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
