Ben Tillman: Bad governor, awful economist

As anyone who has spent any time in South Carolina knows, folks in the Palmetto State tend to do things just a little differently.

See the Nullification Crisis, the Secession Convention of 1860 and S.C. gubernatorial election of 1876 for examples.

Another historical item unique to the South Carolina is the state Dispensary system.

The Dispensary system was a state-run monopoly on liquor sales in South Carolina. It operated from 1893 until 1907.

The Dispensary represented a ham-handed effort by then-Gov. Pitchfork Ben Tillman to effect a compromise between prohibition advocates and anti-prohibition forces. (The Dispensary was sometimes referred to as “Ben Tillman’s Baby.”)

It marked the only time in US history that a state required all liquor sold within its borders to be bottled and dispensed through state-run facilities.

Passed by the South Carolina General Assembly in a rush vote at 5:30 a.m. on the last day of the session in late December 1892, the Dispensary system, not surprisingly, was rife with corruption.

In addition to being a virulent racist, pandering populist and the man most closely identified with the 1895 state constitution, which disenfranchised nearly all blacks and entrenched Jim Crow in South Carolina, Tillman exhibited a general deficiency in economics and human nature in his attempts to promote the Dispensary.

Consider some of his reasoning in defending the Dispensary Law, as quoted in John E. Eubanks’ 1950 work, Ben Tillman’s Baby:

• The element of personal profit is destroyed (with the advent of the Dispensary), thereby removing the incentive to increase sales;
• Liquor is sold only for cash, and there is no longer “chalking up” for daily drinks against pay-day. The work man buys his bottle of whiskey Saturday night and carries the rest of wages home;
• Gambling dens, pool rooms, and lewd houses, which have hitherto been run almost invariably in connection with the saloons, which were thus a stimulus to vice, separated from the sale of liquor, have had their patronage reduced to a minimum, and there must necessarily be a decrease of crime; and
• The local whiskey rings, which have been the curse of every municipality in the State, and have always controlled municipal elections, have been torn up root and branch, and the influence of the barkeeper as a political manipulator is absolutely destroyed. The police, removed from the control of these debauching elements, will endorse the law against evil doing with more vigor, and a higher tone and great purity in governmental affairs must result.

It should be noted that public drunkenness did fall by as much as one half while the Dispensary system was in operation.

But the system ultimately failed because it was administered by corrupt politicians who used the system to strengthen their political machines and enrich their own private fortunes, according to a 1940 paper written by future Harvard law professor Clark Byse.

Also it failed to eliminate the profit motive from retail sales, because retail dispensers had every reason to try to boost sales, as their salaries depended on the amount of liquor sold.

Political considerations determined the nature of the system’s administration and politics determined who would be appointed to positions of power within the system. Those appointees in turn worked to enhance the power of the party, Byse added.

“Those in charge of the dispensary system sold offices, accepted bribes from distillers and others who were interested in selling liquor to the state, and embezzled substantial sums from the state,” he stated.

Of course, by the time the statewide Dispensary system was finally discontinued, Tillman was firmly ensconced in Washington, DC, beginning his third term as a US senator.