As these inventories are important elements in making up the statements of accounts of tobacco and cigar manufacturers each year, it is essential that all doubt as to their accuracy should be eliminated before the accounts are prepared. Upon receipt of these inventories, properly verified, collectors will prepare their annual abstract statements on Forms 144 and 146 of accounts of cigar and tobacco manufacturers, respectively, in their districts for the year 1906, and complete and forward same within ninety days from the first day of January. Special attention is called to notes 5 and 6 of instuctions printed on the back of Form 144; to pages 41 and 52 of regulations No. 8, revised, relating to inventories, and to the third paragraph on page 68, which relates to deficiencies discovered at the time an annual inventory is filed. Attention is also called to T. D. 20480 (vol. 1, 1899), relating to the outside storage of leaf tobacco by manufacturers, and to T. D. 21449 (vol. 2, 1899), relating to imported cigar leaf tobacco not received at the factory and which can not properly enter into the manufacturers' accounts. JOHN W. YERKES, Commissioner. (T. D. 1082.) Amendment of section 26, regulations No. 30, concerning denatured alcohol. [Int. Rev. Circular No. 686.] TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., December 10, 1906. Section 26 of the regulations and instructions concerning Jenatured alcohol, issued September 29, 1906, is amended by inserting after the words." approved benzine," in the ninth line of said section, the following: "Or methyl alcohol and approved pyridin bases, in the following proportions: To every 100 parts by volume of ethyl alcohol of the desired proof (not less than 180°) there shall be added two parts by volume of approved methyl alcohol and one-half of one part by volume of approved pyridin bases-for example, to every 100 gallons of ethyl alcohol (of not less than 180° proof) there shall be added 2 gallons of approved methyl alcohol and one-half gallon of approved pyridin bases." NOTE.-Methyl alcohol intended for use as a denaturant must conform to the specifications prescribed in Circular No. 680. Pyridin bases intended for use as a denaturant must conform to the following specifications: Specifications for pyridin bases submitted for approval as a denaturing material. PYRIDIN BASES. 1. Color. The liquid must meet the same requirements as to color that are imposed upon wood alcohol. (See Circular No. 680.) 2. Reaction with cadmium chloride.-Ten cc. of a solution of 1 cc. of pyridin bases in 100 cc. of water are treated with 5 cc. of a 5 per cent aqueous solution of anhydrous fused cadmium chloride, and the mixture vigorously shaken. Within ten minutes an abundant crystalline separation should take place. 3. Behavior with Nessler's reagent.-With 5 cc. of Nessler's reagent, 10 cc. of the above solution of pyridin bases must give a white precipitate. 4. Boiling point.—When 100 cc. are subjected to the determination of the boiling point in the same manner as prescribed for wood alcohol, at least 50 cc. must distil at 140° C. and at least 90 cc. at 160° C. 5. Miscibility with water.-The same requirements must be met as are imposed upon wood alcohol. (See Circular No. 680.) 6. Content of water.-When 20 cc. of pyridin bases are shaken with 20 cc. of a solution of caustic soda, with a specific gravity of 1.400, and the mixture allowed to stand for some time, at least 18.5 cc. of the pyridin bases must separate from the solution. 7. Alkalinity.—One cc. of pyridin bases dissolved in 10 cc. of water are titrated with normal sulphuric acid until a drop of the mixture placed upon Congo paper shows a distinct blue border, which soon disappears. It must require not less than 9.5 cc. of the acid solution to produce the reaction. The Congo paper is prepared by treating filter paper with a solution of 1 gram of Congo red in 1 liter of water, and drying it. Approved: JOHN W. YERKES, Commissioner. LESLIE M. SHAW, Secretary of the Treasury. (T. D. 1083.) Denatured alcohol. Formula for special denaturant to be used in the manufacture of shellac varnishes. TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., December 11, 1906. SIR: You will please inform the facturers of paints and varnishes in your district, that, in accordance with section 80 of regulations No. 30, the following formula has been authorized as a special denaturant for use in the manufacture of shellac varnishes: To 100 parts by volume of ethyl alcohol shall be added 5 parts by volume of methyl alcohol. The methyl alcohol shall be subject to the same specifications as are imposed upon the methyl alcohol used in completely denatured alcohol, which are set forth in Circular No. 680. Respectfully, JOHN W. YERKES, Commissioner. Mr. H. L. HERTZ, Collector Internal Revenue, Chicago, Ill. (T. D. 1084.) Denatured alcohol. How druggists, who are technically under the internal-revenue laws liquor dealers, but do not handle distilled spirits as beverages, can secure permits to deal in denatured alcohol. on the same premises on which they keep their stock of tax-paid alcohol. TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., December 11, 1906. SIR: I am in receipt of your letter of the 7th instant, in which you say that numerous letters are coming to you from druggists in various sections of the country who complain that under the construction of the regulations concerning dealers in completely denatured alcohol, in letter of November 17, 1906 (T. D. 1071), it is impossible for them to secure permits to deal in denatured alcohol. You say The difficulty of which the druggists complain arises through the construction of the term "liquor dealer." While practically all of the druggists in the country have United States licenses to deal in distilled spirits, they are not "liquor dealers” in the sense that they sell distilled spirits for beverage purposes. In nearly all cases these spirits are intended only for medicinal purposes, and comparatively few druggists sell liquors for use as a beverage. As it would be a great hardship to refuse permission to more than 40,000 druggists to deal in completely denatured alcohol because a few druggists also sell distilled liquors to be used as a beverage, we would respectfully suggest that the ruling of the Treasury Department of November 17 be modified so as to allow of a permit to be issued to all retail druggists who file affidavits to the effect that they sell distilled spirits for medicinal purposes only. In reply, I will say that it seems to this office that the decision in question is clear enough and needs no explanation or modification in order to enable druggists who are entitled to permits to secure same. It was the intention of said decision to do exactly what you suggest is proper, to wit, to include in the exempting clause of section 59 of regulations No. 30, druggists who handle distilled spirits, etc., as medicines, or who sell tax-paid alcohol to be used as alcohol in mechanical or medicinal ways and to exclude from said exempting clause druggists who handle beer, wines, whiskies, brandies, etc., as beverages. That there may be no possible room for misunderstanding the position of this office I will state that because a druggist holds a special-tax stamp as a liquor dealer, it is not to be assumed that he sells distilled spirits as a beverage. It is understood that many druggists, probably a majority of them, sell pure tax-paid ethyl alcohol for mechanical and medicinal purposes and that some sell whiskies, wines, brandies, etc., in a limited way on physicians' prescriptions as medicines. Under the internal-revenue special-tax laws such druggists involve themselves in special-tax liability as liquor dealers, but they are not such liquor dealers as are excluded from the exempting clause of section 59 of regulations No. 30, unless they handle spirits as beverages. On the one side are druggists who may be technically under the internal-revenue laws liquor dealers, but who, not selling distilled spirits, wines, or malt liquors as beverages, can secure permits to deal in denatured alcohol on the same premises on which they keep their stock of tax-paid alcohol, etc., stored; on the other side are druggists who handle distilled spirits, etc., as beverages in the same manner as such spirits are handled by liquor stores and who therefore can not secure permits authorizing them to deal in denatured alcohol on the premises on which they sell their beverage liquors or keep them stored. As to whether a druggist comes within one or the other class depends upon the facts in each particular case. You suggest that some uniform method of determining and disclosing the facts be adopted and you submit a form of an affidavit setting forth that the applicant does not deal in distilled spirits as a beverage, said affidavit to be filed with the application for permit. Upon this point I will state that this office sees no objection to the use of an affidavit of the kind suggested by you, but does not deem it necessary to prescribe such an affidavit as a form. It is thought that such additional clause or words as may be necessary to state the facts in each particular case can be added to the regular application for permit-Form No. 579. All that will be necessary will be for the applicant to show, either in the face of the form or by separate affidavit, that under this decision and section 59, regulations No. 30, he is entitled to permit. JOHN W. YERKES, Commissioner. Mr. Respectfully, New York. (T. D. 1085.) Denatured alcohol. Dealers in varnishes, shellacs, paints, etc., who are technically liquor dealers under the internal-revenue laws but do not sell spirits as beverages, may have permits issued to them to deal in denatured alcohol at the place where tax-paid alcohol is kept. The same rule applies to them as to druggists. TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., December 7, 1906. GENTLEMEN: I am in receipt of your letter of the 5th instant, in which you make certain inquiries in regard to the handling of denatured alcohol. You state that you have made application to the internal-revenue collector of your district for permits to deal in completely denatured alcohol at wholesale and retail, and that you are informed that it is necessary for you to construct a separate room on your premises for keeping the denatured product. You do not understand why you should be required to construct such separate room, and you ask for information on this point. You state you do not manufacture anything at street (your place of business), all of your goods being manufactured at 513-519 West 58th street, New York; that the premises at street (your place of business) consist of a store and office and three lofts, where you sell varnishes, paints, and dry colors, and occupy the whole building. You state further that— At the present time we have a retail-liquor license, as we sell grain alcohol in small quantities, less than 5 gallons, and this is the only thing that we sell, in a small way, which might be construed as being liquor dealers, but if this should interfere with the granting of our permit for the sale of denatured alcohol, we will give up this license on January 1, 1907. * * * In reply, you are advised that, not being manufacturers at street (your place of business), and using no denatured alcohol as manufacturers at said place, section No. 75 of regulations No. 30 does not apply to you, and you will therefore not be required to provide a room in which to keep the denatured alcohol as prescribed by said section. The only question seems to be whether or not you can keep denatured alcohol stored on your premises at street, your place of business, and continue to keep tax-paid alcohol stored on said premises, and deal in it as indicated in your letter. By reference to section No. 59, regulations No. 30, you will note that denatured alcohol can not be stored on the premises of dealers in distilled spirits, wines, or malt liquors, or of persons who, in the course of business, have or keep distilled spirits, wines, or malt liquors stored |