Page:Popular Science Monthly Volume 48.djvu/343

Rh cents again finds explanation in the fact that when it became evident to the distillers that the fiscal necessities of the Government would soon compel an advance in the tax upon their product, and that such increase would not be made applicable to stocks on hand on which the lower rates had been assessed and paid, they pushed their production to the uttermost in order that they might take advantage of the great increase in the market price of all spirits after the advanced rates had taken effect; all which anticipations were fully realized. Thus, of the 85,295,393 gallons on which the Internal Revenue Bureau assessed and collected the spirit tax for 1864—69,000,000 in excess of the product of the preceding year—at least 70,000,000 gallons were manufactured prior to the 7th of March and were released from Government control by the payment of the twenty-cent tax only; and as after the 7th of March, 1864, the market price of the greater part of this increased product, which had not been allowed to pass into consumption, was advanced in accordance with the advance in the tax—i.e., forty cents per gallon—it is clear that $28,000,000 at least were thus at once legislated into the pockets of the distillers and speculators concerned.

Again, immediately after the imposition of the sixty-cent rate in March, 1864, nearly all the distilleries once more suspended operation; the country was acknowledged to be overstocked with tax-paid whisky, and the Government almost ceased to collect taxes upon its manufacture. In May, however, the project for a further increase in the rates began to be again agitated in Congress, and as soon as its realization became probable, all the distilleries speedily resumed operations. How great at that time was the capacity of the loyal States for production may be inferred from the circumstance that the number of distilleries in the country, which according to the census of 1860 was 1,138, had increased in 1864 to 2,415.

On the 1st of July, 1864, the tax was again advanced from sixty cents to a dollar and a half per gallon; and during that month the entire product of the country of which the revenue officials could take cognizance was only 697,099 gallons. How great a "stock on hand," the result of manufacturing under the twenty and sixty cent rates of tax, was carried over the 1st of July and experienced the advance of ninety cents per gallon in market price in consequence of the advance in the tax from sixty cents to a dollar and a half, can not be accurately known; but 60,000,000 gallons would certainly be a low estimate; and on this amount the profit that accrued to private interests was at least $50,000,000.

On the 1st of January, 1865 (the succeeding year), the tax was further advanced to two dollars per proof gallon, when all the operations above described were repeated, with all the benefits to private or speculative interests derived from former experiences,