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310 in this particular found favor, it would have resulted in an accretion of many millions to the national Treasury, a relief from espionage and other frictions to the trade, and a larger diminution of administrative expenditures both to the trade and the Government.

The experience of the Federal Government in its taxation of distilled spirits is extraordinary, and so replete with instruction to economists, moralists, and social reformers as to merit a more extended notice.

The product of distilled spirits in the United States for the year 1860, as returned by the census, was about 90,000,000 gallons. It would be an error to assume that all of this immense production of spirits was used for intoxicating purposes, or in the way of stimulants, inasmuch as the extreme cheapness of spirits or alcohol in the United States during the period under consideration occasioned their employment in large quantities for various industrial purposes; which uses were subsequently in a great degree discontinued when the price of spirits was enhanced from one hundred to one thousand per cent and upward by Federal taxation. For 1860–'61, the year preceding the war, the average price of proof spirits in Cincinnati was 14·40 cents per gallon.

From 1822 to 1862 distilled spirits, in common with all other domestic industrial products, were exempt from Federal taxation. In the latter year, under the necessity for revenue occasioned by the war, Congress imposed a tax of twenty cents per proof gallon on all distilled spirits of domestic production. This tax went into effect on the 1st of September, 1862, and continued in force until March, 1864. The total revenue derived from this source, including the receipts from licenses for rectifying, vending, and the like, for the fiscal year 1863, was $5,176,530. The receipts from the direct tax on the spirit itself was $3,229,990, indicating a domestic production of only 16,149,954 gallons as compared with a production of 90,000,000 gallons returned under the census of 1860, three years previous. The explanation of this result is to be found in the fact that a large amount of whisky was manufactured in anticipation of this low tax, and that there were doubtless some evasions of the tax after it was enacted—conditions that were repeated, as will be presently shown, in a greater degree on every occasion when an advance in the tax was enacted.

The tax of twenty cents continued in force until March 7, 1864, when the rate was advanced to sixty cents per gallon. The revenue accruing under these two rates for the year ending June 30, 1864, was $28,431,797, and the number of gallons returned as having been assessed was 85,295,393. The striking discrepancy between the number of gallons taxed in 1864 at twenty and sixty cents and the number taxed the previous year (1863) at twenty