It is not uncommon to come across screw-top liquor bottles from the 20th century that are boldly embossed on their shoulders or bases with the above text. After Prohibition was repealed on December 5, 1933, US laws once again allowed the legal manufacture and sale of alcoholic drink. Liquor was legal but producing it was subject to greater Federal control.

With its cork top, you might think this bottle is older than it is. With its FEDERAL LAW FORBIDS embossing, we can date it from the 1930s to 1960s
One law required that alcoholic bottles must be embossed with the text, “FEDERAL LAW FORBIDS SALE OR REUSE OF THIS BOTTLE” This law went into effect in 1935 and was repealed on December 1, 1964. Here is a direct link to the Office of the Commissioner of Internal Revenue – Alcohol and Tobacco Tax Division document. The reason for this legislation is fairly obvious: after over a decade of Prohibition, law enforcement was well aware of the illegal trade in alcohol (bootlegging) and wanted to prevent the refilling of bottles by black market businesses.
Jack Sullivan, in an article called ‘ “Nasty Words” and Nifty Whiskeys‘ suggests that one unintended impact of this legislation was to “discourage distillers from putting their legitimate products in “fancy” containers as many had done prior to Prohibition.” Unfortunately, he provides no proof of this. It seems to me that there was simply a change in bottle styles thanks to the automated bottling machine and mass production techniques. The new distinguishing features in packaging came in the form of colorful labels with pictures and graphics.
As you can see in this document, the repeal of the legislation did not require that this marking of bottles cease immediately. Rather, it was simply no longer required. As you might expect, bottlers did not cease production on that very day. In fact, Bill Lindsey has documented one such FEDERAL LAW FORBIDS… bottle that he has accurately dated to 1974.
Federal Law PROHIBITS Sale or Reuse of this Bottle
At times you will see references online to the words FEDERAL LAW PROHIBITS instead of FORBIDS. This is a persistent error which has been reported on some web sites (including, we admit, on ours at one time), although the wording with PROHIBITS does not seem to exist on any bottle.
Value of bottles marked “Federal Law Forbids…”
If you come across such a bottle, you can date it in this time period. Such bottles do not yet hold much interest or value to collectors. However, if you come across one with good labels that have attractive graphics and it is in perfect condition, hold on to it. These are the collectibles of tomorrow.
Photographs of several “Federal Law Forbids Sale or Reuse…” bottles

Typical example of a bottle that is marked Federal Law Forbids Sale or Reuse of This Bottle with screw cap, mold seam running to the top edge of lip and markings on the base.

'Federal Law Forbids' text on an EG Booz Old Cabin Whiskey bottle made by Armstrong Cork Company, Millville, NJ, 1954 to 1966
References:
The Illustrated Guide To Collecting Bottles, Cecil Munsey. 1970.
Internal Revenue Service, Industry Circular, #64-18, October 23, 1964
Tippecanoe and E. G. Booz Too!, Tom Haunton, self-published, 2001, 2003
ORDER BANS REUSE OF LIQUOR BOTTLES; Treasury Issues Regulations, Effective Aug. 1, for Blown-In Markings. New York Times, July 15, 1934
LIQUOR BOTTLE RULES ARE EFFECTIVE TODAY; Marking of Containers and Destruction When Empty to Be Enforced Strictly. New York Times, January 1, 1935
RUM-RUNNERS AGAIN CHALLENGE THE LAW; From Their St. Pierre Stronghold They Resume Their Old Trade in a New Way, New York Times, January 13, 1935


3 Comments
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what is my bottle worth?
clear glass, one pint, screw type top, embossed words on shoulder(federal law prohibits ETC..), i think it is called a dandy flask.
I do address value in a general way in the “Value” section on this page. Rule #1: Most have no value at all. There are a minority that have rather fancy designs in the glass – couple that with original labels in good condition, preferably labels that have a multi-color graphic. Such exceptional pieces in like-new condition could be worth as much as $20-50 to the right collector. If in doubt, see Rule #1.
Inquiry over to the support forum. see http://forum.antiquebottles-glass.com/post/134/#p134
Post photo there if you have one.