JIOW TO RAISE REVE:SUE. 731 



of diamonds, $100,000 on duties representing a value of $1,000,000 

 was reported as collected at the single port of New York. With 

 an increase of duty to twenty-five per cent, little or no revenue is 

 derived from that source. 



The best and most reliable data for estimating the maxi- 

 mum revenue resulting from the taxation of distilled spirits is 

 to be found in the experience of the Internal Revenue Department 

 for the fiscal years from 1887 to 1893 inclusive. During these 

 years, under a uniform and stable rate of taxation, a good and 

 efficient administration of the law, and a fairly prosperous con- 

 dition of the country, the average increase in revenue was nearly 

 $5,000,000 ($4,910,000) per annum ; the whole culminating in the 

 fiscal year 1893 in a revenue of $89,231,000. In a report made by 

 the writer to the Secretary of the Treasury in July, 1893, the 

 sequel of any increase in the then existing rate of tax (uinety 

 cents), which was at that time to some extent advocated, was fore- 

 shadowed in the following language : " It will favor a recurrence 

 of the disgraceful and disastrous results that characterized the 

 period of experimental taxation in the years immediately suc- 

 ceeding the termination of the war. Certain it is also that an 

 anticipation of participation in an increase of the tax would lead 

 to such a production of spirits as to postpone for one or two years 

 any increase in revenue to the Government." It is needless to 

 say that every prediction thus made has been fully verified, and, 

 encouraged by such success, the following anticipations may be 

 warranted : If our legislators in Congress assembled, agreeing 

 to limit all consideration of the subject to the one point of rev- 

 enue, will reduce the present rate of tax per proof gallon of dis- 

 tilled spirits from $1.10 (about 825 per cent) to the former rate of 

 ninety cents (G90 per cent), with no exemptions, and the industry 

 of the country again become fairly prosperous, the average 'per 

 capita consumption of 1892 and 1893 may be fairly taken as the 

 basis of future estimates from the greatest and most reliable 

 single source of national revenue. Or, in other words, an annual 

 revenue, under such conditions, approximating one hundred mil- 

 lions may be anticipated in 1899, with a certain regular increase 

 contingent on a normal increase in population of from three to 

 four millions additional per annum. 



The Alcohol Exemption Proposition. A brief notice of a 

 proposition to essentially impair the revenue from distilled spirits 

 by exempting alcohol used in comparatively few manufacturing 

 industries and in the preparation of "medicinal and other like 

 compounds " from taxation is here pertinent. The history of this 

 movement constitutes an extraordinary feature in American 

 fiscal experience, and in brief is as follows : When " an act to re- 

 duce taxation, to provide revenue for the Government, and for 



