The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1934-11-09
Court Grants I8 Per
Cent Slash in Iron
Ore Tax Valuations
u phOLd Tax Commission
Figures in One-sirth
of 43 Properties.
Judge Hughes Dissents to
Majority Decision in
Duluth Friday.

A rSQuctlOn OF Sl6y6lZ yo61 IN taxable
valuations of iron ore properties was
granted in the suit instituted by
mining companies in contest Of the
state taxable valuation by a four-to-one
decision Of judges of the district court
in Duluth Friday. The majority de-
cision Of the judges upheld the tax
commission valuations on one-Sixtfa OF
the 43 properties and placed new valu-
atoms on the remainder.
Judge Martin Hughes, senior district
jurist, who presided at the trial, dis
scented from the majority opinion and
wrote a minority memorandum. The
ma ority opinion was concurred IN by
judges Bert Fesler, Edward Freeman,
c. R. Magney and H J. Grannis.
Judge Hughes in his opinion held the
mining companies had not conclusively
proven that the valuations placed on
their mines by the state tax commits
sioner were excessive. He stated that
they could easily have produced figures
from thir own records TO show the pro-
hibitiVe value of their properties
The valuations Of the state tax COM
mission were upheld on two of the
largest properties involved, the ROUGH
leau mine at Virginia and the Stephens
mines in the White township. The
Rathbun mine at Mountain Iron was
valued at only a slightly lower figure.
The tax commission figures on the
contested properties total 500, At, 732
in comparison with the courts valu-
ations on the same properties which
total s81 ,664 ,845. The Hoskold formula,
a recognized valuation method, reached
a valuation of $50 ass ,355. In contest
ing the valuations, the mining com.
panies asked for a reduction Of better
than so per cent. The court decision
lowers the total present valuation by
approximately Is per cent.
The defending mining companies are
the following: Oliver Iron Mining Co.,
which contested valuations on SO prop
critics: the Corrigan- McKinney Co., one
property; Snyder Mining Co., two
properties; Republic Steel Corp, one
property; the Hanna Ore Mining Co.,
one property, and the st. James Mining
Co, two properties.
The Hoskold formula, named after
its originator, is accepted by both the
state and defendants as the best avail
able basis for evaluating ore deposits
and is used by mining men In buying
and selling ore properties. The ma
jority decision pointed out the absence
of a "cash" market for sales of iron
ore properties upon which a court
or tax commission can base valuation
on such properties. The decision
pointed out: 1T is unfortunate that q
court has such duty imposed on it.
The valuation of ere deposits is primar-
lily an engineer, not a judicial function.
The judicial questions have been de-
cided quite satisfactorily; the engineer
ing ones, not so satisfactorily"
The tabular statement accompanying
the decision shows that one-Sixth of the
courts valuations are the same as those
of the tax commission and are lower
than those reached by the Hoskold
formula; that two-sixths Of the yalu-
ations are the maximums reached by
the use of the Hoskold formula; and
that three-sixths Of the valuations are
the same as those reached by the use
of the formula.
It will be remembered by local people
that a settlement of the tax amount to
be paid by the mining companies in
Ely was effectuated about a year ago
when mining companies withheld q
large share of their taxes from other
range communities. Ely was then paid
$3.50. 40l.86 when the settlement was
made. The settlement meant sub
stantial reduced levy and other NUM-
cipal commitments relative to Co
operative effort in securing reductions
in mineral valuations for taxation pur-
poses and lowering Of per capita
limitations. Consequently Ely mining
companies properties were not involved
in the delinquent tax proceedings in
Duluth.