Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1936-02-29
Dear Mr.. Deschon

Great dASf A-pAAt
Dear Mr. Deschon;
was somewhat surprised to see the
o,,,nvmous letter printed on rage 81
issue Of your journal Of February ~,
iaeg hearing the heading: "6OFeTilIlnssh.
IL Greatest Enemy of Mining, NriOeS
Critic OF L. S. Bureaus.
do not know much about me WoIA
ms Of the Securieties Act. but l 20
lev something about the II. r. -.
mining development loans. made an
appIication last year for aeseloti ,taint
loan. partly for the purpose OF JD'" e.
Inc the loan, II / could, hut aTgel9 ~
me purpose of finding out Just what w
n + &, would do. and what II c9ul es
10. In other words, this was a Aihu ol
a test case. ~, NJ Tomas
Il Marion one of the chief engineers OF
Tho mining department Of the Il. r. -
and also had considerable correspondence
with him and with other OFFICIALS
After going through the matter tn nor,
onahIv | came to the conclusion thht
the r. f. G. is going as far as II can
in connection with development loans
while / am satisfied that Congress
intended that the Class i loan should
10 made on an entirely different basis
than those in Glass A, it made the ms .
take of simply using the word loan
That term, as elsewhere used IN the
Act implied security ana ODhsa'oh VI
the MART Of the borrower to repay.
willie | believe that Congress meant
10 make IL possible for the X. +. Z. TO
take the explorers chance with the pios
hector Il did not frame the amendment
in proper language to effectutte sucn
nurnose That is one good reason why
"A prudent prospeetor Will NOT ne hA"eH
Interested in the Class u loan.
The n +. C. has been going as far
.s think IL should in trying to meet
fbis situation but the law should pc
amended, and / understand that there ~
a committee of Congress working WIN
this end in view. 20
rive the r. f. c. power to make loans
where the security would De imlteu -
the property itself, it is necessary tnat
certain conditions must exist III orueF
to warrant even this gamble.
AZ have often said. every mine Is
The dream of some prospeetor ana Is
not regarded very highly by anyDo9y
else His dream, however cannot pe
the sole basis Of a loan. There must De
some concrete showing of cohdluon
which. in the Judgment of an unbiased
engineer. would warrant the eApenulluvre
of money in order to further develop
a vein or other deposit which has been
Right here is whore. | imagine. the
shoe pinches, and miners VINO heHeHe
in their property are unable to suDstan an
tiate their belief by facts which satisfy
the engineer.
1t would be dangerous for the govern
ter of developing leads and prospects.
II would take more money than Is now
available to keep such program going.
Those of us who have been IN contact
with the mining game and nave hau
onr feet wet realize that 1t would cost
n tremendous amount or money 10 run
down every little showing OF ore. fer
snnally | think that Congress WAS VIZ
in going into this field very guardediy
II Is easy to expand as it Is demonstrst-
cd that ii should expand, and II TINS
nroblem is approached in this way, II Is
better than to open up Mlue anu 49, 49,
the possibility of government anu III
opening up precious metal mines
The government now has an engineer
in Montana with whom ! am personally
acquainted, and am satlsiie =. a oid 4h ne
IL doing everything he can to ana the
miner and being as liberal as pOssiDle'
This is all that can be expected OF MN nm,
believe that, If property fosterea
and improved the plan Of government
aid for the development Of precious
metal mines may become a permanent
institution so we must look furtherlilto'
the future than the next year
It is impossible to determine from
th, article In the Journal just what
basis there is for the complaint AZ
simply states conclusions and does not
show lust what the II. II. {. did which
was not reasonable.
II anyone has a prospect which Is
plenty Of private capital to get , the
money out of the ground. nut since
nrivate capital. of whoch there is
plenty. which is looking for pro
fifable investments and is not tax
ing these prospects It is hardly
fair to expect the government to DICK
nm what private capital leaves. The
mine operator is an adventurer. to some
extent as he must gamble to some
extent upon his judgment and ms
geology We cannot expect that the
government win become much more dar-
ing than private capital.
have a mine Of my own which IS IN