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January 16, 1919: Prohibition Is Approved

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The 18th Amendment was the product of decades of efforts by the grassroots temperance movement.

At the time, almost 75% of the New York State’s revenue was derived from liquor taxes. With Prohibition in effect, that revenue was immediately lost. In the end, prohibition cost the federal government a total of $11 billion in lost tax revenue and cost over $300 million to enforce. Many states and the federal government would come to rely on income tax revenue to fund their budgets going forward.

The closing of breweries, distilleries and saloons led to the elimination of thousands of jobs. Large breweries like Anheuser-Busch switched to non-intoxicating and legal “near beer” with Bevo, marketed as a “soft drink.”

Prohibition created a “shadow economy” ran by criminal enterprises while causing lasting damage to the alcohol and hospitality industries. The growth of the illegal liquor trade under Prohibition made criminals of millions of Americans; the bootleg black market saw earnings of $3.6 billion in 1926 ($50 billion today). On average, 1,000 Americans died per year from the effects of drinking the black market’s tainted liquor.

A perfect front for bootlegging, the number of registered pharmacists in New York State tripled. In fact, doctors pocketed an estimated $40 million in medicinal whiskey prescriptions.

Because Americans were also allowed to obtain wine for religious purposes, enrollment rose at churches and synagogues.

Public sentiment began to turn against Prohibition during the 1920s and it was finally repealed by the 1933 21st Amendment, to the relief of many.

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