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Wiley and the Whiskey Industry: Strategic Behavior in the Passage of the Pure Food Act

  • Jack High (a1) and Clayton A. Coppin (a2)

Abstract

In discussions of the fight for the Pure Food and Drugs Act of 1906, Harvey Washington Wiley is usually portrayed as the consumers' champion, the Whiskey Trust as their adversary. Messrs. High and Coppin argue otherwise. Wiley's correspondence from 1904 to 1906 reveals a deep split between whiskey producers, with the makers of straight whiskey lining up behind Wiley's pure food bill and the rectified whiskey producers fighting against it. The authors argue that both sides used the consumer only as a convenient focus for their rhetoric; their activities thus provide another example of regulatory legislation passed to further the goals of private interests rather than to protect the public interest.

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1 Wood, Donna J., Strategic Uses of Public Policy (Pittsburgh, Pa., 1986), x.

2 Public interest interpretations of the Pure Food Act can be found in Sullivan, Mark, Our Times (New York, 1927), vol. 2; Bailey, Thomas A., “Congressional Opposition to Pure Food Legislation,” American Journal of Sociology 36 (July 1930); Wilson, Steven, Food and Drug Regulation (Washington, D.C., 1942); Carson, Gerald, “Who Put the Borax in Dr. Wiley's Butter,” American Heritage 7 (1956): 5863; Natenberg, Maurice, The Legacy of Dr. Wiley (Chicago, Ill., 1957); Anderson, Oscar, Health of a Nation (Chicago, Ill., 1958); Young, James Harvey, The Toadstool Millionaires (Princeton, N.J., 1961); Young, , “The Long Struggle for the 1906 Law,” FDA Consumer, 12 June 1981, 1216; Young, James Harvey, ed., The Early Years of Federal Food and Drug Control (Madison, Wis., 1982); Crunden, Robert M., Ministers of Reform: The Progressive Achievement in American Civilization, 1889–1920 (New York, 1982). A theoretical justification for public benefits of pure food laws is given by Hinick, Melvin and Staelin, Richard, Consumer Protection Legislation and the U.S. Food Industry (New York, 1980).

3 The quoted phrase is James Harvey Young's. See Toadstool Millionaires, chap. 14.

4 Hofstadter, Richard. The Age of Reform (New York, 1955), 171–72; Wiebe, Robert H., The Search for Order (New York, 1967), 191. Some excellent essays reviewing the vast literature on the Progressive period are: McCormick, Richard L., The Party Period and Public Policy (New York, 1986), 263310; Rodgers, Daniel T., “In Search of Progressivism,” Reviews in American History 10 (1982): 113–32; Hobson, Wayne K., “Professionals, Progressives and Bureaucratization: A Reassessment,” Historian 39 (1977): 639–58; Kennedy, David M., “Overview: The Progressive Era,” Historian 37 (1975): 453–68; Wiebe, Robert H., “The Progressive Years 1900–1917,” in The Reinterpretation of American History and Culture, ed. Cartwright, William H. and Wadson, Richard L. Jr., (Washington, D.C., 1973), 425–41; Galambos, Louis, “The Emerging Organizational Synthesis in Modern History,” Business History Review 44 (Autumn 1970): 279–90.

5 Kolko, Gabriel, The Triumph of Conservatism (New York, 1963), quotation, p. 109. Vogel, David, “The ‘New’ Social Regulation in Historical and Comparative Perspective,” in Regulation in Perspective, ed. McCraw, Thomas K. (Cambridge, Mass., 1981), 166–67, expresses a similar view. W. E. Mason, a senator from Illinois, claimed that excessive competition in the food industry was responsible for adulteration and that a national law was required to eliminate it. See Food Adulterations,” North American Review 170 (April 1900): 548–52. Weinstein, James in The Corporate Ideal in the Liberal State, 1900–1918 (Boston, Mass., 1968) sees Progressive reform as the creation of leaders of large corporations. Martin, Albro in Enterprise Denied (New York, 1971), vigorously disputes that railroads captured regulators, and Victor, Richard H. K., “Businessmen and the Political Economy: The Railroad Rate Controversy of 1905,” Journal of American History 64 (June 1977): 4766, looks behind the general business interest to see which particular businesses supported and which opposed railroad regulation. For an excellent summary of the historical literature on regulation, see McCraw, Thomas, “Regulation in America: A Review Article,” Business History Review 49 (Summer 1975): 159–83.

6 Wiley, Harvey W., The History of a Crime Against the Food Law (Washington, D.C., 1929). For an updated version of the same argument see Turner, James S., The Chemical Feast, A Nader Group Study (New York, 1970).

7 Temin, Peter, Taking Your Medicine: Drug Regulation in the United States (Cambridge, Mass., 1980), 2930. The “Division of Chemistry” was renamed the “Bureau of Chemistry” in 1901, but its organization and functions remained unchanged.

8 Donna Wood, Strategic Uses, 201. Morton Keller mentions that the meat inspection and pure food acts passed “only after an aroused public opinion conjoined with commercial self–interest.” Affairs of State (Cambridge, Mass., 1977), 414.

9 We are following the advice of Samuel P. Hays, “to observe the actors in that regulatory process more directly and to focus on the people involved in it, their perspectives and choices.…” See “Political Choice in Regulatory Administration,” in Regulation in Perspective, 126.

10 Carson, Gerald, The Social History of Bourbon (New York, 1963), 163–68. Kellner, Esther, Moonshine: Its History and Folklore (New York, 1971), 6062. See also Testimony, U.S. Justice Department, “Proceedings Before and By Direction of the President Concerning the Meaning of the Term ‘Whiskey,’” 1909.

11 Fusel oil is defined in Webster's New World Dictionary, College Edition, 1962, as “an oily, acrid, poisonous liquid occurring in alcoholic products that have not been distilled sufficiently to separate the ethyl alcohol from other substances with a low boiling point: it consists generally of a mixture of amyl, butyl, propyl, and isoamyl alcohols.”

12 Hu, Tun–Yuan, The Liquor Tax in the United States (New York, 1950).

13 Sullivan, , Our Times, 2: 508–9. See also Keller, Affairs of State, 413–14.

14 Carson, History of Bourbon, 153–57, 166.

15 Ibid., 155.

16 Anderson, Health of a Nation; Wiley to Mary M. Schuger, 26 Jan. 1903, Wiley Papers. Library of Congress. All citations of Wiley's correspondence are to this collection unless otherwise identified. For his early years, see Wiley, , An Autobiography (Indianapolis, Ind., 1930).

17 Wiley to Professor N. S. Shaler 7 Jan. 1902; Wiley to Dr. Wm. A. Noyes, 23 Oct. 1903; Temin, Taking Your Medicine, 27; Dupree, A. Hunter, Science in the Federal Government (Cambridge, Mass., 1957), 176–83; True, A. C., A History of Agricultural Experimentation and Research in the U.S. 1607–1925, USDA Misc. Pub. 251 (Washington, D.C., 1937). Expanding bureaus were frequently attributable to entrepreneurial bureau leaders. The most successful were those who found something to regulate. See Rosenberg, Charles E., “Rationalization and Reality in Shaping American Agriculture Research, 1875–1914,” in The Sciences in The American Context: New Perspectives, ed. Reingold, Nathan (Washington, D.C., 1979), 143–63; Daniels, George H., Science in American Society: A Social History (New York, 1971); Rossiter, Margaret W., “The Organization of the Agricultural Sciences,” in The Organization of Knowledge in Modern America, 1860–1920, ed. Oleson, Alexandra and Voss, Jon (Baltimore, Md., 1979).

18 Yearbook of the Department of Agriculture, 1897, 81–82; Anderson, Health of a Nation, 119.

19 Editorial, Pure Food Laws for Private Purposes,” Independent 55 (21 May 1903): 1224–25.

20 Wiley to R. M. Allen, 2 April 1903; Wiley to file, 15 July 1903; and Wiley to Badger, 10 June 1902; Wiley to William Smedley, 18 June 1903; Wiley to George F. Warren, 2 Nov. 1903.

21 Wiley to M. A. Scovell, Wiley to L. M. Frailey, Wiley to Allen, Wiley to Fear, all 30 June 1903; Wiley to Allen, 2 April 1903, Wiley to Scovell, 23 Jan. 1903.

22 Wiley to Scovell, 23 Jan. 1903. See also Allen to Wiley, 21 May 1903, National Archives, Bureau of Agricultural Chemistry and Industrial Chemistry (BACIC). Wiley to Allen, 2 April 1903. Scovell was more than Allen's boss. Orphaned at an early age, Allen had been taken in by the childless Scovells. See Wolfe, Margaret Ripley, “The Agriculture Experiment Station and Food And Drug Control: Another Look at Kentucky Progressivism, 1898–1916,” The Filson Club History Quarterly 49 (1975): 323–38.

23 Wiley, Autobiography, 176.

24 Wiley to Scovell, 23 Jan., Wiley to Taylor, 7 July; Wiley to Overholt & Co., 10 Oct., all 1903. Wiley accepted gifts of whiskey as well as other food items throughout the struggle for a pure food law.

25 Carson, “Who Put the Borax in Dr. Wiley's Butter,” 59–60; Anderson, Health of a Nation, 149–52.

26 Anderson, Health of a Nation, 157–58; Wiley to Frailey, 25 May 1903. William P. Hepburn was a representative from Iowa; Porter J. McCumber was a senator from North Dakota.

27 Wiley to Hon. P. J. McCumber, 6 Feb.; Wiley to Allen, 4 Feb.; Wiley to E. E. Slosson, 12 Jan., all 1904, Food and Drug Administration (FDA), National Archives.

28 Wiley to Hough, 2 Jan. 1904; BACIC. Wiley to Edmund Taylor, 11 Jan. 1904, FDA. Wiley to Hon. P. J. McCumber, 21 Jan. 1904, FDA. Wiley to L. M. Frailey, 5 Jan. 1904.

29 Wiley to Hough, 2 Jan. 1904, BACIC; Wiley to Hon. P. J. McCumber, Jan. 1904; Wiley to Fear, 10 March 1904; Wiley to Percy T. Morgan, 4 March 1904, FDA.

30 Wiley to Hon. P. J. McCumber, 27 Jan. 1904; Wiley to Hon. P. J. McCumber, 8 March 1904; Wiley to M. N. Fline, 8 March 1904. This could explain why there was so little enforcement of the drug provisions of the Pure Food and Drugs Act during the early years. Temin, in Taking Your Medicine, 32, states that “Wiley himself neglected drugs. Only 135 of the first 1000 judgments obtained under the 1906 law concerned drugs.”

31 Allen to Wiley, 2, 18, 23 Feb. 1904, BACIC.

32 Edmund Taylor, the maker of Old Taylor Kentucky Straight Bourbon, was not new to the battle against rectified whiskey. In 1881 at a meeting of the Kentucky Distillers' Association, Taylor had offered to the Association a resolution, which they adopted, recommending that, “a committee of three be appointed by the chairman to see the Commissioner of Internal Revenue, with a view to calling his attention to and seek protection from vicarious manufacture at registered distilleries, and the manufacture of what are known as ‘new process’ whiskies in this state.” See Stevens, William S., ed., Industrial Combinations and Trusts (New York, 1913), 7. Allen to Wiley, 29 Jan. 1904, BACIC.

33 The American Grocer was owned by the Thurber family, large New York wholesale grocers and longtime supporters of pure food. L. O. Howard, chief of the Bureau of Entomology and Wiley's associate, was Thurbers nephew; see Okun, Mitchell, Fair Play in the Market Place (DeKalb Ill., 1986); Howard, L. O., Fighting the Insects ([1933]; New York, 1980); Wiley to Barrett, 1 Feb.; Wiley to Frailey, 5 Jan.; Wiley to Taylor, 11 Jan.; Wiley to E. E. Slosson, 12 Jan.; Wiley to Percy T. Morgan, 4 March; Wiley to Allen, 20 Feb., all 1904, FDA.

34 Wirtschafter, Jonathan Dine, “The Genesis and Impact of the Medical Lobby: 1898–1906,” Journal of the History of Medicine and Allied Sciences 13 (1958): 1549; Wiley to Hon. P. J. McCumber, 4 March 1904, FDA; Allen to Wiley, 2 Feb. 1904, BACIC; Wiley to R. M. Allen, 25 Feb. 1904; Wiley to F. N. Barrett, 1 Feb. 1904, FDA.

35 Wiley to Allen, 19 April 1904; Wiley to Hepburn, 30 April 1904; FDA.

36 Sullivan, , Our Times, 2: 522–23.

37 Hough, , Discussion of Subject of Distilled Spirits (St. Louis, 1904).

38 Anderson, Health of a Nation, 196.

39 The Bureau of Chemistry issued Food Inspection Decision #4 on 6 August 1904, which read, “Whiskey is the distilled product of fermented cereal grains, properly aged in wood in order to remove the greater part of the fusel oils, etc., produced during the distillation.”

40 The Oxford English Dictionary defines whiskey as “A spirituous liquor distilled originally in Ireland and Scotland, and in the British Islands still chiefly, from malted barley… in U.S. chiefly from maize or rye.…” The Dictionary gives an example of the term from 1715 (“Whiskie shall put our brains in a rage”), 150 years before producers started aging it in a barrel. The term originated in Scotland and Ireland, and is shortened from whiskeybrae, which in Gaelic meant “water of life.” In America, Webster's Compendious Dictionary of the English language of 1806 says “whisky” is “a spirit distilled from grain.”

41 Wiley to President, Wine and Spirit Trader's Society, 28 Oct. 1904; Wiley to E. T. Fleming, 11 Oct. 1904, FDA; Wholesale Liquor Dealers Association Letter to Members, 14 May 1904, FDA.

42 National Wholesale Liquor Dealers' Association, “The Truth about Whiskey,” 1904. Hough to Wiley, 11, 19, 28 Oct. 1904, BACIC.

41 Hough to Wiley, 11 Oct. 1904, BACIC.

44 Wiley to Hon. Wm. Lorimer, 4 Jan. 1904; emphasis added.

45 Wiley to J. H. Chinn, 21 March 1906; Wiley to Editor, The Wine Trade Review, 6 March 1905.

46 Edwin F. Ladd, chief chemist of the Agriculture Experiment Station in North Dakota and a correspondent of Wiley, had been successful in using such a strategy against eastern interests. Eastern firms attacked Ladd, which increased his popularity and helped the passage of a pure food law in North Dakota. See Kane, R. James, “Populism, Progressivism, and Pure Food,” Agricultural History 38 (July 1964): 161–66.

47 Allen to Wiley, 24 March 1905, BACIC. For similar statements see Wiley to William O. Bates, 6 April; Wiley to Major William H. Thomas, 25 April; Wiley to Allen, 8 May, all 1905, FDA.

48 Wiley to Fleming, 11 Oct. 1904, FDA.

49 New York Post, 2 April 1905; also see numerous newspaper clippings in the Wiley Papers; Hough to Wiley, 3 Jan. 1905, BACIC. Wiley to Hough, 9 Jan.; Wiley to Scovell, 14 March; Wiley to Allen, 8 March, all 1905, FDA.

50 Sullivan, , Our Times, 2: 531–32; Stephenson, , Nelson W. Aldrich (Port Washington, N.Y.), 280, 464.

51 Tinker, “Who Killed the Pure Food Bill?” Public Opinion, 15 April 1903, 572–73, 590. Allen worked temporarily in Washington in 1908 and 1909 as a special assistant to the attorney general on pure food cases. Wolfe, “Agriculture Experiment Station,” 334.

52 Phillips, David Graham, Treason of the Senate (Chicago, Ill., 1964), reissue of articles that appeared in Cosmopolitan from March to November 1906.

53 Allen to Wiley, 24 March 1905, BACIC; Wiley to Editors, Public Opinion, 18 April 1905; Wiley to William O. Bates, 15 April; Wiley to H. N. Gardner, 18 April; Wiley to Dr. Hugo Schwertzer, 13 April, all 1905; Wiley to Editor, Collier's Weekly, 27 May 1905; Lowery, , “The Senate Plot Against Pure Food,” World's Week 10 (May 1905): 6215–17; Wiley to Alice Lakey, 13 June 1908, FDA.

54 McCormick, Richard L., “The Discovery that Business Corrupts Politics: A Reappraisal of the Origins of Progressivism,” American Historical Review 86 (April 1981): 247–74.

55 Wiley to Miss Elisabeth Foster, 2 March 1905; Wiley to Taylor, 6 May 1905, FDA; Anderson, Health of a Nation, 190–93; Wirtschafter, “The Genesis and Impact of the Medical Lobby,” 15–49; Young, Toadstool Millionaires, 234; Crunden, Ministers of Reform, 163–99.

56 See Young, Toadstool Millionaires, 239–41, for a discussion of the effects of The Jungle on medicines in the Pure Food Act. There is some controversy about the extent to which the book increased overall support for the act. See Wood, Strategic Uses, 6–9.

57 Parmenter, W., “The Jungle and Its Effects,’ Jouralism History 10 (1983): 1417, 33–34; Sullivan, , Our Times, 2: 535–36.

58 Anderson, Health of a Nation, 185–94. Wiley memorandum, 3 April 1906, FDA.

59 National Wholesale Liquor Dealers' Association, Letter to Members, 14 May 1904; Stephenson, Nelson Aldrich, 464; Anderson, Health of a Nation, 181–85.

60 Anderson, Health of a Nation, 185–94; Wiley Memorandum, 3 April 1906; Wiley to Congressman Mann, 8 March 1906; Wiley to Dr. Charles A. L. Reed, 14 March 1906, FDA.

61 Roosevelt quote from Anderson, Health of a Nation, 190. Wiley, “Why I Support Wilson and Marshall,” Wiley Papers; Anderson, Health of a Nation, 192–97.

62 Memorandum on the “‘What is Whiskey?’ Controversy,” Federal Alcohol Control Administration (Washington, D.C., 1938), Wiley Papers.

63 Taft, William H., “Whiskey,” Decision by President Taft (Washington, D.C., 1909).

64 McCraw, “Regulation in America,” 170. Also see his Prophets of Regulation (Cambridge, Mass., 1984).

65 Among the important works in economic theories of regulation are Stigler, George, “The Theory of Economic Regulation,” Bell Journal of Economics 2 (Spring 1971): 321; Peltzman, Sam, “Toward a More General Theory of Regulation,” Journal of Law and Economics 19 (Aug. 1976): 211–40; Tullock, Gordon, “The Welfare Costs of Tariffs, Monopolies, and Theft,” Western Economic Journal 5 (June 1967): 224–32; Kreuger, Anne, “The Political Economy of the Rent–Seeking Society,” American Economic Review 64 (June 1974):291303; McCormick, Robert E. and Tollison, Robert D., Politicians, Legislation and the Economy (Boston, Mass., 1981). For surveys of these theories, see Posner, Richard A., “Theories of Economic Regulation,” Bell Journal of Economics 5 (Autumn 1974): 335–58; Mitnick, Barry M., The Political Economy of Regulation (New York, 1980), 111–53; Tollison, Robert D., “Rent–Seeking: A Survey,” Kyklos 35 (1982).

66 For a discussion of strategic use of public policy, see Barry M. Mitnick, “Myths of Creation and Fables of Administration: Explanation and the Strategic Use of Regulation,” Public Administration Review (May/June 1980): 275–86. Wood has convincingly explained business involvement in the passage of the Pure Food Act as attempts to use regulation to gain an advantage over competitors. See Wood, Donna J., “The Strategic Use of Public Policy: Business Support for the 1906 Pure Food and Drugs Act,” Business History Review 59 (Autumn 1985): 403–42; Wood, Strategic Uses. Heiner, Ronald A., “Super Exhaustive Rent–Seeking,” unpub. MS, Brigham Young University, has recently produced a mathematical theory explaining the economic effects of the strategic use of public policy. Porter, Michael, Competitive Strategy: Techniques for Analyzing Industries and Competitors (New York, 1980), includes the effects of government regulation in his strategic analyses of competitors. McChesney, Fred S., “Rent Extraction and Rent Creation in the Economic Theory of Regulation,” Journal of Legal Studies 16 (Jan. 1987): 101–18, calls active political involvement in regulation “rent extraction.”

67 Dupree, Science in the Federal Government, 176–83; Daniels, Science in American Society, 308; Wiley to Professor N. S. Shaler, 7 Jan. 1902; Wiley to Dr. Win. A. Noyes, 23 Oct. 1903. Although there is no clearcut maximand, such as profits, for the bureau head, the bureau's budget is usually considered a good proxy. See Niskanen, William A., Bureaucracy and Representative Government (Chicago, Ill., 1971), 3842.

68 See Mitnick, Political Economy, 80–84, for a theoretical schema of the regulatory process.

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