Monday, Mar. 20, 1944

Holiday?

"It is odd," harrumphed 58-year-old Major General (retired) Frank Rudolph Schwengel, president of Joseph E. Seagram & Sons, Inc., "that the finely made beverage spirits produced by American distillers for the war effort should go into hair tonic, cosmetics and shoe polish, while substandard commercial alcohol from Cuba goes into the American stomach."

The General spoke with feeling. Last week, for the umpteenth time, the U.S. Government turned down a distilling-industry plan for a "holiday" from industrial alcohol production--and this time it was the General's own plan.

Major General Schwengel's plan, which had the industry's blessing, sounded dazzlingly simple, and fine for the U.S. stomach, which has lately been assaulted by more & more rotgut.* The plan: that U.S. distillers should buy 50,000,000 gallons of Cuban cane alcohol at 80-c- a gal. They would resell this to the Government at 50-c- a gal. in exchange for permission to withdraw 35,000,000 gal. of good U.S. grain alcohol at 90-c- a gal. and to turn it into good U.S. prewar-style potables. This was supposed 1) to add at least 10% to the nation's liquor supplies, 2) to give the Government a smart profit and, 3) to increase the U.S. alcohol supply without drawing on scarce U.S. grain. Besides, as one enthusiastic liquorman put it, it might "head off hoarding, strike at the heart of the black market, curb . . . gorillas and gangsters on the fringes of the industry."

Hope Dashed. There was only one flaw: war industry (synthetic rubber, explosives, etc.) is the big consumer of alcohol today, not hair tonic. And there is not enough alcohol. Smart sugarmen in Cuba and the rest of the Caribbean have converted all sugar possible into liquor instead of into the good alcohol base, blackstrap molasses. Reason: they get about $1 (800%) more a gal. Last month Foreign Economic Administrator Leo Crowley tried to force Cuban producers back into the molasses and industrial-alcohol business by limiting the amount of potable alcohol the U.S. would import in 1944 to 14,300,000 gal.--the already swollen 1943 level. At least in principle, FEA agreed to apply the same pressure to the rest of the Caribbean.

The Schwengel plan threatened to up set this. Forthwith FEA killed the plan. The U.S., said FEA coldly, was already set to get Cuba's entire sugar surplus, and that surplus would all be needed for strictly undrinkable war purposes.

Hope Revived. At week's end a ray of hope appeared again. Nevada's Pat McCarran, chairman of the Senate's liquor investigation, came out foursquare for a liquor holiday as the best way to stop hijacking (see p. 82). His committee colleague, Homer Ferguson of Michigan, concurred. But to U.S. tipplers, who have heard that kind of talk before, the holiday seemed just another mirage.

* Last week, after weeks of cogitation, OPA forbade liquor dealers to use the word "gin" for the new cane-base, shellac-scented cocktail base now pouring into the U.S. from the Caribbean. The official, denatured title from now on: "Distilled spirits made from cane products and favored with aromatics."

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