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.

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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 255 the abandonment of thin beds of coal or the failure to take care of the water in the oil well. The same is true but probably not to the same extent of other minerals. The unfair taxation of precious metals will result in the hampering of the organization and the financing of promising prospects or the shut down of properties that are running very close to the margin of no profits. The following quotation from Mr. T. C. Bonney * emphasizes the difference between real estate and mineral lands: “ The mineral store of each district and of the whole earth is practically limited in quantity, be it gold, or any other metal, be it coal or any fuel. The formation of a fresh supply is a process so slow that, for all practical purposes, it may be excluded from consideration. . . . Hence the store, sooner or later, must be exhausted, now in this country, now in that. In agriculture, provided manures can be obtained, the land seems never to lose its productive power. The mine or quarry, once worked out, has played its part for good in the economy of the earth.” Conclusion Relating to Taxation of Mines. — In conclusion, it may be stated that the fairest way to tax mining properties of any class would be on their annual profits, modified by the regulating body in the case of wasteful or careless operations, capitalized at a rate of interest commensurate with the average mining risk for that class of property. By repeating these valuations at frequent intervals no hardship will be thrown on the property whose profits are on the downward grade. When it is found impossible to estimate the life of the property involved with definiteness as is usually the case in the mining of precious metals, empirical or semi-empirical methods of valuation must be adopted. Such method as establishing a taxable value equal to a percentage of or a multiple of one year’s net or gross pro- ceeds would probably be preferred to the use of an estimated market value by the mining companies. The percentage or multiple used should be fixed so as to distribute the taxes in the proper proportion between mine owners and other taxpayers. The effort to tax non-productive properties cannot be endorsed * T. G. Bonney, D.Sc., F.R.S., Dictionary of Political Economy, 1910, p. 768.

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