The Newberry herald and news. (Newberry, S.C.) 1884-1903, 1894-10-24
TILLMAN STRIKES A SNAG.
Internal Revenue Com missioner Miller Sets
Forth the Reason Why 1t ia fnexpe-
dent to Permit State Seizure OF
Bonded Liquors on Payment
of the Tax.

ter of Internal Revenue Commissioner
Miller, which presents in detail the
questions raised between Governor Till
man, of South Carolina, and the United
States authorities as to the jurisdiction
of each in the enforcement of the South
Carolina Dispensary law. The letter is
as follows:
WASHINGTON, D. g., Oct. 26, 1894.
Hon. John G. Carli'le, Secretary OF
the Treasury-Sir: I enclose herewith
letter from Governor Tillmsn, of
South Carolina, and q printed copy for
warded by him of the State Dispen-
sary law, and I have the honor TO re-
quest that the same may be submitted
to the honorable Attorney General for
his opinion as to the course which
should be taken by this office in the
event of seizures by State officers for
confscation under the Dispensary law
of distilled spirits deposited in distil-
lery bonded warehouses under the in
ternal revenue laws.
It is proper to state that the natural
effect Of acquiesence by this Office in
the course proposed to be taken would
be the probable complete destruction of
the bonded ware house system within
the State, the consequent cessation of
the business of manufacturing distilled
spirits under the internal revenue laws
and the loss to the United States OF
further income from that source.
The Dispensary law, it appears,
has been construed By the State Su-
preme Court as not absolutely pro-
hibiting the manufacture and sale If
distilled spirits. But it appears also
that under the law a distiller IN the
State cannot sell his product to private
persons within the State, nor, if right
~ apprehend the provisions of the
third section, to private persons to be
shipped out of the State, but only to
the State commissioner or to persons
outside of the State and under regula-
tions which would seriously inconve-
nience the shipper. Under such restric.
:ions there would hardly be any fur
ther production of distilled spirits with
in the State. No distiller would be
willing to produce an article to be sold
only on compulsion to single pur-
chaser, and at the price fixed by him.
The question is broadly presented
whether State can so legislate as in
cidentally to deprive the United States
of one of its declared sources of reve-
Due, and it appears to me proper
matter for the consideration of the
highest law officers of the Govern
ment.
The Supreme Court ID McCulIoch vs.
Maryland, Wheat, 3l6, declared that
1.-The States have no power, by taxa
tion or otherwise, to retard, impede,
burden or in any manner control the
operations Of the constitutional laws
enacted by Congress to carry into
effect the powers vested in the Nation.
al Government" And in Hannibal
and St. 10 Railroad Company VS..
Husen, IS q. S., 465, it was held
that "neither the unlimited powers OF
| State 20 tax, nor any of its large po-
lice powers, can be exercised 30 as to
| work practical assumption of the
powers conferred by the Constitution
| upon Congress-" and opinions in num-
erous other cases have been to the same
effect. ......... ...-. iii.
On the other hand, in such cases as
the Boston Beer Company vs.. Massa.
chusetts, 81 United States, 25, the right
of the State to absolutely prohibit the
manufacture and sale of Intoxicating
liquors was upheld. ... ...... --.-
Applying what appears TO be the es.
tablished law to the present case il
would seem that while the State OIL
South Carolina has the rightsin the
exercise of its police power, toPDhibi1
the manufacture of and the traffic in
distilled spirits within the State, it il
doubtful if it has the right, without
prohibiting the manufacture or traffic
to practically take possession Of the
business in all its details and carry il
on ana through its own agencies for its
own profit, thus, perhaps. forcing the
United States to surrender the income
derived by it from a source heretofore
relied upon. It follows, of course, thai
if one State may do this, all may, anC
the police power of the States will have
been so exercised as to work practi'
eel assumption of the powers of Con
gress and to ''impede, burden and con
troll the operation of its laws" .,--...
You will note that the Governor pro
poses to recognize the lien Of the United
States upon the spirits in ware houses
for the taxes due thereon and to pay
the same. -... ..
The law (Sections 4S and 50 of the
Act of Congress, August %, 1894, limits
the right of withdrawal Of spirits from
warehouses to the disti!ler himself. The
State uow proposes to personate the
distiller. Such authority has beer
denied by the United States Courts t
State officers. See Mccullough, Jr., vs
Henry Large, United States Circuit
Court, Western district Of PenDsylva
mia, at the May term, 1884, Justics
Bradley, of the Supreme Court, con
curing.
It is to be observed, also, that it fire.
auently happens that distiller is in
de0ted to the Government in the sun
greater than the tax Upon the spirits
themselves than in ware houses. Such
Indebtedness is, by Section 3,25l, r. S.
| declared to be lien upon the property
and rights to property of the distiller
! The taking of the State in the manner
proposed might easily impair if not de-
stroy. the ability of the Government tc
collect it's debt.
For my own guidance I wish to be
particularly advised whether or not
may fully consent to permit the with
drawal Of spirits from bonded ware
houses in the State Of South Carolina
upon seizure thereof by the State and
tender the tax to the collector, or upon
judgment of forfeiture by the State
| Court.
Governor Tillman personally yester'
day requested an early reply to bis
| inquiry. He was told, however, that
the matter is uuder consideration and
would be decided as soon as possible.
Respectfully yours,
JOSEPH S. MILLER,
Commissioner.