Reforming the Liquor Trade in Great Britain

THE decision of the United States in favor of total prohibition, and the announcement that the British Government had arranged to increase the production of beer, were reported in the press during the same week. The one registered a great moral triumph; the other marked a humiliating defeat. During the war, the United States Government set an example by safeguarding its fighting men from the debilitating and demoralizing effects of drink, and the American people have carried that policy to a radical and logical conclusion. Great Britain, after a certain hesitation, imposed restrictions on the liquor traffic in the interest of national morals. It also began hopeful experiments in control; but no sooner had the fighting ceased than the government relaxed its grip on the trade, and we are now rapidly drifting back to pre-war conditions.

The first act of the new Food Minister, Mr. Roberts, a Labor Member, was to recommend the Cabinet to allow more and better beer to be made, and, as it happened, from American barley. At the same time, Sir George Roffey, a member of the Royal Commission on Wheat-Supply, wrote an apologetic letter about the inadequacy of the facilities for distributing wine and spirits, and also referred to the ‘ unwillingness of Mr. Hoover to ship barley to this country for the purpose of manufacturing alcohol,’ which, said the worthy knight, ‘has, in conjunction with other factors, reduced the supplies of barley for brewing to a figure which will only allow of an increase of 25 per cent on the present barrelage.’

A few days later the government issued this statement: —

It is officially announced that the War Cabinet has decided to allow an increase of 25 per cent on the present permitted statutory barrelage, and an increase of two degrees in the permitted average gravity, to take effect as from January 1, 1919. The schedule of retail prices, which will come into force on February 24, brings within its scope all gravities on a scale ranging from the rate of threepence to eightpence a pint for draught beers in public bars. Bottled beers, hitherto uncontrolled, will be included, but on a separate scale.

The city of Carlisle, recently visited by the President of the United States, gave an encouraging object-lesson in state ownership of all breweries, hotels, and saloons. This city was selected for the demonstration in state ownership because it was near a great new munition township, where drunkenness was prevalent. Restrictions have now been relaxed, and the saloons are open on Sundays.

The contrast between what happened during the war and what is now taking place is all the more striking when we compare the indictment made against the drink trade with the achievement. Early in the war, the French Government, which had for many years carried on a campaign against alcoholism, prohibited the supply of alcohol — which does not, according to the French interpretation, include wine and beer — to soldiers, and restricted the supply to civilians. Britain moved more slowly. The duties on liquors were increased, with the result that there was more revenue and also more drinking.

I

The first statesman to recognize the national dangers from an unrestricted drink trade during the war was Mr. David Lloyd George, at that time Chancellor of the Exchequer. The little Welsh David, with all the ardor of his Celtic nature, declared war on the Goliath of Drink. In February, 1915, he threatened the monster with destruction. He said that drink was ’doing us more damage in the war than all the German submarines put together.’ When he started his tour, in the spring of 1915, to quicken production of munitions, he found evidence which still more convinced him that the Drink Demon must be put under restraint. ‘Nothing but root-and-branch methods,’ he told a deputation of shipbuildders in March, 1915, ‘will be of the slightest avail in dealing with this evil. The feeling is that, if we are to settle German militarism, we must first of all settle with drink.’ The next month, in putting new duties on drink, he said, ‘The nation could afford perhaps a drink-bill of £160,000,000 before the war. What we could afford before the war, we certainly cannot afford after the war, and one of the things we cannot afford is a drink-bill of £160,000,000 a year.’

Yet every year of the war has seen the drink-bill grow. In 1917 it amounted to £259,000,000, and the estimate for the last year is still higher. Altogether, during the four years of war, Great Britain spent over £1,000,000,000 on drink. Economists and prohibitionists can speculate how much wealthier and stronger the nation would have been, if this vast expenditure on liquor had been placed in war-bonds and productive industry. They could add other large sums spent on brewing-materials, barrels, coal, transportation; while the labor of thousands of people working for the traffic would have been diverted into more useful channels. Further than that, there would have been the additional saving to the nation which would have followed the suppression of the traffic. There would have been fewer accidents; less work for the police; more time for work, as none would have been wasted through drink; less lunacy, less disease, and many other benefits would have flowed from enforced temperance. Millions of tons of barley and sugar would have been saved for food.

All this presupposes that the British people would have accepted total prohibition. Mr. Lloyd George never contemplated prohibition, but he wanted drastic control and partial suppression. In another of his anti-drink speeches (March 25, 1915) he declared, ‘We are fighting Germany, Austria, and Drink, and so far as I can see, the greatest of these deadly enemies is Drink.’ And while Germany and Austria are down and out, Drink remains unconquered.

Speaking again on April 6, 1917, to a deputation on state purchase and prohibition, Mr. Lloyd George said if nothing were done now to ‘ acquire complete and absolute control over the trade,’he feared that, when demobilization came, there would be an ‘irresistible demand to put the trade back practically where it had been before.’ That would be a national disaster. He personally wanted the strong hand of the State to be there, instead of a powerful interest which had already beaten them in the past.

Well, nothing has been done to ’acquire complete and absolute control of the trade.’ There is an ‘irresistible demand to put the trade back practically where it was before the war,’ and Mr. Lloyd George’s government is a consenting party to the ‘irresistible demand,’ because it does not try to resist it.

The general feeling in Great Britain is that the government did not make the most of its opportunities. People in America may think that the reforms adopted only trifled with the problem, and that, while they did not expect to see Great Britain turn prohibitionist, even under the stress of war, they hoped that more radical methods, which would have prepared the way for greater achievements, would have been adopted. Public opinion in Great Britain admires America’s thoroughgoing policy, but considers that total prohibition goes too far and will be difficult to enforce in a number of states.

II

When the increase of duties on drink did not check consumption, and after Mr. Lloyd George, then Chancellor of the Exchequer, failed to carry national purchase with the object of establishing a national monopoly, he proposed control. One of his first acts as Minister of Munitions was to set up the Central Control Board (Liquor Traffic), in June, 1915. The chairman is Lord D’Abernon, who is identified chiefly with financial enterprises. The Board consists of Members of Parliament, large employers, several civil servants, a representative of Labor, a brewer, a caterer, and a doctor. I will give a brief account of its work as set out in its latest report. It describes itself as the authority for controlling the sale and supply of intoxicating liquor in naval, military, munition, or transport areas, where such control should be found expedient for the successful prosecution of the war. It has prescribed orders of varying degrees of stringency affecting nine tenths of ihe population of England and Scotland. The report says: —

The characteristic features of the Board’s orders are the drastic restriction of the hours for the sale or supply of intoxicating liquor, the imposition of special restrictions on the sale of spirits, the prohibition of treating and of sales on credit, the curtailment of facilities for off-sales generally, and the application to clubs of the same restrictions as to licensed premises.

Other drastic provisions were applied in ‘scheduled areas’ then exclusively occupied by troops or munition-production. Prohibition of the sale of spirits has been enforced in a few areas, evening sale stopped in others. Hundreds of saloons have been closed. The Board is quite satisfied that its restrictive orders have diminished drunkenness, and has a sheaf of statistics to prove its claim. It encouraged the establishment of factory canteens as a feature of social welfare, and it made experiments in direct ownership. Its first excursion in the saloon business was at the government Small-Arms Factory at Enfield, near London. It was a successful example in the moralization of the drink trade. Next, it went to the north of Scotland, and catered for the men of the fleet in the small towns of Invergordon and Cromarty. Then it undertook a bolder experiment at Gretna — a small border-town known in more romantic days as a haven of refuge for eloping couples from England. Here a great number of munition factories had been built, and the Board bought the existing saloons, which undertook the supply of refreshment under reasonable conditions and in healthy surroundings. It also provided rival attractions to drink as a means of relaxation.

But the boldest experiment of all was the acquisition of all the breweries, hotels, restaurants, and saloons in the city of Carlisle and suburbs — a few miles from Gretna on the English side. The Board reduced the number of saloons by 37 per cent. Its policy was ‘to restrict facilities for the consumption of intoxicants, except with food, and to encourage the provision of food for consumption with intoxicants.’ It set up ‘Food Taverns’ in place of drinking saloons. The report says: —

The Carlisle taverns exhibit considerable variety of detail in their internal arrangements and decoration, and the accommodation provided by each of them, and the meals and refreshments supplied have proved well suited to the several districts of the city which they are designed to serve. The extraordinary increase which has taken place in the population of Carlisle, and in the number of persons passing through it, together with the fact that there was previously in the city little, if any, provision of a like character, has, it is believed, prevented any case of hardship arising from competition between the State and existing private interests.

Sunday closing, which exists in Scotland, was applied in Carlisle, and the sale of spirits was prohibited on Saturday. No one under eighteen years of age was supplied with spirits, or with beer except to be consumed with meals. All advertisements of alcoholic drinks in the saloons were removed. As an experiment in state ownership, this Carlisle undertaking demonstrated the economic advantages of unity of management. The report says: —

The Carlisle undertaking is differentiated from the rest of the Board’s direct-control schemes by the fact that the business side of it is not confined to the conduct of a retail trade. A large proportion of the licensed premises in the district were owned by the four Carlisle brewery firms, by the Maryport Brewery Company, and by firms of wine and spirit merchants carrying on a considerable trade in and round Carlisle. The acquisition of the manufacturing and wholesale business of these firms, besides being necessary in order to make the Board’s control of the liquor traffic effective, was also expedient on financial grounds. From both points of view, the acquisition of these wholesale undertakings has been well justified by the results — great economies both of capital and of current expenditure have been secured, and the practical working of the Board’s measures for the advancement of efficiency and sobriety has been facilitated. The Board have arranged a system for the control of the sale of liquor at the railway refreshment rooms, and they have had occasion to consider questions affecting the control of the liquor-supply in clubs within the area, and questions of the importation of liquor into the area. The management of hotels, commercial and residential, urban and rural, has also necessarily formed part of their work. The varied nature of the experience which they have thus acquired, and the substantial economies, not only in money, but also in man-power and transport, which the comprehensiveness of the scheme has enabled them to effect, are among the incidental advantages of the concentration in their own hands of the control of the manifold grades and branches of the liquor trade.

Judged by results, state ownership in Carlisle has been fairly successful. It diminished drunkenness. In the first quarter of 1916 there were 213 convictions for drunkenness in the city; in the first quarter of 1918, when the Board’s scheme was in full operation, there were only 36 convictions, although the population had increased. If the trade had been thoroughly moralized, there would have been no drunkenness at all. From the commercial point of view, the Board policy paid. The cost of buying the liquor-trade interests exceeded £1,000,000, and the profit for the year ending March 31, 1918, after paying interest on the war-taxes, depreciation, and all expenses, was £167,915, which went toward the reduction of the capital account.

III

The credit for curtailing the production of beer and spirits as a war measure does not belong to the Central Control Board, but to the Food Ministry. It was not until April, 1916, that the Food-Controller acted. The restriction, to begin with, was modest. The annual output of beer was reduced from 30,000,000 to 26,000,000 barrels, and there was a corresponding reduction in the clearance of wines and spirits from bond. The next cut was more drastic. In 1917, the annual output of beer was reduced to 10,000,000 barrels, and there was a further reduction in spirits and wine.

Then a strange thing happened. The government’s courage failed. The War Cabinet overruled the Ministry of Food. There were numerous reports before the government showing that drink reduced the efficiency of the worker and lessened production. There was Mr. Lloyd George’s ringing indictment against the country’s greatest enemy — Drink. The supplies of food were not more plentiful, but the War Cabinet beat a humiliating retreat before the outraged enemy. Let the Control Board’s report tell what happened.

During the greater part of April and May, 1917, the effect of the new restriction was not apparent, since there was a large carryover from the previous year, and the rise in prices occasioned by the changed position helped in some degree to adjust demand to supply. These temporary factors, however, soon spent themselves, and it became apparent that the available supply of beer was falling very far short of the public demand. As early as May 8, the Minister of Munitions stated in the House of Commons that he was ’being confronted from a good many districts by demands for liquor and by representations and complaints in connection with the beer-shortage.’

These complaints increased in number and intensity, and, on July 5, the government announced their decision to allow an increase of the authorised output for the second quarter of 1917-18 (July to September) by 33ὑ per cent. In the discussion which took place on this decision in the House of Commons on the same day, the Home Secretary stated that the increase was granted ‘for reasons connected with the conduct of the war, and for no other reason.’ He said: ‘I want the House to consider for a few moments the grounds which induced the government to make this change. It is a fact — there is no doubt about it — that there is a serious shortage of beer in many parts of the country. Secondly, that shortage is causing serious unrest and is interfering with the output of munitions and with the position of the country in this war. In many of the great towns, in munition areas, and among harvesters, we know that the shortage exists, and there is unrest, discontent, loss of time, loss of work, and, in some cases, even strikes are threatened and indeed caused by the very fact that there is a shortage of beer. These are serious facts.’

These official statements show a lack of courage and resolution. The effects attributed to the shortage of drink are similar to the symptoms, according to scientific testimony, produced by the consumption of drink.

IV

What has been the effect of the control of the liquor traffic on the breweries and the saloon-keepers? When duties were increased as a war-revenue rather than a temperance measure, — in the expectation, however, that consumption would decrease, — the trade raised a cry of distress. It saw ruin ahead. Before it had recovered from the alarming prospect which it pictured to stockholders, it received a greater shock from national control and restrictions. This time it was quite certain of disaster. Nothing could save it from wholesale insolvency. Failing to secure public sympathy, the trade then decided to ease the fall which inevitably loomed ahead by more than doubling the price of the articles it supplied. Half a pint of mild ale, which cost a penny in 1914, was sold at threepence ha’penny in 1917; so that the trade left a large margin between the increase in the duty and the price charged to the public. Beer was heavily diluted, as was also whiskey, so that the difference in value was not fully represented by the 250 per cent increase in price.

The brewers resented the decision of the government to enter the beer business and produce a beverage at once healthy and harmless. But the brewers and their allies, the saloon-keepers, faced this new competition bravely. They bought government ale at 76 shillings a barrel and sold it at 120 shillings. Under the restrictions, the brewers were allowed to brew only one third of their former supply, and all beer and alcoholic liquors could be sold only five and a half hours a day instead of, as formerly, twelve and eighteen hours.

The government made a fatal error: while restricting facilities for consumption, it did not fix a reasonable selling price. One result was that a good deal of the discontent and dissatisfaction among beer-drinkers was due to the high prices they were charged for very inferior tipple. Another result was that the trade became gloriously prosperous — the pessimistic forebodings did not come true. Corporations which had long been non-paying concerns burst forth in an unprecedented boom of prosperity that pleasantly surprised the stockholders. To take one or two illustrations. One large combination of brewers, Watney, Coombe and Reid, was in a derelict condition. Its deferred stock of £600,000 was a drug in the money-market; now it stands at a premium and there is profit enough, after making all sorts of provisions for depreciation, excess-profit duties, and reserves, to pay a thirty-per-cent dividend. Or take Allsopp’s. This corporation’s gross profit in 1913 was £68,000; in 1917 it was £307,000. Before the war it made no provision for redemption and reserve. In 1918 it set aside £42,800 to a redemption fund, £50,000 to reserve, carried forward £21,000, and distributed £181,000 net profit. Like others, this concern had taken the opportunity to increase salaries, carry out renovations, and spend lavishly on maintenance out of revenue. And it should be observed that all these profits, amounts placed in reserve, and all other distributions of revenue, were paid after the excess-profits duty was met. This war-tax is payable on the profits over and above the average profits of any two of the three years before the war. First the duty was fifty per cent of the excess, and it has been increased until, including income tax, it is eighty-five per cent. So that the huge volume of war-profits brought into the coffers of the brewery trade comes out of the residuum of fifteen per cent.

The government assisted the brewers in another way. To save labor, it encouraged the concentration of brewing in fewer establishments. By its own experiments it showed the brewery trade how to economize in production, and paved the way for combines among the brewers after the war.

The brewers have invested part of their profits in politics and in publicity work, so that the end of the war sees the trade more firmly intrenched, more prosperous, more powerful in influencing public opinion, than it has been for many years. It played an important part in the General Election. Its agencies supported candidates pledged to protect trade interests. The chief organizer for the Coalition, the Chairman of the Lloyd George-Bonar Law Campaign Committee was Sir George Younger, a Scotch brewer. He selected candidates who received the Coalition ‘coupon,’ and he saw to it that most of those candidates were Unionists who were not hostile to the drink trade. The election conspiracy was most successfully worked in Scotland, which had always been predominantly Liberal. Sir George Younger, in his capacity of caucus ‘boss,’ chose the candidates so wisely that for the first time in modern Parliamentary history the genuine Liberals elected for Scotland are in a minority. His success was facilitated because there was as a rule a Labor candidate, as well as the Lloyd George nominee, fighting the Liberal, and in many cases the successful candidate represents only a minority of the votes recorded.

V

The system of government control has won support from moderate temperance reformers. They have rejoiced for small mercies. It was the first real advance made in England in constructive work. In the past the liquor traffic had baffled the ingenuity of statesmen. The licensing system was simply a police system. It was negative. It restrained, but did not reform. Licenses for the sale of alcoholic liquor in saloons, hotels, and restaurants are issued by nominated and unrepresentative bodies of justices of the peace, who exercise jurisdiction over anomalous areas which have little relation to municipal boundaries. Licenses come up for review annually, and new applications are considered. Nominally the justices have great powers, but they exercise them with a sympathetic regard for the vested interests of the liquor trade. The majority of them are men of substance who have their own private wine-cellars. The whole system is thoroughly anti-democratic.

Under such a system the way of the reformer is hard. And things are so arranged that it is difficult for the trade to reform itself from within. Anyone attempting reform— improving saloons or transforming them from drinkingdens into decent refreshment houses — is penalized. The only ray of hope has come to light through an institution called the ‘Public House Trust,’ run on almost philanthropic lines, under which the consumption of spirituous liquors is discouraged. It has been a successful demonstration in disinterested management. Temperance reformers in England have fought against any approximation to the continental beer-saloon and café. They have been against the revival of the old English inn, which was as much concerned in the supply of victuals as the supply of drink; hence the survival of the name which is the legal description of the saloon-keeper — ‘licensed victualler.’ But the methods adopted to make drinking-places unattractive, in the hope of making drinking unpopular, did not succeed. On the contrary, they induced the worst possible drinking habits and encouraged consumption.

Two other demoralizing factors characterized the drink trade: the saloons fell into the hands of the brewery owners and became ‘tied’ houses, that is, bound to take supplies from the owners. Not only were they ‘tied’ for drink, but for every article consumed on the premises, including sawdust to sprinkle on the floors. There was a great boom in brewery shares, and the capital of the brewery corporations was inflated by the multitude of tied houses. By these means the drink trade increased its influence in local and national politics. The brewers ran election campaigns, and nothing was so dangerous to the success of the party as the hostility of the trade. Every saloon was a centre of influence and corruption. Candidates were supported irrespective of their party affiliations, so long as they were prepared to protect vested interests in drink.

Progress in public opinion, however, made some impression. A system of reducing redundant licenses was introduced. A pool for compensating the owners of the saloons abolished was created, at the expense of the trade. But the reduction in the number of saloons did not mean a commensurate decrease in the consumption of drink: mostly the business simply passed on to the neighboring saloons. What had a greater influence in diminishing drunkenness was the rise of the popular tea and light-refreshment houses now to be found all over London, and in the big cities and sea-side resorts.

VI

A complaint by reformers is that the Board of Control did not take full advantage of its opportunities during the war. On various occasions official reports have been issued, demonstrating the deleterious effects of alcohol on the working classes. A report to the Central Control Board says, that ‘to use alcohol as it is very commonly used by people who do not appreciate its limitations and drawbacks as a staple food for muscular work, is to run a great risk of damage to health and efficiency’; yet the government has treated beer as a food. It is superfluous to cite testimony against alcohol, to demonstrate its deceptive food-value, or its injurious effects on the nerves and other functions. The Ministry of Munitions has shown the effects of drink on industrial efficiency. A report on the causation of industrial accidents reads as follows: —

The careless habit of mind can be diminished by a stricter sobriety. There can be no doubt that the less alcohol the worker consumes, the better it is for the quality and quantity of his work and for his accident immunity. This applies especially to alcohol by the day-shift in the dinner-hour, and the night-shift shortly before coming on to work. The anticipation of pleasures to come induces lack of attention and carelessness, and tends to produce accidents. This applies to the day-workers in the latter part of their shift. The night-worker, on the other hand, has his bout of drinking before he begins work. He comes to the factory in a state of pleasurable excitement, which has been increased in many instances by the consumption of alcohol, and so he starts work under conditions likely to induce the maximum of carelessness and inattention. As the night progresses, his excitement cools down, the effects of alcohol, if they exist, wear off, and by the time the last spell of work is reached, he has lapsed.

Such testimony, supported by other investigations, would have justified the Board of Control in pushing its war measures very much further. The Board is apparently satisfied that it has brought about a great decrease in consumption and still greater in drunkenness. It is true that there has been less consumption, partly because there have been fewer facilities for consumption. Decrease in drunkenness cannot be measured solely by the number of convictions. During the last four years and a half, an average of four million men have been in the army and out of the country, including many thousands who, under normal conditions, would be liberal consumers. Sailors and fishermen have been at sea during the war, and have had to practise enforced temperance. Wine and spirits have been let out of bond in small quantities and strictly rationed. No new customers were supplied, no credit was given, and no treating allowed. Another cause for the decrease in drunkenness is that beer and whiskey have been so diluted that the hardened drinker could never consume enough to make himself drunk. The final testimony against the case that restriction has led to sobriety is produced by the trade itself, which proves that the variations in restrictions bear no relation to the statistics of drunkenness.

VII

The prospects of drastic liquor legislation, or prohibition, in Great Britain are not encouraging. A small section favors prohibition, but arouses very little enthusiasm. The various reform societies are neither well-organized nor united. State purchase, which would have been possible early in the war, is now considered beyond the range of practical politics. Prohibitionists would not have the State touch the trade except to kill it. Complete suppression without a penny of compensation is their policy. Other temperance reformers were reconciled to purchase, if accompanied by a referendum enabling the people to say just how many, if any, saloons should remain open in their districts. Many of these reformers now fear that State ownership might have the effect of perpetuating the trade instead of gradually extinguishing it, for the reason that this excursion into State socialism would be alluringly profitable. They fear that the people would not vote for doing away with their own property, because it would be a fruitful source of revenue at a time when everything taxable is being squeezed to the uttermost. They are entirely opposed, on economic grounds, to the State’s paying hundreds of millions for an industry and then proceeding to kill it off by degrees, losing the capital which it cost and the revenue which it brings. The average Englishman does not consider such a shortsighted policy either common sense or good business, and he is against it.

When we come down to the constructive programme of the temperance party, Americans will think that it is far from thorough. It is an effort to preserve that good which the Central Board has done, and to carry it further. ‘The Temperance Council of the Christian Churches’ was formed four years ago, representing fourteen organizations differing on social, political, and religious matters. It has four joint presidents: The Archbishop of Canterbury, of the Established Church; Cardinal Bourne, Roman Catholic; Principal Selbie, who represents the ‘Free Churches’; and General Booth, the head of the Salvation Army. This council has agreed on nine points: —

Sunday closing.
Restriction of hours for the sale of drink on week-days.
Reduction in the number of licensed premises.
Increase of the power of local licensing authorities.
Control of clubs.
Abolition of grocers’ licenses. Prohibition of the sale of intoxicating
liquor to young people.
Local option, defined as the right of a locality to vote on the three options, ‘No change,’ ‘Reduction,’ and ‘No license.’
The provision of alternatives to the liquor tavern.

The only real reform measure in the list is the application of local option; but everything depends on the system of voting adopted and on the size of the areas selected. Otherwise the reformers’ programme means little more than the continuance of the system of control in force during the war.

When we remember the recuperation of the drink trade, its strength in elections, and the half-heartedness of the reform movement, there is little chance of Britain becoming dry in a hundred years. If the Labor party were to adopt state purchase, coupled with a democratic referendum, which would settle by popular vote how many, if any, saloons were to remain in a particular locality, then there would be a steady reduction in the number. Much will depend on the women voters. If there were a clean-cut issue on drink, the vast majority of them would vote for reduction, if not for total prohibition.

There is not the slightest prospect of a reform movement in Ireland, where there are more saloons to the population than in any country in the world. But there is a chance in Scotland. The Scottish Temperance Act hands over the future of the liquor traffic to the people. It comes into operation in 1920, and under popular referendum allows the people to vote for the reduction of saloons in municipal areas according to the size of the majority in favor of enforcing the act. If the majority is as much as two thirds, the vote carries total prohibition. There will be a national campaign in 1920, which may lead to striking results. It would be a curious anomaly if this great whiskeyproducing country should be, in part if not entirely, prohibitionist. The commercial instincts of the Scot might be equal to such a revolutionary result, and might continue to make and export for others the spirit which they could no longer consume at home.