Chapter 19 Regulating Liquor: Prohibition Enforcement, Official Corruption, and State Efforts to Control Alcohol After Prohibition Repeal
By Phil Roberts, University of Wyoming
The longer article, from which this is an extract, first appeared in Wyoming Law Review 12 (2012), pp. 389-451. Portions are included in a forthcoming book by Phil Roberts on the history of Prohibition in Wyoming.
….Cities and counties throughout Wyoming issued retail licenses during March and April 1935. The statute set out the procedures by which these licenses would be awarded to individuals.[1] While the Wyoming Liquor Commission would award a total number of retail licenses based on the population for each community and county, it would not determine who would receive any specific license. Town councils were empowered to award, renew, or cancel individual licenses within municipalities.[2] Similar power for county allocations went to the county commissioners. Each license was valid for one year unless revoked.[3] Individuals seeking licenses would fill out a form and pay an application fee,[4] which included the cost of publishing the application particulars in the local newspaper’s legal pages, and file the application in a timely manner with either the town clerk or the county clerk.[5] The published notice would include the name of the applicant, an exact description of the proposed location, and the date the granting authority would consider the proposed license.[6]
Yellowstone National Park concessionaires had been selling beer since the summer of 1933. Federal law authorized sales of other liquor if the state allowed it. When Wyoming regulations finally permitted liquor by the drink in “cocktail rooms at hotels and lodges” in 1935, the Park concessionaires prepared for the summer trade. “Workmen already have started the installation of cocktail rooms,” the Worland Grit reported in June 1935, adding that Pryor and Hamilton retail stores inside the park could sell liquor, but “by the bottle only.”[7]
Even though the population basis for license allocations appeared to be adequate for most places, the legislation gave the Commission the authority to grant additional licenses on application from cities and counties.[8] Within days of the Commission’s creation, several Wyoming cities and counties were already making such requests. In fact, much of the Commission’s time in the first six months of its existence went to determining whether it should grant such additional licenses for various cities and counties.
Requests for additional licenses correlate generally with Wyoming towns and counties where there had been the most reports of bootlegging and other liquor violations during the Prohibition years. Towns in Sweetwater, Lincoln, and Hot Springs counties were among the first to ask for more licenses, beyond those granted by statute, based on their 1930 populations.
In Rock Springs, twenty-six applicants sought licenses, eight more requests than there were licenses allocated to the city under the statute.[9] In the nearby town of South Superior, eight requests were filed.[10] When the Commission met on April 6, the towns of Kemmerer, Rock Springs, Dubois, and Riverton requested additional licenses beyond those authorized by the legislation.[11] After hearing representatives from Rock Springs, South Superior, Kemmerer, and two other towns, Pinedale and Big Piney, the Commission decided to conduct local hearings to analyze the requests and determine whether it would grant these towns additional licenses.[12] Thermopolis, Riverton and Hudson also were asking for more licenses.[13] The following day, Worland, Powell, and Green River also made requests.
Governor Miller, State Treasurer Baldwin, and Commission Director Natwick conducted a hearing in Rock Springs on April 15, 1935, to hear arguments for additional licenses for towns in that area.[14] At the end of the hearing, the commissioners voted to grant one additional license to Green River and five additional licenses each to Rock Springs and South Superior.[15] The Commission, however, denied the requests from the Sublette County towns of Big Piney and Pinedale.[16] The following day, the Commission reconvened for a hearing in Kemmerer, eventually granting six more licenses to that Lincoln county community.[17]
The Commission was busy with additional hearings the following week. On April 24, following a meeting in Riverton that morning, the Commission granted Riverton one additional license, but denied the applications for additional licenses from Dubois and Hudson.[18] Later in the day, after a Thermopolis hearing, that county seat of Hot Springs County, was granted four more retail liquor licenses.[19]
In some Wyoming towns, few residents showed any interest in applying for the available licenses. In Wheatland, the town council decided to set the license fee at $1000 per year.[20] “While Wheatland is allowed five liquor permits . . . under the state law,” Wheatland Times editor Charles W. Hahn wrote, “it is the intention of te [sic] council according to Ben Bellis, Mayor, to hold the permits to two salloons [sic].”[21] The paper reported only two applicants for the available permits.[22]
In other locales, it became apparent almost immediately that the more licenses the Commission granted, the more competitive the liquor trade in that community would become. But even in places where liquor use was not particularly popular, those already holding licenses sought to limit the number.
In some respects, the Worland situation was typical. There, city officials awarded the four liquor licenses authorized to their town by the Commission. The task was easy because just four completed applications had been filed.[23] Five days later, however, the council met again and received applications for two more establishments. Anna Coutis and H. C. Howell were told that the town’s allocation of only four licenses had been granted during the previous meeting. Nonetheless, the council voted to request authority from the Wyoming Liquor Commission for licenses for the two additional applicants.[24]
For the first time under the law and anywhere in the state, previous license holders in Worland appeared before the Commission to argue against granting new licenses to would-be competitors. Just two commission members, Governor Miller and Treasurer Baldwin, conducted the hearing in Worland on April 25 where the exclusivity principle was articulated. Two earlier holders of liquor licenses hired Worland attorney George Bremer to argue that the Commission should not grant any more licenses because of the adverse impact it would have on existing licensees. Mayor H. B. Paris spoke in favor of granting two additional licenses to the town and town attorney Charles Harkin argued specifically for two applicants.
Miller seemed surprised that existing retail liquor dealers would want to shut out competitors by limiting licenses, at least in the early months of the Commission’s deliberations.[25] The existing licensees in Worland claimed to be members of the Big Horn Liquor Dealers’ Association.[26] To Governor Miller, such associations would be useful to the Commission. During a Liquor Commission meeting in early April, Governor Miller “suggested that . . . an association be formed by the firms holding retail licenses, which would undoubtedly help the Commission to enforce their laws.”[27] At the conclusion of the hearing, the Commission voted to defer the Worland decision.[28]
Miller and his colleagues encountered a similar situation that same weekend when competitive concerns dominated the Commission’s hearing in Buffalo. Existing license holders came to the April 27 hearing in force to oppose granting a new license to the Idelwilde Café. After recording numerous protests, the Commission tabled the request until a later meeting when members returned to Cheyenne.[29]
The Commission considered both the Worland and Buffalo cases on the following Monday. After that meeting, Natwick, writing for the board, sent a telegram to inform Worland officials that the Commission would allow the two additional licenses. The board also authorized the additional new license for Buffalo.[30] Immediately, the Worland council granted one of the licenses “to Mrs. Anna Coutis to be used in the Annex Bar; J. W. Bird is to be manager.”[31]
During its first full month of deliberations, the Commission seemed willing to authorize additional licenses if local town councils requested them. In the following month, the Commission received a flurry of requests and denied nearly all of them.[32] The record is silent as to the seeming change to greater parsimony, but given the opinions the commissioners heard from existing license holders in Worland and Buffalo, the vested interest in minimizing competition may have been on their minds. Throughout the remainder of the 20th century and to the present, legislators and city councilors have remarked on the power of the retail liquor dealers’ associations and holders of existing licenses with respect to license renewals and new awards.
Financially, the state’s wholesale liquor monopoly started handing in healthy returns to the state treasury. During the first three months of operation, starting on April 1, 1935, the Commission’s wholesale receipts were $114,474. The report listed gross profits from liquor sales of $61,176 making total gross revenues for the quarter of $139,661:[33] “By months, the net earnings were April, $33,250; May, $38,572, and June $41,651. The total operating expenses of the quarter are shown as $25,186.”[34] By the second quarter, the state’s liquor sales jumped to $380,722 and with the additional receipts from excise taxes, license and permit fees, $78,485 added to that total.[35] With legislative reluctance to adopt any tax increases and spending reduced to skeletal levels, this new source of income must have come as some relief to Miller and his administration.[36]
The Commission’s regular May meetings were occupied with considering requests from various towns for additional licenses, but also considering other issues involving state regulation of liquor establishments. For instance, the Commission was asked to rule on whether radios ought to be allowed in retail liquor establishments. After extensive discussion, the commissioners concluded that radios would be allowed “and their use will not be considered unlawful unless their music is used for dancing in the bar room, or for some purpose which is unlawful.”[37]
During the Commission’s first two months of operation, it was concerned primarily with retail liquor sales. On May 28, attorneys representing Daniel Schikich asked the Commission if their client would be permitted to construct and operate a distillery in Wyoming: “The applicant was advised that it is the present policy of the Wyoming Liquor Commission not to grant any permission for distilleries in Wyoming.”[38] The policy was to remain in effect for the rest of the century and beyond.[39]
Requests from tourist towns for additional licenses became more numerous as summer approached. The town clerk of Jackson, a man named Bark, requested special consideration for that resort town because “the Town of Jackson has a population of several hundred more people than shown by the last Federal census.”[40] The Commission agreed with the rationale and granted Jackson another license.[41]
In late July, Worland’s remaining license was awarded to C.L. Howell, the only other applicant.[42] Within weeks of awarding that additional license, officials from Worland requested an even more unusual exception. Two months prior to asking for another license, the Worland Town Council received a petition presented to it by J. W. Bird and others. The petitioners requested “the Town Council to apply to the Wyoming Liquor Commission for an additional Retail Liquor License, to be issued to Josefa Rivera.”[43] Another petition, presented by H. B. Van Buskirk, asked that a similar license be issued to Y. Fonceca.[44] After discussing the two requests, the council passed a resolution:
Whereas, it has come to the attention of the Town Council that because a large portion of the population of the Town of Worland, and vicinity, is made up of Spanish speaking people who are employed in beet fields adjacent to Worland, and whereas it is for the best interest of the community that a Retail Liquor Store be established in the Spanish Quarter of the city, where Spanish-speaking people could obtain liquor without mingling with the other races, therefore be it resolved by the Town Council of the Town of Worland that an application be made to the Wyoming Liquor Commission for permission to issue one additional retail liquor license.[45]
The Worland officials, in August 1935, told the Commission that it was unaware of any protest from earlier licensees, an issue that existed when the Commission met in Worland four months earlier. Consistent with its policy, the Commission filed notice that it would hold a hearing in September at which point “[a]ny person desiring to protest the allowance of such application for an additional license should file their protest in writing by the ninth day of September, 1935.”[46] The official minutes for the September 18, 1935, meeting, tersely summarized the issue and the outcome:
There was for consideration before the Board, the application of the Town of Worland for an additional liquor license that a liquor store might be opened for Spanish speaking or Mexican people. There was present, to represent the application of the Town of Worland, Alec B. King and Dan Egan, attorneys of Casper, Wyoming. The facts as represented to the Board were that the permanent Mexican population at Worland is four hundred, and during the beet season, reaches one thousand. The Mexicans are barred from the retail liquor stores now operating in Worland, and it further appears that the licensees in Worland had no objection to an additional license and the authority for issuing an additional license was therefore granted.[47]
The Worland council apparently did not immediately issue the new license to either of the two applicants. Finally, on November 4, 1936, more than a year after the council’s formal request for the special license, one of the new ear-marked retail licenses was issued to Josefa Rivera.[48] The record does not indicate why Rivera’s request was delayed for such a long time nor is there any hint as to why Rivera was awarded the license when another person, Dionicio Cantu, had filed a similar application and was denied.[49]
The issuance of Rivera’s license did not end the controversy surrounding Worland’s “special license” for the “Spanish Quarter.” When Mrs. Rivera sought to renew her license the following November, a local man, C. A. Brant and others protested its reissuance. The protesters claimed Rivera was violating the town ordinance and state liquor laws by serving food in the same room as she was dispensing alcohol. The town council voted to deny her license renewal.[50]
By 1936, liquor commission deliberations focused on renewals, as well as additional requests from cities and counties for more licenses.[51] The Commission also issued licenses for Union Pacific passenger trains, crossing through the state.[52] Much of the Commission’s business was by now routine—renewals of annual licenses to wholesalers and pharmacists and occasional requests from agency staff to revoke licenses of violators of Commission rules.[53]
In 1937, the Legislature passed an act naming the five elective state officials as members “of all state boards and commissions upon which two or more such officers [were then] serving.”[54] The act applied to the liquor commission, placing it under all five elected officials.
At the end of the decade, Governor Miller lost re-election to a third term. When his successor, Nels Smith, took office, the new Republican majority on the Commission replaced O. O. Natwick, the first director, with Thomas McKinney.[55] The Commission, acting on the record from the first deliberations of the Commission in February 1935, voted to replace most employees.[56]
[1] 1935 Wyo. Sess. Laws 110–20.
[2] “Incorporated cities and towns and counties within the State of Wyoming shall regulate, prohibit, or license the sale of alcoholic and/or malt beverages within this state under the provisions of this Act.” 1935 Wyo. Sess. Laws 111.
[3] 1935 Wyo. Sess. Laws 114.
[4] Section 10 stipulated that the application fee for each retail liquor dealer could be set by the city or county at a minimum of $300 but not more than $1,500. The money went into the town or county treasury. 1935 Wyo. Sess. Laws 114–15.
[5] Section 5 of the Statute set out the publication requirement for application. It required four consecutive weeks in newspaper of general circulation in city or county. See 1935 Wyo. Sess. Laws 113 (“No license shall be issued until after the date set in the notice for hearing protests. Nor shall a license under this Act be issued if it shall appear at said hearing that the welfare of the people residing in the vicinity of the place for which such license is desired will be adversely affected or that the purpose of this Act will not be carried out by the issuance of such license. Each applicant shall, at the time of filing his application, pay the clerk an amount sufficient to cover the costs of publishing notice.”).
[6] 1935 Wyo. Sess. Laws 112–13.
[7] Yellowstone Park Is to Have Liquor, Worland Grit, June 13, 1935, at 1. Clearly, population could not have been the basis for granting licenses to concessionaires in the Park, given that few people lived within its boundaries. Apparently, Yellowstone concessionaires were treated the same as retail applicants outside of incorporated cities and towns.
[8] 1935 Wyo. Sess. Laws 112 (“Provided, however, that the town or city council of any incorporated town or city, or Board of County Commissioners of any county in the State of Wyoming, may make application to the Wyoming Liquor Commission for additional licenses to be granted in such city or town, or county, and the Wyoming Liquor Commission shall authorize such additional licenses as, after proper investigation and hearing, they may deem necessary.”).
[9] 26 Petitions on File in R. S. for Liquor Licenses, Rock Springs Rocket, Mar. 9, 1935, at 1.
[10] Notice of Applications for Retail Liquor Licenses in the Town of South Superior, Rock Springs Rocket, Mar. 16, 1935, at 6.
[11] See Board Minutes, Wyo. Liquor Comm’n (Apr. 6, 1935) (on file with the Wyoming State Archives).
[12] See Board Minutes, Wyo. Liquor Comm’n (Apr. 9, 1935) (on file with the Wyoming State Archives).
[13] See id.
[14] See Board Minutes, Wyo. Liquor Comm’n (Apr. 15, 1935) (on file with the Wyoming State Archives).
[15] See id.
[16] See id.
[17] See Board Minutes, Wyo. Liquor Comm’n (Apr. 16, 1935) (on file with the Wyoming State Archives). Minnie Marcante who had applied for a wholesale malt liquor license, appeared with counsel to request reconsideration of an earlier commission denial of a license. Id.
[18] See Board Minutes, Wyo. Liquor Comm’n (Apr. 24, 1935) (Riverton meeting) (on file with the Wyoming State Archives).
[19] See Board Minutes, Wyo. Liquor Comm’n (Apr. 24, 1935) (Thermopolis meeting) (on file with the Wyoming State Archives).
[20] Liquor Licenses in Wheatland is $1,000, Wheatland Times, Mar. 7, 1935, at 1.
[21] Id.
[22] Id. The two applicants were listed as Jake Blankenship and Charles Nelson, both requesting application to operate the business from their present locations. Id.
[23] Town Council Minutes, Worland, Wyo. (Apr. 3, 1935) (on file with the Wyoming State Archives); Town Council Issues Four Liquor Licenses, Worland Grit, Apr. 4, 1935, at 1 (stating four licenses were awarded to “Joe Myuskovich, Peter Mileski, John Hohenstein and N. Hodge . . . to resell liquor by the drink, and Read Drug Company to resell liquor in the package. . . . [taking] care of the allotment for the Town of Worland for sale of liquor, of four in all”).
[24] Town Council Minutes, Worland, Wyo. (Apr. 8, 1935) (on file with the Wyoming State Archives).
[25] Board Minutes, Wyo. Liquor Comm’n (Apr. 25, 1935) (on file with the Wyoming State Archives).
[26] Id.
[27] Board Minutes, Wyo. Liquor Comm’n (Apr. 1, 1935) (on file with the Wyoming State Archives).
[28] Id.
[29] See Board Minutes, Wyo. Liquor Comm’n (Apr. 27, 1935) (on file with the Wyoming State Archives).
[30] Board Minutes, Wyo. Liquor Comm’n (Apr. 29, 1935) (on file with the Wyoming State Archives). Powell withdrew its request for an additional license. Id.
[31] Two Additional Liquor Licenses Granted Here, Worland Grit, May 2, 1935, at 1.
[32] A year later, Meeteetse was granted the additional license. Board Minutes, Wyo. Liquor Comm’n (June 9, 1936) (on file with the Wyoming State Archives).
[33] See Reports of Month’s Sales, July, Wyo. Liquor Bd. (1935); see also Board Minutes, Wyo. Liquor Comm’n (July 21, 1935) (on file with the Wyoming State Archives).
[34] Wyoming Liquor Board Reports Month’s Sales, WorlandGrit, July 25, 1935, at 3. The sales figures were included in a liquor commission press release sent to all Wyoming newspapers.
[35] Reports of Month’s Sales, September, Wyo. Liquor Bd. (1935).
[36] For legislative debates over taxation during the period, see Phil Roberts,“A History of the Wyoming Sales Tax and How Lawmakers Chose It from Among Severance Taxes, an Income Tax, Gambling, and a Lottery.” Wyoming Law Review, 4 (2004)..
[37] Board Minutes, Wyo. Liquor Comm’n (May 18, 1935) (on file with the Wyoming State Archives). Banning music from saloons had historical precedent. In August 1907, the Casper Town Council banished instrumental and vocal music from all saloons. Music interfered with the purpose of a saloon, which was to drink. The editor of the Natrona County Tribune wrote:
This order was due to the request of a great many people. It was argued that when they were having a social drink they could not drink and keep time with the music and oftentimes they would have to forego their beverage and dance to the sweet strains from the piano and violin, and they did not want it that way, hence the order of the town council.
More Sidewalks, Less Music, Natrona Cnty. Trib., Aug. 21, 1907, at 1.
[38] Board Minutes, Wyo. Liquor Comm’n (May 18, 1935) (on file with the Wyoming State Archives). K. K. Steffenson of Salt Lake City and Thomas Hunter of Cheyenne represented Schikich. Id.
[39] The commission received other requests for distillery authorization. For instance, on July 27, 1937, B. O. Yowell of Arvada, Colorado, sought approval for a plan to build a distillery at Casper. “After hearing all of the information presented, the Commission was unanimously of the opinion that no need exists for a distillery in Wyoming, and that this is especially true, inasmuch as Mr. Yowell and his associates in the International Distillery are operating a distillery at Arvada, near Denver, Colorado.” Board Minutes, Wyo. Liquor Comm’n (July 27, 1937) (on file with the Wyoming State Archives). The first distillery in Wyoming, Kolts Fine Spirits of Sheridan, founded by the Koltiska family, opened in April 2005. The firm made a 60-proof liqueur known as “Koltiska Original.” The first bourbon distillery, Wyoming Whiskey, Inc., opened in 2009 in Kirby.
[40] Board Minutes, Wyo. Liquor Comm’n (May 22, 1935) (on file with the Wyoming State Archives).
[41] Id.
[42] See Advertisement, Announcing the Opening of the Heidelberg Bar, Worland Grit, Aug. 1, 1935, at 5.
[43] Town Council Minutes, Worland, Wyo. (Aug. 7, 1935) (on file with the Wyoming State Archives).
[44] Id. The record contains several contradictions. For instance, a special meeting on April 17 appears already to have granted a license to Fonceca. Just two weeks later, his name appears owing $24.02 in back taxes. The property is listed as Lot 11, Block 8, Pulliam Addition (west of the railroad tracks from downtown Worland and two blocks south). Notice of Sale of Real Property for Delinquent Taxes, Worland Grit, Aug. 22, 1935, at 6. Later, when Rivera’s application finally came before the council, Fonceca was no longer an applicant, but Dionisio Cantu had applied for the license. Town Council Minutes, Worland, Wyo. (Nov. 4, 1936) (on file with the Wyoming State Archives).
[45] Worland, Wyo., Ordinances, Book no. 3, at 332 (Aug. 7, 1935).
[46] Notice, Worland Grit, Aug. 22, 1935, at 9.
[47] Board Minutes, Wyo. Liquor Comm’n (Sept. 18, 1935) (on file with the Wyoming State Archives).
[48] The Rivera application, dated October 4, 1937, was for lot 13, Block 11, Pulliam Addition, a location between Grace and Obie Sue, bounded on the east by the railroad tracks and the west by Vesta street and the city limits, i.e., across the railroad tracks west from the main downtown. Notice of Application for Retail Liquor License, WorlandGrit, Oct. 21, 1937, at 9.
[49] Town Council Minutes, Worland, Wyo. (Nov. 4, 1936) (on file with the Wyoming State Archives).
[50] Town Council Minutes, Worland, Wyo. (Nov. 3, 1937) (on file with the Wyoming State Archives) (“The application of Josefa Rivera for a retail liquor license was then present [sic] for consideration and a protest having been filed by C. A. Brant and others and the council having heard said applicant and said protestants and being fully advised in the premises it was moved by Councilman Rhodes that the application of Josefa Rivera for a retail liquor license be denied. Motion was seconded by Councilman Chenoweth, and the Motion was carried.”). The record is unclear as to what happened to the license, but it was not awarded to another individual doing business in the “Spanish Quarter.”
[51] See, e.g., Board Minutes, Wyo. Liquor Comm’n (Apr. 2, 1936) (on file with the Wyoming State Archives) (“Authority was granted to the City of Rock Springs to issue seven retail liquor licenses in addition to the statutory number.”).
[52] Board Minutes, Wyo. Liquor Comm’n (Mar. 17, 1936) (on file with the Wyoming State Archives) (“Licenses were granted to Union Pacific trains as follows: Nos. 1, 2, 7, 8, 17, 18, 27, 28, 14, 21, 118, 127, 121, and 114, at $50.00 each.”).
[53] Apparently, the commissioners met only for scheduled meetings. The special meetings reported in the minutes regularly during 1935, were not held in 1936. Further, tensions among the commissioners were apparent by mid-summer 1936, even though all three members were Democrats. Baldwin gained the ire of fellow Democrat Miller when he filed for the U. S. Senate nomination in 1936. Miller, who favored the nomination of H. H. Schwartz, the “machine party” candidate, opened an investigation of Baldwin’s office during the week before the primary, alleging that Baldwin was using state funds to further his campaign. Miller claimed there were requests for an investigation of how Baldwin’s office handled the workmen’s compensation fund. “The so-called investigation by Gov. Miller is merely a political move at the last hour to stop my nomination,” Baldwin replied. After defending the work of his agency, Baldwin added, “Reports reached me in Evanston Friday that Governor Miller was there about ten days ago urging my defeat and citizens were asked to support John D. Clark. The entire move on Gov. Miller’s part is a political effort to beat me in this campaign.” The newspaper article noted that the “stop Baldwin” movement “ha[d] become the outstanding feature of the Democratic primary campaign.” Governor Orders Probe of Funds, Torrington Telegram, Aug. 13, 1936, at 1. Baldwin finished third in the primary that was won by Schwartz. Clark finished second with 6931 votes to Baldwin’s 6508. Carey-Barrett Win Nomination, Torrington Telegram, Aug. 20, 1936, at 1.
[54] 1937 Wyo. Sess. Laws 82.
[55] Wyoming Blue Book, supra note 123, at 157.
[56] The newly-constituted Commission relied on a rule based by the predecessor Commission, passed during a meeting in February 1935 allowing for removal of employees without cause. See Board Minutes, Wyo. Liquor Comm’n (Feb. 23, 1935) (on file with the Wyoming State Archives).