is the distillation of fruits; whisky is the distillation of grain. Brandy yielded us last year altogether in the United States of America $855,075 47. How much of that came from California? One would suppose that no State in the Union was producing any brandy but California. The fact is that the amount received from California was $67,819, while the little State of New Jersey makes apple-jack and peach brandy which yielded us a revenue of $289,595.

Now, Mr. President, this item is an important one in our revenue, amounting to nearly a million dollars, and we cannot afford to surrender it upon a mere talk about the growing vines of California. We must get some revenue from it, and there is no reason in the world why brandy distilled from grapes ought not to pay as much revenue as brandy distilled from apples or from peaches or from any other fruit. No discrimination ought to be made. Indeed, there is no reason that any man can give for making any discrimination between spirits produced whether from fruit or from grain. They are all a convenient subject of taxation, and every nation has a right to get from spirits distilled from grain or from fruits any amount of tax that can fairly be levied on them. Then brandy from grapes is the most valuable of all distillation, worth several times per gallon what any other distillation from any other substance whatever is. Our Ohio brandy sells for from five to ten dollars a gallon.

Mr. CONNESS. I ask the Senator at this point at what age that is after its distillation? I want him to be exact about these things.

Mr. SHERMAN. It is very good brandy in three years, and whisky is not good under that time. No white man, or black man either, ought to drink whisky until it is three years old, although a great many do, because they cannot afford to wait. When brandy is three years old it is worth at least three or four times as much as whisky, because it is more valuable, it is finer in every way, it is a more valuable article of commerce. It is perfectly idle for the Senator from California to ask us to surrender $850,000 of revenue merely to encourage the people of California in growing grapes when the highest product we have received from them on this tax is $67,000. I have no doubt that the advantages of Califor nia as a grape-growing State will not be affected in the slightest degree by this tax. They ought to be satisfied with the reduction of one half the tax now imposed by law. So far as I know, the other States which will contribute a much larger sum than California to this tax make no complaint. They ask to be put on a footing of perfect equality, and there is no reason in the world why we should surrender this revenue. I appeal to Senators, therefore, and ask them to remember that they cannot yield to the appeal now made by the Senator from Califor- || nia without applying the same rule to all the other States, and without surrendering a rev enue which yields in the aggregate under the present law about a million dollars, which probably at fifty cents a gallon will yield us not less than $500,000.

Mr. CONNESS. I wish to add a few words at this time to remind the Senate of the material errors in the statement of the honorable Senator from Ohio. He holds California re sponsible, and judges its grape-growing and brandy-producing capacities for the ten years of its existence as a producer of those commodities

Mr. SHERMAN. Only one year. Mr. CONNESS. The Senator does not understand me.

Mr. SHERMAN. I spoke of only one year, 1867, last year, which was the largest product of California.

Mr. CONNESS. I have not made myself understood by the Senator. I remind the Senator that the present population of California were nearly ten years in that State before they practically discovered the value of that country and its climate for these purposes; so that its productiveness had a beginning at a

But the honorable Senator does the State of California injustice in this regard: he com. pares the tax derived from grapes to the total tax produced from double the amount imposed upon spirits from all other sources except grain.

Mr. SHERMAN. Peaches, apples, and grapes.

Mr. CONNESS. Peaches, apples, and grapes included. I have heard the honorable Senator before this speak of the superior advantages of Ohio as a grape-growing country and of the value of the crop produced there. We have known as well, or nearly as well, as the honor. able Senator of the advance made in producing wines and brandies from grapes in the State of Ohio before we began. Not to know of the history and advance made by the celebrated Longworth, now deceased, would be to argue one's self unknown. But, sir, I remind the Senator that for all Ohio has done in that regard, and for all it is capable of doing, we will exceed it, he keeping his heavy hand off, a thousandfold.

The difference, too, will be shown here, Mr. President: the wines and brandies produced in the State of Ohio, and in New Jersey, and in Michigan, or wherever they are grown on this side of the Rocky mountains, are only those produced from indigenous grapes; grapes not superior in their qualities; from a few kinds native to this soil and severe climate, while in California we have transferred to our soil every known quality of grapes on the face of the earth; and where I have my residence in that State, at an elevation from the sea of twentyfive hundred feet, the choicest grapes of Europe grow and prosper in the most wonderful manner without any attempt at preserving them from the effects of climate or frosts.

Let me not be replied to on this point by saying," these natural advantages are enough." Not so, sir. The production of this interest must be encouraged there as the production of silk must be encouraged there, because it is the natural home for both products. It is where American enterprise and intelligence applied to those two great products can be carried on with great success to completion.

But, Mr. President, it is not my intention to occupy too much of the time of this body on this question. I only regret the view taken of it by the members of the Committee on Fi nance, and will close by saying that I know if they would transfer themselves to our side of this continent for a while they would return here abandoning all such notions as they have now on this subject.

Mr. STEWART. Ithink the Senator from Ohio has not stated this case quite fairly, and consequently I must call his attention to the facts. The amount received from brandy in California was $67,819 13; and that all comes from grapes. They manufacture from nothing else that I am aware of.

Mr. SHERMAN. Do not they make any apple-jack?

difference to the revenue. I have a special reason. Last year I had occasion, while canvassing California, to travel through the great grape-growing region. The country is prolific in the production of the article, but the people engaged in it are poor. It takes a great deal of time to cultivate the vines and bring them to maturity. It is a new interest. They do not understand the manufacture of wines. The manufacture of wine and brandy from grapes, I will state, is dependent the one upon the other. It is impossible to make wine unless you save the refuse, so to speak, that is not used for the purpose of making wine, and work it into brandy. The wine interest is an important interest. What little they can make on the manufacture of brandy will enable them to go on. I believe if you do not relieve this interest you will seriously injure the whole enterprise. If they understood it as they do in Europe perhaps it might be otherwise. There are some experienced persons there struggling to get along, and it is a magnificent country for the purpose, and it is going to be a great interest. Reducing the tax one half will make very little difference. You only lose three or four thousand dollars in Ohio. I think if you encourage the production in California you will eventually make it one of the great interests of the country. I was in Sonoma last year, where the principal manufactories are. They have to wait several years, and they had great quantities in casks there which they were unable to bring into market on account of the competition, and several of the leading men there have actually been broken up. Colonel Haraszthy, who has done more to develop the grape interest than any other man, who has been in Europe several times, and spent his time and substance in promoting the manufacture of wine and brandy in California, has been broken up, which has been a great drawback upon the grape interest in that section. He was the leading man engaged in it.

In view of the importance of the interest, if it is allowed to prosper, I think it but reason. able that this reduction should be made. The whole of that coast from Mexico up to Oregon is suitable for the culture of grapes. It stands upon a different principle from the manufacture of brandy from peaches. You do not manufacture wine from peaches. There is no other interest depending upon it, no interest to be fostered. If we can raise our own wine in this country, it will be a very important item. It is stated by men who profess to understand it that the Pacific coast west of the Sierra Nevada mountains is capable of producing more grapes and more wines, if the interest can be cultivated, than all Europe put together. Some of the best judges from Europe so regard it. But they have to wait very long for their returns, and there are a class of men who have gone into it, many of them Germans and foreigners, who are poor and who have hard work to struggle along. They have come to this country to try to cultivate this interest, and I feel a great deal of sympathy for their efforts, having been among them and seen them, and I could not say less than this to the Senate in their behalf. I do not think it is well to say that the whole revenue derived from brandy is dependent upon this one item, which is so small in the aggregate.

It was stated further by the Senator from Ohio and others that there was no special rea son why this interest should be favored; it is a very small interest, and will make very little

of the highest flavor, but still an article recommended generally by physicians.

Now, what are the facts? In 1861 we only imposed a duty on foreign brandy of one dollar per gallon. As we imposed the internal taxes upon spirits and brandy made here at home we gradually increased it up to the sum of three dollars per gallon. I am not to be told that I am not a friend of encouraging home manufactures when the protection that we give home-made brandy is $2 50 a gallon after we have subjected it to the tax proposed by this bill. If we could do without the revenue I should be perfectly willing to reduce the duties upon foreign brandy one half. It is only for the purpose of revenue that they ought to be kept up to the extravagant figure of three dollars a gallon. But while they are so kept up, so small is the quantity produced in all the land that it is a direct bonus of nearly two dollars a gallon for every gallon that is made in this country.

I am not willing to go further than that. It is a sorry pittance, I know, that my friends from California claim. They ask that we shall not only reduce it from one dollar a gallon to fifty cents, but that we shall split peas, and reduce it to twenty-five cents a gallon. If there is any claim for that in respect to this article, why should there not be a claim in respect to peach brandy or apple brandy? Either of the articles is worth very much more than whisky, and they all have to be kept to a very considerable age before they are suitable to sell. The idea that brandy has to be kept from 1800 or 1805 or 1815 to the present moment before it is fit for use I will say is a very mistaken idea. I have been informed by some of the largest keepers of wine and brandy that no liquor really improves for more than ten years, and it must be a liquor of extraordinary body to do even that. It must be something like Madeira wine, or brandy, or something of that character, that will improve after it is more than three or four years of age.

Mr. CONNESS. What does the Senator mean by "body"

Mr. MORRILL, of Vermont. Alcoholic strength. Now, Mr. President, I have no interest in this matter. We make no brandy or any liquor of any kind in my State. All I desire is to be just and even generous on this subject. I merely desire that the Senate should understand what the facts are in the case.

The PRESIDING OFFICER, (Mr. PoмEROY in the chair.) The question is on the amendment moved by the Senator from California.

Mr. HENDRICKS. Let it be read. The CHIEF CLERK. The Committee on Finance report the following proviso to the first section of the bill:

Provided, That the tax on brandy made from grapes shall be the same and no higher than that upon other distilled spirits.

It is proposed to amend the proviso so as to make the tax on brandy made from grapes one half the tax upon other distilled spirits.

Mr. SHERMAN. There is one other fact in regard to this matter that I ought to state to the Senate. We have removed all restrictions from the distillation of brandy that are so burdensome to the whisky distiller. We put no tax at all upon wine made in California or elsewhere, so that the only tax on the production of the grape is this fifty cent tax on brandy. But that is not all. We have relieved them, as you will see by the next section, from all the restrictions and requirements as to the distillation of whisky. They would be very burdensome to the small distillers of brandy from peaches and grapes; and the next section provides:

And the Commissioner of Internal Revenue is hereby authorized, with the approval of the seeretary of the Treasury, to exempt distillers of brandy from apples, peaches, or grapes, exclusivelv, from such of the provisions of this act relating to the manufacture of spirits as in his judgment may seem expedient.

This is copied from the existing law. The Commissioner, by general regulations, relieves

them from all the requirements about keeping books and all special taxes and all stipulations of that kind, which would be embarrassing to small distillers of brandy. So that the only tax that will be left upon the distillation of brandy from grapes is the fifty cent tax. It seems to me under these circumstances we ought to make no discrimination and keep up no discrimination.

Mr. DAVIS. I desire to offer an amendment to the amendment.

The PRESIDING OFFICER. The pending amendment is an amendment to an amend

ment.

Mr. DAVIS. Then I suggest to the honorable Senator who proposed the amendment to add the words or other domestic fruits" after the word "grapes."

Mr. SHERMAN. That is not in order now. Mr. DAVIS. I merely suggest it to the Senator who moved the amendment.

Mr. COLE. I cannot accept the amend ment suggested by the Senator from Kentucky. I wish to call the attention of the chairman of the committee and of Senators to the fact that brandy manufactured from grapes in the manner suggested is very different from brandy manufactured from peaches or apples. Brandy manufactured from peaches and apples includes the whole product from that fruit, all that can be made out of it. It is not so with this brandy manufactured from grapes. First, the wine is pressed out, and from the residue, the lees, the substance which otherwise would be thrown away, the brandy is manufactured. Each owner of a vineyard has this substance upon his hands after he has manufactured or pressed out his wine, and unless he is encouraged to make this further use of it by getting the brandy out of this refuse substance it will be thrown away, and in that way of course the Govern ment will be injured, because this product, which would pay if the amendment to the amendment is adopted twenty-five cents on the gallon, would afford some revenue; whereas if it is thrown away, as it was formerly, there will be nothing from it. As it is now, the small vineyards cannot use it unless they can take it to some larger owner of a vineyard who has a distillery, and who will buy it of them, or perhaps manufacture it for them. It is not every little vineyard that can afford the machinery and apparatus to get the brandy out of this refuse substance. Senators, therefore, must see that it occupies a different ground from brandy which is manufactured from apples or peaches.

I will add but one word more. There has been no fraud perpetrated under this law. There is no complaint from any quarter on that score. This brandy has paid its tax honestly and fairly, and will do it, wherever it is im posed, or whatever amount may be imposed. The fact is that the internal revenue districts of California have been better administered than those in other portions of the Union. I made a statement some time ago which I will repeat now, that the tax upon spirits in the first district of California, which comprises San Francisco and this wine-growing region, was nearly as great as the entire tax from whisky in the ten districts of New York, including the cities of New York and Brooklyn. This ought to be sufficient to convince Senators that there are no frauds perpetrated there at all events, and that the tax is well collected in that por tion of the Union. I hope the same rule that prevailed under the old law will be allowed to exist under this, and that the amendment to the amendment will be adopted.

Mr. DAVIS. There are two reasons to my mind why the tax on brandy made from grapes ought to be more, or at least equally as much, as the tax upon brandy made from apples or other fruits, one of which was stated by the honorable Senator who has just taken his seat. After the wine is expressed from the grape there is a refuse from which, as the honorable Senator says, the matter of brandy is extracted. He says if the brandy is taxed this refuse will be thrown away, and therefore

lost. He further made the remark that the brandy which is made from peaches and apples is the aggregate value of the raw article. That is true. The fruit that can first be used in the manufacture of wine, and from the refuse of which brandy can also be made, is certainly capable of sustaining a higher tax than where the entire fruit is consumed in the manufacture of brandy. Therefore, the honorable Senator's reason is against his conclusion, and strongly supports the conclusion that brandy made from the grape ought at least to pay as high a tax, and I think a higher tax, if any discrimination is made, than brandy made from apples or peaches.

This

There is another reason why the tax upon brandy made from the grape ought to be larger. It is the most valuable. It commands a higher price in the market. Brandy made from the apple I presume, and I think such is the fact, does not command half the price that brandy made from the grape does. There are apple orchards all over the mountain regions of the United States, and the man who owns an apple orchard erects a shed and gets a small still and he manufactures brandy from his own orchard or from the orchards of his neighbors. is a manufacture that is very extensive in the mountainous portions of the United States. To be sure, when you get so far south that it is too warm for the apple tree to flourish, there is no apple brandy manufactured; but in the whole chain of the Alleganies and the spurs of the Alleganies there are in the aggregate a very large amount of apple orchards, and the fruit is mostly applied to the distillation of apple brandy. A great many inhabitants in the mountain regions of the country have no other sources of revenue than this distillation into brandy, and from the brandy, the result of their distillation, they derive all the revenne that they make at all. Others, of course, have smaller branches of other industries combined with it, and make profits from other sources besides the distillation of apples. But the amount of brandy distilled from apples, which is the exclusive revenue of very many men, in the aggregate amounts to a great deal. I do not think that the brandy distilled from apples especially, and also from peaches, ought to be taxed fifty cents. I think the honorable Senator from California would add to the strength of his proposition if he would adopt my suggestion. If he does not, I shall vote against his amend

ment.

Mr. CONNESS. I submit to the honorable Senator from Kentucky that he can offer that proposition as an amendment after this has been voted upon.

Mr. DAVIS. I would rather put it in company with the proposition to tax brandy made from grapes. I think the whole family, as they are all brandies, might move along harmo niously together.

Mr. BUCKALEW. I suppose we can discuss the amendment of the Senator from Kentucky when it is offered. At present we have simply an amendment proposed to make a discrimination similar to that which is in the existing law. By our present internal tax law, while the duty on spirits generally is fixed at two dollars a gallon, that on brandy made from grapes is fixed at one dollar, being one half the former amount. Now, when the general level of spirit duties is to be brought down from two dollars to fifty cents, the Senator from Califorria proposes that the duty on grape brandy shall be brought down from one dollar to twenty-five cents, being a corresponding decrease in the existing duty to that which is provided for spirits in general. In the first place this discrimination is not a novelty. It is not a new and extraordinary thing proposed for the first time by the Senator from California. He proposes to continue in the new law the principle which is already in existence in the present law. His amendment is not obnoxious to the charge that it is to overturn any settled principle in our revenue system or to introduce any novelty in our enactments.

Another consideration has occurred to me.

We impose no tax upon wine produced in this country from grapes. Our native wines are as yet exempt from the direct pressure of our financial burdens. Our financiers have not proposed to us to resort to that object for raising means to meet the burdens of the Government. Domestic wines are exempt, while you impose very heavy duties, such as the public necessities demand, upon all wines imported from abroad. Now, sir, this production of grape brandy is connected with the production of domestic wines. It is a part of the general production from vineyards, and it seems to me that if there is any good reason for exempting our domestic wines from taxation, necessarily there must be good reason for treating the production of brandy from grapes at least with indulgence.

Mr. President, no sooner does a new interest spring up in the country, no sooner does it commence to exhibit itself, and to show that it has merit and promise, than gentlemen who have charge of our revenue system begin to consider it as an interesting object of taxation. The Committee on Finance, casting their eyes abroad over the productions of the country, have discovered this new production, and it seems not only to have attracted their attention, but also to have inspired their ingenuity if I may so express myself-in argument, in order to bring it under this proposed fifty-cent tax. They say that the duty is, in fact, under the proposed bill less than under the existing law. That is very true. The present duty is one dollar. They propose to make it fifty cents; and they tell us that this is a boon to the vineyard men, and to the manufacturers of wine and brandy from grapes. It is very true that the duty is reduced in amount one half, but this question of duties upon spirits is a relative one. You are to consider all your duties together. You are to consider how one article can command a market in competition with other articles; how one form of alcoholic spirits can get into the market, and can command the market in competition with other forms of production.

Now, then, you observe that the case as to the production of brandy from grapes is entirely changed. When you lower the general spirit duties from two dollars to fifty cents you have a new field, you have a new question; and to apply the reasoning which we have heard here, that you are favoring this particular interest because you reduce its burden one half, seems to me absurd or inconsequential, in view of the fact that you reduce other spirit duties four times. It is a relative question, and you are to take into view all the facts which pertain to it.

Mr. MORRILL, of Vermont. Will the Senator from Pennsylvania permit me to suggest to him that the only article that comes in competition with this grape brandy is an imported article, the duties upon which remain at three dollars a gallon.

Mr. BUCKALEW. I do not understand it so. I understand that there is a competition in the markets of the country and in the consumption of the country between different domestic spirits, a thing I considered so manifest that no gentleman would question it.

planted there by the million. Of course those vineyards are new; they are not yet fully grown; they are not yet felt in the commerce of the country; they do not yield very large and astonishing results in our returns of taxation; but I am entirely convinced that if we permit those interests connected with vineyard cultivation in California to have free course, to grow up, we will reap in our revenue, directly and indirectly, hereafter, very great advantage, and we will get a valuable article for exportation abroad.

Sir, instead of looking with disfavor upon the growth of vineyards in California, or seeking to tax them or their productions severely, I would regard them kindly and bear very lightly upon them. I would enable them, if I could, to spring up and to grow into a great national interest. I agree entirely, so far as my information enables me to form an opinion, with the arguments which have been made by the Senators from California on this subject, and I shall, with great cheerfulness, vote for the amendment which they propose.

Mr. FOWLER. I wish to make one remark in this connection. From the reports that I have got from California and from Senators from the Pacific coast, it is very evident that that country is well qualified for the production of grapes, and of course for the manufac ture of wine and brandy. The mere tax of fifty cents a gallon on the production of brandy amounts to nothing, as they are already protected by a duty of three dollars a gallon on the imported article. Here is a bounty of two dollars and fifty cents a gallon upon the production of brandy made from grapes in the State of California. Besides, this tax really amounts to nothing. Last year I understand it was only $11,000 in California.

Mr. SHERMAN. Sixty-seven thousand dollars in California. Mr. STEWART. And $11,000 in Ohio. Mr. FOWLER. It does not amount to much, at any rate. If it were necessary to protect this production to any greater extent than it is already protected, we had better remit the entire tax. That would be little more than reducing it to twenty-five cents. I do not know how much it would be necessary to pay in order to protect this reduction, if $250 a gallon is not sufficient. To what extent can we go? The argument of the Senator from Pennsylvania would show that we ought to encourage this branch of industry. If this is not a sufficient encouragement, pray how many more dollars would be required in addition? Remember that it has been stated that the foreign article is the only article that enters into competition with brandy made from grapes in this country. If whisky or spirits competed with it, of course the whole thing should be taken into consideration; but this is a specific article and it has a protection larger than almost any other in this country. Again, it is the only possible duty which you can get from the article. If you do not get this tax, you will get none at all. If it be true, as has been stated, and I have no doubt it is, that this brandy is made from the refuse after the manufacture of wine, I see no reason why it should not pay a tax of fifty cents a gallon, whereas in apple and peach brandy the whole fruit is entirely lost as soon as the brandy is made from it.

The PRESIDING OFFICER. The question is on the amendment of the Senator from California, [Mr. COLE.]

Mr. CONNESS. I ask for the yeas and nays upon it.

The yeas and nays were ordered,

Mr. CONNESS. I desire to say one word before the vote is taken, and that is to the Senator from Tennessee. In California, where this interest is known and understood, I want to acquaint him with what the practice is touch.

classes of property in our local State legislation. It is well known, and I need not state it here, that California in the production of the cereals is equal if not superior, according to

its area, to any other State in the Union, and the agricultural or grain-growing interest in that State may predominate in the legislation of the State when it pleases; but it sustains a statute in that State exempting vineyards until they are five years old from all taxation whatever, so universal is the opinion of the necessity, to use a common phrase, of “letting up" on this interest in which so much is invested and which takes such a length of time to maIf the opinion of that State does that, certainly the relative taxation imposed of last year may be kept up here.

ture.

The question being taken by yeas and nays, resulted-yeas 11, nays 24; as follows:

YEAS-Messrs. Buckalew, Chandler. Cole, Connoss, Hendricks, Howard, McCreery, Morton, Stewart, Sumner, and Williams-11.

NAYS-Messrs. Anthony, Cattell, Conkling, Cragin, Davis, Edmunds, Fessenden, Fowler, Frelinghuysen, Harlan, Howe, Johnson, McDonald, Morgan, Morrill of Vermont, Osborn, Patterson of New Hampshire, Pomeroy, Ross, Sherman, Tipton, Van Winkle, Welch, and Yates-24.

ABSENT-Messrs. Bayard, Cameron, Corbett, Dixon, Doolittle, Drake, Ferry, Grimes, Henderson, Morrill of Maine, Norton, Nye, Patterson of Tennessee, Ramsey, Rice, Saulsbury, Sprague, Thayer, Trumbull, Vickers, Wade, Willey, and Wilson-23. So the amendment to the amendment was rejected.

The amendment of the committee was agreed to.

bill, as follows; The Chief Clerk continued the reading of the

SEC. 2. And be it further enacted, That proof-spirit shall be held and taken to be that alcoholic liquor which contains one half of its volume of alcohol of a specific gravity of seven thousand nine hundred and thirty-nine ten thousandths at sixty degrees Fahrenheit; and the Commissioner of Internal Revenue, for the prevention and detection of frauds by distillers of spirits, is hereby authorized to adopt, procure, and prescribe for use, at the expense of the United States, such hydrometers, saccharometers, weighing and gauging instruments, meters, or other means for ascertaining the quantity, gravity, and producing capacity of any mash, wort, or beer used or to be used in the production of distilled spirits, and the strength and quantity of spirits subject to tax, as he may deem necessary; and he may prescribe rules and regulations to secure a uniform and correct system of inspection, weighing, marking, and gauging of spirits. And in all sales of spirits hereafter made a gallon shall be taken to be a gallon of proof-spirit, according to the foregoing standard set forth and declared for the inspection and gauging of spirits throughout the United States.

The committee reported two amendments to this section. The first was, in line eight, to strike out the word "procure," and after the word "use," in the same line, to strike out the words "at the expense of the United States."

The amendment was agreed to.

The next amendment was to add at the end of the section the following:

And the Commissioner of Internal Revenue is hereby authorized, with the approval of the Secretary of the Treasury, to exempt distillers of brandy from apples, peaches, or grapes, exclusively, from such of the provisions of this act relating to the manufacture of spirits as, in his judgment, may seem expedient.

Mr. HOWARD. I think the phraseology of this amendment is rather peculiar, and may lead to misunderstanding. 1 should like the chairman of the committee to explain it. It seems to me it gives the Secretary of the Treasury a discretionary authority even to remit entirely the tax upon these articles.

Mr. SHERMAN. I will say to the Senator from Michigan it is copied from the old law, and is intended simply for this purpose. This bill provides for a great number of reports and a great amount of stringent legislation to guard against frauds in the distillation of grain. These are not applicable to the little distilleries where fruit is distilled into brandy. This provision is the same as that contained in the old law. It always has been a part of the law. It simply authorizes the Commissioner of Internal Revenue, by general regulation, with the approval of the Secretary of the Treasury, to relieve distillers of brandy from apples, peaches, or grapes, from such of the provisions of this act relating to the manufacture of spirits, that is the mode and manner of making the accounts &c., as in his judgment may seem expedient.

Mr. ANTHONY. It does not intend to do it; but does it not do it?

Mr. SHERMAN. No, sir.

Mr. HOWARD. 1 suggest to the chairman to alter the phraseology so as to make it plain and specific.

Mr. SHERMAN. The proof of the pudding is in the eating of it. This provision has always been in the law, and it has never interfered with the collection of the tax.

Mr. HOWARD. If the chairman is satisfied that it is sufficiently explicit I have nothing further to say.

Mr. MORRILL, of Vermont. I suggest to the chairman of the Committee on Finance whether the word "relating" might not be changed to "regulating?"

Mr. SHERMAN. These are the same words that are in the old law.

You

Mr. SHERMAN. The language is here "relating to the manufacture of spirits." cannot make anything else out of it.

The PRESIDING OFFICER. The question is on the amendment of the committee. The amendment was agreed to.

The Committee on Finance reported an amendment, to insert as section three the following:

SEC. 3. And be it further enacted. That whenever the Commissioner of Internal Revenue shall adopt and prescribe for use any meter, meters, or meter safes it shall be the duty of every owner, agent, or superintendent of a distillery to make application to the collector of his district for such meter, meters, or meter safes to be used in his distillery, and the same shall be furnished and attached to the distillery at the expense of the distiller, whose duty it shall be to furnish all the pipes, materials, labor, and facilities necessary to complete such attachment in accordance with the regulations of the Commissioner of Internal Revenue, who is hereby further authorized to order and require such changes of or additions to distilling apparatus, connecting pipes, pumps, or cisterns, or any machinery connected with or used in or on the distillery premises, or may require to be put on any of the stils, tubs, cisterns, pipes, or other vessels such fastenings, locks, or seals as he may deem necessary.

Mr. HENDRICKS. I wish to ask the chair man of the committee whether this contemplates a meter beside that already established?

Mr. SHERMAN. No, sir. I will say to the Senator that this section is in accordance with the existing law. The House undertook in the second section of this bill to require the United States at its own expense to furnish meters to distilleries; but very many of the distilleries have already furnished themselves with meters in accordance with the regulations of the law.

Mr. HENDRICKS. The only reason why I made the inquiry was that I supposed, under the present regulations, distillers had already gone to this expense, and that this contemplated an abandonment of that and the adoption of some other plan.

Mr. SHERMAN. On the contrary, it contemplates going on with the present system. Mr. HENDRICKS. Then I have no objection to it.

The amendment was agreed to.

The Chief Clerk read the third section of the House bill, now become section four, as follows:

And be it further enacted, That distilled spirits, spirits, alcohol, and alcoholic spirit, within the true intent and meaning of this act, is that substance known as ethyl alcohol, hydrated oxide of ethyl, or spirit of wine, which is commonly produced by the fermentation of grain, or starch, or sugar, including all dilutions and mixtures of this substance; and the tax which shall attach to this substance as soon as it is in existence as such, whether it be subsequently separated as pure or impure spirit, or be immediately, or at any subsequent time, transferred into any other substance, either in the process of original production or by any subsequent process; and no mash, wort, or wash fit for distillation or the production of spirits or alcohol shall be made or fermented in any building or on any premises other than a distillery duly authorized according to law; and

no such mash, wort, or wash so made and fermented shall be sold or removed from any distillery before being distilled; and no person other than an authorized distiller shall by distillation, or by any other process, separate the alcoholic spirits from any fermented mash, wort, or wash; and no person shall use spirits or alcohol or any vapor of alcoholic spirits in manufacturing vinegar or any other article, or in any process of manufacture whatever, unless the spirits or alcohol so used shall have been produced in an authorized distillery and the tax thereon paid, or shall have been lawfully imported into the United States and the duties thereon paid. Any person who shall violate any of the provisions of this section shall be fined, for every offense, not less than $500 nor more than $5,000, and imprisoned for not less than six months nor more than two years.

The Committee on Finance reported an amendment, in line seven to strike out the word which."

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The amendment was agreed to.

The next amendment was to insert at the end of the section the following proviso:

Provided, That nothing in this section shall be construed as imposing any additional tax on fermented liquors, or any regulations respecting the manufacture thereof, other than those elsewhere provided for. The amendment was agreed to.

The Chief Clerk read the next section, as follows:

SEC. [4]5. And be it further enacted, That every person having in his possession or custody, or under his control, any still or distilling apparatus set up, shall register the same with the assistant assessor of the division in which said still or distilling apparatus shall be, by filing with him duplicate statements, in writing, subscribed by such person, setting forth the particular place where such still or distilling apparatus is set up, the kind of still and its cubic contents, the owner thereof, his place of residence, and the purpose for which said still or distilling apparatus has been or is intended to be used; one of which statements shall be retained and preserved by the assistant assessor, and the other transmitted to the assessor of the district. Stills and distilling apparatus now set up shall be so registered within sixty days from the time this act takes effect, and those hereafter set up shall be so registered immediately upon their being set up. Any still or distilling apparatus not so registered, together with all personal property in the possession, or custody, or under the control of such person and found in the building. or in any yard or inclosure connected with the building, in which the same shall be set up, shall be forfeited. And any person having in his possession or custody, or under his control, any still or distilling apparatus set up which is not so registered, shall pay a penalty of $500, and on conviction shall be fined not less than $100 nor more than $1,000, and imprisoned for not less than one month nor more than two years.

No amendment being reported to this section, the Chief Clerk read the next section, as follows:

SEC. [5] 6. And be it further enacted, That every person engaged in, or intending to be engaged in, the business of a distiller or rectifier, shall give notice in writing, subscribed by him, to the assessor of the district within which such business is to be carried on, stating his name and place of residence, and if a company or firm, the name and place of residence of each member thereof, the place where said business is to be carried on, and whether of distilling or rectifying. And if such business be carried on in a city, the residence and place of business shall be indicated by the name of the street and number of the building. In case of a distiller the notice shall also state the kind of stills, and the cubic contents thereof, the number and kind of boilers, the number of mashtubs and fermenting-tubs, and the cubic contents of cach tub, the number of receiving cisterns, and the cubic contents of each cistern, together with a particular description of the lot or tract of land on which the distillery is situated, with the size and description of the buildings thereon, and of what material constructed. The notice shall also state the number of hours in which the distiller will ferment each tub of mash or beer, the estimated quantity of distilled spirits which the apparatus is capable of distilling every twenty-four hours, and the names and residence of every person interested or to be interested in the business, and that said distillery and the premises connected therewith are not within six hundred feet of any premises authorized to be used for rectifying or refining distilled spirits by any process. In case of a rectifier, the notice shall state the precise location of the premises where such business is to be carried on, the name and residence of every person interested or to be interested in the business, by what process the applicant intends to rectify, purify, or refine distilled spirits, the kind and cubic contents of any still used or to be used for such purpose, and the estimated quantity of spirits which can be rectified, purified, or refined every twenty-four hours in such establishment, and that said rectifying establishment is not within six hundred feet of the premises of any distillery registered for the distillation of spirits. In case of any change in the location, form, capacity, ownership, agency, superintendeney, or in the persons interested in the business of such distillery or rectifying establishment, or in the time of fermenting the mash or beer, notice thereof, in writing, shall be given to the said assessor or to the assistant assessor of the division within twenty-four hours of said change. And any assistant assessor

receiving such notice shall immediately transmit the same to the assessor of the district. Every notice required by this section shall be in such form and shall contain such additional particulars as the CoinInissioner of Internal Revenue may from time to time prescribe. Any person failing or refusing to give such notice shall pay a penalty of $1,000, and on conviction shall be fined not less than $100 nor more than $2,000, and any person giving a false or fraudulent notice shall, on conviction, in addition to such penalty or fine, be imprisoned not less than six inonths nor more than two years.

No amendment being reported to this section, the Chief Clerk read the next section, as follows:

SEC. [6] 7. And be it further enacted, That every distiller shall, on filing his notice of intention to continue or commence business, with the assessor before proceeding with such business, make and execute a bond in form prescribed by the Commissioner of Interual Revenue, with at least two sureties, to be approved by the assessor of the district. The penal sum of said bond shall not be less than double the amount of tax on the spirits that can be distilled in his distillery during a period of fifteen days; but in no case shall such bond be for a less sum than $5,000. The condition of the bond shall be that the principal shall faithfully comply with all the provisions of this act in relation to the duties and business of distillers, and will pay all penalties incurred or fines impos d on him for a violation of any of the said provisions; that he will not suffer the lot or tract of land on which the distillery stands, or any part thereof, or any of the distilling apparatus, to be incumbered by mortgage, judgment, or other lien during the time in which he shall carry on said business. The assessor may refuse to approve said bond when, in his judgment, the situation of the distillery is such as would enable the distiller to defraud the United States; and in case of such refusal, the distiller may appeal to the Commissioner of Internal Revenue, whose decision in the matter shall be final. A new bond shall be required in case of the death, insolvency, or removal of either of the sureties, and may be required in any other contingency, at the discretion of the assessor or Commissioner of Internal Revenue. Any person failing or refusing to give the bond hereinbefore required, or giving any false, forged, or fraudulent bond, shall forfeit the distillery, distilling apparatus, and all real estate and premises connected therewith, and on conviction shall be fined not less than $500, nor more than $5,000, and imprisoned not less than six months nor more than two years.

The committee reported two amendments to this section. The first was in line twenty-four, to strike out "shall" and insert "may ;" and in line twenty-six to strike out the words "may be required;" so as to read:

A new bond may be required in case of the death, insolvency, or removal of either of the sureties, and in any other contingency, at the discretion, &c. The amendment was agreed to.

The next amendment was in line twentynine, after the word "required" to insert the words or to renew the same."

The amendment was agreed to.

The Chief Clerk read the next section, as follows:

SEC. [7] 8. And be it further enacted. That no bond of a distiller shall be approved unless he is the owner in fee, unincumbered by any mortgage, judgment, or other lien, of the lot or tract of land on which the distillery is situated, or unless he files with the assessor in connection with his notice, the written consent of the owner of the fee, and of any mortgagee, judgment creditor, or other person having a lien thereon, duly acknowledged, that the premises may be used for the purpose of distilling spirits, subject to the provisions of this act, and expressly stipulating that the lien of the United States for taxes and penalties shall have priority of such mortgage, judgment, or other incumbrance, and that in case of the forfeiture of the distillery premises, or any part thereof, the title of the same shall vest in the United States discharged from any such mortgage, judgment, or other incumbrance. In any case where the owner of a distillery or distillery apparatus, erected prior to the passage of this act, has an estate for a term of years only in the lot or tract of land on which the distillery is situated, the lease or other evidence of title to which shall have been duly recorded prior to the passage of this act, the value of such lot or tract of land, together with the building and distilling apparatu, shall be appraised in the manner to be prescribed by the Commissioner of Internal Revenue; and the assessor is hereby authorized to except, in lieu of the said written consent of the owner of the fee, the bond of said distiller with not less than two sureties, who shall be residents of the collection district or county, or an adjoining county in the same State, in which the distillery is situated, and shall be the owners of unincumbered real estate in said district or county, or adjoining county, equal to such appraised value. The penal sum of said bond shall be equal to the appraised value of said lot or tract of land, together with the buildings and distilling apparatus, and conditioned that in case the distillery, distilling apparatus, or any part thereof, shall, by final judgment, be forfeited for the violation of any of the provisions of this act, the obligors will pay the amount stated in said bond. Said bond shall be in such form as the Commissioner of Internal Revenue shall proscribe.

The committee reported an amendment to this section in line twenty-five, to strike out the word "except" and to insert" accept." The amendment was agreed to.

The Chief Clerk read the following sections, to which no amendments were proposed:

SEC. [8] 9. And be it further enacted, That every distiller and every person intending to engage in the business of a distiller shall, previous to the approval of his bond, cause to be made, under the direction of the assessor of the district, an accurate plan and description, in triplicate, of the distillery and distilling apparatus, distinctly showing the location of every still, boiler, doubler, worm-tub, and receiving cistern, the course and construction of all fixed pipes used or to be used in the distillery, and of every branch thereof, and of every cock, or joint thereof, and of every valve therein, together with every place, vessel, tub, or utensil from and to which any such pipe shall lead, or with which it communicates. Such plan and description shall also show the number and location and cubic contents of every still, mash-tub, and fermenting-tub, together with the cubic contents of every receiving cistern, and the color of cach fixed pipe, as required in this act. One copy of said plan and description shall be kept displayed in some conspicuous place in the distillery; two copies shall be furnished to the assessor of the district, one of which shall be kept by him and the other transmitted to the Commissioner of Internal Revenue. The accuracy of every such plan and description shall be verified by the assessor, the draughtsman, and the distiller: and no alteration shall be made in such distillery without the consent, in writing, of the assessor, which alteration shall be shown on the original or by a supplemental plan and description, and a reference thereto noted on the original, as the assessor may direct; and any supplemental plan and description shall be executed and preserved in the same manner as the original.

SEC. [9] 10. And be it further enacted. That immediately after the passage of this act every assessor shall proceed, at the expense of the United States, with the aid of some competent and skillful person, to be designated by the Commissioner of Internal Revenue, to make sarvey of each distillery registered or intended to be registered for the production of spirits in his district to estimate and determine its true producing capacity, and in like manner shall estimate and determine the capacity of any such distillery as inay hereafter be so registered in said district, a written report of which shall be made in triplicate, signed by the assessor and the person aiding in making the same, one copy of which shall be furnished to the distiller, one retained by the assessor, and the other immediately transmitted to the Commissioner of Internal Revenue. If the Commissioner of Internal Revenue shall at any time be satisfied that such report of the capacity of a distillery is in any respect incorrect or needs revision, he shall direct the assessor to make in like manner another survey of said distillery; the report of said survey shall be executed in triplicate and deposited as hereinbefore provided. And, in like manner and under like restrictions and provisions, there shall be ascertained, recorded, and reported the capacity of every establishment now existing, or that may be hereafter commenced, for redistilling distilled spirits.

SEC. [10] 11. And be it further enacted, That after the passage of this act it shall not be lawful for any assessor to assess a special tax upon any distiller, or for the collector to collect the same, or for any distiller who has heretofore paid a special tax as such to continue the business of distilling until such distiller shall have given the bond required by this act, and shall have complied with the provisions of law having reference to the registration and survey of distilleries, and having reference to the arrangement and construction of distilleries, and the premises connected therewith, in manner and as required by this act; nor shall it be lawful for any assessor of interual revenue to assess, or for any collector to collect, any special tax for distilling on any premises distant less than six hundred feet from any premises used for rectifying, nor shall any assessor assess or collector collect any special tax for rectifying distilled spirits on any premises distant less than six hundred feet from any distillery when the distillery and rectifying establishments are occupied and used by different persons; nor shall the processes of distillation and rectification both be carried on within the distance of six hundred feet. In all cases where a distillery and rectifying establishment, distant the one from the other less than six hundred feet are occupied and used by the same person said person shall have the right to elect which business shall be discontiued at that place. In all cases where rectifying or distilling shall be discontinued under the provisions of this section, and the time for which the special tax for rectifying or distilling was paid remains unexpired, the Secretary of the Treasury is hereby authorized to refund out of any money in the Treasury not otherwise appropriated, on requisition of the Commissioner of Internal Revenue, a proportionate part of any sum originally paid for special tax theretor, which shall be in such ratio to the whole sum paid as the unexpired time for which special tax was paid shall bear to the whole term for which the same was paid. Any collector or assessor of internal revenue who shall fail to perform any duty imposed by this section, or shall assess or collect any special tax in violation of its provisions, shall be liable to a penalty of $5,000 for each offense.

SEC. [11] 12. And be it further enacted, That no person shall use any still, boiler, or other vessel for the purpose of distilling in any dwelling-house, nor in any shed, yard, or inclosure connected with any dwellinghouse, nor on board of any vessel or boat, nor in any

building or on any premises where beer, lager beer, ale, porter, or other fermented liquors, vinegar or ether are manufactured or produced, or where sugars or sirups are refined, or where liquors of any description are retailed, or where any other business is carried on; and every person who shall use any still, boiler, or other vessel for the purpose of distilling. as aforesaid, in any building or other premises where the above specified articles are manufactured, produced, refined, or retailed, or other business is carried on, or on board of any vessel or boat, or in any dwelling-house or other place, as aforesaid, or shall aid or assist therein, or who shall cause or procure the same to be done, shall, on conviction, be fined $1,000, and imprisoned for not less than six mouths nor more than two years, in the discretion of the court: Provided, That saleratus may be manufactured, or meal or flour ground from grain in any building or on any premises where spirits are distilled; but such meal or flour only to be used for distillation on the premises.

Mr. CORBETT. Are these provisions to be disposed of as we go along? The PRESIDING OFFICER. That is the

order of the Senate.

Mr. CORBETT. It seems to me that this is a very singular provision:

That saleratus may be manufactured, or meal or flour ground from grain in any building or on any premises where spirits are distilled; but such meal or flour only to be used for distillation on the prem

ises.

Mr. SHERMAN. As soon as the amendments of the committee are disposed of, the whole bill will be open to amendment, and the Senator can then move to amend that provision of the bill, although that provision is a necessary part of any tax bill because they must grind their grain at the distillery. Still, it will all be open to amendment at another stage.

The PRESIDING OFFICER. The reading of the bill will be proceeded with.

The Chief Clerk read the next section, as follows:

SEC, [12] 13. And be it further enacted, That there shall be assessed and collected monthly, in the same manner as other taxes are assessed and collected, on every registered distillery having an aggregate capacity for mashing and fermenting twenty bushels of grain or less, or sixty gallons of molasses or less, in twenty-four hours, two dollars per day; and two dollars per day for every twenty bushels of grain or sixty gallops of molasses of said capacity in excess of twenty bushels of grain or sixty gallons of molasses in twenty-four hours. But any distiller who shall stop work, as provided by this act, shall pay only two dollars per day during the time the work shall be so suspended in his distillery.

dwelling-house shall be used for such purpose, and no door, window, or other opening shall be made or permitted in the walls of such warehouse leading into the distillery or into any other room or building; and such warehouse, when approved by the Commissioner of Internal Revenue, on report of the collector, is hereby declared to be a bonded warehouse of the United States, to be known as a distillery warehouse, and shall be under the direction and control of the collector of the district, and in charge of an internal revenue storekeeper assigned thereto by the Commissioner of Internal Revenue; and the tax on the spirits stored in such warehouse shall be paid before removal from such warehouse, unless removed in pursuance of this act.

The committee reported an amendment to this section, to strike out the last words, "unless removed in pursuance of this act." The amendment was agreed to.

Mr. HENDRICKS. I wished to inquire of the chairman, while the twelfth section was being read, as to the adoption in this bill of the policy of having extraordinary taxes. Why not in one sum fix the tax by the gallon? Here is a tax in this twelfth section by the day.

Mr. SHERMAN. I will state that this came from the House, and we have modified it only in language. The purpose of this section, so far as I know, is to discriminate against very small distilleries, so as not to encourage the distillation of spirits except in distilleries where the distillation amounts to the aggregate here stated. It is not large. If I had my way in a tax bill I would at least quadruple the minimum of this bill; but the committee did not see proper to amend it as fixed by the House. As a matter of course, if a little distillery with a capacity of mashing only ten bushels of grain should be started, it would have to pay two dollars a day. To that extent it would be a discrimination against the very small distilleries.

Mr. HENDRICKS. It would cost that man more than another?

Mr. SHERMAN. The purpose is to discour age, by this language, the very small distilleries. I will say to the Senator that I do not think there are any distilleries in Indiana or Ohio that have not the capacity of mashing twenty bushels a day. I think it would make it more effective if it were a tax upon distilleries having less than a capacity of masning one hundred bushels of grain a day. Then it would probably discourage the distillation of small distilleries.

Mr. HENDRICKS. I supposed the tax was evaded more frequently by large establishments than by small ones.

The next amendment was in line seven, after "hours" to insert "a tax of;" and after 'day" to insert "Sundays excepted;" and in line eight to insert the words a tax of" before two."

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The amendment was agreed to. The next amendment was in line twelve, to strike out "stop" and to insert "suspend." The amendment was agreed to.

The Chief Clerk read the next section, as follows:

SEC. [13] 14. And be it further enacted, That any person who shall manufacture any still, boiler, or other vessel, to be used for the purpose of distilling, shall, before the same is removed from the place of manufacture, notify in writing the assessor of the district in which such still, boiler, or other vessel is to be used or set up, by whom it is to be used, its capacity, and the time when the same is to be removed from the place of manufacture; and no such still, boiler, or other vessel shall be set up without the permit in writing of the said assessor for that purpose; and any person who shall set up any such stili, boiler, or other vessel, without first obtaining a permit from the said assessor of the district in which such still, boiler, or other vessel is intended to be used, or who shall fail to give such notice, shall pay in either case the sum of $500, and shall forfeit the distilling apparatus thus removed or set up in violation of law. No amendment being proposed to this section, the next was read, as follows:

SEC. [14] 15. And be it further enacted, That every distiller shall provide at his own expense a warehouse to be situated on and to constitute a part of his distillery premises, to be used only for the storage of distilled spirits, of his own manufacture, but no

house for transportation or for rectifying. The Senator will see that this bill is framed on the idea that no liquor shall be removed from the place of distillation for any purpose except after the payment of the tax.

Mr. TRUMBULL. Do I understand that it is not to be removed for the purpose of exportation without paying tax?

Mr. SHERMAN. It is not to be removed for any purpose without payment of tax, but there is a provision that in case of exportation in a certain way a drawback shall be paid.

Mr. TRUMBULL. And it must be exported in order to get that drawback?

Mr. SHERMAN. Yes, sir; it must be on ship board and cleared for exportation, and then the drawback is paid on the delivery of a bond to secure the bona fide exportation. The Senator will find some fifty pages further on the machinery by which whisky may be exported. There is no provision by which whisky can be got out of the distillery warehouse except upon payment of the tax on the basis of this aci.

Mr. TRUMBULL. That is very objectionable, I know, to many of the distillers in my State. I have received many letters in regard to it and have sent some of them to the committee.

Mr. SHERMAN. I know that; but that principle is adopted in framing the bill, and as a matter of course if that principle is abandoned the whole bill will have to be reframed. The whole theory of this bill and the striking difference between this and the present system is that under this bill no whisky of any kind can