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Show V r i THE DRAGERTON TRIBUNE Tuesday, July 3, 1956 Depredation Problem in Steel Industry Part Tbrea equipment to keep even with the wearing out of existing equipment And they would be, if there were stability in the buying power of the dollar." The long life of facilities gives the rate of continued inflation of construction costs a long time to compound, Mr. Fairless explained. like ours, this represents an extremely inequitable and unfair situation, because our capital is more heavily taxed away." Mr. Fairless said some elements of American industry had had some measure of temporary relief from the continuing inflation of replacement costs through "accelerated amortization," which applies, however, only to facilities built under government certification as necessary to national defense. But even this, he added, "automatically ' guarantees something of a future crisis"; for when the amortization begins to run ), out (in the situation becomes worse because deprecia tion remaining to be taken in the future will be less and will thus aggravate the existing deficiency, Even alternatives to straight-lin- e depreciation permitted under the Revenue Act of 1954 do "only about, half the job that accelerated amortization does and at the very time when more of a job is beMr. Fairless coming necessary, NEW YORK The nations steel industry will have to spend 1.1 billion dollars to 1.5 billion dollars in each of the next five' years merely to replace facilities that wear out and become obsolete, but the total amount.it can recover Jinder depreciation . provisions of existing tax laws will fall about $3 billion short 6f doing the job, President Benjamin F. Fairless of the American Iron and Steel Institute reported here today. cost By 1960, the industry-wid- e of replacing plant and equipment will be almost twice as much as can be set aside for wear and exhaustion, unless cost inflation is halted and the depreciation problem is given "good and just" legislative treatment by Congress, he told the institutes 1956 annual steel-produci- For.-industri- meeting. Pointing up the 'magnitude of the depreciation problem, Mr. Fairless said the industry has to replace about four per cent of existing steelmaking capacity each year. Its expansion of capacity in the last 10 years was at the rate of slightly under 3 per cent an-- es A $1.1 billion average annual re- SIP IE (DIMS FOR FISHING AND CAMPING Here are some tremendous bargains for the sportsman . . . ... So Easy So Simple BLINDFOLDED if you can say: SPINNING REELS COLORADO RODS Regular 25c Discounted Ne.1743 SPIN WONDERED. His wtBd'weather guard, vtomitlo crank for rtlMM wd ratrtm. 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If the index rises' in the future as it did during the said. past 15 years at a rate of seven The kangaroo went to the psyper cent compounded annually the replacement outlay would chiatrist and complained, "Nothcome to $1.5 billion five years ing I do makes me feel jumpy." hence. Mr. Fairless compared those figures with the approximately $450 million given as the Radiator Service steel industrys replacement cost 1945. in Mr. Fairless said "the simple by fact" is that regular depreciation amounts deductible for tax purSTANFIELD poses are not sufficient to cover the industrys , stay-eve- n requirements, as they should be. PHONE 521 "The purpose of depreciation is to recover over the Jives of facili57 West First North ties the dollars originally invested in them," he explained. "The dolPrice, Utah lars when recovered are presumed to be sufficient to buy enough r punch in becoming the worlds chief coal supplier.-Thiendeavor will be of great benefit to the coal companies, the railroads and the coal miners. It will also be of great benefit to the foreign buyers, some of whom are in dire straits for coal. Finally, it will work to the advantage of the United States and everyone in it by strengthening an industry which is vital to our own economic health and military security. ng 1958-1959- nually. i ng Russia and Red -- China to the million enterprise, and is owned by a number of coal producers, by are accustomed to differrailroads and by the , We ences, sometimes expressed in vio- United Mine Workers union. . lent and bitter ways, between orIts purpose is to expand the exganized labor and industrial con- port market for American coal cerns. from 42 million tons to 100 milon labor and cap- lion tons. 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