730 POPULAR SCIENCE MONTHLY. 



on less than 7,000,000 gallons, leaving to the credit of corruption 

 from the sale of the balance of concurrent annual product, at 

 market rates, of from $80,000,000 to $100,000,000. But with a re- 

 duction of the tax to fifty cents per proof gallon the annual reve- 

 nue, including all taxes on the process of manufacture and sales, 

 increased the first year to $45,000,000, and the second to $55,- 

 606,000. 



By the Act of August 28, 1894, the rate of tax on distilled spirits, 

 which had been in force for fifteen years and was working satis- 

 factorily, was prospectively advanced from ninety cents to a dol- 

 lar and ten cents per proof gallon. Note the result. For the first 

 six months of 1894 the average monthly revenue which accrued 

 from the lesser tax was about $8,000,000. Then the prospective 

 profits from the increase of the tax were anticipated to such an ex- 

 tent by speculators, that the revenue increased during the month 

 of July and for the first twenty-seven days of August to $19,064,000 

 and $31,470,000 respectively, representing an aggregate gift to the 

 speculative interest of about $24,000,000. The increased rate of tax 

 having become operative, the revenue for the month of Septem- 

 ber declined to the comparatively small sum of $510,696. Stated 

 generally, the total receipts from the direct tax of ninety cents per 

 proof gallon during the fiscal year 1893 was $89,231,000 ; for 1894, 

 with increased rate for part of the year, it was $79,862,000 ; for 

 1895, $74,741,000 ; for 1896, $75,327,897. That a considerable part 

 of this recent decline has been due to a contemporaneous depres- 

 sion of the business of the country is beyond question ; but what 

 is to be inferred from the following official statement as to the 

 manner in which the decreased production of spirits in the United 

 States distributed itself during the year 1895 : decrease in the 

 production of alcohol, neutral or cologne spirits, 16,065,000 gal- 

 lons; increase in the production of Bourbon whisky, rye and 

 miscellaneous liquors, 6,924,773 gallons ? These figures do not in- 

 clude illicit production, which is certainly verj^ considerable ; and 

 one effect of the increase of tax in stimulating this business may 

 be inferred from the fact that the number of illicit stills seized 

 and destroyed increased from 1,016 in 1894 to 1,874 in 1895. 



Another point of interest in connection with the increase of 

 the rate of taxation on distilled spirits in 1894, and to a certain 

 extent contingent on such increase, is, that the business of manu- 

 facturing whisky has been so stimulated, with a resulting over- 

 production, that the average market price of this commodity, ex- 

 clusive of taxes, has been reported as below the cost of manu- 

 facture, and in accordance with this view of the situation nearly 

 all the large distillers of the country have united in suspending 

 operations. 



Under a former rate of duty of ten per cent on the importation 



