CORRESPONDENCE.

Evening Star, Issue 11068, 21 October 1899, Page 2

CORRESPONDENCE.

THE OTHKfc SIDE OF THE PICTURE. ffO THE KDITOJi. Sir,—l was* good deal surprised when I read the article in your last nighi's issue criticising the prospectus of a company in process of formation, the shares for which have been fully subscribed, having for its object the acquirement of the interests of a private syndicate in certain valuable mining properties ou the West Coast and of other dredging claims held by the syndicate, or •over which they are arranging " options." I carefully looked into the prospeotus, and :as a buainesi man felt I was on perfectly safe iground in making a moderate investment of •capital in shares in the proposed company. iTo begin with, I found that I should obtain ja partial return for my invested capital tthares in two companies which have been formed to work by dredging areas of undoubted value, such Rhares representing 50 percent, of the amount of capital invested m the new company. The Bhares in.; the two companies in question are held in estimation, in consequence of the reports on the claims, that they are at a steady premium, one of them 4s per share. In addition to these, the syndicate whose interests are being taken over holds properties And has options cf u sterling character, which on flotation Kill approximately give mi additional shareholding interest to investors in the new company that will represent a total of 139 shares for each £IOO invested. The company, further, have exceedingly good prospects, for they may reasonably look forward to a profitable business in the placing of sound investments on the market. Now, an investor in an ordinary dredging company gets only 100 shares for his -investment of £IOO. la not this company on a better footing, when its shareholders get 39 per cent, more, and with 50 per cent, of the ■capital in claims of undoubted value and at a substantial prtmium ? Since reading your article I have again thoroughly looked into the prospectus-and the interests that shareholders will obtain, and I am more than ever satisfied that my investment is a sound one, and likely to be more than ordinarily profitable. It does not matter to me that the members of the syndicate are doing well out of their venture. I am principally concerned to know that the money I have invested is likely to yield me a highly satisfactory return, and I write this letter because I think the members of the syndicate should be put right in the eyes of the public—l am, etc, C. W. Kerb. Ootober 21.

[The remarks ref ;rred to by Mr Kerr were based entirely on the statements contained in the prospectus. When writing we were not in possession of information tending to show that at least two of tha properties belonging to the syndioate are of an exceedingly profitable oharacter. One of their, we are assured on unimpeachable. authority, baa yielded something like. £4f>,ooo worth of gold during a little over twenty years, and there are some forty-four acres of virgin ground, part of the claim, awaiting development. Had facts like these been ascertainable from, the prospectus itself our comments would not have been made. Prospectuses are public documents, and ought to take intending investors into the fullest confidence of the companypromoters, although in this instance the promoters failed to put in information which would have told in favor of the investment. We used this one in good faith, without naming the company, simply aa an illustration of a principle which appears too commonly to rule such undertakings—viz , not giving all the information that might bo furnished.—Ed. E.S.]