The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1924-04-18
PRICE Of IRON ORE
GUT 8OC PER TON.
PRODUCERS HARD HIT BY THE
REDUCTION FROM 1928
PRICES.

Skilling's Mining Review in an
nouncing the drastic cut of 80 cents
per ton, on the selling price of iron
ore, comments on the act and the
probable effects. The Review says i:
"The price of iron ore for 1924
deliveries has been established on
basis of 80 cents reduction from the
prices in effect in 1923. This makes
this years prices as follows, COM
pared with 1928:
Old Range Mesabi
Besse- Non Besse- Non
mer Bess. mer Bess.
1923 ---$6.45 $3.50 $500 $5.55
1924 - 5.65 400 $40 Ats
"This substantial cut in price of
iron ore came as quite a surprise
to the producers of the Lake Super
Tor district. 1t has been known all
the past winter that considerable
pressure was being brought by con-
sumers to obtain concessions from
last years prices. The producers,
on the other hand, pointed out that
the industry could not stand sub
stantial cut, and by good rights
could not stand any cut. There has
been one advance of 10 per cent in
wages since the 1928 prices were
established, there has been increase
of taxes and supplies have not de-
creased in price.
Hoped to Retain 1928 Prices.
''The producers did not seriously
look for any advance in prices, but
they did have faith that prices this
year would be on the same basis as
last year. It is believed that
combination of circumstances has
brought about the cut in price of
ore this year. Competition is said
to have been unusually keen this
spring, and the long delay in estab-
fishing prices has perhaps helped to
bring concession. But the tax situa-
ton unquestionably enters into the
situation in both Minnesota and
Michigan.
High Taxes Cut Figure.
"Taxes are not only high, but
there are penalties. For example,
the producer who stockpiles ore just
to provide employment for his min
ers may have to pay taxes on that
ore for a number of years. He is
taking his chances on that for the
state is uncompromising. The pro-
fit has been taxed out of many mil
lions of tons of iron ore in Lake
Superior district in the years past
that was mined at time when there
was no demand, just to keep the
wolf from the door of the miner.
The mining companies naturally feel
the injustice they are compelled to
undergo. Then there is the occupa-
tional tax of Minnesota as further
penalty on the very mining of iron
ore. 1t cannot be determined at
this time just where and how the
tax situation has entered into this
rather deep cut in the price of iron
ore but that it exists is true beyond
doubt.
Profits Are Hard Hit.
"It is certain that this cut in price
of iron ore of 80 cents will wipe out
all of the profit on the major por-
ton of the ore mined from Lake
Superior shafts during the past win
ter, leaving such with actual loss
Lake freights have not yet been an
nounced but no possible reduction
from the rates prevailing last year
could afford any great relief.
tsFrom this distance it looks as if
the occupational tax department in
Minnesota will experience lean pick
ings on the 1924 ore business. This
tax based on a net value determined
by the State Tax Commission of the
ore at the mouth of the mine, less
freights. The tax is based on the
deduction from such value by the
Tax Commission of certain parts of
the cost of producing such ore.
From present prospects there will be
losses on shaft mined ore, while the
open pit ore will suffer greatly, and
even show losses in some cases.
Will Carry On As Usual.
Nevertheless, the iron ore indus
try of Lake Superior is great and
going institution. If there is dis
appointment over the prices this
year they will carry on as usual. It
will be a fair year as to volume,
and conditions will right themselves
in the future as in the past. It is
the rule of the business, big and
little.