The Daily Alaska empire Newspaper, February 24, 1945, Page 8

PAGE EIGHT THE DAILY ALASKA EM PIRE- - JUNEAU, ALASKA SATURDAY, FEBRUARY 24 witnesses with Tax Consultant Prof. Alfred Harsch ca questioning in the closing minutes Installment Three of the hearing scheduled for 2 o'clock today, with Attorney R. E. previous appearing only as an inquiring voice from the gallery, slated to speak his opinion on the measure, and in turn be ques- tioned The hearing afternoon with President of the cociation, back to answer quiries from the Senators. He was followed by Mr. Stines, who, was supplanted by J. A. Wil- liams, General Superintendent of the Alaska Juneau Gold Mining Company. Hint Of Changes First hint of changes to come in the Income Tax bill came from Senator N. R. Walker, when asked Johnston for his reaction to the measure should the Gross Gold Tax provisions be amended to cut the e from 3 per cent to per cent, with a $500,000 exen npllun allowed, for the period of the next biennium only. Mr. Johnston replied that in his| belief the measure would be ‘“defi- nitely improved” by such We are not against the bill in its STINES RAPS ATINEQUITIES INGROSS TAX Williams Describes Alaska Juneau Problems at Senate Hearing thrill-packed for ex- me Tax Bill Alaska Senate afternoon, with por- for 40 currently or the is med yesterda Charles Johnston, Alaska Miners As- more in- T the struggle Inc the Two of serial of the epic istence of an was run off Chamber yesterday the principal starring r trayed by Norman C. Stines, vears a mining man Alaska Area Representative f War Production Board From the rap of Senator O. D. Cochran’s gavel, calling the Senate Ccmmittee of the Whole together, yesteray's section of the public hearing on Senate Bill No. 12 was turned over to gold-mining industry Episode Today’s Special SCHENLEY BLACK LABEL, fitth >3-4 Juneau Liguor Co. PHONE 498 The Indispensable Slack Suit 7 9 4 4 4 2 2 4 g P! Superbly tailored ) o // /l in advance Spring colors OO0 1009, Wool £ 16.95-19.50 / @ @ @ @ '5 ’ # “ 7 @ @ @ [ @ @ 8 @ @ fi; @ ’ @ @ @ “ g @ 7 (¢ 1A :é ’? (t 55 @ 13 ‘ @ ¢ $§ 4 @ 4 (¢ @ ;2 5? { M‘x AN OO [ SN S CI S SO FOR THOSE WHO CANNOT ’ SHOP DURING REGULAR BUSINESS HOURS ‘e YVONNE'S HOURS EACH MONDAY ARE FROM 11 A. M. TO 9 P. M. ; onmens AppareL \m Cadt Baranof Hotel Blnlding ; é o o N N o N o o o o o N o N Y o o oV o e oot Voo Vot No Voo oo Vo ooV oN o Voo Voo Vo ook e R A 2 2 A A A2 % %% 2 22222 oot s N0 o o tot sl g oot S0t R ot Ot o NS O, WE FEATURE Two Prompt Deliveries Daily IN JUNEAU 10:30A.M.—2:30P. M. and One Morning Delivery TO DOUGLAS at10:30A. M. PLEASE PHONE YOUR ORDERS IN EARLY at the PHONE 704 Juneau Deliveries— 10 A. M. and 2 P. M. Douglas Delivery—10 A. M. T led back for Robertson, | in | he | action. present form,” Mr. Johnston ans- wered a query from Senator H. H. McCutcheon, as to whether it was the gross tax or the net income tax feature of the bill that the mining industry opposed In reply to Senator Allen Shat- tuck, he stated his opinion Ithere would surely not be gold production in Alaska 11945 than there was in 1944. more during /| Talks From Experience | Mr. Stines opened his statement | ywith an outline of his mining ex- puxenuv referring Yo his part in the opening of the Nome gold fields now operated by the |Mining Company, and the estab- lishment and operation of the Fair- banks Exploration Co. He answered Senator McCutcheon that he is now interested in and mining properties in Alaska, interested in a large post-war Imining development. He later said |that an unfavorable tax burden might have considerable effect on [llm( planned future development. Mr. Stines pictured the benefits derived by communit of the |Territory from the establishment nI large mining enterprises, with |large payrolls, most of which work relatively low-grade ores. He con- trasted them with small high-grade {operations employing but a few |persons and distributing only minor benefits within the Territory. He lucidly explained the problems |of mining operations and their |relative costs, using as an illus- |tration the vast open-cut iron mines of Minnesota, on one hand, and the placer diggings common in {Interior Alaska, on the other. The |“severance’ theory for taxing re- source-exhausting industries is not the burden where it is applied in Minnesota, he claimed. There, the |value-range of the iron ores is small and the price of the product is established in an open, com- petitive market, permitting the producer to “pass the tax along,” he said. In gold mining, especially, he pointed out, there is a very great range in ore values and the price of the product is fixed. Inequities Stines demonstrated by figures the inequities that can exist under the gross tax on gold. He showed a possible range of the 3 per cent gold tax, when translated into a tax on net profits, of from less than 10 per cent to more than 60 \per cent under possible operating conditions. The gross tax is type of industry "hu maintained “throttling the you really need,” the burden of the tax falls heaviest on the large | operations ig]dd(‘ grounds on margin. The tax, )|a discouraging | which work the lo a small profit he declared, has effect on the large investments necessary for {such production. It is paying for |the privilege of developing the |country, he said. | Stating himself “an optimist | Where gold mining is concerned,” | Stines concluded that the produc- | tion of gold in Alaska has ‘“not | nearly reached its maximum.” But, | he pointed out, the industry now at low ebb with many lems facing its recovery. of the type necessary placer operations in Alaska, |not be available before 1947, |the earliest, he said. Senator Walker explained that capital at effort to obtain for the Territory a reasonable revenue from mines. What do you think, he asked Mr. Stines, of the fact that in the year 1935, just before the gross tax was enacted, the Territory col- |lected from gold mines in the Second Division less than $5,000 ‘and from the Fourth Division only about $24,000? There must have \been something wrong with your tax collecting system, was Stines’ answer. For Reasonable Revenue | The Legislature’s problem should xb“* the mining man continued, to find some other, more equitable means for obtaining a reasonable revenue from the Territory's mines. Pointing to the fact that all types of metal mining are exhaustive, he asked: Why is there not a “sever- ance” tax on non-ferrous minerals? “It seems to me that the gros: gold tax is more an ‘opportunity tax.” Senator McCutcheon asked Mr. Stines “Would you be for the net income tax provided in this . bill, if the gross tax were abolished?” Very definitely “yes,” was the answer. Williams Gives Evidence Mr. Williams gave evidence taken from the annual reports of the Alaska Juneau Gold Mining Co. The Alaska Juneau, he said, is a big mine, with big production costs, operating on low-grade ores. Recent ore values averaged 96 cents per ton, he stated, comparing that figure to the old Treadwell mine, lin its day considered a low-grade |project. The Treadwell ores at the present price of gold, would have had a value of $4.20 per ton. Many millions of dollars were {required to put the Alaska Juneau into production, Mr. Williams said. In the 28 years since 1917, when the mine first went into large-scale production, 90 million tons of ore have been milled. During the {10 years the mine was unprofitable and -during that same period 13 'millions of dollars were paid out /in wages alone. The increase in the price of gold had the effect of increasing the mine’s ore reserves land made feasible the acquisition and development of the Persever- \ance properties. Increased costs since, however, are and have been a threat to the working of marginal ores, and once a heavier pay-streak is followed up is no turning back to pick ’up lhe lower grade stuff left be- that | Hammon | owns some | and ! that he is connected with a group | the gross tax on gold had been an ! st | hind. There is no high-grade ore in the Ala Juneau, contrary to |popular opinion, Mr. Williams de- |clared. There is but very little ore that can be used to “sweeten” the |average | Speaking directly from the figures, Mr. Williams stated (hul |the Territorial taxes alone, paid |during the year 1942 (when trans- scribed into percentages of operat- ing profit, after payment of taxes, but before deductions for depletion land depreciation, had amounted to nearly 20 per cent—an from approximately 4 per cent in 1936, before the enactment of the |3 per cent gross levy. During the |same years total taxes paid by the [mine, on the same calculating basis, T from 18 to 63 per cent of op- ting profit tax | increase | FOUR BILLS INTRODUCED UNDER WIRE Labor Measure Would Put Benefits for Unem- ployed Higher With the fortieth (l'l} of the Ter- ritorial Legislature’s Seventeenth Operates At Loss Toward the end of 1942, began to operate at a the mine | loss, he | stated, and in 1943 an actual loss |to get four more measures into the | yOLUNTEE of $83,000 was sustained from the | operations et in that same year, $41,000 was paid in the form of | 3 per cent gross gold tax to the | Territory, plus an additional $30, OO()‘ in Federal taxes. i Reopening of the Alaska Juneau | Mine, Mr. Williams concluded, wxll‘ depend on what costs are. Had | there been a gross tax on gold in | 1918, there would have been no Alaska Juneau Mine. After the conclusion of Mr. Wil- liams' testimony, during which Senator Walker made the dis- closure that the A-J paid only about $1,200 annually in taxes to the City of Juneau, Prof. Ha h was again called to the fore. He vas questioned by Senator Edward D. Coffey in regard to provisions | for taxing partnerships and the | selections available to the taxpayer for useé of joint or separate returns. Prof. Harsch answered in the firmative when asked if the effects of a wife would be liable under a joint return. Former Federal In- | ternal Revenue man, O. S. Suilivan, was also quizzed on similar points. | Information Sought Senator Coffey also sought in- formation from the Professor re- garding returns on installment sales ! of real property, pointing out that Senate Bill No. 12 had special provision for personal property sold on installments. Prof. Harsch re- plied that real property sold under such circumstances might be ex- pected to be provided for under administrative regulations. The answer drew from Senator Cochran the comment that bureaus are fa- mous for their immense numbers of | regulations having the effect of! laws. Mr. Robertson’s was again yes- terday the first voice to be heard from the gallery proper. He pointed a question at Prof. Harsch regard- ing the omission, from the proposed Territorial Income Tax Law, of a Federal Code provision | for the carrying over and back of operat- | af- {ing losses during a five-year cycle. That provision, stated, was put Mr. Robertson into the Federal | law to secure a more equitable ef- | fect. Prof. Harsch replied that it had l:wpuxpmely been left out of Senate prob- { Draglines, | |rates imposed, which were thought to most : sufficient Bill No. 12 because of the low tax protection against any will | great injustices. In reply to another ‘oi Mr., Robertson’s queries, Prof. Harsch stated his opinion that persons employed by outside sources such as the Federal Government, and working within the Territoxy only for short periods, would be |subject to the Income Tax only if they were actually assigned to stations in Alaska. Such a problce: is ordinarily so decided by regula- tion, he said. Following the brief questioning, Prof. Harsch made a brief state- jment to the effect that his esti- mates of returns from the Income Tax, given Wednesday, had taken into account the great decrease in gold mining in Alaska since 1941, the year on which he had based his calculations. JFhat point had been emphasized in previous in- terrogation of mining industry wit- nesses. ——————— HOSPITAL HOTES Albert Stern, a medical patient, has been discharged from St. Ann’s Hospital. Mrs. Virgil Bolton and baby hoy have left St. Ann’s Hospital for their home. Eli Ray has been discharged from St. Ann’s Hospital after receiving medical attention. John E. Smith, a surgery patient, has been discharged from St. Ann's Hospital. Mrs. C. Larsen, of Skagway has been admitted to St. Ann's Hospxtul for medical attention. John Kasko, a medical patient, has been admitted to St. Ann's Hospital. James H. Lee has been admitted to the Government Hospital for | medical carc SONS OF NORWAY MEETING TONIGHT The Sons of Norway will meet to-| night at 8 o'clock in the Odd Fellows Hall and the newly elected officers| will preside at the business session for the first time. There will be| initiation after which dancing will be enjoyed and lunch will be served. “ B | | NOTICE TO AUTOISTS! Beginning now, cars without licenses will be taken in and fines |assessed. Session a week away, the deadline for introduction of bills, Represen- | ‘uml.mm\ to meet them in a series of games to be played at Skagway | | ZELMA GROSS to decide who will meet the Ketch- GIVING DANCE kan team for the Southeast Alaska Championship. At a special meeting called by the Douglas School Board last evening, ranged on the Don Jac, owned by Jack Burford. In charge of the boat | is Capt. Ralph Mortenson. Earl Mil- | ler was selected as coach to attend District of the First Division, and an Zelma Gress is giving a party to- |night in the Gross penthouse atop .lhc 20th Century Building. Aboul |50 of her school friends have been mnled and dancing will be enjoyed duung the ev transportation was ar- | ‘l’hl‘ trip with the boys. Leaving | bright and early this morning, the team should arrive in Skagway this | evening and rest tomorrow for the ‘1xr~| big game Monday night. It is | planned that six days will be re- quired before their return. Baoys | leaving were Bach, Kibby, Jim and Dick McCormick, Savikko, Herb and| Louis Bonnett, Pusich, Devon, Kel-| | sey and Havdahl, also Mortenson| and Miller. e | Normally in medieval drama, all |parts were taken by men, though in | Pante these ate sdberdes bt g lmm on the stage prior to 1550. DOUGLAS NEWS tatives hustled yesterday afternoon | hopper. Introduced were, House Bill No. 68 by the Committee on Labor, ex- tending the benefit provisions of the | Unemployment Compensation act; House Bill No. 69, by Representative | Bess Cross, by request, extending pro- visions of laws on juvenile delin- quency to natives; House Bill No. 70, by Peterson, McCutcheon and Taylor, requiring the election of city ! magistrates, and House Bill No .71 by Johnson, to prevent feions from carryiing concealed weapons. The labor bill provides for an in- crease in maximum benefits from $16 a week to $20 a week and a raise | in minimum from $5.00 per week to $8.00. The time in which benefits may be received week unemployment, benefits may | be <-];\imt*d. Representative Oross's bill to amend the juvenile laws would fol- |low the trail of Equal Rights leg- islation passed earlier in the session and would extend provisions of the act to natives, cases involving which | had heretofore been handled by the | Office of Indian Affairs. The bill by Third Divisioners Pet- | erson, McCutcheon and Taylor would require incorporated cities with pop- ulations exceeding 1,500 to elec! magistrates at municipal elections ! at minimum salary of $1,800 a year, providing also for definition of their duties and powers. Sl gupral Ly SHRINE DANCE TONIGHT The first of the Juneau Shrine | Club’s formal dances, highlights in f the social life of Juneau, wiil be | given tonight in the Scottish Rne Temple. The dances are invita- ticnal to Mason and Eastern Star members and their friends. Dancing hours are from 10 o'clock to o'clock. e — - e o 0 0 0 0 0 0 o WEATHER REPORT (U. S. Weather Bureau) e o o Temperature for 24-hour period enling at 7:30 o’clock this morning o o o In Juneau—Maximum, 41; minimum, 36. Precipitation, .53 of an inch. At Airport—Maximum, 42; minimum, 35. Precipitation, .05 of an inch. ® o o 0 0 0 0 0 o TOMORROW’S FORECAST e o o Rain and wind tonight and Sunday, with wind in- creasing from 30 to 35 miles per hour. Highest tempera- ture, 42°; lowest, 38°. IIII||||IIII|||I|IIIIII||IIIIIIIIIIIIIIIIHIIIIII||IIIIIII|I||IIlIIIIIIIIIIIIIIIIIIIIIIII"" is also extended | from sixteen weeks to twenty weeks ! and it is also provided that after one | city | i S WANTED AT GYM | A call has been made by Arne \ghud&hl[l for volunteers to assist in ‘mstallmp new balconies in the Douglas gymnasium. Workers will meet in the Nat as early after din- ner as possible. Construction is | under the supervision of Carl Carl- | son. GIRL FOR CARMICHAELS Word is received that a baby pirl has been born to Mr. and Mrs. Bur- {ford Carmichael at the San Jose | Hospital, California, February 15. | The infant daughter weighed eight | pounds and one-half ounce and has !been named Claire Elizabeth. She | | joins two sisters. . Mrs. Carmichael | is the former Elizabeth Sey. SCHOOL BOARD MEETS Members of the Douglas Se¢hool ' Board and Miss Eleanor Warren met last evening to make arrange- ments for the basketball team’s trip to Skagway where they are t6 meet | the Skagway High School’s tedm for | the Northern District championship. Ink—in the world’s most .2 51"—combine to give you i exclusively for the ™ DOUGLAS HUSKIES TO MEET SKAGWAY TEAM | The Dou High School basket- ball team received a radio of con- gratulations yesterday afternoon |from the Skagway High School's champions of the Northern n s | team EE WHAT WE Plumbing ranted to be in good condition. EAU, “wanted” p «you neyer need a blotter! 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PARSONS ELECTRIC CO. . war- IlIIIIIIIllIIIIIIIllllllIIIII||IIIIIIIIIIIIIHIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII|III HIHIIIIIIl]IIIIlIIIIIIIIIIl|||I|||IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII|lIIIIlIIIIlIlIIIh. ATTENTION LEGIONNARIES: We are entertaining all the men of GASTINEAU CHANNEL who are home on Furlough so be there MONDAY NIGHT, FEBRUARY 26th, at 8 at the American Legion Dugout. Entertainment (Signed) JOHN MONAGLE, Chief of Police. Eats Refreshments