Show WHAT THE COAL PRODUCER MUST GET TO AVERT ECONOMIC LOSS IN BUSINESS te B by y thomas T brewester the proposition that essential industry is charged with public interest is acceptable if accod accompanied with the proposition that capital is entitled to preservation and a fair return for its use because it is obvious that if the natural resources industries are not maintained in a healthy and self perpetuating condition the cornmon commonwealth is impaired A recent bulletin of the census department states the capital invested in the bituminous coal industry to be r 1 and assuming this to be a correct basic preme ise pro rated on an annual production of tons we have a capitalization of per annual ton adhering to the proposition that capital is entitled to preservation and a fair return for its use and with regard to the fact that dividends are subject to surtaxes sur taxes a current annual dividend rate of 8 per cent on capital invested in in coal al is as low lov as can be effective in keeping capital in the industry and as the corporate income will be suba subject act to an income tax of 15 per cent in order to derive a current distributable distributable profit of 8 per cent the coal industry must have ve net earnings equivalent to per cent per annum pon the capital invested or of annual profit aich which pro rated on 1 0 tons demonstrates an merest charge equivalent to c per ton assuming that one third of the stated invested c capital or represents investment in reserve and unde aped loped coal lands and the balance represents investment in coal development and equipment ot of operating aerating De rating mines of an average life of say twenty years and therefore le must be replaced during that time and without regard ard to the fact that the expense of development and equipment of such new mines will be much greater than that of with ith the feces th those ose now exhausting we are faced w sty of annuala fund of 01 say 5 3 er providing replacement P cent cp an 1 0 on the capital invested therein or say wh i loyc pro rated ted on tons demonstrates as the depreciation and necessary essary reserve to replace current depoeti d inon m demonstrated fiction dem this 11 is added to the above coal C co 0 tl als 8 nt and d general manager mt olive staunton mo in cal aa age alov 24 terest char charge ge gives as necessary to preserve capital and pay a fair return thereon to the above should be added a provision for administration and selling sellin expenses which may be moderately stated as an average 1 1 requirement of per ton making Z a total of per ton this is exclusive of state and local taxation of losses from bad debts of any reserve for abnormal catastrophe and contains nothings nothing to cover indemnity for killed and injured workmen hence if the basic premise be correct it is obvious that to conduct the coal industry without great ultimate economic loss the managers of coal properties as trustees for the capital in trusted to them and as trustees for the public good must collect at least 1 per ton over and above the current expenses for labor and material |