254 VALUATION, DEPRECIATION AND THE RATE-BASE
capita expenditures of municipalities have now been limited to
$25 per inhabitant by the State Legislature.
The general principles of mine taxation are not comparable
with those controlling the taxation of unimproved real estate
which is held idle waiting for the unearned increment. Mining
properties may be allowed to remain idle because there is no
present market for their product at a price that will permit a
profit but they cannot be held for any length of time as an
investment waiting for a chance to make a large turn because
under ordinary circumstances no important permanent increase
in value is to be expected. When large increases in the price of
minerals take place, new substances at more reasonable prices are
apt to be supplied to do the same work. Water power takes
the place of mineral fuels. Oil takes the place of coal in certain
localities where coal is high and so on.
Improvements in the methods of production as well as in-
creased production have resulted in decreased prices of the
output rather than in increased returns. Furthermore as com-
pared with farming and other manufacturing industries mining is
not as attractive a field as it formerly was and in another decade
will probably not be as attractive as it is at the present time.
Mr. T. A. Rickard, in a recent paper before the International
Engineering Congress, points out that a mine is not an invest-
ment but is a speculation. He writes:
“ The act of mining cannot be applied on scientific principles
until two basic ideas are fully comprehended: (1) A mine is a
wasting asset and (2) mining is a speculative business. To treat
a mine as an investment, and to appraise it on that basis is to
ignore the cumulative facts of to-day and of other days. Min-
ing is a speculation that can be wise or foolish according as a
man recognizes the inherent risk and takes his chances ac-
cordingly.”
Taxation of certain deposits such as coal-beds, oil fields, etc.,
on the basis of the present value of future production tends to
increase the current output and might easily lead to the de-
structive working of such deposits. if vigorously enforced, e.g.,
