74o POPULAR SCIENCE MONTHLY. 



A tax imposed upon an article at a certain stage of its production 

 or manufacture may enforce the expediency or necessity of a state 

 monopoly. Where the supervision of the state agents must be so 

 close as to interfere with the conduct of the industry, the state inter- 

 venes and itself controls the manufacture and sale. Tobacco has long 

 been subject to this fiscal regime, and, proving so productive of rev- 

 enue, there is little to be said against a monopoly by the state of its 

 manufacture and sale. 



In Italy the tobacco monopoly is conceded to a company, but its 

 return of net revenue to the state is nearly as large as the revenue de- 

 rived from the taxes on real property (about thirty-eight million dollars 

 a year). Prussia imposes a charge on the home-grown tobacco by a tax 

 on the land devoted to its culture, but the return is very small, and 

 Bismarck wished to introduce a true tobacco monopoly, modeled 

 on that of France. But the conditions were opposed to his scheme, 

 for the use of tobacco is general throughout the empire, and a proposi- 

 tion to increase its price by taxation or modify its free manufacture 

 and distribution excited a widespread opposition. France maintains 

 a full monopoly, and finds it too profitable to be lightly set aside 

 unless some equally profitable source of revenue is discovered to make 

 good the loss its abolition would involve. 



While historical support is given to the maintenance of a monopoly 

 as in France, it is not probable that the system will find imitators in 

 other states, however tempting the returns obtained might seem. 

 Great Britain has by her insular position solved the problem in an- 

 other way. By interdicting the domestic cultivation of tobacco, all 

 that is consumed must be imported, and a customs duty offers a ready 

 instrument for making the plant, in whatever form it enters, con- 

 tribute its dues to the exchequer. In Russia, as in the United States, 

 where tobacco is a domestic product, the tax is imposed upon its 

 manufacture, and this method requires supervision but no monopoly 

 of the state. 



The tobacco regime is defended almost entirely on fiscal grounds, 

 and as a monopoly, an extreme measure, has proved its value as an 

 instrument of taxation. Other reasons, of a moral character, are 

 urged to induce the state to monopolize the manufacture and sale of 

 distilled spirits. Both France and Germany have considered this 

 question, and, in spite of confident predictions of a large profit, have 

 decided not to undertake it. Russia, on the other hand, has taken 

 it up quite as much on social as on revenue grounds, and is gradu- 

 ally securing a monopoly of the trade in spirits. The initial cost 

 of the undertaking is large, and, as the system has not yet been per- 

 fected, it is too early to give a judgment on its availability as a finan- 

 cial instrument. 



