January 17, 1920 – Black Tuesday

On January 17, 1920, a Tuesday , Prohibition went into law. The 18th Amendment to the Constitution had passed one year earlier and went into effect one year later. This was a dark day for America. The majority of people did not support this law and it quickly became apparent. People continued to drink alcohol, and to purchase alcohol. Only it was the bootlegger that they were purchasing their spirits from, not legitimate brewers and distillers. This led to a rise in organized crime as gangs organized these sales of spirits. It led to corruption in the government as government officials took bribes to facilitate these gangs and their sales of spirits. People who were purchasing these spirits did not think that they were doing anything wrong because they did not support the law. This organized crime led to violence as gangs competed for territory to make their sales.

Prohibition also had an economic effect on the nation. Thousands of people were all of a sudden unemployed as the distilleries and breweries were closed. Thousands more were forced to find other jobs as saloons were either closed down or forced to become something else such as coffee houses or tea rooms. No longer were distilling companies purchasing bottles from glass factories, labels from printers and advertising from magazines and newspapers, leading to a loss of profits for these companies. Farmers could no longer sell their grain to breweries and distilleries. By 1926, some farmers were burning their crops in the fields because it would cost the farmers more to harvest them than they could make from the sale of the grain. These factors were a component of the Great Depression of 1928. There is also the drop in tax revenue for the government. The tax on distilled spirts paid for a huge part of the government budget before Prohibition, but there was a loss of taxes on the local level because distilleries and breweries paid local taxes as well as federal taxes. Another tax loss is from the fact that unemployed people do not pay income taxes.

It is a wonder that Prohibition lasted as long as it did. The majority of people did not support the 18th Amendment. Many states such as New York refused to spend their tax money to enforce the law, leaving it up to federal law officials to enforce it in those states. It was easy for a person to purchase illegal spirits on the black market. Speakeasies became common as illegal watering holes for people. These speakeasies often were places where gambling and prostitution took place as they were often run by the gangs in cities and towns.

When Prohibition ended on December 5th, 1933, organized crime did not end. It simply moved into other endeavors. The gangs were well organized and simply were not going to quit because their black market spirits dried up. It took years for the economic effects to come back. It takes years for an aged whiskey to be made and distilleries had to get by in the time their whiskey was being aged. Many distilleries simply could not make it during the Great Depression and shut down or were sold to larger companies.

Prohibition should be a reminder to people that the constitution is there to protect people’s rights, not take them away. January 17, 1920, was a dark day in American history.