200 



CONGRESS. (ALCOHOL USED IN THE ARTS.) 



street, Owens, Parker, Patterson, Payne, Perkins, 

 Phillips, Pitney, Poole, Price, Prince, Pugh, Quigg. 

 Ray, Reeves, Reyburn, Royse, Rusk, Russell of 

 Georgia, Sauerhering, Scranton, Settle, Shannon, 

 Sherman, Simpkins, Smith of Illinois, Smith of Mich- 

 igan, Snover, Sorg, Southard, South wick, Spalcling, 

 Sperry, Stahle, Steele, Stephenson, Stewart of Xew 

 Jersey, Stewart of Wisconsin, C. W. Stone, W. A. 

 Stone, Strode of Nebraska, Strong, Sulloway, Sulzer, 

 Tuft, Tarsney, Tawney, Tayler, Thomas, Tracewell, 

 Tracey, Treloar, Tucker, Turner of Georgia, Turner 

 of Virginia, Updegraff, Van Voorhis, Wadsworth, 

 Walker of Massachusetts, Walsh, Wanger, Warner, 

 Washington, Watson of Indiana, Watson of Ohio, 

 Wellington, White, Wilber, Willis, Wilson of Ohio, 

 Wood, Wright 215. 



NOT VOTING Adams, Anderson, Arnold of Penn- 

 sylvania, Barrett, Belknap, Black of New York, 

 Buck, Clarke of Alabama, Cobb of Alabama, Cowen, 

 Crowley, Cummings, Dayton, Eddy, Ellett of Vir- 

 ginia, Fitzgerald, Foote, Foss, Griswold, Hainer 

 of Nebraska, Hanly, Henry of Indiana, Howard, 

 Huff, Hunter, Kirkpatrick, Kyle, Leonard, Linton, 

 Lorimer, McDearmon, McEwan, Meiklejohn, Miller 

 of Kansas, Milliken, Milnes, Miner of New York, 

 Morse, Mozley, Pendleton, Pickler, Powers, Raney, 

 Robinson of Pennsylvania, Russell of Connecticut, 

 Sparkman, Stallings, Wilson of New York, Wood- 

 man, Woomer 50. 



Alcohol used in the Arts. Another financial 

 measure was introduced in the House by Mr. 

 Charles W. Stone, of Pennsylvania, in a bill to re- 

 peal section 61 of an act to reduce taxation, to pro- 

 vide revenue for the Government, and for other 

 purposes, which became a law Aug. 25, 1894. It 

 was referred to the Committee on Ways and Means 

 and reported with an amendment April 22. The 

 bill and report were referred to the Committee of 

 the Whole House on the State of the Union. 



The bill, which provided for repeal of the free- 

 alcohol provision in the Wilson-Gorman act, was 

 debated May 25 and 26. Mr. Evans, of Kentucky, 

 led the discussion in favor of the bill. He said in 

 part : 



" Section 61, which it is proposed by this bill to 

 repeal, is in the following language : 



" ' Any manufacturer finding it necessary to use 

 alcohol in the arts, or in any medicinal or other 

 like compound, may use the same under regulations 

 to be prescribed by the Secretary of the Treasury, 

 and on satisfying the collector of internal revenue 

 for the district wherein he resides or carries on 

 business that he has complied with such regula- 

 tions and has used such alcohol therein, and exhib- 

 iting and delivering up the stamps which show that 

 a tax has been paid thereon, shall be entitled to re- 

 ceive from the Treasury of the United States a re- 

 bate or .repayment of the tax so paid. .(28 Stat. L., 

 567.)' 



" The practical operation of this provision, as I 

 think you will see, is that it allows anybody calling 

 himself a 'manufacturer' to get alcohol, pay the 

 market price for it, use it in what he calls the arts, 

 or in medicinal or other like compounds, sell it at a 

 full price, including the tax, and after that has been 

 done come to the Treasury and get $1.10 a gallon by 

 way of a gift from the Treasury for every gallon of 

 alcohol he has used. I shall endeavor to show to the 

 members of the committee precisely how that act 

 operates to a result such as I have described. 



" All of us who are in the least degree acquainted 

 with the internal-revenue service of the country 

 know that what are called distilled spirits under 

 the internal-revenue laws embrace what we call 

 whisky, what we call high wines, and what we call 

 alcohol. Whenever any distilled spirits are made 

 the law requires them to be put in a bonded ware- 



house, and they are not permitted to be removed 

 therefrom until the tax of $1.10 per proof gallon 

 has been paid to the Government, and just as soon 

 as that is done, at that moment those distilled spir- 

 its must be removed from the warehouse. 



" Right there comes an important suggestion in 

 connection with this matter. The owner can not 

 get the spirit out of bond until the tax is paid. 

 He pays the tax and charges his customer the full 

 amount of that tax, $1.10 a gallon, and probably a 

 profit upon that, and after he has spread his prod- 

 uct over the country and collected the cost of its 

 manufacture, including the cost of the alcohol, 

 after having received from his customer the full 

 value of his goods, including the $1.10 tax which 

 he paid on the alcohol, which is a part of the cost of 

 the goods, he comes to the Government of the United 

 States and says, ' I want the $1.10 paid to me again 

 by you.' 



" The House can see that his purpose in trying to 

 get free alcohol in this way is not to benefit the 

 consuming public. Far from it. The retailer gets 

 no part of the benefit of it ; the man who buys the 

 goods made with the free alcohol does not get any 

 abatement in the price. The manufacturer col- 

 lected the whole price from the man to whom he 

 sold the goods, including the cost of the alcohol 

 and the amount of the tax ; and then, if section 61 

 is operative, he gets $1.10 per gallon again. 



"The Commissioner of Internal Revenue states, 

 in a letter from which I shall read an extract, that 

 in one district in New York claims of this nature 

 to the amount of about $1,000,000 have originated 

 and probably have been presented. To illustrate 

 what I may as well do now as at any time the ex- 

 treme expansibility, so to speak, of this section 61, 

 I will read what the Commissioner has stated to the 

 committee as to the amount and character of these 

 claims. In the report which the committee had the 

 honor to submit to this House will be found the 

 letter of the Commissioner, in which he says : 



"'An investigation of claims presented in one of 

 the collection districts of New York for rebate on 

 alcohol claimed to be used under section 61 of act 

 of Aug. 28, 1894, shows that the same will amount 

 in this district alone to about $1,000,000 annually. 

 From information obtained in this district it is be- 

 lieved these claims will be largely increased in num- 

 ber and amount when it is generally known that the 

 rebate will be paid. 



" ' These claims cover a vast number of articles, 

 such as tinctures, medical compounds, flavoring ex- 

 tracts, essences, patent medicines, bay rum, bay 

 salt, Florida water, medicine extracts, peptoman- 

 gan, homoeopathic medicines, root beer, witch- 

 hazel, medicinal and other like compounds, fruit 

 extracts, nutrolactics, pharmaceutical preparations, 

 barbers' supplies, tobacco, smoking tobacco, cellu- 

 loid and fancy goods, hair tonics, bovinine extract, 

 varnish, bitters of various kinds, essential oils, es- 

 sence of pepsin, medicinal saumetto, tricopherus, 

 perfumery, Jamaica ginger, ethers, oils, wine and 

 liquor flavors, toilet waters, confectioneries, black- 

 berry brandy, cherry brandy, household panacea, 

 soothing sirup, Radway's Ready Relief, sarsaparilla, 

 Venetian liniment, etc.' 



" I am not here to say that there ought not to be a 

 plan devised by which persons may get free alcohol 

 for employment in the useful arts, and I am autho- 

 rized to say in this connection on behalf of the 

 Ways and Means Committee that they will propose 

 a second section. This second section which we 

 propose to offer will provide a method by which we 

 can investigate deliberately and intelligently the 

 whole question, and if there be a way of providing 

 for the use of free alcohol in a manner safe for the 

 interests of the Government, the committee which 



