During Prohibition (1920–1933), whisky production and consumption in the USA faced severe restrictions due to laws like the 18th Amendment and the Volstead Act. Despite the ban, whisky endured through legal loopholes and underground operations. Here’s how:
- Medicinal Prescriptions: Doctors could legally prescribe whisky for therapeutic use, with over 11 million prescriptions issued annually. Licensed distilleries supplied this demand.
- Industrial Alcohol: Bootleggers repurposed industrial alcohol into drinkable whisky, despite government efforts to make it toxic. This led to widespread poisoning and fatalities.
- Religious Exemptions: Some exploited alcohol allowances for religious rituals, though this was more common with wine.
- Bootlegging and Smuggling: Organised crime networks thrived, smuggling whisky from Canada, the Caribbean, and Europe. Smuggling hubs like the Bahamas and St. Pierre saw whisky imports skyrocket.
- Speakeasies: Secret bars known as speakeasies became social hubs for illicit whisky consumption, often serving smuggled Scotch and Canadian whisky.
Prohibition reshaped the whisky industry. Domestic distillers struggled to recover post-Prohibition, while Scotch and Canadian whisky gained popularity. The era also influenced today's whisky market, from premium pricing to the rise of craft cocktails.
Key takeaway: Whisky's survival during Prohibition was driven by demand, legal workarounds, and underground trade, leaving a lasting impact on global whisky culture.
Legal Loopholes: How Whisky Found a Way
Despite the restrictions of Prohibition, whisky managed to endure, finding legal pathways through medicinal prescriptions, industrial use, and religious exemptions.
Medicinal Whisky and Pharmacy Sales
One of the most prominent ways whisky stayed legal during Prohibition was through its classification as a medicinal product. Under the Volstead Act, doctors who obtained permits from the U.S. Department of Treasury could prescribe whisky for therapeutic purposes. This allowed distilleries to continue production within the bounds of the law.
Doctors were permitted to prescribe up to one pint of whisky every 10 days, which came at a hefty price of £6 - a clear sign of its premium status. Patients needed a special prescription written on Form 1403, issued by authorised physicians, and these prescriptions were strictly non-refillable.
The scale of this loophole was staggering. Around 11 million alcohol prescriptions were issued annually during Prohibition. Some doctors took full advantage of this system, with one reportedly writing 475 prescriptions in a single day. Only six distilleries were officially licensed to produce medicinal whisky, but their output met the enormous demand. A 1921 survey by the American Medical Association revealed that 51% of 32,585 physicians believed whisky had therapeutic benefits. Medicinal whisky not only offered a legal option but also provided a safer alternative to the often toxic bootlegged spirits that flooded the market.
Industrial Alcohol and Dual Licensing
Another legal workaround involved industrial alcohol. While industrial alcohol was supposed to be denatured with chemicals to make it unfit for drinking, bootleggers discovered ways to reverse this process, converting it back into drinkable whisky.
By the mid-1920s, the scale of this operation was immense. The U.S. Treasury Department estimated that 60 million gallons of industrial alcohol were being diverted annually for illegal consumption. In 1925 alone, about one-third of the 150 million gallons of industrial alcohol produced was redirected to the black market. Bootleggers found that one gallon of industrial alcohol could yield up to three gallons of redistilled whisky, turning it into a highly lucrative enterprise. By 1930, bootlegging profits were estimated to have reached an astonishing £3 billion.
The government tried to curb this practice by adding increasingly toxic chemicals to industrial alcohol, but the consequences were devastating. Poisonings became widespread. In New York City alone, 1,200 people fell ill from poisonous alcohol in 1926, with 400 deaths. By 1927, the death toll in the city had climbed to 700. Nationwide, it is believed that the federal poisoning programme caused at least 10,000 deaths by the end of Prohibition in 1933.
"The government knows it is not stopping drinking by putting poison in alcohol... [Y]et it continues its poisoning processes, heedless of the fact that people determined to drink are daily absorbing that poison. Knowing this to be true, the United States government must be charged with the moral responsibility for the deaths that poisoned liquor causes, although it cannot be held legally responsible." – Charles Norris, New York City medical examiner
Religious Exemptions and Limited Use
Religious exemptions provided yet another avenue for legal alcohol consumption. The Volstead Act allowed alcohol to be used in religious rituals, though this was more commonly exploited for wine than whisky.
The loophole led to some creative abuses. From 1920 to 1921, certain Jewish congregations saw their membership skyrocket - from 80 families to 900 - as people sought access to alcohol through religious channels. A 1926 Senate committee investigation uncovered that hundreds of thousands of gallons of wine were being distributed by so-called "fictitious rabbis."
"There are Irish rabbis and rabbis of every description... Not only wine, but whiskey, and in some cases, champagne are released for religious uses." – Earl J. Davis, Senate committee's counsel
The American Jewish Committee acknowledged the misuse of these exemptions as early as 1922, noting that they were often exploited for illegal distribution. While new rules were introduced later that year to tighten access to sacramental wine, they did little to prevent fraudulent claims.
Through medicinal prescriptions, industrial alcohol conversions, and religious exemptions, whisky production survived the Prohibition era. These legal loopholes not only kept the industry alive but also set the stage for its resurgence once Prohibition ended.
Bootlegging and Smuggling Operations
When legal loopholes couldn't keep up with the massive demand for whisky during Prohibition, underground operations thrived. A vast, illicit economy sprang up to meet the thirst for alcohol, with bootlegging networks overseeing everything from production and smuggling to storage, transport, and sales.
The Rise of Bootlegging Networks
Organised crime groups seized the opportunity, carving out territorial monopolies and running their operations like well-oiled machines. By 1923, Philadelphia was home to an estimated 8,000 illegal bars, a number that surged to 13,000 by 1928, according to the city’s mayor. Chicago followed suit, with at least 4,000 bars openly selling alcohol by 1921.
These operations were anything but slapdash. Intelligence networks were created to monitor law enforcement and eliminate competition. As Scottish whisky expert Charles Maclean described:
"This organisation would control prices and quality, regulate credit, and vet customers, who would be required to take a proportion of standard brands, alongside cheaper ones... An intelligence network would be set up to ensure that interlopers were excluded as far as possible, and to check that whisky bought for other markets did not find its way to the bootleggers. Customers who breached the regulations would be deprived of supplies and credit."
- Charles Maclean, in "Scotch Whisky: A Liquid History"
Bootleggers also adapted their methods of transport. Cars were modified with hidden compartments, earning nicknames like "whisky sixes", to outrun police vehicles. Bribery, often referred to as the "Queen's Share", became routine, greasing the wheels of these illegal operations and enabling the development of sophisticated smuggling routes.
Smuggling Routes and International Supply
As bootlegging expanded, it quickly grew into an international enterprise. Coastal towns and border regions became bustling hubs of illegal trade. The Caribbean, in particular, became a key conduit for Scotch whisky entering the U.S. market. In the Bahamas, Scotch imports skyrocketed from 914 gallons in 1918 to 386,000 gallons by 1920 - a staggering increase of over 40,000%. Bermuda saw a 4,000% jump, while Canada and the West Indies experienced a 400% rise in 1922.
The French islands of St. Pierre and Miquelon played a pivotal role in these operations. Despite a population of just 6,000, they imported 119,000 gallons of Scotch in 1922. By 1929, that figure had exploded to 5,804,872 litres, valued at about £12 million at the time - nearly £170 million today.
Offshore, "Rum Rows" emerged as floating marketplaces, with up to 60 ships stationed off the New Jersey coast in the early 1920s, waiting to transfer their cargo to smaller boats heading for shore. On land, the Detroit-Windsor Funnel became a notorious passage for whisky flowing from Canada into the American Midwest. As one observer put it:
"Everybody knew who was doing it, but they never got caught. It was because the fellow who was the sheriff there knew he had to put up a show of looking for these guys, but he still had to live there."
- Merrit Carpenter
Even when authorities confiscated shipments - like the 93,960 bottles destroyed at Rouses Point, New York, in September 1924 - it barely dented the overall volume of smuggled whisky. The international network not only kept the supply flowing but also strengthened criminal organisations.
Organised Crime and Whisky
The whisky trade during Prohibition laid the groundwork for modern organised crime. Figures like Al Capone built empires, with Capone’s wealth reaching an estimated £20 million by 1927, largely from whisky sales. His syndicate controlled every aspect of the trade, from imports to retail distribution.
Scotch whisky, prized for its quality, gave criminals an edge. Unlike dangerous alternatives like industrial alcohol or homemade moonshine, Scotch became a preferred choice for consumers. Charles Maclean highlighted its enduring appeal:
"During Prohibition, the demand for Scotch was undiminished, and indeed increased... Unlike bourbon, which was stamped on, and so-called 'bathtub' gin, Scotch was renowned for its quality."
- Charles Maclean, Scottish whisky specialist and historian
Sam Bronfman’s Distillers Corporation Ltd. used St. Pierre as a major hub, storing whisky worth £1 million weekly on the island. The operation involved nearly the entire community, as Daniel Okrent vividly described:
"In any given week, Bronfman had a million dollars' worth of inventory stashed on the North Atlantic island of St. Pierre. Virtually every man, woman and horse on the island was engaged in unloading, storing, and reloading liquor destined for the United States; many houses were shingled with used packing crates."
- Daniel Okrent
Independent smugglers also made their names. William "Bill" McCoy, a former merchant sailor, became famous for running high-quality liquor from Nassau to the U.S. East Coast. His schooner, Arethusa, could carry 5,000 cases of whisky, and his insistence on quality earned him the nickname "the real McCoy." However, his career ended in 1923 when the Coast Guard seized his flagship schooner, Tomoka, off the New Jersey coast.
After Prohibition, these criminal networks didn’t simply disappear. Instead, they diversified into other illegal activities, including narcotics, gambling, and racketeering. The skills, connections, and wealth they gained during the whisky trade allowed them to thrive in new ventures, proving that the underground whisky economy was as efficient as any legitimate business of its time.
Public Demand and Social Changes
Even with the ban in place, whisky remained immensely popular during Prohibition. The underground drinking culture that flourished during this time not only transformed American social life but also fostered a rebellious spirit, turning drinking into an act of defiance.
Speakeasies and Illicit Consumption
Speakeasies played a crucial role in whisky's survival during Prohibition. These secret establishments became hotspots where Americans could discreetly enjoy their favourite spirits. By the late 1920s, New York City alone was estimated to have around 32,000 speakeasies, showcasing the massive scale of this underground movement.
These venues were incredibly diverse, ranging from upscale clubs with live music to unassuming backroom setups. The fierce competition between speakeasies encouraged creativity, particularly in entertainment and mixology. To mask the often harsh taste of poorly made spirits, bartenders crafted elaborate cocktails - many of which remain classics today.
Speakeasies also shifted social drinking norms, especially for women. Many of these establishments catered to female patrons by offering dining, dancing, and a sense of privacy. Historian Mary Murphy highlighted this shift:
"In all aspects of the liquor business, women moved into spaces that had once been reserved exclusively for men."
This marked a significant change from the previously male-dominated drinking culture. These underground venues not only celebrated the thrill of the forbidden but also cemented whisky's status as a symbol of rebellion.
Whisky's Outlaw Status
The outlaw nature of whisky during Prohibition added to its allure. Drinking became more than just a pastime - it was a statement against government restrictions. Many saw Prohibition as an infringement on personal freedoms, and whisky became a rallying point for this defiance. Chicago gangster Al Capone, who reportedly earned an estimated £60 million annually from bootlegging, captured this sentiment perfectly when he said:
"When I sell liquor, it is bootlegging. . . . When my patrons serve it on a silver tray on Lake Shore Drive, it is hospitality."
This quote underscores the irony of Prohibition: the same illicit product that symbolised rebellion also carried an air of sophistication.
Beyond its rebellious image, whisky brought people together. Speakeasies were more than just places to drink - they were social hubs where patrons bonded over their shared defiance of the law. This sense of community became a defining feature of the Prohibition-era whisky culture.
Challenges Faced by American Whisky Makers
While whisky's outlaw status and underground consumption kept its spirit alive, American distillers faced enormous challenges. The Prohibition laws forced many distilleries to shut down entirely. Those who attempted to operate illegally faced relentless risks, including raids, confiscation of goods, and imprisonment. As a result, the industry suffered significant losses - production facilities were abandoned, skilled workers left, and generations of expertise were lost.
Adding to their woes, the absence of American whisky on the legal market drove consumers to smuggled alternatives like Scotch and Canadian whisky. This shift not only eroded market share but also disrupted the traditional apprenticeship systems that had sustained the industry for years. The departure of master distillers further compounded the loss of knowledge and craftsmanship.
When Prohibition ended in 1933, American whisky makers faced the daunting task of rebuilding from the ground up. They had to reconstruct distilleries, retrain workers, and compete with the now-established presence of imported spirits. This recovery process took decades and forever changed the landscape of American whisky production, leaving behind one of Prohibition's most enduring legacies.
sbb-itb-128d6c1
Prohibition's Long-Term Effects on Whisky
The repeal of Prohibition in 1933 marked the start of a new chapter for the whisky industry, but the damage caused by the dry years lingered for decades. Its influence stretched beyond the United States, leaving a lasting imprint on the global whisky market.
Post-Prohibition Recovery
When President Franklin D. Roosevelt repealed Prohibition, he hoped Americans would avoid the "curse of excessive use of intoxicating liquors to the detriment of health, morals, and social integrity." Yet, rebuilding the whisky industry was anything but straightforward. Many distilleries had shut down, resulting in a loss of expertise as master distillers retired or moved on. The traditional apprenticeship system, which had been the backbone of the industry, collapsed during the dry years.
Meanwhile, Scotch whisky thrived in unexpected ways. Smuggling and medicinal exemptions introduced Americans to the unique flavours of Scotch, creating a lasting preference. During Prohibition, Scotch exports surged dramatically - by 400% to Canada and the West Indies, 4,000% in Bermuda, and an astonishing 40,000% in the Bahamas, largely due to bootlegging. Even decades after Prohibition ended, American drinkers continued to favour Scotch and Canadian whisky over domestic options. In fact, it wasn’t until 1973 that the United States returned to pre-Prohibition drinking levels, a clear sign of how deeply the era had reshaped cultural habits.
Before Prohibition, New York relied on liquor taxes for 75% of its revenue. During the dry years, the federal government lost an estimated £8.8 billion in tax revenue and spent over £240 million on enforcement efforts - resources that could have been used to help the industry recover more smoothly.
Effects on Whisky Regions
The challenges of the Prohibition era left distinct marks on whisky-producing regions. In Scotland, the town of Campbeltown experienced a dramatic rise and fall. The rush to meet the demand created by smuggling led to a decline in quality, tarnishing its once-sterling reputation. Campbeltown never regained its former status as a whisky powerhouse.
Irish whisky, heavily reliant on the American market, was hit particularly hard. When exports to the United States came to an abrupt halt in 1920, the Irish whisky industry suffered greatly. By the 1960s, only a handful of Irish distilleries were still in operation.
Scottish distillers, however, adapted to the situation. Alexander Walker of John Walker & Sons famously declared his commitment to exporting whisky to the United States despite the legal restrictions, showcasing the determination of Scottish producers to maintain their foothold in the American market.
Modern Whisky Market Connections
The ripple effects of Prohibition continue to shape the whisky market today. The era’s influence is evident in whisky's evolution into a luxury product. By 2023, the United States remains the largest importer of whisky globally - a reflection of the tastes cultivated during the bootlegging years.
Prohibition also played a role in whisky's premium image. During those years, quality spirits were scarce and often accessible only to the wealthy, creating a strong association between rarity and desirability. This perception laid the groundwork for today’s booming market in aged, limited-edition, and collectible whiskies.
Today’s whisky enthusiasts value craftsmanship and authenticity, a stark contrast to the low-quality spirits of the Prohibition era. Interestingly, the cocktail culture that emerged as a way to disguise the harsh flavours of bootlegged liquor has evolved into the modern craft cocktail movement, which celebrates creativity and high-quality ingredients.
Prohibition’s legacy is also evident in the regulatory frameworks that govern whisky distribution, pricing, and accessibility. At the same time, the rise of craft distilleries producing small-batch whiskies with intricate flavour profiles signals a return to the artisanal traditions that Prohibition nearly destroyed.
For those who appreciate whiskies that embody this rich history, The Really Good Whisky Company offers a thoughtfully curated selection of bottles, perfect for collectors and connoisseurs alike.
Conclusion: The Resilience of Whisky
The tale of whisky during Prohibition is a shining example of how an industry can adapt and persevere through immense adversity. What initially seemed like a death knell for the American whisky market became a story of survival, creativity, and the enduring allure of this timeless spirit. This period of struggle ultimately laid the groundwork for whisky's rise as a global symbol of craftsmanship and sophistication.
Whisky's survival during Prohibition was made possible by a combination of resourcefulness and unyielding demand. Legal ingenuity, such as the use of medicinal alcohol exemptions, allowed production to continue under strict regulations. At the same time, controlled bootlegging operations ensured the maintenance of quality and exclusivity, preserving whisky's appeal even in a restricted market.
Interestingly, these challenges also shifted global whisky trends. American consumers, unable to access domestic whisky freely, increasingly turned to imported Scotch. By 1938, the United States accounted for more than 60% of Scotch whisky's overseas exports - a trend that continues to shape the industry today.
Prohibition elevated whisky from a simple drink to a symbol of rebellion and refinement. The scarcity and premium pricing of quality spirits during this era created an association with luxury that remains intact. Phrases like "The Real McCoy", inspired by rum-runner William McCoy's dedication to quality, perfectly capture this era's focus on authenticity. This same spirit of craftsmanship continues to resonate with modern whisky enthusiasts, who appreciate the heritage and artistry behind each bottle.
Today, whether savouring the rich complexity of a well-aged Scotch or exploring the bold character of American whisky, every sip carries echoes of this resilient past. For those eager to experience this history firsthand, the premium selections from The Really Good Whisky Company offer a chance to taste the legacy of an industry that emerged stronger from its most trying times. Prohibition didn't just challenge the whisky world - it redefined it, leaving behind a legacy of quality and rebellion that endures in every dram.
FAQs
How did medicinal whisky prescriptions shape public attitudes towards whisky during Prohibition?
During the Prohibition era in the United States, whisky found an unusual loophole to remain in circulation: medicinal prescriptions. Doctors could legally prescribe whisky as a treatment for various ailments, transforming it from a mere alcoholic beverage into a recognised remedy. This clever reframing allowed whisky to sidestep the widespread criticism faced by alcohol at the time.
By linking whisky to health and medicine, its availability and acceptance persisted even when most other forms of alcohol were banned. This medical association not only safeguarded its presence during Prohibition but may also have played a role in cementing whisky’s lasting popularity and significance in American culture once the ban was lifted.
How did Prohibition impact the American whisky industry compared to Scotch and Canadian whisky?
Prohibition dealt a heavy blow to the American whisky industry, forcing many distilleries to shut down and pushing production underground. Legal sales were limited to medicinal purposes, but even this couldn't prevent the industry's decline. When Prohibition ended in 1933, American whisky faced an uphill battle, taking years to rebuild both its production levels and reputation.
Meanwhile, Scotch whisky flourished during this time, stepping in to fill the void left by American distilleries. Its popularity soared internationally, with exports to the United States seeing a sharp rise. Canadian whisky also found opportunity amidst the chaos, benefiting from cross-border smuggling. It not only kept production steady but also expanded its market influence. While American whisky faltered, Scotch and Canadian whiskies seized the moment, strengthening their global presence during this turbulent period.
How did bootlegging during Prohibition shape modern organised crime in the United States?
Bootlegging during Prohibition had a major impact on the development of organised crime in the United States. By meeting the demand for illegal alcohol, small gangs grew into large, structured crime organisations, building intricate networks to smuggle, distribute, and profit from banned goods.
These crime groups didn’t stop at alcohol. They developed hierarchical systems and operational strategies that outlived Prohibition, branching out into areas like drug trafficking, gambling, and extortion. This period not only strengthened organised crime domestically but also laid the groundwork for how such networks operate on a global scale today.
Leave a comment