# Appendix — State Bd. of Equalization of Cal. v. Young's Market Co.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix
- **Published:** January 1, 1936
- **Citation:** 299 U.S. 59

## Text

APPENDIX A

CALIFORNIA ALCOHOLIC BEVERAGE
, CONTROL ACT

Chapter 330, Laws 1935.

. AN ACT to license, regulate and control the manufac-
ture, transportation, sale, purchase, possession and disposi-
tion of alcoholic beverages; to levy an excise tax on the sale .
of alcoholic beverages; to provide for the licensing of the
manufacture, distribution and sale of alcoholic beverages;
‘to prescribe penalties for the violation of this Act; to
make an appropriation for the enforcement of this Act; ~

to take effect immediately. . ,

The people of the State of California do enact as follows:

Section 1. “This Act is known and may be cited as the
“Alcoholic Beverage Control Act.”

Section 2. The following words, terms, and phrases
when used in this Act have the meanings ascribed to them
in this section, except where the context clearly indicates
a different meaning:

(a) “Alcohol’” means ethyl alcohol, hydrated oxide of
ethyl, or spirits of wine, from whatever source or by what-

ever process produced. | o

(b) “Alcoholic “beverage” means and includes alcohol
- spirits, liquor, wine, beer and every liquid or solid contain-
ing alcohol, spirits, wine or beer, and which contains one-
half of one per cent or more of alcohol by volume and which
is fit for beverage purposes either alone or when diluted,
mixed or combined with other substances.

(c) “Beer” means any alcoholic beverage obtained by
the fermentation of any infusion or decoction of barley,
malt, hops or any other similar product, or any combination
thereof in water, and shall include ale, porter, brown, stout,

ii >

lager beer, small beer and strong beer but shall not include
sake known as Japanese rice wine.

(d)} “Distilled spirits’. means ethyl alcohol, spirits of
wine, whiskey, rum, brandy, gin and other distilled Spirits
for beverage use, including all dilutions and mixtures
thereof. .

(e) “Wine” means the product obtained by the fer-
mentation of grapes or other agricultural products con-
taining natural or added sugar or any such alcoholic
bevera ortified with grape brandy and containing not
more than’twenty-four per cent of alcohol by volume and
shall inelude sake known as Japanese rice wine.

(f) “Person” includes any individual, firrn, copartner-
ship, joint adventure, association, corporation, estate,
trust, business trust, receiver, syndicate or any other group
or combination acting as a unit, and the plural as well as
the singular number.

(g) “Board” means the State Board of Equalization
of the State of California.

(h) “Club” means a corporation or association which
is the owner, lessee or occupant of an establishment oper-
ated solely for objects of a social or athletic nature, having
a bona fide membership list, and the majority of the mem-

bers of which pay dues at least once in every year, bit not
for pecuniary gain, and the property as well as the advan- -
tages of which belong to the members. ;

(i) “Manufacturer” means every person, who within «
the State of California, brews, ferments, distills, cuts,
blends, rectifies, or otherwise processes, produces, or manu-
factures alccholic beverages containing one-half of one
per-cent or more of alcohol by yolume; provided that any -
person who: manufactures not to exceed two hundred -
gallons of wine per year for his own consumption, shall
not, uge of such manufacture, be considered a manu-
facturer within the meaning of this Act.

(j) “Rectifier” means every person who colors, flavors,
or otherwise processes distilled spirits by distillation,
blending, percolating or other processes. :

iii :

(k) “Importer” means every person who, in the case
of alcoholié beverages brought into this State from outside
of this State, is the first in possession thereof within this .
State after the Act of importation is completed.

_ (i) “Sell” or “sale” and the phrase “‘to sell” means
and includes any of. the following: to exchange, barter,
traffic in; to solicit or receive an order for; to keep or ex-

se for sale; to serve for a consideration with or without
meals; to traffic in or deliver for.value or in any way other
than gratuitously; to possess with intent to sell. The
transfer of title to alcoholic beverages unaccompanied by”
a transfer of possession of such beverages shall not be.
deemed a sale of such beverages. - )

(m) “Public bar” means any bar, counter or other
structure over which beverages of an alcoholic content in
excess of four per cent by weight are sold or served by
the drink to the public for consumption ‘on the premises;
provided, however, that counters" or other structures used
for the sale, service and consuimption of meals, and not as
a subterfuge for a public bar, shall not be deemed to be a
public bar within the meaning of this Act. “Public bar-
room” or “public saloon” means any room to which the
public has access in which is maintained a “public bar.”

(n) “Package” or “original package” means any con-
tainer or receptacle used for holding alcoholic beverages
which is corked or sealed with a stub, stopper or cap, or in
any other manner.

(o) “To bottle” or “to package” means to bottle, barrel,
or otherwise place aicohclic beverages in a container.

(p) “Distiller” means a manufacturer who produces
distilled.spirits from naturally fermented material.

(q) “Proof spirits” means that alcoholic liquor which
contains one-half of its volume of pure ethyl alcohol of a
specific gravity of 0.7939 at sixty degrees Fahrenheit, re-
ferred to water at sixty degrees Fahrenheit as-unity.

(r) “Proof gallon” means a gallon of proof spirits, or
an equivalent amount of alcohol. : :

a

iv >

(s) “Wholesaler” means and includes every person

gother than.a manufacturer or rectifier who is engaged in

business as a broker, jobber or wholesale merchant, dealing
in alcoholic beverages.

(t) “Wholesale sale” or ‘sale at wholesale” means a
sale to any person for purposes of resale.

(u) “Retailer’s on-sale’license” means and includes on-
sale beer licenses, on-sale beer and wine licenses, and on-
sale distilled spirits licenses. .

. (v) “Gallon” or “Wine gallon” means that liquid meas-
ure containing two hundred thirty-one cubic inches.

(w) “Wine manufacturer” means any person engaged
in the manufacture of wine as the term “wine” is defined
in this Act.

(x) “Still” means a still used in the production or cap- *
able of being used in the production of alcoholic beverages,
and does not include stills or apparatus used solely in the
production of distilled water or substances other than
alcoholic beverages.

+

Section 3. On and after July 1, 1935, no person shall
perform any Act or Acts which would constitute such per-
son a manufacturer, rectifier, importer, wholesaler, or re-
tailer of any alcoholic beverage within the meaning of this
Act or shail package, label or sell any alcoholic beverage
unless such person is authorized to do so by a license duly
issued: pursuant to the provisions of this Act, or pursuant
to the provisions of the State Liquor Control Act, Chapter .
658, Statutes of 1933. Any person violating any provision
of this section shall be guilty of ‘a misdemeanor.

Section 4. On and after July 1, 1935, every still located
within the limits of this State must be registered with the
board. Every person owning or possessing a still who
fails to register the same as herein required or who

. fails to obtain a license issued pursuant to the provisions of
this Act authorizing the ownership and possession of such
still shall be guilty of a felony. ;

* | : Vv

The board may seize and summarily destroy any still
wuaich is not registered or for which a license has not been
obtained as required by this Act.,

- Section 5. . The following are the types of licenses to be -
issued under this Act and the annual fees to be charged

therefor :

1. Beer manufacturer’s license............++-- $750.00 per year
2. Wine manufacturer’s license, one thousand
gallons or less per year.......---+++++++ 5.00 per year
Over one thousand gallons to two thousand -
five hundred gallons per year............ 10.00 per year
Over two thousand five hundred gallons to
five thousand gallons per year.........-- 20.00 per year
Over five thousand gallons to twenty thou-
sand gallons per year...... peevesesecees 40.00 per year
Over twenty thousand to one hundred thou-
sand gallons per year......... edogenanes 75.00 per year
Over one hundred thousand to two hundred
‘ thousand gallons per year.............-- 100.00 per year
Over two hundred thousand gallons to one
million gallons a year.......... Roeedeese 150.00 per year
For each million gallons or fraction thereof | a. eee
over a million gallons an additional....... 100.00 per year
3.. Distilled spirits manufacturer’s license...... 250.00 per year
4. Still license ........... a TTTTTE ehecesee 10.00 per year
' per still
5. Rectifier’s license .........cccccescccccees 250.00 per year
6. Fruit brandy manufacturer’s license........ 150.00 per year .
7. Distilled spirits and wine importer’s license.. 100.00 per year
8. Beer importer’s license 4........ eweeeeee . 500.00 per year
9. Wine bottling or packaging license........ 10.00 per year
10. Distilled spirits bottling or packaging: licen 250.00 per year
11. Beer bottling or packaging license....... ... 500.00 per year
12. Distilled. spirits’ wholesaler’s license........ 250.00 per year .
13. Beer and wine wholesaler’s license...:...... _ §0.00 per year

14. Retail package off-sale beer and wine license —_ 10.00 per year
15. Retail package off-sale distilled spirits license _
~ for the first $10,000 retail sales per year.. 100.00 per year
For each $1,000 retail sales or fraction thereof ‘

over $10,000 per year .........+++eeeee- 10.00 per year
16. Industrial alcohol dealer’s license.......... 50.00 per year
17. On-sale beer license .........:..+-+++---- 25.00 per year
18. On-sale beer and wine license............- 75.00 per year
19. On-sale beer and wine license for trains (per
Ge? QED conccecsacecs CE Utaauakouee praia 15.00 per year
20. On-sale beer and wine license for boats (per —
BREED co cccccccccsccccccvccescnsssgses 50.00 per year
-21. Onesale distilled spirits license........ @ . As set by the board

_ holic beverages to persons holding licenses issued by the

vi

. The fees specified above shall be reduced twenty-five
per cent for each full quarter of a year elapsing between -
' the first day of the year for which the license is fssued and

the date on which the application for the license is filed with -
the board; provided, that where an application clearly indi-
cates that the applicant does not desire to exercise the privi-
leges granted by the license applied for until on or after the
beginning of the quarterly period following the quarterly
period in which the application is filed with the board, such
fees shall be reduced twenty-five per cent for each full quar-
. ter of a year elapsing between the first day of the year for |
which the license is issued and the date ‘so indicated in the
application. | de
Where the fee for any license is graduated according
to the amount of alcoholic beverages manufactured or sold
under the license, and the license is applied for after the
beginning of the year, the amount of alcoholic beverage
authorized to be manufactured or sold under the license
shall be reduced proportionately with the reduction in fee
provided in the preceding paragraph in accordance .with a
‘such rules and regulations as the board may prescribe.

Section 6. Except as otherwise provided in this Act
and subject to the provisions of Section 22 of Article XX.
of the Constitution, the licenses provided for in the pre-
ceding section shall authorize the person to whom issued
to exercise the following rights and privileges and no

others at the premises for which issued during the year -
for which issued. .

(a) Any manufacturer’s license authorizes the person
to whom issued to become a manufacturer of the alcoholic
beverage specified-in the license, to package, mix, flavor.
‘and color and label the same and to export or sell such alco-

board authorizing the sale of such alcoholic beverage; pro-
vided that a wine manufacturer’s license authorizes the
manufacture of grape brandy to be used exclusively for
ortifying purposes by its holder on the premises for which
issued. ~~ , |

s

vii

(b) A still license authorizes the person to whom issued
to own or possess the number of ‘stills indicated in the
‘license upon the premises’ for which issued. :

(c) A rectifier’s license authorizes the person to whom
issued to cut, blend, mix, flavor; color and bottle distilled
spirits and to export or sell such products to persons hold- ..
ing licenses issued by the board authorizing the sale of
distilled spirits.’ : ae :

- (d) Any importer’s license authorizes the- person to’
whom issued to become an importer of alcoholic beverages
specified in the license and to export such alcoholic beverage.

(e) A bottling or.packaging license authorizes the label-
ing, bottling or -packaging of the alcoholic beverages
spectfied in the license. ‘

‘(f) Any wholesaler’s license authorizes the sale of the
‘alcoholic beverage specified in the license only to persons.
holding licenses’ issued by the board authorizing the sale
of such alcoholic beverage.

; \

(g) An off-sale beer and wine license authorizes the

sale, to consumers only and not for resale, of beer in pack-

ages and in quantities of thirty-one gallons’ or less, per

~—~sale-and the sale of wine in packages and in quantities of

fifty-two gallons or less, per sale for consumption off the
premises where sold. ‘

(h) An off-sale distilled spirits license authorizes the
~ ‘sale, to consumers only and not for resale, of distilled
spirits in quantities of less than five gallons per sale and
in packages of one gallon or less for consumption off the
_» premises where sold. a

(1) An industrial alcohol dealer’s license authorizes.
the sale of undenatured ethyl alcohol or other distilled
spirits in packages of more than one gallon for use in the
trades, professions or industries. A

(j) Any on-sale license authorizes the sale of the alco-
holig beverage specified in the license for consumption on
the premises where sold. An on-sale beer and an on-sale

.
-
* . .

beer.and wine license also authorizes the exercise, with
' Fespect to the particular beverage or beverages mentioned °
‘in such license, of the rights and privileges granted by an
_ Off-sale beer and wine license. On trains and boats, under
such licenses, alcoholic beverages may be sold: only to
passengers or employees,

Section 7. Each license issued under this Act shall be-

issued to a specific person, and, except-in the case of licenses
authorizing the sale ofalcoholic beverages on trains or
boats, shall be issued for_a specific location, the principal. -
address of which shall be indicatedyon the license. Separate
licfhses shall be issued-for e of the premises of any
business establishment having more than one location.
Licenses for trains and boats shall be based on the aver- .
age number in actual operation, during the license year, of .
each class of operating units, viz.,.trains and boats upon
which the license privileges are exercised, such average
number to be determined as the board may prescribe.
Each license issued under thig Act is separate and dis-
tinct, shall be nontransferable from one person to another,
and shall be transferable from the premises for which
issued only as may be permitted by the board, upon pay- ~

__ ment of a transfer-fee of five dollars for each license.

Whenever a license certificate issued under the Act is
lost or destroyed, the board shall issue a duplicate license
_ upon the payment of a fee of five dollars.

Sectior 8. All retailer’s on-sale licenses shall be issued
on a calendar year basis arid shall automatically expire at
midnight on the last day of December of the year for

which issued. All other licenses issued under-this“Act

shall be issued on-the basis of q fiscal year commencing
July first and ending June thirtieth, and shall automatically

'_ expire at midnight on the last day of June of the year for.

which issued.

. All licenses issued under the provisions of the’ State
__ Liquor Control Act, Chapter 658, Statutes of 1933, which
- authorize the sale of liquor specified in the licenses for
consumption on the premises shall automatically expire
at midnight on December 31, 1935. ;

mee
i 7 |

e :
All other licenses issued under said Act and all licenses -
issued under the provisions of Chapter 178, Statutes of |
1933, shall automatically expire at midnight on June 30,
1935. One-half the annual fee for any license so expiring
at midnight on June 30, 1935, sltall be allowed-as a credit
against the fee for any comparable license issued under
this Act during 1935. — ,
For failure to reapply for a license prior to the time
- when any license expires, the board may by regulati®n pre-
- scribe that in addition to the license fees specified in Section
5 heceof a penalty of not to exceed twenty-five per cent of
such fees must be paid.
a ws
- Section 9. Upon receipt of any license issued hereunder
the licensee shall sign said license and shall post the license.
_ ina conspicuous place upon the licensed premises., Licenses
issued for trains or boats may, in lieu of being posted upon
_ the train or boat for which issued, be posted in such other
“place in this State as the, board shall designate.

ON Section 10. To obtain.a license under this Act applica-

tion theref8r, accompanied by the license fee therefor, must

made to the board upon a form prescribed by the board.

The application must contain the name of the applicant, and

in the case of a copartnership, the names of the individual:

_ parties, in the case of a corporation. the principal officers

and directors, the location of the premises for which a license

,is applied and such other information as the board may re-

quire to assist it in determining whether the applicant and

mites qualify for a license. The board may require

that the application for any on-sale license be verified under

oath and be endof¥ed by five freeholders or householders

of the city or county in which the applicant resides or the
premises aré located. ; |

..

Section 11. Upon receipt of an application for a license

_and the license fee the board shall make a thorough investi-

-~ gation to determine whether the applicant and the premises

for which a license is applied qualify for a license. The
__ board must deny an applicagion for a license if either the

x

e © (s.%° x

applicant or the premises for which a license is applied do
not qualify for a license under this Act. Vou
If an application is denied, three-fourths of, the ficense
fee paid, or an.amount equal to thé license fee paid less ten
dollars, whichever is greater, shall be returned to the appli-
cant and the balance shall be deposited.
age control fund hereinafter created.

_ Section 12. No on-sale distilled spirits license shall be
issued to any applicant who is fot a citizen of the United

ness association is the applicant no, such license shall be
issued to it unless the majority of the members. of the board

of directors and all of its officers who are charged with the

duty of managing, directing or conducting said business, |
are citizens of thie United States. ai

Section 13. The board is specifically authorized to re-
fuse the issuance of on-sale retail licenses for premises

_ located within the immediate vicinity of churches, hospitals,

schools and children’s public playgrounds.

_ Section 14. No retail license shall,be issued to any appli- —
cant for any premises fur which a license has been forfeit

or revoked, during the three months immediately preceding
the filing of such application: ;

in the alcoholic bever- E

_ States; and where a corporation, partnership or other busi- |

Pg

Section 15. .No retail license shall be issued for any -

premises which are located in any territory where,the exér-

cise of the rights and privileges conferred by the Rcense is -

contrary to a valid zoning ordinance of any county, city and
county or municipality. unless such premises had been used

in the exercise of. such rights and privileges at‘a time prior .

to the effective date of any such valid zoning ordinance. .
Nothing in this Act contained shall be deemed to inter-

_ fere with the powers of cities, counties, and cities and ceur-

ties, conferred upon them by Chapter 734, Statutes of 1917,
the same being An Act of the Legislature entitled, “An Act
to provide for the establishment within municipalities of dis-
tricts or zones within which the use of property, height of

aye r

.

xi

Seor

&

_ improvements and requisite open spaces for light and venti-

lation of such buildings, may be regulated. by ordinance.”
Section 16. No.retailer’s‘on-sale license shall be issued

- tg any person to whom or for any premises for which a
~“manufacturer’s, ‘ importer’s,. wholesaler’s or rectifier’s

license shall have been issued, and no manufacturer’s, im-
porter’s, wholesaler’s or rectifier’s license shall be issued to
any person to whom or for any premises’ for which a
retailer’s on-sale license is issued.

é

Section 17. No license shall be issued to any applicant

_ for any premises situated more than one mile outside the

limits of an incorporated city or town and within four miles
of any camp or establishment of: men numbering twenty-
five or more, engaged upon or in connection with the con-

“struction, repair or operation of any work, improyement or
/ utility of a public or quasi public character ; provided, how-

‘ - ever, that nothing in this section shall be deemed’ to apply -
to the renewal of any licenses for any premises which have

been established and licensed under thiS Act or under the

State Liquor Control Act, Chapter 658, Statutes of 1933 ~

at least six months prior to the establishment of such camp

or establishment of. men.
-

\ Section 18. Retailer’s “on-sale beer and wine licenses”

- or “on-sale distilled spirits licenses” shall be issued only to
- bona fide hotels, restaurants, cafes, cafeterias, railroad

dining or club cars, passenger ships or other public eating

places, or bona fide clubs after such clubs have been law-
fully operated for not less than one year.

Section 19. Fruit brandy manufacturer's licenses shall
be issued only to persons holding a wine manufacturer’s

. license.

) Section 20: Industrial alcohol dealers’ licenses shall be
issued only to, persons to whom, and for premises, for

. .. which, either a distilled spirits manufacturer’s importer’s
* _ or wholesaler’s license has been issued.

ra)

Xil

Section 21. Before commencing to engage ir the sale
of any alcoholic beverage at anf premisés, notice of inten
tion to so commence, must be posted in a conspicuors place
at the entrances to such premises.. Licenses will not be
- issued for such premises until suth notice has been so posted

for fifteen consecutive days immediately prior to the issu-’
‘ance of the licenses. The notice herein specified shall be
in such form as the board shall prescribe.

Upon the receipt by the board of an original application
for any license, notice thereof shall immediately be given
by said board to the sheriffs, chiefs of police and district

' attorneys of such locality, and to the city clerks and ‘city
planning commissions in such locality upon request.

Section 22. In the case of any applicant whose license
fee varies with the total amount of alcoholic beverages
manufactured or sold, the applicant shall at the time of fil-
- ing application for license, accompany such application with .

the minimum license fee required,-or such larger fee as the
applicant shall elect. . a8

The licensee shall report quarterly at such time and in
such manner as the board may prescribe, the amount of
alcoholic beverages manufactured or sold during the pre-

ing quarter. :

If any such report shows that the total amount of
_ Alcoholic beverages manufactured or ‘sold during the year

beverages

manufactured or sold as herein required and to pay such

ees when due within ten days of the date

board, shall be considered a violation of this Act, ~
also subject the licensee to an arbitrary assess-

cai

xiii

‘Section 23. Anvexcise tax is hereby imposed upon all
‘beer and wine sold in this State by a manufacturer or im-
porter on or after July 1, 1935, at the following rates: —

(a) On all beer, sixty-two cents for every barrel con-
taining thirty-one gallons, and at a proportionate rate for
any other quantity ; * 3

(b) On ali wire, two cents per wine gallon, and at a
proportionate rate for any other quantity; .

(c) On champagne, or sparkling wine, whether natur-
ally or artificially carbonated, three cents per pint or frac-
tion thereof. pric set

Beer and wine consumed by employees.of manufac-
turers or importers upon the premises of such manufac-
turers and importers shall be exempt from tax under such
rules and fegulations as the board may prescribe.

Té shall be presumed, for the purposes of this Act, that
all beer and wine produced, brewed, fermented, or manu-

- factured in this State by a manufacturer, or delivered td a
manufacturer or importer here, has been sold by such manu-
facturer or importers unless proven to the satisfaction of
the board that suclf beverages are stil! in the possession of
such manufacturer or importer, or, prior to the termination

of stich possession, have been lost through evaporation,

leakage, spillage or destruction by the elements.

Section 24. An excise tax is hereby imposed upon all
distilled spirits sold in this State on and-after July 1, 1935,
# the following rates: ; ,

- On all distilled spirits of proof strength or less, two
cents on each bottle containing two ounces or fraction
- thereof ; five cents on each bottle containing eight ounces or
fraction thereof greater than two ounces; ten cents on each
bottle containing one pint or fraction thereof greater than
a half pint; sixteen, cents on each bottle containing one-
fifth gallon or fraction thereof greater than one pint;
twenty cents on each bottle containing one quart or frac-
tion thereof greater than one-fifth gallon; forty cents on
’ each bottle containing one-half gallon or fraction thereof,
“.. greater than one quart; eighty cents on each bottle contain-

Xiv
ing one gallon or’ a thereof, greater than one-half
gallon.
All distilled spirits in excess of proof strength shall be
taxed at double the above.rate. .

Section 25. Every person who engages in’ business as,
or becomes a manufacturer or importer of beer or wine, as .
defined: in this Act, shall be required by the board to file
with said board a bond duly executed by such’ person ag.
princfpal and a corporation such as is mentioned in Section _
1056 of the Code.of Civil Procedure in this State, as surety, - —
payable to the people of the State of California, conditioned
upon the payment of all excise taxes and penalties assessed
against or imposed upon such person, arising out of this
Act.
The bond shall contain the provisions and be in the form
substantially as follows:

“Know all men by Okpiiite:

(i 5 ee eee ee , as principal, and. Pe eee ae a:
_ corporation duly organized and doing business under and
_ by virtue of the laws of............. , and duly licensed for

the purpose of making, giiaranteeing or becoming sole -
surety upon bonds or undertakings required or authorized
by the laws of the State of California, as surety, are held
and firmly bound unto the people of the State of California
in the sum of:.......... ‘dollars ($.......... ), lawful
money of the United.States of America, for the payment
- whereof well and truly to be made, we bind ourselves, our -
_ heirs, executors, successors and assigns, jointly and sever-.
ally, firmly by these presents.

' The condition of the foregoing obligation is such that,

Whereas, the above bounden principal has made appli-
cation to the State Board of Equalization of the State of |
‘California for a licensé authorizing said principal to engage
in business as a manufacturer or importer of beer or wine
Within‘the meaning of the Alcoholic Beverage Contr6l Act
and amendments thereto, and

* Wherd&s, under the terms of said Acta bond is required
of said principal and good and sufficient surety, payable to’

XV

: the people of the State of California, conditioned upon. the
' payment to the State of California of all of the excise taxes

and penalties assessed against or imposed upon said prin-
-cipal arising out of said Act. ‘ . ;

+ aN ow therefore, if the above bounden principal shall pay
‘all excise taxes and penalties assessed against or imposed
_ upon said principal arising out of said’ Act, or if the board,
within thirty days after any default by said principal in the
‘payment of any such tax or penalty shall fail to notify the
surety thereof, personally or by mail, then this obligation .
shall be null and void: otherwise to remain in full force and ©
effect. | : | |
~ ‘That said bond shall remain in force and effect until the
- surety or sureties are released from liability by said board
- or until said bond is canceled by said surety or sureties as
hereinafter provided. 7
The surety herein reserves the right to withdraw as
such surety, except as to any liability already incurred or -
‘accrued hereunder, and may do:so upon giving written
notice of such withdrawal to the State Board of Equaliza- -~
tion; provided, however, that no withdrawal shall be effect-
ive for any purpose until thirty days shall have.elapsed from
and after receipt of such notice by said board; and further
provided, that ‘no withdrawal shall in anywise affect: the
liability of said surety arising out of any sale of beverage
"made by the principal herein prior to the expiration of such -
period of thirty days, regardless of whether or not the excise
tax based upon such sale shall have been due prior to the
expiration of such period. sale ‘

Signed and sealed this...... ee re , 193...

oe ee aoe 6 Ee OR Oe SOO Ee SE Oe SS SSeS S'S S

Saree a eS ea ee ee, ee ee ee

Xvi

The total amount of the bond or bonds required of any
such manufacturer or importer shall be fixed by the board
and may be increased or redyced by said board at any time
subject to the limitations herein provided. In fixing the
total amount of the bond or bonds required of any such -
manufacturer or importer, the board must require a bond
or bonds equivalent in total amount to one and one-half
. times his estimated monthly excise tax determined in such
_manner as said board may deem proper; provid, that the

total amount of the bond or bonds required of any such -
manufacturer or importer shall never be less than five hun-
dred dollars.

Section 26. Every manufacturer or importer of alco-
holic beverages taxable under this Act shall render to the
board on or before the tenth day of August, 1935, and on
or before the tenth day of each month thereafter, a verified
_ Statement of the quantity-of such alcoholic beverage sold
by such manufacturer or importer during the preceding
calendar month. Such statement shall be in such form as
- the-board may prescribe, together with such other informa-
tion as. the board may require.

If any manufacturer or importer shall.fail, neglect or °

refuse to file said report, within the time prescribed for
filing such report, the board must note such failure, neglect
or refusal upon the tax roll hereinafter described, and must
‘estimate the amount of alcoholic beverage sold by said manu-
facturer or importer assessing the excise tax thereon,
adding to said excise tax a penalty of fifteen per cent thereof -
for failure, neglett, or refusal to report. Such’action of
the board shall be final, and subject only to review by a
court of competent jurisdiction. |

The board shall, on or before the twenty-second day
of August, 1935, and on or before the twenty-second day
of each calendar month thereafter, assess the excise tax
due hereunder, and prepare and complete an assessment roll
showing the amount of the excise tax assessed against
each manufacturer and importer and immediately deliver
.Said assessment roll to the State Controller. |

wits ee -
; XVii

Excise taxes herein required to be paid by the manu-.
‘facturer or importer shall be payable in monthly install-
ments to the State Controller for the month ending July .
31,1935, and for each and every calendar month there-
after. ‘The amount of such excise tax for each month shall
be paid on or before the tenth day of the second calendar
month thereafter, and if not paid prior thereto, shall be-
come delinquent at five o’clock in the afternoon of said day,
and ten per cent penalty shall be added thereto for delin-
quency. , ;

Section 27. The board may examine the books and
records of any person required to make said statement, and
may also examine the books and records of any licensee az
herein defined, and such books and records -shall at all
times be subject to the inspection of said board or its rep-
resentatives during regular business hours.

_ If any examination or investigations made by the board
shall disclose that -any reports of manufacturers or im-
porters theretofore: filed with said board by said manufac-
turers or importers pursuant to the requirements of this
Act, have shown incorrectly the amount of alcoholic bever-

‘ age sold or the excise tax accruing thereon, said board shall
have the power and is thereby authorized, to make such
changes in subsequent assessments of said manufacturers
or importers under. this Act as it may deem necessary to ,
correct: the errors disclosed by its examination of the rec-
ords of said manufacturers or importers or its investiga-
tions in pursuance of its powers hereunder.

Section 28. Any person refusing to permit the board
ot any of its representatives to make the inspection for
which provision is made in the preceding section or failing
to keep books of account as may be prescribed by the board
or failing to preserve such books for the inspection of the
board for such time ‘as the board may deem necessary,
and any person altering, canceling or obliterating entries
in such books of account for the purpose of falsifying ‘the
records of sales of alcoholic beverages-madé under this Act
shall be guilty of a misdemeanor and shall be punished by

XVili

@ fine of not less than one hundred dollars nor more than
Ohe thousand dollars, or by imprisonment in the county
jail for not less than one month nor more than six months,
- or by both such fine and imprisonment.

Section 29. No excise tax shall be imposed by this
Act in any transaction whereby any alcoholic beverages
are sold and delivered by a manufacturer or importer to
another manufacturer or importer holding a valid manu-
facturer’s or importer’s license.

In order to obtain the exemption granted under this
section, the manufacturer or importer selling alcoholic
beverages, must present to the board at the time of filing
his monthly report required under Section 26, a verified
statement, in a form to be prescribed by the board, ob-
tained from the purchaser showing the date, kind and quan-
tity of alcoholic beverage sold and delivered to the pur-
chaser, that thé purchaser holds at the time of such pur-
chase, a manufacturer’s or importer’s license, the number
of such license, and such other information as the board
may require.* A copy of this statement must at all times
be kept on file at the place of business of the manufacturer
or importer desiring to obtain the ‘exemption herein
granted.

Section 30. None of the provisions of this Act shall
apply, or be construed to apply, to commerce with foreign
Nations'or commerce with the several States, except in
so far as the same may be permitted under the. provisions
of-the Constitution and laws of the United States nor
shall the excise tax imposed by Section ‘23, of this’ Act
apply to alcoholic beverages sold and actually exported
from this, State by a licensed manufacturer or importer, |
- or bya subsidiary of a licensed manufacturer or importer,
but every manufacturer and importer shall be required to
report such exports to the board in such detail as the board
_ May require, otherwise the exemption herein granted shall’
~ be null and void and such alcoholic beverage shall be con-
- gidered sold in this State subject fully to, the provisions -of
‘this ma *

4

xix’ |

In support of any exemption from excise taxes aimngd

under this section on account of the exportation of alco-
holic beverage every manufacturer must execute an export
-. certificate in such form as shall be prescribed, prepared .
and furnished by the board containing .a sworn statement 7
made by some person having knowledge of the fact of such
exportation that the alcoholic beverage has been exported
from this State, and giving such detail with reference ‘to
shipment as said board may require. All exportation cer-
tificates must be completed and on: file in the office of the
board within thirty days after the close of the calendar
month in which the shipments were made and no certifi-
cate not completed and filed within such period shall be
recognized for any purpose by the State or any agency.
thereof. The board may demand of any manufacturer
or imiporter such additional data as is deemed necessary
_ by said board in support of any such certificate and failure
to supply such data will constitute waiver of all right to
exemption claimed by virtue of said certificate.

vu

Section 31. In any case in which any tax, interest or:
penalty imposed under this Act is not paid when due the
Controller shall notify the board and may file in the office
of the county clerk of Sacramento County or’ any other
‘county a certificate specifying the amount of the tax, in-
‘terest and penalty due, the name and last known address
, of the manufacturer or importer liable for the same, that
the board has complied with all the provisions of this Act,
in relation to the computation and levy of the tax and a
request that judgment be entered against the manufacturer
or importer in the amount of the tax, interest and penalty
set forth in the certificate. The county clerk immediately
upon the filing of such certificate shall enter a judgment
for the people of the State of California against the manu-
facturer or importer in the amount of the tax, interest and
penalty set forth in the certificate. -The judgment may be
filed by the county clerk in a loose-leaf book entitled .
“Special Judgments for State Excise Tax.”

An abstract of such judgment or a copy thereof may
be recorded with the county recorder of any eed and

Ys

xx ~

from the time of such recording, the amount of the taxes, -
interest and penalty therein set forth shall constitute a lien
upon all the real property of the manufacturer or importer
in such county, owned by him or which he may afterwards
and before the lien expires acquire, which lien shall have
the force, effect and priority of a judgment lien. Execution
shall issue upon such a judgment upon the request of the
Controller in the same manner as execution may issue_xipon
other judgment and sales shall be held under such execu- .
tion as prescribed in the Code of Civil Procedure. «In all
proceedings under this section the Controller shall be
authorized to Act on behalf of the people of the State of

California. | :
In the event.that any manufacturer or importer is de+»
linquent 3 payment of the excise tax -herein provided

for, the’ Controller shall notify the board forthwith and
may give notice of the amount of such delinquency by
registered mail to all persons having in their possession or
under their control, any credits ‘or other personal property

. belonging to such manufacturer or importer, or owing any
debts to such manufacturer or importer, at the time of
receipt by them of such notice, and thereafter any person
so notified shall neither transfer nor make other disposition
of stich credits, other personal property or debts until the
Controller shall have consented to a transfer or disposition,
or until twenty days shall have elapsed from and after
the receipt of such notice. All persons so notified must,
within five days after receipt of such notice, advise the
Controller o: iny and all such credits, other personal prop-
erty or debts, in their possessidn under their control or
owing by them, as the case fhay be.

Whenever any manufacturer or importer shall be de- .
linquent in the payment of the excise tax herein provided
for, thé Controller or his duly authorized representative
may proceed forthwith to collect the excise tax due from
such manufacturer or importer in the following manner:
The Controller shall seize any property, real or personal,
of the taxpayer, and thereafter sell at public auction such
property so seized, or a sufficient portion thereof, to pay
the excise tax due hereunder, together with any penalty

“tl : a : aa ; ‘tins

—

tf xd

or penalties imposed hereby for such delinquency, and any
and all costs that may have been incurred on account of

the time and place thereof, shall be given to such delinquent
manufacturer or importer and to all persons appearing of

- record to have an interest in such property, in writing at
> Jeast ten days before the date set for such sale by inclosing

’ in this State if any, and, depositing same in the United .

such notice in an envelope addressed to said manufacturer
or importer at his last known residence or place of business

States registered mail, postage prepaid, and by publication
for at least ten days before the date set for such:sale in a
newspaper of general circulation published in the county
or city and courity in which the property seized is to be
sold; provided, however, that if there be no newspaper of

general circulation in such county or city and county, then °

by the posting of such notice in three public places in such

county or city and county for said ten days period. The

said notice shall contain a description ofthe property to be
sold, together with a statement of the amount of the excise

taxes, penalties and costs, the name of the manufacturer

or importer and the further statentfént that, unless such ex-
cise taxes, penalties’ and costs are paid on or before the
time fixed in said notice for such sale, said property, or
so much thereof as may be necessary, will be sold in
accordance with law and said notice. ©. 2 |

At any such sale,-the property shall be sold by the Con-
troller of by his duly authorized agent in accordahce with
law and said notice, and the Controller shall deliver to the
purchaser a bill of sale for the personal property, and a

‘deed for any real property so sold, and such bill of sale or

deed shall vest title in the purchaser subject to a right of
redemption as prescribed in the Code of Civil Procedure

_ upon sales of real estate on execution. The unsold portion

of any propegty so seized may be left at the place of sale at
the risk of the manufacturer or importer. If, upon any
such sale, the moneys so received. shall exceed the amount
of all license taxes, penalties and costs due the Stat@ from
such manufacturer or importer, any such excess shall be
returned to the manufacturer or importer, and his receipt

be
such seizure and’sale.. Notice af stich intended sale and -

a

XXii

therefor obtained; provided, however, that if any person
having an interest in or lien upon the property has filed
with the Controller prior to any such sale notice of such
interest>gaid Controller shall withhold any such excess
pending a determination of the rights of the respective
- parties thereto by a court of competent jurisdiction. If,

for any reason, the receipt of such manufacturer or im-
porter shall not be available, the Controller shall deposit
such excess moneys with the State Treasurer, as trustee for ;
such: owner, subject to the order of such semeenel or
importer, his heirs, successors or assigns.

The Controller must also immediately transmit notice
of such delinquency to the Attorney General who shall at
once proceed to collect all sums due to the State from any
such manufacturer or importer hereunder by bringing suit
against the necessary parties to effect forfeiture of the bond -
or bonds of the manufacturer or importer, reducing any
deficiency to judgment against the manufacturer or im-
porter. —
| It is expressly provided that the foregoing remedies of

the State shall be cumulative and that no action taken by
the board, Controller or Attorney General shall be or be
construed to be an election on the,part of the-State or any | -
of its officers to pursue any remedy hereunder to the exclu- »
sion of any other remedy for which provision is made in
this Act. -

In any suit brought to enforce the rights of the State
hereunder the assessment roll prepared by the board pur-
suant to Section 26 of this Act, or a copy of so mpch thereof
as is applicable in such suit, duly certified by th¢ Controller
showing unpaid excise taxes assessed against any manu-
facturer or importer, shall be prima facie-evidence of the
assessment of the excise tax, the delinquency thereof, the
amount of the excise tax, penalties and costs due and unpaid
to the State, that the manufacturef or importer is indebted
to the people of the State of California in the amount of
such excise tax and penalties therein appearing unpaid and
that all the forms of law in relation to the assessment and
levy of such excise tax have been fully complied with by
all a required to perform administrative duties under
this Act.

Xxiii 2
Section 32. Any action to recover any excise tax levied
pursuant to this Act and paid under protest must be insti-
tuted within sixty days after the payment of such excise
_ tax, and failure to bring suit within said sixty days shall
constitute waiver of any and all demands against this State
on account of alleged overpayment of excise taxes here-
under. No grounds of illegality of the excise tax shall be
considered by the court other than those set forth in the
protest filed at the time of the payment of the excise tax.
If in any such\action judgment is rendered for the plain-
tiff, the amount of\the judgment shall first be credited on
‘any excise taxes due from the plaintiff under this Act, and
the balance of the amount of the, judgment shall be refunded
to the plaintiff. In any such’ judgment, interest shall be
allowed at the rate of six per cent per annum upon the
- amount of excise tax found to have been illegally collected
from the date of payment’of such excise tax to the date of
-allowance of credit on account of such judgment or to a
date preceding the date of the refund warrant by not more
than thirty days, such date to be determined by the Con-
troller.
.. In no case shall any judgment be rendered in favor of
‘the plaintiff in any action brought against the State Treas-
urer to recover any excise tax paid hereunder. when such
action is brought by or in the name of an assignee of the
manufacturer or importer paying said excise tax, or by any
. person, other than the person who has paid such excise tax.

Section 33. The tax imposed by Section 24 of this Act
upon the sale of distilled spirits shall be collected by means
of attaching to each package containing such distilled
spirits a stamp or stamps of a denomination equivalent to
the amount of excise tax imposed upon the sale of the con-
tents of such package. Such stamps shall be attached by
- the holders of on- or off-sale distilled spirits licenses issued
under this Act and by the holders of on-sale licenses for
. liquor other than beer and winé issued under the State
Liquor Control Act, immediately upon opening the original
cases in which the distilled spirits were packed and in which

such ‘disfflled spirits were purchased from the manufac-

XXiV

‘turer, rectifier, importér, or wholesaler. In the case of dis-
tilled spirits not in original cases at the time of purchase
the stamps shall be attached immediately upon bringing
such distilled spirits upon the premises for which such on-
or off-sale licenses are issued.

. Such stamps shall be sold by: the board only to persons
holding valid distilled spirits manufacturer’s licenses, recti-
fier’s g ome distilled spirits and wine importer’s licenses
or distilled spirits wholesaler’s litenses issued under ‘this
Act or the State Liquor Control Act; provided, that until’
July 1, 1935, the board shall sell a sufficient number of ch
stamps, to stamp stocks of distilled spirits on hand, td Be
sons holding valid on- or off-sale licenses for liquor other
than beer and wine issued under the State Liquor Control
Act; provided further, that the board may théreafter, in its
discretion, sell such stamps to such holders of on- or off-sale
distilled spirits licenses as it may determine.

_ On ahd after July 1, 1935, mf distilled spirits delivered
by any manufacturer, r tifier, importer ér wholesaler .of
distilled spirits to any He holding an on- or off-sale -
distilled spirits license issued under this Act or an on-sale
license for liquor other than beer and wine issued under the
State Liquor Control Act, must be accompanied by a suf-
ficient number of stamps purchased from the board, to
stamp the packages, containing such distilled spirits. Every
manufacturer, rectifier, importer or wholesaler of distilled
spirits who delivers distilled spirits in violation of this sec-
tion shall be guilty of a misdemeanor.

Such stamps shall be of such size, type, and character
as the board shall determine; provided, that all such stamps
must be of a character, design, and process which will give
the State the maximum amount o® protection against
counterfeiting. The board shall have full charge and

Section 45. Within thirty days after receipt by the
board of a petition for reconsideration the board shall itself
rehear the entire-matter de novo and shall thereupon and
within said thirty days either affirm, modify or set aside its .
original order. 3

Section 46. The action of the board upgn a petition for
a license, a protest, complaint, or a petition™for reconsidera-
tion shall be subject to review by any court of competent
jurisdiction. ee

Section 47. The filing of a petition for reconsideration’
with the board shall not be a bar to any application to the
courts for relief and shall not prevent a court from review-
_ ing or setting aside the action of the board upon a petition

for a license, protest or complaint.

XXXIV

Section 48. Service of the notices required by this Act
may be made personally or by mail; if by mail service shall
be made in the manner prescribed by Section 1013 of the
Code of Civil Procedure. - |

Section 49.. Common or private carriers shall transport
alcoholic beverages into the State only-when such alcoholic
beverages are to be consigned to a licensed importer. The
carrier must obtain the receipt of such importer for the
alcoholic beverage so transported and delivered and, if the
consignee refuses to give a receipt and show his importer’s
license to thé carrier, the catrier shall be relieved of all
responsibility for delivering said alcoholic beverage. Where
the consignee is not a licensed importer the carrier shall
immediately notify the board at Sacramento, giving full
details aS to the character of shipment, point of origin,
destination, and address of the consignor and €onsignee and
within ten days such alcoholic beverage shall be summarily
forfeited to the State of California and shall be turned over
to the board for sale at public auction. :

Every person violating the provisions of this section
_ Shall be guilty of a misdemeanor.

Section 50. Postal authorities may refuse delivery of
any shipment of alcoholit beverage originating outside of
this State. Postal authorities may turn such alcoholic
beverage over to the board.. The beverage when received
shall be summarily forfeited to the State, to be sold at public
auction by the board. Every person violating the provi-
sions of this section shall be guilty of a misdemeanor.

Section 51. It shall be unlawful for any licensee to have
upon any premises for which licenses have been issued to
Such licensee any alcoholic beverages other than the
alcoholic beverages which such licensee is authorized to sell
at such premises under the license or licenses issued ©
therefor. : ee

It shall be presumed that all alcoholic beverages found
or located upon premises for which licenses have been.
issued belong to the person or persons to whom such
licenses were issued. - , |

Pad

XXXV

Every person violating the provisions of this Section
shall be guilty of a misdemeanor. The board or its Pépre-
sentatives may either seize and summarily destroy or may
seize’ and sell at public auction any alcoholic beverages
found upon any premises in violation of this section.

The board shall also have the power to seize and sum-

ily .destroy or sell at pubite auction the following alco-
holic beverages;

1. Alcoholic beverages manufactured i in this State by
any person other than a licensed manufacturer, regardless
of where found;

2. Beer and wine upon the sale of which the excise
tax imposed by this Act has not been paid, regardless of
where found;

3. Distilled spirits except (a) distilled spirits located
upon premises for which licenses authorizing the sale of
such distilled spirits have been issued; (b) distilled spirits
consigned to and in the course of transportation to a
licensee holding licenses authorizing the sale of such dis-
tilled spirits; (c) distilled spirits the containers of which
bear the stamps herein required to be attached thereto;
(d) distilled spirits in United States government bonded
warehouses. )

Section 52. Every person who sells, serves or other-
wise disposes of any alcoholic beverage, except beer which
may be so sold, served, or. disposed of, over or at any public
bar or in any public barroom, for consumption on the
‘premises, shall be guilty of a misdemeanor.

’ Section 53. Any person who fails, neglects or refuses
to file any report required to be filed by this Act within ten
— after the report is required to be filed, or who makes
_ any false statement or gonceals any material fact in any
“application for a licensé or in any record, report, affidavit
or claim provided for herein, shall be guilty of a misde-
meanor unless such act is by any other law of this State
declared to be a felony, and upon conviction thereof shall

‘be punished by a fine of not less than one hundred dollars

Sn Pi NaN Mat ge TRE, NRE Mitre Yama

XXXVi

nor more than one thousand dollars, or by imprisonment
in the county jail not less than one month, nor more than
six months, or by both such fine and imprisonment.

Section 54. No manufacturer, rectifier, distiller,
bottler, importer or wholesaler or any officer, director or
agent of any such person shall

(a) Hold the ownership, directly or indirectly, of any
interest in any “on-sale”’ license;

(b) Furnish, give or lend any money or other thing
of value, directly or indirectly, to, nor guarantee the re-
payment of any loan or the fulfillment of any financial
obligation of, any person engaged in operating, owning
or maintaining any “on-sale” premises“ where alcoholic .
beverages are sold for consumption on such premises;

(c) Furnish, give, rent, lend or sell, directly or in-
directly, any equipment, fixtures or supplies, other than
alcoholic beverage directly or indirectly to any person en-
gaged in operating, owning or maintaining any “on-sale’
premises where alcoholic beverages are sold for consump-»
tion on such premises, provided that this subdivision shall ~
apply only to manufacturers, bottlers, importers or whole-
salers of products of the brewing industry;

| (d) Furnish, give, lend or rent directly or indirectly
to any person‘any decorations, paintings or signs other
than signs for interior use ef not to exgeed in area six
hundred thirty square inches for use in or about,or in con-
nection with any premises where alcoholic beverages are
sold- for consumption on such premises, or pay money or
any thing of value for the privilege of placing or painting
a sign or advertisement, or window display on or in any
premisés selling alcoholic beverages at retail; .

(e) Own any interest, directly or indirectly, in the busi-
ness, furniture, fixtures, signs, except signs for interior
use mentioned in subdivision (d) herein refrigeration,
equipment or lease in or of any premises operated or main-
tained under any “on-sale” license for the sale of alcoholic
beverages for consumption on the premises where sold; or

id

a | XXXvii '
own any interest directly. or indirectly, in realty ‘hereafter
acquired upon which such: “on-sale” premises are main-
tained unless the holding of such interest is germijiet in
accordance with regulations of the board.

Any person violating any provision of this section shall
be guilty of a misdemeanor and any holder of any retail
“on-sale” or retail “‘off-sale” license who shall solicit the
violation of the provisions of this section or accept or per-
mit to be accepted on his behalf and with his consent any
of the prohibited matters, articles or acts herein designated
shall be guilty of a misdemeanor; provided, however, that
the provisions of this section shall not apply to any equip-

" ment, fixtures or'supplics furnished, given, lent or sold
prior to the passage of this Act so long as such equipment,
fixtures or supplies remain in the premises in which in-
stalled prior to such time, nor shall the provisions of this
Act apply to carbonic acid gas or tapping accessories if

_ sold at the reasonable open market value and the aggregate -
cost of tapping accessories furnished to any one person
does not exceed $5.00 in any one calendar year. ©

Section.55. No sign or signs, which in whole or in part
advertise any alcoholic beverage, and exceed in area seven
_ huhdred twenty square inches and no sign using the words
“bar,” “barroom,” “saloon,” “cocktail bar” or “lounge,” — -
or words of like or similar import, shall be maintained,
erected, used or placed upon or adjaceht to the outside of -
any building and in connection with any premises therein
licensed to sell alcoholig beverages at retail for consumption
on such premises.
Signs or other advertising matter used in connection
| with the licensed premises of any retailer of alcoholic bever-
ages shall not be of any obnoxious, gaudy, blatant or of-
.fensive nature and shall in no manner contrary to the rules
_Ar regulations of said board obstruct the view of the interior
‘of the premises from the street.
Each and every holder of an “‘on-sale”’ retail license who
. Shall give, sell or otherwise dispense any draught beer, shall,
upon the faucet, spigot or outlet wherefrom such beer is
drawn, attach and keep posted a-clear and legible notice,

2 ‘

i

i

- XXXVII1

placard or marker which shall in the English language indi-
cate and declare the name or brand adopted by the manu-
facturer of such draught beer so given, sold or dispensed
by such licens@@, and which notice, placard or marker shali
be so situated as to be clearly legible for a distance of at
least ten (10) feet from such spigot, faucet or outlet to
a person with normal vision, and such notice, sign or placard
shall at all times be so situated’ as to be so clearly legible
from the place where such “on-sale” licensee serves any
customer or fonsumer of such beer, and provided further
that if such faucet, spigot or other drawing device is in a
location not within the room of the place of service and
consumption of such beer, then, and in that event there shall

also be kept posted a similar notice, placard or marker in ©

the place of service and consumption of such beer which
shall truthfully state and. indicate only the kinds and brands
of draught beer actually on sale in the premises of the ‘“‘on-
sale” licensee. ees

Any person who shall violate any of the provisions of
this section, or who shall substitute ‘ential ee different
brand of draught beer from that indicated by any of the
notices, placards or mafkers hereinabove provided for; or
who shall substitute one brand of beer for another, or mis-
represent the. brand or ‘kind of beer served to a consumer,
shall be guilty of a:misdemeanor for such violation or non-
compliance. Any person who sells or otherwise disposes of,
except for éxport, any draught beer containing mere than
three and two-tenths per cent of alcohol by weight and any
person who sells or otherwise disposes of, except Ngr export,

~ any*bottled beer containing more than four per cent of alco-

hol by weight, shall be guilty of-a misdemeanor ; provided,
that this limitation shall not apply to the sale of ale, porter,
brown and stout in bottles bearing labels properly describing
the contents under any licenses,. other than on-sale beer
licenses, issued under this act or the State Liquor Control
Act.

Section 56.° Every person who employs or uses the

°

=

|

iservices of minors in or on that portion of any premiises-
_, which are used for the sale and service of alcoholic bever-

bal XXXiX
ages for consumption on the premises shall be guilty of a
misdemeanor.) - |

Section 57.) It shall be unlawful for any person to pay
or agree to paylany hostess, waitress, entertainer-or other
‘ person a percentage of the receipts: from sales of alcoholic
beverages solicited or made by such hostess, waitress, enter-
tainer or other person a salary or remuneration the amount |
of which is in any way dependent upon the amount or num-*
ber of sales of alcoholic beverages solicited or made by such
hostess, waitress, entertainer or other person. Provided,
that this section shall not prohibit the holders of manu-
facturer’s, tectifier’s or wholesaler’s licenses from employ-
ing and paying salesmen engaged in‘selling or soliciting sales
,. for alcoholic beverages on a commission basis.
Every person who violatés the provisions of this section
-shall be guilty of a misdemeanor. ~

Section 58. Every person who keeps or permits to be
used or suffers to be used any disorderly house or place in
which people abide or to which people resort, to the dis-
turbance of the neighborhood, or in which people abide or
to which people resort for purposes’ which are injurious to

the public morals, health, convenience or safety shall be
-_ * guilty of a misdemeanor. a

- Section 59. Every on- or off-sale licensee who sells,
gives away or furnishes any alcoholic beverage in any elec-
tion district or precinct in any county in the State where ~

an election is in progress, during the hours when by law
the polls are required to be kept open for voting shall be
guilty of a misdemeanor. > | :

Section 60. Except as otherwise provided in this sec-
tion, no person licensed to manufacture, import or whole-
sale any alcoholic beverage shall deliver or cause to be de-

- livered any beer to or for any person holding an on-sale or
off-sale license except ‘between.the hours of six a.m. and
eight p.m. and no such delivery of any alcoholic beverage
shall be made or caused to be made by any such licensee on

xl

Sunday. Alcoholic beverages may be delivered at the plat- |
form of the manufacturing or distributing plant at any time.
Every person violating the provisions of this section shall
be guilty of a misdemeanor.

_ Section 61. Every person who sells, furnishes, gives,

or causes to be sold, furnished or given away any alcoholic —
beverage to any person under the age of twenty-one years
shall be guilty of a misdemeanor ; provided, that this section
shall not apply to the parents or guardians of such persons
under twenty-one years of age.

Section 62. Every person who sells, furnishes, gives
or causes to be sold, furnished or given away, any alcoholic
beverage to any habitual or common drunkard shall be guilty
of a misdemeanor.

Section 63. Every person, not authorized by law, who
brings into any State prison, town or county jail, or city
and county jail, or reformatory in this State or within the
grounds belonging to any such institution any alcoholic
beverage of any kind whatsoever shall be guilty of a felony.

Section 64. Every person who sells, gives or delivers
to any other person any alcoholic’ beverage at any public
schoolhouse or upon any portion of the grounds thereof
shall be guilty of a misdemeanor.. Any person convicted
of a violation of this section shall, in addition to the pen-
alty irnposed for the misdemeanor, be barred from having
or receiving any privilege of the use of public school -prop-
_ erty which is accorded by Chapter II of Part III of Division
VI of the School Code of this State.

‘Section 65. Every person convieted of a misdemeanor
for a violation of any of the provisions of this Act for
which another punishment is not specifically provided for
herein, shall be punished by a fine of not more than five “
hundred dollars or by imprisonment in the county jail for
not more than six- months, or by both such fine and im-
prisonment..

xli
»

All fines and forfeitures imposed for a violation of this
Act and collected in any court, except police courts, city
justices’ courts, city courts, and recorders’ courts of cities
or towns, must be paid to the county treasurer of the county
in which the court is held; provided, that all fines and for-
feitures collected in any police court, city justice’s court,
_ city court, or recorder’s court, of any city or town that is
maintained and the salaries of the officers thereof paid
by the city shall be paid to the city treasurer of the city in
which such court is located, excepting, however, all for-
feitures collected by the judge of any of said courts when
sitting as a committing magistrate. |

Section 66. Every person convicted of a felony for a
violation of any of the provisions of this Act for which
another punishment is not specifically provided for herein,
shall be punished by a fine of not more than five thousand
dollars or by imprisonment ‘in the State penitentiary for
not less than one year nor more than five years or by both
such fine and imprisonment. |

Section 67. It is hereby declared that this Act shall not
apply to the manufacture, sale of use of completely dena-
tured ethyl alcohol or special dénatured ethyl alcohol, as
these substarices are defined in the various statutes and
regulations of the United States government relating

thereto. | ,
Nothing in this Act shall be deemed to prevent or re- -
strict the use of ‘tax-free ethyl alcohol under regulation
of the Treasury Department of the United States govern-
ment by any governmental agency, State or Federal, or any
scientific university or college of learning or any laboratory
for use exclusively in scientific research or to any hospital
or sanitarium.

Nothing in this Act shall be deemed to prevent or re-
strict the use of tax-free alcohol or of industrial alcohol
or other distilled spirits or wine under regulation of the
United States government in the manufacture of medicinal -
pharmaceutical, or antiseptic products, including prescrip-
tions compounded by retail druggists; of toilet products,

xlii

of flavoring extracts, sirups, of food products, of scientific,
chemical, or industrial products; provided such products
are unfit for beverage use. ~

Section 68. The State Liquor Control Act, Chapter
658, Statutes of 1933, and Chapter 178, Statutes of 1933,
shall remain in effect until July 1, 1935, after which date
said acts shall no longer be of any force and effect; pro-
vided, that any taxes imposed pursuant to Chapter’ 178,
Statutes of 1933, prior to said date shall rémain fully col-
a

Section 69. The following acts and sections, together
_ with all amendments thereof and all acts supplementary
thereto, are repealed.

YEAR . CHAPTER PaGeE YEAR Coavese PAGE
a 188 240 OE ve is ee 156 161
. 232 193 Se Waxcds cs 240 319
a 223 186 .. ae | = 20
1871-72 .... 188 231 See 123 126
1873-74 .... 13 12 ree 104 127
1873-74. .... 27° 27 i 413 722
1873-74 .... 198 297 ee 351 599
1873-74 .... 300 434 rer 21 20
1873-74 .... 345 ° 509 SAPP Per 80 79
1875-76 .... 473 691 re 89 221
reer 83 80 re 51 340
1889 ...... 241 352 Eee 149 598

eee 8781

PeNnaL Cope. SECTIONS.
63b 397b 680

Po.uiTicaL CopE SECTIONS.

- 3381 a
3383

_ ,_ ScHoot Cope SECTIONS.
3.80 ’ 7
3.81

Section 70. If any section, subsection, clause, sentence
or phrase of this Act which is reasonably separable from

xiii .

the remaining portion of this Act is for any reason held to
be unconstitutional, such decision shall not affect the re-
maining portions of this Act, The Legislature hereby de-
clares that it would have passed the remaining portions of
this Act, irrespective of the fact that any such section, sub-
section, clause, sentence or plfrase of this Act be declared
unconstitutional. .
Section 71. This“Act, inasmuch as it provides for tax
levies for the usual current expenses of the State, shall, |
under the provisions of Section 1 of Article IV of the Con-
stitution, take effect immediately.

Approved, June 13, 1935.

ee

xliv
APPENDIX B ..

‘I FORM OF WEBB-KENYON ACT AS
‘ORIGINALLY PROPOSED.

Senate Bill 4043 (62nd Cong., 3rd Sess.), the original
Bill introduced in the Senate embracing the subject dealt
with in the Webb-Kenyon Act, was first before the Senate ~
for debate on December 16, 1912. In introducing the Bill
for debate it was said:

Mr. Sanders. Mr. President, ca bill 4043, entitled
“A bill to prohibit interstate commerce in intoxicating |
liquors in certain cases,” stripped of its verbiage would
read:

_ Be it Enacted, That the shipment of intoxicating
liquor from one State into any other State by any
person, to be received or used in violation of any
law of such State, is hereby prohibited.

Sec. 2. That all intoxicating liquors transported
into any State shall, upon arrival within the boun-
daries of such State and before delivery to the con-
signee, be subject to the operation of the laws of such
State.

This bill relates to nothing but the shipment of intoxi-
cating liquors from one State into another State where it
is to be sold in violation of State laws concerning same.

_Molupie 49, Congressional Record, page 699)

II. DEBATES STRESSING OBJECT OF BILL AS

AN AID TO STATES IN. EXERCISE OF
POLICE POWER.
Senator Kenyon’s Views on Object and Effect of Bill.

Mr. Kenyon. Now, I think no lawyer who is honest
with himself and perfectly frank will deny that there are

very close constitutional quéstions involved in this bill, and

especially as to section 2. Every forward measure must
run the gauntlet of constitutional objection.

°
. *
SS . tll

xiv

The evil which this bill seeks to strike at is apparent,
and the purpose, it seems to me, is commendable. Jn_its
ultimate analysis the bill is simply to permit the States *c
exercise their reserved police power without interference by
the Federal Government; in other words, to subject inter-
state commerce in certain articles to the laws of the several
States. (Italics ours.) This.Government is one of dele-
gated powers. It has been asserted by constitutional
writers of great‘eminence that one of the incentive reasons
for the adoption of the Constitution was to give free chan-
nels to commerce and not permit the States by various
regulations to block commerce..

The power of the State in its /reserved police power is
one which Congress does not give and is one which Con-
“gress can not take away. It can not add one particle to or
detract one iota from the police power of the States. These
powers belong to the States; the right to make such laws:
concerning the health, life, and safety of its’ citizens as its
legislative power in its wisdom may determine. This is just
' as much a right in the State as the constitutional right to _
regulate commerce is in Congress. The “police. power
‘zone” of the State, if such an expression might be used,
may at times lap over and intrude upon the “interstate com-
merce zone” of the Federal Government. If such’ conflict
ever does arise, the Federal Government, of course, is
supreme. } | 3

This bill if enacted would not be a law to bring about
prohibition. It would not be a law to stop personal use of.
intoxicating liquors, nor to prohibit the shipment of intoxi-
cating liquors for personal use, nor to-stop the use of intoxi-
cating liquors for sacramental purposes. Jts purpose, and
its only purpose, is to remove the impediment existing as to
the States in the exercise of their police powers regarding
the traffic or control of intoxicating liquors within their
borders: ° ;

It ts the spirit of our times and the genius of our institu-
tions that each State should exercise its police power free
from the impediments that might spring from a narrow
construction of ‘the interstate commerce clause. Where a
State has determined that intoxicating liquors shall not be

xlvi
o . ws
manufactured or sold urthin its borders, 1s it not manifest
that the citizens of other States should not be granted
greater privileges in that State than its own citizenship
enjoy? (Italics ours.)
(Volume 49, Congressional Record, page 707)

Mr. Sherley’s views.

Mr. Sherley. Man after man has stood on the floor here
saying, ‘This bill is simply to give to the State additional
power of control.” I say to, you that whatever power a
State has over any subject within its domain is not because
of the Constitution of the United States, and no act of Con-
gress can grant any power to it that it does not already
have. We live under a: government of delegated powers.
Certain powers have been delegated to the States, certain.
to the Nation, and certain reserved té the people, and dele-
gated neither to the State nor to the Nation. The power
that the Federal Government has over interstate commerce
is plenary. It is absolute within the limits of the Constitu-
tion, and Congress can not by all the declarations under the
sun convey to any single State the slightest power that that
State does. not now have.
(Volume 49, Congressional Record, page 2841)

-Mr. Mondell’s views.

Mr. Mondell. What the legislation does is to subject _
certain articles in interstate commerce to the police power
of the State in order that the State authorities may deter-
-mine whether they are to be received, possessed, sold, or
~ in any manner used in violation of the ‘law of the State.
(Volume 49, Congressional Record, page 2837)

Mr. Houston's views.

Mr. Houston. It is -but aiding local option, with tle
State as the unit, and I think that all agree that the con-
trol of the liqugg_traffic belongs to the States and that the
State in its-exercSe of its police power in local self-govern-
‘ment should be aided as’much as it is possible for Congress
to aid it. b

(Volume 49, Congressional Record, page 2824)
_)

- xivii

Mr. Paynter’s views.

Mr. Paynter. Therefore, Mr. President, when it is
stated in the bill under consideration (or the Wilson bill)

’ that an article at a certain time shall be subject to the police

power of a State. the Congress can not thereby add to the
police power of the State. Such a statement, if viewed
from a Constitutional aspect, can not extend the police
power of the State. It would be more accurate, I think,
if Congress should say that the interstate shipment was
terminated upon delivery of the article. Then there would

be no reference made to the police power of the State and

‘would not appear by words that Congress was endeavoring

s

to add to the police power of the State. This would be
better, as Congress can neither confer upon or diminish
the police power of the State. In my opinion it is very in-
accurate to make a declaration that at a certain period it
shall be within the police power of the State, because when
the shipment is terminated the police power of the State
takes hold and control of the article that ts shipped.
(Italics ours.) So, as I say, it is very misleading to make
a statement of that kind in the bill. It is not constitution;

ally accurate. It is not the province of Congress to define

the police power of the States. It is the province of Con-
gress to make uniform rules to regulate commerce; not,
however, to confer such power upon the States.

(Volume 49, Congressional Record, pages 2689, 2690)

III. DEBATE RELATING TO CONSTITUTION-
ALITY OF SECOND SECTION AND REASONS
FOR ITS ELIMINATION.

Views on Constitutionality of Second Section.

Senator McCumber. I had stated, if the Senator will
pardon me, when he first called my attention to it, that I
doubted the constitutionality of ection 2 and that I did
not see the necessity of it.. It was no part of the bill when

‘it was introduced, but is a committee amendment. , I think

it is rather dangerous than beneficial. 4t may be open to

xl viii

the construction that it is a delegation of congressional
authority.

_(Volume 49, Congressional Record, pages 702-3). °

Senator Kenyon’s views.

Senator Kenyon. The real difficulty with section 2 is’
this: The section recognizes the transportation of liquors
into the State and then permits the operations of the police
power that might stop the liquor at the State line, thus
keeping it out of interstate commerce. The first section
takes certain liquor out of commerce and the second section
seems to recognize it as being in. There is some incon-
gruity in this. That is the proposition on which I have
had great difficulty in harmonizing my views. |

(Volume 49, Congressional Record, page 830)

Mr. Paynter’s views.

Mr. Paynter. Section 2 is inconsistent with section 1,
as this section allows intoxicating liquor to be seized upon
arrival in a State, regardless of the question of intent of
those who had a direct or indirect interest in it.

(Volume 49, Congressional Record, pages 2687, 2688)

’ Mr. Borah’s views. a

Mr. Borah. My object in the first place was to discuss
principally the second section of the bill. I do not ‘believe
the second section of the bill is constitutional. I believe it
establishes a different rile and involves a different prin-—
ciple from that which is involved in the first section, and it
was my purpose to state why I entertain that view. I shall
not do so, owever, in view of the fact that I understand ~
the parties in charge of the bill are going to offer as a sub-
stitute for this bill the one that passed the house known as
the Webb bill, and which is in effect the first section of
this bill.

Assuming that: probably the substitute will prevail, I
am not going to take time to state why it seems to me the
second section is inhibited by the provisions of the Con. .
stitution. I could not and Shall not vote for this section

a—_,

xlix

in any event—entertaining the view which I do as to its
unconstitutionality.
(Volume 49, Congressional Record, page 2919)

Mr. Kenyon’s views.

‘Mr. Kenyon. Mr. President, a bill was passed in the
House known as the Webb bill. An attempt has been made
to substitute that bill to-day for what is commonly known

_as the Kenyon-Sheppard bill. That has not been success-

ful, but a motion will be made by the Senator from New
Hampshire [Mr. Gallinger] to strike out all after the en-
acting clause and insert in lieu thereof the words of the
Webb bill. I very much hope that that motion may prevail.

(Volume 49, Congressional Record, page 2920)

IV. DEBATE EVIDENCING DIVERGENCE OF
VIEWS IN RESPECT TO CONSTITUTIONAL-
’ ITY OF BILL.

Mr. Kenyon’s Views.

Mr. Kenyon. Senator Nelson, of Minnesota, in his re-
port*some years ago to Congress on this questica, stated
that matter from that standpoint so clearly that I use his

language. He said:

* violation of the laws thereof is hereby prohibited.

“Mr. President, in agreeing to that section I think the
committee was unanimous that the language used" would
effectuate the purpose that is obviousely designed by section
2. It is claimed, however, and I think with some degree
of assurance for the future, that Congress now has the
power to pass laws to.protect the so-called dry States in
regulation of interstate commerce over intoxicating liquors.
A great many laws on that subject have been enacted:

“T will not review those laws in detail. First, however,
we had what is known as the Wilson law. That law was
treated in the case of Rhodes v. Iowa (170 U. S. 412); but
the Supreme Court in that case gave rather a restricted
construction of the language used by the Congress, and
held that’ under the Wilson Act the interstate character
attached to the liquor until it had actually been delivered to
the consignee. In other words, the court held that the
interstate-commerce clause—that is, the power of Congress
to regulate interstate commerce—attached to that com- -
modity not only before it entered the State but after it
entered the State so lorig as it was in process of transporta-
‘tion either by rail, by express, or by any other method,
until the commodity or the intoxicating liquor was in fact
delivered to the consignee.

Titen came an amendment to the Wilson Act, known as
the. Webb-Kenyon Act. The Webb-Kenyon Act was
interpreted by the Supreme Court of the United States in
the case of Clark Distilling Co. v. Western Maryland Rail- -
~ way Co. (242 U. S.-311). The language of the Webb-
Kenyon Act was designed to give the State in effect power

om ‘ > Lxi*

of regulation over intoxicating liquor from the tithe it actu-
ally entered the confines of the State; and the Supreme
Court held that.it was following the doctrine laid down in
the case of Rhodes against Iowa, and necessarily must fol-
low that doctrine in order to sustain the deCision it was mak- ©
ing in the case of Clark against Maryland Railway Co.

Mr. Wagner. Mr. President, will the Senator yield?

Mr. Blaine. I see my able friend from New York
shaking his head. I yield to him.

Mr. Wagner. I do not want to enter into a controversy,
because it really is not very important, but I do not think
the Senator meant to say that by this act Congress delegated
to the States the power to regulate interstate commerce;
Congress itself regulated interstate commerce to the point
of removing all immunities of liquor in interstate com-
merce. : . .

‘Mr. Blaine. I thank ghe Senator. I think he has giveg
the correct statement of the doctrine. My understanding
of the question was identically the same—that it was the
action of the Congress of the United States in regulating
intoxicating liquor that protected the dry State within the
terms of the law passed by the Congress. |

Then, following the Webb-Kenyon Act, was the Reed
“bone dry” amendment. That wentsomewhat further. I
need not discuss that.’ That amendment was sustained by
the Supreme Court in the case of United States v. Hill (248
U. S. 420). . 7 |

In the-case of Clark against Maryland Railway Co.
there was a divided opinion. There has been a divided,
opinion in respect to the earlier cases, and that division of *
opinion seems to have come _dowfi to a very late day. So,
to assure the so-called dry States against the importation
of intoxicating liquor into thoseStates, it is proposed to
write permanently into the Constitution a prohibition along
that line. | 7

Mr. President, the pending proposal will give the

States that guarantee. When our Government was organ-
ized and the Constitution of the United States adopted,
the States surrendered control over and regulation of inter-
state commerce. This proposal is restoring to the States,

lxii :
in effect, the right to regulate commerce respecting a single
commodity—namely, intoxicating liquor. In other words,
the Stafe is not surrendering any power that it possesses,
but rather, by reason of this provision, in effect acquires
powers that it has not at this time.

The committee felt that since the Congress had acted
and had definitely legislated upon this question, while that
legislation had been sustained by the Supreme Court, yet
it was sustained by a divided court, and that we could well
afford to guarantee to the so-called dry States the protec-
tion designed by section 2. .

I afn opposed to the dry States interfering with the so-
called wet states in connection with this question of intoxi-
cating liquor; and so, by the same token, I am willing to
grant to the dry States full measure of protection, and thus.
prohibit the wet States from interfering in their internal
affairs respécting the control of intoxicating liquors.

(76 Congressional Record, pages 4140, 4141)

* * * * * * * * x

Mr. Biaine. Mr. President, my own personal viewpoint
upon section 3 is that it is contrary to section 2 of the reso-
lution. I am now endgavoring to give my personal views.
The purpose of section 2 is to restore to the States by con-
stitutional ameiidment obsolute control in effect over inter-
state commerce affecting intoxicating liquors which enter
the confines of the States. The State under section 2 may
enact certain laws on intoxicating liquors, and section 2 at
once gives such laws effect. Thus the States are. granted
larger power in effect and are given greater protection,
while under section 3 the proposal is to take away from the
States the powers that the States would have in the absence

of the eighteenth amendment. My view therefore is that
section 3 is inconsistent with section 2, and the two sec-
tions are incompatible, and that section 3 ought to be taken
out of the resolution. I made myself clear before the sub-
committee and before the full committee, and made a reser-
vation to that effect.
(76 Congressional Record, page 4143)

* * * * * * * * *

“-_ 4%, | | | ;
Lxili :

‘* Mr. Fess. I think the Senator has answered my ques-
tion, but he goes farther than I feel free to go. In other
words, the second section og the joint resolution that is now
before us ‘is designed to permit the Federal authority to
assist the States that want to be dry to remain dry. I am
in favor of that. The third section is intended to give au-
thority to the Federal Government to prevent the return of
the saloon to the extent of regulating or prohibiting the

. drinking of liquor on the premises where the sale is -
made. * * *
(76 Congressional Record, page 4168)

* * * . * -; . * +

‘ Mr. Walsh of Montana. I wish to say a word, in view
of what has just been stated by the Senator from Florida
in relation to the second paragraph of the joint resolution
as tendered by the committee.

It is true that the original Constitution authorizes Con-
gress to prohibit the transfer of intoxicating liquors in
interstate commerce. It is held, however, that that author-
ity simply indicates the intention to have commerce free
except as Congress may otherwise direct. It has been held |
that under the existing Constitution the right obtains on
the part of any citizen to pass hig goods into another State,
and they remain under the protection of the Federal Con-
stitution until they actually reach the hands of the con-
signee ; so that they can not be stopped at the State line nor
there fall under the jurisdiction of the-State authorities,
but the goods will not fall undef the jurisdiction of the State

- authorities until they actually get into the possession of the-
consignee who may live in the center of the State. Mean-
while all manner of opportunity is afforded for the diver-
sion of the intoxicating liquors from the consignee to whom
they are addressed. Likewise, even then, the intoxicating
liquor is protected by the commerce clause; if it remains
on the siding in the car of the transportation company, it
still remains under that protection, and if it goes into a
warehouse belonging to the transportation company it re-
mains under the protection of the Federal statute, and ‘is
immune from any control by State statutes until it actually
reaches the possession of the consignee. The purpose of

ae

lxiv

the ‘provision in the resolution reported by the committee
was to make the intoxicating liquor subject to the laws of
the State once it passed the State line and before it gets into
the hands of the consignee as well as thereafter. It was so
decided in’a case reported in One hundred and seventieth -
United States Reports, with which, I think, the profession
generally is not particularly familiar.

Mr. Glass. Mr. President, in my own interpretation of
the resolution as I have presented it, there can be no ‘con-
signee of intoxicating liquors in a dry State. Liquors may
be shipped across a State in interstate commerce from one -
wet State to another wet State, but the resolution as I have
drafted it prohibits the shipment of intoxicating liquors into
a State whose laws prohibit the manufacture, sale, or trans-
portation of liquors. So I have met the objection that we
are undertaking to interfere with interstate commerce as.
between States which authorize the manufacture,’ transpor-
tation, and sale of liquors; but there can ‘be no consignee in
dry territory under the terms of my proposed amendment
to the Constitution. |

Mr.. President, at every point in the presidential cam-
paign when submissior of this question was discussed, and *
whenever the objection was raised as to the return of the
saloon, assurances were given that both, parties, with unex-
ampled unanimity, were opposed to the return of the saloon.
The Democratic national platform, in spirit and by sugges-.
tion—indeed, by denunciation—objected to the return of the
saloon. The Republican platform in text insisted upon a
constitutional guaranty against ‘the return of the saloon.
So my joint resolution complies with both the Democratic
and the Republican platforms; and that is the only way you
are ever going to get the question subinitted at all, as‘it
requires a two-thirds vote. Moreover, not only is it the only.
way you are ever going to get it submitted but it is the only
way you are ever going to get it ratified by 36 States of the
Union. | 0

(76 Congressional Record, page 4219)
* . 7 . .* se » x *

Mr. Reed. May.lI preface the question by saying that
.. I am if sympathy with every word the Senator has thus
* far uttered on this subject. |

OOP TESST RE SOE A PT ES nee WOO a Es ne ——

lxv .

‘A good many Senators are obviously bothered by the
continuance of Federal control in this matter; and while
they are anxious to see the saloon outlawed, they would like
to see it done by prohibition on*State action rather than
_+ continuing this unsuccessful Federal effort to carry its

_ police power into the States. I am wondering whether the
Senator feels that the last sentence in section 1 of his amend-
ment is essential. That is the one which gives concurrent
power to Congress. :

‘ Mr. Glass. No;4 do not think it is essential. If I could
be brought to believe that the joint resolution stands a
better chance of passage by the elimination of that sen-
tence, I should be glad to eliminate it, because the balance
of the joint resolution gives us a constitutional prohibition
against the return of the saloon. |

Mr. Reed. That is just what I want to see; and the.
question of the Senator from Florida (Mr. Fletcher) a
little while ago seemed to be animated by the same thought
T had—that there are ‘many votes that would be secured
for the joint resolution if that grant of concurrent power
--to Congress were eliminated.

Mr. Glass. That being so, I should be perfectly willing .
~ to eliminate that one sentence from the measure. 4
want is a constitutional guaranty against the return of
this abominable saloon system of dispensing intoxicating
liquors—that ‘is all—and if we write it into the Consti-
tution I assume that no State would ever even undertake
~ to violate the text of the Constitution by licensing a saloon.

Mr. Reed. Obviously, if it did, its licensing law would
be invalid.

(76 Congressional Record, page 4220)

°

7)

Ixvi

APPENDIX E

RETALIATORY BILLS AND LAWS.
ILLINOIS.
Senate Bill No. 328, introduced by. Monroe, reads as
follows:

A Bitt For an Act to add Section 2a to Article VI of

“An Act relating to alcoholic liquors,” approved ery
31, 1934, as amended. -

Be it enacted by the People of the State of Ilinvis, repre-
sented in the General Assembly: :

Section 1. Section, 2a is added to Article VI of “An

. Act relating to alcoholic liquors,” approved January 31,
1934, as amended, the added section to read as follows:

ArtTIcLe VI. | }

Sec. 2a. No license shall be issued to a distributor to
import beer manufactured in any State, the laws or rules
or regulations of wh‘ch have the effect of discriminating

against the sale in such State of beer manufactured in
Illinois.

. KENTUCKY.

House Bill No. 42X XX, introduced by Dien April 18,
1936, reads as follows: a

_

An Act relating to revenue and taxation and nd declaring
an emergency.

Be It Enacted by the General Assembly of the
Commonwealth of Kentucky:

Section 1. When by the laws of any other state any
tax, fee, fine or penalty of any sort whatever is imposed

ecm i lia aca a iD

- Ixvii a
on any goods produced in Kentucky, greater than that im-
posed upon the same or similar goods produced in such other
state, then the same tax, fee, fine, or penalty is hereby im-
posed on any goods produced in such other state and sent
or imported into Kentucky. : .

Section 2. This tax is not intended to apply to goods °
or articles in interstate commerce and they are hereby ex-
pressly excluded from the provisions of this Act.

Section 3. The Department of Revenue of the Com-
monwealth of Kentueky is hereby charged with the enforce-
ment of this Act and it shall have all power necessary to
such enforcement in the collection ef the taxes herein pro-
vided, including the institution of legal proceedings, and to
promulgate such rules and regulations and preseribe: such
forms as it may deem necessary for the enforcement of
this Act. — 5b ae :

Section 4. All laws and parts of laws in conflict here-
with are hereby repealed to the extent of such conflict.

Section 5. Whereas, the Commonwealth of Kentucky
is sorely in need of revenue for the maintenance of the sev-
eral necessary branches of government, an emergency is
hereby declared to exist and this Act shall become effective
- from and after its passage and approval by the Governor.

OHIO.

Chapter 15, Ohio General Code, Section 6064-67,
(Liquor Control Act, 1935), progides as follows:

Sec. 6064-67.—If the laws of another state, territory
or nation, or the rules and regulations of an administrative
body therein, provide for or authorize the levy and collection
of taxes, fees and charges upon or against the products of
Ohio manufacturers of wine or manufacturers or brewers .
of beer and other malt liquors when such products are sold
in, delivered or shipped into such state, — or nation,

- Ixviii
@ i 3
or any part thereof, in excess of the taxes, fees and charges
levied and collected on the products of manufacturers or
brewers of said state, whether such taxes, fees and charges
are in the nature of. an excise, sales or import tax, or by —
whatever name designated, the tax commission’of Jhio is
hereby authorized, and shall levy and collect additional
taxes, fees, and charges on the products of manufacturers
of wine or manufacturers and brewers of beer and other ,
malt liquor of said state, territory or nation when sold in,
delivered or shipped into this state, as hereinafter provided.

PENNSYLVANIA.

_ Public Law No. 15, Pennsylvania Liquor Control Act,’
- (1933) (As Amended and reenacted by Act of July 18,
1935, Act No..399), provides as follows: ae

Sec. 201. General Powers of Board.— * * *
* * * * * x *x * x

‘(b) The board shall require each Pennsylvania manu-
facturer and each non-resident manufacturer of distilled .
liquors selling distilled liquors to the board, which are not
manufactured in’ this Commonwealth to make application
for, and be granted, a permit by the board before distilled
liquors, not manufactured in this Commonwealth, shall be ~
purchased from such manufacturer. Each such manufac-
turer shall pay for such permit a fee which, in the -case

. of-a manufacturer of this Commonwealth, shall be equal
to that required to be paid, if any; by a manufacturer of
of the State, territory, or country of origin of the distilled
liquors, for selling liquors manufactured'in’ Perinsylvania; —_
and in the case of a non-resident manufacturer, shall be
. equal to‘that required to be paid, if any, in such Stage,
‘territory, or country by Pennsyivania manufacturers doing
business in such State, territory or country. In the event
. that any such manufacturer shall, in the opinion of the
board, sell, or attempt to sell, distilled liquors to the board
through another person, for the purpose of evading this
provision relating to permits, the board shall require such _

“/ | Ixix

. person before purchasing distilled liquors froffii him or it

- to take out a permit, and pay the same fee as hereinbefore

required to be paid by such manufacturer. All permit fees
". 3 :
Appellants state in argument that since the adoption
of the Twenty-first Amendment, the question presented by
this appeal has been before district courts inegget different
cases, and by some process of reasoning conclude that of
* the eight decisions the question has been determined favor-
ably to appellants’ position in four of the cases. This con-
tention can best be refuted by an analysis of the cases.
One of the opinions referred ta is the “Georgia” opinion.
So far as appellees can ascertain, no such opinion was ever
rendered upon this subject by a District Court of the United
States in Georgia. The refererice of appellants to a Georgia
case apparently results from a mistaken reference of the _
court to such a case in the Premuer-Pabst Sales Company
v. Grosscup, (12 Fed. Supp. 970, E. D. Pa. 1935).
__ The case of Jeseph Triner Corporation v. Arundel, (11
Fed. Supp. 145, D. C. Minn. 1935) is discarded by appel-
lants by the mere staternent that the court declined to pass
upon the application of the 21st Amendment to those states
that recognizéd liquor as an article of commerce, resting
its decision entirely upon a violation of the 14th Amend-
ment. It is true that the’-Court found it unnecessary to
base its opinion upon the Commerce Clause alone, but the
language used by the Court leaves no doubt as to the views
entertained upon that subject. That case involved the con-
struction of a statute of the State of Minnesota forbidding -
the importation by any licensed manufacturer or wholesaler
of any brand of intoxicating liquor containing more than
25 per cent. of alcohol ready for sale without further
processing, unless such brand should be registered in the
United States Patent Office. No like registration of brands
was required of intoxicating faHo manufactured within
the state. It was said by the C

—_ a lxxi

“The contention of the defendants is that chapter
390 represents a proper exercise of its police power .
by the state and is in no respect violative of the Con-
stitution of the United States. They also contend
that, sinct the adoption of the Twenty-first Amend-
ment to the Constitution of the United States, neither
the commerce clause nor the equal protection clause
applies to intoxicating liquor, and that the power to

_ control the manufacture, importation, and use of 9
such liquor was, without any restrictions, conferred
upon the states by virtue of the provision of the
Twenty-first Amendment, that ‘the transportation
or importation into any State, Territory, or posses- .
sion of the United States for delivery or use therein
of intoxicating liquors, in violation of the laws
thereof, is hereby prohibited.’ ,
“With the contention that by this language it
was intended that intoxicating liquors should be ex-

' * cepted from the provisions of the commerce clause
and other provisions of the Constitution of. the
United States, we are unable to agree. The purpose
of the provision referred to was to’ make it im- .

_possible for Congress tg permit the transportation

or importation into any state, territory, or posses:
sion of the United States of intoxicating liquors in >
violation of the laws of the state, territory, or posses-
sion. In other words, the provision left the states,
territories, and possessions free to determine to what ~, _
extent, if at all, intoxicating liquor should be a lawful ~
subject of commerce within their limits.”

The gase of General Sales & Liquor Company v. Becker
_ (14 Fed.-Supp. 348, E. D. Mo. 1936) is apparently thought
by appellants to be. adverse to the contentions asserted in
this case. The propositions therein decided are in entire
harmony with appellees’ position here and are, in fact, in
support of it. The statute assajled limited a non-resident
wholesale dealer in intoxicating liquors to sales to licensed
wholesalers within the state, whereas a resident wholesale.
dealer was free to sell to licensed retailers. The discrimin-

'S

" bxxii
o . .
- ation there complainéd of was one against persons, the
court clearly pointing out that no discrimination was made
under the statute between products. That a state may en-
tirely exclude a nc.-resident from engaging in the sale of ..
. liquors within its borders and limit-sales' solely by residents,
no one will doubt. So holding, the eourt necessarily found
that in limiting a non-resident in the sales which he made
within the state to licensed wholesalers, no discrimination
was made which: was the subject of complaint by him. .
Again, the views of the court expressed upon the question
raised in this appeal admit of no doubt as to the conclusion
that a state statute may not-be so designed as to dis--
¢riminate against the products of another state. It was
said: |
“The adoption of the Twenty-first Amendment
has without doubt limited and qualified the com-
merce clause tg the extent that state laws, regu-
lating the importation of liquor into a state, place no
‘prohibited burden upon commerce. -This conclu-
sion is in complete accord with that of the District
Court in Joseph Triner Corporation v. Arundel, 11
F. Supp. 145, where it was determined that the pur-
pose of the amendment was not to except intoxi-
cating liquors from the provisions of the commerce
clause. The amendment does recognize the author-
’ ity-of the state to regulate the movement of liquor
into. the state, and where availed of, as in this case, |
the importation of intoxicating liquors in violation
of local law is outside the commerce clause.”

The concurring opinion of Circuit Judge Farris clearly
expresses the = of appell@€s in this case, wherein it
js said:

“So, the sole contention here made by plaintiff

_ is that being’ a wholesale dealer, but a non-resident

- of Missouri, it is forbidden dy the Liquor Control

: * Act of Missouri to sell liquor to retail liquor dealers;
while resident wholesale dealers may do so. There:
cannot, I think, be urged as existing any discrimina-
tion. in the statutes attacked, as between liquors of

Lxxill -

foreign manufacture and those of domestic manu-
facture; for the agreed. facts disclose that both beer ©
and distilled spirits of foreign manufacture can be |
sold, and are being sold, in Missouri by. licensed
resident wholesalers, without let or hindrance. So,
I think the sole question in the case is, in the final
analysis, whether the state of Missouri has the right
ander the police power to require by statute that a

‘ wholesale dealer in intoxicating liquor must be a

~

resident of Missouri. This is conceded by plaintiff
in its brief to be the sole question up for judgment,
for it admits that ‘the sole basis of the discrimina-
tion is resident or non-residence.’ i think the alter-
native, that if such dealer does not see fit to become
a resident ‘of Missouri, then it must sell by or
through such a resident, in no wise affects the prin-
ciple involved. So, I repeat, the discrimination

found in the Missouri statute is not against the

commodities, but solely as to who may be licensed
to sell them, and as seen this discrimination goes
no farther than to require the seller to be a resident
of Missouri. It is a discrimination as Be vesdence
and not one of citizenship, and no reason appears
why ‘plaintiff may not, by becoming a resident of
Missouri, become qualified to sell both domestic or
foreign liquors to retailers; so far, at least, as the
two sections of the statute, herein attacked, are con- ©
cerned. I am not saying-that the necessity for a
change of domicile might not in some situations be .
a burden on interstate commerce, but not in -this
case. gt ~ f4 7
“Plaintiff bottoms its contention of discrimina-
tion on the alleged violation by the accused statute
of the commerce clause of the Federal Constitution
and of that provision of the Fourteenth Amend-
ment which forbids any state to pass a statute which
deprives any person of the equal protection of the
law. It may urge, of course, both-of the conten-
tions; but not being a citizen, or even a resident of
Missouri, and being a corporation, it may not rely

on any right to an equality with citizens of Missouri,

“<2?

« 2

Lxxiv

under that provision of the Fourteenth Amendment _
which provides for an equality of ‘privilege and im-
munities.’ Aa
“T agree with the view taken by the courts in
the case of Joseph Triner Corporation v. Arundel
(D. C.) 11 F. Supp. 145, and Young’s Market Co.
-v. State Board of Equalization (D. C.) 12 F. Supp.
140, that section 2 of the Twenty-first Amendment
did not have the effect to abrogate the commer€e
clause of the Federal Constitution, in those states .
of the Union which, as is Missouri, are as ‘wide open’
' in the matter of liquor traffic as it is possible to be
and as they were prior to the adoptiou of the
Eighteenth Amendment.” :

Philip Blum & Co. v. Henry (D.C. E. D. Wisc., March
28, 1936), referred to in appellants’ brief (p. 130), involved
a statute of the same design as that involved in the Becker
case. The difference of treatment by the statute was one
relating to persons:and not property. The non-resident
vendor .or licensee was more limited in-the sale of intoxi-
cating liquor than a resident holder of a like license. A ~
statute of this type marks a sharp contrast from a statute
of the type involved in this appeal wherein the commodity is
discriminated against because of its out of state origin.

All that can be said for the case of Premier-Pabst Sales
Company v. McNutt (D. C. Wdd., Jan. 4, 1935), is that
there was a case by such title instituted in the United States
District Court of Indiana, but, following the “submission
of the case and before its decision, the law challenged was
repealed by the Legislature of the State and a new bill was
enacted: Prior to the enactment of the new law, Judge
Baltzell prepared an unsigned memorandum opinion, which
opinion was not concurred in by the other judges.

In Pacific Fruit and Produce Co. v. Martin, decided by
a three-judge court, (D. C. W. D. Wash., Feb., 1936), a .

_ statute of the State of.Washington provided that brewers
‘and beer wholesalers, whose products were sold by license ~
in the State, but whose plant or principal place of business
was located elsewhere, should be deemed to be beer whole-

.
Oe —

kxxv

salers within the provisions of the law and should obtain.
wholesalers’ licenses. In holding the Act invalid, the court
disposes of the appellants’ contention in this case by the
use of the following languzge:

“The statutes of which particular complaint is
made, Section 2 of Chapter 158 of the Session Laws
of 1935 and Section 3 of Chapter 174, of the Ses-
sion Laws of 1935, if construed and applied as de-
scribed in the bill of complaint, in conjunction, vio-
late the commerce clause, Article 1, Section 8, Clause
3 of the Constitution of the United States, unless the
Twenty-first Amendment repealed the commerce ©
clause, insofar as interstate commerce in intoxicat-
ing liquor, is concerned. This it did not~do.
Young's Market Co. v. State Board of Equaitzation,
12 F. Supp.. 140; Joseph Triner Corporation V.
Arundel, 11 F. Supp. 145.

“While it may be conceded that the intent of the
Wilson Act, 26 Stat. 313, the Webb-Kenyon Act,
37 Stat. 699-49 Stat. 877, the Act of March 22nd,
1933, 48 Stat. 19, Sec. 6, referred to in defendants’

- brief as the ‘Collier Act,’ repealed and in part re-
enacted, 49 Stat. 877, Sec. 202 (a) and (b), and
the Twenty-first Amendment, was to take from in-
toxicating liquor the protection of the interstate
commerce laws insofar as necessary to deny them
an advantage over the intoxicating liquors produced
in the state into which they were brought, yet, none
of them show an intent or purpose to so abdicate
control over interstate commerce as to permit dis-

crimination against the intoxicating liquor brought
into one state from another.

“Tt has been contended, tipon behalf of defend-
ants, that Section 2 of Chapter 158, supra, of which
complaint is made, .does not so discriminate. With .
this contention we are unable to agree. This enact-
ment, in the case of intoxicating liquor made and ,
purchased without the State, denies to the owner the
right to use it as he could use it if made within the

Ixxvi

state. If made within the state both the owner

the state could reach the manufacturer and com-
pel observance of its law or obtain relief for its
violation, but neither the owner nor the State +has
such power over the outside manufacturer who in
no way is within the state. " |

“Tt follows that Section 2 of Chapter 158, supra,
is void, not only because it violates the commerce
clause, Article I, Section 8, Clause 3, but also the
Fourteenth Amendment, in that its endorsement, as
proposed, would take.from the plaintiff its property
without due process of law, and also in that it denies
plaintiff the equal protection of the law. Young’s
Market Co: v. State Board of Equalization, 12 F,
Supp. 140. . |

“If the decision of the District Court for the
Eastern District of Pennsylvania, in Premier-
Pabst Sales Corp. v. Grosscup, et al., 12 F. Supp.
970, is opposed to any of the conclusions which we
have reached we feel constrained, both upon reason
and the persuasiveness of the authorities herein
cited, to so hold without qualification. * * *

“The orderly and secure regulation of the manu-
facture and sale of property in each of the states
by such states and of the regulation and fostering
of commerce between them require that neither
trammel nor encroach upon that authority which
belongs to the other. The authority of neither is
to ‘be extended by construction of constitution or
statute beyond what is clearly implied from the
recopnized authority of each. This enactment at-
tempts to reach beyond the State’s actual authority
and take something from that ef the nation, a sister

‘ state and the individual.”

The case of Premier-Pabst Sales Company v. Grosscup,
(12 Federal Supplement 970, D. C. E. D. Pa. 1935), is
concededly adverse to the position of the appellees in this
case. The decree of the trial court dismissing plaintiff’s
bill was affirmed by this Court solely on the ground that no

Ixxvit

justiciable controversy was presented by appellants m that —
‘t was in no position to complain of the discrimination of.
the statute. As evidenced by the language of the court in
the Pacific Fruit case, appellees are not alone in their dis-
agreement with the logic of that opinion.

Thus, an analysis of the cases, important to this Court
only for the logic and reasoning employed, discloses that
but one of the six cases decided since the adoption of the
Twenty-first Amendment holds to the contrary of appel-
lees’ position. No importance may be attached to the denial
of the petition for certiorari by this Court in the case of
Rosen v. Fry, 296 U. S. 526. The petition was denied
on the ground that there was not properly presented a sub-
stantial federal question, this not because there was no sub-
stantial federal question involved, but because it was not»
properly presented. The fourth paragraph of the petition
referred to in appellants’ argument discloses the very legal
insufficiency of such petition to raise the federal question
before this Court.

lxxvili

APPENDIX G

The following statement from an Article by D. O.
McGovney, now Dean of California Law School, in 3 Iowa
Law Bulletin 145, May, 1917:

(4852)

“Can a state prohibit receipt within the state
or transportation into the state of interstate liquor .
while leaving open traffic in home produced liquor? _
The Webb-Kenyon Law, taken literally, seems to
permit this. It will doubtless be held, however, that
it is not within the intention of the statute to deprive

transportation of intoxicants into such a state of

its interstate character. See the similar holding as ~
to the Wilson® Act, Scott y. Donald, (1897) 165 ©
U. S. 58, ye at law was not intended to confer
upon any state the power to discriminate injuriously .
against the products of other states, * * * evidently _
equality or uniformity of treatment under state laws
was intended.’ See also the dictum in Plumley v.
Massachusetts, (1894)-155 U. S. 461, 471.” ~

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386010_0064%3A06. Public record. Not legal advice.