The New York herald., 1878-11-28
INTERNAL REVENUE.

ANNUAL REPORT OF THE COAIMISsIONER-TROU-
BLEs IN THE SOUTHERN sTATEs-oPPosTTIoN
TO THE REDUCTION OF TAX ON TOBACCO
COMPARATIVE STATEMENT OF COLLECTORS
WASHINGTON Nov. %. 1873.
The Internal Revenue Commissioner in his annual
report that the heavy falling off in the receipts
for internal revenue taxation which marked the
closing months Of the past fiscal year has
ceased and that the receipts for the current
fiscal year have thus far shown an increase.
He is able to report that in majority Of the States
the internal revenue laws have been enforced with
out serious difficulty obstruction. There has
been a commendable spirit exhibited the part Of
manufacturers and dealers to observe the law and it
is believed that the tax distilled spirits is now
being collected with fewer frauds and less loss to the
government than at any time since the estab-
lishinent of the internal revenue system. In the
majority of districts prosecutions for violations Of
the internal revenue Laws have been reduced to
minimum in consequence Of the steady enforcement
of the laws and state of public opinion favorable
their observance and enforcement. In other dis
tricts however has been found necessary greatly
to multiply prosecutions for violations of the inter-
nal revenue laws and institute vigorous and sys-
tematic efforts for the suppression Of frauds.
TROUBLES IN THE SOUTHERN STATES
The Commissioner says
1T is with extreme regret find it my duty to
port the great difficulties that have been and still are
encountered in many OF the Southern States in the
enforcement Of the laws. In the mountain regions
Of West Virginia. Virginia. Kentucky. Tennessee
North Carolina, South Carolina Georgia and Alabama
and in some portions of Missouri Arkansas and Texas
the Illicit manufacture of spirits has beon carried
for number OF years, and am satisfied that the
nual loss TO the government from this source has
been very nearly il not quite equal to the annual ap
ox.rtat N M nal
revenue tax throughout the whole country
In the regions of country named there are
known to exist about five thousand copper
stills many Of which at certain times lawfully
used in the production of brandy from apples and
peaches: but am convinced that large portion Of
these stills have been and are used in the illicit
manufacture OF spirits Part OF the spirits thus pro-
duced has been consumed in the immediate
neghborhood the balance has le,n distributed
and sold throughout the adjacent districts. This
nefarious business has been carried a rule, by
determined act OF men, who. In their various neigh
borhoods league together for defence against the
officers OF the law and at given signal are ready to
together with arms in their hands to drive the
officers of the internal revenue out OF the country.
Great stress is laid upon the necessity for the com
plcte suppression of Illicit disng and the subject
il to be- brought prominently to the attention OF Con-
press with the hope that suitable appropriation for
the early suppression of these frauds may be made.
TOBACCO
With reference to the proposed reduction of the
tobacco tax The Commissioner argues that the reduc
ton Of the one-third proposed by the bill
pending would inevitably result In corresponding
reduction OF the revenue derived from that source
and this has reference the proposition in favor of
reduction of the tax that reduction thereof will
not result in "a decrease OF the revenue from this
source but by stimulating consumption would ult
inatcly increase the receipts. Referring TO another
argument in favor of reducing auch taxation to the
effect that the present rate Of taxation dcpresees the
value of leaf tobacco in the hands OF the
producers and that the proposed reduction
Of the rate Of taxation will inure 90 their
benefit by enhancing the market value OF
their products, Commissioner itim states that an
examination OF the market quotations OF tobacco Tor
a series of years fails 20 show that the tax ON manu-
featured tobacco hats had any dc pressing effect on Inc
market price OF leaf tobacco He shows by table In
another part of his report that the business of mai-
featuring tobncco has year BY year increased; that
Il is now diffused throughout the whole United
states and that some of the largest manufacturers
aro located at great distances from the source Of
supply of the leaf. SO IL will bc seen that there
must be constant competition among manutactng.
ers tor the purchase OF the various choice grades OF
leaf tobacco that used In the production OF the
great variety brands of manufactured tobacco, and
fail to comprehend how this competition would DC
increased by reduction OF the rate OF
taxation on the manufactured article. The
tastes of the people would not Dc cnangcu
by legislation and the manufacturers would, there
FORE continue seek for stocks Of tobacco suited to
the demands OF their customers. IL must De borne
ia mind that fully thrceftbs of the entire crop of
tobacco grown In the United States Is exported and
IL obvious that the price received for this surplus
practically controls the price OF the tobacco retained
for home consumption.
SURPLUS HAND.
statement included la the report shows that there
were l59 1Gi hogshcads of tobacco in warehouse on
for the corresponding period Of 1876. lf to
the depressing influence this large surplus
stock must exert there Il now added
prolonged agitation for the reduction of the
market, the result W the planters cannot be other