registry as a dealer in leaf tobacco. As in the case of receipts from farmers, the duplicate or yellow copy shall be pinned to the back of the original or white copy, and both shall be treated as an original or white copy and handled as though received from the associations from which the tobacco is obtained.

(h) Receipts from leaf sales warehouses.-A dealer receiving tobacco from leaf-sales warehouses shall execute Form 774, in duplicate, covering all tobacco delivered by each such warehouse to him each day. He shall retain the original or white form, which shall be handled as other original or white Forms 774 received from other dealers are handled, and forward the duplicate or yellow notice to the warehouse within 24 hours after receipt of the tobacco. The warehouse shall file such duplicate or yellow copies in order of dates of delivery of the tobacco.

(i) Imported tobacco.-A dealer who imports tobacco is likewise required to execute Form 774 himself. Imported tobacco shall not be accounted for until it has been released from customs custody. The word "Imported" and the letter "I" for imported should be entered under the heads of "Shipped or delivered by " and "Bus.," respectively, shown by the Form 774 in each such case. The weight entered on each such Form 774 shall be the "dock" weight. Both original and duplicate Form 774 covering each withdrawal of imported tobacco shall be presented to the collector of customs who, after stamping both copies showing date received, shall return the original or white Form 774 to the dealer. This copy shall be handled by the dealer the same as other original or white forms. The yellow or duplicate Forms 774 will be forwarded by the collector of customs after the close of each month to the Commissioner of Internal Revenue. Imported tobacco, subsequently transferred, shall be accounted for on other Forms 774 at its actual weight.

ART. 25. Record of receipt and shipment or delivery of tobacco.Every dealer in leaf tobacco shall keep record 59, revised, which will be furnished him by the collector. Every dealer shall enter in record 59, revised, day by day, and on the same day upon which the circumstance, thing, or act to be recorded is done or occurs an accurate account of all tobacco received and shipped or delivered by him. Receipt of the bill of lading will be regarded as equivalent to receipt of the tobacco covered thereby and entries must be made accordingly. It is deemed impracticable and unsatisfactory to require dealers in leaf tobacco to report both purchase and sale as well as receipt and shipment of tobacco. Under these regulations dealers will be required to report only the receipt and shipment or delivery of tobacco which will furnish the Government the information necessary to show that the tobacco is properly accounted for.

Debit entries in record 59, revised, shall correspond with original or white Forms 774, and credit entries in the same record shall agree with duplicate or yellow Forms 774. (See article 24.) The totals of each page of debit or credit entries shall be carried forward only to the close of each month, when the record shall be ruled and the totals entered for the month. These totals must correspond with the totals of the dealer's monthly report. (See article 26.) No provision is made for charging off shrinkage each month, and balances are not to be carried forward. The difference between the sum of the quantities of tobacco inventoried at the beginning of the year (or on commencing of business) and received each month, and the sum of the quantities shipped or delivered each month during the same period and inventoried at the close of the year (or on discontinuing business), will represent shrinkage. If such shrinkage is determined to be reasonable, it will be allowed; otherwise, notice to show cause against assessment will be prepared and served as provided in article 29. (In respect to entries, in case of loss by fire, theft, etc., see article 100, and in case of destruction of tobacco material by a deputy, see article 105. For the use of Form 774, see article 24.)

Record 59, revised, shall be kept at the dealer's registered place of business at all times, for a period of two years, and shall be open at all hours to the inspection of any internal revenue officer or agent. For neglect or refusal to keep this record, the dealer is liable to fine and imprisonment. (See article 30.) Upon discontinuing business, the dealer shall deliver his record 59 covering the period of two years previous to the collector of the district.

Every

SEC. 3360 (R. S., as amended). * * * (b) * dealer in leaf tobacco on or before the tenth day of each month, shall furnish to the collector of the district a true and complete report of all purchases, receipts, sales, and shipments of leaf tobacco made by him during the month next preceding, which report shall be verified and rendered in such form as the Commissioner, with the approval of the Secretary, shall prescribe.

* * *

ART. 26. Monthly report.-Every dealer in leaf tobacco is required to furnish to the collector of his district, on or before the 10th day of each month, a true and complete report under oath on Form 775 of all tobacco received and shipped or delivered during the month next preceding. The report shall correspond with the entries in the dealer's record 59, revised, and the Forms 774 received or prepared to cover all tobacco received and shipped or delivered. As many sheets of Form 775 as may be necessary, numbered consecutively, should be used, and the totals should be entered on the final sheet on which the dealers should make oath to the report. The Forms 774 for items listed on Form 775 should then be securely attached to the

back of said form, the original or white copies on top, with the yellow or duplicate copies underneath. The attachment should be through the holes punched for the purpose. Notation should be made in the heading of each monthly report showing the class of business carried on by the dealer. (See article 19, subdivision (e).) A report on Form 775 is required to be made each month whether or not there have been transactions.

*

SEC. 3360 (R. S., as amended). * (b) Every dealer in leaf tobacco shall make and deliver to the collector of the district a true inventory of the quantity of the different kinds of tobacco held or owned, and where stored by him, on the 1st day of January of each year, or at the time of commencing and at the time of concluding business, if before or after the 1st day of January, such inventory to be made under oath and rendered in such form as may be prescribed by the Commissioner. *

*

ART. 27. Inventory.-Every dealer in leaf tobacco at the time of commencing business and on the 1st day of January in each year, and also at the time of concluding business, if on a day other than January 1, is required to make and deliver to the collector of the district in which he is registered a true inventory, showing the places where his tobacco is stored and the kinds and quantity of each kind of tobacco held by him at each place on said date. Such inventory shall include all tobacco in his possession, but will not include tobacco owned by him, but held by another dealer, who must include it in his inventory. Such inventory shall be made under oath on Form 776, and shall show also the condition of the tobacco (whether green, redried, or resweated) on the inventory date. Actual weighing of tobacco on the inventory day will not be required, but if the tobacco is not weighed, the inventory should show that the "marked " weights are reported.

SEC. 3360 (R. S., as amended).

* *

*

(c) Sales or shipments of

leaf tobacco by a dealer in leaf tobacco shall be in quantities of not less than a hogshead, tierce, case, or bale, except loose leaf tobacco comprising the breaks on warehouse floors, and except to a duly registered manufacturer of cigars for use in his own manufactory exclusively.

* *

Dealers in leaf tobacco shall make shipments of leaf tobacco only to other dealers in leaf tobacco, to registered manufacturers of tobacco, snuff, cigars or cigarettes, or for export. ART. 28. Limitations.—(a) Tobacco shall be shipped or delivered by a dealer in leaf tobacco only in quantities of not less than a hogshead, tierce, case, or bale, except when shipped to or from a leaf-sale warehouse, and except when shipped or delivered to a duly registered manufacturer of cigars for use in his own manufactory exclusively.

Shipment or delivery shall be made only to other dealers in leaf tobacco, to registered manufacturers of tobacco, snuff, cigars, or cigarettes, or for export. No shipment can be made by a dealer in leaf tobacco to a tobacco growers' cooperative association which is not registered as a dealer in leaf tobacco without the dealer making the shipment incurring liability to the penalties provided by section 3360 of the Revised Statutes, and to tax equal to the tax then in force upon manufactured tobacco, on all tobacco so shipped. (b) Byproducts-scraps, cuttings, and clippings, including scraps imported from a foreign country or brought into the United States from its insular possessions—may be transferred only under permit by one cigar manufacturer or tobacco manufacturer to another manufacturer, but not to a dealer in leaf tobacco. In order to handle this class of material, a dealer in leaf tobacco will be required to qualify as a manufacturer of tobacco in separate premises and to account for all such products and keep the same on his bonded factory premises. (c) Scrap tobacco, the refuse of leaf tobacco, waste, and broken leaf, which accumulate in the hands of a dealer in leaf tobacco and have never been in the hands of a manufacturer of tobacco or cigars, may be shipped and delivered to other registered dealers in leaf tobacco, or to qualified manufacturers of tobacco or cigars, or for export under the same restrictions in regard to packages as provided in subdivision (a). A dealer in leaf tobacco is not restricted in the purchase or sale of stems. (Article 99 (b) (3).)

SEC. 3360 (R. S., as amended).

* * (d) Upon all leaf tobacco

sold, removed or shipped by any dealer in leaf tobacco in violation of the provisions of subdivision (c), or in respect to which no report has been made by such dealer in accordance with the provisions of subdivision (b), there shall be levied, assessed, collected and paid a tax equal to the tax then in force upon manufactured tobacco, such tax to be assessed and collected in the same manner as the tax on manufactured tobacco. *

ART. 29. Assessments.-A tax of 18 cents per pound is levied, and will be assessed and collected on all leaf tobacco (a) sold, removed, or shipped by a dealer in leaf tobacco in quantities less than a hogshead, tierce, case, or bale, except leaf tobacco handled by a leaf-sales warehouse and except to a duly registered manufacturer of cigars for use in his own manufactory exclusively; (b) shipped to a person other than a dealer in leaf tobacco or a registered manufacturer of tobacco, snuff, cigars, and cigarettes, or for export; (c) in respect to which no report has been made by such dealer in his inventories, records, invoices, or reports, as provided by law.

The amount of such tax liability will be computed and a statement thereof, with notice to show cause against assessment, will be forwarded to the collector for service on the dealer.

ART. 30. Penalties.-Every dealer in leaf tobacco (1) who neglects or refuses to furnish the statement, to give bond, to keep books, to file inventory, or to render the invoices, returns, or reports required by the Commissioner, or to notify the collector of the district of addition to his places of storage, or (2) who ships or delivers leaf tobacco, except as herein provided, or (3) who fraudulently omits to account for tobacco purchased, received, sold, or shipped, shall be fined not less than $100 nor more than $500, or imprisoned not more than one year, or both. (Sec. 3360 R. S., as amended.)

ART. 31. Miscellaneous.-(a) A registered dealer in leaf tobacco may stem his tobacco without being regarded as a manufacturer of tobacco as defined in article 33.

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(b) A dealer in leaf tobacco is also privileged to manipulate leaf tobacco in a manner to produce what is known as Black Fat," "Black Horse," etc., tobacco without qualifying as a manufacturer of tobacco. He may export such tobacco the same as other leaf tobacco without the execution of an export bond. Such product when intended for such use or for consumption in the United States is subject to tax and must be put in proper packages by a manufacturer of tobacco and stamped tax paid. So long as such product is regarded as raw material it may be disposed of the same as leaf tobacco, as provided in article 28.

(c) A dealer in leaf tobacco who desires to temporarily close business, to transfer to a successor, or under new bond, to remove to new location, either in the same district or in another district, will be governed by articles 94 to 97, inclusive, of these regulations in so far as applicable.

SEC. 3359 (R. S.). It shall be the duty of any dealer in leaf tobacco, or in any material used in manufacturing tobacco or snuff, on demand of any officer of internal revenue, to render a true and complete statement, under oath, of the quantity and amount of such leaf tobacco or materials sold or delivered to any person named in such demand, and in case of refusal or neglect to render such statement, or if there is cause to believe such statement to be incorrect or fraudulent, the collector shall make an examination of persons, books, and papers, in the manner provided in relation to frauds and evasions.

SEC. 3391 (R. S.). It shall be the duty of every dealer in leaf tobacco or material used in manufacturing cigars, on demand of any officer of internal revenue, to render to such officer a true and correct statement, under oath, of the quantity and amount of such leaf tobacco or materials sold or delivered to any person named in such demand; and in case of refusal or neglect to render such statement, or if there is

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