On this day in 1933, President Franklin D. Roosevelt signs the Beer and Wine Revenue Act. This law levies a federal tax on all alcoholic beverages to raise revenue for the federal government and gives individual states the option to further regulate the sale and distribution of beer and wine.
With the passage of the 18th Amendment and the Volstead Act in 1919, temperance advocates in the U.S. finally achieved their long sought-after goal of prohibiting the sale of alcohol or “spirits.” Together, the new laws prohibited the manufacture, sale or transportation of liquor and ushered in the era known as “Prohibition,” defining an alcoholic beverage as anything containing over 0.5 percent alcohol by volume. President Woodrow Wilson had unsuccessfully tried to veto the Volstead Act, which set harsh punishments for violating the 18th Amendment and endowed the Internal Revenue Service with unprecedented regulatory and enforcement powers. In the end, Prohibition proved difficult and expensive to enforce and actually increased illegal trafficking without cutting down on consumption. In one of his first addresses to Congress as president, FDR announced his intention to modify the Volstead Act with the Beer and Wine Revenue Act.
No fan of temperance himself, FDR had developed a taste for alcohol when he attended New York cocktail parties as a budding politician. (While president, FDR refused to fire his favorite personal valet for repeated drunkenness on the job.) FDR considered the new law “of the highest importance” for its potential to generate much-needed federal funds and included it in a sweeping set of New Deal policies designed to vault the U.S. economy out of the Great Depression.
The Beer and Wine Revenue act was followed, in December 1933, by the passage of the 21st Amendment, which officially ended Prohibition.