The daily morning journal and courier. [volume] (New Haven, Conn.) 1894-1907, 1898-06-07
DRAWBACK ON ALCOHOL.
Manufacturers Would Make Export
Business Compensate for Loss of Do



Manufacturers Would Make Export
Business Compensate for Loss Of Do
nestle.
American manufacturers who use alco-
hol in their industry have a for long
period made efforts to secure an
amendment to the internal revenue
laws giving a rebate Of the tax on al
cohol used in the manufacture of goods
exported to foreign countries. The JUS
tice of this demand Is, they claim, not
questioned by Congress, which has
acknowledged the principle involved by
granting a rebate of the tax paid on
imported alcohol. But while extending
this favor to foreign alcohol the gov
eminent has refused to give the same
privilege to the domestic product. The
result of this policy has been to dis
courage our export trade in many lines
of goods, and to encourage the use of
foreign alcohol in preference to the
grain alcohol of this country.
For this unwise and unjust discrim-
ination against an important American
product there is absolutely no excuse"
said a gentleman who is interested in
the government revenues would suffer,
since if the alcohol is not exported it
is not used, and therefore no revenue
is now derived from it. The only at
tempt at argument in favor of the law,
as it now stands, is the alleged danger
of frauds in the use of alcohol in manu-
featuring for export. But there Is GER
tainly no more danger Of fraud in us,
ing domestic alcohol than with the for
eign product as now permitted.
THE case in favor of changing the
law so as to allow the use Of domestic
alcohol in manufacturing for export is
thus concisely stated in the views of
Senator o. H. Plat chairman of the
Joint Select Committee of Congress on
Alcohol in the Manufactures and Arts,
and Representative Chas. A. Russell, of
the same committee, accompanying
their report submitted to Congress De-
cember IL, 1897.
TN this connection we desire to eX-
press our surprise that the use of for
eign alcohol, free of tax, in the produce
ton of articles for export is allowed
while the domestic alcohol is taxed.
There can be no reason given why this
hol and against our own product should
exist. If any alcohol is to be free from
taxation when used in manufacturing
1t should certainly be the domestic ar
ticle. 1t Is an unsound policy which en-
courages the use of a foreign product
at the expense of an equally good or
better domestic product, but under our
laws as they exist to-day, in this re-
gard this strange anomaly is present
ed: That it is possible for manufac-
turer to buy domestic alcohol, export 1t,
use it in the manufacture Of articles
for export free Of any tax whatever,
and yet must pay a tax Of 1900 per cent.
If he uses the same domestic product
without having first exported and re-
imported it. If there is any danger
that fraud will be perpetrated by the
allowance of domestic tax free alcohol
in the manufacture Of articles for ex-
port that danger is precisely the same
In case imported alcohol is used. If
discrimination Is to be practised (as be-
tween foreign and domestic products) it
would seem wiser to discriminate in our
own favor. Whatever else may seem
tudicious in the way of legislation to
relieve our industries of the burden of
this internal revenue tax upon alcohol,
persons manufacturing for export
ought surely to have the same oppor-
tunity to use it untaxed that they now
have to use foreign alcohol
an addition to the arguments so con-
vincingly presented there is at this time
an especial reason why Congress should
extend to manufacturers the right to
use domestic alcohol. The Internal
revenue bill now before Congress i'm
poses increased taxation on a large
number of articles in the manufacture
used The effect of the new internal
revenue taxes on these articles will be
to increase their cost and decrease their
sale. Under these conditions the only
recourse for the manufacturers of such
articles is to find, if possible, new
markets for their products. These
markets must be found in other coun-
tries, and in order to sell goods of
which alcohol is a material part in
competition with England, Germany,
France and other manufacturing coun-
tries which have the advantage of I'M
taxed alcohol, it is absolutely necessary
that our manufacturers should be al
lowed a rebate of the tax paid on all
alcohol entering into products exported.
''Since these manufacturers are called
upon to contribute largely to the gov
ernment's revenues at this crisis it is
only fair that they should be given an
opportunity to recoup themselves for
their losses by building up an export
trade. The proposed change would not
cause the government the loss of one