subject has been ably and exhaustively discussed in Congress, notably in the Thirty-fifth, Forty-fifth. Forty-sixth and Forty-ninth. You, sir, and other distinguished members of the Post-Office Committee, as at present constituted, have on the floor of the House presented the learning which the history of the subject, political economy, or the experience of legislation can teach. It has been frequently demonstrated by the experience of this and other countries, that to enable one line by Government aid to carry more cheaply and thus to destroy competition, does not promote commerce. The most successful ocean steamship lines of the Continent-those of Hamburg and Bremen-receive no pay from the Government other than the moderate postage rates. The British precedent is not in point and would not be even if Great Britain did not offer her mail service to the carriers of the world. "Her aims are political and not commercial. She must have constant communication with the colonies, and she has spent large sums for this object. She must have an efficient and capable transport service for the protection of those colonies." The views of that Government are stated in Mr. Scudemore's report as follows:

*

"The question (mail subsidy service) can not be dealt with on commercial principles. For the sake of keeping up such communication with the Est as the nation requires, they must set commercial principles at defiance, and cost what it may the nation must either pay them what they lose thereby or forego the communication."

WHY ENGLAND MAY AFFORD TO PAY A BOUNTY.

Of course England may subsidize lines of ships to open up new markets for her surplus, because she freely exchanges commodities with such markets, and her policy is after establishing the commerce to steadily decrease the subsidy. If the policy of giving bounties to promote commercial relations with other countries be ever adopted again after the failures in our history, it would seem that its adoption should be deferred until closer commercial relations with those countries can be maintained, and are not antagonized by an opposing system of laws. Commerce in the very essence of its meaning is exchange. It is not to sell and never to buy. The individual or nation does not exist that will buy all one has to sell for cash with no reciprocal return in profitable exchange. Cargoes out and cargoes back are needed for the creation of a merchant marine. The cargo out will not be bought unless we buy in exchange, and it will be bought if we are willing to trade. Until these conditions come,subsidies may maintain a line so long as the subsidy lasts and then the line will go down for want of legitimate trade. If, however, the subsidy policy is to be pursued, I venture to suggest the Mexican method. When a ship arrives with a cargo the tariff tax is divided with the ship owner, the latter taking 50 per cent. of the duty on the goods he brings in payment on account of his subsidy. The trading-ship is thus enabled to remit to the consignor, if he will employ his ship, a portion of the government duties, and thus the ship owner is indeed enabled to promote trade with foreign countries directly. An improvement upon the Mexican method in the interest of the promotion of trade and of the building of ships to conduct it, would be to enable the owners and the builders to receive at the port of consignment in that country still a greater proportion of the duties imposed by the government upon the cargo.

In this way the Mexican ship would be enabled to get her cargo, charge a fair profit for carriage, and sell to the Mexican consumer at a price at which he could conveniently buy, take out a cargo for exchange, and repeat the process, to the cultivation of much closer commercial relations with foreign countries, and to the maintenance of Mexican shipping. Of course, the Mexican method is somewhat cumbersome, and the same end might be reached without indirection and without the payment of a subsidy by the removal or reduction of the Mexican tariff on imports.

OUR BUSINESS RELATIONS WITH SOUTH AND CENTRAL AMERICA.

While on the subject of closer commercial relations with South and Central America, for the promotion of which the bill under consideration is doubtless intended, I call your attention to some interesting figures. Our total trade with Brazil for the year ended June 30, 1887, was as follows:

Our total trade with Central America for the same period was as follows:

Our total trade with the United States of Colombia was as follows:

Total imports...........................

Total exports.

Of the imports we imposed no tariff upon.....

We did impose a tariff upon....

Our total trade with the Argentine Republic was as follows:

$4,771,303

These illustrate the universal rule by which the limitations upon commercial relations and the carrying trade with all the countries of Central and South America may be measured. A comparison of the amount brought into the country free of tariff with what we send in exchange is instructive. It should be noted that of the Brazilian imports free of duty, the large proportion value is the item of coffee, after deducting which the lesson on exchange of trade as bearing on closer relations with all these countries is the same, and the universal one.

I have the honor to be, sir, your obedient servant,

Hon. JAMES H. BLOUNT,

DON M. DICKINSON,

Postmaster-General.

Chairman of the Committee on the Postoffice and

Post-Roads, House of Representatives.

CHAPTER XXXIV.

THE FREE WHISKEY POLICY.

I.

A CAREFUL ANALYSIS OF THE MORAL EFFECT OF INTERNAL TAXES UPON THE CONSUMPTION OF INTOXICATING SPIRITS.

[From the New York Evening Post.]

"The tax on whiskey by the Federal Government, with its suppression of all illicit distillation and consequent enhancement of price, has been a powerful agent in the temperance reform, by putting it beyond the reach of so many," said Mr. Blaine in the "Paris Message." In this statement the "uncrowned king" summed up one of the most striking features of our national development during the last quarter of a century. The subject is so important that it deserves examination, and fortunately the Bureau of Statistics a year and a half ago made an investigation which furnishes all the facts desired.

For nearly fifty years before the war the manufacture of distilled spirits in the United States had been free from all specific taxation or supervision by the Federal Government, and being produced mainly from Indian corn, whiskey was sold at a very low price. The average market price in this city was only twenty-four cents per proof gallon, and common whiskey was sold in the saloons for three cents a drink. The consumption was naturally enormous, and the resulting demoralization of the people terrible. All through the farming districts the whiskey jug, which could be filled at the village store at the rate of only a quarter of a dollar for a gallon, was doing its work, and delirium tremens was a common scourge.

The establishment of the internal revenue system early in the war, with its heavy tax on whiskey, and the consequent great increase in the price of liquor, immediately showed its effect. In 1840 the consumption of distilled spirits had been 43,060,884 gallons; in 1860, under the free-whiskey regime, it had grown to 89,968,651 gallons. The first tax imposed was 20 cents per gallon in 1862, which was increased to $1.50 in 1864 and $2 in 1865, and finally settled at 90 cents in 1875. The check placed upon the consumption of liquor by the tax was at once visible, the total falling from 89,963,651 gallons in 1860 to but 79,895,708 in 1870. The more vigorous enforcement of the law against illicit distillation after 1870 still further reduced the amount of liquor drunk, and in 1886 the consumption was only 72,261,614 gallons.

This reduction in total consumption for the whole country by no means represents the actual diminution relatively to the population. In 1840, under free whiskey, the total had been 43,060,884 gallons for a population of 17,069,453, which was an average of 2.52 gallons per capita. In 1860, still under free whiskey, the total had been 89,968,651 gallons for a population of 31,443,321, or an average of 2.86 gallons per capita. In 1886 the consumption was only 72,261,614 gallons, although the population had nearly doubled since 1860, and was then estimated at 59,000,000, so that the average per capita was only 1.24 gallon. "The amount of whiskey consumed in the United States per capita to-day is not more than 40 per cent. of that consumed thirty years ago," said Mr. Blaine in the "Paris Message,” and the figures above cited show that he was right.

The tax on whiskey was originally levied "purely as a matter of finance," to quote Mr. Ernest H. Crosby's happy phrase, but it was soon appreciated that there was a "moral side" to the question. So long ago as 1868 Senator Edmunds rebuked a colleague who had suggested that it was "a question of expediency, which has nothing to do with morals," and insisted that, even then, it was "too late to advance the doctrine that when we are dealing with subjects of taxation, we have not a right to consider questions of morals as connected with the operation of such taxation." At that time Mr. Edmunds declared that "the true principle upon which taxation ought to be imposed is to put the highest possible rate on articles of luxury, and what can be more so than this?" And the Republican party heartily endorsed this position.

The oligarchy of slave-holders before the war demanded of the Democratic party that it should break its pledges and repeal the compromise which it had declared to be a final settlement of the question at issue. The oligarchy of the protected interests is equally remorseless in its demands upon the Republican party today. The Republicans have always maintained that the question of morals must be kept in mind when taxation was under consideration, and have held that the fact that the tax on whiskey operated as a "powerful agent in the temperance reform" was a sufficient argument against the repeal of this levy on a luxury, "the production of which," in Mr. Edmunds's words, "it would be a great advantage to this country if it could be discouraged instead of encouraged." Now the protected interests insist that the tax on whiskey must go, rather than the taxes on the necessaries of life, and the Republican party in national convention yields to the demand. Whether a majority of the voters are ready to deluge the country with cheap whiskey remains to be seen.

II.

HOW THE NEW POLICY OF THE REPUBLICANS WOULD BRING THE PRICE OF WHISKEY DOWN TO TWO GLASSES FOR FIVE CENTS.

[From the New York Times,]

The Republican platform declares for "the entire repeal of internal taxes rather than the surrender of any part of our protective system." That this means the removal of all national tax on whisky rather than the reduction of any of the existing duties on imports is made plain by the context of this declaration. The position taken is this: The party would deal with the surplus by reducing internal taxes, by entering upon a policy of extravagant expenditures, by increasing duties so as to check imports, and finally by sweeping away all internal taxes rather than reduce duties on raw materials and the necessaries of life. The reduction of internal taxes would not suffice to get rid of the surplus. The sentiment of the country is so opposed to a policy of extravagant expenditures that Congress will never venture upon it. The tendency of opinion has been so long and so strong in favor of a revision and a reduction of the tariff that there is no chance that a proposition to increase duties would be countenanced. Hence, as the surplus continued and the other devices for reducing it failed, the Republicans would be brought face to face with their last resort, and if they fulfilled their promise they would be compelled to try the abolition of the whisky tax.

What would be the effect of such a policy if carried out? The only power the National Government now has for aiding in the restriction of the liquor traffic and thereby promoting the cause of temperance is the power to lay a tax on alcoholic beverages. This tax was originally imposed in time of war on the principle of taxing luxuries or those things the consumption of which should be restrained rather than encouraged, and solely for the purpose of raising revenue, but it has proved the most potent agency for restricting the sale and consumption of whisky that has been in existence. Fully two-thirds of the present price of the commonest brands of whisky is due to the Government tax, and the suppression of illicit distillation and of a wide diffusion of production is wholly due to the Government

supervision made necessary for the collection of the tax. Of course the removal of the tax would greatly cheapen the price of whisky, and as Mr. BLAINE said in his "Paris message "would "increase its consumption enormously." That it would have that effect no man of sense and veracity can for a moment deny. Mr. BLAINE is not a specially trustworthy authority in matters of statistics, but his statement that the amount of whisky consumed in this country to day is "not more than 40 per cent. per capita of that consumed thirty years ago" is borne out by other evidence. His further statement that the Government tax and supervision has been a powerful agent in temperance reform" is beyond question.

Suppose this tax removed and this powerful temperance reform agent abolished, how would it affect efforts at restriction or prohibition by State legislation? In any State, or in any county under a local option system, in which the people had succeeded in establishing a prohibition policy, the difficulty of enforcing it would be increased many fold. Cheap whisky would make its way much more easily than dear whisky, and it would be impossible to prevent clandestine sales. Where the license system prevails the present fees are acknowled to be very inadequate for purposes of restriction, but with the tax removed they would be much less effective than the tax alone would be if there were no license laws at all. High license itself would be practically useless, for the highest annual fees proposed, or likely to be prescribed, bear no proportion to the added cost which the Government tax now imposes upon a year's sales. State taxation, if heavy enough, might be made to operate with some effect upon sales in open bar rooms, but there would be no co operation in legislation between neighboring States, and cheap whisky would make its way everywhere with pernicious effect.

The worst blow to the cause of temperance would come from the unregulated and uncontrollable sale of liquor outside of drinking places. With whisky at twenty or twenty-five cents a gallon from the distillery, it would be within the reach of all, and by the bottle, the jug, the keg, and the barrel it would invade every community and pervade every home not guarded by rigid principles and carefullytrained habits. Its evil influence and direful consequences would be multiplied at once, and the liquor power, which is now so formidable, might become irresistible. The people have not heretofore realized how much the restriction of the liquor traffic and the progress of temperance reform have owed to the Government tax upon alcoholic beverages for nearly a generation, but the Republican platform has sharply reminded them of it, and they are beginning to think of its effects and the possible consequences of removing it. These consequences are offered for what? As a means of preventing a reduction of duties on materials that would increase our industries and cheapen production, and on such articles of necessity or comfort as clothing and blankets.

III.

HOW THIS RESULT WILL CERTAINLY BE EFFECTED UNDER THE POLICY PROPOSED AT CHICAGO BY THE REPUBLICAN CONVENTION.

[From the Chicago Tribune, (Rep.)]

Wipe out the internal revenue altogether, what would be the result then? Down would go whiskey to twenty five cents a gallon, and by retail to three cents a glass, as it was in anti-war days, when the best Monongahela whiskey could be had for five cents a swig, and common whiskey for three cents; and all the evils of those days would be let loose again with redoubled force, because money with which to buy liquor is so much more plentiful now.

There are plenty of men living who can remember the 25-cents-a-gallon whiskey days. They can remember how the farmers came to the towns, some with jugs, some with kegs, and some with barrels. Some would give excuses that they were afflicted with all the diseases to which flesh is heir, and which could only be cured by whiskey. They had malaria, and might have snake bites to cure. Their drinking water was so poor they could not use it without mixing whiskey with it.