January 17, 1920, was an important day in American history. Why? Because on that day the grand social experiment called Prohibition was first enforced. The Volstead Act, the law that put enforcement teeth into the Eighteenth Amendment, banning intoxicating beverages, went into effect. The transformation of the nation from an alcoholic republic to a dry state created a surprising list of winners and losers.
Let’s start with the obvious people who lost out: drinkers, especially working-class immigrants. Temperance advocates worried about immigrant men who gathered—and drank—in saloons. “Alien illiterates rule our cities today; the saloon is their palace,” proclaimed prominent Prohibitionist Frances Willard. Of course many temperance advocates had a double standard; a drink for themselves with dinner was good manners, but booze for others (especially working-class people) was dangerous.
The increasing number of immigrants, and their bars, was a source of race- and class-based fear for many white middle- and upper-class people born in the United States. By 1900, there were 300,000 saloons across the nation (one for every three hundred citizens), and they were heavily concentrated in urban areas. The neighborhood drinking establishment was where working-class men aired grievances, organized politically, and found jobs. The patrons, speaking their native languages (such as German, Croatian, and Italian, among others), worried Temperance advocates who feared the saloon customers were socialists or communists and perhaps fomenting political upheaval. To save America, the saloon must go.
While Prohibition may have killed saloon culture, it didn’t end the consumption of alcohol. Working-class men moved their drinking from saloons into their homes, private halls, “athletic clubs,” and illicit bars. Affluent Americans also continued to drink. Famed Chicago mob boss Al Capone was reported to have said “When I sell liquor, it is bootlegging. . . . When my patrons serve it on a silver tray on Lake Shore Drive, it is hospitality.”
One unexpected downside of Prohibition was its impact on the health of the nation. While alcohol consumption initially decreased after implementation of the Volstead Act, working-class consumers soon turned to alternative forms of alcohol, not all of which were safe. Patent medicine and over-the-counter goods with a high percentage of alcohol (even hair tonic) were consumed for off-label purposes.
Tainted alcohol was an even bigger problem—especially for poor people. Alcohol is an important industrial chemical, and large quantities are produced for use as solvents in paint, antifreeze, and other non-potable substances. Industrial alcohol is not taxed like drinking alcohol and is denatured (purposely adulterated) to make it unattractive for human consumption. During Prohibition, denatured ethyl alcohol and deadly methyl alcohol found their way into the U.S. beverage stream. Many people got sick and some died from unregulated and tainted alcohol.
Retailers and producers of alcohol also lost out during Prohibition. Closing saloons was not only a blow for men who frequented the drinking establishments, but meant a significant loss of business in immigrant communities. Of all licensed saloons, 80% were owned by first-generation Americans.
Some beer producers turned to legal nonalcoholic beverages, but with only limited success. Others made ice cream, cheese, ceramics, and even homebrewing supplies. Vintners and distillers had different options. Since the United States has a large religious population, the Volstead Act allowed for the production and shipment of sacramental wine. Sales went up with Prohibition, essentially making some priests and rabbis bootleggers. A 1925 report by the Department of Research and Education of the Federal Council of the Churches of Christ angrily reported that “there is no way of knowing what the legitimate consumption of fermented sacramental wine is, but it is clear that the legitimate demand does not increase 800,000 gallons in two years.”
Most distillers closed their operations during Prohibition, but another loophole in the Volstead Act allowed for the sale of medical whiskey. While medicinal whiskey had been sold by pharmacies for years, sales skyrocketed during Prohibition. Affluent customers could afford the three-dollar physician visit to get a prescription for legally purchasing their whiskey. In general, however, alcohol producers and retailers took a financial loss during Prohibition.
But, not all sellers of alcohol took a loss. The amount of money to be made in bootlegging was astronomical. Booze is big business. According to United States Attorney Emory Buckner, bootleg liquor sales in 1926 amounted to $3.6 billion. That was about the same as the U.S. federal budget at the time. Bootlegging was an opportunity for entrepreneurial criminals to become fast millionaires. But smuggling, transporting, and distributing large amounts of alcohol was complicated. Criminals organized national operations to manage and conduct their business. Where crime had once been local, the Volstead Act inadvertently promoted the development of organized crime. And competition between rival operations soon became violent.
Despite Prohibition, many Americans chose to flout the law and continue consuming alcohol at home or in illicit bars. Making matters worse, the poorly paid Prohibition officers hired to enforce the Volstead Act often found lucrative opportunities in criminal sales of alcohol. The resulting rise in government graft and corruption led to a lack of respect for authority that continued after Prohibition was repealed.
Who were the winners during Prohibition? One was quick meals. As saloons closed during the first decade of Prohibition, the number of restaurants in the country tripled, and eating patterns changed with the rise of quick meals. Luncheonettes, cafeterias, and soda fountains sprang up in largely urban neighborhoods catering to middle-class and lower-middle-class workers.
Women helped win the argument for Prohibition. White protestant women were the principle advocates for Prohibition. Groups like the Women’s Christian Temperance Union (WCTU) and the Anti-Saloon League made a moral argument, claiming that men squandered money on drunkenness, putting their wives and children at risk. Women’s and family rights were recognized and protected to a degree by Prohibition. More importantly, these activist groups not only won their argument when Prohibition became law, they developed skills and expectations that applied to another cause: woman suffrage. In general, the 1920s was an era of increased rights for women (although to different degrees).
The ultimate loser in the tale of Prohibition was the Eighteenth Amendment itself. Andrew Volstead, author of the Prohibition enforcement act, was defeated in 1922 in his bid for an 11th term in Congress. Widespread unemployment and the economic chaos of the Great Depression fueled political upheaval. The 1932 elections swept many “wets” (politicians opposed to Prohibition) into office. Widely considered unenforceable and a failure, the Volstead Act and the Eighteenth Amendment were repealed by passage and ratification of the Twenty-First Amendment in 1933. The effort for a government-led common good (Prohibition) was replaced by a public desire for a good time. Americans could legally drink again.
Peter Liebhold is a co-curator of the American Enterprise exhibition in the Mars Hall of American Business.