HOW TO MAKE GOLD-MINING PAY.

Inangahua Times, Volume IX, Issue 1373, 12 March 1884, Page 2

HOW TO MAKE GOLD-MINING PAY.

4 {Written for the Otago Witness.) By JOHN A. MILLER. Anyone at all conversant with the nature of Joint Stocjc Companies knows that the issue of its shares or scrip ia equivalent to fabricating negotiable paper, the value of which is subject to chionic commercial excitements, reports of all descriptions, no reports at all, and even to the manufacture of reports. This applies to mining stock with special force, and considering that the formation of mining companies during periods of .prevailing excitement is so easily and cheaply accomplished, it is surprising that no. more bogus companies have been placed upon the market than has been the case. To show how a raining company is organised and floated, it may be pointed out all that is necessary is to mark out a claim by placing securely and uprightly four pegs into theground, having it surveyed, and get it granted by the Warden. Next, to form a company of 20,000 or. i<5,000 shares.

with as good names for a directory as 1 you can get, and the thing ia accotn- j plished. All this has been done on " tick," and stands as a debt against . the company; As soon as these preliminaries are accomplished the promoters begin to sell shares, for anything they will fetch. The money realised of course goes into their pockets, and none of it to the prospecting of the claim, which may or not contain a reef. This proceeding has been called the " Four-Peg System," and the principle upon which it is conducted is that uf "Heads I win and tails you lose !" Such unprincipled ■ abuses of public confidence do an incalculable auiount of harm, and in their shape and form are so disguised that the public is constantly at the mercy of designing parties, who do not care what amount of injury they do to the public weal so-- long as they profit by the transaction. Government has done much to suppress lottery and betting rings, and generally curb the gambling spirit of the New Zealand public, and it would appear that this " gambling spirit'" has found' a new vent in mining speculations, throwing itself with the force of pent up energy into the vortex of mining excitement, with the result we now see. Thus has oil been poured upon the fire ; and by its very action to protect the people against themselves, the Government have delivered them and the chief Colouial industry, of which they are the especial custodians, to the worst and most pernicious kind* of excitement human passions are subject to. \sncontrolled by any restrictions, this new "energy" has done more harm to the Colony than any lottlery could have done. Speculation, or rather gambling, ran rampant ; the excitement became infectious j and the worst form of the game of change, in the shape of mining scrip traffic, developed itself. So that between a want of honesty on the one side, and an absence of judgment and practical knowledge on the other, mining, as a commercial industry, has been reduced to a very low state indeed. There can he no doubt that under such circumstances many mining companies have been started whicli should near have been floated, and that some weak ventures were murdered by over speculation, which with good aud honest management, might have lived and proved payable concerns. [n the absence of some better suggestion it may be proposed, in order to prevent " bogus" companies, that in every application to register under the Mining Companies Act — it be required that plans showing the amount of work done, the extent of reef proved, the exact position of the claim, and the intended manner of working it be deposited with the Registrar of the Supreme Court, duplicate.3 of tHe plans to. be exhibited in the office of the legal manager; and that a clause making such plans convpulsor}' be inserted in the Mining Companies Act. The Act should also require that the statement set forth in the prospectus of any mining company be attested by. the affidavits ol at least one-third of the directors or provisional directors, of the company to be registered. Mining has drifted into so disreputable a condition that nothing but the most drastic measures can redeem it and place it upon a sound footing. Taking this as an acknowledged axiom, it may be suggested, whether or not it be desirable that all traffic and selling of scrip in mining companies be strictly prohibited by the Mining Companies Act until the value of the respective mines has been proved. That is to j say — a company has been formed, a sufficient number of its shares have been subscribed for to warrant a start being made with operations ; the shareholders in the concern would then be forbidden to sell their scrip until the reef has been proved to be of a payable nature by crusliings of stone, not less than 100 tons in the aggregate. Such a provision, it may be argued, would put an effectual stop to the floating of all bogus companies, and greatly strengthen weak ones, for it is by no means an uncommon occurrence that companies retain a portion of their unsold scrip for cases of emergency, but when those arise there are always found quite a number of shareholders ready to undersell their own company, therby not only taking from it the means intended for its subsistence but also undermining public confidence in the venture, two cause quite sufficient to knock the life out of any public enterprise. In the present loose way of floating a mining company the door is actually ilung open to temptation, and illustrations are not wanting to show what it has led to. The repute in which mining speculation is now held is proof that if the industry is to survive at all an improvement iv its conduct is absolutely required. It will not be expected that all the sharp pratices resorted to by parties unprincipled enough to trade upon public confidence, and abuse it for their own ends, should be exposed and discussed in these pages ; any one speculating in mining stock should be fully aware of what he is about before parting with his cash. There need be no fear that really good claims will be shut up for want of funds to work them, but the " bogus" and doubtful ones are what do the harm, and the less of them the better. A means through which to obtain reliable information ahout any mine will be suggested and explained in the fourth chapter of this series of articles.