Nuc beat me to a reply. I had to work today.
Anyway, it was Secretary Josephus Daniels that outlawed alcohol aboard USN ships in 1914. However, Pharmacists Mates and ship's doctors retained limited stocks of usually brandy or whiskey on board for "medicinal purposes" for many years afterwards. These stocks were strictly controlled by the Medical Department and quite often dispensing them required the Commanding Officer's approval.
Daniel's General Order 99 was issued on 01 Jun 1914, to take effect on 01 July 1914. Reportedly, the mood of the fleet on the evening of 30 June was "festive" as the remaining stocks were rapidly depleted.
I personally think that Sec. Daniels' decision was the right one. It was an important step in the transformation of the USN into world class, professional navy. Not that a navy that allows rationed alcohol consumption on board (like the RAN) is unprofessional, it is just that the decision was the right one for the USN at the time and it reflected a cultural trend of that era.
Much has been said over the years about the military-civilian cultural "gap" that often keeps the military lagging behind the rest of the civilian world when it comes to dealing with cultural issues. There is a gap of sorts, but only because the Navy and the rest of our armed forces are forced to approach certain social issues from a different perspective. This different approach is required due to the very nature of what the armed forces does and how its' members have to be motivated and led. This gap, however, is not as large as some people would have you believe and the prohibition order of 1914 reflected this. Temperence and abstaining from alcohol consumption was a fairly strong conservative trend in our society at the time and Sec. Daniels was an adherent of this philosophy. The mere fact that he was able to issue this order without a major upheaval is evidence that he had a reasonably high level of support.
While the banning of alcohol aboard ships certainly contributed to a more professional atmosphere, the consumption of booze while ashore on liberty continued. Over the years, the popular image of the drunken sailor was continuously reinforced by sailors blowing off steam after a long run at sea. This popular passtime for shore side sailors was often easily tolerated by their command and as long as the sailor returned the the ship on time and could do their jobs once they arrived, the Navy would usually look the other way. Submariners in particular became legendary in this regard and their parties became the stuff of legends.
As we moved into the 1990's, the attitude of the USN underwent a dramatic change. American society in general became less and less tolerant of drunken behavior and alcohol related incidents and penalties and fines increased accordingly. The USN's policies mirrored that of greater society and Navy Regs began to reflect this. The USN also became very concerned over the impacts that alcohol related incidents were having in fleet wide efficiency (i.e. loss of man hours in dealing with the incident and the post incident aftermath), the loss of highly trained sailors to alcohol related deaths, and the negative publicity shined on the Navy by these incidents. It is now to the point that any sort of alcohol related incident will most likely be a career killer.
While I agree that a certain amount of boozing while ashore might be considered traditional for a sailor, I can't help but heartily agree with the policies of de-glamorizing alcohol use and the stiff penalties for its' abuse. Losing sailors to alcohol abuse is just plain stupid and the future of the Navy is at least partially dependent on maintaining a squared away and professional image in the minds of the public.