i i LIQUOR LAWS UNITED STATES; THEIR SPIRIT AND EFFECT G. THOMANN, Author of "Rkal and Imaginary Effects of Intemperance." 8 5 7 NEW YORK : THE UNITED STATES BREWERS' ASSOCIATION. ISSS. H Y. Economical Printing Co. 24 Vesey St., New Yobk. S0 7E PEEFACE. The liquor traffic, in all its bearings upon the moral and social condition of man, has recently been made the subject of methodical enquiries in very many European countries, and a mass of extremely valuable material has already been and is still being gathered there for the purpose of establishing a scien- tific basis for future legislation. Similar efforts are at present being made in the United States, and it is to be hoped that fairness, impartiality, and an unselfish regard for the welfare of the whole country may guide them. This book is offered as an unpretending contribution to these efforts. It claims no merit save that of strictest truthfulness in the representation of the spirit and effect of the liquor laws of this country. The nature of its subject-matter required a separation of the laws enacted by Congress from those enacted by the legislatures of the States. The former laws are reviewed in the present volume ; the latter will form the subject of another volume, to be published hereafter. The Author. New York City April, 1885. 448341 1 CONTENTS. Page. Chapter I.— Fiscal task of the first Congress. Pressure in favor of the protection and eneouragement of domestic manufactures. Causes and evidences of this pressure. Debate on Madison's customs proposition. Arguments for and against protection ; for and against high rates of duty on distilled liquors. Moral aspect of such duties. Unanimity of opinions in regard to expedi- ency, from a moral standpoint, of encouraging the manufacture of malt liquors. The first revenue law. The drift of popular sentiment in reference to the question of temperance. Conclusions as to spirit of the first revenue law, in its bearing on the liquor traflic 3-33 Chapter II.— Product of the import duties under the preceding Act. Additional revenue necessary. Hamilton's propositions. Increase of specific duties, and introduction of internal taxes on distilled spirits recommended. Hamil- ton's views on the desirability of encouraging the manufacture of malt liq- uors, for moral reasons. The work of the second session of Congress. Re- jection of excise system. Enactment of Jaws increasing import duties, and regulating collection thereof. Hamilton's revenue proposition again dis- cussed in next session of Congress. Opposition to excise system by South- ern members. Grounds of opposition. Enactment of law imposing addi- tional duties on imported, and excise duties on domestic spirits. Conclusion as to the spirit of these laws 34-55 Chapter III.— Review of the origin, nature and extent of the discontent pro- voked by the excise law. Opposition to Hamilton's fiscal system. Jefi"er- son's attitude. The alarming state of afiairs in Western Pennsylvania. Brief review of outrages committed upon excise ofiicers up to the end of 1791. Hamilton's report on manufactures, and on the excise law. His re- commendations on both subjects. Act increasing duties on distilled spirits and malt liquors. Protective features of this Act. Modification of the Act for laying internal duties on spirits 56-83 Chapter rv. — The Western or whiskey insurrection : Violent opposition to the establishment of excise oflScers. Attack on Captain Faulkner. Meeting at Pittsburgh. Seditious resolutions adopted. Proclamation by the President. Reign of terror inaugurated by Tom the tinker. Continuation of outrages upon officers and complying distillers. Attack on, and destruction of, Gen- eral Neville's house. Seven thousand armed rioters march into Pittsburgh. Bradford's design to revolutionize adjoining States and form an independent State. Mails robbed. Second proclamation by the President. Militia called out. Fruitless efi'orts of a peace cor amission. Advance of the army. Flight of the more violent leaders. Re olutions of submission. Arrival of the army at Parkison's Ferry. Insurgents dispersed and order re- established 84-108 yi, CONTENTS. Chapter v.— Perfectin? the revenue service:; numljer and compeuBation of officers. Licenses to retailers of spirits and wines. Modifications of tlie excise law in favor of country distillers. Repeal of internal duties ; its causes. Effects of the various laws on the internal taxation of distilled spirits. Com- parative table showing production, imports, exports and consumption of spirits during the operation of the excise law. and after Its repeal, up to 1810. Effect of import duties upon fermented liquors. State of grape- culture. The brewing industry in 1810 ; difficulties retarding its progress. . . 109-137 Chapter \T:.— Fiscal policy under Jefferson's and Madison's administrations. Gallatin's financial views. Protection of domestic manufactures. Gallatin's propositions on the subject. Supposition that in case of war the doublinc: of external duties would meet all exigencies. Spirits singled out as capable of bearing heaviest external tax. Timid policy in relation to internal liquor traffic. Eflect of impending war with Great Britain. Change of fiscal policy ; retnrn to Hamiltonian principles. Excise system proposed and ignored. Import taxes doubled. Reverses of war. Madison urges imposition of internal taxes. Congress acts on recommendation. Internal revenue system enlarged; additional excise duties on spirits. Termination of war. Gradual reduction of external and internal taxes, and final abolition of the latter duties. Monroe's policy ; forecast of high protective measures. Retrospect; effects of preceding laws 128-148 Chapter YII.— The relation which the aversion to excises and the protec- tive idea bore to the question of temperance. What the protection of spirits was intended to accomplish for agriculture. The wisdom of protecting spirits, and the desirability of preventing their excessive consumption. Why excises were not permanently applied to accomplish the latter. If it be proper to use the taxing power in one form in order to create and extend manufactures, it ought to be proper to use it in another form for restricting those industries which militate against such economic policy. Reasons for assuming that under certain circumstances a permanent excise on spirits would have been feasible. Results of absence of internal taxes. Excessive drinking habits of the rural population and consequent reaction, leading to the opposite extreme 149-157 Chapter Vm.— The era of high protective tariffs. Party division on the subject. Attitude of Calhotin before and after the Missouri compromise. Tariff of 1824. Temperance policy in regard to use of wine. Congress grants land to French vintners. Duties on wines reduced for moral reasons. Protectionist efforts in favor of whiskey. Pennsylvania farmers ask for prohibition of importation of spirits. Futile efforts to reintroduce an excise on spirits. The struggle for the protection of whiskey in 1828. Mixed state of afi'airs : '•Yankee " mm ostracised ; whiskey described as palatable and fashionable. Wrangle over the duty on molasses. Yankeedom and its alleged frauds arraigned. Interesting debate on the expediency of creating new niarkets for whiskey. Tariff of 1828. Increase of imposts on spirits and molasses. Revocation of unjust clause in regard to latter article in 1830. Revision of duties on wines. Extensive frauds upon the Government by importers of wines. The tariff acts of laSO and 1833. Nullification of tariff. Calhoun and Jackson. Compromise act of 1833. Reduction of duties. Financial crisis nnder Van Buren's administration. Precarious condition of treasury under Tyler's administration. Another conflict and compromise. Increase of duties by tariff act of 1842. Fillmore on excises. Further changes of the laws. Conclusions as to spirit and effect of laws 158-1 79 CONTENTS. VII. CnAriEr. IX.— Results of the "free whiskey" policy. Inebriety in the raral dis- tricts ; clergymen, -vvomeu and children addicted to the vice. Testimony of temperance authors. Work of temperance societies ; their moral efl'orts directed against ardent spirits ; beneficent influence of their agitation. Struggle between moderates and extremists. Split in the temperance party in 1S36. The agitation transplanted from the domain of moral suasion to the legislative field. Fermented drinks classed with ardent spirits. Absurd- ity of means and ends. Various agencies counteracting the evils of drunk- enness: progress of the nation: influx of emigrants; growth of brewing industry and grape-culture. Walker, in 1845, proposes a tariff for revenue only ; Mexican war prevents adoption of all his propositions ; his principles acted on. Continued opposition to excise en spirits. Revenue tariff of 1S57 supplanted by Morrill tarifi'. State of the drink question in 1860 180-197 Chapter X.— Convocation of 37th Congress. Condition of the Treasury in 1861. Fiscal necessities growing out of the rebellion. Increase of import duties and imposition of direct taxes. Internal taxes postponed. Condition of Treasury in 1862. Internal taxes on spirituous and malt liquors, aud on licenses to dealers discussed. The temperance question discussed in both Houses of Congress. Discrimination in favor of malt liquors advocated ; scientific testimony in support of such advocacy. The status of the Prohibi- tion States and of their Congressional representatives. Inconsistency of advocates of Prohibition ; the futility of their schemes demonstrated by their own statements. Differences as to rates of tax on distilled spirits, and as to the expediency of taxing stock on hand. Evasion of tax by distillers predicted. Text of revenue law in relation to intoxicants. Increase of import duties in 1862. Increase of internal tax on spirits in 1864. Specula- tion and fraud combining to frustrate objects of law. Appointment of special revenue commission in 1865: their report and recommendations. Modification of law in 1868 198-230 ■ Chapter XI.— Epitome of the policy of the Government and the spirit of the laws since 1860. Prejudice against excises completely wiped out, so far as intoxicants are concerned. Willingness of distillers and brewers to be taxed. Faithful adherence to the policy of favoring malt liquors for moral reasons. Universal desire, from the beginning of our Government to pre- sent day, to substitute malt liquors for ardent spirits. Hamilton's aims realized. The operation of the revenue laws during the first ten years of their existence. Effect of speculation and frauds ; modifications of laws with a view to preventing both. Brief review of external taxation on intoxi- cants since 1860. Results of internal taxation since 1874. Marvellous growth of brewing industry ; consumption of ardent spirits decreased by over fifty per cent. ; the objects of the temperance movement realized. The people of the United States among the first of temperate nations ; their present policy adopted by European Governments, and sustained by scientific investigations. What is needed to perpetuate and multiply the fruits of wise laws. Revenue tables 231-251 Appendix.— Addenda to Chapters HI. and V. : Fauchet's correspondence, and extracts from Digest of Manufactures, 1810. . 232-250 Tables of Imports and Exports of distilled and fermented liquors, from 1791 to 1883. LIQUOR LAWS OF THE UNITED STATES ; THEIR SPIRIT AND EFFECT. CHAPTER I. FISCAL TASK OF THE FIRST CONGKESS, PRESSTTRE IN FAVOR OF THE PROTECTION AND ENCOURAGEMENT OF DOMESTIC MANU- FACTURES. CAUSES AND EVIDENCES OF THIS PRESSURE. DEBATE ON MADISOn's CUSTOMS PROPOSITION. ARGUMENTS FOR AND AGAINST PROTECTION; FOR AND AGAINST HIGH RATES OF DUTY ON DISTILLED LIQUORS. MORAL ASPECT OF SUCH DUTIES. UNANIMITT OF OPINIONS IN REGARD TO EX PEDIENCY, FROM A MORAL STANDPOINT, OF ENCOURAGING THE MANUFACTURE OF MALT LIQUORS. THE FIRST REVENUE LAW. THE DRIFT OF POPULAR SENTIMENT IN REFERENCE TO THE QUESTION OF TEMPERANCE. CONCLUSIONS AS TO SPIRIT OF THE FIRST REVENUE LAW, IN ITS BEARING ON THE LIQUOR TRAFFIC. In grappling with the fiscal results of the Revolutionary war, the first Congress of the United States, confronted with a depleted treasury and an enormous debt, the interest of which had, owing to the impotency of the Continental Con- gress, accumulated to a startling figure, could not in the nature of things concede more than secondary importance to any fixed policy, to any concisely formulated principle of 4 LIQUOR LAWS OF THE UNITED STATES. political economy.* The controlling idea, the one object which, obtruding itself with imperative directness upon the members of Congress, temporarily excluded all others, was to raise revenue, to rescue the tottering credit of the country, and to establish that national integrity without which the political independence so stubbornly and bravely fought for, so gloriously achieved, would inevitably have fallen into con- tempt. No policy, however judicious and popular, could have prevailed in conflict with this object. It so happened, however, that the mode of securing revenue, the method of taxation most favored, because — then as now — deemed least oppressive, bore within itself the germ of, and presented the form and machinery for, a fixed economic policy which, in the opinion of many leading minds of that day, was singularly well adapted to a country of vast territorial expanse, of immeasurable natural resources, but having a scant population, almost no advanced manufactures, and few means of bringing to the surface and utilizing the immense and diversified wealth hidden under the soil. That the laying of an impost on commodities imported into the United States was the most feasible and popular measure of obtaining revenue, seems to have been a foregone conclusion with all the members of the first Congress. The temptation to give this measure a protective coloring proved irresistibly alluring. For, whatever the theoretical opiuion as * From the report of the Congressional committee appointed to pre- pare an estimate of supplies requisite for the year 1789, it appears that the arrearages of interest up to the 31st December, 1787, amounted to $8,123,124.55, in addition to which sum, Congress had to provide for two years' interest, becoming due 1st January, 1790, and amounting to $3,396,521.43; making a total of $11,519,646, or more than one-fourth of the principal of the entire foreign and domestic debt — the former amounting to $10,070,307. the latter to $27,383,917. (Am. State Papers ; Finance, Vol. I, page 11.) CHAPTER I. to the (jeneral economic expediency of a protective system may have been, there can be no doubt, that a strong, wide-spread popular sentiment in favor of the encouragement and pro- tection of domestic manufactures prevailed in very many localities, though it lacked uniformity of origin and cause. But the very complexity of motives, views and interests, from which this sentiment sprang, lent additional force to the efforts for its realization. While in many instances the desire to emancipate the new-born nation from the industrial thral- dom of England was intensified by the animosity which the war had engendered against everything English, in others it was undoubtedly strengthened by an honest conviction, how- ever erroneous, that industrial protection and national pros- perity bore to each other the relation of cause and effect. In certain localities this sentiment was produced by purely indus- trial considerations, confined to a few manufactures wh^ch formed an essential source of the wealth of the people imme- diately concerned. The greater part of the urban population of the country certainly desired protection from purely selfish motives ; whereas among the rural population the advocacy of a protective system was believed to be a part of true patriotism, even if for no other reason than that, in case of war, the absence of domestic manufactures implied — as the bitter ex- periences of the struggling colonies had demonstrated, with painful clearness — a want of means of defense, and, accord- ingly, a humiliating and withal uncertain dependence upon foreign nations for the munitions of war. Another motive, actively at work in a small circle of far-seeing statesmen, was the desire to acquire national prestige and recognition, and in this case the impulses of patriotism helped to formulate a policy which aimed at the utilization of a -tariff, with differen- tial rates, as a regulator of our international relations. In- asmuch as, under the circumstances then existing, such restric- tions would necessarily have been directed against the very 6 LIQrOR LAWS OF THE UNITED STATES. country from -vrhicli we drew the greater part of imported commodities, and as the condition of European politics, then extremely unsettled and threatening, prevented the United States, for a time, from profiting by their amical relations with other maritime powers, the indirectly protective effect of this motive will readily be perceived. English pre- cedent, it is frequently claimed, may also have been a factor in creating a Protectionist predilection ; but if this assumption be admissible, it must appear as a somewhat singular coincidence, that this policy was americanized by Congress at the time, when it was beginning to lose its vitality in the land of its birth. Eor it is a historical fact that Pitt's Customs Consolidation Act of 1787, growing out of the dis- content at the detrimental effects of a hopelessly confused protective system, was but the timid precursor of the income tax, a measure by which, two years later — hence at the time of the initial session of our first Congress — the anti-Protectionist movement, then, it is true, very far yet from the ultimate con- summation of its objects, was inaugurated in England. Yet, the seemingly flourishing condition of English manufactures and commerce, ascribed by an influential school of politicians to a restrictive and protective policy, may have had its weight with those Americans, who looked up to, and were guided by, English precedents. In some States, the law-making power had already adopted protective measures, so constituted as tO' afford encouragement to those manufactures which the neces- sitous state of things of - preceding periods had called into existence. A scrutinizing study of the meagre stock of information contained in the writings of politicians and statesmen, compe- tent to judge of the state of affairs at the period in question, leads to the conviction, that the cause of industrial pro- tection found many able advocates even in those circles ia which prevailed the opinion that agriculture would well- CHAPTER I. 4 iiis'Ii forever form nine-tenths of our wealth. And there is, at bottom, no inconsistency in this, inasmuch as those holding these opinions, very correctly believed that manu- factures afforded great encouragement to agriculture, and deserved the fostering care of government for this, if for no other reason. Tench Coxe, for instance, subsequently Com- missioner of Interaal Revenue under Hamilton's administra- tion of the Treasury Department, a statesman, who to-day would be styled a Free-Trader, concluded a paper read before the society for political enquiries, convened in Benjamin Franklin's house. May 11, 1787, in the following words : " That the United States of America cannot make a proper use of the natural advantages of the country, nor promote her agricul- ture and other interests, without manufactures; that they can- not enjoy the attainable benefits of commerce and the fisheries, without some general restrictions and prohibitions affecting foreign nations." These conclusions are somewhat qualified by the admoni- tion that, in establishing manufactories and forming these res- trictions and prohibitions, care must be taken not to interfere with the settlement and improvement of the soil. Quite a different view of the question of protection is presented in a petition of seven hundred and twenty-nine tradesmen, mechanics and others, of the town of Baltimore, submitted to the first Congress, April 11, 1789. It is stated therein : " That since the close of the late war, and the completion of the Revolution, the petitioners have observed the manufacturing and trading interests of the country rapidly declining, while the wealth of the people hath been prodigally expended in the purchase of those articles, from foreigners, which our citizens, if pro- perly encouraged, were fully competent to furnish. b LIQUOR LAWS OF THE UNITED STATES. To check this growing evil some of the legislatures in the several States interposed their authority; laws were by them enacted with a view of subduing, or, at least, di- minishing the rage for foreign, and of encouraging domestic manufactures ; but the event hath clearly demonstrated that no effectual provision could reason- ably be expected until one uniform, efficient govern- ment should pervade this wide-extended country. The happy period having now arrived when the adoption of the General Government gives one sovereign legislature the exclusive power of laying duties upon imports, the petitioners rejoice at the prospect thus afforded them, that America, freed from her commercial shackles, will see and pursue her true interest, becom- ing independent in fact as well as in name, by the encouragement and protection of American manu- factures, as it is an universally acknowledged truth, that the United States contain resources amply sufficient to enable them to become a great manufacturing country, and only want the patronage and support of wise and energetic government." The petition concludes with the imperative suggestion that a rate of duty, sufficiently high to afford protection be imposed upon one hundred and twenty enumerated articles, among them beer, ale and porter. A similar petition by the mechanics and manufacturers of New York, was presented to Congress, April 18, 1789, and was followed by many others of similar purport and tenor. This cursory and incomplete enumeration of the causes to whose co-operation must be ascribed the popular agency in favor of protection, suffices, no doubt, to demonstrate the fact that the first Congress did not lack a pressure from without to urge it to the adoption of such a policy. At all events, the CHAPTER I. unbiased reader of history can in no way be surprised to find that the intention of creating and fostering domestic manu- factures, particularly those of which England had so easily acquired an almost complete monopoly in her former colonies, very early assumed such a character, that a disproportionately large part of the Congressional discussion, evoked by what is known as the Tariff Act of 1789, was devoted to this subject. In fact, the only elementary points of disagreement among the national legislators, in reference to the customs tariff proposed by Madison, embraced, in a mild form, all the essential features of a conflict between the divergent principles of Protection and Free Trade. Aside from mere detail, the only other note- worthy cause of differences of opinion — so far as this work is concerned — was of a moral nature, relating, as it did, to the question of temperance. These two facts, each of the utmost significance in its bear- ing upon the liquor question, must constantly be borne in mind, and permitted to guide the student, if an enquiry into the spirit of the laws relating to, and in any manner affecting the liquor trafiic is to yield reliable conclusions. In proposing an impost on articles imported into the United States, Madison, on the 8th day of April, 1789, the House of Representatives having resolved itself into a committee of the whole on the state of the Union — disclosed his opinion on the subject of freedom of commerce, in such a way that from some of his utterances, torn from the entirety of his argu- ment, it might be made to appear that he was a Free Trader in the modern sense of the term. " Commerce," he said " ought to be as free as the policy of nations will admit." And again : " I own myself the friend of a very free system of commerce." The former expression reveals the true inwardness of his position. The scope of the freedom of commerce was, in his opinion, to be circumscribed by the policy of nations. Undecided 10 LIQUOK LAWS OF THE UNITED STATES. himself as to what policy the interests of the entire country would dictate; ignorantof the opinions of his colleagues ; but appreciating the urgency of the situation and overestimating, rather than undervaluing, the necessity of establishing har- mony, by avoiding serious parliamentary conflicts, he proposed what he conceived to be the most effective means of speedily obtaining revenue. — Without fixing the rates, he proposed specific duties on rum ; all other spirituous liquors ; on mo- lasses ; on Madeira wine, and all other wines ; on tea, pepper, sugar, cocoa and coffee, and an ad valorem duty on all other commodities. His proposition was based on a recommen- dation made by the Continental Congress of 17S3, and at that time agreed to by the States. On the following day Lawrence, of New York, opposed the laying of specific duties on enumerated articles, and advocated a duty at a certain rate per cent, on the value of all imported goods. He feared that an enumeration would create confu- sion, besides being unjust, since it was not then known whether the articles enumerated were able to bear the rate specified, nor whether the enumeration included all articles capable of bearing specific duties. Before experience had taught, and systematic enquiries demonstrated, the character and extent of specific duties, best calculated to further the general welfare, a temporary ad valorem system seemed to him x^referable to the one suggested. Fitzsimmons, of Penn- sylvania, on the same day, first introduced the subject of protective and sumptuary regulations. Opposed to & tempo- rary system having for its exclusive object the raising of reve- nue, this legislator offered an addition to the articles enumer- ated in Madison's proposition, stating, that in doing so he was actuated by a desire " to encourage the productions of our country, to protect our infant manufactures and to place res- trictions upon articles which are termed those of luxury.'"* His * See Benton's " Abridgment of the Debates in CongresB." Vol. L, page 23. CHAFrER I. 11 additional list embraced fifty three articles — beer, ale and porter being at the head ; it also included malt and cider. White, of Virginia, and Tucker, of South Carohna, seemed inclined to support Madison's proposition, with the only difierence that both thought rum, wine and sugar could bear an ad valorem tax in addition to a specific duty ; both were unwilling to establish a permanent system, so long as it was not positively ascertained what the interests of the whole Union required. Not a word was uttered by either member against the reasons given for swelling the list of enumerated articles. Hartley, of Pennsylvania, dilated on the protective theories enunciated by Fitzsimmons. He said : " If we consult the history of the ancient world, we shall see that they have thought proper, for a long time past, to give great encouragement to the establishment of manufactures, by laying such partial duties on the importation of foreign goods, as to give the home market a considerable advantage in the price when brought to market. It is also well-known to this com- mittee that thjere are many articles that will bear a higher duty than others, which are to be taxed with a certain impost ad valorem. From this view I think it both politic and just that the fostering hand of the General Government should extend to all those manu- factures which will tend to national utility. * * * We have been forced by necessity, and various other causes, to increase our domestic manufactures to such a degree as to be able to furnish some in sufiicient quan- tities to answer the consumption of the whole Union, while others are daily growing into importance. Our stock of material is in many instances, equal to the greatest demand, and our artisans sufficient to work them up even for exportation. In these cases I take it 12 LIQUOR LAWS OF THE UNITED STATES. to be the policy of every enlightened nation to give their manufactures that degree of encouragement ne- cessary to perfect them, without oppressing the other parts of the community." In a lucid, though somewhat timid manner, Madison, and after him Boudinot, of New Jersey, remonstrated against acy attempt to sacrifice the general welfare to local interests ; but while emphasizing the superiority of agriculture over all other material interests, the former admitted that " the States most advanced in population, and ripe for manufactures, ought to have their particular interests attended to in some degree," Nothino; else was said against the enunciation of Protectionist principles. It will readily be inferred that the advocates of Protection had, thus early, the advantage of a plan of action, of a fixed policy based on a knowledge and appreciation of the wants of their respective localities and constituents. They were, consequently, more direct and decided, less equivocal in their arguments than those members who, for the want of in- formation and experience, were neither prepared wholly to re- ject, nor willing entirely to adopt the Protectionist idea ; yet finally, as will be seen, acceded, reluctantly perhaps, to a tariff of a decided Protectionist coloring. Nor do the preliminary argu- ments, of which the foregoing is a very crude epitome, contain anything warranting the supposition that the conces- sions to local interests, foreshadowed in the last-quoted words of Madison, would have been withheld, if the contemplation of undefined dangers, which seemed to threaten the harmony and hence the stability of the new government, had not produced a feeling of timidity and a mutual inclination to temporize, conciliate and mediate. On the contrary, it will be seen that in few marked instances, even Madison, and others sharing his views generally, advocated Protection from choice and conviction, as, for example, in the case of 7naU liquors. CHAPTER I. 13 When on the third day of the discussion, the first article on Madison's list, rum, came up for consideration (Sherman, of New Jersey, having moved to fix the rate of duty at fifteen cents per gallon), the discussion, which Smith, of Maryland, initiated by a counter-proposition, was intercepted by Madi- son's motion "that the Committee rise, in order to give gentlemen time to make up their mincls respecting the quantum of impost to be laid on each article. — Three days intervened between this action and the resumption of debate on the subject. Lawrence (N. T.) considered twelve cents a sufficiently high duty on rum ; he feared that a higher rate would prove " a strong temptation for smuggling," and thus fail to attain its object. He said : " I wish to lay as large a sum on this article as good policy may deem expedient; it is an article of great con- sumption, and though it cannot be reckoned a neces- sary of life, yet it is in such general use, that it may be expected to pay a very considerable sum into your treasury. But, when we consider the relative propor- tion of the first cost of it, and the fifteen cents duty, we shall find it about one-third. This is too high, as the risk of a total loss may be ventured in order to save so great a sum." Madison favored the higher rate, and adverted to popular sentiment as approving of such measure ; an allusion which Boudinot, of New Jersey, eagerly seized and dilated upon. He stated that a high duty would answer two or three good purposes, No article on the list, he thought, would yield so large a revenue as this, and it might also tend to discourage the use of ardent sj>irits. Moral considerations seem, however, not to have been overwhelmingly potent with this legislator, seeing that the third purpose which he thouglit a high duty 14 LIQUOR LAWS OF THE UNITED STATES. could be made to serve, was the perfecting of our own distil- leries by discouraging the "West Indies from turning their molasses into rum, and compelling them to seek our market for that product. His position, not particularly well defended by sound logic, was assailed by Lawrence, who said : " If we are to reason and act as moralists on this point, I am certain it is the wish of every member to prevent the use of ardent spirits altogether, for their influence on the morals of the people is of the most pernicious kind. Nor does the mischief terminate here, as I apprehend it is equally destructive to the health ; but we are not here to deliberate and determine on this subject as moralists, but as politicians, and endeavor to draw, (if I may use the expression) from the vices of mankind that revenue which our citizens must, in one form or other, contribute. * * * If we lay a high duty on Jamaica rum, it is supposed it will prevent consump- tion, but then the purpose we have in view is frustrated, either because we cannot collect the tax or because the object of it is no longer imported." He again adverted to the danger of an evasion of the law by smuggling, for which occupation our extensive and un- guarded coast offered alluring temptation, as well as tlie con- ditions of success. At the end of this brief discussion it was agreed to tax ardent spirits, of Jamaica proof, fifteen cents ; and all other spirituous liquors, twelve cents.* So far the discussion had not elicited any very pointed Protectionist argument ; but when Madison, asserting, by way of preface, that he wished to protect our own manufacture as much as possible, proposed to lay on molasses a duty of eight * The rates ultimately adopted will be given hereafter. CHAPTEB I. 15 cents per gallon, the representatives of the Kew England States promptly assumed the offensive in the interest of their constituents, contending for a low duty, on the ground that the contrary would involve the ruin of these States. The except- ionally high duty proposed to be imposed on Jamaica rum was to them a protective measure whose effectiveness would have been seriously impaired, if not entirely neutralized, by a high duty on West India molasses. Massachusetts then imported annually between 30,000 and 40,000 hogshead of molasses, obtained from the West Indies in exchange for the products of the fisheries. A great quantity of this material was manu- factured into rum, but no. inconsiderable portion of it entered, in its original state, into the common diet of the people. The latter circumstance gave the New England members an excel- lent vantage-ground, and furnished them the means wherewith to cloak the real animus of their opposition, had they elected to do so, as they did not. Their avowed object was to protect the rum distilleries at all hazards. Thatcher (Mass.) was the only one who took a broad view of the temperance aspect of the question. He said : " I presume a principal reason why a high tax on spirits was admitted was in order to discourage the use of it among ourselves. If this was the intention of the committee, I have no objection to the burden ; but, even here, I fear difficulties will arise. Did we judiciously examine whether the spirit of the law accords with the habits and man- ners of the people? and did we assure ourselves of the full execution of the law ? If we have not, the act becomes impo- litic, because a law which cannot be executed tends to make the Government less respectable.'' Ames (Mass.) stated his ob- jections in a speech which deserves to be reproduced in the abridged form given in Benton's work : " The principles on which this tax is founded, I understand to be this: that it is an article of luxury, and of pretty general consumption, so that the duty is expected to fall equally upon all, but that it will not operate in 16 LIQUOR LAWS OF THE UNITED STATES. this manner, I ttink is easily demonstrable. Can a duty of fifty per cent. ad valorem, paid, as it were, in an exclusive manner, by tbe State of Massa- chusetts, be equal ? No, sir. But, taking it as a part of the general system can it be equal unless a proportionable duty, equal to fifty per cent, is laid upon articles consumed in other parts of the Union ? No, sir ; and is it in contemplation of gentlemen to lay duties as high as to produce this equa- lity ? I trust it is not ; because such duties could never be collected. Is not, therefore, eight cents disproportioned to the rates fixed, or intended to be imposed on other articles ? I think it is ; and, if to these considerations we add what has been said before, relative to its being a raw material impor- tant to a considerable manufacture, we cannot hesitate to reject it. How- ever gentlemen may think the use of this article (rum) dangerous to the health and morals of our fellow-citizens, I would also beg them to con- sider, that it is no more so than any other kind of spirituous liquors, that it will grow into an article for exportation ; and although I admit we could export it even encumbered with the duty proposed, yet by it we run the risk of having the manufacture totally ruined, for it can hardly now stand a competition at home with West India rum, much less can it do so abroad. If the manufacturers of country rum are to be devoted to certain ruin, to mend the morals of others, let them be admonished that they prepare them, selves for the event. If their situation will not operate to restrain the hand of iron policy, consider how immediately they are connected with the most essential interests of the Union, and then let us ask if it is wise, to take measures subversive of your very existence. For I do contend that the very existence of the Eastern States depends upon the navigation and fish- ery, which receive a deadly wound by an excessive impost on the article before us. I would concur in any measure calculated to exterminate the poison covered under the form of ardent spirits, from our country ; but it should be without violence. I approve as much as any gentleman the intro- duction of malt liquors, believing them not so pernicious as those in common ^lse. But before we restrain ourselves to the use of them, ice ought to he certain that we have malt and hops, as well as brew-houses for their manufacture." A slight concession, subsequently followed by a consider- able reduction of the rate, was the result of this speech. The duty on Madeira wine and other wines evoked no discussion throwing any additional light on the subject, in either of the two principal aspects l)efore-mentioned. A high duty on Madeira was advocated, on the ground that it was an article of luxury used exclusively by the rich. CHAPTER I. 17 On the 15tli of April, the question being on inserting in the list of dutiable articles heer, ale and porter, Fitzsimmons, who had originally proposed such insertion, moved an alter- ation in these objects, by distinguishing beer, ale and porter imported in casks, from what was imported in bottles. He urgently advocated the encouragement and protection of malt liquors on moral grounds. " If," he said " the morals of the people are to be improved by what enters into their diet, it would be prudent in the National Legislature to encourage the manufacture of malt liquors. The small protecting duties laid in Pennsylvania had a great effect towards the establish- ment of breweries ; they no longer imported this article, but on the contrary exported considerable quantities, and in two, three years, with further protection, would be able to furnish enough for the whole consumption of the United States. He moved that the duty be fixed at 9 cents per gallon. Lawrence^ whose strictures and criticisms on high duties had, from the beginning, placed him in an attitude of opposition to the wdiole measure, wished to have American malt liquors strongly pro- tected, on the ground that they were preferable to the English product, and for the further reason that this manufacture would add to the prosperity of domestic agriculture, as hops and bar- ley were products of our soil. All those members, who partici- pated in the debate, evinced the same inclination to protect malt liquors, for moral and economic reasons ; but opinions differed as to the expediency of the rate of duty named. Some feared, that so high a duty, practically operating as a prohibi- tion against foreign malt liquors, would give American brew- ers a monopoly, and, by enhancing the price of the beverage, increase the use of ardent spirits. To this objection was opposed Sinnickson's (N. J.) argument that a prohibition of foreign malt liquors would inevitably increase the domestic manufacture of the article, and as inevitably lessen its price. Madison, moving to lay a duty of eight cents on malt liquors. 18 LIQUOR LAWS OF THE UNITED STATES. hoped " that this rate would he such an encourageTnent as to induce the manufacture to take deep root in every State of the Union." The striking unanimity of the members of Congress on the subject of protecting this article precluded further discussion. In subsequent debates the objections urged against high rates became more general, but preserved their original color- ing, although the protective feature was no longer the principal pivot of argument. The supposed difficulties in collecting high rates, and the incentive they offered to evasions of the law, were put forth as valid reasons against their adoption. Great stress was laid on the alternative of tolerating such eva- sions and suffering their consequences to the national treas- sury, or of resorting to a system of collection which the people would regard as oppressive, and hence resist. These objections were met by a countervailing alternative, formulated by Sherman, who thought that to reduce the proposed rates would frustrate the object of raising an adequate amount of revenue for the liquidation of the accumulated national obligations, and the maintenance of the Government, and in that case it would become necessary to supply the deficiency by direct tax- ation. This touched a most vulnerable point in the legislative and the popular mind. A deep-rooted aversion to direct taxes seemed, at that time, absolutely to exclude the possibility of having recourse to this method of raising revenue. When- ever, in the devious course of the discussion, a casual allusion, however slight, was made to any other mode of taxation than the one under consideration, it instantly became evident that a great majority of the members were unwilling even to enter- tain any proposition tending in that direction. Yet, when the motion to reduce the proposed duty on molasses was again being considered, in its bearing on domestic distilleries, fisheries and navigation, the New England members daunt- lessly propounded the adoption of an excise on domestic rum. CHAPTER I. 19 as a revenue-method holding out an offset to the probable deficiency of national income, consequent upon the wished-for lowering of the duty on molasses. Such was the potency of the local interests in question, that their defenders felt no hesitancy in suggesting this highly unpopular measure. In one sense, their position was entirely logical however, even if they only used it as a blind, depending for its rejection upon the very unpopularity of it. Logical it was, because all that had been said in reference to distilleries, from a moral as well as from an economic point of view, could not apply to imported molasses in the raw state, save on the assumption that the entire quantity imported would be trans- formed into rum. But inasmuch as this premise was recognizedly untenable, it seemed but just to claim an exemp- tion from the high tax for that portion of the imported article consumed in its original state. Yiewed in conjunction wnth what was predicted as to the ruinous effect of a high tax on distilleries, the position seemed not quite so well taken ; for, as Madison justly argued, to resort to a low rate of impost on molasses, adding to it an excise on domestic rum, would lay an equally heavy burden on the distilleries — the only difi'erence being, that the tax would be paid in two forms, instead of one. After Ames and Goodhue had again stated the close con- nection existing between the molasses trade and the fisheries, Madison, who in this debate displayed all that keen penetration, rapid comprehension and felicity of utterance which easily won for him the leadership of the House, summed up the counter-arguments in this forcible manner.* " He tliought an excise very objectionable, but as no actual proposition for entering into such a system was before the committee, he forbore to say anything further about it. He admitted an excise would obviate in part * These and all previous quotations are taken from Benton's " Abridg- ment of the debates of Congress." 20 LIQUOK LAWS OF THE UNITED STATES. some of the difSciilties, but Tie did not think the answer pfiven to his argu- ment altogether satisfactory ; yet there was another argument he urged on a former occasion remaining unanswered — it was, that at this moment the fisheries, distilleries, and all their connections, were laboring under heavier duties than what is now proposed ; true, the duty is collected in a different mode, but affects the consumer in the same manner. The gentlemen have said, to be sure, that the duty is evaded ; but if half is collected, it amounts to more than six cents per gallon. It is said that a tax on molasses would be unpopular, but not more so than a tax on salt. Can gentlemen state more serious apprehensions in the former than the latter case ? Yet the com- mittee did not forego a productive fund, because the article was a necessary of life and in general consumption. If there is the disposition that is repre- sented for people to complain of oppression of Government, have not the citizens of the Southern States more j ust ground for complaint than others ? The system can only be acceptable to them, because it is essentially neces- sary to be adopted for the public good. Gentlemen argue that a tax on molasses is unpopular, and prove it by experience under the British Govern- ment. If this is to be adduced as a proof of the popularity of a measure, what are we to say with respect to a tax on tea? Gentlemen remember, no doubt, how odious this kind of tax was thought to be throughout Ame- rica ; yet the House had, without hesitation, laid a considerable duty upon it. He did not imagine that a duty on either of those articles was in itself objectionable; it was the principle upon which the tax was laid that made them unpopular under the British Government. It is said that this tax is unjust : now he had not a single idea of justice, that did not contradict the position. If it be considered as it relates to rum, he was certain the consumers of foreign rum paid a larger propor- tion of revenue into the Treasury than the consumers of country rum ; they paid more than equal distribtitive justice required ; if it was considered as it respected molasses, there would appear no injustice. Molasses was consumed in other States ; but if it was not, sugar was used in its stead, and subjected to a duty as high as that on molasses. But dismissing both these considerations^ and even admitting the whole weight to fall ou the Northern States, it would not be disproportioned, because, in the long list of enumerated articles subject to a high duty, they import few or none ; indeed the articles were pretty generally taxed for the benefit of the manufacturing part of the uortbern community; see loaf sugar, candles, cheese, soap, &c. He hoped gentlemen would not infer from this observation, that he thought the en- couragement held out by the bill to manufacturers improper ; far from it ; he was glad to see their growing consequences, and was disposed to give them every aid in his power. From this view of the subject, he was inclined to adhere to the bill, and not make any reduction." CHAPTEK I. 21 The discussion, so far as it throws any light ou the features of the subject under consideration, practically ceased with Madison's speech. After various amendments had been made, and clauses added — among the latter, one limiting the opera- tions of the law to the 1st day of June, 1796 — the bill was sent to the Senate, and there read a first time on May 18th, passing to a second reading on the 21st, and a third reading on the 11th of June. On June 12th, the bill was returned to the House with various amendments. For obvious reasons, the literal text of the debates in the Senate cannot be given ; their tenor, however, may readily be deduced from the character of the amendments. The latter were principally based upon the grounds maintained by the minority of the House. The refusal of the House to concur in the amendments proposed by the Senate, was met by the declaration of the latter body, ' that the amendments would not be receded from. Both branches of Congress insisting, with equal tenacity, on carrying their points, the appointment of a committee of conference was finally agreed upon ; and this committee reported, on the 27th of June, that the conference resulted in the adoption of the bill as amended by the Senate, with some additional alter- ations affecting, among other things, the rate of duty on spirituous and malt liquors. The President approved the bill on July dth. The rates of duty imposed by virtue of it upon the articles of the liquor traflic were as follows : Specifio Rates: Ale, beer and porter, 5 cents per gallon ; and 20 cents per dozen bottles. Cider, 20 cents per dozen bottles. Malt, ten cents per bushel. Molasses, two and one-half cents per gallon. Spirits, Jamaica, ten cents per gallon, and all others eight cents. Madeira wine, eighteen cents per gal- lon, and other wines, ten cents per gallon. 22 LIQUOR LAWS OF THE UNITED STATES. The following is the title, and the full text of the first section, of the law. AN ACT FOK LAYING A DUTY ON GOODS, WARES, AND MERCHANDISES IMPOETED INTO THE UNITED STATES. Section I. Whereas it is necessary for the support of government, for the discharge of the debts of the United States, and the encouragement and protection of onanufactures, that duties be laid on goods, wares and merchandise imported : Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That from and after the first day of August next ensuing, the several duiies hereinafter mentioned shall be laid on the following goods, wares and merchandise imported into the United States from any foreign port or place, that is to say : on all distilled spirits of Jamaica proof, imported from any kingdom or country whatso- ever, per gallon, ten cents; on all other distilled spirits, per gallon, eight cents ; on molasses, per gallon, two and a half cents ; on Madeira wine, per gallon, eighteen cents ; on all other wines, per gallon, ten cents ; on every gallon of beer, ale or porter in casks, five cents ; on all cider, beer, ale or porter in bottles, per dozen, twenty cents ; on malt, per bushel, ten cents ; on brown sugars, per pound, one cent; on loaf sugars, per pound, three cents ; on all other sugars, per pound, one and a half cents ; on coffee, per pound, two and a half cents ; on cocoa, per pound, one cent ; on all candles of tallow, per pound, two cents ; on all candles of wax or spermaceti, per pound, six cents; on cheese, per pound, four cents; on soap, per pound, two cents ; on boots, per pair, fifty cents ; on all shoes, slippers or goloshes made of leather, per pair, seven cents ; on all shoes or slippers made of silk or stuff, per pair ten cents ; on cables, for every one hundred and twelve pounds, seventy-five cents : on tarred cordage, for every one hundred and twelve pounds, seventy-five cents ; on untarred cordage and yarn, for every one hundred and twelve pounds, ninety cents ; on twine or pack thread, for every ODe hundred and twelve pounds, two hundred cents ; on all steel un wrought, for every one hundred and twelve pounds, fifty-six cents ; on all nails and spikes, per pound, one cent ; on salt, per bushel, six cents ; on manufactured tobacco, per pound, six cents ; on snuff, per pound, ten cents ; on indigo, per pound, sixteen cents ; on coal, per bushel, two cents ; on pickled fish, per barrel, seventy-five cents ; on dried fish, per quintal, fifty cents. On all teas imported from China or India, in ships built in the United States, and belong- ing to citizens thereof, or in ships or vessels built in foreign countries, and on the sixteenth of May last, wholly the property of citizens of the United States and so continuing until the time of importation as follows : on bohea tea, ;4 CHAPTER I. 23 per pound, sir cents ; on all souchong, or other black tea, per pound, ten cents ; on all hyson teas, per pound, twenty cents ; on all other green teas, per pound, twelve cents. On all teas imported from Europe in ships or ves- sels built in the United States, and belonging wholly to a citizen or citizens thereof, or in ships or vessels built in foreign countries, and on the sixteenth of May last, wholly the property of citizens of the United States and so continuintr until the time of importation, as follows : on bohea tea, per pound, eight cents ; on all souchong, and other black teas, per pound, thirteen cents; on all hyson teas, per pound, twenty six cents; on all other green teas, per pound, sixteen cents. On all teas imported, in any other manner as above mentioned, as follows : on bohea tea, per pound, fifteen cents, on all souchong, or other black teas per pound, twenty-two cents; on all hyson teas, per pound, forty cents, on all other green teas, per pound, twenty-seven cents. On all goods, vfares and merchandises, other than teas, imported from China or India, in ship not built in the United States, and not wholly the property of citizens thereof, nor in vessels built in foreign countries, and on the sixteenth of May last wholly the property of a citizen or citizens of the United States, and so continuing until the time of importation, twelve and a half per centum ad valorem. TEN PER CENTUM AD VALOREM. On all looking-glasses, windows and other glass (except black quart bottles) ; on all china, stone and earthen ware ; on gun powder ; on all paints ground in oil ; on shoe and knee buckles ; on gold and silver lace ; and on gold and silver sheaf. SEVEN AND A HALF PER CENTUM AD VALOREM. On all blank books ; on all writing, printing or wrapper paper, paper hangings and pasteboard ; on cabinet wares ; on buttons ; on all saddles ; on all gloves of leather ; on all hats of beaver, fur wool, or mixture of either ; on all millinery ready made ; on all castings of iron, and upon slit and rolled iron ; on all leather tanned or tawed, and all manufactures of leather, except such as sball otherwise be rated ; on canes, walking sticks and whips ; on clothing ready made ; on all brushes ; on gold, silver, and plated vrare, and on jewelry and paste work ; on anchorc*, and on all wrought, tin and pewter ware. On playing cards, per pack, ten cents. On every coach, chariot or other lour wheel carriage, and on every chaise, solo, or other two wheel carriage, or parts thereof, fifteen per cent, ad valorem. On all other goods, wares and merchandise, five per cent on the value thereof at the time and place of importation, except as follows : saltpetre, tin in pigs, tin plates, lead, old pewter, brass, iron and brass wire, copper in plates, wool, cotton, dyeing 24 LIQUOR LAWS OF THE TIISnTED STATES. woods and dyeing drugs, raw hides, beaver and all other furs, and deer Bkins. The question of temperance, which formed a strong under- current throughout the discussion on the subject of laying high duties on spirituous and malt liquors, was presented in various aspects, according to the conjunction in which it stood to the principal issue. When arrayed against local interests, as in the case of the New England States, it was promptly relegated, by those immediately affected, to the domain of moral philosophy and ethical speculation, as an uncommonly good thing in itself, highly desirable wherever attainable, without detriment to material interests ; but scarcely worthy of serious considera- tion, where the raising of revenue and the protection of exist- ing industries dictated a contrary course. But even in these cases there was rare unanimity of opinion as to one of the reme- dies, propositionally and positively recommended, and ulti- mately adopted. The true status of the question needs some elucidation. The historian Hildreth, in reviewing the foregoing debates, says : The great evils attending the free use of ardent spirits had already attracted public attention. A tract on this subject by Dr. Kush had lately been republished in almost all American papers, and had made a strong im- pression on the public mind. At the federal festival at Philadelphia (held on July 4, 1788, celebrating the ratification of the new Constitution by ten States,) ardent spirits had been excluded, American beer and cider being the only liquors used." * This laconic reference clearly points out both the evil and the remedy, as understood by all those members of Congress, whose speeches are herein quoted ; but a closer examination * " The History of the United States of America," Vol. IV.,. page 69. CHAPTER I. 25 will be necessary to a full understanding of the question. — The consumption of ardent spirits had assumed almost incredible proportions ; the use of whiskey and rum had become so com- mon that these articles were almost universally regarded as necessaries of life. According to an estimate, the correctness of which the reader will have an opportunity of testing hereafter, the per capita consumption at that time appears to have been between twelve and thirteen quarts, annually. Tlie actual consumptiou eludes computation ; but this estimate, it is justi- fiably assumed, falls below, ratlier than above the true figure. Almost every farmer, in some States, manufactured his own whiskey, not only from the surplus of his cereal produce over and above the marketable portion, but frequently from all that part for which, either in the raw state, or manufactured into flour, a ready market could have been found, jind this is not inexplicable when it is considered that ardent spirits had in some States become a measure of value, in lieu of currency, being accepted, for example, without reluctance, as remunera- tion for agricultural labor. Indeed, distillation had become an almost indispensable adjunct of agriculture in grain-growing localities; the condition of things growing out of this combi- nation resembling strikingly the situation which was produced in Sweden, at about the same time (1787), when every family was given the right to distill liquors for home consumption.^ Distillation afforded many pecuniary advantages. Coxe states, that from a bushel of rye two gallons of spirits could be extracted and brought to market, where it realized for the farmer two-thirds of a dollar at less expense than if the same quantity of grain had been manufactured into flour and carted to the same place for sale.f The fisheries and navigation of the New * See " Real and Imaginary Effects of Intemperance," by G. Thomann, New York, 1884 ; page 93. f " View of the United States ; " page 124. 26 LIQUOR LAWS OF THE UNITED STATES. England States were — as has been learned from tlie debates in Congress — but the superstructure erected npon the basis of molasses ; and, whatever Ames and his colleagues may have said of the consumption of this article in the raw state, it is not difficult to understand that advantages, similar to those favoring distillation in grain-growing localities, also operated to increase the manufacture of ardent spirits in the JSTew England States. — In Pennsylvania the consumption of whiskey must have been prodigious, there having been, in 1790, no less than five thousand stills in operation. The census of 1790 places this State's entire population at 4-34,373 ; at a rough estimate, then, there was one still for every eighty-six of the inhabitants, man woman and child. Excesses, of which the present generation, trained to comparative sobriety, have no adequate conception, naturally followed such drinking habits and tended to arouse the darkest apprehensions in the minds of the more enlightened citizens of Pennsylvania, particularly of the city of Philadelphia — then the centre of humane thought and philanthropic aspirations. A rational temperance move- ment aiming, not at the destruction of the distilleries and the total abandonment of spirituous liquors, but at a refinement of drinking habits, was inaugurated long before the assembling of tlie first Congress, and its advocates and promoters had, at the period now under consideration, already acquired, by study, observation and experience, a very clear conception of the means necessary to the consummation of their object. The nature of this means cropped out at every stage of the Con- gressional debate on the subject of imposts, and the unanimity with which it was approved and adopted by members of Con- gress, shows that the public mind had been thoroughly imbued with a sense of its importance and effectiveness. This was, it need scarcely be said after all the quotations on the subject, the effort to create and cultivate a taste for malt liquors, and to substitute these, so far the climate of the various localities, the CHAPTER I. "• mode of life and occupation of the people would permit, for ardent spirits. Dr. Benjamin Rush, physician, moralist, philosopher, essayist, politician and orator; at one time professor of medi- cine and clinical practice at the University of Pennsylvania; a savant whose writings are even to this day quoted by tem- perance advocates, believed, as did the majority of his cultured contemporaries, that the true solution of the question lay m encouraging the brewing industry. In his essays on the effects of the excessive use of alcohol on the human body, this idea stands out in bold relief; but it is also easily traceable in all those didactic writings, by which he strove to mould popular thought in matters relating to individual happiness and general prosperity, as, for example, in his " Account of the manners of the German inhabitants of Pennsylvania." This valuable paper is prefaced with the following words : " The State of Pennsylvania is so much indebted for her prosperity and reputation to the German part of her citizens that a short account of their manners may, per- haps, be useful and agreeable to their fellow-citizens in every part of the United States." Dwelling briefly on the origin of German immigration, he proceeds to a description of those characteristics in which the German farmers differed from most other farmers of Pennsyl- vania. He praises their frugality and economy, their habits and love of labor ; holds up for emulation the almost tender care they take of their horses and cattle ; describes minutely the splendid condition in which they maintain their farms, gar- dens and buildings ; the economy they practice in the disposi- tion of their products ; their methodical cultivation of the soil ; the division of labor on their farms; the charming concord prevailing in their families ; their aptitude for music ; their piety and rectitude ; their love of civic liberty, and the pride 28 LIQUOR LAWS OF THE UNITED STATES. they take in the propagation of their kind.* And, as if to furnish a key to all these traits, he states, in describing these peoples' diet : " Yeiy few of them ever use distilled spirits in their families, their common drink being leer^ wine and ciderP Dr. Rush closed his essay with an eloquent apostrophe to the citizens of the Union, the legislators of Pennsylvania and the law-makers of the United States, to the latter of whom he addressed the following words : " Legislators of the United States, learn from the wealth and independence of the German inhabitants of Penn- sylvania to encourage, by your examples and laws, the republican virtues of frugality and economy. They are the only pillars which can support the present Con- stitution of the United States." Contrasting Rush's description of the manners of these people with what was said in reference to the general drink- ing habits and their results, it is not difficult to comprehend the objective point of the essay quoted. The moral and economic aspect of this temperance movement becomes still more manifest in the writings of Tench Coxe. His views on the expediency of creating and fostering breweries coincided with the opinions of a great majority of the members of the first Congress : " The encouragement to agriculture," he says, in his essay before quoted, " afforded by seme manufactories, is a reason of solid weight in favor of carrying them on with industry and spirit. Malt liquors, if generally used, linseed oil, starch (and, were they not a poison to our morals and constitution, we might add grain spirits,) * Had a German written sucli an essay, he would be liable to the impu- tation of an excess of national pride, and the author of this book, himself a German, would scarcely have found the courage to quote him. CHAPTER I. 29 would require more grain to make tliem, than has been exported in any year since the revolution. We cannot omit to observe here, that beer strengthens the arm of the laborer without debauching him, while the noxious drink now used enervates and corrupts him." He styles beer " the best of our commodities," and urges upon farmers the advantages held out to them by the cultiva- tion of hops and barley ; but, though he consistently keeps in the foreground the economic interrelation between agriculture and the various manufactures mentioned, basing thereon his advocacy of moderately protective measures, he emphasizes again and again, with unusual ardor and force, the advisability of generally introducing malt liquors, upon purely moral grounds. This leading idea of temperance advocates had already borne appreciable fruit, when Congress devoted some attention to the matter. The local authorities had in some cases acted upon it, with wisdom and judicious discrimination, and to their action and the refining influence of increasing intellec- tual activity must be attributed the flourishing condition of the brewing industry of Pennsylvania, as before described in the words of one of the Congressional representatives of this State. So evident, indeed, were the results of a rational exercise of moral suasion and judicious laws — unaided by any- thing resembling, in the remotest, an intermeddling with private rights, that Coxe found in the actual state of things sufficient warrant for the statement, that " it may be considered a fact strongly in favor of the in- dustry, sobriety and tranquility of the city of Phila- delphia that its breweries exceed, in the quantity of their manufactured liquors, those of all the sea-ports of the United States." 30 LIQUOR LAWS OF THE UNITED STATES. And again : " The superior virtue, both moral and political, of a country which consumes malt liquors instead of distilled spirits, needs only to be mentioned." It has been observed that in addition to economic consid- erations, and those of a moral nature, there is plainly discernible in the Congressional debates and other public utterances, what one might be tempted to regard as a patriotic motive, tending to a preference of American malt liquors over English beer, ale and porter. In reality this motive partakes more of a sanitary, than a patriotic character. The fiscal policy, which unfortunately transformed the drinking habits of the English people, had reached its climax at the very period when the necessity for a contrary course became manifest in the United States ; in fact, the decline of the English taste for malt liquors is coeval with its comparatively vigorous rise and development here. From 1760 to 1803 malt and hops were so heavily taxed in England, that they naturally ceased to form the essential ingredients of the beverage then offered for sale, under the alluring name of malt liquors ; and the adulterations of the article, overstepping the limits of the average human stomach's forbearance, drove people from the use of that drink. As a consequence, great dissatisfaction pre- vailed throughout the three kingdoms. The Enghsh brewers were made the butt of much abuse and sarcasm.* * "The tax on beer, early in the reign (George III.) had greatly exas- perated the mob. The Royal Magazine tells that while their Majesties were at Drury Lane Theatre, to see the Winter's Tale, as Qarrick was repeating the lines : • For you, my hearts of oak, for your regale, Here's good old English stingo, mild and stale,' a fellow cried out of the gallery : ' At threepence a pot. Master Garrick, or confusion to the brewers ! ' Imposts on malt were continually brought forward. The brewers as CHAPTER I. ^1 Strange it would have been, indeed, had this state of things escaped the observation of American patrons of English malt liquors, or failed to bring about, in some degree, a revulsion of the prejudice in favor of that article. Naturally, American beer was* given the preference, and deservedly, too, as the article manufactured here possessed all the qualities of good and pure English ales of the old standard, and none of the abominable qualities of the later decoctions. The best proof of this is in the fact, that, as early as 1790, Calcutta mer- chants—as James Mease tells us in his " Picture of Phila- delphia," published in 1810— having tasted American porter, and found it to be a wholesome, pure drink, able to bear the climate, ordered large quantities of it, in preference to the stuff they had been accustomed to import from England. With these facts before him, the reader can not find it difficult either to draw his own, or fully understand our, con- clusions as to the spirit of the first revenue law, in its bearing on the liquor traffic. Specific duties upon spirituous liquors were adopted, first, because their general consumption offered a strong guarantee for their becoming a lucrative source of revenue ; and, secondly, because, for moral reasons, popular sentiment seemed to exact them. But the force of either of these reasons, logically con- sidered, must more or less attenuate that of the other, because they are based on opposite assumptions. The efficacy of the well as their clients were wild. Mr. Whitbread inveighed on one occasion against the Ministry for laying a war tax upon malt. Sheridan, who was present, extemporized the following lines : ' They've raised the price of table drink ; What is the reason, do you think ? The tax on malt 's the cause, I hear — But what has malt lo do with beer?" {Nineteen Centtt.-y.H of Drink in England by V. FrenchX 32 LIQrOK LAWS OF THE UNITED STATES. duties in the one case, must necessarily be proportionate to their insufficiency in the other. The economist calculated upon a large consumption ; the moralist, on the contrary, on a discouragement of the use of ardent spirits. Both masters could not be served in an equally efficient manner ; for what- ever was to be a gain to the treasury must inevitably be a loss to morality. But even this is not yet an entirely correct state- ment of the case ; for, under the system adopted, it might occur — and did — that neither the fiscal nor the moral objects would be attained. Comparatively high duties might operate as a check on the importation of liquors, and tliat would be a loss to the treasury ; — yet morality need not necessarily gain anything by it, since the check on the importation must un- avoidably act as a correspondingly effective impetus to domestic manufacture. The contemplation of the latter contingency must naturally have suggested to the minds of the law-makers the necessity of resorting, in the near future, to an excise on distilled spirits; and the countervailing benefits to agriculture, anticipated in that case, may have silenced other remon- strances. Protection, though strongly recommended as a helpmate to agriculture, was held subordinate to fiscal and moral considera- tions, save in the case of the distilleries of the New England States. The representatives of these States, while acknow- ledging the force of the ethical arguments, and admitting, as Ames did repeatedly, that a partial substitution of malt liquors would bring about a much-desired change of the general drink- ing habits and their results, insisted, very properly, that the moral aspect of their case should not prevail against its material requirements, when it was known beforehand that a contrary course would involve the welfare of a large part of the population. Here, the idea of protecting the domestic product overbalanced all other considerations. On general principles, then, the members of the first Con- CHAPTER I. 33 gress admitted the desirability of diminishing the use of ardent spirits, but seeing the impossibility of realizing this desidera- tum, by the legislative enactments ])roposed, they agreed to draw from the vicious indulgence of a human craving the greatest attainable pecuniary and economic advantage. An impost was placed on malt liquors for the express and sole purpose, and with the distinctly avowed intention, of en- couraging and protecting domestic breweries, partly on account of the advantages offered by this manufacture to agriculture, but primarily and principally because it was universally con- ceived to be a moral corrective of great force ; the only means by which the desideratum before-mentioned could be realized. Breweries were, by legal measures, to he forced into existence, encouraged, fostered and nurtured, so that their product, by its abundance, cheapness and quality, could become the com- mon drink of the people.— This was the intention of that generation of law-makers, whom we of the present day look up to with reverence and grateful admiration, as to the founders of our civic happiness and material prosperity. And it is well to keep in view this indisputable historical fact, as, in the light of subsequent events and the present state of things, it serves as a gauge of the far-seeing wisdom, sound judgment and keen penetration of those legislators; and shows, by con- trast, the perniciousness of measures advocated in our day — measures which, wherever adopted, have completely withered the inestimable fruits of temperance matured under the opera- tion of wise laws. CHAPTER II. product of the import duties under the precedlng act. additional revenue necessary. hamilton's proposi- tions, increase of specific duties, and introduction of internal taxes on distilled spirits recommended. Hamilton's views on the desirability of encouraging THE manufacture OF MALT LIQUORS, FOR MORAL REASONS. the work of the second session of congress, rejection OF excise system, enactment of laws increasing im- port duties, and regulating collection thereof. Hamilton's revenue propositions again discussed in next session of congress, opposition to excise system by southern members, grounds of opposition, enact- ment OF law imposing additional duties on imported, and excise duties on domestic spirits, conclusion as TO THE spirit OF THESE LAWS. The act layinor duties on imported goods, wares and mer- chandise was almost immediately followed by an act to regulate the collection of duties (approved July 30, 1789j, establishing collection districts ; designating ports of entry and delivery, and prescribing the mode of collection. In all fifty-nine collection districts were established, of which IS^ew Hampshire, Pennsylvania and Delaware formed one each, while in Massachusetts there were twenty districts ; in Con- necticut, three ; in !N^ew York, two ; in New Jersey, three ; in Maryland, nine ; in Virginia, twelve ; in South Carolina, three, and in Georgia, four. North Carolina and Rhode Island, not having ratified the Constitution, were necessarily excluded for a time from the operation of this law, and, in some respects, CHAPTER II. ^«^ Stood to the United States in the same relation as any foreign country. Thns, for example, an act, approved September 16th, 1789, provides that " all rum, loaf sugar, and chocolate manufactured or made in the States of North Carolina, or Khode Island and Providence Plantation, and imported into the United States, shall be subject to the like duties, as goods of the like kinds, imported from any state, kingdom or coun- try, are made subject to." * The custom houses in the several States were not organ- ized till at different periods, from the fifth of August to sometime in September, f and even then the machinery of collection could not be said to be in perfect working order. Hence the result of the operation of the law during the remainder of the year cannot be depended upon as a safe cri- terion of the pecuniary productiveness of the duties. Under date of March 4th, 1790, the Secretary of the Treasury reported that the net revenue from imposts and tonnage, from the 11th of August to the 31st of December, 1789, amounted to $788,797.40. A large part of this sum was derived from the duties on malt licpiors and distilled spirits.:{: From the 1st of October, 1789, to the 30th of September, 1790, the gross product of the duties on imports amounted to $2,130,224. ; the net amount, minus discount, drawbacks and expense of col- lection, being $1,903,709. According to the official exhibit of imports (see appendix) there were imported in the period * In his tour of the Eastern States, after tlie adjournment of the first eeasion of Congress, Washington purposely avoided Rhode Island. (See Hildreth.Vol. IV., p. 149.) f Hamilion's report to the House of Representatives, April 22, 1790. t The tables of Exports and Imports contained in the appendix to this book, be:in with the year 1790. For their compilation, which required great pkill and attention, I am indebted to the kindness of my friend Mr. W. Burchard, a staiisticiau of large experience. 36 LIQUOR LAWS OF THE UNITED STATES. named : 90,813 gallons and 18,997 dozen bottles of beer, ale and porter ; 3,8-l-l,411 gallons of spirits ; 271,007 gallons of Madeira Wine, and 616,751 gallons of other wine ; the dnty on these imports yielding a gross revenue of over half a mil- lion dollars. If the net amount of the revenue obtained under the operation of the tariff act of July 4, 1789, be placed opposite the sum necessary for the maintenance of government and the payment of the annual interest on the public debt — both items amounting in the aggregate to $2,839,163 — it will be understood that an increase of means of revenue was un- avoidable. Hamilton, in his report of the 14tli of January, 1790, and again in his communication to the House of Kepre- sentatives, dated March 4tli, 1790, recommended an increase of the specific duties on imported spirituous liquors, and the introduction of a system of internal revenue. In the former report he says, dealing exclusively with wines, spirituous liquors, tea and coffee as objects of additional taxation : " That the articles which have been enumerated, will, better than most others, bear high duties, can hardly be a ques- tion. They are, all of them, in reality, luxuries ; some of them, in the extent in which they are used, pernicious luxuries. And there is, perhaps, none of them, which is not consumed in so great abundance, as may justly denomi- nate it a cause of national extravagance and impoverish- ment. The consumption of ardent spirits, particularly, no doubt very much on account of their cheapness, is carried to an extreme which is truly to be regretted, as well in regard to the health and morals, as to the economy of the community. — Should the increase of duties tend to a decrease of consumption of those articles, the effect would be, in every way, desirable. The saving which it would occasion would leave individuals more at their ease, and promote a favorable bahince of trade. As far as this CHAPTER II. 37 decrease might l:>e applicable to distilled spirits, it woiild encourage the suhstitution of cider and malt li 45 Jackson was particularly severe in his strictures on the petition of the college of physicians, which had lately been read in the House, on the subject of distilled spirits. They might, he thought, with equal propriety interpose their offices to prevent the use of many articles which were deemed poisonous or of pernicious quality ; they might, for instance, petition Congress to pass a law prohibiting the use of mushrooms, because some ignorant persons had been poisoned by eating that plant. In giving vent to his opposition to excises on general prin- ciples, he fell into an error, common in those days with politicians of intellectual mediocrity ; he referred to the unpo- pularity of excises in England, but either purposely or unwittingly ignored the fact, that the wide difference in the state of affairs of both countries absolutely precluded a ration- nal parallelism. In England the rapacity of the government had, for so-called State reasons, unintelligible to the masses, abused the taxing power, in this form, to an extent, subversive of the material welfare of the people, as well as of their rights; whereas in our country this mode of taxation was adopted, in its least objectionable form, under stress of circumstances created by the people in their successful struggle for political independence. In England the tax included many necessaries of life, and rose to a figure which placed before the manu- facturer the alternative of abandoning an unprofitable business, or cheating the purchaser by the offer of spurious articles ; whereas in the United States the tax extended to but a few articles of consumption, not absolutely necessaries of life, and was, withal, so low that it could not affect the quality of the articles taxed. Parker (Virginia) objected to the manner of collecting internal duties, exaggerating — nigh unto ludi- crous distortion — the infringements on the people's rights to which it was alleged the measure would give a clear field. " It will^'' he said, " convulse the Government ; it will let loose a swarm of harpies, who, under the denoniination of revenue 46 LIQUOR LAWS OF THE TTNITED STATES. officers toill range through the country^ prying into every marCs house and affairs, and like a Macedonian phalanx hear doion all hefore them.''' These words are here typograph- ically emphasized, because they sounded the keynote of that spirit of defiant opposition to which the American people owe the subsequent open resistance by the people of "Western Pennsylvania to the execution of the excise law. Jackson, Parker and Stone (the latter from Maryland) were opposed to the measure for the further reason, that, as they thought, no necessity existed for additional revenue. A simple reference, by Lawrence, to the exhibit of revenues derived from import duties and tonnage during the year ended in September, 1790, sufficed to reveal the fallacy of this assertion. The rejection of Jackson's motion closed that day's parliamen- tary combat, in Avhich, by the way, the friends of the measure offered, in the matter of arguments, merely a passive resist- ance, very effectively opposing the vis inei^tice to the rather virulent assaults from Southern members. On the next day (January 6.) Parker moved to strike out the section specifying the rates of duties, and renewed his aro-uments against the mode of collection. The alternative of adopting an excise system, or resorting to direct taxes, and the preferableuess of the former mode of taxation were pointed out by Madison, who confessed, that he also would oppose excises, if any other less objectionable mode of raising revenue could be devised. Lawrence adverted to the act of last session, by which the debts of the States were assumed, and the obliga- tions of the General Government increased. He also pointed out the deficiency in the revenue already existing, and expressed it as his opinion that, in view of the pressing demand for additional revenues, the duties contemplated in the bill ap- peared the most obvious for the Government to recur to. A rigorous collection would bear hard only on the dishonest, while it would protect the fair trader from bearing an undue CHAPTER II. 47 proportion of the public burdens. He doubted whether direct 'taxes would be agreeable, even to the gentlemen who had mentioned them. Steele (North Carolina) feared that the situation of affairs in some of the Southern States, especially the one he represented, would help to breed great discon- tent at a system of excise. Such, he said, was the state of the public mind, in various parts of the Union, that he should dread taking any measures which serve to increase the fer- mentation which the people are in. An excise he considered of that nature. He thought a direct or poll tax, or duties on navigation, law proceedings, legal conveyances, etc., preferable to excises. One of his singular statements was, that the con- sumption of ardent spirits in North Carolina was so gre«it, that the duty would amount to about ten times as mucl. as in the State of Connecticut. Livermore (New Hampshire) liked the bill, and thought the people would ; they would consider this mode of taxation as drinking down the national debt. He and Sedgwick (Massachusetts) defended the entire mea- sure from a Hauiiltonian standpoint, showing that the obnoxious features of English excise laws, which had been adverted to as evidences of the unrepublican character of such taxation and its consequent unpopularity, were carefully avoided in the bill under consideration. Of all the subjects of revenue within the power of Congress, they deemed none so proper as the internal duty on ardent spirits contemplated by the bill. The import duties had been extended as far as sound policy dictated, and there remained only excises to be resorted to, unless direct taxes were to be adopted. Popular sentiment was more strongly opposed to the latter taxes than to an excise duty on spirituous liquors. Furthermore, Sedgwick said, It should be observed that in all insensible modes of taxation a much greater sum would be obtained from an individual tlian by any mode of direct imposition: this, without entering into a discussion of the reasons upon which it was founded, could 48 LIQUOR LAWS OF THE UNITED STATES. be demonstrated by a fact. He instanced the porters of Lon- don, from whom, in the single article of beer, was drawn ten times as much as could be procured by the most rigorous mode of direct taxation. Though he attached no weight to the moral considerations urged agu'nst the great consumption of ardent spirits, he thought a diminution in the consumption of those liquors would not be attended with any sensible inconve- nience. The imputation of a lack of patriotism, which some of the Southern members had cast on their own States, evoked a very energetic protest from Smith (of South Carolina), who felt convinced that the Southern people would submit without complaint to any measures which the General Government would see proper to adopt ; and all the more willingly would they do so in this case, when, seeing and judging for them- selves, they would find the tax proposed to be equal and just. On the 21st of January, a unique bit of discussion on what to- day would be styled civil service reform took place, on the motion to amend the bill, by adding a clause to prevent in- spectors, or any officers under them, from interfering in elections, further than giving their own votes. The arguments in favor of this amendment form a forecast of the circum- stances which gave birth to the law on the same subject, in force at the present time ; hence, to the members using them would have to be accorded credit for great foresight, were it not for the fact that the pictures they drew of possible abuses of official power were borrowed from English examples. It was feared that the power vested in inspectors would give these officers many opportunities of acquiring such a know- ledge of persons and characters, as would enable them unduly to influence election results. On the other hand it was con- tended that to prevent any citizen from publicly or privately uttering his opinions on political affairs, would be equivalent to depriving him of rights, inalienably vested in citizenship. CHAPTER II. 49 Citizens of good character and standing in the community would not accept an office coupled with such a degrading con- dition, and the Executive would consequently be com- pelled to appoint irresponsible persons, alike willing to take the office and suifer the degradation. This rather exalted view of the matter prevailed with a large majority of the members ; the vote on the adoption of the amendment being: Yeas, 21 ; Nays, 37. With this vote, the virulent opposition to the bill, fomented at the beginning of the discussion by resolutions passed by the Pennsylvania Legislature, and demonstrations of discontent from other quarters,* sullenly yielded ; and on the 27th of January the bill passed the House by a vote of 35 to 21. Smith, who had so manfully vindicated the honor of the Southern States, voted /or the bill ; so did four members from Yirginia, namely : Madison, Griffin, Lee and White. Alto- gether, only five Southern votes were cast for the bill. Two members from New York and three from Pennsylvania voted with the majority of Southern representatives against the act. As finally passed, the act, (approved March 3, 1791) embraced the essence of Hamilton's suggestions. The import duties on distilled spirits were fixed as follows : For every gallon of spirits, more than ten per cent below proof, twenty cents. For every gallon of spirits under five and not more than ten per cent below proof, twenty -one cents. For every gallon of spirits of proof, and not more than five per cent below proof, twenty-two cents. For every gallon of spirits above proof, but not exceeding twenty per cent, twenty-five cents. * The succeeding chapter treats at some length of these demoustrations of disconteut- 50 LIQtTOR LAWS OF THE UNITED STATES. For every gallon of spirits more than twenty, and not more than forty per cent above proof, thirty cents. For every gallon of spirits more than forty per cent above proof, forty cents. Here is the text or purport of the principal sections relating to excise duties : Section 14. And be it further enacted, That upon all spirits which after the last of June next, shall he distilled within the United Slates, wholly or in part from molasses, sugar or other foreign materials, there shall be paid for their use the duties following; that is to say ; — For every gallon of these spirits more than ten per cent, below proof, according to Dicas' hydrometer, eleven cents. For every gallon of those spirits under five and not more than ten per cent, below proof, twelve cents. For every gallon of these spirits of proof, and not more than five per cent, below proof, thirteen cents. For every gallon of those spirits above proof, and not exceeding twenty per cent., fifteen cents. For every gallon more than twenty, and not more than forty per cent, above proof, twenty cents. For every gallon more than forty per cent, above proof, thirty cents. Section 15. That upon all spirits, which after the last day of June next, shall be distilled within the United States, from any article of the growth or produce of the United States, in any city, town or village, there shall be paid for their use the duties following ; that is to say : — For every gallon more than ten per cent, below proof, according to Dicas' hydrometer, nine cents. For every gallon under five and not more than ten per cent, below proof, ten cents. For every gallon not more than five per cent, below proof, eleven cents. For every gallon above proof, but not exceeding twenty per cent., thirteen cents. For every gallon more than twenty and not more than forty per cent, above proof, seventeen cents. For every gallon more than forty per cent, above proof, twenty-five cents. Section 16. That the said duties on spirits distilled within the United States shall be collected under the management of the Supervisors of the Revenue. Section 17. That the said duties on spirits shall be paid or secured previous to the removal thereof from the distilleries at which they are respectively made. And it shall be at the option of the proprietor or pro- prietors of each still either to pay the said duties previous to such removal, with an abatement at the rate of two cents for every ten gallons, or to secure the payment of the same, by giving bond quarter-yearly, with one or more sureties, to the satisfaction of the chief officer of inspection within whose CHAPTER n. 51 survey such distillery shall be, and in such sum as the said officer shall direct, with the condition for the payment of the duties upon all such of the said spirits as shall be removed from such distillery, within three months next ensuing the date of the bond at the expiration of nine months of the said date. Section 18. That the Supervisor of each district shall appoint proper officers to have the charge and survey of the distilleries within the same, assigning to each one or more distilleries as he may think proper, who shall attend to such distilleries at all reasonable times, for the execution of the duties by this act enjoined on him. Section 19. That previous to the removal of spirits from any distil- lery, the officer within whose charge and survey the same may be, shall brand or otherwise mark each cask containing the same, in durable char- acters, and with progressive numbers, and with the name of the acting owner or other manager of such distillery, and of the place where the same was situate, and the quantity therein, to be ascertained by actual guaging, and with the proof thereof. And the duties thereupon having been first paid or secured, as above provided, the officer shall grant a certificate for each cask of the said spirit, to accompany the same wheresoever it shall be sent, purporting that the duty thereon hath been paid or secured, and de- scribing each cask by its marks ; and shall enter in a book for that purpose to be kept, all the spirits distilled at such distillery, and removed from the same ; and the marks of each cask, and the persons for whose use, and the places to which removed and the time of each removal, and the amount of duties on the spirits so removed. And if any of the said spirits shall be removed from any such distillery without having been branded or marked, or without such certificate, the same, together with the cask containing, and the horses or cattle, with the carriages, their harness and tacliling, the vessel or boat with its tackle and apparel, employed in removing them, shall be forfeited, and may be seized by any officer of inspection. And the Superintendent or manager of such distillery shall also forfeit the full value of the spirits so removed, to be computed at the highest price of like spirits in the market. Section 20. That no spirits shall be removed from any distillery at any other times than between sun rising and sun setting, except by consent and in the presence of the officer having the charge and survey thereof, on pain of forfeiture of such spirits, or of the value thereof at the highest market price, to be recovered with costs of suits from the acting owner, etc. Section 21. That upon stills which after the last day of June next shall be employed in distilling spirits from materials of the growth or pro- 52 LIQUOK LAWS OF THE UNITED STATES. duction of the United States, in any other place than a city, town or village, there shall be paid for the use of the United States, the yearly duty of sixty- cents for every gallon, English wine-measure, of the capacity or content of each and every such still, including the head thereof." Section 23 prescribes that duties shall be paid half-yearly upon demand by the officer of the survey ; and that in case of failure to pay, the amount of duties due may be recovered, with costs, in action of debt, or may be levied by distress and sale of goods of delinquent distiller. Section 24: gives distillers the right to keep an account of the quantities of spirits distilled and sold ; which account, if sworn to and submitted to the proper officers, shall form the basis of computing the taxable quantity of spirits distilled. Section 25 makes it incumbent on distillers to place a sign upon a conspicuous part outside and in front of each building used for distilling or keeping ardent spirits ; also to make entry of every such building at the nearest office of inspection. Section 26 authorizes inspectors to visit distilleries, take account of spirits, brand casks, keep registry of stock, give certificates to distillers, etc. Section 36 provides that the penalties imposed on dis- tillers for neglecting to make report to inspectors of their intention of distilling spirits, or for neglecting to mark the houses, apartments or vessels to be employed, or for neglecting to enter in books the quantity distilled, shall not extend to any person employing one still only, and that of a capacity not exceeding fifty gallons, including the still-head. Section 60 pledges the net product of duties under this act for the payment of the interest on loans made prior to the fourtli of August, and to be made pursuant to the Act " making provision for the debt of the United States." CHAPTER II. 53 As to the spirit of this law, it will be noticed, in respect to high rates of import duties, that the act indicates a striking mu- tation of opinions, for which various explanations may be oifered. In tlie first place, the necessity for introducing the much- dreaded excise system, as the lesser of two evils — the alterna- tive of direct taxation being considered the greater — reconciled the opponents of high rates of imposts with a system which, even if carried to the utmost limits proposed, was in their opinion still the least objectionable of these three modes of raising revenue. And their opposition naturally diminished in proportion to the growth of their desire to restrain the excise within narrow bounds. More potent, at all events more direct in its influence, than this reason, was the conviction, rapidly gaining ground, that high duties on imported articles could be made collectable, without recourse to obnoxious mea- sures of supervision and control. The productiveness of the duties under the Acts of July 4:th, 1789, and August 10th, 1T90, imposing comparatively high rates, helped to form this conviction, and Washington's favorable account of the opera- tion of both laws strengthened it. A further explanation may be found in the growing inclination to protect certain manu- factures ; but it must be remarked in this connection that the excise on distilled spirits neutralized in a degree the protective agency of import duties imposed by the foregoing law. It is, indeed, a most singular characteristic of the debates on the subject, that the deviation from the rule of incidental protec- tion, established during the preceding sessions, a deviation, whose results were easily to be foreseen, failed to elicit any serious adverse criticism. That the protective idea was tem- porarily lost sight of, so far as distilled spirits are concerned, cannot be gainsaid. The Act of 1790 imposed an import duty of from twelve to twenty-five cents per gallon, according to proof ; the Act of March 3, 1791, fixed a like duty at from twenty to forty cents. Now, if the rates of the excise duties 54 LIQrOE LAWS OF THE UNITED STATES. imposed by the latter law, namely, from eleven to thirty cents per gallon, according to strength, be deducted from the rates of import — as deducted they must be, if the ability of the domestic article to compete with the foreign product is to be determined — it will be seen that the protective duties were diminished, as compared with those imposed by the Act of 1790, by from three to fifteen cents.* That this inequality, which in view of the avowed intention of the legislative majority may be termed an anomaly, occurred merely by an oversight, will be shown in the next chapter. In regard to the excise duty, the strictures of the refractory minority were dictated not so much by the solicitude usually felt in reference to measures threatening, or seeming to threa- ten, the liberty of citizens, as by an intense selfishness, jealous of the material interests of a few localities, indifferent to the weKare of the whole Union. Subsequent events prove that this selfishness, conspiring with the popular prejudice against excises in general, served partly as a lever, partly as a mask for an incipient cabal, which ended by becoming a line of demar- cation between two great political parties. It is true that any excise system, however liberally constituted and lenientlj carried out, would have been unpopular ; but it is historically demonstrable that the unpopularity of this particular measure would have occasioned no serious disturbance, had not the malevolence of ambitious aspirants for political fame — or noto- riety — resorted to inflammatory means for purposes of its own, and had not radical differences of political opinion helped to create a feeling of antagonism to the administration, an anta- gonism proceeding no doubt from pure motives in most instances, from questionable motives in some, but in all from a total misconception of the administration's purposes. The * The excise duty on spirits from foreign material is, of course, re- ferred to. CHAPTER II. 55 attempt to justify the opposition to excise duties on spirituous liquors, on the ground that these articles of consumption were necessaries of life, failed to make any impression ; for, though it may have been admitted that in some localities and under certain circumstances, the moderate use of ardent spirits was indispensable to physical comfort, yet the excessive consumption could not by any manner of reasoning be made to appear as necessary for the proper sustenance of life. The most significant fact in connection with the discussion on this law is the general approval — outspoken at times, tacit and implied at others — of the moral tendency, sought to be established as a policy in relation to the liquor traffic. Hamil- ton's words, quoted in this chapter, were but the echo of a popular sentiment which even pervaded the speeches of those members of Congress, who opposed the taxing of ardent spi- rits. "When Jackson, for instance, in his bitter speech against the excise law, said that the Southern people had " no breweries or orchards to furnish a substitute for spirituous liquors," he virtually confessed himself a supporter of the policy which Madison, voicing the sentiment of all his colleagues, * formu- lated in the first session, when he spoke in favor of encouraging and protecting American breweries for moral purposes, and uttered the hope that this industry would take deep root in every State of the Union. The excise law is but another illustration of this sentiment, inasmuch as it treats exclusively of distilled spirits. * In all the debates on this subject, not one word was uttered either against the moral or economic reasons urged in favor of this policy. CHAPTER III. REVIEW OF THE ORIGIN', NATURE AND EXTENT OF THE DISCONTENT PROVOKED BY THE EXCISE LAW. OPPOSITION TO HAMILTON'S FISCAL SYSTEM. JEFFERSOn's ATTITUDE. THE ALARMING- STATE OF AFFAIRS IN WESTERN PENNSYLVANIA. BRIEF RE- VIEW OF OUTRAGES COMMITTED UPON EXCISE OFFICERS UP TO THE END OF 1791. — HAMILTON'S REPORT ON MANUFACTURES, AND ON THE EXCISE LAW. HIS RECOMMENDATIONS ON BOTH SUBJECTS. ACT INCREASING DUTIES ON DISTILLED SPIRITS AND MALT LIQUORS. PROTECTIVE FEATURES OF THIS ACT. MODI- FICATION OF THE ACT FOR LAYING INTERNAL DUTIES ON SPIRITS. Little doubt can exist that the discontent provoked in some localities by the act laying duties on spirits distilled within the United States, derived a potent impetus from the inflam- matory agitations of the enemies of Washington's administra- tion; but it must be remembered that a strong repugnance to excises,* ingerminated by British misrule, had, years before the enactment of the present law, found vent in such official documents as may justly be termed the prototypes of the anti- excise resolution passed by the Pennsylvania Legislature, on the 22d of January, 1791. The changed condition of afi"airs, * " The colonists had brought with them from England a deep aversion to excises, -which perpetuated itself, unabated, from generation to genera- tion. The first Congress, in its address of October, 1774, to the inhabitants of Canada, laid particular stress on the imposition of excises as one of the evils accompanying subjection to England. In the nullification convention of New York, it was proposed that the power to impose excise duties on any article which grew or was manufactured in America, should be expressly denied to Congress. " (Hoist's Constitutional and Pol. Hist, of the U. S. Chicago, 1877, Vol. I, p. 94.) CHAPTER m. 67 by which the rebellious subjects of a monarchy became the sovereign citizens of a republic of their own creation, did not essentially change popular sentiment in regard to excises gene- rally ; and it was to be feared that in localities on which the burden of taxation must fall with particular weight, the dissatis- faction naturally aroused by measures militating against self- interest, would occasion some difficulties in collecting the taxes. There was all the more reason for this apprehension as to Pennsylvania, seeing that the Legislature of that State had, with a large majority,* passed the above-mentioned reso- lution, characterizing the excise law, before its passage, as having a tendency to destroy the rights and liberties of their constituents. And this in the face of the fact, that at various times during the Revolutionary war and the period succeeding it and preceding the permanent estabKsliment of the National Government, excise taxes had been levied on distilled spirits by the local authorities of Pennsylvania — taxes which, it must be added, however, the distillers displayed little alacrity in paying. That Pennsylvania was from the beginning, and for a number of years remained, the most dangerous seat of the opposition against the new law, will be readily understood in the light of the description before given of the state of the liquor traffic. So general had the manufacture of ardent spirits be- come in Pennsylvania, that as early as 1779 the Assembly enacted a law to prevent distillation of all kinds of grain or meal, being induced to this act by the threatening aspect, both moral and economic, of a consumption of ardent spirits almost fabulous. " In many parts of the country," says Find- ley in his History of the Insurrection, " you could scarcely get out of sight of the smoke of stiU-houses." Famine and demoralization of the people were regarded as the inevitable results of such a state of affairs. In October, 1779, this pro- The vote on the passage of the resolution stood : Yeas, 40 ; Nays, 16. 58 LIQTJOB LAWS OF THE UNITED STATES. liibitorj law was repealed and permission granted to distill rye and barley ; an excise tax being then again levied on every gal- lon of ardent spirits distilled within the State. But neither law seems to have had the slightest effect upon the extent of the manufacture of distilled spirits. After their passage, as before, nearly every farmer distilled his own whiskey and deemed it his inalienable right to evade the tax, and resist the collector whenever a favorable opportunity presented itself for doing so. Open violence was resorted to in few isolated cases only, and in these, though involving no fatal casualities, the courts of law speedily meted out justice to the rioters. In view of the state of the public mind on the subject, and the condition of things generally, the Pennsylvania Legislature must at least be held accountable for having added fuel to the fire, by the adoption of a resolution which every one of their constituents could, by a slight stretch of conscience, construe as a justification for whatever means he chose to employ in the defence of rights so wantonly (!) violated. This resolution reads as follows : The Legislature of this Commonwealth ever attentive to the rights and liberties of their constituents, and conceiving it a duty incumbent on them to express their sentiments on such matters of a public nature as in their opinion have a tendency to destroy those rights, agree to the following reso- lutions, namely ; Resolved, That in the proceedings on the part of the United States, tending to the collection of a revenue by means of excise established upon principles subversive of the peace, liberty, and rights of the citizen, ought to attract the attention of this House. Resolved, That no public exigency within the knowledge or contempla- tion of this House, can, in their opinion, warrant the adoption of any species of taxation which shall violate those rights which are the basis of our government, and thereby exhibit the singular spectacle of a nation resolutely opposing the oppression of others in order to enslave itself. Resolved, That these sentiments be communicated to the Senators repre- senting the State of Pennsylvania in the Senate of the United States, with CHAPTER ni. 59 the hope that they will oppose every part of the Excise Bill now before Congress, which shall militate against the just rights and liberties of the people.* Gallatin (subsequently Secretary of the Treasury), Find- ley and others, who are said to have either openly fomented or secretly abetted the violent opposition to the law, endeavored to defend the resolution on the ground that it was the right of every State Legislature to express their opinions as to proposed or adopted measures of the Federal government. This right was not seriously questioned at all ; it was undoubtedly the right of the Pennsylvania Legislature to give expression to their views, but it was wrong under then existing circumstances to exercise this right — wrong from a patriotic point of view to do aught which, by shaking the confidence scarcely re-esta- blished by dint of heroic efibrts on the part of Washington and his cabinet, could not but emperil the welfare of the com- monwealth. That the majority favoring the adoption of the resolution lacked that degree of foresight which would have enabled them to estimate beforehand the dangers their conduct invited, may readily be assumed without further proof; but history points to a clique of politicians who instigated this short-sighted, yet well-meaning legislative majority, and did so with the determination of bringing about evils they had persistently presaged, and ardently wished for. In them, the act was much worse than wrong. In the subsequent development of the insurrectionary spirit incited by them, they buttoo palpa- bly evinced their malevolence, showing that what they alleged to have been the outcome of their sympathy with, and desire of expressing, a popular sentiment, was, in verity, an artifice designed to cover their enmity to the National Administration, an enmity which soon stalked forth boldly, making Hamilton its central point of attack. And this inimical attitude was * Journal of the Legislature, 1791, p. 110. 60 LIQUOR LAWS OF THE UNITED STATES. neither confined to the one locality nor to the one cause here in question. The bitter struggle over the Assumption Bill only marks the beginning of a relentless political warfare against the Administration, particularly against Hamilton's fiscal system. The Virginia Assembly had passed a resolution denouncing assumption " as repugnant to the Constitution, giving to it the exercise of a power not granted to the General Government ; a measure particularly injurious to the interests of Virginia, an act impolitic, unjust, odious and defoi'med ; one which republican policy could scarcely have suggested as intended to concentrate and perpetuate large moneyed interests, which would produce a prostration of agriculture at the feet of commerce, or a change in the present form of the Federal government, fatal to American liberty."* In North Carolina and Maryland a similar spirit had been aroused and found vent in resolutions antagonistic to Hamilton's financial schemes. The secret enemies of Washington, and open adversaries of Hamilton, spread the most astounding reports as to the inten- tions and aims of the Administration. Washington, too popu- lar and too highly esteemed to be openly charged with unpa- triotic motives, was represented as being the tool of a party headed by Hamilton and Adams, whose policy, it was alleged, tended to pave the way for a change of government from a republican to a monarchical form. Although as yet little cre- dence was accorded to such reports outside of the disaffected localities, it was evident that the Administration must be pre- pared to meet an opposition as virulent as it was, in some respects, unjustified. The formation of the minority into a compact political party had begun, and the leaders were cast- ing about for material wherewith to erect a distinctive politi- * " This is the first symptom of a spirit," was the language of Ham- ilton to the Chief Justice," which must either be killed, or will kill the Con- stitution of the United States." (History of the Republic, by J. C. Hamil- ton. Vol. IV., p. 479. CHAPTER III. 61 cal basis. Apprehensions on that account were all the more warranted as the least placable of Hamilton's opponents, Jef- ferson, held the foremost administrative office under Washing- ton, and was, indeed, the most gifted, as he surely was the noblest and most patriotic of the leaders of the opposition. It would seem, as if his ardent love of liberty, partaking some- what of the character of French republicanism of those days, rendered him unduly suspicious of his surroundings, and, clouding his usually bright intellectual vision, made him see dastardly schemes for the destruction of the American Repub- lic, where, in truth, there was but the most self-sacrificing devotion to the country's welfare. " Hardly Avas Jefferson warm in his new office as a member of the cabinet," says Hildreth,* "when he appears to have adopted the idea, founded, it would seem, on casual expressions of speculative opinion dropped in the freedom of unreserved social intercourse, that a conspiracy was on foot, headed by Adams and Hamilton, to overturn the republican institutions of the United States, and to substitute a monarchy and an aristo- cracy in the place, the monarchy being principally patronized by Hamilton, and the aristocracy by Adams, and both being inclined to give the wealthier and more intelligent few a very disproportionate influence in the government. Though a great advocate for toleration and liberality in matters of religion, in politics Jefferson was a consummate bigot. One single specu- lative error outweighed, in his estimation, the most devoted patriotism, the most unquestionable public service." Professor V. Hoist, writing of the compromise by which the Assumption Bill was passed, an expedient which he characterizes as the first unmistakable indication of a geographical party division, asserts, as do nearly all competent historians, that " Jefferson, when he believed there was no danger that his words would * History of the United States, Vol. iv., p. 297. 62 LIQUOB LAWS OF THE UNITED STATES. "be whispered in wider circles, gave full vent to his secret ani- mosity against Washington." * It would surelj be a venture- some undertaking, to establish any direct connection between the revolt in Pennsylvania and the animosity of Jefferson against the Administration, although Jefferson styled the excise duty an " infernal error," and held Hamilton's system to be founded on " principles inimical to liberty," and calculated to undermine the Constitution. Yet it must be conceded, that his antagonism and the manner in which it was manifested, strengthened the opposition generally, and gave nourishment, perhaps against his will and wish, to the insurrectionary spirit of the people of Western Pennsylvania. Under such circum- stances the solidification of the opposition party progressed rapidly, and the seed of discontent was being sown broadcast, even while the measures proposed and carried out by the executive departments were bringing forth blessings which, to use Washington's words, three years ago it would have been madness to have foretold. It was necessary to digress thus briefly from the subject in hand, to show that the discontent at the excise, though springing, as has been shown, from pre- judices and preconceived ideas alike powerful and unreasonable, and especially dangerous for being the one and the other, would not seriously have disturbed the tranquility of the na- tion, particularly under the beneficent influences of a prosper- ity almost miraculously restored, had it not been indirectly nurtured by men of eminence and popular power, and used by others to serve a purpose foreign to its original ends and objects. The spirit of resistance was most violently manifested in the western counties of Pennsylvania, because, as Findley — one of its prime instigators — says, the people of that locality anticipated peculiar hardships from the excise. " Without money * Pol. & Const. Hist. Vol. I. , \^. CHAPTER m. ^^ or the means of procuring it, and consuming their whiskey only in their families or using it as an article of barter, which though in some respects answered the place of money, yet would not be received in pay for tlie excise tax, they thought it hard to pay as much tax on what sold with them but at from two shillings to two shillings and six pence, as they did where it brought double that price."* From this it might be inferred that a modification of the law would have allayed the excite- ment prevalent among the inhabitants of those localities ; but the truth is, that Findley himself, who was afterward elected to represent his State in the second Congress, and his coadjutors did everything in their power to prevent a pacific solution of the question. '^ While a member of the Pennsylvania Legisla- ture he intimated, in an entirely unguarded manner, that no taxes should be paid at all, and the excise officers made to feel the full weight of popular indignation. And the latter recom- mendation was by no means a figurative phrase. The predom- inant opinion among the people of those counties, an opinion, stimulated by men of Findley's calibre, was, that to restrict distillation in any manner, however legitimate, or to impose taxes upon what they deemed a necessary of life, must be regarded as a violation of "natural rights "—a term used in the petition of the citizens of Westmoreland. Yet even this disposition, dangerous and deplorable under any circum- tances, would not of itself have brought about a conflict of the people with the government ; it required the devices and arti- fices of the demagogue, to fan the embers into flame ; f and the demagogue was industriously at work. * Findley's History of the Insurrection, p. 41. f Washington writing of his tour through the Southern States, in some of which sentiments prevailed similar to those entertained in Western Penn- sylvania, states that he found everywhere a ready acquiescence to the laws made under the new government. " At the time," he wrote, " of passing a law imposing a duty on home-made spirits, it was vehemently affirmed by 64 LIQUOK LAWS OF THE UNITED STATES. As early as July 27, 1791, hence a few weeks after the beginning of the operation of the law, but ere yet the first excise office had been opened in any of the western counties of Pennsylvania, the movement for an open opposition was inaugurated. On the day mentioned, an indignation meeting was held at Ked Stone Old Fort (now Brownsville), attended by delegates from the counties of Westmoreland, Allegany, Wash- ington and Fayette. Prominent citizens were present at this meeting, among them Albert Gallatin. The resolutions adopted characterized the act of Congress as " unequal in its operation, immoral in its effects, dangerous to liberty, and especially op- pressive to the inhabitants of the Western country." A tho- rough organization of all citizens opposed to the law was recommended, and preliminary arrangements were made for organizing county committees, who were either to attend in corjjore, or be represented at a general convention to assemble at Pittsburgh on the 7th of September, for the purpose of planning concerted action. Previous to the latter date the committee for Washington county — the seat of the greatest turbulence — adopted resolutions declaring that " any person who had accepted, or may accept an office under Congress, in order to carry the law into effect, should be considered as ini- mical to the interests of the country," and urging upon the citizens of Washington county the expediency of " treating every person who had accepted such office, or might thereafter accept, with contempt, and absolutely to refuse all kind of com- munication or intercourse with the officers and withold from many, that sucli a law could have never been executed in the Southern States, particularly in Virginia and North Carolina. I took some pains to obtain information on this point and there remains no doubt that the law- will be carried into effect, not only without opposition, but vrith general approbation, in those very parts where it was foretold that it would never be submitted to by any one. It is possible, however, and perhaps not impro- bable, that some demagogues may start up and prodiice and get signed some resolutions declaratory of their disapprobation of the measure. CHAPTER III. 65 them all aid, support or comfort." * The f^encral meeting held at Pittsburgh (September 7, 1791) entered into resolutions more comprehensive in their objects and less inflammatory in their tendency, than those which had before passed the meet- ing in "Washington. Their resolutions contained severe cen- sures, not only on the lavr which was the immediate subject of objection, but upon what they termed the exorbitant salaries of officers, the unreasonable interest of the public debt, the want of discrimination between original holders and trans- ferees, and the institution of a national bank. A representa- tion to Congress, and a remonstrance to the Legislature of Pennsylvania against the law more particularly complained of, were prepared and published. On the day before the meeting the opposition broke out in an act of violence upon the person and property of Robert Johnson, collector of revenues for Allegany and Washington. Waylaid and seized by a masked party, at a place on Pidgeon Creek, in Washington County, he was robbed of his horse, tarred and feathered, clipped of his hair, and left in that con- dition to make his way home as best he could. Having recognized some of his assailants in spite of their masks, he procured warrants for their arrest. The serving of the pro- cesses was confided l)y marshal Clement Piddle to liis deputy, Joseph Fox, who, going into Allegany, in the month of Octo- ber, to discharge this duty, took alarm at the threatening aspect of things, and fearing for the safety of his person, resorted to what Hamilton disapprovingly styled the injudicious and fruit- less expedient of sending them by private messenger under cover.f The deputy's report to his superior officer contained * The description of the disturbances from this meeting onward is almost literally talccn from Hamilton's " Report on the opposition to internal duties." Hamilton's Works, Vol. iv., 578. f Findley, who avidiously seized every incident by which the insurrec- tionary movement could in any degree be justified, criticises this unwise 66 LIQUOK LAWS OF THE UNITED STATES. many particulars evincing a considerable fermentation in the locality in question, and inducing the belief that the processes could not with safety have been executed. Indeed, the person who had been sent with the processes was seized, robbed, whipped, tarred and feathered, blindfolded, and tied in the woods, in which condition he remained five hours. Other outrages of a similar character soon followed. Wells, collector of revenue for Westmoreland & Fayette, was ill- treated at Greensbui-gh and Union Town. About the same time a demented person of the name of Wilson, a stranger in those parts, laboring under the unfortunate delusion that he was officially connected with the revenue service made inqui- ries in reference to stills, pretending that he was instructed to report to Congress the names of the distillers who had entered their places of business according to law. Pursued and captured by a party of masked regulators, the poor idiot was dragged to a blacksmith's shop, a distance of five miles from the place of his capture, stripped of his clothing, repeatedly branded with hot irons, tarred and feathered, and then turned course in these words : " If the inspector could have contrived a surer method to degrade the government in the esteem of the rioters, and invite insults, it is beyond my comprehension ; and unhappily the poor man, who was ignorant of what he was doing, was the victim of this injudicious plan. What better could the inspector expect ? If the people were well disposed, where the process was to be served, why discourage the marshal from going forward ? If they were not well disposed, why send a poor creature who, not knowing what he delivered, could not give testimony of his having servad the processes ?" [Findley either unconciously or wilfully covfoxuids the story oftheidiot, named Wilson, /witJi that of the private messenger sent hy Fox.'] " The authority of a commission from government, and the respectability attached thereby to the person that bears it, generally procures a degree of reverence to an officer of justice. The sheriff or constable will be respected where the officious bum vnll probably be flogged. " [History of the Insurrec- tion, page 69.] Findley seems to forget that collector Johnson and other excise officers learned to their sorrow that their commission secured them no sort of reverence. CHAPTER m. 67 loose in this pitiable state. These outrages were not confined to othcers of the revenue, however ; everybody who ventured to express an opinion favorable to the law was treated in like manner, as was shown in the case of a man of the name of Eoseberry, who was tarred and feathered for remarking that the inhabitants of Washington county could not reasonably expect protection from a government whose laws they so stren- uously opposed. Persons who had been summoned as wit- nesses against the rioters in the case of Wilson were seized and carried off, in order to prevent their giving testimony in court, and all well-disposed citizens were systematically terror- ized. A recent writer terms these outrages " practical jokes," and seeks to exonerate the prominent citizens and oflace-holders, who had partaken in the meetings before-described, from the reproach of having sanctioned or even tacitly approved any acts of violence. This is evidently an opinion based on Findley's description of the troubles ; but even the most charitably disposed will scarcely deem it tenable, in view of the un- deniable fact that open violence was simply the natural con- sequence of the spirit pervading some of the resolutions adopted at those meeting ; that nothing was done to allay the excitement by those who had fomented it, and, finally, that the law could not be executed in those counties, and remained a dead letter for over three years. Hamilton explains the comparatively passive attitude maintained l)y tlie National Government subsequent to these outrages and before tlie assembling of Congress, in these words : " It seemed highly probable, from the issue of the experi- ment which had been made, that the ordinary course of civil process would be inefiectual for enforcing the exe- cution of the law in the scene in question, and that a per- severance in this course might lead to a serious concussion. The law itself was still in the infancy of its operation. 68 LIQUOR LAWS OF THE UNITED STATES. and far from established in other important portions of the Union. Prejudices against it had been industriously disseminated, misrepresentations diffused, misconceptions fostered. The Legislature of the United States had not jet organized the means by which the Executive could come in aid of the Judiciary, when found incompetent to the execution of the laws. If neither of those impedi- ments to a decisive exertion had existed, it was desirable, especially in a republican government, to avoid what is in such cases the ultimate resort, till all the milder means had been tried without success. It was deemed wise to forbear urging harsh measures, till further reflection and experience had corrected false impressions, and till the National Legislature had an opportunity to modify the law." Before considering the propositions submitted to Congress in Hamilton's report on the subject of excises, it is necessary to make mention of two other reports, closely related to the liquor traffic; the one is Hamilton's justly renowned report on manufactures,* the other his plan for raising additional reve- nue for the protection of the Western frontiers,t submitted December 5, 1791, and March 17, 1792, respectively. The former report, demonstrating the expediency of en- couraging domestic manufactures, as a means of creating a home market for the surplus of agricultural produce, to which some of the principal foreign markets were closed at the time, includes, among the manufactures to be encouraged and pro- tected, breweries and distilleries. It must have been remarked that all utterances heretofore quoted revealed a strong inclina- tion to protect and encourage at least those manufactures which, to use an oft-repeated phrase, were generally regarded as handmaids to agriculture. Whatever opposition was brought * American State Papers, (Finance), Vol. I., p. 123. f Ibid., p. 159. CHAPTER ni. 69 to bear against this inclination so far as the two beforenamed manufactures from grain were concerned, was directed against the manner of doing the thing. In this respect, however, the more recent laws, and the discussions had thereon, show a marked change of opinion. As to ardent spirits it was now pretty generally admitted that it would be wise— since they must, from their great consumption, form one of the princi- pal sources of revenue— to give preference to the domestic product over the foreign article. As to malt liquors the opin- ion predominated, and very decidedly too, that, equally profitable to agriculture, they should be fostered as a means of diminishing the use of the former liquors and thus improve the moral status of the people. Hamilton's report is conceived entirely in this spirit. It reads : " Manufactures of the several species of grain have a title to peculiar favor : not only because they are most of them immediately connected with the subsistence of the citizens, but because they enlarge the demand for the most precious products of the soil. Ardent spirits and malt liquors are, next to flour, the two principal manufactures of grain. The first has made a very extensive, and the last a considerable progress in the United States. In respect to both an exclu- sive possession of the home market ought to be secured to the domestic manufacturers, as fast as circumstances will admit. Nothing is more practicable, and nothing more desirable. The existing laws of the United States have done much towards attaining this valuable object. But some additions to the present duties on foreign malt liquors', and perhaps an abatement of those on home-made spirits, would more efi'ectually secure it ; and there does not occur any weighty objection to either. An augmentation of the duties on im- ported spirits would favor as well the distillation of spirits from molasses as that from grain. And to secure to the na- tion the benefit of a manufacture, even of foreign materials, is 70 LIQUOK LAWS OF THE UNITED STATES. always of great, though perhaps of secondary importance. A strong impression prevails in the minds of those concerned in distilleries (including, too, the most candid and enlightened), that greater differences in the rates of duty on foreign and domestic spirits are necessary, completely to secure the suc- cessful manufacture of the latter ; and there are facts which entitle this impression to attention. " It is known, that the price of molasses for some years past has been rising in the West India markets, owing partly to a competition which did not formerly exist, and partly to an extension of demand in this country ; and it is evident that the late disturbances in those islands, from which we draw our principal supply, must so far interfere with the pro- duction of the article as to occasion a material enhancement of the price. The destruction and devastation attendant on the insurrection in Hispaniola, in particular, must not only contribute very much to that effect, but may be expected to give it some duration. These circumstances, and the duty of three cents per gallon on molasses, may render it difficult for the distillers of that material to maintain, with adequate profit, a competition with the rum brought from the "West Indies, the quality of which is so considerably superior. The consumption of Geneva, or gin, in this country is extensive. It is not long since distilleries of it have grown up among us to any importance. They are now becoming of consequence ; but being still in their infancy they require protection. It is represented that the price of some of the materials is greater here than in Holland, from which place large quantities are brought — the price of labor considerably greater — the capitals engaged in the business there much larger than in those which are employed here — the rate of profits, at Avhich the under- takers can afford to carry it on, much less — the prejudices in favor of imported gin, strong. These circumstances are alleged to outweigh the charges, which attend the bringing CHAPTER m. 71 of the article from Europe to tlie United States and the pres- ent difference of duty, so as to obstruct the prosecution of the manufacture with due advantage. Experiment could alone decide with certainty the justness of the suggestions which are made ; but in relation to branches of manufac- ture so important, it would seem inexpedient to hazard an unfavorable issue and better to err on the side of too great, than of too small a difference in the particular in question. " It is therefore submitted, that an addition of two cents per gallon to the duty on imported spirits of the first-class of proof, with a proportionable increase on those of higher proof, and that a deduction of one cent per gallon be made from the duty on spirits distilled within the United States, begin- ning with the first-class of proof and a proportionable de- duction from the duty on those of higher proof. It is ascer- tained, that by far the greater part of the malt liquors con- sumed in the United States are products of domestic breweries. It is desirable, and, in all likelihood, attainable, that the whole consumption should be supplied by ourselves. The malt liquors made at home, though inferior to the best, are equal to a great part of those which have been usually imported. The progress already made is an earnest of what may be ac- complished. The growing competition is an assurance of improvement. This will be accelerated by measures tending to invite a greater capital into this channel of employ- ment. " To render encouragement of domestic breweries decisive, it may be advisable to substitute for the present rates of duty eight cents per gallon generally, and it will deserve to be considered as a guard against evasions, whether there ought not to be a prohibition of their importation, except in casks of considerable capacity. It is to be hoped that such a duty would banish from the market foreign malt liquors of inferior quality; and that the best kind only would continue to be 72 LIQUOR LAWS OF THE UNITED STATES. imported, till it should be supplanted by the efforts of equal skill and care at home. " Till that period, the importation so qualified, would be a useful stimulus to improvement ; and in the meantime the payment of the increased price, for the enjoyment of a luxury, in oixier to the encouragement of a most useful branch of domestic industry, could not reasonably be deemed a hardship. " If anything in addition is judged eligible, the most proper would appear to be a direct bounty on window glass and black bottles. The first recommends itself as an object of general convenience ; the last adds to that character the circumstance of being an important item in breweries. A complaint is made of great deficiency in this respect." * The war carried on against hostile tribes of aborigines on the then western frontiers of the Union, helped to realize, sooner perhaps than would otherwise have been the case, the intentions of Hamilton as to the protection of distilled, and the encouragement of malt liquors. The defeat of St. Clair by the hostile Indians and the insufficiency of martial means for the protection of the western frontiers necessitated the augmentation of the military establishment of the Union. A bill was accordingly introduced into Congress (January 21, 1792), and passed, embodying the main features of a report by * The lack of black quart bottles was at that time deemed an impedi- ment to the brewing industry, and it was for this reason that this article was exempt from the ten per cent, duty imposed, by previous acts, upon glass ware. Interesting in this connection is the fact, that on June 2, 1 790, a Congressional committee reported favorably on the petition of John F. Amelung, who, having established a large glass manufactory in Frederick County Md., sustained great losses by fire, and hence asked Congress for a loan of money in order to enable him to continue operation. The committee recommended, that a sum not exceeding $8,000.00 be advanced by the Treas- ury, on the ground that an industry so important to the United States deserved help. (Am. State Papers, Finance, Vol. i, p. 63.) CHAPTER III. 73 the War Department, to the effect that the two enrolled regi- ments, as well as the artillery battalion be raised to their full complement — the strength of a regiment on war footini;" being nine hundred and sixty men — and that three new regiments, including a small mounted force, be organized ; the President being further authorized to cause the ein-olment of additional squadrons of cavalry, in case the exigencies of the service should require it. The amount of money requisite for this increase of the military forces was estimated at $675,950 ; hence additional revenues had to be raised amounting to that figure, minus $150,000, which latter sum Hamilton thought would represent the surplus of income for the preceding year. Pointing out three expedients for providing this sum, namely, disposing of the interests of the United States in the Bank of the United States, contracting a new loan, and imposing addi- tional taxes, Hamilton declared himself in favor of the last named resort, recommending an increase of the specific duties on imported wines, distilled spirits, malt liquors and ten other articles, and also of certain ad valorem duties. The increase of import duties on distilled spirits and malt liquors recom- mended in each of the two documents just mentioned, was again urged in Hamilton's reports respecting the difficulties in the execution of the act laying duties on spirits distilled within the United States. Reviewing the objections which had arisen in various quarters against this law, and which were stated in a number of memorials and petitions, the Secretary states : " These objec- tions have reference to a supposed tendency of the act, first, to contravene the principles of liberty ; secondly, to injure morals ; thirdly, to oppress by excessive penalties ; fourthly, to injure industry and interfere with the business of distilling.'" As to the first objection Hamilton took the ground that there can surely be nothing in the nature of an internal duty on a consumable commodity, more incompatible with liberty 74 LIQUOR LAWS OF THE UNITED STATES. than in that of an external duty on a like commodity. A doctrine which asserts that all excises are inconsistent with the genius of a free government, would tend to deprive the Gov- ernment of what is, in most countries, a principal source of revenue, and, by narrowing the distribution of taxes, would throw an undue proportion of the public burden on the mer- chant and on the landholder. Tacitly admitting that the prejudices against excises had a rational foundation in the fact that the manner of collecting such taxes had generally been productive of a tendency to in- terfere with the rights of the tax-payers, he states that in the case of the law under consideration, the mere name of the measure misled the people, while prejudices excluded a due attention to the fact, that the act was free from the features which have served, in other cases, to render laws on the same subject exceptionable. " The very things which have been stu- diously avoided in the formation of the law are charged upon it." The complaint that a summary and discretionary juris- diction vested in excise officers, tended to abridge the right of trial by jury, is dismissed by Hamilton as unfounded, there being nothing in the act even to give color to a charge of the kind against it. In answer to the charge that excise officers are empowered to search and inspect indiscriminately all the houses of persons engaged in the business of distilling, he refers to that section of the law which prescribes that all houses and buildings used for the purposes in question must be previously entered and marked, and then says : " An officer, under the act in question, can inspect or search no house or building, or even an apartment of any house or build- ing, which has not been previously entered and marked by the possessor as a place used for distilling or keeping spirits. And even the power, so qualified, is only applicable to distilleries from foreign materials, and in cities, towns and villages from domestic material; that is, only in cases in CHAPTER ni. 75 which the law contemplates that the business is carried on upon such a scale as eflectually to separate the distillery from the dwelling of the distiller. The distilleries scattered over the country, which form much the greater part of the whole, are in no degree subject to discretionary inspection and search. The true principle of the objection which may be raised to a general discretionary power of inspection and search is, that the dwelling of a citizen ought to be free from vexatious in- quisition and intrusion. The principle cannot apply to a case in which it is put in his own power to separate the place of his business from the place of his habitation / and, by designating the former by visible public marks, to avoid all intermeddling with the latter. Such marks are represented (by the oppo- nents) as a dishonorable badge ; and thus a regulation, designed as much to conform with the feelings of the citizen, as for the security of the revenue, is converted into a matter of objection. There can be nothing more harmless or less inconvenient than such a regulation. The thing itself is frequently done by per- sons of various callings, for the information of customers ; and why it should become a hardship or grievance, when required for a public purpose can, with difficulty, be imagined. The supposed tendency of the act to corrupt morals," Hamilton continues, " relates to the oaths, which are, in a variety of cases, required, and which are liable to the objection, that they give occasion to perjury. The requiring of oaths is not pecu- liar to the act in question ; oaths are common appendages of revenue laws, and are among the usual guards of these laws, as they are of public and private rights in courts of justice. They constantly occur in jury trials, to which the citizens of the United States are so much and so justly attached. The same objection, in different degrees, lies against them in both cases, yet it is not perceivable how they can be dispensed with in either. As to the charge that the penalties of the act are severe and oppressive, it is made in such general terms, and so 76 LIQUOR LAWS OF THE TTNITED STATES. absolutely without the specification of any single particular that it is difficult to imagine where it points. The penalties the law inflicts are in their nature the same with those which are com- mon in revenue laws, and, in their degree, comparatively mod- erate. There appears to be but one provision in the law, which admits of a question whether the penalty prescribed may not partake of severity. It is that which inflicts the pains of perjury on any person who shall be convicted of wil- fully taking a false oath in any of the cases in which oaths are required by the act. Precedents in relation to this particular vary. In many of them, the penalties are less severe than for perjury in courts of justice, in others they are the same. The latter are, generally, of the latest date, and seem to have been the result of experience. And the practice is certainly founded on strong reasons. 1st. The additional security which it gives to the revenue cannot be doubted. Many who would risk pecuniary forfeitures and penalties would not encounter the more disgraceful punishment annexed to perjury. 2d. There seems to be no solid distinction between one false oath in violation of law and right, and another false oath in violation of law and right. A distinction in the punishment of different species of false swearing is calculated to beget false opinions concerning the sanctity of an oath ; and by countenancing an im- pression that a violation of it is less heinous in the cases in which it is less punished, it tends to impair in the mind that scrupulous veneration for the obligations of an oath which ought always to prevail. The supposed tendency of the act to injure in- dustry, and to interfere with the business of distilling, has re- lation to the eff"ect of the duty upon the extent of the manu- facture ; when a manufacture is in its infancy it is impolitic to tax it, because the tax would be both unproductive, and would add to the difficulties which naturally impede the first attempts to establish a new manufacture, so as to endanger its success. But when a manufacture (as in the case of distilled CHAPTER ni. 77 spirits in the United States) is arrived at maturity, it is as fit an article of taxation as any other. To the manufacture itself the duty is no injury if an equal duty be laid on the rival foreign article, and when a greater duty is laid upon the latter than upon the former, as in the present instance, the difference is a bounty on the domestic article, and operates as an encour- agement of the manufacture, * * * However true the allegation that it is, and ought to be, the prevailing policy of nations to cherish their own manufactures, it is equally true that nations, in general, lay duties for the purpose of revenue on their own manufactures ; and it is obvious, to a demonstra- tion, that it may be done without injury to them. The most successful nations in manufactures have drawn the largest rev- enue from the most useful of them. It merits particular at- tention, that ardent spirits are an article which has been gen- erally deemed, and made use of, as one of the fittest objects of revenue, and to an extent, in other countries, which bears no comparison with what has been done in the United States." Reviewing, in the thorough and exhaustive manner charac- teristic of all his public documents, a series of other less im- portant objections to the act, Hamiltion concludes his report * by submitting such alterations as were thought to remove some of the causes of discontent on account of the law, and to ren- der the collection of the taxes more secure. Among his prop- ositions he repeats the one made in his report on manufactures relative to an increase of the rate of import duties on distilled spirits. He further proposed that in localities where a want of money might prevent the payment of the tax, the Govern- ment should accept the product itself in lieu of currency ; that the distinction respecting distilleries from domestic material * It is in tliis report that Hamilton estimates the annual per capita con- sumption of distilled spirits, in the United States, at eleven quarts. The consumption in the year 1880 did not amount to four quarts. 78 LIQUOR LAWS OF THE UNITED STATES. in cities, towns and villages be so altered as to confine it to one or more stills worked at the same distillery, the capacity or capacities of wliich together do not fall short of four hun- dred gallons ; that at least one oflB.ce of inspection shall be es- tablished in each coi^nty, and as many more as the supervisor may judge necessary for the accommodation of the inhabitants. That in order to prevent evasions of the law, the possessors or proprietors of stills be held jointly and severally liable, and the duty be made a specific lien on the still ; also that the owner of the land upon which stills are worked should be made an- swerable for the duty, except where the distiller is a honafide tenant of the land for a term of not less than one year ; and that the exemption specified in the 36th section of the law be abolished. He also recommended a number of changes in respect to drawbacks, to the marking of casks and other ves- sels used in the manufacture of distilled spirits ; to the man- ner and time of paying taxes, and to the character, duties and compensation of revenue oflicers. These suggestions, together with the recommendations con- tained in the two other reports, resulted in the enactment of two laws. The one, an act for raising a further sum of money for the protection of the frontiers (approved May 2, 1792,) imposed the following duties on objects pertaining to the liquor traflBc : Madeira wine of the quality of London particular, per gallon, fifty-six cent ; Madeira of the quality London market, per gallon, forty cents ; other Madeira wines, per gallon, forty cents ; Sherry, per gallon, thirty -three cents ; Saint Lucar, per gallon, thirty cents ; Lisbon, per gallon, twenty-five cents ; Oporto, per gallon, twenty -five cents ; TenerifEe and Fayall, per gal- lon, twenty cents. All other wines, forty per cent, ad valorem. Spirits, distilled wholly or chiefly from molasses, or other foreign materials: Of the first-class of proof, per gallon, twenty-eight cents. second third fourth fifth sixth twenty-nine thirty-one thirty-four forty fiftv CHAPTER III. 79 All other distilled spirits : Of second-class of proof and under, per gallon, twenty-five cents. " tliird '• " " " twenty-eight " " fourth " " " " thirty-two " fifth " " " " thirty-eight " " sixth " " " " forty-six Beer, Ale and Porter, per gallon, eight cents. (Black quart bottles again exempt from the duty on glass ware. ) The other law (approved May 8, 1791), concerning the internal duties on distilled spirits, is sufficiently important to warrant its partial reproduction. It reads : Section 1. Be it enacted, &c.. That from and after the last of June next, the present duties upon spirits distilled within the United States, and on stills shall cease, and that in lieu thereof, upon all spirits which after the said day shall be distilled wholly or in part from molasses, sugar or other foreign materials, there shall be paid the duties following, that is to say : For every gallon of those spirits of the first-class of proof, ten cents. second third fourth fifth sixth eleven twelve " fourteen " eighteen " ' twenty-five " And upon all spirit which after the said day shall be distilled within the United States from materials of the growth or produce of the United States, in any city, town or village, at any distillery at which there shall be one or more stills which, singly or together, shall be of the capacity of four hundred gallons or upwards, there shall be paid the duties following : For every gallon of those spirits of the first-class of proof, seven cents. " second " third " " fourth " fifth " " sixth " And upon stills which after the said day shall be employed in distilling- spirits from materials of the growth or produce of the United States, at any other place than a city, town or village, or at any distillery in a city, town or village, at which there shall be one or more stills, which, singly or to- gether shall be of less capacity than four hundred gallons, there shall be paid the yearly duty of fifty-four cents for every gallon, English wine measure, of the capacity or contents of each and every such still, including the head eight nine eleven thirteen eighteen " 80 LIQUOK LAWS OF THE TJNITED STATES. thereof : Provided, that it shall be at the option of the proprietor or posses- sor of any such still, instead of the said yearly duty, either to pay seven cents for every gallon of spirits by him or her distilled, or to pay at the rate of ten cents per gallon of the capacity for each and every month of the em- ployment of such still, and in case the said proprietor shall elect to pay either the said rate of seven cents, or the said monthly rate of ten cents, according to the capacity of his still, he at the time of making entry of his still or stills, shall by writing under his hand, left at the office of inspection where such entry shall be made, notify the said election, and if the same shall be to pay the said monthly rate of ten cents, shall demand a license for the term of time, specifying the day of commencing and the day of ending, during which he shall intend to work his still or stills, which license shall without delay or expense to the said proprietor be granted. And in case of an election to pay the said monthly rate of ten cents, it shall not be lawful for any person by whom the same shall have been made, to work his still or stills at any time within the year from the date of his entry thereof, other than that for which a license shall have been granted unless he shall have previously obtained another license for such further time, which upon like application shall be granted in like manner, and if such person shall work his still or stills, contrary to direction or provision aforesaid he shall forfeit and pay for every such ofEence two hundred dollars. Section 2. That there be in each county comprehended within any dis- trict, at least one office of inspection at which every person having or keep- ing a still or stills within such county shall, between the last day of May and the first day of July in each year, make entry of such still or stills ; and at which every person, who being a resident within the county shall procure a still or stills, or who removing within a county, shall bring therein a still or stills, shall, within thirty days after such procuring or removal, and be- fore he or she shall begin to use said stills, make entry thereof. And every entry, besides describing each still and capacity thereof, shall specify the place where, and the person in whose possession it is, and the purpose for which it is intended, as whether for sale or use in distilling ; and in the case of removal, shall specify the place from which every such still shall have been brought. Section 3. That every proprietor or possessor of a still shall be jointly and severally liable for the duty thereupon ; and that every owner of land, upon which any still shall be worked, shall be liable for the duty, unless the same shall be worked by a lawful and bona fide tenant of the land of an estate, not less than for one year, or unless such owner can make it appear, that the possessor of, or person by whom such still shall have been worked, was during the whole time of working the same, a trespasser or intruder on his laud. CHAPTER in. 81 Section 4. Tliat every oflBcer of inspection within whose survey any distillery of Geneva or sweet cordial, subject to the payment of duty by the gallon of spirits distilled thereon may be, shall forbear to visit or inspect, for a space not exceeding two hours in each day, such part of the said dis- tillery as he may be required by the proprietor or manager of such distillery to forbear to visit and inspect, for which purpose it shall be necessary for the said proprietor to give notice in writing to the said officer, describing therein particularly the part of such distillery, which it shall be his desire that the said officer may forbear to visit, &c. , * * * Section 5. That it shall be in the discretion of the Secretary of the Treasury to regulate as well the marks, to be set upon the casks, vessels and packages containing distilled spirits, as the forms of the certificates which are to accompany the same, and that when any cask or vessel in which dis- tilled spirits have been contained, shall have been emptied of its contents, it shall be lawful for the marks thereupon to be effaced by, or in the pre- sence of an officer of inspection, and if the said cask or vessel shall after- wards be used for putting therein other spirits, the same may be marked anew. Section 6. That instead of a notice of twenty-four hours heretofore required to be given of the intent to export distilled spirits in order to obtain the benefit of the drawback of the duties thereupon, six hours shall be sufficient. Section 7. That there be an abatement for leakage at the rate of two per cent, in every case in which the duty shall be payable by the gallon of the spirits distilled, to be allowed at the distillery where such spirits shall be made. Section 8. That the officer of inspection within whose survey any still shall be, the duty whereupon is payable according to the capacity of the still, shall identify by progressive numbers and other proper marks, every Buch still within his survey, and the duty thereupon shall operate as a spe- cific lien upon the said still. Section 9. That every distiller of and dealer in spirits, who may have in his or her possession, distilled spirits not marked or certified, pursuant to the act, intituled " An Act repealing after the last day of June next, the duties heretofore laid upon distilled spirits imported from abroad, and lay- ing others in their stead, and also upon spirits distilled within the United States and for appropriating the same," shall, prior to the last day of Septem- ber next, report the spirits in his or her possession in writing, at some office of inspection, to the end that such spirits may be marked and certified as old stock. And that from and after the said last day of September next. 82 LIQUOR LAWS OF THE UNITED STATES. casks and vessels of the capacity of twenty gallons and upwards, contain- ing distilled spirits, which shall be found in the possession of any distiller or dealer in spirits, except at a distillery were the same were made, or in tran- sit from one place to another, without being marked according to law, or without having a certificate from some proper oiiicer, shall be liable to seizure and forfeiture, and that it shall be the duty of the several officers of in- spection, upon request of any dealer or distiller, to take measures for the marking of casks, vessels and packages containing distilled spirits, and to furnish such dealer or distiller, free from expense, with certificates to accom- pany the same. Provided, That it shall not be incumbent upon any such officer to mark or certify any cask, vessel or package which ought to have been before marked or certified according to any law of the United States. Section 10. That from and after the last day of April, one *tkou- sand seven hundred and ninety-three, no distilled spirits except arrack and sweet cordials, shall be brought into the United States from any foreign port or place, except in casks or vessels of the capacity of ninety gallons and upwards. Section 11. That no drawback of the duty on distilled spirits which shall be exported after the last day of June next, shall be allowed upon any quantity less than one hundred gallons. Section 12. That after the last day of June next, no distilled spirits shall be brought into the United States, from any foreign part or place, in any cask or vessel, which shall have been marked pursuant to any law of the United States concerning distilled spirits, on pain of forfeiture of the spirits so brought, and of the ship or vessel in which they shall be brought. Section 13. That if the owner or possessor of any still or stills shall neglect to make entry thereof, within the time and in the manner prescribed by the second section of this Act, such owner or possessor shall forfeit and pay the sum of two hundred and fifty dollars : and if any distilled spirits, except arrack and sweet cordials, shall, after the last day of April next, be brought into the United States in casks or vessels of less capacity than ninety gallons, all such spirits, and the casks and vessels coutaiuing the same, shall be subject to seizure and forfeiture, and every such penalty or forfeiture shall be one half to the use of the person who shall first discover and make known the matter or thing whereby the same shall have been incurred. It appears somewhat difficult to determine how far Hamil- ton's proposition to protect the domestic manufacture of dis- tilled spirits would liave affected legislation, in the absence of CHAPTER m. 83 that combination of circumstances which necessitated an in- crease of revenue and rendered expedient the reduction of internal duties upon stills and ardent liquors. The increase of the import duties, effected simultaneously with a reduction of the internal taxes, certainly was intended as a protective measure ; but it must remain a matter for conjecture, whether its adoption was not due quite as much to a desire to re- move the discontent manifested in consequence of the excise law, as to considerations of a purely Protectionist character. So far as malt liquors are concerned, the increased import duty cannot fail to be regarded as a means for the encourage- ment and protection of breweries, not only because there is abundant direct evidence of a very decided purpose to foster this manufacture ; but also because the additional revenue to be derived from an increase of import duties, was not a matter worthy of serious consideration. Out of a total of $523,000 to be raised by the additional taxes, malt liquors were estimated to yield but $5,000, on the basis of the amount of importation of the previous year. Considering that the increased rate would diminish the quantity imported — as, indeed, it was in- tended to do — it becomes evident that protection and encour- agement were the sole factors in the increase of duties in question. CHAPTER lY. the westeen or "whiskey insukrection : violent opposi- tion to the establishment of excise offices. attack on captain faulkner. meeting at pittsburgh. seditious resolutions adopted. proclamation by the president. reign of terror inaugurated by tom the tinker. continuation of outrages upon officers and complying distillers. attack on, and destruction of, general Neville's house. — seven thousand armed rioters march into pittsburgh. bradford's design to revolutionize adjoining states and form an INDEPENDENT STATE. MAILS ROBBED, SECOND PROCLAIMATION BY THE PRESIDENT. MILITIA CALLED OUT. FRUITLESS EFFORTS OF A PEACE COMMISSION. ADVANCE OF THE ARMY. FLIGHT OF THE MORE VIOLENT LEADERS. RESOLUTIONS OF SUBI^HSSION. ARRIVAL OF THE ARMY AT PARKISON'S FERRY. INSUR- GENTS DISPERSED AND ORDER RE-ESTABLISHED. Under the new law embracing, as has been seen, the more important modifications suggested — some of them intended to obviate, others calculated pacifically to overcome opposi- tion — the revenue officers succeeded little better than before in collecting the taxes from the recalcitrant distillers. A dis- position to comply with the law was, indeed, sporadically manifested in the localities least infected, but the opposition soon found means to smother it. The menaces and outrages by which the Federal officers had before been prevented from the fulfillment of their duties, were now generally applied against every person in any manner favoring the law or its executors; and in a short time it became manifest, that to aid, even indirectly, in facilitating the collection of duties must CHAPTER IV. 85 inevitably imperil the life and property of those doing so. For a time the opposition's principal object was to prevent the carrying out of the second section of the new law which provided that there shall be one office of inspection in each county ; the old law having left it to the discretion of the supervisors (there being one for each State) to appoint these officers. This object was first sought to be attained by threat- ening the well-disposed citizens with destruction of life and property in case they should give aid or comfort to the excise officers. Too many horrible proofs of the determined char- acter of the opposition had been given, to permit the people to ignore these threats, and, in consequence of the state of fear produced by them, it was for a time impossible to obtain suit- able places for excise offices. Finally in August, 1792, an army officer, Captain William Faulkner, gave permission for the use of his house as an office of inspection in the county of Washington, but was compelled by the rioters to rescind his action. The occurrence is related in Hamilton's report to the President * in these words : " Captain Faulkner, being in pursuit of some deserters from his troops, was encountered by a number of people in the same neighborhood where Johnson had been ill-treated the preceding year, who reproached him with letting his house for an excise office, drew a knife upon him, threatened to scalp, tar and feather him, and reduce his house and property to ashes, if he did not solemnly promise to prevent tlie further use of his house for an office. Faulkner, to save his life and property, made the promise, and, in consequence of the cir- cumstance, wrote a letter to the inspector, dated the 20th of August, countermanding the permission for using his house." In order to prevent others from letting their houses for * Hamilton's Works. Cabinet Papers. Vol. IV., p. 585. 86 LIQUOR LAWS OF THE UNITED STATES. the purpose in question, Captain Faulkner was further com- pelled to publish a letter in the Pittshwrgh Gazette, giving notice that the office of inspection should no longer be kept in his house. A manifesto breathing the same spirit which dictated the outrage upon Faulkner, was made public at about the same time ; it was prepared in a meeting of a number of persons from Washington, Fayette and Allegany counties, held at Pittsburgh (August, 1792). Among other things the resolu- tions set forth, that *'atax on spirituous liquors is unjust in itself and oppressive upon the poor ; that internal taxes upon consumption must, in the end, destroy the liberties of every country in which they are introduced ; and that the law would bring distress and ruin upon the western counties." The meeting — of which Gallatin acted as secretary — also made arrangements to enter into correspondence with opponents of the Government in the four refractory counties and other parts of the Union, the object of this being to effect concerted action. It was further declared that the persons attending the meeting will take all legal means to obstruct the operation of the excise law, that they " will, in future, consider those who hold offices for the collection of the duty as unworthy of their friendship, that they will have no intercourse nor dealings with them, will withdraw from them every assistance, with- hold all the comforts of life which depend upon those duties, and will upon all occasions treat them with contempt, earnestly recommending to the people at large to treat them in the same manner." This public declaration, taken in connection with the out- rages already committed in accordance and harmony with previous manifestations of a like nature, certainly partook of an insurrectionary character, and would have justified strong measures for the vindication of the "majesty of the law." Findley styled these resolutions censurable on the ground of CHAPTER IV. 87 discretion,* but deemed them entirely lawful ; and in support of his opinion he refers *to the fact that the Attorney-General of the United States, Edmund Randolph, failed to discover anything actionable in the testimony procured against the persons who had participated in the meeting. A most unfor- tunate reference, in the light of subsequent events which showed Randolph to have been in collusion with the leaders of the Insurrection as well as with the French cabal of Genet. Hamilton's view of the determination on the part of the opponents to obstruct the operations of the law is given in these words : " The idea of pursuing legal measures to obstruct the operation of a law needs little comment. Legal measures may be pursued to procure the repeal of a law, but to obstruct its operation presents a contradiction in terms. The operation, or what is the same thing, the execution of a law cannot be obstructed after it has been constitu- tionally enacted, without illegality and crime." On the 15th of September (1792) Washington issued a proclamation " admonishing and exhorting all persons whom- soever it might concern, to refrain from unlawful combina- tions and proceedings whatsoever, having for object or tending to obstruct the operation of the law, inasmuch as all lawful means would be applied for bringing to justice the infractors thereof and securing obedience thereto ; and, moreover, charg- ing all courts, magistrates and officers, according to the duties of their several offices, to exert the powers in them respec- tively vested by law for the purpose aforesaid, and also enjoining and requiring all persons loving the welfare of their * History of the Insurrection, p. 44. It may not be amiss to place this version of the Insurrection in a true light, seeing that it is even at the present day treated with that confidence and deference which are due only to impartiality and fairness. 88 LIQUOR LAWS OF THE UNITED STATES. country, interested in the just authority of Government and preservation of public peace, to be aiding therein ; likewise directing that offenders be prosecuted in accordance with law." The efforts made under and by virtue of this proclama- tion, to break the spirit of resistance, by employing the judiciary machinery — to which end the supervisor of the revenue for the district of Pennsylvania, George Clymer, had been directed to proceed to the refractory surveys and to col- lect testimony, whereon to base indictments — proved abortive, partly in consequence of errors committed by the officer just named, and partly by reason of the decision of the Attorney- General of the United States, to the effect, as already stated, that the resolutions adopted at the last Pittsburgh meeting offered no ground for indictment. In the case of the Faulkner riot prosecution was attempted against two persons ; but the latter had to be set free, owing to mistaken identity. In this perplexing state of affairs, a recourse to force being feared by some officers of the Government as much as it was openly deprecated, but secretly accelerated by others,* the Trea- sury Department endeavored to conciliate the distillers by a measure which had been proposed by Hamilton, but was not embodied in the new law, namely : The purchase of spirits for the use of the army from those distillers of the western coun- ties who had complied with the law. In addition to this, an attempt was made to intercept the markets for the surplus produce of the distilleries in the western counties, and prose- cute violators of the law. Some seizures were made of spirits intended for market, occasional purchases were effected and prosecutions instituted against non-complying distilleries. This * While officially shielding the rioters from the employment of force against them, Randolph seems to have secretly done all in his power to accelerate the course of those events, which could not but ultimately lead to what, as yet, he endeavored to avert by his decision. CHAPTER IV. 89 leniency of the Government was, however, variously construed. While some took it at its real worth, and felt inclined to yield obedience to the law, others— and by far the majority of citi- zens — regarded it as a symptom of weakness of the Adminis- tration, and as an earnest of the ultimate repeal of the law. The willingness of some distillers to comply with the law only tended to exasperate the delinquents, who again began to practice their old m.ethods of intimidation. In spite of a law passed in March, 1793, authorizing special sessions of the United States Circuit to be held at convenient places within the Judicial District, so as to afford protection to the well- disposed, by a speedy course of justice against rioters, outrages continued to occur quite frequently, only differing from those which preceded them in their increased cruelty and violence. In April, 1793, the house of the revenue inspector of Fayette County was attacked at night by a party of regula- tors ; but, fortunately, the officer was absent from home. The attack was, however, repeated on the 22d of November, and the inspector was then compelled, at the muzzle of a pistol, to surrender his commission and books, and to swear that he would publish his resignation in the newspapers, on pain of another attack and the total demolition of his property. The stills, barns and houses of complying distillers were burned ; persons who dared to testify against rioters fared no better. Armed regulators patrolled through the four counties, sud- denly appearing here, there and everywhere ; terrorizing every- body, and compelling infractions of the law, where otherwise the fullest submission might have been accorded to the fair demands of the Government. "The threats of the rioters," says Findley, " contained in letters signed by Tom the Tinker, were directed to certain persons, with express orders to have them published, and the editor of the Pittsburgh Gazette did not think it prudent to refuse to admit them." 90 LIQUOB LAWS OF THE UNITED STATES. Tom the Tinker is said to have first been suggested as a nom de guerre by a rioter of the name of John Holcroffc. Destroy- ing the stills of law-abiding citizens was termed " mending" ; tinker being a synonym of mend, the former word, as a sub- stantive, ultimately became the appellation for the destroyers of stills. Although the reign of terror maintained by Tom the Tinker exceeded anything experienced before its inauguration, there seemed to be, towards the close of 1793, and the begin- ning of 1794, a more general disposition to comply with the law. Many of those who had at first opposed excise duties shrank from the consequences of the outrages committed by the Tinker; and that feeling of insecurity which must inevit- ably attend an anarchical state of things, told very perceptibly on the material prosperity of the people. It was thought that a general compliance with the law could be eifected if the fear of Tinkerdom were counteracted by a swift course of retribu- tive justice. In order to attain this object, and at the same time still more efiectually to remove one of the objections to the law, an act was passed on the fifth of June, 1794, confer- ring on the State courts jurisdiction concurrent with the courts of the United States. Among the many alleged griev- ances of the rioters the mode of prosecuting violators of the excise held a prominent place, and the substance of the act just mentioned was virtually a compliance with one of their demands. Under this new law — the last of the many concessions made to a seditions spirit, under stress of circumstances pregnant with evil — the Government determined to enforce the entering of stills and the collection of taxes at all hazards, and it was now in a better condition to do so than ever before. All the artifices and stratagems employed by the opposition to render Washington's administration odious, had failed ; the investi- gation into the conduct of the Treasury had resulted in a CHAPTER IV. 91 brilliant vin.lication of Hamilton's course ; the cabal of the French faction had received a severe blow by Genet's recall, and in the matter of foreign relations the Administration had achieved a victory. Immediately after the adjournment of Congress, June 9, 1T94, indictments were found and warrants issued against a number of non-complying distillers in Western Pennsylvania. The marshal, who was charged with the serving of these war- rants, met with no resistance, until, having successfully served twenty-nine papers, he reached the house of a delinquent dis- tiller named Miller, near Peter's creek. On his way he was accompanied by John Neville, revenue inspector of the dis- trict. Both officers were attacked by a party of armed men, fired upon and compelled to fly for their lives.* Neville re- turned to his house, in the vicinity of Pittsburgh. On the same day the " Mingo Creek Society," composed of a battalion of militia, rendezvoused, as Findlej says, "in order to form a select corps of militia, as their quota of the 80,000 men required by Congress." It is not known whether the organization of this select corps was perfected for the laudable purpose stated ; it is a fact, however, that the next morning (July 16th, 1794), led by John Holcroft, a party of about forty of those who had * Findley states in his account : " A number of men were observed as if in pursuit of them and one gun was discharged ; not however, with a design to do execution. It is well known that if the design had been to shoot one, or either of them, they could not have escaped. " p. 77. On the the very next page Findley blames Neville for having accompanied the marshal, in these words contradicting in toto the assertion, that the gun was fired without design to do execution : " The inspector knew that there were designs again-^t him, and he ought not to have involved the marshal in the same risk with himself." The same author explains the animosity of the people against Neville, by stating that, as the latter had formerly opposed the State excise, and now accepted an excise office from the Fede- ral Government, the people " looked on him as giving up his principles for a bribe ; " the bribe being his salary as inspector, amounting to 92 LIQUOK LAWS OF THE TNITED STATES. attended the militia meeting, appeared with arms in their hands, at the house of General jSTeville, and prepared foi- an assault. The inspector, aware of the temper of his assailants of the evening before, had, in anticipation of an attack, barri- caded his house and armed his servants. On the approach of the rioters, he opened a brisk fire, and drove back the attacking party, with a loss to the latter of five men wounded and one killed.* Conscious of the perilousness of his position, Keville applied for protection to two magistrates, and the com- mandants of the militia at Pittsburgh, and failing in this, he asked for, and obtained, a detachment of eleven regulars from the garrison of Fort Pitt, under the command of Major Fitz- patrick, his kinsman. In the meantime the rioters made pre- parations for a renewal of the attack and the gratification of the spirit of vengeance, which had been aroused by the casual- ties of the previous attack, and stimulated bj the incendiary eloquence of John Holcroft. The next morning the Mingo Creek battalion, fully armed and. equipped in militia style, assembled at Couche's Fort and after holding a council of war, appointed a committee of three, for the conduct of the expedition. This committee placed McFarlane, formerly a lieutenant in the Continental army, in command of the troops numbering five hundred men. On seeing this body of despe- rate men approaching his house, Keville, convinced that he could not successfully defend his property against such odds^ concluded to escape, leaving Major Fitzpatrick to make a capitulation in favor of the property, if practicable, if not, to defend it as long as possible. Before begmning the assault, McFarlane, in accordance * Findley describes tins episode as follows ; The party, on being asked what their business was, and answering m a suspicious manner, were, icith- out further provocation, fired on from the house, and after returning the fire, they were fired on by the negroes from the adjoining buildings. Bemg thus unexpectedly attacked m flank, they retired." CIIAl'TKR IV. 93 with instructions from the committee of three, opened a parlej with the beleaguered regulars, demanding the surrender of Neville ; being informed of the inspector's escape, he next proposed that six of his men be admitted to the house for the purpose of a search, the object of which was said to be Ne- ville's commission and the documents relating to the prosecu- tion of delinquent distillers. Upon Fitzpatrick's refusal to accede to this demand, McFarlane sent notice for the women of Neville's household to leave the premises. This having been done, the insurgents at once began firing. The very un- equal combat lasted but a short time ; McFarlane having been killed, the mob became infuriated, and setting fire to the out- houses, compelled the intrepid little garrison to surrender. The eleven men, three of whom had been wounded during the brief struggle, were dismissed. At this juncture the marshal and Neville's son came upon the scene, and were immediately seized by the mob ; the former would undoubtedly have been killed, had he not promised to relinquish the task he had un- dertaken and to refrain from serving processes west of the mountains. The inspector's residence was entirely consumed by fire. General Neville and the marshal, who had escaped to Pittsburgh, found little safety there ; on the following day the rioters demanded of the former that he resign his oflice, of the latter, that he surrender all warrants in his possession. Un- willing to comply with these requirements of their personal safety, and aware of the consequences of a refusal, the two ofiicers descended the Ohio river as far as Marietta, and thence made their way to Philadelphia, the seat of Government. Flushed with victory, the leaders of the riot at once took steps for the raising of a still greater military force. A public meeting, appointed, it is said, at the funeral of McP'arlane, was held at Mingo Creek, July 23d'; Bradford, prosecuting attorney for the District, the most violent of the excise rioters, delivered a brutal speech in which he urged continued resist- 94 LIQUOK LAWS OF THE UNITED STATES. ance, and the arming of all able bodied men of the western coun- ties, with the design of marching upon Philadelphia. Brack- enridge, a prominent lawyer of Pittsburg, who has left us a history of the insurrection, opposed Bradford's wild scheme ; he succeeded in shaking the bitter determination of the Bradford faction, and the result was that no definite action was taken, save the calling of a convention of delegates from the townships of the western counties of Pennsylvania and the neighboring counties of Yirginia, to meet on the IMh day of August, 1794, at Parkison's Ferry, on the Monongahela, The object of the convention was to have been " a consideration of the situation," and it may be, as the apologists of the insurrection subsequently claimed, that the submission of the revolting counties was contemplated by many of the rioters. ♦ If such was the intention, Bradford took unusual precaution to frustrate it. By an arrogation of power he assumed the right vested in the directoire, i. e., the committee of three, appointed on the 17th of July, and undertook to guide the movement. His first act was the robbmg of the western mail on the post-road between Greensburgh and Pittsburgh. Pretending to have discovered secret plans detrimental to the interest of the good people of western Pennsylvania, this self-created dictator sent to militia officers the following circular, dated Cannonsburgh,and signed by himself, A. Fulton, J. Cannon, B. Parkison, T. Speers, I. Lowry and J. Marshall : " Having had suspicions that the Pittsburgh post would carry with him the sentiments of some of the people m the country, respecting our present alarming situation ; and the letters by the post being now m our posses- sion, by which certain secrets are discovered hostile to our interest, it is therefore now come to that crisis, that every citizen must express his sentiments not by his words but his actions. You are then called on, as a citizen of the western country, to render your personal service, with as many volun- CHAPTER IV. 95 teers as you can raise, to rendezvous at your usual place of meeting on Wednesday next ; and from thence you will march to the usual place of rendezvous at Braddock's Field, on the Monongahela, on the first of August next, to be there at two o'clock in the afternoon, with arms and accoutrements in good order. Here, sir, an expedition is proposed, in which you will have an opportunity of displaying your military talents, and of rendering service to your country." On the day appointed seven thousand armed men gathered on Braddock's Field ; among the multitude were Ross, United States Senator, Col. Cook, one of the judges of Fayette county, and Albert Gallatin, who in 1793 was declared ineligible to a seat in the United States Senate, to which he had been elected by the Pennsylvania Legislature.* Bradford created himself major-general, and in this capacity reviewed the troops. The army, resolving itself into a deliberative body, of which Cook was chairman and Gallatin secretary, appointed a committee for the conduct of the enterprise, and this Direetory ordered that, in addition to a number of men already banished because their letters, which had been opened by Bradford, contained expressions of loyal sentiments, two more citizens of Pitts- burgh should be expelled. Bradford, idolized by his support- ers and feared by all, marched his army to Pittsburgh, where a seemingly hearty welcome was given to the rioters. After an improvised repast a great number of men went to their homes, but those bent upon mischief remained in town, under Brad- ford's command, and during the night burned a bam belonging to Major Fitzpatrick. That the expulsion of two citizens could not have been the real object of the march upon Pittsburg is obvious enough ; * By a vote of fourteen to twelve, tlie Senate, sitting for the first time with open doors, decided that Gallatin, a Swiss by birth, had not been a citizen of the United Statics sufHcier, ;ly lonj? to entitle him to a seat. 06 LIQUOR LAWS OF THE UNITED STATES. in reality, Bradford bad hoped that be could induce tbe mili- tia officers to seize Fort Pitt by force of arms, and thus obtain possession of tbe arms and munition stored in its arsenal. His ulterior scbeme seems to bave been a secession of tbe western counties. His immediate plan was frustrated, however, by the good sense of a majority of the militia officers ; but he still retained power over a large body of rioters, and coirtinued to perpetrate horrible outrages ; driving from tlie counties not only all Federal officers, save the military, but also all well-dis- posed citizens. It was a critical moment in Washington's administration, when — seeing the authority of the Government successfully defied in one part of the country, and a spirit of resistance, rekindled by the French faction, spreading throughout the land — he felt compelled to resort to an exercise of the powers vested in him by the Militia Law.* Mifflin, governor of Penn- sylvaniajhaving shown a disinclination to call out the militia of his State, on the ground that such a course might increase the opposition to such an extent as to necessitate the employment of troops from the adjoining States — an event which he feared would result in a general war — Washington resolved to make use of his power. In accordance with the law providing for the calling out of the militia, he submitted a statement of the disturbances to a judge of the Supreme Court, who gave a cer- tificate to the effect, that the execution of the laws of the United States was obstructed by combinations too powerful to be suppressed by the ordinary course of judicial proceedings. The question of issuing a proclamation was now discussed by the cabinet, all the members, with the exception of Randolph, * The perilousness of the situation was greater, in the eyes of the Pre- sident and his cabinet, than would appear from the above narrative. In Hildreth's history (vol. iv., p. 503) we read : With the arrival of news of the great triumphs achieved by the French arms, and of the subsidence of internal revolt under the terrible discipline of the Reign of Terror, the cnAPTr.R IV. coinciding with the President in the conviction that "the Government could no longer remain a passive spectator of the contempt with which the laws were treated." Eandolph, who had succeeded Jefferson in the office of Secretary of State, opposed the calling out of the militia for various reasons. He doubted the legality of the measure as well as its expediency; among his reasons was the danger, if the insurgents accepted the aid of the British, that the western army would he des- troyed and that a severance of the Union and a British war would be the consequence. The subsequent disclosure of Randolph's intercourse with the French ambassador, Fauchet, and the publication of the dispatches the latter sent to his government, prove that the fear of a severance of the Union was not without foundation. (See Appendix.) In a letter of Brackenridge addressed under date of August 8, 1794, to Tench Coxe, and by him submitted to the Cabinet, it was stated that in case of a military force being sent against the insurgents, the first measure of the latter would be the organization Democratic societies, recovering from the temporary check growing out of the conduct of Genet and the disasters of the French Kepublic, had become more vigorous and violent than ever, and very unsparing in the attacks upon the policy of the federal administration. The Charleston society, on their own application had been recognized by the Jacobin Club of Paris as an affiliated branch. The Democratic Society of Washington county, one of those involved in the present disturbance (excise riots), had passed strong resolutions, copied from those of Kentucky, on the subject of the naviga- tion of the Mississippi. The French agents were still active in Kentucky, and a secret understanding was suspected between all these parties. The Democratic society of Philadelphia hastened indeed to pass resolutions, in which, after execrating the excise law, they declared, however, their disap- proval of \iolent resistance. But no great faith was placed in their sin- cerity, or in the concurrence of the affiliated branches. In a contemporary letter to Governor Lee, of Virginia, Washington speaks of the leaders of these societies as artful and designing men, whose great object was, under a display of popular and fascinating guises, to destroy all confidence in the administration, and likely, if not counteracted and their character exposed, to shake the government to its foundation. 98 LIQUOR LAWS OF THE UNITED STATES. of a new government comprehending the three Virginia coun- ties, and those of Pennsylvania to the westward. '' Should an attempt be made," Brackenridge continued, " to suppress these people, I am afraid the question will not be, whether you will march to Pittsburgh, but tohether they will march to Phila- delphia^ accumulating in their course, and swelling over the banks of the Susquehanna like a torrent — irresistible and de- vouring in its progress." As among the measures contem- plated by the insurgents, Brackenridge mentions an applica- tion for aid to the British. Eandolph clearly misunderstood Washington's character if he thought that these and similar considerations could change the course of action proposed. Indeed it was to be expected that these very reasons would confirm him in his purpose of using the radical measures which a crisis of such a character impera- tively demands. The President and his cabinet persevered in their purpose, and accordingly on the 7th day of August, the following proclamation was issued : Whereas, combinations to defeat the execution of the laws laying duties upon spirits distilled within the United States, and upon stills, have, from the time of the commencement of these laws, existed in some of the western Counties of Pennsylvania : and whereas, the said combi- nations, proceeding in a manner subversive equally of the just authority of government and of the rights of individuals, have hitherto effected their dangerous and criminal purpose, by the influence of certain irregular meet- ings whose proceedings have tended to encourage and uphold the spirit of opposition by mis-representations of the law, calculated to render them odious, by endeavors to deter those who might be so disposed from accept- ing oflSce under them, through fear of public resentment, and of injury of person and property ; and to compel those who had accepted such offices, by actual violence to surrender or forbear the execution of them : by circulat- ing vindictive menaces against all those who should otherwise directly or indirectly aid in the execution of the said laws, or who, yielding to the dic- tates of conscience and to a sense of obligation, should themselves comply therewith ; by actually injuring and destroying the property of persons who were understood to have complied ; by inflicting cruel and humiliating punishment upon private citizens, for no other cause than that of appear- CHAPTER TV. 99 ing to be friends of the laws ; by intercepting tlie public officers on tbe high wars, abusing, assaulting, and otherwise ill-treating them; by going to their houses in the night, gaining admittance by force, taking away their papers, and committing other outrages ■ employing for these unwarrantable purposes the agency of armed banditti, disguised in such manner as for the most part to escape discovery ; and whereas, the endeavors of the legisla- ture to obviate objections to said laws, by lowering the duties, and by other alterations conducive to the convenience of those whom they immediately affect (though they have given satisfaction in other quarters), and the en- deavors of the executive officers to conciliate a compliance with the laws, by explanations, forbearance, and even by particular accommodations, founded on the suggestions of local considerations, have been disappointed of their effect by the machinations of persons, whose industry to excite resistance has increased with every appearance of a disposition among the people to relax their opposition and to acquiesce in the laws, inasmuch that many persons in said western part of Pennsylvania have at length been hardy enough to perpetrate acts which I am advised amount to treason, being overt acts of levying war against the United States, the said persons having on the 16th and 17th of July last, proceeded in arms (on the second day amounting to several hundred) to the house of John Neville, inspector of the revenue for the fourth survey of the district of Pennsylvania, hav- ing repeatedly attacked the said house, with the persons therein, wounding some of them ; having seized David Lenox, marshal of ihe district of Pennsylvania, who previous thereto had been fired upon while in the execu- tion of his duty by a party of armed men, detaining him for some time pri- soner, till, for the preservation of his life, and the obtaining of his liberty, he found it necessary to enter into stipulations to forbear the execution of certain official duties touching processes issuing out of a court of the United States ; and having finally obliged the said inspector of revenue and the said marshal, from considerations of personal safety, to fly from that part of the country, in order, by a circuitous route, to proceed to the seat of government; avowing, as the motives of these outrageous proceedings, an intention to prevent by force of arms the execution of the said laws ; to withstand by open violence, the lawful authority of the government of the United States ; and to compel thereby an alteration in the measures of the legislature, and a repeal of the laws aforesaid. [Here the President quoted the act to provide for calling forth the militia.] And whereas it is in my judgment necessary, under the circumstances of the case, to take measures for calling forth the militia — in order to suppress the combinations aforesaid, and to cause the laws to be duly executed, I have accordingly determined to do so, feeling the deepest regret for the occasion, but withal the most solemn conviction that the essential interests of the Union demand 100 LIQUOR LAWS OF THE UNITED STATES. it, that tlie verj- existence of government and the fundamental principles of gocial order are materially involved in the issue, and that the patriotism and firmness of all good citizens are seriously called upon, as occasions may require, to aid in the effectual suppression of so fatal a spirit. Wherefoke, I, George Washington, President of the United States, do hereby command all persons, being insurgents as aforesaid, and all others whom it may concern, on or before the first day of September next, to dis- perse and retire peaceably to their respective abodes. And I do moreover warn all persons whatsoever against aiding, abetting or comforting the perpetrators of the aforesaid treasonable acts ; and do require all officers and other citizens, according to their respective duties, and the laws of the laud, to exert their utmost endeavors to prevent and suppress such danger- ous proceedings. As Governor Mifflin had officially expressed the opinion that the Pennsylvania militia alone would not be able to cope with the insurgents (Randolph opined that the four counties could easily muster fifteen thousand men) it was resolved to call out thirteen thousand men (afterwards raised to fifteen thousand) ; and a requisition was accordingly made upon Pennsylvania, Yirginia, Maryland aud New Jersey for their quota of this force. On the first day of September (1794) the troops were to be ready for marching orders. Alarmed at the turn affairs had taken, Governor Mifflin, after a previous interview with the President, addressed to the latter a letter deprecating the measures contemplated and sug- gesting others in their stead. In reply to this, Washington directed Hamilton to write a letter expressing the President's regret at the possible necessity of an appeal to arms and his willingness to make one more attempt to avert that necessity, "To manifest his attention to the principle that a firm and energetic conduct does not preclude the exercise of a prudent and humane policy, he [the President] concluded upon the measure of sending Commissioners to the discontented counties, to make one more experiment of a conciliatory appeal to the reason, virtue and patriotism of their inhabitants, and has also signified to you how agreeable would be to him your cnAPTE:R IV. 101 co-operation in the same expedient." Upon this, Mifflin issued two proclamations, one calling out the militia, and the other commanding the insurgents to disperse; he also appointed Chief Justice McKean and General Irving commissioners to act jointly, with the peace commission appointed by the Presi- dent, which consisted of three Pennsylvanians, viz : Senator Ross, U. S. Attorney General Bradford, and Yates, one of the judges of the Supreme Court of Pennsylvania. While these pacific measures were carried out and the pre- parations for the employment of force were being pushed by the government with energy, and soon responded to, with un- looked for enthusiasm, by the loyal population, the insurgents remained not idle. They made repeated expeditions into the adjacent counties of Virginia and Maryland, spreading discon- tent and kindling a martial spirit far and near. On the day appointed for the meeting at Parkison's Ferry [Aug. 14,] two hundred delegates met, representing the four disaffected Pennsylvania counties, and two counties of Yirginia. The de- legates assembled in a grove on an eminence commanding a view of the Monongahela river. In the morning an organiza- tion was effected by the election of Cook as chairman and Gal- latin as secretary. Two resolutions were offered and discussed — one appointing a " Committee of Public Safety," to consist of sixty member , whose proposed duty was defined in these words : " to call forth the resources of the western country, to repel any attempts that might be made against the rights of the citizens, or of the body of the people ; " the other de- clared against the taking of citizens from the vicinity for trial. At this juncture the arrival of the two commissions, and the object of their coming were announced, and it seems that this event changed the drift of affairs. Gallatin exerted what influence he possessed in order to avoid an open conflict ; he argued in favor of more moderate language than that pro- posed, and endeavored, successfully, to have all utterances of a 102 LIQUOR LAWS OF THE UNITED STATES. revolutionar}^ character stricken out of the resolutions, and a promise inserted to submit to municipal laws.* It was finally agreed to appoint a committee of sixty, with power to call another meeting, and a second committee of fifteen to meet and negotiate with the two commissions. A meeting of the latter committee with the commissioners took place at Pittsburgh, on the 21st of August, when the com- missioners, at the request of the insurgents' representatives, for- mulated an ultimatum to the effect that the committee on behalf of their constituents explicitly declare their determination to submit to the laws of the United States, and neither directly nor indirectly to oppose the execution of the excise law ; that they recommend entire obedience to the law and a discontinuation of all violence ; that they take measures to ascertain the sense of the people, and furnish on or before the 14th of Septem- ber satisfactory assurance of a pacific disposition of the inhab- itants of the disaffected counties. The commissioners on their part promised that in the event of a ready compliance with these stipulations a term of probation, extending to the 10th of July, 1795, would be granted, during which no prosecutions would be commenced ; and in the case of entire obedience to the laws during this probationary term, a general pardon would be given. Willing to accept these terms, the committee to which belonged Gallatin, Marshal, Bradford, Brackenridge and Cook— all of whom, excepting Bradford, were disposed to adopt conciliatory means — requested time to consult the committee of * J. C. Hamilton says : " Gallatin now felt that they were on the verge of an abyss. Resolves would not stand the test of resolution. The oppres- sion of the poor by excises was no more thought of. ' Legal measures for obstructing the operation of the law,' it was feared would not stand the test of justice— sternly pointing to a prison and the gibbet." (Vol. vi., p. 94) Hildreth says : " There were many persons present whose object, like Gal- latin's, it was to extricate the people from the disastrous consequences of a violent opposition to the law, which they themselves had done much to stimulate." History of the United States, vol iv., p. 506. CHAPTEK IV 103 sixty. But their ready acquiescence only irritated the Brad- ford wing, now impatient of delay and sanguine of the success of open resistance. A letter signed by Tom the Tinker and accusing the committee of having sold out the insurgents, was published in the Pittsburgh Gazette, and made a very deep im- ])ression on the insurgents. The result was that, vt^hen the Committee of Public Safety met at Red Stone Old Fort, to discuss the stipulations of the ultmiatuTn^ a party of armed rioters, displaying a menacing front, entered the town, and so intimidated those who were disposed to submit, that Gallatin, justly fearing the miscarriage of his good intentions, thought it wise to move an adjournment till the next day. In spite of Bradford's opposition, he succeeded in this as well as in his and his friends' efforts to induce the armed party to return to their homes. When the Committee of Public Safety re-assembled on the next day, Bradford in opposing Gallatin's arguments in favor of submission, openly declared his conviction that the insur- gents only wanted fire-arms to enable them to defeat the mili- tia, and establish an independent state. His harangue filled the minds of the submissive with grave apprehensions as to the prevalence of such treasonable ideas, and a feeling of distrust naturally rendered the wary still njore cautions. A viva voce vote on the proposed terms seemed too hazard- ous, and a vote by ballot was accordingly determined upon. It resulted in a majority of eleven votes for submission, out of a total of lifty-seven. Thus far the Committee of Safety proceeded, and no fur- ther ; the principal part of the stij)ulations they had not the courage to comply with. They, however, appointed a sub- committee of nine, to test the sense of the people and obtain individual pledges of submission. On the first of September this sub-committee, meeting the two commissions, asked for delay until the 10th of October — 104 LIQUOR LAWS OF THE UNITED STATES. a proposal which was peremptorily rejected, the original terms being earnestly insisted upon by the Commissioners. On the following day the conf A-ees acceded to the proposition of tak- ing the sense of the people and rendering a return of tlie votes on the 16th of September. While in a few localities the out- come of this arrangement gave promise of a subsidence of the revolutionary disposition, in others, and by far the majority of them, a direct expression of sentiments was either entirely avoided or assumed a most threatening character. In some cases a discussion of the proposed tei*ms was forbidden under threat of burning the houses of the loyal dissenters ; in others the declarations of submission were torn and trampled upon, and again in others resolutions of defiance took the place of the proposed vote. So violent was the spirit manifested by the obdurate rioters, that in some of the disaffected parts those who signified their submission felt constrained to form asso- ciations for common protection. To the latter the interven- tion of the militia seemed quite as requisite for their personal safety as for the vindication of the authority of government. Under such circumstances the Commissioners could not but conclude that their mission of peace had completely failed, and that force of arms must be resorted to. On their way home the two State Commissioners, Judges McKean and Yates, had further opportunities of tesfing the correctness of this conclu- sion. At Greensburg, in Westmoreland County, the house in which they lodged was attacked by a mob, who were only pre- vented from forcibly gaining access by a well-directed f usilade. At Carlisle, where the judges administered justice in the cases of a number of persons who, late in August, had made sedi- tious attempts to frustrate the enrolment of the militia, they narrowly escaped capture by a mob of two hundred rioters. Arriving in town after the departure of the Commissioners, the insurgents burnt the judges in effigy. A riot in the neighbor- hood of Hagerstown was quickly suppressed by a detachment CHAPTER IV. 105 of cavalry. Upon receiving the Commissioners' report, Wash- ington, on the 24th day of September, issued his third proclama- tion, commanding submission to the law and admonishing the law-breakers of the consequences of their revolt. At the same time the preliminaries for an advance upon the rebel districts were perfected. The call for the militia had brought out a much larger body of soldiers than the requisitions demanded. The troops of Maryland and Yirginia, led respectively by Morgan and Smith, rendezvoused at Cumberland ; those of New Jersey and Pennsylvania, under command of the governors of their States [Howell and Mifflin], at Carlisle. Forming respectively the left and right wings of the army, the former marched across the mountains by Braddock's road, the latter by the northern or Pennsylvania road. The fact that a large part of the troops was composed of volunteers, served materially to change the aspect of things, since it proved that whatever the designs and desires of the secret societies may have been, they had not succeeded in bringing about the calamities pre- dicted by Eandolph and others.* On the 30th of September, Washington, accompanied by Hamilton, proceeded to Carlisle, where he reviewed the troops and was received with unusual enthusiasm by the citizens, whom he addressed on the dangers of the situation. While there he was called upon by Findley and Eeddick who, as the delegates of a convention of citizens held at Parkison's Ferry, on the 2d of October, submitted to him resolutions of submission, and endeavored to dissuade him from a continuance of military * Mifflin's lukewarmness suddenly changed into an almost suspicious eagerness to aid the government, when the Legislature of his State, con- vened in special session, denounced the insurgents, and, to obviate difficul- ties said to have arisen in drafting the militia, authorized the enlistment of volunteers, at the same time authorizing the offer of a bounty, if needed. Upon this Mifflin made a tour of the most populous counties of the State to raise volunteers displaying a degree of zeal truly astounding in the light of his former attitude. 106 LIQUOR LAWS OF THE UNITED STATES. operations. This conveiition marks the beginning of the dis- solution of the rebellious movement ; it was called after Brad- ford and other equally violent leaders, as cowardly as they were treacherous and disloyal, had fled from the counties, and when the rapid approach of two powerful columns of loyal soldiers, the determined attitude of the Administration and the enthusiasm of a vast majority of the population, had destroyed the last hope of the insurgents. From Hamilton's version of Findley's interview with the President it would seem, that doubts were entertained as to whether the resolutions of sub- mission represented the sentiments of the mass of insurgents ; at all events, Washington, though he treated Findley and Red- dick courteously, did not allow himself to be moved from his purpose. Findley, who like Gallatin had but a short time before been elected to Congress, essayed in various ways to impress the President with his popular influence and his ability to make good his promises, and failing in this, he went so far as to offer his services in capturing offenders. N^o wonder that his importunate conduct aroused suspicion. lie was finally told that the advance of the troops would not be interrupted, un- less more trustworthy evidences of submission were offered. He and Reddick thereupon returned to their homes, intending to procure the required evidences. At a third meeting held at Parkison's Ferry, on the 24th of October, and of which Gallatin again acted as secretary, resolutions were passed fully in accord with, and in some points even exceeding, the terms proposed by the joint com- mission, before the movement of the troops. It was declared that '' the civil authority was competent to enforce laws and to punish both past and present offences, as the people were determined to support every description of civil officers in the discharge of their duty ; and that the offices of inspection might immediately be opened." Summoning all delinquents, who had not secured impunity by timely submission, to sur- CHAPTER rv. 107 render for trial, the delegates to the meeting further pledged themselves " to unite in giving assistance to bring to justice such offenders as shall not surrender." When Findley and his brother delegates, Ecddick, Douglass and Morgan, empowered to present these resolutions, reached Uniontown, in Fayette county, where a junction of the two wings of the army had been effected, Washington had already returned to Phila- delphia, after having again reviewed the troops — the Virginia and Maryland militia at Cumberland, the Pennsylvania and New Jersey quota at Bedford. Governor Lee was now in chief command of the troops, and Hamilton represented the President on the held of action. Both received the delegates of the Park- ison's Ferry convention courteously, and Lee issued a friendly address to the people, in reply to pacific assurances, urging the well-disposed to persevere in their laudable course. How- ever o-ratifying these symptoms of a re-awakened sense of duty may have been, they could not bring the advancing columns to a halt. According to the admission of one of Findley 's colleagues, there were still many " young headstrong boys who had got arms in their hands, unwilling to give assurance of submission," and that they probably would remain recalcitrant " until convinced the army was approaching," Accordingly, Governor Lee marched further into the disaffected survey, reaching Parkison's Ferry, on the 8th of November, without having encountered armed opjposition at any stage of his aggressive movement. Forsaken by those leaders who had urged them to take up arms, the misguided rioters fled to their homes at the approach of the army — and thus order and peace were re-established, ere a blow had been struck. On the day of his arrival at Parkison's Ferry, Lee issued a proclamation granting the amnesty previously offered to those who had accepted the terms of the peace commissions, and calling upon the people to take the oath of allegiance to the United States, which was m the form of tlie pledge exacted by the ultimatum^ 108 LIQUOR LAWS OF THE UNITED STATES. being a solemn promise, henceforth to submit to the laws of the United States; to abstain from directly or indirectly oppos- ing the execution of the act for raising a revenue on distilled spirits and stills ; to support the civil authorities, and to afford protection to all officers and other citizens. Under instruc- tions from Governor Lee, a number of arrests were then made in the four counties, the prisoners being turned over to the civil authorities for trial. After a few days, tranquility hav- ing been entirely restored, the troops, excepting a corps of observation ot 250C men under Morgan, were sent to their homes, and thus the Whiskey Insurrection ended. CHAPTER Y. PERFECTING THE REVENUE SERVICE ; NUMBER AND COMPENSATION OF OFFICERS. LICENSES TO RETAILERS OF SPIRITS AND WINES. MODIFICATIONS OF THE EXCISE LAW IN FAVOR OF COUNTRY DISTILLERS. REPEAL OF INTERNAL DUTIES ; ITS CAUSES. EFFECTS OF THE VARIOUS LAWS ON THE INTERNAL TAXATION OF DISTILLED SPIRITS. COMPARATIVE TABLE SHOWING PRO- DUCTION, IMPORTS, EXPORTS AND CONSUMPTION OF SPIRITS DURING THE OPERATION OF THE EXCISE LAW, AND AFTER FTS REPEAL, UP TO 1810. EFFECT OF IMPORT DUTIES UPON FER- MENTED LIQUORS. STATE OF VINE-CULTURE. THE BREWING INDUSTRY IN 1810; DIFFICULTIES RETARDING ITS PROGRESS. It remains to be stated that before the bloodless suppres- sion of the Whiskey Insurrection had been effected, a number of circumstances, other than the popular prejudice, and the timidity and reluctance of excise-officers, conspired to render the collection of taxes extremely difficult, even in States where tlie Federal administration generally iopnd hearty support. Prominent among these were: the inevitable imperfections of the system, growing out of the experimental character of the institution ; the insufficiency of the number of officers, and the want of adequate compensation for excise-services. When Congress, intent upon avoiding the imposition of direct taxes,* by the Act of June 5, 1794, still further extended the system of internal taxation, by imposing duties upon carriages for the conveyance of persons, upon auction sales, snuff and snuff- mills, refined sugar, and upon the retailing of wine and foreign * In 1794, the special committee on public credit recommended the rais- ing of $750,000 by direct taxation— a recommendation wliicli was promptly rejected. 110 LIQUOR LAWS OF THE UNITED STATES. spirituous liquors, it became absolutely necessary to adopt measures calculated to remove the difficulties before mentioned; and this was accomplished by an act, approved June 5, 1794, making further provisions for the collecting of duties on foreign and domestic distilled spirits, wines and teas. This act author- ized the President to establish new districts and surveys, make such alterations in, and additions to, those already existing, and appoint as many additional officers as to him appeared expe- dient and necessary. By virtue of this law the President, un- der date of April 9th, 1Y95, re-organized and perfected the revenue-establishment by forming new, and altering old, sur- veys ; by appointing additional officers and increasing their compensation. The annual salaries of supervisors, of whom there still was one in each State and Territory, were fixed at from five hundred to thirteen hundred and fifty dollars ; in addition to which sums, these officers were allowed a commis- sion at a certain per cent, of the gross revenue in their several districts, and a fee for certain duties connected with their offi- ces. Inspectors were allowed an annual salary of from four hundred and fifty to five hundred dollars in addition to certain commissions and fees ; while the compensation of collectors consisted entirely of such commissions and fees.* The entire service, in 1796, consisted of sixteen supervisors,t twenty-two inspectors of surveys, two hundred and thirty-six collectors, and sixty-three auxiliary officers; the total compensation amounted to a little less than seventy-eight thousand dollars. After the re-organization of the service the collection of internal taxes went on smoothly, ij: The tax imposed upon the * Subsequently an increase of compensation became necessary, and was again effected. f Vermont bad been admitted, and Obio and Tennessee, constituted as territories, were given one supervisor eacb. jj. Tbe tax upon conveyances was assailed on tbe ground of inconstitu- tionality, but by tbe decision of tbe Supreme Court in tbe case of Hylton vs. tbe United States (3 Dall., 171), was declared constitutional. CHAPTER V. Ill retailing of wines and si3iritnous liquors was in the form of a yearly license of five dollars, issued by the supervisors of reve- nue to retail merchants, *'. 6. to every person engaged in selling wine and foreign spirits (to be sent out of his place of busi- ness), in a less quantity, at one time, than thirty gallons of the former, and twenty gallons of the latter liquid. The law did not apply to keepers of taverns, inns, or places of entertain- ment, licensed and authorized under the law of a State. Before considering the effect of internal and import taxes upon the domestic manufacture of distilled and fermented liquors, mention must be made of a number of laws, enacted subsequent to the organization of the revenue service. They were generally in favor of the so-called country distillers. To them the mode prescribed for entering stills, and the manner of paying taxes, were sources of some inconvenience and loss. In cases, for example, where the owners of stills were liable, by their entries, to pay the duty of fifty-four cents upon the capacity of the stills, it frequently happened that the destruc- tion or failure of crops, whether of grain or fruit, either pre- vented distillation entirely, or considerably reduced the quan- tity intended to be distilled, at the time the entries were made. Special relief was provided in these cases by an act approved June 1, 1796. By an act approved March 3, 1797, owners of country stills, that is to say, of stills operated in places other than a city, town or village, and of a capacity of less than four hundred gallons, were given the privilege to pay the following licenses, in place of the former taxes, viz : For a license for the employment of every still during the term of two weeks, six cents per gallon, according to the capacity or contents of every such still ; for a license for a term of one month, ten cents per gallon ; for three months, twenty-four cents per gallon ; for four months, thirty cents per gallon ; for five months, thirty-six cents per gallon, and for six months, forty-two cents per gallon. 112 LIQUOR LAWS OF THE UNITED STATES. Not yet satisfied with these modifications of the law in their favor, a certain class of conntry distillers sought to obtain a further concession in the form of weekly licenses, and, accord- ingly, in the second session of the fifth Congress, a recommend- ation to that effect was made by the House Committee of Ways and Means. Southern farmers, who mostly distilled fruit, — principally peaches — were to be benefited by this arrange- ment. It was contended that the preceding law, which fixed the minimum duration of a license at two weeks, leaving un- changed the requirement of entering stills at stated times, excluded four out of five of the owners of orchards in the Southern States from distilling their early fruit at all ; that peaches ripened and rotted hastily ; and that persons who had not enough fruit to employ their stills more than three or four days, would sufier their fruit to rot, rather than take a license for a fortnight. The obligation, under the existing law, of taking out separate licenses for distilling the fruit harvested at three different periods of the year, was represented as another hardship, involving expense and loss of time in going to and from the excise offices, which latter in many cases were situated at considerable distances from the homes of distilling farmers. The annual entry of stills, prescribed by law in all cases, whe- ther or not the owners intended to work them, was also com- plained of, and led to the proposition that stills once entered should not require a renewal of entry, save when their owners intended to work them. None of these proposed alterations had the approval of Walcott (Hamilton's successor), and were consequently rejected. The only further concession made to country distillers was the act of January 29th, 1798, which provided " that it shall be lawful for all owners of stills which shall have been duly entered according to law, to make their election, at any time of the year, both as to the rate of duty which they may choose to pay for the employment of their said stills, whether for a year or such other shorter period, as CHAPTER V. 113 may be allowed by law ; and also as to the time of commencing such eniploynient." The laM^s on the internal taxation of distilled spirits remained in this state to tlie date of their revocation, in 1802 ; while the rate of imposts on distilled and fermented liquors, excepting certain wines imported into the United States, were not changed until the war of 1812, although the exigencies of part of Adams' administration (1797-1801), joroduced by the disquieting aspect of foreign affairs, led to the development of new sources of revenue — among them one still less popular than excises, viz : direct taxation.* As it is intended to bring under consideration, in this chapter, the general results of the external and internal taxation of liquors during the last decade of the past, and the first decade of the present century, it seems appropriate, in order to preserve the chronological order of events, briefly to narrate under what circumstances the excise law was repealed. The origin of the opposition to the Federalist administra- tion dates back, as has been seen, to Hamilton's fiscal system, beginning with the assumption of the State debts, and grow- ing stronger under every subsequent measure of taxation — from the imposition of excise duties to the system of direct taxation introduced under Wolcott's administration of the Treasury Department. Other causes arose, it is true, to solid- ify and strengthen the opposition, but the fiscal questions remained landmarks of party division throughout Washing- ton's and Adams' administrations, and formed an essential part of the credo to which Jefferson owed his accession to the pre- sidential chair. Under these circumstances it was but natural * For augmenting the army and perfecting coast defences tlie act of July 14, 1798, imposed a direct tax of $3,000,000 on houses, lands and slaves. Singularly enough this law also met with open resistance in Pennsylvania ; in this case however, the riot — dignified in history with the appellation of the Pries Insurrection — was quelled almost before it was begun. 114 LIQUOR LAWS OF THE UIOTED STATES. that the Democrats (pre\nously called the Republicans) should, on assuming control of the government, hasten to abolish tlie systems they had so vigorously and ably assailed. The aus- picious state of affairs under which they came into power * necessarily confirmed their resolution and accelerated their action. On the 30th of December, 1801, twelve days after Jefferson had, in his inaugural address, recommended the abolition of all internal taxes, the House Committee of Ways and Means were instructed to inquire into the expediency of repealing duties on stills and distilled spirits, and other internal duties. In their report, submitted March 8,1802, the commit- tee, after dwelling upon the difficulty and expense of collecting the tax on twenty-two thousand country stills, scattered over an immense, but thinly settled territory ; and recounting the popular objections to excises, viz : the oppressive and vexatious character of the taxes, their hostility to the genius of a free people and their tendency to multiply offices, recommended the revocation of the laws relating to internal duties. In the dis- cussion which attended the resolution calling for an inquiry into the expediency of abolishing these taxes, the expense of collection formed the principal source of acrimonious wrang- lings, and led to some very inaccurate statements on the part of the supporters of the new administration. The truth is, that, compared with the cost of collecting imposts and tonnage duties, the expense of securing excise taxes seemed dispropor- tionately large. The reasons are too obvious to require more than passing notice. The amount ofinternal taxes, imposed upon but a few articles, was comparatively small ; the objects taxed were widely dispersed over the entire Union ; and the tax-payers * Hildretli writes of this period : " The treasury was fuller, the reve- nue more abundant than at any previous period. Commerce was flourishing, and the pecuniary prosperity of the country was very great. All the res- ponsibility of framing institutions, laying taxes, and providing for debts, had fallen on the ousted administration." (Vol. iv., p. 419.) CHAPTER V. 115 were not inclined to aid the collectors. In proportion as the amount ot" taxes increased and the opposition to excises sub- sided, the cost of collection decreased. Thus in 1795, when th6 internal revenues from all sources amounted to but $528,481 the cost of collection was twenty-five per cent. ; while in 1801, the total revenue being double the former amount, the expense of collection only amounted to twelve per cent. The difi*er- ence between the cost of collecting the taxes on distilled spir- its in the country, and in cities, towns or villages, amounted to almost fifty per cent., a fact which in itself sufficiently explains the causes of the expensiveness of internal taxes at the time in question. An attempt on the part of the minority, to have only the taxes on country stills revoked, leaving the excise on spirits distilled in towns and villages intact, proved abortive, and the entire system was finally abolished. The question of temperance was remotely hinted at, but failed to receive any consideration whatever. As to the efi*ect, upon the respective manufactures, of internal and external taxes upon distilled, and import duties upon fermented liquors, during the four years from 1791 to 1795, it goes without saying, that no reliable conclusions can be deduced from the reports of the Treasury Department, in- asmuch as, before the suppression of the Whiskey Insurrection the collection of taxes, save in the New England States, was so irregular as to afford no index to the quantity of spirits actually distilled. In Pennsylvania, for instance, where about five thousand public and private stills were in operation, in 1790, only eight hundred stills, producing 250,380 gallons of spirits, had been entered from July 1, 1791 to July 1, 1792. Yirginia paid but $12,000 on distilled spirits during the same period ; whereas in 1795, with decreased rates, she paid $G5,990. It does not follow in either case that less whiskey was manufactured during the fiscal year 1791-1792; but it does follow, from what has been related before, that the law 116 LIQUOR LAWS OF THE UNITED STATES. was evaded. The changes made in the rates before and after the Insurrection, and the mode of computing taxes according to the capacities of stills, in any event precluded accurate statements of quantities distilled, and the only guide in res- pect to a comparison must be the amount of duties paid. In order to give as clear a statement as possible of the operation of the laws, it seems ^idvisable to follow the various official reports on the subject. The amounts of duties on spirits distilled in the United States to 1795, inclusive, were: 1792 $208,942 1793 ... 337,705 1794 274,089 1795 337,775 The estimated quantity of spirits distilled in 1791-92 from foreign material, in stills entered according to law, was 2,210,559 gallons, and from domestic material 944,004: gallons. For the year ended June, 1795, the quantity distilled from foreign material, in stills which were entered according to law, may be estimated at 1,500,000 gallons, yielding a gross amount of revenue of $141,989; whereas the gross income from spirits distilled from domestic material amounted to $218,036. It will be seen at a glance, that the state of things of 1792 was reversed in 1795 ; during this brief period the manufacture of rum decreased as considerably as that of whiskey and spirits from domestic fruit increased. The war in the West Indies explains the for- mer fact. The importation of molasses in the year 1794 was less than in 1791, by 3,700,000 gallons ; and, owing to the high price of sugar, a greater proportion of the quantity of molasses imported was consumed in the raw state. The manufacture of spirits from domestic products yielded a much greater sum in 1795, than either in 1792, in 1793 or in 1794; yet the quan- tity for which taxes were paid remained far behind the quan- tity distilled. The principal causes of this discrepancy are known CHAPTEK V. 117 to the reader. There may, however, have been, and no doubt there was, an actual decrease in the manufacture. The Commis- sioner of Internal Revenue, in his report of the 5th of March, 1796, points out some reasons for this. " The excessive prices,'* he says, " of grain, of marketable and exportable fruits, and of cider, have deprived the distillers of avery large portion of the means to employ their stills. In all places the induce- ments to distil have been greatly diminished by the increased competition of the miller and merchant of every species of grain." Although no accurate data can possibly be obtained at this late day, yet it may readily be taken for granted, that a part of the decrease was due to the abandonment of distil- lation by a large portion of the farmers. From speeches made in Congress it appears, that many Southern farmers let theu' fruit rot, rather than pay taxes for a longer period than they intended to work their stills; and Findley states in his History of the Insurrection, that many country distil- lers, who were too conscientious to evade the law, abandoned distilling altogether. In 1796 the manufacture of rum amounted to 2,296,300 gallons, that of spirits distilled from domestic products to 1,009,797 gallons. The importation of molasses in 1795 had been much greater than in the pre- vious year, which fact explains the increase in the production of rum. For the succeeding years, up to 1802, the total reve- nues from all internal duties on distilled spirits were: 1797, $565,984, of whicli amount licenses to retailers yielded,* $63,861 1798, 584,923, " " 64,823 1799, 573,086, " " 66,434 1800, 580.508, " " 65,159 1801, 593,000, " " 69,173 * In 1795 and 1796 the retail licenses yielded $54,731 and $63,763 respect- ively. In 1795, tliere were 3,203 licensed retailers of wine and 7,461 licensed retailers oi foreign spirits ; in 1801 the former numbered 3,556 ; the latter 10,283. 118 LIQUOR LAWS OF THE UNITED STATES. The quantity of spirits annually distilled from foreign ma- terial remained nearly the same throughout this period, rang- ing from 1,500,000 to 2,000,000 gallons ; the average annual revenue from this source being $160,000 ; hence the increase of revenue, as shown in the above table, is attributable to an augmentation of spirits distilled from grain and fruit of the growth of the United States. With the relaxations of the law up to 1795, country distilling rapidly recuperated, or to be more concise, the amounts of taxes paid on spirits distilled in the country approached the actual quantity distilled far more nearly than in preceding years. Hamilton, in 1791, estimated the annual domestic production of ardent liquors of both kinds at 6,500,000 gallons ; but it was not before the year 1775 that the amount of revenue from this source approximately corres- ponded with this estimate. During the ten years, from 1792 to 1802, the importation of spirits of all kinds increased from 4,679,993 in the former, to 8,396,738 gallons in the latter year ; the exportation increased but very slightly, viz : from 1,032,050 to 1,313,728 gallons. Of the incidental objects sought to be attained by the va- rious laws on the liquor traffic, one was the protection of the home products against the competition of the foreign article ; the other a diminution of the consumption of ardent spirits. Neither aim was fully realized. The protection of spirits from the products of American husbandry was effected ; but it re- quired higher duties, to enable American distillers of foreign material to compete with foreign manufacturers ; besides, the former labored under mechanical difficulties, which rendered their product of a quality inferior to that of foreign countries. In a petition submitted to Congress in 1798, a number of dis- tillers of Rhode Island asked for an increase of the duties upon imported spirits, on the ground that they had invested consid- erable sums in the erection of distilleries for the distillation of rye and molasses ; but owing to the great cheapness of rye CHAPTER V. 119 in Holland, and the hazard and difficulty which attended the obtaining of molasses, found themselves imable to compete with foreign manufacturers of rum and gin. The Ilonse Com- mittee of Ways and Means, to whom this petition was re- ferred, reported adversely thereon in the following words: " The petition seeks to secure a preference to the domestic manufacture, which would have the effect of taxing the con- sumer of imported spirits, for the benefit of the home distil- lers. From this view of the subject, the Committee are of the opinion that the petition ought not to be granted." What a departure from the original purpose of the law-makers ! A still higher duty might have answered the moral purpose contem- plated, had the government had the means to enforce the ex- cise law of 1791, or even that of 1792, in spite of popular opposition, and notwithstanding the many obstacles, which the great extent of teriitory and the widely dispersed population threw in the way of such a system of taxation. In that case consumption would surely have been decreased, as a high im- port duty would have diminished importation, and a moderate tax on domestic spirits would inevitably have restricted country distilling. In view of the habits of the people, and of the de- cisive importance which the liquor question had assumed in the political agitations of the day, these hypotheses seem chi- merical. But even unfavorably as matters stood, there is in- controvertible evidence, that the legal restrictions laid upon the manufacture of ardent spirits, though they did not positively diminish consumption, at least had a very strcmg tendency to 'prevent a dilatation of that ratio of increase which occasioned so much anxiety hefore 1790. This can easily and effectively be demonstrated. The following table, compiled from official reports, and showing population, production, imports, exports and consumption, needs some explanation in order to be rightly understood. In the third column is given the production of domestic spirits, as estimated by the Treasury De- 120 LIQUOR LAWS OF THE UNITED STATES. partment for the years set opposite the quantities pro- duced ; in the sixth and succeeding columns the period from 1790 to 1800, although consisting of eleven years, was treated as a decade, so as to obtain a basis of calculation cor- responding with the official enumeration of the inhabitants of the United States. The excise system remained in force until 1802, and for this reason .the years 1801 and 1802 should properly have been included in the first period, but from the nature of the official data obtainable, such a division of the two decades would have occasioned erroneous conclusions. The statements of the average quantities annually imported and exported during the two periods are based entirely upon official returns ; the quantity of domestic spirits produced in 1810 is stated in the Digest of Manufactures^ submitted by President Madison to the Senate on the 5th of January, 1814. (Am. State Papers ; Finance, vol. i., p. 763.) CHAPTER V. 121 :v,>-n\ g_^g si-- a * »H <» .2 =5 a , ai boa -S " 'C o a OS g 0.0) 313 O S a a a-s g^ OoW •'^ 0) a.L"' a. S ^ "o a ^^SS|g>a ^ S a a ^, O o oi -r; - 2 s ita consumption in 1840, 1850 and 1860 would presumably have been what it was in 1810, namely, eighteen quarts. During the three decades named other factors helped to pave the way * See " Real and Imaginary Effects of Intemperance, pp. 66-84. 192 LIQUOK LAWS OF THE UI-flTED STATES. to a reformation of the drinking usages of the people. Of themselves these factors could not have accomplished such a reformation, but they laid the foundation for that structure of temperance, the erection of which was not rendered possible until the deplorable war between the North and the South compelled a change of the fiscal policy in regard to the liquor traflfic. The progress of civilization, the difi'nsion of knowledge among the laboring people, the general refinement of tastes and inclinations form one of these factors. They grew out of the general progress of the country, the development of domestic manufactures creating not only opportunities for a great diversity of in-door employments, but also a variety ot new wants, tending to render life more comfortable, more re- fined. In the older States the hardships of " pioneering it " against the numerous obstacles of virgin wildernessess gave room to the easy-going methods of improved agriculture. The effect which this progress must have had upon the drink- ing habits of the people will be better understood, when it is remembered that intemperance was always most prevalent in lumber regions and border localities, and that there, according to reliable authorities, the primitive mode of life, the hard- ships of out-of-door employment and the want of recreation were regarded as among the prime causes of incontinence.* The influx of emig-rants of moderate drinkino' habits occasioned another great stride in the path of temperance. From 1810 to 1850 the number of breweries increased from one hundred and twenty-nine to four hundred and thirty-one ; the quantity of malt liquors produced in the Union increased during the same period from 5,754,737 to 23,267,730 gallons, of which latter * " There can be no doubt that drunkenness prevails more in a rude than in a civilized state of society. This is so much the case, that as men get more refined, the vice will gradually be found to soften down, and assume a less revolting character." Robert Macnish's Anatomy of Drunkeness, (p. 2.) New York, 1835. CHAPTER LK. 193 quantity Pennsylvania produced 12,765,974:, New York, 6,059,122 gallons. In 1815 the manufacture of lager beer was lirst introduced into the United States, and from this time onward the brewing industry developed rapidly, though not at a ratio to be in any manner compared with its astonishing development since the war of the rebellion. The cultiva- tion of the grape-vine also received a strong impetus through the German immigration, particularly after 1848. The climate and soil of Central New York, Southeastern New Jersey, Yirginia, Northern Ohio, Michigan, Missouri, Texas and California offered special inducements to wine-growers, and some of these States are to-day in a fair way to rival the Khenish countries. In spite of the many difficulties which attend w^ine-culture, the home produce of wine in 1860 amounted to 1,627,192 gallons. In 1810 only 11,655 gallons of wine were produced in the United States, of which 2,525 gallons were made of grapes, and 9,130 gallons of currants. The reduction of import duties on wines, particularly those of inferior quality, together with the extreme cheapness of ardent spirits, unquestionably delayed the development of this highly important branch of agriculture ; but at all events the foun- dation laid during the period named facilitated the mar- velous growth of later years. To a certain extent — not a very considerable one, however — the light taxation of the articles temporarily helped temperance, inasmuch as, under it, the importation of cheap wines increased, averaging about 3,500,000 annually during the decade 1830-1810. Compared with the earlier periods, 1801-1810, for instance, this state of the imports indicates no advance, but compared with the status shortly after the beginning of the era of high protective tariffs, it marks an appreciable improvement. Insignificant as each of these agencies may appear, when separately considered, in their joint influence they surely were of importance in preventing a still greater degree of 194 LIQUOR LAWS OF, THE UNITED STATES. misery, than the abuse of spirits had actually occasioned. The good they accomplished by keeping bad from worse, eludes every attempt at computation. It will always be a matter for surprise and regret, that when the temperance agitation was at its greatest height, and when the protective idea had lost most of its force, not a single serious proposition was made in reference to what every sane man knew to be the only radical remedy against the evil of inebriety, namely : the restriction of distillation by internal taxation. When, in 1845, E. J. Walker, Secretary of the Treasury under Polk's administration, promulgated his economic anti- thesis * to Hamilton's report on manufactures, it was well understood that under the proposed regime of a tariff for rev- enue only, luxuries were to be taxed at the highest rate, so that even then spirits would be most protected, because its rival foreign product would be most heavily taxed ; yet no thought was given to an excise on the article, save to scout the idea of its practicability. Surely, the popular prejudice against it should not then have had any more weight, seeing that the leirislatures of some States went so far as to entirelv prohibit distillation. Walker's first tariff propositions, based on the new princi- ples and adjusted to a peace-footing, would perhaps have be- come law in 1846 (although, as a German proverb has it, soups are rarely eaten as hot as they are brought from the stove), had it not been for the war with Mexico. As it was, * Report of the Secretary of the Treasury, December 3rd, 1845, in which the following principles are enunciated, viz : that no more money should be collected than is necessary for the wants of the Government ; that duties should only be laid at the lowest rate yielding the largest rev- enue ; that below such rates discrimination may be made, descending in the scale of duties, or, for imperative reasons, the article may be exempt from duty entirely ; that the maximum duties should be levied on luxuries ; that specific duties be abolished, and that the duties be so equitably arranged as to discriminate neither for nor against any class or section. CHAPTER IX 195 the elemental parts of his policy were adopted, but his imme- diate propositions as to the rates of duties had to be so enlarged as to answer the public exigencies of a war. Under the new tariff law, approved July 30th, 1846, only ad valorem duties were imposed, ranging, in eight gradations, from five to one hundred per cent. Between the first grade of duties, viz: 100 per cent., imposed exclusively on spirituous liquors, and the second grade there was a difference of sixty per cent. This second class comprised spices, manufactures of tobacco, and wines ; the next grade below this was a duty of 30 per cent, on the value, and in this schedule we find, among very many other articles, ale, beer and porter, in casks and bottles ; and molasses. The rates were not again changed until the spring of 1 857,* when the opponents of Protection found a potent ally in the plethoric condition of the Treasury. The argu- ments were not new on either side ; the friends of the system claimed, that, in order to insure their prosperity, the American people must manufacture more, import less, and keep their specie at home; whereas the opponents of the American system maintained that the glutting of the Treasury with sur- plus revenues produced business stagnations, and that it was unjust to make the consumer pay indirect taxes to the dom.estic manuf acturer.f The latter opinions won the day, and a great reduction of duties was effected by the tariff act of March 3rd, 1857, spirits and wines being taxed thirty per cent, on their value; molasses, twenty-four per cent., and ale, beer and porter at the same rate. The interval of a low tariff lasted only four years, as the outbreak of the Rebellion necessitated an unprecedented in- crease of revenue ; it is a significant fact, however, that lefore * Act approved March 3rd, 1857. \ Boyce, of South Carolina, asserted that the indirect taxes thus paid by the consumer to the manufacturer amounted, up to 1857, to $1,000,- 000.000. 196 LIQUOR LAWS OF THE UNITED STATES. this increase of revenue bad become necessary, Mr. Morrill * introduced tbe tariff bill which to this daj bears his name— a bill, in the framing of which some of the fundamental propositions of Walker's policy were entirely ignored ; while the general ter.or of the discussions on the measure seemed to indicate, to say the least, a leaning towards a protective tariff. At all events, a strong inclination prevailed to make the insufficiency of the tariff of 1857, as a revenue measure, serve as a cloak for the protection of various manufactures.f The duration ot the low tariff' regime was so short, then, that in examining the general effects of the various fiscal and economic policies of the Government, it deserves but a modi- cum of consideration. Practically, the policy of protecting domestic distilleries — in a manner sometimes amounting to an inhibition of the importation of foreign spirits — lasted forty years ; if the time be deducted during which, previous to 1820, ihe excise system was in force, the protection of domestic spirits and their absolute exemption from taxes may be said to have lasted fifty-five years. This double encouragement, together with the abundance of cereal produce, made whiskey so cheap, that in no country of the civilized world could one indulge his appetite for ardent spirits at a smaller cost than in the United States.:}: The cheapness of the article necessarily invited ex- cessive consumption ; there was no effectual preventive against that, save in a change of policy. Tbe evil was inevitable • but great as it was, the people of the United States have ample cause to congratulate themselves, that it was not greatei, as indeed, without the conjunction of the favorable * In Marcli, 18G0. •f On the part of the opponents of the Morrill tariff it was claimed that the measure -nas in the nature of a political concession to Pennsylvania, whose adhesion to the Republican party was alleged to have been condi tioned on the partial rehabilitation of the American system. i In 1860 the average reiaU price of whiskey was 30 cents per gallon. CHAPTER IX. 197 circumstances already mentioned, it would unavoidably liave been. The per capita consumption of ardent spirits in 1860 may be estimated at between eight and nine quarts. The total product, as returned by the census of 1860, was over 90,000,000 gallons ; of this quantity at least 25,000,000 gallons were used in the arts, sciences and manufactures — leaving for consump- tion as drink and for export about 65,000,000 gallons. The exports of spirits and cordials of all kinds amounted to 4,437,132 gallons, the imports to 6,448,362 gallons* — the ex- cess of the latter over the former being 2,011,230. The population was 31,443,321. In connection with what has already been said concerning the circumstances, which helped to counteract the tendency to inebriety, the evident change for the better will be more readily understood when it is remembered, that the " foreign born" part of the population increased, from 1850 to 1860, at the rate of ninety per cent. — a large proportion being people of moderate drinking habits — and that the use of fermented drinks, compared with the total population, increased at a far greater rate, as will be seen from the following table : Year. Population. Product of Hops, in lbs. Product of Barley, in bushels. Value of Malt liquor, brewed. =«.2 o ^ o ^ pq Product of Wine, in gallons. 1850 1860 23,191,876 31,443,321 3,497,029 10,991,996 5,167,015 15,825,898 $5,728,568 $21,310,983 431 1269 221,249 1,627,192 Thus affairs stood when the outbreak of the war ushered in a complete revolution of our policy and liscal methods. *See Appendix. CHAPTER X. CONVOCATION OF 37tH CONGRESS. — CONDITION OF THE TREASTJET IN 1861. — FISCAL NECESSITIES GROWING OUT OF THE RE- BELLION. INCREASE OF IMPORT DUTIES AJSTD IMPOSITION OF DIRECT TAXES. INTERNAL TAXES POSTPONED. — CONDITION OF TREASURY IN 1862. INTERNAL TAXES ON SPIRITUOUS AND MALT LIQUORS, AJSTD ON LICENSES TO DEALERS DIS- CUSSED. — THE TEMPERANCE QUESTION DISCUSSED IN BOTH HOUSES OF CONGRESS. DISCRIMINATION LN FAVOR OF MALT LIQUORS advocated; SCIENTIFIC TESTIMONY IN SUPPORT OF SUCH ADVOCACY. THE STATUS OF THE PROHIBITION STATES AND OF THEIR CONGRESSIONAL REPRESENTATIVES. — INCON- SISTENCY OF ADVOCATES OF PROHEBITION ; THE FUTILITY OF THEIR SCHEMES DEMONSTRATED BY THEIR OWN STATEMENTS. DIFFERENCES AS TO RATES OF TAX ON DISTILLED SPIRITS, AND AS TO THE EXPEDIENCY OF TAXING STOCK ON HAND. EVASION OF TAX BY DISTILLERS PREDICTED. TEXT OF REVENUE LAW IN RELATION TO INTOXICANTS. — INCREASE OF IMPORT DUTIES LN 1862. — INCREASE OF INTERNAL TAX ON SPIRITS IN 1864. SPECULATION AND FRAUD COMBINING TO FRUSTRATE OBJECTS OF LAW. APPOINTMENT OF SPECIAL REVENUE COMMISSION IN 1865 : THEIR REPORT AND RE- COMMENDATIONS. — MODIFICATION OF LAW IN 1868. When Lincoln convoked the thirty-seventh Congress,* se- cession was an accomphshed fact, the commandant of Fort Sumter had been compelled to capitulate, the Southern coast defenses and arsenals were in the hands of the enemy, and a Confederate army stood in the field, eager to meet the seventy- five thousand Union soldiers who had responded to their coun- try's call. Of patriotism, of martial spirit, of strong arms there was no lack on the Union side ; but the Treasury was * The special session was begun on the 4th of July, 1861, and ended on the 6th of August. CHAPTER X. 199 practically empt3^ Chase's report of the 4th of July, 1861, showed that the receipts from June 30th, ISGO, to June 30tli, 1861, amounted to $86,972,893— including $l:6,061-,082 from loans and Treasury notes, and that the aggregate of expendi- tures was $84,577,258. For the succeeding year the expendi- tures were estimated at $318,519,581. Loans, an increase of import duties, and direct and internal taxes were the means proposed by the Secretary of the Treasury to supply this sum. The Committee of Ways and Means, acting in the main on the Secretary's propositions, reported a revenue bill, including direct taxes, an income tax, and excises upon spirits, fermented liquors, and a number of other articles. After much discussion and many recommitments of the bill, a law was finally passed, and approved August 5th, 1861 , enlarging the customs tariff, in- creasing certain import duties, laying direct taxes on lands and houses, and a tax on incomes. Unable to agree upon a system of internal taxation, unless information could be obtained as to the character and extent of the various objects contemplated to be embraced in it, Congress postponed this revenue meas- ure in order to give the proper committee time to submit a comprehensive scheme. The import duties on spirits from grain and other material were fixed at fifty cents per gallon ; those on brandy, $1.50 per gallon ; the duties on beer, ale and porter, which, by the Morrill tariff, had been fixed at twenty-five cents, when imported in bottles, and fifteen cents when im- ported in casks, remained unchanged ; whereas the duties on wines, which, by the Morrill tariff, had been increased from thirty to forty per cent, on their value, were now raised to fifty per cent. In December (1861) Chase reported a prospective deficit for the year 1861-62, of $213,904,497, this being the ex- cess of estimated expenditures over receipts. In the hope that '' the war may he brought to an auspicious termination before midsummer'''' (1862), the Secretary recommended that 200 LIQUOK LAWS OF THE UNITED STATES. the obtaining of loans to the amount of two Imndred millions be autborized; tbat certain import duties be increased and tbe amount of direct taxes levied under tbe existing law be raised. Had this hope been realized, the Committee of Ways and Means of the House of Representatives might not, perhaps, have been called on to present the system of internal taxa- tion, with the preparing of which it had been entrusted in the extraordinary session. But, instead of the auspicious ter- mination of the war, the next year brought to the minds of all the conviction, that the struggle would be carried d Poutrance, that the last ditch must be fought for. The expenditures necessitated by the war continued to increase at an enormous rate, and the making of provisions for them no longer permitted delay. Considering the magnitude and complexity of the sub- ject of internal taxation, as it presents itself in the law of July 1st, 1862, the Committee of Ways and Means may well be said to have consummated their task with great skill. Their report, submitted to the House on the 3rd of March, 1862, was based on the result of a series of investigations and inquiries, which at that time seemed to preclude serious errors ; un- fortunately, they did not. Manufacturers, merchants and shippers, economists and moralists seem to have been given a hearing by the committee for the purpose of ascertaining as nearly as possible, what tax- burdens the various trades and callings could bear. In refer- ence to the taxing of spirits the committee appear to have been a little perplexed by the superabundance of advice, legiti- mately offered and obstinately obtruded upon them. People of prohibitory proclivities wished to have the manufacture taxed to death ; earnest, but moderate temperance advocates desired to restrict it by taxation ; wealthy distillers, having either a large stock on hand or the means rapidly to accumulate one. insisted on an exorlntant tax, because they already specula- ted on the enormous profits they would realize by a rise of CHAPTER X. 201 prices — it being a foregone conclusion with tbem, that '* stock on hand " would not he taxed ; the owners of small distilleries objected to an excessively high rate of tax, and the agricultur- ists again sided with the latter, on the ground, that much the largest quantity of spirits produced in the country was from corn, and that consequently a tax tending to restrict distillation would be detrimental to the farming interests. Along with all these divergent views came the question of giving prefer- ence to fermented beverages over ardent liquors. In what manner these conflicting desires, views and expectations were treated, may be seen from a speech in wliich Morrill, who was a member of the Ways and Means Committee and acted as their spokesman, explained the nature of the bill. He said : The duties proposed by tlie present bill rest heavily on spirits and malt liquors — being about one hundred per cent, on raw whiskey, fifty per cent, on rum, and twenty five per cent, on ale or beer — but far below the point at which even some prominent distillers thought they might be safely car- ried, and yet largely above the point indicated by the majority of those en- gaged in the business. The men who now are supposed to have large stocks on hand, and those who would destroy the traffic, regardless of rev- enue, for once agree in the propriety of an exorbitant tax. Large quantities of alcohol are used in the arts and manufactures, and will pay a duty in proportion to its strength. For any such purpose the duty proposed on the raw article is as high as it will bear. Little whiskey is sold to be used as a beverage until it Las passed through some process of rectification, is re- distilled, or is filtered through charcoal. All :5pirituous liquors, it will be seen, which are subjected to this hocus-pocus, or the jargon of juniper, strychnine, and other sugar-coated pills, are again assessed to the extent of twenty-five cents per gallon, making in all forty cents per gallon on a large share of spirituous beverages. Surely this is enough, very possibly too much. In England the duty on spirits is ten shillings and fivepence ster- ling, or about $3.53 per gallon. It is manifest that at present no such duty could be collected of the people of the United States. Much the largest quantity of spirits produced in this country is from corn, and many per- sons engaged in the business apprehend, that we shall cut them up by the roots with a duty so high as even fifteen cents per gallon, and that great in- jury will result to farming interests thereby. The committee were satisfied these fears are not well founded. So long as consumption keeps equal pace with production — as in the case of all manufactures — the consumer 202 LIQDOR LAWS OF THE TJNITED STATES. must pay tlie increased cost price. The consumption will not be seriously checked ; and, if it could be, such a result would bring upon us no national disgrace. Whisky and ram, with the duty added, will still leave it possi- ble for any man or brute to get drunk in our laud on cheaper terms than in any other that I know of. Persons who like good liquors are patriotic on the subject of taxation, and never quarrel about the price of the article ; and those who swallow that which is said to be " sure to kill at forty rods," will have it at any hazard of life or purse. Although the representative of a State, in which a prohibi- tory law was at that time in force, Morrill had the moral courage to admit — with some reserve, it is true — the correct- ness of the assertion, that malt liquors promote temperate drinking habits. This admission must be looked for between the lines, as the saying is, but it is there for all that. " Ale and beer," said Morrill, " as beverages maybe regarded as less unhealthful tlian spirits. It is therefore desirable to preserve the relative difference in the value of the quantities usually disposed of at retail, so as not to give any new advantages to competing liquors." Throughout the debate in the House on the taxes intended to be imposed upon distilled spirits and fermented liquors, the old question of fostering the milder beverages in preference to ardent spirits, was kept prominently in the foreground, and the issue between the Prohibitionist minority and the majority of rational temperance advocates was all the more pointed for the reason, that Stevens, of Pennsylvania, who had reported the bill, was himself a brewer, represented a beer-drinking constituency, and consequently had triple cause to defend the provisions of the proposed law, so far as they tended to dis- criminate in favor of fermented liquors. The opposition to these was neither very bitter nor very formidable ; in fact, excepting the promiscuous onslaughts of some of the most zealous mem- bers from ISTew England, there was no objection at all to such a discrimination, and it seemed to be pretty generally acknowl- edged, that what was regarded in all civilized countries as the CHAPTER X. 203 only possible solution of a much vexed question, ought to hold good ill our country. This was true to such an extent, that, through the solicitude of members, lest the brewing industry be overburdened, even Stevens was frequently forced into an attitude of seeming hostility to his constituents' interests. Thus, when the licensing of brewers was discussed, Eolman, of Indiana — who was under the erroneous impression, that a tax on beer of one dollar per barrel would amount to three cents per quart — spoke against the laying of additional burdens on the brewing industry, which he conceived to be alike beneficial and necessary. He said : "This tax applies to all kinds of beer— lager beer, strong beer, and every kind of brewed drink of that nature. This has become an article of absolute necessity in many parts of the country, as much so as tea and coffee. Among the German population lager beer seems to have become an article of absolute necessity. In my own county, at almost every point where a pure spring gushes out of the hills, there is a brewery." Many other members spoke in a similar strain, and although Stevens showed them that their objections were predicated on an erroneous supposition, they nevertheless insisted on a reduction of the brewers' license. This occurred just at a time when a sanitary commission, appointed by the President and Secretary of War, to examine the camps of the Union array and to report upon their sanitary condition,* had rendered an interesting report which testified to the healthfulness of malt liquors in these words : " In certain regiments containing a large percentage of Germans, lager beer has been freely used. There is evidence before the commission tending to show that its use (at least during the summer) was beneficial, and that disorders of the bowels were less frequent in companies regularly supplied with it in moderation than in other companies of the same regiment. " * This commission consisted of Rev. H. W. Bellows, Professor A. D. Bache, George T. Strong, Frederick Lew Olmsted, Drs. J. S. Newberry, J. F. Jenkins, J. H. Douglas, A. J. Bloor, E. B. Elliott and John Bowne. 204 LIQUOR LAWS OF THE DI^ITED STAiES. The same report contained a comparative statement showing the proportion of cases of sickness among the troops from the various States, from which it appeared that the average number of men constantly sick in regiments, one thousand strong, was as follows : New York, 52 ; Pennsylvania, 57 ; Massachusetts, 52 ; Connecticut, 49 ; Yermont, 88 ; and Maine, 124. With telling effect these facts and figures were held under the eyes of the members from Prohibi- tion States. In the main, the old ideas, ventilated so fre- quently and thoroughly in nearly every Congress since the adoption of the Constitution, again came to the surface when- ever the matter of fermented drinks was on the tapis ; and in nearly every instance the representatives of Maine rendered a vindication of these ideas necessary. Rice, of that State, for instance, in opposing a motion to reduce the tax on wine from 5 to 2 cents per gallon, and proposing, instead of either, a tax of sixteen cents, did not hesitate to class wine with whiskey and rum. This elicited the assertion (by Horton), that wine was one of the most efficient agents of carrying out the idea of the Maine law. " I take the responsibility," retorted this gentleman, " of saying that it has a greater tendency to prevent the excessive use of ardent spirits than any agent I have known to be appealed to for the last ten years. The moderate and habitual use of good American wine produces a distate for the use of deleterious ardent spirits. I think, therefore, that all those gentlemen who believe as the gentleman from Maine does, that' the Maine law is a benefit to the country, and that it advances civilization, should come up to the help of the Committee of Ways and Means in this instance, and vote for a small tax on native wine as a promotive of temperance." In the Senate Sherman, of Ohio, opposed a tax on wine made of domestic grapes, on the ground, that it would retard the progress of grape-culture in his State, in Missouri and in California, where, he thought, altogether about ten thousand CHAPTER X. 205 acres were then being cultivated by German vintagers. Grimes of Iowa, after adverting sarcastically to the expunging of a tax upon "brandy manufactured out of whiskey that killed at forty rods," said that he would regard it as " the greatest boon that could be conferred upon this country if Congress could so stimulate grape-culture that wine would be as common a drink as cider used to be in New England when he was a boy/' McDougal, of California, reminded his colleague of the Con- gressional tradition on the subject of wine-culture ; and empha- sized the fact, that in his State large premiums were paid for the purpose of encouraging the production of wine : ' ' The enterprise is in its infancy. It operates toward both material prosperity and national morality ; and such is the opinion, I believe, of the entire country. It has been considered a thing that States should favor by legislation and by bounty, and it is favored by particular localities in the same manner. I vsrill ask whether, when the great culture and production of wine was started about Cincinnati, it was not regarded as a great feature of American * enterprise, and, if it could be accomplished, as a success and a great thing for our country. Such was the voice of the nation, and so it has been from that time until now." Sherman, ordinarily a man of " hard sense" rather than of sentiment, indirectly claimed the exemption of wine from in- ternal taxation as a sort of mark of recognition to the German- Americans, who, as he thought, were showing themselves very patriotic in the war, and had at all times manifested a sincere solicitude for the welfare of the country. This usually stern law- maker disclosed a very keen appreciation of a sentiment, which to this day prevails among the German population, when he said that in cultivating the grape-vine, the vintners "supposed they were contributing to the public weal." Why should they * Colonel Longworth, whose ambition it was said to have been to malie the Ohio a sort of American Rhine, induced a great number of German vintners to settle on his lands and to cultivate the grape-vine, offering them unusually favorable terms. Under this arrangement the industry developed rapidly, yielding large pecuniary profits and an excellent wine. 206 LIQUOR LAWS OF THE UNITED STATES. not have supposed so ? Every child then knew that in all civil- ized countries, where ardent spirits were used to excess, the aim of law-makers had been to introduce milder stimulants ; that as the Swedish Government endeavored to compel the cultivation of hops, so the German authorities successfully strove to introduce the brewing industry into the North of Germany, and the English Parliament sought, less successfully, to correct the errors of its predecessors, by releasing malt liquoi- from its exorbitant burdens. And in America — what was the whole temperance agitation, before it degenerated into a Quixotic crusade of extremists, but an effort to substitute as far as pos- sible and rational, beer and wine for whiskey and rum ? It is worthy of note, that the moral arguments advanced in favor of wine and beer were not assailed in the Senate, although Wilson, of Massachusetts, and Pomeroy of Kansas (" coming events cast their shadows before"), jealously watched over the interests of Prohibitionists, availing themselves of every opportunity of expounding the Maine idea. With a zeal and an energy characteristic of him, Wilson, this truly patriotic man and gifted legislator, opposed every feature of the tax bill that could in any manner be construed as a concession to the demon of inebriety ', he, nevertheless, allowed it to be under- stood — if silence in such a case may be said to imply consent — that he approved of the views expressed by Sherman and evidently entertained by a majority of both Houses. This is nothing to be wondered at, seeing that in the very States, whose prohibitory laws had become the favorite temperance scheme of Wilson, the question of exempting fermented liquors was frequently made an issue between the friends of the cause, and quite as often determined affirmatively. His opposition to the liquor traffic, and that of his co-workers in the House and Sen- ate generally, might have been more effective, if it had been more consistent While he, and a few others, who styled themselves friends of temperance, advocated the highest rate CHAPTER X. 207 of taxes on the manufacture of spirits, thej strenuously ('pi)osed the licensing of retailers of that article, and in the endeavor to carry their point, they unwittingly revealed the futility of the prohibitory laws then in force. In truth, they tried very hard to make national legislation do what, according to their own admission. State legislation had absolutely failed to accom- plish. If later enquiries had not yielded an abundance of statistical evidence of the total worthlessness of Prohibition, one could not wish for better proof of it than is offered in the speeches of Wilson and others. When he first assailed the section relating to licenses, Wilson argued that the retail traffic would be lifted '' into a kind of respectability," which he predicted would have " a most demoralizing influence upon the country," and particularly of course, in States where prohibitory laws were then in force. It is well to state the reasons for this in his own words : "Sir, in some States we have laws forbidding the retailing of ardent spirits, but in spite of these laws, thousands of persons are retailing spirits to the great injury of the community. It (the license) is intended to go into the State of Massachusetts, where there are, in spite of prohibitory laws, several thousand rum sellers. " Appealed to by Wilson, Foster, of Connecticut, stated that in his State a prohibitory law, much more stringent than that of Massachusetts, was in force, but could not be executed. This gave Wilson a fresh subject for lamentation, and he now indulged his imaginative faculty in the best style of our later- day Prohibitionists. For the sake of a few thousand dollars, he said, the United States Government would give licenses to sell an article by which " more Union soldiers have been killed than by the balls of the enemy." When asked why he gave his vote to tax distilleries, he answered that he did so, be- cause he wished to kill these establishments by a tax. Sin- gularly enough, all his ablest opponents hailed from Prohibition States. Fessenden, of Maine, for example, had the moral 208 LIQUOR LAWS OF THE UNITED STATES. courage to be logical in this matter, claiming tbat it was no worse to license the retailer than to tax the distiller, that, if it was immoral to pocket the " wages of sin " from one, it must of necessity be immoral to take the money of the other. Anthony, of Rhode Island,* said : " In Maine and Massachusetts where no licenses are granted, the busi- ness is carried on, I suppose, quite as extensively— 1« is in our State— &s it is where licenses are granted ; and there ougrht to be some mode provided in this bill whereby men who sell spirituous liquors contrary to law should at least be made to pay to the general Treasury as well as those who sell according to law." Foster, of Connecticut, gave a brief history of the prohibi- "bitory law which had been in force in his State since 1852, and in doing so, he not only acknowledged that the legal inhibition could not stop the stealthy sale of spirits, but he also proved that after two years the law had became virtually inoperative by reason of a strong popular sentiment against it. His re- marks left nothing to be desired in point of directness. Thus he said : " In all large towns of the State, and many, probably most, of the small ones, liquor is now sold and sold very generally, in utter violation of law. Our public authorities occasionally, but rarely, institute prosecutions, and convictions are by no means common. Where a man is prosecuted, he defends. It is frequently difficult to make out the proof, even although the place may be notorious as one where liquor is sold, and men sometimes escape conviction who are notoriously guilty. Public feeling has become rather indifferent to the subject of prosecutions and they are generally discontinued." Hale, of New Hampshire, another Prohibition State, was still more emphatic in his utterances ; he said : " I live in a city of about ten thousand inhabitants, about as orderly a city as there is, I believe, in New England anywhere, of its size, as law- abiding a people ; and I believe to-day there never were, at any time, and under any circumstances, two-thirds as maiiy places where liquor is openly and * Rhode Island had her second prohibitory law up to 1863. CHAPTER X. 209 haUtnally and ronslantly soil, week days and Sundays, as it is under the operation of our entirely prohibitory law ; and 1 do not think we are worse than the rest of mankind." These specimens will suffice, it is hoped, to corroborate the assertion, that the representatives of the Prohibition States were unanimous in their conviction, that the prohibitory laws they had helped to enact did not stop the liquor traffic ; never- theless, some of them preferred their system of illicit, illimit- able and uncontrollable traffic to a method by which, as Wilson justly remarked, the business would be rendered respectable, that is to say. placed under control and in the hands of re- sponsible citizens. The attitude of Wilson in this question only confirms the observation, that even the best and most talented of men sometimes succumb to the infection of visionary schemes. He made no attempt to conceal his zealotism on the subject ; on the contrary, he openly declared that he preferred to " let everybody sell that chose to sell, rather than to have anybody licensed to sell." With all due reverence for the manes of a patriot whose memory thousands of brave Union veterans cherish,* it must be said that such utterances characterize the wildest sort of fanaticism. He asserted what he did not and could not know ; he talked of facts which never existed ; he bnilt up a structure of fantastic arguments, which the slightest inquiry into facts completely subverted. He claimed that " the system of licenses increased drunkenness and the crimes that follow drunkenness " — yet, in 1867, when the real state of things was laid bare by a thorough examina- tion, his own State repudiated these views as totally unfounded in fact. In view of the mass of evidence, adduced by representatives of Prohibition States, against the expediency of tyrannical legislation, there is no cause for wonderment that the Maine * One of Wilson's claiins to his country's gratitude is his untiring work in the Committee on Military Affairs. 210 LIQUOR LAWS OF THE UNITED STATES. idea failed to have any effect whatever on any of the features of the revenue law. Concerning the rate of tax which whiskey was supposed to be able to bear, the views of our legislators differed widely. Some members of Congress advanced the opinion, in all seriousness, that a tax on ardent spirits, however exorbitant, would be collectable, and could not diminish consumption ; while others seemed to think that taxing the article at the rate of one hundred per cent, on its value would be almost equiva- lent to destroying the manufacture. This divergence of opinions subsequently led to a series of experiments which incited a ruinous spirit of speculation and invited the per- petration of frauds upon the Government. At the time when the laying of the first tax was being discussed in Congress, there was abundant evidence that the distillers of the country already speculated on the increase of price, which must inevit- ably follow the imposition of a tax on the article, and that this speculation was based on the supposition — which proved to be correct — that the stock on hand at the time the law was to go into effect would not be taxed. Legislators could not well plead ignorance of this scheme, as Sherman and others re- peatedly called attention to it, and sought to contravene it by inserting in the bill a clause imposing a tax upon stock on hand. Sherman said : " I am satisfied, and I make the statement now witli perfect confidence, that if this tax is made twenty or twenty-five cents, or even fifteen cents, it will stop in a great measure the manufacture of whiskey for at least six months, for a very simple reason. It has been known ever since last July that a tax would be put on whiskey, and all distilleries of the country have been running to their extremest capacity, and to-day they are running more than they have done liefore. Every old still in the country has been set at work, simply because it was supposed a tax would be put on wfiiskey, andtJiat tJie stock on hand would not be taxed." This statement of fact, made at so early a stage of the development of our gigantic revenue system, should be borne i CHAPTER X. 211 in mind, as it is of great importance in forming a just opinion of the fluctuating character of distillation in subsequent years, under repeated changes of the rate of tax. The revenue law, as finally passed, imposed a tax of twenty cents per gallon, on whiskey, and of one dollar per barrel, on fermented liquors. According to the schedule of licenses, which included nearly every trade and calling, dis- tillers had to pay $50 for each license, annually ; brewers, $25 and $50, according to the quantity of beer brewed ; wholesale dealers in all kinds of liquors, $100, and retail dealers in liquors, $20. The full text of that part of the law which relates to spirits, ale, beer and porter reads as follows : SPIRITS, ALE, BEER AND PORTER. Sec. 39. And be it further enacted. That it shall be the duty of the collectors, within the respective districts, to grant licenses for distilling, which licenses shall contain the date thereof, the sum paid, and the time when the same will expire, and shall be granted to any person, being a res- ident of the United States, who shall desire the same, by application, in writing, to such collector, upon payment of the sum or duty pavable by this Act upon each license requested. And at the time of applying for said license, and before the same is issued, the person so applying shall give bond to the United States in such sum as shall be required by the collector, and with one or more sureties, to be approved by said collector, conditioned that in case any additional still or stills, or other implements to be used as aforesaid, shall be erected by him, his agent or superintendent, he -will, be- fore using, or causing or permitting the same to be used, report in writing to the said collector the capacity thereof, an information from time to time of any change in the form, capacity, ownership, agency or superin- tendence, which all or either of the said stills or other implements may undergo ; and that he will, from day to day, enter, or cause to be entered, in a book to be kept for that purpose, the number of gallons of spirits that may be distilled by said still or stills, or other implements, and also of the quanties of grain or other vegetable productions, or other substances put into the mash-tub, or otherwise used by him, his agent, or superintendent, for the purpose of producing spirits, which said book shall be open at all times during the day (Sundays excepted) to the inspection of the said collec- tor, who may make any memorandums or transcripts therefrom; and that he will render to the said collector, on the first, tenth, and twentieth days of 212 LIQUOR LAWS OF THE UNITED STATES. each and every month, or within five days thereafter, during tha continu- ance of said license, an exact account, in writing taken from his books, of the number of gallons of spirits distilled and sold, or removed for consump- tion or sale, by him, his agent, or superintendent, and the proof thereof, and also of the quantities of grain and other vegetable productions, or other substances, put into the mash-tub, or otherwise used by him, his agent or superintendent, for the purpose of producing spirits, for the period or fractional part of a month then next preceding the date of said report, which said report shall be verified by affidavit in the manner prescribed by this Act ; and that he will not sell or permit to be sold, or removed for con- sumption or sale, any spirits distilled by hun under and by virtue of his said license, until the same shall have been inspected, gauged and proved, and the quantity thereof duly entered upon his books as aforesaid ; and that he will, at the time of rendering said account, pay to the said collector the duties which by this Act are imposed on the spirits so distilled ; and the said bond may be renewed or changed, from time to time, in regard to the amount and sureties thereof, according to the discretion of the collector. Sec. 40. And be itfurtJier enacted. That the application in writing made by any person for a license for distilling, as aforesaid, shall state the place of distilling, the number and capacity of the still or stills, boiler or boilers, and the name of the person, firm, company, or corporation using the same ; and any person making a false statement in either of the said particulars shall forfeit and pay the sum of one hundred dollars, to be recovered with costs of suit. Sec. 41. And he it further enacted, That in addition to the duties payable for licenses herein provided, there shall be paid, on all spirits that may be distilled and sold, or removed for consumption or sale, of first proof, on and after the Ist day of August, eighteen hundred and sixty-two, the duty of twenty cents on each and every gallon, which shall be paid by the owner, agent, or superintendent of the still or other vessel in which the said spirit- uous liquors shall have been distilled; which duty shall be paid at the time of rendering the accounts of spirituous liquors so chargeable with duty, re- quired to be rendered by this act: Provided, That the duty on spirituous liquors and all other spirituous beverages enumerated in this Act shall be collected at no lower rate than the basis of first proof, and shall be increased in proportion for any greater strength than the strength of proof. Sec. 42. And be it further enacted. That the term first proof used in this Act and in section six of the Act of March second, eighteen hundred and six- ty-one, entitled " an Act to provide for the payment of outstanding treasury notes, to authorize a'loan, to regulate and fix the duties on imports, and for CHAPTER X. 213 otlier purposes," shall be construed, and is hereby declared to mean, that proof of a liquor wbich corresponds to fifty degrees of Tralles' centesimal hydrometer, adopted by regulation of the Treasury Department, of August twelfth, eighteen hundred and fifty, at the temperature of sixty degrees of Fahrenheit's thermometer ; and that in reducing the temperatures to the standard of sixty, and in levying duties on liquors above and below proof, the table of commercial values, contained in the manual for inspectors of spirits, prepared by Professor McCuUoch, under the superintendence of Pro- fessor Bache, and adopted by the Treasury Department, shall be used and taken as giving the proportions of absolute alcohol iu the liquids gauged and proved according to which duties shall be levied. Sec. 43. And be it further enacted, That there shall be designated by the collector in every assessment district where the same may be necessary one or more inspectors, who shall take an oath faithfully to perform their duties in such form as the Commissioner of Internal Revenue shall prescribe, and who shall be entitled to receive such fees as may be fixed and prescribed by said Commissioner. And all spirits distilled as aforesaid by any person licensed as aforesaid shall, before the same is used, or removed for consump- tion or sale, be inspected, gauged, and proved by some person so as aforesaid designated for the performance of such duties, and who shall mark upon the cask or other package containing such spirits, in a manner to be pre- scribed by said commissioner, the quantity and proof of the contents of such cask or package, with the date of inspection and the name of the inspector. And any person who shall attempt fraudulently to evade the payment of du- ties upon any spirits distilled as aforesaid, by changing in any manner the mark upon any such cask or package, shall forfeit the sum of five hundred dollars for each cask or package so altered or changed, to be recovered as hereinbefore provided. And the fees of such inspector shall in all cases be paid by the owner of the spirits so inspected, gauged and proved. And any such inspector who shall knowingly put upon any such cask or package any false or fraudulent mark shall be liable to the same penalty hereinbefore provided for each cask or package so fraudulently marked. And any person who shall use any cask or package so marked, for the purpose of selling, spirits of a quality different from that so inspected, shall be subject to a like penalty for each cask or package so used. Sec. 44. And he it further enacted, That the owner or owners of any dis- tillery may erect, at his or their own expense, a warehouse of iron, stone, or brick, with metal or other fire -proof roof, to be contiguous to such distillery; and such warehouse, when approved by the collector, is hereby declared a bonded warehouse of the United States, and shall be used only for storing distilled spirits, and to be under the custody of the collector or his deputy. 214 LIQTJOR LAWS OF THE r:NITED STATES. And the duty on the spirits stored in such warehouse shall be paid when and as it is sold or removed from such warehouse for sale. Sec. 45. And he it further enacted, That every person who, on the first day of August, eighteen hundred and sixty -two, shall be the owner of any still, boiler, or other vessel, used or intended to be used for the purpose of distilling spirituous liquors, as hereinbefore provided, or who shall have such a still, boiler, or other vessel under liis superintendence, either as agent for the owner or on his own account, and every person who, after said day, shall use or intend to use any still, boiler, or O-her vessel, as aforesaid, either as owner, agent, or otherwise, shall from day to day make true and exact entry, or cause to be entered, in a book to be kept by him for that purpose, the number of gallons of spirituous liquors distilled by him, and also the number of gallons sold, or removed for consumption or sale, and the proof thereof, which book shall always be open in the day time, Sundays excepted, for the inspection of the said collector, who may take any minutes, memorandums, or transcripts thereof, and shall render to said collector, on the first, tenth and twentieth days of each and every month in each year, or within five days thereafter, a general account in writing, taking from his books, of the num- ber of gallons of spirituous liquors distilled and sold, or removed for con- sumption or sale, and the proof thereof, for the period or fractional part of a month preceding said day, or for such portion thereof as may have elapsed from the date of said entry and report to the said day which shall nest ensue ; and shall also keep a book or books, in a form to be prescribed by the Com- missioner of Internal Revenue, and to be open at all seasonable hours for in- spection by the collector and assessor of the district, wherein shall be entered,, from day to day, the quantities of grain, or other vegetable productions, or other substances put into the mash-tub by him, his agent, or superintendent, for the purpose of producing spirits ; and shall verify, or cause to be verified^ the said entries, reports, books, and general accounts, by oath or affirmation, to be taken before the collector or some other officer authorized by the laws of the State to administer the same according to the form required by this act, where the same is prescribed ; and shall also pay to the collector the duties which by this act ought to be paid on the spirituous liquors so dis- tilled and sold, or removed for consumption or sale, and in said accounts mentioned, at the time of rendering an account thereof. Sec. 46. And be it further enacted, That the collector of any district may grant a permit to the owner or owners of any distillery within his district to send or ship any spirits, the product of said distillery, after the quantity and proof thereof shall have been ascertained by inspection according to the pro- visions of this act, to any place without said district, and within the United States ; and in such case the bill of lading or receipt (which shall be in such CHAPTER X. 215 form as the Commissioner of Internal Revenue may direct) of the same shall be taken in the name of the collector of the district in which the distillery is situate, and the spirits aforesaid shall be consigned, in such bill of lading or receipt, to the collector of the district in which the place is situate, whither the spirits is sent or shipped, and the amount of duties upon said spirits shall be stated in the receipt ; and upon the arrival of the spirits, and upon the de- mand of the collector aforesaid, the agent of the distillery (and the name of the agent, for the convenience of the collector, shall always appear in the bill of lading or receipt) shall pay the duties upon the said spirits, with the expense of freight, and every other expense which has accrued thereupon; and the said collector, upon the payment of the duties aforesaid, shall deliver the bill of lading or receipt and the spirits to the agent of the said distillery ; and if the duties are not paid as aforesaid, then the said spirits shall be stored at the risk and cost of the owner or agent thereof, who shall pay an addition of ten per centum thereupon ; and all the general provisions of this act in reference to liens, penalties, and forfeitures, as also in reference to the col- lection, shall apply thereto, and be enforced by the collector of the district in which the spirits may be : Provided, That no permit shall be granted, under this section, for a quantity less than fifty barrels : And provided fur- ther, That the Commissioner of Internal Revenue, under the direction of the Secretary of the Treasury, may make such further regulations, and require such further securities, as he may deem proper in order to protect the revenues and to carry out the spirit and intent of this section. Sec. 47. And be it further enacted. That distilled spirits may be removed from the place of manufacture for the purpose of being exported, or for the purpose of being redistilled for export, and refined coal oil may be removed for the purpose of being exported, after the quantity of spirits or oil so re- moved shall have been ascertained by inspection, according to the provisions of this act, upon and with the written permission of the collector or deputy collector of the district, without payment of the duties thereon previous to such removal, the owner thereof having first given bond to the United States, with sufficient sureties, in the manner and form and under regulation, prescribed by the Commissioner of Internal Revenue, and in at least double the amount of said duties, to export the said spirits or oil or pay the duties thereon within such time as may be prescribed by the commissioner, which time shall be slated in said bond : Provided, That any person desiring to give such bond shall first make oath, before the collector or deputy collector to whom he may apply for a permit to remove any such spirits or oil, in manner and fortn to be prescribed by said commissioner, that he intends to export such liquors or oil, and that he desires to obtain said permit for no other pur- pose whatever : and any collector or deputy collector is hereby authorized to administer such oath : And provided further, That no such removal shall be 216 LIQUOK LAWS OF THE UNITED STATES. permitted where the amount of duties does not exceed the sum of three hundred dollars, nor in any case where the person desiring such permission has failed to perform the obligation of any bond previously given to the United States for the removal of any such articles, until the same shall have been fully kept and performed. And the collector of the district in which any such bond may be given is authorized to cancel said bond on payment of said duties, with interest thereon, at a rate to be fixed by said Oom missioner, and all proper charges, if said liquors or oil shall not have been exported, or upon satisfactory proof that the same have been duly exported as aforesaid. And in case of the breach of the obligation of any such bond, the same shall be forthwith forwarded by the collector of the district to the Commissioner of Internal Revenue, to be by him placed in the hands of the First Comptroller of the Treasury, who shall cause the same proceedmgs to. be taken thereon, for the purpose of collecting the duties, interest, and charges aforesaid, as are provided in this act in case of a delinquent collector. Sec. 48. And be it furtJier enacted. That the entries made in the books of the distiller, required to be kept in the foregoing section, shall, on the first, tenth, and twentieth days of each and every month, or within five day* thereafter, be verified by oath or affirmation, to be taken as aforesaid, of the person or persons by whom such entries shall have been made, which oath or aflarmation shall be certified at the end of such entries by une collector or oflBcer administering the same, and shall be, in substance, as follows r " I do swear (or affirm) that the foregoing entries were made by me on the respective days specified, and that they state, according to the best of my knowledge and belief, the whole quantity of spirituous liquors distilled and sold, or removed for consumption or sale, at the distillery owned by , in the county of , amoimting to gallons, according to proof pre- scribed by the laws of the United States." Sec. 49. And be it further enacted, That the owner, agent, or superin- tendent aforesaid, shall, in case the original entries required to be made in his books by this act shall not have been made by himself, subjoin to the oath or affirmation of the person by whom they were made the following oath or affirmation, to be taken as aforesaid : " I do swear (or affirm) that, to the best of my knowledge and belief, the foregoing entries are j ust and true, and that I have taken all the means in my power to make them so. " Sec. 50. And be it further enacted. That on and after the first day of August, eighteen hundred and sixty-two, there shall be paid on all beer, lager beer, ale, porter, and other similar fermented liquors by whatever name such liquors may be called, a duty of one dollar for each and every barrel containing not more than thirty-one gallons, and at a like rate for any other quantity or for fractional parts of a barrel, which shall be brewed or manu- CHAPTER X. 217 factored and sold or removed for consumption or sale within the United States or the Territories thereof, or within the District of Columbia, after tliat day ; which duty shall be paid by the owner, agent, or superintendent of the brewery or premises in wliicli sucli fermented liquors shall be made, and shall be paid at tlie time of rendering the accounts of such fermented liquors so chargeable with duty, as required to be rendered by the following section of this act : Provided, That fractional parts of a barrel shall be halves, quar- ters, eighths, and sixteenths, and any fractional part containing less than one- sixteenth shall be accounted one-sixteenth; more than one sixteenth and not more than one-eighth shall be accounted one-eighth ; more than one-eighth, and not more than one-quarter, shall be accounted one-quarter; more than one- quarter, and not more than one-half, shall be accounted one-half ; more than one-half, shall be accounted one barrel. Sec. 51. And he it further enacted, That every person who, on said first day of August, eighteen hundred and sixty-two, shall be the owner or occupant of any brewery or premises used or intended to be used for the pur- pose of brewing or making such fermented liquors, or who shall have such premises under his control or superintendence, as agent for the owner or occupant, or shall have in his possession or custody any vessel or vessels intended to be used on said premises in the manufacture of beer, lager beer, ale, porter, or other similar fermented liquors, either as owner, agent, or otherwise, shall from day to day, enter or cause to be entered in a book to be kept by him for that purpose, and which shall be open at all times, except Sundays, between the rising and setting of the sun, for the inspection of said collector, who may take any minutes or memorandum or transcripts thereof, the quantities of grain, or other vegetable productions or other substances, put into the mash-tub, or otherwise used for the purpose of producing beer, or for any other purpose, and the quantity or number of barrels and frac- tional parts of barrels of fermented liquors made and sold, or removed for consumption or sale, keeping separate account of the several kinds and de- scriptions ; and shall render to said collector, on the first day of each month in each year, or within ten days thereafter, a general account, in writing, taken from his books, of the qualities of grain, or other vegetable produc- tions or other substances, put into the mash-tub, or otherwise used, for the purpose of producing beer, or for any other purpose, and the quantity or number of barrels and fractional parts of barrels of each kind of fermented liquors made and sold, or removed for consumption or sale, for one month preceding said day; and shall verify or cause to be verified the said entries, reports, books, and general accounts, on oath or general affirmation, to be taken before the collector or some officer authorized by the laws of the State to administer the same according to the form required by this Act where the same is prescribed ; and shall also pay to the said collector the duties 218 LIQUOR LAWS OF THE UNITED STATES. which, by this Act, ought to be paid on the liquor made and sold, or re- moved for consumption or sale, and in the said accounts mentioned, at the time of rendering the account thereof, as aforesaid. But where the manu- facturer of any beer, lager beer or ale, manufactures the same in one collec- tion district, and owns or hires a depot or warehouse for the storage and sale of such beer, lager beer, or ale, in another collection district, he may, instead of paying to the collector of the district where the same was manufactured the duties chargeable thereon, present to such collector or his deputy an in- voice of the quantity or number of barrels about to be removed for the pur- pose of storage and sale, specifying in such invoice, with reasonable cer- tainty, the depot or warehouse in which he intends to place such beer, lager beer, or ale ; and thereupon such collector or deputy shall indorse on such invoice his permission for such removal, and shall at the same time trans- mit to the collector of the district in which such depot or warehouse is situ- ated a duplicate of such invoice . and thereafter the manufacturer of the beer, lager beer, or aie so r«moved shall render the same account, and pay the same duties, and be subject to the same liabilities and penalties as if the beer, lager beer, or ale so removed had been manufactured in the district. The Commissioner of Internal Revenue may prescribe such rules as he may deem necessary for the purpose of carrying the provisions of this section into effect. Sec. 52. And be it further enacted. That the entries made in the books required to be kept by the foregoing section shall, on said first day of each and every month, or within ten days thereafter, be verified by the oath or affirmation, to be taken as aforesaid, of the person or persons by whom such entries shall have been made, which oath or affirmation shall be certified at the end of such entries by the collector or officer administering the same, and shall be, in substance, as follows : " I do swear (or affirm) that the fore- going entries were made by me on the respective days specified, and that they state, according to the best of my knowledge and belief, the whole quantity of fermented liquors either brewed or brewed and sold at the brew- ery owned by , in the county of , amounting to barrels." Sec. 53. And be it further enacted, That the owner, agent, or super- intendent aforesaid shall, in case the original entries required to be made in his books shall not have been made by himself, subjoin to the oath or affirmation the following oath or affirmation, to be taken as aforesaid : " I do swear (or affirm) that, to the best of my knowledge and belief, the fore- going entries are just and true, and that I have taken all the means in my power to make them so." Sec. 54. And be it further enacted. That the owner, agent, or super- intendent of any vessel or vessels used in making fermented liquors, or of any CHAPTER X. 219 Still, boiler, or otlier vessel used in the distillation of spirits on wliicli duty is payable, who shall neglect or refuse to make true and exact entry and re- port of the same, or to do, or cause to be done, any of the things by this act required to be done as aforesaid, shall forfeit for every such neglect or refusal all the liquors and spirits made by or for him, and all the vessels used in making the same, and the stills, boilers, and other vessels used in distillation, together with the smu of five hundred dollars, to be recovered with costs of suit ; which said liquors or spirits, with the vessels containing the same, with all the vessels used in making the same, may be seized by any collector of internal duties, and held by him until a decision shall be had thereon ac- cording to law : Provided, That such seizure be made within thirty days after the cause for the same may have occurred, and that proceedings to en- force said forfeiture shall have been commenced by such collector within twenty days of the seizure thereof. And the proceedings to enforce said for- feiture of said property shall be in the nature of a proceeding in rem, in the circuit or district court of the United States for the district where such seizure is made, or in any other court of competent jurisdiction. Sec. 55. And he it further enacted, That in all cases in which the duties aforesaid, payable on spirituous liquors distilled and sold, or removed for consumption or sale, or beer, lager beer, ale, porter, and other similar fer, mented liquors, shall not be paid at the time of rendering the account of the same, as herein required, the person or persons chargeable therewith shall pay, in addition, ten per centum on the amount thereof; and, until such duties with such addition shall be paid, they shall be and remain a lien upon the distillery where such liquors have been distilled, or the brewery where such liquors have been brewed, and upon the stills, boilers, vats, and all other implements thereto belonging, until the same shall have been paid ; and in case of refusal or neglect to pay said duties, with the addition, within ten days after the same shall have become payable, the amount thereof may be recovered by distraint and sale of the goods, chattels, aud efifects of the delinquent ; and, in case of such distraint, it shall be the duty of the oflScer charged with the collection to make, or cause to be made, an account of the goods, chattels, or efifects which may be distrained, a copy of which, signed by the officer making such distraint, shall be left with the owner or pos- sessor of such goods, chattels, or eflTects, at his, her, or their dwelling, with a note of the sum demanded, and the time and place of sale ; and said officer shall forthwith cause a notification to be published in some newspaper, i f any there be, within the county, and publicly posted up at the post office nearest to the residence of the person whose property shall be distrained, or at the court-house of the same county, if not more than ten miles distant, which notice shall specify the articles distrained, and the time and place proposed for the sale thereof, which time shall not be less than ten days from the date of 220 LIQUOR LAWS OF THE UNITED STATES. such notification, and the place proposed for sale not more than five miles dis- tant from the place of making such distraint : Provided, That in every case of distraint for the payment of the duties aforesaid, the goods, chattels, of effects so distrained may and shall be restored to the owner or possessor if, prior to the sale thereof, payment or tender thereof shall be made to the proper oflacer charged with the collection, of the full amount demanded, to gether with such fee for levying and advertising, and such sum for the necessary and reasonable expenses of removing and keeping the goods, chattels, and effects so distrained as may be allowed in like cases by the laws or practice of the State or Territory wherein the distraint shall have been made ; but in case of non-payment or neglect to tender as aforesaid, the said oflScer shall proceed to sell the said goods, chattels, and effecis at public auc- tion, after due notice of the time and place of sale, and may and shall retain from the proceeds of such sale the amount demandable lor the use of the United States, with the said necessary and reasonable expenses of said dis- traint and sale, as aforesaid, and a commission of five per centum thereon for his own use ; rendering the overplus, if any there be, to the person whose goods, chattels, and effects shall have been distrained. Sec. 56. And he it further enacted, That every person licensed as afore- said to distill spirituous liquors, or licensed as a brewer, shall, once in each month, upon the request of the assessor or assistant assessor for the district in which his business as a distiller or brewer may be carried on, respectively, furnish the said assessor or assistant assessor with an abstract of the entries upon his books, herein provided to be made, showing the amount of spirit- uous liquor distilled and sold, or removed for consumption or sale, or of beer, lager beer, ale, porter, or other fermented liquor made and sold, or removed for consumption or sale, during the preceding month, respectively ; the truth and correctness of which abstract shall be verified by the oath of the party so furnishing the same. And the said assessor or assistant assessor shall have the right to examine the books of such person for the purpose of ascertaining the correctness of such abstract. And for any neglect to furnish such abstract when requested, or refusal to furnish an examination of the books as aforesaid, the person so neglecting shall forfeit the sum of five hundred dollars. A few days after the approval of tliis law (July 1st, 1862), the import duty on brandy was increased by twenty-five cents per gallon, and on all other spirits, fifty cents per gallon. The duties on malt liquors were raised from fifteen to twenty cents per gallon, when imported in casks, and from twenty-five to thirty cents, when imported in bottles. By the act of March CHAPTER X. 221 3, 1863, tlie internal tax on fermented liquors was temporarily reduced to sixty cents per barrel, that is to say, the tax was to be at this rate from the date of the passage of that act to April 1, 1864, after which date the original tax of $1.00 per barrel was to be revived. At this rate — it may be stated right here — the tax upon malt liquors remains to this day. No change in the rate of the internal tax on distilled spirits was made until the year 1864, when two acts were passed,* one rapidly following the other, successively increasing the excise dut^^ to 60 cents, $1.50 and $2. The latter was to take effect on the 1st of February, 1865, but this provision was subsequently so amended as to make the rate take effect a month earlier. It is worthy of note that after the date men- tioned a discrimination in the rate of tax was made in favor of brandy distilled from grapes, which shortly afterwards was extended so as to include spirits distilled from apples and peaches. Every proposition to increase the tax on spirits brought out repetitions of Sherman's assertion, that the laws would inevitably be made the basis of dangerous speculation, unless a tax be imposed upon stock on hand. Experience had even then furnished ample proof of the truth of this statement, and everything seemed to combine, to impress upon the minds of members of Congress the necessity of profiting by the lessons which this experience offered. If the effect of the various laws, beginning with that of July 1st, 1862, be examined — a task rendered very easy by the help of the masterly re- ports of the Special Revenue Commission, of which D. A. Wells was chairman — it will be found that Sherman's predic- tion was more than verified. In the fiscal year 1862-63, under the tax of twenty cents, imposed July 1st, 1862, the revenues accruing from this source amounted to but $3,229,900. Hence^ May 7tli and June SOtli, 18G4. 222 LIQUOK LAWS OF THE UIOTED STATES. the quantity of spirits on which taxes were paid during that time did not come up to one-fifth of the quantity returned by the census of 1860. Did so low a tax have the effect of restricting consumption to so great an extent ? Surely not. The consump- tion was undoubtedly diminished, as is shown by the official reports of the revenue commission, but not to an extent at all approaching the ratio above indicated. The fact is, produc- tion had ceased to that extent, for the simple reason, foretold by Sherman, that long before the passage of the law — its enactment being then an almost absolute certainty — the dis- tillers produced" spirits so largely in excess of immediate de- mand, that during the time in question there was no need of a larger production than the one stated above. The tables of internal revenue receipts, reproduced in another part of this book, demonstrate very plainly the sudden fluctuations in the manufacture of this article, which cannot be explained other- wise than Sherman had done in the second session of the thirty-seventh Congress. Anyone acquainted with the progress of the war, and the condition of the Treasury, must have foreseen, at the beginning of the fiscal year 1863-64, that an increase of taxes would have to be effected ; as subsequent disclosures showed, dis- tillers had as good an opportunity of knowing what Congress would do in the matter, as any other class of manufacturers, and they did not fail to improve their opportunities. As soon as the first increase in the rate of tax had become what might be called a moral certainty, distillation was re- sumed with so much energy, that before the new law, imposing a tax of sixty cents, went into operation, no less than 56,863,59.5 gallons of spirits were manufactured on which the old tax of twent}'^ cents was paid. Under this and the new tax — which latter, as has been shown, was more than trebled within five months — the aggregate quantities of spirits returned by the revenue officials amounted to 85,295,393 gallons. This CHAPTER X. 22S effect of the instability of the rate of tax could have been averted from the beginning, if the law-makers had acted on Sherman's suggestion, but it seems that even then the influence of what is popularly called the third House had more weight than prudential considerations. The Special Revenue Com- mission, appointed in 1865, made this statement in reference to the operation of the law : * ' ' The immediate effect of the enactment of the first three and successive rates of duty was to cause an almost entire suspension of the business of distilling, which was resumed again with great activity as soon as an advance in the rate of tax in each instance became probable. The stock of whiskey and high wines accumulated in the country under this course of procedure was without precedent, and Congress, by its refusal to make the advance in taxation, in any instance retroactive, virtually legislated for the benefit of the distillers and speculators rather than for the Treasury and the Government." This was not, however, the worst feature of the law, for the Treasury at least obtained revenue at the lower rate of tax on which this sort of speculation was based. The worst feature by far was the facility offered for an entire evasion of all taxes. From the report already cited it appears, that the matter of inspecting distilleries and spirits was frequently left entirely to the " workmen or partners in the distilleries inspected." The testimony of George Parnell, United States revenue agent, was very pointed in this respect. He made the statement, that distillers manufactured and fraudulentlv sold, without the slightest pretense of concealment, spirits, in quan- tities ranging from 20,000 to 80,000 gallons, without suspicion on the part of the local officers, that the business was not con- ducted in all respects legally and honestly. In answer to the question whether, then, these frauds were due to the neglect on the part of the Government officials, he literally stated : " There never has been any oflScer appointed under the revenue act, whose special duty it was to look after distilleries. The inspectors are paid * House Ex. Doc. No. 60, Ist Session, 39th Congress, p. 19. 224 LIQUOR LAWS OF THE UNITED STATES. in the shape of fees, by the distillers. The fees are generally very small. In most cases all the inspectors ever thought of doing was, to go and inspect the iiquors when the distillers sent for them." From a mass of evidence, which would form a small volume, the conclusion is inevitable that the law, as it then stood, would not have enabled the Government to prevent fraud, even if the conduct of the war had not detracted attention from the details of this subject. It must not be sup- posed that frauds upon the Government were committed by distillers only ; the disposition to evade the tax extended to all trades. It is to be regretted that the example of the U. S. Brewers' Association, which was organized for the purpose of protecting both the interests of its members and those of the Government, found few, if any, imitators. The appointment of the special revenue commission — under authority of an act of Congress, approved March 3rd, 1865 — and the subsequent creation of the office of Special Com- missioner of the revenue, in 1866, signalized the beginning of those attempts at a thorough revenue reform, which in later years brought about the annihilation of a combination of speculators, commonly known under the name of " whiskey ring," and placed the Government in a position to prevent and detect revenue frauds. A general outline of the modifica- tions of the law, deemed necessary in order to make taxes on spirits and fermented liquors more easily collectable and to prevent frauds — is found in the following extract from the report of the Special Revenue Commission of January, 1866:* " Distilled spirits. — Of the various sources of revenue in- cluded under the internal revenue, that of distilled spirits ranks first in importance. The amount of revenue derived from this * House Ex. Doc. No. 34, 1st Session, 39th Congress. CHAPTER X. 225 source for the several fiscal years during which the internal revenue law has been in operation, is as follows: 1863 $3,229,990.79 1864 \ 28,431,797.83 1865 15,995,701.66 During the fiscal year 1863 the tax was uniformly twenty cents per gallon. For the fiscal year 1864 the tax was twenty cents until March 7th, after which it was sixty cents. From July 1st, 1864, until January 1st, 1865, it was $1.50 per gal- lon, and afterwards $2. Of the receipts from excise on distilled spirits in the year 1865, $3,862,753, or nearly one-fourth of the whole amount, was from spirits previously bonded, and paying the former rates of twenty and sixty cents per gallon. The average taxable production of distilled spirits per year, from September 1st, 1862, to June 30th, 1865, as returned to the department, was 40.537,371 gallons. The amount of distilled spirits produced in the country during the year 1860 was in excess of ninety millions of gal- lons. The amount at present required to meet the consumption of the country, under the influence of the high rate of taxation imposed upon this article, is estimated by the commission as from forty-two to forty-five millions of gallons ; and with the continuance of the present rate of excise they have no reason to believe that this amount will, for some years to come, be either largely increased or diminished. Of the amount at present required to supply the consump- tion of the country, the commission estimate that probably about 39,000,000 gallons are required for drinking purposes, leaving from 3,000,000 to 6,000,000 gallons for industrial uses. This estimate does not include the amount of spirits exported, from which by reason of the drawback, no revenue pccrues. The largest amount ever exported in any one year has not, according to the ofiicial returns, exceeded 3,000,000 gallons. In regard to the rate of tax to be imposed upon spirituous or distilled liquors, the commission are of the opinion that the present rate of two dollars per gallon is in excess of the proper revemie standard, and that a reduction will be for the interests botli of the revenue and the country. They accord- ingly recommend that the rate of tax on distilled spirits be 226 LIQtrOK LAWS OF THE UNITED STATES. reduced to one dollar per gallon. {The Commissioner after- wards proposed a tax of 50 cents per gallon. With this rate of duty, and with the consumption for industrial purposes (esti- naated at not less than 10,000,000 gaWons) which must follow, the commission are of the opinion that, making all allowances, an average annual revenue of at least forty millions of dollars, from this source may be collected. But whatever may be the rate of tax agreed upon for the future, it is clearly evident that a far more stringent and effect- ive law than that which now exists is needed, if any fair pro- portion of the amonnt which the Government has a right to expect from this source is to be collected, and protection at the same time extended to the honest distiller as against the competition of his illicit competitor. The commission, therefore, present, in connection with their special report upon this subject, a draught of a new law,, which they believe will be effectual for the prevention of fraud and the securing of the revenue. This bill, which is neces- sarily arbitrary and restrictive, does not, in some of its essential features, meet the approval of a portion of the distilling interest of the country, and their opposition to it may be fairly expected. The commission have, however, given a great amount of time to the investigation of this subject, and have availed themselves of the judgment of the most experienced revenue officials, distillers and dealers, from various sections of the country; and have also sought to acquaint themselves most thoroughly with the manner in Avhich this subject is treated for revenue in the various States of Europe. The securing of a large revenue from distilled spirits in the United States is absolutely necessary to insure the sucsessf ul carrying out of any plan for simplifying the internal revenue system, and relieving the general industry of the country from a burden of taxation which must inevitably result in disaster. No industrial interest in the country can better sustain the burden of taxation than distilled spirits. The precedents of all other countries are uniformly in favor of taxing spirits to the maximum consistent with revenue ; and while any relaxa- tion of the law, on the other hand, does not benefit the con- sumer its strinijent enforcement with a regulation of the CHAPTER X. 227 business will not diminish the amount which appetite or industrial necessity demands for consumption. If it be urged that the bill as reported by the commission is too restrictive and arbitrary in its character, destructive of small private in- terests; and as imposiniy large additional restrictions and ex- penses upon all engaged in the business, it may be replied that the amount of good which must inevitably accrue to the whole country by the course recommended — if the same will insure an enforcement of the law and the collection of the revenue — is sufficient to justify a disregard of the interests of a comparatively small number of individuals. The com- mission, therefore, express the hope that Congress will not too readily listen to the appeals of those who are more anxious to subserve their own interests than the interests of the country. Fermented liquors. — The next source of revenue to which the commission ask attention is that derivable from fermented liquors, which, like distilled spirits, are capable of sustaining, without injury to the country, a heavy taxation. From this source the following revenues have accrued for the fiscal years 1863, 1S64 and 1865; 1863 $1,558,083.41 1864 2,223,710.73 1865 3,657,181.06 From September 1862, to March 3, 1863, the tax was one dollar per barrel — of not more than thirty-one gallons ; from that date to April 1, 1864, sixty cents ; and since that time, one dollar. The number of barrels upon which the tax was received, as nearly as can be ascertained, was 1,765,827 in 1863 ; 3,459,119 in 1864; and 3,657,181 in 1865. By the census of 1860 the number of breweries then exist- ing in the United States was returned at 1,269, affording a product of nearly four million barrels (3,812,346.) The com- mission, after a careful review of this branch of industry, and personal consultation with nearly every leading brewer of both ale and lager beer in the United States, are of the opinion that the number of barrels of beer produced and consumed in the country during the fiscal year 1865 was nearly or quite 6,000,000, and that the annual increase of product at the pres- 228 LIQUOR LAWS OF THE UNITED STATES. ent time is about ten per cent, per annum, mainly of lager beer. If this opinion be correct, it is apparent that the Government received for the above year but little more than sixty per cent, of its just dues from this source. Upon the announcement of the ajypointment of this com- mission in the spring of 1865^ the National Brewer i Asso- ciation appointed a committee of three of their onost prominent memhers, to visit Europe, and examine^ carefully and in de- tail, the results of the working of the systems of taxation in regard to ferm^ented liquors adopted in those countries of Europe, where the demand for such liquors is more general and extensive than in the United States. The report of that committee,'^ comprising a great amount of information touch- ing this industry, now so rapidly developing itself in the United States^ has, hy vote of the Brewer^ Association, been placed in the hands of the com.mission, and is now at the dis- posal of Congress for publication if they deetn it expedient. The commission believe that its p>ublication v^ould be of great benefit to the breioing interest of the country, and, indirectly, to the revenue ', and they therefm^e recommend it. As the present rate of tax imposed upon fermented liquors, viz : one dollar per barrel of thirty-one gallons, is in excess of the rate imposed by any of the States of Europe (Austria ex- cepted) ; and as the present rate, moreover, in the opinion of the commission, after full consideration, is believed to be fully up to the revenue standard ; and as such is all but unanimously acquiesced in by the brewing interest of the country, they would, therefore, recommend that the existing rate be neither increased nor diminished. The determination of the proper mode of collecting the tax on fermented liquors, and preventing the large amount of fraud which has heretofore, undoul)tedly, been committed in regard to the same, has been to the commission a subject of no little difficulty. By reference to their Special Report, (No 6.) it will be seen that a tax on malt in this country is not prac- ticable; neither is the plan, also investigated by the commis- sion, of ganging and assessing the liquors, either in the "coppers" during the process of maimfacture. or subsequently, * See Proceedings 5th U. S. Brewers' Convention ; pp. 10-48. CHAPTER X. 229 while in the fermenting vats. Abandoning both of these methods, therefore, they have, with the full concurrence and assistance of the leading brewers of the country, devised a plan for collecting the tax by means of a stamp, printed on insoluble parchment paper, to be affixed to each barrel sold and removed from the place of its manufacture, with a requirement that the same be cancelled by the retailer or consumer Specimens of the stamps assigned for this purpose have been prepared for submission to Congress, while the full de- tails of the plan are given in the special report referred to. With the adoption of this system, and the retention of the present rate of excise, the commission estimate that the Government may rely upon an immediate annual revenue, from fermented liquors, of at least five millions of dollars." Not until the year 1868 — when, under the tax of two dollars per gallon, the revenue from distilled spirits had decreased to a figure indicating either an almost entire suspension of distilla- tion or an unprecedented degree of fraudulent transactions — was the law enacted ^ which Special Commissioner D. A. Wells liad proposed. The system of collection, supervision and con- trol then introduced, and subsequently perfected in many particulars, is practically the same wiiich is in operation at this day. It is the method which makes the internal duty payable by means of stamps to be affixed to the packages con- taining the spirits or fermented liquors, and which surrounds the manufacture and sale of these articles with an effective, though by no means oppressive, guard against infractions of the law. The duty, now reduced from two dollars to fifty ■cents per gallon, was thought to be low enough to do away with the temptation to defraud the Government and to afford the greatest possible guarantee of an easy collection of the whole, or nearly the whole amount of taxes due to the Treasury. This rate was, however, again changed a number of times (as will be seen from the tables reproduced in the next chapter), Act of July 20, 1868. 230 LIQUOR LAWS OF THE UNITED STATES. but, in tlie main, not in such a manner as permanently tO' defeat the objects of the law. It was not so far, and is not now, deemed essential to enter into the details of the system of drawbacks, of the regulations relating to hydrometers and bonded ware-houses, although in regard to the latter a great deal might be said concerning practices on the part of distillers, which show little regard for the interests of the Government. No attempt will be made either to review the many laws on the subject, passed since 1868, or to narrate the history of the fraudulent schemes — yet fresh in the memory of the reader — which were disclosed and punished, and whose re-- currence was effectually guarded against under General Grant's second Administration. For present purposes it is sufficient to know the exact policy of the Government, or rather the spirit of the laws and general results ; and as to the latter point it must be clear to everybody that, in determining the legiti- mate effects of internal taxes upon the manufacture and con- sumption of fermented liquors and distilled spirits, we must pass over the period of questionable speculations, of frauds and fluctuations, and take into consideration only the period during which the revenue laws were generally obeyed. This period embraces at least eleven years, from 1874 to the present day. CHAPTER XL EPITOME OF THE POLICY OF THE GOVERNMENT AND THE SPIRIT OF THE LAWS SINCE 1860. PREJUDICE AGAINST EXCISES COM- PLETELY WIPED OUT, 80 FAR AS INTOXICANTS ARE CONCERNED. WILLINGNESS OF DISTILLERS AND BREWERS TO BE TAXED. — FAITHFUL ADHERENCE TO THE POLICY OF FAVORING MALT LIQUORS FOR MORAL REASONS. UNIVERSAL DESIRE, FROM THE BEGINNING OF OUR GOVERNMENT TO PRESENT DA.Y, TO SUBSTITUTE MALT LIQUORS FOR ARDENT SPIRITS. HAMILTON'S AIMS REALIZED. THE OPERATION OF THE REVENUE LAWS DURING THE FIRST TEN YEARS OF THEIR EXISTENCE. EFFECT OF SPECULATION AND FRAUDS. — MODIFICATIONS OF LAWS WITH A VIEW TO PREVENTION OF BOTH. — BRIEF REVIEW OF EXTERNAL TAXATION ON INTOXICANTS SINCE 1860. RESULTS OF INTERNAL TAXATION SINCE 1874. MARVELOUS GROWTH OF BREWING INDUSTRY, CONSUMPTION OF ARDENT SPIRITS DECREASED BY OVER FIFTY PER CENT ; THE OBJECTS OP THE TEMPERANCE MOVEMENT REALIZED. THE PEOPLE OF THE UNITED STATES AMONG THE FIRST OF TEMPERATE NATIONS ; THEIR PRESENT POLICY ADOPTED BY EUROPEAN GOVERN- MENTS, AND SUSTAINED BY SCIENTIFIC INVESTIGATIONS. WHAT IS NEEDED TO PERPETUATE AND MULTIPLY THE FRUITS OF WISE LAWS. REVENUE TABLES. The policy of the Government in regard to the internal taxing of ardent liquors is to-day precisely what it was when the Revenue Commission formulated it in these words : '' In respect to distilled spirits, the commission, taking as their guide the history of past congressional legislation, and what seems to be the general public sentiment of the country, assume in the outset, that it is to be the future policy of the Government to impose upon these articles the maximum tax which they can bear, without too largely encouraging attempts at evasion of payment by the smuggler, the illicit distiller, and the retailer." This was the policy of the Government 232 LIQUOR LAWS OF THE UNITED STATES. when the entire system of internal taxation, as created bj the^ law of July 1, 1862, was necessarily resjarded as simply a war measure ; it remained the policy when, after the re-establish- ment of peace, the gradual reduction and final abolishment ot all other internal taxes — those upon tobacco excepted — was initiated ; and it is the policy to-day when the system embraces but one other article besides ardent and fermented liquors. In determining the maximum tax, conformably to the sense of the foregoing quotation, that is to say, in endeavoring to fix the highest collectable excise on spirits, Congress erred re- peatedly, and, considering the imperfections of human nature, it will surely not be regarded as a matter of surprise that 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 -."Q.5i •}• w 0^ Tf 0; X Q o_ , 0, S^f 03 w CO 35" oi.-'o t-T co^' oT >n -r' I- CO •S^ ts »- eco50-:»0!i-os CO TT 5- ■a< "a -Sx « 00 C! ^ 0^ t~ ^t-' CO -^ t-T od' 0" X irf CO r-^ ^3 G)i:- CO eo tj t- 1 S *"* la 00 § s ec -^ X X t' 1- X lo tJ'-^CJ'S'Xthx C> l- eo X • o ir: 1-" ■^ SI S a lT Tt 00 y— o^x Ours — CO o> t- t- J; &I 0> Oi 1-1 CO ■?» — f- en £ CC M J2 Ci X 'S^ rt t- 0« OI-WOOOSCS iO 1- ST. CO & to o» co- 0' a. o» t> So in CO 0* » CJ m t- uO ■» CO l^ ro L-j" oT t^ ifs" .-T Si t-' co' co' o> of t- -* s '"' s (^ aj (C 32 IS tC OQCDIRXiaiXtC CD tC m~ CE 33 ^Sa . g 5 5 g 555 5 55 5 5 5 5 5 JS c a a Length timera were i forc€ "S fl a a fl s a a c c a p a c o OOOCOOO 3 a a aaa a as a 3 a g a> Tj< ffl CO a-. £- 1- CO t- 1- X °° r: .-< 5? w ■» ,- r-l _ ,-. -J. •>1< CO CO ■!-( -^ S 3 3 X L'^ '^ to •:- X X c« OJ 1.0 ^ ^ CO CO -^ -^ -^ -^ -^ !.- i- 1- t-^ 00 GO X xxxxxxx X X X "33 i- <;> in 1 bo -^ CO CO CO CO CO CO CO t- i- i- u S do X xxxxxxx X X X X QO « a '"' Q a .• ® « B S' li .S? i; i; -^ 1-5 Hs 0' a 3 CO 1 CO C a a o oj a s S SSS S SS S ■5 o 0.0 t- t- C5 o> Rat tax gall o y^ a 11 o} o»T-< ^ m tn m IE 3 ^' ' . • •' '^ : ■ : »» ■' t^ '. u, '. h ~^ K4 "3 •c 53 ■5 •c Q V ■ S. :» : 1 a> 5 m ft a s a « S ■ m ' a a i V as S~^~ :5-a :ft -ag & a a; s 03 a > > > 1 •7: a c ft -aa ft _2 ft -ft a o > a as a tl^aaaf iasis = !il a c I g o ii c £ Is ^c 1 1 .£,2 Q. " il||lll ;ii|^i J:' c — X -a 0) .'2 2^ So ^ fti g'-S^^- 2=5-"^ §• "^ «■£.■=•£. 5, -ft-ftft^ rr X = x tJ '-c E a i£ c ■- a .i 00 .ti a 1 !§< •ft a" ft 1^1" a"" "3 •£=■ 03 COM OS XXODS XuCK /: M x 1 REVENUE TABLES. 251 TABLE C* STAIEMEWT showing the INTERNAL REVENUE RECEIPT f^ from FER- MENTED LIQUORS at ONE DOLLAR per BARREL aial at SIXTY CENTS per BARREL, together with the QUANTITIES of the game on which TAX was PAID during each fiscal year, from September 1, 1863, to June 30, 1884. Fiscal years ended June 30. Rates of tax at which collections were made. Aggregate collections at each rate. Aggregate quantities at each rate. Aggregate collections for each fiscal year. Aggregate quantities in barrels and their equiva- lents in gallons for each fiscal year. 1863 "I 1864 "1 1865 $1 00 60 60 1 00 1 00 1 00 1 00 1 00 1 00 1 00 1 00 1 00 1 00 1 00 1 00 1 00 1 00 1 00 1 00 1 00 1 00 1 00 1 00 1 00 $885,271 88 672,811 53 1,376,491 12 847,228 61 3,657,181 06 5.115,140 49 5,819,345 49 5,685,663 70 5,866,400 98 6,081,520 54 7,159,740 20 8,009,969 72 8,910 823 83 8,880,839 68 8,743,744 62 9,159,675 95 9,074,305 93 9,473,360 70 10,270,352 83 12,346,077 26 13,2.37,700 63 15,680,678 54 16,426,0.50 11 17,573,722 88 Barrels. 885,272 1,121,353 2,294,152 847.229 3,657,181 5.115.140 6,207,402 6.146.663 6,312,0-5 6,574,617 7,740,260 8,6.59.427 9,633,323 9,600,897 9,452,697 9,902,352 9,810,060 10,241,471 11,103,084 13,347,111 14,311,028 16,9.52,085 17,757,892 18,998,619 |- $1,558,083 41 !• 2,223,719 73 3,657,181 06 5,115,140 49 5.819,345 49 5,685,663 70 5,866,400 98 6.081,520 51 7,159,740 20 8.009.969 72 8,910,823 83 8,880,829 68 8,743,744 62 9,159,675 95 9,074,305 93 9,473,360 70 10.270,352 83 12,346,077 26 13,237,700 63 15,680,678 54 16,426,050 11 17,573,722 88 Barrels. 2,006,625 3,141,381 3,657,181 5,11.5,140 6,207,402 6,146,663 6,342,055 6,574,617 7,740,360 8,659.427 9,633,323 9,600,897 9,452,697 9,902,352 9,810,060 10,341.471 11.103,084 13,347,111 14,311,028 16,953,085 17,757,892 18,998,619 306.701,370 Gallons. 62,205.375 97,382,811 113,372,611 1866 158,569,340 1867 1868 193,439,463 190,546,553 1869 196,603,705 1870 203,813,127 1871 1872 239.948,060 268,442,337 1873 298,633,013 1874 1875 1876 1877 297,627,807 293 033,607 306,972,912 304,111,860 1878 317.485.601 1879 344,195,604 1880 413,760,441 1881 443,641,868 1882 525,514,635 1883 550,494,653 1884 588,957,189 Totol $190,954,088 28 206,701,370 $190,954,088 28 6,407,742,470 1 STATEMENT showing the AMOUNT of INTERNAL REVENUE derived from FERMENTED LIQUORS at ONE DOLLAR per BARREL and at SIXTY CENTS per BARREL, tinder the ENACTMENTS IMPOSINO THOSE RATES, the QUANTITIES on which the TAX was PAID, the DATE when EACH RATE was IMPOSED and when it ENDED, and the LENGTH of TIME each rate was in force, from Jidy 1, 1862, to June 30, 1884. Rates of tax per barrel. Dates of Acts. Length of time rates were In force. Aggregate Aggregate Articles, ^^ftlJXx'l^-^-^tax. collections, quantities Ale, beer, lager beer, porter, and other simi- lar fermented liquors. Ale, beer, lager beer, porter, and other aimi- far fermented liquors. Ale, beer, lager beer, porter, and other simi- lar fermented liquors. $1 00 60 1 00 July 1, 1862 Mar. 3, 1863 July 1,1862 Mar. 3, 1863 (Limiting to Mar. 31,1864) 6 months 13 months 843 months $885,271 88 2.049,302 65 188,019.513 75 Barrels. 885,272 3,415,504 202,400,594 Total $190,954,088 28 206,701,370 From the report of the Commissioner of Internal Revenue, 1884. APPENDIX. See Chapter IV. The dispatches of the French ambassador Fauchet to his govern- ment, which fell into the hands of the British by the capture of a French privateer, and were transmitted to the British ambassador at Washington, contained sufficient evidence to convict Randolph of complicity in the movements mentioned. The following extracts from said dispatches plainly show this. Fauchet wrote : " The measures which prudence prescribes to me to take with respect to my colleagues, have still presided in the digesting of the dispatches signed by them, which treat of the insurrection of the western countries, and of the repressive means adopted by the Government. I have allowed them to be confined to the giving of a faithful, but naked recital of events. The reflections therein contained scarcely exceed the conclusions easily deducible from the character assumed by the public prints. I have reserved myself to give you, as far as I am able, a key to the facts detailed in our reports. When it comes in question to explain, either by conjectures or by certain data, the secret views of a foreign government, it would be imprudent to run the risk of indiscretions, and to give one's self up to men, whose known partiality for that government, and similitude of passions and interests with its chiefs, might lead to confidences, the issue of which is incalculable. Besides, the precious confessions of Mr. Randolph alone throw a satisfactory light upon every thing that comes to pass. These I have not vet communicated to my colleagues. The motives already men- tioned lead to this reserve, and still less permit me to open myself to them at the present moment. I shall then endeavor. Citizen, to give you a clew to all the measures, of which the common dispatches give you an account, and to discover the true causes of the explosion, which it is obstinately resolved to repress with {Treat means, although the state of things has no longer any thing alarming. To confine the present crisis to the simple question of the excise, is to reduce it far below its true scale ; it is indubit- ably connected with a general explosion for some time prepared in the public mind, but which this local and precipitate eruption will cause to miscarry, or at least check for a long time. Ih order to see the real cause. APPENDIX. 253 in order to calculate tlie effect and the consequences, we must ascend to the origin of the parties existing m the State, and retrace their progress." *******»■» When the riot had reached its height, in August, 1794, and prepara- tions were being made to suppress the insurrection, Fauchet wrote : "Scarce was the commotion known {i. e. the uprising in the West during July and August, 1794) when the Secretary of State (Randolph) came to my house. All his countenance was grief. He requested of me a private conversation. ' It is all over,' he said to me : ' a civil war is about to ravage our unhappy country. Four men, by their talents, their influence, their energy, may save it. But, debtors of English merchants, they will be deprived of their liberty if they take the smallest step. Could you lend them instantaneous funds to shelter them from English persecution ! ' This inquiry," the dispatch continued, " astonished me. It was impossible for me to render a satisfactory answer. You knowing my want of power, and my defect of pecuniary means, I shall withdraw myself from the affair by some common-place remarks, and by throwing myself on the pure and disinterested principles of the republic." Eandolph himself was clearly among the four men who needed this money to save their country. ********* Still later Fauchet wrote: "It appears that these men, with others unknown to me, all having without doubt Randolph at their head, were balancing to decide on their party. Two or three days before the proclamation was published, and of course before the Cabinet had resolved on its measures, Mr. Randolph came to see me with an air of great eagerness, and made to me the over- tures, of which I have given you an account in my No. 6. Thus, with some thousands of dollars, the republic could have decided on civil war or peace ! Thus the consciences of the pretended patriots of America have already their price ! It is very true that the certainty of these conclusions, painful to be drawn, will forever exist in our archives. What will be the old age of this Government, if it is thus early decrepid? " See Chapter V. — Wine op the Gkapk. The proper wines of the grape, of the best qualities, are those produced in various climates which are found in the United States, if reliance can be placed upon the indications of temperature which I have ventured to suggest. To the kinds of that liquor which have been mentioned, the celebrated wine, called Tokay, may be added. It is produced near a place 254 LIQUOK LAWS OF THE UNITED STATES. of the same name, situated, in Hungary, in 49° north, in a temperature approaching to that of Champagne, one of the best wine districts of France. This situation may be considered as nearly corresponding with that of the country around the common point of contact of Virginia, Maryland, and Pennsylvania. The exquisite wines of the Cape of Good Hope, particularly the red and white Coustantia, which are produced in 34° south, a position deemed colder than the same latitude north, may be also added. The Madeira produces there an excellent wine. It has been understood, within a short time, that some enterprising and well informed emigrants from Germany, after careful experiments, have considered the temperature of the southwestern corner of Pennsylva- nia as suitable for the production of the Bheniah and Moselle qualities of wines. This fact contributes to support the opinion, that it will be safe to count the degrees and minutes of common temperature in Europe and North America, respectively, from Lisbon and St. Augustine or New Orleans. It appears by the returns, that about ninety-six quarter casks (a quantity of good red wine worthy of notice) have been made by a few Swiss settlers, from the Madeira and Cape of Good Hope grapes, on the river Ohio, in about 39° north latitude, in the territory of Indiana. It is also understood, that a good wine, really fit for table use, has been made in the vicinity of Columbia, in South Carolina. Other experiments have been made with various success. The grape vine of several distinctly different species is indigenous in the Unitea States, and is found in every degree of latitude, from the river St. Croix to the Gulf of Mexico. It is, doubtless, from such original stocks, in corresponding temperatures of Europe, that its several present excellent wine grapes have been obtained by selection, choice of position, and soil and cultivation. The skill of the wine maker, resulting from practice, and improved by the relative arts, has curiously perfected the manufacture of wine. This commodity rewards, by profit and pleasure, the skill and exertion of its improvers. A striking difference, very interesting to the United States, occurs in the charaters of certain great classes of foreign wines, extensively used in this country, a statement and attempt to explain which may contribute to improve the future operations of the wine makers of the United States. It has been constantly observed that, although the superior red and white wines of France (the Burgundy, the finer clarets, the Champagne, and the Sauterne) are proved by the hydrometer to be as strong as some, and stronger than others, of the wines of Spain, Portugal, and their wine islands, (the Sherry, the Pacharetta, the Lisbon, the Carcavella, the Madeira, the TenerifEe, the Fayal, and the St. Michael's) yet the French wines can APPENDIX. 255 only be kept i)i bottles icell corked and sealed, while the latter are constantly kept upo7i tap, in Jialf emptied casks. It is also observed, that, within a few hours after the uncorking of a bottle of French wine, especially of any of the superior qualities, it becomes sensibly bad, while these white wines of Spain, Portugal, and their islands, remain good, and some of them even improve in decanters, which by accident have remain long unstopped. This difference is considered to be occasioned by the fact, that the spirit of the French wine is its own natural and proper fermented spirit, while the Portugese and Spanish wines have, in addition to ih.eiv fermented, luiusiOTis of distilled spirits or brandy. The French wines, soon after their exposure to the air, by the drawing of the cork, are believed to recommence fermen- tation, and are quickly injured, having been before sufficiently and most perfectly fermented ; while the distilled spirits in those wines of Spain and Portugal prevents a similar recommencement of fermentation and its con- sequent injuries. Distilled spirits have no sensible fermentation. Believing in this cause of the difference between those two great classes of wines, and deeply impressed with the importance of that difference, in several views, I submitted the facts, in a guarded and informal, conference with the President, Vice-Presidents, and several other learned and judicious members of the American Philosophical Society, at one of our meetings, in a manner which led to suggestions of the moment, from the gentlemen, respectively, in order to attain a knowledge of the cause; and, after hearing the whole, that which I have stated was also submitted to their considera- tion, and was received with as much assent as the nature of a learned body and of the subject rendered proper and necessary, on a new and informal communication. This matter is introduced here as the foundation of a suggestion, that, in the wine-making business of the United States, in internal situations, where bottles may be costly or unattainable, a cautious infusion of the barely necessary portion of homogeneous distilled spirits (the purest and best brandy of the grape) will, probably, enable our citizens to keep their wine as they keep those of Lisbon, Xeres, Madeira, Fayal, and Teneriffe, in half empty casks and common decanters. Thus, not only a great and universal economy in respect to bottles may be made, but the practicability of keeping wines, in a condition fit for use, may be extended to all situations, and to every storekeeper and family. Hitherto the manu- facture of fermented liquors has been impeded, by the expense of bottles, and often by the total want of them. As the grape and its wines and essential salt (known under the name of cream of tartar) are of very considerable importance to our interior country, which must receive foreign wines at costs and charges, which a great majority of the people cannot sustain, and as wine has a high value as an inducement from distilled spirits and as a medicine, besides the value ^56 LIQUOR LAWS OF THE UNITED STATES. of tlie fresli and dry grape, it is a matter of real consequence in this state- ment, that the success of the wine manufacture appears to be rendered certain, by the variety and universality of native grapes, by a number of successful esperiments, and by the correspondence of temperature between parts of our country and the districts of the Tokay, the Champagne, the Moselle, the Ehenish, and the Hock, the Burgundy, the various clarets of Bordeaux, the Sauterne and the Grave, the Oporto, the Lisbon, and other superior or estimable wines of the European continent, and those also of the Cape of Good Hope. Extreme heat does not appear necessary or even favorable to the happiest concoction of the juices of the grape, the orange, and fruit in general. France, not less distinguished for its various and exquisite fruits than any other country, has no point more southern than 42° 26^ north latitude. In considering the character of Madeira and its wines, it will be remembered that it is a small and elevated island, and similar con- siderations, as to temperature, arise, in regard to the Constantia vineyards, at the southern point of Africa, the Gape of Good Hope, which must greatly partake of insular characteristics. Imports and Export of Beer, Ale and Porter, Spirits and Wi es, into and from ttie United States during he years 1790 to 182Q inclusive. 1 s .MPORTS. ' DOMESTIC EXPORTS. L =^.,.,^ 1 w,«« ymtts. IlKIB, ALB A raltTBIL ibdcri.. J oii,«. BESR. AI.B, FOB- a f™.™. on,.. «.««», 0.K,. rr^OM, 0...r. Clto.. j O.IM..L :i 0^,0... B.™. I «.,«„. o.,l.„. 0.,,.,. o.«™ 0.,,^. O- - 1 °•"■■"•• cw.™. Oifloot. («.o«. D««. OiUmi. D—. I !S? 00.813 iDsloia 3i iin i-i"; si^ 7cUea i;^ GOO 03.8S0 ijs; 1 403.SS3 880.540 300.777 93S,D08 '■| ' uIt:''!;! I'l-^ m', ..... ,|;^ ilow Tiaoo 18,023 :::: siiiua 1' 1603 i8oa iua.sis saoi^iD .::. jjr ...u-2,'43(5203) UNIVERSiTY ot CALlFORittA LOS ANvjjLi^.^j. LIBRARY ^JQ 58 00336 9591 UC SOUTHERN REGIONAL LIBRARY FACILITY AA 000 837 263 3