The 18th Amendment (Prohibition) outlawed "intoxicating liquors for beverage purposes," but made no reference to alcohol content. The Volstead Act set the legal alcohol limit at one-half of 1 percent, apparently based on Internal Revenue Service distinctions made for the purpose of taxation.  Under the Volstead Act, the only "beer" that could be sold legally in the United States was "near beer" (see below).

Prohibition became a central issue in the Presidential election of 1932.  Concerns with unemployment, the need for farm relief, and growing sentiment against Prohibition led Franklin Roosevelt to call at the Democratic National Convention for "modification of the Volstead Act just as fast as the Lord will let us to authorize the manufacture and sale of beer." The New York Times of June 28, 1932, reported that Roosevelt's position on the Volstead act "managed to draw the convention several times to its feet, and to start a real demonstration for prohibition repeal."

After Roosevelt's election, "modification of the Volstead Act" focused on changing the level of alcohol content deemed "intoxicating."  Efforts had been made during prohibition to raise the level from one-half of one percent to 2.75 percent by introducing scientific evidence that intoxication was physically impossible drinking beer of this alcohol content.  These efforts, one of which reached the Supreme Court, failed.   In 1933, similar scientific arguments were used to support enactment of the Cullen-Harrison bill, permitting the resumption of the manufacture and sale of 3.2 percent beer and light wines in the states that had already repealed their dry laws.

Because "3.2 beer" became legal as a result of the new definition of intoxication in the Volstead Act instead of as a result of the repeal of the 18th Amendment, its distribution and sale in some states was not initially regulated under the State laws established after repeal to control commerce in "intoxicating liquors."  Some states still maintain a separate regulatory structure for 3.2 beer.

Near Beer

Near beer is sometimes confused with 3.2 beer.  They are, however, very different beverages.

With the passage of the 18th Amendment to the Constitution (Prohibition), brewers looked for other sources of revenue.  By removing most or all of the alcohol from conventional beer, brewers were able to mass market a legal product labeled "cereal beverage," but almost universally known as "near beer."  These beverages carried colorful names such as Bevo, Chrismo, Graino, Barlo, Bravo, Becco, Cero, Gozo, Kippo, Lux-O, Milo, and Mulo.  By 1921, production of near beer had reached over 300 million gallons a year.  Food critic Waverly Root described "near beer" as "such a wishy-washy, thin, ill-tasting, discouraging sort of slop that it might have been dreamed up by a Puritan Machiavelli with the intent of disgusting drinkers with genuine beer forever."