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Tuesday, January 14, 2020

Winners and Losers in the Prohibition Era

     In 1919, the 18th Amendment to the U. S. Constitution allowed for the Volstead Act that banned the manufacture, shipping, and selling of liquor. In 1933, the 21st Amendment repealed the 18th Amendment which allowed the repeal of the Volstead Act. Americans went back to lawful drinking.

     Besides people who liked to drink, the U. S. government, during the prohibition era, was the big loser. During that period, the federal government lost $11 billion in tax revenue from liquor sales. Moreover, the government spent $300 million in a futile effort to enforce the Volstead Act.

     Prohibition's big winner ended up being organized crime. During the liquor ban, the Mafia gained a giant foothold in every major city in the country. In Chicago, gangster Al Capone earned $60 million a year providing illegal booze to thirsty Americans. Eventually the IRS brought Capone down by taking him to court for tax evasion. Scarface served eleven years at Alcatraz before he died in 1947 from untreated syphilis. Before his federal conviction, Capone virtually ran the city of Chicago.

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