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the inspection and gauging of spirits throughout the United States.

In 1830, May 29, the Senate directed a new comparison to be made of the weights and measures in use in the various customhouses.

This work was intrusted to Prof. Hassler, Superintendent of the Coast Survey. He found much discrepancy to exist. He procured accurate copies of the British standards, and upon his recommendations these were adopted as standards by the Treasury Department in 1832, and copies of them were then furnished to all the custom-houses.

To secure uniformity throughout the country, Congress, by a joint resolution, June 14, 1836, directed that complete sets of these a lopted standards be furnished by the Weights and Measure Bureau (which by law still remains under the charge of the Superintendent of the Coast Survey) to the various States.

The standard English gallon, of which ours is an exact copy, is defined as containing 58,372.2 grains distilled water at its maxi. mum density, weighed in air of the temperature of 62° F. and barometric pressure of 30 inches. (Extract from letter dated January 18, 1886, of F. M. Thorn, Superintendent of the U. S. Coast and Geodetic Survey, to Hon. c. S. Fairchild, Assistant Secretary of the Treasury.

See also definitiou of gallon, as relates to fermented liquors,

in section 21, act of March 1, 1879 [ý 3339a, p. 227].) Tax on distilled

SEC.3251, as amended by section 1, act of March 3, 1875 (18 Stat., 339). spirits. Repealed by [There shall be levied and collected on alí distilled spirits

48 act of produced in the United States on which the tax prescribed Aug. 28, 1894.

by law has not been paid, a tax of ninety cents on each proof gallon, or wine gallon when below proof, to be paid by the distiller, owner, or person having possession thereof before removal from the distillery bonded warehouse: Provided, That distilled spirits lawfully deposited in a distillery

bonded warehouse prior to the first day of August, eighteen Obsolete. hundred and seventy-two, may be withdrawn on payment

of the taxes thereon at the rate, within the time, and in the manner provided by law at the time of such deposit.)

The tax on such spirits shall be collected on the whole number of gauge or wine gallons when below proof, and shall be increased in proportion for any greater strength than the strength of proof spirit, as defined in this title; [and any fractional part of a gallon amounting to one half gallon or over in a cask or package shall be taxed as a gallon, and any fractional part of a gallon less than cne-half gallon in any cask or package shall be exempt from tax.] Every proprietor or possessor of, and every person in any manner interested in the use of, any still, distillery, or distilling apparatus, shall be jointly and severally liable for the taxes imposed by law on the distilled spirits produced therefrom, and the tax shall be a first lien on the spirits distilled, the distillery used for distilling the same, the stills, vessels, fixtures, and tools therein, the lot or tract of land whereon the said distillery is situated, and on any building thereon from the time said spirits are in existence as such until the said tax is paid.

Part in brackets repealed by act of Aug. 28, 1894. Fractional parts of a gallon. [Sec. 3251a.]

The stockholders of a corporation engaged in operating a distillery are “persons interested in the use of the distillery," within the meaning of section 3251, which declares that every proprietor and possessor, “and every person in any manner


Tax on distilled

interested in the use of” a distillery, shall be jointly and sever-
ally liable for the taxes imposed by law on the distilled spirits
produced therefrom.

(United States v. Wolters, et al., (1891) S. D. Cal., 46 Fed.
Rep., 509. United States v. Howard, 11 Int. Rev. Rec., 119.)
(3251a.] Sec. 48, act of August 28, 1894 (28 Stat., 509). That on
and after the passage of this act there shall be levied and

spirits. collected on all distilled spirits in bond at that time, or that have been or that may be then or thereafter produced in the United States, on which the tax is not paid before that day, a tax of one dollar and ten cents on each proof gallon, or wine gallon when below proof, and a proportionate tax at a like rate on all fractional parts of such proof or wine gallon : Provided, That in computing the tax on Fractional any package of spirits all fractional parts of a gallon, less gallons. than one tenth, shall be excluded. The Commissioner of Internal Revenue, wit

the ap- Stamps. proval of the Secretary of the Treasury, shall prescribe and furnish suitable stamps denoting the payment of the internal-revenue tax imposed by this section; and until such stamps are prepared and furnished, the stamps now used to denote the payment of the internal-revenue tax on distilled spirits shall be affixed to all packages containing distilled spirits on which the tax imposed by this section is paid; and the Commissioner of Internal Revenue shall, by assessment or otherwise, cause to be collected the tax on any fractional gallon contained in each of such packages as ascertained by the original gauge, or regauge when made, before or at the time of removal of such packages from warehouse or other place of storage; and all provi. Laws applicasions of existing laws relating to stamps denoting the pay. ment of internal revenue tax on distilled spirits, so far as applicable, are hereby extended to the stamps provided for in this section.

That the tax herein imposed shall be paid by the distiller of the spirits, on or before their removal from the dis. tillery or place of storage, except in case the removal therefrom without payment of tax is authorized by law; and (upon spirits lawfully deposited in any distillery warehouse, or other bonded warehouse, established under internal-revenue laws) within eight years from the date of the original Tax to be paid entry for deposit in any distillery warehouse, or from the within bigbt date of original gauge of fruit brandy deposited in special years. bonded warehouse, except in case of withdrawal therefrom without payment of tax as authorized by law.

Collection the tax.



Rates of tax on spirits under the different laws which hare been in force.

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Spirits distilled from whatever mate.

Months. rials.

$0.20 July 1, 1862 Mar. 7, 1864 18 Do.


Mar. 7, 1864 June 30, 1864 Spirito distilled from whatever mate. rials, except grapes.. 1. 50 June 30, 1864 Dec. 22, 1864

6 Spirits distilled from whatever materials, except grapes, to Apr. 1, 1865, and from whatever materials, except apples, grapes, and peaches, after Apr. 1, 1865

2.00 Dec. 22, 1864 July 20, 1868 43 Spirits distilled from grapes.

25 June 30, 1864 Mar. 3, 1865

9 Do...

.50 Mar. 3, 1865 July 13, 1866 17 Spirits distilled from apples or peaches. 1.50


17 Spirits distilled from apples, grapes, or peaches.. 2.00 July 13, 1866 Mar. 2, 1867

6 Spirits distilled from apples or peaches. 2.00 Mar. 2, 1867 July 20, 1868 17 Spirits distilled from grapes ... 1.00 .....do

17 Spirits distilled from whatever mate. rials.

50 July 20, 1868 June 6, 1872 48 Do.

70 June 6, 1872 Mar. 3, 1875 31 Do.

90 Mar. 3, 1875 Aug. 28, 1894 234 Do..

1. 10 Aug. 28, 1894




The art of July 1, 1862, went into operation September 1, 1862.

The act of June 30, 1864, provided that a tax of $1.50 per gallon should be levied and collected on all distilled spirits, except brandy distilled from grapes, from July 1, 1864, to February 1, 1865; on and after February 1, 1865, the tax should be $2 per gallon.

The act of December 22, 1864, provided that the tax of $2 per gallon should take effect January 1, 1865, instead of February 1, 1865.

So far as the other acts referred to relate to the tax on spirits, they went into operation immediately on their passage, except the following: Act of March 3, 1865, took effect April 1, 1865; act of July 13, 1866, took effect September 1, 1866; act of June 6, 1872, took effect August 1, 1872.

The act of July 20, 1868, made the tax 50 cents per gallon, to be paid by stamps; but there was imposed on the distiller by that act an additional tax on his product of $4 per barrel of 40 proof gallons, which made the tax really 10 cents per gallon additional, or 60 cents per gallon. There was also a tax on the grain-mashing capacity of the distillery, and a further requirement of reimbursement by the distiller of the sums paid by the Government for gaugers' fees and storekeepers' salaries, altogether amounting to about 7 cents per gallon of the aggregate product of spirits, thus making the whole tax charged upon the distiller about 67 cents per gallop.

By the act of June 6, 1872, taking effect August 1, 1872, the barrel and grain capacity taxes and the reimbursement provision were repealed, and the tax was made 70 cents per gallon, being only an actual addition of about 3 cents per gallon. By the act of March 3, 1875, increase was made to 90 cents per gal. lon. August 28, 1894, the tax was again increased to $1.10 per gallon.

Stamps first required in payment of tax on spirits by the act of July 20, 1868 (15 Stat., 125), and went into use November 2, 1868. (Circular of Sept. 17, 1868.)

The act of Congress approved July 20, 1868, imposing a tax on distilled spirits, is not unconstitutional. The tax imposed upon the distiller is in the nature of an excise, and the only limitation upon the power of Congress in the imposition of taxes of this character is that they shall be "uniform throughout the United States." (United States v. Singer, 15 Wall., 111; Same v. Van Buskirk, 15 Wall., 123.)


Theory of Government supervision over distilleries. (United States 1. Parker, Mason & Co. et. al., 21 Int. Rev. Rec., 245.)

Persons having interest in distillery liable. (United States v. Howard, 11 Int. Rev. Rec., 119.)

Lien can not be divested by transfer of title. (Milan Distilling Company r. Tillson, collector, 26 Int. Rev. Rec., 5.)

The soakage of spirits into distiller's packages, not being included in the basis of computation, is not a part of the quantity upon which the tax is levied, and, consequently, when extracted from the empty barrels, it is spirits on which the lawful tax bas not been paid, and is subject to taxation. (Corning & Co. v. Hunter, collector, U. S. Circuit Court of Appeals (1898); 86 Fed. Rep., 913; Vol. 1, Treas. Dec., p. 522, No. 19191.)

Stockholders in a distilling company individually liable for taxes due from the corporation. (15 Op. Atty. Gen., 559; 23 Int. Rev. Rec., 141.)

Municipal corporations engaged in distilling liable to tax. (Salt Lake City v. Hollister, collector, 118 U. S., 256; 32 Int. Rev. Rec., 158.)

Payment of tax on forfeited spirits by the marshal out of proceeds of sale (9 3158) discharges liability of sureties on distillers' warehousing bond for tax. (Cnited States v. Ulrici, 111 U.S., 38; 30 Int. Rev. Rec., 111.)

The laws imposing taxes on distilled spirits are coextensive with jurisdiction of United States. (V 3418, p. 144.)

Domestic whisky returned from abroad. (26 Int. Rev. Rec., 50; 27 ibid., 333.)

Domestic spirits exported from the United States subject to rate of duty equal to internal-revenue tax upon reimportation of same into this country. (See si 2500.)

Where there is presumptive evidence that it was the intention of the parties to return the spirits to United States, entry under section 2500 not allowed. (35 Int. Rev. Rec., 358.)

[For opinion of Attorney-General as to what constitutes an exportation within contemplation of law see references under 0 3330.)

Domestic spirits returned to the United States and not admitted under section 2500 as reimported spirits subject to internal-revenue tar on full quantity contained in packages at time of withdrawal from distillery warehouse.

The purchaser of spirits deposited in the distillery warehouse and sold subject to tax takes the property subject to the lien not only of the tax levied pursuant to the report of the distiller, but to any additional tax that may be assessed by the Commissioner under the acts of Congress. (Hartman v. Bean, 99 U.S. (9 Otto), 393; 25 Int. Rev. Rec., 141.)

“We find no provision in any part of the internal-revenue laws giving conntenance to the idea that a sheritt has the right to enter a bonded warehouse of the l'nited States and seize spirits held thereip for Government tax, as the property of the defendant, in an execution in his hands, even though he may offer to pay the tax.” (McCullough 1. Large et al., 30 Int. Rev. Rec., 166.)

Section 61, act of August 28, 1894, providing for exemption from tax of alcohol to be used in the arts or medicinal compounds, etc., was repealed by the following act of June 3, 1896:

“SEC. 1. That section sixty-one of an act entitled “ An act to reduce taxation, to provide revenue for the Government, and for other purposes,' which became a law August twenty-eighth, eighteen hundred and ninety-four, be, and the same is hereby, repealed.

“SEC. 2. That a joint select committee is hereby authorized, to consist of three Senators to be appointed by the presiding officer of the Senate, and three Members of the House of Representatives to be appointed by the Speaker of the House, which select committee shall consider all questions relating to the use of alcohol in the manufactures and arts free of tax, and to report their conclusions to Congress on the first Monday in December, eighteeu hundred and ninety-six.

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“Said joint select committee is authorized to sit, by subcommittee or otherwise, during the recess or session of Congress, at such times and places as they deem advisable; to summon witnesses, administer oaths, print testimony or other information, and to employ such stenographic, clerical, and other assistance as may be necessary, one-half of the expense to be paid from the contingent fund of the Senate and one-half from the contingent fund of the House of Representatives."

The grant in the act of August 28, 1894, was the right to a rebate on alcohol used “under regulations to be prescribed by the Secretary of the Treasury." There was no vested right unless the alcohol was used under such regulations. The failure of the Secretary to prescribe regulations will not supply the essential element.

The fact that the Secretary reported to Congress his failure to prescribe regulations and that Congress repealed section 61 of the act may be regarded as legislative construction. (Dunlap & Co. v. United States, 33 Ct. Clms., 135.)

The grant was conditional on use, in compliance with regula. tions to be prescribed, in the absence of which regulations the right did not so vest as to create a cause of action by reason of

the unregulated use. (Dunlap 1. United States, 173 U. S., 65.) (SEC. 32516.) Act of March 3, 1891 (26 Stat., 1050). An act making appropriations for the Department of Agriculture. manufacturer of sugar from sorghum may remove from distillery warehouses to factories used solely for the manufacture of such sugar from sorghum distilled spirits in bond

free of tax, to be used solely in such manufacture of sugar Withdrawal from sorghum; that all distilled spirits removed as herein free of tax of authorized shall be of an alcoholic strength of not less spirits used in the manufacture than one bundred and sixty per centum proof, and may be of sugar from sorghum.

removed, stored, and used in the manufacture of sugar from sorghum, and when so used may be recovered by redistillation in the sugar factory of such sugar manufacturer under such bonds, rules, and regulations for the protection of the revenue and the accomplishment of the purposes herein expressed as the Commissioner of Internal Revenue with the approval of the Secretary of the Treasury

may prescribe. Penalty. Any person who removes or uses distilled spirits in vio

lation of this provision, as for the regulations issued pur. suant thereof, shall, on conviction thereof, be fined not than one thousand dollars nor more than five thousand dol. lars for each offense, and the spirits and the premises on which such spirits are used shall be forfeited to the United

States. Adding sub. SEC, 3252. Every person who adds or causes to be added fictitious proof; any ingredient or substance to any distilled spirits before penalty. the tax is paid thereon, for the purpose of creating a ficti

tious proof, shall be fined not less than one hundred dol. lars nor more than one thousand dollars for each cask or package so adulterated, and imprisoned not less than three months nor more than two years; and every such cask or package, with its contents, shall be forfeited to the United

States. Tax on spirits SEC, 3253. The tax upon any distilled spirits removed removed without depositum ware from the place where they were distilled and not deposited

. honso; assess in bonded warehouse as required by law, shall, at any

time, when knowledge of such fact is obtained by the Commissioner of Internal Revenue, be assessed by him upon the distiller of the same, and returned to the collector, who

stances to create


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