The sun. [volume] (New York [N.Y.]) 1833-1916, 1900-02-15
An Extraordinary Legacy From the
Wilson Revenue Act.

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Here IL n story OF the notification Of law
by the Executive Department Of the United
States Government, and Of consequent
wrong to many American citizens, which
we believe to be without parallel in the
record Of legislation. The case has all the
elements OF public interest.
When the Wilson Revenue bill Of 1894 was
enacted in the second term OF President
CLEVELAND, Mr.. CARLISLE was the Secre-
tary OF the Treasury. The Wilson bill raised
the beverage tax on alcohol from ninety
cents a proof gallon to $1.1O The Increase
was advocated and enacted as a revenue
measure.
But alcohol not only enters the Tsoph-
agus as q beverage; it also enters "a a
raw material into the products Of numer-
Gus American manufacturing industries,
products for export as we'll as for domestic
consumption. To force the American
manufacturer TO pay for the alcohol
which he uses In the arts or in medicinal
preparations a beverage tax Of nine
hundred per cent. or more. for that Is what
it amounts TO, was 80 manifestly unjust and
against public policy, that special provision
was made for the legitimate interests OF
the manufacturer In Section 81 OF the
Wilson Act. This section was added to the
bill during it's passage through the Senate,
at the instance, II we remember rightly, OF
Senator HoAR OF Massachusetts. 1t was in
force until July 3, 1895, when Congress
repealed it:
ANY manufacturers finding IL necessary to use
alcohol in the arts, OF in any medicinal or other like
compound. may use the same under regulations
10 Be preGrIbsd by the secretary Of the Treasury, and
on satisfying the Collector OF Internal Revenue for
the district wherein he resides or carries on bust
ness tina. he has compiled with such regulations and
has used such alcohol therein. and exhibiting and
delivering up the stamps which show that q taI has
been paid thereon, shall be entitled to receive from
the II, asury OF the United States a rebate or repay
ment OF the tax 80 paid"
We have given the exact language Of tho
section, because the surprising situation
which has ensued depends upon the techni-
cal construction Of the words, and not upon
any question Of equity or disputed facts.
Under this distinct statutory provision,
this contract between the United States
Government and the American manufacture
ers, the latter proceeded to buy and use
such alcohol as they needed in their respec-
tive industries, paying temporarily. as they
thought. the nine hundred per cent. tax
thereon. In not r single case, it is said,
was the price to the consumer raised on
account Of the apparent increase in the cost
Of alcohol. On the contrary, manufact-
urers reduced the prices OF their products,
and in many instances actually sold them
at cost, relying for their profit upon the
rebate Of the alcohol tax, which the law
plainly promised them.
They never got a cent OF that rebate. In
spite Of the mandatory direction to the
Secretary Of the Treasury to prepare tho
regulations under which the tax tempo
rarily collected should be returned to the
manufacturers, Mr.. CARLISLE refused to
execute the law.
The excuse given for his astonishing pol.
icy OF notification was that there was no
specific appropriation to enable the Inter.
ternal Rerenue Bureau to supervise properly
the use OF alcohol in the arts. II has been
shown since that this pretext was wholly
without foundation, The appropriations
for that year included 81, 7OO,O 900 for sala.
ries, beside 81 900, 900 for miscellaneou
expenses, and every dollar OF the same was
available for the performance. Of the duty
which Section 81 OF the Act Of 1894 de,
volved upon the Secretary. Section AZ oil
the Revenue Act of 1890 provided in SINH
lar although less mandatory terms for the
prescription Of regulations to enable tho
American win" makers to enjoy their lega
exemption from n tax on the alcohol used by
them to fortiiy their wines. There was nc
specific appropriation in that case, either
yet Secretary WINDOW promptly executed
the law, as was his duty, and it has beef
executed ever since, down to the presen'
day. Mr., CARLISLE was the first and onl,
Secretary of IN" Treasury who ever under
took To veto n section Of a tax law enacted b,
I the Congress Constitutionally invested will
the power to say what shall be taxed an
q. what exempted from taxation. He was tn,
first Secretary Of the Treasury to set up tn
+ theory that the ultimate power Of taxation
or exemption Is with the Off ter charged b,
|, a law with the execution Of that law.
The real reasons influencing Mr.. CAR
Isle can only be coniectured. Did In
. Secretary partake OF the ~iierccly Suspicion
I hostility to the American manufacture
o which his principal President CLEVELAND
. had confessed in so many Of his message
3 and speeches? Or was it the obvious il
s adequacy Of the Wilson Act to raise revenu
enough to meet the necessary public Q,
p%enditures that inpelled Secretary Cal