the Senate side, and they certainly did over on the House side when the bill was before my Interstate and Foreign Commerce Committee. These concerns are, of course, important and do need to be answered. But as a member from a control State, as a member of the House Interstate and Foreign Commerce Committee where the bill originated, and as a spokesman for the bill on the House floor when it was before us in the first part of the 1st session of the 93d Congress, I would like particularly to take this opportunity to stipulate five things the bill emphatically does not do.

First, the bill does not affect the right of any State in my judgment, to prohibit the sale of alcoholic beverages.

Second, the bill does not interfere in any way with the right of a State to fix license fees, markups, hours of sale, or the exercise of any other of its police powers.

Third, the bill does not affect the adoption by any State of local option laws.

Fourth, the bill does not interfere with the exercise of full discretion which the commissioners have regarding the number of brands or the kinds of brands of wine a State wishes to purchase or sell.

Fifth, and finally, the bill does not interfere in any way with the right of a control State to list or delist any or all brands of wine.

Mr. Chairman, the only purpose, as I see it, of H.R. 2096 is to prevent one State from passing any discriminatory tax, discriminatory regulation, discriminatory markup, or discriminatory requirement against wine produced simply because that wine is produced outside of that particular State.

Mr. Chairman, I suppose many of us, all of us have some kind of special interests in our district or our State. Most of us have particular agricultural or industrial enterprises within each of our States which are somewhat unique and which greatly affect the economies of our States. Each of us feels obligated, I am sure, to promote these local or regional interests in every way possible.

In the case of the wine industry, I suggest that the best and indeed the right way to promote these interests is to see that they are an attractive product competing in a free economy.

Mr. Chairman, I strongly believe that it is in the interest of every one of us to maintain and to increase the flow of commerce in this country. This, in fact, was and is clearly the intent of article I, section 10 of the Constitution.

This, Mr. Chairman, is what H.R. 2096 is all about. It is concerned with implementing the Constitution of the United States. I believe it is needed because of a few minor court decisions which favored special interests and which created an unwise legal precedent that has come into existence. Nothing more, nothing less is, I think, at stake here. Senator MONDALE. As a general question of public policy, I think there is a very strong argument for removing various forms of discrimination, including discriminatory taxes, but the central question, as I see it here, turns on the whole constitutional issue of whether the 21st amendment did not in fact, as Senator McClellan argues, authorize State discrimination as a condition to the adoption of the 21st amendment, and that is the question that I think will bother this committee and the Senate.

Do you have any comments on that issue?

Mr. HEINZ. Only as a nonlawyer.

Senator MONDALE. That is usually the best.
Mr. HEINZ. I am glad you said that.

Mr. Chairman, I cannot help being struck by the fact that court interpretations of the Constitution are dynamic. Up until 1954, the law of the land with respect to education was that separate was equal. In 1954 the Court reversed the decisions of previous Supreme Courts in the Brown v. Board of Education suit and declared that separate was not equal.

I use that as an example simply to indicate that our Constitution is a dynamic instrument. We are engaged today in an argument in the House, in the House Judiciary Committee I believe, as to what the meaning of the impeachment clause is; should it be considered strictly as a legal kind of remedy, or has it got political implications.

I suggest that to my way of thinking that the laws are what we make them and what, at a particular point in time, the Court in its best judgment, interprets them to be in the light of a more complex and ever-changing society.

Senator MONDALE. Right out of Yale Law School.

Mr. HEINZ. Mr. Chairman, I have to confess that I went to Yale, but I did not go to Yale Law School. I probably could not have gotten in.

Senator MONDALE. I bet you drank wine with some of those guys. That was very good.

You come from a State which does in fact impose a different tax upon imported wines than upon its own Pennsylvania produced wines. Nevertheless, you feel in the interest of a national economy that this amendment should pass.

Mr. HEINZ. Mr. Chairman, we do have some Pennsylvania wines which are excellent, and I commend them to anybody who reads this record. Unfortunately, we do not have as many as we would like. Senator MONDALE. You do not even show up on the figures here. Mr. HEINZ. Well, one of the vineyards, Mr. Chairman, I thank you for giving me this opportunity, is the Pennzel Vineyard in Erie, Pa.

Senator MONDALE. Is that the same one that makes oil?
Mr. HEINZ. No, that's Pennzoil.

Senator MONDALE. I thought it was one of the distillates.

Mr. HEINZ. I think the interest here is what is in the best interest, not only in the people who produce wine in Pennsylvania, of which by the way, it is impossible to buy a bottle of wine unless you go to a State run store or to a restaurant, of course, with a liquor license. We are a control State, and I do not think that the people of Pennsylvania feel that they are well served by discrimination that militates against their freedom of choice.

Senator MONDALE. I thank you very much for your fine statement, and for your legal analysis.

Mr. HEINZ. Mr. Chairman, thank you very much. I appreciate the opportunity of appearing before your committee.

Senator MONDALE. We are very pleased to have you.

Our next witness is Jefferson E. Peyser, General Counsel of the Wine Institute in San Francisco.

Mr. Peyser, we are pleased to have you here.

STATEMENT OF JEFFERSON E. PEYSER, GENERAL COUNSEL, WINE INSTITUTE, SAN FRANCISCO, CALIF., ACCOMPANIED BY ARTHUR L. SILVERMAN, ESQ.

Mr. PEYSER. Thank you, Mr. Chairman, for the opportunity of being here.

May I ask the privilege at this time of responding to statements that may be made by witnesses in opposition following me?

Senator MONDALE. I think I will have to deny that request but we would be very pleased to have you submit a letter. It might be better as a matter of policy if we had debates rather than these statements, but as a rule we have tried to avoid such debates here. Therefore, we would be very appreciative if you would write us a letter stating your responses to other statements made, and we, of course, will accord this same opportunity to the other speakers this morning.

So, feel free to do that, and your written material will be analyzed by me and by the staff.

Mr. PEYSER. Thank you very much, Senator.

In order to be brief, I will not repeat some of the earlier statements. Oh, yes. May I state that I also am authorized to represent the Finger Lakes Wine Growers Association of New York, and the Ohio Grape Growers and Vintners Association of Ohio, in addition to, of course, the California wine industry.

Senator MONDALE. I see. The Wine Institute is the California Wine Institute?

Mr. PEYSER. Yes.

Senator MONDALE. And you also represent these other concerns? Very well, if you would proceed.

Mr. PEYSER. May I just briefly reiterate that the purposes of this bill and by its terms, does not affect the right of any State to do anything that it is presently doing, that is, regulate the sale or distribution of wine within its borders, or regulate or legislate within the purview of its police powers. It can prohibit in whole or in part the sale and distribution of alcoholic beverages. It can levy taxes. It can do anything it wants to do. It can also exercise discretion in control States as to what brands or how much of any brand they wish to purchase or sell.

There is only one thing this bill has as its purpose, and the only thing it does do by its terms is to end economic discrimination by a State that produces wine against wine produced outside of the State.

For example, Hon. Senator McClellan's State imposes a 75 cent tax on wines produced outside the State, and a tax of 5 cents on its own wine. That is a very substantial amount per bottle differential in the marketplace.

There are other discriminations in the State of Arkansas also. They permit the sale only of Arkansas wine in restaurants and no out of State wines can be sold in restaurants.

I think the thing that you appear to be most interested in, Mr. Chairman, and the thing that is most vital is whether this bill, whether this legislation is constitutional.

Senator MONDALE. Yes. I think as a matter of public policy, the arguments favor the adoption of this bill, but I am troubled about the question of constitutionality, so maybe you could address yourself to that issue.

Mr. PEYSER. Yes.

Well, the proposed legislation is definitely within the power and scope of the Congress, and it is constitutional, for even if one chooses to follow the four Brandeis decisions that have been referred to in the late 1930's, and ignore totally the congressional debates on section 2 of the 21st amendment, the proposed legislation is constitutional.

The Congress always has power to legislate in a field in which the Supreme Court has not acted or made any decision. My personal feeling is that the Congress, as a matter of law, has the right to legislate at any time, and it is for the Court to make a determination whether that legislation in their wisdom is constitutional or unconstitutional. Senator MONDALE. That is correct, but we do not want to just pass blatantly unconstitutional bills. We do want to show some deference to the Court. I know what you are saying, but if we are convinced that this is clearly violative of the 21st amendment, I think my colleagues would be disinclined to pass it. So I would like you to address the question of whether you, as I assume you do, have a strong argument for the proposition that this bill is consistent with the 21st amendment. Mr. PEYSER. That is correct.

I was interested-I will do that. I was interested in the comment made about the expanded activities of the courts, the civil rights cases, where for many, many years they made one determination about the interpretation and then in its wisdom, based upon further considerations, it changed its mind.

However, the legislative history of the 21st amendment shows clearly that there is no evidence that the Congress intended to permit States to Balkanize this country. A central principle of the Founding Fathers was that the various States should constitute a single, united trading union. The only purpose of section 2 of the 21st amendment was to perpetuate the protection given to States to remain dry by the Webb-Kenyon Act. In other words, before prohibition, alcoholic beverages had the benefit of the commerce clause, the same as shoes, shirts or anything else. It was the Webb-Kenyon Act at that time that protected the dry States.

When the debates of the Congress took place

Senator MONDALE. Now, you are very familiar with this matter. Did the Webb-Kenyon Act clearly work the way you say section 2 should now work; namely, that States can have a uniform policy affecting alcohol, whether produced domestically or outside the State, but they cannot have a different policy

Mr. PEYSER. That is correct.

Senator MONDALE. Was that your interpretation of the WebbKenyon Act?

Mr. PEYSER. Well, by its specific terms, it does not mention. All it talks about is that a State has a right to be dry or wet.

Now, the same way in the debates of the Congress, which I have read very carefully. I challenge anybody to find one State, in the debates of the Congress in which the 21st amendment was being discussed, where there was any discussion about giving a State the right

to discriminate. All they talked about is they wanted to repeal prohibition. They did not want the return of the saloon, and then those who were interested in the dry States went into this discussion, whether the Webb-Kenyon Act was sufficient protection, and they felt it was not sufficient protection because they said, after all, it is only an act of Congress and Congress could repeal that. We want it written into the Constitution.

So section 2 was put into the Constitution as a substitution, so to speak, for the Webb-Kenyon Act. Now, let's see what section 2 says. Section 2 says, "The transportation or importation into any State, territory, or possession of the United States for delivery or use therein of intoxicating liquors in violation of the laws thereof is prohibited." Nowhere does it say that States can discriminate. Nowhere does it say anything except that the importation and transportation into the State in violation of its laws is prohibited.

Now, this is borne out further by Senator Borah's statement in the 76 Congressional Record 4170, who after reviewing the history of the right of dry States to remain dry and be protected, spoke against a motion from the floor by Senator Robinson of Arkansas to strike out section 2. In that debate he said, and I quote:

Mr. President, as I understand, this is the question of striking out section 2, which provides for the protection of the so-called dry States.

I look upon this provision of the amendment as vital. It does not seem to me that we can afford to strip the amendment of all that which protects the dry States. Indeed, if I understand the two platforms, that is a part of the pledge of the platforms.

Mr. President, it has been said that the Webb-Kenyon Act is sufficient protection to the dry States. The Webb-Kenyon Act was sustained by the Supreme Court of the United States by a divided court.

Secondly, we are asking the dry States to rely upon the Congress of the United States to maintain indefinitely the Webb-Kenyon Act.

Now, Senator Borah then discussed the Clark distilling case and other Supreme Court cases under the Webb-Kenyon Act. After demonstrating that those cases did not, in fact, actually deter importation into dry States from wet, he concluded that "We must have some other method, some other provision of the Constitution than those which existed prior to the adoption of the 18th amendment in order to protect those States wishing to remain dry after repeal," 76 Congressional Record, 4172.

"All this," he continued, "was sought to be remedied by the WebbKenyon Act. I am very glad the able Senator from Arkansas has seen fit to recognize the justice and fairness to the States of incorporating it permanently into the Constitution of the United States," 76 Congressional Record, 4172.

Mr. Justice Marshall, in a dissenting dictum in California v. LaRue, 34 Law Edition 2d 342 (1972), discussed the true intent of section 2 of the 21st amendment only a few months ago. By its terms, he said, the amendment "speaks only, only to State control of the importation of alcohol, and its legislative history makes clear that it was intended only to permit dry States to control the flow of liquor across their boundaries despite potential commerce clause objections." In a footnote, Justice Marshall discusses the legislative history I have already set before you, detailing its genesis in the Webb-Kenyon Act which "was designed to allow dry States to regulate the flow of alcohol