The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1906-02-02
GOOD SUGGESTION
Compulsory Publication Of Re.
ports of Stock Selling
Concerns.

To think of the millions OF dollars
spent annually In developing the
great mineral resources Of the United
States mot forgetting the thousands
lost in illusory mining schemes). there
is wonder why legislative action is
not taken to protect the holders.
Various remedies for prevailing
evils could be suggested; one in par
ticular, the compulsory publication Of
detailed reports of operations. is wor.
thy Of prompt consideration. So
many companies, with an inflated
capitalization, floated at the high
tide of speculation, are now hiding
their "iniquities" under the cloak Of
an unitelligible report. These "fg-
urehead reports" ale usually issued
annually, and by juggling Of the fig
ures showing the earnings and ex.
penses, it Is often possible to make
the uninitiated shareholder believe
dividends are or will be soon declared.
OF course, 1t is the managerial policy
to make earnings look large compared
with the heavy capitalization; conse-
quently the details OF the profit and
loss account are often meager, and
there is no explanation given to aid
shareholders to check up the lump
sums. And yet the directorate Of
these companies solicit the confidence
Of shareholders.
To plead that elaborate bookkeeping
is costly, by reason of its complexity,
may be true; but considering the pro-
misses made to the public when their
subscriptions to shares were asked, it
becomes the duty of directors to gee
that the shareholders are kept honest
ly Informed with regard to their pro-
perry. The periodical declaration of
a dividend is not sufficient to retain
the friendship of shareholders, as 1t
has been proved on more than one &C.
cassion that ear nings, IL properly d.
vided, would shows a larger yield on
the capital invested. This is the sit
uation that has undermined many ex-
travagantly managed companies and
made necessary a change in the d.
Irectorate. It is reasonable to sup
pose that had the unseated directors
published more detailed reports of
the perations of their property they
would have retained the confidence Of
the shareholders and, perhaps, heard
suggestions which might have saved
the administration.
Fortunately there are to be had
model mining reports, but they are
usually issued by companies under the
British control. Under the company
laws OF Great Britain and its colors,
organizations, whether financial or
industrial whose shares are held by
the public. are compelled to make
periodical reports. Should it happen
that the directorate desires for some
reason or other to conceal a certain
expenditure OF income which might
disturb the harmony among the
shareholders II detailed in the report,
there are ten chances to one that it
will be brought out by an inquisitor
at the statute meeting. The chair
man of the board Of directors who
presides at the meeting may haw and
hem all he pleases but when his aud.
itors become impatient and cry
Hear! Hearr' the desired explana-
tion is usually forthcoming. Some.
times, however. the chairman by per-
suasive argument will table the mo-
tion," but as soon as the meeting has
adjourned the pertinent question
finds its way to the print shop and
next day appears as anonymous cor
respondence in one OF the leading
financial papers. To avoid further
publicity the company usually makes
amends by issuing signed statement
which gives the facts bearing on the
controversy.
Abroad it is also customary for min
ing compa MES to make monthly or
quarterly reports in which the profit
or deficit is usually estimated. In
the case Of the Transvaal gold mines
monthly reports are published show
ing the quantity of ore crushed and
gold produced together with such
other details as may be of service to
shareholders. As result good deal
more is known about the mining In
dustry of the Rand than of most other
prosperous districts.
Give honest publicity to the oper.
ations Of mining company, and the
wild cat" enterprise will sound its
own death knell. Hide facts from
confiding shareholders, and your COM
pany will eventually be lined up by
the bugle call OF public Condemnation
to hear "taps. THE Mining World.