The Kevin review. [volume] (Kevin, Mont.) 1922-1929, 1925-11-19
Oil Development MenanCed
By Proposed Tax RevisiOns
Green's Plan to Wipe Out Oil Discovery and Deple
ton Allowance Threatens Exploration in Monta-
and Other Western States
in any new fields.

bring in any new fields.
Petroleum producers believ
there is plenty of oil in the eartl
yet. But it is a question, or soor
will be a question of going ou
and developing new fields ant
those new fields, they say. mus
be developed as all fields have
been developed by men and com
panies who are willing to pioneer
and wildcat"
AS always the question in the
oil industry is where do we gC
from here" when an old field is
exhausted and along with the
question where do we go from
here" is the collateral one of lis
it worth the going? Without the
discovery allowance they doubt
if it would be worth it.
There is little general under
standing of the question of dis
covery and depletion. Depletion
is based on the value Of the pro-
perty at the date of discovery in
the case Of oil wells and mines.
Up to Americas entrance into
the World war federal taxes
were moderate. With the great
war expenditures it became nee
cessary to find every possible
of taxation. But the ma
tion neeeed oil and it needed GER
tain kinds of minerals. So the
discovery provision was worked
out as a method of making the
oil and mineral producer pay his
lust part of the tax and at the
same time encourage the develop
nent of the natural resources of
he country.
Under the 1918 and su6se-
luent acts. the discoverer, or the
who discovers an oil
we'll, for example, can set up as
he basis of depletion the value
# the oil well at the date of dis
.overy, and in making the de-
luction against the income from
he operation Of the oil well, the
deduction is based upon the val
lie at the date of discovery.
Besides the war time need for
petroleum and certain minerals |
here was another reason that |
mpelled congress to enact dis
overy provision. The other rea-
on was that the petroleum in
lustry is very hazardous one,
which suffered great losses and
made great gains, and that when Z
hese gains were made there
hould be some offsetting return
ecause Of the previous looses.
The result has been that con-
'ress has squeezed all of the war
ime idea out of the discovery
At the height of the
1ar the discovery deduction was
nlimited. under the act of 1921
was limited to 100 per cent Of
he profits Of the property on
,hich the discovery was made.
Jnder the act Of 1924 congress
ut the deduction to one-half and
lade it 80 per cent of the income
rom the property on which dis
0very was made.
With the deduction at so per
ent, oil men say, the war time
eed idea was entirely written
Ut of the law and it had got
own to the proposition OF a re-
ignition of the normal hazards
{ the industry only. They add
lat it is not as liberal as it
lould be when consideration is
lken of the hazards of the in j
ustry and the fact that on the
eyelopment of petroleum sup
lies depends the development of
rcraft and the very national de-
snse itself, and they point to
ecretary Works recent state
lent that the supremacy Of ma
ons in the future may be deter
lined by the possession of avail
BILE oil supplies. Chairman
reen's proposal, they say, would
e the greatest blow possible to