The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1939-08-31
Competition With Scrap Iron,
Harsh Taxation, Can Blot
Ranges, Says Engineer.

NdlSSSt Jays AAA6 hASSAs
At the session of the Sixth Annual
Metal Mining Convention and EXPOSE
ton of the American Mining Congress
at Salt Lake City this week, o. A.
SundneSS, chief engineer of the Snyder
Mining Company, Chisholm, read a
paper in which he gave an outline OF
the iron ore industry of northeastern
Minnesota.
Mr.. SundneSS in his paper felt that
the industry on the iron ranges, world
renowned for many years due to its
enormous size of deposits, high average
iron content and easy accessibility, is
steadily losing its position in the pig
iron and steel picture of the United
States.
The decline of Minnesota'S position
as an iron producer is attributed by
Mr.. Sundness to competitive conditions
with aluminium, with scrap iron and
scrap steel and to a multiplicity Of
taxes, high tax and royalty rates. In
outlining statistics showing the pro-
duction, reserves and values of the
Minnesota iron ores, he stated:
In northern Minnesota, many fine
communities, modern in every way,
with excellent schools and municipal
improvements, have been erected and
maintained from these iron ore values.
Through 1888 a total of 1927, 729, 934
had been diverted for the purpose of
local governmental expense.
In addition to maintaining the local
communities, these ore values have con-
tributed generously to the county and
state governments. Through 1888 the
counties had received $75,988,681, while
the State of Minnesota, through its
ad valorem tax, occupation tax and
royalty tax, had benefited to the ex-
tent of $104,653, 978. Also supplement-
ing the tax income to the State, are the
royalty payments on State owned
mines. This distribution from the ore
values totaled $50 924 ,447 through 1888.
The State and it's subdivisions have
the extent of $498,O0O,OO0.
In addition to the foregoing, the
Federal government has benefited
handsomely in its collection of income
tax, corporation tax, war profits tax,
surplus tax, social security tax, and
others, the total of which is not
easily obtainable.
These payments from the iron ore
values, in addition to local payrolls,
which totaled $33yO00,O00 in the one
year, 1920, together with the income
from, and the payrolls in the various
auxiliary industries, have been possible
because this iron ore had a value. In
order to have value, it is necessary to
have a market for the ore in which it
can be sold at a price which will pay
for its extraction, pay for its trans
portation, pay its taxes, and still leave
a profit incentive for the investment
of capital by tn operator after he has
satisfied the demands of the Federal
government. It is this broad and COM
prehensive, but fundamentally sound
definition of value that is so often lost
sight of by legislatures when for
labor organizations when enforcing I'M
reasonable labor demands.
I'm the final analysis, so-called
Ghost Towns do not always come into
being because of the exhaustion of
the mineral itself. Competition with
other minerals or materials, COMPETE
ton with the same mineral from other
fields, harsh taxation policies, and other
economic reasons are just as vital and
just as effective in destroying the
market for a mineral, and consequently
its value, as though the deposit were
exhausted. In other words, any mineral
which can no longer be brought into
a market and sold at profit has no
further value, can pay no more taxes,
can support no more payrolls, and can
sustain no more auxiliary industries.
"The iron ranges of Minnesota are
not without their Ghost Towns even
though they are not spoken of as such
Competitive conditions with aluminium,
with scrap iron and scrap steel, with
iron ores from other fields, causing
slow but steady decline in Minnesota's
position as a producer of raw material
for the steel industry, have resulted in
the inability to operate most Of the
mines on the Mesaba and
Guyana Ranges. Because of low grade
ores in some cases, because of high
costs, high taxes, as well as multi
plicity of taxes, and high royalties, these
ores cannot be brought to market
and show profit. Hence the ore is
the mine is imperative, the
payrolls are destroyed, and the town
without its industry is in it's ghost
stage.
"The argument is frequently adj
Vanced that since Minnesota is shipping