PRESERVATION INLET REEFS. TO THE EDITOR.

Otago Witness, Issue 2086, 15 February 1894, Page 13

PRESERVATION INLET REEFS. TO THE EDITOR.

Sib, — Some correspondence in your columns in January last calls for serious and important reform by the Government, as gold reefs are an important national asset, and as an interest capable of profitably employing thousands of miners, if the leases of 30 acres were honestly carried out by miners, companies, and the Government. At, present investors are completely at the mercy of beiDg defrauded by every new company floated ; therefore the industry of mining is paralysed, to the serious loss of all interests in New Zealand. For example : Six or 12 working miners discover a payable reef, apply for a lease to the warden at Riverton, which is granted, with sufficient time to get machipery on the ground. They float a company, with an enormous share capital of 30,000.0r 50,000 £1 shares, with three-fourths of them paid-up to 15s, the remaining fourth to pay up all calls as far as 153 per share, if necessary, in developing the mine. Then, when that point is reached, all the other shares are liable for calls ; but should the mine be payable at an early date, or be boomed by false and exaggerated statements, the owners and directors, who hold the original 15s paid-up shares, place them in brokers' hands in Dunedin, Christchurch, Wellington, &c, and sell

at the biggest price they can get that which has cost them nothing, and at the risk and cost of the one-fourth of the shareholders who have had to pay calls for machinery, material, and wages.

This fraudulent and swindling system has well nigh ruined gold ruining both in Australia and New Zealand, and the Government are seriously to blame for permitting the State property of gold reefing areas to be made the machinery for robbing innocent investors, and causing pecuniary loss to all commercial interests and permanent settlement that would be created by successful mining. The cure is for the Government to insist on the holders of leases to begin the work of developing the lease with the requisite number of men according to area of 10 or 30 acres, or forfeit the lease and let others try it ; the abolishing of all large share companies in floating — as in the case above-mentioned 10,000> shares in the company of 30, 000 are considered enough to find sufficient capital to fully prove whether the mine is profitable or not. The confidence of investors is completely sapped in company-mongering, which is not mining. A report in your columns lately informs us that a London investor in Queensland quartz mining had been very successful in investing money in companies of 10,000 or 15,000 £1 shares, proving that the share capital was ample for proving the supposed mine, and dividends correspondingly large when the mine became valuable. Such will be the case here if honest miniug is intended, and plenty of investors of spare cash in same. The Government are seriously to blame in allowing State property to lie unutilised through a bad law without making an effort to reform the same ; and they should also devise measures for the protection of the ganeral public. — I am, &c, February 5. iNVKvrou.