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The politics of beer: analysis of the congressional votes on the beer bill of 1933

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Abstract

Nine days after he took office in March 1933, Franklin Roosevelt asked Congress to amend existing federal Prohibition policy so as to allow for the sale and consumption of 3.2% alcohol beer. Over the following 8 days, the so-called “beer bill” was proposed, debated, passed and signed into law. This study analyzes the political decision making behind one of FDR’s earliest New Deal policies. Specifically, we consider how voter preferences, representatives’ ideologies, national party affiliations, and the influence of special interests affected legislative decision making. We find that special interests and party affiliations were particularly important drivers of congressional voting behavior.

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Notes

  1. Specifically, a section of the Democratic Party’s platform said, “we favor immediate modification of the Volstead Act; to legalize the manufacture and sale of beer and other beverages of such alcoholic content as is permissible under the Constitution and to provide therefrom a proper and needed revenue.” http://www.presidency.ucsb.edu/ws/?pid=29595.

  2. According to the 1935 Census of Manufactures, beer producers in the United States spent around $70 million on barley and barley malt, $11 million on hops, and around $19 million on all other inputs, such as rice, grits, sugar, corn syrup and yeast (Census of Manufactures 1935, “Malt Liquors,” Table 6, “Principal Materials Consumed, by Kind, Quantity, and Cost for the United States: 1935.”). Thus, barley represented around 70% of the total cost of raw material inputs into beer and hops around 11%.

  3. “Wheat Prices Sag as Trading Eases,” New York Times, April 26, 1933, p. 28.

  4. “Slow in San Francisco…. Hop Prices Rise.” New York Times, April 2, 1933, p. N13.

  5. Three-point-two percent alcohol by weight (ABW) is around 4% alcohol by volume (ABV). That was the ABV of a typical American lager beer prior to Prohibition. For a modern comparison, Coors Light and Bud Light are 4.2% ABV today.

  6. Congressional Record, 77th Congress, Record 310, March 14, 1933 p. 375.

  7. Congressional Record, 77th Congress, Record 310, March 14, 1933 p. 378.

  8. Congressional Record, 77th Congress, Record 310, March 14, 1933 p. 389.

  9. Congressional Record, 77th Congress, Record 310, March 14, 1933 p. 393.

  10. Congressional Record, 77th Congress, Record 310, March 14, 1933 p. 394.

  11. Congressional Record, 77th Congress, Record 310, March 14, 1933 p. 397.

  12. “Brewers at Chicago Lay in Barley Malt.” Wall Street Journal, March 31, 1933, p. 1.

  13. Congressional Record, 77th Congress, Record 310, March 14, 1933 p. 399.

  14. Congressional Record, 77th Congress, Record 310, March 14, 1933 p. 389.

  15. Congressional Record, 77th Congress, Record 310, March 14, 1933 p. 373.

  16. Congressional Record, 77th Congress, Record 310, March 14, 1933 p. 393.

  17. Congressional Record, 77th Congress, Record 310, March 14, 1933 p. 388.

  18. “Wine of 3.2% Added to House Beer Bill in Senate Report.” New York Times, March 16, 1933, p. 1.

  19. “3.2 Per Cent Beer Passed by Senate.” New York Times, March 21, 1933, p. 1. Incidentally, wine coolers, which became popular in the 1980 s, are indeed around 3.2% ABW, i.e., around 4% ABV.

  20. Congressional Record, 77th Congress, Record 503, March 16, 1933 p. 526.

  21. Congressional Record, 77th Congress, Record 503, March 16, 1933 p. 535-6.

  22. Congressional Record, 77th Congress, Record 503, March 16, 1933 p. 512.

  23. “Upholds 3.2 Per Cent Beer.” New York Times, March 17, 1933, p. 3.

  24. “Beer Bill Signing Delayed by Mix-Up.” New York Times, March 22, 1933, p. 1.

  25. “Mid-West Cheered by Banks and Beer.” New York Times, March 19, 1933, p. E6.

  26. “Beer for Revenue.” New York Times, March 14, 1933, p. 14.

  27. It should be noted that “sacramental wines” were allowable under national Prohibition. Incidentally, a wine bill, which would have allowed the production of wine up to 11% alcohol, was later proposed by Representative Lea of California. On June 8, the House Ways and Means Committee heard testimony regarding the bill. Representative Cullen of New York was intent on making sure that sugar could be added to the 11% wines since this was important for the many wines made in the Finger Lakes region of New York (“Dry Chief Backs Light Wine Bill,” New York Times, June 9, 1933 p. 15). On June 12, the Ways and Means Committee voted 11–9 to postpone consideration of the bill until the next congressional session. The bill was never taken up because Prohibition was repealed in December 1933.

  28. “House Passes 3.2 Beer Bill.” The Washington Post, March 15, 1933, p. 1.

  29. April 7 is currently known as “National Beer Day” in the United States in homage to beer’s legalization on that date in 1933.

  30. “Colorado Senate Passes Beer Bill.” New York Times, March 17, 1933, p. 5.

  31. “Indiana adds many rules to legalized beer.” Chicago Tribune, March 23, 1933, p. 2.

  32. United States Brewers Association Brewer’s Almanac, October 2, 1940, p. 78.

  33. Barley output data for each state are from the 1930 Census of Agriculture. Hops data are from Table 2 of “An Economic Study of the Hop Industry in Oregon,” Agricultural Experiment Station, Oregon State Agricultural College, Station Bulletin 288, June 1931.

  34. Barrels of beer produced in each state are from Cherrington (1915).

  35. State population data were from the 1910 and 1930 Census of Population.

  36. Importantly, a number of senators abstained from voting on both the March 16th bill and on the amended bill on March 20th. Therefore, those abstentions are excluded from the analysis. Specifically, there were 22 abstentions for the March 16th vote and 15 abstentions for the March 20th vote. Interestingly, there do not appear to be any clear patterns that emerge. Minnesota was the only state who’s entire delegation abstained from both votes, while the entire state delegations of Kentucky, South Carolina, and Wyoming abstained for the March 20th vote. An evaluation of the abstention patterns based on the median value of each of the main variables of interest indicates that only four of the abstentions occurring on the March 20th vote were from states with above the median number of brewing interests in 1932. Otherwise, there appears to be a fairly even split.

  37. These data are available at legacy.voteview.com/dwnomin.htm. A much more thorough discussion of these scores and the construction of the index is laid out in Poole and Rosenthal (2007).

  38. These data are from the Association of Religion Data Archives, http://thearda.com/Archive/ChState.asp.

  39. We employ the change in manufacturing between 1929 and 1931 rather than 1929 and 1933 (which is also a Census year) since the 1933 data would have been influenced by beer legalization. Data on number of wage earners (average for the year) and values of products were collected from the Statistical Abstract of the United States, 1935, Table 761, “Summary for all Manufacturing Industries Combined: By Geographic Divisions and States.”.

  40. While a somewhat more informative analysis could include county-level data, which is more readily available for some of the variables, including religious affiliation, data on the beer industry and agricultural production are available only at the state level. Furthermore, given the prevalence of heavily gerrymandered House districts from the 73rd Congress (see Martis 1982, p. 167 for a detailed breakdown), even the use of county-level data would still require a significant amount of subjectivity on the researcher’s part to decide how best to match counties to particular districts. For these reasons, we continue to employ state-level data in the analysis. However, we did consider one specification that evaluated each individual Representative’s vote as a dependent variable using a probit model with those variables that were available at the district level (party affiliation, DW-NOMINATE scores and a dummy variable for Southern states) as explanatory variables. The results conform to what we find using state-level data—members of the Democratic Party were more likely to vote “yes”, while personal conservatism and individuals from the South were more likely to vote “no”. All variables, except the first dimension DW-NOMINATE scores were statistically significant at conventional levels. These results are not reported in the interest of space, but are available upon request.

  41. Congressional Record, 77th Congress, Record 503, March 16, 1933 p. 531.

  42. Congressional Record, 77th Congress, Record 503, March 16, 1933 p. 534.

  43. We use the 12th day of the month as the cutoff so that, for example, if a state legalized on April 12 it received a zero, but if between April 13 and May 12, it received a one. We tried alternative cutoff dates such as the 15th and the 20th of the month, and the results are not qualitatively different throughout the study.

  44. We also consider these specifications excluding the DW-NOMINATE score, since this may not perfectly reflect state-level legislative preferences. Overall, the results are qualitatively the same, save for the coefficient on per capita barrels of beer produced, which shifts from being marginally significant to insignificant. Given the comparable results between the specifications, we do not report these in the interest of space. However, they are available upon request.

  45. We also considered negative binomial regressions for robustness. Overall, there are only marginal differences to report. Most importantly, each of the results for preexisting brewing interests maintain the same sign coefficients and are statistically significant. While these results have been excluded for the sake of space, they are available upon request.

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Authors and Affiliations

  1. LICOS Centre for Institutions and Economic Performance, Faculty of Economics and Business, Campus Brussels, KU Leuven, Warmoesberg 26, 1000, Brussels, Belgium

    Eline Poelmans

  2. Manuel H. Johnson Center for Political Economy, Troy University, Troy, AL, 36079, USA

    John A. Dove

  3. Department of Economics, Central Michigan University, Mount Pleasant, MI, 48858, USA

    Jason E. Taylor

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  1. Eline Poelmans
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  2. John A. Dove
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  3. Jason E. Taylor
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Correspondence to Jason E. Taylor.

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Poelmans, E., Dove, J.A. & Taylor, J.E. The politics of beer: analysis of the congressional votes on the beer bill of 1933. Public Choice 174, 81–106 (2018). https://doi.org/10.1007/s11127-017-0493-1

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