The Saint Paul globe., 1897-03-22
RIVER Al D A. M.
THE IRON ORE TONNAGE TAX.

At each recurring session of the leg
islature efforts have been made to cor
rect the gross inequality of taxation
that was begun in 1878, when Charlie
magne Tower came up from Philadel-
phia and wheedled the legislature into
violating the constitution by laying a
tonnage tax on iron ore of the ridicu-
lously insignificant amount of 1 cent
a ton. Thanks largely to this, MI.
Tower left an estate of 500 000, 900 when
he died few years ago. In 1891 de-
termined effort was made to increase
this tax, but the iron interests, well
fortified in their local delegation rail-
lied, and, by plea of poverty with
some and a more substantial argument
with others, defeated the bill. At that
time the price of range ore was $3.50
ton. and the tax was 1 cent. Later.
the prices fell until $3.50 was reached
in 1895, when the ore interests got to-
gether and organized a pool that made
Gogebic Bessemers a standard at 81 a
ton, with differentials for other grades.
The average during 1895 and 1896 was
$3.50. There have been frequent con-
ferences' for the purpose of fixing
the price for this year, but up
to this date no agreement has been
reached. The fact is that the control
of output and price is now with the
large ore producers, of which the Rock
efeller and Carnegie interests are the
chief. There is a practical monopolza-
ton of the ore products of Wisconsin,
Michigan and Minnesota
Meantime the state took steps to Sc
cure its interests in ores on it's lands.
1t provided for the lease of the land
and imposed a royalty of 25 cents a
ton on the output, virtually a tax,
while it was permitting private owners
to escape with a tax of but 1 cent a
ton. The G o b frequently pointed
out this gross disparity and denounced
the tonnage tax as unconstitutional a
contention that was finally sustained
by the attorney general, under whose
decision last year the tonnage tax was
assessed as is other property. The in
adequacy of this, the evident control of
the assessors by the mine owners and
even Of the county board of review,
were all commented on by the Glob e.
Some better and more equitable meth
cd is plainly needed, and the present
session is again wrestling with the
problem. After adopting an amend
ment to the Reeves bill, which fixed
the tonnage tax at cents a pound, re-
ducing it to 5 cents, the house, by a
narrow vote. defeated the bill; but no.
tice of reconsideration was given, and
it is probable that the iron interests
will not be able to wholly defeat the
movement.
When it is known that the iron prop
critics are stocked for between $100, 900,
600 and $2O0,O00,0OO; that the output last
year was nearly 100000 tons, of an
average value of $3.65 a ton, there is a
manifest injustice to the other taxpay-
ers of the state in allowing these prop
critics to escape with the slight valua-
ton and meager taxation Of last year
on the valuation of the ST Louis coun-
ty board of equalization. The only
question is, now that the amended con-
stitution allows a tax on the tonnage
output, or gross earnings, of mines
what is q reasonable tax per ton? In
this connection it is well to remember
that the state taxes the railways Of
tie state cents on each dollar, not OF
their net earnings. but OF their gross
earnings. 1t taxes them not on their
actual income, but On their expenses OF
operation as we'll 1t should not treat
the railways more harshly than the
iron mines. nor the latter any more
leniently than its other property own
ers. BY analogy a per cent tax on the
gross earnings or sales oS the mines
would put mines and railways on Ih5
sane basis. This would avoid the in
equality that must arise from fiat
rate per ton on ores varying in value