Prohibition’s Repeal

Neither Prohibition’s repeal nor the government’s liquor enforcement resolves the country’s illegal liquor problem. Repeal requires the government to re-establish the legal liquor industry. Registered distilleries that had operated prior to Prohibition are now dismantled or require extensive repairs. Stocks of ready-for-sale whiskey are small – less than 7 million gallons. However, organized criminals who have established enterprises during Prohibition not only have huge stocks of aged whiskey on hand, they also control the necessary resources to meet public demands. Law enforcement is critical, not only to stamp out illegal alcohol production, but also to enforce alcohol tax collection. The Bureau of Prohibition is reorganized into the Alcohol Tax Unit (ATU) and transferred back to the Treasury Department.

ATU - The New Enforcers

When Prohibition ends with the passage of the 21st Amendment, after three years under Department of Justice (1930 – 1933), the Federal Prohibition Bureau and its successor, the Alcoholic Beverage Unit, are abolished and their function, records and personnel transfer back to the U.S. Department of Treasury as the Alcohol Tax Unit.

The new ATU faces grave problems. Corrupt local authorities could not be reformed overnight, and the public’s acceptance of liquor rackets results in lackluster prosecutors, complacent juries and lenient judges. 

In spite of the ever increasing organized crime activities, the Alcohol Tax Unit seizes many illegal distilleries in the first few months after its creation. With revived support from the public, the hard work of the Unit slowly begins to pay off. As the Unit manages to shut down and dismantle large organized crime liquor syndicates and the attitude of prosecutors, juries and courts begin to change.