The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1913-09-11
Toxt Of Letter.

Ao otocknOiuerS OF tne tederaI Mining 8
and Smelling Company:
As the present fiscal year of the
Federal Mining and Smelling company
draws to close. the extent of the
continuous loss sustained through its
unfair 25-year contract with the Am
erican Smelling and Refining company
becomes more clearly apparent
An official statement recently issu-
ed estimates the net profit for II
months at $4,000 Assuming that
shipments have been maintained at
the same level as during the previous
full fiscal year, it is evident that
about 10S,163 tons of crude ore and
concentrates have been shipped at a
net profit of only $3.50 per ton.
Half Million Loss on Unjust Contract.
The average price Of lead in New
York for the II months covered by
this statement was SASS per 100
pounds (as compared with $4.38 per
100 pounds for the last full fiscal
year,. Under its unjust contract the
Federal received but ,$3.S65 per 100
pounds, for its lead, an actual loss Of
$O.5SS per 100 pounds, or total Of no
less than $457,s53.97 on shipments of
IL months containing an estimated
average of 40 per cent lead.
Loss on Freight, $135,203.
Federal also pays an average Of
about $1,25 per ton more for trans
portation than other producers, thus
accounting for further loss of $685.
203 on II months production.
Federal and Hercules Ore Sales and
Freight Rates Compared.
In other words, If Federal had re-
ceived market prices for it's lead and
had paid the same freight rate as is
paid on ores from the Hercules mine
of President and General Manager
Harry L. Day, a net profit Of $780,.
056.97 would have been made, or $685..
o56.97 more than the official II
months estimate admits. This indi.
Gates that the report for the present
full fiscal year will show q total loss
to Federal Of no less than $642,477. As
the market price Of lead advances, the
proportionate loss will continue to in.
crease.
Another Way Of Taking Profit.
On the other hand, the American
Smelling and Refining company has
exacted $S per ton for all ore treated;
has paid $423 per ton less than the
price paid to other producers and has
also pocketed the difference between
$2.75 and $3.50 on every ton Of ore
diverted from Colorado points (Which
rate the contract exacts Irrespective
Of destination Of shipment) to the
smelter at East Helena, Mont. II all
Federal ore has been so diverted the
emoluments of the Guggenheim con-
cern have been So plus $4.23 plus $4.75
1888 per ton. or total Of 1885,
932.22 on II months output.
Mining Company Gets But One Third
Of Profit.
Briefly, therefore, the American
Smelling and Refining company re-
talnS 1888 OF the prOnt from every
ton of ore shipped, magnanimously
leaving for the 1000 Federal stock
holders $3.50 per ton, out Of which
$4,000 year must be provided for
preferred dividends and provision
made for the future
The mining company gets about 80
per cent of the profit and the smelt-
ing company 66 per cent. 1t Is this
manifestly unlawful division, dishon-
estly effected by Guggenheim control
Of Federal common stock, that minor
ity stockholders are now endeavoring
to upset In the supreme court of New
York.
SIDNEY NORMAN,
For Plaintiffs in the Action.