MANAGEMENT OF MINES.

Evening Star, Volume VII, Issue 1957, 13 August 1869, Page 2

MANAGEMENT OF MINES.

(From the A rgus. ) Just now a very damaging disclosure | has been made by a Ballarat tradesman, who, from the internal evidence of a letter he has addressed to a local contemporary, is engaged in the iron trade. In a lengthy, but well written and pointed letter, Mr James Campbell exposes a wide-spread system of corruption in mine management. The writer puts the matter beyond all doubt, for in a frank and manly way he regretfully admits his own past complicity in a system of fraud upon shareholders, which demands instant attention and remedy. It has before now been cited as a gratifying fact that amidst the host of men occupying mining positions of trust—having the charge of gold and money of laige value—very few have taken the South American tour. Mr Campbell’s letter spoils the illusion. It shows that it is more profitable to the mining manager to stay at home, and plunder in detail, than to take ship with his plunder in the mass. The particular fraud from which the mask is now rent is the levying of black mail upon tradesmen by directors and managers of mines. Primarily and apparently this comes from the pocket of the tradesman into that of the director or manager. Ultimately and actnaly, its destination being the same, it is taken surreptitiously from the shareholders. This particular form of swindle has a specific and well-understood designation. Thieves always delight in slang. The burglar’s crowbar is a “jemmy,” and the mining manager’s plunder is “ kick.” Kick is a return-commission demanded by the manager upon the value of all goods supplied to his company. The manager dictates the amount of kick, and the tradesman adds to it the cost of the article he supplies. The shareholders pay it, the manager pockets it. Although “ kick” may not he found in the list of statutable felonies or misdemeanours, we imagine a less playful equivalent term for it might be discovered if deluded shareholders cared to push a case to legal extremity. Mr Campbell cites numerous examples of this kind of dishonesty. Some of them are startling from their enormity, others contemptible from their meanness, and all arc alike an outrage of honest prin- j ciple. Here is one which shows how directors add to their income from board fees. Says Mr Campbell, “ I ! remember another little case in which ! three directors were sent to inspect i some machinery and report. They saw | several (engines'?) among which was one offered at, say, L2OO. They expressed themselves well satisfied with the engine, but hemmed and hawed a good deal about something, until at last one 1

asked how much ‘ kick ’ there was attached to it. The seller intimated that there might be a L 5 note apiece on the job. ‘ Five pounds ! Ridiculous ! They couldn’t think of it ; it wouldn’t pay shoeleather. He must make a decided spring if he intended to do business with them.' Determined to poke some fun at them, although much annoyed, Mr asked them with a grave countenance if they thought L6O apiece would do. Mark the sequel. They actually began to seriously discuss the probabilities of getting the engine bought by the whole board at LIBO advance on the price first asked. I am happy to say, however, the thing didn’t come off.” Mr Campbell relates another case, in which he was himself a partner beneficially interested. He and others had bought a mining plant as a speculation. A price at which it was to be resold was agreed on, and it was left in the hands of one of the partners (No. 1) for realisation. The plant hung on hand for some time; but one morning Mr Campbell was agreeably surprised by heaving that it had been sold at 30 per cent, over the agreed-on limit. The rest of the story Mr Campbell must tell in his own words :—“ I posted off to No. 1, and my first question, after assuring myselt that it was really true, was, ‘ How in the world did you get such a price V Sundry laughs, and intimations that he was the man to make a bargain, were all I could get out of No. 1. Some little time afterwards a balance-sheet was handed to each of us, in which this mysterious item appeared, ‘Negociatious, Lso.’ Then I saw quite where the laugh came in. The excellent price was accounted for in as simple a manner as the solution of the celebrated problem of Columbus’s egg.” In affairs of this kind it is very difficult to secure direct evidence. Neither the briber nor the bribed is willing to criminate himself. The system which Mr Campbell has now the courage to expose (not sparing himself in the process) has long been suspected—nay, believed to exist. But its discovery and denunciation being the business of everybody, was grappled with by nobody. Here, at length, is a distinct clue, which should be followed to the end. It is alleged, and the statement is supported by more than one witness, that a wide-spread system of black mail extortion exists amongst the management of companies ; and that the tradesmen, through stress of competition, have been compelled into acquiescence therein. It is not, of course, to be assumed that every mine manager or every director thus causes his constituents’ interests to subserve his own. There are to be found, even upon the boards and in the managements of mining companies, men of unsullied honor, incapable of frauds such as those described, Rut we fear that they arc exceptional,