The Inland Revenue of Canada is derived from Excise, Public Works, Culling Timber, Bill Stamps, and Weights and Measures, Gas and Law Stamps. There was a decrease in the revenue from Excise, Culling Timber and Bill Stamps in the Fiscal Year 1876-77 of $610,470, and an increase on Public Works, Weights and Measures, Stamps, &c., of $63,292, leaving a net decrease, as compared with 1875-76, of $547,178. The following table gives a comparative statement of the revenue accrued from these sources for the last five years:

Spirits.

The quantity of spirits taken for consumption was less by 498,788 gallons than in the preceding year, and less by 21¾ per cent, than the average of the four preceding years. This decrease is partly due to the large entries made in the beginning of 1876, when an increase in the Excise was expected, but the average quantity of spirits taken for consumption during the two years 1876 and 1877 falls much below the average of the four preceding years. If the difference of population is taken into consideration, this decrease may be estimated at 750,000 gallons. The falling off is attributed by the Commissioner to three causes. First, The uncertainty of dealers with regard to prohibitive legislation, and consequently the avoiding further increase of stock than necessary, as shown by the fact, that though the quantity has largely decreased the number of entries has largely increased. Second, Illicit distillation, which appears to be largely on the increase, 47 stills having been seized during the fiscal year and 18 between June and December, 1877; and the loss to the revenue was, probably not less than the duty on 200,000 gallons; and Third, The diminished consumption from the diminishing power of the people to purchase. The quantity of spirits held in bond was considerably greater also at the close of the fiscal year than at its commencement, the figures being 1,276,786 and 1,513,720 gallons, and this last quantity is greater by 160,015 gallons than the average quantity held at the close of the preceding four years. There was a slight increase in the quantity of spirits exported, and a small decrease in the quantity taken into bonded manufactories.

Malt and Malt Liquor.

The quantity of Malt manufactured during the year 1876-77 was less by nearly three million lbs. than the average of the four previous years, and less by 12,041.087 lbs than In 1875-76. The quantity taken for consumption was less by 1,814,896 than in the previous year. There has been a steady falling off in the consumption of malt during the last five years, as will be seen by the following table:— page 56

Comparison of Five Years as to Malt.

The quantity of Malt exported was 1,454,436 lbs. greater than in 1875 76 and nearly 3¼ million lbs. greater than the average of four previous years. The quantity remaining in Bond was 1,223,977 lbs. less than on the 30th June, 1876.

27,471,797 lbs of malt were used in the manufacture of malt liquor, and 3,013,920 lbs. in distilling. The use of glucose, sugar and syrup as a substitute for malt has been entirely discontinued. 227,141 gallons of beer were exported. The revenue from the Excise on malt and malt liquors was $431,548, over $100,000 more than in the preceding year, and nearly that over the average of four preceding years.

Tobacco.

The production of manufactured Tobacco was much greater than in any of the four previous years, but the quantity taken for consumption was less by 633,322 pounds than in 1875-76, though greater by 301,148 pounds than the average of the four years. The stocks in warehouse at the close of the year exceeded the average by 530,000, and the previous year by 630,000. There has been an annual decline in the quantity of Canadian leaf taken for consumption, although it is believed there has been a steady increase in the quantity cultivated. There seems to be determination to evade the duty. The following table shows the transactions in Tobacco for five years.

Cigars.

Petroleum.

The Excise Duty on Petroleum was repealed in February, 1877, up to that date 7,913,751 gallons had been manufactured. Only that taken for consumption is now inspected, but not that exported a full ac-count of the trade in Petroleum for the last fiscal year is not obtainable. The per capita consumption in the Dominion in 1876-77, was

The average consumption of Spirits per capita since Confederation was greatest in Ontario and least in Manitoba; of Beer greatest in British Columbia and least in New Brunswick; of Wine, greatest in British Columbia and least in Ontario; of Tobacco, greatest in British Columbia and least in Prince Edward Island, and of Petroleum, greatest in Ontario and least in Manitoba. For the year 1876-77, the per capita consumption was greatest

Manufactures in Bond.

These are chiefly Vinegar and Methylated Spirits. Of the former 634,335 gallons were manufactured, in 1876-77, against 592,643 in 1875-76, and of Methylated Spirits 51,595 gallons against 43,595 the previous year; 105,738 gallons of Vinegar, and 1,635 of Methylated Spirits remained in Ware-house on June 30th, 1877, against 82,872 Vinegar and 167 gallons of Spirits remaining on June 30th, 1876.

Culling Timber.

The fees from this source amounted to 567,127, and the outstanding balance was also reduced from $33,901 to $26,813, making the actual revenue derived $74 216. A regulation has been made forbidding the Issue of specifications in future until the fees have been paid. The cost of the Culler's office was $68,171, $944 more than was received. The number of Cullers was, by the amended Act of 1877, reduced to 18, at a fixed salary of $700, and the fees charged were reduced 12½ per cent., 27 cullers were struck off the list, an annuity of $200 being allowed them.

Bill Stamps.

There was a further decline in the revenue from Bill Stamps of $17,991. The following is a statement of Bill Stamps issued on requisition by the Inland Revenue Department, for the year ended 30th June, 1877:—

Weights and Measures.

Several modifications in the regulations respecting these have taken place. The fees charged for a second and subsequent verification have been reduced to one-fourth of the first fee, and the first fee has been materially reduced, so that the Revenue from the inspection does not now nearly cover the cost of the service. The expenditure for equipping the Weights and Measures inspection offices up to 30th June, 1877, was $70,140 while the Revenue collected was $50,735. But these only represent the average collections of nine months. The number of all kinds of Weights and Measures inspected were as follows:

Not one of the 60 lb. weights legalised by the special request of parties in the grain trade was presented for verification

Tolls from Public Works.

The Statistics of the Revenue from Canals show an increase in the tolls on the Welland of 13-5 per cent., on the Ottawa canals of 24 9-25 per cent., and on the works in the Newcastle District, an increase from 100 to 664 dollars. On the St. Lawrence canals there was a decrease of over 8 per cent., on the Chambly of 8½, on the Rideau or 14½; Burlington over 5, and St. Peter's over 100 per cent. The total revenue from canals showed a slight increase. On the Welland Canal there was an increase of traffic in every thing but agricultural products, on which there was a decrease of nearly 12 per cent.

Slides and Booms.

The Revenue from these works shows an increase of $12,021, the figures for 1876-77 being $111,085 and those for the preceding year $99,064 There are outstanding balances, mostly disputed claims, of $221,240. Of the Revenue received, $98,259 was from the works on the Ottawa River and its tributaries 445,430 pieces of square and flatted timber, and 1,132,073 saw logs passed through these. Of the pieces 381,000 were white pine and 50,400 red pine.

Hydraulic Rents and Minor Public Works.

The Revenue accrued on these was $57,472; of which $24,916, less than one half, was collected, $5,234 was remitted by authority. Steps were taken during the latter part of 1877 to force the payment of those balances as to which there could be no question.

Inspection of Gas.

Up to the close of the fiscal year, the Gas Inspection had been extended to 8 places, and since that time the Gas has been inspected in Charlottetown, P.E.I, and instruments forwarded to 6 other places. 4,725 Gas Meters were presented for verification from the time of opening the office in April, 1876, up to June. 1877. Of these 4,479 were verified and 246 rejected The offices were opened at Montreal, St. John, Halifax, Toronto, Hamilton, Quebec, Ottawa and Pictou The illuminating power of the gas was found below the standard in Toronto, in October 1876, and in January and March 1877, and in St. John, N.B., in August 1876. At all other times, It was every where found above the standard. Sulphur and ammonia above the standard allowance, were found in every month in Montreal, and sulphur in months, ammonia in nearly all in Toronto, sulphur once in Ottawa, and ammonia in two months out of the three in which inspection was made, and ammonia in May and June in Quebec. Sulphuretted hydrogen was presents months in Toronto, two at St. John, N.B., two at Quebec, and in every test made at Pictou, N.S. Inspectors have been appointed for Brantford. Newcastle, Chatham, Port Hope and Fredericton. The value of the standards, office fittings, Ac., is estimated at $21,877. The expenditure for rents, salaries, &c., was $9,640 and the fees collected $2,770.

Adulteration of Food.

488 samples of food were analysed by officers appointed under the Inland Revenue Department in 1877; of these 247 were adulterated. Most of the spices page 59 were largely adulterated. Out of 19 specimens of mustard, only one was pure; out of 21 of ginger, 4 were pure, and in 36 specimens of pepper, 30 were found adulterated. Coffee was found largely adulterated with chicory, peas and wheal; out of 44 specimens examined, only 10 were pure coffee. 90 specimens of milk were tested. A little more than a third, 37, were pure. Tea and sugar showed little adulteration, 30 out of 34 samples of sugar were unadulterated, and 44 out of 59 of tea. Paris green was largely mixed with other substances. Only 20 out of 50 samples were pronounced genuine by the analysts. Of the different inspections, 103 were made in Toronto; 55 in Montreal, 24 in Quebec, and 58 in Halifax.

Inspection of Staple Articles.

In the months of July, August and September, examinations were held for outside officers in the Excise. 8 first-class, 19 second and 15 third obtained certificates.