I am working on some papers at the Filson that are from Robert Worth Bingham in the 1920s and 30s. Today I found some interesting reports frpm M. Gratton O'Leary of the Ottawa Journal Newspapers. They deal with the Canadian Liquor Control in 1932, just before the repeal of prohibition in the United States. The reports are three articles about the revenue raised by the Liquor Control Board in Canada.
For background, Canada flirted with prohibition, but settled with state control of liquor sales instead. They were able to make too much money as a supplier of whiskey to the bootleggers in the United States to destroy the industry. To illustrate how lucrative this was for the Canadians, the legal sales of alcohol in Canada in the 1920s brought in $399,130,083 to the Dominion and $205,766,580 to Provincial revenues for a total of $604,896,663. This money was able to be used for unemployment relief without having to raise taxes. This is the time of the Great Depression and unemployment was very expensive cost to the government. For example, the 1930 there was a deficit of $646,000, but without liquor revenue, this would have been $10, 900,000. In five years, Ontario had a surplus of $2,310,000 but without liquor revenue, it would have had deficit of $41, 485,000.
This tax was invisible to the consumer, but it did raise a lot of revenue for Canadian governments and seemed fairly depression proof, with only a drop of 25% after 1929.The tax was $9 a gallon on Canadian spirits and $10 on imported spirits. As the report states, a $4 quart of whiskey from Canada had $2.25 tax and a quart of $4 scotch had $2.50 tax. The reporter had a figure of 75 cents per bottle for the cost of overhead to run the state stores leaving the distiller $1 if Canadian, 75 cents if imported.More expensive brands could bring more money to the distiller since the taxes was based on the gallon of spirits.
The last part of the report states that the system also did help control drinking as per capita drinking shrank under the system from 7.5 gallons of beer in 1914 to 5.9 gallons in 1931. A similar figure is given for distilled spirits. They were also able to use the system to keep people on the unemployment dole from purchasing alcohol. They achieved many of the goals that the temperance people of the United States failed to achieve while raising revenues at the same time. It is no wonder that Bingham found these reports interesting since he did support prohibition, but saw that it was not working. It is probably reports like these that led many of the states in the United States to becoming control states.
"Our people live almost exclusively on whiskey" - E H Taylor, Jr. 25 April 1873