Valuation Of Iron-Mines

R. B. BRINSMADE, Puebla, Puebla, Mexico (communication to the Secretary*) :-As I have previously considered the general equations for mine-valuation,1 I will here discuss only that part of Mr. Finlay's paper criticized by E. E. White, along with some of the general principles of mining taxation, under the following six topics: 1. Rate of interest earned by sinking-fund. 2. Rate of interest earned by investment. 3. Place of royalty item in valuation. 4. Place of taxation item in valuation. 5. Calculation of future ore-prices. 6. Valuation of undeveloped mining land. 1. Rate of Interest Earned by Sinking-Fund.-Mr. Denny's quoted opinion of a 3 per cent. rate is evidently based on English conditions before the Boer war. The great destruction of liquid capital by the great wars and catastrophes since 1897, along with the flood of gold and consequent rise in the average index of commodity prices, has undoubtedly increased the rate of interest at least one-half per cent. In the United States sound savings banks now allow 4 per cent. on deposits, while safe bonds are quoted at prices which yield even 5 per cent.. 2. Rate of interest Earned by Investment.-Gold-mines with uncertain and scanty ore reserves, the objects of Mr. Denny's quoted remarks, are quite different from iron,. copper, or coal mines with definite mineral reserves blocked out ahead by drilling or driving. While 10 per cent is often all inadequate yield from gold-mines, the latter class of mines are often, as safe as city real estate and resemble it as an investment in more ways than one.