minute. Whether you raise the necessary revenue to construct a road system from the internal-revenue tax on tobacco or not, the increased rate should be adopted and the tax on some necessary of life reduced a like amount. This admitted luxury, tobacco, bears a less tax than almost any other commodity in comparison with its value when sold on the market. Compared with any other luxury, one might say it is not taxed at all.

Two years ago I had occasion to review the tax on tobacco in the House, and I went very thoroughly into the question, and I am going to quote very freely from the remarks I then made, so the data I give will bear date as of 1911. What I then said is essentially true now. If I were to get a statement from the Treasury Department giving the amount of revenue that would be received under my proposed law for last year and the amount actually received last year, the comparative figures would be about the same. I desire to quote freely from the speech I then made.

The internal-revenue tax on fermented liquor is the same to-day that it was at the highest point during the Civil War. It has never been lowered 1 penny. It was doubled during the Spanish War, but when that war was over the tax was restored to the point of the Civil War. Our war tax on distilled spirits was for a short time reduced from an average of about $1.50 to 60 cents a gallon in 1868.

In 1872 it was raised to 70 cents a gallon; in 1875 it was again raised to 90 cents a gallon; and in 1894 it was raised to $1.10 a gallon, and the tax has remained at the last figure ever since 1894. The tax on

distilled liquors since 1894 has been about as high as the average tax during the Civil War. The tax on tobacco from its highest point during the Civil War has been lowered from year to year until it is now but a small fraction of that tax. The changes have been quite numerous, and I have prepared a table showing the rate and date of each law reducing the same. Smoking and chewing tobacco and snuff in each law are fixed at the same rate, there being one or two exceptions in relation to snuff, which I will not notice, so I will speak of them as tobacco. Cigars and cheroots have been taxed by each law at the same rate, and I will speak of them together as cigars. Cigarettes by each law have borne about one-half of the rate of cigars, so I will not especially mention them. I am discussing only the internal-revenue tax. I am not taking into consideration at all import or tariff duties.

Now, we will observe that from the highest point during the war, 40 cents a pound, tobacco has been reduced to 8 cents a pound. Cigars, at the highest point of the Civil War, were $8 to $40, according to the value, per thousand; they were reduced to $3 a thousand in 1883, and they have remained at that point all the time, except during the Spanish War, when they were slightly raised.

So it clearly appears, while the tax on whisky or distilled spirits. is about the same as that of the Civil War tax, and the tax on fermented liquors, beer, and ale is equal to that of the highest Civil War tax, our tax on tobacco has been reduced from time to time until it is but a fraction of the Civil War tax. Our present tax is not one-fourth of what it was during the Civil War and up to 1872; twofifths of what it was from 1872 to 1875; one-third of what it was from 1875 to 1879; one-half of what it was from 1879 to 1883.

While the foregoing table shows that our tax on tobacco is but a pittance compared with what it was during the 20 years following the Civil War, and the tax is insignificant compared with the tax on other luxuries, it does not give one a full idea of what a small ad valorem tax it really is.

If we were to increase our tax on tobacco 100 per cent, it would equal the tax in effect from 1879 to 1883; if we were to increase it 300 per cent, it would equal the tax in effect from 1875 to 1879; if we were to increase it 250 per cent, it would equal the tax in effect from 1872 to 1875; and if we were to increase it 400 per cent, it would then equal the tax in effect from 1864 to 1872.

Our present tax on a 5-cent cigar is 6 per cent of the retail price. Our present tax on a 25-cent cigar is 1.2 per cent of retail price. Our present tax on a 50-cent cigar equals six-tenths of 1 per cent at retail price.

Our tax on sugar represents about 36 per cent of the price of retail sugar in the city of Washington. The tariff is almost five times as much on a dollar's worth of sugar as the tax on a dollar's worth of smoking tobacco or on a dollar's worth of 5-cent cigars, 12 times as much as the tax on a dollar's worth of 10-cent cigars, 30 times as much as the tax on a dollar's worth of 25-cent cigars, and 60 times as great as the tax on $1 worth of 50-cent cigars.

When one of our millionaires buys a dollars worth of 50-cent cigars he pays the Government six-tenths of 1 cent revenue; when he buys a dollar's worth of 25-cent cigars he pays the Government a revenue of 1.2 cents; when he buys a dollar's worth of two-for-a-quarter cigars he pays the Government in revenue 2.4 cents. When his gardener buys a dollar's worth of nickel cigars or of smoking tobacco he pays the Government a revenue of 8 cents; when his washerwoman buys $1 worth of granulated sugar at the market price in Washington5 cents a pound-36 cents is extracted from her on account of our tariff on that necessary of life.

Snuff common, ordinary snuff-sells for about 75 cents a pound and pays a tax of 8 cents a pound, or a tax equal to 10 per cent of its retail price. Would it not be good, decent legislation to tax this not altogether delicate and refined luxury 36 cents per pound and thus raise our revenue $10,000,000 a year, and put the revenue where needed so badly-building of Government roads. Let the woman or man who wants to use snuff pay as large a percentage on the retail price as the poor woman does who has to buy sugar for herself and her children.

The Commissioner of Internal Revenue, at my request, in 1911 gave me in detail the amounts of smoking and chewing tobacco and snuff, cigars, and cigarettes that were withdrawn for consumption for the year 1910, so that I might determine what the revenues of the Government for the fiscal year ending 1910 would have been if the internal revenue law of 1875 and the internal-revenue law of 1879 were in force.

The internal revenue that we would have received for the amount of tobacco consumed during the fiscal year 1910 if the internal-revenue tax of April, 1879, had been in force would have been, in round numbers, $138,000,000, as opposed to $58,000,000 actually received under the existing tax. If the internal-revenue law of 1875 had been in force on the tobacco consumed during the fiscal year 1910, instead of the Government getting $58,000,000 it would have collected $178,000,000. It must be borne in mind that the tax in this law of 1879 was not reduced because it was too high, or because there was any demand for the reduction of it by anyone interested in the industry or by the consumer, but because the Government found it necessary to reduce its income-to check its increasing surplus. Why should we not restore the law of 1879 when we need the revenue so much for the construction of good roads?

The law of 1875 reduced the war tax 25 per cent; the law of 1879 further reduced the tax to about 50 per cent of the war tax. So there could be no excuse for the third reduction of 1883, which again reduced the tobacco tax to one-fourth of the Civil War tax, except the desire to still further reduce the revenue.

Mr. Beveridge, in his great speech on tobacco in the United States Senate in 1899, and to whom I am indebted for much information, said:

To bring home to us more clearly the grotesque littleness of our present tax compared with that of other countries, I have had computed a table which I shall insert in my remarks, showing what our revenue would be if we taxed tobacco as these other countries taxed tobacco.

For example, if we taxed tobacco at the same rate that England taxes tobacco, we would get $380,086,000. If we taxed tobacco at the rate that Austria taxes it, we would get $202,884,000 every year; at the rate that Hungary taxes it, $169,498,000 every year. If we taxed tobacco at the rate that France taxes tobacco, we would get $436,585,000 of revenue every year from that single source of taxation. If we taxed tobacco at the rate that Italy taxes tobacco, we would get $447,675,000 every year

Our internal-revenue tax on tobacco yielded last year $57,889,000. Over one-half of the tobacco consumed in Great Britain is imported from this country and bought in the open market, and when it reaches England it is taxed 74 cents a pound, which the consumer pays; we furnish France with over half of the tobacco consumed by the French people, and this tobacco pays a tax when it reaches France of 85 cents a pound; we furnish Italy with practically all the tobacco that country consumes, and when it reaches Italy it pays a tax of 93 cents a pound.

It might be well to observe that probably the French and English people pay no tax which is less felt and about which there is less complaint.

THE TAX ON TOBACCO WAS REDUCED IN 1879 AND AGAIN IN 1883 BECAUSE THE GOVERNMENT DID NOT NEED THE REVENUE.

It may be asked by those who do not recall the history of the reduction of the tax on tobacco in 1879 and 1883 why these reductions were made. I want to recall the fact that they were made in order to prevent a large surplus in our Treasury.

During the preceding years the income of the Government had been exceeding its expenditures by a large amount. The Government was collecting more revenue than it needed to meet its fixed charges, and the question was, What tax should the Government reduce in order to prevent a further accumulation?

Our protected interests objected to a reduction of duty on imports and were successful in preventing a reduction of the tariff. The internal-revenue tax on tobacco was adopted as the easiest and most satisfactory way of reducing our large and then growing surplus. This was the sole reason for the reduction made in this tax at both of these dates. It was not because the Government or Congress regarded the tax as too high; it was not because the consumers of tobacco were objecting to the tax; it was not because the farmers who raised the tobacco demanded or requested it. It was done in each instance solely for the purpose of cutting down the revenue. It was cut down for this express purpose, and this amounted to a notice to the world that it would be and should be restored whenever the Government's needs required. No man can complain if the Government restores this tax when it should be restored.

Who would complain if the tax of 1883 or 1879 on tobacco were restored?

The Hon. Green B. Raum, then Commissioner of Internal Revenue, protested against the reduction of the internal-revenue tax on tobacco in a special report to Congress. After stating the amount of money required by the Government and the amount of its revenue, he showed that we were collecting from $70,000,000 to $80,000,000 more than we needed, and then says:

It is an old and sound maxim that no more revenue should be raised than is necessary for an economical administration of the Government and a gradual reduction of the public debt.

Therefore it becomes obvious that a reduction of from seventy to eighty millions in the annual revenues of the country could be safely entered upon; and, in my judgment, such a reduction is urgently called for. I respectfully offer some suggestions for your consideration in this regard.

The great bulk of internal-revenue taxation is derived from distilled spirits-about nine-tenths of which are used as a beverage—malt liquors, tobacco, and cigars. These are not articles of necessary consumption, but are articles of luxury, the taxes upon which are readily paid by the consumers, and no one need consume them.

I am strongly of the opinion that so long as the principle of deriving part of the revenue of the Government from internal taxation is retained, these articles and the dealers therein are proper subjects for taxation. There is no demand on the part of consumers of these products for the remission of the taxes imposed upon them; there is no public sentiment calling for their repeal. On the contrary, the general current of public opinion seems to be in favor of their retention.

This is a strong argument against the reduction of the tax in 1879. His advice was not heeded, and the tax on tobacco was reduced from 24 to 16 cents a pound, and again in 1883 to 8 cents.

In the annual report of Gen. Raum for the fiscal year ending June 30, 1879, the report bearing date November 24, 1879, referring to the

reduction of the internal-revenue tax on tobacco in this report, he

says:

Experience has shown that no material advantage has inured to the consumer (of tobacco) in the reduction of price by reason of the reduction of the tax.

One of the arguments that has been raised against increasing the internal-revenue tax on this luxury is that it will injure the farmer who raises it. The opponents of the increase of this tax-those who do not desire the Government to obtain any other large source of revenue which will enable Congress to reduce the tariff-warn us solemnly and with great unction that if we raise the tax on tobacco the farmer will be greatly affected, if not ruined. To one who has not made a study of this question this argument may seem very plausible, but in fact nothing is further from the truth. History shows us over and over again that a large or small tax on a luxury of this kind has no effect on the price of the raw ingredients used in the production of such luxuries or on the amount consumed.

The history of tobacco since America was discovered, when tobacco came into use, shows conclusively that the tax on tobacco has nothing whatever to do with the price paid to the farmer. The average price of tobacco on the farm has been quite as high when our internal-revenue tax has been one, two, three, four, five, and six times as high as our present tax. Whenever we have made the heaviest reduction in our internal-revenue tax on tobacco the price of tobacco on the farm has not been increased a fraction of a cent.

In 1879 we took off 8 cents a pound. The farm price of tobacco prior to that time was 8 cents per pound. Did the farmer get this 8 cents that was removed from the internal-revenue tax? Not at all, though the tax removed was equal to the price of the farm product.

In 1883 we again reduced the internal-revenue tax on tobacco 8 cents per pound; the then prevailing price of tobacco on the farm was about 8 cents a pound. Did this increase the value of the tobacco on the farm? Not a particle. The farmer did not receive one penny advance, nor a fraction of a penny advance, for his tobacco.

The average price of tobacco from 1875 to 1883 was 7.7 cents per pound. The internal-revenue tax on tobacco for the first four years of this time was 24 cents a pound; for the last four years it was 16 cents a pound.

The average price of tobacco from 1885 to 1895 was 8 cents a pound, while the internal-revenue tax on tobacco was only 6 cents a pound as compared with 24 cents and 16 cents a pound from 1879 to 1883.

The average price of tobacco from 1895 to 1905 was 7.2 cents a pound, with an internal-revenue tax of only 6 cents a pound; the farm price was one-half a cent a pound less than from 1875 to 1883, when the tax was 24 and 16 cents a pound.

The average price of tobacco on the farm from 1900 to 1905 was 7.1 cents per pound.

It will be seen that the farm price during these five years was sixtenths of a cent less a pound than it was from 1875 to 1883, when the revenue tax was 24 cents and 16 cents a pound.

From 1865 to 1872 the tax on tobacco was 32 cents a pound, the highest tax ever placed by the United States on tobacco. During these years while this tax was in force, the average price of tobacco