The Northern Daily Times.
Liverpool, Merseyside, England, 1853-11-22 00:00:00

servant,

• •
" To' John Harrison, Esq., and John Hopkins, Esq."
The accounts annexed to to this prostrating report are
too voluminous for our columns at present. The reader has
seen that the capital has been wholly frittered away. Not-
withstanding the assertions as to copper ore, not one penny
credit is given for the sale of that metal, nor for the "silver
lead." The gentlemen, whose names are attached, " John
Harrison" and " John Hopkins," thus conclude :—" Your
committee deem it necessary to state, that the books to which
reference is made in the foregoing report being considered by
the accountant indispensable for a complete investigation, an
application was made in le&al form to Absalom Bennett,
Esq., the purser of their mine, to produce the said books,
and he in answer promised to do so, but which promise he
ultimately neglected to fulfil. Your committee, influenced
by a desire to render to each shareholder a faithful statement
of all circumstances connected with this investigation, beg
to refer each shareholder to the Reports of Mr. Begbie and
Capt. Vivian ; and when a general meeting of proprietors
takes, place, your committee will have the pleasure of tender-
ing any further information in their power in and for the fu-
ture welfare of the proprietors generally."
The meeting adverted to is to come off at Liverpool this
day (Friday.) There will be a pretty. scene !
In Carlisle there are numerous victims; no less, we are
told, than a score or more. They were assured that a good
thing awaited them, and some of them bit to the tune of
£1,200 ; some £9OO ; some £BOO, £6OO, £4OO £3OO, &c.
They rushed upon the hook like a shoal of perch when sand
is thrown into the water. They were told that shares were
a matter of favour. Nay, some were pulled in under the
guise of philanthropy ; they had shares ass boned almost as
charity, and, till lately, lived in the hope that their fortunes
were made.

Why do we enter into these details ? Not, certainly, to
exult oven those who are suffering lacerations in the trap,
but to add one more to the many warnings to be found in
the history of railway and mining speculations, that it is
not only not all gold that glitters, but that " gozzan" oftener
indicates brass than copper, and silver lead.

THE " GREAT CONSOLIDATED" BUBBLE

(From the same, October 22.)
" The earth hath bubbles as the water has;
"And these are of them." --Macbeth.

TO THE EDITOR OP THE CARLISLE PATRIOT

you permit me through the medium Of your
columns, to make public a huge scheme which is being now
successfully carried out for obtaining money from the pub-
lic without an equivalent. The morality of the transaction
I must leave for the public to decide upon, after reading the
following statements.
The plan consists in bringing out mining companies,
the mines being in Cornwall. The parties, whom we
will call A 13 and Co., have grand offices in London.
The shares are disposed of there by themselves, and
also in Liverpool and the North by means of agents.
They take on lease certain old mines, or plots of land
likely to contain ore, on the usual terms, viz., 1-16
dues on ore raised, or thereabouts. They then let it
be known through private channels that they
,have
got some wonderfully good mines, and otherwise act
as though they had realised a fortune. As these
have varied a little in each instance, I will give them
seriatim, distinguishing them by the letters of the
alphabet. The first was A mine ; they informed
their friends that there was a few shares to sell in
this valuable mine at £3 each ; that there were 5,000 shares
to be sold, and printed circulars were issued, but no particu-
lars as to the financial affairs of the company. They said
there were 20,000 shares in all; that 5,000 were disposed of
to raise an additional capital to carry on more extensive
operations, which they considered sufficient for the purpose.
The destiny of the remaining 15,000 was carefully kept out
of sight ; and they said, in reply to a question put, that
" the original proprietors will have no advantage over others."
Now, it appears that the 15,000 shares are really free shares
appropriated to themselves, for the good-will and previous
outlay on the mine ; in other words, £45,000 worth of
shares. The mine and all its concerns are entirely worked
by them; they are universal officers, but self-appointed. No
meeting of this company was ever held, and no accounts
over publiohod, although thoy havo boon oolling thoir oharco
above twelve months. The public, in paying £3 per share,
are thus really paying 300 per cent. premium ; and yet
such is the blind confidence in the promoters, that the shares
are now quoted at £5 10s., though no dividend has ever
been paid. The fact that the 15,000 shares are granted, or
rather taken for nothing, is, I believe, at the present moment
unknown to most of the shareholders.

Meanwhile another concern is being hatched, which I
will call the B mine. This was an old mine, abandoned
by former adventurers, and was taken by A B and Co., in
January, 1851. This was brought out as a private com-
pany, first in 5,000 shares of £3 each, of which 1,000 were
sold. The £3,000 thus produced set the company to work ;
but in January this year, a meeting of the company was
called by A B and Co., in London, to decide on bringing
it out as a great public company. This was agreed to, and
it was then reconstituted, with 50,000 shares of 30s. each,
of which A B and Co. were to sell (as they had to do the
5,000 in the A mine), 10,000 shares to the public at 30s.
or so many as would realise £15,000; 10,000 were given
to the holders of the 1,000 shares of £3 each in the former
company, and 30,000 were allotted to A B and Co. for
nothing. Thus the holders of the 1,000 shares each got
£l5 worth of shares for his £3, and were thus made ac-
complices. A further arrangement was also made that the
£15,000 now raised, and the £3,000 previously raised,
should all be entirely expended on the mine, and that the
gross proceeds of ore should be divided in dividends. This
rule, I find, applies to them all. Thus.
Nominal capital.
10,000 shares sold for £15,000, bring.. ..... £15,000
10,000, ', 15,000, to original hold-
ers, bring 3,000
45,000, to A B and Co . nil.

30,000

Nominal capital, as ) 75,000 Real capital .. £lB,OOO
per share list
In other words, out of the £75,000 nominal capital,
£57,000 is at once unavailable for the working of the mine.
But the arrangement just referred to, is, in other words,
simply an arrangement that this £lB,OOO of capital, found
by the few, shall be divided as dividend amongst the whole.
Thus, A B and Co., who found none of it, get XlO,BOO ; the
original holders, who found £3,000, get £3,600 ; the new
shareholders, who found £15,000, get £3,600. Again, by
the way that A B and Co. have worded the resolution re-
specting selling the 10,000 shares, it will be seen that they
simply credit the company £15,000, and if they can sell them
at more, they keep the remainder ; in other words, they take
the 10,000 shares, and add them to their 30,000, and credit
the company £15,000.

Thus it will be seen, as A 13-and Co., alone know the real
value of the mine, alone know who the shareholders are, and
make all the transfers, they can go on, and not only sell the
10,000, but also theif own 30,000 shares, and no one be the
wiser. The price of these has been already run up to £4 10s.
Taking 7s. 6d. as about the par price, (which it really is, if
the capital, £lB,OOO, is divided among 50,000 shares), or
1,100 per cent. premium, and if they succeed in clearing out
their shares—as why should not, being much more certain
than waiting for the development of the mine—their account
will stand thus :

£45,000

16,000 shares, at £3, in A mine
Premium on above, now £2 10s. per share,
say on an average, £1 lOs ..
Premium on the 5,000 shares sold first, say
£1 each
30,000 shares, at 30s. each, itt B mine 45,000
Premiums on above, now quoting at £3,
take it at 30s

22,500

45,000

Premiums on 10,000 shares sold to the
public—say .
[3.sths of the capital paid as divided if
the shares are not sold, £10,800.]

10,000

Clear profit £175,000
Meanwhile another is preparing—the C mine—irt 50,000
shares of £2 each—Mo,ooo—" of which 10,000 shares
are to be sold to raise a further working capital." This
mine has 'been previously brought out in a small company
like the B mine, and may be seen in the Mining fournal a
few weeks back, as in "5,000 shares of £2 each, present
price £4" this will be their own quotation. The pros-
pectus states that Mr. A. spent £6,000 on the mine, which
has belonged to him for many years —what the last company
spent we have no information ; but their own valuation in
the mining list is 5,000 shares, at £4 each, or £20,000,
which is evidently at least twice the amount laid out in the
mine, and now they are going to accept 40,000 free shares
at £2 as their consideration—or £BO,OOO for what they
value at £20,000. Of this £BO,OOO worth of free shares
doubtless' the holders of the shares in the little or first com-
pany, will, as in the 13 mine, receive a little bone to pick to
keep them quiet, but leaving, no doubt, some 30,000 shares,
or £60,000 worth to A B and Co.

Were there only, one concern I can just perceive it pos-
sible that after_taking. an ordinary mine, they might have
made some extraordinary discovery to, justify them in this;
but when it comes one mine after another, each on a more
gigantic scale than the previous one—when we look at the
mysterious mode of bringing them out—the entire absence
of any clear statement of accounts—the retention of the
management in their own hands, and many more points that
I can show to yon, Sir, only one conclusion can be come to,
namely, 'that they think the public can be persuaded to in-