AGRICULTURAL ALCOHOL IN GERMANY. 5 
therefore, has increased fully 24 fold. If it be remembered that the 
percentage of yield assumed for 1855 was taken rather higher than. 
was in all probability obtained on the average, this ratio becomes 
favorable. | 
TAXES ON THE FINISHED PRODUCTS, 1887. 
/ 
While the tax on the mash capacity, therefore, had had a very 
beneficial effect on the technology of alcohol and on the industry as 
a whole, the legislation of 1887 had, at least at first, a very different 
effect. In addition to the mash-capacity tax, a tax was levied on the 
finished product. when disposed of (Verbrauchsabgabe). This sec- 
ond tax was higher than the first and was graded according to the 
quantity of whisky produced. A certain amount (Kontingent), 
supposed to equal the consumption for beverage purposes established 
on the basis of the statistics of the previous period of 5 years, was 
taxed at the rate of 50 cents per gallon. The surplus alcohol above 
this estimated amount (Ueberkontingent) was taxed at the rate of 
70 cents per gallon. The alcohol used for industrial purposes was 
not affected by this legislation, since the tax paid was refunded, as 
will be shown later. | 
The considerably increased price for whisky resulted in a corre- 
sponding diminution in the consumption. The amount consumed 
shortly before this law went into effect has been estimated at 
79,252,500 gallons (300,000,000 liters) (Wittelshofer and Behrend, 
1906, p. 363), whereas in 1887 it dropped to 57,825,975 gallons 
(217,000,000 liters), that is, about one-third. In the long run it did 
not pay to produce more alcohol than the demand called for. A con- 
siderable reduction in the quantity of alcohol produced had to be 
the inevitable result. Such a setback to a most important agricul- 
tural industry was equivalent to a setback of agriculture at large. 
In this setback the South German States (Bavaria, Wurttemberg, 
and Baden) did not share to the same extent as the North German 
States, since this law applied only to the northern group. In order 
to persuade the southern States to accept the same taxation and to 
join the whisky-tax union (Branntweinsteuergemeinschaft), thereby 
making it effective for the entire German Empire, these States were 
given a more liberal assignment at the lower tax rate. As a result, 
the distilleries of these States produced but very little surplus alco- 
hol; that is, practically all of their alcohol was taxed at the rate of 
_ 90 cents per gallon (50 marks per hectoliter) and but very little at 
70 cents per gallon (70 marks per hectoliter). 
The setback which was the immediate effect of the law of 1887 
was, in part at least, counterbalanced by other effects which were 
the indirect outcome of the legislation. While the German distilling 
industry possibly never faced the problem of prohibition, the legis- 
