Eureka daily sentinel. [volume] (Eureka, Nev.) 1871-1887, 1880-04-21

The systems I'm Vogue I'm the Eas
and England.


The Systems in Vogue In the East
and England.
The Eastern people have q great horror
Of assessable mining stocks. They seem
to think it is the bane Of the mining bust
ness on this coast. The SENTINEL believes
that with an honest and capable Directory
it is the wisest method ever devised. Min
ing cannot be prosecuted without money.
A dividend-paying mine to-day may need
capital in a few months to develop new
levels and ore bodies. There is nothing
fairer than that each shareholder should
contribute his proportion to carry ON nec-
essary dead work. Under the assessment
system in vogue ON this coast he can be
made to do this promptly, or, failing, he
~forfeits his stock. By this means the work
OF development Is never permitted to drag.
We have all witnessed the operations Of
Eastern companies in Eastern Nevada.
They usually raise . few thousand dollars,
and when that is gone work stops. Our
coast companies outrank them sl hollow
in the matter Of having the "sand" to
keep things moving.
They have o debenture system in Eng
land which is closely allied to our assess-
ment system. So much or many deben-
lures are provided for by the Directory Of
. company, subject to be called in when
ever necessity may require additional cap
ital. The shareholder must come up with
his coin from time to time, as these deben-
lures may mature. In q word, the system
of debentures amounts to IN advance or
loan to the company, which must be met
Uhax, 1xrn kho ruholn .~nna~k- ~ kkn nan--
pany being pledged to the faithful payment
or redemption OF these outstanding evil
dences of indebtedness. If the mine fail
to pay, then the shareholders must go into
their pockets, so in the end it amounts to
an assessment in the case Of q non-pro-
ductive mine. All stock of the company
is sold subject to the de~bentures, which are
regarded pretty much in the nature Of first
mortgage bonds.
Now as to the system which seems to be
generally favored in the East. Mr.. D. F.
V~erdenal, late Of the San Francisco Stock
Exchange, and a very clever and competent
gentleman by the way, is writing some ex-
cellent mining letters to the Boston Ad-
vertiser. He thus explains how the East
ern people propose to raise the wind to
carry on mining development
Thanks to the benign laws Of New York,
the Trustees ant levy assessments. But
they can borrow money On the credit OF
the company at a rate per annum OF inter-
est and a percentage Of discount based
upon the loaner's ideas Of the prospects
and solvency of the company. Bonds will
be issued and sold on the market for what
they will bring. The company will realize
q certain percentage, and out Of its future
prosperity repay principal aud interest.
The bonds will fioat and the interest run.
Nov, compare this with the terribly oner-
Gus, oppressive system in vogue out in Ne
vada and California. Let us suppose Little
Pitts were incorporated in San Francisco,
under the laws Of California. Its man
ayers might be innocent INC conscientious
as the New York managers, but we hardly
believe it, and dividends had to be stopped
and " lead work. commenced. The Trus-
tees would say We will levy an assess
ment Of one dollar per share. payable i'm
mediately. The Trustees will pay at once
ON the stock they own. It will require go
days to collect this assessment of 5000, 900,
which, according to our estimates, will
carry us along 80 or 100 days." They
would then go to the Bank Of California,
and see Mr.. President Alvord or Mr.. Cash
Ter Brown, and say We have levied an
assessment of 5000, 900. Before it is COL
lected we shall require from SIS 900 to
$100, 900 to meet our current expenses"
The answer would be Draw your checks
gentlemen ; your overdrafts will be one
per cent" In sixty days the assessment
would all be paid in (: money in bank I;
credit good no floating bonds, no rum
ming interest !: everything snug and ship
shape. Perhaps the California system has
some redeeming features, after all.