Mr. SUMNERS. Aside from the objections which you have stated incident to the education of the new personnel, what other objections are there?

Doctor WHITAKER. I think that is objection enough.

Mr. SUMNERS. We have to pass on this law. That might be entirely satisfactory to you, but the committee would like to know if there are any others.

Doctor WHITAKER. I have the constitutional objection from a business and economical standpoint to having any unnecessary administrative control saddled upon me and my business which is reflected in the cost of my product.

Mr. SUMNERS. Those are pretty general statements.

Doctor WHITAKER. I will give you a specific one: We are required to-day to spend $1,000 a month, or $12,000 a year, for watchmen and guards and men with shotguns at one of our plants in Peoria, Ill., to keep crooks from stealing alcohol. That is a part of the cost of enforcing prohibition that is being put upon our business.

Mr. SUMNERS. I understand you are insisting upon a continuation of a condition about which you complain.

Doctor WHITAKER. I am insisting upon the enforcement of the Volstead Act the way you gentlemen passed it.

Mr. SUMNERS. Let us get right down to that.

Doctor WHITAKER. And not the picking out of social features and enforcement of those to the exclusion of these industrial alcohol sections.

Mr. SUMNERS. What you were reading and what you were saying were complaints with reference to the administration under the existing arrangement?

Doctor WHITAKER. No. I think I can make that clear in this way. I see your point now. I am citing those as instances of what happens and what has happened which hampers lawful industry, and why burden us with any more of that kind of stuff?

Mr. SUMNERS. Now, then, could you very clearly show to the committee that, aside from this question of having to educate new personnel, which we have already discussed, that the new arrangement would add materially to the difficulties existing now?

Doctor WHITAKER. We desire an amendment to the present proposed bill. You have proposed in this bill practically a two-headed institution in which the prohibition people are going to control industrial alcohol and thereby reach out and dabble in the management of all businesses using alcohol; and then we are going to have the tax collectors of the Internal Revenue Bureau in our plants helping to run some other features of the law. We want this administration of legitimate uses of alcohol centralized. We believe that in view of the fact that 90 per cent of the alcohol referred to here to-day is used by industries that is a fair proposition, yet this Cramton bill provides only for a prohibition commissioner, with prohibition policemen as subordinates; and I think the language of the measure justifies that

statement.

Mr. MONTAGUE. That is one of your suggested amendments, is it not?

Doctor WHITAKER. It is not my suggested amendment, but there is a provision in the suggested amendments there that covers that. Mr. CRAMTON. Might I ask a question, not in a controversial spirit?

The CHAIRMAN. As I understand, you cite these illustrations you have quoted as indicative of the difficulties which you have had to encounter in the past.

Doctor WHITAKER. Yes, sir.

The CHAIRMAN. But by a method of education, the expenditure of much money and time, the men in charge of the industrial alcohol to-day have been trained so that you are getting a better administration of it than you had at first?

Doctor WHITAKER. That is correct.

The CHAIRMAN. Now, then, you contend that if this is put over into another unit, the head of which is clothed first and primarily with the idea of law enforcement, that you are going to create a new set of difficulties and hamper business by the administration of this business in the country through the hands and heads of people who are not in sympathy with business, but who are more in sympathy with the administration of prohibition?

Doctor WHITAKER. That is correct.

Mr. SUMNERS. I would be obliged if the witness would indicate generally to what degree the difficulties have disappeared with the development of education on the part of the personnel.

Doctor WHITAKER. So far as denatured alcohol goes, they are very much improved I could not put it in percentage-but are yet a long way from perfect and are yet expensive burdens and are now and then gummed up by some new experiment which is perpetrated on the industry.

Mr. SUMNERS. But you could not indicate to the committee any more specifically than you have indicated just about to what degree and in what way these difficulties do disappear through education on the part of the personnel?

Doctor WHITAKER. A great many of these difficulties have been perpetrated by the attempt to force more and more unnecessary regulation into the manufacture and use of alcohol.

Mr. SUMNERS. That is exactly what I am trying to get at right.

now.

Doctor WHITAKER. I think I get what you refer to, and I will say that the industries when they met situations like that which they could not overcome, they appealed to the Commissioner of Internal Revenue and have invariably "sold" their proposition to him when they were right and have gotten relief through him by his overruling these unwarranted regulations. That appeal is the only remedy we have had.

Mr. SUMNERS. I just want to ask you one more question, whether or not these difficulties that you speak of really occur, in the majority, you think, out of lack of training on the part of the personnel or, according to your view, occur not so much from the addition of new men to the corps but from the application of new regulations to the industry. I am trying to get a clear statement on that.

Doctor WHITAKER. Your question was as to how these difficulties originate?

Mr. SUMNER. You have indicated difficulties here. I am trying to find out whether you can indicate to the committee what percentage, that is, what proportion of those difficulties that you have discussed, come about through the putting of new men into the service

or from the lack of training men in the service or come about from the application of the new rules and regulations applicable to the industry. Doctor WHITAKER. I say that 90 per cent of our difficulty is due to inexperienced prohibition officers, men unsympathetic and lacking the technical knowledge which is required to carry on this kind of work.

Mr. CRAMTON. Now, Mr. Chairman, if I might ask one question: Doctor Whitaker has made a very interesting and very pertinent statement, I think, and a very frank statement. My questions are not now asked in a controversial spirit, but one point I would like to ask an expression from Doctor Whitaker about might be of interest to the committee. Doctor Whitaker has emphasized that 90 per cent of his objections, if I may put it that way, to the pending bill are based upon the proposition that there has been educated under the Commissioner of Internal Revenue a force of men who are now experienced; he does not desire to have that work turned over to a new bunch of men.

Might I say, Doctor Whitaker, that the pending bill provides that there may be transferred to the control of the Commissioner of Prohibition such employees, etc., now under the control of the Treasury Department as may within 30 days after the passage of this act be designated by the Secretary of the Treasury; and I have so much sympathy with the gentleman's statement that I hope and would expect that whoever is Commissioner of Prohibition would under this provision transfer men of experience, in so far as their experience had proven them to be men of judgment, integrity, and capacity. Now, a proper administration of this proposed law by the Secretary of the Treasury would permit the transfer of all those men, except perhaps the Commissioner of Internal Revenue himself. Would that not largely and I just ask this to get the gentleman's opinionwould not that largely eliminate the danger concerning which the gentleman expresses apprehension?

Doctor WHITAKER. I certainly think it would not. You would be putting your trained soldiers in command of a landlubber who knows nothing about military tactics. [Laughter.] I would call to your attention page 3 of the bill where it provides for the selection of those who are to equip such a new bureau with men. In the first place, with the exception of a few immediate assistants and attorneys in departments, all others are to be selected under the civil service. Second, that preference is to be given to those who served in the military or naval service in the recent war, otherwise qualified; and then there is to be transferred from the existing prohibition bureau its present bunch provided they pass within six months of this act a civil service examination. I do not see that there would be much latitude in the selection of trained men under those provisions.

Mr. CRAMTON. Might I call attention to this, Mr. Chairman. The men who are doing this work now, if under the prohibition unit and not now having a civil-service status, would have, of course, to take an examination, but the very fact of their experience, if they join with that honesty, would seem to assure their being retained. If they are now--and I have not enough knowledge of the subject to knowunder the Commissioner of Internal Revenue and have a classified status, of course, they would be transferred without examination.

Mr. LARSON. Is not your objection this, that should these men operate under the prohibition director, they would come to your plant with detective mind, rather than a constructive mind, to assist you in regulating your business; is that the real reason?

Doctor WHITAKER. Yes, sir; that is one reason, and the type of men that we might be subjected to there would lay our research laboratories and our plant processes open to inspection by men who might represent our competitors either directly or indirectly, or men who are seeking patent information, or maybe men who are seeking information which they might sell to somebody else. That fact should not be overlooked. And to-day, notwithstanding the fact they have on the books and in the permits a statement to the effect that we must throw our plant open to anybody who comes along flashing a prohibition badge, we admit nobody to that plant except under the guidance and by the introduction of an internal revenue officer, whom we recognize to be our legal supervisor in the business. Two members from the Tubize Artificial Silk Co. of Hopewell, Va., expected to be here to-day. They wanted to be represented, because they are the second largest users of alcohol in this country. The Du Pont company is the third. The Tubize people are manufacturers of an artificial silk, which is an industry sprouted up in a war plant after the war, and it has grown to be a tremendous institution, employing some 6,000 people, and they are absolutely dependent upon alcohol for industrial purposes and they are dependent on an uninterrupted supply. When I say "uninterrupted supply," it means that when they need an extra tank car of alcohol or two extra tank cars of alcohol shipped on a certain day they must have it promptly and not one week, two weeks, or three weeks afterwards when some prohibition director locates its application for an increased supply which our own people have got him to dig up and act upon. Reference was made this morning again to some of the things that make alcohol cost money. One of the things that make it cost money is the trips we have to make to Washington to get these things untangled and get all those things ironed out. In regard to denatured alcohol, those conditions are becoming better, but we do not want to have to go through this thing again. It is costing us thousands and thousands of dollars. We maintain an office in Washington with three or four men all the time to do this kind of work, and it has only been in the past few months, and expecially in connection with denatured alcohol, which has always been under the jurisdiction of the Commissioner of Internal Revenue that we have had fairly uninterrupted operations.

When it comes to high-proof pure alcohol, which is just as much industrial alcohol, mind you, as denatured alcohol, and is just as little a potable alcohol as sulphuric acid is--when it comes to that alcohol, that is where we could tie up a good deal of money, because it is under the administration of the Prohibition Unit and its State directors.

It has always seemed to me, when you consider and recall the fact that 95 per cent of alcohol as such, is nothing in the world but a chemical-it is not a potable liquor it was made an intoxicating liquor by the definition of the Volstead Act-that the only way that such alcohol can be made into a potable liquor is to have something illegal done to it.

If

you are going to permit the people to take something that they can make potable liquor out of and you are going to permit them to do that uninterruptedly in spite of the law and try to choke this lawful alcohol off at its source, you will have to go down the line. Take molasses; it is just as fruitful a source of alcohol, with a little different know-how and some illegal operation; and your sugar bowl or honey bottle is just as good a source of alcohol as, again, 95 per cent alcohol-if you are going to let these people go the limit and do these illegal things, then there is no end to it. If you should stop the production of alcohol to-day, you would not stop these illegal acts, because they could simply hop from one thing to another through the whole gamut of sugars and starches until they got all the alcohol they wanted.

Thank you very much.

The CHAIRMAN. You wanted to correct something?

Doctor WHITAKER. When Mr. Montague asked me a question I meant so far as industrial alcohol was concerned. I did not get your idea when you spoke of that.

The CHAIRMAN. You spoke of a separate unit or these two units? Doctor WHITAKER. We want a separate industrial alcohol and chemical commissioner with the Commissioner of Internal Revenue at the helm.

The CHAIRMAN. A separate unit for the business end?

Doctor WHITAKER. Yes, sir.

Mr. CROUNSE. The next witness is Mr. Eugene C. Brokmeyer, who is general consel of the National Association of Retail Druggists.

STATEMENT OF MR. EUGENE C. BROKMEYER, GENERAL COUNSEL, NATIONAL ASSOCIATION OF RETAIL DRUGGISTS

Mr. BROKMEYER. Mr. Chairman and gentlemen of the committee, I think if you will permit and pardon a personal allusion, I may be able to furnish some information helpful to the committee, which some of the members have indicated they desired, by virtue of the fact that I represent not only the National Association of Retail Druggists, but also the National Barber Supply Dealers Association; and it so happens that the druggists, on the one hand, are mostly users of alcohol and other forms of liquor which is not denatured, while the barber-supply dealers are exclusively users of the special denatured alcohol. I take it that our experience since this law went into effect with the administration of the law would be the best guide for the members of this committee to determine the best course to pursue with respect to this Cramton bill.

I can truthfully say, and I would be unfair did I not say, that I had little or no trouble or difficulty with the chemical and industrial alcohol division of the prohibition unit, so far as barber supply dealers are concerned in the administration of the law, because although that division is nominally under the control of the Prohibition Commissioner, as a matter of fact the supreme authority is the Commissioner of Internal Revenue, and the policy of enforcing the law, of making the regulations, of construing and applying the regulations governing industrial alcohol by that chemical and industrial alcohol division, has been reasonable, has been fair, has been