The evening herald. [volume] (Albuquerque, New Mexico) 1914-1922, 1922-02-05
APPRAISAL OF THE MINES
OF NEW MEXICO
By JAMES r. FlNLAY
Section z; 81. Louis, Rocky Mountain q Pacific 90.
Bv JAMES r. FlNLAY

power in the large amount N coal
hand which Mr.. Matson estimates ~
500 .Ooo acres, with 2to. ooo.ooO tons
probably available on 10000 acres
partially prospoctrd. enough Ia main
tain the present output Tor 100 years.
This iustifics. in addition to the cor
tainty Of a very long ne, an cN-
p~cctation That the output and profits
may bc Increased in the future. The
company has taken this into con-
sidcration and dwclt upon II ia lts
annual reports They have calculated
Tor instance that petroleum from
california. TcSas and MeNico dIg-
places 20. OO0.O00 tons Of goal within
the aipa in which more ~ Ices coal
be- marketed front tho Rntun field
should thu southern Pacific railroad
give up the us" of OH b would prob
ably buy 900. 900 Ions u year OF
this coal etc. etc. II rs therefore,
not Improbable that with his pros
pert ~ future business an investor
might br content with AN uverpgo
profit caual tu "a bare interest rate,
say y or per icnt. In such "a
property the question Of amuriiIa-
ton Of present vaiuo. or depletion.
is hardly worth considering II we
capitalize an expectation Of $3.50 QUO
a year.
~ peg sent the value
would ice, ,.+.. ...t.... ~ zoe 600
Al e nor cent The value
would hc.............. 5000. 600
II is hard to find support on eco
I nngHlf HfYBFNna1A for my htrlar Na Inn
ton The moncy market influence
the rate that should be taken \
year ago the going Interest rate un
the best securities. such as the bonds
of stable governments like Norway,
wa 10 less than = per cent hut d
u falling and Will probably continue
To fall The return on g. s bond.
90 present lS about ~ per cent and
uu ordinary securities OF the first
class Ike 4, =. steel preferred about
q per cent, Under present c0ndl.
lions The smaller valuation at : pet
cent seems the utmost that can It
justified The department Of lutcruiO
revenue has refused To capitalize en-,
normal profits Of any mine at less
thHn o pcr cent. and then only 10
the case of income f"um royalties
The expectation - Increased uutpu|
IS the only factor worth considering
70 give any additional value. uut
that musi be taken with caution fol
while the present q serage production
Is maintained out Of earnings with
out calling for the inves' mcnt OF new
capital "a great increase ~ tunnag,
could not be so maintained. new
plants would have to be built /
seems fair, therefore. to apportioi
the value Of the miner at 6 per cen
Tor the life that u positively assure,
with an installment Tor the rctur
% capital sufficient to allow Tor Ia.
removal of mining plants to new 10
~calities At the end u the period. Th.
table given herewith shows The ~
suit OF this calculation. It Is hnsrl
on some assumptions that may no
be borne out, indeed probably wi
nor be. for Instance. tl that the out
put will continue uniformly at abou
the rate OF 1890. and 60 that th
rate OF profit is uniform for an ia,
mines. but the result b. as near RICH
as Il can be made; FOR an estimate /
an estimate. an average an avcrag,
and an Intelligent approximation /
more accurate than precise figure.
J based on guessed premises.