Tobacco Tax

To the Federal Farm Board, tobacco is an agricultural product worthy of relief. To the Treasury, tobacco is a highly valuable tax-producing commodity which brings in some 434 millions, or one-eighth of all U. S. internal revenue. Last week, Treasury and Farm Board braced themselves for a tug-of-war over the tobacco tax.

First tug was given by James Clifton Stone, vice-chairman of the Federal Farm Board. From Kentucky, he represents tobacco growers on the Board. His proposal: a 50% reduction in all U. S. tobacco taxes. At the Capitol Senator Alben William Barkley of Kentucky and other members from tobacco-growing States were cheered at this potent support for their efforts, so far ineffectual, to ''relieve" tobacco growers by a tax cut.

On each 15-c- package of 20 cigarets is gummed a blue Internal Revenue stamp with De Witt Clinton's face upon it. That stamp costs the purchaser 6-c-. From the other 9-c- the retailer, the wholesaler and the manufacturer deduct their profits. For the actual tobacco in the 20 cigarets the grower receives between 1 1/2-c- and 2-c-.

In the name of farm relief Vice-Chairman Stone would cut the tax on 20 cigarets to 3-c- which, he believes, would reduce the cost to the consumer and increase the sum received by the grower. Vice-Chairman Stone argued that such a cut would before long double tobacco consumption in the U. S. with the result that the Treasury would collect as much in tobacco taxes as it does now.

Vice-Chairman Stone was less concerned about cigarets--more than 100 billion of which were sold in the first ten months of 1929, an increase of 13% over 1928--than he was about chewing and smoking tobacco. There has been a 1% decline in plugs. Vice-Chairman Stone's august and expert explanation was this:

"Formerly when a man bought a plug of tobacco to chew he got a good-sized piece that enabled him to be generous in sharing it with his fellows. Now, largely due to the tax, the plug commonly used does not contain more than a half a dozen good-sized chews. The buyer . . . seeks privacy when he takes a chew in order to avoid sharing it with others."

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