AGEICULTUEAL ALCOHOL IIST GERMANY. 3 



THE ECONOMIC SITUATION. 



It would appear that as soon as the production of alcohol became 

 an industry it ^vas placed under governmental control. Not only 

 for ethical reasons was this necessary, but for economic reasons as 

 well. The fact that although alcohol as a beverage is not a physiolo- 

 gical necessity, but that nevertheless there is a strong demand for it 

 by man, makes it an especially opportune object for raising internal 

 reA-enue. Under such conditions it is self-evident that the develop- 

 ment of the alcohol industry in any country will be materially in- 

 fluenced by revenue and other legislation. 



While the increased tax on alcohol used as a beverage placed a 

 national check upon its consumption and therefore upon its manu- 

 facture, the rapid strides which have been made, especially in the 

 improvement of the crude material, are directly attributed to the 

 operation of a certain phase of the laws taxing the finished product. 



MASH-CAPACITY TAXES, 1820 AND 1868. 



The tax which up to 1820 was levied upon the still was in that 

 year replaced in Prussia and in others of the North German States 

 by a mash-capacity tax. To control the output of alcohol and to 

 tax this directly was not considered feasible, although theoretically 

 it was the simplest and most equitable method. Inasmuch as the 

 ratio between the volume of mash, as made in those days, and the 

 finished product was fairly well established, the taxation of the mash 

 capacity, while indirect, appeared more equitable and fair than a tax 

 on the distilling apparatus, a much more variable factor in the pro- 

 cess of manufacture. 



The average yield of alcohol about 1820 was computed at 2.5 per 

 cent of the mash, a very low figure when compared with the results 

 attained since then. Immediately, therefore, it became an object to 

 the manufacturer to crowd as much fermentable material as possible 

 into each unit of his mash-tub capacity. This was accomplished on 

 the one hand by thickening the mash and on the other hand by 

 choosing those potatoes which were richest in starch. As will be 

 seen later, this second factor led to the general cultivation of potatoes 

 richer in starch: and, since it was much to his advantage to secure 

 the most complete fermentation possible, the distiller was led to a 

 more careful study mihI manipulation of the yeast. 



The inevitalile lesult was that the oi-iginal tax on the basis of a 

 2.5 per cent ah-ohol yield became antiquated and had to be increased 

 gradually in accordance with the improvements made in the tech- 

 nology of feiinentiif if)n. W''\\\\ ciich increase in the rate of taxation 



