The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1929-04-05

Nevertheless, although millions upon
millions of tons of iron ore have been
mined in Minnesota and shipped out
of the state, Minnesota today pro-
duces the major part Of all the iron
ore mined in the United States and a
very large proportion Of the entire
production or iron ore in the world.
The products Of the farm are the
annual fruits of the fertility OF the
soil, but iron ore Is a single crop.
once mined 1t is gone forever, 1t is
said, and therefor It should be taxed
upon q different basis from other pro-
ducts or other property. To justify q
higher tax upon iron ore than upon
other forms of property two ingenious
theories were devised, the heritage
theory and the diminishing asset"
theory. Iron ore is heritage" of the
people is the contention Of the people
who would impose heavier taxes upon
it. Those who advocate the "nerl-
tage" theory say that iron ore Is the
heritage" of the people of Minnesota.
1t is not the heritage" of the people
of st. Louis county where the ore lies;
neither is it the heritage OF the peo-
pie of Iowa. They deny the man
made line which sets off st. Louis
county, put they affirm the man-made
line which sets off the state OF Iowa
and all other states.
The diminishing asset" theory
takes account of the fact that the
states resources are being diminished
by every ton of iron ore that is ship
ped out of the state, but 1t does not
lake account of the fact that II the
iron ore were not dug and taken away,
IL would never be an asset at all.
Three Super Taxes.
Buttressed by these arguments the
legislature of Minnesota set to work
20 make iron ore pay dirt" 1t first
devised the scheme of assessing iron
ore at so per cent of its true and full
value and thus make iron ore pay hall
as much again in taxes as other prop
erty. That was good and the legiSla-
6ure rested from its labors. But soon
1t began to itch for more and it finally
enacted the occupation tax which
turned more millions from the iron ore
industry into the states Golfers. That
was good again, and again the legisla-
ture rested from its efforts. But not
for long. One super tax, it reasoned,
deserved another, so it made q tax
against the royalties" of fee owners
of iron ore, altho it was perfectly Ger
tain, and the courts so finally ruled,
that the iron ore operator would have
to pay the tax. Then the legislature
sat back to watch the money roll in
and think up something else.
Three super-taxes on the iron ore
industry did make the money roll in
for a time But lately the iron ore
industry has begun to slow down and
less and less money Is rolling in each
year. The legislature begins to wonder
if something Is wrong and it calls for
an interim committee to investigate.
A Rich Strike.
A very brief examination will con-
vince anyone that the iron ore indus
try has been a rich strike for Mime
sota-and that it yielded Minnesota
rich returns even before the clever
legislature thought Of the heritage"
theory and the diminishing asset"
theory and piled three super-taxes
one atop of the other.
The iron ore industry in Minnesota
pays taxeS-a regular tax and three
super-taxes-and in addition it yields
most substantial benefits from the
mineral lands owned by the state and,
thru the gross earnings taxes, from
the haulage of iron ore. If we
leave out of account altogether the
last two super-taxes devised and levied
by the legislature we shall find that in
the five year period from 1928 to 1927
inclusive the state received from the
iron ore industry Is million dollars
out of lot million dollars that the
industry paid to government in Min
nesota. That is, the iron ore industry
paid the state almost two and one
half times as much as other property,
which pays to the state but 10 per
cent of its contribution to government
in Minnesota.
But If we include the returns from
the super devices of legislative in
genuity, the occupation and royalty
taxes, we find that in the same five
year period the state received 46 mill
lion dollars from the iron ore industry
out of the 1913 millions it contributed
to government in Minnesota. This is
SO per cent to the state from the iron
industry contrasted with 10 per cent
paid to the state by other property!
In other words, the state soaks the
iron ore industry three and one-half
times as hard as it does other
property.
Kinds of Iron Mining.
The heaviest deposits of iron ore in
Minnesota lie In great flat beds as on
the Mesaba range. This formation
naturally yields itself to "open pit"
mining. On the Vermillion range the
ore lies vertically; the iron ore de-
posits stand on end, and underground
process Of mining naturally follows.
Originally all mines were under
ground mines, but underground mines
are expensive to operate and they
have gradually given way to open pit
mines. Soon there will be no under
ground mines except where the YER
tical deposit of ore compels them.
In addition to 10 billion tons of
merchantable iron ore Minnesota has
many billions of tons of low grade ore.
Whether these immense deposits of
low grade ore ever become a real
economic and taxable asset to Min
neSota depends upon two things-the
discovery Of processes by which low
grade ores may be made CONNER
cially valuable and a tax policy of en-
couragement in place of the present
tax policy of Encouragement.
Significant Facts.
Minnesota iron ores are rich in
iron content, they are easy to mine,
they may be cheaply transported to
the steel furnaces.
The state stake in IFS low grade
ores Is enormous. IF these ores can
be developed, the iron ore industry will
continue for many hundreds of years,
its trust funds and its revenue funds
will receive millions upon millions,