have highly varying values independently of their physical characteristics, because of their relative immobility. But the values even of gold and precious stones represent a combination of intrinsic qualities and of demand. A diamond is made of carbon but is more valuable than coal or graphite because it appeals to the esthetic taste. It is only because man introduces an element of demand that the diamond takes on value. In short, man is the multiplier and the mineral substance is the multiplicand in the product known as value. Recognition of the two elements of value is vital to a clear understanding of the methods and problems of valuation of minerals. It is too often assumed that the physical properties constitute the sole factor. Looked at in a large way, the returns from the mineral industry are commensurate with the effort put into discovery and development of mineral resources, even though the returns to lucky individuals have been excessive. In respect to the importance of the human energy element, the mining of minerals is not unlike the cropping of soils. Some interesting economic studies have been made of mining districts to ascertain whether the total return has been equal to the total investments by both successful and unsuccessful participants. The results show that, even in some of the most successful districts, there is not a large "social surplus,"--that is, a surplus of receipts over total expenditures. It is difficult to generalize from such studies with any degree of accuracy; but it seems likely that if we could measure the vast amount of fruitless effort which has been expended in non-productive territories, the result would tend to bear out the general conclusion that the social surplus for the mineral industry as a whole is a modest one, if it exists at all. Of course, it is to be remembered that the total benefits from mineral resources are not to be measured in terms of gain to the producers,--but that their measurement must take into account the satisfying of all the complex demands of modern civilization. VALUES OF MINERAL DEPOSITS NOT OFTEN ESTABLISHED BY MARKET TRANSFERS While minerals as extracted and used may have standard market values, mineral deposits in the ground are not bought and sold on the open market with sufficient frequency to establish standard market values. A sale may establish a criterion of value for the particular deposit, but not for the class of deposits,--for no two mineral deposits are exactly alike. Stock quotations may establish a certain kind of market value, but these are often vitiated by extraneous considerations. For these reasons the valuation of a mineral deposit is in each case a special problem. THE AD VALOREM METHOD OF VALUATION