ealed; and from that time
until 1862 no specific tax was levied on liquors. During this period of
thirty-five years the average market price of whiskey was 24 cents a
gallon, sometimes dropping as low as 14 cents. Spirits were so cheap
that a "burning fluid," consisting of one part spirits of turpentine to
four or five parts alcohol was used in the lamps of nearly every
household. Moonshining, of course, had ceased to exist.

Then came the Civil War. In 1862 a tax of 20 cents a gallon was levied.
Early in 1864 it rose to 60 cents. This cut off the industrial use of
spirits, but did not affect its use as a beverage. In the latter part of
1864 the tax leaped to $1.50 a gallon, and the next year it reached the
prohibitive figure of $2. The result of such excessive taxation was just
what it had been in the old times, in Great Britain. In and around the
centers of population there was wholesale fraud and collusion. "Efforts
made to repress and punish frauds were of absolutely no account
whatever.... The current price at which distilled spirits were sold in
the markets was everywhere recognized and commented on by the press as
less than the amount of the tax, allowing nothing whatever for the cost
of manufacture."

Seeing that the outcome was disastrous from a fiscal point of view--the
revenue from this source was falling to the vanishing point--Congress,
in 1868, cut down the tax to 50 cents a gallon. "Illicit distillation
practically ceased the very hour that the new law came into operation;
... the Government collected during the second year of the continuance
of the act $3 for every one that was obtained during the last year of
the $2 rate."

In 1869 there came a new administration, with frequent removals of
revenue officials for political purposes. The revenue fell off. In 1872
the rate was raised to 70 cents, and in 1875 to 90 cents. The result is
thus summarized by David A. Wells:

"Investigation carefully conducted showed that on the average the
product of illicit distillation costs, through deficient yields, the
necessary bribery of attendants, and the expenses of secret and unusual
methods of transportation, from two to three times as much as the
product of legitimate and legal distillation. So that, calling the
average cost of spirits in the United States 20 cents per gallon, the
product of the illicit distiller would cost 40 to 60 cents, leaving but
10 cents per gallon as the maximum profit to be realized from