per head; so that with this addition we have as the total present annual consumption in Great Britain, of spirits of all kinds for drinking purposes, a quantity equivalent to about eight-tenths (79) of a gallon for every inhabitant of the kingdom. The consumption of wine in great Britain for 1864 was estimated by the commissioners of the inland revenue at three-eighths (38) of a gallon per capita.

The distribution of the consumption of spirituous and fermented domestic liquors among the British people is in a measure indicated by the amount of excise paid on these articles by the different classes of the population. Thus, in 1859, the revenue derived from excise on spirits and malt was £15,500,000 ($77,500,000.) Of this sum, according to Prof. Leone Levi, the so-called upper classes, numbering about one million individuals, paid about £3,100,000 $15,500,000 ;) the so-called middle classes, numbering about nine millions, paid £2,200,000 ($56,000,000 ;) and the working classes, numbering about eighteen millions, paid £7,200,000 ($36,000,000; ) or, in other words, the upper classes paid in taxes to the government, on the spirituous and fermented domestic liquors consumed by them, and for the licenses for the sale of the same, $15 50, the middle classes $2 SS, and the working classes $2 per head.*

The testimony of all the persons competent from observation and experience to form an opinion on this subject, who have appeared before the commission, is unanimously to the effect that the consumption per capita of distilled spirits in the United States is considerably in excess of that in Great Britain; and one gentleman of large intelligence, who for many years held a place of high responsibility in the British excise department, and who has since, for a period of several years, been conversant with the importation and sale of liquors in the United States, estimates the consumption of spirituous liquors for drinking purposes in this country as equal, at least, to a gallon and a half per capita. So marked a difference as this, however, in the consumption of distilled spirits by the people of the two nations of the United States and Great Britain must, it would seem, have heretofore excited attention and comment; and we are, therefore, inclined to consider the estimate of a gallon and a half per head for the consumption of the United States as somewhat exaggerated.

A comparison of the licenses granted in the two countries for the retailing of distilled spirits gives the following results. The whole number of licenses granted in Great Britain for the year ending March 31, 1865, was 107,933. The whole number granted in the loyal part of the United States for the year ending June 30, 1865, as estimated from the receipts,was 88,235. Adding 20,000 additional licenses as the theoretical number required to supply the retail demand for spirits in that part of our country not subject, during the fiscal year 1864-'65, to the operation of the national revenue laws, we have 108,235 as the probable number representing the retail business for the sale of liquors in the entire United States.†

The manner in which liquors are retailed in the United States and in Great Britain differs somewhat. In the former, when a "drink" of distilled spirits is called for, the bottle or decanter is passed and the purchaser helps himself ad libitum; in the latter, on the contrary, every quantity of spirits retailed is

Some calculations have been made of the sum annually spent in the United Kingdom for British and foreign spirits. It is estimated that the consumer pays for every gallon of spirits used three times the amount of duty, and at this calculation the expenditure for rum will amount to £4,000,000, ($20,000,000;) for brandy, £3,400,000, ($17,000,000;) and for British spirits, not less than £28,000,000, ($140,000,000,) making in all £35,000,000, ($175,000,000.) If to this amount we add £30,000,000 spent in beer and £5,000,000 in wine, we have a grand total spent in wines, spirits, and beer, of nigh £70,000,000, ($350,000,000,) a sum exceeding the taxation of the United Kingdom, and amounting to ten per cent. of the whole income of the country.-Prof. Leon Levi "On Taxation." London, 1860.

The rate of duty on an annual license to retail spirits in the United States for 1863-'64 was $20; for the year 1864-65, $25. This duty on licenses in Great Britain varies from $11 to $55 per annum, according to the rental of the premises occupied.

measured by the seller, and accurately proportioned to the price to be received. This custom prevails equally in Great Britain in the leading hotels and clubhouses as in the lowest "dram-shops;" the original signification of the term "dram-shop"-i. e., the place where liquor is sold by the fluid drachm, or other measure-being in fact due to this British trade peculiarity. It may also be remarked, in this connexion, that "fancy" or "mixed" preparations of spirits, which, from their agreeable appeal to the taste, may be regarded as incentives to consumption, such as "cobblers," "smashes," and "cock-tails," &c., are all peculiarly American, and are little known or used in Great Britain.

The amount received in the United States from licenses granted to wholesale dealers in liquors ($50, and $1 for every $1,000 of sales above $50,000) for the year ending June 30, 1865, was $400,693. In Great Britain the rate per annum imposed on wholesale dealers in liquors is £10 10s., ($52 50,) and the amount received from such licenses for the year ending March 31, 1865, was $240,030. In respect to the consumption of distilled spirits in the British North American Provinces, the commission, through the courtesy of members of the various provincial governments, are enabled to present some very satisfactory data.

In Canada, the annual production of distilled spirits, according to the official reports of the minister of finance, has been, since 1861, as follows:

1862...

1863..

1864.

1865..

2, 973, 130 gallons, tax 30 cents per gallon.

Assuming the population of Canada to be 2,506,755, (census of 1861,) this would give an annual per capita production of distilled spirits of 1.55 gallon for 1862; 1.46 gallon for 1863; and 1.40 gallon for 1864.

The present population of Canada is estimated at 2,900,000, which, adopting the returns of production of distilled spirits of 1864-'65, would give 1.02 gallon per capita. During the year 1864-'65, 542,118 gallons of distilled spirits were returned as imported into Canada, and 29,297 gallons as exported during the same time. Making an allowance for this additional quantity, and also for what escaped the excise, we have, as the probable consumption of distilled spirits in Canada, for all purposes, an amount in excess of 14 gallon per capita.

In New Brunswick, where, as before stated, there is no domestic production of distilled spirits, the quantity of the same imported for 1860, 1861, and 1862, was as follows:

1860....
1861...
1862.

317, 593 gallons.

320, 380 gallons.

302, 115 gallons.

The quantity imported in 1862 was classified as follows: alcohol, 144,015 gallons; brandy, 30,437 gallons; gin and whiskey, 98,900 gallons; rum and other spirits, 28,763 gallons; total, 302,115 gallons.

The population of New Brunswick, by the last census, was 252,047, which would give an annual importation of spirits of 11 gallon per capita. If we could reduce the returns of importation into proof gallons the per capita figures as above given would need to be considerably increased.

The following table shows the estimated importations of spirits into Nova Scotia (in which province, like New Brunswick, there is no domestic production of distilled liquors) for the following years:

1860...
1861.
1862.

560,000 gallons.

260, 000 gallons.

470, 000 gallons.

The population of the province of Nova Scotia being by the last census 330,857, we have, as the average annual importation of spirits, 1.30 gallon per head.

For Prince Edward's island the production and importation of distilled spirits is estimated at about one gallon per head; and the same estimate is made for Newfoundland.

The bulk of the spirits, however, returned as imported into the provinces of New Brunswick, Nova Scotia, Prince Edward's island, and Newfoundland, is undoubtedly consumed by that part of the population engaged in the fisheries and in the lumber business.

With these data before them, the commission are inclined to believe that about 39,000,000 gallons of distilled spirits are required to meet the present annual demand of the present population of the United States for drinking purposes, (being nearly 14 gallon per head of the whole population,) and they are of the opinion that the quantity so required, under the present tax of two dollars per gallon, is not likely to be for some years in excess of this estimate. The quantity of raw spirits (whiskey) required to meet the demands of New York city and its immediate precincts, prior to 1862, is estimated by distillers and others conversant with the trade to have been from eight hundred to one thousand barrels daily, or from twelve to fifteen millions of gallons per annum. Of this amount one-half is set down as having been consumed in New York for drinking and other purposes; while the balance, having been converted into alcohol, pure spirits, imitation liquors, medicinal preparations, &c., found a market elsewhere.

The number of establishments where liquor is sold at retail in the city of New York, according to the testimony of Mr. Kennedy, superintendent of police, is upward of eight thousand. The amount of liquor sold over the bars of some of the largest hotels, restaurants, and drinking-saloons, is reported as equivalent to a barrel of fifty gallons proof spirits per diem; while the sales of many establishments considered small are estimated as equivalent to a barrel per week. Previous to the imposition of the tax, the sales of one jobbing-house for drinking purposes are reported to the commission as averaging one hundred barrels per day.

The proprietors of the largest wholesale commission house dealing in whiskey and high wines in the city of New York report to the commission that their average receipts of high wines and whiskeys, shipped from the west direct, were formerly at the rate of one hundred thousand barrels (6,000,000 to 7,000,000 proof gallons) per annum, and of this amount they give it as their opinion that "more than one-half was used directly as a beverage." The present average annual receipts of this house do not exceed fifty thousand barrels.

As the estimated excess in the consumption of distilled spirits per capita, in the United States, over the corresponding amount consumed in Great Britain, may be questioned by some, the commission would call attention to the following circumstances: The number of gallons of spirits consumed in the United Kingdom, for drinking purposes, in the year 1864-'65, was 20,369,844 gallons; the number of barrels of beer consumed in Great Britain in the same year was 22,037,902, or seven-tenths of a barrel per head of the population. The quantity of malt charged with duty the same year was 48,538,412 bushels. In an average of years, one bushel of malt yields two gallons of proof spirits, so that the malt yearly made into beer in Great Britain would yield the enormous quantity of 97,176,824 gallons. In the fermentation of the wort, or extract of malt, for the manufacture of beer, the whole of the sugar is not transformed into alcohol, but from one-quarter to one-half may remain unchanged in the beer. "The quantity of malt, therefore, which is consumed in Great Britain for the making of beer does not, in reality, indicate the consumption of so large a number of gallons of proof spirits as the distiller would extract from it."

But

if we allow one-quarter of the whole for the quantity of sugar remaining unchanged in the beer, the annual quantity of proof spirits actually consumed in Great Britain in the form of beer would be 72,882,618 gallons. Adding this amount to the quantity of distilled spirits returned as "consumed," it would appear that the consumption of ardent spirits in Great Britain per capita is far in excess of that in the United States, as estimated by the commission, the present annual consumption of beer in the United States being estimated at between five and six millions of barrels.

EXPORTS.-In estimating the annual production of distilled spirits available for assessement and revenue, it is obvious that all exports subject to drawbacks, equivalent to the excise duties imposed upon them, and all spirits exported in bond, must be deducted. The quantity of spirits thus exported from the United States to foreign countries is extremely variable, and depends mainly upon the abundance or scarcity of the crops in Europe. The following table, prepared for the use of the commission by the Treasury Department, shows the registered exports of spirits derived from grain, from the several ports of the United States, from 1855 to the close of the fiscal year June 30, 1865, inclusive:

It will thus be seen, that the quantity of distilled spirits exported since 1856 has never attained so high a figure as six million gallons, the quantity assumed by the Commissioner of Internal Revenue in his report for 1864.

It might naturally be supposed, judging à priori, that by reason of the extraordinary low price which grain commands, in fruitful years, in many parts of our country, the American distiller and rectifier might successfully compete for and command the sale of high-wines and alcohol in foreign markets over manufacturers of all other countries. Such, however, is not the case. Great Britain, which now yearly imports from foreign countries over four bushels of grain per capita, for her consumption exports on an average, annually, nearly double the quantity of distilled spirits that are exported from the United States,* as will be seen by the following table:

*In consideration of the increased cost of manufacturing spirits, caused by the enforcement of more recent and stringent excise regulations, the amended act of Parliament, 1860, grants an allowance or bounty of twopence per proof gallon, in addition to all drawbacks or abatement of duties, on all plain British spirits shipped as stores, exported to foreign countries, or deposited in customs warehouse for exportation, or for fortifying wines.

H. Ex. Doc. 62- -2

British spirits (proof gallons) exported 1861, 2, 995,051

A part of the recent increase in the British exports of spirits is attributed (and probably most correctly) to the disturbance of the American trade in consequence of the war. Thus, according to the report of the commissioners of inland revenue of Great Britain for 1863, the exports of British spirits to Turkey increased from 3,272 gallons in 1862, to 638,297 in 1863; to Sardinia and Tuscany, in the same year, from 1,738 gallons to 524,018; to Naples and Sicily, from 137 gallons to 72,741; and to the West Coast of Africa, from 268,128 gallons to 357,458. Another striking illustration of the competition to which American high wines and alcohol are subjected, is to be found in the fact that, within the last three years, New York manufacturers have found it expedient to import alcohol from Germany, to be worked up into medicinal preparations and perfumery, in bond (paying for the same in gold, with freight and commissons,) rather than supply themselves in the New York market.

With the removal of trade disturbances, consequent upon the war, and with the return of grain and labor to ante-war prices, there seems no reason to doubt that, under the present treasury regulations, the American export of spirits will maintain its former proportions and increase; although it is the opinion of many that, with the reduction in the demand for French brandies consequent upon the high customs duties imposed on the same, the exportation of American alcohol to France will be permanently and proportionally diminished.

PRODUCTION OF DISTILLED SPIRITS THEORETICALLY AVAILABLE FOR UNITED STATES ASSESSMENT AND REVENUE.

After a careful review and consideration of the facts as above presented, and after conference with many of the principal dealers and manufacturers from all sections of the country, the commission are of the opinion that, with the maintenance of the present tax of two dollars per gallon, the quantity of distilled spirits which may be expected to be produced and rendered subject to assessment for the immediate future will be from forty-two to forty-five millions of gallons, capable of yielding a revenue of from eighty-four to ninety millions of dollars.

RESULTS OF THE TAXATION of distilled SPIRITS FROM JULY 1, 1862, TO JUNE 30, 1865.

The first tax imposed by Congress, under the present revenue system, on distilled spirits, was twenty cents per gallon. (Act of July 1, 1852.) The revenue derived from the same for the fiscal year ending June 30, 1863, was $3,229,991, which amount corresponds to a production of 16,149,955 proof gallons.

The tax of twenty cents per gallon continued in force until March 7, 1864, when the rate was advanced to sixty cents per gallon. (Act of March 7, 1864) The revenue derived from distilled spirits for the fiscal year ending June 30, 1864, under the two rates as above indicated, was $28,431,798.

On the 1st of July, 1864, the tax on distilled spirits was raised to one dollar and fifty cents per proof gallon, (act of June 30, 1864,) which rate was further advanced on the 1st of January, 1865, to two dollars per proof gallon, the present rate of duty.

The revenue derived from distilled spirits for the fiscal year ending June 30, 1865, under the two rates of tax as above indicated, was $15,995,701 66.

The average taxable production of distilled spirits per year, from September 1, 1862, to June 30, 1865, as returned to the department, was 40,537,371 gallons.