Monday, August 11, 2025

Taxes, Tariffs, Tarantula Juice and Unintended Outcomes

                                            Sheriff Howard Beacham  

 
During the Civil War, President Lincoln’s administration put a tax on alcohol to pay for the war and the tax persisted until 1920. By the early 1900s, nearly 40% of the United State’s national government’s income came from liquor, wine, and beer taxes. 
In 1910, the federal government took in $200 million in taxes from the sale of spirits; the rest of the United State’s budget relied upon the sale of federal lands and tariffs collected at customs houses from American wholesalers who purchased goods coming into the country.  
Taxes on alcohol were so crucial to the budget that brewers and distillers didn’t take the possibility of prohibition seriously. They believed the government would never give up such a rich source of income. But another source of taxable funds was added in 1913: the 16th Amendment to the Constitution of the United States was ratified which allowed the federal government to collect income taxes from every employee in the country.
Surprisingly, the income tax was popular among most people.  The working class felt that the Gilded Age “robber barons” should be assessed proportionate to their wealth because it wasn't fair that the rich contributed little of their income and wealth to keep the country afloat.

“The New Man on the Job,” 1913. This cartoon depicts the “Idle Rich” joining the “Working Class” on the treadmill of “Governmental Expenses.” 

“The New Man on the Job,” 1913. Library of Congress.

 Sixty percent of the federal budget came mostly from import taxes. Prices of imported goods were inflated because tariffs were passed along from the wholesaler to the retailer to consumers; therefore,  the smaller one’s income was, the more they paid as a percentage in taxes from their purchases. The regressive import taxes created a larger burden on the poor; citizens believed that the new income tax would mean everyone would pay taxes fairly. 
There were plenty of smugglers along the coasts and borders who snuck in goods to avoid paying the custom house fees. Since the vast majority of the federal budget came from import duties, the precursor to the Coast Guard—the Revenue Cutter Service—was part of the Treasury Department. The Revenue Cutters were established to prevent smugglers from bringing items into the United States without paying import duties.  
  

                                         United States Revenue Cutter Service

Sugar, cigars, French champagne and cordials, coffee and tea were transported in boats and also across Canadian and Mexican smuggling routes to avoid paying these tariffs. Sugar smuggling shenanigans alone amounted to American consumers saving around $6,000,000 per year in taxes. Offenders also sought to avoid the tariffs on protected manufactured goods - from lumber to iron, to machinery which was produced cheaper elsewhere and covertly conveyed across borders and beaches.  
Ironically, luxury goods, which only the wealthy could afford, were also illegally snuck in: silk, lace, furs, diamonds, and French fashions were popular. One economist claimed that $11.7 million in silk, or 25 percent of the total yearly silk imports, entered through the black market.  
The largest smuggling seizures involved imported goods from Europe, the Caribbean and Asia. English china graced carved rosewood Asian dinner tables in elegant homes; French haute couture swathed the bodies of chic women whose necks dripped with De Beer’s diamonds - snuck in tax free. 
In 1914, customs officials arrested millionaire glove manufacturer Lucius Littauer, a former congressman and adviser to President Theodore Roosevelt, for failing to declare a $5,800 diamond and pearl tiara imported from Venice, once owned by Empress Josephine Bonaparte. He pleaded guilty to avoid jail, but he did not avoid disgrace; his constituents demanded he be stripped of his right to vote - but that didn’t happen. 
                                                          The Empress Eugenie Tiara
Meanwhile, women were becoming a political force because they had few rights to protect themselves and their children and were not allowed to vote or run for office to enact pro-family legislation. At the turn of the century, married women could not own property, control their wages, enter into contracts, nor act contrary to their husband's authority. 
 It wasn't difficult for a husband to get a divorce, but wives didn’t have a separate legal identity unique from their husband's. If a woman wanted a divorce, the husband or a “next friend,”  usually a father or brother, would have to petition for it on her behalf.  
It was not until 1937 that laws allowed for divorce in cases where bigamy, desertion, insanity, and drunkenness were proved. Divorce had to be justified with a cause such as infidelity, gross neglect, abandonment, or abuse - which needed to be witnessed by someone other than the wife. The concept of "irreconcilable differences" didn't exist. 
A major concern about getting a divorce was  very few employers would hire women.  The jobs that were available meant women would have to leave their children to fend for themselves during the work day and females could not earn enough to feed many mouths.  
 But women began meeting with other politically active groups to not only get the vote for themselves, but also to outlaw the sale of alcohol which was often the cause of wives needing to divorce.  The alcoholism rate before Prohibition was three times current levels, and the addicts were mostly male - women were not welcome in bars.   
The Women’s Christian Temperance Union joined a coalition of southern Protestant churches, revival evangelist Billy Sunday, former presidential candidate William Jennings Bryan, the Anti-Saloon League, ax-yielding Carrie Nation, and curiously enough, the Ku Klux Klan. 
The evils of alcohol were clearly spelled out by Prohibitionists: poverty - addiction was a major drain on a family budget and the biggest hit to finances was when an alcoholic breadwinner lost their job.  Women and children had no recourse against physical, domestic and emotional abuse caused by the disease: insults, threats, physical violence, neglect, humiliation, intimidation, anxiety, depression and shame inflicted on families by a loved one’s addiction.  Social reformers were out to tackle these problems by outlawing booze! 
The KKK imposed their prejudices into the mix through the influx of German (Catholic) immigrants who arrived in droves and began brewing beer from grains grown in the Midwest  known as the German Belt. The newcomers opened beer halls and beer gardens instead of saloons. Italian and Irish immigrants, also Catholic, were wine and beer drinkers and were soon placed on the KKK’s and the “Know Nothings” aka “American Party’s” hit list. 
American Party candidates began winning elections in several cities. Their platform included banning languages other than English, requiring Bible readings in public schools, restricting certain types of alcohol like beer and wine and banning beer sales on Sundays. 
 When Know-Nothing party member  Levi Boone was elected mayor in Chicago, he raised the cost of a beer garden license by 600% and revived a law banning beer sales on Sundays - the day Germans took their families to beer gardens for food, music, and imbibing. The Anti-Saloon League said beer halls were owned by “enemy aliens” and even characterized brewers as “the worst of all our German enemies” during World War I. 
Beer producers were soon boycotted because of anti-German sentiments. Adolphus Busch, Frederick Pabst, and Joseph Schlitz were financially successful and this also bred resentment and jealousy among some white Protestants or “Native Americans” as they called themselves (they said they were here first). 
 A lack of support for Prohibition was deemed “unpatriotic,” and many Germans chose to Americanize their last names: Müller became Miller, Schmidt became Smith, and Braun became Brown.  
The forces were aligned: suffragists, anti-saloon prohibitionists, preachers, people with common prejudices, and politicians were ready with their agenda. With the 16th Amendment in place, funding for federal taxes could be transferred from liquor taxes to wage earners. The 18th Amendment was ratified thereby outlawing the manufacture, sale, and transportation of alcoholic beverages.  Hopes were high! 
Prohibitionists predicted the sales of clothing and household goods would skyrocket. Real estate developers and landlords said neighborhoods would improve and slums, poverty, and crime would be eliminated when saloons closed. Social reformers conjectured that domestic abuse and financial hardships would disappear when drunken husbands and fathers became sober. 
Chewing gum, grape juice, and soft drink companies ramped up production expecting drinkers would switch over to their products. Theaters anticipated larger crowds as Americans would look for new ways to entertain themselves without alcohol. 
Preachers believed divorces would plummet - down from 1 divorce in every 3000 marriages to no divorces. Church attendance would rise; tithes would increase.  Hopes were high! 
The first effect on the economy was that Prohibition led to the loss of around 250,000 jobs. These included jobs in brewing, distilling, barrelmaking, box making, bottle manufacturing, label printing, coppersmithing, vat making, trucking, bartending, serving, cleaning, stockers, clerks, salesmen, hops and barley farmers, bookkeepers, stenographers, as well as positions in venues like nightclubs and dance halls with entertainers and musicians. Upscale restaurants closed their doors without wine and cocktails to serve. 
The Volstead Act didn’t do what it intended - which was to stop people from drinking. Alcohol enthusiasts began consuming more hard liquor during Prohibition than ever before, and spirits accounted for a staggering 75% of all alcoholic beverages consumed in the United States because it was more cost effective to transport.  
Alcohol consumption before Prohibition had been gravitating towards beer, but a new drinking culture arose, giving birth to libations including mixed drinks to disguise the taste of alcohol, bathtub gin, and moonshine. Bootleggers and pharmacists became wealthy.   
The only legal distributors of alcohol were drug stores with a doctor’s prescription for liquor used medicinally. Charles R. Walgreen expanded from 20 stores to 525 stores during the 1920s thanks to medicinal alcohol sales. Walgreen said his success was due to the popularity of his newly invented milkshakes at his stores’ lunch counters. But drugstores provided the only legal source of liquor during all 13 years of prohibition, and many distilleries kept their lights on during Prohibition by selling to the Rexalls. 
Drugstores’ lucrative “secrets” are even alluded to in F. Scott Fitzgerald’s classic, The Great Gatsby. Daisy thinks Gatsby is rich because he owns drugstores. But drugstore was also an euphemism for a bootlegger - and pharmacists were getting rich during the Roaring ‘20s. 
With the great alcohol abstinence experiment underway, Alamogordo, Otero County, and New Mexico’s citizens and visitors were among those who made a national cat-andmouse pastime between those violating the law and those who were arresting the violators. 
 The Twenties were ready to roar and Otero County had one lawman who intended to see that the roar was a non-alcoholic one. Howard S. Beacham, a strong law and order man who believed in Prohibition, was elected county sheriff in the 1920 election. He took the enforcement of Prohibition seriously and did his best to apprehend bootleggers, still owners, and others connected with the trade. Moreover, he pushed the courts to prosecute the cases according to the rule of law. 
Beacham’s effectiveness in the war on bootleggers brought him to the attention of the Department of Justice, and he was chosen to be a federal Prohibition Agent. As an agent, he had jurisdiction in four counties in addition to Otero County: Chaves, Eddy, Lea and Lincoln.  
Nothing in Beacham’s background indicated that he would become such an effective lawman. Born January 27, 1883, he traveled west in his late teens and early twenties, making his way to Colorado, where he engaged in mining. On his way to South America to get rich at mining, he stopped in Alamogordo and Cloudcroft to visit friends. 
Beacham traveled into Mexico before he decided that he liked what he had seen in the new towns of Otero County and returned to live in the Sacramento Mountains in 1907.
 
In Cloudcroft, he went to work for Mr. and Mrs. L.C. Jones at the Virginia Hotel. He became a cook of wide reputation, and he won the hand of Mrs. Jones’ daughter by a previous marriage, Juanita Chase. They were married in 1909.

 

Stutz Bearcat 

 The Beachams later moved to Alamogordo and operated the Hotel Alamogordo from 1913 to 1917. He remained a restaurant operator until his career as a peace officer began. In one of his raids, Sheriff Beacham confiscated a Stutz Bearcat, one of the fastest sports cars of the time. This car became his official vehicle, and no rumrunner was going to outrun the sheriff. 
Among the many arrests Beacham made, one was an individual calling himself Franklin Turner. When Turner was turned over to federal officials, his real identity became known: “Machine-Gun Kelly”! 

           Machine Gun Kelley

Sheriff Beacham’s most notable apprehension occurred by happenstance in Alamogordo. The Sheriff was working on his automobile at his residence on Indiana Avenue when a very unusual load of lumber came by, headed north. The lumber was of good quality, without knots, a fact that struck the sheriff as odd since lumber from the nearby Sacramento Mountains was never free of knots. Also, the lumber was dusty, indicating that it had not been cut at a local mill and freshly loaded. 

Bootlegger D.E. Sherry followed what he thought was a safer route, Indiana Avenue, and had driven right in front of the sheriff ’s house. The irony of the situation was that Mr. Sherry, the driver of the truck, had heard of Sheriff Beacham’s no-nonsense tactics and had avoided driving on the main highway through town. 

Beacham got in his car and followed the lumber truck; he pulled the truck over near La Luz. The sheriff found that it was a rumrunner’s truck, cleverly camouflaged with a load of lumber. D.E. Sherry was running his goods out of Mexico. The load contained 972 pints of whiskey, 60 quarts of Gordon’s gin, 60 quarts of tequila and cognac, 9 one-gallon cans of alcohol, and a ten-gallon keg of whiskey. It was valued at $7,000 (around $130,000 in today’s money).

On February 7, 1928, newspapers throughout the Southwest reported, “The largest single cargo of liquor ever captured by officials in the vicinity of Alamogordo was flagged down by Prohibition Officer Howard Beacham.” The load had been cleverly disguised in a fake load of lumber. Beacham promised the newspapers that he would avoid joking and “refrain from saying anything about wood alcohol.” 

                                              
                                   Confiscated Alcohol smuggled from Mexico 

 Another unusual capture of what newspapers dubbed “a booze plane” was effected by Howard Beacham on November 22, 1927. This was reputedly the first capture of a liquor plane in New Mexico. Beacham seized the plane and the five cases of whiskey on information provided to him by Special U.S. Customs Agent Juanita McDaniels. Ms. McDaniels often posed as a high-school student, a cover which allowed her to gather information on immigration and prohibition violations. 

                   Bootlegger Plane

Bootleggers were often very shrewd in concealing illegal goods. A 1929 Nash Coupe was seized near Alamogordo in January of 1931. The liquor in the car, which included 100 gallons of bulk bourbon whiskey and twenty-three bottles of French cordial, was cleverly hidden in “traps” under the car body and in the back of the upholstery. Thirteen specially made containers held the bulk whiskey. 

                  Rum Runner's Booty

The pursuit of “rum runners” traveling in fast automobiles was a dangerous undertaking. On August 13, 1928, Howard Beacham, chasing a suspected bootlegger, was speeding along when his car was hit by a truck, which necessitated a brief trip to the hospital. In his long career as sheriff and prohibition officer, Beacham had only two automobile accidents. 

Two moonshiners, J. Oral Whitefield and William M. Horton from Eddy County, who built and operated a 355 gallon still, were arrested and pleaded guilty in court. Mr. Whitefield, who was very proud of his workmanship on the still, insisted on being photographed with it before heading off to federal prison.

                                                            Whitefield's Still

Howard Beacham was credited in 1928 with the “invention” of a large banner, which rolled like a scroll and allowed officers to establish a roadblock at a moment’s notice. A December 12, 1928 newspaper article said of the banner, “In numerous instances autoists have believed that they were being held up by bandits and attempt to crash the bars. When a tourist sees [this] big banner...he will be reassured, unless he has some of the proscribed stuff that is alleged to circulate clandestinely.”

Beacham’s vigorous and successful enforcement of Prohibition appeared to be his undoing for a time. Towards the end of his term in office, 1921-1923, he was not renominated for Sheriff at the Democratic convention because of his undue diligence - no good deed goes unpunished.

Beacham, however, was still a federal Prohibition Agent and continued as a Prohibition Officer for the remaining nine years of prohibition, 1924 to 1933. He was again elected sheriff in 1935 and reelected again in 1937. After his terms ended, he went back to the restaurant business and operated the popular Plaza Café. He also served as municipal judge and justice of the peace.

Howard Beacham died on March 9, 1963, at the age of 80, respected and beloved by the law-abiding citizens of Alamogordo and Otero County, and probably some of the law-breakers, too.

Unintentional consequences always follow the best laid plans: the federal government lost around $11 billion in tax revenue during Prohibition and spent $300 million trying to keep America on the wagon. Doctors in the United States were paid an estimated $40 million to write medicinal whiskey prescriptions and bootleggers and the bootleg market saw earnings of an estimated $47 billion over the course of Prohibition, or approximately $650 billion in today’s dollars.

Al Capone alone was alleged to be making $100 million a year in the 1920s, and was never convicted of bootlegging - but he was sent to prison for non-payment of his income-taxes - thanks to the 16th Amendment.   

Rumrunners who managed to stay out of prison, such as Lansky, Siegel, Costello, and Dalitz, headed to Cuba and Las Vegas, Nevada to dabble in legal casinos and all the vices that accompany the vice industry.

President Woodrow Wilson changed his mind about supporting women’s suffrage when he saw how the “weaker sex” stepped up to work during World War I.  The 19th Amendment passed to allow women to vote and Maria C. Brehm was the first female candidate for Vice-President on the ballot in 1924 and women slowly trickled into the political arena.

Other strange consequences of Prohibition include the birth of NASCAR and the Border Town.  Moonshiners in Appalachia and the South took ordinary looking cars, modified the engine for speed, installed suspension springs to handle the weight of cases of liquors, removed the seats and filled the insides with illegal booze.

Good mechanics could make engines run faster then police cars.  “Souped-up” Ford flathead V-8 eight cylinders cars were used to stay ahead of federal agents and local police while transporting illegal whiskey on curvy mountainous roads in the dark of night. Bootleggers still sold corn mash hooch after Prohibition to avoid taxes and regulations. The back woods drivers became race car drivers several years later and NASCAR was born.

The Border Town was also a product of the Volstead Act. Tijuana, Juarez, Nogales, and other border cities ramped up their entertainment offerings.  Drinking, dog and horse racing, bull fights, boxing matches, cheap quickie divorces, and other forms of entertainment were just a short walk away from the U.S. border.  Celebrities made the towns popular with their mere presence and glorification in the movies and gossip columns.

A NOTE ON SOURCES: My history contributors were my father, Clif McDonald and Dr. David Townsend, my favorite history teachers. My dad grew up in the Sacramento Mountains. His family ranched, farmed, and sheared their way through the Great Depression. Daddy knew most of the families from Dell City to Mescalero and collected their stories and old photographs. 

Dr. David A. Townsend was a retired college professor, former Campus Director at NMSU at Alamogordo, a former member of the NM House of Representatives, and a well-known local historian and considered to be a leading scholar on the life of Eugene Manlove Rhodes and the State Constitution.

Sheriff Howard S. Beacham’s son, Arthur M. (Buddy) Beacham preserved many of his father’s papers used in this article. Gertrude Painter wrote an unpublished manuscript entitled “Howard Beacham, Alamogordo’s Own Sherlock Holmes.” A copy of the paper can be found in the files of the Tularosa Basin Historical Museum in Alamogordo at the Plaza Cafe on Pennsylvania Avenue across from the Corner Cafe and down the hill from the TB Sanitarium.


           Prohibition Poem


The Volstead Act's got us down,

No good cheer to be found in town.

But a glimmer of hope, a whispered plea,

Across the border, there's a place for me!


The rumrunners whisper, the moonshiners hide,

But freedom's calling, we can't be denied.

To Canada or Mexico, we'll make our way,

And raise a glass to a brighter day.


Oh, the border beckons, a watery line,

Where legal drinking is truly divine.

Pack the car, let's make the run,

'Fore the sun sets, and the fun is done!


So raise your glass, let the good times roll,

Across the border, to save our soul                                    

                            by Ella Wheeler Wilcox



Taxes, Tariffs, Tarantula Juice and Unintended Outcomes

                                                       Sheriff Howard Beacham       During the Civil War, President Lincoln’s administration...