20 EXPORT AND MANUFACTURING -TOBACCOS. 
The shrinkage in exports of leaf, however, was comparatively. 
slight because, under the influence of high prices, effort was made to 
export as much as possible. The conditions in the western produc- 
ing territory, particularly in Kentucky and Ohio, were not so com- 
pletely unfavorable for the production of tobacco as in Virginia, 
Maryland, and North Carolina, and the production in the West 
remained fairly large during most of the active period of the war. 
The influence of the Civil War, indeed, brought Kentucky to first 
place as a producing State, which place she has continued easily to hold. 
INFLUENCE OF THE NEW FISCAL SYSTEM. 
INTERNAL-REVENUE TAX. 
The financial necessities of our National Government brought 
about by the tremendous expenses of the war led to many new 
devices for raising revenue. The war-revenue act of 1862 placed an 
internal-revenue tax on all manufactured tobacco. Up to this time 
no tax had been levied except for two short periods of trial in 1794, 
and again during the period of the War of 1812. Since the passage 
of this law in 1862 tobacco has regularly been one of the principal 
sources of revenue, although the rate of levy has passed through a 
ereat variety of changes. 
IMPORT DUTY ON CIGARS AND CIGAR LEAF. 
Prior to the Civil War the import duty on cigars and leaf tobacco 
was comparatively low and was not sufficient materially to affect 
imports. The revenue act of 1862, however, materially mcreased 
these rates and greatly stimulated the home production of cigar-leaf 
tobacco and the home manufacture of cigars. The revenue rates 
were still further increased later on, with the effect of greatly reduc- 
ing the imports of both cigars and leaf tobacco and practically exclud- 
ing all but the highest grades of cigars and leaf. 
The import tax on tobacco has been maintained upon a high basis 
and the present rates of 35 cents a pound on filler and $1.85 a pound 
on wrapper leaf are equivalent to about 50 per cent ad valorem on 
fillers and about 175 per cent on wrappers. It is claimed that the 
domestic wrapper-producing industry would be ruined with any 
material reduction of the rate on wrapper leaf. Nevertheless, we 
continue to import wrappers of the finest grades to the extent of about 
6,000,000 pounds annually. 
Be aenaene that 3 pounds of these high-grade wrappers are re- 
quired to wrap a thousand cigars, the duty amounts to a full 
half cent for each cigar covered with imported wrappers. The 
duty on cigars ($4.50 a pound and 25 per cent ad valorem) is 
much higher and is equivalent to about 64 cents for each cigar 
244 
