The Yale expositor., 1913-09-25
STATE GEOLOGICAL ALLEN HAS
COMPLETED APPRAISAL OF
IRON MINES.
COST OF AVERAGE LIFE LOST IN
ACCIDENTS.
Figures of Board Show That to XIII
Michigan Workman Costs in
Final Analysis More Than
100000.
10y Gurd M. Hayes.l

LAX COMMISSION the appraisal Oh the
iron mines of the state for 1913. The
figures for Gogebic, Iron ar Dickin-
son counties have been fixed definite
ly, but the assessment of the Mar
quette county iron mines, is, as yet,
only tentative. Since the first of the
year State Geologist Allen has been
engaged in this work for the state tax
commission and the appraisal is re-
garded as the best and most accurate
that has ever been made. Two years.
ago the legislature appropriated $780,
900 for the purpose OF securing an ap-
praisal of all mining properties in
Michigan and Prof. Finley completed
the enormous task in ten weeks. How
ever, his figures were questioned By
the commission and were little used
and the money spent has been re.
garded as one of the legislatures poor
investments.
1t is expected that the appraisal
made by r. c. Allen will play a prom
| inent part in the next session of the
| legislature in the event that an at
| tempt is again made to pass tonnage
sively that some OF the larger and
more profitable mines would pay less
| to the state under a specific tax OF
ten cents per ton, which was the fig
ure named in the last tonnage tax bill
| introduced in the legislature, than
they are now paying on an ad valorem
basis, which some of the smaller and
hr
| tically forced out of business.
In 1911 the valuation of the iron
mines of Michigan was $S5,5S7,325,
| while the valuation for 1913 is $780,
| 707,256. In other words there is a
| decrease in 1913 of 1886 per cent from
! the valuation of two years ago. In or
| der TO understand why the mines show
a decrease in valuation for this year
| II is necessary to know the methods
used in the appraisal of the mines.
Each mine has furnished the tax com
mission a sworn statement OF the
| ftemized costs and receipts for each
property during a period covering the
| five years preceding January !, 1913.
! From this information there has been
figured the profits, or in many cases
| losses, per ton of ore mined from each
property. Royalties are in all cases
| figured as profits The value of ton
of ore in the ground in each particu-
| lar property is thus obtained with
| great precision. The total tonnage of
| ore shown up in each property is then
| figured by State Geologist Allen and
there is added to this, in most cases,
a certain tonnage designated as pros
| pective or profitable ore. This figure
! of total reserves is then divided by
| the average shipment made by the
! property during the past five years
and the quotient is taken as the pros
pective life of the mine.
In obtaining the actual present
value of the mine the total ore re-
serves are multiplied by the
value OF ton of ore in the ground
and this figure is then multiplied by
the present worth of dollar to be
! paid in equal installments during a
period OF years equal to the produc-
| tive life of the mime. figuring interest
at six per cent In SOME case it has
been found necessary to vary the
method of appraisal, but on the whole
this plan has been followed wherever
possible.
In some classes of property, such as
those having ore bodies which have
been developed by drilling but which
have not been mined, it is not posi-
BILE to obtain from the records of OPP
Grating experience the various factors
on which the appraisal is based. The
factor of tonnage may be obtained
with very reasonable degree of ac-
curacy in most cases, but the remain
ing factors are assumed by the APP
praiser. These assumptions are based
on the operating experience of the ac-
tive mines.
From the statistics prepared by
State biologist Allen it is shown that
the amount of ore in the ground has
increased during the past two years
by about 100000 tons, notwithstand-
ing the fact that the state has ship
ped during that period approximately
fhe same amount. In other words
there is more ore found and develop
ed each year than there is shipped.
The question arises as to why it is
that 1S9, 1000, 900 tons OF ore in the
ground are worth less in 1913 than
169 200, 900 tons were worth in 1911.
The explanation is that the value of
ton OF ore in the ground depends
on ore prices and the relation of these
70 the cost OF mining and transporta-
ton.
During the five year period preced-
ing the 1911 appraisal the mines made
profits of about s54000,000, while dur
ing the FIVE year period preceding the
appraisal OF 1913 the total profits
dropped to approximately s47,5O0,OOO.
rhis shows a falling of in the earn
lngs OF 1913 per cent. State Geologist