310 POPULAR SCIENCE MONTHLY. 



dation in this particular found favor, it would have resulted in 

 an accretion of many millions to the national Treasury, a relief 

 from espionage and other frictions to the trade, and a larger 

 diminution of administrative expenditures both to the trade and 

 the Government. 



The experience of the Federal Government in its taxation of 

 distilled spirits is extraordinary, and so replete with instruction 

 to economists, moralists, and social reformers as to merit a more 

 extended notice. 



The product of distilled spirits in the United States for the 

 year 1860, as returned by the census, was about 90,000,000 gallons. 

 It would be 'an error to assume that all of this immense pro- 

 duction of spirits was used for intoxicating purposes, or in the 

 way of stimulants, inasmuch as the extreme cheapness of spirits 

 or alcohol in the United States during the period under consid- 

 eration occasioned their employment in large quantities for vari- 

 ous industrial purposes ; which uses were subsequently in a great 

 degree discontinued when the price of spirits was enhanced from 

 one hundred to one thousand per cent and upward by Federal 

 taxation. For 1860-'G1, the year preceding the war, the average 

 price of proof spirits in Cincinnati was 14'40 cents per gallon. 



From 1822 to 1862 distilled spirits, in common with all other 

 domestic industrial products, were exempt from Federal taxation. 

 In the latter year, under the necessity for revenue occasioned by 

 the war. Congress imposed a tax of twenty cents per proof gallon 

 on all distilled spirits of domestic production. This tax went into 

 effect on the 1st of September, 1862, and continued in force until 

 March, 1864. The total revenue derived from this source, includ- 

 ing the receipts from licenses for rectifying, vending, and the 

 like, for the fiscal year 1863, was $5,176,530. The receipts from the 

 direct tax on the spirit itself was $3,229,990, indicating a domestic 

 production of only 16,149,954 gallons as compared with a produc- 

 tion of 90,000,000 gallons returned under the census of 1860, three 

 years previous. The explanation of this result is to be found in 

 the fact that a large amount of whisky was manufactured in 

 anticipation of this low tax, and that there were doubtless some 

 evasions of the tax after it was enacted conditions that were re- 

 peated, as will be presently shown, in a greater degree on every 

 occasion when an advance in the tax was enacted. 



The tax of twenty cents continued in force until March 7, 1864, 

 when the rate was advanced to sixty cents per gallon. The reve- 

 nue accruing under these two rates for the year ending June 30, 

 1864, was $28,431,797, and the number of gallons returned as hav- 

 ing been assessed was 85,295,393. The striking discrepancy be- 

 tween the number of gallons taxed in 1864 at twenty and sixty 

 cents and the number taxed the previous year (1863) at twenty 



