The copper era and Morenci leader., 1915-11-19
MINING COMP PAN|ES MUST COME ID
 AMERICA
European Taxation Is Driving Many Concerns to Make New York Quar- terS

LONDON, Nov. 15.-American sup remacy in gold mining is one of the probable results of the war taxation in Great Britain. While the large gold mines of the world have been mainly opened and managed by Am erican mining engineers they have been owned by the British because of a system of finance which brings public money to the support of mining much more generally than in Amer ica where the investing public does not take the same interest in the in dustry. This structure, whereby Lon don has become the mining capital of the world, 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 Ia prominent American mining engin- ger said: Already orders have gone out from London to transfer to Am erican companies several mines in South and Central America, and plans for an extensive transfer of control of other mines are under dis. cussion in the city. Even in ordin- any times the insistence of the Brit ish authorities that income tax must be paid on all shares of companies less controlled in Great Britain re- gardless of the location of the mine or residence of the stockholders had driven some companies away, mo- tably the Fl Gro of Mexico largely owned in France which moved it's Of ices to Paris two years ago.
 'The most recent taxation makes a more general migration almost cer- tain. The new budget proposed a fifty percent 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 cur rent 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 begun to produce, since in their case there would be nothing to subtract, and consequently the tax would be fifty percent of the profit of the year. This new import, it is to be noted, is in addition to the ordinary taxa ton including the income tax, The effect on new enterprises would be especially severe in the case of mines since they require liberal expendl-
  them to production. The Brakpan in South Africa, for example, opened by w. L. Honnold, a Michigan min ing engineer, absorbed $6,0O0,000 in six years and then began to make a profit of about $1,500,00O a year. The Spring mine nearby is now building a new plant and would normally soon come into production. These com panies, though organized in South Africa, and already paying heavy reg ular and special war taxes, would come under the new plan. The gold mining interests point out that, un- like the rubber and tea companies, they are not able to charge an in- crease due to the war on their pro duct. Gold has not risen in value as a result of the war, but the cost of mining has risen materially as a re- suit of labor shortage, disorganized transport and increased cost of sup plies Dividends from a mine are wasting asset and taxing these pro- fits is like taxing man on the money he draws from savings bank.
 Representation are being made and some notifications of the original plan are expected, but in any event the taxation on mines is sure to be heavy with no opportunity to recoup by raising prices. A number of com panies have issued orders to cut down production to the average of previous years and are stopping all work of expansion.
 As Great Britains ownership of the great gold mines extends around the world and into many countries, wide changes in the industry are cer tain and they may become of primary importance to the growth of America in financial power.