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.