This section is from the book "Alcohol, Its Production, Properties, Chemistry, And Industrial Applications", by Charles Simmonds. Also available from Amazon: Alcohol: Its Production, Properties, Chemistry, And Industrial Applications.
Alcohol suitable for use as a beverage is heavily taxed in most countries. In so far, however, as it is required for purposes other than internal consumption by human beings, there is probably no country that would wish for the imposition of a tax upon so useful an article as alcohol has proved itself to be in the arts and manufactures. To mention only a few of its industrial applications, it is largely employed as a source of heat and light, as a solvent for resins in the making of varnishes and polishes, as a reagent in the extraction of drugs and the preparation of various chemicals, and as a constituent of medicaments for external use. There may be good economic grounds for an impost upon alcohol used as a luxury; but the case is far otherwise when the spirit is employed as the raw material of, or as an adjunct to, productive industry.
For this reason it is a common practice to " denature " alcohol required in manufacturing operations, and allow it to be used free of duty. The denaturing process consists in mixing with the alcohol nauseous substances which render it unfit for drinking, but do not prevent its use for industrial purposes. Chief among these substances are wood naphtha (crude methyl alcohol), mineral naphtha, benzene, and bone oil or crude pyridine bases; though for special requirements many others are employed. The denaturing may be either " complete," the denatured alcohol being then allowed to be distributed for general industrial or domestic use with relatively few restrictions; or it may be less complete, in which case the spirit is sanctioned for manufacturing purposes only, and used under closer supervision.