RECEIPTS FROM THE SAME GENERAL SOURCES, FOR THE FIRST QUARTERS OF THE FISCAL YEARS 1869 AND 1870, COMPARED. The following statement of the receipts from the several general sources of revenue for the first quarter of the present and last fiscal years includes the returns of twenty out of the twenty-six districts not given in the table immediately preceding, and received since the preparation of that table. The receipts of the following districts only are, therefore, not included in the receipts for the year 1870: Third Mississippi and ninth Kentucky, for the month of July; third Mississippi, for August; eleventh New York, sixth Tennessee, and fourth Texas, for September. Sources not otherwise herein specially enumerated. (Articles now exempt from taxation) Net receipts from stamps.. Penalties. Total.. $8,465, 443 $10, 017, 031 8, 131, 298 1,739, 609 1,246, 286 1,514, 756 1,727,206 1,739, 513 1,961, 828 2,969, 427 3,244, 624 11, 201, 809 13, 278, 504 278, 590 340, 361 254, 065 300, 843 265, 287 317,984 Total gain, $8,020,517, or 20.8 per cent. It will be seen that the gain on tobacco during this period of compar ison is increased, and that on stamps is sustained, while that on spirits is fully sustained, if allowance be made for the fact that the old spirits in bond had all been withdrawn and the tax paid before this period commenced. The gain on tax of banks and bankers is likewise more than sustained by this comparison, and the entire table affords ample promise of satisfactory future results. AGGREGATE RECEIPTS FOR THE FIRST FIVE MONTHS OF THE FISCAL YEARS 1869 AND 1870 COMPARED. The following is a statement showing the aggregate of certificates of deposits received at this office from July to November, 1868 and 1869: In considering the large increase of revenue from distilled spirits for the last six months of the fiscal year ending June 30, 1869, the subjoined facts should be remembered. There were in bonded warehouses on 1st July, 1868, as shown by the accounts kept in this office, 27,278,420 gallons of spirits. This included all claims for leakage then outstanding, and a large quantity claimed to have been destroyed by the burning of several bonded warehouses, as well as certain amounts which had previously been withdrawn upon fraudulent bonds and were still unaccounted for. Under the provisions of the act of July 20, 1868, as amended, all spirits in bonded warehouse at the time of the passage of the act were required to be withdrawn and the tax paid thereon prior to July 1, 1869; and by this requirement 21,383,951 gallons of spirits were necessarily forced upon the market during this fiscal year, and served, to that extent, to increase the revenue from this source; while on the 1st of July, 1869, there remained in bonded warehouse of the new product only 16,663,838 gallons. It thus appears that the quantity of spirits in bond, to be withdrawn and tax paid during the fiscal year ending June 30, 1870, is less by nearly eight millions gallons than the quantity which was compelled to be withdrawn and tax paid for the fiscal year ending June 30, 1869. The following statement, exhibiting the movements in distilled spirits, is made from statistics furnished by the division in charge of the subject in this bureau; and although the figures may not be absolutely accurate, they approximate it so nearly as to be deemed reliable. Number of gallons withdrawn from bonded warehouses from July 1, 1868, to June 30, 1869, produced prior to July 1, 1868, at 50 cents per gallon.... Produced prior to July 1, 1868, on which tax was paid at $2 per gallon......... Total gallons distilled spirits, old product.... Total gallons... Number of gallons of spirits produced from July 20, 1868, Total gallons.. Total amount on which the tax was collected... Number of gallons withdrawn for consumption and export from July 1, 1867, to June 30, 1868. 10, 936, 647 Of this was exported without payment of tax.. 4, 227, 101 Balance on which the tax was collected for fiscal year 1868. 24, 383, 951 95, 561 24, 479, 512 37, 122 24, 516, 634 36, 704, 046 871,737 37,575, 783 62,092, 417 6,709, 546 From which it appears that the amount for which the tax was collected for 1869 exceeded that for 1868, gallons... 55, 382, 871 There were produced during the year and in bond July 1, 1868, gallons... 5, 459, 704 It would appear, also, if the records of this office exhibit fully all the spirits that were consumed and exported during the two years, that for the year 1869 the consumption and exportation exceeded that of 1868 to the extent of 51,155,770 gallons. These figures are presented not for the purpose of showing the true amount of production and consumption of distilled spirits, but to exhibit the fact that, prior to the law of July 20, 1808, the government did not collect a tenth part of its tax on distilled spirits. After July 20, 1868, and prior to June 30, 1869, a period of eleven months, the number of gallons of spirits shown by the records of this office to have been produced, and the tax paid thereon, was...... And of brandy from fruit during the same period... Total on which the tax was collected... Produced during the same period and remaining in bond Showing a production in eleven months of.. 36, 704, 046 871, 737 37, 575, 783 16,663, 838 54, 239, 621 Being at the yearly rate of 59,170,496 gallons. The following table shows the receipts for distilled spirits and fruit brandy for the four years ending June 30, 1869: These figures show simply the gallon tax. They do not include the capacity tax, nor the special taxes of distillers, rectifiers, liquor dealers, &c., which are elsewhere included in the receipts from spirits. The rate of tax for those years was two dollars per gallon until July 20, 1868, when it was reduced to fifty cents. It is not believed, however, that for the year ending June 30, 1869, the tax has been collected on all the spirits which have gone into consumption, or that all manufactured, on which the tax was uncollected, have been placed in bonded warehouse; and it is not doubted that the results of the current year will verify the accuracy of this opinion. RESURVEYS AND CAPACITIES OF DISTILLERIES. According to the plan of surveying distilleries originally adopted by this bureau, the average fermenting period is seventy-nine hours. There have been surveyed and operated, under the law of July 20, 1868, by this plan, 864 distilleries. These distilleries have a total mashing and fermenting capacity of 150,155 bushels of grain in twenty-four hours, and a spirit producing capacity of 473,666 gallons for the same period. The number of these distilleries now in operation is 444, with a producing capacity of 243,410 gallons each twenty-four hours when operating to their full extent. The number now under temporary suspension is 420, with a producing capacity of 230,252 gallons each twenty-four hours. Of these it is estimated that at least fifty per cent. will renew operations during the winter months. One hundred now running have resumed, with the approval of the government, since the 1st of September last. Having become convinced that the average fermenting period heretofore established was much too great, and was a means of fraud upon the revenue, I have ordered a resurvey of all distilleries in the United States. This work is now progressing upon the basis of forty-eight hours for the average fermenting period, which it is believed is sufficient time, though, under necessary circumstances and conditions, longer time may be given. By this resurvey the following result is obtained: The present capacity of the 864 distilleries, at 79 hours' fermentation, is 473,666 gallons for every 24 hours. By the resurvey, at 48 hours' fermentation, the capacity for each 24 hours is estimated at 677,342 gallons. The present capacity of the 444 distilleries now operating, at 79 hours' fermentation, is 243,410 gallons for every 24 hours. The capacity of the same, by the resurvey, on 48 hours' fermentation, is 348,076 gallons, or an increase of 104,666 gallons for each 24 hours. The per cent. of increase in capacity, by the new system of survey, is forty-three one-hundredths. While this action is believed to be just to the manufacturer, it is expected to work a large increase of the revenue by preventing evasions of the tax, and in many instances positive frauds. LEAKAGE. The practice of allowing spirits, when taken out of bond, to be regauged in order to deduct the difference, under the title leakage, between the quantity gauged when the spirits were received in bond and when taken out, has been a fruitful source of fraud. This office is in possession of facts showing that the government has been generally and almost systematically cheated by this practice. Measures have been taken which it is hoped will result in recovering some of the losses thus sustained. In view of these facts, and with a clear conviction that the act of July 20, 1868, abolished all provisions for leakage on spirits manufactured after that date, and that, by the proper construction, spirits previously made and placed in bond were no longer subject to deductions for leakage, this office issued an order, on the 14th of April last, disallowing leakage in all cases. It is believed that this regulation works no injustice to the dealer, while it saves the revenues from fraudulent depletion. THE LAW AS TO SPIRITS. In the absence of reliable data to fix the annual consumption of distilled spirits we are left to the necessity of conjecture. Were I to express an opinion on this subject, I should place the amount at not less than eighty millions of gallons. This quantity, if the tax were collected, would yield a revenue of not less than fifty-two millions of dollars, basing the estimate on the hypothesis that the entire tax on spirits equals sixty-five cents per gallon. The best consideration I have been able to give this subject has brought me to the conclusion that, after the present law taxing spirits has been brought into complete execution, and such amendments have been made as time and experience may demonstrate to be necessary to perfect the system, it will yield an annual revenue of sixty millions of dollars. In view, therefore, of these probabilities, it is submitted whether it will be wise or expedient for Congress to change its legislation in any essential particular as to the amount or as to the collection of the tax on distilled spirits, until further time shall be given to test the merits of the present law in all of its important provisions. TOBACCO. Referring to the comparative statements of receipts for different periods so far as the same relate to tobacco, I have to say that, during the first six months of the fiscal year 1869, the gain on cigars over the corresponding period for the year 1868 was fifty-six per cent. The loss on chewing and smoking tobacco for the same period was fifteen per cent.; the increased revenue from these articles under the law of July 20, 1868, not being realized until after January 1, 1869, while on cigars the appreciation commenced immediately after the passage of the law. The number of cigas returned for taxation during the last seven years is as follows: 1863, at an average tax of $2 37 per 1,000... 199,288,284 492,780,700 693,230,989 347,443,894 483,806,456 590,335,052 991,535,934 It will be seen that during 1866, when the tax was at a uniform rate of ten dollars per thousand, only 347,443,894 cigars were returned for taxation, while under the present law there were returned for the year 1869 nearly three times the quantity, with the tax at the uniform rate of five dollars per thousand. The amount of tax collected on cigars was for the fiscal year 1869 1866... Showing an increase of revenue on one article for 1869 over 1866, at half the rate of taxation, of.... TOBACCO STAMPS. $4,957, 679 3,474, 438 1,483, 241 Since assuming the duties of this office much time, labor, and expense have been bestowed upon the preparation of suitable stamps for the collection of the tax on tobacco. An entirely new set of stamps has been provided, greatly superior, it is believed, to any internal revenue stamps for tobacco previously issued by the government. A stamp in serial numbers has been adopted for plug tobacco, adapted for all packages of ten pounds and upwards. This stamp is prepared with a stub, and the regulations require, in its use, the name of the collector who sells it, and that of the manufacturer who uses it, to be written thereon, and consists of seven denominations, as follows: ten pounds, fifteen pounds with nine coupons, twenty, twenty-one, twenty-two, twentythree, forty, and sixty pounds. These stamps have been prepared with as much skill as possible by the engraver, with the view of protecting the government from imitations. The former stamp for plug tobacco, of ten pounds and upwards, is known to have been extensively counterfeited, greatly to the loss of revenue. The stamps for smaller packages of tobacco have also been changed, to prevent, as far as possible, fraudulent imitations. These improvements were found to be necessary, and have thus far aided in protecting the government to a large extent, though it has not been possible to wholly defeat the practices of counterfeiters. |