but in either case the party would have great difficulty in satisfying the commissioner of the error. It has been suggested that a system of weighing would obviate the difficulty, or that it might be accomplished by allowing the distiller to measure his spirits into his barrels through a copper box with a graduated scale, upon which each gallon and fractional part thereof is marked.1 To prevent undergauging from the high temperature of the spirits, the commissioner requires gaugers to see that when the temperature of the atmosphere is fiftyfive degrees or less, that the spirits do not exceed seventy degrees Fahrenheit, and they are on their returns to indicate the temperature of the atmosphere at the time and place of gauging. Books, or Records of Distillery.-The storekeeper is required to keep a warehouse book. In this book he is to record an account of every article deposited, the date of deposit, by whom manufactured, a full description of the packages, according to the cuts, marks and stamps of the revenue officers, giving all the information contained in them; the permit of the collector to remove is to be recorded in full, and any other particulars which may be prescribed, or found necessary for the identification of the packages, to insure correct delivery thereof and proper accountability therefor. Daily.-The storekeeper is to make a return of all articles entered or removed from the warehouse on the preceding day. This return is made to the collector, and a copy mailed to the commissioner. Monthly.-On the first Monday in every month, he is to make a duplicate report of all packages which remained in the warehouse at the date of the last report, giving a description of them by their revenue marks and stamps; of all the articles received and delivered during the preceding month, and of all articles on hand at the end of said. month. One of these reports is furnished to the collector having charge of the distillery, to be recorded and filed in his office, and the other is transmitted to the commissioner.3 Material Book.-The storekeeper is also to keep a record of all materials brought into the distillery, or on the premises, to be used in producing spirits, from whom purchased, and when delivered at the distillery; of the fuel used, and repairs made; of the residences of all persons employed in or about the distillery; of the materials put into the mash-tub, or otherwise used for the production of spirits; of the time when any fermenting-tub is emptied of ripe mash or beer, re 1 21 Int. Rev. Rec. 353, letter of commissioner to F. O. Boyd & Co. N. Y. 3 R. S. U. S. § 3301. cording it by the number painted on the tub; and of all spirits drawn off from the receiving cistern, and the time of withdrawal.1 Distiller's Books.-The distiller is required to keep a book in which he is to make an exact entry of the materials purchased by him, from whom, by what conveyance delivered, and the amount paid therefor; the amount paid for ice and water used in the distillery, the repairs, the cost of and by whom made; the name and residence of each person employed in the distillery, and in what capacity. In another book he is to make an entry of the quantity of grain or other material used for the production of spirits, the time of day when any yeast is put into any mash or beer to excite fermentation; the quantity of mash in each tub, designating it by the number; the number of inches between the top of the tub and the mash, called dry inches; the specific gravity and temperature at the time of yeasting, and the quantity, gravity and temperature each day thereafter at 12 the time when any fermenting-tub is emptied of ripe mash or beer; the number of gallons of spirits produced; the number placed in the warehouse, and the proof thereof; the number of gallons sold, with proof; and the name, place of business, and person to whom sold. These books are always open to inspection. When a book is filled it is to be preserved for two years after that period, and it is to be produced whenever demanded by any officer of the revenue.2 Distiller's Return.-On the first of each month, or in five days thereafter, the distiller is to make to the collector a duplicate return, taken from his books, which is to show: (a) the quantity and kind of material used each day for the production of spirits; (b) the number of wine gallons, and of proof gallons produced and placed in the warehouse during the month. This is sworn to, the form of the affidavit being prescribed by statute. One of these returns is transmitted by the collector to the commissioner.3 Deficiency Assessment.-The commissioner, from the returns of the distiller and those made by the collector, has accurate information as to the amount of spirits produced by the distiller, and the amount of materials used by him, and by the survey he has information of the producing capacity of the distillery. From the information in his possession he is authorized to make an assessment for deficiency in the amount reported. There are three of these assessments: 1. If the amount returned as produced is eighty per cent. less than the capacity of the distillery, as determined by the survey, although 1 R. S. U. S. § 3802. 3 R. S. U. S. § 3307. 2 R. S. U. S. §§ 3303, 3304. the whole amount produced has been actually accounted for, the distiller is to be assessed for this deficiency. The payment on the quantity actually produced and returned does not prevent an assessment for the difference between such quantity and eighty per cent. of the capacity as determined by survey. The distiller has notice, by the survey, of the capacity determined, and if he fails to produce that quantity he must pay on the difference up to eighty per cent. He is only allowed to fall short of the capacity determined by the survey twenty per cent.1 In ascertaining whether the amount produced is within eighty per cent. of the capacity, the commissioner makes his calculation from the time of the delivery of the copy of the survey to the distiller. This was the construction given by the department to the act of 1868, and which influenced the decision of the Supreme Court on that subject. Now, in the Revised Statutes, the decision is adopted by Congress, and in express words the survey is declared to take effect upon the delivery of a copy to the distiller. 2. The survey not only determines the producing capacity of the distillery for a day of twenty-four hours, but it also determines the quantity of spirits a practical distiller can, with good management, produce from a bushel of grain. The commissioner having in his possession a record of the materials used, can ascertain whether the distiller has produced from the grain used the quantity of spirits which could have been produced. In making this estimate the commissioner is to take fifty-six pounds of grain as a bushel. Having thus ascertained the difference between the amount produced and the amount which could have been produced by good management, the commissioner makes an assessment at the rate of ninety cents a gallon on the difference. This assessment is entirely different from the first, and is made whether the production reported equals or exceeds eighty per cent. of the capacity. It is the failure to produce, from the materials used as reported in the returns, the quantity that could have been made, that is assessed. By the survey of a distillery the quantity capable of being produced was fixed at 31 gallons per bushel of grain. The returns of the distiller showed a product exceeding eighty per cent. of the capacity, and that the product had been accounted for, but the return of product, when compared with the quantity of material used, showed a less quantity than 34 gallons for each bushel of grain used. For this 1 R. S. U. S. § 3309; United States v. Singer, 15 Wall. 111; Pahlman v. The Collector, 20 Wall. 189. Peabody v. Stark, 16 Wall, 240. 2 R. S. U. S. § 3264. deficiency the distiller was assessed, and the assessment was held to be valid, although he had paid on the whole product, and that product was in excess of eighty per cent.1 Justice Strong: "The quantity of material used is made a measure of production, and upon all spirits ascertained by that measure to have been produced, either actually or potentially, he is taxed."2 Eighty per cent. of estimated capacity is the smallest amount taxable. If the distiller produces more than the eighty per cent. he is liable for the amount produced, or if the quantity of grain used shows a larger production, a capacity to produce more, he is taxed for that quantity also in excess of product returned. The estimated capacity is not affected by the fermenting period stated in the notice of the distiller when he commences business. It is not the object of the notice to allow the distiller to fix the fermenting period; that is to be done by the commissioner. The object of the notice is to furnish protection against frauds, and possibly to assist in the ascertainment of the quantity of spirits actually distilled. The collector and his assistant must determine the true and actual capacity, not what the distillery would produce according to the distiller's mode of running. The distiller may subject himself to penalties by fixing a period of fermenting different from that of the commissioner, but he cannot thus change the capacity of the distillery, actual or poten tial.3 3. There is still a third assessment to be made when the actual product returned is not accounted for. The returns show the amount the distiller has on hand, and the amount sold and removed from the warehouse. These amounts ought to correspond with the actual production. If they do not, the distiller is to be assessed for the difference. But in no case is the actual product to be assumed to be less than eighty per cent. of the capacity. This last assessment seems not to have been included in the act of 1868, which is construed by the cases cited, and which is reproduced in § 3309 of the Revised Statutes, but was first introduced in the act of June 6, 1872. In ascertaining the actual product, to make this third assessment, the commissioner is not confined to the evidence in the returns of the distiller, but is to make the estimate from all the evidence he can obtain. Defenses to Deficiency Assessments.-The distiller is supposed to be running his distillery from the time it commences until the notice The Collector v. Beggs, 17 Wall. 182. 217 Wall, 189. Palilman v. The Collector, 20 Wall. 189; affi'g 17 Wall. 182, and 15 Wall. 111. of suspension is given tothe collector, in the mode heretofore pointed out. Formerly, it was given to the assessor, and by him forwarded to the commissioner. A notice of suspension, directed to the assistant assessor, was written in the office of the assessor, and came to his hands; the assessor was not able to lock the furnaces, and he failed to report the suspension to the commissioner. In a suit against the distiller, it was held that the failure of the officers to do their duty was not to affect the distiller, and he was to be treated as having suspended operations from the time of the delivery of the notice.1 In a suit on a distiller's bond, he offered evidence to show that for the first four days for which taxes were assessed against him for a deficiency, he was unable to operate his distillery because no storekeeper was assigned by the government to the distillery, and that for four other days, from the 8th to 12th of October, he had by unavoidable accident, been unable to operate the distillery; that at that time he gave the notices required by law; that the machinery during that time was securely fastened by an assistant assessor, and remained fastened as required by law. The Supreme Court of the United States decided that such evidence ought to be admitted, that it would be unjust and oppressive to charge the distiller with a tax during a period when he could not operate his distillery, on account of the omission of the government to furnish the proper officer to superintend the distilling. The dissenting opinion in this case was based on the principle that such evidence, if admitted, did not show that the tax was illegal, but merely that the assessment was erroneous, and that the tax was for a larger amount than the distiller was liable to pay. On principle, this would appear to be the better view of the case. These deficiency assessments are to be made monthly, and if they are erroneous the distiller may apply for an abatement of the tax by the correction of the error. It is true that this application is to the same person who makes the assessment, the commissioner, but that does not alter the principle. The broad distinction between erroneous and illegal taxation, noticed in another part of this work, applies as well to federal as to State taxation.3 New Survey.-The capacity of the distillery is fixed by the survey. If the distiller wishes to change it, he gives the notice pointed out in § 3311. If the commissioner is not satisfied, he may order a new survey. The commissioner alone can direct the new survey, and when directed by him it must be made precisely in the mode |