorum call.
Senator REED of Missouri. Just let him finish that, if you please.
Senator WALSH. I should like to have him finish what he started there, if he may.
Senator MEANS. All right, just a moment more.
Mr. BUCKNER. I do not want to overemphasize this, but the fact is that bootleg alcohol is actually, to some extent at least, being exported from the United States into Canada. The customs inspector at Ogdenburg, N. Y., told one of my assistants that it was not at all an infrequent occurrence for him to stop an entire carload of industrial alcohol being bootlegged into Canada, because of the high Canadian tax, in order to compete with the liquor in Canada. In other words, dry United States, at least on some occasions, is exporting bootleg industrial alcohol into Canada to help the Canadian bootlegger beat the Canadian Government out of the tax. And all of that is a question of control at the source.
Senator MEANS. The subcommittee will now stand in recess until 7.30 o'clock this evening.
(Whereupon, at 12 o'clock and 2 minutes p.m., the committee recessed until 7.30 o'clock p. m.)
The subcommittee resumed at 7.32 o'clock p. m., at the expiration of the recess.
Present: Senators Means (chairman), Harreld, and Reed of Missouri.
Present also: Senators Edge and Edwards of New Jersey and Representative Vare of Pennsylvania.
Senator MEANS (chairman of the subcommittee). The committee will come to order. Mr. Codman, who will be your first witness?
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Mr. CODMAN. Mr. Chairman, before putting on a witness to night I want to find out, if I may, what arrangement the committee can make for to-morrow's hearing. And I ask for this reason, that I have here representatives of the American Federation of Labor, who, under the original schedule, were to testify before the committee on Thursday. They come from distant parts of the country, and represent a very large organization, as you gentlemen know. Mr. Roberts is here to speak especially for President Green of the American Federation of Labor, and the total time that their testimony will take will be about two hours. There are some eight representatives of the American Federation of Labor who wish to be heard. I am very anxious to put them on some time to morrow.
Of course I recognize the fact that to-morrow morning's session will be very fully occupied by the resumption of Mr. Buckner's testimony. I have also a very short matter to present, simply to put in some figures which will be commented on later by some gentlemen who have to leave to morrow, and I should like to put those figures on first, and then Mr. Buckner will go on again.
It all depends upon what this committee can do as to its sessions to morrow as to what I can tell the gentlemen representing the American Federation of Labor.
Senator MEANS. I know that you are entitled to have the information as soon as it may be given, but it is impossible for the chairman to tell now what the members of the committee will want to do about holding a session to-morrow afternoon. Whereas at any ordinary time of legislation I could probably make reply, yet under the present situation with members of the committee desiring to participate in the discussion now going on on the floor of the Senate, there is a change of plans. I can not possibly tell you at this moment whether we can meet to-morrow afternoon or not.
Mr. CODMAN. May I ask this: If we do not meet to-morrow afternoon, and I recognize perfectly the difficulties under which the chairman is working, can we be assured that we can have an evening session to-morrow?
Senator MEANS. The chairman of this subcommittee is as helpless on that subject at this moment as he was a moment ago about deciding on an afternoon session to-morrow. The chairman must do what the majority of the members of this subcommittee desire. They do not like evening sessions, and there were only three of the five members who would agree to attend a session to-night, so I doubt if they would agree to attend a session to-morrow night. The chairman would like very much to go on to morrow afternoon, and personally would like to have a session to-morrow night, but he can not tell you with any degree of certainty until it is discussed with the committee. At the present moment only Senator Harreld and myself are here, but I assume that Senator Reed of Missouri will be here in a short time.
Senator HARRELD. You want two hours to-morrow besides having a session from 10 in the morning until noon, do you?
Mr. CODMAN. I should like to have all the time I can get to-morrow. I should like to have an afternoon session if possible, and also an evening session.
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Senator MEANS. I Will See if we can give an answer to that after another member of the committee comes in at least, but can not tell you positively now.
Mr. CODMAN. Well, I felt that I must make my necessities clear. You appreciate that I have my difficulties too.
Senator MEANS. Oh, yes. I will try my best to induce the committee to take into consideration the difficulties that surround you. I am sorry that I can not answer for the other members of the committee, but I should like very much to hold afternoon and evening sessions if we can.
Mr. CODMAN. If there are in the room representatives of the American Federation of Labor you have heard what I have said to the committee, and have heard what the chairman of the committee has said. And I will say personally that I will give you information on the subject as soon as possible.
Senator HARRELD. Personally I will say that if we can not get a meeting to-morrow afternoon I will come back here to-morrow night for a meeting.
The CHAIRMAN. And I will do the same thing. Now, if we can find another member of the committee who will agree to that we can certainly have a session to-morrow evening.
Mr. CODMAN. I thank you very much. Congressman W. S. Vare would like to make a short statement to the committee first.
Senator MEANS (the chairman). The committee will be glad to hear Representative Vare.