The importance of readjusting the internal revenue regulations and taxes on alcohol is clearly brought out by the United States Consul Halstead, Birmingham, England, who reports: The London, Manchester, Liverpool, Glasgow, and Birmingham chambers of commerce are taking part in the agitation to modify the restrictions placed by the inland revenue authorities upon the use of alcohol in manufacturing processes. I have reported that the chancellor of the exchequer had appointed a committee to look into the matter.

The Birmingham " Daily Post " claims that no district is so interested in the granting of the desired con--cessions as Birmingham, many of the principal industries in which alcohol is used being represented in or near the midland metropolis. There are a great many varnish manufacturers and lacquer makers with works in Birmingham or the immediate neighborhood. The " Post" says that "more lacquer is made in Birmingham than in all the rest of the world put together, and there can be no doubt that more of it is used than in any other place, " for Birmingham is the center of the brass and other metal trades, and lacquer is used on practically every article of metal on which a high polish is desired. I quote the "Post " article in part, as follows:

It is contended that if lacquer could be made from pure, cheap spirit the metal workers would be able to turn out a better finished article at a lower price. Even in the manufacture of varnish the use of spirit that has been denatured by adding 10 per cent of wood naphtha has the effect of clouding the varnish. It is more expensive to use methylated spirit than to use pure spirit, because the cost of the methylating has to be added to the cost of the alcohol. The cost of methylated spirit is further increased by the fact that the process of methylating it is only practiced by a few firms in this country, and they are able to keep up the price. Consular returns show that during the present year, when English methylated spirit was being sold at 42 cents per gallon, alcohol of the best quality was being sold at Marseille in new, iron-bound barrels at 23 cents per gallon, less 6 per cent for cash ; and the price of alcohol in Cuba was 10 cents per gallon.

The manufacturers contended that wood naphtha and turpentine are not the only effective denaturants, and that they should be allowed to mix the alcohol with denaturants that are not inimical to the process of manufacture. In the case of the lacquer manufacturers it is suggested that it is only necessary to mix the alcohol with shellac, which is impotable, and therefore would spoil the spirit for drinking purposes, but is an essential ingredient, of lacquer and would improve the spirit for manufacturing purposes.

Chemists claim that the revenue authorities should be satified if they saw the alcohol mixed with one or other of the constituents of the particular drug that was in process of manufacture. Motorists would probably be content if the spirit was mixed with 10 per cent of petrol, which would render the liquid undrink-able and would improve it as a motor power. With regard to the manufacture of explosives, it is argued that if pure alcohol could be used a much cheaper and less dangerous process could be adopted. A leading firm of chemical manufacturers at Bristol states that practically the whole of the trade in drugs containing alcohol has got into the hands of the Germans because of the duty on alcohol.

On paper it seems that the Germans are not allowed to use absolutely pure alcohol duty free, but Mr. Bar-low states that he has bought cheap alcohol in Germany which on analysis showed no signs of a denatur-ant except a small percentage of shellac, and there is documentary evidence to show that the restrictions in Germany are very much lighter than in this country. Instead of 10 per cent of wood naphtha Germans may mix with the alcohol 2 per cent of wood naphtha and 2 per cent of petroleum benzine or 0.6 per cent of turpentine. These quantities are so small that they do not appreciably affect the nature of the spirit, and there are many exceptions to these regulations. Under certain conditions the infinitesimal amount of .025 per cent animal oil may be used. The principle that the denaturant should be adapted to the commercial purpose for which the alcohol is to be used is largely carried out in Germany and also in France. For instance, in the manufacture of collodion, the alcohol may be mixed with 10 per cent of ether, which is a necessary ingredient of collodion.

In answer to the objection on the part of the inland revenue authorities that a relaxation of the existing restrictions would open the way to illicit dealing in spirits, Mr. Barlow contends that this could be obviated by granting the privilege only to those firms which are able to satisfy the revenue officers that the alcohol is duly mixed with the denaturant, and that it is actually used in the process of manufacture. He suggests that alcohol should be run direct into sealed tanks containing the shellac, petrol or ether, as the case may be.