The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1896-02-22

One of the sections Of the bill which
provides for the defining of the duties
of the secretary of state. section 10,
is very obnoxious to the mining men OF
this state.
The section provides that all com
panies filing articles of incorporation
with the secretary of state shall pay
to him the sum of so cents for each
81, 600 of the capital stock up to $1,000
900: % cents per 1000 for each thou-
sand over one million, provided that
no company shall be taxed more than
$1,000 for fling.
This section has been vigorously OPP
posed by Senators Chambers and Booth
who contend that its adoption will
have the effect of keeping many COM
panies from incorporating here; that
it will cause them. to seek other states
where the law is not in force.
So earnest has been the work of these
two senators that the bill was delay
ed yesterday at their request, until
they can obtain some information from
Montana as to the workings of the
law which is said to be in force there,
in a modified form.
Messrs. Booth and Chambers have
behind them the sentiment of all the
mining men of this section. It is claim
ed by such men as Hardness that the
passage of the law will initiate against
the development of the mining indus
try here to the extent that the state
will suffer badly. In the incipiency
of a, mining incorporation, the men in
tereSted may have for instance, five
claims, which they have reason to be
lieve WILL when developed. become a
producing property to the value of one
million. 1t is incorporated at that hg-
ure and the shares are placed at a
par value of So each. No one ventures
to contend they are worth par at the
outset. These shares, or at least a, por-
ton of them-the treasury Stock-are
sold at a nominal value for the pur-
pose of development. Now any one VIII
venture a small amount on shares OF
this kind. He reasons with h1mSeH
that if the mine does become a paying
one, he will have acquired a good
thing at nominal figure; that the m
vestment is fair one, provided the
results are what are anticipated. On
the other hand, if the property does
not pan out, the amount of money lost
on the investment is small and the
party who has purchased the same
loses very little, not nearly as much
as those who are the promoters, by
large majority
Now what is the result if the mine
is capitalized for a small amount?
Suppose the value of the claims men
toned are placed at $4,000. There are
10000 shares at 81 each. In order to
obtain cash enough to work the pur-
chasers would have to take a greater
portion of the stock at an advanced
figure; more by far than would be the
case where the capital stock was larger
and the shares more numerous. In the
event of failure, the purchaser loses
more money and development of other
properties is discouraged to the ex-
tent of his dissatisfaction. Mining is a
sort of gamble to say the least. No
one can tell whether there is mineral
below the surface until he digs down
after it. The best mine may peter
out at any time The work of nature
is by no means of a character to be
depended upon. Faults may be encoun-
tered anywhere; the vein may be lost
never to be regained. But as the min
ing industry is an important one, when
successful, it is argued by those who
are interested, that the chances of loss
in DEVELOPMENT should be leSSened to
the minimum.
There is another point which seems
to be overlooked by the advocates of
the measure. In the incipiency of a.
mine, development means everything.
In the case of a mine capitalized for
one million: Suppose the shares are
placed on the market at 8 cents per
share. The sale of $4,000 means that
81, $50 has been raised for development.
If the mine is capitalized at one mil
lion, there is $500 gone to the state
which might have been used in sink
ing a shaft and getting into the pay
streak. Presume that not a share is
sold. The men who own the property
have a good reason, if they be poor
men, for believing they have prop
erty with a value, developed, of a mil
lion as has the rich company which
can afford to pay. Yet the INDECENT
miners must forego incorporation be-
cause they have not got the cash, or
go to other states and file articles.
The revenue bill which will be intro
duced soon provides that all paying
mines shall be taxed as regards the
product and machinery; the ground, if
patented. A good paying mine will
pay to the state a round sum yearly
The more paying mines there are, the
more permanent revenue will be de-
rived. Mines are incorporated but once
in fifty years; they can be taxed every
year they are worked.
In no other mining state in the west
are corporations so taxed. The doors
are open wide TO men VINO want to
come in and assist in developing the
state. 1t is claimed by those who are
opposed to this BILL that if it becomes
law, there will be hundreds of com
panies which might try to do some
thing for Utah, that will never be form
ed. On the other hand, the state will
lose by the corporations being organ
lied in Colorado and Idaho, where no
such measures obtain.
The supporters of the bill urge this
as a protection against wild cat
stocks. 1t will be just as easy to float
wild cat stock under circumstances
where the amount of the capital is
small as where it is large. and the
losses will be much heavier. People
do not buy without investigating. The
exceptions are those who are willing
to be swindled, no matter what the
circumstances.
1t is safe to assert that there is
not a mining man in Utah who is NOT
opposed to this bill. The general
opinion among those who have express
ed themselves upon the matter is that
the legislature should forego action on
this section until the mining interests
have had a chance of being heard. 1t
is said that passing the measure at
this time is like taking snap judgment
upon them and denying them a chance