37 



The immediate influence of the higher taxation was to con- 

 siderably lessen the amount of spirits produced, which in the 

 years before 1887 is estimated to have averaged four million 

 hectoliters for the entire empire. But this was an overpro- 

 duction, according to the market condition, which had been 

 unfavorable since 1884. In the early eighties the German in- 

 dustry had been greatly favored by the rapid expansion of the 

 export trade, which rid the home market of the excess product, 

 and so aided in the maintenance of good prices. The average 

 yearly export between 1870 and ; 79 was 49.1 million liters 

 and between 1880 and '84, 74.18 million liters. This export 

 was chiefly to the wine growing countries of Southern Europe, 

 whose vineyards were being ravaged by the Plrylloxera at this 

 time. , Especially was export favored by a trade treaty with 

 Spain, which country imported German spirits to take the 

 place of the wine exported to France as a result of the short 

 French crops. However, these favorable conditions did not 

 last long. Cheap Kussian potato spirits, favored by an ex- 

 port premium, as well as the Austrian and American product, 

 began to compete with Germany in her best markets. Be- 

 tween 1885 and 1892 the exports declined from 87.7 to 8.3 

 million liters, and the result was a sharp fall in price from 

 53.40 marks a hundred liters of pure spirits in 1883 to 34.80 

 marks in 1888. 1 In addition, the potato crops were unusually 

 good for several years, and they were distilled in spite of the 

 ever-sinking price of spirits. The industry faced a crisis. 

 Efforts were made by the producers to limit the amount dis- 

 tilled, but without success. This was the condition at the 

 passage of the law of 1887, which .increased the tax by 300 per 

 cent. In spite of higher taxation there continued to be an 

 excess of several hundred thousand hectoliters over the needs 

 of Germany, which could be only partially exported on ac- 

 count of Russian and Austrian competition, and th re- 

 mainder greatly depressed the market. 



In 1885 the government sought to still further lower the 

 production by imposing an additional tax on all plants pro- 



1. H. w. b. der Staatswissenschaften ii, p. 1064, 1095 and Vierteljahrshefte zur 

 Statistik, 1900 i, prices. 



