Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1941-09-20
Finds 20 Percent of Gross
Profits of Large Mines of
Montana Remain in State
lContinued from Page Twol

some figures that we're estimated b.
Dr. Francis A. Thomson, president o
the Montana School Of Mines, Butte
in an address given at the fifth annua
meeting of the Mining Association Of
Montana at Bozeman IN the SUMMED
of 1899.
DR.. Thomson estimated the gross
production from the entire mineral in
dustries of Montana at So ,3OO,OO0,OOC
through 1888 His production figures
are given in Table /, Page Two.
The distribution of this production,
covering all minerals in which the
breakup is about the same as for
metal minerals, is given in Diagram
C, which segregates the actual wages
paid for mining, smelling, refining,
and transportation within the state.
While the taxes are figured at asa
percent, they have increased since 1888
and will continue to increase, and the
other items are comparable to the
same items in Diagram A and B when
the wage items are properly analysed.
Other States Benefit
DR.. Thomson further stated: al
though most Of this money was spent
in Montana, a greater part OF the
supplies item was goods manufac-
tured outside of Montana, and an ap-
preciable amount of the freight was
for products shipped from Montana
through other states.
Taxes have, of course, risen rapidly
during the last seven years and amount
to far more than percent Of the
operating cost at present.
Typical of a small mine we have the
expenditures of the expense and the
gross income dollars of the New Park
Mining company, as shown in Diagram
D and E. The company is operating
in Utah, producing gold, silver lead,
zinc and copper, and the figures are
for the first three months of 1941
The company had gross income dur
ing that period of a little over $500, 900
and the net income was higher than
some of the larger mines. In the case
of the New Park the state taxes are
charged to the expense dollar and the
federal income tax and new equipment
are shown against the gross income
dollar The railroad freight to the
smelter and the smelling charges are
deducted before figuring the gross in
come, although loading and hauling toll
the smelter are charged in the ex-
pense dollar. In the chart of the gross
income there appears a charge of 3
cents for development, as the company
is keeping its developments well In
line with the ore extracted. The item
in the expense dollar designated sur
charges on labor" covers accident
compensation and social security charg-
es. In Montana this item runs over
IL percent of the payroll. The labor
entailed in smelling and other items
not directly connected with the New
Park company's payroll, Is not segre-
gated in these charts.
Conclusions and recommendations
l. From the charts the analyses,
and the figures quoted, it may easily
be seen that with the normal large
mine anywhere from so percent to 20
percent Of the gross dollar remains in
the state in which it is produced and
that labor gets the biggest part Of
the dollar
g. Working men in the mining in
dustry are considered very good spend
ers and statistics show that they live
better than most working men; there
fore, as they receive the largest part
of the gross dollar, they are large
consumers of clothing, food, and lux
uries and in states where the mining
industry is prospecting the farmers
and mercantile establishments always I
prosper. Quite a large part of this q
prosperity is passed to other states
that manufacture and produce articles I
that the miner uses.
3. That producers of machinery and /
supplies that go into mining, smelt- :
ing, etc, in other states, reap a large
part of the gross dollar, which also /,
benefits labor in those states.
4. He who invests his money in a !
mine at the beginning Of I;
the venture, usually receives a large re-
turn and the investor in the going
mine usually receives a fair return and =,
the bulk Of the gross dollar produced
does not go to Wall Street." !
5. Ore is metal-bearing rock that =
can be worked at a profit. Modern
mining, business, and metallurgical
methods have made ore from what was :
only metal-bearing rock before. If .
taxes and operating expenses go much :
higher, either the price of base metals
must advance or the present ore will .
again go back to only metal bearing
rock. The charts and figures show :
that the stockholders will suffer first
and labor next, if ore again reverts :
10 metal-bearing rock.
6. From No. 5, we think the mining
Industry would be reasonable in con-
lending that if the prices of metals l
are to be frozen the wages of labor 3
and the prices Of supplies and services
hat go into mining also should be II
frozen, certainly the things that the II
working man buys, such as rent, food,
clothing, ETC., should be frozen.
z. The mining industry desires to III
,ay its just share of the tax burden III
,ut it does not desire to assume an
unjust burden, such as the paying of III
n excess profits tax on the normal III
,rofits Of the business especially on III
he strategic and critical minerals. the
omestic production Of which must be
tinulated. Mining Is a liouidatino ii