REPORT OP COMMITTEE ON PUBLICATION 23 



PROBABLE EFFECT OF THE FEDERAL TAX ON BRANDY 



UPON THE HORTICULTURAL INTERESTS 



OF CALIFORNIA. 



By R. D. STEPHENS, 

 1210 N Street, Sacramento, California. 



Read by Mr. E. M. Sheehan. 



In replying to your request for an expression of opinion as to what 

 effect the Federal Tax on brandy used in fortifying sweet wines will have 

 upon the horticultural interests of California will say, that I do not know 

 how I can better illustrate how it will affect the interests of the table or 

 shipping grape growers than to give my personal experience which practi- 

 cally has been the experience of all other table grape growers in the State. 



I had a very heavy crop in common with all other growers and as the 

 demand was not equal to the supply, I sold to the winery over 220 tons which 

 amounted to about 45 per cent of my entire crop. 



While the price I received for these 220 tons was not sufficient to cover 

 all cost of production, picking and delivery, yet the result was profitable to 

 me, for the reason that I received a profit over the cost of picking and 

 delivery in other words salvage; and, by disposing of over 220 tons to the 

 winery, which were manufactured into brandy and used to fortify sweet 

 wines, I was enabled to put up a superior pack for Eastern shipment. Had I 

 not had an opportunity to dispose of this 45 or 50 per cent of my crop, at a 

 price, which, while it did not cover the total expenses for the year, yet 

 brought a profit over the cost of picking and delivery, it would have been a 

 total loss, which would have materially reduced my income. 



Growers and Manufacturers. 



Growers can no more afford to sacrifice 45 per cent or 50 per cent or 

 60 per cent of their products than can manufacturers afford to sacrifice an 

 equal proportion of their products. 



There is a great difference between the products of the manufacturer and 

 those of the growers, for the reason that one is perishable, while the other is 

 not. If the manufacturers have an excess supply, they can hold it until there 

 is a demand for it at a price which will bring them a good profit, for they 

 have the power to fix the price at which they will sell to the growers, but the 

 growers have to sell at a price fixed by the buyers. 



The Tax and Its Effect. 



If the tax is permitted to remain on California manufactured brandy 

 which is used for fortifying sweet wines, it will mean the financial ruin of 

 many who have built up this industry through the teachings of experts sent 

 to California by the Federal Government, which now, through a system of 

 taxation if it is permitted to remain, will destroy this industry; an incon- 

 siderate action on the part of the Federal Government. 



