CHAPTER II

THE EXCISE SYSTEM

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The centralized governments of format feudal Europe, requiring large revenues, resorted to various devices to raise them. One adopted in Russia, and for a time in Sweden, was the "crown stills," whereby the government monopolized the manufacture and trade in distilled spirits, fixed the price and obtained large revenues therefrom.

About the middle of the seventeenth century England adopted the Excise System, whereby various articles of domestic manufacture were specifically taxed. In the United States, at the present day, it is known as Internal Revenue, which is identical with the Excise in Great Britain.

Among other articles upon which an excise tax was placed was alcoholic liquors. The tax was light at first, but increased from time to time. Historians agree that prior to the time of imposing a special tax on liquors drunkenness was a comparatively rare occurence in England. In 1669 the government absolutely prohibited the importation of spirits from all foreign countries and threw open the trade to all its subjects, upon payment of the duties. By act of Parliament in 1700 a license was required to sell. A sober but uncultivated people, as a class, prior to the enactment of special liquor laws, became, by the year 1724, if not a nation of drunkards, a nation of hard drinkers. Speaking of this period, Lecky, in his History of England, Vol. I, page 519, says: "The passion of gin-drinking appears to have infected the masses of the population, and it spread with the rapidity and violence of an epidemic. * * * The fatal passion for drink was at once, and irrevocably, planted in the nation. The average of British spirits distilled, which is said to have been only 527,000 gallons in 1684, * * had risen in 1724 to 3,601,000, and in 1735 to 5,394,000 gallons." Says the Cyclopedia of Temperance and Prohibition, page 273: "Soon after the beginning of the eighteenth century the evils resulting from . the use of distilled spirits in England became in the highest degree alarming."

With the avowed intention of arresting the evil, in 1736, the Parliament placed an excise tax of 20s (almost $5.00) a gallon on all spirituous liquors and a tax or license of 50£ a year on the retailers. Says Lecky, "A clandestine retail trade soon sprang up, which being at once very lucrative and very popular, increased to such an extent that it was found impossible to restrain it. In 1742, more than 7,000,000 gallons were distilled, and the consumption was steadily augmenting."

Violent riots ensued, and the heavy tax measures, being plainly inoperative, an act was passed in 1743 designed to suppress the illicit trade and at the same time to increase the public revenue. The excise tax and license fees were reduced, but, says Lecky, "It appears to have had little or no effect upon smuggling. In 1749 more than 4,000 persons were convicted of selling spirituous liquors without a license, and the number of private gin-shops, within the Bills of Mortality, was estimated at more than 17,000. At the same time crime and immorality of every description were rapidly increasing." Such are the effects of drastic and oppressive liquor laws wherever enacted, in whatever clime or country, from the beginning to the present day. The reason for this will be discussed in a future chapter.

History records that in the middle of the eighteenth century the habit of gin-drinking had become so common in England that if "continued at its present height during the next twenty years there will, by that time, be very few of the common people left to drink it," and "will, if continued to be drank, destroy the very race of people themselves."

But there is something in the race that resists total destruction and that is experience, observation and education. Without abolishing the excise and license tax-although both were somewhat reducedafter a little more than a quarter of a century of drunkenness and debauch, the people saw and realized the evils of intemperance, a reaction set in and on their own volition the people cultivated and practiced temperance which became popular where intemperance and drunkenness was popular a generation before. The race still survives and is today shedding its blood for democracy on the devastated ruins of Belgium and northern France.

The English people, changing from a drunken to a sober people, is an illustration of the truth of the following statement of Buckle, in his History of Civilization, Vol. I, page 272: "No great political improvement, no great reform, * * has ever been originated in

any country by its rulers. The first suggestions of such steps have invariably been bold and able thinkers, who discern the abuse, denounce it and point out how it is to be remedied." In this case the remedy was provided by the people themselves without the aid of law, but it may be said, in spite of the law that demanded large revenues for the government.

About 1844 the British government begun a gradual abolition of the eixcse tax on many articles. But a high excise has been maintained upon alcoholic liquors, running as high in times of peace as $2.40, in

our money, a gallon on spirits, and $1.50 a barrel on beer. Besides the excise, a high license fee has always been required from both wholesale and retail dealers. The government of the United Kingdom has relied upon the revenue from liquor for a great portion of its annual income.

As a rule, the more highly cultured class in Great Britain and Ireland, as with every other civilized people, long since learned not to use alcoholic beverages to excess. However, it is well known that a comparative large amount of liquor is consumed, especially by the Scots and Irish, more by the former than the latter.

I have gone into some detail regarding the liquor laws of Great Britain for two reasons: one is that they are more available than the laws of any other European country to any American who cares to check them up; the other, and more important, is that the laws of the United States are largely founded on English law and our government, for more than half a century, has closely followed the British liquor laws.

The governments of northern Europe generally, and Portugal in southern Europe, have for centuries exacted a large revenue from alcoholic beverages and the traffic therein. This policy, wherever it has been adopted, has resulted in efforts to regulate the traffic and curb the evils arising from excessive use.

Search where you may, in whatever age or country, and the greater the revenues from intoxicating beverages exacted by the government and the more stringent the laws designed to regulate the traffic therein, the greater have been the evils resulting therefrom. The writer realizes that this is a broad statement, not, as yet, commonly accepted; but to the reader, who peruses these pages, I undertake to prove its truth. Before reaching a final conclusion, however, it might be well to recall more historical facts.

In an early day the Russian government established its own stills and monopolized the production and traffic in liquors. In the latter part of the eighteenth century, Sweden adopted the Russian plan, but soon abandoned it for the excise and license system. A little after the middle of the nineteenth century the Gothenburg system was introduced in Sweden-named after the City of Gothenburg, where it was first adopted. Its distinguishing feature is the restricting of the traffic to a limited number of municipal houses managed by "respectable persons only," the net profits to go into the city treasury, and the National government at the same time drawing about one-sixth of its total revenue from spirits alone. The cities of Sweden generally adopted the

Gothenburg system. Other schemes have been tried and it may be said that in no nation of Europe has there been so many attempts, in various ways, to check the evils of intemperance by law, and in none has drunkenness been more prevalent than in Sweden.

While in Germany the government obtains a revenue from alcoholic liquors and grants license to vendors, the excise and the license fees have been comparatively light. The common drink is beer. The custom of treating is unknown. Liquors are cheap; and, whatever crimes and barbarities we may lay at the door of the German government, we can not charge the German people with being a nation of drunkards. Drunkenness is comparatively rare in Germany.

Portugal has been said to be "the most drunk-cursed country of southern Europe"; and it is the only country of southern Europe in which the government has depended upon the drink-habit for a large amount of its revenue.

Spain, adjoining Portugal, being in the same latitude and having the same climate and natural resources, and not having adopted any system of special tax on the drink-habit-deriving no revenue therefrom-her people rank as the most temperate people of all Europe in the use of alcoholic beverages.

In Italy, a great wine-producing nation, a small license fee only is required of the retailer and drunkenness, being a rare occurrence among her people, has long been considered a disgrace.

In southern France where, like Portugal, Spain and Italy, wine has for centuries been produced in abundance and much of it exported; its common use has had no evil effects upon the people.

As a further example of the evil effects of the excise policy I will briefly quote from the Cyclopedia of Temperance and Prohibition -Funk & Wagnalls—from the article on India, pages 242-5:

"The history-or modern history-of the drink curse in India dates from the introduction of the British Excise system near the close of the 18th Century. Previously to the era of British domination, the inhabitants of India were among the most abstemious of peoples.

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"In the Buddhist scriptures and also in the Mohammedan Koran strong drink is prohibited. The earliest Europeans visiting India testified to the freedom of the people from the vice of intemperance. *

"The British Government in India inaugurated its Excise policy in 1790, but for thirty or forty years comparatively little liquor was sold. Until September 19, 1878, all the dis

tilleries were owned and operated by the Government, under what was known as the Sudder (or District) still system. The sole object was to produce revenues, and it was thought the distilling business would be the most profitable if operated by the Government itself. Under this system, the revenue finally reached considerable proportions-in excess of $10,000,000 annually; but the authorities were not satisfied, and a new scheme was devised.

"On September 19, 1878, the new measure, or Abkari act as it was called, was published by the Government at Bombay. At first it applied only to the Bombay Presidency, but it is now in force all over India, excepting a few small districts under native rule. Its distinctive feature is the 'Out Still' system. The right to operate distilleries in competition with the Government is sold at public auction to the highest bidders. The successful bidder in each locality may distill as much liquor as he chooses, and of any kind and quality, free from Government supervision. But the revenue from private distillers, though the chief element of the Excises, is only one element.

"All the sap-bearing palm trees of India-trees yielding juice from which fermented liquor is made and spirits are distilled-are taxed by the Government; the right to draw the sap is farmed out to the highest bidder, and nobody—not even the owner of the trees-can extract sap without a Governmen license. Licenses to sell liquor at retail are also sold to the highest bidder. Thus the Excise policy of India is based on the High license principle exclusively. And like the High License legislation of the United States it is an entire success

""The Government are driving this liquor trade as hard as they can,' said Mr. Caine. 'Collectors find it the easiest way to increase their contributions to the revenue, and for years they have been stimulating the consumption of liquor to the utmost. If the Government continue their present policy of doubling the revenue every ten years, in thirty years India will be one of the most drunken and degraded countries on the face of the earth. All moral considerations are swamped in the effort to obtain revenue,' and 'the worst and rottenest Excise system in the civilized world is that of India'."

Wherever a government has entered into the liquor business, either alone or in partnership with others, excessive drinking has always been lamentable.