UNIVERSITY 
 
 OF CALIFORNIA 
 
 LOS ANGELES 
 
 SCHOOL OF LAW 
 LIBRARY
 
 TREASURY DEPARTMENT 
 
 UNITED STATES INTERNAL REVENUE 
 
 REGULATIONS No. 40 
 
 RULES AND REGULATIONS 
 
 FOR 
 
 COLLECTION OF TAX ON TRANSFERS 
 
 OF STOCK AND ON SALES OF PRODUCTS 
 
 FOR FUTURE DELIVERY 
 
 UNDER WAR REVENUE ACT 
 
 APPROVED OCTOBER 3, 1917 
 
 MADE AND PROMULGATED BY THE 
 
 COMMISSIONER OF INTERNAL REVENUE 
 
 WITH APPROVAL OF THE 
 
 SECRETARY OF THE TREASURY 
 
 NOVEMBER 30, 1917 
 
 WASHINGTON 
 
 GOVERNMENT PRINTING OFFICE 
 
 1917
 
 s 
 
 \9\^
 
 
 REGULATIONS No. 40. 
 
 WAR REVENUE ACT OF 1917. 
 
 law and regulations relating to the assessment and collection of 
 
 war stamp taxes on sales, transfers. and deliveries of shares of 
 
 stock and uke securities. and contracts of sale of products 
 
 and merchandise upon exchanges for future delivery. 
 
 Treasury Department, 
 Office of Commissioner of Internal Revenue, 
 
 Washington^ D. G.^ November 30, 1917. 
 
 LAW. 
 
 By an act of Congress approved October 3, 1917, entitled "An act 
 to provide revenue to defray war expenses, and for other purposes," 
 it is provided, among other things : 
 
 Bg it enacted by the Senate and Hov.se of Representatives of the United States 
 of America in Congress assembled : 
 
 Title VIII.— Wab Stamp Taxes. 
 
 • Sec. 800. That on and after the first day of December, nineteen hundred and 
 seventeen, there shall be levied, collected, and paid, for and in respect of the 
 several bonds, debentures, or certificates of stock and of indebtedness, and 
 other documents, instruments, matters, and things mentioned and described in 
 Schedule A of this title, or for or in respect of the vellum, parchment, or paper 
 upon which such instruments, matters, or things, or any of them, are written or 
 printed, by any person, corporation, partnership, or association who makes, 
 signs, issues, sells, removes, consigns, or ships the same, or for whose use or 
 benefit the same are made, signed, issued, sold, removed, consigned, or shipped, 
 the several taxes specified in such schedule. 
 Sec. 802. That whoever— 
 
 (a) Makes, signs, issues, or accepts, or causes to be made, signed, issued, or 
 accepted, any instruments, document, or paper of any kind or description what- 
 soever without the full amount of tax thereon being duly paid ; 
 
 iii ^ ^ ^ ^ ^ ^ 
 
 (d) Makes use of any adhesive stamp to denote any tax imposed by this title 
 without canceling or obliterating such stamp as prescribed in section eight 
 hundred and four; 
 
 Is guilty of a misdemeanor and upon conviction thereof shall pay a fine of 
 not more than $100 for each offense. 
 
 Sec. 803. That whoever— 
 
 (3)
 
 (a) Fraudulently cuts, tears, or removes from any vellum, parchment, paper, 
 instrument, writing, package, or article, upon which any tax is imposed by this 
 title, any adhesive stamp or the impression of any stamp, die, plate, or other 
 article provided, made, or used in pursuance of this title ; 
 
 (b) Fraudulently \ises, joins, fixes, or places to, with or upon any vellum, 
 parchment, paper, instrument, writing, package, or article, upon which any tax 
 is imposed by this title, (1) any adhesive stamp, or the impression of any stamp, 
 die, plate, or other article, which has been cut, torn, or removed from any other 
 vellum, parchment, paper, instrument, writing, package, or article upon which 
 any tax is imposed by this title; or (2) any adhesive stamp or the impression 
 of any stamp, die, plate, or other article of insufficient value; or (3) any forged 
 or counterfeit stamp, or the impression of any forged or counterfeited stamp, 
 die, plate, or other article ; 
 
 (c) Willfully removes, or alters the cancellation, or defacing marks of, or 
 otherwise prepares, any adhesive stamp, with intent to use, or cause the same 
 to be used,^ after it has been already used, or knowingly or willfully buys, sells, 
 offers for sale, or gives away, any such washed or restored stamp to any person 
 for use. or knowingly uses the same; 
 
 (d) Knowingly and without lawful excuse (the burden of proof of such 
 excuse being on the accused) has in possession any washed, restored, or altered 
 stamp, which has been removed from any vellum, parchment, paper, instrument, 
 writing, package, or article, is guilty of a misdemeanor, and upon conviction 
 shall be punished by a fine of not more than $1,000, or by imprisonment for 
 not more than five years, or both, in the discretion of the court, and any such 
 reused, canceled, or counterfeit stamp and the vellum, parchment, document, 
 paper, package, or article upon which it is placed or impressed shall be for- 
 feited to the United States. 
 
 Sec. 804. That whenever an adhesive stamp is used for denoting any tax 
 imposed by this title, except as hereinafter provided, the person, corporation, 
 partnership, or association, using or affixing the same shall write or stamp or 
 cause to be written or stamped thereupon tlie initials of his or its name and the 
 date upon which the same is attached or used, so that the same may not again 
 be used : Provided, That the Commissioner of Internal Revenue may prescribe 
 such other method for the cancellation of such stamps as he may deem ex- 
 pedient. 
 
 Sec. 805. (a) That the Commissioner of Internal Revenue shall cause to be 
 prepared and distributed for the payment of the taxes prescribed in this title 
 suitable stamps denoting the tax on the document, articles, or thing to which 
 the same may be affixed, and shall prescribe such method for the affixing of 
 said stamps in substitution for or in addition to the method provided in this 
 title, as he may deem expedient. 
 
 * * 'P * * if * 
 
 (c) All internal-revenue laws relating to the assessment and collection of 
 taxes are hereby extended to and made a part of this title, so far as applicable, 
 for the purpose of collecting stamp taxes omitted through mistake or fraud 
 from any instrument, document, paper, writing, parcel, package, or article 
 named herein. 
 
 Schedule A. — Stamp Taxes. 
 
 Sec. 807. Subdivision 4. Capital stock, sales or transfers: On all sales, or 
 agreements to .sell, or memoranda of sales or deliveries of, or ti'ansfers of legal 
 title to shares or certificates of stock in any association, company, or corpora- 
 tion, whether made upon or shown by the books of the association, company, 
 or corporation, or by any assignment in blank, or by any delivery, or by any
 
 paper or agreement or memorandum or other evidence of transfer or sale, 
 whether entitling the holder in any manner to the benefit of such stock or not, 
 on each $100 of face value or fraction thereof, 2 cents, and where such shares 
 of stock are witliout par value, the tax shall be 2 cents on the transfer or sale 
 or agreement to sell on each share, unless the actual value thereof is in excess 
 of $100 per share, in which case the tax shall be 2 cents on each $100 of actual 
 value or fraction thereof : Provided, That it is not intended by this title to 
 impose a tax upon an agreement evidencing a deposit of stock certificates as 
 collateral security for money loaned thereon, which stock cortificares are not 
 actually sold, nor upon such stock certificates so deposited: Provided further, 
 That the tax shall not be imposed upon deliveries or transfers to a broker for 
 sale, nor upon deliveries or transfers by a broker to a custoaiet' for v/liom and 
 upon whose order he has purchased same, but such deliveries or transfers shall 
 be accompanied by a certificate setting forth the facts: Provided further, That 
 in case of sale where the evidence of tran^ifor is shown only by tlie books of 
 the company the stamp shall be placed upon such books; and where the change 
 of ownership as by transfer of the certificate the stamp shall be placed upon the 
 certificate; and in cases of an agr<3ement to sell or wliere the traiisfer is by 
 delivery of the certificate assigned in blank there shall be made and delivered 
 by the seller to the buj'er a bill or meniuranduin of sucli sale, to which the 
 stamp shall be affixed; and every bill or meiiiovanduni of sale or agreem^^nt 
 to sell before mentioned shall show the date thereof, the name of the seller, 
 the amount of the sale, and the matter or thing to which it refers. Any per- 
 son or persons liable to pay the tax as herein provided, or anyone who acts in 
 the matter as agent or broker for such person or persons who shall make any 
 such sale, or who shall in pursuance of any such sale deliver any stock or 
 evidence of the sale of any stock or bill or memorandum thereof, as herein re- 
 quired, without having the proper stamps affiled tiiereto wivh intent to evade 
 the foregoing provisions shall be deemed guilty of a misdemeanor, and upon 
 conviction thereof shall pay a fine of not exceeding $1,000, or be imprisoned not 
 more than six months, or both, at the discretion of the court. 
 
 Subdivision 5. Produce, sales of. on exchange: Upon each sale, agreement 
 of sale, or agreement to sell, including so-called transferred or scratch sales, 
 any products or merchandise at any exchange, or board of trade, or other 
 similar place, for future delivery, for each $100 in value of the merchandise 
 covered by said sale or agreement of sale or agreement to sell, 2 cents, and 
 for each additional $100 or fractional part thereof in excess of $100, 2 cents: 
 Provided, That on every sale or agreement of sale or agreement to sell as 
 aforesaid there shall be made and delivered by the seller to the buyer a bill, 
 memorandum, agreement, or other evidence of such sale, agreement of sale, 
 or agi-eement to sell, to which there shall be affixed a lawful stamp or stamps 
 in value equal to the amount of the tax on such sale : Provided further. That 
 sellers of commodities described herein, having paid the tax provided by this 
 subdivision, may transfer such contracts to a clearing house corporation or 
 association, and such transfer shall not be deemed to be a sale, or agreement 
 of sale, or an agreement to sell within the provisions of this act, provided 
 that such transfer shall not vest any beneficial interest in such clearing house 
 association, but shall be made for the sole purpose of enabling such clearing 
 house association to adjust and balance the accounts of thi^ members of said 
 clearing house association on their several contracts. And every such bill, 
 memorandum, or other evidence of sale or agreement to sell shall show the 
 date thereof, the name of the seller, the amount of the sale, and the matter 
 or thing to which it refers ; and any person or persons liable to pay the tax 
 as herein provided, or anyone who acts in the matter as agent or broker for
 
 such person or persons, who shall make any such sale av agreement of sale, 
 or agreement to sell, or who shall, in pursuance of any such sale, agreement of 
 sale, or agreement to sell, deliver any such products or merchandise without 
 a bill, memorandum, or other evidence thereof, as herein required, or who 
 shall deliver such bill, memorandum, or other evidence of sale, or agreement 
 to sell, without having the proper stamps affixed thereto, with intent to evade 
 the foregoing provisions, shall be deemed guilty of a misdemeanor, and upon 
 conviction thereof shall pay a fine of not exceeding $1,000, or be imprisoned 
 not more than six months, or both, at the discretion of the court. 
 
 That no bill, memorandum, agreement, or other evidence of such sale, or 
 agreement of sale, or agreement to sell, in case of cash sales of products or 
 merchandise for innnediate or prompt delivery which in good faith are actually 
 intended to be delivered shall be subject to this tax. 
 
 Sec. 1001. That all administrative, special, or stamp provisions of law, in- 
 cluding the law relating to the assessment of taxes, so far as applicable, are 
 hereby extended to and made a part of this act, and every person, corporation, 
 partnership, or association liable to any tax imposed by this act or for the 
 collection thereof shall keep such records and render, under oath, such state- 
 ments and returns, and shall comply with such regulations as the Commissioner 
 of Internal Revenue, with the approval of the Secretary of the Treasury, may 
 from time to time prescribe. 
 
 Sec. 1004. That whoever fails to make any return required by this act or the 
 regulations made under authority thereof within the time prescribed or who 
 makes any false or fraudulent return, and whoever evades or attempts to 
 evade any tax imposed by this act or fails to collect or truly to account for and 
 pay over any such tax, shall be subject to a penalty of not more than $1,000 
 or to imprisonment for not more than one year, or both, at the discretion of the 
 court, and in addition thereto a penalty of double the tax evaded or not col- 
 lected or accounted for and paid over, to be assessed and collected in the same 
 manner as taxes are assessed and collected in any case in which the punishment 
 is not otherwise specifically provided. 
 
 Sec. 1005. That the Commissioner of Internal Revenue, with the approval 
 of the Secretary of the Treasury, is hereby authorized to make all needful 
 rules and regulations for the enforcement of the provisions of this act. 
 
 In pursuance thereof, the following regulations are hereby made, 
 prescribed, and promulgated :
 
 PART 1. 
 
 Regulations Promulgated by the Commissioner of Internal Reve- 
 nue, with the Approval of the Secretary of the Treasury, 
 for Collection of Stamp Taxes on Sales and Trans- 
 fers of Shares of Stock and Like Securities. 
 
 DEFINITIONS. 
 
 Article 1. That for the purpose of these rcguhitions, the term 
 " sales or transfers " shall be held to include all sales, agreements to 
 sell, memoranda of sales, and all deliveries or transfers of legal title, 
 except as otherwise specifically provided in these regulations. 
 
 That the word " person " or " every person " or similar term when- 
 ever used in these regulations shall include the plural as Avell as the 
 singuLar, and shall be taken to refer to individuals, partnerships, 
 associations, and corporations, except where it is plain from the 
 context that a different meaning is intended. 
 
 That wherever the word "exchange'' is used in these regulations, 
 except as otherwise specifically indicated, it shall be deemed and 
 taken to include each and e^i eiy agent or agency, auction place or 
 other meeting place at which stocks are publicly bought, sold, bid for, 
 offered, or excliangecl, either between the members or patrons of sueh 
 exchange, or as between members and nonmembers, patrons and the 
 public, and it shall include all incorporated and unincorporated asso- 
 ciations of individuals, partnerships, and corporations engaged in the 
 business of publicly selling, buying, or exchanging shares of stock 
 or interests therein. 
 
 The term " share or shares of stock," when used in these regula- 
 tions, except as otherwise therein specifically defined, shall be held 
 and taken to mean and include the shares and certificates for shares 
 of stock representing interests in corporations, and in incorporated 
 and unincorporated associations, as well as voting trust certificates 
 for shares, and certificates for shares or interests in shares, " if, as, 
 and when issued," and for " rights " therein. 
 
 The terms " clearing house," " clearing house corporation," and 
 "clearing house association," shall be held and taken to mean and 
 include each and every incorporated and unincorporated associa- 
 
 (7)
 
 tion of individuals, partnerships, and corporations wholly or partly 
 engaged in the business of clearing, settling, or adjusting transac- 
 tions in the purchase, sale, receipt, or delivery of shares of stock, 
 whether or not the same be a part or department of an exchange or 
 an independent bod3^ 
 
 The act, omission, or failure of any official, agent, or other person 
 acting for or employed by any association, partnership, or corpora- 
 tion within the scope of his employment or office, shall, in every case, 
 also be deemed the act, omission, or failure of such association, part- 
 nership, or corporation, as well as that of the person or persons. 
 
 REGISTRATION. 
 
 Art. 2. Every person, partnership, corporation, exchange, or clear- 
 ing house engaged in whole or in part in negotiating, making, or 
 recording sales, agreements to sell, deliveries or transfers of shares 
 or certificates for shares of stock, or in conducting or transacting a 
 stock-brokerage business, or in the clearing, settling, or adjusting 
 of any of the transactions referred to in section 807, subdivision 4 of 
 the act, or who shall be engaged in the business of accepting or pro- 
 curing the transmission of orders for the sale or purchase or trans- 
 fers of stock to be made or executed at or under the rules or customs 
 of an exchange in the continental United States, shall, on the first 
 day of December, 1917 — and if not on that date engaged in business 
 then within ten days after engaging in business, and on the first day 
 of July annually thereafter— file in the office of the collector of inter- 
 nal revenue of the district in which each place of business of such 
 person, partnership, corporation, exchange, or clearing house is 
 located, or with such other internal-revenue officer as may be here- 
 after designated, a statement, under oath, setting forth the full name 
 or names of such person or persons, and of all the members of such 
 partnership conducting or transacting the business, with the post- 
 office address or addresses of such person or persons, or partnership, 
 unless the person so certifying be a corporation, exchange, or clear- 
 ing house, in which event it shall set forth its principal office or place 
 of business, with the names and addresses of its chief officer, its sec- 
 retary, accompanied by a list of its members and their addresses, and 
 if incorporated, Avlien and where incorporated, and if not incor- 
 porated under what agreement or authority it is conducting such 
 business or agency. Such statement shall also specifically set forth 
 the character of the business to be conducted, and shall be executed 
 and duly acknowledged by the person or persons so conducting or 
 intending to conduct said business, or by the president or secretary 
 of the corporation or exchange or clearing house. Each exchange or 
 clearing house shall also file with said collector or other designated
 
 internal-revenue officer a copy of its constitution, charter, agreement 
 of association, by-laws, rules and regulations, and of all amendments 
 thereto, as the same may from time to time be adopted, and the names 
 and addresses of new members as from time to time admitted to 
 membership. 
 
 The said statement shall further contain information as to whether 
 the person executing the same has been licensed under any State laws 
 or under any other provision of Federal law ; and if so, the dates and 
 places at which any such licenses were issued. Such statements shall 
 be made upon forms to be furnished upon application to the collector 
 of internal revenue. 
 
 RECORD OF REGISTRATION KEPT BY COLLECTOR. 
 
 Art. 3. Every collector or other designated internal-revenue officer 
 shall file and preserve each statement of registration made to him in 
 ac<?ordance with these regulations, and shall issue to such person, 
 partnership, exchange, clearing house, or corporation a certificate of 
 registry, showing the date of issue, the name of the person or persons, 
 or exchange, clearing house, or corporation, conducting the business, 
 the nature of the business for which the license is granted, and the 
 date of expiration of said registry, which certificate shall be signed 
 by the collector or other designated internal-revenue officer, and shall 
 be posted in some prominent place in the office of said person, partner- 
 ship, exchange, clearing house, or corporation during the period for 
 which issued. If such business is conducted at more than one place, 
 a certificate shall be so posted in each such place of business. 
 
 RATE OF TAXATION. 
 
 Art. 4. In the case of sliares or certificates of stock having a face 
 (or par) value, the amount of the tax shall be based upon the total 
 face value of the shares involved in any sale or agreement to sell 
 or memorandum of sale, deliver}', or transfer, and shall be at the 
 rate of 2 cents for each $100 of such total face value or fraction 
 thereof, whether such aggregate face value is greater or less than $100. 
 Thus where the total face value of the shares or certificates of stock, 
 agreement to sell, or memorandum of sale involved in any such trans- 
 action is less than $100, the amount of such tax shall be 2 cents;. 
 where the total face value exceeds $100 but is $200 or less, the amount 
 of such tax shall be 4 cents, and on all fractions of $100 of face value, 
 the tax shall be 2 cents; and where such sliares of stock are without 
 face (or par) value, the tax shall be 2 cents on the transfer or sale 
 or agreement to sell on each share, unless the actual value thereof 
 is in excess of $100 per share, in which case the tax shall be 2 cents 
 on each $100 of actual value or fraction thereof. 
 30102°— 17 2
 
 10 
 
 TRANSACTIONS NOT TAXABLE. 
 
 Art. 5. No tax is imposed upon an agreement evidencing a deposit 
 of stock certificates as collateral security for money loaned thereon, 
 which stock certificates are not actually sold or intended to be sold 
 nor as to which there is no change of oAvnership or interest nor upon 
 such stock certificates so deposited. 
 
 Nor upon deliveries or transfer to a broker for sale, nor upon 
 deliveries or transfers by a broker to a customer for whom and upon 
 whose order he has purchased the same, provided such deliveries 
 or transfers shall be accompanied in each case by a certificate set- 
 ting forth the facts, such certificates to be substantially in the fol- 
 lowing form: 
 
 (a) (In the case of a transfer to a broker) — 
 
 " We hereby certify that we have no ownership, or in- 
 terest, in * * * shares of the stock above transferred, 
 tlie transfer by the owner to lis being merely for the pnr- 
 pose of sal?." 
 
 (6) (In the case of a transfer by a broker) — 
 
 " We hereby certify that the transfer of * * * of 
 the within sliares to the names indicated by tlie star is 
 made solely to complete the purchase made by us for our 
 customer, and we have no ownership or interest therein." 
 
 No broker who has filed a certificate under the foregoing clause 
 {a) of this ruling shall file a certificate under the foregoing clause 
 (b) with reference to the transfer of any shares of stock covered by 
 the certificate filed by him under clause (a). 
 
 Nor upon transfers or deliveries to a clearing house for the 
 sole purpose of clearing or adjusting accounts between members, 
 where no beneficial interest is vested in said clearing house or 
 clearing association and there has been no change of title or inter- 
 est : Provided, The exchange shall by appropriate by-laws or regula- 
 tions require from its members that all transactions of such members 
 in shares of stock be promptly reported to such clearing house to 
 the end that the stamp taxes thereon may be collected and that no 
 other clearances or settlements or trading in balances shall be per- 
 mitted. All transactions, actual or otherwise, except as in the act 
 are exempt, shall be subject to the tax. 
 
 No provision, by-law, rule, or custom of any exchange, or similar 
 institution, inconsistent with any requirement or provision of the 
 act or any regulations thereunder, nor any collateral or additional 
 agreement or understanding, either verbal or written, respecting 
 the subject matter of such sales or transfers, or the settlement or 
 fulfillment thereof, which is inconsistent or in conflict with any
 
 11 
 
 requirement of said act or of these regulations, shall exempt any 
 person from the payment of the tax provided for under said act. 
 
 DELIVERY OF MEMORANDUM OF SALES. 
 Art. 6. Every person who makes sales, or agreements to sell, or 
 memoranda of sales or deliveries of, or transfers of the legal or bene- 
 ficial title to shares of stock, at, in or on any exchange or similar 
 place of business, and every person who makes any agreement to sell 
 stock or makes a transfer of stock by delivery of the certificate there- 
 for assigned in blank, shall as a part of every such transaction, 
 promptly make and deliver to the buyer a bill, or memorandum of 
 sale, or agreement to sell, duly signed by the principal or his agent, 
 which shall show the date of the transaction evidenced by it, the 
 names of the seller and buyer, the shares of stock to which it relates, 
 the number of shares and the price per share of said stock, and shall 
 bear a number upon the face thereof. No more than one such bill or 
 memorandum made by the seller on any given day shall bear the 
 same number: Provided., however, That no single transaction of a 
 purchase or sale that is made upon an exchange by one member for 
 another member shall require to be evidenced by more than one 
 stamped memorandum of sale or agreement to sell. 
 
 AFFIXING AND CANCELLATION OF STAMPS, 
 
 Art. 7. In case the transfer is effected by delivery of the certificate 
 of stock assigned in blank the stamp shall be aifixed to the bill, 
 memorandum, or agreement to sell. 
 
 In case the change of ownership is by transfer of the certificate of 
 stock, the stamp shall be affixed to the certificate, and in no event 
 shall any company or registrar or transfer agent accept or transfer 
 any shares of stock or certificates therefor unless stamps for all 
 transfer tax required to be affixed to the certificate are attached 
 thereto properly canceled. 
 
 In case the evidence of the transfer is shown only by the books 
 of the company the stamp shall be placed upon the books. 
 
 In all other cases the payment shall be evidenced by affixing the 
 stamp upon the memorandum or agreement of sale to be delivered 
 by the seller to the buyer. 
 
 The person using or affixing a stamp shall write or stamp thereon, 
 in ink, his initials and the day, month, and year on which the same 
 shall be used or affixed, or shall by cutting or cancelling said stamp 
 with a machine or punch affixing his initials and date as aforesaid, 
 so deface the stamp as to render it unfit for reuse. In addition to 
 the foregoing, stamps of the value of 10 cents or more shall have 
 three parallel incisions made by some sharp instrument lengthwise 
 through the stamp after the same has been attached to the bill, 
 memorandum, or other evidence of sale or transfer of stock, provided
 
 12 
 
 this will not be required where stamps are canceled by perforation. 
 The cancellation by either method should not so deface the stamp 
 as to prevent its denomination and genuineness from being readily 
 determined. 
 
 RECORDS OF SALES OR TRANSFERS OF STOCK. 
 
 Art. 8. All persons who are wholly or partly engaged in the busi- 
 ness of buying, selling, or transferring shares of stock, whether at 
 public or private sale, or whether or not they are members of an 
 exchange, including persons engaged in transactions known as 
 " matched," or " on-ordep," or " pass-outs," or by any other name or 
 term at, on, or in any exchange or similar place, whether or not such 
 transactions are cleared, adjusted, or settled through a clearing house 
 or directly between seller and buyer, or otherAvise, shall keep a record 
 showing — 
 
 (a) The date of the transaction. 
 
 (b) The name of the seller or transferror. 
 
 (c) The name of the purchaser or transferee. 
 
 (d) If the order was executed on an exchange, the name of the 
 
 person who executed the order. 
 
 (e) Whether the transaction is a purchase or sale. 
 
 (f) The name of the corporation the stock of which is the subject 
 
 of the sale and the number of shares thereof. 
 
 (g) Whether the stock was listed on an exchange. 
 
 (h) Whether the stock was cleared through a clearing house, 
 (i) The face or par value of the stock, 
 (j) The price of the stock if there is no face or par value, 
 (k) Whether the shares were borrowed or loaned. 
 (1) Whether the transaction was " matched," " on-order," a " pass- 
 out," or a " scratched sale," or any other kind of sale or 
 purchase, 
 (m) The amount of tax paid, 
 (n) The identifying number of the bill or memorandum of sale, 
 
 as required by article 6 of these regulations, 
 (o) The origin of the order, whether domestic (referring to the 
 Continental United States), or foreign (referring to other 
 countries) . 
 Persons using such forms may incorportite therein additional col- 
 umns that would be of use to them, such columns to be placed after 
 the columns containing the information herein required, so as not 
 to interfere with the columns and headings hereby prescribed. These 
 records must be in book form, and all entries therein must be legibly 
 written in ink and the records kept for a period of at least two years. 
 Such record forms will not be supplied by the department. 
 The form of record required shall be as follows :
 
 13 
 
 
 n 
 
 S 
 a 
 
 d 
 u, 
 
 o 
 m 
 
 g 
 
 § 
 
 CO 
 
 f-4 ^ 
 
 ^1 
 
 
 
 
 
 1 
 
 
 9 
 
 » 
 
 CO 
 
 ,.-sapBj) 
 paqojBH,, uBq:) jaqjo 
 
 
 
 ,/jjo-jTBj,, JO ,,japjo 
 no,. JO .,sapBji paqoiBjv,, 
 
 
 
 '1 
 
 ■aouBjBg 
 
 
 
 •junoooB s, jamojsno JO jjiqg 
 
 
 
 {6) -paam} 
 -9J sajBqs ,,paA\ojjog,, 
 
 
 
 (/) -patrcoq 
 
 
 
 '5 
 
 53 
 
 ■a 
 
 •iiSiajoj 
 
 
 
 
 •oijsamoa 
 
 
 
 as 
 !s3 
 
 
 
 (?) -anjBA 
 
 (jBd JO) 80BJ OU JO SO.IBt]S UO piBd XB 
 
 
 
 
 
 
 
 
 
 (» 
 
 o 
 
 ' II °l||l| 
 
 •s)uao 
 
 
 "T 
 
 
 
 S 
 
 
 O 
 
 
 
 
 
 
 es 
 
 
 H 
 
 
 ■psjjojsTiBjj JO pps qorq.u ib ootjj 
 
 
 S 
 
 o 
 
 rr, 
 
 C3 
 
 a . 
 
 g g 
 £ 
 
 CQ 
 
 (p) -aniBA 
 
 (JBCI JO) 90EJ IBIO J UO ptcd XCJ, 
 
 
 
 
 
 
 
 C3 
 
 1 
 
 
 ■sjuao 1 1 
 
 
 
 O 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 •ejutis jad onjBA (jcd jo) aoBj 
 
 
 
 a 
 
 o • 
 
 .£■§ 
 1° 
 
 •pajsrian 1 
 
 
 •pa^siq 1 
 
 
 1 
 ''A 
 
 
 
 •S9jBqs JO J3qmn>i 
 
 
 
 
 
 
 
 
 ^ 
 
 
 « 
 
 u 
 
 
 
 HI 
 
 , o 
 ■<i o o o o 
 
 
 w 
 
 (q) -jaqirmu emq 
 
 -H M « T^ UO to r^ 
 
 U4 
 
 •9;ca 
 
 
 
 .g ■^ 
 
 
 ? 
 
 
 a 
 
 
 ^ 
 
 
 o 
 
 
 c3 
 
 
 
 - 
 
 
 
 cq 
 
 
 a 
 
 
 s 
 
 "c 
 
 O 
 
 S 
 
 
 •rt 
 
 
 » 
 
 .i 
 
 ■^ 
 
 a 
 
 P 
 
 
 o 
 
 
 
 
 
 
 
 
 
 >>£ 
 
 3 
 
 
 Si 
 
 ^^ 
 
 
 CI 
 
 £" 
 
 a 
 
 tu 
 
 o 
 
 .r; 
 
 c 
 o 
 
 c 
 
 
 
 
 
 _ 
 
 
 _g 
 
 
 
 
 
 
 
 
 » 
 
 J_ 
 
 "■-, 
 
 o 
 
 o 
 
 ' 
 
 .y 
 
 
 
 t.> 
 
 
 
 
 
 
 
 
 -t 
 
 n 
 
 o 
 
 c 
 
 o 
 
 ^ 
 
 c? 
 
 •r. 
 
 CC/J 
 
 c 
 
 h 
 
 "3 
 
 
 -3 
 
 c 
 
 O 
 
 S 
 
 ~ 
 
 *-" 
 
 o 
 
 
 H 
 
 c 
 
 
 
 o 
 
 3 
 
 
 3 
 
 a> 
 
 
 
 
 
 
 
 
 
 CJ 
 
 
 o 
 
 
 
 
 
 
 p. 
 
 C3 
 
 
 _a 
 
 3 
 O 
 
 O 
 
 5 
 
 
 
 
 '< 
 
 o 
 
 
 
 T> 
 
 
 
 .^ 
 
 VI 
 
 m 
 
 ;:; 
 
 
 O 
 
 Tl 
 
 -n 
 
 
 
 
 
 
 ■« 
 
 o 
 
 
 ^ 
 
 — 
 
 — t 
 
 ^ 
 
 rr o 
 
 a 
 
 o 
 
 
 3 
 
 s 
 
 p 
 
 
 o 
 
 o 
 
 
 
 
 
 
 
 
 1- 
 
 a 
 
 
 
 
 
 
 
 
 _ 
 
 
 n 
 
 r/T 
 
 
 " 
 
 rn~ 
 
 
 
 
 
 T1 
 
 ^ 
 
 T! 
 
 T) 
 
 X3 
 
 
 
 
 
 
 
 
 
 o 
 
 3 
 
 
 
 
 
 
 M 
 
 is 
 
 C 
 
 & 
 
 ^ 
 
 :J 
 
 ? 
 
 (^ 
 
 o 
 
 > 
 
 p 
 
 o 
 
 
 
 5 
 
 CJ 
 
 
 u* 
 
 -* 
 
 ^ 
 
 o 
 
 
 s^ 
 
 o» 
 
 ir. 
 
 
 ^ 
 
 ^^ 
 
 ■-^ 
 
 
 '.^ 
 
 ^-' 
 
 SSi 
 
 
 
 
 
 
 
 HH 
 
 
 
 
 

 
 14 
 
 
 CO 
 
 ^ 
 
 Z 
 
 ■a 
 
 O 
 
 
 
 ^ 
 
 H 
 
 i-i 
 
 O 
 
 « 
 
 -f 
 
 
 en 
 
 M 
 
 ?r 
 
 
 -e* 
 
 OJ 
 
 « 
 
 At 
 
 H 
 
 fl 
 
 H 
 
 r 
 
 !/) 
 
 p 
 
 P 
 
 
 o 
 
 
 ffl 
 
 £ 
 
 o 
 
 ■a 
 
 z 
 
 01 
 
 HH 
 
 T3 
 
 »s 
 
 
 
 -< 
 
 
 Ed 
 
 n 
 
 hJ 
 
 !fl 
 
 O 
 
 z 
 
 « 
 
 
 U 
 
 
 
 a 
 
 f 
 
 O 
 
 1 
 
 s 
 
 
 
 
 
 1 
 
 1 
 
 O ft 
 
 •saoncjBaio 
 
 
 •saScjOJioja 
 
 
 (/sino-ssTJd,, 
 JO „'p8Jjajsmu},, 10 ^paqo-jcjog,, 
 
 
 JO «'18S-J30,; ..'siuouieinasioajra,, 
 
 
 ,,-i)o-J!Bj,, JO 1 
 ,,J3pjo no,, JO ,,sapBJ') paqoi^Hu 1 
 
 .2 
 
 "3 
 
 ft 
 
 ■oout![t!g 1 
 
 •^UROOoBs,J8rao!)snojo ^jtqg 
 
 • (/J) panjtn 1 
 -aj sajEqs „p8MOjjoa„ | 
 
 
 •(/)panBoq | 
 
 
 l°s| 
 
 •USIWQ^.I 1 
 
 •onsauiocr 1 
 
 •joraoisno jo anreN 
 
 
 (jEd 
 
 •(s)8niBA 
 jo) 8DBJ oa JO saieqs no pied tbj, 
 
 
 
 
 
 "3 . 
 
 O o 
 
 Frac- 
 tions 
 
 of 
 hun- 
 dreds 
 ($100) 
 ofdol- 
 lars. 
 
 •s^nao 
 
 
 
 
 
 
 
 
 
 
 
 •pajja;suBjj lo pjos qojqAi jb ooiij 
 
 
 C3 
 ft 
 
 M 
 
 o 
 
 .a 
 
 (•p)3n[BA 
 (jBd JO) ooBj [Bjoj no pred xox 
 
 
 
 
 
 « 3 
 
 1- 
 
 Frac- 
 tions 
 
 of 
 hun- 
 dreds 
 ($100) 
 of dol- 
 lars. 
 
 ■sjn30 1 1 
 
 
 
 
 
 
 
 
 
 
 •ajcqs jad enjBA (ji3d jo) aotij 
 
 
 1^ 
 fl 
 
 O) o 
 
 Q 
 
 
 •paisqun 
 
 
 "Pajsri 
 
 
 •aniBN 
 
 
 •sajBqs JO jeqnm^ 
 
 
 
 
 
 
 
 •(3)piosmoq.\iox 
 
 
 uapjo pojnoaxo oqM uosiod jo onreM 
 
 
 •(?) jaqnmuamq 
 
 w^ CA n ^ m to t* 
 
 to to uo to to iO kC 
 
 
 
 
 
 •ajcci 
 
 
 ■B .9 
 
 ft 
 « o 
 
 « £ 
 
 "5 -O 
 
 
 "IS 
 
 o 
 
 ' oSi 
 
 ^ . ^ «tw ° S — 
 
 , , '^ l!3T3!r^.a o o 
 
 "^ £= — a- =< 
 <w S^- o g- » 
 
 O 1^ O t« - ."O-^ 
 
 -o t3-:5.2 c 0.3 
 
 o r.2M-afe- 
 
 •r o ~ . S 3 » It 
 
 S s.g-^r OS'S 
 
 « r-^-^s i ° ^ 
 
 , 3 4) a M S D i3 
 
 gai>c3-^og 
 
 t. J' O o c o 
 
 £: --ggloia-S 
 
 B! « <fl .2 "^ .S fe « 
 
 .- .E r- -J o ^
 
 15 
 
 RETURNS BY PERSONS MAKING SALES. 
 
 Art. 9. All persons who are wholly or partly engaged in the busi- 
 ness of buying, selling, or transferring shares of stock at, in, or on 
 an exchange, whether or not such sales, purchases, or transfers shall 
 be made, cleared, settled, or adjusted through a clearing house; shall 
 on or before the fifteenth day of each month, and at any other time 
 or times that may be designated by the Commissioner of Internal 
 Revenue, render under oath a true return of all such sales and pur- 
 chases to said commisioner for the preceding month or for any other 
 period designated by the commissioner, containing in detail the fol- 
 lowing data and information: 
 
 (a) The month for which the return is made. 
 
 (b) The name and address of the person, partnership, corporation, 
 
 or association making the return. 
 
 (c) The number of shares of stock sold and purchased on such ex- 
 
 change and cleared by its clearing agency or association. 
 
 (d) The number of shares of stock sold and purchased on such ex- 
 
 change that Avere not cleared by its clearing agenc}' or 
 association. 
 
 (e) In respect of shares having a face (or par) value: 
 
 (1) The aggregate face value of all shares, not including 
 
 any fraction of less than $100 of face value involved 
 in any transaction. 
 
 (2) The number of fractions of less than $100 of face value 
 
 involved in all transactions. 
 
 (f) In respect of shares having no face (or par) value: 
 
 (1) As to such shares of an actual value in excess of $100 
 
 per share — 
 
 (A) The aggregate actual value of all shares, not 
 
 including any fraction of less than $100 in- 
 volved in any transaction. 
 
 (B) The number of fractions of less than $100 in- 
 
 volved in all transactions in such shares. 
 
 (2) As to such shares of an actual value of $100 or less per 
 
 share — 
 
 (A) The total number of such shares. 
 
 (g) As to shares purchased, the same information and detail re- 
 
 quired for shares sold, transferred, and delivered required 
 under (e) and (f) for shares sold, transferred, or delivered. 
 
 (h) The number of shares of stock borrowed. 
 
 (i) The number of shares of stock loaned. 
 
 (j) The number of shares of loaned stock returned. 
 
 (k) The number of shares of borrowed stock returned. 
 
 (1) The amount of tax paid.
 
 16 
 
 (m) The amount in dollars of stamps purchased during the month. 
 
 (n) The amount in dollars of stamps on hand on the last day of 
 the month for which return is being made. 
 
 Such returns shall be made upon forms furnished upon application 
 by the internal revenue collector or other designated officer. 
 
 The Commissioner of Internal Revenue may, from time to time, 
 require any person wholly or partly engaged in the business of 
 buying, selling, or transferring shares of stock, whether at public 
 or private sale, and whether or not such sale shall be made on an 
 exchange or cleared, settled, or adjusted through a clearing house 
 to render under oath returns of all such transactions upon forms 
 prescribed by him. 
 
 RETURNS BY CLEARING HOUSES. 
 
 Art. 10. Every clearing house or committee or body through or 
 by which clearing is done shall, on or before the fifteenth day of each 
 month, and at any other time designated by the Commissioner of 
 Internal Revenue, render in writing under oath to the Commissioner 
 of Internal Revenue a return for the preceding month, or for any 
 other period that may be designated by the commissioner, of all 
 facts in their possession relating to any and all such transactions, 
 and showing in detail : 
 
 (a) The month for which return is made; 
 
 (b) The name and address of the clearing house or similar busi-' 
 
 ness, agency, or institution making the return ; and 
 
 (c) The number of shares of stock directed to be received and the 
 
 number of shares of stock directed to be delivered and 
 
 cleared, settled, or adjusted for each member during the 
 
 month or period for which the return is made. 
 
 Such return shall be made upon the forms to be furnished upon 
 
 application by the collector of internal revenue or other designated 
 
 officer. 
 
 If any person who negotiates sales or transfers of stock on a stock 
 exchange, shall appoint in writing the clearing house for such ex- 
 change upon which such sale or transfers are made, if any, his 
 agent for the purposes hereinafter indicated, such clearing house 
 being approved hj the Commissioner of Internal Revenue, and shall 
 make a written return, statement or sheet, to such clearing house 
 containing a full disclosure on each business day of all such trans- 
 actions, both such as are clearable and non-clearable, of the preceding 
 day in shares of stock that are listed or permitted to be dealt in by 
 such member on such exchange, also which if any of such stocks 
 are loaned or borrowed, then in that event such return, statement, 
 or sheet delivered to the clearing house shall be deemed to be the
 
 17 
 
 bill, or memorandum of sale, or agreement to sell, required under 
 section 807, subdivision 4, of the act approved October 3, 1917, and 
 such clearing house is hereby authorized to affix to such return, 
 statement, or sheet the amount of stamps required for each sale or 
 agreement to sell or memorandum of sale for delivery or transfer 
 of such stock indicated thereon, and to cancel the stamp so affixed. 
 The affixing and cancellation of such stamps by the clearing house 
 shall be held to be that of the person making such sale or agreement 
 to sell, or memorandum of sale, for delivery or transfer of such 
 stock. The returns, statements, or sheets made to the clearing house 
 shall in respect of each sale show the date thereof, the name of the 
 seller, the name of the buyer, the amount of the sale, and the name 
 of the stock, certificates, voting shares, or other things traded in, 
 but a return for more than one sale may be upon the same return, 
 statement, or sheet, and no settlement of differences or other dealings 
 between members shall be permitted that will interfere with the full 
 disclosure of the whole transaction. 
 
 Said clearing house shall preserve the returns, statements, or sheets 
 so made and stamped for at least two years. 
 
 But such return, statement, or sheet to the clearing house shall not 
 relieve the person from making the monthly return required by 
 these regulations. 
 
 Wherever any clearing house association or similar body carries 
 upon its sheets or records information or reports of transactions 
 showing the transfer by one of its members of an account of a cus- 
 tomer without change of ownership of the securities of the customer, 
 there shall be kept by the members of such clearing house or body 
 concerned in such transaction, a record showing the particulars 
 of such transaction. 
 
 SUBSTITUTE RETURNS— AGENTS. 
 
 Art. 11. If any person or clearing house required to make any 
 return by law, or the regulations thereunder, shall fail or refuse to 
 make such return within the time prescribed, such return may be 
 made by an internal revenue officer, upon inspection of the books and 
 papers of the person or clearing house required to make such re- 
 turns ; but the making of such return by an internal revenue officer 
 shall not relieve the person or clearing house in default from any 
 penalty incurred by reason of the failure to make such return. 
 
 Any officer designated by the Commissioner of Internal Revenue 
 shall have authority to examine the books, papers, and records kept 
 pursuant to these regulations and may require the production of any 
 other books, records, papers, or statements of account, necessary to
 
 18 
 
 determine any liability to the tax imposed by the act, or to the observ- 
 ance of the provisions of the regulations made in accordance there- 
 with. 
 
 SALE OF STAMPS. 
 
 Art. 12. No person other than a collector of internal revenue, or 
 duly authorized deputy collector of internal revenue, an Assistant 
 Treasurer, or other United States designated depositary shall sell 
 or expose for sale, give away, traffic in, trade, barter, lend, bor- 
 row, or exchange any stamp, issued pursuant to these regulations. 
 No person shall buy or receive any such stamps or have the same 
 in his possession or under his control, unless such stamps have been 
 purchased directly from the collector of internal revenue. Assistant 
 Treasurer, or other United States designated depositary, in the dis- 
 trict in which the stamps are to be used. 
 
 All requisitions for stamps to be used under these regulations, 
 shall be made in Avriting, in ink, on a. form prescribed by the Com- 
 missioner of Internal Eevenue, to the collector of internal revenue, 
 or to an Assistant Treasurer, or other designated depositary, in 
 the internal-revenue district in which the stamps are to be used, 
 giving the date thereof, the number and denomination of stamps 
 applied for, and the name and address of the purchaser, and shall 
 ])e signed in ink by the person receiving the stamps. 
 
 The collector of internal revenue to whom such requests are made 
 shall keep a record thereof, and shall keep the requisitions separate 
 and apart from all other requisitions for stamps, and preserve them 
 in his office for a period of two years. Any Assistant Treasurer or 
 designated depositary of the United States, receiving requisitions 
 for such stamps shall keep a record of each such requisition and at 
 the end of each month shall file such requisitions with his monthly 
 report to the collector of internal revenue of the district in which 
 said Assistant Treasurer or other designated depositary is located. 
 
 The stamps to be used under these regulations shall be of such 
 kind and color as are prescribed by the Commissioner of Internal 
 Revenue. 
 
 NOTE. 
 
 For the provisions as to fines and penalties applying particularly 
 to violations or attempted evasions of the act or of these regulations, 
 reference is made to sections 802, 803, 807, subdivisions 4 and 5, and 
 1004 of the "Act to provide revenue to defray war expenses and 
 for other purposes," approved October 3, 1917. The provisions of 
 the internal-revenue laws of the United States, so far as applicable, 
 including sections 317;'), 3174 and 3175, of the Eevised Statutes, as 
 amended, apply to said act.
 
 PART 2. 
 
 Regulations Promulgated by the Commissioner of Internal Reve- 
 nue, with the Approval of the Secretary of the Treasury, for 
 the Collection of Stamp Taxes Upon Sales of Products 
 or Merchandise on Exchanges for Future Delivery. 
 
 DEFINITIONS. 
 
 Art. 1. That for the purposes of these regiilations the term " sale " 
 or " contract of sale " shall be held to include all sales, or agreements 
 of sale, or agreements to sell, including so-called transfers or 
 "scratched sales." 
 
 The word " person " or " every person," or similar term, whenever 
 used in these regulations, shall include the plural as well as the 
 singular, and shall be taken to refer to individuals, partnerships, 
 associations, and corporations, except where it is plain from the con- 
 text that a different meaning is intended. 
 
 The word " exchange " as used in these regulations, except as other- 
 wise specifically indicated in the regulations, shall be deemed and 
 taken to include each and every agent or agency, auction place, or 
 other meeting place at which produce or merchandise for future 
 delivery is publicly bought, sold, bid for, offered, or exchanged, or 
 contracts for such future delivery are made, either between the 
 members or patrons of such exchange, or as between members and 
 nonmembers, patrons, and the public, and it shall include all incor- 
 porated and unincorporated associations of individuals, pjirtnei-ships, 
 and corporations engaged in the business of publicly selling, buying, 
 or exchanging product^ or merchandise for future delivery. 
 
 The term " clearing house " shall be held to mean each and every 
 clearing-house corporation, clearing-house association, or incorpo- 
 rated and unincorporated association, carried on for the purpose of 
 clearing, settling, and adjusting transactions in purchasing, selling, 
 receiving, or delivering products or merchandise, whether such clear- 
 ing house be a part or department of an exchange or an independent 
 body. 
 
 The act, omission, or failure of am^ official, agent, or other person 
 acting or employed by any person, association, partnership, or cor- 
 poration, within the scope of his employment or office, shall in every 
 case also be deemed the act, omission, or failure of such person, asso- 
 ciation, partnership, or corporation. 
 
 (19)
 
 20 
 
 REGISTRATION. 
 
 Art. 2. Every person engaged in whole or in part in making con- 
 tracts of sale of any product or merchandise or commodity at, on, or 
 in, or under the rules or customs of any exchange for future delivery, 
 or engaged in the businc?^s of accepting or procurmg the transmis- 
 sion of such contracts of sale, to be executed on any exchange, and 
 every exchange and every clearing house shall, on the first day of 
 December, 1917, and if not on that date engaged in business, then 
 within ten days after engaging in business, and on the first day of 
 July annually thereafter file m the office of the collector of internal 
 revenue of the district in which each place of business of such person, 
 exchange, or clearing house is located, or with such other internal- 
 revenue officer as may be hereafter designated, a statement under 
 oath setting forth the full name of such person, if an individual, and 
 if a partnership the full names of all the members of such partner- 
 ship, with the post-office address of the individual or partnership; 
 and if the person filing such statement be a corporation or associa- 
 tion it shall set forth its principal office or place of business with 
 the names and addresses of its chief officer and its secretary, accom- 
 panied by a list of its members and their addresses, and if in- 
 corporated when and where incorporated, and if unincorporated, 
 under what agreement or authority it is conducting business, tor 
 gether with a copy of such agreement. Statements filed in behalf 
 of any corporation, association, exchange, or clearing house shall 
 be executed and duly acknowledged by the president or secretary 
 thereof. EA-ery statement filed by an exchange or clearing house 
 shall specifically set forth the character of the business conducted or 
 intended to be conducted. Each exchange and clearing house shall 
 also file with the said collector or other designat. cl internal-revenue 
 officer a copy of its constitution, charter, agreement of association, 
 by-laws, and regulations, and all amendments thereto, as the same 
 may from time to time be adopted, and the names and addresses of 
 new members as from time to time admitted to membership. 
 
 The statements required by these regulations shall be made upon 
 forms to be prescribed by the. Commissioner of Internal Revenue. 
 
 RECORDS AND CERTIFICATES. 
 
 Art. 3. Every collector of internal revenue or other designated 
 internal-revenue officer shall file and preserve each statement or regis- 
 tration made to him in accordance with these regulations, and shall 
 issue to the person making such statement a certificate of registry
 
 21 
 
 showing the date of issue, the name of the person, the nature of the 
 business for which the certificate is granted, and the date of the ex- 
 piration of the registration, which certificate shall be signed by the 
 collector or other designated internal-revenue officer, and shall at 
 all times during the period for which it is issued be posted in some 
 prominent place in the office of the person receiving it. If the busi- 
 ness of such person is conducted at more than one place, a certificate 
 shall be so posted in each such place of business. 
 
 TRANSACTIONS NOT TAXABLE. 
 
 Art. 4. No tax is imposed on cash sales of products or merchandise 
 for immediate or prompt delivery which in good faith are actually 
 intended to be delivered. All sales at an exchange for future de- 
 livery are subject to the payment of the tax. 
 
 For the purpose of these regulations " immediate or prompt de- 
 livery " shall mean delivery at once or as soon as practicable, and in 
 any event within twenty days of the date of the sale or agreement. 
 Every sale or agreement not evidenced by a memorandum or contract 
 expressly requiring immediate or prompt delivery within the above 
 definition shall be deemed to be for future delivery. In all cases in 
 which the commissioner is not satisfied from the evidence submitted 
 to him that the transaction was in good faith intended to be followed 
 by immediate or prompt delivery, within the above definition, the 
 seller shall be required to pay the tax as on a sale for future delivery. 
 
 Sellers of products, merchandise, or commodities having paid the 
 tax provided by law may transfer such contracts to a clearing-house 
 association, and such transfer shall not be deemed to be a sale, or 
 agreement of sale, or agreement to sell, within the provisions of the 
 act, provided that such transfer does not vest any beneficial interest 
 in the clearing-house association and is made for the sole purpose of 
 enabling such clearing-house association to adjust and balance the 
 accounts of the members of said clearing-house association on their 
 several contracts. 
 
 No provision, by-law, rule, or custom of any exchange, board of 
 trade, or similar institution or place of business which is inconsistent 
 or in conflict with any requirement or provision of the "Act to pro- 
 vide revenue to defray war expenses, and for other purposes," ap- 
 proved October 3, 1917, or any regidations thereunder, nor any 
 collateral, or additional agreement or understanding, either verbal or 
 written, respecting the subject matter of such contract or the settle- 
 ment or fulfillment thereof, which is inconsistent or in conflict with 
 any requirement of said act or the regulations thereunder promul- 
 gated by the Commissioner of Internal Kevenue, with the approval 
 of the Secretary of the Treasury, shall exempt any person fi'oni the
 
 22 
 
 payment of the tax provided for under section 807, subdivision 5, of 
 said act. 
 
 MEMORANDA OF SALES. 
 
 Art. 5. Every person who makes sales or contracts of sale of any 
 product, merchandise, or commodity at, on, or in any exchange for 
 future delivery, shall, except as herein otherwise expressly pro- 
 vided, deliver to the buyer a bill, memorandum, agreement, or other 
 evidence of such sale or agreement of sale, which shall show the 
 date thereof, the name of the seller, the name of the purchaser, the 
 product, merchandise, or commodity, the quantity thereof to which 
 it refers, the price, the aggregate amount of the sale, and the amount 
 of the tax to be paid, to wdiich bill, memorandum, agreement, or 
 other evidence of sale there shall be affixed a lawful stamp or stamps 
 in value equal to the amount of tax on such sale. 
 
 No single sale or contract of sale that is made upon an exchange 
 by one member for another shall require to be evidenced by more 
 than one such stan>i3ed memorandum. 
 
 If any person making contracts of sale for future delivery of 
 any products or merchandise at, in, or on any exchange shall in 
 writing appoint the clearing house for tho exchange upon which 
 such sales are made his agent for the purposes hereinafter indicated, 
 such clearing house being approved by the Commissioner of Internal 
 Revenue, and shall make a written return or sheet of each such sale to 
 such clearing house in accordance wdth these regulations, the return 
 or sheet of the person to the clearing house shall be deemed to be the 
 bill, memorandum, or agreement of sale required to be delivered by 
 the seller to the buyer, and the clearing house is hereby authorized to 
 affix to such return or sheet the amount of stamps required for each 
 contract of sale indicated thereon, and to cancel the stamps so affixed; 
 the affixing and cancellation of such stamps by the clearing house to 
 be held to be that of the person making suctj contracts of sale. The 
 return or sheet of sales so made to the clearmg house shall in respect 
 of each sale set forth the date, the name of the seller, the name of the 
 purchaser, the amount of the sale, and the matter or things to which 
 it refers, but a return for more than one sale may be made upon the 
 same paper or sheet. The clearing house shall preserve for a term of 
 not Isss than two years each return or sheet made to it by any person 
 under the foregoing regulations. 
 
 Every clearing house so acting shall include in the monthly re- 
 turn to the Coimnissioner a statement of the amounts of stamps so 
 affixed and canceled for each person. The making of such return 
 by the clearing house shall not relieve the person maldng such sales 
 from making the monthly return of his transactions required by these 
 regulations.
 
 23 
 
 The person using or affixing stamps shall write or stamp thereon 
 in ink his initials and the day, month, and year on which the same 
 shall be used or affixed, or shall, by cutting and canceling the stamp 
 with a machine or punch affix his initials and date as aforesaid, so 
 deface the stamp as to render it unfit for reuse. In addition to the 
 foregoing, stamps of the value of 10 cents or more shall have three 
 parallel incisions made by some sharp instrument lengthwise through 
 the stamp after the same has been attached to the document : Provided^ 
 This will not be required where stamps are canceled by perforation. 
 The cancellation by either method should not so deface the stamp as 
 to prevent its denomination and genuineness from being readily 
 determined. 
 
 RECORDS BY SELLERS AND BUYERS. 
 
 Art. 6. All persons who make sales or contracts of sales, including 
 so-called " transferred or scratch sales," " pass outs," " pair-off s," or 
 '■• matched trades, and all other forms of sale of any product or 
 merchandise at, on, in, or under the rules, or customs of any exchange 
 for future delivery shall keep a record showing : 
 
 (a) Date 'when contract was made. 
 
 (b) Name and address of the other party to the contract. 
 
 (c) Name of person executing the contract. 
 
 (d) Whether the transaction is a purchase or sale. 
 
 (e) Quantity of product, merchandise, or commodity involved; 
 
 whether in tons, pounds, bales, bushels, bags, mats, barrels, 
 gallons, or other unit of measure or weight, as the case 
 may be. 
 
 (f) Name of product, merchandise, or commodity, including (if 
 
 not a basis grade contract) grade, type, sample, or de- 
 scription. 
 
 (g) Name of customer. 
 
 (h) Whether the contract is a "basis grade " contract. 
 
 (i) Time specified in contract for delivery. 
 
 (j) Specified price per ton, pound, mat, bale, bag, bushel, barrel, 
 
 gallon, or other unit of measure or weight, as the case 
 
 may be. 
 (k) Gross amount of sale or purchase. 
 (1) Amount of tax paid, 
 (m) Whether the order for sale or purchase was of domestic 
 
 (meaning the continental United States) or foreign origin 
 
 (meaning from countries other than the continental United 
 jStates). 
 (n) Date of delivery or settlement.' 
 (o) Method of fulfillment or settlement.
 
 24 
 
 Persons who use such forms may incorporate additional columns 
 which would be of use to them, such columns to be placed in such 
 positions as not to interfere with the columns and headings pre- 
 scribed. Such record forms will not be supplied by the department. 
 
 The records required by these regulations shall be legibly written 
 in ink and kept sej^arate in books, and contracts of sale for future 
 delivery of two or more distinct products or merchandise shall be 
 kept separate. Any person who executes or makes such contracts of 
 sale shall preserve the trading cards, memoranda, or slips of each 
 transaction, and the purchaser shall preserve the bill, memorandum, 
 or evidence of sale to which the stamps are affixed, for the period of 
 two years. 
 
 The form of the record required by these regulations shall be as 
 follows :
 
 25 
 
 > 
 
 H-l 
 
 Q 
 
 Est 
 O 
 
 
 OQ 
 
 5 
 
 g 
 
 1 
 
 f 
 
 O 
 
 1 
 
 a) 
 ta 
 
 1° 
 
 0| 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 iti 
 
 Q C3 <fl 
 
 •pasiojaxe 
 nojido ajBcr 
 
 
 
 
 ■pajidxo 
 nondo ajBd 
 
 
 
 
 
 •so3treJEa[o 
 
 
 
 
 •saSBJOJioja 
 
 
 
 
 ,,'sinossT;d,, lo ,/poj.i3j 
 
 • 
 
 
 •sopsji „passojD„ JO 
 
 ,/paHO}Bln„ 'irSgO-JIBcI,, 
 
 
 
 
 (,'S50-19S„ „S-(8S 
 -J0„ 's4uaUI8[J18S ^03JTC[ 
 
 
 
 
 •sSaia 
 
 
 
 
 •9snoq Sau^aio 
 
 
 
 
 •passed 
 saai^on aiqBJajsncJX 
 
 
 
 
 •(panssi 
 saonou) paiaAiiaa 
 
 
 
 
 a> 
 Q 
 
 
 
 
 
 .5 ^' 
 
 O o 
 
 •uSiaJOj 
 
 
 
 
 •onsaino(j 
 
 
 
 
 
 0) 
 
 •o 
 
 OJ 
 
 i-4 
 
 "o 
 
 T} 
 
 g 
 
 o 
 
 a 
 
 X 
 
 Ol 
 
 "3 
 
 o 
 
 Q 
 
 5_ 
 
 1 
 1 
 
 
 
 
 ^ P. 
 
 
 
 
 5^ 
 
 
 
 
 to 
 
 P-. 
 
 
 
 
 i 
 
 03 
 
 a 
 
 2 
 
 •a 
 
 o 
 t-< 
 
 Ui 
 0) 
 
 si 
 
 1 
 
 1 
 
 o 
 XI 
 
 
 
 
 
 1i 
 
 
 
 
 Name of 
 
 person 
 
 who 
 
 executed 
 
 contract. 
 
 
 
 
 
 
 03 
 
 ft 
 
 
 
 
 ■sa 
 
 o c3 
 
 ^ sa 
 
 53 M-3 
 
 
 
 O T3 
 
 a> 4> 
 3 ra 
 
 03 O 
 
 
 5^" 
 
 CL4) 
 
 ^:: 
 
 §5 
 
 gs 
 
 
 ^- |s 
 
 d ^ e 
 
 cs S d 
 
 . SS'O 2
 
 26 
 
 RECORDS TO BE KEPT BY CLEARING HOUSES. 
 
 Art. 7. All persons who act in the capacity of a clearing house or 
 clearing association shall keep a record showing : 
 
 (a) Name of person for whom each contract is cleared. 
 
 (b) Date when contract was made. 
 
 (c) Whether the transaction is a purchase or sale. 
 
 (d) Quantity of j^roduct, merchandise, or commodity involved, 
 
 whether in tons, pounds, bales, bushels, bags, mats, barrels, 
 gallons, or other unit of measure or weight, as the case 
 may be. 
 
 (e) Name of product, merchandise, or commodity, including (if 
 
 not a basis-grade contract) grade, type, sample, or descrip- 
 - tion. 
 
 (f ) Whether the contract is a basis-grade contract. 
 
 (g) Time specified in contract for delivery, 
 (h) Date of settlement. 
 
 (i) Method of settlement. 
 
 Records of sales for future delivery of two or more distinct prod- 
 ucts or merchandise must be kept separate. 
 
 RETURNS BY MEMBERS OF EXCHANGES. 
 
 Art. 8. All persons who make contracts of sale of any commodity, 
 product, or merchandise, at, on, or in any exchange, board of trade, 
 or other similar place of business, for future delivery, whether such 
 contracts shall be cleared and adjusted through a clearing house, or 
 clearing association, or directly between the seller and buyer, or 
 otherwise, shall on or before the fifteenth day of each month, and 
 at any other time required by the Commissioner of Internal Revenue, 
 make return, in writing, to the Commissioner of Internal Revenue, 
 or some officer designated by him, for the preceding month or any 
 other period, verified before some officer authorized to administer 
 oaths, showing : 
 
 (a) The number of contracts of sale and purchase of each product, 
 
 merchandise, or commodity brought forward from the pre- 
 ceding month. 
 
 (b) The number of contracts of sale and purchase of each product, 
 
 merchandise, or commodity during the Current month. 
 
 (c) The month in which the products, merchandise, or commodity 
 
 is to be delivered. 
 
 (d) The method of settlement of each contract, i. e. whether by 
 
 " actual delivery," " notice," " ring," " direct," " transfer," 
 or " scratch sale," " pair off," or " matched," " pass out," 
 " set-off," " give up," through a clearing house or clearing 
 association, or otherwise.
 
 27 
 
 (e) The gross amount of the contracts of sale. 
 
 (f ) The tax paid thereon. 
 
 (g) The number of contracts both of purchase and sale left open 
 
 at the end of the month. 
 
 (h) The amount of stamps on hand from preceding month. 
 
 (i) The amount of stamps purchased during month. 
 
 (j) The amount of stamps used during month. 
 
 (k) Balance of stamps on hand at end of month. 
 
 (1) The origin of the order of the contracts, whether domestic or 
 foreign. 
 
 Such returns shall be made upon forms to be furnished, upon 
 application, by the collector of internal revenue, or other designated 
 officer of the district in which the exchange, board of trade, or other 
 similar place is located. 
 
 RETURNS BY CLEARING HOUSES. 
 
 Art. 9. Every clearing house, or clearing association, shall on or 
 before the 15th day of each month, and at any other time required, 
 render in writing, under oath, a return, for the preceding month 
 or for any other period designated, to the Commissioner of Internal 
 Revenue of all facts in their possession showing: 
 
 (a) The number of contracts " long" and " short " for each mem- 
 
 ber brought forward from the preceding month. 
 
 (b) The number of contracts bought or sold by each member of 
 
 the association. 
 
 (c) The number of tons, pounds, bales, bushels, bags, mats, bar- 
 
 rels, or gallons, or other units of weight or measure in- 
 volved in such constracts, as the case may be. 
 
 (d) The month in which such product, merchandise, or commodity 
 
 is to be delivered. 
 
 (e) The method of settlement of said contracts — i. e., whether by 
 
 " set-off," " notice," or " delivery," or by any other method. 
 
 (f ) The number of open contracts " long " and " short " for each 
 
 member carried to the following month. 
 Such returns shall be made upon forms to be furnished, upon appli- 
 cation, by the collector of internal revenue of the district, or other 
 designated officer, in which the clearing house or clearing associa- 
 tion is situated. 
 
 FAILURE TO MAKE RETURNS— AGENTS. 
 
 Art, 10. If any person, or clearing house or clearing association, 
 required to make returns by this act, or the regulations thereunder, 
 shall fail, or refuse to make any return within the time prescribed in
 
 28 
 
 these regulations, or designated by the Commissioner of Internal 
 Revenue, then the same shall be made by an internal-revenue officer, 
 upon inspection of the books and papers of the person, or clearing 
 house, or clearing association, so required; but the making of said 
 return by an internal-revenue officer shall not relieve the person in 
 default, from any penalty incurred by reason of his failure to make 
 such return. 
 
 Any officer designated by the Commissioner of Internal Kcvenue 
 shall have authority to examine the books, papers, and records kept 
 pursuant to these regulations, and may require the production of any 
 other books, records, papers, or statements of account, necessary to 
 determine any liability to the tax imposed by this act, or the observ- 
 ance of the provisions of the regulations made in accordance there- 
 with. 
 
 SALE OF STAMPS. 
 
 Art. 11. No persons other than a collector of internal revenue, 
 or duly authorized deputy collector of internal revenue, assist- 
 ant treasurer, or designated depositary of the United States, in 
 the district in which is located an exchange, shall, sell or expose 
 for sale, traffic in, trade, barter, or exchange any stamp required 
 by law or by these regulations to be used for the payment of taxes 
 upon sales or contracts of sale of any product or merchandise for 
 future delivery. 
 
 All requisitions for such stamps shall be made in writing on a 
 form prescribed by the Commissioner of Internal Revenue to the 
 collector of internal revenue, an assistant treasurer, or designated 
 depositary in the internal-revenue district in which the stamps are 
 to be used, giving the date thereof, the number and denomination 
 of stamps applied for, and the name and address of the purchaser, 
 and shall be signed in ink by the person receiving the stamps. If 
 the requisition for such stamps shall be made to any assistant 
 treasurer or designated depositary of the United States, such as- 
 sistant' treasurer or designated depositary shall keep a record 
 thereof, and at the end of each month shall file such requisitions with 
 his monthly report with the collector of internal revenue of the dis- 
 trict in which said assistant treasurer or designated depositary is 
 located. The collector of internal revenue shall keep the requisitions 
 for such stamps made to him and those filed by such assistant 
 treasurer or designated depositary separate and apart from all 
 other requisitions for stamps and preserve them in his office for a 
 period of two years. 
 
 The stamps shall be of a color and design prescribed by the Com- 
 missioner of Internal Revenue.
 
 29 
 
 NOTE. 
 
 FINES AND PENALTIES— ENFORCEMENT. 
 
 For the provisions as to fines and penalties applying particularly 
 to violations or attempted evasions of the act or of these regulations 
 reference is made to sections 802, 803, 807, subdivision 5, and 1004 
 of the "Act to provide revenue to defray war expenses, and for 
 other purposes," approved October 3, 1917. The provisions of the 
 internal-revenue laws of the United States, so far as applicable, 
 including sections 3173, 3174, 3175, of the Kevised Statutes, as 
 amended, apply to said act. 
 
 November 30, 1917. 
 
 Commissioner of Internal Revenue. | 
 Approved : 
 
 Secretary of the Treasury. 
 
 o
 
 LAW LIBRARY 
 LOS ANCWfcBB
 
 GAYLAMOUNT , 
 PAMPHLET BINDER |: 
 
 Manufactured by ^ 
 GAYLORD BROS. Inc. , 
 
 Syracuse, NY. 
 
 Stockton, Co'it . 
 
 UC SOUTHERN REGIONAL LIBRARY F^^^^^^ 
 
 D 000 829 394 6