you draw the line if the dealer exceeds the amount of course he becomes liable to a higher tax as a wholesale dealer. It is a small amount which the retailer is required to pay. The moment the amount of sales exceeds $25,000 the man becomes a wholesale dealer. We must have some line of demarkation.

Mr. DAVIS. It is provided in the bill that persons and corporations in certain branches of business shall pay a tax upon their annual sales. It is also provided, I believe, that they shall pay the tax before commencing business. I desire to know how the amount of this tax is to be ascertained.

Mr. MORRILL. The tax upon the annual sales does not commence until those sales shall have exceeded $50,000, though a special tax of a fixed amount is paid at the outset.

The amendment was not agreed to.
The Clerk read as follows:

4. Wholesale dealers in liquors whose annual sales do not exceed $50,000 shall pay fifty dollars, and if exceeding $50,000, for every additional thousand dollars in excess of $50,000, one dollar. Every person who shall sell or offer for sale any distilled spirits, fermented liquors, or wines of any kind in quantities of more than three gallons at one time to the same purchaser, or whose annual sales, including sales of other merchandise, shall exceed $25,000, shall be regarded as a wholesale dealer in liquors.

Mr. HUBBARD, of Iowa. I move to amend by striking out "one dollar" and inserting in lieu thereof "two dollars."

I understand that this business of selling liquor is very profitable, and if so, I think the liquor sellers are able to pay the sum I pro

pose.

Mr. MORRILL. Mr. Chairman, I suppose the object of Congress to be to obtain as large a revenue as possible from liquors; but I conceive that the more legitimate way to reach that object is to levy the tax upon the liquor; and if, as proposed in the bill, we allow the tax to remain at two dollars per gallon, it seems to me that ought to satisfy us. I hope, therefore, that the amendment will not prevail. The amendment was not agreed to.

Mr. MORRILL. I move to amend by inserting after the word "dollar" in line nine hundred and ninety-two the following words:

And such excess shall be assessed and paid in the same manner as required of wholesale dealers. The amendment was agreed to.

Mr. MORRILL. I move to amend by inserting after the word "dollars" where it last occurs in line nine hundred and ninety-one the words "they shall pay."

The amendment was agreed to.

Mr. PRICE. Hopeless as the attempt may appear, I will make one more effort to amend this section. I move to amend by striking out the word "fifty" in line nine hundred and eighty-nine and inserting in lieu thereof "one hundred;" so that the clause will read:

Wholesale dealers in liquors whose annual sales do not exceed $50,000 shall pay $100.

Under this bill as it stands the wholesale liquor dealer selling $50,000 worth of liquor annually will pay only fifty dollars; while a banker doing business right alongside of him, with a capital of $50,000, pays a license of $100, and pays also upon every additional $1,000 double the amount which the liquor dealer pays. It appears to me that men in the liquor business can afford to pay a tax of $100, which is not as much as men in honest branches of business pay on a corresponding amount of capital. The amendment was agreed to.

The Clerk read as follows:

5. Retail dealers in liquors shall pay twenty-five dollars. Every person who shall sell or offer for sale foreign or domestic spirits, wines, ale, beer, or other malt liquors in quantities of three gallons or less, and whose annual sales, including all sales of other merchandise, do not exceed $25,000, shall be regarded as a retail dealer in liquors under this act.

Mr. HARDING, of Illinois. I move to amend by striking out "twenty-five," in the first line of the paragraph just read, and inserting in lieu thereof "fifty."

Mr. Chairman, while I have great respect for the opinions of the chairman of the Committee of Ways and Means, I distrust the notion

that we are going to realize much revenue from distilled spirits by a tax of two dollars a gallon. I think the gentleman will concede that the experiment has not in the past been very successful. Members of the House are, I suppose, fully aware that, within the last year at least, the larger proportion of distilled spirits in the United States has paid little or no tax. What has been paid has been divided among informers, detectives, and the Government.

Mr. MORRILL. The gentleman will have an opportunity to discuss this question at a later stage of the bill.

Mr. HARDING, of Illinois. I think the discussion is apropos now.

Mr. Chairman, the practice has been to manufacture distilled spirits illegitimately, making it out of dollar corn, and then smuggle the article into the market. When once in the market, it can be sold in the groceries by paying a license of twenty-five dollars. I propose to catch some of it in this way, by a charge of fifty dollars for the privilege of selling.

Mr. MORRILL. I would not object if it were the sentiment of the country that all these beer shops and groggeries should be suppressed; but I warn gentlemen, if they can enforce the law, the Government will get no revenue at all. If you adopt this increased tax, a poor widow or a maimed soldier who is keeping a small beer shop will have to pay this large tax; and hotel keepers will be compelled to pay this in addition. I hardly think Congress will be disposed to raise the tax.

The amendment was disagreed to.

The Clerk read the next paragraph, as follows:

6. Lottery ticket dealers shall pay $100. Every person, association, firm, or corporation who shall make, sell, or offer to sell lottery tickets or fractional parts thereof, or any token, certificate, or device representing or intending to represent a lottery ticket or any fractional part thereof, or any policy of numbers in any lottery, or shall manage any lottery, or prepare schemes of lotteries, or superintend the drawing of any lottery, shall be deemed a lottery ticket dealer under this act: Provided, That any person doing the business of lottery ticket dealers shall give bond, in the sum of $1,000, with sureties, to be approved by the collector of the district, conditioned that he will not sell any ticket or supplementary ticket of such lottery which has not been duly stamped according to law.

Mr. DARLING. I move to amend in line ten hundred and five by inserting the word "policy" after the word "ticket." I shall next move to strike out one hundred" and insert "one hundred and fifty.'

66

If we are to legalize this iniquitous traffic, I want to get the largest possible amount of revenue. I am satisfied, from the information I have received, that the Government is defrauded out of at least $9,000,000 a year in the way of taxes under the present law. All of the small dealers have been subject to the monopolists who carry on the business, particularly in New York city, the same as the banking business. It is carried on with a magnitude that would astonish the House. Every man who wants to go into the business is subject to the orders of the large dealers. I desire that every man who goes into the business, no matter how small his business may be, shall pay the tax directly to the Government, and that he shall give bond to the United States that he will pay the tax into the United States Treasury. That is the reason I move the amendment.

Mr. MORRILL. We have already tried the policy of extreme taxation in relation to lottery dealers. We placed the tax as high as $1,000. It proved to be a bad policy, and we did not derive much revenue at all. Since the amount has been fixed as it is the Government is in receipt of a considerable amount of revenue. Let me say it is to ferret out, and seize the parties who sell these tickets, and that we may know who they are that this license or special tax is imposed.

After all this is done, we impose a tax upon all of their sales of five per cent. If we succeed in collecting this special tax we shall collect the other also.

The law is amended in one respect.

Under

the existing law one or two parties in New York have enjoyed a monopoly; others dealing in lotteries have been dealing in them surreptitiously and in violation of law, or have been made to pay tribute to one or two men. The present bill changes all that. I hope the amendment will not prevail.

The amendment was rejected.

Mr. DAVIS. I offer the following amend

ment:

Insert in line ten hundred and nineteen: And provided moreover, That nothing herein contained shall be construed to authorize the sale of lottery tickets in any State where such sales are prohibited by the laws thereof.

Mr. HOOPER, of Massachusetts. That is already in the bill.

Mr. DAVIS. Then I withdraw my amend ment.

pro

Mr. DARLING. I move to amend the viso by striking out the word "any" and inserting the word "every" before the words

person doing the business of lottery ticket dealers," &c.

The amendment was agreed to.

Mr. DARLING. I move to further amend the same sentence by inserting after the words "lottery ticket dealers" the words, “'or dealers in policy of numbers." What I want to get at is this: I want to prevent if possible the spread of this nefarious and iniquitous practice in our large cities, which is entailing so much ruin and distress and suffering upon the families of poor people. It is a species of gambling which is carried on to an extent that, in my judgment, inflicts more misery, more sorrow, and more suffering upon families than the use of intoxicating drinks, or at least quite as much.

Now, I do not mean, if I can help it, that any person shall be authorized to do this business unless he takes out a license and is put under heavy penalties that he will pay the tax due to the Government under the law. And therefore I want to include, not only those who sell lottery tickets, but those who do a business far worse, that of selling policies of numbers, which are sold principally to the poor, the degraded, and the ignorant.

Mr. HOOPER, of Massachusetts. I want to call the attention of the gentleman from New York [Mr. DARLING] to a description of lottery ticket dealers which renders his amend ment unnecessary. The attention of the committee was called to this subject, and they made a provision to meet the point the gentleman refers to, by inserting it in the description of lottery ticket dealers.

Mr. DARLING. Where is that?

Mr. HOOPER, of Massachusetts. In the part of the paragraph which reads:

Every person, association, firm, or corporation which shall make, sell, or offer to sell lottery tickets or fractional parts thereof, or any token, certificate, or device representing or intending to represent a lottery ticket or any fractional part thereof, or any policy of numbers in any lottery, or shall manage any lottery, or prepare schemes of lotteries, or superintend the drawing of any lottery, shall be deemed a lottery ticket dealer under this act.

Mr. DARLING. The gentleman from Massachusetts [Mr. HOOPER] is right, and I will

withdraw that amendment.

I move to amend by inserting in the proviso, before the words "or supplementary ticket," the words "", or policy of numbers." I want to make it so clear and distinct that there will law. be no escape from a proper construction of the

The amendment was agreed to.

The Clerk read the next paragraph, as follows:

7. Horse dealers shall pay ten dollars. Any person whose business it is to buy or sell horses or mules shall be regarded a horse dealer under this act: Provided, That one special tax having been paid, no additional tax shall be imposed upon any horse dealer for keeping a livery stable, nor upon any livery stable keeper who may also be a horse dealer.

Mr. MORRILL. I move to strike out at the end of the paragraph the words "who may also be a horse dealer," and insert in lieu thereof the words "for dealing in horses." The amendment was agreed to.

Mr. BENJAMIN. I move to amend the first sentence so that it will read:

or any kind of personal property whatever, as security for the repayment of money lent thereon, shall be deemed a pawnbroker under this act.

Mr. MORRILL. I move to amend this par

sand dollars.

My amendment is intended to make this paragraph correspond with the paragraph in regard to cattle dealers. In this paragraph there is no limit to the amount of sales that horse dealers may make under a license of ten dollars. In the case of cattle dealers there is a limit of -$10,000, and I think this paragraph should be modified accordingly. Or if a horse dealer with a license of ten dollars can sell without any limitation as to the amount of his sales, then the provision in regard to cattle dealers should be the same. This business of horse dealing is a large business in some localities; there is an immense amount of capital invested in it; and it strikes me there should be some limit on the amount of capital invested or the amount of sales under a license of ten dollars.

Mr. MORRILL. I do not know that I have much objection to the amendment of the gentleman from Missouri, [Mr. BENJAMIN.] But I do not believe there are a dozen men in the United States who do so large a business in horse dealing as to render them liable to the proposed increased tax.

Mr. BENJAMIN. I beg to inform the gentleman that there are more than that number in my district alone.

Mr. MORRILL. They are very fortunate men. The business is very much reduced from what it was for the last three or four years, when the Government had occasion to employ this kind of men.

Mr. DELANO. I would inquire of the chairman of the Committee of Ways and Means [Mr. MORRILL] if he is willing to have this amendment adopted, and also allow the proviso to remain which allows a party to be a livery stable keeper also without paying an additional tax. I would prefer the paragraph as it is. I shall certainly move to strike out the proviso if the amendment of the gentleman from Missouri [Mr. BENJAMIN] shall be adopted.

Mr. MORRILL. I think the paragraph better remain as it is; that is my view of it.

The amendment of Mr. BENJAMIN was not agreed to.

The Clerk read the next paragraph, as follows:

8. Livery stable keepers shall pay ten dollars. Any person whose business it is to keep horses for hire, or to let, or to keep, feed, or board horses for others, shall be regarded as a livery stable keeper under this act.

No amendment being offered,

The Clerk read the next paragraph, as follows:

9. Brokers shall pay fifty dollars. Every person, firm, or company, except such as have paid a tax as a bank or banker, whose business it is to negotiate purchases or sales of stocks, bonds, exchange, bulfion, coined money, bank notes, promissory notes, or other securities, for themselves or others, shall be regarded as a broker under this act: Provided, That Any person having paid the tax as a banker shall not be required to pay any tax as a broker.

Mr. MORRILL. I move to strike out the words "except such as have paid a tax as a bank or banker," as that is provided for in the proviso.

The amendment was agreed to.

Mr. MORRILL. I move to amend the proviso by inserting the word "special" before the words "tax as a banker."

The amendment was agreed to.

Mr. MORRILL. I move further to amend the proviso by striking out the word "any" and inserting the words "a special" before the words "tax as a broker."

The amendment was agreed to.

The Clerk read the next paragraph, as follows:

10. Pawnbrokers using or employing a capital of not exceeding $50,000 shall pay fifty dollars; and when using or employing a capital exceeding $50,000, for every additional thousand dollars in excess of $50,000, two dollars. Every person whose business or occupation it is to take or receive, by way of pledge, pawn, or exchange, any goods, wares, or merchandise,

lars" the words and such excess shall be assessed and paid in the same manner as required of wholesale dealers."

The amendment was agreed to.

Mr. HOOPER, of Massachusetts. I move to amend by inserting the words "shall pay" before the words "two dollars."

The amendment was agreed to.

are now several hundred of them. Those distilleries are making, in a great measure, contraband whisky, which is being sold in the various markets of the country for less than the Government tax.

Rectified whisky in the city of New Orleans is sold at $1 75 per gallon-twenty-five cents less than the amount of the Government tax. Unless the legitimate manufacture of whisky is protected by law, the Government will obtain no revenue from this business, while the country will be flooded with whisky. All the evil consequences of the manufacture and conwhile there will be no adequate compensation to the Treasury of the United States. Unless we adopt a system similar to that carried out in Great Britain, the Government taking charge of the manufacture of this article and recognizing those engaged in its manufacture as agents of the Government, we shall get, comparatively speaking, no revenue.

11. Land-warrant brokers shall pay twenty-five dollars. Any person shall be regarded as a landwarrant broker within the meaning of this act who makes a business of buying and selling land-warrants, or of furnishing them to settlers or other persons. No amendment being offered,

The Clerk read the next paragraph, as follows:

12. Cattle brokers, whose annual sales do not exceed $10,000, shall pay ten dollars; and if exceeding the sum of $10,000, one dollar for each additional $10,000. Any person whose business it is to buy or sell or deal in cattle, hogs, or sheep shall be considered as a cattle broker.

No amendment being offered,

The Clerk read the next paragraph, as follows:

13. Produce brokers, whose annual sales do not exceed the sum of $10,000, shall pay ten dollars. Every person other than one having paid the special tax as a commercial broker or cattle broker, or wholesale or retail dealer, or peddler, whose occupation it is to buy or sell agricultural or farm products, and whose annual sales do not exceed $10,000, shall be regarded as a produce broker under this act.

No amendment being offered,

The Clerk read the next paragraph, as follows:

14. Commercial brokers shall pay twenty dollars. Any person or firm whose business it is, as a broker, to negotiate sales or purchases of goods, wares, or merchandise, or to seek orders therefor in original or unbroken packages, or to negotiate freights and other business for the owners of vessels, or for the shippers, or consignors, or consignees of freight carried by vessels, shall be regarded a commercial broker under this act.

Mr. MORRILL. I move to amend by striking out after the word "merchandise" the words " or to seek orders therefor in original or unbroken packages."

The amendment was agreed to.

The Clerk read the next paragraph, as follows:

15. Custom-house brokers shall pay ten dollars. Every person whose occupation it is, as the agent of others, to arrange entries and other custom-house papers, or transact business at any port of entry relating to the importation or exportation of goods, wares, or merchandise, shall be regarded a custom-house broker under this act.

No amendment being offered,

The Clerk read the next paragraph, as follows:

16. Distillers shall pay $100. Every person, firm, or corporation who distills or manufactures spirits shall be deemed a distiller under this act: Provided, That distillers of apples, grapes, or peaches, distilling or manufacturing less than one hundred and fifty barrels per year from the same, shall pay fifty dollars: And provided further, 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.

Mr. INGERSOLL. I move to amend this paragraph by striking out "$100" and inserting "$1,000" as the tax to be paid by distillers. I have this much to say in support of my proposition: unless you guard and protect the legitimate manufacturer of this article, you will fail to derive any considerable amount of revenue from this source.

In one district in the State of New York where three years ago the census shows there was no distillery, there are now thirty distilleries. And so it is in the State of Pennsylvania. In the northern district of Georgia, where but a few years ago there was no distillery, the internal revenue collector of the district reports that there are now fifteen hundred distilleries. In one district in Virginia where there were formerly no distilleries there

The manufacture of whisky in the United States ought to produce to the Government a yearly revenue of $80,000,000. This is the amount of the estimate formerly made by the Committee of Ways and Means; and this amount could be realized under a proper system. Estimating that the annual consumption of whisky during the last two years has been forty million gallons per annum, a tax of two dollars per gallon should yield to the Treasury $80,000,000. But if we allow every little distillery to be run for a license of twenty-five dollars, we shall have the country flooded with. contraband whisky, and the Treasury will obtain but little revenue. If the license be fixed at $1,000, we drive this contraband trade out of existence, thereby protecting the legitimate manufacturer, who can thus afford to pay a license of $1,000, and also a tax of two dollars per gallon.

Mr HOOPER, of Massachusetts. I would like the gentleman to explain what he means by a "legitimate manufacturer."

Mr. INGERSOLL. I mean one who pays his license, who makes his regular monthly returns, as required by law, and pays two dol lars on every gallon of whisky that he manufactures. Sir, it is known to the revenue officers of the country that under the present system not one gallon out of every four gallons manufactured pays any tax to the Government.

Mr. Chairman, I desire to submit some statistics relative to the manufacture of this article during the last fiscal year. The table which I submit emanates from the internal revenue department:

Collections returned on distilled spirits for the first six months of the fiscal year ending June 30, 1866. July, 1865.........

August...
September....
October....
November....
December..

Total for six months.. January, 1866. February.

March

Total returns to date..............

$352,252 15

267,457 88

755,662 06

1,366,025 23

3,050,671 28

3,762,134 21

9,554,202 81

3,751,469 91

3,592,677 46

2,439,124 42

.$19,337,474 60

NOTE. The collections for February and March will be somewhat increased, as all returns have not yet been received.

Thus it appears that the Government, instead of receiving, as it should, $80,000,000 per annum from this source, receives annually only about twenty-four million dollars.

[Here the hammer fell.]

Mr. STEVENS. I entertain just the contrary view to that of the gentleman from Illinois, [Mr. INGERSOLL;] and I move to amend his amendment by inserting, in lieu of what he proposes, to strike out, the word "fifty," so as to make the amount fifty dollars instead of $100, as it now stands in the bill.

Now, Mr. Chairman, we do not expect to raise any large amount of revenue from the licenses of these distilleries. Anybody who knows anything about the matter must know that the amount received from licenses is a

mere bagatelle compared with the whole amount of taxation derived from this branch of business. The object of requiring a license to be taken by distillers corresponds with the object of requiring a license for the manufacture of cigars. The purpose is that the officers of the Government may know who are engaged in distilling, so that they may require proper returns. If we induce every distiller to take out a license then the officers of the Government have a clue as to who are manufacturing whisky. But if the amount of license be fixed at $1,000 not one in twenty of these distillers will take out a license. The majority will prefer to risk the chances of being detected in the illicit manufacture, and the Government officers will not have the means of tracing them which they have when licenses are taken out.

Besides that, sir, there are all over the country very small distilleries, making perhaps twenty-five gallons a day, They cannot afford to pay a large license.

There are in several parts of the country small distilleries running out perhaps in the course of a year from four hundred to five hundred gallons. Now twenty-five dollars license and then raising the tax on the distilled article is, I think, a great deal. After all, the revenue to the Government comes from the tax on the distilled article.

My friend from Illinois, [Mr. INGERSOLL,] represents larger operations than those I have referred to. He represents men who distill a thousand gallons a day. What is a thousand dollars to them if they can crush out all other distilleries than those at Peoria? What is a thousand dollars to them in comparison to the enormous profits which they are enabled to make?

I am sure the gentleman would be glad to have the monopoly confined to Peoria. They have had the monopoly there this year. I also understand that a great many of them there were caught in attempts to defraud the Gov

ernment.

I am in favor of leaving the license at twentyfive dollars, and not increasing it as is proposed to fifty dollars.

I agree with the gentleman that down South there may be thousands of gallons distilled which do not pay tax to the Government. It is I suppose because the Government cannot find loyal men enough to take the oath and support "my policy." [Laughter.] I am told that one half of the whisky in the United States is now made in the southern States.

[Here the hammer fell.]

Mr. INGERSOLL. Mr. Chairman, I rise to oppose the amendment. I have no sympathy with the large distilleries in Peoria or the small distilleries in Pennsylvania. I believe the distilleries in Peoria and elsewhere are generally carried on by Democrats. Of course they support "my policy" as it is termed.

But, sir, I am looking at the interests of the revenue of this Government. I desire to state here in regard to the administration of the revenue law as it is applicable to the manufac ture of whisky, that in the large distilleries the collector appoints what is called an inspector whose duty it is to remain there night and day if necessary to watch and supervise operations, and to see that they return the exact number of gallons that is manufactured.

Mr. STEVENS. That is the way they do with the distilleries in my county, but they found three of these inspectors who received $5,000 a year each from these distilleries for the purpose, I suppose, of watching. [Laughter.]

Mr. INGERSOLL. I presume that is so. Of course you will find here and there a fraudulent agent. But, sir, if you do not watch these distilleries, I will guaranty you will get but little revenue. If you employ honest men, the Government will get its proper revenue. The gentleman from Pennsylvania says that it is not the license that goes to make up the amount of the revenue, but the tax ou the article. I am aware of that; but in order to get that tax you must have the manufacture of whisky, to a certain extent, under the control

of the Government. If you do not, as I have said, you will get but little revenue. The small distilleries in Pennsylvania, Kentucky, or anywhere else, paying a license of twenty-five dollars, and having no one to supervise them, may return only one barrel on which the tax is paid, and will sell as many other barrels of whisky on which no tax is paid.". They may make $100 profit each day, and I have no doubt many of them do, from illicit traffic in this article. The Government, of course, gets nothing in the way of tax on this contraband whisky. You cannot detect them, because you have no one there to watch them. If you put up the license to $1,000, and have an agent in every distillery, together with severe penalties for violation of the law, I have no doubt the Government will secure the collection of the tax.

I am speaking in the interest of the revenue, and not in the interest of the manufacturer, whether he be a large one or a small one. ask whether twenty-five millions is an adequate revenue from this source. It ought to be eighty millions.

[Here the hammer fell.]

Mr. STEVENS. I withdraw my amendment Mr. HOOPER, of Massachusetts. I will renew the amendment simply for the purpose of calling attention to the thirty-third section on page 155 of this bill, where it is required that an inspector shall be appointed for every distillery established according to law.

I concur with the gentleman from Pennsylvania that the object to be secured by having the rate of special tax a smaller sum is to induce everybody who distilled to come and pay for a license. With a tax of $1,000 it is certain the small distiller would not and could not pay it. Then I think there will be more fraud in the large distilleries than the small ones. If I am not mistaken, in the neighborhood of the gentleman from Illinois, [Mr. INGERSOLL,] among the largest distilleries there were found some heavy frauds.

Mr. INGERSOLL. I will state how that is, because I wish to defend every manufacturer from any unjust imputation on his character. Within my knowledge in the Peoria district, so far as the manufacturers are concerned, I think there is but one house that has ever had any charge preferred against it for any fraud, large or small, upon the revenue connected with the manufacture of whisky. That is the only case that I am aware of in the fifth district.

Mr. STEVENS. What was the amount of the fraud?

Mr. INGERSOLL. I think the amount of the whisky alleged to have been made in fraud of the revenue law was between four and five hundred barrels.

Mr. HOOPER, of Massachusetts. I do not mean to charge fraud upon the gentleman's district; but I know that in Illinois there have been large frauds committed.

Mr. MORRILL. It is evident that in regard to the policy of having a high or low tax on the business of distilling liquors, there is a wide difference of opinion among members of the House. The revenue commission have reported a bill for our action, adopting the policy somewhat of England, that is, of confining the business to a few large distilleries. But in this country, I think, where the business is already established-and there is a large amount of property invested all over the country in small distilleries-it would be rather hard to suddenly adopt a policy that would crush the business of these men and destroy their property without notice.

I am willing for one to go to some extent on that line of policy. I believe that in the end we may find it to be the only policy by which we can squeeze out of this manufacture the large amount of tribute that evidently is intended to be done not only by the people but by Congress. With that view the committee have raised the amount of special tax from fifty dollars to $100. I believe that is as far as we ought to go now, and it is a just compromise between the conflicting opinions that undoubtedly now prevail.

In another part of the paragraph it will be found that a less rate is imposed upon those who distill apple brandy or apple jack where the amount is less than one hundred and fifty barrels a year.

The CHAIRMAN. Debate is exhausted and the amendment is withdrawn.

Mr. HOOPER, of Massachusetts. I do not withdraw it. I insist upon a vote.

Mr. PAINE. I rise to a point of order. Has not this precise amendment once been voted down?

The CHAIRMAN. The gentleman from Pennsylvania [Mr. STEVENS] withdrew it, and the gentleman from Massachusetts [Mr. HOOPER] renewed it.

Mr. PAINE. The House voted down the amendment of Mr. STEVENS, I believe, and then he informed the House that he withdrew it.

The CHAIRMAN. The Chair did not announce the result when the gentleman from Pennsylvania [Mr. STEVENS] rose and stated that he withdrew it.

Mr. PAINE. There was a vote upon it. The CHAIRMAN. The Chair does not sustain the point of order, inasmuch as the gentleman from Pennsylvania withdrew the amendment before the Chair announced the vote. The same amendment is now offered by the gentleman from Massachusetts, [Mr. HOOPER.] No further debate is in order upon it.

The amendment to the amendment was disagreed to.

The question recurred on the amendment offered by Mr. INGERSOLL to strike out "$100" and insert "$1,000."

Mr. HENDERSON. Are remarks in order on that amendment?

The CHAIRMAN. No debate is in order: The gentleman can move pro formâ to strike out 'one thousand" and insert "two hundred."

Mr. HENDERSON. Very well. I move to insert "eleven hundred." I was going to renew the motion to insert "fifty," with a view of stating, not that I was in favor of reducing it to fifty dollars, but that I was in favor of the amendment of my friend from Illinois, [Mr. INGERSOLL.] I think the first business of the Government is to so adjust the tax as to have as little distillation as possible, and to make as much profit as possible out of what is

manufactured; the least possible amount of liquor with the greatest possible revenue from it.

Now, I cannot understand how it is that a thousand-dollar tax will increase the distillation of liquor. That is to my mind very strange. I have heard it stated here by several gentlemen that by thus increasing the amount of tax you will increase the number of distilleries. If it is so, and they all pay their tax, we certainly will get more revenue. But I am impressed with the belief that it will not have the effect to increase the number of distilleries; that is to say, if the Government is able to enforce the laws which it makes. I do not believe that the Governenforce its laws, and consequently I am fully ment has come to that point that it cannot satisfied that the high tax, with vigilant prosecution of the laws, will reduce the number of distilleries, and at the same time increase the amount of the revenue. My principle would be to reduce the amount of liquor and increase the revenue.

[Here the hammer fell.]

Mr. HENDERSON. Iwithdraw the amend ment to the amendment.

Mr. LAFLIN. I move to strike out "one thousand" and insert "twelve hundred." I was very glad indeed to hear the chairman of the Committee of Ways and Means assert that the revenue commission, in making their propositions of amendment to the revenue laws, had endeavored, as far as possible, to follow the example set by England. As was remarked by the chairman of the committee when he first introduced this bill, this subject of internal revenue is an entirely new one with us, and I commend to the judgment of this House whether it is not for our interest to fol

low, as far as we can, the example set to us by a nation which has had a long experience on this subject.

We find that Great Britain has adopted the plan of taxing all luxuries to the very greatest extent, and it raises over $50,000,000 annually from its tax on distilled spirits. By reference to the report of the revenue commission of that country it appears that in the year 1863-64 England raised $50,666,775, and in 1864-65|| $53,200,335 on spirits.

Now, sir, what is our experience? We have a population nearly as great as that of England, and the statistics of our returns show that we consume fully as much in amount as England does. And yet according to the returns of the internal revenue it appears that in 1863 we raised a revenue of $3,229,990, in 1864 a revenue of $28,431,797, and in 1865, when we taxed whisky two dollars a gallon, we raised only $15,995,702.

Now, what are the facts with reference to the production and consumption of whisky in this country? Prior to 1860 this country produced one hundred million gallons of whisky annually. If the same amount was produced to-day and the tax of two dollars a gallon was collected we should receive $200,000,000. But we find since the tax of two dollars has been imposed that the amount consumed in this country is fortyfive million gallons annually, which instead of yielding a revenue of $90,000,000 has only yielded a little over $15,000,000.

Mr. STEVENS. The gentleman must recollect that when we were about to impose the tax of two dollars for six months there was not a distillery that did not run night and day up to the time when the tax commenced; and from that time until within three months scarce a distillery ran at all, because they had laid in an immense quantity at the old tex.

Mr. LAFLIN. I understand that, but at the same time, during 1864, when we had a tax of $1 50, we only raised $28,000,000. It is estimated that seven eighths of all the whisky produced in this country is used for drinking purposes.

Now, what is the fact in regard to the number of distilleries? In 1860 there were eleven hundred and ninety-three distilleries in the United States. Now the number is estimated at five thousand. Why? Because under the stimulus of high prices people all over the United States have engaged in distillation on a small scale, some of them producing at the rate of one hundred gallons a year. It is said to be a fact, and I have not seen it denied, that every manufacturer of small stills has more orders on hand than he can fill. And it is said that in the State of Georgia there are fifteen hundred distilleries in one district.

[Here the hammer fell.]

Mr. DODGE. Mr. Chairman, all that we require in regard to this question of whisky is a law sufficient to find out these small distilleries. I fail to perceive the force of the suggestion made by the chairman of the Committee of Ways and Means, that a small tax of twentyfive dollars will induce men who are carrying on an illicit traffic in cellars and garrets to come forward and make known the fact that they are engaged in this business. I hope, sir, || that we shall fix a tax so large and frame a law so stringent that every manufacturer of distilled spirits, whether he makes a thousand gallons a day or five gallons a day, will be found out, so that the Government shall receive from him the entire amount of revenue contemplated by the law.

We may rest assured, sir, that a tax of twenty-five dollars will never bring to light men who are seeking to carry on an illicit traffic. If the tax be fixed at $1,000 or $1,500 there would be an object in finding them out. In the city of New York we have now a law fixing the license at $200 and $150. Last year, when only a small tax of ten dollars was required for selling liquor, there were in that city more than nine thousand places in which intoxicating drinks were sold. Under our present system, where it is an object to detect every

individual selling liquor without a license, the city is receiving $1,000,000 of revenue annually from this source. If men will manufacture, if men will sell, if men will drink alcohol, let them pay the tax which the Government imposes. The amendment to the amendment was not agreed to.

Mr. HOTCHKISS. I move to amend the amendment by striking out "$1,000" and inserting the following:

Distillers distilling less than fifty thousand gallons annually shall pay $100; those distilling fifty thousand gallons, or over, annually, shall pay $200.

Mr. Chairman, it appears to me that this is a more reasonable proposition than to make distillers indiscriminately pay $1,000. The latter system would simply break up the small distilleries and give a monopoly of the business to the large manufacturers. I do not see that any good is to be gained by it. It would not diminish the amount of whisky distilled. It would simply leave the monopolists at liberty to increase the price of the article for their own benefit.

Experience has shown that the amount consumed is not decreased by an increase in the price; and I see no reason why we should enact an oppressive law with the view to obtain revenue, or to effect a moral reform. I am as hostile to the manufacture and the use of whisky as any gentleman on this floor can be, but I do not think it wise for us to attempt to enact oppressive laws to suppress this traffic, because I do not think that we would effect the object.

Let us have, however, a discrimination between large establishments and the smaller ones. I do not know how much a small establishment manufactures annually, but I suppose that the quantity would not exceed fifty thousand gallons. Those manufacturing more than that quantity will be required by this amendment to pay $200. Gentlemen more familiar with this branch of the business can, if they deem it proper, move to increase the license fee in proportion to the amount manufactured.

Mr. MORRILL. 1 do not know but that I, for one, would be willing that the Government should forego all revenue from this source if we could entirely suppress the distillation and consumption of the article throughout the country. But, believing that to be impossible, I am for obtaining the largest possible amount of revenue on the smallest consumption of the article. I believe, however, that in this case moderation is true wisdom. Our own experience, corresponding with that of other countries, has shown that when we undertake to levy an exorbitant tax we always defeat our object. If we now undertake to levy a tax of $1,000 upon every distillery in this country, not one fourth of these distilleries will ever be reached at all. Why? Because we give a sufficient amount to make it an object for parties to conceal the fact-to hide their stills in garrets and cellars.

As I said in my opening speech, it is true the manufacturers in small copper stills have been exceedingly busy for the last two years. They are spread over all parts of the country. If we leave this tax at the moderate sum proposed by the Committee of Ways and Means, I believe we can collect it. I am therefore opposed either to reducing or increasing it.

There is in the paragraph a provision by which distilleries of apples, grapes, and peaches shall be taxed a less amount. We do not expect to extract so much revenue from them. These distilleries are located in Pennsylvania, Kentucky, and New Jersey, and are small establishments-to accommodate their neighborhoods. Unless they shall be allowed to remain, those who have large peach or apple orchards will find they will have no sale for their fruit. If we are to have whisky or brandy at all I would as soon have it from apples or peaches as from anything else. I hope we shall allow the bill to stand as it is.

I move that the committee rise for the purpose of closing debate on this paragraph. The motion was agreed to.

So the committee rose; and the Speaker having resumed the chair, Mr. DAWES reported that the Committee of the Whole on the state of the Union had had under consideration the Union generally, and particularly the special order, being bill of the House No. 513, to amend an act entitled "An act to provide internal revenue to support the Government, to pay interest on the public debt, and for other purposes," approved June 30, 1864, and acts amendatory thereof, and had come to no resolution thereon.

CLOSE OF DEBATE.

Mr. MORRILL moved that all debate on the pending paragraph of the tax bill in the Committee of the Whole on the state of the Union be closed in five minutes after its consideration shall be resumed. The motion was agreed to.

TAX BILL-AGAIN.

Mr. MORRILL moved that the rules be suspended, and that the House resolve itself into the Committee of the Whole on the state of the Union on the special order.

The motion was agreed to.

So the rules were suspended; and the House accordingly resolved itself into the Committee of the Whole on the state of the Union, (Mr. DAWES in the chair,) and resumed the consideration of the special order, being a bill of the House (No. 513) to amend an act entitled "An act to provide internal revenue to support the Government, to pay interest on the public debt, and for other purposes," approved June 30, 1864, and acts amendatory thereof.

The CHAIRMAN stated the question to be on Mr. HOTCHKISS'S amendment to the amendment.

The amendment to the amendment was disagreed to.

The question then recurred on Mr. INGERSOLL'S amendment, and it was also disagreed to.

Mr. RANDALL, of Kentucky, moved after the word "manufacture," in line ten hundred and eighty-nine, to insert the words "fifty and," and after the word "dollars," in line ten hundred and ninety-one, to add the following:

And those distilling or manufacturing less than fifty barrels per year from the same shall pay twenty dollars.

The committee was divided; and there were -ayes 35, noes 47; no quorum voting.

Mr. ALLISON demanded tellers. Tellers were ordered; and Messrs. RANDALL, of Kentucky, and ALLISON, were appointed. The committee was again divided; and the tellers reported-ayes 50, noes 43.

So the amendment was agreed to. Mr. INGERSOLL. I move to strike out the proviso as amended.

The motion was disagreed to.

The Clerk read the next paragraph, as follows:

17. Brewers shall pay $100. Every person, firm, or corporation who manufactures fermented liquors of any name or description, for sale, from malt, wholly or in part, or from any substitute therefor, shall be deemed a brewer under this act: Provided, That any person, firm, or corporation, who manufactures less than five hundred barrels per year, shall pay the sum of fifty dollars.

No amendment being offered,

The Clerk read the next paragraph, as follows:

18. Rectifiers who shall rectify any quantity of spirituous liquors, not exceeding five hundred barrels, packages, or casks, containing not more than forty gallons to each barrel, package, or cask, shall pay twenty-five dollars; and twenty-five dollars ad-. ditional for each additional five hundred such barrels, packages, or casks, or any fractional part thereof. Every person, firm, or corporation, who rectifies, purifies, or refines spirituous liquors or wines by any process, or mixes distilled spirits, whisky, brandy, gin, or wine, with any materials for sale under the name of whisky, rum, brandy, gin, wine, or any other name, shall be regarded as a rectifier under this aot.

Mr. HARDING, of Illinois. I move to strike out the word "rectifiers." I notice in a subsequent portion, of this bill a direct blow at the only prosperous manufacturing business we ever have had in the West. We are situated far from market; the products of our soil

are abundant in the forms of rye and corn; and we have been able heretofore to compete successfully in the business of manufacturing alcohol with our friends in the East who are so generally superior in manufactures. But if this paragraph shall pass that interest in the West will be destroyed.

Now, I wish to call the attention of the House to the unfairness of this paragraph. I say what I mean; I use the word "unfairness" intentionally. It is known to the country that the business of manufacturing alcohol is performed by two modes. The mode which has been successfully performed in the West is the redis tillation carried on by continued processes in the same establishment in which the spirit is manufactured. By continued redistillation it is rectified to the standard of alcohol.

Now this bill, infamous in this particular, the vile brood of a local interest-I have no reference of course to the chairman of the Committee of Ways and Means, [Mr. MORRILL,] for he evidently has been imposed upon-this bill provides that alcohol and spirits shall not be made in the same establishment. Why? There is no other reason that can be given than that it is because we can manufacture alcohol out of the cheap corn of the West, in the same establishment where spirits is made, at such a rate that no man who buys his spirits in New York or New England can compete with us. And therefore it is that obstacles must be put in the way of the successful manufacture of alcohol in the West.

And how is that done? This bill requires our distiller to take his spirits out of the whisky distillery, put it in barrels, put it into bond, then take it out of bond, and put it into another establishment where it is to be made into alcohol. And when I asked why this was done, one of the heads of bureau informed me that it was to enable the eastern manufacturer to compete with the western manufacturer. Now here in this instance the man is not allowed to produce alcohol in any particular quantity by rectifying, or if he does he has to pay this additional tax for every few hundred gallons that are rectified.

Mr. ALLISON. I am quite as anxious as my friend from Illinois [Mr. HARDING] to protect the interests of our western friends who are engaged in this business. The provision that he objects to is a mere repetition of the existing law; and I have yet to hear of a single rectifier of whisky or manufacturer of alcohol in the West who complains of this license.

The provision prohibiting the rectifying of whisky or the manufacture of alcohol upon the same premises or in the same establishment where high-wines are distilled, is in another part of this bill, and has no reference whatever to this subject. I think that it is a provision that should be adopted, perhaps with some modification; because it is well known that under the existing law most of the frauds that have been discovered have been in the cases of parties who manufacture alcohol upon the same premises where they distill high-wines, without having their high-wines inspected.

It

This provision is evidently a just one. certainly is a just one now, when we have doubled the tax upon the manufacture of distilled spirits, but leaves the tax as it exists in the present law upon the manufacture of alcohol and the rectifying of whisky.

I hope the amendment of the gentleman from Illinois [Mr. HARDING] will not be adopted.

The amendment of Mr. HARDING, of Illinois, was not agreed to.

The Clerk read the next paragraph, as follows:

19. Coal-oil distillers shall pay fifty dollars. Any person, firm, or corporation, who shall refine, produce, or distill crude or refined petroleum or rock oil, or crude coal oil, or crude or refined oil made of asphaltum, shale, peat, or other bituminous substances, or shall manufacture coal illuminating oil shall be regarded as a coal-oil distiller under this

act.

Mr. MORRILL. I move to strike out the

word "coal" before the words "illuminating oil."

The amendment was agreed to.

The Clerk read the next paragraph, as follows:

20. Keepers of hotels, inns, or taverns shall be classified and rated according to the yearly rental, or, if not rented, according to the estimated yearly rental of the house and property intended to be so occupied, as follows, to wit: when the rent or valuation of the yearly rental of said house and property shall be $200, or less, shall pay ten dollars; and if exceeding $200, for any additional $100 or fractional part thereof in excess of $200, five dollars. Every place where food and lodging are provided for and furnished to travelers and sojourners, in view of payment therefor, shall be regarded as a hotel, inn, or tavern, under this act: Provided, That keepers of hotels, taverns, and eating-houses, in which liquors are sold by retail, to be drank upon the premises, shall pay an additional tax of twenty-five dollars. The yearly rental shall be fixed and established by the assessor of the proper district at its proper value; but if rented, at not less than the actual rent agreed on by the parties. All

steamers and vessels upon waters of the United States, on board of which passengers or travelers are provided with food or lodgings, shall be subject to and required to pay twenty-five dollars: Provided, That if there be any fraud or collusion in the return of actual rent to the assessor there shall be a penalty equal to double the amount of the tax required by this section, to be collected as other penalties under this act are collected.

Mr. MORRILL. In the sentence which now reads, "the yearly rental shall be fixed and established by the assesor of the proper district at its proper value," I move to insert the word "assistant" before the word "assessor,' and the word " assessment" before the word "district."

The amendment was agreed to.

Mr. MORRILL. I move further to amend this paragraph by striking out the following:

Provided, That if there be any fraud or collusion in the return of actual rent to the assessor, there shall be a penalty equal to double the amount of the tax required by this section, to be collected as other penalties under this act are collected.

And inserting in lieu thereof the following: Provided, That any person who shall make a false or fraudulent return of the annual rent mentioned in this paragraph shall be subject to a penalty therefor of double the amount of the tax.

The amendment was agreed to.

Mr. PIKE. I move to amend by inserting at the close of the first sentence in this paragraph the following proviso:

Provided, That no license shall be required when the rent or valuation of the yearly rental shall be less than $100.

The object of my amendment must be apparent to any one. It is merely to exempt from this tax a class of people who keep small country wayside inns, which can hardly be called inns or taverns, except for the purposes of this act; places which are kept for the benefit of passers-by rather than for profit.

The amendment was not agreed to. Mr. STEVENS. I move to amend this par. agraph by striking out the following proviso:

Provided, That the keepers of hotels, taverns, and eating-houses, in which liquors are sold by retail, to be drank upon the premises, shall pay an additional tax of twenty-five dollars.

In the first place, this proposes to tax tavernkeepers on a pretty high rental. Now, a tavern-keeper, everywhere that I know anything about, is a man who keeps a house of public entertainment, including liquor to be drank upon the premises. Retailers of liquor that is not to be drank upon the premises are a different class of persons and are taxed differently. It is proposed by this paragraph to tax all tavern-keepers twenty-five dollars more for selling liquors to be drank on the premises than if they sold none. Now, a tavern where no liquors are sold is no tavern. All taverns, except now and then a temperance house, as it is called, sell what we propose to charge twentyfive dollars for. In Pennsylvania a man licensed to keep a tavern is allowed by the law to sell liquors.

A tavern-keeper pays $200 a year rental, for what? To allow a man to call there and get a little bread and milk. He can get nothing to drink there unless the tavern-keeper pays twenty-five dollars extra. I therefore propose to strike out this proviso.

Mr. PIKE. The committee have just refused to adopt a very reasonable proposition I made in regard to small taverns. I hope they will not adopt the proposition of the gentleman from Pennsylvania, [Mr. STEVENS,] which I consider a very unreasonable one. This paragraph provides that tavern-keepers whose rent does not exceed $200 per annum shall pay a license tax of ten dollars. The proposition of the gentleman from Pennsylvania is to allow man to take out a tavern license of ten dollars, and then go into the retail liquor business. Mr. STEVENS. Only to sell liquor to be drank on the premises.

Mr. KUYKENDALL. Retail liquor dealers always sell liquor to be drank on their premises.

Mr. PIKE. If it was to apply only to those who did not sell liquor to be drank on the premises, then we would have to keep an inspector always on the premises to see if the liquor sold was or was not drank there. The effect of the amendment of the gentleman from Pennsylvania [Mr. STEVENS] will be simply to allow tavern-keepers to retail liquors to any extent under the license of ten dollars. I hope the amendment will not be adopted.

Mr. THAYER. I was the author of this proviso in the old law, and therefore I feel called upon to defend it now. I believe that no provision in the law has been more popular than this one. I think it is a tax which nine tenths of every community will approve.

Now, without this provision in the law, any man who shall take out a small license for an eating saloon could sell any quantity of liquor without paying any additional tax at all. And a man who sells thousands and thousands of dollars' worth of liquors, as they do in the firstclass hotels of this country, could carry on a retail liquor trade under this ten-dollar license -a trade exceeding in its profits the legitimate business of entertaining travelers, and not pay one cent additional to the Government for the purposes of revenue.

I do not consider it necessary to say much in defense of such a provision as this. I cannot conceive in what manner a tax can be laid which will be more universally approved, or more justly imposed than by this provision.

Mr. PRICE. Let me ask the gentleman whether he does not think it possible in this age of the world to keep a tavern without selling whisky.

Mr. THAYER. I do think it possible; and where that is the case, of course no tax is to be paid for liquor sold.

Mr. HENDERSON. Mr. Chairman, I view this question very differently from my friend from Pennsylvania, [Mr. STEVENS,] who seems to think that public houses where liquor is not sold do not generally keep anything in the shape of refreshments, except bread and milk, or something of that sort. According to my observation, those houses that keep no liquor keep much the best provisions. Hence, I think that my respected friend, in the remark which he made, was not in earnest, but was joke. only practicing upon the House an innocent

Mr. MORRILL. For the purpose of terminating debate on this paragraph I move that

the committee rise.

The motion was agreed to.

So the committee rose; and the Speaker having resumed the chair, Mr. DAWES reported that the Committee of the Whole on the state of the Union had had under consideration the Union generally, and particularly the special order, being bill of the House No. 513, to amend an act entitled "An act to provide internal revenue to support the Government, other purposes," approved June 30, 1864, and to pay interest on the public debt, and for resolution thereon. acts amendatory thereof, and had come to no