The sun. [volume] (New York [N.Y.]) 1833-1916, 1916-01-15

The eighth article on conditions IN
Mertco, BY Nork 8. Watson. t~VestI0otor
for THE SCR and tke Chicago Trtbv~e,
foiioWs:
~ MARK 3. WATSON.
A delegation Of mining mon visited
the Mexican Department Of Hacienda
tTrcasury) and nled protest against the
new tax programme Of the Administfa-
ton. They received an audience and
we're assured that something would be
done about It
What the something Is remains to Be
seen. but there 10 good . for sur
missing the law will be enforced. And
there is equally good reason for being
sure that II It II mining operations
will not be resumed. Already one Of the
largest mining companies has tossed
overheard certain Of It's exploration
properties M will confne It's work to
recovering ores already assured
Tho tax on 100 p~ertenenclas (this
unit Of 100 meters sQuare. or 2.<7li
acres. being the standArd) figures thirty
two times the old tax Or, figuring II
In another way. the maximum gross,
not net. revenue of n OF the largest
companies would be 80 per cent. con.
sumed In taxes TO the Mexican Govern
ment. This would mean an annua
deficit to the company under the moe'
favorable operating conditions 1t ha.
ever seen.
The old mining law was too lax,
T1ta In o1rnn0& stnaivp,Not NfnrAONpY
II Was wrong in theory. also practically
undisputed. as It IN effect gave a pre-
MUM on taking up large claims and
delaying development. The Mexican
Government was entirely justified II
changing the form. whereby develop
ment should be FASTENED. md raising
the amount. whereby the mines should
pay more toward Government support
But In raising the rates to such Al
appalling degree and by taxing non
productive property TO the point whert
the companies cannot AFFORD to inves'
heavily In development work. as dis
tinguished from recovery. II not onl,
did the companies u serious injury bu'
also dealt the republic itself a blow
which the fatuous Administrators doe,
not wish to see.
High Yield Mines PrWat.
There are certain mining companies
which maintain a smiling face. The,
have reason to. being the producers oi
the ore with a high percentage OF metal
This high yield ore naturally allows &
vastly higher operating cost and still
shows a proht. The harder the com
peting low yield companies are hit. tn,
greater is the proft OF the high yielt
mines. For them the Law Is good. com,
narafiyely and fhev haya reasOp fol
satisfaction.
The mining law appears to be baset
on the current belief that Mexico con
sists Of mountains lightly covered with
trees and soil beneath which IL a sole
mass Of gold and silver. That, is rathe,
far from the truth. The layrnan will o,
interested to nov that the average
amount Of silver recovered from u met
rio ton Of ore in one Of the bes, mine,
In Mexico is SO Of a kiiogram. In otheI
words. the ratio of silver to ore - abou
] to 5000.
There are high grade properties
plenty Of them. just AS near Durang'
there Is tn. famous mountain which il
| almost pure iron. But the mining indus
try In Mexico is fundamentally Low
| yield. and every blow at low yield op
GRAFTON IL a blow at the biggest industr!
In the entire republic. the industry whicl
has made Mexico possible.
Nieto. the former bucket shop opera
tor. who Is now In charge of hacienda
told one Of the protesting miners that II
| his home town there has been a quick
| silver mine hich did not treat the poo
OF the neighborhood fairly. ON this cir
cumstance appears to be based the pro
gramme for s~trangling every mine In tn
republic.
The theory was that by taxing tn
large holdings the small operator woul
he encouraged. In fact, the small holde
Is the first to let go. as the smalle
his holdings the less economy he Ca
practise in operations, With silver run
ming one-fftieth Of l per cent. in tn
ore-which the Real del Monte compan
can work at a prott--the small holde
has not much incentive for work. TIL
small holder generally Is "A prospecto
who has no idea of working his I'm
and Is not financially equipped for dom
40.
How Tax IL HOisted.
The accompanying table shows IN
manner in which the tax on properties
whether worked or idle, has bee
holsted. As II that were not enough
the Government proceeded TO impose 4
added tax on the product itself. amount
ing to 10 pesos in gold. on eac xii
Of gold. or more than . per cent o
gross
The Government which imposes thi
tax refuses to accept In payment its ow
currency. but demands payment In golt
the while refusing 10 ALLOW merchant
TO deal on "A gold standard. but forcin
all under threat OF imprisonment. COT
hscation or worse TO accept the 9 or