When Prohibition went into effect on January 16, 1920, many distilleries had barrels of whiskey stored in their warehouses. Some of this whiskey was being taken out by illegal means and sold on the black market. In 1922, Congress passed the Liquor Concentration Act that required all whiskey stocks had to be moved to designated, federally supervised, warehouses, where the government could keep a close eye on the inventory. This Act of Congress created “concentration warehouses” and had a government guager on the site.
This Act did prevent much of the whiskey from being illegally sold, but did not prevent it from happening all together. There was a huge market for forged warehouse transfer papers that allowed people such as George Remus to get barrels out of concentration warehouses. Corruption was often the cause of these papers being sold. Under the Presidency of Warren G. Harding, corruption of government officials was rampant. Bribery was a common practice for Remus and other organized crime leaders.
Concentration warehouses helped the problem but it did not solve it. Julian Van Winkle, Sr. wrote a letter to one of his salesmen in the 1920s telling him not to get involved with any deal that seems too good. There was no reason to risk getting in trouble with the government and having their license to sell medicinal whiskey revoked. Organized crime had a strong position in American society that only ended with the repeal of Prohibition in 1933.
