being allowed for would probably increase the figures above given by one-third, and make the total consumption of alcohol, for the preparation of burning fluid 25,000,000 gallons of proof spirits.

"Since 1862 the production and consumption of burning fluid in the United States have almost entirely ceased.

"From 1856 to 1862 the price of alcohol in the New York market ranged from 30 to 60 cents per gallon, and this excessive cheapness induced a most extensive use of it in the manufacture of varnishes, hat stiffening, furniture polish, perfumery, tinctures, patent medicines, imitation wines, transparent soaps, percussion caps, picture frames, and in dying, cleaning, lacquering, bathing and for fuel. With the increase of the price since July 1862, to $4.00 and upwards per gallon, the use of alcohol for all the above named purposes has largely diminished or entirely ceased. *

"In some instances entire branches of business have been destroyed in consequence of the great advance in the price. of alcohol."

A number of branches of business so destroyed are given. Remember that proof spirits is a term applied to whiskey or other spirits containing 50 per cent alcohol, and in the tables of production and consumption the government abbreviates the term to spirits, meaning proof spirits.

The Statistical Abstract of the United States shows that in 1850 the total consumption of spirits in the United States, including that of domestic manufacture and imported, was 51,833,473 gallons—2.24 gallons per capita. As there was in 1860 25,000,000 gallons consumed as a burning fluid alone, and there was "a most extensive use of it in the manufacture" of the articles above named, it is safe to assume that at least half of the 2.24 gallons per capita consumed in 1850 was consumed other than as a beverage, leaving the total consumption as a beverge 1.12 gallons, four and one-half quarts compared with eleven quarts under the internal revenue tax of the latter part of the eighteenth century. At this time the per capita consumption of wine was 0.27 gallons and of malt liquors 1.58 gallons.

The price of honest, unadulterated whiskey at this time-no other being upon the market—was 20 to 25 cents a gallon, the average price for the five years, 1857-62, just before the internal revenue tax, was 24 cents a gallon; again proving the truth of Adam Smith's statement that "the cheapness of wine seems to be the cause, not of drunkenness but of sobriety."

By this time drunkenness had become a disgrace instead of a mark of contempt for some restrictive and obnoxious law. The year 1850 and some years prior thereto, was a period of the most widespread temperance, of the least drinking of alcoholic beverages, ever known throughout the United States.

Such are the effects of democracy, the unrestricted liberty of man to control his own private affairs without any restriction or dictation of the government of which, in America, he is a part.

I have given the figures for 1850 instead of 1860 because, as heretofore intimated, democracy in a number of States of the Union, during the decade from 1850 to 1860, had ceased to exist in its prior purity and the consumption of alcoholic beverages during this time greatly increased.

Within these sixty years there was not a saloon, in the modern sense of the term, in the United States, and, excepting in the last decade of this period there was not a bootlegger in America. Profit is the inspiration of the saloon and the bootlegger, and where ever they exist or ever did exist they are creations of law; in the United States, of national, State and municipal law, the abandonment of the democratic principles of the founders of our Republic.

Let your prejudice run where it may; a little logical thinking, a little observation, a little reflection upon past history as well as upon the present, will lead you to this conclusion.

CHAPTER VI

THE INTERNAL REVENUE AND HIGH LICENSE SYSTEM

In 1861 the evil hour in America struck when the North and South were plunged in a bloody conflict, and this came about because a large part of the people of the South denied democracy, liberty, freedom, to another part of the people.

Although the national treasury was substantially depleted, during the first fourteen months of the Civil War, Congress refused to enact any excise or internal revenue law. In order to meet the extraordinary expenses a law was passed and approved August 5, 1861, enlarging the customs traffic, increasing some of the import duties, laying direct taxes on lands and houses and imposing a tax on incomes.

Prior to this time agitation had sprang up regarding alcoholic liquors. Some people wished to have the manufacture and traffic therein taxed to death, imagining that a high tax would prevent their manufacture and use. With these people were joined, in the policy advocated, the larger and more wealthy distillers, having either a large stock on hand or the means of rapidly accumulating one, who, under the guise of patriotism at a time of national crisis, promptly consented to such tax, knowing that at least the tax, whatever it might be, would be added to the price and paid by the consumer.

It was well understood that the stock on hand and that which should be manufactured before any law that might be passed, should take effect, would not be taxed; but the price of all liquors on hand when the law should take effect could be immediately enhanced at least to the extent of the tax. So that the short-sighted people who wished to exterminate liquor by taxing it, looking at it from one standpoint, and those having a large stock or the means to soon accumulate one, looking at it from the standpoint of private profits, joined in insisting upon a high tax.

Much the larger quantity of spirits produced in the country was from corn, and the farmers, fearing a high tax on spirits would lessen distillation and consequently reduce the price of corn, generally opposed a high tax. Many of the small distillers, not having any considerable stock on hand nor much means, perhaps being unable to pay for a distiller's license and furnish bond conditioned to obey the law, also opposed the proposition. Therefore, selfish motives operated both for and aganist it.

At that time in Great Britain the excise tax on spirituous liquors was ten shillings and sixpense sterling-about $2.52—a gallon. But it was manifest that no such duty could be collected, at that time, from the people of the United States.

In the spring of 1862 the Committee on Ways and Means submitted to Congress a bill to lay an internal tax on all spirits at 25 cents a gallon, and fermented liquors at $1.00 a barrel, and on various other articles and business, and creating the Bureau of Internal Revenue.

Morrill, of Vermont, seeing clearly what the effects would be on drinking, stated:

*

*

"The duties proposed by the present bill rest heavily on spirits and malt liquors-being about one hundred per cent on raw whiskey; fifty per cent on rum, and twenty-five per cent on ale and beer-but far below the point at which even some prominent distillers thought they might be safely carried, and yet largely above the point indicated by the majority of those engaged in the business. The men who now are supposed to have large stocks on hand, and those who would destroy the traffic, regardless of revenue, for once agree on the propriety of an exorbitant tax. So long as consumption keeps equal pace with production-as in the case of all manufacturers—the consumer must pay the increased cost price. The consumption will not be seriously checked; and, if it could be, such a result would bring upon us no national disgrace. Whiskey and rum, with the duty added, will still leave it possible for any man or brute to get drunk in our land on cheaper terms than in any other that I know of. Persons who like good liquors are patriotic on the subject of taxation, and never quarrel about the price of the article; and those who swallow that which is said to be 'sure to kill at forty rods,' will have it at any hazard of life or purse."

The bill finally agreed upon and passed-approved July 1, 1862— placed an internal revenue tax of 20 cents a gallon on all spirituous liquors and $1.00 a barrel of thirty-one gallons, on fermented liquors, besides requiring a license fee from distillers, brewers, restifiers, wholesale and retail dealers. In addition to this, the act required a license fee in order to conduct many kinds of business, even from carpenters, livery stable keepers, candle and soap makers; from photographers, lawyers, physicians, surgeons and dentists, which are only a few named in the act. It specifically taxed scores of the necessary articles in

common use, such as candles, coal oil, sugar, starch, umbrellas, stoves, paper, soap, salt, leather, cotton, etc., and all incomes above $600. Documentary stamps were required in various business transactions. In the national emergency nearly every thing and every body were taxed. The tax on distilled spirits and fermented liquors did not apply to the stock on hand.

From March 3, 1863, to April 1, 1864, the internal tax on fermented liquors was reduced to 60 cents a barrel and at the last date the original tax of $1.00 a barrel was revived and it remained at this rate until the Spanish-American war.

The act of 1862 was of great length, but awkwardly drafted as a revenue measure for which it was intended. Instead of providing for government inspectors, under the employment and pay of the government, to have charge and custody of all spirits distilled-as in later years-it provided that the owner, his agent or superintendent should report, from time to time, to the collector the "quantity of spirituous liquors distilled and sold, or removed for consumption or sale," the books of the distillers to "be open in the day time, Sundays excepted, for the inspection of the said collector, who may take minutes, memorandums, or transcripts thereof."

It is true the act provided that all spirits distilled should be inspected, gauged and proved. But in practice the inspectors seldom inspected, gauged or proved the liquors until requested to do so by the distiller. The act specifically stated: "And the fees of such inspector shall in all cases be paid by the owner of the spirits so inspected, gauged and proved," making him dependent upon and virtually an employee of the distiller.

These provisions opened the door for extensive evasions of the tax which were taken advantage of by distillers throughout the country, and they were carried into the acts, hereinafter mentioned, which greatly increased the tax rate on distilled spirits.

The special Revenue Commission appointed in 1865 found that the matter of inspecting distilleries and their products were frequently left entirely to the "workmen or partners in the distilleries inspected." One of the United States revenue agents, in his testimony, stated that distillers manufactured and fraudulently sold spirits in quantities ranging from 20,000 to 80,000 gallons, without suspicion on the part of local officers; that the business was not conducted legally and honestly. In answer to the question whether these frauds were due to neglect of government officials, he stated: