Evening star., 1911-08-22
PRESIDENTS MESSAGE
VETOING COTTON BILL

ment which Is a 50 per cent reduction
from the present rate. A curious result
appears In the rate fixed for alumina hy-
drate containing less than 81 per cent OF
alumina, and the same containing moro OF
alumina. The latter is q finished product
as compared with the former. but the
latter In the amendment is given duty
of only per cent. while the raw and un-
finished product has q rate Of Is per cent
ad valorem.
These are some of the typical incon
sistencies and instances Of haste In prep
aration and Of the error Of calculation II
the proposed sweeping horizontal reduc
tion of a most important schedule in the
tariff. The eighty-five paragraphs o.
schedule do not refer to the various
manufactured forms Of one or more ma
terials. Each paragraph relates to 9
different subject, the duty on which, botf
with reference to its revenue-producine
capacity and with reference to its pro-
tecting effect upon an industry OF this
country, ought to be determined by sepa'
rate examination. and the taking OF care
full evidence of experts, because the SUD-
ject is peculiarly one for experts. The
figures l have given show that the meth
cd pursued In making what was tnougn'
to be a reduction Of 25 per cent would
if it became the law. produce the greatest
ical schedule.
I. Intrinsic Cost Varies.
But the most remarkable feature Of this
amendment to the chemical schedule re-
main to be stated. The internal revenues
of this country to the extent of $16O.O0O.-
600 are dependent on the imposition OF
tax of $1.2O a gallon on distilled spirits
vryt,t tnH tu iVI1j
consisting Of 80 per cent absolute alcohol
and so per cent water. The intrinsic
cost of spirits Of this proof varies from
10 to 20 cents a gallon. SO that the enor-
nous tax as compared with the intrinsic
value of the article furnishes a motive
for fraud and evasion Of the law stronger
than In the case Of any commodity within
the range Of federal taxation. 1t has
therefore been necessary In all customs
legislation to protect the internal revenue
system against the introduction from for
eign countries Of alcohol in any form and
in association with any other article ex-
cept upon the payment Of such a customs
duty as shall make 1t improbable to i'm
port the alcohol into this country to be
used in competition with alcohol or dis
titled spirits of domestic manufacture.
The customs duty on a proof gallon Of
alcohol Is $2.25. The care and anxious
concern with which Congress has hereto
fore guarded against The Introduction Of
alcohol in any form without the payment
of sufficient duty to prevent its interfer-
ing with our domestic production and the
payment of the internal tax may be seen
In at least ten paragraphs of the chem
ical schedule of the Payne law and pre-
vious enactments:
Thus. in paragraph 2 Of the existing
law 1t is provided that vegetable. ami
NAL or mineral objects immersed or plac-
ed in or saturated with alcohol shall have
duty Of 90 cents per pound and 25
per centum ad valorem. and the same
duty Is imposed in that paragraph on al
coholic compounds not specially provid-
ed for Sixty cents pound Is equiva-
ent to 60 cents pint Of the alcohol or
distilled spirits used at proof. and this Is
equiv to $3.50 a gallon for alcohol,
which. of course. prevents its importa-
tion for any purpose other than as speci-
fed in the paragraph.
Again. in paragraph 3. chemical COM
pounds containing alcohol and chemical
mixtures containing alcohol have a
duty of 90 cents per pound. which
duty of 81 40 a gallon,
The same thing is true in paragraph
So, covering medicinal preparations
containing alcohol, or any preparations
in which alcohol Is used. These have
a&duty of 55' cents per pound. which
used of at least $40 gallon.
Again. on perfumes. including. cologne
and other toilet walters cSsithioliae a1Hs-
hol Or in the preparation OF which
alcohol Is used, there is a duty OF 60
cents per pound and so per cent ad
valorem, by which the domestic alco-
hol used in American made perfumes
is protected by tax of $3.50.
Under the present bill all these pre-
cautions against the undue Introduction
-. @I~y t. oil s.r.1
pounds included In the chemical schedule
are. in fact, abolished by striking out
the specific duties per pound. Thus in
paragraph 2 the specific duty per pound
is stricken out and the whole rate Is
fixed at 30 per cent ad valorem. In para
graph there Is similar change; In
paragraph 65 the change is to 45 per
cent ad valorem, and in paragraph %. to
30 and 30 per cent ad valorem. With
alcohol at a foreign cost of 70 cents a
gallon, this would make the tax, SO far
as the alcohol Is concerned. In paragraph
2, 10 cents gallon; in paragraph, 3, s
cents gallon; In paragraph 65, cents
a gallon, and In paragraph SO. from IL
to II cents a gallon. That Is, the alcohol
thus introduced would pay under this
chemical schedule from 8 to IL cents a
gallon duty instead Of $1.2O a gallon as
imposed by our internal revenue system
or 81 25 a gallon as imposed by our GUS
toms laws upon the introduction Of proof
alcohol. or the higher rates as fixed in
the existing chemical schedule.
Alcohol is also used in the manufac-
ture of collodion and fruit ethers. and
under the existing law the invasion Of
our internal revenue system Is here also
prevented by the imposition Of high rates
per pound as the equivalent OF the inter
nal revenue tax. BY this amendment the
compensatory duties for the high domes'
tic tax on alcohol in collOdion and ether
Is abolished. and If the bill passed. the
domestic manufacturer would pay $40 a
gallon for his alcohol while his import.
ing competitor would pay but 30 cents.
Disastrous In Effect.
l need hardly dwell on the disastrous
effect such an amendment in reference tc
alcoholic compounds would have upor
the internal revenue system Of taxing
distilled spirits. nor need point out thu
opportunities of evasion and fraud thus
presented. OF course. the change wal
not intended. but If this bill became law
it would be made.
This bill thus illustrates and enforces
the views which have already expressed
in vetoing the wool bill and the so-called
free-list bill. as to the paramount i'm.
portance OF securing, through the tnvesti
cation and reports of the tarin board.
definite and certain basis of ascertainec
fact for the consideration Of tariff laws
When the reports Of the tartn board upor
these schedules are received. the duties
which should be imposed can be deter
mined upon justly. and with intelligent
appreciation OF the effect that they VIII
have both upon industry and upon rev.
enue. Very likely some OF the changes
in this bill will prove to 3e desirable and
some tn he undesirable. So far as they