under a seventy and ninety cent rate. Such a result is undoubtedly referable in the main to the economic law that a reduction in the price of a commodity encourages its consumption (in this instance for industrial as well as stimulant purposes), and in a degree to the fact that a fifty-cent tax, with its accompaniment of stringent penalties, greatly diminished the incentive for illicit production. A wonderfully striking illustration of the strength of temptation for the evasion of the revenue created by the previous high taxation, which had little other reason than mere sentiment for its imposition, is also afforded by the fact that while the Government in 1872, under a tax of fifty cents per proof gallon, took cognizance of an average annual tax-paid consumption on the part of the people of the United States of 1·63 gallons per capita, it was only able to recognize in 1868, under a two-dollar tax, a similar average annual consumption of about 0·38 proof gallon per capita.
The second point of interest in connection with the foregoing tabular exhibit is the demonstration it affords of the very curious variations which occurred in the successive years from 1870 to 1894, inclusive, in the quantity of spirits that annually paid taxes to the Government, and which may be regarded as constituting an approximately accurate measure of the average annual per capita consumption of this commodity by the entire population of the country. The explanation of such changes is not difficult. They are in general unquestionably referable to immediately antecedent or contemporary changes in the business condition of the country, which in turn are determinative in a high degree of the popular ability to consume an article—like distilled spirits—of comparatively high cost and largely a luxury, popular tastes and habits and restrictive moral influences remaining constant. Thus, passing by the year 1870, in which there was a great increase (from altogether abnormal causes) in the number of gallons produced and made subject to taxation, the increase in the tax-paid product and in the average per capita consumption during the succeeding fiscal years 1872 and 1873, when the business of the country was fairly prosperous, was regular and not inconsiderable. The commencement of the next fiscal year (1874) was signalized by one of the most memorable financial panics in American history and a general prostration of business, from which last there was no decided recovery until 1879.
During all this period the domestic production of distilled spirits of which the Government took cognizance continued to decline, and the average per capita of consumption touched the exceedingly low proportions of 1·07 and 1·09 gallons in the fiscal years of 1878 and 1879 respectively. With a renewal of active and profitable business throughout the country in 1880, the
