The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1933-01-20


Lake Superior ore on May 1, 1898. At
present the rate Of consumption this
is sufficient for five years.
Minnesota's tax policies may be
leading to specialization of the mines.
The purpose evidently is not there, but
the effect may be the same The state
has long held the wfip-hand. and the
operators have been compelled TO pay.
But, suppose they should be forced to
say: We cannot payl" Either those
communities which have been lavish
with iron ore tax money would have to
yield; the banks that hold warrants and
bonds would have to insist on q new
deal and the state as a unit would have
70 change its attitude, or the alternative
would be for it to take the properties.
and offer them for sale, the buyer to
assume the taxes that a well organized
industry could not pay A final resort
would be for the state to operate the
mines-Something that it could not do.
probably, IN competition, with other
sources, including foreign, that would
be built up.
take the mines is not SO far fetched
when it is considered a number of
mining companies VIII be forced to de-
fault on payments, and not one of them
could withstand the siege of high taxes
and low output much longer. Socialism
does not need its own system 70 gain
some of It's own ends; 1t can attain them
through taxes, up 70 certain point
This Is the iron ore situation as It
exists in Minnesota today Operators
chief cause Of complaint is not against
the formula for determining mine
values, which probably is as scientific
as any yet proposed, but with the
system Of assessing those values. The
state has set up several separate clasSi-
ficatlons for assessing property and
iron ore heads the list. It is assessed
at SO per cent of its full value Plated
real estate is down for 40 per cent; un-
plated real estate 80 1-3 per cent;
household goods Is per cent; agricul-
tural products and machinery 10 per
cent.
The operators contend that the state
tax authorities have been grossly over
valuing mines. while being lenient with
respect TO plated and unplatted prop
erry, resulting IN discrimination against
ore, right at the start. Besides, how
ever, the state has singled out the ore
industry for an occupation tax, amount
ing to six per cent on the difference
between cost and market price. And
then there is tax on royalties, which
the legislature evidently intended 20 be
paid by those who receive the royalties,
but which has fallen on the operators
under lease terms specifying payment
of all taxes.
Operators contend that since 1920 the
assessed value of unplatted property
has been reduced 40 to so per cent, and
that reductions have been made in
other classes, but none on iron ore,
though ore was worth S1.65 more per
ton at the mine in 1920 than IN 1881
or 1892. They have been fighting for
uniform rule for general property
taxation, and the abolishment Of special
taxes. In the hearing before the tax
commission in St. Paul IN October, they
made strong plea for 20 per cent
reduction IN valuation on mining prop
erty.
They claimed that even this much
would not correct the irregularities
existing between mines and other prop
erty, nor would It bring mines down TO
their actual values figured under peak
conditions The state authorities, how
ever, have arbitrarily denied even this
relief in mining property.
1t is important" says the COM
mission, that no hurried or makesfift
general revision OF the existing basis
for determining the taxable value of
unmined iron ore should be undertaken
until further examination of some of
the mineral deposits by our mining en-
glneers and until after a careful ANALYSIS
and consideration of the voluninous
testimony offered at the hearings may
be made, all of which would require
more time than is now possible To give
them"
More than three fourths of the min
ing companies tax money goes TO de-
10y SAA-Sy oAx4 AcCd4 tx
penses where the mines are located.
1t would seem therefore, that the state
would not permit a situation where a
basic industry was overbudened with
taxes, chiefly for the benefit Of local
communities But such is not the general
political attitude; rather it Is that the
mines should not only support those
communities, but contribute generously
TO the rmeainder of the state, as wen.
The mines pay 20 per cent of all taxes
received by the state.
Mining complaints claim that the
state by over-aSsessing them has given
the local communities a false sense of
values. thus fostering extravagance-
and there IS much evidence to support
their claim
As an example, they pay more than
50 per cent Of the taxes raised IN the
mining communities. Hibbing with a
population Of 5000 has as much tax
money to spend as Duluth, with over
100000 inhabitants The average per
capita IN the mining districts IN the
state is approximately $500; In all the
other portions OF Minnesota, only $40.
The cost Of government in the mining
towns IS more than seven times as high
as In other communities not blessed