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EXHIBIT S-16

Butler Brothers—Comparative 1944 and 1946 Lower Lake base prices of Mesabi non-Bessemer 51.50 natural iron; summary of costs for 1944 compared with July 1946, designed to show that the 60-cent increase in ore prices, from 1944 to July 1946, has been consumed in added production costs

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1 Average wage rate in 1944 was $1 per hour so 1814 per hour increase equals 181⁄2 percent. Actually there will be a slight increase in insurance.

Increase in depreciation due to higher cost of equipment in 1945 not reflected. Royalty rate increases with increased mine value of iron ore, contract provision. (See the following):

Increase in occupation tax (occupation tax labor credit was decreased by State legislation in 1945 causing a large increase in tax).

Increase in royalty tax...

Increase in payroll tax.

Increase in ad valorem tax..

Tons crude ore mined in 1944.

Tons beneficiated ore produced (recovery 47.23 percent).

Tons merch, ore produced..

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EXHIBIT S-17

Butler Bros. comparative 1944 and 1946 lower lake base price of Mesabi nonBessemer 51.50 natural iron—Summary of costs for 1944 and 1946

MR E. A. WISCO: You asked me what effect our 1946 experience had on the figures I gave you July 23, 1946, which showed what our 1944 costs would have been, based on subsequent increases in cost of labor, supplies, and other items and you also asked for a statement of our actual 1946 costs, which vary from the comparative because of variations in tonnage produced, sales contracts, and recovery from crude ore mined.

The following figures show the information requested.

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110 months actual cost plus 2 months estimated costs.

* April 1947 production estimated at 140,000 tons of concentrate at 50 percent recovery.

1946

* 3, 580, 252 0

21, 521, 342

42.61

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EXHIBIT S-18

Summary of net operating income from Minnesota mining operations based on occupation-tax reports, years 1939 to 1943, inclusive

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$0.333

.703

.786

(1) Net operating income shown above have been determined by adjusting Minnesota
occupation tax returns for each property to include royalty tax and occupation tax in
order to arrive at the net income from operation.

(2) For comparative purposes mines from which ore was produced by combined open
pit and underground operations are included in open pit. Likewise, the mines from
which both direct and beneficiating ores were produced have been included in the bene-
ficiating group.

(3) Large drop in net operating income from 1939 to 1940 caused by United States Steel reducing lower lake ore price 50 cents per ton.

NOTE.-Figures in parentheses indicate loss.

AVERAGE NET OPERATING INCOME PER TON

Year

Direct

Benefici-
ating

$1.023

1. 122

1. 111

1.059

1.088

1.346

1.210

EXHIBIT S-19

Comparison of iron ore production for years of 1939 to 1945 showing tons, net operating income before fixed charges and Federal taxes, amounts collected by upper lake rail carriers, and royalty taxes paid to fee owners, designed to show gradual increasing unfavorable position of producers of beneficiated ores

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Direct shipping mines with net operating income of $1 per ton or over

(10)

and royalty

tax

(14)

Beneficiating mines with net operating income of $1 per ton or over

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5,478, 886. 19

Beneficiating mines with net operating income under $0.30 and with losses

Direct shipping mines with net operating income between $1 and $0.30

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Beneficiating mines with net operating income between $1 and $0.30

1,721, 295

$1,448, 450. 93 3, 401, 721. 04

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456

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4,005, 462.96

1941..

4,741, 612

3,246, 177. 51

.685

11, 160, 894

4,362, 283. 04

764

8,075, 533. 81

3,622, 591.57

.724

10, 268, 022. 48

411

4, 587, 127. 43

1942..

15, 607, 263

11, 448, 052. 28

.734

1943..

10, 359, 354

14,358, 681, 96

719

6, 584, 010. 64

.6356

11, 221, 622. 10

19,816, 523.85

533

5,521, 535. 68

1943..

11, 726, 806

1944..

9,982, 216

7,089, 182, 33

6,361, 965. 28

6373

19, 459, 147, 88

6045 111,112,321.37

592

6,942, 269. 15

.4029

4, 021, 834. 83

1944

10, 020, 691

1945.

5, 381, 149

2,730, 825. 93

5,058, 583. 19

.5079

1 5,099, 176. 79

5347

2,877, 300.37

1945..

10, 512, 061

6,564, 751. 53

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Direct shipping mines with net operating income under $0.30 and with losses

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