THE FUTURE OF GOLD-MINING IN OTAGO.

Otago Witness, Issue 1374, 30 March 1878, Page 4

THE FUTURE OF GOLD-MINING IN OTAGO.

(Written specially for the Otago Witness.)

By A Mineb.

Otago, like every other gold-producing country, has felt a relapse after the first flush of success consequent upon a sudden increase of immigration, which, if it did not bring wealth with it into the country, created it by its labour. This relapse is attributable to one or two causes — whether Otago'a case or that of Victoria, or of any gold-producing country be considered — these are, namely, counter-attractions elsewhere, and the exhaustion of surface diggings, and for neither of these causes is there any remedy ; a preventive for a continued exodus or abject impoverishment of the miners must be sought in another quarter.

It is admitted by every experienced miner that quite as much gold as haß been taken from the Otago Gold-fields yet remains to be raised ; and although it may be only procurable under far greater difficulty than had to be encountered heretofore, yet it will yield as large, if not larger, fortunes than have ever been known in New Zealand. The two greatest difficulties in the way of developing the unworked portions of our goldfields are scarcity of mining timber and the high rate of living. It must, however, be borne in mind that, writing as I do from the Wakatip Gold-field, I quote perhaps the highest prices for provisions charged in the whole of the Colony. To clothe and diet a miner decently in this locality requires about 30s. or 355. a week. It would serve no purpose to go into detail on the ruling prices of provisions, &c, nor is it my desire to calculate the profits of the trader — my object is to point out the difficulties under which the miners labour, and why it is they do not and cannot widen the sphere of their action in Otago. To show that business men on the Gold-fields have been blind to their own interests in keeping up prices, I need only mention the prices at which a few articles are sold by different firms. For instance, gum-boots of the same manufacture are priced 275. at one store, while at another they are sold at 20s. per pair ; moleskin trousers vary 2s. 6d. per pair at different stores, and the cheaper are the best as to quality. It is the same with local produce. The price of bacon is lOd. and Is. 2d., according to which side of the street you buy it ; bread is seemingly the most unstable of all articles, varying, according to the whim of the vendor, from Bd. to la. per 4-pound loaf ; and in the midst of millions of sheep and thousands of cattle, which have become so plentiful that boiling-down establishments are talked about, we are charged from 4d. to sd. for mutton, and from sd. to Bd. for beef.

It may be advanced that there is a simple and ready remedy to procure cheap materials — viz. : to deal where the most reasonable charges are made ; but this does not meet the argument advanced, for the lower prices quoted are only of a few months' duration, before which time only one price was known for the same article in the different stores, that was the highest, and the reduction was not made until the goose that laid the golden egg was nearly killed. Whether a reduction of 25 per cent, in the cost of living is a consideration, I leave those to decide who have had some experience in the matter.

The indirect effects of these high prices have produced a- more disastrous result than emptying the pockets of the miners, for by thus reducing the value of money, habits of recklessness and waste have been fostered that are nowhere to be found except on a Gold-field. It is not at all my aim to exonerate the miners from the share of the blame they bear in having brought about the present reduced condition. I have lived quite long enough amongst them to produce damnatory evidence against them ; but as by law no one is expected to criminate himself, I beg to avail myself of the privilege, and turn my discourse to the only source, so far as I am able to judge, from which improvement may be expected. If gold-mining is to continue as one of Otago's industries, capable of giving remunerative employment to a large number of men, it can be only by an honest and fair co-operation of labour and capital, not of that orthodox description hitherto followed, of forming a company with large fixed capital, to be expended chiefly in labour. While those undertakings have in Otago at least, almost without exception, proved futile to the capitalist, the few instances of success furnish the key to solve the problem. In nearly all such successful cases, the system of "backing" has been more or less closely ad1 hered to. This system differs from others in this respect, that instead of the workmen engaged upon the undertaking being only labourers, they are made shareholders, and depend for part of their pay on the success of the venture. To illustrate this more fully, a company may be supposed as formed upon such a basis. For the sake of order and system, as well a3 for the mutual protection of the shareholders, it is necessary that the company be registered under the Mining Companies Act, and that the scrip or shares into which such company is divided represent and maintain, in its first issue, a fixed value. A part of the nominal capital is reserved in unallotted shares, which

* We shall be glad to receive and publish ia our .columns any comments on this ipaper, or anjr tuples in farther ventilationjof the subject, which' may be pent to us,

are to go as part payment for labour, onl such part of the current wage being paid in cash as will suffice for the workman to meet his weekly expenses say £1 or £] 10a, as the case may be. Besides having the effect of considerably augmenting the spending power of a company, this plan furnishes some guarantee that the undertaking has a reasonable hope for success, and also that the money and labour put into it are expended to the best advantage, for it will require no special argument to point out that no miner would go to work upon a claim, if he was not led by his experience to expect to be paid for his labour. The advantages of such a system will be self-apparent to the speculator, for it is nothing less than a mint ; such a company is to all intents and purposes issuing notes worth 20s to the £ sterling ; and this system has also a far-reaching beneficial influence on the miners as a body. There is a tendency in all employers of labour on the goldfields to reduce the mining wage, as a plea for which it is advanced that the charge is too high as a preliminary outlay, or that the venture which does require the labour cannot afford such a strain as £3 or £2 10s per week per man imposes. There is a great deal of truth in both arguments, which, however, the proposed plan meets completely. Perhaps it will be replied that a company which enters into such a contract, is saddled with men, who, however promising at first, turn out upon trial as worthless, or too dear even at the price, and could not be discharged because they are shareholders. This is utterly fallacious, for the men have engaged with the company as workmen, upon a fixed and clearly-defined understanding, and as soon as the company (as the employer) performs its share of the contract, all connection between employer and employed ceases. The workmen who have become shareholders will have no other claim upon the company than that confered upon them by their scrip.

When an undertaking has been brought to a successful issue, and ia yielding a return sufficient to allow the whole of the working expenses to be paid in cash our of the proceeds, it will of course be preferable to discontinue issuing shares in lieu of cash payment. It is now that the greatest benefit will accrue to the miners, for having placed the mine by their assistance in a prosperous condition, the objection to the rate of wage can no longer hold good, and it will be seen that by adopting and advocating this plan, they will do the very best thing possible to maintain mining wages at a fair figure.

Another and almost incalculable advantage of such a backing system will be that it will reclaim mining enterprise from the hands of men, who, through their action in the past, have reduced speculative mining enterprise to little better than gambling ventures. It is painful in the extreme to contemplate the amount of money that has been fruitlessly sunk in mining by capitalists. In Otago alone the amount cannot be very far short of £1,000,000. Whatever the real sum may be, it will be found to be enormous ; and the result nil, absolutely nil. It can, therefore, not surprise anybody, that, however willing merchants and others interested in the development of mining have been in the past, and may still be to assist, they have after such a lesson become cautious.

There is no reason why public mining companies should not pay as well in Otago aB in Victoria, yet we cannot quote one single company, on' any of our Goldfields, that even in an approximate degree approaches to what in Victoria would be called a fairly paying spec ; and why this is bo must be attributed to overspeculation It is well-known that more money is made by the sale of and the speculation in mining shares than the total dividends of any company have amounted to ; nor can speculation in mining shares be condemned any more than speculation in shares of any other concern, be it bank or insurance companies, provided that the rise and fall be not artificially procured. But the very uncertainty of mining seems to be the great attraction to the most reckless gambler, and in his impatience he cannot wait till things take a turn in his favour, but must always be busy to hasten on such a consummation by foul means if fair won't serve ; and it ia this " over-speculation " which has been the bane of, and nipped in the bud, nearly every mining company in Otago, until the very word "mining speculation" has come to be synonymous with swindling. I do not hesitate to state that if the backing system got a fair trial, it would prove that mining in Otago could be prosecuted like most other speculative businesses, and be made quite as remunerative here as it is in any other mining country.

Although, generally speaking, legislation has not done much for the development of mmmg — for experience teaches that wherever it has been left most alone there mining haa prospered the most — yet it cannot be denied that the new Mines Bill has introduced several innovations, that will react on mining in a favourable way. Water rights taken up under the new Bill will in effect be the private property of the applicant, and may be assigned and mortgaged like any other freehold ; the reduction in the price of leases will enable miners to prosecute their calling in a more efficient and systematic manner than has been the case heretofore ; while the provisions made under the new Bill for settlement upon the Goldfields is the most liberal imaginable, and must inevitably result in'attaching a large number of miners permanently to the Colony. These very decided improvements, taken together with the contemplated School of Mines, dhow that the

Government have at last recognised the importance of the mining industry, and are ready to lend any legitimate assistance in their power to the furtherance and development of mining in the Colony. It therefore behoves the miners to strain every nerve to embrace the opportunity offering, and by honest effort raise mining to the rank of a profession, as it ought to be. Those miners with families are especially concerned in a healthy development of mining, for a certain proportion of their children will nndoubtedly follow the calling of their fathers, and it is desirable that the miners of the future should find a state of affairs not quite so chaotic and discreditable as is presented by too many of our Goldfields.