charged offer the sum of $5.

This office will consider and determine each case on its merits, whatever may be the cost of the investigation leading to the assessment. It is proper, however, that, as a rule, the sum tendered should not be less than the expenses of the Government incurred in the detection of the offense and the consideration of the offer. It rarely occurs that this expense does not exceed $5. You are therefore advised to refrain hereafter from advising the acceptance of a proposition in compromise where the amount offered is but $5, except in extreme cases where it is clearly shown that the violation of law was without intention and where the circumstances of the case and the financial condition of the party strongly appeal for the acceptance of so small an amount.

J. W. YERKES, Commissioner.

(497.)

Sale of leaf tobacco by farmers.

Farmers and growers of tobacco are privileged to sell leaf tobacco of their own growth and raising (and that received from tenants as rent) and in its natural condition without restriction; but the farmer must sell his tobacco in the condition in which it was cured on the farm, and can not stem, twist, plait, roll, sweeten, or otherwise manipulate it for sale to consumers.-No person can lawfully be employed by a farmer as his agent to sell and deliver his tobacco to consumers.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., April 7, 1902.

SIR: In your letter, dated 2d instant, you present several questions concerning the sale of leaf tobacco by and for farmers who raise the tobacco or who, receive the same from tenants or who buy the same while it is growing in the fields, and also whether a number of farmers may employ an agent to travel from place to place and sell the tobacco for them.

In reply, you are informed that a farmer or grower of tobacco may sell tobacco of his own growth or raising, or that which he receives from his tenants as rent for land, without restriction as to the quantity sold or the business of the person to whom the tobacco is sold and delivered. This privilege is one which the farmer or grower can not delegate to another person.

The office has decided that where a grower of tobacco sells his crop before it is severed from the land to another person the purchaser would not be privileged to resell the tobacco to consumers without payment of the tax.

A farmer or grower of tobacco may place his tobacco in the hands of a qualified dealer in leaf tobacco to be sold by him on commission, and such dealer must sell the tobacco only to other qualified leaf

dealers or to qualified manufacturers of tobacco or cigars, or to persons who buy leaf tobacco in packages for export.

Any arrangement made by a farmer, or a number of farmers, with another person to sell and deliver his or their tobacco for him or them while traveling from place to place would be in violation of law. An agent who is paid a stipulated salary may travel and solicit orders for the sale of tobacco raised by another person, but he may not deliver the tobacco to purchasers, nor can he sell tobacco on commission or receive as compensation for his services the difference between the price as fixed by the farmer and the selling price.

All tobacco sold by an agent for the farmer who raised the tobacco must be delivered by the farmer, and not the agent, directly to the person who purchased the tobacco; and a farmer must sell his tobacco in the condition in which it was cured on the farm and can not stem, twist, plait, roll, sweeten, or otherwise manipulate it for sale to con

No tax on passage tickets from a port in the United States to a port in the Philippine

Islands.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., April 11, 1902.

SIR: I have to acknowledge the receipt of your letter of the 5th instant, in which you state that the general manager of the Occidental and Oriental Steamship Company has requested a ruling from this office in regard to the necessity for stamping passage tickets sold for passage between the United States and the Philippine Islands.

In reply, you are advised that paragraph 13 of Schedule A, act of March 2, 1901, imposed a tax on passage tickets by any vessel from any port in the United States to a foreign port costing $50.

The United States Supreme Court at its present term, in the case of Emil. J. Repke v. United States, decided that by the treaty ceding the Philippine Islands to the United States such islands ceased to be a foreign country and became territory of the United States.

It follows from this decision that passage tickets from a port in the United States to a port in the Philippine Islands are not passage

tickets to a foreign port, and consequently not subject to a stamp tax under the internal-revenue laws, and it is so ruled.

Where a manufacturer or wholesale dealer in oleomargarine receives an order from a purchaser for original stamped packages of oleomargarine in "1,000-pound lots," the packages must be set apart at the factory or at the place of business of the wholesale dealer and shipped in such a manner as to entitle the purchaser to the ownership and receipt of the packages as his own property absolutely and unconditionally. If this is not done, and the agent of the manufacturer or wholesale dealer upon the arrival of the packages at their destination withholds them, or any part of them, from the purchaser until the latter pays for them and only then makes delivery, the sales are to be regarded as completed at the place of such delivery, and special tax is required to be paid therefor at that place.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., April 12, 1902.

SIR: I have received your letter of the 28th ultimo, in which you refer to letter from this office dated February 3, 1902, and inquire whether the agent of a manufacturer of or wholesale dealer in oleomargarine has the right to break lots and deliver parts of lots, each lot to be in excess of 10 pounds. You state as follows:

Case in point is where a party, in order to save half a cent a pound, orders in 1,000pound lots, but can not pay for and take it at one time, and the agent is unwilling to deliver it except as it can be paid for, but willing to make the price on the 1,000pound basis when ordered in one lot.

It is presumed that by "lot" is meant several manufacturer's original packages of oleomargarine sold to the same person, and the proposition is to deliver certain of the packages, leaving the remaining packages for future delivery upon payment therefor by the purchaser.

I think the question contained in your letter is practically answered by Treasury decision 485, dated March 14, 1902 (vol. 5), to which your attention is invited.

Treasury decision 2 (vol. 3), dated December 29, 1899, contains decision of a United States court which bears on the subject, while Treasury decision 152 (vol. 3) shows the only plan by which manufacturers of oleomargarine are permitted to send out original pack

ages for delivery and collection of purchase price through agents without becoming liable as wholesale dealers at points of delivery.

This office holds that the sale must be consummated at the factory or place of business of the wholesale dealer absolutely, the packages marked with the buyer's name, and set apart in the factory and billed to the purchaser, so that absolute ownership is vested in the latter, and delivery to be made upon demand of the buyer free of all liens, claims, and demands of the consignor.

If, as in the case you cite, the agent holds a part of the shipment because the same has not been paid for, the company making the sale retains the full ownership and control of such packages, and the sale can not be said to have been completed at the point of shipment. In the opinion of this office, such a transaction would render the manufacturer or wholesale dealer making the sales liable to the special tax of wholesale dealer in oleomargarine at any point where such deliveries are made.

The manner or time of collection for the goods by the agent will not be considered in fixing liability for special tax at place of delivery so long as the consignee is privileged to receive the packages purchased by and billed to him free of all liens, claims, and demands from the consignor, the latter having relinquished claim to ownership of the property when the sale is consummated.

Respectfully,

J. W. YERKES, Commissioner. Mr. JAMES D. GILL, Collector Internal Revenue, Boston, Mass.

(500.)

Internal-revenue law-Act of April 12, 1902, repealing war-revenue

taxes.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., April 16, 1902.

To collectors and other officers of internal revenue :

Your attention is called to the act of April 12, 1902, entitled "An Act to repeal war-revenue taxation, and for other purposes," which is printed below.

J. W. YERKES, Commissioner.

AN ACT To repeal war-revenue taxation, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section one of the Act entitled "An Act to provide ways and means to meet war expenditures, and for other purposes," approved June thirteenth, eighteen hundred and ninety-eight, as amended by the Act of March second, nineteen hundred and one, entitled "An Act to amend an Act entitled An Act to provide ways and means to meet war expenditures, and for other purposes,' approved

June thirteenth, eighteen hundred and ninety-eight, and to reduce taxation thereunder," be, and is hereby, further amended so as to read as follows:

"SECTION 1. That there shall be paid on all beer, lager beer, ale, porter, and other similar fermented liquor, brewed or manufactured and sold, or stored in warehouse, or removed for consumption or sale, within the United States, by whatever name such liquors may be called, in lieu of the tax now imposed by law, a tax of one dollar for every barrel containing not more than thirty-one gallons; and at a like rate for any other quantity or for any fractional part of a barrel, as authorized and defined by section thirty-three hundred and thirty-nine of the Revised Statutes of the United States: Provided, That in lieu of or in addition to the present requirements of law in that respect all stamps used for denoting the tax upon fermented liquors or other taxes may, in the discretion of the Commissioner of Internal Revenue, be canceled by perforations to be made in such manner and form as the Commissioner may, by regulations, prescribe."

SEC. 2. That section two of said Act of June thirteenth, eighteen hundred and ninety-eight, and all amendments thereof, are hereby repealed.

SEC. 3. That section three of said Act and amendments thereof be amended to read as follows:

"SEC. 3. That upon tobacco and snuff manufactured and sold, or removed for consumption or use, there shall be levied and collected, in lieu of the tax now imposed by law, the following taxes:

“On snuff, manufactured of tobacco or any substitute for tobacco, ground, dry, damp, pickled, scented, or otherwise, of all descriptions, when prepared for use, a tax of six cents per pound. And snuff-flour, when sold, or removed for use or consumption, shall be taxed as snuff, and shall be put up in packages and stamped in the same manner as snuff.

"On all chewing and smoking tobacco, fine cut, cavendish, plug, or twist, cut or granulated, of every description; on tobacco twisted by hand or reduced into a condition to be consumed, or in any manner other than the ordinary mode of drying and curing, prepared for sale or consumption, even if prepared without the use of any machine or instrument, and without being pressed or sweetened; and on all fine-cut shorts and refuse scraps, clippings, cuttings, and sweepings of tobacco, a tax of six cents per pound.

66

That the internal-revenue tax on cigars or cigarettes weighing more than three pounds per thousand shall be three dollars per thousand; and the tax an cigars weighing not more than three pounds per thousand shall be eighteen cents per pound, and on cigarettes weighing not more than three pounds per thousand and of a wholesale value or price of not more than two dollars per thousand shall be eighteen cents per pound; and the tax on cigarettes weighing not more than three pounds per thousand and of a wholesale value or price of more than two dollars per thousand shall be thirtysix cents per pound; and all such cigars and cigarettes weighing not more than three pounds per thousand shall, for purposes of taxation, be held and considered as weighing three pounds.

That in addition to the packages of smoking tobacco and snuff now authorized by law there shall be packages of one and two-thirds ounces, two ounces, two and onehalf ounces, three ounces, three and one-third ounces, and four ounces; and there may be a package containing one ounce of smoking tobacco."

SEC. 4. That on all original and unbroken factory packages of smoking and manufactured tobacco and snuff held by manufacturers or dealers on July first, nineteen hundred and two, upon which there has been paid a higher tax than that provided for in the preceding section of this Act, there shall be allowed a drawback or rebate equal to the full amount of the difference between such higher tax and the tax imposed by this Act, after making the proper allowance for discounts and rebates heretofore