The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1882-05-26

Is would have on hand to sell $500
gallons of whiskey at $9.25 per gal
Ion ............. .......... ....Sl1,is0 W.
Deduct tax at 90 cents ............... 29,!5o %
balance. .......................... $la,87S 90
ADD gain in leakage, $40 gallons ut 49, -
S'so........'.... -. '''' '.'''''' ''f"' "o
Deduct for loss of three wears use of
$4,000, which has been locked up
by the operation, ut six percent s,Eo W
As against ...............' .'..''S'o'"-" wv
by the policy of immediate sale.
If these changes in the law have
made so profitable to distilling Of fine
whiskeys it is difficult to see how
complaint can be made of the law,
unless it has encouraged business and
stimulated it beyond the bounds of
safety, or has brought about IA state OF
affairs dangerous either to the general
distilling interests or to tho revenues
of the government or both. In this
latter case it has been not only spe-
cial but vicious legislation.
The distillerS who have been bene-
fitted by the legislation of 1878 and
1880 point to the fact that the rev.
enues from spirits have never been so
great as under these laws. That is
true, but the increase has come al
most wholly from a class of spirits
not at all benefited by this legislation,
not increased by it, but the produc-
ton of which has grown rapidly be-
cause of the large crops and general
prosperity, aided TOO by largely in
creased export demand rs well rs
greater domestic consumption. Very
little of the increased production of
fine whiskey has paid the tax. The
working of the law has been to pile
in the warehouses some seventy-fve
million gallons of spirits, nine-tenths
of 1t Bourbon and rye whiskey, on
which a tax Of $87 100000 has ac.
crued and will fall due within three
years. Taking the average consump-
ton of this class of goods for the past
four years there is now on hand Il
seven and Il half years supply, the
tax on which has not been paid TAX
ing the last years withdrawals-the
largest-as basis, there is a six
years stock on hand.
1t would seem likely, therefore,
that the very profitable business
which has been SO far carried on in
fine WHISTLES and the rapid increase
in the values of such stock from age
cannot be safely counted on to con-
tinue. Indeed, that this over prOduc-
ton has gone over to an extent dan.
gerous to all distilling interests, and
that in unduly fostering and encour-
aging this special branch of distilling
the general interests of the trade have
been imperiled and may be seriously
impaired or for time destroyed if
this over production of Il particular
kind of spirits is continued. And of
course anything to impair the dis
tilling interest equally impaires the
revenues of the government from
spirits. But an immediate cause of
anxiety is the security of the $751;
100000 of revenue already accrued.
Whatever the profits in fine whis-
key have been, whatever they would
be under conservative production not
in excess of the demands of trade,
cannot he taken as basis of calcu-
lation when the stock has accumula-
ted six years in excess of the demand;
and in this connection it becomes
necessary to keep in sight the fact
that the tax on spirits is fully three
times the cost of production of these
fine goods and in such an abnol-
NAL condition Of affairs rs NOW exists
it may well be conceived that events
may at any time precipitate a crash
which would prevent even the cost of
production from being realized.
Would it not, therefore, seem that
good judgement, safe administration
and sound legislation should be in the
direction of strengthening the securi.
ty for so vast an accumulation of
revenue and of checking over produc
ton by endeavoring to get back to the
law of 1858. the departure from
which has worked So much evil and
brought things to so dangerous con-
dition!
Again, the large distilliDg interests
which manufacture the great bulk of
distilled spirits-the staple goods
and which have paid four times as
much tax in the past four years as
has been paid by the B0urbons and
rye whiskey interests, have been con.
tending for a reduction in tax. They
pay the same rate of tax for their
low grade goods that is paid for the
high grades, and contend that their
profits are very small because of the
large amount of money it takes to
handle their products and because
they can get none of the benefits
which special legislation has given
to the manufacturers of fine whiskey.
But this very favor that has been
shown to the last mentioned class
has built up an excessive accumula-
tatiOn dangerous to all interests,
threatening panics, Offering great
temptation for combinations to con.
troll the market for individual gain
at the general expense, and has OPP
Grated to accumulate a stock SO great
that q reduction of tax involves the
surrender of vast amount of public
revenue to a particular class of men
without any compromising benefit to
the public or to the government.
To reduce the tax from ninety to fifty
cents a gallon now that 70.000,000
gallons has been accumulated in ex.
cess of the demand is to donate $780,
100000 of public money to the Bour.
bon and rye distillers to be divided
between themselves and the whole
sale and retail dealers, and it is to
upset the calculations of the govern
ment and may embarrass it. This
would seem to be strong reason tor
an early return to what was from
1868 to 1873 the settled policy of the
government, and by such return to
insure safe conservative business
necessary to prosperity and security
to the revenue and distilling interests
as well.
Would it not seem that any change
in the law should be in the direction
of reducing the bonded period to one
year again, giving spirits now in
warehouse the benefit of the existing
period and the repeal of the leakage
allowance except for whiskey now on
hand! This would probably work
some hardship to those who have
recklessly overproduced, but the over
production is now growing from bad
to worse, and, unless it is checked,
must end in general crash. sacrifice
ing this particular interest, impairing
the general distillery business, very
likely seriously affecting man, other
branches of business and involving
the loss of very many millions of ac-
crued taxes, and seriously impairing
the future revenues of the govern.
ment. 1t would seem that the large
increase in the value of fine whiskey
from age would be rs great an induce
ment to production as is consistent
with sound business. That these
special privileges have been given
may well raise the suspicion that
those who brought them about had