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.