112  Internal  Revenue  Tax  on  Alcohol.  {K™iiSX^xm' 
or  nearly  1 ,000  per  cent,  of  the  original  cost  of  the  alcohol  as  dis- 
tilled. The  effect  of  a  tax  of  this  kind  on  a  material  used  in  manu- 
facturing many  important  articles  of  general  consumption  is  so 
evidently  oppressive  on  productive  industry  that  practically  every 
commercial  and  manufacturing  country  in  the  world,  except  the 
United  States,  makes  a  distinction  between  alcohol  used  for  indus- 
trial purposes  and  that  used  as  a  beverage.  In  Germany,  France, 
Great  Britain,  Austria,  Russia,  Holland,  Denmark,  Norway,  Sweden, 
Switzerland  and  Italy,  and  several  smaller  countries,  no  tax  is  im- 
posed on  alcohol  which  has  been  rendered  unfit  for  drinking  pur- 
poses, or,  as  it  is  commonly  called,  "  denaturized  alcohol." 
This  policy  of  exempting  industrial  alcohol  from  taxation  has 
been  in  force  in  these  countries  for  varying  periods,  in  some  cases 
for  more  than  twenty  years,  and  in  every  case  the  advantages 
resulting  from  it  have  been  found  so  great  that  the  tendency  every- 
where has  been  to  broaden  the  scope  of  the  laws  relating  to  this 
subject.  In  no  instance  has  a  country  which  has  once  adopted  such 
a  policy  gone  back  to  the  old  system  of  taxing  alike  beverage  and 
industrial  alcohol. 
Notwithstanding  the  fact  that  the  most  important  of  these  Euro- 
pean countries  have  very  costly  military  and  naval  establishments 
to  sustain,  which  are  a  very  heavy  strain  on  their  revenue  resources, 
and  which  necessitate  many  special  forms  of  taxation  to  which  the 
American  people  would  not  submit,  no  suggestion  is  ever  made  of 
levying  internal  revenue  taxes  on  alcohol  used  for  industrial  pur- 
poses. 
The  most  notable  example  of  the  benefits  conferred  by  freeing 
from  taxation  alcohol  used  in  the  arts  and  manufactures,  is  found  in 
the  experience  of  Germany.  That  country  in  1887  enacted  a  law 
greatly  extending  the  system  of  untaxed  denaturized  alcohol  which 
had  previously  been  in  force,  and  encouraging  the  production  and 
general  use  of  alcohol  for  industrial  purposes.  The  results  of  this 
more  liberal  policy  have  been  of  great  benefit,  both  to  the  farming 
and  manufacturing  interests. 
The  German  farmer  has  been  benefited  by  cheap  untaxed  alcohol 
in  two  ways:  (1)  Through  a  great  additional  market  for  his  pota- 
toes, of  which  enormous  crops  are  annually  grown  for  making 
alcohol ;  and  (2)  through  the  use  of  alcohol  for  light,  heating  pur- 
poses and  as  a  fuel  for  motor  engines  running  all  kinds  of  farm 
