Weekly journal-miner., 1915-02-10
MANAGER UNITED VERDE DIFFERS
 WITH WOOD
w. L. CLARK SAYS PRES ENT SYSTEM OF TAXING MINES IS JUST AND EQUITABLE
(From Tuesdays DaiIy.)


 In regard to the mine taxation measure now before the legislature at Phoenix, Will L. Clark, manager of the United Verde Copper Company, who was in Prescott Sunday, said:
 "I am surprised at the tenor of the article published by C. B. Wood, post master of Phoenix. Two years ago, Mir. Wood, then State Senator from Maricopa county, gave the committee representing the mining industry of the state, which appeared before the senate committee, of which he was chairman, fair and generous hear ing. and. although opposed to the in come or earnings basis, he eventually voted for the bill which has been in effect the past two years.
 "The results have fully justified his courage in then making the com promise, for the system of taxing producing mines on the earnings basis is the best adapted to this state. The reasons for this are as follows:
 The Reasons.
 "Q A mine is worth, in the final summary, just whatever its net pro duction, as converted into money or its equivalent, may be.
 "(2) The net production for each calendar year Is the only correct basis 'or taxation.
 "(3) Montana, Utah, Idaho and Nevada tax on net proceeds only; Colorado, onc-half the gross plus the net.
 "(4) The tax in Arizona for the past two years, and as fixed under the present bill, is much higher: 400 per cent of the net plus 12H per cent Of the gross. In addition to this, all smelters, mills, and other surface i'm provements are assessed at their full cash value the same as other prop erty
 "(5) There is no industry, except agriculture, of so much importance as mining. To some countries 1t is of paramount importance, and the state not only gets taxes from the mines. but from the towns built around them and all business enterprises there, and increased business in other places due to the mines and ore reduction works
 System of Taxation.
 "It appears elemental, but those who have not thought upon the ques- ton, regularly ask why mine cannot be assessed like a farm. The mine Is undeveloped and unp-oducing, has only prospective value, and, if work ing, part of its value is produced each calendar year, and creates new wealth i'll the channels of trade. The part of this produced at a profit should be taxed, and the highest au- thorities agree this represents the most ideal method.
 Prof Seligman. president for the past two terms of the National Tax Association and reelected this year, says ill his book on taxation publish ed in 1914. page 252:
 '"The fuundamcntal point of our whole contention is that such corpo- rations should not be treated like in Iividuals, but should be subjected to special forms of taxation. It is grati- lying to see that the truth of this cor- tention is now being recognized by the specialists in Germany and Switzerland, the two countries where the most active discussion of these topics, outside of the United States, has taken place-as well as by those of this country and Canada
 "On page 257. find the following;
 '"If, however. the ad valorem meth od necessarily means in practice the indirect use of the earnings method, the question arises, "Why not use di- rectly what you arc compelled to use indirectly" We may go further and affirm that nothing is gained, but much Is lost. by electing the indirect rather than the direct, earnings meth cd. For, as we have seen, the direct earnings method is susceptible of re- duction to mathematical rule, where the indirect earnings O. ad valorem method is open to the ob- iections of secret, irresponsible, star chamber methods."'
 Again on page 25S. find:
 ''lf then the earnings tax is to be preferred to the ad valorcm tax, the question remains, "Shall it be gross earnings or net earnings?' As mat ter of principle, it is conceded by all writers that net earnings approach more closely to the ideal method"
 Referring to Postmaster Woods fear for the mining counties and speaking from personal knowledge in regard to Yavapai county, Mir. Clark said that while the United Verde had curtailed production last year from August on account of European war causes, that the proposed bill being based on tcn-year average price for copper computation would raise the gross and net figures considerably. l and the balance would practically all