The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1933-01-20
MINING TAXES SIX TIMES
THE SUM PAID LABOR
Mines Will Pay Taxes This Year Amounting ~
Magazine Writer Shows Tax Cost Greater Than Value
of Ore Made Into Pig Iron

E industry printed at Cleveland, sum-
marizes the tax situation in Minnesota
{ as related to iron ore. The article was
printed two weeks ago at the time the
: mining interests were asking the Tas
j commission for cut in the taxes The
: article bears the signature of A. ]
Hahn, one of the Editors of steel
It said:
Determined efforts are being made
by the Lake Superior iron mine onera-
tors to obtain a reduction in taxes
This question is of the utmost i'm
portance TO the iron and steel industry
as 10 a great extent iron and steel
prices IN the future viii depend 1non
H. In the mining industry during Ie32
practically all other problems were sub
ordinate to that of taxes. A vigorous
campaign was conducted in Minnesota
70 convince the state officials that their
pohcles are destroying mining enter
prise
unoer normal conditions. a severe
burden was imposed upon the Industry
oy excessive public expenditures and
outright discrimination against mines in
Minnesota With demand for ore di-
unfinished as in 1881 and 1892, the tax
nad become almost insuprortable.
A lew moments consideration of the
Minnesota State Tax Commissions OWN
ngures VIII indicate the magnitude of
lakes, IN relation to ore and pig iron
prices In 1881 the operators sf1ipned
I730s,2O0 tons Of ore from the state
ana paid in taxes S13,650,1OO. In 1899
shipments dropped to 100000. and the
lax bill unless revised, stands at ST.
Soo,645. The average of the two wears
Is Sl.86 for every ton of ore Skinned
from the state
The commissions latest report dis
closes the average cost of producing ore.
l926-1929, was S1335. This covers a
period in which unit costs were rela-
lively low because shipments were large.
Inc cost figure includes DEVELOPMENT
LABOR, supplies, royalties, adu,inistra-
tlon, depreciation; but not taxes mr.
interest on capital.
IL must be considered. also that M
lndustry's affairs are more omen To
PUBIC inspection than mining in Min
nesota 1t Is necessary for the COM
MISSION TO make thorough investipa-
ion, from the tonnage and character
OF the ore, which lies open to view tn
the companies books which must he
MADE available. The commission has
experts IN minerology and mining
through facilities Of its own department
ana the states school of mines. No
discovered ore escapes assessment: costs
cannot be padded"
The average tax for the two wears ;s
sl-o6. The mining cost is approxin-
aoely s1-335-a figure taken because il
Is the latest official, though probably
less than actual for the past two wears
These combined equal 1915. Against
Inns must be considered the commits
SONS average value of the ore at the
NINE. This range from s2.7l for Mes
aOl non-oessemer, representing so per
cent OF the ore shipped from the state
20 sol for old range bessemer.
The simple fact is that the con,-
MISSIONS own figures show that total
costs-of which taxes constitute SO Der
cent-are higher than the value of the
ore at the mine. Its mine values are
based upon open market prices. when
practically all the ore is sold on long
term contracts, at a discount of Is To
% cents or more per ton.
! The quoted price of ore has remained
unchanged for four years mainly be-
cause in the last three years there has
been little demand IF anyone had
really desired to buy ore in quantity
during that period. the price certainly
would have been materially less than
1he nominal market quotations. S1ch
reductions only serve TO increase the
discrepancy between prices and costs.
| Tax per ton in the past two years in
Minnesota has been more than six times
greater than labor costs under normal
working conditions With relatively
heavy shipments in the years l923-193O.
the tax averaged Ssh cents. or 80 Der
cent over the labor charge.
In 1882 when ore shipments shrank TO
the lowest point in Al years the tax
assumed fantastic proportions, averag-
ing about s7.80 per ton. One counpany's
tax bill in Minnesota for the year is
equivalent TO four tons of gold-and the
irony OF it is the company did not
ship ton of ore from the state. Unless
relief is granted before the 1892 taxes
fall due, the industry viii be called upon
to pay sl7,965. 500 an amount equal to
approximately q tons of gold.
Shipments from the state last year
were only 100000 tons. It is a
curious coincidence that the state wants
TO take in taxes an amount more than
the market value Of the pig iron that
could be made from such tonnage Of
ore. The equivalent in pig iron is
1,24l 900 tons, and the price of iron
at Lake Erie furnaces during the past
year was around s14 ton, or s17,374.-
600 for the iron that could be made from
the ore
Volume might rescue the ore industry
from its plight, but such volume does
not appear Immediately in view The
best informed m the industry today
confess themselves at loss to know
what shipments VIII amount to in 1898;
while assuming that there win be some
increase, they believe It VIII be
moderate Winter operations to pro-
vide work VIII further build stocks
IN the Lake Superior district, which IN
f,r-r, NAV ,,ofa-~1 rr,o,o%s<-x,r -s,x~s~7 A.,