Straight Whiskey & Dirty Politics: Distillers, Rectifiers, and Public Health Crusaders in Early American Whiskey

63 Pages Posted: 28 Sep 2021 Last revised: 28 Jul 2022

See all articles by Daniel J. Smith

Daniel J. Smith

Political Economy Research Institute and Department of Economics and Finance at Middle Tennessee State University

Macy Scheck

Political Economy Research Institute and Middle Tennessee State University

Date Written: September 27, 2021

Abstract

Does public interest or public choice theory better explain the adoption of early consumer safety legislation for whiskey in the United States? This paper explores the political economy of the Bottled-in-Bond Act of 1897 and the Pure Food and Drugs Act of 1906 as it pertained to whiskey. The public interest justification for these acts came from straight whiskey manufacturers who claimed that rectifiers, who flavored neutral spirits to replicate barrel-aged whiskey, were utilizing toxic ingredients and engaging in fraud. Using historical newspapers and trade books, we find that rectifiers were not commonly engaging in the intentional poisoning of their customers. The toxic ingredients in rectified whiskey were either 1) not found to be present in reputable chemical analyses, 2) not found in trade recipe books, 3) not fully understood to be dangerous at that time, 4) used in bootleg whiskey where alcohol was prohibited, or 5) had a niche demand for their intoxicating properties serviced by a small number of rectifiers or dealers. We also find that in an industry with asymmetric information, market competition led whiskey distillers to undertake investments to assure consumers of the authenticity and quality of their products. These investments included adopting 1) processes that imparted distinct characteristics to the whiskey, 2) brand names, 3) leveraging the reputation of local dealers, and 4) the adoption of sealed bottles. Historical evidence does not support the public interest justification for consumer protection legislation. Instead, straight whiskey distillers sought regulation to stifle competition from rectifiers under the pretenses of consumer protection.

Keywords: whiskey, Bottled-in-Bond Act, Pure Food and Drugs Act, political economy, economic history, Progressive Era

JEL Classification: D51, D52, D72, N81

Suggested Citation

Smith, Daniel J. and Scheck, Macy, Straight Whiskey & Dirty Politics: Distillers, Rectifiers, and Public Health Crusaders in Early American Whiskey (September 27, 2021). Available at SSRN: https://ssrn.com/abstract=3931797 or http://dx.doi.org/10.2139/ssrn.3931797

Daniel J. Smith (Contact Author)

Political Economy Research Institute and Department of Economics and Finance at Middle Tennessee State University ( email )

MTSU Box 190
1301 E. Main St.
Murfreesboro, TN 37132-0001
United States

HOME PAGE: http://www.danieljosephsmith.com/

Macy Scheck

Political Economy Research Institute and Middle Tennessee State University ( email )

Murfreesboro, TN
United States

HOME PAGE: http://www.macyscheck.com/

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