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trafic since the settlement of this State by white men. I have intended to give these documents verbatim et literatim, omitting only such portions thereof as have no bearing on the liquor traffic.
I have done this believing that, as our people are now making a new and radical departure from the principle of local control, which for over 300 years has largely governed the treatment of a question never, to them, satisfactorily settled, that it may be interesting for them tu review its past history so far as the same is revealed by ordinances of Colonial Governors and Councils, and, since the organization of the State, by legislative enactments.
To make this transcript of value for reference, I have had a careful search and examination made of all records touching the subject in the State Library and in various other libraries of the State, particularly the library of the Bar Association of New York city, through the courtesy and assistance of which the Department has been materially aided in the prosecution of the work. A large part of the information thus secured has never yet been published, although the Statutory Revision Commission has a portion of it now in the hands of the printer, to which they have kindly given me access for the purpose of comparison and verification of the work.
As a guarantee of the accuracy and reliability of this collection of liquor and license laws, I have the pleasure to state that the examination and compilation of the same was made by the Hon. L. E. Chittenden, now connected with this Department.
RECOMMENDATIONS. Although the experience of this Department has been short, matters have developed in the practical application and working of the law which make certain amendments almost imperatively neces
RETAIL TRAFFIC BY WHOLESALERS. One of the first complaints received by this Department was that so-called wholesale liquor dealers, who pay no State tax, sell at retail by making sales of different kinds of liquors, including cider, beer, wine and whiskey in small packages, having a care only that the aggregate quantity should be five gallons.
The Department held that section 2, which provides that a sale of liquor of less than five wine gallons "shall be trafficking in liquor," was intended to mean a sale of less than five gallons of one kind and caused a test case to be brought for a judicial settlement of the question. The court decided against the Department's construction.
Fairness to those who pay the tax for the retail privilege seems to demand that either the limit as to quantity be raised or that the law be made to specify a single kind only. Dealers doing this semiretail business have, quite generally, a government retail license.
To meet this and kindred cases, in the opinion of this Department, the second clause of this section should also be amended so that the application for, or holding of, a license for the retailing of liquor under the Internal Revenue Department of the United States shall be presumptive evidence of “trafficking in liquors” within the provisions of this act.
ENUMERATION AND ADJUSTMENT OF TAX.
(SECTION 11.) Section 11 imposes upon this Department the duty of enumeration for the purpose of fixing the tax rate in cases where the population of any city or village is rot shown, either in the last State or United States census, by reason of its incorporation subsequent to such census. In the absence of precedent or competent decisions as to whether this direction to the Commissioner included the duty of enumerating those cities and villages in which neither census showed their populations, separate and distinct from contiguous territory, the Department investigated the subject and found that of new cities and villages and those not separately enumerated there were four cities and sixty-two villages. Many of these villages were not separately enumerated, and, under a decision of the Supreme Court, the Department was obliged to consider them as of the class named in the statute as “all other places” and only the smallest tax rate could be imposed. Under this decision, liquor dealers, in certain incorporated villages containing a population of several thousand, obtain certificates on payment of the lowest possible tax rate, while those of other villages separately enumerated, but with actual population of less than one-half or even one-third of the non-enumerated places, have been compelled to pay two or three times as much for the same privileges.
In view of this manifest injustice in a law designed to be strictly impartial, it seems very desirable that it should be amended in this particular by vesting in the State Commissioner the power to cause an enumeration of any village in which he may deem the popu. lation not accurately or distinctly shown by the last State or United States census. The importance of this suggestion can not be overestimated, since, in addition to the serious defect already stated, the last State census has proved to be misleading and full of errors, and, therefore, wholly unreliable for the purposes of the law.
(SECTION 1.) About the time of the passage of the Liquor Tax Law, a Court of Appeals decision, rendered in a case brought under the law of 1892, held that the distribution of liquor, for pay, among the members of a club or membership corporation was not a sale of liquor within that law and, following this precedent, subordinate courts have held that, under the present law, the sale of liquor to members of a club is not "trafficking in liquors.” These decisions have resulted in suggesting a method for evading the law, and very many parties who had paid for certificates have surrendered the same and organized and incorporated so-called social clubs of which a former certificate holder or his employe is usually the president, treasurer and steward; and very many others, under the protection of such decisions, have readjusted old-established places for the sale of liquor and arranged with a majority of their customers to “ distribute ” liquor to them during prohibited hours and on Sundays. The number of these places so changed, together with new places of that character established within the last six months, as shown by the records of the Secretary of State's office, is over 2,000, the most of which are located in the first-class cities where the liquor tax is largest.
The extent of this evasion becomes apparent from the fact that, whereas but 845 so-called clubs were chartered by the Secretary of State from May 1, 1895, to May 1, 1896, there have been 3,360 such clubs chartered from May 1, 1896, to November 24, 1896, and 3,711 to January 13, 1897.
The loss to the public revenue, sustained from this source, is fairly estimated at about one million dollars for the present liquor tax year.
This evasion of the law, or at least the evasion of its plain intent, should be made impossible by legislation; otherwise the State's revenue will be still further seriously impaired and lawabiding liquor dealers discouraged and driven by unfair compeBy careful investigation of the United States Internal Revenue records of the liquor traffic in this State, the fact is disclosed that most of these clubs apply for and receive the proper Internal Revenue stamp of the United States before beginning the traffic in liquor and, in order to procure such stamp, must and do make a sworn statement as follows, viz.: “That it intends to engage, or is engaged, in the business or occupation of retail liquor dealer, subject to special tax under the Internal Revenue Laws of the United States."
tition to the same subterfuge and evasion.
The judicial decisions above alluded to have constrained this Department, as well as all other officials charged with the execution of the law, to await an amendment which, it is hoped, will remedy the defect and make clear the intention of the law. The Department respectfully suggests for your consideration, as a practical solution of this vexed question, that bona fide clubs or membership corporations be allowed to traffic in liquor under a special certificate which shall require them to pay the highest tax of the locality, subject to such restrictions as may be deemed necessary and applicable to such institutions for the purposes of the act, as is already done in the case of the traffic upon cars, steamboats and vessels.
HOTELS AND GUESTS.
(SECTION 11.) Inasmuch as hotels are given certain privileges, not enjoyed by other places that sell liquor, it is very desirable that the law should be so amended, if possible, as to more explicitly define in connection with such privileges, for the purposes of this act, the term “hotel” as well as the terms “guest” and “meals."