University of Virginia Library

ENGLISH VS. AMERICAN MINE REPORTS

Again, granted even a valid and a well-managed mine, how much information regarding it does the average investor in the stock secure? In a general way, he knows in advance that all mining, whether placer or quartz, is very expensive. Beyond that, he gets the annual report of the officers, which will tell perhaps the names of the men who are spending his money, the total earnings, the total output, the balance sheet, the statement of capital stock issued—and little else. All of which means nothing!

A well-regulated English company is obliged to go much farther than this. A good annual report will show the advertisement of the general meeting of stockholders, the list of directors and officers, reports of directors, giving details of the condition of property, including the development work, the tonnage of production, the values recovered from such tonnage, the costs of operation, the profits for the period covered, the balance sheet of accounts, the profit and loss statement, including a working cost estimate, the appropriation list showing what has been done with all the earnings, the reports of managers giving details of the development work, the estimated values of ores exposed on three sides, the probable values of ores not so well exposed, the working expenses, the construction account, general remarks on the physical condition of the property, and a map of the property itself.

What American promoter would trouble himself to make such a showing as that to the American sucker? Even if such detailed information existed in the records of the average American mining concern, the sucker could not get access to the books even did he have the temerity to demand it.

Professor H. S. Munroe, of the Columbia School of Mines, when asked whether such a thing as general supervision of mining investment could be possible, answered: "Yes, if some philanthropist will give us ten millions to endow such an institution, and maintain a corps of engineers in the field who will do work similar to that accomplished by J. Curle under the auspices of the London Economist. Such work should, of course, cover all incorporated mining companies, not merely a few hundred of the more prominent gold mines; and it should be continuous and not spasmodic. Such a plan is of course Utopian, but I feel that anything less would be likely to do little good. Even Curle's opinions began to lose their value within a month or two after they were written, and are of less value every year. Mining can never be put on the same basis as agriculture, for the reason that the risk of failure is infinitely greater, and that it is impossible to prove the value of any mine or mining region without spending a large amount of capital, the greater part of which will inevitably be lost in this work of initial development."

Those are the sober words of an expert who spends his life in studying the theory and practice of mining. If such words shall teach us a little wisdom, so much the less need for laws. But let us consider what the laws ought to do in order to protect you for the sake of your family, and for the sake of society, and for the sake of the savings which lie back of the prosperity of this country.

Let us agree that no government can guarantee the safety of any investment. Let us admit that digging gold can never be put on the same amortization basis with digging potatoes, for instance, because the soil remains

for more potatoes, whereas the ore of a mine is exhausted and does not raise more ore. Nevertheless, although the industries of potato growing and ore digging are not the same, the principles lying back of them ought to be precisely the same; and our governments, both state and national, ought to see to it that they are kept precisely the same, and controlled on the same plane legally. If it be true that no government can watch after every mine, none the less any enlightened government can establish general conditions for engaging in mining or engaging in the sale of mining stock; and, perhaps with yet better results, it can establish a general supervision over the mining intelligence of the public, just as it does over the agricultural intelligence of that public.