of application. At least five methods are distinguished. In the most
complete and regular form a vote is taken every year in all localities
whether there shall be licences or not in the ensuing year and is
decided by a bare majority. A second method of applying the general vote
is to take it at any time, but not oftener than once in four years, on
the demand of one-tenth of the electorate. A third plan is to apply this
principle locally and put the question to the vote, when demanded, in
any locality. A fourth and entirely different system is to invest the
local authority with powers to decide whether there shall be licences or
not; and a fifth is to give residents power to prevent licences by means
of protest or petition. The first two methods are those most widely in
force; but the third plan of taking a local vote by itself is adopted in
some important states, including New York, Ohio and Illinois. Opinions
differ widely with regard to the success of local veto, but all
independent observers agree that it is more successful than state
prohibition, and the preference accorded to it by so many states after
prolonged experience proves that public opinion broadly endorses that
view. Its advantage lies in its adaptability to local circumstances and
local opinion. It prevails mainly in rural districts and small towns; in
the larger towns it is best tolerated where they are in close proximity
to "safety valves" or licensed areas in which liquor can be obtained;
the large cities do not adopt it. On the other hand, it has some serious
disadvantages. The perpetually renewed struggle between the advocates
and opponents of prohibition is a constant cause of social and political
strife; and the alternate shutting up and opening of public houses in
many places makes continuity of administration impossible, prevents the
executive from getting the traffic properly in hand, upsets the habits
of the people, demoralizes the trade and stands in the way of steady
improvement.
_Public Dispensaries._--This entirely different system of controlling
the traffic has been in general operation in one state only, South
Carolina; but it was also applied to certain areas in the neighbouring
states of North Carolina, Georgia and Alabama. The coloured element is
very strong in these states, especially in South Carolina, where the
coloured far exceeds the white population. The dispensary system was
inaugurated there in 1893. It had been preceded by a licensing system
with local veto (adopted in 1882), but a strong agitation for state
prohibition brought matters to a crisis in 1891. The usual violent
political struggle, which is the only constant feature of liquor
legislation in the United States, took place, partly on temperance and
partly on economic grounds; and a way out was found by adopting an idea
from the town of Athens in Georgia, where the liquor trade was run by
the municipality through a public dispensary. A law was passed in 1892
embodying this principle but applying it to the whole state. The measure
was fiercely contested in the courts and the legislature for years and
it underwent numerous amendments, but it survived. Under it the state
became the sole purveyor of liquor, buying wholesale from the
manufacturers and selling retail through dispensaries under public
management and only for consumption off the premises. Many changes were
introduced from time to time without abandoning the principle, but in
1907 the system of state control was replaced by one of county
administration. Local veto is also in force, and thus the localities
have the choice of a dispensary or no sale at all. The regulations are
very strict. The dispensaries are few and only open on week-days and
during the day-time; they close at sunset. Liquor is only sold in
bottles and in not less quantities than half a pint of spirits and a
pint of beer, and it must be taken away; bars are abolished. There is a
general consensus of testimony to the effect of the system in improving
public order especially among the coloured population, who are very
susceptible to drink. The law seems to be well carried out in general,
but Charleston and Columbia, the only two considerable towns, are
honeycombed with illicit drink-shops, as the writer has proved by
personal experience. Columbia is the capital and the seat of cotton
manufactures, as are all the larger towns, with the exception of
Charleston, which is the port and business centre. The population of the
state is predominantly rural, and local prohibition obtains in 18 out of
41 counties.
The following statistical comparison, extracted from the United States
Census of 1900 and the Inland Revenue Returns by Mr W. O. Tatum (_New
Encyclopedia of Social Reform_) and here presented in tabular form, is
highly instructive. It shows the population and number of liquor
dealers paying the United States tax in two prohibition states, one
state under what is considered the best licensing system, and South
Carolina.
+-------------------------+-----------+----------+--------+
| | | Wholesale| Retail |
| State. |Population.| Liquor | Liquor |
| | | Dealers. |Dealers.|
+-------------------------+-----------+----------+--------+
| Maine (Prohibition) | 694,466 | 51 | 1366 |
| Kansas (Prohibition) | 1,470,495 | 129 | 3125 |
| Massachusetts (Licence) | 2,805,346 | 617 | 5092 |
| S. Carolina (Dispensary)| 1,340,316 | 13 | 534 |
+-------------------------+-----------+----------+--------+
This table may be said to epitomize the results of the United States
restrictive liquor laws. It presents examples of three different
systems; the proportion of retail liquor sellers to population
is--under complete prohibition, 1 to 508 and 1 to 475; under licence
and local prohibition, 1 to 530; under dispensary and local
prohibition, 1 to 2509. But the remarkable thing is the enormous
amount of illicit traffic existing under all three systems. It is
incomparably greatest under complete prohibition because the whole of
the traffic in these states is illicit. In South Carolina one of the
wholesale dealers and 388 of the 534 retailers were illicit. In
Massachusetts the number cannot be stated, but it is very large. If
the whole state were under licence the total legal number of licences,
which is limited in proportion to population (see above), would be
3400; and in that case there would be some 1700 illicit retailers. But
a large part of the state, probably more than half, is under local
prohibition, so that the majority of the 5000 retail dealers must be
illicit. These facts, which are typical and not exceptional, reveal
the failure of the laws to control the traffic; only partial or
spasmodic attempts are made to enforce them and to a great extent they
are ignored by common consent. The illegal trade is carried on so
openly that the United States revenue officers have no difficulty in
collecting the federal tax. It is not a satisfactory state of things,
or one which countries where law is respected would care to imitate.
The example is a good lesson in what to avoid.
_Taxation._--Mention has been made above of the federal and state
taxation imposed on the liquor trade. The former is uniform; the
latter varies greatly, even in those states which have adopted the
"high licence." This system is intended to fulfil two purposes; to act
as an automatic check on the number of licences and to produce
revenue. It was introduced in Nebraska in 1881, when a tax of 1000
dollars (£200) was placed on saloons (public houses) in large towns,
and half that amount in smaller ones. The practice gradually spread
and has now been adopted by a large number of states, noticeably the
populous and industrial north-eastern and central states. In
Massachusetts, where the high licence was adopted in 1874 when the
state returned to licensing after a trial of prohibition, the fees are
exceptionally high, the minimum for a fully licensed on and off house
being 1300 dollars (£260); in Boston the average tax is £310. In New
York state it ranges from 150 dollars (£30) in sparsely populated
districts to 1200 dollars (£240), and in Pennsylvania it is much the
same. In New Jersey, on the other hand, it ranges from £20 to £60; in
Connecticut from £50 to £90; in Rhode Island from £40 to £80. In
Missouri, which has a special system of its own and a sort of sliding
scale, great variations occur and in some cases the tax exceeds £500.
In Michigan it is uniform at £100. The mean for the large cities is
£133. The revenue derived from this source is distributed in many
ways, but is generally divided in varying proportions between the
state, the county and the municipality; sometimes a proportion goes to
the relief of the poor, to road-making or some other public purpose.
The amount levied in the great cities is very large. It will be seen
from the foregoing that the taxation of licences is much heavier in
the United States than in the United Kingdom. The total yield was
ascertained by a special inquiry in 1896 and found to be rather less
than 12 millions sterling; in the same year the yield from the same
source in the United Kingdom was just under 2 millions. Allowing for
difference of population the American rate of taxation was 3¼ times as
great as the British. It has been inferred that the liquor trade is
much more highly taxed in the United States and that it would bear
largely increased taxation in the United Kingdom; that argument was
brought forward in support of Mr Lloyd George's budget of 1909. But it
only takes account of the tax on licences and leaves out of account
the tax on liquor which is the great source of revenue in the United
Kingdom, as has been shown above. The scales are much lower in the
United States, especially on spirits, which are only taxed at the
average rate of 5s. 8d. a gallon against 11s. (raised to 14s. 9d. in
1909) in the United Kingdom. Mr Frederic Thompson has calculated out
the effect of the two sets of rates and shown that if British rates
were applied to the United States the average yield in the three years
ending 1908 would be raised from 44 millions to 76 millions; and
conversely if American rates were applied to the United Kingdom the
average yield would be lowered from 36 millions to 23 millions. Taking
licences and liquor taxation together he finds that the application of
the British standards for both would still raise the total yield in
the United States by 39%; and that even the exceptionally high rates
prevailing in Massachusetts would, if applied to the United Kingdom,
produce some 4 millions less revenue than the existing taxation. Other
calculations based on the consumption and taxation per head lead to
the same conclusion that the trade is actually taxed at a considerably
higher rate in the United Kingdom. In the three years ending 1908 the
average amount paid per head in taxation was 13s. 8¾d. in the United
States and 17s. 6¾d. in the United Kingdom. It may be added that the
method of taxing licences heavily has certain disadvantages; it
stimulates that illicit trade which is the most outstanding feature of
the traffic in the United States, and combined with the extreme
insecurity of tenure involved in local option it gives licence-holders
additional inducements to make as much money as possible by any means
available, while they have the opportunity, for no compensation is
ever paid for sudden dispossession. The notion that the trade will
stand an indefinite amount of taxation is a dangerous and oft-proved
fallacy.
_European Countries._
With the exception of Sweden, Norway and Russia, which have special
systems of their own, the continental countries of Europe have as yet
paid comparatively little legislative attention to the subject of the
liquor traffic, which is recognized by the law but for the most part
freely permitted with a minimum of interference. Differences exist, but,
generally speaking, establishments may be opened under a very simple
procedure, which amounts to an elementary form of licensing, and the
permission is only withdrawn for some definite and serious offence.
Regulations and conditions are for the most part left to the discretion
of the local authority and the police and are not burdensome. The reason
for such freedom as compared with the elaborate and stringent codes of
the United Kingdom and the United States is not less concern for public
welfare but the simple fact that the traffic gives less trouble and
causes less harm through the abuse of drink; the habits of the people
are different in regard to the character of the drinks consumed, the
mode of consumption and the type of establishment. Cafés, restaurants
and beer-gardens are much more common, and mere pot-houses less so than
in the English-speaking countries. Where trouble arises and engages the
attention of the authorities and the legislature, it is almost
invariably found to be associated with the consumption of spirits. In
several of the wine-producing countries, which are generally marked by
the temperate habits of the people, the widespread havoc among the vines
caused some years ago by the phylloxera led to an increased consumption
of spirits which had a bad effect and aroused considerable anxiety. This
was notably the case in France, where an anti-alcohol congress, held in
1903, marked the rise of public and scientific opinion on the subject.
Temperance societies have become active, and in some countries there is
a movement towards stricter regulations or at least a demand for it; but
in others the present law is a relaxation of earlier ones.
_France._--The present law governing the licensing of establishments
where liquor is sold for consumption on the premises was passed in
1880; it abrogated the previous decree of 1851, by which full
discretion was vested in the local authorities, and freed the traffic
from arbitrary restrictions. It provides that any person desiring to
open a café, cabaret or other place for retailing liquor must give
notice to the authorities, with details concerning himself, the
establishment and the proprietor, at least 15 days beforehand; the
authority in Paris is the préfecture of police and elsewhere the
mairie. Transfers of proprietorship or management must be notified
within 15 days, and intended transference of location 8 days
beforehand. The penalty for infraction is a fine of 16 francs to 100
francs. Legal minors and persons convicted of certain crimes and
offences--theft, receiving stolen goods, various forms of swindling,
offences against morality, the sale of adulterated articles--are
prohibited; in the case of crimes, forever; in the case of offences,
for five years. Otherwise permission cannot be refused, subject to
conditions which the local authority has power to lay down regulating
the distance of such establishments from churches, cemeteries,
hospitals, schools and colleges. But persons engaged in the trade, who
are convicted of the offences mentioned above and of infraction of the
law for the suppression of public drunkenness, are disabled, as above.
The law practically amounts to free trade and the number of houses has
increased under it; in 1900 there was one to every 81 persons. This
proportion is only exceeded by Belgium. Under the Local Government Act
of 1884 municipal authorities are empowered, for the maintenance of
public order, to fix hours of closing, regulate dancing, forbid the
employment of girls and the harbouring of prostitutes and make other
regulations. The hours of closing differ considerably but usually they
are 11 P.M., midnight or 1 A.M. The trade is lightly taxed; retailers
pay from 15 to 50 francs a year; wholesale dealers, 125 francs;
breweries the same in most departments, distilleries 25 francs. The
excise revenue from liquor amounted to £20,000,000 in 1900.
_Germany._--The German law and practice are broadly similar to the
French, but the several states vary somewhat in detail. Under the
imperial law of 1879 inns or hotels and retail trade in spirits for on
or off consumption may not be carried on without a permit or licence
from the local authority which, however, can only be refused on the
ground of character or of unsuitability of premises. This is the
general law of the empire; but the state governments are empowered to
make the granting of a licence for retailing spirits dependent on
proof that it is locally required, and also to impose the same
condition on inn-keeping and the retailing of other drinks in places
with less than 15,000 inhabitants and in larger ones which obtain a
local statute to that effect. Before a licence is granted the opinion
of the police and other executive officers is to be taken. The
licensing authority is the mayor in towns and the chairman of the
district council in rural areas. The provisions with regard to the
dependence of a licence on local requirements have been adopted by
Prussia and other states, but apparently little or no use is made of
them. Permits are very freely granted, and the number of licensed
houses, though not so great as in France, is very high in proportion
to population. Three classes of establishment are recognized--(1)
_Gast-wirthschaft_, (2) _Schank-wirthschaft_, (3) _Klein-handel_.
_Gast-wirthschaft_ is inn-keeping, or the lodging of strangers in an
open house for profit, and includes "pensions" of a public character;
the imperial law provides that a licence may be limited to this
function and need not include the retailing of liquor.
_Schank-wirthschaft_ is the retailing for profit of all sorts of
drinks, including coffee and mineral waters; it corresponds to café in
France and refreshment house in England; but the mere serving of food
does not come under the law with which we are here concerned.
_Klein-handel_ is retail sale either for on or off consumption, and
the liquor for which a licence is required in this connexion is
described as _branntwein_ or _spiritus_, and is defined as distilled
alcoholic liquor, whether by itself or in combination. A licence for
_Schank-wirthschaft_ includes _Klein-handel_, but not vice-versa; none
is required for the retail sale of wine which is the seller's own
produce. Licences may be withdrawn for offences against the law.
Licensed houses are under the supervision of the police, who fix the
hours of closing; it is usually 10 P.M., but is commonly extended to
11 P.M. or midnight in the larger towns and still later in the case of
particular establishments. Some cafés in Berlin do not close till 3
A.M. and some never close at all. Persons remaining on the premises in
forbidden hours after being ordered to leave by the landlord are
liable to punishment. Serving drunkards and persons of school age is
forbidden. Drunkards, in addition to fines or imprisonment for
disorderly conduct, are liable to be deprived of control of their
affairs and placed under guardianship. For music and dancing special
permits are required. With regard to taxation, in Prussia all business
establishments beyond a certain value pay an annual tax and licensed
houses are on the same footing as the rest. Businesses producing less
than £75 a year or of less than £150 capital value are free; the rest
are arranged in four classes on a rising scale. In the three lower
classes the tax ranges from a minimum of 4s. to a maximum of £24; in
the highest class, which represents businesses producing £2500 and
upwards (or a capital value of £50,000 and upwards) the tax is 1% of
the profits. There is also a stamp duty on the licence ranging from
1s. 6d. to £5. The latter goes to the local revenue, the business tax
to the government. Beer and spirits are also subject to an excise tax,
from which the imperial revenue derived £7,700,000 in 1901; but the
total taxation of the liquor trade could only be calculated from the
returns of all the federated states.
The laws of France and Germany are fairly representative of the
European states, with some minor variations. In _Holland_ the number
of licensed spirit retailers is limited in proportion to population (1
to 500), and the taxation, which is both national and local, ranges
from 10 to 25% of the annual value.
In _Austria-Hungary_ and _Rumania_ the licence duty is graduated
according to the population of the place, as used to be the case in
Prussia. In 1877 a severe police law was applied to Galicia in order
to check the excesses of spirit-drinking. The Poles, it may be
observed, are spirit-drinkers, and the exceptional treatment of this
part of the Austrian empire is one more illustration of the trouble
arising from that habit, which forces special attempts to restrain it.
The law, just mentioned, in Holland is another instance; and the
particular cases of Russia and Scandinavia, described below, enforce
the same lesson. Where the drink of the people is confined to wine and
beer there is comparatively little trouble. In _Switzerland_ the
manufacture and wholesale sale of spirits has been a federal monopoly
since 1887, but the retailing is a licensed trade, as elsewhere, and
is less restricted than formerly. Before federation in 1874 the
cantons used to direct local authorities to restrict the number of
licences in proportion to population; but under the new constitution
the general principle of free trade was laid down, and the Federal
Council intimated to the cantonal authorities that it was no longer
lawful to refuse a licence on the ground that it was not needed.
_Russia._--In 1895 Russia entered upon an experiment in regard to the
spirit traffic and began to convert the previously existing licence
system into a state monopoly. The experiment was held to be successful
and was gradually extended to the whole country. Under this system,
which to some extent resembles that of South Carolina but is much less
rigid, the distilleries remain in private hands but their output is
under government control. The retail sale is confined to government
shops, which sell only in sealed bottles for consumption off the
premises, and to commercial establishments which sell on commission
for the government. Spirit bars are abolished and only in a few high
class restaurants are spirits sold by the glass; in ordinary
eating-houses and at railway refreshment rooms they are sold in sealed
government bottles but may be consumed on the premises. The primary
object was to check the excesses of spirit-drinking which were very
great in Russia among the mass of the people. The effect has been a
very large reduction in the number of liquor shops, which has extended
also to the licensed beer-houses though they are not directly affected
as such. Presumably when they could no longer sell spirits it did not
pay them to take out a licence for beer.