Little Falls herald. [volume] (Little Falls, Morrison County, Minn.) 1889-1950, 1907-01-11

local assessors and boards and provide
rules to facilitate the performance of
the duties of assessors and otherwise
aid them in the work of securing equal
and uniform assessments. Specially
important service can be rendered by
the proposed state commission in see-
Ing that the tax laws made by this leg
1slature are enforced strictly, uni
formly and impartially and that as
easements are free from discrimfna-
ton as between counties, local assess
ment districts and different parcels Of
property in the same district.
Our condition is different from that
Of many other states and laws which
might obtain in other states might not
be wise in Minnesota. While we are
largely agricultural, and like indus
trial conditions obtain more or less
uniformly throughout large portion
Of our domain, we have in Northern
Minnesota the exceptional condition
Of vast and rapidly developed min
ing industry, which bring into the
question Of taxation conditions which
were entirely foreign quarter of a
century ago. On the iron ranges in
the northeastern portion of our state
we have developed great mining enter
prises which probably do not now bear
their just proportion of the taxes of
the state.
Taxation Of Iron Mines.
Prior to 1895 the owners Of iron
mines in Minnesota paid a nominal tax
CT 1 cent per ton on ore mined and
shipped in lieu of all other taxes. The
law, that of 1881, was clearly uncon-
stitutional at that time and was re-
pealed in 1897. Under this act, dur
ing the five years ending with 1896
the tonnage taxes on Minnesota iron
mines netted total of only S73,S45.
Beginning with 1896 the mines have
been assessed as other real property
for direct taxation; the totals for st.
Louis county, as equaliZed by the
state board of equalization, being, for
the past ten years. approximately as
follows: $3,900,000 in 1896; $6,O0O,0o0
in 1893, $16,000,000 in 1900, $30,OO0,-
900 in 1902, $42,000,0O0 in 1904 and
$70,OOO,O00 in 1906
How Inadequate even the assess
ment of 1906 may be is apparent from
the estimates of the companies them
selves who held the mining properties
as assets for capitalization. In 1902,
when the United States Steel corpora
ton had much smaller iron ore hold
1ngs than at present, the officers testi-
fed In chancery suit, us appears in
government report, that the corpora
ton had in reserve in deposits of test
ed ore upwards of 700,000,00O tons,
upon which the officials placed value
Of 81 per ton as the worth Of the ore
to the company as material for con-
version into merchantable products.
Subsequent reports of the corporation
and public statements of it's recent
president, Charles M. schwab, confirm
this valuation and show, moreover,
that the great bulk of this iron ore
asset of the United States Steel cor
poration is located in Minnesota.
iron Ore Royalty Tax.
Under the new constitutional amend
ment it is within your power, as it is
your duty, to provide some system of
taxation which will give the state at
least an approximately fair share of
Its just revenue income from this
great iron ore wealth. One step in the
right direction, it occurs to me, would
be an income tax on the royalties or
mineral rights, which are not now list
ed for taxation.
An income tax of 5 per cent on the
$6,500,000 of royalties estimated to
have been received by feeholders of
Minnesota iron lands during the year
1906 would net the state treasury
1926, 900, or 10 per cent tax would
net $650,o0O.
This tax on mine royalties, however,
would not reach the large feeholders,
like the United States Steel corpora
ton, who operate their own fee prop
critics. The royalty enjoyed from the
use of such properties operated by the
holding company is as great as from
the leased properties and the tax
should reach if possible such royalty
values as we'll as the royalties based
on lease.
The problem in such case would be
to devise a method of arriving at or
discovering a fair and just measure of
such royalty values. Inasmuch as the
tonnage of ore shipped is the basis for
computing the royalties on leased
it Is possible that you may
be able to devise a practicable and
lawful method of computing royalty
taxes, using tonnage as the basis of
computation.
Royalty Taxes to Go to State.
A royalty tax were the total thereof
equivalent to cents per ton on the
present tonnage of 25,000,000. tons
shipped from Minnesota mines In 1906,
would net $1,250,000, or somewhat ex-
coed the present tax revenue derived
from direct taxation Of tangible prop
erty. This royalty tax should go to
the state treasury and represent the