New Britain herald., 1915-11-11
AMERICA WILL LEAD
 IN GOLD MINING
Probable Result Of New War Tax
 ati0n in Great Britain

London, Oct. 31-American suprem-
 acy in gold mining is one of the prob able results of the new war taxation l in Great Britain. While the large gold | mines of the world have been mainly l opened and managed by American ] mining engineers they have been l owned by the British because of a 1 system of finance which brings public ] money to the support of mining much l more generally than in America where l the investing public does not take the same interest in the industry. This structure whereby London has become the mining capital of the wold, is
 now threatened by the new "excess profits tax," one of the features of the new war budget.
 Discussing the effect of the new tax,
 a prominent American mining engi- neer said: Already orders have gone
 out from London to transfer to Amer ican companies several times in South and Central America, and plans for an
 extensive transfer of control of other mines are. under discussion in the city, Even in ordinary times the insistence of the British authorities that income
 tax must be paid on all shares of com
 panies controlled in Great Britain re-
 gardless of the location of the mine
 or residence of the stockholders had
 driven some companies away, notably
 the El Orc of Mexico largely owned in
 France which moved it's offices to Paris two years ago.
 The most recent taxation makes a more general migration almost certain. The new budget proposed a fifty per cent tax of the excess profits of all British companies for the period since the beginning of the war. This excess is to be determined by sub- tracting from the increase of the
 current year the average income of
 any two of the preceding three years.
 This would be particularly hard on
 any new business, but extremely so in the case of mines which have just be-
 gun to produce, since in their case 1 there would be nothing to subtract and consequently the tax would be 1 fifty per cent. of the profit of the ,, year. This new import, it is to be not 1 ed, is in addition to the ordinary taxa tion including the income tax. The effect on new enterprises would be 1 especially severe in the case of mines since they require liberal expenditure l through several years to bring them to production. The Brakpan in south | Africa, for example, opened by w. L.. | Honnold, a Michigan mining engineer,
 absorbed six million dollars in SIX 1 years and then began to making profit of about one and one-half m1l- lion dollars a year. The Spring mine
 nearby is now building new plant l and would normally soon come lnto l production. These companies, though
 organized in South Africa, and already
 paying heavy regular and special war
 taxes, would come under the new plan l The gold mining interests point out
 that unlike the rubber and tea com
 panies, they are not able to charge ar
 increase due to the war, but the cost
 of mining has risen materially as re-
 suit of the war, but the cost of mining
 has risen materially as a result of la
 bor shortage, disorganized transport . and increased cost of supplies. D1v1- dends from a mine are a wasting asset and taxing these profits is like taxing
 1 a man on the money he draws from 8
 1 savings bank.
 Taxation To Be Heavy. Representations are being made and some modifications of the origina plan are expected, but in any even
 the taxation on mines is sure to be , heavy with no opportunity to recouI by raising prices. A number of com panies have issued orders to cut 'dowr production to the average of previous = years and are stopping all work of ex' pansion.
 . "As Great Britain's ownership of the great gold mines extends around the world and into many countries, wide changes in the industry are certain ano they may become of primary import ance to the growth of America in ii. nancial power"