NAS Committees Advisory to Government 1863-1913

The National Academy of Sciences’ Committee on Proving and Gauging Distilled Spirits and Preventing Fraud

In the early history of the United States excises or internal revenue taxes were extremely unpopular on account of their association in the minds of the people with the despotism and extortions of colonial times. Nevertheless, the Government found it necessary to lay such a tax in 1791, which led to resistance, and the well-known Whiskey Insurrection of 1794. In Jefferson’s administration all internal revenue taxes were abolished, but it was found necessary to revive them again in connection with the War of 1812. After that war they were once more discarded and no excises were collected subsequently until the outbreak of the Civil War. The enormous demands then made on the treasury necessitated the establishment of a vast series of internal revenue taxes, which were levied on property and activities of every description. Nothing was too great or too small to be pressed into service and the revenue collected in this way in the year 1866 amounted to more than $3,000,000.

Among the articles subjected to taxation at this time were distilled spirits manufactured in the United States. At an earlier date only imported spirits were taxed and a simple system of inspection sufficed, but the collection of a high internal revenue tax on all domestic spirits necessitated much greater vigilance, a better form of proving instruments and a more elaborate system of inspection. By a singular coincidence the system of inspection employed for fifteen years prior to the Civil War was based on the recommendations of Professor Alexander Dallas Bache, the first President of the Academy. This system had now to be modified to adapt it to the new conditions.

On February 15, 1866, the Secretary of the Treasury Hugh McCulloch addressed a letter to Joseph Henry, then acting President of the Academy, requesting that a committee be appointed to report to the department on the best method of proving and gauging alcoholic liquors, with a view to the establishment of such rules and regulations as would insure to a uniform system of inspection of spirits subject to duties. Professor Henry accordingly appointed a committee to consider the subject, assuming the chairmanship himself and designating as his associates J.E. Hilgard and M.C. Meigs. At the same time, F.A.P. Barnard, John Torrey and B.F. Criag were requested to prepare tables of standard mixtures of alcohol and water. Dr. Craig was not a member of the Academy.

The chief difficulty regarding the system recommended by Professor Bache in 1848 was that the Tralles hydrometer, which was the one then proposed, gave percentage in alcohol, instead of percentages in “proof spirit,” or a mixture of 50 per cent alcohol and 50 per cent water, upon which all commercial negotiations were based. While the former could readily be converted into the latter in most cases, it would lighten the labors of the inspectors if their hydrometers gave readings in proof spirits. Tralles’ hydrometer, furthermore, was not adapted for quick observations within one per cent, which it was necessary, should be recorded, on account of high duty; or for gauging large quantities of spirits out-of-doors in inclement weather, or under other unfavorable circumstances. It was also found that the tables used by the Treasury Department were not entirely correct.

In view of these circumstances, the committee set itself the laborious task of finding a more convenient hydrometer, and of preparing new tables. Its report was submitted on July 21, 1866. The recommendations were that following the custom of the trade, the strength of distilled spirits should be estimated according to their equivalent in proof spirits, and be expressed in terms of percentage of proof spirits rather than by the use of the terms “above proof” and “below proof”; that a special form of hydrometer designed by Wm. G. Tagliabue of New York, be used instead of the ordinary Tralles instrument, and that the Government should test these hydrometers and issue them to the inspectors free of expense. The hydrometers, which were figured in the report of the committee, were to be made in series of five each, so graduated as to cover all percentages from pure alcohol to pure water. The tables which accompanied the report cover 25 pages. They give real and apparent specific gravities and percentages for all mixtures of alcohol and water at different temperatures from zero to 100° Fahrenheit, together with other data of similar character. In addition, the report has appended to it a “Manual for inspectors of spirits,” consisting of tables of the hydrometer at temperature between 0° and 100° F., and instructions for their use. This part of the report covers thirty-four pages.

The committee was not content to restrict its tables to the temperature limits of the earlier ones, but carried on an elaborate series of experiments to ascertain the proper readings of hydrometers at temperatures as low as zero Fahrenheit. This was necessitated by the fact that spirits were sometimes received at warehouses in the Northern States in winter time at temperatures far below freezing and often approaching the zero of the Fahrenheit scale. These experiments were carried on, by request of the Treasury Department, at the laboratory of the Surgeon-General’s Office, and were conducted by Dr. B.F. Craig.

The committee also considered various forms of hydrometers and decided to recommend once which, in its opinion, was best adapted for the revenue service. Dr. John Torrey and Dr. F.A.P. Barnard made especially accurate mixtures of water and alcohol and prepared and marked a series of delicate floats which were afterwards used by Tagliabue in graduating the hydrometers which he manufactured for the Treasury Department.

The whole report, covering 39 printed pages, was, as already mentioned, submitted to the Secretary of the Treasury on July 21, 1866. In the Annual Report of the Academy for 1866 Joseph Henry said regarding the work of the committee:

“…The duty devolved upon the members of the committee was one of much labor and responsibility. The tables accompanying the report are of much value, and will be referred to by all persons engaged n pursuits requiring a knowledge of specific gravity and volume, at various temperatures, of alcoholic spirits of different strength; they are not only indispensable to the distiller, rectifies and gauger of spirits, but will prove extremely useful in the laboratory of the chemist, and in many processes of manufacture involving the use of alcohol.” [Rep. Nat. Acad. Sci. for 1866, p. 3]

At an earlier date, however, on April 19, 1866, the committee recommended to the Treasury Department the adoption of a definition of “proof spirit,” and this definition was incorporated I the internal revenue law, together with the provision that the Secretary of the Treasury should procure suitable hydrometers and other instruments. At the beginning of the fiscal year 1866-1867, therefore, the Treasury Department was in possession of the information necessary for the establishment of a new system of roving and gauging spirits and the authority for carrying it into effect. In his report for 1867 the Commissioner of Internal Revenue remarks on this subject as follows:

“For several years there had been frequent complaints of a lack of uniformity in the inspection of distilled spirits in different sections of the country. The accounts of revenue officers were disturbed, and the interest of shippers prejudiced by difficulty in procuring their proper allowance for leakage. The Treasury, too, was frequently, it is presumed, unfavorably affected by an excess of such allowance. The secure, therefore, a uniform and correct system of inspection and gauging of spirits subject to tax throughout the United States, the Secretary of the Treasury, in February last, adopted the hydrometer of Mr. Tagliabue, of New York. This hydrometer was approved by a committee of the National Academy of Sciences, consisting of Professor Henry, General Meigs, and Professor Hilgard, and has been furnished, with an accompanying manual prepared and printed for that purpose, to collectors of the Internal Revenue for the use of duly appointed inspectors in their several districts. The caliper and head-rod system of gauging has been adopted likewise, and a manual of instructions n their use furnished revenue officers. The hydrometers are furnished by the manufacturer I sets of five, at a charge of eighteen dollars per set, and in sets of three at thirteen dollars. Seven hundred and thirty-four sets have been received from the manufacturer at a cost of $11,826.50, and about five hundred sets have been distributed to officers. Inspectors supply themselves at their own charge with the necessary gauging instruments.” [Rep. Comm. Of Int. Rev. for 1868, p. xxxiii.]

Thus the work of the committee relative to the proving and gauging of spirits was completed, but the question of the prevention of fraud still remained for consideration.

There was a widespread belief at the time, based on the strongest evidence, that the Government was being deprived of a vast amount of its revenue through frauds practiced on an enormous scale, either by the distillers separately or in collusion with the inspectors, and many thought that these could be stopped by making the capacity of the distilleries the basis of the tax. The Commissioner of Internal Revenue, E.A. Rollins, was convinced that this idea was erroneous, but he was of the opinion that measurement of the output by means of meters attached to the stills would aid the inspectors in detecting gross misstatements of the amount of spirits manufactured, besides having incidental advantages. He remarks in his report for 1867 regarding the law as follows:

“It does not undertake to levy the tax in accordance with any real or estimated capacity, for this has always been regarded as impracticable; but it does endeavor to give to revenue officers information from which the possible product may be approximately estimated, so that fraud may well be presumed if the product returned is unreasonably small….Could the production of distilleries be ascertained for the purpose of taxation by some mechanical means, and were it impracticable for distillers to deceive officers or to collude with them, it is evident that much of the cost of supervision would be avoided, while efforts to discover illicit spirits after they have left their place of production would no longer tend to embarrass and discourage honest dealers. It was for this reason that the Department was persuaded nearly two years ago to invite the co-operation of the National Academy of Sciences, and a committee of the Academy, consisting of Professors Joseph Henry and J.E. Hilgard, gentleman of eminent ability and wide reputation, has given the subject the full consideration which its importance deserves.” [Rep. Comm. Int. Rev. for 1867, pp. xxvii, xxviii.]

The committee, on its part, believed that an instrument could be devised that would measure the output of the stills. In its report of July 21, 1866, the committee remarks:

“The committee confidently believe that a spirit meter can be constructed which will register the quantity of spirits passing from a still, and afford a reliable check on the distiller and inspector.

“They recommend that an instrument based upon the principle of Worthington’s water-meter be constructed and submitted to trial.

“Of various inventions submitted for measuring an registering the quantity of spirits passing from a still, the only one which has commended itself for simplicity and certainty of action, is that of Cox & Murphy, of Montreal, which the committee likewise recommend to be submitted to actual trial in a distillery, for several months, under the supervision of an officer of the revenue.” [Rep. Nat. Acad. Sci. for 1866, p. 56]

“The desire of the Internal Revenue Department to possess a reliable spirit-meter having become generally known through its officers and agents, a large number of inventions were brought forward, from time o time, between June, 1866, and January, 1868, and referred to this committee. The examination of the various plans and models, and the correspondence incident thereto, involved the expenditure of much time and labor, the constant aim being to develop any promising plans by pointing out defects, and making suggestions of improvement when practicable.” [Rep. Nat. Acad. Sci. for 1867, p. 12]

The committee examined in all some 18 different meters and submitted written reports on most of them. This work occupied a year and a half, the last report being submitted on January 2, 1868. The meter of Cox and Murphy did not, in the end, prove satisfactory, and the committee finally turned to that of I.P. Tice, of New York, which was recommended to the Treasury Department for adoption on April 3, 1867. On August 1, 1867, Joseph Henry and J.E. Hilgard read before the Secretary of the Treasury and the Commissioner and Deputy Commissioner of Internal Revenue a statement relative to modes of defeating the operation of spirits meters. On October 9, 1867, they submitted rules for the use of the Tice meter, and by the end of that year 19 such meters had been attached to distilleries in New York. Early in 1867 General Meigs was obliged to withdraw from the committee on account of ill health. He was replaced by L.M. Rutherford, ho in turn was prevented by sickness from taking an active part in the work of the committee. The labors of 1867 fell, therefore, entirely upon Henry and Hilgard.

No sooner had the adoption of the Tice spirit meter been decided upon than difficulties began to arise regarding it. The manufacturer, through sickness and unforeseen mechanical difficulties, failed to deliver the meters as promptly as agreed upon, and he also claimed that on account of the small number ordered the cost of manufacturing them was necessarily greater. The Treasury Department thereupon increased the order to 100 meters. As already mentioned, a number of these instruments were attached to distilleries in New York late in 1867 and early in 1868. They had scarcely been put into operation than a storm of opposition arose from the distillers, and on February 3, 1868, a joint resolution of Congress was approved appointing a commission of five persons who, in connection with the committee of the Academy, should again immediately examine all meters presented to them for consideration and report to Congress in detail he results of their examination, together with such recommendations as would in their opinion promote the interests of the Government. The resolution also directed that all work on the construction of meters under direction of the Treasury Department should be suspended until the report was submitted, and that no further contract for such instruments should be made under the act of March 2, 1867.

The introduction of this resolution led to an extended and acrimonious discussion on both houses of Congress, a discussion which took a wide range and even involved the question of the integrity of the highest officers of the Government. Those who opposed the measure did so on the ground that no form of meter would protect the Government from fraud, or that scientific men were not qualified to pronounce on the practical utility of such instruments as applied to distilleries, or that the new committee of the Academy, or that to enact the second section of the resolution, which prohibited the Treasury Department from attaching any more meters to distilleries until the Commission reported, would open the door to greater frauds. Those who favored the resolution pointed out that the Tice meter had proved effective as far as tried, but that other devices had been brought forward after the adoption of the former had been decided upon, which while operating on the same principle, might give more accurate results, or operating on other principles might give a better indication of the amount of spirits produced or producible. They considered that the inventors of these devices were entitled to a hearing and that the distillers should not be compelled to pay for the Tice meters while it was still uncertain whether they might not be soon discarded for more effective ones. In the end the resolution prevailed and was approved.

Upon the passage of this resolution, the manufacturer whose meters had been adopted by the Treasury Department, I.P. Tice, discharged his employees and closed his manufactory. The report of the new commission was submitted in March, 1868, and was again favorable to the Tice meter, which the committee of the Academy had already recommended. No action was taken thereon, however, until July 20, 1868, when the Commissioner of Internal Revenue was authorized to adopt and prescribe for use such meters as he should deem necessary. He once more adopted the Tice meter, and Mr. Tice was persuaded to reopen his manufactory and construct the instruments required. Though he employed some 125 workmen to construct the meters and others to attach them to the distilleries, only eleven were so equipped in November, 1868. The distillers resisted the use of the meters as far as possible, and some closed their distilleries to prevent the application of the instruments.

The mater had progressed thus far when the Commissioner of Internal Revenue began to entertain suspicions as to the real utility of the meter and to resolve his doubts he, accordingly, appointed an expert commission to make a series of practical tests regarding it in order to ascertain whether its use should be continued.

Who these experts were, or what was the nature of their finding is not disclosed in the reports of the Commissioner of Internal Revenue, but it is evident that the latter was unfavorable to the use of the meter, for we read in the report for 1871 that “the period within which distillers were required to procure meters was extended from time to time until the 8^th day of June, 1871, when Circular No. 96 was issued discontinuing their use.” [Rep. Comm. Int. Rev. for 1869, pp. xvi, xvii.]

Thus, at the end of nearly five years’ agitation of the subject the Government abandoned its project of utilizing meters to gauge the capacity of distilleries, but found itself in possession of improved instruments for proving spirits. Of the latter, which were recommended by the committee of the Academy the Commissioner of Internal Revenue said in 1871, “These instruments distributed under the present system of inspection, seem to give general satisfaction, and their accuracy and uniformity have relieved the tradeoff the embarrassments resulting from errors in gauging.” [Rep. Comm. Int. Rev. for 1871, p. vi.]