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Show I.N VESTMENTS IN WESTERN AMKH1CA. Sir, Wo have heard a good deal of the swindled perpetrated by tho vendors ven-dors of American inincH, but little or nothing of those accyuipliihed by promoters, pro-moters, syndicates ond capital-mongers on this t,ide. Of the two the latter appear to uio to bo the most difficult to deal with. An American vendor has but Gnu chance the wiling of a bad property er a good one for more than it in worth, liut if we buy mines upon the representation of American vendors, wo deserve to be taken in. Americans are not better than other people, and, according to my experience, experi-ence, a VVelfth or a Cornish vendor is not a bit trustworthy. Why, sir, it' you havo an idea of purchasing a Welbh slate quarry you will lind plenty of vendors of bad bargains, and scores of Welsh experts rjudy to give flaming reports of their prospects. The whole population is ready to havo yoo spend your money amongst them, come what may; and if you attempt to trust : them you will inevitably lose your money. Havo none of your readers been taken in by tho representations of Cornish vendors and experts? Ib there no salting, no exaggeration, no concealment conceal-ment of difficulties? Are Cornish proprietors pro-prietors so anxious for the public interest in-terest that they aro ready to sacrifice the unheard-of advantages of their mines, and the 1U0 per cent, they are sure to realize? Well, sir, let uh come back to common-senso, and, depend upon it, the public must learn to act on business principles, and must accept ac-cept fully the reeponhibility of purchasers. purchas-ers. It will then bo seen that investments invest-ments in American mines will bo successful suc-cessful in proportion to tho judgment brought to boar upon thoir purchase and the richness of tho country. As tho latter is at least many times greater in America than hero it Bhould follow that in that proportion the prospeots are nngnter. uut tno iauures uuo lo tho manner in which theso properties aro introduced horo are muuh more disgraceful to our commercial Bystem, and much more difficult to guard against. Two mining companies may be brought out on tho same day with a oapital of (say) 300,000, of whioh some 20.000 is appropriated to working work-ing capital, the rest (say, 150,000) is to bo paid in cash; and the remainder in oh ares. Now, we havo already laid down tho principle that a large payment pay-ment of cash ought not to be considered consider-ed as an evidence of swindling. If tho mine to bo purchased has an extensive location, iswell and sufficiently explored, explor-ed, has an abundance of rich ore within easy access, or actually on the dump-yard, if there bo extensive and valuable ouildings, machinery, etc, in fact, if thore bo really value for the 150,000 it is better that tho oash should be paid for it, beoause, as a rulo, ready money will secure prompt and complete possession on the easiest terms. What we have to guard aganst is that oash bo not paid for prospective, and therefore doubtful results. These should be represented by the payments made in shares, which should occupy a secondary valuo to those of the proprietors pro-prietors who have paid their oash. Mow, sir, tho publio havo really a great difficulty iu determining the question of valuo, especially when tho promoters are gentlemen of high position posi-tion and wealth, who profess to be parties to the valuation of the property and shareholders in the result. The Times, however, is quite justified in cautioning the public against paying large oash payments, though not for the reasons assigned. Tho business objactioo is that there are few mines which justify such payments. What was there, for example, to justify tho directors of tho Emma in giving 500,000 in oash for a property which had changed hands shortly before for less than one-eighth of that sum ? There was no machinery, no buildings, no furnaces, no tramways, no pumps, and even the mine itself was known to be unsafo from insufficient timbering. By no possiblo calculation could Buch an amount of ore be accurately accurate-ly described as being"in sightTor the simple reason that its value could not be tested by assay. If the directors had really seen tho condition of the property in tho true interests of pur- j chasers is it possible to suppose that j they would have paid so much for it? i I know nothing of the circumstances i in ueiau, uuu u ia ucuaiu mab iuc Americans were less to blame than the directors of English capital. It might have been supposed that the history of the Emma purchase would havo led to a very close scrutiny of the position and motives oi' promoters and directors in other cases; but there is so lit tie difference between thepropseotuses of a good and bad property, and such little care is taken to separate the interests in-terests of directors and vendors, that it becomes exceedingly difficult to find out whether wc are likely to be taken 1 in or not. Quite recently a company has been launched, with a capital of 300,000, to bo appropriated in the way already described. A most enticing en-ticing prospectus was issued, and very largely advertised. Gentlemen of title and position were put on the direction; and the property was represented to be extensive, and of great value; a confidential expert reported in favor of its prospects; a director of a well-known and successful company had visited the property, and had consented to oome upon the board; and the company was to have the privilege of electing the vendor as a director as soon aB the purchase was complete. No sooner was the company's prospectus launched than laudatory articles appeared in nearly all but the leadiog journal. Tho shares are still quoted at a premium, prem-ium, and from time to time accounts havo been published of tho progress made towards developing the mine. Now, sir, to reduco all this to the limit of fact. That the property is exten-sivo exten-sivo cannot bo denied, but extent in America is not considered a matter of much account. I venture to state that I could have bought the entire mining district for the sum said to be paid for tho mino I havo desoribed. No great developments of wealth have as yot been made in it; no single proprietor pro-prietor has got rich in it; a considerable number have lost their all in it. Prospects Pro-spects are to bo had in any number, and on the easiest term?. The property which tho English proprietors have bought for 280,000 was for several months last year in tho hands of San Francisco capitalists, who failed either to sell it or mako it pay. Geo- Hearst, annfcfiscdlv tho host iudpo nf mininp properties on the Pacific Coast, and who is backed by the richest capitalists capital-ists of America, went to see it last , autumn, and refused to give $20,000 i for it. Keport states that it was taken up by an American speculator at $-15,-000, and that on his arrival here ho askod the moderate price of $100,000. It will not be difficult to imagine the oourso of events. Some fifteen or twenty capitalists, probably, agreed to take upon themselves the rcsponsibil ity of paying tho price asked, and of finding tho small amount of cash required re-quired to work tho mine and build a furnace; thenxho public were invited to subsoribo as wo havo seen. It would not surprise me to learn that I am over-estimating the success of the venture ven-ture by .supposing that less thau ooe-tenth ooe-tenth of the shares offered to the public pub-lic have been taken up. In that cate the syndicate wilt realize more thau sufficient to pay tor the mine, for advertising, ad-vertising, getting a quotation daily, and still havo somctbiug left for working work-ing expenses. I'rom this moment every share rhey sell to tho publio will be profit; and as they have a margin of 12U.UU". left on hand there will be no want of stock in trade for some time to come. Ba; how to get the in off? Why, of course, notbinu is cir-it-r than to pay dividends; of '60 per conL The management man-agement will, of course, rem iin abo-utcly abo-utcly in the hands uf vendors The bona fide subscribers will bo passive; they dro not prupo.-o li j'ji l itiijn, because their money would bo divide ! amongst all the holders of sh ires. It is a bad "proi-pec:"' iridic j thv will n at pay wffi!H;io(t towards tati 'Vine the ca.h subscribers, and ilie public may easily suppose the dividend has been paid upon the entire capital. Of course, if nothing has been earned some other expedient must be found. The mine may be salted, ore exchanges may be made, or a New ifork banker may be found who will pay the dividends by mistake. Somehow or other, depend upon it, dividends will be paid; and the public, after being well baited, will be taken in as a great favor when the fhares-reaeh a premium of 50 per ocot. , Thus the very people who ought to form the protection of the public become be-come their spoilers, lo such cases experts, ex-perts, directors, stockbrokers, and financial fin-ancial agcuts are all interested aB vendors mure than they ever oan be as shareholders; and the publio having paid their money, awake, after a year or two, with the sense of having been done by Americans, when it is their own ostensible agents who are, in fact, to blame. A Traveleb. London Mining Journal. |