The Donaldsonville chief., 1922-02-04
PARKER TO URGE SCENT TAX.
The Executive IS Released from So
Called Gentlemen's Agreement

ton fSouSS 4 lew udyS dSt tlitst eiiS
so~called 'gentlemens agreement. .
whereby the severance tax on natural
resources was fixed at per cent had
!been abrogated, and that ne would
recommend tc the next Legislature 2
severance TAX cf ! ger cent Oh ol
and gas
The governo2. made the following
statement;
] II have never doubted The inherent
right of the oil and gas producing
parishes to q fair and just proportion
| Of the severance tax, in view Of the
contention that the cost Of preserv~
| ing law and order, and Of maintain
ing public highways, was increased
i by the exploitation Of oi: and gas r
those parishes,
! "But local severance taxation was
nor a prominent issue at the time che
so~called sgentlemen's agreement was
made and ratified by the legislature
We were considering Their only the
j dire needs Of certain state lnstitu-
tiens and provision fol- the Greater
| Agricultural College. Ii was not un-
| til the discussions with the oil and
gas producers had been concluded
and the severance act Of 1920 writ
ten ,ntc the statutes Of Louisiana,
that the imposition E,f an Increased
severance tax in aid Of the ol! and
gas parishes 1oomeo up as 2 yltaa
problem.
''It must pe remembered tnat N
, 1920 tax values were much nearer
| tion which probably accounts for
failure to vigorously urge the local
needs Of oil and gas parishes IN sew.
erance tax discussions two years ago.
But at any rate these needs were GER
tainlv not conspicuous factor when
the 2 per cent agreement was made
and ratified
''As is we'll knowr, that agreement
was the result of discussions extend
ing over several weeks The first de-
finite offer. Of fixed rate came to
me from the Independent Oil & Gas
Producers Association of north Lou
isiana, It was for one per cent
based on value, instead of 3-4 Of one
cent per barrel, the the1. existing tax
"Thls offer was promptly rejected,
and the independents then called a
general conference of oil and gas pro-
ducers in Shreveport to further CON
slider the matter. I knew nothing Of
this until long afterwards: but re
sulting from this conference, open
negotiations were started, eventual
ting in an agreement for 2 per cent
severance tax during the life of the
present state administration, if the
legislature ratified it as it subse,
quently did.
'The agreement once made and
approved, it seemed to be moral OBJ
legation from which there was no es-
cape in good conscience. 1t was not
a one-slded covenant. AS result OF
it, the state got millions from its
natural resources where before it had
got thousands, and that, too, at a
time when much of this money was
needed TO take care of the insane
and other dependent wards of the
Estate
"There was serious talk of resist
ing the tax in the courts. This would
have tied up the money the state
needed so badly and forced delay
(perhaps for years. of it's plans for
meeting the needs of its institutions
and building an agricultural college.
'.The governors agreement with
the oil and, gas producers at that
time was that if the tax was not liti-
gated, and the legislature ratified
the agreement for 2 per cent, he
would do his best during his admins
tratlon to maintain it. His word was
given. and, as he conceived it, writ
ten into law. And the fact that later
on other public needs manifested
themselves did not; constitute rea
son for breaking it
"Much political capital has been
made of the severance tax issue. But,
aside from that, there was a we'll
defined sentiment in the constitution
al convention. and in the legislature
at it's 1921 session, in favor of au-
thorizlng the levying Of an increased
severance tax on oil and gas. the in
crease to be allocated to the oil and
gas bearing parishes, This opinion
was founded: to a considerable ex-
tent upon laws Of justice and neces-
slty. It was easy to separate that un
selfish influence from the political
phases of the controversy
til ali Of the discussions of the
imposition of severance tax for the
parishes in which Z as governor
took part, che merits of the question
were not touched upon BY me l tried
&c make 1t clea, that J deemed my
sell horo1ap1y bound TO maintain the
? per cent agreement while that
agreement vas cons,deren bv tht paG
Tles 10 be Ill force.
The action Of tne ,i' and gas p.o
ducers n voluntarily releasing me
from 5he >oeallea gentlemen
agreement changes the SITUATION It
leaves ne free TO recommend TO tne
Legislature the lmposi+1on Of q higher
severance tay n o,de, that fhe loca;
needs Of +ne oil anu gas parishes
may oe met Anu nave necldeo 20
recor1mend \ per cenr TAX which
is the rate which advocates u III
creased severance taxation .r the
CONSTITUTIONS Conrent'or nne 'eg's
'ature demanded
The gentlemen 6 agtaem ment' mas
been resc'nded ano 40 condit ons
whatever attach to 1ts aDrogation
Practically rhe same producing IN
terests thar made the original agree
ment with the goverro' have releas
ed MN from It understand tie
Mid Continent Association. ~epre
sents The oil and gas producers IF
north Louisiana large and small.
Y woulc ne lngrateful If / 1id lot
re-e-d my strong appreciation o. The
actor of The iii anc gas producers
of the state IN clearing the way fol
adjustment of This 1uestlo3, From