To the Editor of the "Nonra-Cuiva Dany News.'
Sm,—It is unfortunately a fact that the prices of shares of existing companies as well a the success of the intended flotation of new companies are not guided by their intrinsic value but by the law of supply and demand. or all practical pu. yeses most or our local shares may ye as counters for gambling pur-Poses, and as the Municipal Council seem to have abandoned the idea of legalizing lottery, the scheme of a gola-uuning company could not have been put before certain section of the public at a more tune moment. If the i yuited i in the development of this comntiy. "The Jess aireculy dependent on the progress conditions under which the pioneer com-object of public com-
loss inflicted on shareholders would be a pany i fail, the pecunii retigation. Should the frst
small evil compared to the serious check it would give to the movement for introduction on a large scale of native and foreign capital in Chinese mining undertakings. To avert, if possible, such a blow to Shanghai trade seems justification enough for a public analysis of the prospeotus, of the Welbsiwei Gold Mining 10.5 be acquired are two limited companies The joint vendors of the proportion to and the proposed daughter company "confidently anticipates" that in its turn it will form "from time to time" subcompanies, a good illustration of the old saying " pig draws on pork." But why this splitting of the risk if a profit "will be made" equivalent to a dividend of 80 per cent?
The sale price fixed by the vendors for their claims is Mexican Dollars 300,000, but it ie nob apparent that any capital expenditure has been made besides a few Prospecting trips, assays, and reports, even the necessary concession of the Central Government to develop the claims on Tiger Hill has not, yet been obtained, it being evidently intended that the necessary outlays for this permit should
The prospectus states that the claims he paid for by the proposed, compeay. cover an area of about 9,600 acres, but it is not said whether. the proposed company will acquire this land as freehold property or not.
Since 1899 the present companies have had in their possession "very favourable reports" and information, to the effect that by the outlay of Mexican Dollars 150,000—"a profit of £20,000" Mexican Dollars 226,000 equal to about. 150 per cent can be made... Why have the vendors delayed five years the exploiting of such an exceptional opportunity and what are the. reasons for their. declining to. raise among themselves this comparatively small capital The two reports published are favourable in what they say but do not seem to cover the whole ground. founded on even more encouraging reports in Hongkong and elsewhere found to their cost the difference between the theory of gold mining. Mr. Duff's aport is careful in-saying that "so far as surface indications go" the veins sre very promising but we read nowhere that prospecting shafts have been sunk. It stated that the immediate work rered is the of three tunnels driving partly through steel hard rock," but) 1 surface indications or the exploration of old workings do not seem to be a sound basis for such expensive plans. Mineral veins are most apt to disappoint, frequently do they pinch out between hard rocks, or end in a pocket or become changed in character and value when least. The vendors seem to hare shirked the expense for the necessary Prospecting shafts and determined their! plans on surface indications only.
Labour is stated to be cheap and abundant but local experience has taught us that undertakings started in China on such first estimates have not paid, the natives disposing of effective means to force up their wages. Independent information also points to certain doubts as to the continuous water supply obtainable in this district.
The history of gold mining in Shantung_ is not pleasant reading. It is true, the province is riddled with old workings and the metal may be discovered in the sand of almost all the streams in the eastern portion of the country, after heavy rain, but so small is the quantity found that the peasants till their fields first and dig and wash in their spare time to earn a fow extra cash. The much excitement Shanghai 1868 when the rumour spreed ary rich discoveries both of alluvial des and of veins alleged to have been made not far from Chefoo. The papers of that time were filled with glowing reports, the people lost their heads, and rushed. to Chefoo on overcrowded steamers. "Advertisements offer ing to engage 5,000 European diggers appeared, but fortunately the Bubble burst after a fow months before much mischief was done. At that time hundreds of experienced foreign prospectors systematically explored every and covery gully near Chefoo and Weihaiwei but not only did none of them find it worth their while to stay but a large number had to apply for Consular help tothe Imperisl Government appointed a wards their passage home. When in 1881
commission, to which several foreign exports wore attached, to investigate the state of gold mining in Shantung, only: the Pingtu mine was reported to contain "payable stuff." In 1883 foreign machinery had been imported and a foreign staff engaged but it was soon found that the results did not justify anticipations and the mino had to be closed down again. The next boom occurred in 1890 when what promised to be a very Golconda according to reports was opened at a spot some 65 li to the South-east of Ninghai, and much better-looking specimens were sent to Sbanghai than those now exhibited by Mr. Duff. But only some empty drifts which had been excavated during the Ming dynasty had been come upon and after a twelea} months' trial, work had to be stopped and, the foreign machinery sold as old iron With such past experience before us it would not stem that, gold mining fair chance of success It would retort Shantung cou! undertaken with a
the development of mining industry in ty, Chins for years if this next move should tam out a failure. Under these circumstances it is the duty of all intending subscribers to fist satisfy themselves by all the means at their disposal that the)
posed company has in itself all the elements of success.
Lam, ete., 4th February.
To the Editor of the
Text read from the printed page and cleaned; old type leaves the occasional error.