A Surplus War

It became the duty of the U.S. Coast Guard and Customs to curtail liquor smuggling at sea. As Prohibition dragged on, the war on smuggling escalated. This “war” was made possible by a surplus of both alcohol and military equipment. Much of the liquor smuggled in the U.S. during the first few years of Prohibition was actually surplus from American distilleries. The surplus liquor and beer sat in bonded warehouses, where one only needed a permit to withdraw it. In many cases, distilleries and breweries sent their alcohol overseas only to have it smuggled back into the U.S. at inflated prices.
The fighting between the Coast Guard and rum smugglers escalated quickly, largely because of America’s war surplus. World War I ended before most American factories finished cranking out their war goods; so the government auctioned off the excess items to anyone who could afford it. The smugglers were usually a step ahead of the Coast Guard with their newly-purchased gear. Smugglers were soon using airplanes, machine guns, submarines, torpedoes, armored craft, and speedboats powered by 400-horsepower Liberty engines. Most of this equipment came from government surplus auctions.
The Coast Guard also relied on surplus gear. The early Prohibition fleet was made up of submarine-chasers, made of wood, and Eagle boats. Both types of vessels were World War I surplus Navy vessels. Later on, the Coast Guard acquired more than twenty surplus destroyers to fight the rum fleet.