The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1918-01-24
To the Stockholders.

the month OF January. The letter fol-
lows:
To the Stockholders.
Wallace, Idaho, January 20, 1918.
According to dividends paid,
amounting to $6,955,O00, including
consecutive monthly payments from
March, 1904, to date is evidence of the
fact that your board of directors has
always favored the policy of distrib
uting earnings in the form of divi-
dends as promptly as possible. This
policy has always met with the hearty
approval of the stockholders and un-
der ordinary conditions would, no
doubt, be continued. AS you know
the present abnormal conditions have
resulted in the passage of so-called
war excess profits tax law. This law
III it's present form will call for an ex-
tremely large payment by June 15
1918, for taxes for the year 1917
I'VE regard the law as inequitabe
and unjust in its application to mines
and particularly to companies of low
capitalization such as Hecla and hope
that efforts now being made will re-
suit in modifying it to more equit-
able form.
Your board of directors has reluct-
antly decided that, in view of the un-
certainty of the demands to be met on
account of this law, it is advisable to
suspend payments of dividends for the
present This action is taken with
great reluctance since the physical
condition of the mine is splendid.
dividends will be resumed at such
time and in such amounts as may
be warranted by conditions in the
opinion Of the board"
Not Unexpected
This announcement is not surpris-
ing to stockholders generally nor to
others who have kept informed upon
the effect of recent legislation upon
the mining industry. No legal mind
or expert accountant has yet been
found who is able to state just what
the tax on Hecla under the excess
profits law will be, but as far as can
be determined it will amount to up
wards of $1,000,000 for the year just
closed. Confronted with the probabil-
ity of having to pay this vast sum on
or before June Is, it is easy to under
stand why the directors of Hecla have
decided to conserve all earnings tc
meet it. Concerted efforts are beine
made by the mining interests of the
west to induce congress to amend the
law in order to make its provisions
more equitable, and strong represen-
tations have been made to the secre.
tary of the treasury for liberal con-
struction Of the law as it stands II
the event that congress fails to give
relief to the mining companies
through amending 1t. Up to date
however, no assurance has been re
ceived that these efforts will be sue
cessful in either case. While ther
are various ambiguous and confusih'
clauses in the law, the main featur
that it is desired to be cleared UP !
the meaning Of the law as appilea
invested capital.
Proposed Amendment
In order to simplify the meaning Q
the law on this point and to render II
provisions fair and equitable to all Tn
mining companies, the committee rep
resenting the mining interests
Washington have submitted an amend
ment which provides: "That in Tn
case Of mines, oil and gas wells, TN
invested capital. at the option OF u
taxpayer, shall be a. the average pre-
war net income capitalized at pt
cent, and (2) paid in or earned SUI
plus and undivided profits used or Ell
ployed In the BUSINESS since the pre-
war period, exclusive of undivided pre-
fits earned during the taxable year
This amendment has been submltte
to the general advisory committee
war industries, but 1t is not know
what action, If any, that commitf'
has taken.
Until definite disposition has bee
made OF this amendment, or until Il
treasury department has constru'
the law as applied to mining compal