The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1930-06-20

series of articles on the taxation of
the mining industry. Mr.. Brandes
writes as citizen of Minnesota and
not as citizen of the ranges and he
sums up the situation, barring few
generalitieS, in concise manner. He
says:
"Contending in a previous article
that a careful study of the present and
past conditions in the mining in
dustry will convince any impartial in
veStigator that existing conditions in
the industry are much less favorable
than they were few years ago, and
that these conditions react with equal
| force on those sections of the state
| that must of necessity measure the
! prosperity of the laborer and business
men within their limits by the pros
| perity of the mining industry; addi-
| tional evidence is supported by the
| following editorial in metropolitan
| daily, "The county auditors of the
! state meeting in st. Paul yesterday
voted unanimously in favor of re-
| ducing the legal basis of assessing
| iron ore for taxation from half of
| actual value to one-third.
"They could hardly done otherwise
in view of the facts of the situation,
! which were outlined by Gunnar Bjorn-
son of the state tax commission who
showed that this great Minnesota in
| dustry is now fainting under a burden
of taxation caused not by one supertax
! but by three.
| ''The first supertax, adopted earliest
is the provision of the law that iron
shall be assessed at 5000 of it's value
where all other property is assessed
q hnc ACcn t,.Nf1
property at higher rate than other
property constituted the first supertaX
Later came the occupational tax of
$50 on the output, and after that
came the royalty tax, aimed at the
fee-owners, but now definitely fixed
on the producers by a decision of the
supreme court of the United States.
Because it is big and supposedly
rich and because of the diminishing
value" idea, possibly it might have
been well enough to impose one super
tax on the iron industry providing it
was not oppressive.
'But surely there will be nobody in
all this state who will contend that
the iron industry or any other indus
try, should be handicapped by three
supertaXeS. This excessive burden has
stopped exploration entirely and has
reduced mining operations to those
that get out only the richest and
easily mined ore, with disasterous re-
suits in the mining communities.
"The lowering Of taxes or attempted
legislation to give the iron industry
relief is not party question. In 1927
Senator George Lommen GARNER
Labor chairman of an important
committee during the last Farmer
Labor convention, and for years one
of the most consistent and bitter
enemies of the mining interests, intro
duced a bill-a repeal bill in the
Minnesota senate. This bill would en-
tirely repeal the 1923 royalty tax law
No companion was introduced in the
house.
How long will iron mining last in
Minnesota? This is an extremely vital
and timely question which divides it
self into schools of thought.
Zone is that the iron deposits will
endure forever, and that when the
present merchantable iron ores are ex-
hauSted, others are going to be found,
and therefore taxation makes no par
ticular difference.
'The other theory is that iron ore
is limited to its good grades and sub
ject to early depletion and that it
should be taxed Immediately and while
there. Their argument is that the
mining industry is taking wealth for
the present and leaving holes in the
ground for the future
What are the facts? The Mime
sofa Tax Commission has found that
on May l, 1927, there were 1883 ,139-
915 tons OF iron ore in Minnesota that
are considered merchantable and there
fore taxed. AS years go on additional
ore may be found. With shipments of
ore on the basis of 35 or 40 million
tons a year, allowing for normal in
crease for iron and steel, Minnesota's
ore, may be placed as lasting = quarter
of a century. Is years is very short
period in the life of an industry of
this nature. Mining operators them
selves have said that at the way,
things are going at present it will not
last over to 8 years."
''The United States Geographical
Survey says that in Minnesota are
found at least 80 billion tons of iron
ore formation of low grade This ore
is of no use in its natural formation,
but with large expenditures of money
and favorable operating conditions, it
can be made into ore with market
value.
Low grade ore found in other states
will soon come into competition with
Minnesota ore. Taxes do not allow
the independent companies to mine
this low grade ore. If it could be
mined at a profit it would be thus
conserving the better grade of ore to
an indefinite period instead of being
Quilted in hurry as it is at the present
time. Here is real problem of con-
servation and one that the state does
not allow to exist. And we must not
forget that the mining companies In
Minnesota are not the United States
Steel Corporation. The corporation
dealing in steel, furnaces and finished
products very easily passes all taxes
on to the consumer. Mr.. Farmer
when he buys pound of nails Is
paying the taxes and nobody else.
1.-THE school of mines at the state
university worked out process where
by this low grade ore could be crushed
and separated making one ton out of
three merchantable. This process was
taken over by the Mesaba Iron Com
pany and an experimental plant erec-
ted at Babbitt at a cost of $3,500,00
This plant was operated successfully
for some time; when the abnormal tax
situation in the mining industry re-
duced the value of iron ore to point
where the profits were wiped out. The
plant is now idle with the buildings
boarded up.
"Here is only one specific example;
there are dozens of others. How much
taxes are these mines not operating
bringing into the state school fund?
How many men are out of employ
ment because of this situation and