Vocabulary:

The term Branntweinmonopolgesetz stands for a German law introduced in 1919 which ensured a total state control on all spirits and by-products.

This law also introduced a few changes in civil law and the responsibilities and rights of local authorities. Up until then, all spirits where produced by private companies which of course needed a permit and had to transfer the special taxes on spirits, which where very high, to the local authorities. But various irregularities during this process as well as the large number of moonshiners resulted in a high annual loss in taxes, adding to the high cost produced by the tax inspectors needed to frequently control the different companies.

To further understand this, one must know that until then moonshining was not a criminal act which was handled through the police - it was a tax offence which had to be followed by tax officials. Of course a tax inspector was more expensive than a local policeman, who on top also knew his district a lot better. Therefore, as a side-effect of the new law, moonshining was also declared a criminal act which could be followed by the police, resulting in a lower number of tax inspectors needed to ensure a regular tax flow, increasing the amount of money actually being made out of spirit tax.

These changes where so efficient that a few years later, the taxes on spirits were lowered as the effort needed to ensure the flow of taxes had been cut back to a minimal effort on the side of the state.