The Daily times. [volume] (Richmond, Va.) 1886-1889, 1888-03-22
THE TOBACCO TAX.
now IT CREA TES 4 MONOPOLY FOh
THE RTCH NUFA CTURFRS.

How The Tax Burdens the Farmer and
Limits the Price Of His Productive
One Article that Bears Foreign and
Domestic Burden
The following circular by Mr. Talcott
Williams, written for the Lynchburg press,
is practical exeinplificalion OF the bur
den which the tobacco tax is to tie farm
or OF Virginia, and will be read with in
terest by all engaged in the growing and
manufacture OF Virgnia's great staple
LYNcuBURG, VA, February ls-The
tobacco manufacturer is as decided in de-
manding the repeal Of the internal reve
nue. tax as the tobacco farmer i was
assured before | came here that the
manufacturer favored the tax. This Is
true Of the large Eastern firms, of some
OF their agents IN the tobacco district
here, in North Carolina, and in Kentucky,
and Of few of the largest of The local
factories. But this only deepens public
demand for the repeal. Southern com
munitics are still full Of healthy prefer
ence for small enterprises. 1t is at once
the strength and weakness Of the section
period in which great organizations OF
capital have taken the larger fields OF in
dustry for their own. The Whisky Trnst
has done this for one Southern industry,
and the Cotton seed OIL Trust for an
other; but there are exceptions, and the
influence OF the internal revenue tax in
keeping the tobacco trade in few hands
increases its unpopularity.
This 10 particularly true OF the branches
of the trade in the South and West. The
average capital OF the Az establishments
i'm 1850 engaged in manufacturing chew
ing aud smoking tobacco was $36,074
and this comparatively small number OF
firms employed 30, 1876 persons and turned
out Sj2 1913 05G Of product. Even the
fifty two stemming establishments bad
an average capital of s20,9j0. 1t is only
I'm the cigar and cigarette trade, OF which
q large relative share is made at the
North that the capital wac small at the
last census, or an average of 5000 for
1,l4j establishments employing jS,201 per-
sons and producing yearly sG3,9i9,j1j.
BoNDs THAT ARE NEARLY PRoHBIToRY.
This objection is scarcely felt at the
/ North bat i'm this and the two adjoining
tobacco States the bonds required OF a
manufacturer are almost pTohibitOry in a
community whose business capital is still
small. The Government collects its tax
AZ every sale, and the tobacco itself Is
bought for spot cash, daily settlements
bcing required in Richmond and Dan
vile aud weekly here but the manufac-
Wrcr sells at sixty and ninety DAYS TO the
dealer and the practice of dating bills ahead
Is frequent one. Practically the manu-
laclurer carries not only the cost of bis
raw material and his labor, for the dealer
but the tax IS well, and here again the
system, which Mr.. Cleveland assured the
country bred no complaint, by increasing
,he capital required bars out of the small
manufacturer. The stamps, too, give the
large dealer an infallibie clue TO
The product of his small competitor, and
this information is Of value in enabling
% great firm % crush out the encrOach
men,s of young. ambitious, hut weak
firms While the assertion made her,
that these causes have united to prevent
any important new brand OF chewing
tobacco from appearing on the market
in twenty years is not quite accurate, il is
true thai lhc repeal Of The tax would
start crop o. small manufacturers
4 whose existence would stimulate com
petition and improve the market for the
consumer and producer. These small
factories which would spring up all owes
the country are no small argument for
the repeal at time wheIf the tendencies
Of trade are strong in the direction Of
suppressing the small dealer and maker
LAST YEARS EXPORT.
In this region, which supplies so large
a share Of the shipping tobacco which
goes abroad-last year our exports
amounted to 500, 230, ,072-it must not he
forgotten that the feeling is strong that
this is the one agricultural product which
bears heavy tax in Europe. The i'm
port value of the American tobacco i'm
ported by Great Britain in 1886 was fl4
30j. 900, and this tobacco paid the enor-
NOUS lax OF $4j, 100000 Add TO this its
share of license taxes and the total is
fully $4,000 900 This single American
import furnishes Great Britain with
nearly half its customs revenue and a
tenth of lis entire income. THIS tax of
800 per cent, Is, | may add, "ior revenue
only and until recently the growth of
tobacco was prohibited altogether in
England. This burden, which plays its
part in reducing the profits of the
Virginia farmer, may be a miracle of
( finance, and is doubtless approved
by Mr. Carlisle but IL is far from making
the farmer any reader TO bear an unneces-
sary tax on the share OF his product he
sells in the United States. Nor is Eng
land alone in this practice. The profits
of the French tobacco monopoly, yearly
a heavy purchaser of our product, began
| in 1915 with u net profit OF S6,400,000,
and this hsd risen TO $50 400 600 in 1867,
and in 1850 was $56,s00,0O0 Five years
ago The Italian Government was obtain
ing $21 ,902 500 from the company TO
which il farms out the tobacco mon.
opoly, and which spent fully three
fourlhs of the IS ,200, 900 ii paid ont on
Kentucky tobacco. Nearly every Euro
pean country leyies a tax IN the same
proportion, and while 1t would be pleas
ant TO believe that the consumer pays the
tax, the method In which IL is imposed
shifts a large burden on the far
mer. Except in England, the Gov
ernment rate is monopoly and
this excludes the haggling of the
market Is far as the customer is con-