Butte Paper - Valuation of Coal Land (with Discussion)

Adequate treatment of the difficulties surrounding the valuation of mineral lands requires that agreement be first reached defining value as understood for the purpose of appraisal. To define value as the price of a product is not sufficient, and does not assist us in using the factors that cause variations in values and in relative values. The real value of any product depends primarily upon its relation to the necessities, comforts and pleasures of mankind. As the necessities, comforts and pleasures of the civilized races differ from those of more primitive man, the value of products varies with the degree of civilization and the environment of the consumer. Coal has no value to the savages of warm climates, and arrow-head flint none to the residents of New York. It has long been recognized that what has been termed " intrinsic value " must be limited to materials that are essential to existence—air, water, food. But " intriusic value" cannot be measured in monetary terms. The intrinsic value of a bushel of wheat is due to the fact that it will support the life of an individual for a certain definite time, but this fact does not enable us to measure or to express that value in monetary terms. It has often been proposed to adopt as a measure of the value of any product the quantity of labor necessary to produce it, but this method is of limited application, and will not apply to what may be termed " intrinsic values." For many reasons it might be well, while assenting to the fact that any material may be intrinsically valuable, to abandon the use of the term " intrinsic value." One of these reasons is the tendency to confuse the idea of intrinsic value with a value that is conferred by economic conditions, that is purely artificial and that may be permanent or evanescent. Intrinsic value must from its nature be permanent and unchangeable. Possibly for present purposes the value of any material may be considered as having a dual origin: First, that due to economic