CONTENTS Statements of- Page Beneman, George R., representing the United States Brewers' Associ- 93 Cannon, Hon. Clarence, a Representative in Congress from the State 154 Sears, Hon. William J., a Representative in Congress from the State 139 Winship, Maj. Gen. Blanton, Governor of Puerto Rico.... 61 III ADMINISTRATION OF LIQUOR TAXING LAWS MONDAY, MAY 13, 1935 HOUSE OF REPRESENTATIVES, Washington, D. C. The committee met at 10 a. m., Hon. Robert L. Doughton (chairman) presiding. The CHAIRMAN. The committee will be in order. There were three bills from the Treasury Department that were referred to this committee, all dealing with the subject of insuring better collection of the revenues on intoxicating liquors, and so forth. These bills were numbered H. R. 7497, H. R. 7498, and H. R. 7500. At a meeting the other day, the committee decided that if possible these bills should be consolidated into one bill. The chairman, with the consent of the committee, requested the legislative drafting service to draft a new bill consolidating the three bills to which I have just referred. That bill is here this morning, H. R. 8001, and the meeting this morning is for the purpose of conducting hearings on that bill, which is a bill "To insure the collection of the revenue on intoxicating liquor, to provide for the more efficient and economical administration and enforcement of the laws relating to the taxation of intoxicating liquor, and for other purposes." Mr. Hester is here representing the Treasury Department, and we should be glad to hear him at this time. STATEMENTS OF C. M. HESTER, OFFICE OF THE GENERAL COUNSEL, TREASURY DEPARTMENT; DR. 0. V. EMERY, ALCOHOL TAX UNIT; 0. N. FORREST, ATTORNEY, ALCOHOL TAX UNIT; AND B. M. BRODSKY, ATTORNEY, TREASURY DEPARTMENT Mr. HESTER. Mr. Chairman, we have prepared a detailed analysis of the various sections of this new bill, H. R. 8001. We might be able to conserve the time of the committee by simply offering our detailed analysis, to be incorporated in the record, and then the committee could hear from various other interested parties. The CHAIRMAN. Suppose we incorporate your detailed analysis at this point in the hearing, and the explanation that you have furnished the committee, and then have you proceed briefly to explain the purpose of the bill, so that any members of the committee who may desire to propound questions on the bill may do so. Mr. TREADWAY. As I understand it, these three bills were consolidated. Mr. HESTER. Yes. 1 Mr. TREADWAY. There was no change of purpose? Mr. HESTER. That is correct. Mr. TREADWAY. You simply put them all under one head, so to speak? Mr. HESTER. That is right. Mr. Chairman, in view of the fact that the bill is rather long, it would be rather difficult to decide just where to begin if this were merely incorporated in the record. I could probably read this statement in 30 minutes, and during the course of the reading if any members of the committee wish to ask any questions, we have with us Dr. Emery, who is one of the most experienced men in the country on this work, who is with the Alcohol Tax Unit, and who is fully prepared to answer any questions propounded by the committee. The CHAIRMAN. If this statement is going to be read, would it not be well to have it read without interruption and then ask questions later? Mr. HESTER. That would expedite the matter; yes. Mr. FULLER. You are going to take up H. R. 8001 title by title? Mr. HESTER. That is correct. The CHAIRMAN. Without objection, Mr. Hester will proceed to read the statement he has referred to, without interruption, and after he has finished members of the committee may ask him such questions as occur to them, and they will be answered either by Mr. Hester or someone here from the Treasury Department. Mr. HESTER. Section 1 of H. R. 8001 defines intoxicating liquors. Now, we understand that there is some objections to defining intoxicating liquors in this bill. We have given the matter consideration, and although retention of the definition would beneficial we have no objection, if the committee decides to eliminate section 1 insofar as it defines intoxicating liquors as any liquors containing one-half of 1 percent or more of alcohol by volume. Section 2 of H. R. 8001 provides for the seizure and forfeiture of containers of intoxicating liquors, together with the contents thereof, which do not have on them the stamps, brands, or marks required by law, or have on them false, fraudulent, or fictitious stamps, labels, or marks, or which are not accompanied by proper shipping papers or other required documents. Section 3 of H. R. 8001 provides for the punishment of those who violate laws in regard to intoxicating liquors and have in their possession at the time of such violation smokes-screen devices or dangerous weapons or explosives. The section further provides for penalty of from 5 to 20 years' imprisonment for those who, while violating the laws in respect to intoxicating liquors, have in their possession or under their control machine guns or sawed-off rifles or shotguns in violation of provisions of the national firearms act. The section also provides for the seizure, forfeiture, and disposition of all weapons and smoke-screen devices in the manner provided by section 7 (b) of the national firearms act. Section 4 clarifies section 1 of the act of May 18, 1934, which provides a punishment for the killing of Federal officers while engaged in the performance of their duties. Section 5 of H. R. 8001 provides that in any affidavit, information, indictment, or libel under any law of the United States in regard to the manufacture, taxation, and transportation of, or traffic in, intoxicating liquor, it shall not be necessary to negative any ground of exception to the operation of the law on which the proceeding is founded. Mr. McCORMACK. I do not like to interrupt the reading of your statement, but a thought enters my mind, and that is that it would be very nice if the gentleman would give the distinction between the present law and the proposed changes, in chronological order. That is simply a suggestion. Are you prepared to make them? Mr. HESTER. Yes. We can do so as we proceed, if that is agreeable. Mr. McCORMACK. Anything is agreeable, except that your record would look better if you told us what the present law is and what the proposed changes are. Mr. HESTER. If you want us to go into that now Mr. McCORMACK. That is up to you. Mr. HESTER. Dr. Emery can answer that question. The CHAIRMAN. Will you state the capacity in which you appear, Doctor? Dr. EMERY. I am an attorney. The CHAIRMAN. What is your official title? Dr. EMERY. Attorney in the Alcohol Tax Unit, Internal Revenue, Treasury Department. Section 5 is a statement that in making charges in an action arising in either criminal or civil cases, we do not have to set up matters of defense. In other words, if there are defensive matters or negative averments, you do not have to set them up in your indictment, or in your pleadings if it is a civil action. That is a matter of the defense, and the defense should introduce such evidence. That was contained in the old National Prohibition Act and was Mr. HESTER. Is that satisfactory, Mr. McCormack? Mr. HESTER. Section 6 of H. R. 8001 gives to the court having jurisdiction over property seized by officers of the Government the right to refuse to release such property on bond, when good cause for such refusal is shown by the Government. This provision is highly desirable, inasmuch as under present law, in certain instances, the property must be returned to the alleged violator upon the offer of a bond. Section 7 contains definitions of the words "vehicle", "vessel", and "machine gun." The purpose of section 8 Mr. TREADWAY (interposing). May I interrupt, Mr. Chairman? We had some legislation last year with reference to selling machine guns, licensing dealers in those articles, and so forth. Mr. HESTER. That is the National Firearms Act. Now, the same Mr. TREADWAY. That was the National Firearms Act; yes. is this definition on page 5, this definition of machine guns, as in that law, or are you setting up a new definition? Mr. HESTER. We took it verbatim. Mr. TREADWAY. Thank you. |