Posted by Todd Zywicki:
WINE WARS, PART 10�PROPOSED BUT NOT ENACTED §3 OF THE 21ST AMENDMENT:

   The contemporaneous debates in Congress over the proposed but never
   enacted �3 of the 21st Amendment further indicate that the purpose of
   �2 was to restore the constitutional balance disrupted by the 18th
   Amendment by returning local police power authority to the states, but
   not to grant to the states new powers to interfere with federal
   authority over interstate commerce. Defenders of state alcohol
   protectionism have relied heavily on the defeat of this section as
   well as the debates surrounding it to suggest that it evidences an
   intent of Congress to give wet states a sword to engage in economic
   warfare against one another, as opposed to simply giving dry states a
   shield to protect themselves against being forced to tolerate evasions
   of their alcohol regimes. As a result, even though it was never
   enacted, it is an important part of the 21st Amendment debate.
   Again, the entire thrust of the debate over �3 was whether the states
   would have sole control over local affairs governing alcohol, neither
   �3 itself nor the debates over it pertain to whether the states would
   be given new unprecedented, unjustified, and unnecessary powers to
   regulate interstate commerce, but merely to constitutionalize the
   Wilson Act and Webb-Kenyon, thereby enabling the states to apply their
   police power regulations on the same terms to alcohol shipped in
   interstate commerce equally as to alcohol produced inside the state.
   Proposed �3 of the 21st Amendment read: "Congress shall have
   concurrent power to regulate or prohibit the sale of intoxicating
   liquors to be drunk on the premises where sold." 76 Cong. Rec. 4141.
   This provision would have given the federal government concurrent
   power with the states to regulate saloons. Id. (Statement of Sen.
   Blaine). Notwithstanding this enumeration of "concurrent" power,
   however, the operation of the Supremacy Clause meant that federal law
   would prevail in the event of conflict. Id. at 4143 (Statement of Sen.
   Wagner). Critics of �3 objected that this intermingling of state and
   national authority was precisely the source of the problems that
   plagued effective enforcement of national Prohibition under the 18th
   Amendment in that it encouraged federal meddling in wholly local
   police power affairs governing alcohol. See [1]Part 8. Senator Wagner
   similarly observed, "The real cause of the failure of the eighteenth
   amendment was that it attempted to impose a single standard of conduct
   upon all the people of the United States without regard to local
   sentiment and local habits. Section 3 of the pending joint resolution
   proposes to condemn the new amendment to a similar fate of failure and
   futility. No law can live unless it finds lodgment in the public
   conscience and is nourished by public support."
   As Senator Wagner observed in his criticism of proposed �3, the
   purpose of the 21st Amendment was to "restore the constitutional
   balance of power and authority in our Federal system which [had] been
   upset by national prohibition. That equilibrium which prior to the
   eighteenth amendment was one of the functional marvels of our system
   of government is not restored by the pending resolution." Cong. Rec.
   at 4144 (Statement of Sen. Wagner). By contrast, �3 would give to the
   federal government a new power that it lacked prior to the enactment
   of Prohibition-what would amount to a general police power authority
   to regulate in the area of saloons, an intrastate transaction that
   Congress otherwise would have been unable to reach under the
   prevailing interpretation of the Commerce Clause during that era. The
   federal government has no independent police power authority (as most
   recently noted in Lopez), and could not likely have regulated the
   purely local transactions described in �3 under the prevailing
   interpretation of the Commerce Clause at that time, A.L.A. Schechter
   Poultry Corp. v. United States, 295 U.S. 495, 542-548 (1935). As a
   result, the deletion of �3 was sufficient to remove the federal
   government from conflict with the states' intrastate police power.
   Senator Wagner noted that while the 21st Amendment as proposed
   "pretends to restore to the States responsibility for their local
   liquor problems," because of proposed �3, it "does not in fact repeal
   the inherently false philosophy of the eighteenth amendment. It does
   not correct the central error of national prohibition. It does not
   restore to the States responsibility for their local liquor problems.
   It does not withdraw the Federal Government from the field of local
   police regulation into which it has trespassed ...." Cong. Rec. at
   4144 (Statement of Sen. Wagner); see also id. at 4147 (noting that �3
   could enable Congress to comprehensively regulate local issues related
   to saloons). As a result of �3, the 21st Amendment would "expel[] the
   system of national control through the front door of section 1 and
   readmit[] it forthwith through the back door of section 3." Id. at
   4147. Because proposed �3 was inconsistent with the goal of restoring
   the pre-18th Amendment constitutional balance, it was deleted. Just as
   the grant of a new power to Congress to effectively engage in police
   power regulation of saloons was considered an undesirable departure
   from the pre-Prohibition constitutional balance, so too would an
   unprecedented plenary power of the states to impose discriminatory
   barriers to interstate commerce.
   Thus, �3 would not merely have been a minor incursion on absolute
   state power over all aspects of liquor sales and importation. Rather,
   it was an incursion of a specific kind--it would have retained the de
   facto federal police power of the 18th Amendment that had proven so
   disastrous as both a policy and a constitutional principle.
   Note that if it were true that �2 gives the states plenary power over
   interstate commerce in alcohol, then if �3 had been enacted it would
   have created a regime where the states regulated interstate commerce
   in alcohol and the federal government would have regulated the local
   operations of saloons (due to its primacy under the supremacy clause).
   It is a far more plausible interpretation of �2 and �3 together that
   the former provision meant to restore the traditional constitutional
   balance and the latter was inconsistent with this goal.

References

   1. http://volokh.com/archives/archive_2004_08_21.shtml#1093273065

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