COPY OF A MEMORANDUM BY THE SECRETARY OF CUSTOMS ON THE PROGRESS OF ILLICIT DISTILLATION AND SMUGGLING.

Appendix to the Journals of the House of Representatives, 1867 Session I, D-08

D.—No. 8.

COPY OF A MEMORANDUM BY THE SECRETARY OF CUSTOMS ON THE PROGRESS OF ILLICIT DISTILLATION AND SMUGGLING.

PRESENTED TO BOTH HOUSES OP THE GENERAL ASSEMBLY, BY COMMAND OF HIS EXCELLENCY.

WELLINGTON.

1867.

D.—No. 8.

Memorandum for the Hon. the Commissioner of Customs. The questions raised in the Memorandum by the Hon. the Colonial Treasurer which has been referred to me, I presume have reference only to such goods as Spirits, Tobacco, &c, the high duties on which afford such strong temptation for smuggling; for, with respect to the measurement and low duty goods, I think it may be assumed that the rates of duty do not hold out sufficient inducement to traders to attempt to smuggle them, and on this account, as well as from their generally bulky nature, that the duties are fairly collected on all that are imported. I shall, therefore, only allude to the articles liable to the higher rates of duty. With respect to spirits, there can be no question that the increase in the duty in December, 1864, from nine to twelve shillings per gallon, had the effect of increasing contraband trade, principally, I believe, in the shape of illicit distillation, for smuggling could not be undertaken to any very large extent on account of the difficulty of obtaining the spirits, as the countries wo principally trade with (Great Britain and the Australian Colonies) only export spirits under bond, and full particulars are always sent by the Customs with every shipment. Unquestionably, however, smuggling is carried on by means of the small vessels which trade to the South Sea Islands, principally from the port of Auckland. These vessels clear for the South Soa Islands with spirits and tobacco, shipped from the warehouse under bond, ostensibly to be used in trading with the Islands, but I believe many of them land the principal part of their cargoes before leaving the coast of New Zealand. The numerous bays, creeks, and harbours in the Province of Auckland, and the large fleet of coasting vessels constantly trading about, afford unusual facilities for this contraband traffic, and it will be very difficult, if not impossible, at present to suppress it. The Sydney manufactured tobacco also affords a strong temptation to the contrabandist to defraud our revenue, and I have no doubt this is taken advantage of. Only the other day 14 kegs, weighing 1,255 lbs., were being smuggled into Hokitika, concealed in hogsheads purporting to bo hogsheads of eggs. These were fortunately seized by the Customs. It is very generally believed that illicit distillation is being carried on to a considerable extent, and I have no doubt the revenue suffers more from this cause than from tho introduction into the country of uncustomed goods. No less than fifteen Illicit Stills have been seized by the Customs and Police in various parts of the Colony within the last two years; many of these were of the rudest possible description, and the spirits distilled in them must have been of too inferior a quality for general consumption, but yet no doubt such as would readily bo disposed of in the outlying districts and among the Natives. In a sparsely populated country like New Zealand it is not to be expected that illicit distilling can be entirely put down, but it may be suppressed to a considerable extent by means of rewards offered to informers. With this view a notice was recently published, and copies have been distributed throughout the Colony offering rewards from £5 to £50 for information which may lead to tho conviction of persons engaged in illicit distillation. Very soon after the issuing of this notice information was received which led to the suppression of two Illicit Stills at Hokitika, and the imprisonment of their owners. In one case the still was most ingeniously placed in a cellar under a house, and so contrived as to render detection impossible if information had not been given by a person acquainted with the place. The most effectual way of suppressing Illicit Stills will no doubt be by bringing into operation the proposed regulations for legalizing distilling. Each licensed distiller will theu have a direct interest in putting down the illicit trade ; and the lower rate of excise duty, combined with the superior quality of the rectified spirits from the large distilleries, will also operate powerfully against tho small stills. I enclose a rehirn showing the quantities entered for consumption of the principal high duty goods and the revenue received thereon during the years 1864, 1865, and 1866, and. the population in those years. From this it will be seen that in 1865 there was an immediate decrease of 38,096 gallons of spirits entered for consumption, and of 84,016 lbs. tobacco. Supposing the rate of consumption to have been the same in both years, the decrease would be —spirits 91,000 gallons, and tobacco 140,000 lbs. There has been an increase in the spirits and tobacco duty paid in 1866 over 1865 ; but having regard to the increase of population, the quantity is not so great as it ought to be, as compared with the rate of 1864, by 56,000 gallons of spirits and about 28,000 lbs. of tobacco. Other points, such as the relative prosperity of the community during the different periods stated, I am aware ought to be considered in any calculation of the Customs revenue based on population, still the figures I have given will be sufficient to show generally how the revenue is being affected. It seems impossible to resist the conviction that tho heavy increase which was made in the duties by the New Customs Duties Act in December, 1864, led immediately to a large increase in smuggling and illicit distillation. If the duties had been reduced in the session of 1865, much of this contraband trade might, I believe, have been checked; but now those who are engaged in smuggling have, I fear, during the., past two years and a half so far systematiscd their operations that nothing short of a very considerable reduction of the rates of duty would break up their trade. With regard to the tariff of last session, I think I am justified in saying that it has fully realized the expectations which were formed regarding it. The amount of revenue estimated has been received, and the collection of it has been unattended by those endless and constantly recurring disputes between the Customs and tho public as to the interpretation of the tariff which existed under previous Customs Duties Acts. In the course of a day or two I shall have completed a return in detail of the duties received on each item in the new tariff during the first six months it was in operation. William Seed, Custom House, Wellington, 14th June, 1867. Secretary and Inspector.

MEMORANDUM ON ILLICIT DISTILLATION AND SMUGGLING.

D— No. 8.

RETURN of CUSTOMS REVENUE collected in each Colony Province on SPIRITS, TOBACCO, and other HIGH-DUTY GOODS, in the Years 1864, 1865, and 1866. AUCKLAND.

RETURN OF CUSTOMS REVENUE.

4

1864. 1865. 1866. Total Population Total MDitary 42, 8, 773 ]50' 905 Total Population Total Military... 49,605') r ,, n . 5,500 j55' 10 ° Total Population Total Military 50,101 \ 51QOl 1,800 \ 51,9U1 Amicus. Rates of Duty. Quantity. Revenue. Rates of Duty. Quantity. Revenue. Rates of Duty. Quantity. Revenue. Spirits gals. 9s., 12s. 125,985 £ 61,890 12s. 118,797 £ 71,277 12s. 106,078 1 837 j 7,G35 149,936") 12,656 j 31,419 135,981 398,720 132,880 4,224,960 £ 63,647 ) 503) 1,749 1S,742 7 1,582 ) 6,421 8,04G 9,968 1,661 17,604 Cigars Tobacco lbs. 3s., 4s. 6d. Is. 6d., 2s. 6d. 19,923 175,084 3,152 13,224 4s. Gd. 2s. 6d. 13,075 134,824 2,942 16,853 4s. Gd., 5s. 2s. Gd. Wine Ale and Beer Tea Coffee Sugar gals, lbs. )) 3s., 4s., 5s. 6d.,9d.,ls.,ls.6d. 4d., 6d. 3d. Id. 49,374 206,107 . 337,938 241,360 3,423,840 7,707 9,377 5,755 3,017 14,266 4s., 5s. 9d., Is. 6d. Gd. 3d. Id. 49,400 225,080 345,210 244,560 4,494,960 10,474 12,818 8,631 3,057 18,729 4s., 5s. 9d.,ls.,ls. 3d., Is. Gd. 6d. 3d. Id. TARANAKI. 18G4. 1S65. 186S. Articles. Total Population Total Military 4,374 \~ M , 1,500 j0'874 Total Population ... Total Military 4,4781 19 ,r 8,000 j 12' 4' 8' Total Population Total Military 4,626 ■) - „►.„ 750 j5' 3' 6' Rates of Duty. Quantity. Revenue. Rates of Duty. Quantity. Revenue. Rates of Duty. Quantity. Revenue. Spirits Cigars Tobacco Wine Ale and Beer Tea Coffee Sugar gals. lbs. gals. lbs. 9s., 12s. 3s., 4s. Gd. Is. 6d., 2s. 6d. 3s , 4s., 5s. 6d., 9d., Is., Is. Gd. 4d., Gd. 3d. Id. 14,S46 1,701 16,789 3,636 15,531 28,595 22,800 309,8-10 £ 6,817 2G2 1,285 590 603 495 285 1,291 12s. 4s. 6d. 2s. Gd. 4s., 5s. 9d., Is. Gd. 6d. 3d. Id. 16,1.81 1,666 11,992 4,770 12,931 17,240 7,048 353,040 £ 9,709 375 1,499 993 674 431 88 1,471 12s. 5s., 4s. 6d. 2s. Gd. 4s., 5s. 9d., Is., Is. 3d., ls.Gd. Gd. 3d. Id. 13,631 667 10,992 8,741 10,734 20,240 10,160 319,920 £ 8,179 157 1,374 1,760 306 G5G 127 1,333 N oil. —lhc increase of duties tcok place in December, 1864, so that, for purposes of comparison, the low duties may be said to have been in force throughout that year. —W. S.

D.—No. 9,

5

RETURN OF CUSTOMS REVENUE.

1864. 18G5. 1806. Total Population Total Military 14,987 1 1G 987 1,300) 10' ' Total Population ... Total Military 19,165') „„ .„- 23'105 Total Population Total Military 22,748 1 0 . .„„ 1,818) Z1,5Jd Articles. Rates of Duty. Quantity. Revenue. Rates of Duty. Quantity. Revenue. Rates of Duty. Quantity. Revenue. Spirits Cigars Tobacco Wine Ale and Beer Tea Coffee Sugar gals. lbs. gals. lbs. 9s., 12s. 3s., 4s. 6d. Is. 6d., 2s. 6d. 3s., 4s., 5s. 6d., 9d., Is., Is. Gd. 4d., 6d. 3d. Id. 44,053 3,363 44,210 17,114 76,757 126,270 48,000 1,199,760 £ 21,625 507 3,527 2,586 2,762 2,199 600 4,999 12s. 4s. 6d. 2s. 6d. 4s., 5s. 9d., Is. 6d. 6d. 3d. Id. 60,091 5,946 39,280 25,900 130,746 175,800 65,920 1,804,080 £ 36,055 1,338 4,970 5,539 6,731 4,395 824 7,517 12s. 4s. 6d., 5s. 2s. 6d. 4s., 5s. 9d.,ls., Is. 3d., Is. 6d. 6d. 3d. Id. 64,716 3,898 48,168 25,568 161,571 209,040 74,320 1,866,240 £ 38,830 897 6,021 5,314 8,717 5,226 929 7,776 HAWKE'S BAY. 1864. 1865. 1866. • Total Population Total Military 3,770 \,, f() 400) 4' 1' 0 Total Population ... Total Military 4'302Ul02 g00^ Total Population Total Military 4,820 > . on . • iyo j 4,990 Articles. Rates of Duty. Quantity. Revenue. Rates of Duty. Quantity. Revenue. Rates of Duty. Quantity. Revenue. Spirits Cigars Tobacco Wine Ale and Beer Tea Coffee Sugar gals. lbs. gals. lbs. 9s., 12s. 3s., Is. 6d. Is. 6d., 2s. 6d. 3s., 4s., 5s. 6d.,9d.,ls., Is. 6d. 4d., 6d. 3d. Id. 17,182 891 15,122 0,917 24,062 34,569 G,000 277,920 £ 7,796 134 1,174 1,053 935 571 75 1,158 12s. 4s. 6d. 2s. 6d. 4s., 5s. 9d., Is. Gd. Gd. 3d. Id. 20,686 911 12,968 8,691 20,639 18,810 8,080 363,600 £ 12,410 205 1,621 1,821 1,160 471 101 1,515 12s. 4s. 6d., 5s. 2s. 6d. 4s., 5s. 9d., Is., Is. 3d., Is. 6d. 6d. 3d. Id. 21,715 1,051 21,704 7,495 27,813 37,080 5,840 405,360 £ 13,029 240 2,713 1,537 1,530 927 73 1,689

Customs .eyenx'e on Spirits, Tobacco, <fcc, in 1861, 18G5, ani 18GG — continue! WELLINGTON.

D.—No. 8.

6 RETURN OP CUSTOMS REVENUE.

USTO-S Revenue on ipirits, Tobacco, EC, in 864, 1865, am 1866 — continue. NELSON.

1864. 1865. 1866. Total Population 11,910 Total Population 13,920 Total Population 15,542 Articles. Rates of Duty. Quantity. Revenue. Rates of Duty. Quantity. Revenue. Rates of Duty. Quantity. Revenue. Spirits Cigars • Tobacce Wine Ale and Beer Tea Coffee Sugar gals. lbs. gals. lbs. 9s., 12s. 3s., 4s. 6d. Is. 6d., 2s. 6d. 3s., 4s., 5s. 6d.,9d, Is., Is. 6d. 4d, 6d. 3d. Id. 19,961 3,285 33,276 6,334 25,368 57,430 32,720 766,800 £ 9,204 506 2,558 970 1,040 1,012 409 3,195 12s. 4s. 6d. 2s. 6d. 4s., 5s. [9d., Is. 6d. 6d. 3d. Id. 22,860 4,573 37,640 10,775 29,066 91,400 70,080 1,219,680 £ 13,716 1,029 4,705 2,316 1,873 2,285 876 5,082 12s. 4s. 6d., 5s. 2s. 6d. 4s., 5s. 9d.,ls.,ls. 3d.,ls.6d. 6d. 3d. Id. 18,906 4,567 34,872 7,380 15,554 94,200 42,560 1,047,360 £ 11,344 1,053 4,359 1,510 1,851 2,355 532 4,364 MARLBOROUGH. 1861. 1865. 1866. Total Population 5,519 Total Population 5,464 Total Population 5,773 Articles. Rates of Duty. Quantity. Revenue. Rates of Duty. Quantity. Revenue. Rates of Duty. Quantity. Revenue. Spirits Cigars Tobacco Wine Ale and Beer Tea Coffee Sugar gals. lbs. gals. lbs. 9s., 12s. 3s., 4s. 6d. Is. 6d., 2s. Gd. 3s., 4s., 5s. 6d.,9d., Is., Is. Gd. 4d., 6d. 3d. Id. 9,284 471 12,077 1,695 3,131 21,198 3,680 182,880 £ 4,229 71 906 258 109 367 46 762 12s. 4s. 6d. 2s. 6d. 4s., 5s. 9d., Is. Gd. 6d. 3d. Id. 6,290 368 6,184 1,733 5,013 13,080 3,280 143,040 £ 3,774 83 773 363 316 327 41 596 12s. 4s. 6d., 5s. 2s. 6d. 4s., 5s. 9d., Is., Is. 3d., Is. 6d. 6d. 3d. Id. 5,301 76 4,752 1,230 580 13,640 2,560 134,160 £ 3,181 19 594 248 47 341 32 559

D.—Xo. 8.

RETURN OP CUSTOMS REVENUE. 7

1864. 1865. 1866. Total Population 32,276 Total Population 48,618 Total Population 58,752 Articles. Rates of Duty. Quantity. Revenue. Rates of Duty. Quantity. Revenue. Rates of Duty. Quantity. Revenue. Spirits Cigars Tobacco Wine Ale and Beer Tea Coffee Sugar gals, lbs. gals. lbs. 55 9s., 12s. 3s., 4s. 6d. Is. 6d., 2s. 6d. 3s., 4s., 5s. 6d.,9d., Is., Is. 6d. 4d., 6d. 3d. Id. 171,189 5,465 70,991 35,924 202,690 237,291 86,160 1,708,080 £ 32,254 828 5,009 5,480 7,320 4,055 1,077 7,367 12s. 4s. 6d. 2s. 6d. 4s., 5s. 9d., Is. Gd. 6d. 3d. Id. 127,455 13,915 132,488 60,450 181,408 347,840 93,760 3,103,440 £ 76,473 3,131 16,561 13,212 10,093 8,696 1,172 12,931 12s. 4s. Od., 5s. 2s. 6d. 4s., 5s. id., Is., Is. 3d., Is. Gd. 6d. 3d. Id. 207,953 21,338 234,230 83,539 259,503 566,600 211,360 5,050,800 £ 124,772 4,926 29,279 17,299 18,976 14,165 2,642 21,045 Note. —The above includes Hokitika and Greymouth. The numbers of the population for 1865 and 1866 cannot be depended upon. See separate Return at end of East Canterbury alone. OTAGO. 1864. 1865. 1866. Total Population 49,019 Total Population 46,599 Total Population 49,942 • Articles. Rates of Duty. Quantity. Revenue. Rates of Duty. Quantity. Revenue. Rates of Duty. Quantity. Revenue. Spirits Cigars Tobacco Wine Ale and Beer Tea Coffee Sugar gals, lbs. gals. lbs. J) 9s., 12s. 3s.. 4s. 6d. Is. Gd., 2s. 6d. 3s., 4s., 5s. 6d., 9d., Is., Is. 6d. 4d., 6d. 3d. Id. 206,490 26,372 211,773 71,334 452,916 503,3,98 240,080 4,341,840 £ 92,803 3,965 16,277 10,786 16,768 8,408 3,001 18,091 12s. 4s. 6d. 2s. Gd. 4s., 5s. 9d., Is. 6d. 6d. 3d. Id. 147,710 17,911 139,032 27,818 355,010 500,400 229,760 4,189,920 £ 88,626 4,030 17,379 12,428 16,851 12,510 2,872 17,458 12s. 4s. 6d., 5s. 2s. 6d. 4s., 5s. 9d., Is., ls.3d.,ls. 6d. 6d. 3d. Id. 133,466 12,491 138,704 43,501 185,511 429,120 151,120 4,184,640 £ 80,080 2,889 17,338 9,013 10,490 10,728 1,889 17,43G

USTOilS I Revenue on : Spirits, Tobacco, &c, in 18 364, If 86u, am — con, mue, # CANTERBURY.

D.—No. 8.

8 EETURN OP CUSTOMS EEVENUE.

;> i'STOMS .EVENTS on ! Spirits, Tobacco, &i ,c, in 15, ani — continue. SOUTHLAND.

1861. 1865. 1866. Total Population 8,085 Total Population 7,046 Total Population 7,657 Articles. Rates of Duty. Quantity. Revenue. Rates of Duty. Quantity. Revenue. Rates of Duty. Quantity. Revenue. I i Spirits Cigars Tobacco Wine Ale and Beer Tea Coffee Sugar gals. lbs. gals. J) lbs. 9s., 12s. 3s., 4s. 6d. Is. 6d., 2s. 6d. 3s., 4s., 5s. 6d., 9d., Is., Is. 6d. 4d., 6d. 3d. Id. 61,267 3,215 41,563 15,609 77,230 90,927 25,680 879,360 £ 27,587 483 3,153 2,352 3.015 1,516 221 3,664 12s. 4s. 6d. 2s. 6d. 4s., 5s. 9d., Is. 6d. 6d. 3d. Id. 22.148 897 23,104 6,328 34,106 66,040 12,400 650,610 £ 13,289 202 2,888 1,367 1,919 1,666 155 2,711 12s. 4s. 6d., 5s. 2s. 6d. 4s., 5s. 9d.,ls., Is. 3d., Is. 6d. 6d. 3d. Id. 28,028 1,582 27,160 8,059 29,785 86,120 22,720 892,080 £ 16,817 360 3,395 1,658 1,827 2,153 284 3.717 CHATHAM ISLANDS. 1864. 1865. 1866. Total Population 86 Total Population Total Population Articles. Rates of Duty. Quantity. Revenue. Rates of Duty. Quantity. Revenue. Rates of Duty. Quantity. Revenue. Spirits Cigars Tobacco Wine Ale and Beer Tea Coffee Sugar gals, lbs. gals. lbs. 9s., 12s. 3s., 4s. 6d. Is. 6d., 2s. 6d. 3s., 4s., 5s. 6d.,9d., Is., Is. 6d. 4d, 6d. 3d. Id. 54 £ 26 12s. 4s. 6d. 2s. 6d. 4s., 5s. 9d., Is. 6d. 6d. 3d. Id. £ 12s. 5s., 4s. Gd. 2s. Gd. 4s., 5s. 9d.,ls.,ls. 3d.,ls.6d. 6d. 3d. Id. 43 4 568 £ 26 71 1,316 6 99 1 192 21 40 80 4S0 1 1 2 . ...

RETURN OE CUSTOMS REVENUE.

9

D.-No. 8,

LYTTELTON, CHRISTCHURCH, AKAROA, AND TIMARU.

HOKITIKA AND GREYMOUTH.

RETURN of CUSTOMS REVENUE collected in the Colony of NEW ZEALAND on SPIRITS, TOBACCO, and other HIGH-DUTY GOODS, in the Years 1864, 1865, 1866.

Articles. 186186; 1861 Spirits Cigars Tobacco Wine Ale and Beer Tea Coffee Sugar gals. lbs. gals, lbs. 11 11 Quantity. 71,189 5,465 70,001 35,024 202,600 237,201 80,160 1,768,080 £ 32,254 828 5,600 5,480 7,320 4,055 1,077 7,367 Quantity. 70,288 7,401 70,512 33,548 133,837 238,280 70,160 2,272,560 £ 42,173 1,666 8,814 7,050 7,012 5,057 877 0,460 Quantity. 55,645 5,001 56,584 25,085 125,554 285,360 00,560 2,647,440 £ 33,387 1,379 7,073 5.371 7,782 7,134 1,132 11,031

Articles. 1864. 181 16. 18Gi Spirits Cigars Tobacco Wine Ale and Beer Tea Coffee Sugar gals. n*. gals, gals, lbs. 02 & Quantity. 57,166 6,511 61,970 26,902 47,571 109,560 23,600 830,880 £ 24,300 1,465 7,747 6,153 3,081 2,739 295 3,462 Quantity. 152,308 15,347 177,618 87,554 133,949 281,240 120,800 2,403,360 £ 91,385 3,547 22,206 11,928 11,191 7.031 1,610 10,014

Aeticlm. 1864: Population, 181,131. 1865: Population, 217,497. 1866: Population, 224,529. Spirits Cigars Tobacco Wine Ale and Beer ... Tea Coffee Sugar £ 264,230 9,908 47,812 31,783 41,929 24,378 8,731 54,798 £ 325,329 13,335 67,273 48,513 52,436 39,412 9,186 68,010 £ 360,402 12,289 84,468 43,733 52,268 40,530 8,710 75,548 3