The Glasgow courier. [volume] (Glasgow, Mont.) 1913-current, 1922-02-24

PIAAClpleS underlying tHo he
proceeds tax as applied to mines 1.
sound. No mar lives, or ever lived
who can valre the Butte mines. No
body can see beyond the actual work
the ground. Again II the ad valorem
tax was applied to mines as advocated
what would be the result? Taxation
now averages close to s per cent on
the taxable value. Some of the mines
In Butte have been in operation over
10 years. If the ore reserves in the
ground had been taxed on this basis
in the past 1t would mean that their
full value would have been taken In
TAXATION before a large portion of these
ore bodies were ever touched. The
mining industry of this state could
not survive under any such system.
Net Proceeds Not Net Profits
"A common misunderstanding Of net
proceeds Of mines under our taxation
system Is that 1t meal net profits to
the operator. That such Is not true Is
apparent. A mine has been aptly
ilkened to a piece Of cheese, from
which you take a slice in every days
operations, and when the ore body IN
the mine Is exhausted nothing is left
but an empty cavern on the hillside.
It therefore follows that the net re-
turn from a mining operation is neces-
sarily a return Of capital. Putting 1t
another way, If you buy a mine for
100000, which mine contains a body
Of ore that will net $1,000 600, and in
five years operations you make a net
return Of 100000 a year, at the end
NJ Ftv~A 1yAn vC r-AVv Vr-i1t hnrA I'd
100000 In net proceeds. Your ore
body Is then exhausted, you have not
one cent Of net profit, but the entire
net proceeds represents a return of
capital invested in the mine. A min
ing operation Is necessarily an opera
ton Of wasting assets, and all returns
from a mine necessarily includes a re-
turn Of capital, and is not in any sense
wholly net proceeds or net profit.
again, In the determination of net
proceeds for purposes of taxation, the
operator is not permitted to deduct all
Of the expenses of his operations from
the gross, but is limited to fixed de-
auctions determined by the statute.
This statute makes no allowance for
any prospecting o r development work
VI ~ expenditures P1lol W Tic ScdI
for which the net proceeds are being
determined. 1t likewise permits no de-
auctions for prospecting or develop
ment work on any other mine or group
of mines owned by the same operator
other than the mine or group Of mines
being assessed.
Mine Taxation Method Misstated
II read with interest a s~tenographlc
report Of an address delivered in this
city some few weeks ago by a promi-
nent educator in this state, which I
think illustrates the injustice and mis-
representation of this taI situation as
is usually presented to the public in
this state. In discussing the question
Of net proceeds, I quote the following
from his address:
I'm other words, after mining
companies have paid their en-
ployes and allowed their manag-
ers, including lawyers, large sal
aries after they have bought their
supplies and paid for their de-
velopment work in this and other
states and countries; after they
have paid for improvements for re-
~ oiiN tIiCl DCtlCl lllClllS ACCcSs
sary after they have made all re-
placements Of the milling and re-
duction works used in connection
with the mine, allowed the sum Of
6 per cent Of the assessed valua-
ton for depreciation of milling
and reduction works and have paid
all money expended for otherwise
placing the ore upon the market,
then on what is left a tax will be
paid.
This statement was deliberately
made after the quotation Of the statute,
which provides among other things:
such expenditures shall not in
clude the salaries, or any portion
thereof, OF any person or officer
not actually engaged in the work.
Ing Of the mine or experimenting
the management thereof.
"And the same statute likewise pro-
that the deduction for develop
nent work Is confined to the mine or
,roup of mines upon which the net
proceeds Is determined, and not upon
my other mines in this state or other
or other countries. The statute
5 so plain that I submit there Is not a
Ugh school boy In Montana who, after
1t, will not tell you that the
quotation from this speech, as above
Is a absolute misrepresen.
alton. The public would be fortunate
indeed If those who proposed to dis
uss this question would first learn
he facts and then talk them.
Anaconda Contributes Six Millions
"What contributions has the Ana.
onda Copper Mining company made,
nd Is making. toward the maintenance
t this state government? During the
I'VE years last past this company paid
taxes in the state Of Montana the
UNI of $G,323,576, ar an average of
per year. During that same
eriod the total net return of the CON-
any's operations in Montana amount
d to $33,3O9.3IS. In these five years
we're two of the most successful years
n the history Of the Anaconda Copper
lining company. These taxes include
My taxes paid in Montana, and does
OF include any taxes paid to the fed
government. During the last five
ears this company paid $40 In taxes
, every $lW returned to 1t from Its
!ontana operations for the support
the government OF this state. I
to you hat no industry, be 1t
llhlhg, numbering, manufacturing,
'rming or stockraising. can pay such
proportion OF the return of it's bust.
ess Tor the support OF. Its state gov
'nlnent and prosper. While this per-
is without parallel, we concede
lat this condition IL nor nacuIi.r m
S alone. Every taxpayer in this