That happened in the Prohibition era. Since good ethyl alcohol immediately became expensive and hard to obtain, bootleggers and makers of cheap hard liquor for speakeasies used wood alcohol as a base for liquor. What was commonly referred to as "wood alcohol" was ethanol that was "denatured" with methanol to form methylated spirits.
[1] Chemists working for bootleggers and organized crime tried, with varying degrees of success, to "renature" wood alcohol back to ethanol.
The Federal government's response was to require that wood alcohol be made even more poisonous. When the toll of the dead and maimed from drinking the stuff was pointed out, the Federal government's position was basically that the drinkers should have known it was poison, so it sucks to have been them.
So under the guise of trying to improve the health of the nation by banning the consumption of alcohol, the Federal government did not only turn a blind eye towards the carnage, they cheered at it.
[2] In 1926, in New York City alone, 1,200 people were sickened or blinded by drinking various forms of wood alcohol and 400 people died.
There was, of course, an undercurrent of classism in all of this. Rich people could afford to buy good hard liquor that was smuggled in from Canada, the Bahamas and other places. High-class people in major cities often had connections with foreign embassies or consulates, where they could attend parties and drink legally. It was the workers and the poor who were drinking "bathtub gin". It was those people who filled up the hospitals and the morgues.
Prohibition was not only an abject failure, it exposed the moralists, people that I now would refer to as the American Taliban, as people who would willingly close their eyes to public health issues if they thought it served their goals. People of the same moralistic stripe would later initially oppose research into AIDS prevention and vaccines. They opposed, and continue to oppose, needle-exchange programs as a tool to prevent the spread of hepatitis and other diseases (including AIDS).
In point of fact, the carnage actually pleases them. They are just despicable.
More reading: "
The Poisoner's Handbook" and the author's blog,
Speakeasy Science. The Poisoner's Handbook also looks at how, back before the days of Federal regulations, companies willfully put poisonous compounds in consumer products.
____________________________________________
[1] I am vastly oversimplifying the chemistry and I'm lumping a lot of different types of denatured alcohol under the rubric of "wood alcohol". Alcohol taxonomy is not the focus of this post. So sue me.
[2] This was during the presidencies of Coolidge and Hoover.