Prohibition history
Sacramental wine.
The Volstead Act exempted wine for religious use. Clergy certified what their congregation needed, the government issued permits against that certification, and licensed dealers supplied it. Nobody counted the congregations. Withdrawals rose steeply after 1920, and the Treasury’s own agents said most of it was not reaching an altar.
Why the exemption existed
Because the alternative was unthinkable politically. Wine is integral to Catholic, Orthodox and Jewish religious practice, and a constitutional amendment that made the Mass or the Passover seder illegal would have been challenged on First Amendment grounds immediately and would have lost a great deal of support it needed.
So the Act carved it out, and did so generously: wine for sacramental purposes, in quantities certified by the officiating clergy, supplied by permit-holding dealers. The drafters knew what they were doing and accepted the cost.
How it was abused
In every way an honour system can be. Permits were forged. Dealers overfilled orders. Congregations were invented, with letterheads, and in the case of several rabbinical supply operations the lists of members were taken straight from phone books. Clergy certified quantities far beyond any plausible need, sometimes under pressure and sometimes for a share.
The Treasury’s own figures showed sacramental withdrawals rising sharply in the early 1920s, at a time when nothing about American religious observance had changed. Agents investigating it said plainly that a large share of the wine was being sold commercially.
Jewish communities took a disproportionate share of the resulting scandal in the press, and some of the coverage of the period is straightforwardly antisemitic. The fraud was real; so was the fact that Catholic, Protestant and Orthodox supply chains were all involved and received less attention.
What it did for California
Kept a few producers alive. Beaulieu Vineyard in Napa is the best-documented case: Georges de Latour held a sacramental licence, supplied the Catholic Church through the whole period, and emerged in 1933 with vines, equipment, trained staff and a market, when most of his neighbours had grafted over to table grapes or pulled their vines entirely.
A handful of others did the same. It is the reason the California wine industry had any institutional continuity at all across those fourteen years, and the reason the rebuild after repeal was a rebuild rather than a fresh start.
The tightening that came too late
The Bureau introduced stricter certification, membership verification and dealer audits through the mid-1920s, and the recorded withdrawals fell. Whether that reflected less fraud or better-organised fraud was argued at the time and cannot be resolved now.
What the episode demonstrates is the structural problem with the whole statute. Prohibition tried to abolish a product while permitting it for four separate legitimate purposes — religion, medicine, industry and the home — and each exemption was a door that could not be locked without closing something the law had promised to protect.
What it looks like in the record
Permit applications, dealer ledgers, congregation rolls, and the Bureau’s own frustrated correspondence, much of it in the National Archives. It is one of the better-documented corners of Prohibition precisely because it ran on paperwork rather than on boats.
If you want to see how the period actually worked — the gap between a law as written and a law as administered — this is a better place to look than any gangster biography.