Memorandum for the Secretary of the Treasury. Copy: The Attorney General: This morning I was visited by a man named Lewis Rosenstiel, President of Schenley Industries, Inc.1 The motive behind the visit was, he frankly (and refreshingly) admitted, mercenary, but the ideas he expressed, he thinks, are likewise important to the government.
By and large he argues that there is a very great volume of illicit liquor manufacturing in this country, a process that not only robs Federal and State governments of enormous revenues, but creates great health dangers to the population. He gave me a number of statistics of various kinds in his effort to substantiate this statement, and to me his statistical presentation seemed impressive.2
Another phase of the same question involves what he feels to be an excessive allowance of liquor that can properly be carried back by returning visitors to this country without tax. He believes that the $500 allowance for each returning visitor is possibly too large, but he is more interested in the amounts brought home of such items as liquor, perfume, furs and jewelry. He thinks that the government, both State and Federal, is being deprived of a great many millions of revenues and, of course, both the illicit manufacturer and the unjustified imports create very bad competition for his particular company.3
There is one difference between his argument and that normally brought to me by corporate heads in this country. In the usual case I am asked to support a higher tariff. His primary argument is that we should block up loop holes in the revenue collection, particularly when they involve tax evasion.
He believes that the internal revenue forces should be strengthened and that there should be a coordinated State and Federal effort to stamp out illicit distilling.
I informed him that I would communicate with you and the Attorney General on the matter and that if either of you should like to call on him for statistics or information bearing on these questions, you should notify him. Incidentally, he says there is a wealth of this kind of information available.
Please let me know informally what, if any, action you might take in the matter.4
