The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1882-05-26
MANKATo FREE Press.
The Whiskey Ring.
New York Herald. May sth 1859.
FRIDAY, MAY, 20, 1882.

New York Herald. May sth 1889.
The Herald of the oath of April
made an exposure of tho Whiskey in
Bond bill now before the Senate. The
article has compelled very careful
investigation of the subject. and the
result will be seen in the discussion
of the bill whenever it comes mp.
The Kentucky whiskey men have
raised the cry that the Herald article
was written 10y blackmailers, who first
attempted to get money from the
Whiskcy Ring. The writer OF the
Herid article never, directly or in
directly. held any communication
whatever with amy whiskey man
upon the subject of the bill exposed.
or any other whiskey legislation past
or proposed, but from study of the
matter detected the gigantic steal
hidden in the bill and exposed it..
The cry of blackmail now raised has
induced a careful examination of the
legislation secured by the Kentucky
distillers i'm 1878 and 1880, with the
result given below. 1t shows clearly
that the proposed bill Is but the
eliminating measure in series of
special laws intended to bring about
the very dangerous condition of af.
fairs which now exists.
From 1858 to 1878 the manufacture
of distilled spirits went OH under the
act of July 20. 1863, that great sweep.
ing reform which reduced to order q
loose system under which all sorts of
fraud had tlourished and made it pos
sible to carry on the distillation of
spirits honestly, safely and protitably
to the distillers, and, except where
officers were dishonest. for they must
always be trusted more or less with
with safety to the revenues of the
government. The principal depar.
lures from the act of July 20, 1858,
have been -
Errst-The joint resolution of March
2s, 1878, which extended the bonded
period from one year to three years,
but required five per cent. interest
on the tax after one year, and
Second-The act of May %, 1880,
which made the bonded period three
years without interest, reduced the
bond to secure the tax from double
the amount of tax (; and further, it
established leakage allowance
amounting to seven gallons and half
out of every barrel of forty gallons
for the full bonded period of three
years, with graded allowance for
shorter periods of storage.
An examination of the workings of
these two laws shows that they have
only been of benefit to u single class
of distillers-viZ., those who make
Zine good" rye and Bourbon whiskey
mainly; that they have been of no
benefit whatever to the general distil-
ling interests engaged in the manu-.
facture of alcohol, highwines and
cologne spirits. The production of
alcohol, highwines ana cologne spir-
its, which may be briefly designated
us staple goods" for the four fiscal
years ending June 80. 1878, 70, 80
and 81 amounted to 2l0,284, 6S5 gal.
Ions, an average production of ST.
57l.l.l gallons year.
Now, as to the amount of these
staple goods remaining in warehouse
ut the end of the corresponding fiscal
years June 30, 1878, the quantity
in warehouse was 942,S $3.50 gallons ;
next year, 1,l76,l36 gallons; in 1880
i: was $50, 4lS gallons and in 1881, the
largest amount of all, l,3l6,s75 gal
Ions; showing clearly that the ware.
houses were simply clearing houses
Tor the staple goods, which were
sold, tax paid, as rapidly as they
could be handled.
y little examination of the figures
will show that there is no profit to
the manufacturers of staple goods,
either in the leakage allowance or a
long bonded period, because they can
only lose money by storing their
goods for any great length of time.
Take Il case TO illustrate this A has
1000 barrels-40. 900 gallons-of sta
pie spirits, and considers the propo-
sition whether to sell at once or store
them three years. Such spirits are
worth now III or lis cents gallon,
tax paid. That is their price as soon
us made. They do not increase in
value with time, and would be worth
no more old than new. AS 1000
barrels at lis cents would bring him
at once SAT 200; deduct for tax at &c
cents, 5000 balance, 81 200 add
to this the use of this $ll 200 in bust.
ness for three years, say at 6per cent
$2,016. Result $l3,2l6.
Take the case of holding it in bond
for three years. The single tempta.
tion is that the leakage allowance at
~ gallons out of 40 is twice the
actual leakage, and he would thus get
"a gallons out of 40 to sell for the
full price, on which he would have
no tax to pay. Allowing $500 gal
Ions for leakage, he would have
nominally 32.50O gallons to sell at
81. 1S.
This would bring OBSERVATION-DISCLOSURES. $3S, $50
Deduct tax on 81 500 gallons at 9Oc " 29,25C
Balance ...........:... $9.lOC
To this add the advantage of, say, s.
$50 gallons actual gain on leakage
allowance, free of tax, would bring
at $l.lS. S,4Zi
Total. ....... ..................... sls,62s
But his 81 200 that he could have real
lied three years before has been
looked up and he has lost the use OF
IL, which use, at six per cent. should