WORKING- OF GOLD MINING COMPANIES.

New Zealand Herald, Volume XIII, Issue 4482, 25 March 1876, Page 3

WORKING- OF GOLD MINING COMPANIES.

The practical -working of the Goldfields has from time to time called forth legislative enactments, which to some extent have secured the object in view. One of the chief purposes of legislation has .been security of title to those who may have invested their capital in gold mining companies. But there arc evils which are not yet brought to light, and means .should be provided to render the greatest security to the greatest number; that is, the largest number of persons, rather than the largest holders or directors in any company. Under the present arrangement the practice is, to name a directory, who, with the legal manager, or secretary, issue their orders to the mine manager, who endeavours to carry them out. For this purpose, a call or calls are made; if gold is obtained in sufficient quantities to cover expenses, all is well. Any overplus is declared a dividend, arid while the mine manager can keep the run of golden quartz to hand, and enable ever so small a dividend to be made, his character is on the ascendant; even if the company can maintain their position without calling upon shareholders it is all right. But when the quartz will not pay for crushing, calls are made ; the small shareholders keep on paying, but the heavy holders hold back, the money is not sufficient to keep the mine workiug, and it is let on tribute, which for the most part, means virtually giving up the property, the per centages : just covering office charges and rent. Or, in the event of continued calls being made, and not being paid by large numbers, the scrip is advertised as forfeited, sold at a nominal sum, realising not sufficient to pay the debts incurred, aud the company is at the mercy of any creditor , to sue and obtain a judgment to sell the property, which must end in the winding up of the enterprise. The bane of all the companies consists in the inordinate desire of shareholders through their directors to divide every pound as fast as it is made, and the want of information to outsiders as to the financial position. It is a delusion to reckonasanavailableassetuncalledupcapital, while facilities exist for dummying shares, that is, to place buyers of scrip upon the book 3 of the company whom it is impossible to find. Far better that it should be legal aud binding that a company should receive such shares at once, and so do away with the delusion, that cash can be realised upon them. In the outset of all companies there is a bad foundation. The amount of subscribed capital bears no comparison to the interests involved, and in no case is provision made for a sinking fund to provide for any emergency. . That a few companies may have funds in hand is accidental, rather than owing to any regulations. Seeing that so many of our companies have come to grief, to the distress of creditors and a portion of the shareholders, while others, having better information as to the state of financial arrangements, avail themselves of their position to avoid responsibility, it would be for the interest of the public—that no company be registered as such, until a certain proportion of the proposed capital was actually subscribed, that debtor and creditor accounts be published every six months, and that out of all sums set aside as dividends, a fixed rate should be declared as sinking fund, to be dealt with only, on the company determining to abandon the enterprise. Such a provision would always ensure awellgroundedstability, shareholders would,pay calls ' if needed, knowing that they would'not be called upon to pay up their liabilities except for the legitimate " purposes of working the mine, and not for the mere sake of keeping the company's office open, and pay-, ! ing debts contracted in maintaining a useless property. If the share list of any proposed company cannot be positively subscribed for to, Bay, one'tenth of the - capital, then let; the parties be content to'work the same as a private speculation, and riot.fce-allowed.to come before the public " with a scheme, in

i which thereis "every thing* to winaail nothing rto^lose^-Tt w is'an- undoubted' fact,"that:'goli-: bearing mines, .owing to , many - } causes, are] liable to seasons of outlay ana unprofitable-; nes?, that calls are made, debts are contracted, which the majority of Shareholders know! nothing; about, and- the; property is sold to t satisfy creditors, to the amazement of those who have been regularly paying. their * calls, j If mines cannot.be worked with.the resources at command, the sooner shareholders know'it the better,—wind it up—and be done with it, not let it be swamped in debt before action is taken, which means ruination to the majority of those interested.—-[Thames .Correspondent.]