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Newspaper Page Text
Montana Oil Journal
Ownad and published by Oil Journal, Incorporated. Addren all communication« 518 First Avenu* Sou in. Great Palla, Montana. . to SUBSCRIPTION KATES 83 Par Year in Advsnce—Canada and Poralgn Subscription*. 82.60 Par Yaar. 81X5—6 Months. Foreign 11.78—6 Months. Published Every Saturday Entered aa Second Claaa Matter. April 2S, 1931. at the Poatofflca at Greet Fall», Mon tana.—Under Act of March 3, 1879. ,1 NEW SPECIES OF WILD CAT Prospecting for oil is one of the most speculative activities. Never theless, it has attracted vast numbers ill-prepared to assume the risks involved. According to S. F. Peterson, petroleum engineer for the Illinois state division of oil conservation, three-fourths of the oil in the United States was discovered by poor men seeking to run a shoestring into a fortune. We all know about the lucky strikes, but the wildcatters are legion who have gambled away their nest egg and what they could borrow. In recent months some newcomers have leased land and rented drilling apparatus. These are not the poor prospectors of the con ventional kind, but well-heeled and highly profitable corporations, whose regular lines have nothing to do with oil. Among the oil well operators which have come to our attention are a brewery, a re frigerator car company, a manufacturer of building materials, a paint and varnish concern, a railroad, and a producer of shipping cases and flooring. The one common characteristic of the new wildcatters is that they are all making so much money that they are subject to the excess profits tax. With 80 percent of their profits going to the govern ment, the companies can engage in the hazardous business of seek ing oil. When somebody else backs you in going after oil and puts in $4 for every dollar you put in, you can take chances you wouldn't dream of taking if you paid the whole cost of the gamble yourself. Oil found when the excess profits tax is in effect can be held in reserve to be marketed at some later date after the excess profits tax has been repealed. Thus an answer to the prayer of the tax oppressed corporation seems to have been found. government runs its tax rates on business so high that the bulk of profits goes to the treasury, it leads to the taking of extreme measures for self-preservation. The search for methods of minimizing or avoiding the tax then becomes the dominant pur pose in business planning. Thus, until the revenue act was passed last year, there was a great wave of mergers to save taxes. Under previously existing laws, a company with a large excess profits tax credit it wasn't using because it had no statutory excess profits could, through a consolidation, transfer the tax immunity to a company heavily burdened with taxes. These tax advantages re sulted in a bus line merging with a machine tool company, a meat When Producers, Refiners and Marketers of Quality Products ,V>t tcv° \o* dû» * we' HOME OIL & REFINING 00. Refinery and General Office« - Greed Fcdk, Mont packer with an automobile finance firm, and an aviation parts with an investment trust One big concern brought under its tax umbrella eight little companies, hard hit by the excess profits tax. The 1943 tax law took away the opportunities this way. But other ways have been found, improvisations for keeping tax by congress, man's ingenuity will not end. An excess profits tax of current severity diverts brains, energy, and enterprise from op erating problems to a quest for methods of reducing payments to the treasury. It ought to be clear that if we are to have the new ventures that will be needed to create more jobs after the war, the excess profits tax will have to be repealed, and the sooner the better —Chicago Tribune firm of reducing taxes And if the latest down are circumvented in ) The Sunburst Badger Says— The difference between the Es kimos at the North Pole and those at the South Pole is this—at the North Pole they say "Glug, glug," and at the South Pole they say "Glug, glug, y'all" "Läwd Amlghty, Mandy, with all these bombin's we is gonna be blowed into materait "You sho said it, & , an' in the blackouts we won't know who done it. I'm sick of marriage. Tom hasn't Farmers Union Central Exchange, Inc. Refiners and Marketers of Quality Petroleum Products For Cooperatives MAIN OFFICE AND BLENDING PLANT SOUTH ST. PAUL MINNESOTA l REFINERY AT LAUREL MONTANA REFINERY OFFICE BILLINGS, MONTANA hedge against inflation ■ ■ ■ . Already being freely discussed in financial circles is the likelihood of controlled inflation after the war, to lessen the burden of repayment of the enormous national debt, swollen by military expenditures. Which means simply that dollars are to be made cheaper and more plentiful. Which also means the dollar won't buy as much as it did. Which also means that values of tangibles will rise, as the purchasing power of the dollar shrinks. Owners of idle dollars even now are seeking to offset this possibility. There is a noticeable tread toward purchase of ranch property and other real estate. In the oil business, owners of royalties need not make any changes in their in vestments. As the value of the dollar drops, prices of oil will rise. Automatically carried along will be the royalty owners, who will continue to receive a fixed percentage of the SELLING PRICE of the oil. As prices mount higher, their incomes will keep pace. Royalties are an excellent hedge against the pit falls of possible inflation. For information concerning royalties and their invest ment possibilities, write Landowners Royalties Company In On gist Ten GREAT FALLS. MONTANA kissed me since I came back from my honeymoon." "Why not divorce him?" "Hun? Oh, I'm not married to Tom. His name was Practice and he met a girl named Perfect. JUTH WHAT HE THAID When a reporter turned in a story about a farmer's loss of 2,025 pigs by theft, a copyreader thought the figure high and phoned the farmer to check up on It. "Did you lose 2,025 , when the he asked. ught farmer answered 'Teth," the news paper thanked him and changed the copy to make the loss 2 sows and 25 pigs.