Bisbee daily review., 1917-10-21
NET REVENUES OF COPPER CONCERNS
 IS BIG QUESTION
Net Revenues of Chino Cop- per Company May be Great ly Reduced Through Excess
 Profits Tax of Government.

Just how the operations of the new : war revenue bill and the governments 231s-cent copper price will affect the net revenues of the copper producers is a question seriously agitating the minds of copper shareholders.
 Until some uniform. sharply de- fined ruling on or interpretation O: { invested capital" as relating to min ing concerns is had. it will be diff cult to estimate with accuracy just what exemption will be permitted in determining the taxable revenues.
 Then again mining companies are allowed to make some deductions from taxable net earnings on account of de preciation of plant and to compensate for ore exhaustion. In other words. some recognition is to be made of the fact that mining dividends are not important degree a return of capital issued against a wasting or iquidat- ing enterprise.
 How far the government will allow the mining companies accounts to go in the matter of these various offsets cannot be determined at this early stage
 Nevertheless. it is worth while with the information at hand to attempt some sort of a calculation in order to see where the stockholder gets off after the government gets through with him. Such calculation We have made respecting Chino Copper
 This company has S7O. 900 shares. a cost of 10 cents per pound. a produC- tion of S0,OO0.000 pounds per annum and an estimated life" of 2S years. Its invested capital" is assumed to be its total resources less current in- debtedness. or S21,5OO.OOO.
 With this as a starter the following is deduced:
 Estimated 1917 invested
 capital ...--..-.----------.-.---- s2l. .5O0. 900 Estimated 1917 net inc of
 100000 allowed for ore
 exhaustion -....--..--..-.-.---.--.. 12.OOO. 900 g per cent deduction. plus
 $3OOO --.--.....-.--..-.-..-.-.--.. 1.S3S.0OO Income subject to excess
 profits tax ----------------------.s- 1O.O62. 900
 Applying the graduated tax levies we have the following:
 20 per cent on difference between amount of deduction and 15 per cent on invested capital. viz, amount taxe-. $12S7.O .OOO; amount of tax S257.O0O.
 25 per cent on amount between I5 per cent and 20 per cent Of invested capital. viz. amount taxed. S1.075.OO0; amount of tax. S26S.7 750.
 35 per cent on amount between % per cent and 25 per cent of invested capital. viz. amount taxed, Sl.075.O0o: amount of tax, $S76.25O.
 45 per cent on amount between 9 per cent and B per cent of invested capital. amount taxed, Sl.720.00G: amount of tax. s774.OoO.
 SO per cent on amount in excess of .33 per cent of invested capital. amount taxed. s4,9O5,OOO; amount of tax. s2.943. 900.
 Total tax. s4.619,000
 The above tax of S4.6l9.000 (over 3S per cent of net profits) is equal to S5.30 per share. Assuming net profits this year of Sl4 per share. there re mains a divisable balance of SS.70 against current dividends at the rate of S1O per share.
 On a 2Sla-cent copper market. as- stunning same production and costs. Chino should earn about SIP per share before war taxes and S7 after the gov ernment has been settled with.