The new dominion. [volume] (Morgantown, W. Va.) 1876-1904, 1889-08-17
TRUSTS AND MON0POLIES.
THE NOTORIOUS WHISKY RING
A COTTON.BAGGING COMBINATION.
Great Conspiracy to Defraud the Gov.
eminent OF Internal Revenue Tax
The Cotton. Bag Corner and
Its Effects.

/ shall devote a single paper +
these two combinations, which wer
deemed proper subjects of investiga
ton by the House committee, ant
whose operations may present som
facts of interest.
THE WHISKY FRAUDS.
The great whisky Ring whicl
engrossed so large share Of publi
attention in the closing years of Gen
Grants administration, was an asso
citation of revenue officers and dis
tillers to defraud the government o
the internal revenue tax on distilled
spirits. Its headquarters were il
ST. Louis, and it had branches il
four northern cities and in New Or
leans. Secretary Bristow deserves
the credit of breaking it up, although
it's power was so great that fol
awhile it defed the government, and
even in its dying throes effected his
withdrawal from the cabinet. Itwas
temporary conspiracy, and had nc
lineal or other connection with ex
isting combinations.
THE DIsTILLERY COMBINATION.
Distilled spirits are with us as
with most of the great nations of the
world, a fruitful source of revenue
We impose on the home product an
internal revenue tax of ninety cents
per standard gallon, which means a
mixture testing fifty per cent. pure
alcohol. This is tax of from 300
to 400 per cent. on actual value. The
tax on imported spirits is two dol
lars per gallon testing ninety -four
per cent. pure alcohol, which offsets
the internal revenue tax and gives
real tariff tax of about 26 cents on
standard gallon, or an average
much more than one hundred per
cent. ad valorem. Omitting rye
whisky, of which there is moder-
ate production in several States, the
general whisky production of the
United States falls into two great
classes, that made in Kentucky and
that made north of the Ohio river !;
or that made for aging and that
which does not require aging. The
Kentucky or Bourbon whisky made
from corn, with an admixture of
about one-third rye and barley malt,
is unfit for immediate use as a bev-
erage, and the Blue Grass expert dis
dams to touch it until it has passed
its third summer, and then quaffs it
with delight measured by its in
creasing years. The other grade,
which includes the great bulk of the
products, is not made for aging, and
is about as coed when first made as
ever afterwards. 1t is distilled from
corn, with the least addition of
small grain that will establish fer
mentation. Peoria, Illinois, is the
chief seat of its production, and most
of the distilleries are scattered
through the states of Ohio, Indiana
and Illinois. In both grades of whisky
there has been immense r-produc-
tion in recent years. The Kentucky
distillers, after vainly trying to find
or to create foreign market for
their surplus, entered into an agree
ment whereby they covenanted with
each other to suspend production for
l year from the st of July, 1887. This
agreement was signed by most of the
large distillers of Kentucky. II ex-
pired without renewal, and was not
trust, but voluntary compact
which rested on the good faith of
those who made it, having no con-
solidation of properties under sim
gle control, and exhibiting its kim
ship to the trust family only in its
purpose to limit or suspend produc-
ton until consumption could catch
up with it.
THE WHISKY TRUST.
The distillers north of the Ohio
river formed, in May. 1887, regu-
lar trust called 1.-THE Distillers and
Cattle Feeders Trust" Their agree
ment was, as testified by their presi-
dent, modelled closely after that OF
the STANDARD Oil Trust and is SO
like that agreement in its general
scheme of organization that | need
not go into details.
The corporations whose stockhold
ers had become parties to this trust
numbered 81 ON the first day of Jan
uary, 1886, and it has been paying a
monthly dividend of one per cent. on
it's capitalization of $50, 100000 since
that date. The alleged reason for
its formation was the fact that a
brisk export demand for spirits arose
in 1878 and stimulated the building
of new d:stilleries and an increased
output. This demand fell off in
1887, and, after trying various pool
ing schemes without success, the dis
tillers adopted the Standard Oil
plan. They have since been running
only such houses as can manufac-
ture most cheaply, having shut down
the rest The headquarters of this
trust are at Peoria, and it claims
that it has not, in fact. increased OF
attempted to increase, the price OF
its products.
AS it began with a largely over
stocked market, its earliest efforts
were necessarily directed toward
maintaining paying prices, while re
ducing production to the volume OF
demand, and the dividends it has
been able to declare show that it has
let itself down to s'hard pan" with
out shock or injury. It may, there
fore. be pronounced successful and
promising" trust. This "whisky
trust" produces more than half OF
the distilled spirits of the country,
only the smaller part of its product
being used for beverage primarily,
and it is easy to see that with the
surplus product worked it will have