Originally published in The Vidette-Messenger of Porter County on January 20, 1931.
HOW MANY BASEMENT BREWERS HAS INDIANA? IT’S A POINT THAT STIRS TAXING INTEREST
INDIANAPOLIS, Jan. 20ー(UP)ー Extent of “basement breweries” in Indiana homes, where malt is used for making “cellar beer,” is one of the things the Ways and Means Committee of the House of Representatives is seeking to determine.
Such information is needed in their deliberations on a proposed tax on malt syrup and wort, commonly referred to as unfermented beer.
M.J. Donnelly, Cedar Rapids, Iowa, representing the malt manufacturers, appeared before the committee, but said he had no information on the quantity of beer being made annually in Hoosier homes. He did say, however, that in Detroit alone, more beer now is being made in private homes than was manufactured by breweries throughout Michigan in pre-prohibition days.
Donnelly said the malt manufacturers are ready to cooperate with the general assembly in declaring a tax on malt and other luxuries but warned against a tax that would be high enough to encourage bootlegging the product. He advocated a tax of two cents on each pound, which he said would yield the state about $150,000 per annum.
The committee was also warned by Donnelly against making their measure class legislation, thereby making it unconstitutional as malt is used extensively by bakers. This was the point on which Michigan’s law was held unconstitutional two weeks ago, he said.
Donnelly said the law proposed in a bill introduced by Fred S. Galloway, democrat, Indianapolis, and William J. Black, democrat, Anderson, was patterned after the Michigan law and was built on dangerous legal grounds, inasmuch as no provision was made for excluding bakers. He also said that the proposed tax of five cents per pound was too high, as it would encourage bootlegging.
Louisiana passed a high tax on malt, he said, but was forced to reduce it low enough to make the bootlegging of malt unprofitable.
