State Control of the Liquor Traffic
The Alleged “Moral” Objection, and the Financial Practicability of the Scheme.
EVER since Mr. Lloyd George’s proposal for state purchase and control of the liquor trade was made public it has been evident that opposition to it, outside the ranks of Licensed Victuallers’ Associations whose attitude will in the end be decided by the terms and conditions of purchase, would take two principal forms. The first is concerned solely with the financial practicability and expediency of the scheme; and the second with an alleged “moral” objection to a policy which fastens upon the State a new and direct “complicity” the trade. In view of the new Canadian regulation, a reply to these objections, appearing in The Contemporary Review, is of interest. The writer says:
No doubt at the time when Mr. Lloyd George’s proposal was first announced the financial dimensions of the scheme seemed formidable, and the risks out of proportion to the necessities of the situation as they were then understood. Since then our knowledge has widened, and our appreciation of the value of direct State action has increased. The additional fact, now widely known, that a treasury committee of hard-headed, nonfanatical financial experts was able readily and unanimously to agree upon a workable scheme, has also done much to destroy the force of the financial objection.
The so-called moral objection is more difficult to remove. In some cases, owing to the view taken of the drink habit, it is plainly irremovable: it may, however, be examined. In any such examination it is necessary, as a preliminary, to distinguish between two entirely different standpoints. First, the standpoint of the man who regards the drinking of alcoholic beverages as a sin; and, second, the standpoint of the man who, while not taking up this extreme position, fears that State management and control would give a sanction to, and create a “complicity” in, the drink traffic that does not now exist. The two points of view are often confused, but they are quite distinct. So far as the first of these views is concerned, the case is obviously not susceptible to argument. It is already decided. The view may be right or wrong (and it is certain that it goes much farther than the common conscience of the Christian Churches is prepared to go), but to the man who holds it the matter is settled. He is not a reformer; morally and logically he is not even a restriction-
ist; he is an abolitionist. His place is out side the licensing reform movement altogether He can have no part in any scheme of regula tion or restriction, however severe and strin gent. He cannot even be a local vetoist, since that implies ah authorized option to continue the trade. His counsel cannot be invoked nor his criticism be heard in respect to any scheme of regulation, whether it be direct State control or any alternative plan of restriction It is necessary to make this plain at the outset, because it is already apparent that some who hold this view and are opposing Mr Lloyd George's proposal do not appreciate the inconsistency of their general line of argument nor the compromise in their personal commitments in matters of policy. I have before me at this moment an authorized report of a paper entitled, “Ought the Church of Christ to advocate the manufacture and sale by the nation of intoxicating liquors?” read by Mr. G. B. Wilson, the Secretary of the United Kingdom Alliance, to the Free Church Council at Newcastle-on-Tyne on October 29th of last year. In this paper Mr. Wilson, in his own words, “dwelt on the necessity for applying the test of Christian principle to all proposals affecting the making and selling of drink,” because the reasons put forward by advocates of State purchase and control, “though differing in many respects, have been alike in this, that they have been argued rather on grounds of expediency than with reference to Christian principle.” His own view of the drink habit was put in a single sentence: “We are, to-night, in the presence of no mere misfortune, but of a sin which, for countless souls, rises like an awful cloud to shut out God.” If that be Mr. Wilson’s view -and I respect it, by whomsoever held then the rest of his detailed argument, including
some misleading references to Russia, was unnecessary and irrelevant. To a man who holds this view, it is beside the mark to speculate on the possible dangers of State management, or to criticize the working results of systems of control in other countries. He'is forearmed with a case against any system of control. He is not a reformer but an abolitionist. To him it is nothing that under a scheme of State control the sale of drink might be largely diminished. Mr. Wilson makes this quite clear in a specific reference: ‘“But we should largely reduce the evil.’ How does that help you,” asks Mr. Wilson, “even if it were trpe? Is it a sin against humanity for ‘the Trade“ to sell thirty-five and a half million barrels of beer and thirty-one and a half million proof gallons of spirits, but not a sin for the nation to sell half that quantity?”
Plainly such an argument carries the user very much further than hostility to Sute purchase and control. It ia an argument against any and every proposal for restriction short of absolute and total prohibition. If the United Kingdom Alliance had adhered to its original policy and demand for “the total and immediate legislative suppression of the liquor traffic,” we could understand the position taken up by its present Secretary; but it has reduced its demand into one for “local veto," which plainly recognize» the right of communitics to continue the traffic if they so desire. I think the Alliance was wise so to modify its policy. No reasonable person believes “total and immediate suppression” to be practicable. If this be so, and if the Alliance, as it now does, recognizes the right of communities to have the trade continued if they so will, some system of management and control is indispensable. It is solely a question of what system. Obviously the best system is that which most efficiently regulates the trade and restricts it, as far as may be, to legitimate needs and uses. It is a system which deprives the seller of any pecuniary inducement to sell, and is immediately susceptible to all thé restrictions which public convenience and welfare demand. I need not here repeat the general and, as many think, the irresistible argument for State purchase and control. Outside certain limited and unyielding circles, influenced, in part certainly, by convictions based on the alleged sinfulness of the drink habit, it is not g neatly contested. The average man agrees tl;at State purchase and control would give a freedom of action which we now lack, -and which is essential to improvement and progress. He also agrees that the measure of progress would thereafter be determined by public opinion and not, as now, by the power and interests of the trade.
But, recognizing these things, some shrink from involving the State in what they regard as a new and direct “complicity” in the trafile. It is not an unfamiliar fear. It has met in some form every proposal made for the elimination of private profit from the conduct and control of the sale of liquor. Is it well and reasonably founded? Plainly such “complicity”. as would exist would not be new. Complicity is inseparable from license and control. It is involved in all forms of taxation. Mr. G. B. Wilson, in the paper already referrrt to, attempts to meet the argument from present taxation in this way:—
“The position of the State is this:—
“Here is an article so noxious in character that the best interests of the community demand the total prohibition of its sale: and, therefore, 329 out of every 330 persons in England and Wales áre forbidden to sell it. In deference, however, to the ignorant and unscientific prejudices and habits of many of our people it has been deemed expedient to allow a comparatively few individuals to cater for the supposed alcoholic needs of the people under special restrictions imposed by Parliament. But, inasmuch as this indulgence is a luxury, bringing appalling evils on the community, the State is justified in indemnifying itself, so far as money can do so, for its drinkcaused losses by imposing heavy taxation, and the more so that such taxation inevitably tends to check the consumption of the liquor thus taxed.
“Are we partners in the pawnbroking or patent medicine trades because the pawnbrokers and patent medicine vendors have to take out a license to trade? Are we partners in the tea and sugar business because these articles are taxed? ‘The Trade,’ except for platform purposes, recognizes no such partnership. Its profit and loss accounts are not subject to State inspection; it never treats license duty and liquor taxation as items chargeable against profits. On the contrary, in its accounts it always enters taxation as part of those working expenses by which its charges to the consumer are regulated.” I fear this argument is neither historically nor economically sound. It is certainly not the case that the State has ever taken th? view that “the best interests of the community demand the total “prohibition” of the sale of alcohol. That is the view of the abolitionists, but not the view of the State. Our present license system was superimposed upon freedom of sale. The regulations and restrictions which govern the trade were originally, what they are still essentially, police regulations. Th« State has always recognised the trade as a legitimate (i.e., legal) trade. Nor is it historically accurate to speak of liquor taxes as primarily indemnification taxes. That was not the motive of their original imposition, nor has it been the avowed or primary motive of their modern development. As Messrs. Rowntree and Sherwell have pointed out in their volume on The Taxation of the Liquor Trade, until the dawn of the eighteenth century the idea of regulation was not merely uppermost but the sole consideration in the mind of the State. “The licensing system was a police system pure and simple, and the idea of revenue was entirely absent.” It was not until 1710 that the first license duty, in the shape of a small stamp duty of one shilling, was imposed upon the licensed victualler’s annual beer license. These stamp duties were essentially revenue taxes, although, in the case under consideration, the duty was too slight to modify the character of our license system, or to act in any way as an economic check upon the number of licenses taken out. In 1808 the stamp duties (which had slowly risen, in the course of a century, to two guineas) was abolished, but the impost was re-imposed as an excise duty of the same amount. Similarly, the first restriction on the sale of spirits (Le., in the form of a requirement that the sellers should be licensed), was imposed in 1701 solely for police purposes. This continued to be the governing principle until towards the close of the eighteenth century, when it was modified, to some slight extent, by the financial policy of Pitt; but even in 1787, when Pitt adopted rateable value as the basis of taxation, he was careful to point out to Parliament that revenue considerations were not the motive of the change, a statement easy of belief when the yield of the new duties is considered. During the nineteenth century revenue considerations much more directly influenced the policy of the State, especially in regard to war taxes on the manufacture of beer and spirits, and in quite recent years the liquor trade has been legitimately subjected to heavy additional taxation for revenue purposes, until at the present time it contributes from fiftyfive to sixty millions sterling to the national exchequer. These increases have been avowedly revenue taxes.
Now Mr. Wilson and others appear to think that in the matter of “complicity” there is a real and substantial difference between revenue derived from Cass* on a trade and revenue derived from profite. Is the distinction a sound one? Taxes are essentially, although not technically, appropriations of profits. The distinction is purely one of accountancy and bookkeeping. Technically, it is doubtless true, as Mr. Wilson suggests, that taxes are treated by the trade as working expenses; but working expenses, after all, determine both prices and profits. The real point—the only substantial point—is that the national exchequer derives vast rams annually from the manufacture and aale of alcohol. It could not receive these amas from the trade unless the trade existed. It derives them from the trade a« e trade. Mr. Wilson asks; “Are we partners in the pawn broking or patent medicine trades' because the pawnbroker and patent medicine vendors have to take out a license to trade? Are we partners in‘the tea and sugar business because these articles are taxed?"
The examples are not happily chosen, because pawnbroking and patent medicine licenses are essentially and avowedly registration licenses required for police purposes; they are not revenue licenses, although, incidentally, they yield a certain amount of revenue to the State. Tea and sugar taxes, on the other hand, are primarily and essentially revenue taxes. The answer to the question is, however, simple. To the extent to which the State derives revenue from the tea and sugar trades it is clearly a “partner” in those trades. Partnership is not a matter of degree, nor is it a question of bookkeeping and arithmetic; it is a matter of participation in receipts. The only escape open to the State from its present “complicity” in the liquor trade, short of “total and immediate” suppression, which even ÿ the United Kingdom Alliance does not now believe to be practicable, is to leave the trade unlicensed, unregulated, and untaxed. That is not an alternative which any sane man would agree to. It is a suggestion from Bedlam. The essence of the matter was well put by Mr. Lloyd George in his statement in the House of Commons during the debate on the Defence of the Realm (Amendment) No. 3 Bill, on May 11th of last year, when, dealing with this same objection of “complicity,” he said: “I am fully alive to all the conscientious suggestions which my honorable friends urge, but the idea that you are not to touch the unclean thing when, through the Chancellor of the Exchequer, we are touching £60,000,000, and to that extent relieving the duties on tea, sugar, and everything else, I have never been able to appreciate. You will not touch it direct, but as long as it goes through the refining fires of the Exchequer you can take it. That is an argument which I do not care to describe.” The point may be left there.
After all, academic and theoretical objections must yield place to paramount practical considerations. The trade in alcoholic liquors is here. In large but, we hope, much reduced volume, it is certain for some considerable time to remain. Is it better that it should remain subject to the ordinary commercial induce-
ments of pecuniary gain, under the management of men whose “trade” is avowedly their “politics,” and rooted in vested interesta which fetter the action of the State; or that the State should, at a stroke, remove the vested interests, recover its freedom of action, and reorganize the trade for such restricted and legitimate purposes as the nation may desire and decide? Can any unprejudiced citizen hesitate in his choice? f
If, as a distinguished Christian minister (the Rev. T. Rhondda Williams) has reminded us, the traffic that remains “is left in private hands to be worked for profit, there will be enough of it to attract enormous capital, capital that should be free to flow in more useful directions; the money appetite will invent new allurements faster than statutes can put them down; there will be trade enough to work its havoc in the wastage of human life and the wreckage of human interests; trade enough to organize for political purposes, with serious menace to the welfare of the people.” It has been said that we should have nothing to do with “modified evils,” but, as the writer just quoted well says: “The great saving passions of human nature do not despise the modification of evils when they cannot exterminate them. . . . WThy should we not
be willing to do what we can because we cannot do all we would? ‘But you cannot touch pitch without being defiled,’ we are told. What if our fellow-countrymen in large numbers are half-submerged in pitch, are we to consider our own fingers? A false conception of what it is to be saved and unpolluted underlies this argument. The figure of a saved man, in many minds, is that of one making his way to some Zoar in the mountains, leaving the cities of the plain to the fire and brimstone. In truth, such a man is more lost than any Sodomite; the truly saved man is he who remains in Sodom tq do his best to make Sodom the city of God.
“It is time,” says Mr. Williams, “to consider the management of the drink traffic, for its modification and towards its elimination, ee a grfat moral duty."