148

C.—3.

Statement of Business in Courts and Bevenue collected. Complaintsin Warden's Courts, 26 ; ordinary applications received, 441; special claims granted, 48 ; miners' rights issued, 375 ; water-race licenses, 179 ; general registrations, 593 ; revenue collected, £1,431 ss. 3d.; deposits on applications, £1,541 Bs. 6d. Magistrate's Court. —Civil cases, 113; criminal cases, 74. I have, &c, S. Mead Dalgleish, Warden. The Under-Secretary, Mines Department, Wellington.

Mr. Warden McCarthy to the Under-Secretary for Mines, Wellington. Sir,— Warden's Office, Clyde, 24th April, 1900. I have the honour to enclose herewith the annual statistical returns, and to submit the following report on mining matters in the Dunstan-Wakatipu subdivision of the Otago Mining District, for the period ending the 31st March last. Hydraulic-sluicing and Quartz-reefing. There is scarcely anything of note to chronicle in connection with either of these branches of the industry ; both continue to be somewhat neglected for mining by means of dredges. As showing the extent to which this has taken place, there is appended a comparative return (Schedule I.) showing the number of claims granted during the year, distinguishing between those granted for dredging and those for other classes of mining, together with the gross area and rental payable in respect of each. The only attempt, so far as I can learn, to float a hydraulic-sluicing company of any magnitude is that relating to the Mid-Molyneaux Company, the object of which is to elevate 100 acres held by the promotor, Mr. John Ewing, at Anderson's Flat, about twelve miles below .Roxburgh. The proposed company will have a water-right, ample not only for doing the necessary elevating, but also to provide power to drive by electricity a limited number of dredges, and affords a curious example of linking an older with a newer form of mining. Dredging. This system continues to be that to which public attention is being chiefly directed. During the year there have been granted in this subdivision 217 dredging-claims, having a gross area of 11,885 acres. The number of companies promoted to work dredging areas up to the 31st March last is 137, having a gross nominal capital of £4,452,826. Of this, £215,450 was absorbed in promoters' shares, and £985,676 in contributing-shares actually allotted, of which £518,042 has been called up. In some of the companies all the contributing-shares have not been allotted. Taking into account the premiums at which the shares in by far the larger number of companies are freely selling, and the number of dredges constructed or in course of construction (the number cannot be less than a hundred), the present value of the dredging interests located in this district cannot be less than £2,500,000. The continued activity in dredging matters has caused an increase during the last two years of 614 men employed in the iron-foundries in Dunedin, the numbers being 1,016 men in January, 1898, 1,144 men in January, 1889, and 1,630 men in the same month of the present year. There is attached to this report a return (Schedule I, Table B) giving certain particulars in connection with those dredging companies, the operations of which are confined to this district, and in this connection I would remark that last year I took occasion to remark on the number of " wildcat " schemes attempted to be foisted on the public. The warning is as much needed now as then. In addition, a rash spirit of speculation would seem to have taken hold of all classes of the community. Mining shares are being taken up by those who cannot hope to pay the calls, and who are merely buying in the hope of selling-out at a premium. Further, a practice is gaining ground of buying shares for what is euphemistically termed "forward delivery." The buyer, socalled, who often has no capital, agrees to pay at some future time a price in advance of the market-value at the date of sale. On the expiration of this time the shares are again sold, when the buyer either receives the profit or pays the loss. It need hardly be said this practice in no sense savours of investment, and reduced to its elements is neither more nor less than a wager between the buyer and seller, whereby the former bets against a fall in prices. This practice, however profitable to the sharebroker and however disastrous it may eventually turn out for those practising it, cannot succeed in eventually killing a promising industry, though it may introduce into the management of mining companies many of the worst features of the turf, and inflict on the industry itself a set-back from which it may take years to recover. It may be deemed worthy of consideration whether too much of the capital of the companies is not being devoted to the purchase of promoters' interests. The price paid for these interests usually ranges from £1,000 to £2,000. The interests, for the most part, are nothing more than an unprospected claim without machinery. Now, to procure the grant of such a claim cannot, at the outside, cost more than £50. A fair proportion of the shares allotted to promoters finds its way into the hands of those who can be prevailed on to sign reports as mining experts, who have either inspected or mined on or in close proximity to the claim, and it is making too great a' draft on human credulity to suppose that many of these experts do not give rein to their imaginations in proportion to the number of paid-up shares promised to be allotted them. And the fact must not be overlooked that a certain proportion of these promoters' shares are given to the promoting broker in addition to the commission allowed him as promotion-money. Keeping these facts in view, it is only a fair inference that a judicious lessening of the proportion of the capital of companies allotted to promoters might decrease the risk of undesirable properties being placed on the market.