The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1904-11-30
OIL and Gas Legislation. Is the
KnOtty Question.
That LIS Troubling Southeast
Kansas Counties.
UP TO LAWMAKERS.
Taxation That Will Please
Both Glasses Wanted.
What Are Wells Assessable i'm
Another Trouble.

Chanute, Nov. S0-The oil belt people
are far from unanimous as to what leg
islation they desire at Topeka this win
ter. Some of them say they are salts
fed with present conditions, while 9TH
ers say that some laws are necessary
for the protection of the industry. The
rapid development of the oil and gas
fields has occurred since the adjourn
ment of the last legislature, and has
brought about changed conditions in
Allen, Wilson, Neosho, Montgomery,
Miami and Chautauqua counties.
There is no law on the statute books
fixing a basis for the taxation of an
oil or a gas we'll. BY agreement the
assessors in most of the oil producing
counties this year fixed a valuation of
$500 a well, and taxes were paid on
that basis. But the assessors could
Just as well have fixed the valuation
Of the wells at $1,000, or even higher
than that, and the producers would
have been practically without recourse.
The question as to whether oil is not
mineral, and therefore liable to taxa
ton only after it reaches the top of
the ground arose in the discussion with
the assessors, as was the question OF
the value of the machinery. The
question as to how much the farmer
ought to pay enters into this feature of
1T. The farmer owns the land and
draws his royalty of one-eighth OF the
oil produced. He is the owner of the
fee, and the increased value is to his
profit.
This year the assessors taxed the land
at the old rate as purely agricultural
land and taxed the producer for the
wells on it. How to arrive at a basis
which will prorate the tax equally and
justly between the producer and the
farmer is a knotty problem The farm |
ers will object to having their assess !
ment raised and the producer will pro- |
badly object to paying all of the tax. |
Suggestions have been made that the |
earning capacity of the we'll be ascer- |
tanned by the assessors and a valuation
arrived at in this way, but this has
been met by the statement that the |
producing capacity of wells vary, and |
one years earnings constitute no basis |
OF arriving at a conclusion Of perman- |
ent value. Some properties in the first
year produce twice as much oil as they
do in the second year, and the producer
says he should not be compelled to pay
taxes on this basis So far as the ma
chinery, pipe and other things used in
the production of oil are concerned,
their value can be easily determined.
The small producer is not satisfied
with the fiat rate adopted by the as
SCISSORS this year The man who pro
duces five or ten barrels a day under the
system of valuation adopted pays as
much as the man with a so barrel well.
This is one. of the places where the leg
islature will strike a snag. The small
basis of valuation, while the large pro-
Queer is satisfied to be let alone under
the present arrangement This is sup
posed to be one reason why the pro-
ducers' associations have been unable
10 formulate a plan which would be sat
ssfactOry to everyone.
The pipe line question is bound to
come up in some form. Some OF the
producers are confident with law
which would give county commission
ers the absolute control of the public
specific act which will determine finally
the status of the pipe lines, both for
oil and gas. This they say will avoid
friction with county commissioners and
insure an outlet for the product. This
divergence of opinion is greater among
gas men than among oil men. The oil
men have had no trouble up to this
time in laying their pipe lines. The
commissioners have always
granted rights of way across public
highways when requested.
But gas is another proposition. The
sentiment which has been worked up
to keep the gas in the state, or in the
counties where it is produced, will take
the form of some sort of law which Will
be drafted by the legislative commit
tee of the Kansas Gas Protective aSSO-
citation. But the Gas Protective asso-
citation is not all of the gas interest
The greatest gas interests and the
greatest gas producers are the Kansas
Natural Gas company and the consti-
tuent companies of the Associated Oil
They own more than 80
per cent of the production and pipe
lines and they age desirous of legisla-
ton which will Permit them to market
their product all over the state, if not
outside the state. There has been
some doubt expressed about the con-
structiOn of the law making a pipe
lire common carrier and entitled to
the right of eminent domain.
1t develops that r. N. Allen of Cha
mute, one of the organizers of the Kan
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