MANAGEMENT OF GOLD MINING COMPANIES.

New Zealand Herald, Volume VII, Issue 1840, 7 December 1869, Page 6

MANAGEMENT OF GOLD MINING COMPANIES.

The adjourned meeting of persons interested in the management of gold mines was held yesterday, pursuant to notice, at the office of Mr. Lascelles, Shortlandstreet, for the purpose of receiving the report of the committee appointed to inquire into and report upon the present evils connected with the management of gold mines at the Thames. . On the motion of Mr. Thomas TCtjssell, seconded by Mr. Lascelles, Mr. James Farmer was called to the chair. The Chairman said the meeting had been convened in the usual way, and notice 'and been given by advertisement in the newspapers. The object, of the meeting was to receive, and. if they saw fit, to adopt the report which had been drawn up by the committee appointed at the last meeting. The Cn.umtAN read the report as follows :— Report of the Committee appointed at "'e meeting held ou the 25th inst., to consider and Report upon " The Present System of Management of the Companies and Claims at. thcThmiesGoldfiold." Your Committee hare very carefully eon" sidered and discussed the various topics which may be considered lo be comprised under (he head of " Manau'-.'mciil of ill-- Companies and Claim?." ami have now t e pleasure of laying before you the rosull ol" their deliberations, and, in doing so, would wish it to be understood, that whilst eaeh subject has met with the fullest criticism and consideration, the resolutions which have teen passed by the Committee have, inevory ease, been unanimous.

1. The vei-v important p.mi! of the amalgamation of the claim.~ w;jy t'jie first, whilst it is probablv the most important, that occupied the attention of the Committee, and it is felt, to be so important that, they ilrsire to record their opinion that all oilier ivfor.n is mainly dependant on '.''.is being carried out in the vast majority ol' cases. Whether us regards economy of management, permanence of the speculation, or careful ami ell'.-etivo supervision, the Committee believe that these, and their lvsults—profit :>bk- rot urns—«m only be obtained in a satisfactory manner by disc-ou-linunee of the present expensive system of working small separate patches, anl by increasing the area of the claims; and in order to meet the iliiiieulties which have hitherto prerenied this very desirable ivsulr, it was resolved—" U'hatit is'dcsirnbloto increase thearea of many of the claims at. the Thames by ihe ainaltr.'inini ion of adjoining claims, and that the Superintendent he moved 10 make such regulations as will enable a majority in number and value iu any claim, by resolution, to bind t!:e luiuoritv. , '

2. The necessity of more elt'eetive supervision aud management of the claims next called for the consideration of your Cominittcc, and, after very careful deliberati on, they resolved to recommend —"That the mines until they are formed into larger claims and areas, should be worked by a foreman, receiving his instructions from an inspector of mines, appointed by, and responsible to, liie directors." In the details of this measure, much must be left to the discretion and powers of the directors of each company ; but your Committee believe that it would not be difficult to engage competent mining inspectors, who should be paid a certain fixed salary, in proportion to the area inspected by them, and who should conduct all the practical working of the mines, making their suggestions to, aud receiving their orders from, the directors. The present system of virtually unchecked working managers your Committee entirely condemn. 3. The difficulty that is experienced in convening meetings of the shareholders at the I Thames, the absolute impossibility of procuring efficient and willing diuvtors there, and t:ie extreme desirability of having the offices of the company in such place as is most accessible to the majority of those interested, have induced your Committee strongly to recommend —"Tliat" -where the majority of the shaveholders are not resident at the Thames, the offices of the company should be at Auckland," and they believe that this suggestion will meet with very general approval. 4. "With a view of affording some check on the accounts, aud of inducing the workmen to realise their responsibility to others, the Committee resolved—" That the payment of the men should be made through some other method than through the working manager." Should the foregoing recommendation of appointment of Inspectors be carried out, it ■would not be difficult to make arrangements for them to attend at the payment; but should this method not be found practicable, your Committee would suggest that such mode of payment be adopted as may prevent any collusion between the working manager or foreu.an and the workninn or miner, and as will enable the latter to feel his responsibility to his actual employers. 5. Another important point connected with the :'nancial administration if the companies and claims, is the present system of, and audit of, accounts. Your Committee have eau-e to believe that, in a very large number of cases, the accounts are kept in a very careless and linsati-fhi'lory manner, and that serious inaccuracies frequently exist which can only be prevented by adopting a-careful audit by competent auditors, and with this view they resolved —" That the Eever.il companies be recommended to apply a stringent system of audit to their accounts, such auditors to be paid out of the companies' funds."

G. ]S"ot U-s* important than the foregoing is the direction of the coneriil affairs of the various companies, and it is the opinion of your ! Committee that very much of the efficient working of the companies and claims depends upon the care and uttcnti' n given by directors to their duties, and they strongly urge the shareholders of the several companies to select those directors only who will give the necesaary time and attention I<j the affairs of the company or claim.

7. The various conflict ing statements that have been made on the subject, and the general feeling of insecurity that prevails, with regard to the abstraction of specimens from the mines, and of amalgam from the batteries, have met ■with serious consideration from your Committee ; but whilst they admit the existence of the practice to a small extent, they believe that the circumstances of the various mines and batteries differ so widely, that it must be left to the directors of each to take the necessary precautions against such theft, and the following resolution was passc.l —" That in Order to prevent pilfering specimens, it is desirable that all the batteries should be closed to the public, who should only be admitted on presentation of a card of admission from the legal manager or a director, and that greater care should be taken of 1 lie specimens ami amalgam."

8. The obstructions freqncnt'v made by the proprietors of adjoining claims to the adoption of such means as would facilitate the working of neighbouring properties, by making tunnels to attain deeper levels to the claims above them, have induced your Committee to su"gest—" That the Superintendent be moved to put into force the power given by a recent Act of the legislature, to authorize the making of tunnels through adjoining claims, so as to attain lower levels to the claims above them.

9. Your Committee vrould recommend for more general practice the system of working by contract, as far more satisfactory to the capitalist and to the honest workman, and that wherever it is necessary to employ time labor, that it should be engaged, and paid for by the hour. It is believed that there is room for the exercise of much economy nyi this point. 10. Though your Committee can scarcely hope tli.'it their opinion on the point will be unanimously adopted, yet they consider that the expression of such opinion on the cause of the present depression on the-goldfields will be expeeted : in, a report of this nature, and to prevent any misapprehension, they would conclude their labors by a statement of their belief that to undue expectation of immediate

results, to over-speculation, and injudicious investments, is to bo attributed mainly the present low price of all mining interests on the goldfields. Whilst the mismanagement alluded to in the other parts of this report lias undoubtedly retarded the profitable development of the\niues, yet your Committee believe that in no case will the amount that lias been expended in the actual working of the mines, whether as claims or companies, bear any proportion to the sums of money which ha-vo been in too many cases injudiciously paid for the original interest; and in confirmation of this opinion, your Committee -would quote the cases of those mines which are actually paying dividends, the prices of the interests in which are by no means low when the nature of tho investment is considered, although considerably loss than was p:\id during the late period of speculation ; and your Committee confidently believe, that when, by the adoption of the suggestions already made, the working of other mines shall likewise bo attended with like profitable results, it will bo found that this species of investment has not declined in public estimation ; and that, both to the permanent investor, as well as to the temporary speculator, the Thames Croldlield oilers opportunities second to none of a similar character in any part of the world.

Jfr. .Lascelles, in moving the adoption of the report, said : I am glad to sco amongst the meeting several gentleiaen \v)io may be considered to represent the Thames—one of whom is, I believe, a member of the committee appointed at the Thames — having come here to consider this interesting subject. Although the remarks that were made upon us at the Thames may have been ill-timed, lam rather glad thiui otherwise that some remarks have been made, the fact is a sign of the interest that is taken in it, both in Auckland and at the Thames. When all parties shall have considered their proper interest, I think that in a very short time afterwards we will see active co-operation instead of opposition. The interests of Auckland and the Thames are identical ; there is no separating them. There is no doubt that the suggestions in the report have been made quite as much in (he interest of the Thames gold field itself, and those who reside on it, as of Auckland or the shareholders who may be resident here. Btit to come to the objections which have been made. It is thought by some that we wish to nggrr.ndize Auckland by bringing the whole management of the working companies up here. Another matter that was merely incidentally mentioned seems to have given great umbrage. That was the abstraction of specimens. I think those gentlemen who were present will bear me out when I new say that at that meeting it was doubted whether such a thing was common. Unless the miners are more virtuous and better behaved than any other class of people in the whole world, I think they ought to be glad that we propose to place them iu circumstances where they will be above suspicion ; and not only that we should place them iu such circumstances that they would be free from suspicion, but that no suspicion could enter into the minds of their employers ; and to effect this that all persons should be excluded, us stated in the report, unless having authority from a director or the legal manager. I think it may be as well, as this is a public meeting, that I should state that when such a thing was mentioned it was also stated to be a very rare occurrence ; so rare as to be scarcely worth while taking notice of. We have at heart the interest of mining companies. We do not attach blame to any parties. Though we have not taken any measures heretofore, matters have now come to a pass that it is absolutely necessary to adopt some means of improving the system of working, and for protecting those important interests. The other matter to which the people at the Thames have taken objection, is, the removal of the offices to Auckland. Now, there is no denying that four-fifths of the capital in the Thames is Auckland capital, and that threefourths ot the shareholders live in Auckland. Under these circumstances, what is it we ask, but that wo should be allowed to manage our own afl'airs •* All know—the Thames people as well as those resident in Auckland —how often it happens that two or three meetings are called and lapse for want of a quorum, and at last the} , see an advertisement iu which " it is particularly requested that shareholders will attend" so that the business may be transacted. Even in some cases at a directors' meeting they cannot be got to attend. I Many people know that companies are I placed in great difficulties in consequence of being unable to issue their report. It was certain that shareholders in Auckland could not give up their time and business to go down and wait at the Thames under such circumstances. But •we have no wish—l speak for myself and those gentlemen who assisted in framing this report—that the whole of the meetings should be held here in Auckland. There are cases where it would be most convenient to hold the meetings at the Thames ; but when we do find that in nine cases out of ten the directors live in Auckland, then it is only reasonable that we should expect the minority to give way to the majority. I might also state that we do not want to start anything like opposition or rivalry. What we want is co-operation. Rvcvy one of us is suffering more or less from mismanagement. If we are to get out of the present difficulties it must be by a long-pull and a strong pull and a pull all together. I here is no doubt whatever as to the goodness of the investment; but we have very greac doubt whether we have gone about the work we had to do in a proper way. If any gentlemen at the Thames will join with us iu effecting such improvement as is needed, we would be happy to have his assistance. I see gentlemen present who represent the Thames in respect of feeling, as well as large interests; and I hope we will have from them co-operation, and not jealousy, and that in assenting to this report, they will assent to a great good. But not only by our assent to this report, but by our individual action in all companies in which we may be interested, we ought to give force and operation to the principles contained in his report.

Mr. Mackelvie seconded the motion for the adoption of the report.

Mr. Eowe, in answer (o loud calls to address the meeting, said he was put on the committee at the Thames, although lie took no part in the meeting. 'J lie necessity for some such movement at the present time must be obvious. Whether the suggestions made would exactly cure the evils he could not. say. With reference to an amalgamation, he thoroughly agreed with that. As to the difficulty of getting meetings together, his experience was that Auckland was as bud as the Thames, man had wasted half the time he had in trying to get directors' meetings even in Auckland, They were not very punctual in coming together in this city. _ There was another aspect of the question. Directors might be perfectly _ competent to carry out the financial management, but directors in Auckland would never be able to manage a mining interest, unless they have

their managers with them at their meetings. It was impossible, in tho nature of the thing, that gentlemen in Auckland could understand the details of working a gold mine. It would be necessary to have gentlemen who would have a number of mines under (heir management, and with whom they could have frequent communications. He found it difficult to make directors understand unless by meeting them face to face. With reference to specimenstealing, he did not think that the remarks which had been made on that subject were worth much consideration. It did not exist on.

anything like the scale that was supposed. He (IVTr. ltowe) had never been able to find out more than one or two authentic cases. As soon as they were found the men got out of reoch. Attempts were made to collect evidence, but he had not succeeded in getting enough evidence as would amount to a conviction, lie (Mi. Kowe) was sorry that matter was brought before the public, because means had beon taken to discover whether such practice really existed, but as tho matter had been brought forward it was, probably, that any endeavour rnado in this direction would be foiled. To remedy tho present evil there could be no doubt they must have larger areas to work on. There must be a well advised system adopted—a system that would be economical. Work should be measured every week where it is not done by coutract, and it ought to be done by contract wherever that was possible. Working managers had not, up to the present time, been quite competent to the work or to occupy the position in which they were placed. In some cases they were not judges of work, and in others they could not measure work after it was done. But these were being substituted by a better class of men. He (Mr. Kowe) did not think it would be right to withdraw all confidence from the working manager. They might have inspectors, but if the working manager had himself no interest in the work, if they could not awaken interest in his mind, then they would certainly not succeed. Where the working manage', was not fit for his position, lie should be done away with as soon as possible. Nothing was more calculated to perpetuate an unsatisfactory state of things than want of confidence between working manager aud directors. If there was once a feeling of suspicion that could not bo allayed, then the}' must do away with the working manager. He was not certain that the imported talent was an improvement on what they possessed in this country. If they only used properly the tslent they had there would be no necessity to go far to seek it. But there must be mutual confidence between working managers and directors. Unless there was mutual co-operation in mining speculations, they did not succeed. He knew scores of claims which, if amalgamated, ought to pay well and permanently. .He believed the suggestions thrown out in the report were good as far as they went. They would deal with such evidence of evils as was to be found ; and as they were worked, what further might be necessary would be discovered in due time. Mr. Henry Isaacs said he must disagree with something which had fallen from the last speaker. He did not think that any really honest man would find fault with anything, however stringent, that might be doue to prevent the stealing of specimens or amalgam. The truly honest man would be pleased to be put above all suspicion. He had heard of a person, a miner, who had some thirtyfive pounds of specimens carrying about with him. He thought the suggestions thrown out were judicious. He would further add one or two remarks with respect to legal managers. Tho management at present, in a great|number of instances, was exceedingly careless ; mistakes were constantly occurring which led to the greatest anuoyance. Captain Hutton asked Mr. Rowe whether some of the claims might not be advantageously worked under the tribute system. Mr. Kowe thought that very few of the claims at the Thames had yet arrived at such a position that they could be so worked. For his own part he would rather take another course. He thought ii system by which not only wages but a certain proportion of the gold produced might be given to the miners. In such circumstances it would be his interest to protect the property, and to get out of it all the gold ho could. The Golden Crown and the Long Drive might very soon be iu a position to be worked by tribute. In order to work upon the tribute system, they would require to have a large area of ground open, so that it might be let level after level. Mr. Beetham understood that great offence had been taken at the Thames in reference to the removal of managers of companies to Auckland. He believed that a greater amount of dissatisfaction was manifested on this subject than anj T other. Tliey considered that an injury was meant to the Thames. But the suggestion only extended so far, that where a greater number of directors and shareholders resided iu Auckland, it would be more convenient to hold the meeting at that place. There were a great many cases where it was not desirable that the office of tlic manager should be removed from the spot on which the works were. He knew of one case where, in defiance of any such recommendation, the office had to be retained in Grahamstown. He thought specimens might bo deposited in some safe place. Tn order to carry out the suggestion of the committee, that payment of men should be made by the legal manager, it was necessary that the legal managor should be on the spot. Mr. Kowe had suggested, a few days previously, a plan I for sending a clerk to pay the men direct from the Auckland office. Probably that plan might be carried out with success. It would be more desirable, taking this subject in conjunction with the reason that there must be an office down there for specimens, and as there must be a clerk, he could undertake the duties connected with the transfer of shares and the payment of the men. There was no reason why that should not be done. In all specimen claims it would be found desirable to have an office in Grahamstown, aud at the same time to hold the meeting of directors in Auckland. When the pilfering of specimens was spoken of on a former occasion, he must say that he had no feeling. The object of mentioning the subject was to prevent the practice. Everybody saw and knew that specimens were taken about. He thought it best at the time to take the bull by the horns ; or, otherwise, to shut the stable door before the horse went out. There was no allusion to any individual case. As far as he knew, there was less pilfering of specimens at the Thames than on any goldfield that ever existed. The motion fot the adoption of the report was then put and carried unanimously.

Mr. Thomas Bus Sell said : In order that the report may not be useless, I think it necessary that a committee should be appointed, or rather that the present committee should be re-appointed, with power to correspond with the Superintendent on the seVeral subjects referred to. Therefore, I shall move — " That the committee be re-appointed, with power to confer with his Honor the Superintendent upon the subjects referred to in the report, and with power to wateh over the interests of Auckland shareholders." I am not one of those who suppose that those recommendations will intttanlcr cure all the evils that exist ou the Thames golclfield. The evils have grown up partly from our own inexperience and want of knowledge in the management of the mines. A new thing sprung up in the midst of this community, and wo, without any previous knowledge of mining, did the best we could under the circumstances. In this effort to discover evils and supply a remedy we do not wish to reflect upon anybody. All we want to do is to discover the evil, and fret rid of it as quickly as possiole. JVIr. ltowe very graphically described the difficulty of getting 'a meeting of directors ; or rather, he argued against the recommendation to bring the legal management to Auckland, and gave his own experience as furnishing an illustration. But the very systems which he described aro the evils that are complained of. The legal manager has to find out where the directors are ; he knows where one or two are, and he hopes to find the rest in Auckland when he arrives. But he can only find one or two, instead of half a dozen. Now. this is the thing wo want to get rid of and put an end to. We want either to take the whole of the directors from Auckland, or the whole of the directors from the Thames. One or the other—either case will be better than the present state of things. The report only goes to this, that where the majority of the shareholders are resident iu Auckland, the financial business should be transacted there— there the manager should be, in order to receive the instructions of the directors. The very case brought forward by Mr. Kowe appears to me the most striking proof of tho necessity of a change of system. lam glad to hear the statement made that the former working managers are being superseded by a better class of men. I do not sa3' this with any feeling against those men. They were the best men that could be got, and they did the work as well as they could do it. They did their cluty as far as we know. I think tho principles contained in the report will work good, and help to mould public opinion, so as to bring about a change for the better. The motion being duly seconded, and carried unanimously. Mr. Eowe wished to explain that what he intended to have said was, that it they intended to cure the evils they complained of, directors must be punctual in their duty. (Hear, hear, hear.) Mr. It. G. Wood moved a vote of thanks to the Committee for their very able report. Mr. G. B. Owen seconded the motion, which was carried unanimously. Mr. Howe : I will take this occasion to say one thing more before this meeting separates. There is one matter to which the attention of the Committee might be called, with great advantage. It is this, that money should be found before commencing to mine. The object here seems to be to commence mining first, and find the money afterwards. They went to the bank and trot an overdraft, and then as long as the money lasted they worked at the mine. As soon as the money -was gone they knocKed off work. I have never seen mining commenced in that way in any other part of the world. With such a beginning the enterprise was always in debt. Those who commenced to mine should first provide money to go. at least, to a certain extent, according to the prospect. If people did this, many of the evils at present complained of would be cured. (Hear, hear.) Mr. S. Hague Smith moved, and Mr. Lascelles seconded, a vote of thanks to the Chairman, which was carried unanimously, and the meeting separated.