230 THE COLLIERY GUARDIAN. January 31, 1913. Lancashire type, and he dealt with the tests in detail. He went on to say that it was somewhat strange that the author had not given a test of Lancashire boilers of equal size, and working under the same conditions as the Yorkshire boiler. Testing boilers of equal size, a Lancashire boiler evaporated 8'924 lb. of water, as against 8T68 of the Yorkshire boiler; the temperature of escaping gases being 839 degs. for the Lancashire boiler, and 825 degs. for the Yorkshire boiler. The thermal efficiency for the Lancashire boiler was 56'67, and for the Yorkshire boiler 56'64. In a further test the thermal efficiency of the Yorkshire boiler came out at 53'38, and that of the Lancashire boiler 54’40; the Yorkshire boiler evaporating 11'950 lb., while the Lanca- shire boiler of the same size evaporated 12'670 lb. The discussion was adjourned, Mr. Casmey intimating that he would reply to Mr. Sugden on another occasion. rather than taxes them by virtue of its powers, mining taxation may then be divided into two classes.* The first class consists of special imposts which bear the same relation to mining property and the ore-extracting industry as common law taxes bear to othei’ industries. These are the two well-known duties, “ the fixed duty ” and “ the proportional duty.” Under the second system, instead of such special taxes, the mining industry is merely subjected to common law taxes, the same as those to which all other industries are subject. More- over, this is the sole method of taxing the mining industry in all countries where the minerals belong to the landowner. An example of this kind is the French “ licence tax ” on quarries and mines. Although there are many countries to-day where the mineral rights are separated from surface ownership, yet in some of these countries, as in Germany, Austria, and Italy, common law taxes have been systematically substituted for the old special imposts. A similar evolution within recent years may be traced even in those countries where the mining rights of the State go furthest back. When common law taxes have for their basis revenue or profit, they do not differ materially from the special tax referred to above as “ the proportional duty ” on the net produce. Though the common law taxes are rather “ indexical,” they must be of a fairly general character, in order to be capable of being adapted to the many peculiar characteristics of the mining industry without involving too great objections, difficulties or inequalities. Even when a common law tax may, by means of special indices, be rendered capable of being applied to various industries, it is difficult to find any index which would be appropriate to the mining industry taken as a whole. For instance, one of the indices on mining licences in France is the number of workmen employed. This index, as a matter of fact, leads to considerable anomalies and inequalities. Reference has been made above to the recent evolu- tion in some of the oldest countries exercising Crown mining rights in the substitution of common law taxes in the place of special taxes. In the same way, we find in these same countries, expressed in the Prussian “ Gamp ” Law of 1905, views in regard to the State which aim, as regards certain substances, at least, at the creation of a regime giving to the State special advan- tages in regard to mines. This new attitude involves proposals to introduce special modes of State interven- tion referred to later. It would be inadvisable here to dwell on the applica- tion to mines of such common law taxes as our income- tax, the Italian Richezza Mobile, the German and Austrian Einkommensteur and Gewerbesteuer, and the various Russian taxes, together with some of the taxes which the communes are authorised to collect in Belgium. We might, however, refer to the practice of superimposing, at least partially, common law taxes on certain special taxes, as in Alsace-Lorraine or Belgium, under the heading of communal taxes. The system of common law taxation, when it is exclu- sively applied, has this advantage for those exploiting mines, and the disadvantage for the State, of precluding the latter from the possibility of drawing from the mines larger profits than from other industries. It is from this fact that arises the State’s interest in the special taxes which have now to be considered. “ Special Taxes.” These special taxes, in the precise meaning which has been given to them above, are of three kinds, of which the first, which might be termed the “ institution ” or “ establishment ” tax, is of, perhaps, relatively recent origin, whilst the other two—the “ fixed duty ” and the “ proportional duty ”—are, so to speak, as old as mining itself. The “institution ’’ tax consists in the payment, on delivery of the title, either of a fixed sum whatever the extent of the concession, or of a sum calculated accord- ing to its extent. With variations in special cases, this tax is in force in several countries, in Alsace-Lorraine, in the Belgian Congo, as well as in Turkey, and the English colony of Perak. This is practically equivalent to the sale of mining concessions as practised in the United States and Canada. In some cases this tax may be collected under the system of “ fixed ” duties or rents, these being considered as arrears which, with the “ institution ” tax, might be in some way bought off for the future by the payment of the original capital. * A third class, which might be mentioned, would include those countries which avoid levying taxes on mines, in order to encourage their development to a greater extent. Such a policy might have indirect advantages instead of the direct profits derived from taxation. The author does not know of any other country besides Uruguay and the Argentine Republic where this policy is adopted. But although the Argentine Federation has refiained from imposing any federal taxes, it has not prevented certain of its States from taxing works which are opened out there. THE TAXATION OF MINES IN VARIOUS COUNTRIES.* By Mr. David Bowen, of the University of Leeds. In most countries to-day public authorities are con- cerning themselves with the question of increasing the pecuniary returns they may derive from mines. When the State does not itself undertake the exploitation of mines—and this does not appear to be a very practical means of increasing the financial revenue of a country— and when it cannot dispose of the minerals by agree- ment or contract as owner, it is only able to derive a direct pecuniary benefit therefrom by taxation. At the basis of all mining questions considered from the economic and administrative points of view, there rests the distinction as to whether, as is the case in England, Russia and the United States, all mineral substances are the property of the landowners, or that the institution and creation of exploitation works can only result from an act of some public authority. Further, a good deal of arbitrariness and diversity of practice exists as to the classification of exploitation works. In England, it is the nature of the excavation which determines whether it is a mine or a quarry. In France, on the other hand, the classification of exploitation works depends, not on the mode or nature of the excavation, but on the mineral substance excavated. This is true also of a large number of other countries. Briefly, it may be stated that the various mining countries may be divided into two classes in this respect: (1) those that follow, generally, the English classification — practically all English - speaking countries ; and (2) those that follow the French system of classification—practically all non-English-speaking countries. It must be remembered, however, that the classification of works exploiting coal, petroleum, phosphates, &c., differs very largely in different countries. Although reference has been made above to taxation for the benefit of the State, it will be necessary to consider also those taxes levied on behalf of its various members, such as its provinces, departments, and more particularly its communes or local government bodies. What is of importance in this respect is not so much the public body which benefits by the tax, as the amount of the tax itself. For this reason it is necessary to take into account the payments made by the mine exploiter to the landowner in virtue of the legal contract entered into between the parties, sometimes of a very variable nature, and also, to take account of the obligatory payments made by exploiters for the special benefit of the workmen. The author proposes in the first place to preface this account of mining taxation with some simple explana- tions setting forth to a certain extent the principal features of mining taxation. Although this account is chiefly concerned with exploitation taxes, there are in many countries, especially new countries, some taxes which are levied in connection with prospecting investi- gations when they are to be carried on outside the prospector’s limits, and especially where the right of prospecting may involve the right of exploitation. The prospector, to some extent, takes the mine at his option. Further, this paper is not concerned with all the general taxes of common law, stamp or registration duties, &e., which affect mines or the mining companies, under the same conditions as, in similar circumstances, all other individuals and all other companies are affected. The taxes levied on rock salt and the potassium salts are also ignored. Common Law Taxes If one leaves out of this discussion those special cases, comparatively exceptional, in which the State, as has been indicated, acts as proprietor of the mineral rights * From a paper read before the Midland Institute of Mining, Civil and Mechanical Engineers. Although, on the one hand, the institution tax, taken by itself, may be advantageous to the pecuniary interests of the Treasury, this system may, however, be contested from the point of view of the general interest, provided the amount is considerable—otherwise the question need not be considered—because of the surcharge on capital with which the undertaking is burdened from the com- mencement. It is a better policy to be content with taxes levied on profits. This brings us to a considera- tion of the more normal form of taxation. The “ fixed duty ” consists in the annual payment, whether the mine is exploited or not, of a sum deter- mined by measurement of the surface comprised in the mining concession ; and to facilitate comparison, all the calculations in this paper are referred to acres. One point may be of interest in regard to the various rates actually levied. They vary according to the countries, and in the same country, according to the substances. Even setting aside the excessive assessments of certain goldmines, the French assessment of 2d. per acre must be regarded as very moderate, if not extremely low, although the concessions granted in France are of relatively large extent. That this assessment was regarded as extremely low in France may be gathered from the fact that although the French Law of, 1910 allowed reductions in the areas of concessions when the law raised the tax from 0'4d. to 2d.,* only a quite infinitesimal number of reductions were asked for by the parties interested. It might be noted that in some countries—notably in Australia and the Belgian Congo—sums payable under the title of “ fixed duty ” may be merged into those payable as “ proportional duty.” This is quite a fair arrangement. The “ fixed duty ” is essentially a tax against inexploitation, or may be taken as representing the minimum of what the “proportional duty” should amount to. Thus considered, it corresponds to that minimum obligation to work which is one of the features of our system of leases and to which so large a propor- tion of mineral legislation still applies. However, there is one aspect of the case which must be noted, and that is, that the Treasury prefers super-imposition ; it does not like giving back anything. The “ proportional duty ” is essentially the special tax of exploited mines. It has been in vogue at all times in two different forms, which may be distinguished as the duty on the “ gross produce ” and the duty on the “ net produce.” These terms have, in actual taxa- tion, significations which may vary, and which it is very necessary to define precisely. In the administrative sense, “ gross produce ” is essentially the value of the substances extracted from the mine, the gross receipts resulting or which might result from their sale, or again what economists and financiers would call “ turnover.” The “ net produce ” is the profit resulting from these sales—that is to say, the receipts from which have been deducted the cost of extraction and all the other opera- tions necessary before arriving at the point of sale. The “ net produce” thus understood, is, on the other hand, often called by economists and financiers “ gross profit,” ’ or even “ gross produce,” in order to retain the term “ net produce ” or “ net profit ” solely for the purposes of expressing what is essentially the “ distributed profit ” or “ dividend ” ; the “ gross profit ” or the “ gross produce ” in this signification is merely the “ industrial” profit before distribution, more especially before allocation to redemption funds and reserves. For the purposes of this discussion, it will be con- venient to refer to “ gross produce ” and “ net produce ” in the administrative sense above stated. But, under these appellations, and without the fundamental character of the tax changing in any way, the various countries may apply forms which may sensibly modify its actual effect in one case or another. The “ gross produce ” may be calculated according to the quantities extracted, whether they have been sold or not, or merely according to the quantity sold. In arriving at the valuation, the prices obtaining at the site of the mine may be taken, or the prices of actual sales, or prices more or less conventional. The “ net produce,” in its turn, may be, in regard to certain expenses, more or less conventional, or may approach more or less to the distributable profit or dividend, even so far as to become confounded with it, as in our income tax, the German Eitikommensteuer,’f' the Italian Richezza Mobile, and the French forfaitaire duty of the French Act of 1910. It must be remarked, however, that whatever these difference may be, or how * People little acquainted with all these questions asserted on that occasion that never in any country had taxes been abruptly raised 500 per cent. No concessionnaire took any notice of it in any way whatever. f In the German Einkommensteuer there are, however, abatements or averages to be taken into account which make it so that it does not correspond exactly to the distributed dividend in practice.