Tulsa daily world. [volume] (Tulsa, Indian Territory [Okla.]) 1905-1919, 1916-02-20

to Indian landowners and farmers
and bonuses given for land upon
which to explore for oil amounted to
more than did the royalties on the
production of oil. be the royalties one
eighth, one-quarter or one-half. In
any event the oil man paid both
rental and royalties, and in the case
of the Indian leases he paid not only
rental. but an oil royalty in ad-
vance. The oil man has built up
every community into which he has
gone Since statehood the question
OF taxing the oil industry has been
before the legislature. 1t remained
for this legislature to have the senate
double the tax without the decency
OF a hearing to anybody.
''lf our oil fields are to be devel-
oped, and society demands that they
be developed, we must treat the in
vestors right. Ninety-three per cent of
wildcat wells are dry or Improbable.
Thirty-three per cent of all wells
drilled are dry or Improbable, re-
gardless of where they are drilled.
Add to this the ever-changing market.
The first of last December found con-
ditions such that the smaller prop
erty was completely shut down and
running at loss. The market was
40 cents a barrel. The majority OF
the oil operators were then facing
bankruptcy. Now the market Is s130
per barrel and the majority of the
operators are just getting back on
their feet. The large marketing con-
Germs who may own oil production
can dispose of any tax by adding II
on TO the consumer or deducting IL
from the producer when they consid-
er such tax as excessive. The inde-
pendent producer of oil has no such
refuge. An excessive tax will be
great burden to him.
What the gross income from oil
this year will be no one can tell. As
Mr.. Russell has Just as good a right
to guess as anyone. | will accept his
estimate of a gross income of s140,-
100000. AS he fi"ured a royalty as
one-eighth, when ! have shown that
large tracts are under a one-fifth
royalty and higher. have proven his
figures wrong. Upon his own esti-
mate of q gross income of $l40,
100000 / can prove that at least sell
0O0,O of this amount will go to the
landowner without his investing a
dollar or taking n chance. When the
present governor of the state of Okla
homa was the chief justice Of the
supreme court his court decided that
when oil was in the ground 1t was
not property, and only became so
when brought to the surface and re-
duced to possession. The supreme
court Of the United States has said
the same thing.
"Vista of Hope.
"Chief Justice Kane of the Okla
homa supreme court in his wonderful
decision which has been a milestone
in the law of oil and gas said that
the ad valorem tax on an oil and gas
lease was "a tax on the illimitable
vista of hope. Judge Kane found it
necessary to study this problem. The
supreme court found it necessary, but
w are asked to rush this matter
through without further investigation.
81 believe that the attorney general
of this state recognizes as does the
supreme court of the state, that the
only true measure of the value of an
oil producing property is by its gross
production. This being the only rec
ognized method of practical and
scientific taxation, the question of
the rate Is the big problem. Two per
cent is fair and equitable. well
producing a thousand barrels is pay
ing under this per cent gross pro-
duction tax a value of 100000. No
single well in oklahoma was ever
sold for or Is worth third Of this
per cent of all oil produced as de-
duction for impurities in the product.
Nothing has ever been said about this
by Senator Russell. On all incomes
over $4,000 an income tax is levied.
Large investments must carry large
returns. Inasmuch as the oil busi-
ness is a business of huge proportions,
it is caught by the supertaX on in
comes ranging as high as per cent.
l,tr "a ~
seventy million barrels storage which
Oil has already paid a 2 per cent pro-
duction tax, and also add the personal
tax on the money of the operator In
the bank to pay his labor and his
rental, and a desire to treat the oil
man right should be in the minds of
us all There is no money in the state
of Oklahoma which is taxed in So
many ways as is the money of the
oil man. Let us be fair, let Okla
homa Democracy be constructive. The
per cent tax on gross production of
oil will bring from the oil man and
the Indian royalty owner in ten
counties alone the sum of s2,S00,000
II the tax is left at per cent, accord
ing to the figures of Mr.. Russell.
''Is this not enough?"
Run the Government.
"Mr. Speaker, what will be the re-
suit Of the placing of tax of 3 per
cent upon the gross production of
oil? There will be enough money
raised to pay the entire expense of
running the state government. This
will relieve the necessity of laying a
tax on tn railroads. telephone and
One Small Well