I dissent. I think the judgment of the District Court was correct. As pointed out in the opinion, the statute imposes
"an occupation tax equal to 1% of the gross amount received for, or the gross value of metalliferous ore sold,"
and fixes the basis of computation as the amount of money actually received from the sale of ores or metals under a bona fide contract of sale, less transportation charges from the mine to delivery point; but in the event that the ore is treated at a mill, smelter or reduction works, owned by the *Page 170 same interests as mines the ore's value shall be figured on the values such smelter or reduction works would pay for the ore or metal received by it from independent sources.
Are the premium payments made by the War Production Board included within this base? To me, it seems evident they are not included. In the first place, the premium payments are not money received for the ores or metals under a bona fide contract of sale.
Secondly, if the ore is milled, smelted, or reduced in a plant owned by the miner, which plant also treats independent ores, the value of the ores at the mill is the value for determining gross proceeds, the same as would be the value to the independent producer.
But the real question is: Is the premium payment an increase in the sale price of ore? It seems rather inconsistent to say the government would fix a sale of 12¢ for copper to some people and 17¢ to other parties under a program to insure equality or uniformity in prices. It hardly strikes sound to say the government was blackmarketing itself. Yet that seems to be what the situation would amount to. Let us note the statement of the War Production Board to which reference is made in the opinion and from which I shall quote more fully. The statement consists of Rules
"by which * * * mine operators may obtain premium prices for over quota production," the "Purpose of the plan is to expand theoutput of" needed metals.
"Quotas will be fixed to include all output that can reasonably be expected at established market prices."
"Purpose of the premium plan is to compensate operators forextra costs involved in bringing out additional metal output."
"The premium payment plan has been established to make it possible quickly to increase production by mining low gradesub-marginal ores, and to develop additional reserves."
"The only purpose of the premium price plan is tocompensate for extra costs involved in bringing out theadditional metal output."
"Should any mining property fail to maintain its quota production, premium payments will be made." (All italics are mine.) *Page 171
I come now to the quoted statement in the opinion of Mr. Justice Wade:
"Premium payments will be based upon metal paid for under the terms of settlement contracts,"
which statement I think is misconstrued and misapplied. Settlement contracts are the contracts between the mine and the smelter. The quoted statement when read in connection with the whole declaration of which it is a part, does not justify the construction that premium payments are paid on ores sold. It simply gives the rule that computations for premium payments will be figured upon the basis of metal not only mined but actually turned into the channel of trade, so as to be available for the needs created by the war. In other words the mining operators cannot mine the ores, hold them and claim they have satisfied their quotas and had some overproduction for which they are entitled to premium payments. The metals will not be considered produced until turned into the channels of trade and manufacture. Computations therefore will be figured from the amount of metal bona fidely sold, and not upon the quantity mined. These payments are made only for the extra costs of bringing to trade the submarginal ores. It is somewhat analogous to the statutory provision deducing the cost of transporting the ores from the place where mined to the smelter. I think the premium payments are not within the contemplation of the statute included within the "amount received from the sale of ores under bona fide contracts of sale." I therefore dissent.
PRATT, J., not participating. *Page 172