Note 6 — VII

Wine and liquor monopoly a failure. The proceeds of this monopoly (wines and liquors) were rated at $1,622,810 in the colonial budget for 1861; but its collection was so difficult, and so disproportionately expensive, that it nearly swallowed up the whole profit. It caused espionage, robberies of all sorts, embezzlement, and bribery on a large scale. The retail of the brandy by officials, who are paid by a percentage on the consumption, did a good deal to injure the popular respect for the government. Moreover, the imposition of this improper tax on the most important industry of the country not only crippled the free trade in palms, but also the manufacture of raw sugar; for the government, to favor their own monopoly, had forbidden the sugar manufacturers to make rum from their molasses, which became in consequence so valueless that in Manila they gave it to their horses. The complaints of the manufacturers at last stirred up the administration to allow the manufacture of rum; but the palm-brandy monopoly remained intact. The Filipinos now drank nothing but rum, so that at last, in self-defence, the government entirely abandoned the monopoly (January, 1864). Since that, the rum manufacturers pay taxes according to the amount of their sale, but not upon the amount of their raw produce. In order to cover the deficit occasioned by the abandonment of the brandy monopoly, the government has made a small increase in the poll-tax. The practice of drinking brandy has naturally much increased; it is, however, a very old habit.6 With this exception, the measure has had the most favorable consequences.