Evening journal., 1889-02-14
A BIG MINING SWlNDLE.
1T WAS IN NEW ZEALAND AND
RANKS WITH THE cUTEsT.

Quarrel Between Owners OF Adjoining
Claims Taken Into Court and the Prop
erty Wen Advertised-The Tricksters
Cleaned UP Sum IN Big Figures.
Besides its scenery and its former large yield
OF gold, the Shotover river is celebrated
throughout New Zealand for one Of the big
gest aud most ingenious mining swindles ever
perpetrated in these southern colonies.
Among the most remunerative mining enter
prises in the district had been the suicing Of
the terraces which sordcr on the river Two
claims in particular were famous for the
splendid returns they had given These nd
joined one another, and each was the prop
erty Of three or four working partners, most
of the men being old californians and no
shares being ever made available to the pub
lic-the thing was too good for that. The
stories circulated of the wealth of these for
tunate miners were probably exaggerated, as
such stories usually are. The quantity Of
gold which from time to time they passed
wer to their bankers was, however, pretty
well known, and as the men looked after and
worked on their own claims, it was clear that
there was no wasteful management to run
away with the profits
SETTING THE TRAP.
A considerable sensation was caused
through all the district when it became known
that dispute about boundaries and claims
for encroachments had sprung up between
these two prosperous firms. One party had,
In the course Of its operations, contrived to
cause mass Of clay and shingle 20 fall over
on TO the auriferous material laid bare for
working In the others claim. There was a
case in the local wardens court, and then an
appeal TO the supreme court and a jury.
Work was stopped on both claims pending
decision in the suit The partners in the
claims had 10 go down to Dunedin, where the
court sat, and 50 had various mining experts
and other witnesses who had to testify 10 the
serious loss the injured party must sustain by
the alleged encroachment The books of the
claimants bad TO be laid before the jury TO
demonstrate the richness Of the ground, the
right TO which was contested. The suit be-
came naturally the talk of the town. How
far the litigation had gone do not remem-
Der, but it was still pending, either on the
original proceedings or on appeal, when it be
came known that negotiations had arisen with
a view to a compromise.
The proposal was to amalgamnte these rich
claims on fair basis and so render all ques-
tons OF encroachment and disputed bounda-
ries immaterial. Then It appeared that one
or two of the men stood out, and it was given
out that rather than agree 70 the amalgama-
ton they would sell their shares. No one
was at all surprised when the leading finan-
cial brokers of the city, solid men, Scotch
men and sound Presbyterians all, in whom
the public had unlimited confidence, had
made arrangements with the proprietors Of
both claims to put upon the market the
shares Of the "Shotover Terrace Mining Com
pany, Limited" the provisional directors Of
which company held an offer of the proper
ties on terms, the advantageous nature Of
which was described in those glowing phrases
IN which the promoters Of stock companies SO
well know how to revel The original owners
were each to have some moderate sum in
hard cash, but were chiefly 70 take out the
value Of their interests in paid up shares.
Never was a company more quickly aoated.
AlA GAHHEONS cNAhED.
Everybody, literally everybody, who had
anything 10 invest, and numbers who had
nothing, insisted upon having shares. These
were selling at a premium as soon as the al
lotment was made, and it appeared certain
that the golden treasures of the Shotover
terraces were going to make all Otago rich.
Three hundred thousand dollars in hard cash
were quickly paid up, the company was or
ganized, directors appointed, the manager
selected. operations on a largely extended
scale commenced, and the enthusiasm among
the shareholders was immense.
1t was not very long, however, before SIMS
ter rumors began to circulate These rich
claims appeared suddenly to have become
tracts Of barren gravel. Big checks for
wages were signed by the directors every
week, but Of dividends or returns Of any sort
there was no sign Nor from that day to
this has that valuable property ever returned
a cent TO the shareholders The truth was
discovered just when the funds Of the com
pany were coming TO an end, and an investi-
eating committee Of the shareholders, who
were sent up to find out what it all meant,
were let in 70 pay their own expenses. 1t is
hardly necessary TO mention that the paid up
stock given 70 the original proprietors bad
been carefully unloaded on to the public al
full rates before the bubble burst The en-
croachments and the quarrel arising out Of
them, that brought about the jury trial,
were all s1illful inventions to catch the ears
Of a curious public and to spread abroad the
belief that here was real FL Dorado that
these men were fighting about. Never in the
history Of mining swindles, lengthy and won
drous as that chapter Of human history is,
was a more elaborate conspiracy conceived
and executed, nor was any more absolutely
successful. San Francisco Chronicle