THE VALUATION OF MINES AND OIL PROPERTIES 25 3
of the cost of operating. This amounts to no tax when the
profits are 6 per cent or less, to 10 per cent tax on gross produc-
tion when the profits are 20 per cent of the gross, to 31 per cent
when the profits are so per cent and so on up to the limit of 66
per cent of the gross production when the operating expenses
approach zero.
Propriety of Taxing Mining Property. — The question of the
propriety of taxing mining properties is an important one. In
states such as Michigan and Minnesota where mines make up
a large proportion of the industry of the state it is necessary
that mining properties bear a large share in the maintenance
of the government which exists largely for their protection.
In the states just mentioned a closer approximation of the value
of the ore underground is possible than in states where the
mining interests are largely concerned with precious metals.
This should not be construed to mean that the methods of assess-
ment now in vogue in the former should be considered the
proper ones.
There is no doubt that taxation of mines in any form must
retard to some extent the development of the mining industry
which is of such economic value to the country. It also must
be granted that in certain communities the mining interests are
so large that it is only proper that they pay their share of the
governmental burden. Injustice can be avoided only by the
exercise of caution when mineral lands are to be taxed. That
taxation may run riot has been shown in Minnesota in the case
of mines located within the boundaries of municipalities.
In Buhl, Minnesota, the 1913 municipal tax levy was $12 5,000
or $125 per inhabitant. The town had 172 voters and had
over 100 persons on the pay roll during the year. Only 1} per
cent of the assessment was paid by the inhabitants and ¢82
per cent by the Mining Companies. In Keewatin the levy
amounted to $374.10 per inhabitant. The township of Stutz
in 1914 spent more than $goo for every voter. By court
order some of these levies have been modified but they show
what extremes are possible. It is understood that the per
