was due to the change in the law.38 The metal mines in 1912 were assessed at 4.27 percent of the total for the state; in 1913, 3.52 percent; in 1914, 3.17 percent; and in 1915, 2.64 percent.

In the fifteen principal metal mining counties of Colorado the mines have paid a large proportion of the taxes, as shown by the following statistics of assessed valuation:

Assessed value of all min- 1912

1913
$43,546,803

1914 $38,667,874

36,974,647 109,446,426

107,134,265

Coal land and improvements were returned by the county assessors of Colorado as shown in Table No. 32.

TABLE NO. 32.

ASSESSED VALUE OF COAL LANDS AND IMPROVEMENTS IN COLORADO.

Nevada. Statistics of taxes paid by Nevada mines in 1911, 1912, and 1913 are given in the accompanying table:

38 Supra, Chapters III and IV.

39 Annual Report Bullion Tax Agent, 1912, p. 50.

40 Report for 1913-14, Nevada Tax Commission, p. 21,

5,286,338.00 32,701,522.47

Utah. According to the Report of the Utah State Board of Equalization for 1913-14 the assessed value of the mining property for the state was as follows:

Mining companies.

Net proceeds

Mining claims

1,131,952

221,720,400

Total of all property. ......213,868,897

Virginia. The assessed value for 1913 of mineral lands in

42

Virginia is shown by the following data:

Lands under development

Value of land

Value of minerals

Per acre

$5.06

Total $ 640,323

21.42

Value of improvements and machinery 49.80

2,715,422 6,323,651

Total value of minerals

Total value of improvements and machinery.

12,992,515

Total

7,433,871

$27,476,239

Wyoming. The state and county taxes on the output of the mines of Wyoming amounted to $62,878.48 in 1908 and to $30,094.51 in 1910. The mines in Sweetwater and Unita counties paid over $40,000 in 1908, the rate being approximately $19 per $1000; in 1910 the mines in these counties paid $27,000, the rate having been reduced to less than $8 in both counties. In 1913, the output tax of the mines of the state amounted to $47,734.95. The mines of Sweetwater county were taxed at a rate of $8.88 and paid $22,164.14 of the total of $47,734.95.

41 Report for 1913-14, Utah State Board of Equalization, pp. 26, 54. 57. 42 Report of Joint Committee on Tax Revision, Virginia, 1914, pp. 31-33.

CHAPTER IX

SUGGESTED METHODS OF TAXATION AND REFORMS

The prevailing methods of taxing mines have provoked much discussion and have frequently been criticised as being unjust and inefficient. From time to time there have been made many suggestions for the correction of apparent or imagined faults in the system. At the present time there seems to be generally a sincere desire, on the part of the mine owners and the tax officials alike, to discover the facts and to equalize the tax burden. In a number of the western states the mine operators have realized that within the local taxing district at least there is little to be gained by attempts at concealment of the physical condition of the mine and of the financial condition of the mining company. The value of the real estate in the mining districts usually varies directly with the aggregate value of the mines, and as the mines become exhausted the value of the real estate diminishes unless there are other local industries that can support the population previously engaged in mining.

This interdependence of interests has been demonstrated recently in several mining districts in which the important mines have depreciated in value. When the mining companies asked the Boards of Equalization for a reduction in the assessed value of the mines, the other property owners demonstrated the fact that the depreciation suffered by the mining companies was no greater than that suffered simultaneously by owners of dwellings and business houses in the mining community and that a reduction of the assessed value of the mines would result in greatly increased taxes upon other property. It was shown in a number of instances that the mining companies were no less able to pay taxes than were the other property owners.

The criticisms of the methods of taxing and appraising mines have come principally from four classes of writers, namely, (1) mining engineers, (2) mine operators and officers, (3) state officers and tax commissions, and (4) economists.

The criticisms of mining engineers have usually been directed at the methods of appraising mines for taxation rather

than at the system of taxation employed. The mining capitalist has frequently made a protest against increased assessment and changes in rates or in the system of taxation. In a number of instances protests have been filed against heavy public expenditures within the local taxing district. The mine operator and the mine capitalist are probably no less public spirited than those who furnish the capital for other industries; in fact, in many of the western and of the Lake Superior mining districts, the mining companies pay most of the taxes and realize that they must continue to do so.1

The view point of the state officer is occasionally influenced by the demand made upon him for additional funds to meet the increased expenditure of the state. This criticism is not justified in general as, in most of the mining states, the members of the tax commissions and the other state officers have been broadminded and fair in dealing with the mining industry, particularly when all property has been assessed at its true and full cash value. The mining companies have come to realize that they are more apt to secure justice by presenting all the facts in regard to the condition of their property, than if attempts are made to conceal part of the facts.

The criticisms of a number of the economists who have written upon the taxation of mines have been founded upon and formulated from their personal conceptions of public rights in minerals and have not been directed at the method of taxation itself.

In presenting the suggestions and criticisms of the various contributors, an effort has been made to point out suggestions that (1) can be formulated into laws not conflicting with existing state constitutions; (2) that may be feasible in most of the mining states; (3) that may be practical and economical of administration; (4) that will apply to all types of mines without discrimination; and (5) that will cause mines to contribute a fair portion of the necessary public revenue.

MINING ENGINEERS AND MINE OPERATORS

As previously noted, most of the criticisms and suggestions made by mining engineers and geologists have been directed at the methods of appraisal rather than at the system or method

1In Ishpeming, Michigan, the 1912 tax roll was $279,393 of which three mining companies paid 85 percent. The same condition prevails in Minnesota on the Mesabi iron range, and in some districts the mines pay more than 90 percent of the taxes.

of taxation. In this discussion attention will be directed particularly to the system or method of taxation, the purpose of this discussion being to show what the mining men themselves think of the systems of taxation and what changes they would advise.

Mr. James R. Finlay recommends that mining property be taxed for local purposes upon the value of the surface and of the equipment, and for state purposes upon the excess of receipts over expenditures. The combined taxes should not exceed the average levied on other forms of property. Undeveloped mineral lands should be valued exactly as unused real estate is valued, namely, at a fixed price per acre, "according to the prices fixed by mere trading. There is apparently no other basis.''

Mr. J. Parke Channing said: "There are radically different classes of mines; those in which you see all the ore and those in which you cannot see any. We must know it is impossible to get any method of taxation that is absolutely equitable. You have to get a method that is a compromise and get as nearly as possible to the truth. And, therefore, I am strongly of the opinion that a tax or valuation based upon the net or gross product or both is the most equitable."'

Mr. A. H. Rogers favors a "reconciliation of property and gross product taxes."

Mr. Heath Steele has presented a program for the taxation of mines based upon apportioning to each industry in a state its share of the revenue to be raised by taxes. This burden should then be apportioned among the mines as follows:

1. A tax upon all surface lands owned, according to their use and value.

2. After the surface tax has been adjusted, a rate should be determined which, when applied to the yearly profits, would make up the balance necessary.

3. All buildings not used immediately in mining operations should be taxed at the same rate as other property.

4. All plants, equipment, unmined ore, and untreated ore on hand should be exempt from taxation.

In determining profits, Mr. Steele would permit deductions from receipts and the value of the finished product on hand as follows:

2Bulletin of Mining and Metallurgical Society of America, 1912, V, 158. 3Proceedings of National Tax Association, 1913, VII, 407.

Bulletin of Mining and Metallurgical Society of America, 1912, V, 164.