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discussed once to-day, fairly considered, and fairly defeated. If I understand the vote of the committee, it is clearly in favor of making this discrimination, so that distilled spirits exported shall receive a drawback of fifty cents a gallon, and no more. So the committee have declared by a large majority, and I am rather surprised to find the gentleman from Massachusettes bringing up this defeated proposition. If a proposition is to be argued over again every three hours in the day, it will take some time to go through this bill. The best way to get it through, in that case, would be to take the bill out of committee, call the previous question on it, and pass it. Our object is to make the bill better, not worse; and I am clearly of the opinion that the gentleman's amendment will make it worse. Therefore I shall vote against it.

Mr. BUTLER. I move to amend the amendment pro forma by striking out the last word. I am sorry to trouble the committee on this subject again, and I would not do so except that this is a matter of the very gravest consequence. Unless the amendment can be passed your export trade will be very much injured, ay, I may say, destroyed. There can be no such thing as the exporting of spirits with a drawback of fifty cents against a tax of sixty three cents and a tax on the sales besides. It is not a mere question how many gallons of spirits are exported, because that would be but a bagatelle in comparison, perhaps, with the whole amount manufactured; but it is of great consequence whether the article shall be made and shipped by our merchants to foreign countries, there to meet other merchants on their own ground.

Let me state a single fact which is capable of demonstration by anybody who will look into the matter. While England puts a very heavy duty on spirits. she allows the exporter an advantage of two pence per gallon to enable him to compete with the Dutch merchants in India, while we are putting on now fifteen per cent. Our own merchants can but struggle now with the English trade. Our trade has been falling off largely, but we hope by superior energy to compete with them unless you load us down. We take our spirits in assorted cargoes to the East Indies or Africa. Now, strike out spirits and we are not able to compete because we have not what is known as an assorted cargo. It is no small matter. We bring back gold and put it into your Treasury by the customs duties paid on the goods which are brought in the return cargoes. They are considerably more in amount than the whole value of the spirits we export. It is said that if you keep the amount down you will substantially stop fraud; but let me say to you if frauds can only be perpetrated by perjury and by sending out water men will carry water at fifty cents a gallon just as quick as they will at sixty.

[Here the hammer fell.]

Mr. SHELLABARGER. Mr. Chairman, I have no views to submit in regard to the merits of the amendment of the gentleman from Mas sachusetts except what may grow out of the constitutional proposition to which he has appealed in its support. But I do want to say a word in regard to that question of law, the application of which, if the apparent view of the gentleman be adopted by the House, will not be confined to the proposition now before the committee, and which, if adopted by the House as a rule for our action on this bill, or any other internal revenue bill, I think would be very unfortunate and wholly inadmissible. The gentleman says if the committee refuse to allow an additional drawback, so as to make the drawback substantially equal to the internal tax, we shall thereby, and by a mere indirection, virtually levy a tax upon exports equal to the difference between the internal tax and the drawback, and shall in that way violate the constitutional prohibition which forbids the taxation of exports. It seems to me this cannot be the law, and that constitutional consideration surely ought not to affect the vote upon

his amendment. The proposition will result in this: that you could impose no internal revenue tax upon any commodity which might enter into our exports unless you also allowed a drawback just equal to the revenue tax, lest thereby you were taxing exports and violating the Constitution. Take for an illustration the article of tobacco. Suppose we allow no drawback upon it, it might be said with exactly the same propriety that because you impose a tax upon tobacco you are evading the Constitution and taxing its exportation. Now, the truth is, as it seems to me, that the allowance of drawback, instead of being a prohibition of exportation or tax upon exportation, is really a bonus offered to exportation to the amount in this case of fifty cents per gallon. We might impose a tax of sixty cents, or any other internal tax that we choose, on this article, and leave it there. Instead of doing that we propose to encourage exportation by allowing a drawback of fifty cents per gallon as an invitation to export. What the Constitution prohibits is the levying of a tax on exports as such, and because they are such. It forbids the selec tion of "articles" about to be exported from any State, and the taxing of them because they are exported, thus taxing them as a class as distinguished from the other productions of the State. The argument of my friend surely has no weight, for if it has it would result in prohibiting all internal tax on any article which might be exported; because the tax might so enhance its cost as to render the exportation unprofitable. In regard to the merits of the amendment, except as affected by this legal point, I did not desire to say anything.

Mr. BUTLER. I withdraw the amendment to the amendment.

Mr. BOUTWELL. I renew it, merely for the purpose of saying that I meant the committee should understand that the reasons which lie at the foundation of the constitutional rule that there shall be no export tax imposed, apply also in this case and probably in every other. As regards cigars, the Committee of Ways and Means have made provision for export without payment of tax.

I now withdraw the amendment to the amendment, and ask for a vote on my amendment.

The question was put on Mr. BOUTWELL'S amendment; and there were-ayes 51, noes 50. Mr. MAYNARD demanded tellers. Tellers were ordered; and Messrs. PRICE and BOUTWELL were appointed.

The committee divided; and the tellers reported-ayes 39, noes 59.

So the amendment was rejected.

The CHAIRMAN. The hour of half past four o'clock p. m. having arrived, under the order of the House the committee will take a recess until half past seven o'clock p. m.

EVENING SESSION.

The hour of half-past seven o'clock p. m. having arrived, the Committee of the Whole on the state of the Union, (Mr. BLAINE in the chair,) resumed the consideration of the bill (H. R. No. 1284) to change and more effectually secure the collection of internal taxes on distilled spirits and tobacco, and to amend the tax on banks.

Mr. SCHENCK. I suggest that the Clerk read down to the end of the sixty-fifth section. It will then all be open to amendment instead of only the paragraph.

The CHAIRMAN. The Chair has no objection, and that course will be pursued.

The Clerk resumed and concluded the reading of the sixty-fifth section, as follows:

Rectifiers of distilled spirits rectifying, purifying, or refining two hundred barrels or less of distilled spirits, counting forty gallons of proof-spirits to the barrel, within the year, shall each pay $200, and fifty cents for each such barrel produced in excess of two hundred barrels. And monthly returns of the quantity and proof of all the spirits purchased and of the number of barrels of spirits, as before described, rectified, purified, or refined by him, shall be made by each rectifier in the same manner as monthly returns of sales are made. Every person who rectifies, purifies, or refines distilled spirits or wines by any process, and every wholesale or retail liquor

dealer or compounder of liquors who has in his possession any still or leach-tub, or who shall keep any other apparatus for the purpose of refining in any manner distilled spirits, shall be regarded as a rectifier.

Compounders of liquors shall each pay twenty-five dollars. Every person who, without rectifying, purifying, or refining distilled spirits, shall, by mixing sueh spirits, wine, or other liquor, with any materials, manufacture any spurious, imitation, or compound liquors, for sale under the name of whisky, brandy, gin, rum, wine, spirits, cordials, or wine bitters, or any other name, shall be regarded as a compounder of liquors.

Retail liquor dealers whose annual sales do not exceed $2,500 shall each pay twenty-five dollars; if exceeding $2,500 and not exceeding $5,000 shall each pay fifty dollars; if exceeding $5,000 and not exceeding $10,000 shall each pay $100; if exceeding $10,000 and not exceeding $20,000 shall each pay $200; and if exceeding $20,000 shall each pay $100. Every person who sells or offers for sale distilled spirits, wines, or malt liquors, in less quantities than one quart at a time, or in any quantity to be drank at the place or on the premises where they are sold, shall be regarded as a retail liquor dealer. And any peddler who sells or offers for sale distilled spirits, fermented liquors, or wines shall pay $1,000, in addition to his special tax as a peddler, the special tax of a wholesale or retail liquor dealer according to the amount of his sales.

Wholesale liquor dealers shall each pay $100, and, in addition, shall pay thirty dollars for every $1,000 of sales in excess of $2,000. Every person who sells or offers for sale distilled spirits, wines, or malt liquors in quantity of not less than one quart at one time, and not to be drank at the place or on the premises where the sale is made, shall be regarded as a wholesale liquor dealer. But no distiller or brewer who has paid his special tax as such, and who sells only distilled spirits or malt liquors of his own production in the original casks or packages in which they are placed for the purpose of affixing the tax stamps, shall be required to pay the special tax of a wholesale dealer.

Manufacturers of stills shall each pay fifty dollars, and twenty dollars for each still or worm for distilling made by him. Any person who manufactures any still or worm to be used in distilling shall be deemed a manufacturer of stills.

Dealers in leaf tobacco whose annual sales do not exceed $10,000 dollars shall each pay twenty-five dollars; and if their annual sales exceed $10,000 shall pay in addition two dollars for every $10,000 in excess of $10,000. Every person shall be regarded as a dealer in leaf tobacco whose business it is, for himself or on commission, to sell or offer for sale leaf tobacco. And payment of a special tax as wholesale dealer, tobacconist, manufacturer of cigars, or manufacturer of tobacco, shall not exempt any person dealing in leaf tobacco from the payment of the special tax therefor hereby required. But no farmer or planter shall be required to pay a special tax as a dealer in leaf tobacco for selling tobacco of his own production, or tobacco received by him as rent from tenants who have produced the same on his land.

Dealers in tobacco whose annual sales do not exceed $1,000 dollars, shall each pay five dollars, and when their annual sales exceed $1,000 shall pay in addition two dollars for each $1,000 in excess of $1,000 Every person whose business it is to sell or offer for slae manufactured tobacco, snuff, or cigars, shall be regarded as a dealer in tobacco. And any retail dealer or keeper of a hotel, inn, tavern, or eatinghouse, who sells tobacco, snuff, or cigars, shall pay in addition to his special tax the special tax as a dealer in tobacco.

Manufacturers of tobacco shall pay ten dollars, and in addition thereto, where the amount of the penal sum of the bond of such manufacturer required by this act to be given shall exceed the sum of $5,000, two dollars in for each $1,000 excess of $5,000 of such penal sum. Every person whose business it is to manufacture tobacco or snuff for himself, or who shall employ others to manufacture tobacco or snuff, whether such manufacture shall be by cutting, pressing, grinding, crushing, or rubbing of any leaf or raw tobacco, or otherwise preparing raw or leaf tobacco or manufactured or partially manufactured tobacco or snuff, or the putting up for use or consumption of scraps, waste, clippings, stems, or deposits of tobacco, resulting from any process of handling tobacco, shall be regarded as a manufacturer of tobacco. But no manufacturer of tobacco shall be required to pay the special tax as a dealer in tobacco for selling the products of his own manufacture.

Manufacturers of cigars, whose annual sales shall not exceed $5,000 shall each pay ten dollars; and when their annual sales exceed $5,000 shall pay, in addition, two dollars for each $1,000 in excess of $5,000. Every person whose business it is to make or manufacture cigars for himself, or who shall employ others to make or manufacture cigars, shall be regarded as a manufacturer of cigars. No special tax receipt shall be issued to any manufacturer of cigars until he shall have given the bond required by law. Every person whose business it is to make cigars for others, either for pay, upon commission, on shares, or otherwise, from material furnished by others, shall be regarded as a cigar-maker. Every cigar-maker shall cause his name and residence to be registered, without previous demand, with the assistant assessor of the division in which such cigar-maker shall be em ployed; and any manufacturer of cigars employing any cigar-maker who shall have neglected or refused to make such registry shall, on conviction, be fined five dollars for each day that such cigar-maker so offending by neglect or refusal to register shall be employed by him.

Mr. KOONTZ. I move to amend the first

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Mr. Chairman, I will say, first, that the amendment which I propose will make no difference whatever to the Government in the amount of revenue that will be produced. will be observed that $200 on fifty barrels makes exactly four dollars per barrel. Now, to make each distiller who distills twenty-five barrels pay $100, and then pay four dollars in excess of twenty-five barrels, will, when it reaches fifty barrels, realize for the Government the amount fixed by the provisions of this section. It will yield precisely the same revenue, and it will give a better chance to the small distillers than they would have under the section as it now stands. Now, under the unjust and oppressive legislation of the last two years, many of the small distilleries have been compelled to stop. The consequence is that it has worked very serious injury to a number of men who have invested their capital in small distilleries. It has driven the business from the country to the cities, where fraud can be practiced with more security. It has caused men who were engaged in an honest business to stop. I make this motion for the protection of the small distillers, and at the same time it must be manifest to every gentleman that it will produce just as much revenue as the section now stands.

Mr. SCHENCK. I hope that amendment will not be made. It was originally proposed that distillers should be assessed a much larger tax, of $1,000 upon two hundred barrels and less. But after consultation and consideration, in order to accommodate the demand and expectation of those representing the smaller distillers, we came down to fifty barrels. I really think we have got about low enough. I know there are small distilleries in the country; and I know it is the policy in every other country than ours, as far as practicable, to confine the business of distilleries to a few persons. I believe they have gone so far in England as to bring it down to eight persons. We do not expect anything of the kind in this country. I believe my friend from Pennsylvania [Mr. KOONTZ] has about twenty-six distillers, more or less, in his district.

Mr. KOONTZ. Thirty-odd.

Mr. SCHENCK. Thirty-odd in his own district. Surely there ought not to be any attempt on the part of the Legislature of the country to encourage and increase the number of these small distillers. We have by this standard put it down to a point so low that a fifty-barrel distillery, or less than one quarter of a barrel per day, is provided for. I doubt very much whether we ought to put it any lower than that. I hope the amendment will not prevail.

The question was taken on the amendment of Mr. KOONTZ, and it was not agreed to; there being upon a division-ayes eight, noes not counted.

Mr. STEWART. I move to strike out the paragraph relating to retail liquor dealers. The paragraph was as follows:

Retail liquor dealers whose annual sales do not exceed $2,500 shall each pay twenty-five dollars; if exceeding $2,500 and not exceeding $5,000 shall each pay fifty dollars; if exceeding $5,000 and not exceeding $10,000 shall each pay $100; if exceeding $10,000 and not exceeding $20,000 shall each pay $200; and if exceeding $20,000 shall each pay $1000. Every person who sells or offers for sale distilled spirits, wines, or malt liquors, in less quantities than one quart at a time, or in any quantity, to be drank at the place or on the premises where they are sold, shall be regarded as a retail liquor dealer. And any peddler who sells or offers for sale distilled spirits, fermented liquors, or wines, shall pay in addition to his special tax as a peddler the special tax of a wholesale or retail liquor dealer, according to the amount of his sales.

Yet

Mr. STEWART. The reason I have for moving to strike out this paragraph is simply this dealers of liquors who sell to the amount of $25,000 a year now pay a tax of twenty-five dollars; dealers who sell more than $25,000 a year are regarded as wholesale dealers, and charged a different tax. Now, it strikes me that this class of business ought not to be wiped out of existence by special legislation. if this tax is adopted by this House it will reduce the number of retail dealers one-half. They now have to pay not only this twenty-five dollar tax, but they have to pay a tax on their rentals, amounting in the aggregate to a very large sum. Now, I thought, and I think it was so understood by the House, that this bill was to refer specially to distilled spirits. Iis well known that retail dealers in liquors do not deal and retail out whisky coming from the still, but they do deal in whisky worth from five to ten dollars a gallon-that is, the most of them do; ninety-nine out of every hundred. In any event, it strikes me that the committee will see at once that if my motion to strike out is not agreed to this paragraph should be amended so as not to be as burdensome as it will be in its present form. I think it should be stricken out and the law allowed to stand in this respect as it now is. There is nothing to be gained by this provision this year even if it should be adopted. The retail dealers have already taken out their licenses, which run from the 1st of May this year to the 1st of May next

year.

Mr. SCHENCK. Under the existing law retail liquor dealers and wholesale liquor dealers are divided by a line indicated by the amount of sales. That is, every man selling less than $25,000 a year is styled a retail liquor dealer; every man selling more than $25,000 a year is styled a wholesale liquor dealer. The committee, for reasons which Ithink will be obvious to every one, have abandoned that arbitrary division between wholesale and retail liquor dealers. We now define a retail liquor dealer to be any man who sells in quantities less than a quart, or who sells liquor to be drank on the premises, following the much more sensible definition found in the statutes of most of the States. And we have defined a wholesale liquor dealer to be any one who sells in quantities above a quart, as, for instance, by the bottle or case of bottles, or by the gallon or barrel or otherwise, and who does not sell liquor to be drank at the place where sold. This, I say, is the distinction adopted in the statutes of most of the States, and it is founded in reason. The man who sells by the case, by the demijohn, by the barrel, not to be drank at the place where sold, sells upon a different principle and with a dif ferent degree of profit upon his sales from the man who sells by the drink. The man who sells liquor in larger quantities, not to be drank where it is sold, is treated as a wholesale dealer, whatever may be the amount of his sales, and is charged upon those sales three per cent. The man who sells by the drink makes a very much larger profit. While the man who sells by the gallon, demijohn, or barrel makes a profit of ten, fifteen, or twenty per cent. upon his stock, the retailer who sells by the drink makes from one hundred to four hundred per cent.

Mr. STEWART. But all these retail dealers are taxed by the local authorities, and taxed very heavily.

Mr. SCHENCK. I know they are; and we propose also to tax them. Yet, notwithstanding all that, the retail liquor dealer will pay under this bill one per cent., or between one and two per cent., while the wholesale liquor dealer will pay three per cent. We have fixed what is considered to be a high rate of tax, but I think not too high.

Mr. CARY. Are druggists who sell liquors as medicines embraced in this bill?

Mr. SCHENCK. This has nothing to do with them.

Mr. CARY. They often sell by the pint.
Mr. SCHENCK. There is a provision for

that.

Mr. CARY. That is what I wanted to know.

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Mr. MAYNARD. I move to amend the pending paragraph by striking out the first sentence, as follows:

Retail liquor dealers whose annual sales do not exceed $2,500 shall each pay twenty-five dollars; if exceeding $2.500 and not exceeding $5,000, shall each pay fifty dollars; if exceeding $5,000 and not exceeding $10,000, shall each pay $100; if exceeding $10,000 and not exceeding $20,000, shall each pay $200; and if exceeding $20,000, shall each pay $1,000.

And inserting in lieu thereof the following: Retail liquor dealers whose annual sales do not exceed $500, shall each pay twenty dollars; if exceeding $500 and not exceeding $1,250, shall each pay fifty dollars; if exceeding $1,250 and not exceeding $2,500, shall each pay $100; if exceeding $2,500 and not exceeding $5,000, shall each pay $200, and forty dollars for each additional $1,000 on all sales in excess of $5,000.

Mr. Chairman, I ask the attention of the committee to this amendment, which I offer in good faith, and which I hope will commend itself to the judgment of the House. The bill as reported by the Committee of Ways and Means taxes retail dealers; and retail dealers, as the House will have observed from the remarks of the chairman of the committee, are those who sell liquor by the small to be drank at the place where sold. They are taxed by the bill one per cent. upon the amount of their sales. Wholesale dealers, it will be seen, are taxed two and a half per cent.; considerably more. I presume that every member of the House is aware that no traffic is so profitable; certainly no traffic in spirits is so profitable as the retail liquor traffic. No other class of persons are so ready and willing to pay a tax. Whatever other evils attach to the business, certainly it is not a kind of traffic that makes the dealer penurious or close-fisted. Every gentleman who was connected with the Army during the war will bear witness that the license to traffic in spirits was one for which men would give almost any price; and the profit made from that traffic was very great. I see no justice in taxing the wholesale dealer two or three times as much as we tax the retail dealer. It is reversing the true policy. The retail dealer can afford to pay a larger percentage. His profits are immensely larger than those of the wholesale dealer, and I think we ought to take this into consideration in our policy of taxation.

The gentleman from New York says this is a thing that can bear taxation. There are things which in the language of legislation will bear taxation. The policy of the law is to collect the tax, not in one body at the tail of the worm, as under the present law, two dollars a gallon and no more, but to carry the tax along and to collect a little from the man who makes the still, a special tax on the distiller, a special tax on the number of bushels of grain which represent the capacity of the still, and then a tax of fifty cents at the tail of the worm, besides a tax upon the retail dealers and the wholesale. dealers. As was properly stated by the chairman of the committee the aggregate of the tax on whisky as it comes to the consumer would be a little under a dollar a gallon. Now, sir, it seems to me the tax we have reported in the bill, of one per cent. on retailing spirits, is entirely incommensurate with the other taxes in the bill. I hope, therefore, my' amendment will be adopted. The amendment, as I have offered it, commences with a small tax on those who deal to the extent of $500 a year. This will embrace those who expect to carry on the business for a short time, such as at places of amusement, or at watering places, where the traffic will be carried on only for a few months. For that class of persons I thought it proper to commence at $500. I graduate it up to the large hotels in the cities and towns, where the traffic amounts to thousands in the course of a year. I hope the gentleman will accept my amendment.

Mr. ELDRIDGE. What will the amendment add to the aggregate tax on whisky per gallon?

Mr. MAYNARD. The gentleman can make the calculation. It is a mere matter of arithmetic which his mind can work out for him.

Mr. ELDRIDGE. I did not think the gen

tleman would offer an amendment without making the calculation.

Mr. MAYNARD. It is three per cent. on the amount of sales.

Mr. ALLISON. Mr. Chairman, I desire to say, in reply to the gentleman from Tennessee, that this was considered over and over again in the committee, and I believe every member of the committee, except my friend from Tennessee, came to the conclusion that the amount in the paragraph is all we can procure from this class of persons. I hope, therefore, the amendment will be voted down.

Mr. MAYNARD. I must be permitted to say, as "the secrets of our prison house" have been exposed, that my recollection is different. Mr. PRICE. Let me ask my colleague a question. The estimate of the tax under this bill is one dollar a gallon upon whisky. This proposes a tax of one per cent. One per cent. of a dollar is one cent. Now, I ask whether they cannot bear a tax of four per cent? [Here the hammer fell.]

The amendment was rejected.

Mr. CARY. In the fifty-fifth line, after the words "malt liquors," I move to insert "except druggists and apothecaries;" so it will read:

Every person who sells or offers for sale distilled spirits, wines, or malt liquors, except druggists and apothecaries, in less quantities than one quart at a time, or in any quantity to be drank at the place or on the premises where they are sold, shall be regarded as a retail liquor detailer.

Mr. Chairman, this amendment is so manifestly proper that I will not consume the time of the committee in debating it.

ment of the gentleman from Ohio, [Mr. CARY. ] I knew my friend would rise on this occasion, for I suppose I have included him in the remarks I have made. [Laughter.] I am opposed to all this kind of discrimination. Let everybody who sells liquor pay according to the quantity he sells, whether he sells as apothecary to those men who will not drink at any other place, or whether he sells to that honest class of people who drink whenever they are dry at the first place they come to. The amendment of Mr. CARY was rejected.

Mr. INGERSOLL. I move to strike out all after the word "dollars," in line fifty-eight, to the end of the paragraph. I believe, Mr. Chairman, that the Government can be robbed of hundreds of thousands, and perhaps millions, by these perambulating distributors of distilled spirits roving under a special tax. Now, if this provision is stricken out it will result in a large saving to the revenue. I invite the attention of the Committee of Ways and Means to what extent the revenues can be defrauded under this provision. I shall leave it to the committee to propose a provision in the place of this one that shall more certainly protect the revenue. If you wish to collect the tax on distilled spirits you must confine the sale of it to known and permanent places of business.

Mr. SCHENCK. Mr. Chairman, the committee might have provided. and did once draft, a bill providing that no peddler should sell.

Mr. INGERSOLL. That is just what ought to be now, if not by direct prohibition, it ought and could be done by imposing so heavy a tax upon such persons that it would amount to a prohibition. However, I only made the motion in order to call the attention of the committee to the subject and then leave it with them.

Mr. SCHENCK. By the general law, which is not interfered with, this has already been provided for. If the gentleman will look at it, he will find it provides that no apothecary shall be required to pay, in addition, the special tax as a retail dealer in liquor in conMr. SCHENCK. But there is a little difsequence of selling alcohol, or selling or dis-ficulty in the way. The Supreme Court of the pensing, on the prescription of a physician United States has decided that you cannot wines and spirits officinal in the United States prohibit a man from doing a business in anyor other national pharmacopoeias, in quanti-thing. But you can put a tax upon it. Thereties not exceeding half a pint at any one time, and not exceeding in the aggregate cost value thereofthe sum of $300 in any one year. There is the provision saving their right to sell for medicinal purposes. It remains in the general law.

Mr. CARY. I suppose it does remain in the general law. This is a new law, and they are not excepted, and I want them to be excepted.

fore we fell back upon that decision, and provided if they do sell that they shall be charged like other wholesale and retail dealers, and that charge is, as has been indicated in reference to retail dealers, higher, and for wholesale dealers three per cent. on everything they sell.

Mr. INGERSOLL. I offered the amendment to hear what the chairman of the committee could offer. A very high tax will probMr. SCHENCK. This act does not inter-ably accomplish the object. I now withdraw fere in the slightest degree with the general law in regard to special taxes.

Mr. ELDRIDGE. I rise to oppose the amendment. I understand the proposition of the gentleman from Ohio to be to authorize apothecaries and druggists to sell spirits in cases where other retail dealers may not, without the same obligations and duties, or the same taxation. Now, I know there are a great many people who have an immense amount of confidence in these apothecaries and druggists. But I tell you those are the places where all these hypocrites, all these men who desire to be considered on the sick list, go to drink under cover. They go and take their drams at these apothecary shops. They are men who never want to pay much. They are never willing to go to a place where liquor is sold in the regular way; but they sneak into the apothecary shops or drug stores, and there get a treat out of a friend without paying a cent.

Now, if there is any class that ought to pay the tax on what they sell it is these apotheca ries who allow their friends to sponge their drinks out of them. I am decidedly in favor of taxing them to the highest degree. And I am confirmed in this opinion by my friend from Missouri, [Mr. ANDERSON,] who holds his seat here for a short time with us. And this, perhaps, is the last counsel he will give us. [Laughter.]

Mr. WILSON, of Iowa. What amendment is the gentleman opposing?

Mr. ELDRIDGE. I am opposing the amend

the amendment.

The question was taken on Mr. STEWART'S motion, to strike out the whole paragraph in relation to retail dealers, and it was disagreed to.

Mr. STEWART. I move to insert after the word "sales," in line forty-five, the words "of distilled spirits manufactured in the United States;"" so that it will read:

Retail liquor dealers whose annual sales of distilled spirits manufactured in the United States do not exceed, &c.

It has been stated in this debate that this tax is intended to affect whisky distilled in this country. The chairman of the Committee of Ways and Means stated in his opening speech that that was the object of all these taxes. Now, the object being to increase the tax on distilled spirits manufactured here, why do you.make these dealers pay on spirits which are imported into this country?

Mr. ALLISON. We cannot distinguish. Mr. STEWART. Why do you make your provision so narrow as it is? It will be the means of wiping out of existence hundreds of thousands of small taverns throughout the country. I do not suppose it is the intention of the House to pass a prohibitory law. We are not here to legislate for temperance or for intemperance, but for the purpose of raising

revenue.

Mr. MAYNARD. Does the gentleman think we ought to discriminate in favor of foreign producers and against our own producers?

Mr. STEWART. The foreign production

pays a tax by way of impost, yielding a very large revenue to the country. Brandy is now selling at ten and twenty dollars a gallon that used to sell at two, three, and four dollars a gallon. The object of my amendment is to carry out the intention avowed by the chairman of the Committee of Ways and Means, to fix a tax upon distilled spirits manufactured here, and he referred to this very paragraph, as well as to the tax on wholesale dealers, as being for that purpose. I say you are inconsistent unless you adopt my amendment.

Mr. SCHENCK. I do not see the inconsistency that the gentleman speaks of. I did say that if you put one per cent. on sales or three per cent. on sales of wholesale dealers of liquor it would be that much added to the tax on domestic spirits, but I did not say that the same amount put on the sales of foreign spirits might not also be in the same proportion a tax on them.

Mr. STEWART. Allow me to ask what proportion of distilled spirits is sold by retail dealers?

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Mr. STEWART. It is very small, indeed. Mr. SCHENCK. Oh, no. Whatever it is there is a percentage upon it, and so of wholesale dealers. Whatever they sell there is a percentage upon it, and you can calculate the percentage whether on the foreign or domestic, for it is the same on both. Now, the law has never made a distinction in taxing dealers, trades, businesses, between dealing in that which is foreign and dealing in that which is domestic. For instance, in the present law a wholesale dealer is defined in this way:

Every person shall be regarded as a wholesale dealer whose business it is for himself or on commission to sell or offer to sell any goods, wares, or merchandise of foreign or domestic production, &c.

Here we charge it upon dealers in spirits and we do not make any distinction between foreign and domestic spirits, and if we should it would be a premium of so much in favor of the foreign. It is true that foreign liquors pay a duty. So do all foreign goods; and yet we charge a dealer in foreign goods the same as dealers in domestic goods. And another difficulty would be that if you put your tax upon your wholesale or retail dealer on the domestic production alone, and thus give a large premium to the foreign production, you would find that every one would be drinking foreign liquors.

Mr. STEWART. They have to pay a twentyfive dollar license tax besides.

The amendment of Mr. STEWART was not agreed to.

Mr. STEWART. I now move to amend this paragraph so that it will read as follows:

Retail liquor dealers whose annual sales do not exceed $7,500 shall each pay twenty-five dollars; if exceeding $7.500 and not exceeding $10,000 shall each pay fifty dollars; if exceeding $10,000 and not exceeding $15,000 shall each pay $100; if exceeding $15,000 and not exceeding $25,000 shall each pay $200; and in addition shall pay twenty-five dollars per $1,000 of sales in excess of $25,000, &c.

I offer this amendment because I represent New York city in part. Probably the committee are not aware that so far as our local tax upon this kind of business is concerned it amounts to $250. That is the local tax for the city and county of New York, Kings county, and Richmond county. Now, if you impose this additional tax upon retail liquor dealers in the city of New York, the result will be, as I said before, to drive one half of them out of business. I do not stand here as the special advocate of these retail liquor dealers. I am neither a strict temperance man, nor am I a man in favor of the use of spirits as a beverage. But I think it is our duty here to pass a law under which they can live. I do not suppose it is the duty of this House, no matter how much members may be in favor of temperance, to pass a prohibitory liquor law. If the amendment I have proposed be adopted, you will be doing justly and fairly by this class of persons. I do not know a State in this Union where there is not a local tax on taverns.

Mr. PRICE. I desire to correct the gentle

man; there is one State where there is no such local tax.

Mr. STEWART: What State?
Mr. PRICE. The State of Iowa.

Mr. STEWART. Well, there ought to be such a law there. A retail liquor dealer, under this provision, will have to pay a tax of twenty-five dollars if his annual sales are $2,500 or less; fifty dollars if they are more than $2,500 and less than $5,000; $100 if they are more than $5,000 and less than $10,000; $200 if more than $10,000 and less than $20,000; and $1,000 if more than $20,000. If a man sells $20,100 a year you impose a tax upon him of $1,000. Now, that is unjust and unfair. Under the present law the license tax of twenty-five dollars a year has realized a very large sum. If you adopt this provision you will not realize one half the amount that you now realize, because you will drive these men out of business. I do not stand here to uphold this business; that is not my object. But I am here to legislate for the purpose of securing as much revenue for the Governinent as possible.

Mr. SCHENCK. Do you get your $250 tax in New York?

Mr. STEWART. A great many of them have been driven out of the business. The same license tax is imposed upon the large hotels, such as the Metropolitan, the St. Nicholas, and the like, that is imposed upon the corner groceries.

Mr. SCHENCK. We discriminate. Mr. STEWART. Yes; but you do not discriminate far enough. I hope my amendment will be adopted.

Mr. SCHENCK. The argument of the gentleman from New York [Mr. STEWART] is, that because his State has been very hard on these retail liquor dealers therefore we should be very easy on them. I do not agree to that. The question was then taken upon the amendment of Mr. STEWART, and it was not agreed to; there being, upon a division-ayes six, noes not counted.

Mr. GETZ. I move to insert after the paragraph relating to wholesale liquor dealers the following:

And any brewer who has paid his special tax as such, being the owner and occupant of the premises on which the vaults for the storage of lager beer of his own manufacture are constructed, may erect thereon and brew lager beer for his own wholesale sales without being required to pay an additional special tax upon the same.

Mr. SCHENCK. I rise to a question of order. I submit that this amendment is not in order. It proposes to regulate the rights and privileges of brewers, a matter which is already provided for in the general law, and which is not connected with the pending provision. The brewer is only mentioned here in order to show that the special tax upon the liquor dealer is not intended to extend to him. We do not propose by this bill to regulate brewers.

The CHAIRMAN. The Chair sustains the point of order.

Mr. GETZ. I wish to say, in answer to the point of order raised by the gentleman from Obio

The CHAIRMAN. The Chair sustains the point of order, and points of order are not debatable. The Chair rules out the amend

ment.

Mr. GETZ. I wish to give the Chair my reasons for supposing this amendment to be in order. This section relates to brewers as well as to distillers. It relates to the special tax upon brewers as well as the special tax upon distillers.

The CHAIRMAN. If the gentleman will read the title of the bill he will see that the subjects which it embraces are extremely limited, and intentionally so.

Mr. GETZ. I am aware of that; but this section relates to brewers as well as distillers. The CHAIRMAN. The Chair rules the amendment out of order.

Mr. INGERSOLL. I move to amend by

adding after the word "dollars," in line sixtyfive, the following:

Provided, That all sales of distilled spirits in bond for export shall not be included in the account of sales upon which the special tax shall be assessed. So that the first clause of the paragraph will read as follows:

Wholesale liquor dealers shall each pay $100, and in addition, shall pay thirty dollars for every $1,000 of sales in excess of $2,000: Provided, That all sales of distilled spirits in bond for export shall not be included in the account of sales upon which the special tax shall be assessed.

Mr. Chairman, the wholesale liquor dealer may act at the same time as the commission merchant of the distiller. An alcohol distiller may be also a distiller of high wines, carrying on two distilleries and manufacturing both articles, with the ultimate view of exportation. The facilities for sale may be enjoyed to a greater degree by the wholesale dealer, who perhaps has his agents in foreign countries, and into whose hands the manufacturer of alcohol puts his alcohol for the purpose of negotiating foreign sales. Now, by my amendment I propose to provide that such sales shall not be taxed. By this bill it is proposed to tax them thirty dollars on every $1,000, no matter though the alcohol may be sold for export. That is a burden upon the export trade which it is not able to bear. It is not worth while, perhaps, to discuss this question at any great length, for there seems to be a determination here that no export trade shall be carried on from the United States. The amendment was not agreed to. Mr. ROBINSON. I desire to move an amendment somewhat similar to that which was proposed by my colleague, [Mr. STEWART.] I move to amend, so that in the paragraph commencing at line forty-five the amount of sales of liquor dealers upon which tax is imposed shall be doubled, so as to make the amount of tax upon sales one half that proposed in the paragraph. I was sorry that the amendment of my colleague was voted down with so much unanimity. The provisions of this bill, as he has remarked, amount almost to prohibition, and will result not in increasing our revenue from this service, but in reducing it. It seems to me from the manner in which taxes are piled upon the liquor traffic that it is to a certain extent an Ishmael, against whom every man's hand is raised, though I do not know whether it is considered as raising its hand against every man. It seems to me that we might almost as well adopt a provision that no man shall be concerned in the sale of liquor. I do not desire to occupy time, but I beg the House to lighten to some extent the burdens upon this trade. The object of the committee seems to be to tax it in every way. In addition to all other taxes the men engaged in this business have to pay their regular tax on their incomes. We have piled tax upon tax, precedent upon precedent, line upon line, and buried it under tax so deep it can never survive.

The amendment was rejected.

Mr. STEWART. I move to strike out the following:

And any retail dealer or keeper of a hotel, inn, tavern, or eating-house, who sells tobacco, snuff, or cigars, shall pay, in addition to this special tax, the special tax as dealer in tobacco.

Mr. Chairman, the law now is that retail dealers, keepers of hotels, inns, and taverns selling tobacco, cigars, and snuff are exempted. When the first bill was reported I made the same motion I now make, to strike out these words. That amendment was reserved for a vote in the House. It fell, of course, with the bill. In this new bill they have added retail dealers. This will apply to every confectioner, every apothecary, every small store throughout the country where they may sell cigars, snuff, or tobacco. There is not one of them which will not have to pay this tax, although they may not sell more than twentyfive or thirty dollars' worth of cigars and tobacco. I think it is unjust and unfair to impose burdens upon this class of business.

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Mr. Chairman, if my amendment is understood by the ruling power in this House there will be no objection to it. The effect of that amendment will be to give the dealers in tobacco, snuff, and cigars in one State a right to sell them in another State subject to no other tax than that which the dealers in that State are subject to. The equity and justice of that provision will occur to every fair mind. I may say, for the information of gentlemen, if they do not know it now, in many States there is a sort of "fencing out" legislation practiced. Dealers from other States are forbidden to come there and sell their wares by the small. We have such laws in Pennsylvania. Dealers of one part of Pennsylvania are forbidden to come in other parts. Dealers from other States are excluded. This article of cigars and tobacco is easily transported; and, in point of fact, is often sold in another State from that in which it has been raised or manufactured. We produce some in our own State, and we want to go into other States to sell it subject to no other taxes than those which dealers in the other States may be subjected to. We wish to be able to go to any State in the Union and there have the same rights in disposing of this article as the citizens of that State. That is the object and purpose of the amendment.

That

Mr. MULLINS. I shall be glad to understand the proposition of the gentleman from Pennsylvania in the way he represents it. It astonishes me, Mr. Chairman, that an argument of such a character should come from the quarter it does; for, sir, the Constitution lays down the doctrine that there shall be no restriction upon the trade between the States. is the right guarantied in the Constitution. Tobacco may go into any State without paying the tax, except as provided in the general law. I do not see why it should not be taxed just as any other tobacco or snuff or cigars, or in whatever shape they may manufacture it. That course of trade is laid down by laws a little higher than the one that it is proposed now to pass, and being a little higher how are you going to get over it? It is indirectly coming up and saying there is a constitutional barrier in the way. I have always understood that the Democratic party was the most strenuous in regard to constitutional powers. Now, I do not accuse them of trying to get around this in any way, but they seem to ignore it, and they cannot do it my presence without my holding them up to their own standard. There fore I cannot see the propriety of the ameudment, and I shall oppose it.

The amendment of Mr. WOODWARD was disagreed to.

Mr. CARY. I move to strike out the words "retail dealer or;" so that it will read:

And any keeper of a hotel, inn, tavern, or eatinghouse, who sells tobacco, snuff, or cigars, shall pay, in addition to his special tax, the special tax as a dealer in tobacco.

It seems to me that in little country places where we have small groceries and confectionery shops and they keep a little tobacco and snuff for sale they ought not to be required to pay this tobacco tax.

Mr. UPSON. Not five dollars? Mr. CARY. No, sir; not anything. They only keep it for accommodation and not as matter of profit. I see a propriety in requiring keepers of taverns or eating-houses to pay the tax, because it is a legitimate part of their business. But these little groceries should not be required to pay a license for selling a little suuff and plug tobacco. It is an unnecessary tax upon them.

Mr. SCHENCK. Mr. Chairman, I have heard from the "Cross-roads" lately, and the answer was Bascom is willing." [Laughter.] The amendment was disagreed to.

66

Mr. HOLMAN. I move to amend in the first line of the paragraph by inserting after the word "sales" the words "exceed five hundred dollars and;" so that it will read:

Dealers in tobacco, whose annual sales exceed $500 and do not exceed $1,000, shall each pay five dollars.

It seems to me there is great force in the afgument suggested by the gentleman from Ohio, [Mr. CARY,] that in these small communities where for the mere conveniences of their customers the shops keep a small amount of tobacco, cigars, and snuff, it is really a very great hardship to require them to pay a tax of five dollars. The effect of it will be to prevent in many communities where these articles are matters of almost absolute necessity the keeping of it on hand for sale at all. It seems to me the tax should not be imposed so as to work a petty annoyance to the whole community. I suggest therefore an exemption of $500 shall be made. It is well enough to impose the tax where the sales exceed $500 a year.

Mr. SCHENCK. If the gentleman had only read a few lines lower he would have found a definition of dealers in tobacco and snuff to be "every person whose business it is to sell or offer for sale manufactured tobacco, snuff, or cigars." I think every man whose business it is to sell these articles should pay five dollars. The amendment was disagreed to.

Mr. ROBINSON. I move to insert after the words "eating-house" the words "who has paid a special tax as such shall not be required to pay additional tax for selling." The object of this is that the retail dealer or tavern keeper or keeper of an eating house who, in addition to having paid the tax on any or all of these, as the law provides, shall not be required to pay this additional tax. The amendment would be nearly the same if we had proposed to insert one word in the clause, so that it will read "any retail dealer or keeper of a hotel, inn, tavern, or eating-house, who seils tobacco, snuff, or cigars, shall not pay, in addition to his special tax the special tax as a dealer in tobacco." Now, sir, there are a great many tavern and eating-house keepers where the profits on all the cigars sold during the year would not amount to the tax imposed by this section of the bill. I hope the amendment will prevail.

The amendment was disagreed to.

Mr. PRICE. I offer the amendment which I send to the Clerk's desk.

The Clerk read as follows:

At the end of line seventy-five, on page 87, insert: But the payment of any special tax imposed by this act shall not be held or construed to exempt any person carrying on any trade, business, or profession from any penalty or punishment therefor provided by the laws of any State; nor to authorize the commencement or continuance of any such trade, business, or profession contrary to the laws of any State, or in places prohibited by municipal law; nor shall the payment of any such tax be held or construed to prohibit or prevent any State from placing a duty or tax on the same trade, business, or profession for State or other purposes.

Mr. PRICE. The only object of that amendment is to prevent a conflict between the act of Congress and the acts of the Legislatures of some of the States which have legislated on this question; and I offer it with the assent of the Committee of Ways and Means.

Mr. SCHENCK. Oh, no. I mean to raise a question of order on it.

Mr. PRICE. I supposed I offered it with

the consent of the committee, but it appears that I do not. I will say, then, that it is just as the Committee of Ways and Means reported it in the original bill.

Mr. SCHENCK. I rise to a question of order. The amendment is general legislation on the subject of special taxes, all of which is now provided for in section seventy-seven of the act of 1866, which is now in force and is not repealed by this bill. The only difference is that it is better expressed in the amendment of the gentleman, and he got it out of our general bill which he helped to lay aside.

Mr. PRICE. I give the gentleman credit for having put it in very good shape, and I want to adopt it here.

Mr. SCHENCK. It is general legislation, and is to be found now in section seventyseven of the act of 1866.

Mr. PRICE. This will be an act passed subsequent to that, and it will be held in some States that this law repeals the other, and therefore I want this passed so as to "make assurance doubly sure."

The CHAIRMAN. The Chair overrules the point of order for two reasons: it is made too late, and the Chair regards the amendment as germane to the bill.

The question was put on the amendment; and there were-ayes 51, noes 49.

So the amendment was agreed to.

Mr. SCHENCK. I desire now to know whether it is in order to move any general sections?

The CHAIRMAN. The gentleman from Ohio will observe that, in the first place, he allowed the amendment to be offered and read at the Clerk's desk, and the gentleman from Iowa [Mr. PRICE] to consume half of his five minutes in its defense, before the point of order was made; and, in the next place, that the amendment proposes merely to exclude a certain conclusion which might otherwise be derived from this act, and it must, therefore, be entirely pertinent and in order at this time.

Mr. COBURN. I move to insert after the word "sales," in line ninety-five, the words "whose annual sales exceed $100 and." The object of that amendment is to provide that all persons who may sell tobacco in amounts less than $100 a year shall not have to pay the fivedollar tax. There are many dealers throughout the country whose exclusive business is not to sell tobacco, but who keep and sell tobacco merely for the accommodation of their cus tomers, and to compel a man who sells only a small amount to pay a tax of five dollars seems to me to be a very small business.

The amendment was agreed to.

Mr. MYERS. I move on page 88, line one hundred and two, after the words "eatinghouse," insert the words "whose annual sales of tobacco, snuff, and cigars exceed $500." The amendment last adopted does not, in any way, conflict with this. This provides if these dealers are to be charged a special tax for dealing in tobacco that they shall make sales amounting to at least some considerable sum before they shall be accounted dealers in tobacco. I will modify my amendment so as to fix the amount of annual sales at $100.

Mr. PILE. This amendment is not necessary; it is provided for elsewhere in the bill. Mr. MYERS. If that is the case, I will withdraw my amendment.

Mr. HOLMAN. I move to amend this section by striking out the first paragraph, which has been amended to read as follows:

Distillers producing fifty barrels or less of distilled spirits, counting forty gallons of proof-spirits to the barrel, within the year, shall each pay $200; and if producing more than fifty barrels shall pay in addition four dollars for each such barrel produced in excess of fifty barrels. And monthly returns of the number of barrels of spirits, as before described, distilled by him, shall be made by each distiller in the same manner as monthly returns of sales are made. Every person who produces distilled spirits or who brews or makes mash, wort, or wash for distillation or for the production of spirits, or who by any process of vaporization separates alcoholic spirit from any fermented substance, or who, making or keeping mash, wort, or wash, has also in his possession or use

a still, shall be regarded as a distiller: Provided, That a like tax of four dollars on each barrel, counting forty gallons of proof-spirits to the barrel, shall be assessed and collected from the owner of any distilled spirits which may be in any bonded warehouse at the date of the taking effect of this act, to be paid whenever the same shall be withdrawn from such warehouse under the provisions of the sixty-second section of this act: And provided, That no tax shall be imposed for any still, stills, or other apparatus used by druggists and chemists for the recovery of alcohol for pharmaceutical and chemical or scientific purposes which has been used in those processes.

The amendment of Mr. HOLMAN was not agreed to.

No further amendment was offered.
The next section was read, as follows;
Tobacco and snuff.

SEC. 66. And be it further enacted, That upon tobacco and snuff which shall be manufactured and sold, or removed for consumption or use, there shall be assessed and collected the following taxes:

On snuff, manufactured of tobacco or any substitute for tobacco, ground, dry, damp, pickled, scented, or otherwise, of all descriptions, when prepared for use, a tax of thirty-two cents per pound. And snuff-flour, when sold or removed for use or consumption, shall be taxed, as snuff, and shall be put up in packages and stamped in the same manner as snuff.

On all chewing tobacco, fine-cut, plug, or twist; on all tobacco twisted by hand or reduced from leaf into a condition to be consumed or otherwise prepared, without the use of any machine or instrument and without being pressed or sweetened; and on all other kinds of manufactured tobacco, not herein otherwise provided for, a tax of thirty-two cents per pound.

On all smoking tobacco exclusively of stems or of leaf, with all the stems in and so sold, the leaf not having been previously stripped, butted, or rolled, and from which no part of the stems have been separated by sifting, stripping, dressing, or in any other manner, either before, during, or after the process of manufacturing; on all fine-cut shorts, the refuse of fine-cut chewing tobacco which has passed through a riddle of thirty-six meshes to the square inch by process of sifting; and on all refuse scraps and sweepings of tobacco, a tax of sixteen cents per pound.

Mr. GARFIELD. I move to amend this section by inserting in the first paragraph the word "or" between the words "dry" and "damp; so as to make the provision conform to the present law in that respect.

Mr. LOGAN. It is exactly right now. Mr. GARFIELD. I have made the motion. That is the way it is in the present law. The amendment of Mr. GARFIELD was not agreed to.

Mr. MYERS. I move to strike out the last two paragraphs, relating to chewing tobacco and smoking tobacco, and to insert in lieu thereof the words "on all chewing and all smoking tobacco, a tax of twenty-four cents per pound." The rates fixed by this bill on these two kinds of tobacco, and, if I may use the expression, on the different species of the same kind, are thirty-two cents and sixteen cents per pound; just as last year we had dif ferent rátes of taxes for different kinds of When cigars and cigars of different values.

I offered an amendment last year to tax all cigars at the rate of five dollars per thousand great objection was made to it, and a sliding scale was advocated. But the amendment was adopted, and now the whole country agrees that that plan is best. Now, if we fix the rate of tax at sixteen cents per pound on all finecut shorts or refuse tobacco, that will allow a large amount of tobacco such as killikinnick, Lynchburg, &c., to come in under this head. Cigars are now taxed five dollars per thousand. It takes twenty pounds of tobacco to make a thousand cigars, so that the tax is about twenty-five cents per pound. The material of which cigars are now made can avoid this tax of twenty-five cents per pound by being cut up into refuse smoking tobacco, which it is proposed to tax only sixteen cents per pound. Now, I think the tax on the higher grades of tobacco should be reduced, and the tax on the lower grades raised, so as to make the two alike.

Mr. ALLISON. I hope the tax on smoking tobacco will not be raised eight cents per pound, as proposed by this amendment.

The amendment of Mr. MYERS was not agreed to.

Mr. GRAVELY. I move to amend the clause imposing a tax on chewing tobacco by

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