Financing prospectors and miners in general and at Te Aroha in particular
Hart, P. (2016). Financing prospectors and miners in general and at Te Aroha in particular. (Te Aroha Mining District Working papers, No. 50). Hamilton, New Zealand: University of Waikato, Historical Research Unit.
Permanent Research Commons link: http://hdl.handle.net/10289/10362
Miners required capital to develop their mines, but being dependent for this on investors, usually small local businessmen, they often found the latter made more from mining than they did. Faced with the costs of extracting and treating ore, miners of small means sought sleeping partners, creating opportunities for exploitation by both sides. As all interests had to be worked in the early days of mining, all shareholders had either to do physical mining themselves or pay for others to work on their behalf; examples are provided of how this worked out in practice, including when those who did not fulfil their part of the bargain being sued. Storekeepers commonly provided provisions to prospecting and mining parties with the expectation of holding interests in profitable mines. Occasionally the use of dummies hid the names of investors. To obtain finance, sometimes miners made exaggerated claims about the value of their ore, and examples are given of when their claims were deliberately fraudulent, with mines being salted or unreliable assays enticing the unwary. By the late nineteenth century, as gold mining faded, prospecting associations were formed whereby a few experienced prospectors were employed, a system that could defraud both investors and those they employed. Examples are provided of miners working alone and with little capital, relying on assistance from sleeping partners and, in some cases, seeking government aid as well. As illustrated, many miners frittered money away on small and unprofitable mines. Because of the insufficiency of capital, it was common to obtain protection for mines, leading to complaints of shepherding and of locking up ground. Prospectors complained that their discoveries made others rich, but some prospectors and miners exploited investors (who in many cases should be described as speculators) in a system that, at its worst, encouraged such exploitation.
Historical Research Unit, University of Waikato
© 2016 Philip Hart