PEGGING OUT.

Tuapeka Times, Volume XXXIV, Issue 4895, 28 September 1901, Page 3

PEGGING OUT.

Mr Warden Hawkins, in his annual mining report for the Greymouth district, thus describes the manner in which dredging claims are taken up: — There are certain facts within tha experience of all persons which generally govern the acquisition of olaims and the floating of a company to work them ; and, subject to exceptions, I think it may be recognised as a fact that the general run of properties and formation of companies ie as follows : A man pegs out, say, 100 acres as a prospeoting area, at the cost now of some fonr wooden pegs and, say, half a day's labor. ' He gets one or two experts to make a few holes in and a report on the claim: If he is not in a position to float it himself he applies to some one who is— probably a broker. The prospectus is got out, provisional directors secured, brokers, solicitors, and bankers named. Up to that point the expenses incurred by the " promoter " are probably less than £30 to £40. I have before me the reports of ten companies, and I find from them that the amount of expenses paid in cash bj the several companies for preliminary espenaes average £269. That oovers brokers' commission on flotation, cost of special claim license, &0., apparently all cash expenses of the acquisition of the claim, and the floating of the company. If I am correct in tbis, then the " promoter " is recouped all his expenses, and, besides, a not inconsiderable profit in the way of oommission, and he gets cash for this oat of the contributing shareholders. Besides this, the 11 promoter " acquires from the contributing shareholders paid-up shares in the company to a large amount. What tbis is, is shown by an average of 102 companies in my returns A and B, where paid-up shares are 23§,400, out of a share capital of £1,028,975, or rather over one fourth of the entire capital. The lowest amount I find from the returns is £600 in paid-up shares ; the highest £6,000. That practically is the " promoter's " estimate of the value of a property which he acquired for nothing from the State, for his expenses, if I am right in my svippoßltioa, ate aimyß fixed to ba paid in cash. It is sot as if any great amount of exploration or skill or experience had been used. The pegging out of these claims has, with oertain exceptions, been the most care* less, reckless work. It has been a race as to who could peg out ground quickest, anywhere and everywhere. My returns for last year show tbis, where from the 31st March, 1899, to the 31st May, 1900, there were 919 olaims taken up, including 67,342 acres. It is, I think, apparent tbat the whole burden lies upon the contributing shareholders. They pay all the "promoter's" expenses. They pay for all the machinery of the company. They pay for all the information and suryeys, the boring necessary to assure them whether the claim is profitably workable or not. While the " promoter." stands by, as is said, " on velvet," he has his property proved and worked at the cost of the contributing shareholders. The utmost, it seems to me, that oan be said is that if the company are unwilling to go on «rith ihe venture the license should be hanclecl back ho ihe " promoter,"