some persons, who were in a position to derive pecuniary ad-
vantage from such legislative errors, did not hesitate to profit
by them. Nor is it to be wondered at that frauds became the'
rule, when the tax on spirits rose to a sum amounting to 1,000
per cent, on the prime cost of the article.
When the proper level was found for the tax, and when
Congress ceased directly or indirectly to aid the nefarious
schemes of greedy speculators, we find on the part of all,,
or very nearly all, distillers a cheerful compliance with the
law or, in other words, an unreserved endorsement of the
policy of the Government. No objection was ever urged
by them against the principle of excises in their particular
case. They undoubtedly knew of the prejudice against
this system of taxation and were aware of the role it
played in the political and economic history of the country ;
but they did not themselves entertain it, and flir from
endeavoring to profit by whatever force this prejudice may
have possessed in their time, or may still possess, they have,
on the contrary, signified their preference for a retention of
the tax. Public sentiment certainly sustains them in this.
When the final abolishment of internal taxes on all other
articles and trades had become inevitable, by reason of a super-
CHAPTER XI.
233
abundance of revenue, no serious effort was made to reduce the
excise on spirits below the rate which experience had demon-
strated to be the maximum collectable tax ; and whenever such
a reduction was proposed, it invariably emanated from quarters
which left it doubtful, whether repugnance to an excise or the
desire to retain the protective system of taxation prompted tlie
proposition. At all events it can safely be asserted— proof
being easily accessible— that those who have to bear the tax
in question and all the inconveniences that are said to grow out
of its alleged obnoxious features, are perfectly satisfied with
their present status, and that whatever commiseration may be
felt for them by those theorists, who regard excises as tyran-
ical, is just so much sympathy wasted. Any party now
wishing to make a political issue of this question, would have
to build up a new foundation for it, for, excepting the dissat-
isfaction still expressed sometimes on account of the number of
officers required by a system of excises, there would not even
be a shadow of reasonableness in recurring to the objections of
old. The subject of an excise on spirits in its relation to the
condition of the Treasury may, of course, be made an issue ;
in that case, however, the question would not be, whether the
tax "infringes upon inalienable rights," but, whether the
copious flow of revenues shall be stayed at the expense of Pro-
tection or at the expense both of an economic principle and of
a moral idea, viz : the principle of imposing the heaviest tax-
burden upon an article of luxury best able to bear it, and the
moral idea of diminishing the use of ardent spirits by means
of a tax. The willingness to bear internal taxes is not confined
to distillers, the manufacturers of fermented beverages being
no less disposed to contribute their share. In fact, as we have
seen, the brewers went so far as to suggest to the Govern-
ment the most practicable and profitable method of collecting
taxes on malt liquors, and of avoiding evasions of tax pay-
ments. They fully appreciate the fact, that a system of taxation
234: LIQUOK LAWS OF THE UNITED STATES.
which properly discriminates between fermented and distilled
liquors, must greatly benefit their industry.
So far as fermented liquors are concerned, the spirit of the
laws enacted since the outbreak of the civil war, indicates no
departure from the policy enunciated by Hamilton, and acted
upon by nearly every Congress since the adoption of the Con-
stitution. It is the policy of favormg and furthering grape-
culture and the manufacture of malt liquors, with the aim of
substituting the products of the vineyard and the brewery
for ardent spirits. The Congressional speeches quoted in the
preceding chapter show very plainly that the great diiference
between the tax on spirits and that on malt liquors was
universally regarded as a means by which temperate drinking
habits could be produced ; and in their report of January,
1866, the Eevenue Commission reiterated this policy, when they
endorsed the statement, that the oljject of a true temperance
agitation must be the substitution of mild beverages for ardent
drinks. There was sufficient evidence even then that, under
normal conditions, such an object could be attained by a reason-
able excise system.
It was observed that the consumption of beer increased to
a very remarkable extent, as soon as the tax on whiskey was
raised above sixty cents per gallon. From 1864 to 1866 this
increase amounted to 89,652,000 gallons. To be more explicit,
in 1864 taxes were paid on 68,913,000 gallons, while in 1866
the Government collected duties on 158,565,000 gallons. In
the absence of malt liquors, a still greater part of the demand for
stimulants would undoubtedly have been supphed by stealth.
As it was, the country fortunately possessed a brewing industry
capable of a sudden and very great expansion, and of furnishing
to the poorer parts of the population a healthy substitute for
the stimulants which they had used before, but which were
now placed beyond their means by reason of a high tax. The
investigation conducted by the revenue commission in 1865-66,
CHAPTER XI. 235
though it was much hampered by contradictory testimony,
justified the conclusion, that the cause of the reduction in the
production of distilled spirits in the United States in 1865, as
compared with that in 1860, was the diminished demand for
spirits for drinking purposes, and that " by far the largest pro-
portion of the reduction in the consumption of spirits for such
purposes has been on the part of the working or poor classes of
our population, and has been very considerable/'* It need not
be said that the object here and elsewhere always has been, to
make beer and wine so much cheaper than wliiskey, that the
very classes mentioned in the commission's report would find
in the diflference of price a sufficient inducement to discontinue
the use of the latter and adopt that of the former beverage.
According to the very best statistical authorities the excellent
jiquor laws of Sweden, frequently cited as model temperance
measures, failed, until very recently, to diminish the consump-
tion of ardent spirits,f partly because the introduction of malt
liquors encountered obstacles which prevented a general use
of these beverages. In a number of official and semi-official
reports it is stated that in Holland and Belgium practical ex-
periments have convinced the governments, that legislation
directed against the abuse of ardent spirits cannot operate suc-
cessfully unless supplemented by measures which enable the
working classes to obtain milder stimulants at less expense
than ardent spirits.:}: As compared with Sweden, the United
States have the additional advantages of a favorable climate
and of a very much superior condition of the workingmen —
advantages to which great weight is due from a temperance
point of view,
* House Ex. Doc. No. 62, 1st Session, 39tli Congress; p. 11.
f The case of Sweden must be judged from a cosmic point of view, in
order to understand fully the many difficulties which must be overcome in
combating intemperance in that cold climate.
:{: " Real and Imaginary Effects of Intemperance," p. 15.
236 LIQUOB LAWS OF THE rNTTED STATES.
For reasons already stated it is not contemplated to hazard
any deductions from available material as to the consumption
of ardent liquors in the period during which, by reason of the.
defectiveness of the laws, the inefficiency of the revenue ser-
vice, and the influence of a powerful ring of speculators and
politicians, the Government was defrauded of a great part of
the revenue from this source. Making due allowance for
these extensive frauds, it cannot be doubted that the consump-
tion decreased considerably during that time. It is clearly
shown in the reports before mentioned, that after the high tax
had enhanced the price of spirits, the use of this article in a
great number and variety of manufactures was discontinued.
No less than twenty million gallons of proof spirits were
used, in 1 860, in the preparation of hiirning jluid alone. After
1862 the production of this illuminating agent ceased almost
entirely and was replaced by petroleum.f Among the in-
dustries, in which the use of alcohol was very great before, and
became considerably diminished or ceased entirely after, the
imposition of the higher rate of excise taxes, the report men-
tions the manufacture of varnishes, hat stiffening, furniture
polish, perfumery, tinctures, patent medicines, imitation
wines, vinegar, transparent soaps, percussion caps and picture
frames.
Considered in connection with what was said conceming^
the diminished demand of spirits for drinking purposes, these
statements might well serve as a basis for general conclusions,
but there would always be justification for an objection on the
ground, that the extent of frauds committed in the period in
question invalidate any deductions having reference to the in-
fluence of the taxes upon the drinking habits of the people.
If, therefore, a wholly reliable conclusion is to be obtained, it
must be drawn from official data covering a period during
f House Ex. Doc. No. 62, 1st Session, 39th Congress; p. 7.
CHAPTER XI.
23T
which the Government, under a perfected revenue system^
.succeeded in fully enforcing the laws. Without fear of con-
tradiction it may be said that from 1874 to the present time
the Treasury received the tax on ninety-seven hundredths of the
total quantity of spirits distilled in the United States. The
stringency of the law and the keen vigilance of revenue officers
preclude the possibility of frauds on auything like a large
scale. Infractions of the law are confined to the petty
operations of so-called ^noonshiners, and even of this species
of illicit manufacture one hears but very rarely nowadays.
The period named is in every way suited, then, for a test of the
efficacy of the present policy as a promoter of temperate drink-
ing habits.
Before undertaking this very easy task, a few words
must be said about the tariff — only very few are necessary*
The prevailing policy — that of protecting domestic manu-
factures — necessarily found its proper application in the case
of distilled and fermented liquors, for it was universally
conceded, that to impose an internal tax on these articles,
without increasing to a reasonable extent the import duties
thereon, would be legislating in the interests of foreign grain-
producers and hop-growers to the detriment of domestic agri-
culture. Considered apart from its economic disadvantages, such,
legislation was moreover thought to be unwise for the reason,
that it would retard the growth of the domestic brewing in-
dustry, and thus militate against true temperance. Without
attempting an analysis of these views, and without venturing to
express an opinion as to whether fermented liquors, if untaxed
at home, would need any protection — the fact must be stated,
that no parallel could be found for a policy by virtue of which
a domestic industry would be taxed for the benefit of its
foreign competitor. Under existing circumstances, it will be
admitted, there is nothing economically pernicious in an import
duty on spirits and fermented liquors, so long as the internal
tax on these articles remains what it is at present.
238 LIQUOR LAWS OF THE UNITED STATES.
The duties on ale, beer and porter, as we have seen, were
increased in 1862 to 30 cents per gallon, in bottles, and 25
cents per gallon, in casks ; in 18G-i the former rate was raised
to 35 cents. At these rates the duties continued in force up to
1883, when the duty on malt liquors, imported in casks, was
reduced to 20 cents per gallon. When the excise on spirits
was fixed successively at sixty cents, one dollar and fifty cents,
and two dollars, the import duty was increased to $2.50 per
gallon, at which rate it remained to 1870. In that year it
was reduced to $2, which rate in still in force. From 1864 to
1870 the duties on wines ranged, according to quality and
alcoholic strength, from twenty cents to one dollar per gallon,
in addition to an ad valorem duty of twenty-five per cent ;
sparkling wines paid from $3 to $6 per dozen bottles, according
to size of packages, in addition to two cents for each bottle.
In 1870 the specific duties on still wines were fixed at from 40
to 60 cents per gallon, in casks ; this was followed by a tax of
40 cents, which was superseded, in 1883, by a uniform impost
of 50 cents per gallon, in casks. Sparkling wines now pay
from $1.75 to $7 per dozen according to size of bottles. The
importation of wines containing more than twenty-four per
cent, of alcohol, is practically prohibited by a clause of the
law which prescribes the confiscation of all such liquors.
Now, as to the results of internal and external taxes upon
distilled and fermented liquors during the period named, a
mere glance at the tables appended to this chapter will suffice
to show that, in the matter of temperance, our country is now
in the enjoyment of the blessing for which, as we have proved,
nearly every American statesman of note, from the beginning
of our Government to the present day, has wished and M-^orked
— a blessing which the governments of Russia, Sweden,
France, Northern Germany, Italy, Belgium and the Nether-
lands are to-day striving to secure for their people — a blessing
embodying the realization of the hope which Madison
CHAPTEK XI. 239
expressed, when, voicing the sentiments of all economists and
moralists of his time and of succeeding generations, he spoke in
favor of protecting malt liquors, to the end that " the brewing
industry may strike deep root in every State of the Union."
Consulting the tables appended to this chapter, it will be
found that from 1874 to 1884 the average annual consumption
of ardent spirits, for all purposes, amounted to 64,264,354:
gallons, being 25,735,646 gallons less than the people of the
Union consumed in 1860. Comparing this decrease in the
consumption with the increase in the population of the United
States during the twenty-four years which have elapsed since
the census of 1860 was taken — amounting to about seventy-five
per cent.* — it will be found that a most wonderful change of
drinking habits has been produced during the period men-
tioned. "With a view to placing this change before the
reader in the plainest possible manner, we will select the year
1883 and compare it with the year 1860 in the matter of con-
sumption of ardent and fermented liquors. In 1860 the total
consumption of ardent spirits amounted to 90,000,000 gallons,
in 1883 to 76,762,063 gallons; of the former quantity 25,000,-
000 gallons are assumed to have been used in the arts and
manufactures ; of the latter eighteen per cent, must be de-
ducted as representing the quantities used in the arts and
manufactures, lost by leakage and other causes, and the quan-
tity withdrawn from the " bonded warehouses " by reason of
the expiration of the bonded period allowed by law, f that is to
say, the quantity of spirits removed from the warehouses,
but not immediately brought to market.:}: The excess of im-
* Population in 1860, 31,443,331 ; in 1884, 55,000,000, arrived at by
approximation on the basis of tlie increase during the decade 1870-80.
•j- According to ofBcial reports the losses by leakage and theft, in 1883^
amounted to 2,475,783 gallons.
I This is taken into account by every competent writer on the subject.
Hon. D. A. Wells, than whom no better authority can be cited on the ques-
tion of internal taxation, takes this ground in an article published in the
240 LIQUOR LAWS OF THE UNITED STATES.
ports over exports in 1860 amounted to 2,011,230 gallons ; in
1883 the exportation exceeded the importation of spirits by
2,672,303 gallons, but of this no cognizance can be taken
here, as the quantity exported is not included in the total
number of gallons on which, according to our tables, taxes were
paid in the year 1883. The number of gallons imported — being
1,301,919 — must, however, be added to the total quantity
withdrawn from warehouses, minus 18 per cent. Thus we
obtain the following :
1860 : Population, 31,443,321, Spirits consumed as drink, 67,011,230 gallons.
1883 " 55,000,000, " " " 64,344,811 "
Per capita consumption in 1860, 2.13 gallons.
" 1883, 1.17
That these figures are not arrived at by computations based
on anything not strictly in harmony with official data, will
readily be admitted by every fair-minded reader. There may,
indeed, be differences of opinion as to the quantity of spirits
used for mechanical and other similar purposes, as this part of
the computation must of necessity be guess work more or less ;
yet, all in all, the above figures will be admitted to be more
favorable to an argument adverse to our premise than the
results arrived at by other authors — fully as competent as
the writer of this. Thus, to cite but one example, Hon.
D. A. Wells, whose knowledge of the subject is not surpassed
by that of any American economist, has this to say on the
jn'esent consumption of ardent spirits : *
* See the article already quoted: Princeton i2mew, March, 1884; p. 205.
Princeton Review of March, 1884. He there says : For the year 1883, with
an aggregate population of approximately 56,000,000, the number of gal-
Ions of proof -spirits of all kinds on which the internal -revenue tax was
paid was returned at 76,762,003 ; hut a considerable part of this product un-
doubtedly represented spirits which paid the tax and were taken out by neces-
sity, through the expiration of the permitted bonded period, and not by reason
of any coincident demand on the part of the public for consumption.
CHAPTER XI. 241
" If we assume tlie present aunual consumption of domestic distilled
:spirits in the United States to be about 70,000,000 gallons, and about twelve
per cent., or 8,400,000 gallons, of this amount be used for industrial or
scientific purposes, or lost by leakage and other casualties, then the use
of domestic spirits for drink in this country must be at present at the rate
of about 1.10 gallons per capita annually for the entire population. To this
must also be added the consumption of foreign or imported spirits — the
amount of which, exclusive of wines, is not, however, very considerable, Itsss
than a million and a half of proof-gallons having been imported during the
fiscal year 1882-3. But adding this amount to the consumption of domestic
distilled spirits before assumed, the total consumption of spirits — wine,
cider, and fermented liquors excepted — by the population of the United
States, would therefore appear to be at present at the rate of about 1.14
gallons per capita."
It would seem, then; that the decrease in the per capita
consumption of ardent spirits in the United States during the
period in question amounts to nearly fiftj per cent. The
incalculable benefits of this change will be better appre-
ciated, if it be remembered that but half r century ago the
American people ranked among the first on the list of " hard-
drinking " nations, whereas to-day they stand very near the
foot of such list. The following table from the exhaustive
report of the Statistical Bureau of Switzerland ^ corroborates,
in its way, the latter assertion.
PER CAPITA CONSUMPTION OF SPTKITS.
liters. liters.
Norway 3.90
Great Britain and Ireland 5.37
Austria-Hungary 5. 76
France 7.28
Eussia 8.08
Sweden 8.14
German Tax Union 8. GO
Belgium 9.20
Switzerland 9.40
Netherlands 9.87
Denmark 18.90
The per capita consumption of spirits in this country
being, according to our computation, 1.17 gallons, equal to 4.42
* Zur Alcoholfrage &c., Bern, 1884, p. 622. Extracts from this public
•document will be translated and publislied in the forthcoming annual re-
.porl of the Publication Committee. U. S. Brewers' Association.
242 LIQUOR LAWS OF THE UNITED STATES.
liters, the United States would rank second in the above list,
i. e., below Norway and above Great Britain.*
To the mind of anyone acquainted with what might be called
the philosophy of the drink question, it must be evident that so
great a decrease in the consumption of spirits within so short
a time, would not, in itself, be evidence of an amelioration of
public and private morals. In order to be able to determine,
whether it may be taken as such evidence, one must know
what it is that has taken the place of the quantity of discarded
liquors. In Turkey, for instance, a diminution in the quantity
of spirits stealthily consumed would simply mean an increase
in the consumption of opium, and a corresponding augmenta-
tion of moral and physical ills. It is, in part, this apprehen-
sion of diverting man's inherent craving for stimulants from,
the use of a pernicious article to one still more pernicious, that
has prompted the policy of aiding the brewing industry and
fostering grape-culture simultaneously with the adoption of re-
strictive measures directed against ardent spirits. In no
civilized country has the wisdom of such a course been
more forcibly demonstrated than in the United States, and
Table C. gives ample proof of this. It shows that the
brewing industry of this country has grown, within twenty-one
years, at a rate for which the industrial history of the world
scarcely affords a parallel. From 62,205,375 gallons in 1863,
the production of malt liquors increased within the stated
period to 588,957,189 gallons — a growth which gives to the
United States the third place among beer-producing nations.
Let figures speak ! Adding the increase in the production
since June 30, 1884, the following comparative statement is
obtained, showing the actual production of malt liquors in round
numbers :
* The Swiss report estimates our per capita consumption of spirits as
drink at 4.79 litres — evidently an error, which arose from the fact that
losses, etc., were not taken into account.
CHAPTER XI. 243
France 175.500 •■Depn^ark JM^^^^^^^^^^ „
b:Su^ '"-'r/f^^^^^^ " I ''^'^ '''''•''' "
The per capita consumption of malt liquors in our country
amounts to-day to very nearly eleven gallons. .Deductmg the
population of States and Territories, where beer is not commonly
used viz: Alabama, Arizona, Florida, Georgia, Louisiana,
Maine, Mississippi, New Mexico, North Carolina, South Caro-
lina, Tennessee, Texas, Utah, Virginia and Washington Terri-
torv, in all about 14,000,000, it will be found that the
consumption of malt liquors in the other States of the Umon
is about 151 gallons, very little less than the consumption ot
the same article in the German Tax Union, which is reported
as amounting to 65 liters.
As to the progress of domestic grape-culture and the pro-
duction of American wines since 1860, it is only necessary to
reproduce a few figures from the tables contained in our appen-
dix and from the report of the Commissioner of Agriculture,
to illustrate the readiness with which our people seize upon
a <rood thing. According to this authority the production of
gi^ape-wine amounted to 12,450,000 gallons in 1870, and to
30 000 000 gallons in 1880. In the former year the excess of
imports over exports was 9,056,192 gallons, making a total of
21,506,192 gallons, available for domestic consumption. In the
latter year the excess of imports over exports amounted to but
3,925,924 gallons, but this decrease was vastly overbalanced by
increased domestic production, the quantity on hand for home
consumption being 33,925,924 gallons.
In what manner and to what degree this revolution in the
drinking habits has ameliorated the physical and moral con-
dition of the American people, will be understood by every-
one who is at all acquainted with the effects of distilled and
2-i-i LIQUOR LAWS OF THE UNITED STATES.
fermented liquors upon the mind and body of man.* A single
example may answer present purposes. Comparing Bavaria
with Denmark, in point of consumption of ardent and malt
liquors, and in the matter of insanity produced by drunkenness,
we obtain the following :
Consumption of Consumption of Percentage of insanity
spirits. malt liquors. produced by drink.