The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1898-04-21
THE TOBACCO TAX
The Proposed Increase
Causes Much Interest.
RETROACTIVE FEATURE
PROVISION TO TAN BACK MANI
FACTURE OBJECTIONABLE.
INTERVIEW WITH Mr.. JOSEPH E. POGUE
Thinks it will Temporarily DemoraIze Trade
and that the Government will Receive
Very Little Increase in Revenue
Will open Door for BIockading.

Will open Door for BIOckading.
The proposed increase of tax on to-,
hocco from 6 cents per pound to Il cents
per pound is creating a great deal OF ln-
tercst among tobacco manufacturers. n
great deal of speculation us to how the
trade will be affected is being INDUCED
in, 1t is believed that temporarily, at
any rate the business will be consldera-
bly, dcmoralized and material lost VIII
result to the manufacturers.
II also appears that Congress is not
content with increasing the tax on the
product made subsequent to the law
but proposes to levy ON all tobacco al
ready manufactured in the hands OF
manufacturers and dealers the differ
ence between the tax already paid and
the increased tax.
This latter proposition appears to be
very unjust one and is causing consider
able excitement and unfavorable COM
ment among manufacturers, jobbers and
the smaller dealers.
The tobacco industry is one of the
largest in the State and therefore what
pie.
The increased tax will not only have
the effect of curtailing the output of
manufactured tobacco, but it will require
n larger outlay of capital to the manu-
facturer. 1t will also result perhaps in
the chewing of cheaper grade Of the
golden weed.
The tax will possibly have tendency
to cripple the smaller manufacturer
more so than the larger ones, owing to
increased capital required. The average
pound of manufactured tobacco costs
about is cents, stamped and
ready for market; which cost is divided
as follows: Six cents for the raw ma
terial; cents to manufacture, Including
labor factory, boxes, &c.) and q cents
present tax. Hence every pound of to-
bacco sold carries with it 6 cents in
cash, and with the proposed advance of
q cents reduces the smaller manufactur-
ers' resources just one-third. This will
possibly cut off competition to some eX-
tent in the raw material market, to the
interest of the large manufacturers.
The advance will no doubt, revive the
old block days of "'65'h to 20 10
when wagons loaded with fish and
'other products" traversed the State
and peddled contraband tobacco. A
more rigid enforcement of the revenue
laws will, as Il consequence, follow, es-
pecially the laws regulating leaf dealers.
as their records will be watched with
greater care by the officers for informa-
ton concerning manufacturers.
Mr.. Joseph f. Pogue, of this city, one
OF the largest and most enterprising to-
bacco manufacturers of this district,
was interviewed by News and Obser-
yer reporter on the subject yesterday and
gave some pertinent views on the pro
posed measures.
The reporter asked:
What do you think of the proposed
bill in Congress to increase the tax on
tobacco from 6 cents to l. cents per
pound.
He replied: Il do not think that it
will increase the revenue very materially
as the records of the past do not show
that the government realizes any more
revenue from high tax than it docs from
low tax"
''Why is this SOP was asked.
Because he replied, there is more
incentive for irresponsible parties To
blockade and then, too. the consump-
ton is decreased, owing to higher prices
which rule"
'You think business would be consider
ably demoraized them"
Undoubtedly so, for the present at
any rate, and the manufactures would
be put to considerable expense. i'll chang
ing the run OF his factnrv in tho wav
of machinery, etc, TO mees the new Eon'
ditiOn of things.
"What is your opinion of the retro
action clause, which proposes to levy
tax amounting TO the difference in the
present tax and the increased tax on all
manufactured tobacco in the hands of
dealers and manufact. 1rerS!"
Perfectly absurd. untenable and I'M
constitutional" is the strong manner IN
which Mr. Pogue characterized that
proposition.
IF that provision becomes part of the
law. will the manufacturers contest its
constitutionality
"Most assuredly. 1t would be resisted
by the manufacturers, as unit. That
is the worst feature about the whole
business. OF course, the tax on suisse
quent manufacture would be Just, but it
would be entirely unfair and unwise TO
make or endeavOr to enforce the retro
active feature"
The increase tax would necessitate
larger outlay in manufacturing, would
it not?'
Considerably so. at least % per cent
more capital would be necessary. and
the lost, too, by bad debts would be
heavily increased"
In discussing the matter further, Mr.
Pogue stated that, if tax is increased
the free leaf clause ought to be, by all