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or narcotic drugs, or by the National Prohibition Act, as amended, or any other law relating to the enforcement of the eighteenth amendment, are hereby transferred to, and conferred and imposed upon, the Secretary of the Treasury. (b) The Secretary of the Treasury is authorized to confer or impose any of such rights, privileges, powers, and duties upon the Commissioner of Prohibition, or any of the officers or employees of the Bureau of Prohibition, and to confer or impose upon the Commissioner of Internal Revenue, or any of the officers or employees of the Bureau of Internal Revenue, any of such rights, privileges, powers, and duties which, in the opinion of the Secretary, may be necessary in connection with internal revenue taxes.

SEC. 5. (a) The Secretary of the Treasury is authorized to transfer to the Bureau of Prohibition such records, property (including office equipment), and personnel of the office of the Commissioner of Internal Revenue as may be necessary for the exercise by the Bureau of Prohibition of the functions vested in it.

(b) The Commissioner of Prohibition, with the approval of the Secretary of the Treasury, is authorized to appoint in the Bureau of Prohibition such employees in the field service as he may deem necessary, but all appointments of such employees shall be made subject to the provisions of the civil service laws, notwithstanding the provisions of section 38 of the National Prohibition Act, as amended. The term of office of any person who is transferred, under this section, to the Bureau of Prohibition, and who was not appointed subject to the provisions of the civil service laws, shall expire upon the expiration of six months from the effective date of this Act.

SEC. 6. Any action or decision of the Secretary of the Treasury under the National Prohibition Act, as amended, or of any officer upon whom the power to take such action or make such decision is conferred, shall be subject to the same review by a court of equity as the action or decision of the Commissioner of Internal Revenue under such Act, as amended, prior to the effective date of this Act.

SEC. 7. This Act shall take effect on April 1, 1927.
Approved, March 3, 1927.

ANALYSIS OF BILL BY ASSISTANT ATTORNEY GENERAL G. AARON YOUNGQUIST, IN CHARGE OF PROHIBITION ENFORCEMENT IN THE DEPARTMENT OF JUSTICE

This bill has for its purpose the transfer of certain duties and functions relating to the enforcement of the national prohibition act and related laws from the Secretary of the Treasury to the Attorney General. The Secretary of the Treasury and the Attorney General approve the purpose and the general provisions of the bill. It separates the duties now performed by the Bureau of Prohibition and retains in what is to be known as the Bureau of Industrial Alcohol in the Treasury Department certain functions and duties relating to permits, and transfers to the Attorney General the so-called enforcement features of prohibition.

All of the personnel transferred to the Department of Justice is made subject to the provisions of the civil service laws, except the director, the assistant director, and the attorneys. Of the 108 attorneys, many are engaged in the administration of permits and will remain in the Treasury Department. Those transferred to the Department of Justice will probably be attached to the offices of the United States attorneys as assistants. The civil service laws do not apply to United States attorneys and their assistants, and in view of that situation it is deemed inadvisable to have them apply to the small number of attorneys who will be transferred to the Department of Justice under this bill.

Section 4 transfers to the Attorney General the duties and functions specified therein. Subdivision (b) of that section leaves with the Secretary of the Treasury the duty to make all investigations necessary

to or incidental to administrative action with respect to permits, but the Attorney General is required to make such investigations as he deems necessary for the purpose of passing on applications for permits, as well as for the purpose of enforcing the law generally. Under subsection (4) of subdivision (a) of that section the Attorney General will report to the Secretary of the Treasury the cases involving violations of the national prohibition act out of which arises liability for internal revenue taxes and penalties. The Secretary of the Treasury will upon the report so made assess and collect such taxes and penalties, as now provided by the national prohibition act, Title II, section 35. The Attorney General will have the duty of instituting suits for the collection of taxes and penalties and of making compromises.

In order that the Attorney General may more effectively enforce the penal provisions of the national prohibition act, he is given power, under section 5 (a), to prescribe jointly with the Secretary of the Treasury all regulations relating to permits. To the same end section 6 (b) requires that all applications for permits or for renewals or amendments that are to run for more than 90 days (the object being to exclude the short-time purchase and withdrawal and other temporary permits) shall be filed with the Attorney General, except as otherwise provided by regulations. There are about 155,000 applications each year for so-called annual permits, and the purpose of permitting the exclusion by regulation of some of them from the provisions of this subdivision is to relieve the Treasury Department from the necessity of filing with the Attorney General copies of applications for minor permits. These constitute more than two-thirds of the total number. The Attorney General is, however, by section 7, given the right, whenever he deems it advisable, to act jointly with the Secretary of the Treasury upon an application for any kind of permit, including those for purchase, withdrawal, or other temporary permits.

Section 8 relates to the bureau that remains in the Treasury Department, which is now called the Bureau of Prohibition and which has charge of the administration of the narcotic act and the prohibition laws. This bill does not in any way affect that organization, except to change its name to the Bureau of Industrial Alcohol and to relieve it from enforcement activities under the prohibition laws. As reported, the bill has the unqualified approval of the Secretary of the Treasury, the Attorney General, and Dr. James M. Doran, the Commissioner of Prohibition.

MINORITY VIEWS

The undersigned members of the Committee on Expenditures in Executive Departments respectfully disagree with the report on H. R. 8574.

We concur in all of the provisions of the bill as reported by the committee, save and except the provisions of section 5 (a) thereof which vest joint authority in both the Attorney General and the Secretary of the Treasury in connection with the issuance of permits for the manufacture and distribution of industrial and other alcohol. We do not approve this joint authority for the reason that no effective enforcement of the law can be obtained with two departments having joint authority to deal with any part or portion thereof. We firmly believe that the enforcement of the national prohibition laws and all matters relating thereto properly lies in the Department of Justice; that this joint authority will promote friction and the assumption by one department that the other will do all things necessary in connection with the joint authority prescribed and will permit a continuation of the present lax enforcement. Further, it will permit one department to charge the other with responsibility for all resulting laxity of enforcement, and the public will not be able to hold either department responsible.

We are firmly convinced that the illegal diversion of industrial and other alcohol under the existing enforcement provisions, with dual responsibility, has caused the present deplorable conditions in the enforcement of the prohibition laws.

In keeping with the foregoing, we suggest that section 5 (a) of the bill be amended so as to read as follows:

SEC. 5 (a). The Attorney General shall prescribe all regulations under this act and the national prohibition act, and the form of all applications, bonds, permits, records, and reports under such acts.

This amendment should commend the favorable consideration of all Members of Congress who believe in a high standard of law enforcement, be they for or against the existing prohibition laws.

A. H. GASQUE.

H. E. ROWBOTTOM.
JNO. W. MOORE.
U. S. STONE.
JOHN C. SCHAFER.

O. H. CROSS.
NUMA F. MONTET.

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VIEW OF MR. COCHRAN

I can not concur in the majority report of the committee. The bill proposes the removal of the investigation of violations of the national prohibition act, the apprehension and prosecution of offenders against such act, and the making of all seizures and enforcement of all forfeitures under such act from the Secretary of the Treasury to the Attorney General. It, however, goes much further and gives to the Attorney General the power jointly with the Secretary of the Treasury to make regulations under the national prohibition act and to prescribe the form of all applications, bonds, permits, records, and reports under such act. (See sec. 5-a.)

The bill also gives the Attorney General certain powers to determine liability for internal-revenue taxes, and this is a removal not only of enforcement authority under the national prohibition act but deprives the Treasury Department of a part of its fiscal powers. (See sec. 4 (a) 4.)

Under the eighteenth amendment and the national prohibition act the use of all alcoholic liquors for nonbeverage purposes is as completely protected as is the use of such alcohol and liquors for beverage purposes forbidden; and it is the duty of the Government as completely to protect business institutions, hospitals, doctors and druggists, and sacramental use of wines as it is to detect and punish moonshiners and bootleggers. The maintenance of a supply of industrial alcohol, medicinal liquor, and sacramental wines in the hands of manufacturers and merchants is a constitutional necessity under the eighteenth amendment, and any act of Congress that interferes therewith or subjects the people to delay and difficulty in securing the same is contrary to the eighteenth amendment and oppressive. This is the business part of prohibition administration. just as the detection and prosecution of crime under the act is the legal part of administration.

All of the administrative business should be left with the Treasury Department, and all of the detection of crime and prosecution of offenders should, under the theory of this transfer, be placed in the Department of Justice, but an examination of the bill, in sections 3 and 4, shows that the Attorney General under the bill as reported is to be given power over permits and internal revenue incidentals, which is a plain transfer of part of the business end from the Treasury Department to the Attorney General.

The provision in section 6 (b) and section 7 requiring that except as otherwise provided in regulations the Attorney General shall have filed with him copies of all applications for permits extending for more than 90 days, and the provision of section 7 that the Attorney General may act jointly with the Secretary of the Treasury in passing upon any such application and that no permit shall be granted without the joint approval of the Attorney General and the Secretary of the

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Treasury, gives the Attorney General absolute power to overrule the Secretary of the Treasury respecting permits extending beyond 90 days. This provision gives the Attorney General overwhelming power in the administration end of the nonprohibited business under the national prohibition act and reaches to every business operation in nonbeverage liquors, including altar and other sacramental wines. Thus the bill as reported confers upon the Attorney General not only the legal power within the strict prohibition field to investigate, detect, and prosecute crimes against the prohibition law, but also to participate in the internal revenue and business aspects of the administration, and by his veto power to control substantially all of the business operations of industrial alcohol, medicinal liquors, and sacramental wine distribution.

Much discussion occurred in the committee regarding section 5 (b). This section legislates out of existence all existing regulations on the effective date of this new measure.

Section 10 provides:

This act shall take effect on the first day of the second month after its approval. In other words, all existing regulations are wiped out within a minimum of 30 or 31 days, or a maximum of 2 months, after the approval of the act. The Attorney General and the Secretary of the Treasury in that short period would have to prepare new regulations to replace existing regulations now covering some 600 or 700 pages of printed matter and dealing with every feature of prohibition administration as now comprised in the voluminous regulations affecting all fields of prohibition activity.

I object to the provisions of the bill as originally drafted and as reported. The entire business administration under the prohibition act, affecting 160,000 permittees engaged in industrial alcohol operations, the medical professions, pharmaceutical and hospital operations, and the whole field of sacramental wine and religious customs, should be left with the Treasury Department.

The investigation, detection, and prosecution of crimes under the act should be put with the Department of Justice. The Attorney General, instead of being given any authority over permits, should be entirely relieved of any concern therewith. The effect of this would be to enable the Attorney General and his staff of lawyers and investigators to search out and prosecute crime wherever it occurs, whether by moonshiner, smuggler, bootlegger, or any other kind of violator, including the whole mass of permittees acting under permit authority. The Attorney General, in order to comply with the bill as reported, will, if he exercises the functions, have to maintain a considerable part of his force in examining permittees' applications and deciding whether or not he approves in a preliminary way of permits being issued. These functions will take the time and attention of men who should be investigating, detecting, and prosecuting actual crimes. Such a burden defeats the very purpose of this bill, which is to enable the Attorney General to prosecute through his own organization by detection of crime and preparation of cases within the Department of Justice. The penal business should be at the Department of Justice and the business end should be left with the Treasury Department. JOHN J. COCHRAN.

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