Cleveland morning leader. [volume] (Cleveland [Ohio]) 1854-1865, 1864-12-29

4
TRDAsURY DEPARTMENT, OFFICE OF INTERSA-
TIoEAL REvESUE, WAsHINGToN, Dec. Is, 1854.
Sir: Your letter of December I, in re-
lation to the stamp duty on an aoil lease
SO called, has been received. The law
makes the "rent on rental value" the test
which determines the amount Of stamp
duty, and of course where the rent is fixed
at a specified sum in money the stamp du.
ty is easily determined
In the case ofthese oil leases there Is,
however, very rarely fixed rental value
in money agreed upon. In some instan-
ces the lessee contracts to erect valuable
machinery or sink shafts, as well as to pay
certain rate per gallon or barrel for the
oil produced, OF deliver a certain portion
of the oil inGtead Of cash payments, and
in others the rent is to ba certain por-
tion of the oil or its value in mOney-the
machinery in the first case is to be tho
property Of the lesser at the end Of the
term.
Insuch cases the annual rent. or rental
value, can only be determined by estima-
ton. If the lease is of new and untried
lands, there is OF course a possibility that it
may turn out to be worthless, so far as the
production of oil is concerned, but it would
not be safe 10 assume thst it would always
or perhaps ever be SO. If the lessee has
erected valuable machinery upon the prem
ises, or made valuable improvements which,
upon the termination or surrender of the
lease, become the property Of the lessor,
it is evident that he has received q portion
of tho rent or compensation for the use of
his land agreed upon, although no oil is
produced.
The rental value cannot in such cases be
accurately determined, and of course the
s.ampt duty can no more be accurately
calculated, and therefore parties in such
cases are obliged to apply to the collector,
under section 1872 of the act of June 80,
TO have the stamp duty determined, which
of course involves the calculation of the
annual rental value.
If the land has been worked before the
lease is made, or if the original lessee in
such case underlets OF assigns his lease or
a portion or undividad interest in it. the
collector will in such case have some reli-
able data to start upon, but in all cases be
should estimate from the best information
he can get-the probable average rented
value; and of course in doing this he
will have regard to his own knowledge Of
the premises, the information derived from
the parties and others, and the stipulstions
of the lease; and if the rent is payable
in oil, the average market vslS-S Of the
oil is an element in the calculations, snd
in cases where he is in doubt he will o.
course receive such instructions as may bC
desired from this ofiee.
Such leases, whether Of oil, coal or min
eral lands, are held to be subject 10 stamI
duty assesses, and stamp as an sgreemen
or contract is of course insufficient.
: There are Thousands Of farms in tn
country which are leased Hupon shares" a
it is termed, and is of course impossible t
determine at a given date what the farn
will produce for the ensuing year; the rem
tai value must be estimated, and tho guam
tity as well as value Of the several product
, must become elements in the calculation
and yet no difficulty seems 10 have arise
in such cases. Tho calculation in the cas-
! cf coal or oil lease may be more compl
Gated, but the principle is the same
Very respectfully,
JOSEPH J. LEWIS, Commissioner.
3 WIN. HENRY ARROW, Esq, No. $50 NasSs
street Now York City.