New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1897-01-16
RAINEs LAW UP TO DATE.
FIRST REPORT OF THE STATE EXCISE
DEPARTMENT.
-, 1yuANs PLAN FOR COMPELLING CLUBS.
FAKE" AND OTHERWISE TO PAY A
LICENSE rAx-EvIDENcE OF EXTENSIVE

Albany jar. Estate Excise Commissioner Lyman
.a.v submitted his first annual report 10 the Leg
'..u-, showing the operation Of the Rsines Liquor
r.xlaw Referring to the existence Of fake hotels.
ne says
arioved hy other places that sell liquor. il Is very
.rah,e that the law should be so amended, II pos
rh,s as 70 more explicitly define. in connection with
,h privileges for the purpose Of this act. the torn
c,,sl' as wei as the terms guest and meals. "
r. sneaking ~ the Incorporation of several thou
.na social clubs in order 70 avoid the tax under the
p.,nes law the Commissioner says: About the time
=, ,be massage of the present Excise Liquor Tax law
a Court Of Appeals decision, rendered in case
sroush. under the law OF 1892 held that the dstrh-
,,on. Of liquor for pay among the members OF club
or membership corporation not sac OF liquor
x,,h,n that law. and. following this precedent sub
n,snate courts have held that under the present law
.,. sale Of LIQUOR 10 members OF club is not traf-
acknc in liquors These decisions have resulted in
suggesting method for evadine the law. and very
many parties who had paid for certificates have sur
rendered the same and organized and incorporated
socaled social clubs OF which former certificate
hoder or his employee usually the president.
urer and steward and very many others. under the
protection Of such decisions have readjused old es
,ablsheG places FOR the sale OF liquor and arranged
with a majority OF their customers 10 distribute
Nouor 70 them during prohibited hours and on Sun
day The number OF these places changed. includ-
ing new places 81 that character established within
the las, six months. shown by the records OF the
Secretary Of States office. IL 1000. the most OF
which are located in the cities Of New-York. Brook
yn and Buffalo. where the liquor is largest. The
extent % this evasion becomes apparent from the fact
that there have been $3.50 such clubs chartered from
May 1896, 10 November "a. 1896 and 371 20 January
49, 1897 The loss TO the public revenue sustained from
this Is fairly estimated about 81 900 COO for
the present liquor-tax year.
This evasion Of the law. at leas; the evasion of
its plain intent. should be made impossible by iegis
laton, otherwise. the States viii be still
further seriously impaired and abiding liquor
dealers discouraged and driven by unfair competition
to the same subterfuge and evasion. BY careful IN
vestigation OF the United States Internal Revenue
records Of the liquor traffic in this State the fact is
disclosed that most of these clubs apply for and re
eeve the proper internarevenue stamp OF the United
States before beginning the traffic in liquor. and in
order 10 procure such stamp must make sworn
Statement as follows: That IL intends engage. or
Is engaged. in the business or occupation Of retail
lalor dealer subject 10 special under the Internal
Revenue laws of the United States
The judicial decisions above alluded 10 have
constrained this Department. well all other
officials charged with the execution of the law.
10 await amendment which. It is hoped. will
remedy the defect and make clear the intention Of
the law. The Department respectfully suggests
for your consideration IS a practical solution OF
this vexed question that bona -fde clubs mem
bcrship corporations be allowed traffic in liquor
under special certificate which shall require them
to pay the highest Of the locality. subject 10
such restrictions may be deemed necessary and
appca bic 10 such Institutions for the purposes of
the act. is already done1in the case Of the
traffic upon cars. steamboats, and vessels
The summary Of tax certificates issued and
ceipts therefrom in the first six months OF the
iiquor-tax year. beginning May and ending Octo-
Der 81 1896. shows: Total certificates issued. 2s2l1
fetal cancellations. 1s2s; number Of certificates in
force November /. 1896. 2s5S; received for certf-
Gates transfers and fines. Nl.o3S,322 refunds paid
Sa5 74s: refunds due and be paid. sS.6sl; county
treasurers fees x6iA transfers TO November l.
1896 llse: gross collections after payment Of re-
funds and treasurers fees. s1o.640.4os amount Of
municipa Iities' share <.tS433s: States share.
81. 0s9.
The Department has complied statistics 10 show
the working Of the old Excise law. in comparison
with the present system. Information for this com
parison is gathered principally from reports Of the
sss old Excise Boards which were made 10 cover
the twelve months preceding April 80. 1896. The
comparison follows: Licenses issued for Twelve
months prior April 30 1895 20 49, liquor-taN GER
tifcates in force November l. 1896 S5s3; reduction
IN licensed places 1854; total receipts the last year
under the old law $3172376 expenses Of collection
for same period s252. 7s2: net revenue for towns
and cities s2s95sS; ratio Of expense OF COLLECTION
of SANE per cent; total receipts under Raines
Y,ouor Tax law from May ] 10 october 81. 1896.
Si.SSs22: deductng rebates paid and due $si 80
net collections Nos @ enhsRfhe eT % % &
county, ~, ,reasurers fees Ns4s4 total Sio799; bal
ance or net revenue. Sa.eoS.l% , -,
II is estimated that collections IN the feiildlllun'
Of the liouor-tax year 90 May !. no VIII ne sum
Client refunds due and TO- nS11mr o dp Se a rr
naming six months will be Sl1oVr, wfllch VIII
make the ratio OF '9a m eS for
thirteen months, ending April 80 1891 ABOUT = per
Th renort continues: Through the kindness of
the United States Internal Revenue Department.
n ns y pares IN " this State retailing liquor
United States certificate. Comparison OF these
M ~ The date of this report, dscoses the fact
that s37e who have paid an nternal-revenue rstan
iquor-dealers' tax have failed to pay me S'a,e
tax fo- such privilege OF this number l,s2s are
clubs or associations After careful ana ana , tx,
haustive examination and comparison OF the Two
lists the Department is thoroughly convinced that
the evasion of the Excise law rs ana mas pe Sa, ,?l
revenue is being seriously impaired by the pracuceS
Of many who dare 6Gs sfKe co ne bn are wiling
10 take the risk Of conviction and punishment IN
The number Of verified complaints submitted 10
Dstrict-Attorneys for prosecution as Al ana me
sumber Of !, ss w Tbe SumbeT of cV
lions m which the State Department appeared py
~ 81 ssned on order Of
and injunctions against parties Hieta'! "di"oA'"s
Il, has been the policy OF the Department not to
interfere with local officials IN the execution OF
complaints when presented 10 Grand Jures so far
as acted upon and known. have peen quite similar
10 Ike complaints under former Excise laws. VIZ
depending largely upon the prevailing sentiments
Of the locality, but more especially upon tse char
scter and preiudices Of juries and court oircials
IN some localities it is evident that juries have
or less prejudice against convlcVne 1or Of
fences against the Excise law. avallng themseI'es
o. which Offenders escape unpublished This pre-
much against the taxation OF the trafc as against
police regulations with which for ages 1t mas been
deemed necessary for the welfare ana protectioh
Of society TO circumscribe and limit H. Nothing
shows more plainly than the cheerful alacrity with
which Uouor-dealers OF all grades and conditions
pay the United States tax which is coupled WIN
10 restrictive conditions harsh penalties except
tor non-payment OF the assessment