tax, and the consumer must pay it. Nothing therefore is gained to the people of the State by levying in this manner a contribution. to the public revenue. It may lessen to an inconsiderable degree taxation upon their lands and personal estates, but the same burden is transferred to an article of universal consumption. And in the next place we encounter the objection that without profit or rational motive, a single article of prime necessity is singled out for a specific duty in opposition to all our laws and rules of taxation, and to the most commonly received maxims of statesmanship.

The force of this argument would be in some degree modified if it were true that the increased cost of salt arising from taxation upon the article is now paid and will hereafter be paid by the people of other states who are or may be consumers. In that aspect of the question the tax might have an intelligible although an unjustifiable motive. But the tax is not and never will be paid by consumers in other states. It must and will be paid by the people of our own State who are compelled to use the Onondaga salt. The rule that the consumer pays the increased cost arising from taxation implies that a competing article equally adapted to his use and exempt from the tax is not within his reach. If it is within his reach the producer who is subject to the tax must either not sell at all or must sell at prices which are governed by the exempted competing article. Let us now look at the facts relating to the trade in Onondaga salt which the committee have carefully ascertained; something less than 2,000,000 of bushels of Onondaga salt are annually sold in the northern, central and western portions of New York, and in the northern counties of Pennsylvania. In all this territory here mentioned, embracing a population of about 2,000,000 our salt meets virtually no competition, and has now for several years been sold at $2.35 per barrel, with cost of transportation added. At the exterior lines of this territory competition with other salts is encountered which requires the Onondaga manufacturer to go no further with his product or else to reduce the price, and the further these exterior lines of his trade are extended the more his prices must be reduced. It is both his policy and his interest to carry his salt further and further until he reaches points where he cannot sell except at a positive loss, and both policy and interest will often prompt him to encounter temporary loss for the sake of keeping his ground in a close and disputed market. This general statement of the condition of the

In

market the accuracy of which is abundantly verified by the evidence before the committee demonstrates that every addition to the cost of salt contracts the circle of exclusive trade, and contracts also the wider circle of territory in which competition can be maintained. Fully three-fourths of all the salt made from the Onondage springs is sold in that outer circle of trade, where the people of this and other states are supplied from other sources, both foreign and domestic. In New York, and upon our tide waters, and in those parts of New England which we can reach at all, the foreign article is met in great abundance. Last year the Onondaga manufacturers sold some 700,000 bushels in New York and neighboring markets at less than cost. the same year nearly 4,000,000 of bushels were carried to the western and northwestern States, and sold with a very slight profit, or none whatever. There are some facts and figures verified before the committee which are very convincing on this subject. The salt manufacture has been carried on for several years past by a single company, organized under the laws of the State, which has conducted the business with vigor and with the greatest possible economy, undoubtedly, as the members of this committee believe, with much greater economy than would be possible under other circumstances. The books of the company have been produced and verified before us, which show that in the year ending in April, 1867, the aggregate profit made by the company was $107,016.58, including in the expenses a fair return in the nature of rent to the individual proprietors of the salt works. In producing this result a cash capital was necessarily employed throughout the year, averaging at least one and a quarter million of dollars. Now this profit was wholly realized from sales in that limited district of territory already referred to, and lying almost wholly in this State, where the prices demanded were unaffected by competition with other salt. This general fact in regard to which the slightest doubt does not exist, clearly proves that any increased cost of the article arising from additional duties must be drawn from consumers within the restricted market referred to, and therefore drawn from the people of this State. This is plain because the manufacturers could not maintain their ground at all in other and more distant markets without actual and serious loss.

If a more precise demonstration of this result is required, the following facts and figures are stated:

In 1866, the cost of producing a barrel of boiled salt at the works was $1.85, of solar salt $1.55. The quantity of boiled salt being about 5,000,000 of bushels, and of solar, about 2,000,000, the average cost at the works was therefore, $1.77. The cost of transporting salt during the year to the ports of the Lakes Erie, St. Clair and Michigan, and cost of agencies in those ports, in storing, handling and selling salt, was thirty-eight cents per bushel. To this must be added the interest on $1,250,000, cash capital constantly used in the producing and transporting the salt, amounting to six (6) cents per barrel. These items make a total cost of the Onondaga salt in the western markets of $2.21 per barrel. Now the evidence shows that the average highest price at which Onondaga salt could be sold during the year at Chicago, the greatest of all our western markets, was only $2.25 per barrel, and that in all the markets on Lake Erie and Michigan, the salt from Saginaw in the State of Michigan, was selling at from five cents to ten cents per barrel cheaper. It is seen at a glance that no appreciable profit in these markest was left for the Onondaga manufacturer. Against the keen and active competition with the Saginaw salt, the salts of Ohio and Kenawha, and even with foreign salt,, on the upper Mississippi it was and generally is a question of selling at these reduced prices or of abandoning the market. So far, however, it has been the settled policy not less than the interest of the manufacturers to maintain their ground in these markets as far as possible, because in the vieissitudes of trade higher and better prices sometimes occur. During the same year of 1866, the sales in the city of New York, as already stated, resulted in actual loss, it being proved that such sales netted at Syracuse only $1.60 to $1.75 per barrel, which is less than the cost of production at the springs.

The close and active competition disclosed by these statements in what may be called our exterior markets, including the most populous portion of our own State, must always continue. While the salt markets of the West are gradually extending with the increasing population, the Salines of that region, and especially those of Saginaw, are annually rising in importance. The importation of cheap salt from foreign countries will always continue. There is no reason, there

fore, for supposing that the salt of the Onondaga springs will enjoy in the future any greater advantages over other interests competing in the markets of the country than it now does. It must be evident, moreover, that any addition to the cost which will overcome entirely the narrow margin of profit which the manufacturer can now realize in the contested markets, would compel him either to withdraw from such markets or to charge the increased cost upon the consumers in this State who have no other sources of supply. This inevitable condition of the trade presents, therefore, first, the question, shall the salt of this State be sent as heretofore to buyers and consumers in other States, and the duty upon it imposed for revenue, be paid by consumers at home? As this is clearly inadmissible, then, second, shall the production be reduced to one-half or one-third of its present amount? The only other solution rendered possible by the situation is not to impose the tax at all.

And to that conclusion the undersigned comes without hesitation. It is a conclusion fortified by other considerations upon which there is no time to dwell at large. For example, the tolls upon the canals of this State annually paid by the Onondaga salt are about $100,000, and to this must be added the tolls upon 100,000 to 150,000 tons of coal annually transported upon the canals to the salt works and used for fuel in the manufacture. As almost the entire production of salt as well as all the coal so used is moved by the canal, the one from and the other to the works, the more the manufacture is depressed and reduced, the more the State suffers in its canal revenues. And there are also important industrial interests involved in the question. A very large capital is invested, and hundreds of men are employed in the production and preparation. of fuel. The actual manufacture of salt employs an immense industry. One million four hundred thousand barrels and bags are required as packages, giving employment to great numbers of persons in the manufacture of these articles. The articles of salt and coal furnish to our canals annually nearly 400,000 tons of freight, employing a great number of boats and greater numbers of boatmen. A large amount of shipping upon the lakes on our border is freighted with salt for the western States. All these interests must be directly and injuriously affected by any policy which depresses and reduces the production and sale of our

salt. But as all industrial pursuits have mutual and dependent relations, there are many trades and occupations to be more remotely and indirectly affected by such a policy. The great interest of agriculture is deeply concerned, for that interest demands the article of salt at the cheapest attainable rate. The undersigned is not able even to say with certainty that the direct revenues of the State. would be increased by the tax or duty in question. He repeats, you cannot impose a new burden of any amount without increasing the cost and contracting the area of the markets; what is gained in the amount of the tax on the bushel may be wholly lost in the diminished number of bushels produced and sold. That the revenues would not be increased is a result of which there can be little doubt when we take into consideration, also, the diminution of canal tolls upon coal aud salt certain to result from the contraction and depression of the salt manufacture. The undersigned, therefore, believing that in all points of view it is impolitic and unwise to look to this source for public revenue, that it never can be politic or wise so to do; believing also that the subject should be at rest from periodical and unwholesome agitation in the Legislature or elsewhere recommends that the following provision be inserted in the Constitu tion, viz. "The Legislature may appropriate moneys for the devel "opment of the salt springs of this State and to pay the expenses of "the care and management of said springs, of the property of the "State connected therewith, and of the inspection of salt, but all "moneys so expended shall be reimbursed to the treasury as soon as practicable by a duty on salt. No other or further duty on salt "shall be imposed."

GEO. F. COMSTOCK.

I concur in the foregoing report as to the impolicy of imposing by constitutional provision an additional tax or duty on salt, believing that the subject belongs to the Legislature. I also concur in the report made by the Chairman of the Committee so far as the same recommends a removal of the existing restraint upon the sale of the salt springs and reservation.

SOLOMON G. YOUNG.