The Daily Alaska empire. [volume] (Juneau, Alaska) 1926-1964, 1950-10-26
energy N The search.

energy in the search.
| Given find-which is probably 100-to-1 shot
to lose-he dependent upon the second stage which
we may call the stage of the preliminary operator
who puts in some capital further development and
equipment He undertakes probable 20-to-1 shot.
The third stage is where large capital is required
for equipment especially in large deposits of low grade
ore or difficult meaurgy Even this stage is prob
ably 3-to-1 shot to lose.
a. The average profitable life of even successful
ventures is definitely limited The average is prob
ably not than ten years happy days.
5. All along this line, stage by stage, taxation
and government regulations step in to do violence or
to give discouragement. The preliminary operator"
is throttled by the SEC. in securing capital which
has usually to be done by selling stock interest in
corporation.
If the preliminary operator develops a success
full mine then he is confronted with the voracious
double income and corporation tax, which may take
from 80 per cent to 80 per cent OF his profits Inc
depletion and depreciation allowances are on the aver
age too little to allow the getting his money back
Moreover with his limited capital, he is not able to
undertake more than one shot at time Thus he
cannot write off his 10 bad shots against his one
success Some of the larger companies do deal with
the prospector they write off their bad shots
against their good ones but the large companies
the market for the prospectors finds has SO onsheo
that he is becoming scarce person.
g. The answer to all this is that A, the SEC
should leave the prospector and the preliminary OPP
orator. wholly alone in their seeking venture capital
When people buy their mining stocks they know that
thew are taking risk and do not need a guardian
The SEC does The SEC does not seem interested
in Reno and Las Vegas which CANDLES produce no
national wealth. B. The prospector ana the pre-
ninary operator" should be allowed to average theH
losses with their successes over long retrospective
period-say 10 years. c. They should be given not
denetion and depreciation allowance, but total free
dom from taxes until they get their capital back
After this they should join the ranks OF taxpayers
7 Even the large companies need more deple-
ton and depreciation allowances, as the average lie
of given mine is too short for recovery of develop
ment and equipment within the present allowances
believe if the present level of taxes and controls
had been in operation for the past fifty years. there
would scarcely be two dozen large producers III acto
TODAY This risky business is built up largely out of
blowing in the profits But the Government by oouoie
taxation takes from 80 per cent 80 per cent from
successful enterprise.
There are otner uy-products of all this lack
of intelligence in taxation and regulating The pros
hector and the preliminary" production is coming
must constantly get new mines to replace the ex-
bansted ones and with the crowdng out of the
nrospector and the preliminary operator" the COM
panes are being for such new sources OF ore
Today we realize the prophecies which many OF
us in the industry made fifteen years ago. Some oo
ner cent of the number of mines have disappeared
in this IS years We being driven to imports LOT
orr metals And parallel our Government IS giving
subsidies under the Marshall Plan to develop foreign
mines.
The national consequence of all this is the min
ing industry is seeking government subsidies IN some
form But can government subsidies re-cfeate Cne
prospector and the preliminary OPERATOR MS 10
not the sort of spirit that can be created by nu-
reauracy.
A wither of 80 per cent in the number of units
in vital industry in Is years should be some shock
to the nation.