These figures will be found to agree substantially with others of the same character made up for iron and coal, and are as nearly correct as can be. The item of "whiskey" may seem large, but when the fact is stated that over 1,250 barrels, or 50,000 gallons, are annually consumed on Portage lake alone, it appears that the estimate errs in being too small rather than too large. Add Direct tax on 100 pounds copper, at three and six-tenths per cent..... $1 08 2 55 Indirect tax on license, stamps, incomes, steel, iron, castings, machinery and repairs, freights, brokerage, and sundries connected with production and sale of copper, amounting to not less than... 1 00 4 63 Making $4 63, the amount of direct and indirect taxes that the government actually realizes from every hundred pounds of copper mined in the country, while the same government only claims $2 50 of tariff on every hundred pounds of copper imported; thus, instead of fostering native production, actually legis lating against the home miner to the extent of $2 13 on every hundred pounds of copper, which is given as a bonus to the cheap labor of England and Chili. It is true that an additional tax of two and four-tenths per cent. is imposed on foreign copper when it enters into manufactured goods, but, from the nature of the case, this additional tax is readily evaded, and we have yet to learn the first instance in which it has been paid. A similar calculation can be made for foreign ores, and with even a worse result, as the duty on ores is merely nominal. From these statements, it clearly appears that, to put the copper-producing interests on the same footing they occupied in 1861, which was then considered fairly equitable, and to enable them to pay the taxes the government requires, and compete with the foreign producer, the duty on ingot, pig, and bar copper must be raised to at least six (6) cents per pound, and on ores to twenty (20) per cent. ad valorem. : Again from careful computation, it is found that the amount of capital actually invested in the Lake Superior copper mines and mining lands is not less than thirty millions of dollars, and that the present market value of this investment is under ten millions. The cause of this excessive depreciation is briefly stated in the fact that the high cost of labor, supplies, and taxes have, within the past two years, compelled the temporary abandonment of many properties which, four years ago, under the then-existing state of things, pro REVENUE SYSTEM OF THE UNITED STATES. mised to give a fair return over and above the cost of working. From 1856 to 1862, the product of pure copper per annum had gradually increased from eight to fifteen million pounds, and has since decreased, until the product of 1865 will not exceed twelve million pounds, and must still further decrease, unless the duties on the imported article are increased at least sufficient to meet the heavy direct and indirect taxes paid to the government on the home product. Previously to 1862, one-half the product of Lake Superior was exported, and the government the business was fairly prospering at an average price of twenty-three cents, gold; since then, until the commencement of the present year, has consumed the whole of the product, and paid therefor not more, at any time, than an equivalent in currency for the said twenty-three cents, gold. How large a saving such a supply, produced within our own borders, has been to the government cannot, of course, be precisely stated, but had it been necessary to import the quantity needed for consumption, the advance in cost must have That an article of such universal use should be afforded during been enormous. the war at no greater real cost than previously is entirely anomalous, and a strong argument in favor of fostering, by adequate protective duties, an interest of such vast importance, whether considered in the amount of the capital invested, or as one of the great productive interests of the country. This year copper has cost very nearly the equivalent of twenty-three cents, gold, and market rates have little more than paid the cost of production. When gold was rated at 210 to 240, the cost of production in the items of labor and supplies generally was no higher than it is at present, when gold is at a premium of forty-four to forty-eight per cent., while the former rate was a barrier to excessive importation, and amounted in effect to a protective duty. And it cannot be difficult to perceive that if gold continues its downward course without affecting the value of commodities, and consequently the cost of production, the advantage is all in favor of foreign copper, produced by foreign cheap labor, and yielding, under the existing tariff, but little more than one-half the revenue the home article is required to pay, as hereinbefore demonstrated. This advantage has already stimulated the importation to such an extent that there will be marketed this year, 1865, not less than 10,000,000 pounds, the product of foreign ores and regulus, an amount within one-sixth of the whole product of Lake Superior. Under such competition, the mines cannot be worked, the government must lose the large amount of revenue now gathered from this source, and the country be impoverished to the extent of the capital invested, which must lie idle, and eventually prove worthless, unless the present nominal duties on imported copper are effectually increased. For this purpose, we claim, and think we have demonstrated, that the duty on ingot, bar, and pig copper should not be less than six (6) cents per pound, and on ores, regulus, &c., twenty (20) per cent. ad valorem. Testimony of Samuel T. Hyde. 51. State your name, residence, and occupation.-Samuel T. Hyde; residence, New York; and business, commission merchant for the sale of copper only, which business I have followed for five years exclusively, and for fifteen years in the main. I am also interested in the copper-mining stocks. 52. What is the present condition of the copper-mining interest, and how is it affected by the government tax ?-The interest, at the present time, is in such a condition that the expenditures, owing to the excessive advance in wages, produce, machinery, and other articles needed in copper mining, have more than reached the market value of the copper produced. Just at the present moment, owing to exceptional causes, such as the suspension of commercial intercourse with Chili, and the uncertainty of a supply of copper from that quarter, the price of copper has temporarily advanced; but the general condition is as I have said, very much depressed. 53. To what do you attribute that depression ?-To the want of a margin for profit on the cost of production. 54. Why has not the price of your product advanced to such an extent as to enable you to make a profit after paying the original cost of production?-Well, for no other reasons than that the markets of the world have kept the price at figures ruling lower than the copper can be produced for in this country. Our market, during the last two years, has been altogether at home. We have not been able to export any. Copper is produced in other countries, and brought in here at prices less than we can raise it from our own mines for. 55. In what shape is that copper brought into this country?-In the shape of pig copper, "regulus," as they term it, and ores. 56. What are the duties upon these three kinds of copper?-On the pig copper it is two and a half cents per pound; on the regulus, which is an ore partially reduced, and containing from fifty to seventy-five per cent. of copper, the duty is five per cent.; and on the ore, which is from eighteen to thirty or forty per cent. of pure copper, the duty is five per cent. 57. How much pig copper is imported into this country?-I am not able to answer exactly. My impression is, that we do not furnish over about one-half— say for the last five years. 58. What increase of these duties do you think necessary to place the copper interest in a fair condition?—I should say, upon the ores and regulus an increase of twenty-five per cent. is necessary, and three and a half cents per pound additional upon pig copper. Testimony of Joseph Rudd. 59. State your name, residence, and business.-Joseph Rudd; residence, New York; president of the Minnesota Copper Mining Company. 60. What is your opinion in regard to the present condition of the coppermining interest, and the effect upon it of the present government tax and impost duty-Well, as president of the Minnesota Mining Company, I have to say that the Minnesota mine, which was one of the first developed, and the Cliff mine, have produced nearly three-quarters of all the dividends obtained from mining on Lake Superior. Seven other mining companies, who have spent $1,100,000, have produced about $1,700,000 in dividends. The balance of the mining companies, which are about eighty-five in number, now in existencethough there have been more than that have spent $11,000,000 in assessments, without any return to any of the stockholders. The company which I represent are spending about as much money in trying to reclaim the property as it spent originally in developing it. It has spent $300,000 in the last two years. In that county where our mine is located there is no other mine which has ever paid a dividend, excepting the National; and the whole county looks to me as if it was going to ruin. The roads are getting out of order, and property is going to waste. I think the mining companies in that region will all of them sink money every day they go on under the present circumstances. Our local taxes have increased from about $1,800, as they were formerly, to $12,000 this year. The average price of copper in this market during this last year has not more than paid the cost of production. Our company will spend $150,000 more than we shall get returns; but this expenditure will open new parts of the property, some portions of which have given out. 61. Do you agree with Mr. Hyde in regard to the relief which is required from the government?-I do. I think that three and a half cents per pound additional on pig copper, and twenty-five per cent. additional on the ores and regulus, will be sufficient to enable us to proceed with our business profitably. REVENUE SYSTEM OF THE UNITED STATES. DECEMBER 13. Testimony of William H. Stevens. 62. State your name, residence, and business.-William H. Stevens, and am engaged in copper mining. I am a director in quite a number of companies, and have general supervision of the mines which they work. This 63. Please to state in what manner the production of copper in this country is affected by the taxes and customs duties imposed by the government.-I would suggest, first, that the mining interest is affected unfavorably by the manner in which the internal revenue tax is collected-I mean, as to the time and place of its collection. We are now compelled to make return of our product at the smelting works as it is smelted, and to pay the tax upon that return before any sale is made. This I consider to be unjust, and injurious to our interests. 64. Now please state the process of producing copper ingots.-First, the That ore is usually broken with hamground is broken and the ore taken out. mers, by hand, but in some cases with stone crushers, by machinery, and reduced to fragments below the size of five inches in diameter. When I say "ore," I mean what we call the copper rock, in which form alone the ore exists in this country. It is not a chemical mixture of copper with other elements, but a mechanical mixture of pure copper with other adventitious substances. copper rock, thus broken, is in a condition for stamping. It is then passed through the stamping mills and pulverized to fine sand. This fine pulverization is produced by weights or stamps of one thousand pounds each falling upon the rock and thus reducing it to powder. This powdered ore is then washed, or, as it is called, "dressed," by the passage of a current of water over and through the powdered ore in any way that may be convenient. By that process, the dressed finer particles of extraneous matter, being specifically about three times lighter The product remaining is called than the copper, are washed out. mineral," and consists of from sixty-five to ninety per cent. of copper, and the balance of other mineral substances which have not been removed by the washThis dressed mineral is then ready for smelting. In some cases, ing process. it is smelted at works near the mines, but in most instances it is shipped either to Detroit, Cleveland, or Pittsburg, and smelted at smelting works there. This dressed mineral is shipped in barrels, either pork, beef, whiskey, or other strongly-made barrels. As these are not usually to be had in sufficient supply, others have to be made on purpose. These are usually shipped to the mining region filled with grain and other supplies for the miners. The process of smelting is simply melting the mineral in a reverberatory furnace, with the addition of a flux of lime or other suitable substance. The lighter minerals rise to the top of the melted mass and the copper sinks to the bottom, whence it is withdrawn, and run into pigs or ingots. These ingots are then shipped to the commission merchant at Boston, New York, or Philadelphia, and there sold to the manufaccopper A very small percentage of the turers or other consumers. west for castings. The largest market for consumption at any one point is at and other similar Waterbury, Conn. One establishment at Waterbury consumes 1,500 tons of copper per annum in the manufacture of pins, hooks and articles. There are a number of other copper manufactories in Waterbury, conThese establishments purstituting almost the entire business of the place. chase copper in large quantities. And now I contend that it is not just, or in At the same time, I accordance with a rule which is applied to all other manufactures, to require the payment of our tax until the final sale of the copper. do not admit that the production of pure copper is a manufacture any more than the production of pure iron or coal, or of wheat or corn that is cleaned and ready to be converted into flour. And, even with this relief, our interests will eyes, is sold in the not be benefited very much, unless we have protection against foreign import. ation. 65. Can you give any statistics of the production of copper in this country?— I submit a statement of the result of the operations of eight of the principal copper mines of Lake Superior for the year 1861, which will give a view of the extent and condition of the business at that time; also a statement of the average prices for which copper was sold during a period of five years-from 1857 to 1861, inclusive; also a statement of the products in rough copper of all the Lake Superior mines for a series of five years, from 1859 to 1863, inclusive; also a table showing the product in tons, the value and the price for which it was sold, of the Lake Superior mines from 1845 to 1864. 66. What is your estimate of the amount of capital actually invested in copper mining in the Lake Superior region ?—I estimate for capital paid in, in instalments, $13,000,000. The cash received from products sold and applied to the further development of the mines, as an addition to the capital, $17,000,000— making a total capital of $30,000,000; upon which dividends have been actually paid to shareholders to the amount of $5,600,000, to which should be added $767,000 for profits earned but not yet divided nor paid over. The entire amount realized from sales of copper is $36,367,000, embracing the sales for the whole period from 1845 to the end of 1864. The remaining $13,000,000, received from the product, has reimbursed the capital stock paid in, in instalments. At present, owing to the high cost of production and the successful competition of foreign copper and ores, it is impossible to produce copper from Lake Superior mines at a profit upon the actual cost of production and transportation, allowing nothing whatever for interest upon capital and dividends upon stock; and my opinion is, that unless relief is obtained, the copper-mining interest will suffer to such an extent that production will entirely cease, except in the case of a few mines which have very valuable veins of copper ore. 67. State particularly the competition to which you refer?-I refer to the importation into this country of the sulphurets of copper and other ores, which are now imported in large quantities from Chili, being subject to the nominal duty of only five per cent. ad valorem, which was the duty imposed ten or twelve years ago, under an entirely different condition of things from that which exists at present. I refer also to the importation of regulus, which is copper ore partially reduced, and is subject to the same duty. I refer also to ingot copper, which is imported from England, and the Chili pig copper, which last contains about ninety per cent. of pure copper, and is imported from Chili-both coming in under a duty of two and a half cents per pound. 68. What increase of our customs duties is necessary, in your opinion, to equalize the condition of the copper-mining interests with that which they held before the war in reference to foreign competition?I do not think that six cents per pound on copper, and twenty-five per cent. on ores, will place us in as good a condition as we occupied before the war, owing to the various internal taxes and the increase in the price of labor and other costs of production and transportation. At the same time, it is my opinion that the copper interest will be satisfied with an increase of he duties to that extent. 69. To what extent has copper been produced in other parts of the country besides the Lake Superior region ?-The Lake Superior region is the only part of this country, and, I believe, the only part of the world, where copper is known to exist in large quantities in a pure state, or in the state of copper rock; but the sulphurets and other ores have been mined to some extent in Tennessee, North Carolina, Virginia, Pennsylvania, New Jersey, Connecticut, Vermont, and California. The production from these sources, however, has been very small and almost universally unprofitable. The only exception that I now recall is a single mine in California. In Tennessee the oxides and sulphurets will, in my opinion, eventually be mined to advantage, and profitably. |