Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1921-01-31
MAY FRAME THE
TONNAGE TAX
BILL TONIGHT
The Preliminary Hearing on
Such Legislation Held
Today in St. Paul.

st. Paul, Minn., Jan. 31.-After
preliminary hearing today on tonnage
tax bills the house committee on taxes
and tax laws voted to meet tonight in
executive session to attempt to draw
a tonnage tax bill for introduction as
committee measure and substitute
for the three already introduced in
the house.
Authors Of the pending bills are to
be heard first.
A tonnage tax may not kill the ore
industry in northern Minnesota but it
will entirely stop all expansion which
is being discouraged by the present
unsettled state police, operators and
mine officials today declared during
the final public hearings on tonnage
tax bills before the house committee
range was compared by w. F. Swart,
representative of an ore concentration
organization, to a big cake filled with
raisins. Although the raisins or richer
ore deposits represent about 80 per
cent Of the cake, the cake as we'll as
the raisins already is being eaten, he
said, one company having undertaken
to turn the lean ore into a marketable
product. The raisins will last from 20
to 80 years, according to estimates,
while the cake will last probably L.
900 years. he said. That tonnage taxes
will force ou the operations in lean
ore, that the industry already is taxed
to the limit, and that Canadian and
other deposits threaten competition,
more keen than ever were the main
contentious advanced by tonnage tax
opponents, who occupied the time OF
the committee today.
Mr.. Swart opened the discussion and
was followed by George Tweed and
nx1yi irhf "o01hri6pn Whn 6i9cn9Gp6
different phases of the subject.
Plans for concentration plant
which will eventually represent an in
vestment Of $40,000,000 or more. il
the state policy is such as to encour-
age investment, were outlined by Mr.
Swart for the Mesaba Iron company
The organization has spent $75O,00C
on preliminary work and is building a
!. drst--uni at a cost of $4,000, 0Q0~ al:
though without hope that it win be
profitable until others are added. Be.
cause of the small margin of profit he
explained. big volume Is necessary tt
the success of the business.
/ Added tax burdens will further re-
| duce the small profit margin and prob.
| ably drive the company to more favor
able fields. Questioned by Representa-
tive Bendixen. author of one of the
| bills, he refused to admit that the low
| Representative c. T. Murphy main
tanned that the pending bills make in
sufficient amortization provision. Mr.
Bendixen insisted the clause relating
| to benefaction expenses is ampl!
| broad and that anything over a fai
! return is profiteering.
i Mr.. Tweed said that the ad valoren
tax system was most general and sat
! isfactory; that Michigan had repealed
a tonnage tax law after it's operation
proved unsatisfactory and that tn
| present policy in Minnesota is retaFd
| ing development of iron mining.
Mr.. Woodbridge recalled trips to st
! Paul every two years since 1907 t.
oppose supertaN legislation agains
! the mining industry. He asserted tha
the mining industry is now taxed al
the business will stand and that ton
mage tax may not kill it, but will stol
expansion and divert capital to othe
localities. The law of supply and de
mand controls the price of ore. MI
Woodbridge informed Representativ
r. A. Wilkinson. but the new price re
mains to be fixed.
Chairman George Wicker announc
ed that after the hearing today an eff
fort will be made to agree upon
committee bill, but that it may not b
! introduced for two or three weeks.