Charles Evans Hughes

“ Respondent had entered into contracts with oil producers for the treatment of wet gas by the extraction of gasoline. The Board of Tax Appeals made the following findings: Natural gas, commonly known as 'wet gas' as it flows from the earth, is not a salable commodity. It is only through processing by separation of the gasoline therefrom-rendering it dry, that it may be sold for commercial uses. Conversely, it is only through the separation of dry gas from wet gas that the gasoline is salable. ”

“ But the phrase 'economic interest' is not to be taken as embracing a mere economic advantage derived from production, through a contractual relation to the owner, by one who has no capital investment in the mineral deposit. ”

“ The content of gasoline in wet gas varies from one-half gallon to six gallons a thousand cubic feet of gas produced, depending upon its richness. Respondent's contracts provided, generally, that it should install and maintain the necessary pipe lines and connections from casing-heads or traps at the mouth of the well to its plant, through which the producer agreed to deliver the natural gas produced at the well and that respondent should extract the gasoline therefrom, respondent to pay the producer 33 1/3 per cent. ”