The producers news. [volume] (Plentywood, Mont.) 1918-1937, 1918-10-18

,Vo,VVV LUIS AAo dNCA o6S 1oA A51AiS4 I
he present law went into effect
amounts to about 90 cents per ton Of
he ore shipped each year. At this
.ate the future revenue win be $500. |
100000. A fair tax would be at least
30 cents, and probably rs cents per ton
If ore extracted. At the lowest figure
he total revenue would be 5000, o0o,-
300 from the ore and cne-half billion
toms remaining in the state
Therefore, If the present rata of tax,
alton is continued. until all the ore Is
the stateMiM lose $500 ,0eo, 600,
In addition to the $500 9oo.eo0. 1t has
already lost--a total 0fsSs00, O0o, 600,
But even. fkese fabulous figures do
not tell ths whole story OF the prob
able losses to theEstate, through under
taxation Of its mineral resources. U
der pressure of war demands Europe
an countries have recently found
means whereby to utilize iron ore with
q. mineral content as low as thirty
per cent, and with a higher percent
age fog PHOSPHORUS and other foreign
materials than is contained by the So
called non-merchantabl ore In Min
tnesuta. The United States Geological
Survey has estimated that there are
over 10000, 600, 900 of iron-bearing ma
terial in the state, which shows a
mineral content Of 35 per cent or
more. The workable iron resources Of
the world are being so rapidly used
up that 1t Is quite within the bounds
of reasonable probability that all Of
these immense deposits will soon be
profitably workable. And prices will
probably advance so that the royalty
value of the remaining ore will equal
that of the ore now being mined. In
that case, IL the state continues to tax
at a rate that is 40 cents per ton too
low 1t will in the end lose $4,000, 000,-
600 on the ore not now considered
merchantable. II only one-twelfth of
this tonnage proved to be merchant
able the loss would be $1,000,000,000.
+. Basis of Market Prices.
Under the present law ore Is taxed
on so per cent OF the net value Of all
the ore in the state, at the time Of
making the assessment each year.
The net value is arrived at by SUBJ
tracing in each case the cost of min
ing, handling, storing and shipping
the ore to Lake Erie ports, and dis
counting the value OF the ore remain
ing at per cent to the end of an esti-
mated exhaustion period AS the VAL
uation is determined for several class
es of ore, for ore in stock pile, ore in
mine and ore reserves, and separately
for each mine, it is impossible for any
but experts to go through all the de-
tails, even were it practicable for
every person SO desiring to go through
the records OF the Tax Commission.
However, the wide margin between
the published Lake Erie prices and
the values placed by the commission
Indicate that it has been unable to
fix value for taxation that will re-
suit in securing to the state the rev.
enues that rightly should be derived
from it's ore resources. In 1917 Lake
Erie market prices ranged from $3.50
to $3.50 per ton, but the average valu-
alton per ton placed by the Tax Com.
mission was 40 cents, giving an aver
age assessed value OF 20 cents per
ton. 1t appears that the Commission
deducts dockage and transportation
charges, instead Of actual costs. But,
as most Of the transportation facilities
ARE owned by the steel trust, there
seems to be no good reason for this,
except in the cases of independent OPP
orators not interested In the transpor-
.tation facilities. In his book on, the
cost of mining, published In 1910, Mr..
FinIay gives transportation cost as
$1.00 and mining cost as IS cents per
ton, including 10 cents per ton taxes
and 40 cents royalty. There has been
a considerable advance in rates and
wages, but has there been any ad,
vance in actual cost? The last re-
port of the United States Steel Corpo.
ration shows that on all it's operations,
costs have been reduced, notWithstand-
ing an advance in wages which they
represent to be 80 per cent. Improved
methods and economic devices it ap-
pear oil Z lSopOnOlolC 1Ol LAlSs
Applying Finlay's cost figures to
1917 operations, and assuming the av,,
erage market price of ore to be $3.50
per ton, we get a net value per ton of
$415. At this price the net value OF
the ore shipped was $191, 674,35O, and
a tax at the rate of 10 per cent would
have yielded $19,674,350, which is ST.,
8S7,656 more than the total taxes on
mining interests in 1917 Tf this net
value were applied to the estimated
ore in the ground, tax on 80 per
cent of the total would amount to the
enormous sum of SEQ, ABE, 900.
But the market price of ore is not a
fair measure of valuation for tax pur.
poses, for the reason that the greater
part of the Minnesota ores are owned,
mined, shipped and manufactured by
the same corporation, which is In a
position to control, prices. The true
value is that shown in their profits,
as explained above.
Proposed Tonnage Tax.
A tonnage tax of per cent on the
net value, of the ere as determined
from the net profits made in mining
and manufacturing would have yielded1
RI thn state In 1917 S15242371 Oul