factor in the political battles of which it has been made a part in the last ten years.

During the past year a Department of Publicity has been organized in a modest way by your Board of Trustees, the wisdom. of which has already shown itself by the appeals of our membership for assistance and advice, which, unfortunately, could only be extended in a very limited way. I am firmly convinced that the work of this department will have to expand and grow to very large proportions during the ensuing year, as it is clearly indicated that only through educational and publicity channels can we look for permanent success in winning the good will of the people of this country. Let us put the facts before them plainly and fairly without prejudice or animosity, resting our case upon its merits in the light of accumulated knowledge and experience. An enlightened public sentiment depends upon full information, which must be made accessible to the mass of the people. If we would build upon a sure foundation, we must take this task upon us with an eye single to the truth, and must show our willingness to co-operate in any measures of constructive reform that are of a practical character.

REPORT OF THE BOARD OF TRUSTEES

For the last four months the eyes of the world have been focused on the War of the Nations. Many years may pass before its causes and effects can be told with full justice. To-day we know only that human isolation is impossible, and that no people is so wise or so superior as to be able to separate its interests from those of other nations. While our country has been spared the physical horrors of the conflict, our lives have been touched in a hundred ways by it and we have been made to realize our relation to the other peoples of all sorts and conditions. In such a time as this we rise above the limitations of trade and circumstance. Our hearts throb and our minds march in time and sympathy with the brave fellows who are in the ranks, and the members of the brewing industry have responded generously to the appeals that have been made for the wounded of all nations, and for the relief of the families who have been impoverished by the loss of their bread-winners.

The whole fabric of international commerce and finance has broken under the strain. Values have become so intangible that they can only be guessed at, and the helpless Bourses of the world

were forced by their own futility to stop business and shut their doors. In this crisis the Government of the United States has had to face the question of financing its own maintenance. We can perhaps imagine the Secretary of the Treasury stating the problem to the Committee on Ways and Means in some such way as this:

"Gentlemen: Congress has made appropriations on a liberal scale, based on our expected receipts from customs duties, internal revenue taxes and the income tax. But the war has robbed us of a hundred million dollars of import duties. How shall we make it up? We cannot raise the tariff rates-that wouldn't do any good. The income tax and the corporation tax are levied upon the people who have been hit hardest by the industrial depression, and we cannot squeeze any more out of them; to tax the incomes of the smaller fellows would be most unpopular. We cannot tax our exports, and the Treasury experts tell us that if we increase the tax on whiskey it will invite wholesale moonshining and that the tax would be uncollectable."

And so by the process of elimination, the Government finally falls back upon beer as the one item which is sure to make good, and the brewing industry is called upon once again to bear the burden of supporting our Federal Government in its great crisis. With the increased tax the United States Government will get three times the revenue from the brewing industry that the brewers themselves get! When you take into account the state and local taxes for the manufacture and sale of beer, the real estate taxes, the corporation and income taxes, and all the other items of direct and indirect taxation, it is evident that beer is bearing a greater public burden than any other commodity. It is a mistake to suppose that American brewers will benefit by the possible shortage in imported beers. Our total imports of beers and ales from all the countries of the world average only a quarter of a million barrels, whereas we produced ourselves in the United States last year sixty-five million barrels.

It is worth noting that the only organized opposition to the extra tax on beer has come from the various Methodist Conferences, and from the Women's Christian Temperance Union, the AntiSaloon League and other prohibition bodies. It will be remembered that the present system of collection of the beer tax was adopted originally by Congress upon the recommendation of the American brewers of the country, who had studied the matter thoroughly

and sent a commission to Europe to investigate the systems of beer and malt taxation, which obtained in the various European countries. It is safe to say that the beer tax is the cheapest to collect among all the taxes imposed by the United States Government, and there are no attempts to evade it!

A STUDY OF THE BEER SALES

It is generally conceded that the beer business is an industrial barometer, and from this standpoint a study of the beer sales for the fiscal year running from July 1, 1913, to June 30, 1914, inclusive, is most enlightening. For the first six months of this period (July to December, 1913) the beer sales increased 5% over the same period in 1912. During the next six months, however (January to June, 1914), the beer sales decreased approximately 21%. In this connection it should be recalled that the commercial atmosphere of the United States was disturbed by the inevitable changes. brought about in the adjustment of business to the new tariff schedule; by the financial hesitancy which was caused by the discussion and passage of the national banking bill; by the re-adjustment of large commercial corporations under the operation of the Sherman Anti-Trust Law; and by the action of the railroads in stopping new construction work and holding up improvements pending the disposition of their appeal to the Inter-State Commerce Commission for an increase in the freight rates. In addition to these factors, the Balkan War and the Mexican War affected the financial markets of the world, and their reflex influence was, of course, felt in the financial centres in this country; though all of these depressing conditions did not apparently manifest themselves in the beer business until the beginning of 1914. Considering the very great depreciation in other branches of commerce during the period indicated, it is remarkable that the beer sales should have kept up so well; especially when we recall that the general business depression was most marked in the industries that employ large numbers of men. With the outbreak of the European War, however, the situation changed immediately, and the beer sales during July, August and September fell off over 10% as compared with the same period in 1913. In spite of the fact that immigration has almost ceased, we hope and believe that the beer sales will recover rapidly as soon as the commerce of the country rebounds, and our mines and factories are again working on full time.

A TEN-YEARS' COMPARISON

The gain in the beer sales during the past ten years appears on the surface to be somewhat perplexing in view of business depression and the prohibition movement. It is due, in the first place, to the increasing popularity of beer as a family table beverage. Bottled beers are now being advertised more thoroughly and intelligently than ever before, and their present selling price puts them within reach of people of very moderate means. Of course, beer is consumed mostly in the cities and towns and the adjoining suburban territory. The freight cost and the loss on the unreturned empties makes the shipment of bottled beer to individuals too expensive, at a distance of more than about fifty miles. Beer can be shipped in barrels in carload lots to a distribution point in a rural state where a refrigeration storage plant is maintained by the shipping brewers, and re-layed from there in single case lots to local points and to individuals. Under the operation of a prohibitory law, however, whether due to state-wide prohibition or local option, the distributing depot is closed down, and the trade is diverted to the mail order liquor dealer, who deals in a concentrated article on which the transportation and packing charges are easily absorbed in the selling price.

When it is considered that over three-quarters of all the beer brewed in the United States is consumed by the adult urban people, it is evident that beer is becoming more and more the popular beverage in all the centres of population. The per capita consumption of beer in the United States is still, apparently, much less than it is in Northern Europe, but it should be remembered that every hamlet in Germany, England and Belgium is within easy reach of a nearby city or town where there is a local brewery, so that the cost of transportation is not a serious item of expense, and every family is a potential customer. Moreover, it must be remembered that in the European countries where the sentiment for temperance is most advanced, direct encouragement is given to the sale of light beers. In the Scandinavian countries light beers are almost taxfree, while France and Belgium encourage the sale of beer by exempting beer shops from anything more than a nominal license fee. The whole trend of enlightened statesmanship in European countries is towards the rigid regulation of the sale of spirits, which are sold under special restrictions, and are subject to a special license fee. On the other hand, the mild beverages are lightly taxed, or else

are entirely tax-free, and may be sold almost as freely as groceries or other articles of food. This movement is especially significant in view of the fact that it has not been aided in any way by trade interests; in fact the influence of the trade has, if anything, been against it. The movement has come from the outside, just as it must, and will come in this country, if any progress along this line is to be of lasting value. It must be the expression of a general and well-informed public sentiment, or it will be of no avail.

THE TREND OF THE MOVEMENT

Recent elections indicate that in the poorly policed rural districts in a number of states there is a strong sentiment against the village saloon as it is now being conducted. It is evident that this question must be studied thoughtfully, with careful regard for the wishes of the people of the locality, and that any objectionable features must be done away with completely if the village saloon is to be continued.

In some of the Southern States, even in prohibition territory, provision is now made for the licensing of establishments where light beers may be sold. In this connection it should be noted that England only imposes a revenue tax on malted beverages which contain over 2% of alcohol; whereas, in the United States no malt liquors are tax-free which contain as much as one-half of one per cent. of alcohol. The consequence is that the two per cent. beers cannot be labeled as temperance beers, or non-alcoholic beers, under the Federal Food and Drugs Act. The Southern prohibition States would, we believe, be willing to sanction the sale of light alcoholic beverages, in specially licensed places.

THE NATIONAL PROHIBITION MOVEMENT

The Hobson Bill to provide by constitutional amendment for the national prohibition of the manufacture and sale of all alcoholic beverages, has died in committee. But it is evident that the prohibitionists will make an effort to revive it at the next session of Congress. (In fact, they tried to make it an issue in the Congressional elections.) In view of its national importance, the United States Brewers' Association is conducting a very thorough investigation to show what the displacement cost of National Prohibition would be, from the standpoint of revenues to the Federal