MINING PIONEERS OF TO-DAY

Otago Daily Times, Issue 22063, 20 September 1933, Page 9

MINING PIONEERS OF TO-DAY

TO THE EDITOR. Sir, —When reading recently the conditions of the reward offered to Hartley and Riley for the discovery of their goldfield I thought of the “loading” of the typical mining company of to-day. These two pioneers lone handed faced all the dangers and trials and hardships of prospecting in the early days, and what was their “rake-off?” Sixteen thousand ounces of gold had to be won from their field before they were entitled to anything, and then their share was £2OOO cash. No “ promoter ” shares, or any other perquisites such as a seat on the board ,of directors, went with the cash. Contrast this with to-day’s “ pioneer ” who, in most cases, takes an option for Is, does not know what a hardship is, takes not an atom of risk, launches a mining company on the public, pockets some thousands in cash and a loading of “promoter” shares which are eventually disposed of to the public, and leaves the people who have aetifally put up the cash to prove or disprove the fabulous returns from the claim. No such condition as the production of a certain amount of gold fetters this “ pioneer.” All he is concerned about is the minimum subscription to allow the company to go to allotment, when it is then in a position to pay him his “ modest ” cash consideration. We also find in certain cases that the articles provide that the promoter has a seat on the board. Some go so far as to state “ the promoter desires to be associated with, and to share in, the responsibilities of management.” The amendment of the Companies Act should provide for the amount of gold to be won from the field as set out in the prospectus before any cash or any “promoter ” shares can be paid to the promoter. This means that the bard cash put up by the long-suffering public would be preferential capital, and it should be. It would be essentially the same terms that were imposed upon Hartley and Riley, and why should they be any different to-day? Hartley and Riley earned their reward. In a month or two the acid will be upon several claims which have been floated, and shareholders will be faced with the usual string of excuses. But the outstanding fact will remain that the promoter has had his cash consideration and has probably disposed of the bulk of his “ buckshee ” shares. In my opinion the extravagant claims and prospective profits should be proved before any profits or even payments be made to the promoter. This would have the effect of raising the status of the mining industry and of making available huge sums of money which under to-day’s ways and methods are afraid to touch mining.—l am, etc., fair go. September 18.