Valuation, depreciation and the rate base

Bibliographic data

Monograph

Identifikator:: 174667931X

URN:: urn:nbn:de:zbw-retromon-119897

Document type:: Monograph

Author:: Grunsky, Carl Ewald http://d-nb.info/gnd/10180959X

Title:: Valuation, depreciation and the rate base

Edition:: 2. ed., revised and extended

Place of publication:: New York

Publisher:: Wiley

Year of publication:: 1927

Scope:: X, 500 Seiten

Digitisation:: 2021

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter XIII. The valuation of mines and oil properties

Collection:: Economics Books

THE VALUATION OF MINES AND OIL PROPERTIES 249 cism of this system is that the values of the ore bodies cannot be accurately determined, that by using annual profits as a basis a premium is placed on inefficient operations, that the life cannot be determined with any degree of certainty and that the rate of interest is too low, making the present esti- mate of value too high. It has several times been proposed to introduce a tonnage tax in Michigan. Recently the State Grange proposed to invoke the Initiative in order to obtain a tax bill proposing a levy of cent per pound on copper and 10 cents per ton on iron ore. This method of taxing would penalize the concern that was mining with only a small margin of profit and would tend to unnecessarily hamper the mining industry in the State. Minnesota has the engineers of the State Tax Commission measure up the tonnage of ore underground and then an ad va- lorem tax on 50 per cent of the present indicated value is levied. Mineral lands that are not productive are taxed. A tax of 4 to 43 cents per ton has been proposed on stock piles. In Wisconsin the 1913 Legislature passed a law assessing mining properties or mineral lands upon the estimated value of the ore underground. A report based on production profits, etc., was made by W. L. Uglow, engineer for the State Tax Commission, but his recommendations were greatly altered by the Commission. It was found necessary to reduce the figures for developed properties and to entirely cut out the estimates on undeveloped properties. The system he adopted might be called a semi-empirical method which is based on figures from a theoretical zinc mine. His theoretical or ‘hypothetical ” mine was the result of combining the figures from several actual operating properties. The assumed life was taken as four years which is the average as determined from the previous experience of the district. Mr. Uglow’s method of ascertaining the value of a mine as applied consisted of multiplying the annual profit by the factor 2.43 which is the figure obtained by using the “ hypothetical ” mine and assuming that profits do not fluctuate from year to year. He claims as advantages that his method

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