coal trade bulletin - Clpdigital.org

my opinion, we want these laws for the coal and
oil and phosphate lands first of all for the sake
of the citizens who wisn to use the mineral product
from these lands. Not that other citizens
are not to be served by the new legislation, but
as new consumers we are all concerned with prices,
and, to benefit tbe many as well as the few, legislation
must, favor low costs. I should therefore
put down as the first essential of mineral land
legislation that no provision in the law should
place any unnecessary charge, burden or operating
cost upon the operator. Accordingly, no royalty
should be imposed with the primary purpose of
revenue. The consumer will surely pay the tax,
if the charge paid to the government landlord is
imposed for other than purposes of administration
and of control in the interest of the consumer.
The most recently issued waterpower permits provide
that the federal government shall receive a
royalty which varies directly with the square of
the average price paid by the public for the electric
current. The less the consumer pays, the less
the government landlord receives.
A large burden which the mining industry now
has to bear and which should be lightened is that
made up of the various risks and uncertainties that
attend it. In mining there is guess work enough
of Nature's own making to give the industry all
the speculative flavor it needs. As I have pointed
out in a paper published this month by the American
Institute of Mining Engineers, any investment
risk increases both cost and selling price, and
whatever the origin of that risk, the ultimate consumer
will find that he pays the carrying charge.
For this reason, in order to lower the cost of coal,
I favor a leasing law. rather than the present
method of selling government coal lands at an appraised
valuation. Any scheme of selling an undeveloped
resource involves uncertainties in valuation,
and the risk thus created is liberally discounted
by the operator—necessarily and properly,
I may add, for his own protection, but the public
pays the bill. Even more important is the feature
that under the lease the operator is relieved from
all the burden of land investment.
Other illustrations of uncertainties that can and
should be cut out will occur to those of you who
are more familiar with mining than I am. I
may mention, however, the unnecessary risk that
has been forced on tl e oil prospector in the possibility
of having his claim jumped by a more resourceful
driller. Absolute protection during a
PROPER; PETHOD OF EXPLORATION
should be made a feature of every mining law.
Another unnecessary and very costly risk has been
mentioned by H. V. Winchell—the extra-lateral
right embodied in our lode law. Mere mention of
the "apex" brings to mind litigation that has
THE COAL TRADE BULLETIN. 49
wasted the substance of western mine owners like
a plague, many a long-continued suit being almost
as disastrous to the successful litigant as to his
opponent. Even where lawsuits have been avoided,
fear of them has constituted an element of risk
that surely found its place in the financing ancl
operating of a mine on a lode claim.
Second in importance only to this matter of protecting
the mineral producer from unnecessary
operating costs is the need of offering to the developer
of an unused resource an inducement commensurate
with the hazardous or speculative character
of his undertaking. This cuts both ways.
To promote development, mining laws should attract
the men having the knowledge and capital
necessary to engage in the business of mining,
but it does not follow that mining on the publicdomain
should be set up like a public lottery, with
the same big prizes for all comers, whatever the
risk taken. Too often in the past the practice
has been for the majority of locators to sit by and
watch a few real miners test out the ground, when,
if a strike was made, these hangers-on at once had
valuable claims to sell. The "wildcatter," who
in his compliance with both spirit and letter of
the law has risked his last cent in discovering oil,
has received no more land from the government
than the school teachers, drygoods clerks and barkeepers
whose names have decorated the paper
locations for miles about. The present system
has passed out too many large premiums to those
who didn't even take a chance—at least their stake
was only a picayune compared with the bonanza
prize. This means unearned increment in large
amounts, and in the end the consumer pays for it.
To continue this kind of mineral land lottery is
bad economics. On the other hand, however, any
law for the disposition of mineral land, whether
by lease or not, should provide large rewards for
the real prospector and the wildcatter, who so
often stake their all against an uncertain and
secretive Nature; when they lose out they have no
redress, and when they win, their discoveries usually
add more to the nation's wealth than to their
own pockets. They deserve to be in the preferred
class; but why offer the same rewards to
the taggers-on, who simply rush in to grab a share
in a sure thing?
A third side of this proposition is the question
of the inalienable right of each citizen to his share
of the nation's mineral wealth. This vague right
has possibly come to appear more definite and substantial
in recent years because of magazine statistics
setting forth our per capita share in the
WONDROUS WEALTH
represented by Alaskan coal, but even writers with
much more information and sense also speak of
the unconditional free grant of valuable minerals
as the something-for-nothing that goes with Ameri-