MANAGEMENT OF QUARTZ MINES.

Cromwell Argus, Volume III, Issue 130, 7 May 1872, Page 6

MANAGEMENT OF QUARTZ MINES.

To the Editor of the Cromwell Argus. Sir, — In my previous letters, I tried to explain how shareholders were victimised by the incompetency of managers, and the neglect of duty (or worse) of directors. In this 1 wish to call the attention of working men to the Limited Liability Act, under which many of the present Companies arc registered, —an Act most fair in theory and intention, but unfortunately, like most Acts of Parliament, liable to be made use of for fraudulent purposes. If all working men .understood its meaning, and nevertheless chose to risk their labour on the chance of eventual payment, it would be their own look-out ; but as nine out of ten know nothing whatsoever about it, I consider it comes within your province as a journalist to explain the matter to them. What little I know about it, I will take this opportunity of mentioning; leaving it to some one else better versed in the law to enlarge on the subject. In a Limited Liability Company each shareholder is only liable for the amount at which his individual interest in the Company was valued by the directors at its formation. Consequently, a Company, to be solvent to the amount of their declared capital, must not only have all their shareholders honest and solvent, (which is seldom or never the case,) but, moreover, the claim or plant must not deteriorate in value, as a very large proportion of the so-called capital is represented by the mine itself and the machinery on it ; so that, in many instances, Companies are not good for more than one-third of the amount of their declared capital. I can better explain my meaning thus : Wo will suppose a Company to consist of 20 shares of L.150 each. They thus start on a declared capital of L.3000, —of which the claim represents L.IOOO, the machinery L.IOOO, and leaving L.IOOO to be called up. Half the shareholders, being able and willing, pay up their full amount; the other half, being unable or unwilling, do not do so ; thus, at the wind-up, this supposed L.3000 Company turns out to be good for only L.500. When this small sum is expended unsuccessfully on the mine, the workmen have nothing to look to for their wages but a claim which has proved worthless, ton insolvent shareholders, and a plant which, very probably, has been mortgaged by the directors. It may be said that no men have been swindled as yet in this district ; but it is yet early, and prevention is better than cure. I' lieu have been swindled in Victoria by such Companies, and also, I regret to say, on the Arrow. The only preventive measure that I can see for this evil is the following : —All Banking corporations protected under this Act are obliged to publish a half-yearly statement of their assets and liabilities for the information and protection of the public ; and I cannot see why mining companies sheltering themselves behind the same Act, and Laving as their principal creditors working men, (many uneducated, and consequently peculiarly liable to imposition,) should not be compelled to do the same. Then, if men wish to work for them on credit, well and good,—they know their own business best ; but at least let them be disabused of the idea at present almost universal amongst them, —that two or three wealthy and honest men in a company constitute it solvent. I will now dismiss this very unpleasant

subject, and should I again presume on your kindness, it will be on the more congenial one of “ How to make our poor reefs pay.” —By-the-hye, “ Viator,” in his letter, called me a “free-lance” ; hut I forgive him, in consideration of his having agreed with nve in opinion ; otherwise, after the recent ridiculous exhibition made by the Melbourne analytical chemists in the alum case, I wonder at his hardihood. During my twenty years’ experience on the goldfields, I have not known one useful discovery, or even suggestion, made by a scientific man, and I decidedly object to their big words, commencing with “ hy.,” “ 0x.,” or “sul.” This may betray ignorance on my part, but at all events it is not wilful ignorance.—l am, &c., Crusher.