The Lexington dispatch. [volume] (Lexington, South Carolina) 1870-1917, 1894-10-24
BONDED WHISKEY.
THE QUESTION between THE
STATE AND GOVERNMENT.

WASHINGTON, Oct. 18.-Secretary
Carlisle has forwarded to Attorney Gen
eral Olney for his decision, the letter
of Revenue Commissioner Miller,
which presents In ditail the question
raised between Governor Tillmsn 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 folio VS.:
Washington, Oct 16, 1894.
Hon. John &. Carlisle, Secretary of
Treasury.
Sir: enclose herewith letter from
Governor Tillm an of South Carolina
and printed copy forwarded by him
of the "State Dispensary" law. and ]
have the honor to request that the
same may be submitted to the Hon.
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 confiscation under
the Dispensary law, Of distilled
spirits deposited In distillery bonded
warehouses under the internal revenue
laws. It Is proper to stats that the
natural effect of scqulescence by this
Office in the course proposed to be
taken would be the probable complete
destruction of the bonded warehouse
system within the State; the consequent
cessation Of the business OF manufac-
turing distilled spirits under the inter.
nal 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 Supreme
Court as not absolutely prohib iting
the manufacture and sale Of dis titled
spirits. But it appears also that under
the law distiller in the State cannot
sell his product to private persons
within the State, nor If rightly ap-
prehend the provisions Of the Third
Section, to private persons to be ship
ped out Of the State, but only to the
State Commissioner or to persons out
side of the State and uader regula.
tions which would seriously inconVeo-
ience the shipper. Under snch restrlc.
tions, there would hardly be any fur.
ther lawful production of distilled
spirits within the State. No distiller
would be willing to produce an article
to be sold only on compulsion to q
single purchaser, and at the price fixed
by him. i.
The question is broadly presented
whether State can 80 legislate as
Incidentally to deprive the United
States of one Of its declared sources or
revenue and 1t appears to me q proper
matter for the consideration OF the
highest law officer of the government.
Supre ms Court In McCulloch vs. Mary.
land, 4, Wheat 31s, declared that "the
States have no power, by taxation or
other wise, 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 national government.
| And in Hannibal and St. J. r. r. Co.
vs.. Husen, 95 U. S., 465, it., was held
that neither the unlimited powers Of a
State to tax nor any of its large police
powers can be exercised so as to Work
q practical assumption Of the powers
conferred by the Constitution upon
Congress. And in numerous other
cases it has been held to the same ef.
feet. On the other hand such cases as
Boston Beer 60. vs.. Massachusetts,, 81
III. S., 25, the right Of the State to abso-
lutely prohibit the manufacture and
sale Of intoxicating liquors was upheld
Applying what appears to be the es-
tablished law to the present case, 1t
would seem that while the State OF
ISouth Carolina has the right In the ex
ercise of Its police power to prohibit
the manufacture of and traffic in dis
titled spirits within the State, 1t Is
doubtful If it has a right without pro-
hibiting the manufacture or traffic to
practically take possession Of bushes.
in all its details and carry 1t on, and
through its own agencies, for It's own
profits, thus perhaps forcing the unit
ed States to surrender the income de-
rived by this source. It follows, OF
course, that if one State may do this
all may, and the police power OF tn e
States will have been $50 exercised a.
to work practical assumption Of the
powers of Congress" and to Impede,
burden and control the operation OF Its
laws"
You will note that the Governor pro.
poses to recognize the lien Of the Unit
ed States upon the spirits In the ware
houses for the taxes due thereon, and
to pay the same. The law (sections
48 and 10 OF the Act of Congress, Au'
gust %, 1884, limits the right Of with
drawai of spirits from the warehouse
to the distiller himself. The State nov
proposes to personate the distilIer
Such authority has been denied by
United States Courts to stay officers.
See McCulloch, Jr., vs.. Henry Large
United States Circuit Court, Western
District Of Pennsylvania, at the Msy
term, 1894, Justice Bradley of the Su
preme Conrt concurrihg.
It is to be observed also that 1t fre'
Iquently happens that dtstiller Is In
debted to the government in a sun
greater than the tax upon the spirits
themselves then In toe warehouse
Such indebtedness is By section 1881
Revised Statutes, declared to be lier
upon the property and rights to prop
erty of the distiller. Taxing spirits
by the State in the manner proposed
might easily impair If not destroy the
ability Of the government to collec
it's debt. For my own guidance,
wish to be particularly advised whsth
er or not l may lawfully consent Il
permit the withdrawal of spirits il
bonded warehouses ii the State Q!
South Carolina upon seizure therein by
the State and tender of tax to the
Collector, or upon Judgment Of for
fetture by the State Court.
| Governor Tillman personally yester
day requested al early reply to hi
inquiry: He was told however tha
the matter is under consideration an(
will be disposed of as soon as possible
Respectfully yours.
| (Signed) Jos. S. MILLER,
Commissioner.
| Nuho