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Jan 1, 1936

By Helmar Schubert

The tensile strength of moist agglomerates consisting of granular materials is demonstrated with the aid of models. The applicability of these models is proved by experiments. An explanation of the different values of strength of imbibed and drained agglomerates is given and it is shown that the maximum tensile strength occurs at the so-called entry suction. The entry suction, which can be considered as the characteristic capillary pressure of the agglomerates, is described in terms of its parameters by a dimensional analysis. The influence of porosity is determined experimentally by means of regressional analysis and is compared with known model equations.

Jan 1, 1977

The 140th meeting* of the American Institute of Mining and Metallurgical Engineers was held in New York, Feb. 16 to 19, 1931. It consisted of the annual business session, twenty-six technical sessions at which 149 papers were presented, two round table discussions, two meetings of the Board of Directors, three meetings of Section Delegates, two formal lectures, four group dinners and 11 group luncheons, luncheon daily for members and guests, 20 committee meetings and conferences, the annual reception and dinner dance, an informal dance, a smoker-dinner, two meetings of the Woman's Auxiliary and a special program of entertainment for the ladies. Former members of the Rocky Mountain Club and friends lunched together at the Engineers Club on Tuesday. The proceedings of the Iron and Steel Division included four general technical sessions, an Iron Ore Round Table, the Howe Memorial Lecture, the Division luncheon at the Engineers Club Wednesday noon, a session each of the Executive Committee and the Committee on Nondestructive Testing, a luncheon each of the Committee on the Manufacture of Alloy Steel and the Blast-furnace Conference Group, and a dinner of the Committee on Physical Chemistry of Steelmaking. Dr. F. F. Lucas delivered the Howe Lecture, the title of which was "On the Art of Metallography." The Institute of Metals Division held three general sessions, its annual lecture, which was delivered by Dr. Arne Westgren and entitled "X-ray Determination of Alloy Equilibrium Diagrams," and a Division dinner at the Hotel New Yorker Thursday evening, at which Dr. G. W. Thompson was the principal speaker. The Executive Committee assembled at a luncheon on Thursday. A round table on Coal Land Valuations, a general technical session and a Division luncheon were held by the Coal Division. C. E. Bockus, President of the National Coal Association, made an informal talk at the luncheon which was held at the Engineers Club Monday noon. The Petroleum Division held six general sessions, including its annual production symposium. The annual dinner was held at the Engineers Club Thursday evening. A Gold Supply Symposium was the feature of the proceedings of the Committee on Mining Geology. This Committee also held a general session and a luncheon meeting. Sessions were held by other Technical Committees as follows: Mining Methods, 2; Mine Ventilation, 1 (besides which the Committee on Mine Ventilation Code held a meeting); Ground Movement and Subsidence, 1; Milling Methods, 1; Nonferrous Metallurgy, 1; Engineering Education, 1 (also a Committee luncheon); Non-metallic Minerals, 1, and Geophysical Prospecting, 2.

Jan 1, 1931

By E. W. McAllister

THE decision of the California Oil Umpire's1 office to accept well potentials established from subsurface-pressure data has brought to the attention of many operators for the first time the application of such data to production problems. This paper reviews the development and application of subsurface-pressure data in Kettleman Hills, where these data have been used in production work since 1932. The Kettleman Hills field was discovered in October 1928. The first subsurface-pressure surveys were made early in 1932 and by the middle of 1933 the two major operators in the field were making routine pressure runs in their respective wells. Shortly thereafter, these companies agreed to exchange pressure data, and later a third company entered into the agreement. This made it possible to analyze the effects upon the reservoir pressure of past production practices, which are discussed in the latter part of the report. It is interesting that many of the applications of subsurface-pressure data discussed herein were anticipated by C. L. Clarks and C. B. Kimberlin‡ in a reports dated March 1933. PRODUCTIVITY INDEX In the majority of individual well problems involving the use of subsurface pressure data, it is necessary to use a factor known as the "productivity index," which indicates the ability of a well to produce and represents the number of barrels of oil or oil and water per day that will enter the well bore for each pound per square inch pressure drop made opposite the producing interval of the well. The productivity index may be determined from pressure and production data for one or more rates of flow and a static or shut-in pressure survey or from production and pressure data for two or more rates of flow. Productivity indices may be based upon either net oil or total fluid production. All indices referred to in this report are based upon net oil. The value of the productivity index for Kettleman Hills wells decreases generally with time and it is not uncommon for the index to vary in value at any specific time for various rates of flow. The decline of the productivity index may be attributed partly to the loss of reservoir pressure. As. the reservoir pressure decreases, gas originally in solution is released from the oil, congesting the flow of fluids through the formation and increasing the viscosity and surface tension of the oil; thus the flow resistance of the fluids through the formation is increased, resulting in a decrease of the productivity index. For convenient reference, the productivity indices for each well are plotted against time and a curve is drawn through the points showing the trend of the average index value. Plotted on Fig. I are index values for five

Jan 1, 1941

By Henry F. Cooper, Lee Burford, John C. Thompson

In the past year or two, considerable effort has been expended to calculate the spherical wave propagation phenomena associated with explosions in a "hard rock" medium (Godfrey, 1969; McKay and Godfrey, 1969; Burford, et al, 1970). This effort was stimulated primarily by the recognition that early calculations predicted peak particle displacements which seriouly disagreed with field data. In most of the calculations mentioned above, rock was modeled as an inelastic continuum (see for example Isenberg, et al, 1970 for some recent results using "classical" elastic-plastic material property models). However, several investigators (Handin, et al, 1967; Cherry, et al, 1967) have shown that the simple classical yield surface models cannot simultaneously account for the observed brittle failures of intact materials under compression, extension and torsion. One approach to more correct modeling of dynamic rock behavior is to make the inelastic model more and more sophisticated. For ex- ample, recent experiments at the University of Utah (Swanson, 1969) have suggested possible modifications to the yield surface model that could better account for the ductile behavior of intact granite sam- ples under various states of stress. The approach followed in this paper proceeds in an entirely different direction. We want the physics which is built into our conception of rock to be as simple as possible while at the same time reproducing the most important features of rock's behavior. Therefore, we abandon the requirement that rock be treated strictly as a continuum. Instead we consider a "discontinuous" model in which one of the most significant characteristics of rock is treated..

Jan 1, 1971

By Herbert Haas

GEORGE W. HAWKINS, Tucson, Ariz. (communication to the Secretary*).-The paper by Mr. Haas will no doubt be followed with considerable interest, as it covers the power-plant problem in quite a comprehensive way, including not only the usual operating costs but also the fixed charges on the investment, and for load factors ranging all the way from 25 to 100 per cent. and fuel oil ranging from $1.25 to $2 per barrel. The very fact, however, that his paper does cover such a wide range of conditions, makes it the more imperative that any conclusion drawn from his analysis be very carefully considered for any specific case, for in making such analysis the type of prime mover and size must be selected for some one condition which might not be the proper selection had some other condition been assumed as the basic one, resulting in an unfavorable comparison under all conditions except that condition assumed. From the reasons given by the author for his selection of the large turbine units, it is evident he had in mind very high load factors, ranging

Jan 12, 1916

By D. L. King

The San Francisco Chemical Co. has been actively interested in phosphate mining since 1908. It was, in fact, the first company to make claims on properties in the western phosphate belt. From the period of 1908 to 1947, the company's phosphate operations were centered at their Waterloo property, five miles east of Montpelier, Idaho. A small tonnage of phosphate rock was shipped annually from their underground mines in that area. In 1945, the company started the first western open-pit phosphate mine on the slopes of Waterloo Hill. In 1947, they obtained an option and lease on the Beckwith Hills' deposits in southwestern Wyoming, some 25 miles south of Cokeville. While the operations at Montpelier and the Beckwith Hills are both open pit, there are many differences which suggest separate treatment in this paper. Structurally, the Waterloo Hill is the west slope of an anticline. The beddings dip from 20" to 35" to the west. Erosion has caused the footwall exposures (Well's formation) to appear in the upper areas as a series of apices, giving the outcrops a festooned arrangement. Dip faulting with subsequent erosion has induced gullies normal to the strike and resulted in eroded areas which separate the remnants of the

Jan 1, 1950

By William P. Blake

The literature of the occurrence of quicksilver-ore in the United States does not contain, so far as the writer is aware, any mention of the locality herein described. In the preliminary report * upon the resources of the transPecos region of Texas, von Streerwitz gives a long list of minerals observed as occurring there, but cinnabar is not mentioned. In the second report upon the same region † mention is made of the reported existence of cinnabarite in one of the mountain ranges north of the Sierra Carrizo and the Bofecillos, but the author adds: " In spite of my careful examination of the float, I have not yet found any traces of this metal (quicksilver) up to the present time." Prof. Dumble, also, in * Geol. Surv. of Texas, E. T. Dumble, 1889, p. 225 (first report). † Geol. Surv. of Texas, E. T. Dumble, 1890, p. 713 (second report)

Jan 1, 1896

By Jesse Jones

1. BRINELL tests at progressively increasing temperatures are given for a representative lead-base and a representative tin-base babbitt, showing that the former has superior resistance to deformation at the working temperatures of bearings. 2. Small squares of bearing bronze, tinned and then babbitted with a representative lead-base babbitt and a representative tin-base. babbitt were subjected to compressive loading. The lead-base babbitt showed less average compression than the tin-base babbitt. Compression did not materially increase the Brinell hardness of the babbitts. 3. A process and a tool are described for giving smoother and more accurate surfaces to bearings than has heretofore been possible. The following experiments have recently been carried out in the chemical laboratory of the Westinghouse Electric and Manufacturing Co., Pittsburgh, Pa. While the work is incomplete, it is described at the present time because data on the comparative merits of lead-base and tin-base babbitts are of interest in connection with the present shortage of tin.

Jan 8, 1918

Lieutenant Gorman was born in Ottawa, Canada, in 1888, and after preliminary education at Ottawa University and the Ottawa Collegiate Institute, he graduated from McGill University in 1913, as a mining engineer. After graduation, Mr. Gorman spent several months in a tour of Europe. The year 1909 was occupied at one of the Canadian graphite mines, and the summer of 1911 he spent with the Granby Mining, Smelting & Power Co., Ltd. At the time of his admission to the Institute, in 1914, he was sampler with the Dome mines at South Porcupine, Ontario. His next engagement was at the Creighton mine, Ontario, but in 1916 he joined the Canadian Expeditionary Force and went to England. A letter written by Major Ritchie, commanding the Second Tunnelling Company, to Lieut. Gorman's mother, contains the following words. Tommy was lulled at our headquarters by a nine-inch shell which struck the officers' quarters. The Hun had been shelling a small village close to the camp with a long-range gun and a shot fell into our camp. Tom was killed instantly by the concussion. He mas buried this morning with Military Honours in the military cemetery close to our camp. Tommy was an efficient officer and a good soldier and his loss is very keenly felt by the officers and men of this unit. Lieutenant William Hague William Hague, First Lieutenant Co. F, 116th Regiment of Engineers, and a member of the Institute since 1906, died of pneumonia in France, on Jan. 1, 1918. Lieutenant Hague was born in Orange, N. J., Mar. 31, 1882, the son of the late James D. Hague, a distinguished mining engineer and a life member of the Institute, and Mary Ward (Foote) Hague, of Guilford, Conn. He attended Milton Academy, Milton, Mass., and was graduated from Harvard in the class of 1904. He was a nephew of the late Arnold Hague, of the United States Geological Survey. Seven years ago he married Elizabeth Stone, of Milton, who with their son, James D. Hague, six years old, survives him. Lieutenant Hague's mining career began immediately after his graduation from Harvard, when he went to Bisbee, Ariz., to be a surveyor's helper in the mines of the Copper Queen Consolidated Mining Co. In 1905, he became an instrument man, being engaged on the construction work of the Copper Queen smelting plant at Douglas, Ariz. In the latter part of the same year he was transferred to the geological depart-

Jan 1, 1920

By Fred D. DeVaney

MINNESOTA taconites are extremely hard, and fine grinding is required to produce an acceptable concentrate. To reduce grinding costs, waste material is rejected by magnetic separators as soon as it is liberated. Cyclones are now used in all Minnesota taconite plants to close the grinding circuits. Erie Mining Co. installed its first grinding section at Aurora, Minn., in 1948-a 9 ½ x12-ft. mill and a fine grinding section consisting of a 10 ½ x12-ft ball mill in closed circuit with a duplex 60-in. spiral classifier. Concentrates from the magnetic cobbers treating the rod mill discharge passed directly into the classifier; the ball mill discharge was also treated in magnetic separators and the concentrate from these machines also went to the spiral classifier. Both concentrates passed through ac demagnetizing coils. It is axiomatic that for proper classification the material in suspension must be well dispersed, and it follows that magnetic concentrate must be almost completely depolarized if classification is to be successful.

Jan 8, 1957

By Reino Kurppa

The Pyhäsalmi mine of the Outokumpu Co. is located in central Finland (Fig. 1). The deposit was discovered in the autumn of 1958. Construction of the mine was started a year later, and production began on Mar. 1, 1962 (Fig. 2). At present, 750,000 metric tons (mt) of ore and a nearly equal amount of country rock are mined annually. Slightly over one-half million tons of various concentrates are produced per year, of which 85% is pyrite concentrate, 10% zinc concentrate, and 5% copper concentrate. The pyrite concentrate is treated in the company's pyrite smelter,1 yielding elementary sulfur, sulfur dioxide, and iron-oxide cinders, as well as electric power. Thus all the sulfides, totaling 75% of the ore, are of economic value. This is a fact which had a bearing on the development of the stoping method. GEOLOGY The ore is of breccia type containing fragments of country rock of varying sizes. It is coarse-grained pyrite ore containing sphalerite and chalcopyrite as a matrix between the pyrite grains. Only small amounts of pyrrhotite have been observed in certain marginal parts of the orebody. The ore averages 0.85% Cu, 3.0% Zn, 38% S, and 33% Fe. The orebody extends from the surface down to at least 500 m, which is the lowest level from which present information has been obtained. Horizontally, the orebody is 650 m long. It is 75 m wide at its central part, narrowing towards the ends (Fig. 3). At a depth of 115 m, the orebody suddenly narrows down to a thickness of 25 to 30 m. In the northern part of the orebody, the dip is 50° to 70°, but elsewhere it is almost vertical (Fig. 3).

Jan 1, 1969

By Albert Burch

The theory of the present law with reference to lode locations contemplates the existence upon the surface of mineral-bearing veins which have clearly marked boundaries, and which can be so readily traced that a locator may immediately mark the boundaries of his 600 by 1,500 ft. claim in such a way that the vein will 'pass through both of its end-lines. It also supposes that, having discovered such a mineral-bearing vein, the locator will at once post a notice upon such discovery, mark the boundaries of his location in such a manner that they can be readily traced, and from that time forward have absolute title to the ground embraced within such boundaries, as against every person except the United States. For initiating title to placer ground, the law presupposes the discovery of a valuable mineral deposit; but not necessarily in place, as in the case of lode claims; and the location must be made to conform "as nearly as may be" to the legal subdivisions of the United States public land survey. When the placer law was extended to include the acquisition of title to oil lands, no exception was made as to the necessity for the discovery of valuable mineral in advance of location! Practice under the Present Law Nature did not make all veins clearly defined and readily traceable upon the surface; nor did she, in all cases, leave upon the surface which overlies important ore bodies such outcrops as would in them-selyes be considered valuable; and the citizen of the United States has in the past endeavored to steer his course between the mandates of the law and the limitations of nature. Until quite recently, it has been possible to obtain a patent for any-

Jan 1, 1915

By Donald W. Gentry

The recently established SME-AIME Education Board has completed its first full year of operation, and its six constituent committees-Accreditation, Career Guidance, Continuing Education, Educational Statistics, and Scholarship-have been extremely active in identifying and initiating programs to serve the educational needs of the Society of Mining Engineers and its members. The Continuing Education Committee-primarily concerned with the needs and problems associated with providing a continuing education program for SME members-is responsible for: (1) determining the need for short course offerings; (2) developing needed courses, along with new means and opportunities of presentation; and (3) scheduling and evaluating course presentation. In response to this charge, the committee has sponsored two short courses at the SME-AIME Fall Meeting in St. Louis and three short courses at the AIME Annual Meeting in Denver. Its major effort, however, has been directed toward the 1978 SME-AIME Fall Meeting to be held in Orlando, Fla., where 18 days of short-course instruction have been scheduled. A portion of these courses will be presented prior to the meeting, with the remainder to be presented in Nassau, Bahamas, immediately following the meeting.

Jan 7, 1978

During the year this Committee has had the benefit of the services of 75 Committee members, resident in the various States of the Union and in foreign countries, 10 of them representing us abroad. A number of plans for awakening the interest of possible new members have been carried out and the results have been very gratifying. The comparative results for 1913 and 1914 are as shown in the following table: 1913 1914 Applied for membership 630 946 Elected 450 1,006 Accepted election 433 921 When it is remembered that the depression following the outbreak of war in Europe has had more serious effect on the mining industry than almost any other, these results cannot be regarded as anything other than very encouraging. Because of the unsatisfactory conditions still prevailing it will doubtless be difficult to make even as good a showing next year. It is considered, however, that the function of this Committee is not merely to secure new members, having no regard for other than numbers; its true function is to exercise a proper supervision over the growth of the Institute, building it up in those fields in which it is weak, and directing its growth in such a way as to make it most effective in fulfilling its proper function as the national organization representative of the mining profession. The plan of inviting the alumni of the leading mining schools to apply for membership, which was initiated last year, was completed this year, with the exception of one or two schools, notably the University of California, from which we have not been able to obtain a list of alumni. With these exceptions we have now extended to the graduates of all the important mining schools of this country, and several of those abroad, an invitation to apply for membership in the Institute. It. is not thought desirable to repeat this invitation too frequently, and it is therefore suggested that this field be left alone for a year or two, when, if the mining industry experiences a marked revival of interest, it will be well to send out a second letter to the same men.

Jan 4, 1915

By Cyril S. Taylor, Junius D. Edwards

Magnesium is the lightest metal used for structural purposes, for which reason perhaps more than usual interest is attached to measurements of its density. Although the density of solid magnesium has been det,ermined frequently, no measurements of the density of the liquid metal are available. Because of unusual experimental difficulties in measuring the density of the liquid, only a limited number of measurements of good precision were secured. The results, especially the value for the crystallization shrinkage, are of great interest in connection with the casting of the metal. A number of samples for these measurements were made available through the courtesy of the American Magnesium Corp. They were in the form of extruded bars 3/8 in- in diameter and several were of exceptional purity, as indicated by careful analyses. Table 1 gives the density values (at 20" C.) for magnesium of varying degrees of purity. The density was measured at room temperature by comparison of the weight in air, and when immersed in distilled water. The necessary buoyancy corrections were applied, so that the density could be expressed in absolute measure—grams per milliliter. The effect of the buoyancy of the immersed suspension and the surface-tension pull of the water upon the suspension were eliminated from the results by a preliminary weighing of the suspension immersed to the working depth. Great care was necessary to prevent the introduction of a significant error by the formation of gas bubbles upon the clean magnesium surfaces; these are sometimes very minute and easily escape observation. They may be detached by raising the specimen from the water and again immersing; this should be done just prior to completing the weighing. Their formation may be almost entirely prevented during a measurement by previously immersing the specimen in a solution of paraffin in petroleum ether. The thin film of paraffin remaining after the evaporation of the solvent prevents wetting of the magnesium surface by the water. In one such determination, the paraffin coating on a 22-gm. Specimen

Jan 1, 1923

By Junius D. Edwards, Cyril S. Taylor

Magnesium is the lightest metal used for structural purposes, for which reason perhaps more than usual interest is attached to measurements of its density. Although the density of solid magnesium has been det,ermined frequently, no measurements of the density of the liquid metal are available. Because of unusual experimental difficulties in measuring the density of the liquid, only a limited number of measurements of good precision were secured. The results, especially the value for the crystallization shrinkage, are of great interest in connection with the casting of the metal. A number of samples for these measurements were made available through the courtesy of the American Magnesium Corp. They were in the form of extruded bars 3/8 in- in diameter and several were of exceptional purity, as indicated by careful analyses. Table 1 gives the density values (at 20" C.) for magnesium of varying degrees of purity. The density was measured at room temperature by comparison of the weight in air, and when immersed in distilled water. The necessary buoyancy corrections were applied, so that the density could be expressed in absolute measure—grams per milliliter. The effect of the buoyancy of the immersed suspension and the surface-tension pull of the water upon the suspension were eliminated from the results by a preliminary weighing of the suspension immersed to the working depth. Great care was necessary to prevent the introduction of a significant error by the formation of gas bubbles upon the clean magnesium surfaces; these are sometimes very minute and easily escape observation. They may be detached by raising the specimen from the water and again immersing; this should be done just prior to completing the weighing. Their formation may be almost entirely prevented during a measurement by previously immersing the specimen in a solution of paraffin in petroleum ether. The thin film of paraffin remaining after the evaporation of the solvent prevents wetting of the magnesium surface by the water. In one such determination, the paraffin coating on a 22-gm. Specimen

Jan 1, 1923

By A. F. Frederickson

Rapid advances in any branch of science often follow the development of new instruments or techniques which permit the scientist a closer look at the material in which he is interested. With the development of the polariz¬ing microscope, modern petrology was born. The resolving power of the microscope, however, was not great enough to enable the geologist to dis¬tinguish or identify the material now known to be minerals which constitute the bulk of the rocks known as "clays" and laterites. The discovery of X-rays and the development of powder X-ray diffrac¬tion techniques provided the extra resolving power necessary to get "a closer look" at the minerals in the clays and laterites. These techniques are largely responsible for the great strides made in the past two decades in the identification of the clay, sesquioxide and hydroxide minerals. To obtain an X-ray diffraction. pattern of a mineral or rock is relatively a simple procedure, but to interpret this pattern in terms of crystal structure or min¬eral identity is quite another matter. It has taken the combined talents of physicists, physical and colloid chemists, mineralogists, and geologists to unravel the identity of some of the minerals in these complex rocks and, as this symposium will indicate, many more problems remain to be solved. To assist in the identification of these minerals, we have the ever-useful microscope, which, is supplemented by the development, only in the last ten years, of differential thermal techniques and the powerful and costly "eye" that enables us to see the shapes and sizes of extremely small particles -the electron microscope. To this array of equipment must be added such gadgets as supercentrifuges, spectrographs, and the apparatus necessary for chemical analytical work. Obviously, not only is it difficult for any one man to master all of the techniques to the point where he can do competent re¬search, but also few institutions are able to provide the high capital outlay for purchase and maintenance of suitable equipment. Here we clearly see that if this equipment is to help us solve our many problems, a close co¬operation of specialists from various institutions and industry is essential. This, however, is less than half the problem. If the geologist is going to learn to intelligently find, and the industrialist to intelligently and eco¬nomically exploit the materials that constitute a large part of the mineral wealth upon which our way of life is based, we must get a better insight into

Jan 1, 1952

The Library of the above-named Societies is open from 9 A.M. to 10 P.M. on all week-days, except holidays, from September 1 to June 30, and from 9 A.M. to 6 P.M. during July and August. The Library contains about 55,000 volumes, including sets of technical periodicals and the publications of scientific and technical societies. Members of the Institute, with few exceptions, are forced to spend a portion of their time in "localities isolated from sources of information. To these the Library can render valuable service through correspondence; letters requesting information will receive special attention. The Library is prepared to furnish references and copies of articles on mining and metallurgical subjects; to determine the existence of mining maps, and to furnish general information as to the geology and mineral resources of all countries. All communications should be made as definite as possible so that the information received may be what is desired and not include collateral matter which may not be of interest. The time spent in searching for such collateral matter will be saved, and the information will be sent more promptly and in more usable shape. The members of the Institute can be of service to ,the Library by forwarding copies of mining reports, maps privately issued, and similar material, which will be classified, indexed, and made available to other members. Suggestions for additions to the Library, either by purchase or personal solicitation as gifts, will be welcomed. It is hoped that members while in the city will use the Library freely, and assurance is given that most careful service will be rendered to then.

Jan 7, 1915

By Granville S. Borden

MANY complaints have been filed by mine prospectors, explorers and producers about inequities in mining taxation. They have insisted upon improvement, and in the past 35 years there has been some progress. Many of the best taxation provisions made to date are those contained in the Revenue Act of 1951. Mining economics presents special problems, a fact even recognized by many textbooks. Certain provisions have been made to take care of mining taxation rights, but these have been made by Congressional act and do not represent basic, constitutional, guarantees. Despite special provision, in the form of depletion allowances, there remain injustices. The industry faces the problem of gaining adequate income tax allowances for exploration and development expenditures, operating losses, and bonus and subsidy payments. Problems in mine taxation arose soon after the adoption of the 16th Amendment. This amendment gave Congress the power to impose income taxes. Supreme Court decisions against a number of mining companies held that Congress, under its power to tax income, could tax net operating revenue before depletion allowance was deducted. The court also ruled that the right to deduct depletion is a matter of Congressional permission. There is no statute provision permitting mining stockholders to recover their investment out of dividends while the mine is being operated. The Supreme Court did not recognize that part of mining proceeds are actually amortization of the cost of mineral rights. Both these omissions stem from failure to recognize that by its very nature mining consumes its mineral rights and therefore that a part of gross proceeds are not income but recovery of capital. Suppose a Congress unfriendly to mining interests repeals the provisions that allow deductions for depletion. Under such a situation assume that a corporation buys a mineral deposit for $300,000. They mine the deposit and earn an operating profit of $500,000. At the current rates they would pay a Federal Income tax of in excess of $250,000. This venture results in a loss of $50,000 as shown in the table below. For the example given the absence of depletion provisions in income tax law would turn ore into waste rock, because the word "ore" connotes commercially mineable rock. [ ] In retrospect the conclusion is clear: If the Supreme Court had recognized that a part of mining proceeds represent in reality sales proceeds of mineral rights, then profits derived from such sales would have been taxed at the favorable long-term capital rates, instead of being taxed at the high normal, surtax and excess profits rates. It is a question whether percentage depletion allowances offset this tax situation. History The history of depletion allowances has been one of general improvement. The original act did not include depletion, but an allowance at the rate of 5 pct of gross proceeds was provided in 1913. The Acts of 1916 and 1917 allowed depletion upon cost of property, and in 1918 the law was further changed to permit depletion upon cost, or market value as of date of discovery. In 1932 metal, coal and sulphur properties were permitted to elect depletion in percentages of gross income, limited to 50 pct of net income, in lieu of cost depletion. Shortly thereafter the rule was changed and percentage depletion is now allowable in any case where it is higher than cost depletion. Since 1942 percentage depletion allowances have been extended to cover many nonmetals, and in 1951 the rate for coal mines was increased from 5 to 10 pct of gross income. It is interesting to note that these allowances have been retained, and even

Jan 1, 1952