The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1878-11-28
Commissioner Raun1.s DpposftfOn-to
the ReducrlOS, or the Tobacco Tax. &

/ posed reduction OF .the tobacco tax. His
views are unfayornble to q renewal OF the
| plan OF granting amnesty to Yio!ators of the
/ revenue laws. as be does not think It has
worked satisfactorily. The Commissioner
Eestimates the revenues for the present fiscal
year at Sf15, 900, 900. Considerable space il
given In the report to the condition OF NJ
fairs in regions OF the South, where Illicit
distiling has. prevailed, and additional le-
legislation for the protection OF revenue Off
GERS Is recommended.
With reference TO the proposed reduction
Of the tobacco tax, the Commissioner argues
that the reduction OF the tax one third, as
proposed by the bill now pending, would
inevitably result in corresponding reduc-
ton OF the revenue derived from that
source, and that this has reference to the
proposition in favor OF reduction OF the
tax; that a reduction thereof will not re-
suit in decrease OF the revenue from this
source, but by stimulating consumption
would ultimately Increase the receipts. Re-
ferring to another argument in favor OF
reducing such taxation, to the effect that
the present rate OF taxation depresses
the value OF leaf tobacco in the
hands Of the producers, and that the
proposed reduction Of the rate OF taxation
will nure to their benefit by enhancing the
market value Of their products, Commits
| sioner Raum states that an examination OF
the market quotations of tobacco for series
OF years fails to show that the tax on manu-
featured tobacco has had any depressing
effect on the mar ket price of leaf tobacco.
He shows by table in another part OF his
report that the business Of manufacturing
tobacco has year by year increased; that it
is now diffused throughout the whole
| United States, and that some OF the largest
manufactures are located at great distances
from the source Of supply Of the leaf.
$50 it will be seen that there must
be constant competition among manu-
facturers for the purchase Of the va
rious choice grades OF leaf-tobacco that are
used in the production Of the great variety
| Of brands OF manufactured tobacco, and
| fail 10 comprehend how this competition
would be increased by reduction OF the
rate of taxation on the manufactured arti-
Gle. The tastes OF the people would not be
changed by legislation, and the manufac-
turcrs would therefore continue to seek for
stocks Of tobacco suited to the demands OF
their customers. It must be borne in mind
that fully three fiiths OF the entire crop of
tobacco grown in the United States is eY-
ported, and it is obvious that the price re-
ceivcd for this surplus practically controls
consumption. The value OF each crop OF
tobacco depends largely upon ifs quality
and the manner in which it is cured and
handled. and the value Of the. entire crop of
the country is controlled by the laws OF
supply and demand"
A statement included in the report shows
that there were $50, 761 hogsheads OF tobac-
co in warehouse on the 1st Of the present
month against $4,000 hogSheads for the cor
responding period OF 1915. Ill to the de-
pressing influence which this large surplus
stock must necessarily exert there is now
added Il prolonged agitation for the reduc-
ton Of the tax so as to withdraw the manu-
iacturers from the market, the result to the
planters cannot be otherwise than dctri-
mental. 1t may be insisted that shipping
leaf is unsuited for manufacturing pur-
poses, and therefore its price would have
no material effect upon the value OF the
manufacturing leaf. This statement, how
ever, would be falacious, for it is an ascer-
tanned fact that The tastes OF the people vary
so much that, to produce manufactured to-
bacco to meet all demands, manufacturers
are compelled to draw their stocks from all
portions OF the country. Not only are the
light tobaccos OF Virginia and North Caro-
lima, and the red tobaccos Of Kentucky, in
request for manufacturing purposes, butth
tobaccos grown in Tennessee, Missouri, Hit
nois, Indiana, and Ohio enter largely into
the manufactured tobacco Of this country;
so that, in fact. all the various grades OF to-
bacco grown 60 to make up the stocks which
find it necessary to use in Or
der to meet the wants OF their Gus
toners. 1t is therefore obvious that
the price OF the tobacco used by
our manufacturers is affected by the
foreign demand for the surplus pro-
duct. A small accumulated surplus, light
crops, and an active foreign demand will
increase the price of all grades, while large |
accumulated stocks, heavy crops, and slug
sish foreign demand will result in depres-
sion of prices OF all grades, and these re-
suits would he produced whether the tax
on manufactured tobacco remained at twen-
ty-four cents or should be reduced to siX-
teen cents per pound, or il the tax were en-
tirelF removed.
ssThc bill before the Senate proposes a
reduction of the tax on cigars from six to |
five dollars per thousand. This would be
equivalent to reducing the tax on each cigar
one mill. 1t is Incredible that such q re-
duction could affect the retail price, or in |
any degree operate to stimulate the con-
of cigars, and in my opinion the |
reduction would be an absolute loss OF rev. |
enue without any compensating advantage. |
1t is to be noted that the agitation for the |
reduction OF the tax on manufactured to-
bacco does not come from the consumers, |
who alone pay the tax. Not single tax.
payer has vet come forward as such to de- |
mand its reduction. The whole movement, |
in my Judgment, involves an absolute sacri- |
flee Of S11 100000 Of revenue without a
reasonable prospect Of benefit to the pro.
ducer, or relief to the taxpayer.
''The agitation Of the question Of re-
ducing the tax on manufactured tobacco |
last year paralyZed the trade during the
time the uncertainty prevailed. Many man
ufacturerS were compelled to temporarily |
suspend operations, and large numbers OF
working people were thrown out OF en-
ploEment.
'sThe tax on manufactured tobacco from
December, 1877, to June, 1873, showed a
falling off, rs compared with the CORE
spending months of the preceding year, OF
81, 947, 041, while Immediately upon the adj
iournment OF Congress, when it became
known that the tax would for time re-
main undsturbed, the trade began to re-
cover, the receipts from the tobacco tax
for July, 1878, showing an increase OF
S54G,427 over the corresponding month
Of the previous year. / have no doubt
that similar results would follow pro-
longed agitation Of the subject this year.
1t therefore appears to me very desirable
that whatever action is had by Congress in
regard to the proposed change of the fax.
should be had rs early rs possible in the
interest Of the revenue as well as OF the
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