Bureau of Prohibition

The Bureau of Prohibition (commonly called the Prohibition Bureau) was established to enforce National Prohibition (1920-1933). It replaced the Bureau of Internal Revenue of the Treasury Department, which had originally been designated by the National Prohibition Act of 1919 (usually called the Volstead Act) as the federal agency responsible for enforcing National Prohibition.

The Bureau of Internal Revenue, headed by a Commissioner of Prohibition, organized departments supervised by federal prohibition agents for the enforcement work and created state organizations under a federal prohibition director for the regulation and control of the legal (non-beverage) alcohol industry with a system of permits.

Corruption of Prohibition agents and other employees was widespread as were abuses committed against American citizens. A substantial number of Bureau employees were convicted of a variety of crimes. This led to much criticism of the Bureau.

As Assistant Secretary of the Treasury, it was Jouett Shouse's responsibility to supervise the new Bureau of Prohibition, the job of which it was to enforce national Prohibition. In that role, Shouse became convinced that National Prohibition was not only ineffective but counterproductive in the number and magnitude of problems it created. His disillusionment led him to become president of the Association Against the Prohibition Amendment.

One of the most famous Prohibition Bureau agents was Elliot Ness, whose The Untouchables became a best selling book in 1957, soon followed by a television series, a movie in 1987, and another television series in 1993. However, even among the elite handful of "untouchable" agents, at least one was corrupted.

Also well-known were Isador "Izzy" Einstein and his partner Moe Smith. Time magazine reported that Einstein was the most famous Prohibition agent and that he and Smith formed the most effective team of Prohibition agents. They disguised themselves as vegetable vendors, gravediggers, streetcar conductors, fishermen, icemen, opera singers, and Democratic National convention delegates, among many others. Their work led to 4,932 arrests and the confiscation of an estimated 5,000,000 bottles of illegal alcohol. Ironically, after a busy day arresting Prohibition offenders, Izzy and Moe enjoyed sitting back and enjoying their favorite beverages, which were beer and cocktails. Izzy and Moe's story was made into a television film, Izzy and Moe, in 1985.

The most infamous, but much more typical agent in the corruption-ridden Prohibition Bureau, was William H. Thompson. Better known as "Kinky" Thompson, he was well recognized as a "blackjack artist." In one instance, he used one on a man who had no reputation for violence. A jury hearing the resulting case denounced Thompson for his brutal beating of the defendant. The judge who presided at the trial later called Thompson's supervisor into his chamber and warned him about Thompson's behavior. However, the supervisor defended Thompson's actions, saying that "No bootlegger gets rough treatment unless he deserves it." Indeed, he told Thompson and his partner to be tough and "to beat the hell out of them and drag them out by the feet."

On one occasion, Kinky Thompson and his partner Agent Earl Corwin entered a pool hall.

"Vaulting the counter Kinky sapped the cook. When the waiter protested, Kinky bludgeoned him to the floor. Kinky then demanded to know the location of the joint's liquor cache. When the owner said there was no cache, Thompson broke a bottle over the owner's head, cutting him severely. Then Kinky and Corwin set to work with axes demolishing cash registers, coffee urns, light fixtures, pool tables, even the long wooden counter. When they finished the floor was littered with meat and flour, cigars and candy, and the remains of a crate of eggs. Only a ventilation fan and a clock on the wall continued to turn, and these the agents destroyed with cue balls thrown like grenades."

Prohibition Bureau Agent Corwin defended the violence, saying that "Anyone who has been hit by Thompson had it coming" and insisted that "There is no more violence in this office than in any church in the city." Two weeks later Thompson blackjacked a twelve year old boy, the boy's mother, and his one-legged father. However, the Prohibition Bureau administrator assured reporters that it was all just "bootlegger propaganda."

Thompson went on to pistol-whip a manacled prisoner in full view of a crowd of onlookers who were outraged at his behavior. However, his violent behavior was continually defended by the Bureau of Prohibition.

For many Prohibition Bureau agents it was a case of "do as I say, not as I do." Thompson often became highly intoxicated. While driving drunk one night he sideswiped another car, snapped off a telephone pole, and careened through a plate glass window into the middle of a store.

When he died, Thompson was eulogized as a martyr for the dry cause and his death was ironically blamed on societal disrespect for law and order. Prohibition Bureau officials later praised Thompson's "zeal" but never acknowledged that he had ever used excessive force.

Thompson's career illustrates one of the problems - unprofessional and violent enforcement - and its defense by the Bureau of Prohibition, that led to increasing opposition to National Prohibition.

In 1925, retired General Lincoln C. Andrews became Assistant Secretary of the Treasury and assumed federal responsibility for enforcing Prohibition. He reorganized the Prohibition Bureau enforcement system by using federal judicial districts rather than states as the basic geographic units and organized these into 24 prohibition districts.

During a Senate investigation in 1926, General Andrews testified that the major sources of illegal alcohol were smuggling, the diversion of medicinal and industrial alcohol, the diversion of industrial alcohol, (the biggest source of bootleg liquor), and moonshine or illegally produced alcohol. The investigation also revealed many very serious problems in the Bureau of Prohibition and its operation.

Subsequently, in 1927, Congress passed the Bureau of Prohibition Act. This legislation again re-organized the bureaucracy by creating within the Treasury Department the Bureau of Customs and the Bureau of Prohibition, each headed by a separate commissioner. The law also required that employees be hired or re-hired under the Civil Service laws. Fifty-nine percent of existing employees failed their examinations.

The Bureau of Prohibition pioneered in the use of wiretapping evidence. Former police officer Roy Olmstead was a major bootlegger until his conviction for violating the National Prohibition Act and for conspiracy based on wiretapping evidence, which he unsuccessfully appealed in Olmstead v. United States.

The budget of the Bureau of Prohibition in its various forms increased five-fold between 1920 and 1930, yet it continued to be plagued by corruption and incompetence.

Even with the infusion of new employees and a new organizational structure, the Bureau of Prohibition continued to fail and it was transferred to the Department of Justice in 1930. Early in 1933, the Bureau of Prohibition was re-named the Alcohol Beverage Unit and briefly transferred to the Federal Bureau of Investigation (FBI). However, it operated as an independent bureau there because the head of the FBI, J. Edgar Hoover, did not want his agents subject to corruption by the vast sums of money that organized crime could use to bribe officials.

In 1931, the Wikersham Committee found that two-thirds of the total federal law enforcement budget was directed at Prohibition. The Bureau of Prohibition worked in cooperation with the individual states, but even together, they couldn't adequately enforce Prohibition. Local and state law enforcement officers were also commonly corrupt.

Upon the repeal of National Prohibition in December of 1933, the Alcohol Beverage Unit was returned to the Treasury Department, where it became the Alcohol Tax Unit of the Internal Revenue Service (IRS). It then became the Bureau of Alcohol, Tobacco, Firearms (ATF). Following the terrorist attacks on the World Trade Center and the Pentagon, it was renamed the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and transferred to the Department of Justice under the Homeland Security Act.

Although Prohibition was a dismal failure that created serious problems, many people and organizations today support neo-Prohibition ideas and strongly defend the many vestiges of Prohibition that continue to exist.

 

Resources on the Bureau of Prohibition:

  • Bureau of Prohibition. The Value of Law Observance: A Factual Monograph. Washington, DC: Government Printing Office, 1930.
  • Bureau of Prohibition. Padlock Procedure: The Judicial Method of Closing Property Used to Violate the Prohibition Laws. Washington, DC: Government Printing Office, 1930.
  • Bureau of Prohibition. State Cooperation: Federal and State Responsibility under the Concurrent Power. Washington, DC: Government Printing Office, 1930.
  • Bureau of Prohibition. Public Cooperation in Prohibition Law Enforcement. Washington, DC: Government Printing Office, 1930.
  • Bureau of Prohibition. Possible Production of Illegal Liquor in the United States, Year Ending June 30, 1930. Washington, DC: Government Printing Office, 1930.
  • Bureau of Prohibition. Amounts Appropriated for the Use of the Bureau of Prohibition for Enforcement of the National Prohibition Act for the Fiscal Years 1920-1932. Washington, DC: Government Printing Office, 1932.
  • Bureau of Prohibition. Reading Eagle, December 21, 1923. (Reported proposed establishment of a bureau of prohibition in the Treasury Department.)
  • Bureau of Prohibition Alters Name, Not Work. New York Times, August 10, 1933.
  • Committee on Civil Service. Placing Employees of the Bureau of Prohibition under the Civil Service. April 9, 1928. Washington, DC: Government Printing Office, 1928.
  • Committee on Finance. Bureau of Customs and a Bureau of Prohibition in the Department of the Treasury: Hearings, Sixty-ninth Congress, Second Session. Washington, DC: Government Printing Office, 1927.
  • Committee on the Judiciary. To Provide for a Bureau of Prohibition in the Treasury Department: Hearings before the United States House Committee on the Judiciary, Sixty-eighth Congress, First Session, on Mar. 13, 21, 27, Apr. 2, 1924. Washington, DC: Government Printing Office, 1924.
  • Committee on the Judiciary. Bureau of Prohibition (Cramton Bill). Hearings, Sixty-eighth Congress, Second Session. Washington, DC: Government Printing Office, 1930.
  • DENIES DRY AGENTS GET JOBS BY 'PULL'; Campbell Says the Civil Service Commission Pays No Attention to Political Pressure. ONE OUT OF SIX QUALIFIES Out of 36,000 Applicants Only 6,000 Survived, He Tells Women's Forum--Many Had Jail Records. Lipton Trophy Fund Is $5,290. New York Times, October 18, 1930, p. 5. (Reports that many Bureau of Prohibition agents had criminal records.)
  • Einstein, Isidore ("Izzy"). Obituary. Time, February 28, 1938.
  • Felio v. United States. 55 F.2d 161 (8th Cir. 01/14/1932). (Attorney General authorized to confer or impose any of the rights, privileges, protection, powers and duties conferred or imposed upon him by this upon any of the officers or employees of the Bureau of Prohibition.)
  • Go-Bart Co. v. United States, 282 U.S. 344 (1931). (Bureau of Prohibition argued that books and papers it allegedly seized in violation of the Fourth and Fifth Amendments be admissible as evidence.)
  • Goldstein, Richard. Albert Wolff, last of Ness's men, dies at 95. New York Times, March 25, 1998, (Wolf reported that at least one of the handful of elite and supposedly untouchable Bureau of Prohibition agents was corrupted.)
  • Prohibition Unit, Bureau of Prohibition. Statistics Concerning Intoxicating Liquors. Washington, DC: Government Printing Office, 1924.
  • Schneckebier, Lawrence F. The Bureau of Prohibition: Its History, Activities, and Organization. Washington, DC: Brookings Institution, 1929. (Reprinted. NY: AMS Press, 1974.)
  • Smith, Moe. Obituary. Time, December 26, 1960.
  • U.S. Department of Justice. General Records of the Department of Justice (DOJ). http://www.archives.gov/research/guide-fed-records/groups/060.html?template=print (Bureau of Prohibition was abolished on March 2, 1934, by EO 6166, June 10, 1933, with investigative functions merged with those of Bureau of Investigation to form Division of Investigation, DOJ. Residual functions transferred to Bureau of Internal Revenue.)
  • U.S. dry bureau to shrink again within 12 days. Chicago Daily Tribune, July 30, 1933, p. 4. (Reports that the Bureau of Prohibition would cease to exist as an independent agency and become part of the Department of Justice.)
  • Williamson, William. Transfer of the Bureau of Prohibition to the Department of Justice. Report. Washington, DC: Government Printing Office, 1930.

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