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2.S. Congress,

Senate. Committee on

fina

HEARINGS

BEFORE THE

COMMITTEE ON FINANCE

UNITED STATES SENATE

SEVENTY-FOURTH CONGRESS

FIRST SESSION

ON

H. R. 8870

AN ACT TO FURTHER PROTECT THE REVENUE DERIVED
FROM DISTILLED SPIRITS, WINE, AND MALT BEVERAGES,
TO REGULATE INTERSTATE AND FOREIGN COMMERCE
AND ENFORCE THE POSTAL LAWS WITH RESPECT
THERETO, TO ENFORCE THE TWENTY-FIRST AMEND-
MENT, AND FOR OTHER PURPOSES

5137

JULY 26, 27, AND 29, 1935

Printed for the use of the Committee on Finance

UNITED STATES
GOVERNMENT PRINTING OFFICE

WASHINGTON: 1935

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CONTENTS

Statement of:

Denning, William I., Washington, D. C., National Publishers' Asso-
ciation...

136

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Donnelly, M. J., Chicago, Ill., representing brewers shipping in
interstate commerce_

113

141

Jones, Howard T., Washington, D. C., counsel Distilled Spirits Insti-
tute, Inc.

Gross, Miss M. Louise, Harrison, N. Y., national chairman Women's
Moderation Union__

Hankerson, F. P., St. Louis, Mo., national legislative committee
tight-cooperage industry..

Hodges, Joseph C., Chicago, Ill., Advertising Metal Sign and Display

Manufacturers Association..

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66

FEDERAL ALCOHOL CONTROL ACT

FRIDAY, JULY 26, 1935

UNITED STATES SENATE,
COMMITTEE ON FINANCE,
Washington, D. C.

The committee met pursuant to call at 10 a. m., in the Finance Committee room, Senate Office Building, Senator Pat Harrison (chairman) presiding.

Present: Senators Harrison (chairman), George, Bailey, Clark, Byrd, Gerry, La Follette, and Capper.

The CHAIRMAN. Mr. Choate, will you come up here, please?

STATEMENT OF JOSEPH H. CHOATE, JR., WASHINGTON, D. C., CHAIRMAN AND DIRECTOR, FEDERAL ALCOHOL CONTROL ADMINISTRATION

The CHAIRMAN. We have before us this morning H. R. 8870, the Federal alcohol-control bill. Will you make a statement on this bill? Mr. CHOATE. In general, Mr. Chairman, I have very small criticism of the bill as passed. The greater part of it, it appears to me, is entirely satisfactory. It has, however, two major defects from my point of view, and my point of view now, I think, is that of the unprejudiced observer, because the future of this organization is a matter that does not concern me personally.

The second section of the bill makes the new Federal Alcohol Administration a division in the Treasury Department. It provides that the salaries of the staff, which are to be fixed by the single Administrator, must be approved by the Secretary of the Treasury, and in the next subsection (d) it provides that the rules and regulations which the Administrator is authorized and directed to make are subject to the approval of the Secretary of the Treasury.

I respectfully submit that these provisions are violations of one of the fundamental principles of good government, that power and responsibility shall be concomitant. The bill places upon the single Administrator an enormous task, gives him immense power, makes him the judge of the business life and death of 17,000 or 18,000 businesses, gives him power to make regulations which protect the entire public in the matter of labeling and advertising. He proceeds under the bill to study the problems involved in the making of his regulations. After that study he drafts and promulgates his regulations. Under the bill as it stands they have no force whatever until approved by the Secretary of the Treasury.

Now the Treasury has not now and never has had any concern with the main purposes of this bill, those purposes which are sometimes escribed, rather unhappily, as social control of alcohol.

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