20 INTERNATIONAL CONGRESS OP VITICULTURE 



Though thinking of our wine-grape vineyards now and of our wine- 

 making industry, I shall endeavor to show you later how confiscatory Federal 

 taxation on wine will affect our raisin and table-grape growers unless this 

 new tax law is repealed at Washington, and repealed promptly with the 

 assistance of every fair-minded member of our National Congress. 



Permit me to give a brief recital of what has happened to the wine-grape 

 interests of California. 



Nine years ago and for years prior, the sweet wines were made without 

 Federal tax. As the industry grew and the expense of Government super- 

 vision increased, a tax of three cents per proof gallon on brandy used in 

 fortification of the sweet wines was levied and it more than offset the expense 

 of the Federal employes in the gauging service. This tax or the necessity for 

 it has not been questioned these nine years. A maker of sweet wines in 

 California to the extent of 200,000 gallons has paid, in addition to all other 

 expense, $1,500 to the United States Government as his part of the three-cent 

 tax on brandy which he made and added to his fermented wine to preserve a 

 certain degree of sweetness or sugar. Suddenly the United States Govern- 

 ment needs money to meet deficiencies in customs and decides to tax sweet- 

 wine makers 55 cents per proof gallon on fortifying brandy instead of three 

 cents per gallon, and demands that the manufacturer who makes 200,000 

 gallons of wine shall pay a fortifying tax of $27,000 instead of $1,500. More- 

 over, we are now informed that after the coming vintage season the fortify- 

 ing tax will automatically become $1.10 per proof gallon (the same as has 

 always applied to commercial brandy when taken from bonded warehouses), 

 and consequently the Government tax on the winemaker who produces 

 200,000 gallons of sweet-wine will after January 1, 1916, be $54,000 instead of 

 the original tax of $1,500, or about 35 times what he has been paying. 



This means practically prohibition of the sweet-wine industry, or the 

 imposition of a tax from the Federal Government of over four and a half 

 millions of dollars annually on California's normal output of sweet wines a 

 tax prohibitive in the extreme and one under which the winemakers individ- 

 ually or collectively could not exist. 



The layman asks, "What has this to do with dry wines? How are they 

 affected? What have the table and raisin-grape growers to fear? It does 

 not concern them, does it?" 



And the answer is, "They are affected tremendously." 



Just consider first of all the plight of the maker of sweet wines. On top 

 of the cost of his grapes, his labor, his investment in plant, tools and machin- 

 ery, and his administration, taxes and insurance, the wine he produces must 

 yield the Government from 25 to 30 cents per gallon a figure as much as a 

 wholesaler would pay a manufacturer for sweet wine a little more than a 

 year ago. Indeed, sweet wine sold in California for two years at prices 

 ranging from 12 to 20 cents per gallon. 



Then what is there for the sweet-wine maker to do? He cannot afford to 

 make more than 10 per cent of his normal output and he promptly uses his 

 plant for the production of dry wines such as Claret, Hock, Zinfandel and 

 other types of dry wine. He converts 17,000,000 gallons of sweet-wine pro- 

 duction into 30,000,000 gallons of dry wines, which, added to California's 

 normal dry-wine production of 22,000,000 gallons, makes a total seasonal out- 

 put of 52,000,000 gallons of dry wine. 



