ofit, imposes a relative injustice. To meet this difficulty, it is
sometimes proposed that the tonnage tax should be graded in such a
manner as to allow for differences in physical conditions and in profit
at different mines. When one attempts to apply a graded tonnage tax,
however, it soon becomes apparent that, in order to make such a
valuation equitable as between properties, it is necessary to use all
of the factors of the _ad valorem_ method for each of the properties.
The wide appeal of arguments for a flat tonnage tax is based partly on
popular misconception of the complexity of elements entering into
mineral valuations.

There are many forms of more or less indirect tax which are substituted
in different parts of the world for direct taxes. For instance, certain
states in South America do not tax ores in the ground, but collect the
revenue in the form of mining licenses or export taxes.

GENERAL COMMENTS ON TAXATION OF MINERAL RESOURCES

There has been a noticeable tendency in recent years to regard mineral
resources as a heritage of the people, to be held in trust, rather than
as property to be acquired and managed solely for private interest. This
tendency has been indicated by the adoption in various parts of the
world of laws affecting rights to explore and acquire minerals on the
public domain; laws relating to the right of eminent domain over
minerals already alienated from the government; laws regulating the
exploitation of minerals in the interests of conservation; laws relating
to tariffs and other restrictions on the export of mineral commodities;
and laws relating to taxation.

The feeling that mineral resources really do not belong in private hands
has undoubtedly been an underlying factor in the imposition of heavy
taxes. Contributing to this action also are the popular belief in the
intrinsic bonanza values in mineral resources, the failure to recognize
the large element of value which is put into such resources by human
efforts, and the failure to realize that the social surplus in the
aggregate is small. To some tax officials an ore is an ore, more or less
regardless of situation, of conditions of mining, of the demand for the
product, and of the time when the demand will allow the ore to be
mined,--in short, more or less regardless of what the ore may be made to
yield as a going business. In this way heavy taxes are sometimes imposed
on mineral reserves, which are based on unwarrantably hig