PAVC Takes an In-Depth Look at the Founding of the PA Liquor Control Board (PLCB)
Perusing the Pennsylvania Liquor Control Board Wikipedia page recently — as the dedicated wine history lover and commonwealth citizen is wont to do — I noticed a quote I’d surely seen before, but for whatever reason gave me pause that day. According to this source, Gifford Pinchot — the PA governor responsible for establishing the agency in 1933 — once stated that he created the PLCB to “discourage the purchase of alcoholic beverages by making it as inconvenient and expensive as possible.” [1]
Though this sentiment does seem to help explain the buying experience my fellow PA residents have grown accustomed to over the years, quotes on the internet are notoriously — and sometimes hilariously — unreliable. Certainly, if prior research has taught me anything, it’s that there are many myths, legends and downright lies in the historical record. In addition, this statement, if true, would illustrate an awfully cynical view of the new government agency Pinchot was in the midst of creating. I decided to dig deeper.
My research — not surprisingly — led me back to the question that any Pennsylvanian who’s enjoyed the occasional alcoholic beverage has surely wondered at one time or another: WHY? Why is our system for liquor sales so convoluted? Why can’t it be more like nearby states, where beer and wine can be purchased pretty much anywhere, without so many restrictions? These are obvious questions, with less than obvious answers.
Certainly in this century, many hours of debate on privatization have graced Harrisburg’s halls, and journalists and pundits have dedicated much conversation to the topic. Even if the answer seems easy, it isn’t; there is just so much red tape, employment and money tied up in this nearly 100-year old system. Changing it is complicated.
Putting aside the debates of the 2020s, one also has to wonder how the heck our forefathers — especially Pinchot — came up with this system in the first place. Did they mean well, or were they corrupt buffoons? What, in other words, were they thinking?
A Misquote on the Internet? No!
As noted above, Pinchot is often quoted as stating that the PLCB’s original purpose was to make buying alcohol “as inconvenient and expensive as possible.” It turns out, however, that skepticism about this particular quote is warranted. As much as current PA residents might use this sentiment to rationalize what they see as a backwards system, Pinchot never actually said anything like this.
Searching for the phrase brings up hundreds of modern articles that include the quote, most of which do not provide a reference. The PLCB Wikipedia page (as of October 1, 2021), however, does: Yuengling: A History of America’s Oldest Brewery, a book by Mark A. Noon, which features said text on page 131. Here’s the broader statement:
Over the years since its inception, critics of Pennsylvania’s liquor laws argue that the present system reflects Pinchot’s desire to “discourage the purchase of alcoholic beverages by making it as inconvenient and expensive as possible.” [2]
Although this passage could probably be more precise, following through to Noon’s references shows that the person being quoted is the critic of Pennsylvania’s liquor laws, not Pinchot himself. (Noon confirmed this.) It turns out, in fact, that the quote comes from an anti-PLCB editorial from the Philadelphia Inquirer in 1983 that marked the 50th anniversary of repeal. George Wilson, of the paper’s editorial board, wrote:
In late 1933, after national Prohibition had been abolished by repeal of the 18th Amendment, Pinchot called the legislature into special session to establish rigid controls designed to discourage the purchase of alcoholic beverages by making it as inconvenient and as expensive as possible. That was the genesis of the Liquor Control Board and the State Stores. [3]
Again it could be clearer what the author is asserting versus what Pinchot actually said or did, but this nonetheless shows that the inconvenient / expensive phrasing is the invention of an outspoken PLCB critic, not its architect.
Ironically enough, the quote reappeared in the very same publication in 2010 - this time clearly attributed to Pinchot.
Less than a month later (March 8, 2010), the quote was added to the aforementioned PLCB Wikipedia page, and since then it has appeared in hundreds of newspaper articles, blog posts and other pieces of content.
Beyond showcasing some lazy journalism, this illustrates a broader point: Pennsylvanians hate the system so much that it doesn’t require much to believe such a statement could be true. Especially when factoring in our general distrust in government these days, it’s easy to believe that there were cynical motives at play in the creation of something disliked by most. Yet, the propagation of this inaccurate quote obfuscates a more important fact : that the 1930s architects of this system created it not with cynicism, but with belief that it was the right idea for Pennsylvania.
Will the Real Gifford Please Stand Up?
Aside from this misattribution, reviewing what Pinchot did say or do during the leadup to the PLCB’s establishment provides insight into the organization’s initial purpose, and draws interesting parallels to the debates around its existence that rage on today.
Before diving into that, however, it is worth examining Pinchot’s broader character. Actually best known as a conservationist, before becoming PA governor he was twice the head of the US Forestry Service. Generally believed by both his friends and enemies to be upstanding and honest, perhaps Pinchot’s biggest flaw was his insistence on enforcing his own morality on his constituents. As one example unrelated to liquor, the Governor — who despised gambling as well — called the suggestion of a state lottery to raise desperately needed depression-era funds “the most absurd suggestion that has been brought to my attention in many a moon.” [4]
“Gifford is a dear,” his friend Teddy Roosevelt once said of him, “but he is a fanatic.” [5] Another friend, Charles Snyder — former republican State Senator, Auditor General and Treasurer — commented that “every Sunday the governor tries to make some change in the universe where the Lord hasn’t done it right.” [6]
(And these were his friends.)
Pinchot had particularly strong feelings about saloons, which he considered the root of political corruption in the country. He believed — probably at least somewhat correctly during the time leading up to prohibition — that these watering holes created environments ripe for bribes, vote buying and other forms of collusion with gangsters and other disreputable sorts.
As such, he was indeed a dry through and through, never touching liquor, unlike many other politicians who talked dry, then went to speakeasies to unwind. In 1933, a State Senator mentioned, during a floor debate, that Pinchot’s wife had been drinking at a recent party. An irate Pinchot stormed into the chamber the following day, seeking an apology. “I cannot properly horsewhip a senator, however much I desire to, and however much the senator may deserve it,” he said. After demanding that the Senate “require the slanderer to produce his proof or make public reparation,” the Senator apologized. [7]
So much did he believe in the dry cause, Pinchot was not swayed by the increase of organized crime and bootlegging during Prohibition, commenting on the eve of repeal that “Prohibition at its worst has been infinitely better than booze at its best.” Despite that, he begrudgingly understood that public sentiment had swung sharply towards repeal, and thus worked towards a compromise between what he called “the sincere wets and the sincere drys.” [8]
“I have accepted the decision of the majority,” he wrote in 1933. “This decision against my own view does not lead me to believe that the great majority of the people of the United States are for repeal because they want to guzzle whisky and wallow in the gutter. We are not a nation of drunkards.” [9]
Pinchot’s main goal coming out of Prohibition, in fact, appeared to be ending bootlegging and the crime & corruption that went with it. Though he would have certainly preferred to continue the so-called noble experiment, he realized that making it easier for the general public to acquire wine and spirits through his state stores than through the flourishing criminal underground was crucial to that goal.
In the January 1934 issue of The Rotarian (the official publication of Rotary International), as part of a wide-ranging discussion on liquor control, Pinchot himself wrote an editorial outlining his plan for the state’s legislation, in which he shared the five “cardinal” points on which his plan was based. Below, these will be examined in depth.
- The saloon must not be allowed to come back
- Liquor must be kept entirely out of politics
- Judges must not be forced into liquor-politics
- Liquor must not be sold without restraint
- Bootlegging must be made unprofitable [10]
The Saloon Issue
As mentioned previously, the governor made it abundantly clear that a key tenet of his PLCB plan was to “prohibit forever the open saloon.” [11] This would be accomplished mainly by preventing the sale of any liquor over a bar, with the exception of private clubs, a matter that deeply troubled Pinchot. Speaking of the last-minute concession that allowed the latter to occur, he called it “the worst provision in this bill.” [12]
It was also made illegal to display or mix drinks in public dining rooms. [13] Furthermore, hotels wishing to secure liquor licenses were required to have a “good reputation,” [14] to offer sleeping accommodations (at least 10 in cities and 6 elsewhere) and to furnish meals in a public dining room (accommodating at least 40 people). For restaurants to qualify, they needed to offer at least 500 square feet of space and tables and chairs for at least 50, and at least three people regularly employed in the creation of meals.
Ironically, Pinchot’s “forever” turned out to be around two years, thus making this the least impactful aspect of his plan. Shortly after being sworn in 1935, gubernatorial successor George Earle nullified the anti-saloon aspect of Pinchot’s legislation, forever (so far). Before we hail Earle as some kind of consumer savior, however, it’s worth noting that the same bill that brought back the bar also introduced — among other things — the requirement for PA beer distributors to sell in quantities of no less than a full case, [15] an absurd law that was changed only recently.
Government Liquor… without Politics?
Pinchot’s second and third points — both about keeping liquor out of politics — are particularly ironic today, considering how the privatization issue has polarized the state’s lawmakers in modern times. The governor, it seems, felt this was perhaps simpler than it actually was, believing that organizing the PLCB as a civil service organization would generally do the trick. “The personnel of the stores will be selected through competitive examinations held by the Department of Public Instruction,” he wrote, as dryly as these tests surely were. “Papers of applicants will bear no identification, and the successful candidates will be ranked strictly according to grade. Appointments will be made in order of their standing.” [16]
In addition to bringing objectivity to state store staffing, Pinchot sought to avoid a climate where “the profits of private dealing in liquor [would] pay the cost of political machines or political campaigns,” and where “any group of people [would] grow rich and powerful from the profits of the traffic in strong drink.” [17]
In terms of judges specifically (his 3rd point), there was some early discussion during the liquor control negotiations of courts handling liquor licenses as well as the locations of state stores. Pinchot favored instead giving this power to the board, again feeling the former would bring too much political maneuvering into liquor. He also vetoed a bill earlier in 1933 that would have allowed judges to issue beer licenses. [18]
In the very same issue of The Rotarian, Frank J. Loesch — a noted crusader against organized crime and member of the National Commission on Law Observance and Enforcement (aka the Wickersham Commission), which, in 1929, undertook “the first comprehensive national study of crime, the American criminal justice system, and law enforcement in the United States” [19] — wrote his own editorial, favoring a licensed retailer plan, which succinctly rebutted several of Pinchot’s ideals:
After hearing many witnesses and considerable debate on the subject, the members of the [commission] unanimously opposed either the federal or state governments as such going into the liquor business…The objections to it are that no matter how well guarded on paper such a monopoly may be, its tendency is to work out into control for corrupt political ends…
The [PLCB], for example, is bound to be a body composed of politicians who will look to party advantage and are likely to use that in the matter of locating state stores for the sale of liquors and political corruption is likely to ensue…
The state is a political organization and is not created for the purpose of running a business. It can neither have the personnel nor the ambition of men, nor the incentive on the part of employees, to make a success of a business venture. [20]
During the early stages of PLCB planning, a dispute also arose between two factions of the Republican party. Though both favored some state involvement in liquor, PA GOP Chair Edward Martin led a group pushing for the privatization of licensed stores. “Friends of the Pinchot plan,” wrote The AP on November 3rd, “assert it would keep politics and the liquor traffic apart; friends of the [private] system assert the return of liquor will afford more employment if private dealers are licensed. They insist the manning of the stores by state employees would drag politics into the traffic.” [21] This debate would drag on throughout most of the month, and while a Pinchot-leaning compromise was eventually reached, one can’t help but wonder if the parties involved could have anticipated this very issue resurfacing during so many future Novembers.
Unsurprisingly, Democratic leaders were vehemently opposed to Pinchot’s plan. “Not only does the [plan] put liquor into politics, but there is grave danger that it may put politics into liquor,” said John B. Kelly, chairman of the Independent Democratic Committee. “Opportunity that the liquor monopoly might give,” Kelly continued, “to a politically-ambitious administration to build up and finance a political machine staggers the imagination.” [22]
Democratic House floor leader Wilson Sarig proclaimed Pinchot “the whiskey king of Pennsylvania.” upon passage of the latter’s legislation. “This first lieutenant of Wheelerism [after Wayne Wheeler, noted leader of the Anti-Saloon League] and political terrorism,” Sarig continued, “has made liquor a political issue. This bill means a second era of prohibition for Pennsylvania [and] a repudiation of the will of the people expressed at the November election in voting repeal.” [23]
The first official charge of political corruption emerged even before the PLCB was officially established. According to news reports at the time, “parties who say they can control things” under the Governor’s plan asked a PA distiller for “payment of certain amounts.” Pinchot — who had by this point successfully converted Martin and the rest of the state GOP to his state store plan — remained undaunted; while he did request an “immediate and thorough inquiry,” he also asked that this not get in the way of his impending legislation. [24]
Just a few years later, newly appointed Governor Earle alleged the existence of “secret contracts” that directly resulted in higher liquor prices in PA, among other issues with the nascent PLCB that would need to be addressed with new legislation. [25] Going forward, then, there could be no pretense that politics and liquor were not uniquely linked in the commonwealth.
Looking back, it’s quite perplexing how a man like Pinchot — whose unwavering insistence that politics and liquor remain separate certainly seemed genuine — could conclude that the best way to accomplish this was to have the government control liquor. And while there were certainly plenty at the time who pointed out the obvious flaw in this logic, by all accounts he honestly believed that his approach was the right one.
Driving Revenue without Salesmanship
Pinchot’s final two points seem to be most contradictory. One one hand, he was adamant that any sort of marketing or capitalistic competition be eliminated from the process of purchasing liquor. On the other, he was convinced that his plan would be appealing enough to consumers that it would drive down bootlegging.
“There will be no artificial stimulation of demand for liquor,” he wrote. “Whisky will be sold by civil service employees with exactly the same amount of salesmanship as is displayed by an automatic postage stamp vending machine.” (One can’t help but wonder if this advice is in the current PLCB employee handbook.) Comparing his plan to a pre-prohibition policy in South Carolina where employees were paid based on sales numbers, he added that “store employees will be paid salaries without regard to the amount of liquor they handle.”
“If sales were in the hands of private retailers and wholesalers there would be sharp competition for business,” continued Pinchot. “People would be urged to buy this brand or that brand. Under our plan anyone may purchase any brand or kind of liquor. If the article wanted is not in stock, the state stores must obtain it.” [26]
The governor also believed that the PLCB should be in charge of regulating all liquor-related advertising in the commonwealth. This provision, however, was dropped during last minute negotiations just before the legislation was passed in late November. 1935 updates revisited the issue somewhat, prohibiting signs outside of buildings from referencing liquor or malt liquor sold and limiting the size of indoor signs. [27]
Despite his aversion to traditional sales tactics, Pinchot was convinced that his stores would be able to sell items at low enough prices to dissuade bootleggers. “One of the first duties of the [PLCB],” he wrote, “will be to make bootlegging unprofitable… This is based on the sound theory that when crime does not pay it ceases to exist.” He added that “careful analysis of costs indicate that state stores will be able to sell liquor at a price much lower than prevailing depression bootlegging prices.” [28] (It is worth noting here — for those keeping score — that these are certainly not the words of a man who intended to make liquor “as expensive as possible.”)
Not surprisingly, the latter aspect of Pinchot’s plan also had plenty of critics. “Foes of Governor Pinchot’s State liquor monopoly plan tonight envisioned Pennsylvania as a paradise for racketeers and bootleggers,” reported the Wilkes-Barre Record on November 28. The previous night, Raymond Pitcarin, secretary of the United Repeal Council, had addressed a joint meeting of the Senate Finance and Judiciary General Committees on this issue, stating “I know positively as a fact that the distillers and bootleggers of New Jersey are jubilant and chortling over the Pinchot plan which will enable them to reap a golden harvest in Pennsylvania.” [29]
At the same meeting, Robert K. Cassatt, representative of the Association Against the Prohibition Amendment, also attacked the plan, noting that state stores would “encourage illicit distilleries and illicit imports,” and also asserting the destined-to-be-exorbitant PLCB prices would further encourage bootleggers. [30]
Repeal, of course, did not magically eradicate bootlegging — especially in rural areas — but the practice did lessen with time, suggesting that the above concerns were overstated, especially in the long-term. Though taxation was usually higher in PA than elsewhere — which would have boosted the illicit trade — it’s difficult to find evidence that significantly more bootlegging occurred here compared to other states, even while the illegal industry maintained a strong presence in those first few years. This is, however, more of an indication of broader market evolution post-repeal than any particular aspect of Pinchot’s plan.
Cash Flow
Though not specifically listed under Pinchot’s five cardinal points for the PLCB, generating revenue for desperate depression-era programs was arguably the legislation’s most important aspect, especially with so many struggling to make ends meet. In particular, the governor believed that the existence of state stores would help citizens reap the benefits of liquor sales while preventing nefarious parties from cashing in on repeal.
“Under the Pennsylvania Plan a new source of revenue for social needs will be provided,” Pinchot wrote. “Millions of dollars will be made available from taxes and from liquor store profits to help meet the cost of unemployment relief; to make old age assistance payments; and to relieve school districts in which the schools are in danger of being closed…Thus millions of dollars which otherwise would go into the pockets of whisky dealers — and possibly into the pockets of politicians — will be diverted to the needs of society.” [31]
Responding to the Governor’s desire to realize as much revenue as possible from liquor, Pitcarin opined that “the intention may be laudable, but when we contemplate the crime, the racketeering and the corruption … we say solemnly in the words of the old adage: ‘Hell is indeed paved with good intentions.'” [32]
Though Pinchot tended to avoid predicting exact revenue numbers as he pushed his plan, shortly after passage he forecasted revenue of nearly $55 million for the first 18 months post-repeal, [33] or 1.1 billion in inflation-adjusted 2021 dollars. [34] This estimate actually proved to be conservative, with the state stores alone bringing in $41.3 million in 1934 and upwards of $56 million in 1935 (with profits of $5.3M and $8.5M respectively). [35]
A Question of Motives, or Results?
Considering Pinchot’s plan, as well as the large amount of discussion it generated, it remains highly debatable whether the governor’s approach to control of and revenue generation from liquor was a smart one. (Obviously, many today would prefer that he had implemented a private system.) That said, it does seem clear he was sincere in his belief that this was indeed the correct decision. “I sign this bill with genuine satisfaction,” he commented at the time of passage. “It represents the enactment in record time of what I regard as the best liquor control system in America.” [36]
Still, the governor remained pragmatic, noting several aspects of the bill that did not fully match his views. “Nobody will get everything that he or she would like best in the smaller details of liquor control,” he wrote. “All must give and take.” [37]
“Nevertheless,” he later stated, “every principle of sound liquor regulation and control contained in the bill as first introduced is still in it. Leaders of the House and Senate, sincere wets and sincere drys, are certainly entitled to congratulate themselves on a great achievement.” [38]
“Only experience will prove whether or not this liquor control plan will be thoroughly satisfactory,” he went on to say. “I believe it is the best yet devised.” [39]
Notes
[1] “Pennsylvania Liquor Control Board,” Wikipedia. Accessed September 28, 2021.[2] Mark A. Noon, Yuengling: A History of America’s Oldest Brewery, United Kingdom: McFarland & Company, 2005, Google Books.
[3] George Wilson, “State Liquor Laws Go Back to the ’30s,” The Philadelphia Inquirer, September 23, 1983.
[4] Frank Whelan, “An Answer To The End Of Prohibition * State Liquor Stores Are Legacy Of Former Pa. Gov. Gifford Pinchot,” The Morning Call (Allentown, PA), February 23, 1997.
[5] “Pinchot’s Legacy: Pennsylvania’s Liquor Control System,” 69 News, July 2, 2016. Accessed September 21, 2021, https://www.wfmz.com/features/historys-headlines/pinchots-legacy-pennsylvanias-liquor-control-system/article_7550c145-3a2b-5768-8e69-423d36c77dad.html
[6] Whelan, “An Answer To The End Of Prohibition * State Liquor Stores Are Legacy Of Former Pa. Gov. Gifford Pinchot.”
[7] Ibid
[8] Gifford Pinchot, “State Store Plan,” The Rotarian, January 1934.
[9] Ibid.
[10] Ibid.
[11] “McClure Liquor Control Measure, Passed Early This Morning, Is Signed,” The Evening News (Harrisburg, PA), November 29, 1933.
[12] Ibid.
[13] “Pinchot Now Asking State Liquor Stores,” Nebraska State Journal, November 14, 1933.
[14] Pinchot, “State Store Plan.”
[15] “Beer in Buckets Held Legal Here With Bar Return,” Pittsburgh Post-Gazette, July 20, 1935.
[16] Pinchot, “State Store Plan.”
[17] Gifford Pinchot, “The Governor Says,” The Republic (Meyersdale, PA), November 9, 1933.
[18] The Tribune (Scranton, PA), “Quick State Rum Control Plan Likely,” November 10, 1933.
[19] Dr. Greg Bradsher, “The National Commission on Law Observance and Enforcement’s Report on Lawlessness in Law Enforcement,” National Archives, May 4, 2021. Accessed on 09/28/2021, https://text-message.blogs.archives.gov/2021/05/04/the-national-commission-on-law-observance-and-enforcements-report-on-lawlessness-in-law-enforcement/
[20] Frank J. Loesch, “The Regulated, Licensed Retailer Plan,” The Rotarian, January 1934.
[21] “Pinchot and Martin at Odds on Liquor,” Warren Times-Mirror, November 3, 1933.
[22] John M. Cummings, “All Liquor Bills Pass; Club Curbs Are Eased,” The Philadelphia Inquirer, November 29, 1933.
[23] “State Owned Liquor Shops Are Assured,” The News-Chronicle (Shippensburg, PA), November 24, 1933.
[24] “Bribe Charges Stir Assembly Liquor Hearing,” Reading Times, November 21, 1933.
[25] “Earle Flays Liquor Board,” Harrisburg Telegraph, January 30, 1935.
[26] Pinchot, “State Store Plan.”
[27] “Ask 43 Changes in Liquor Laws,” Reading Times, April 11, 1935.
[28] Pinchot, “State Store Plan.”
[29] “See Smuggling Increase Under Liquor Stores,” Wilkes-Barre Record, November 28, 1933.
[30] Ibid.
[31] Pinchot, “State Store Plan.”
[32] “See Smuggling Increase Under Liquor Stores,” The Wilkes-Barre Record
[33] “Clash Looms as Legislature Turns to Funds,” Pittsburgh Sun-Telegraph, December 3, 1933.
[34] US Inflation Calculator, https://www.usinflationcalculator.com
[35] “State Liquor Store Profit Up $3,139,836,” The Evening News (Wilkes-Barre, PA), February 22, 1936.
[36] “State Enacts Rum Monopoly Plan,” Pittsburgh Sun-Telegraph, November 19, 1933.
[37] Pinchot, “The Governor Says.”
[38] “State Enacts Rum Monopoly Plan,” Pittsburgh Sun-Telegraph.
[39] Pinchot, “State Store Plan.”
Bibliography
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