How Much $$ Was Made during Prohibition?

255_10000_1934_face_large_2This is a famously difficult question, one that historians and economic historians have played with for decades. Still, it is fun to speculate. According to Daniel Okrent, the historian who wrote the marvelous book, Last Call, the annual sales from bootleg liquor reached about 3.6 billion dollars by 1926. To put this into perspective, that was about the same amount as the entire federal budget that year, including the military. 

Another way to look at the question is to measure the increase in printed bills by the Bureau of Printing and Engraving. In 1925, they printed $300 million MORE large-denomination bills than they had five years earlier, before Prohibition started. As NY Mayor Fiorello LaGuardia said, “What honest businessman deals in $10,000 bills? Surely these bills were not used to pay the salaries of ministers.” 

Surely not. They were more likely to go to pay for things like Al Capone’s armor-plated car ($350,000 in today’s dollars) or bootlegger Terry Druggan’s solid silver toilet seat, not to mention bribes for the judges, politicians, lawyers, policemen, juries, federal agents, and bureaucrats in every town and city. 

The introduction of electronic money transfers between banks and credit cards meant the end of large bills. Nothing larger than a $100 bill has been printed in America since 1969. 

Published in: on August 15, 2014 at 2:28 pm  Leave a Comment  

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