Page:The Economic Journal Volume 1.djvu/339

 TAXATION THROUGtt MONOPOLY 317 Russian Government had from an early time used a monopoly as the best mode of collecting a revenue, and only abandoned it in 1863 in fayour of an excise. M. Alglave's proposal for the esta- blishment of a pirit monopoly in France, extending to the refining process and partially to sale, excited attention; and a somewhat similar scheme was submitted in 1886 to the German Reichstag, with the encouraging estimate that it would give a net return of 300 million marks (or 15,000,000). This proposal met with the same fate as the earlier plan for tobacco monopoly, and it was reserved for Switzerland to take the lead in the adoption of a monopoly for the sale of alcohol. A law for that object was passed in 1886, and on being submitted to the popular vote (or referendum) it was approved by 259,000 votes against 136,000. The motives that dictated the measure seem to have been twofold, viz., (1) to reduce the consumption of spirits, (2) to provide financial resources; and, owing to the unexpected fall in the price of imported raw spirit, both these objects were attained. During the first year of working (1888 and 1889) the consumption fell from the previous amount of 150,000 hectolitres to 80,700 and 85,000 respectively. The net yield for the seventeen months, July 20, 1887, to end of 1888, was in round figures 5 million francs, while for the year 1889 it was 5 million francs. For the latter period the gross receipts were 11 million francs, but the expet.diture came to 6 million francs, leaving the balance just stated. In the case of alcohol monopoly the fiscal element is not so prominent as in those of tobacco or opium, but it is put forward as an additional reason in fayour of it; and in the taxation of all three commodities there is a moral ground, real or alleged. In other respects the spirit monopoly has a weaker case. The great extent of the industry, the many tech- nical processes employed, and the changes that invention brings about, are all hindrances to effective working by a state department; and it is shown by Russian experience that the transfer from state to private industry is beneficial even for the increase in revenue. In 1862, the last year of the monopoly in that country, the net yield was 123 million roubles, in 1864 it had fallen to 118} million roubles, but rose to 244 million roubles in 1884, and to 265 million roubles in 1888. The evidence when weighed seems as much against the monopoly in spirits as it is for that in tobacco.  What is known as the Gothenburg system is simply a municipal monopoly of the sale of alcohol, which is farmed out to a company. a For the Russian alcohol monopoly, see De Parieu, vol. ii. pp. 438 6; F. ce Flaix, p. 311; M. Alglave's views in Journal des Economistes, lIarch 1886; De Flaix, pp. 363 6; for the Swiss monopoly, Wolf iu Finnzarcbi', vol. vii. pp. 189 200.