Forest City press. (Forest City, Potter County, D.T. [S.D.]) 1883-19??, 1916-03-15
AMERICA TO LEAD IN
THE MINING OF GOLD
New British Tax Threatens
Supremacy of London as
Mine Financial Center.

l.ondon.-American supremacy in
gold mining is one of the probable re-
suits of the new wan taxation in Great
Britain. While the large gold mines
pf the world have been mainly opened
and managed by American mining en-
einecrs they have been owned by the
British because OF a system of finance
which brings public money to the sup
port of mining much more generally
than in America, where the investing
public does not take the same inter-
est in the industry. This structure.
whereby London has become the min
ing capital of the world. is now threat
ened by the new excess profits tax
one of the features of the new wal
budget.
Discussing the effect of the new tax.
Il prominent American mining engineer
said. Already orders have gone out
from London to transfer TO American
companies several mines in out and
Central America, and plans for an ex-
tensive 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
panles controlled in Great Britain, re
ii of the location of the mine or
residence of the stockholders. had driy-
-. 'AH aW&Iyp Id CHe
ll Orc. of Mexico. largely owned i'm
France, which moved it's offices To
Paris two years ago.
The most recent axation makes a.
moro general migration almost certain.
the new budget proposed a SO per cent
TAX OF the excess profits of all British
companies for the period since the be
ginning of the Il This excess is to
pe determined by ~subtracting from the
increase OF the current year the av-
erage income Of any two of the proceed
ing three years. This would be partic-
extremely so in the case of mines tina
nave Just begun to produce. since in
their case there would be nothing to
subtract. and consequently the tax
would be so per cent of the profit of
the year. This new import. it is to be
taxation. including the income tax. The
effect on new enterprises would be es-
pecially severe in the case of mines.
since they require liberal expenditure
through sveral ear to bring them to
production. h Brakpan in South AZ
r1ca. for example. opened by w. L..
Honnold. a Michigan mining engineer.
absorbed $6.00O.0O0 in six years and
then began to make a profit Of about
1,5OO,0OO a year. The Spring mine.
nearby. is now building a new plant
n would normally soon come into
nGSe companies, ClOuEn
organized in South Africa and already
paying heavy regular and special war
taxes. would come under the new plan.
The gold mining interests point out
that. unlike the rubber and tea com
panies. they are not able to charge an
increase. due to the war on their prod
net. Gold has not risen in value as a
result of the war, but the cost of min.
ing has risen materially as a result Of
labor shortage. disorganized transport
and increased cost of supplies. Divi-
bends from u mine are a wasting as
set and taxing these profits is like
taxing a nan on the money he draws
rom a savings bank.
Representations are being made and
some notifications of the original plan
are expected, but in any event the tax
alton on mines is sure to be heavy with
no opportunity to recoup by raising
prices. A number of companies have
lssued orders to cut down production
10 the average of previous years and
are stopping all work of expansion.
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 and
they may become of primary import
ance to the growth of America in fl
nancial power"