COLLAPSE OF THE SILVER BOOM. (From THE " Melbourne Act.")

Te Aroha News, Volume VI, Issue 273, 16 June 1888, Page 6

COLLAPSE OF THE SILVER BOOM. (From THE " Melbourne Act .")

Tm: crash which careful observer foicpaw in the fufcme of the recent mining boom has come at last. During (ho pa-t month the fall of t-tocks pointed to the collapse which muf-t. inevitably follow the creation of fictitious \alues that con demned the present silver cra/e : and, athe fall in prices has. been accompanied by more or less unsciupulou.- opeiation-* on the Exchange, the collapse 1- all the more severe in its> etlocts?. >Se\eial biokeiha\e stopped payment and called in then creditors, and two have disappeared, leaving lar^e deficiencies. The public will sutler 'considerably, but the 01 ash will be most felt by stiaiir!it-<j;oiii<: btokeis w lio lia\c dealt with those who now deelaie themselves unable to meet, their enjjauement*. The piimaiy cause of tlie collapse it the wild rush 01 the public themselve- loi -llvei shares A rotten .-late ot aiuir- has been produced by this feveii-h eia/e ten speculation, and the public ha\ c ehielly them^eU eto blame for the circulation ot valueksserip and the grossly unju-tmable mice- at which siher shaies wcie larels quoted. When the re-action -et m, consequent on the x-eports of the state of the mine-, there had been hea\\ sale* ot -luue? In the Adelaide brokers "for for waul deh\ei\, and these shares were ioiccd on the maiWet at a sacrifice. The le.-ults icached Melbourne, whcie a similar piaetice ha- Ik en going on. and the eileet has been a di-a— ttou.- failure. Looking back ar the latrei pei io 1 ot tin, silver boom, about the beginning: ot la-t month, ir was then apparent that tlic siher stock market w tt - on the bunk ot disaster. In the full tv-h and excitement of its splendoui theie wa- a wnunu on the wall which many an untoitunaie speculator is now uanslating at paintul cost. Taking the Bioken lhU !'iopilctoi\ as the basis of calculation, it would bt_ found that to yield pashy dividends on the original investment that mine would ha\e to pay £1,160,000 pei annum fur seven yeais. Its shate- weie then up to t'29o, which represented a capital value or 1'4,640,C00. But instead ol pa\iuu 25 pet cent., it g'.ivc only 3, <iiul oil/ti lJanui stock \o^. The \ iclil unen by the Piopiieton mine un- tht six months unliny 183/, wa1,257,699 ounce.-," biin v qinir a pioiit ot 1120,001, of which ClOOloOOwd- -ct vipa^t for dividends-. If the wliole ot the minemaintained <i siniilai [iiopoituui bin* ten output and dividend, thepo-niun would be this — that to give the -arne late ot -Xt dividends the output of the Held v\ouM have to reach 34,227.873 ounce- tm the year. Tin- mean- that the Uainei iield b\ itself would turn out mote lhaa one- half of the total silve; vie Id or the whole wOlw 01 Id. 101 the annual output ot tin ejlobc ha- for mam veai- .-ttadiiv lcinained at between 50,000,000 and60.000,00Uoiincv-. l!ufc the miuin^ mania took little note ot -ueh impiobabihuc-, and did ma ,-(a_\ '<i lo >k at an\ a,-pect 01 the po-inon t liat 1. \ po-^d its weakiie-», and public < tcduhtv now pajs foi its co-tl\ C\pei ijulih THE FALL IX IMIKJZS Tin. rail in the value of the ■Mhci -toi j - In te meutionLil v\a& ujiwaul- ot -J1. 300. 000 in le-? thuii a couple ot wlJv-, and lot tho-e who had I ou^ht lai^ely theie v,a< no ei-capf. TilE DEFAULTIXI. IJRDKEKn illusnation? ma\ bo ui\cn ot the conduct of the-e un 3 ciupulou- 01 lcckle--dealei-. Foi example, one ol i!k d» f.mltin'4 biokti- bought, through anothei pei -on, at tl c top of the maiket. at 110 17- 6d. 'The -ha;c- icll, and thedetaultoi would nut take them up. The ])incha?ei re-old them at i 4 2- and lose- the di'leretice. The detaultei liad also bought .-hare- and moit'^aviefl them. He ha- been in dithcultic- -eveial time-, and at a nuetinjr of hi- ci edit 01* held lecently he -tatcd tint onl\, at la-t i up time all lie had wa- fl. .still tin- man v\ahiuinjj thou-ands of pound- \v<uth of -C'p The bank at la-t -topped hi- ciedit. and lie left Melbouinc and could noi be found for about ten cl in -. Jit turned up apiin on Fiiday week at tin Melbourne .Stocl: i^xclumurc, -tatm^ that he had nothing, and the^ could do what they liked with him. Ik wa- .-u-pended by the Exchange tin moment they heard the complaint a<r dn-t him, and has -ince been ane-tcd fm jm--injra valueless cheque in j)a\ me.nt lot -omc *-ci ip. Another -hatebiokcr who ha- ju-t f.'ile.d i-; involved to the extent of about IL-T.O'.'O lie be^au bu-ine--5 about 12 month- a^o with only Cl5O. A meeting ot in-ciedhoi-, was held a few das- a^o, and he could not pay them. The only secured crcditot 11 the bank which was causing bun on till it his ciedit on the 2oid Niw. Tlie bioker dealt in large quaniitie-. and took v}) seveial time tiatiaactions in which sarious other people aie involved, lleal-o was suspended by hi- Exchange. The third .-haiebioker undci .-u-pen-ion who ma) be mentioned ha- ab-ronded fiom IMclbouine, leavinjx lar^o babilitie- in -lhci share.-, and nothing i- known of hi- mc\L111 ent.-. Under any chcum-,tance- thi- collap-e will cause serious 10-- to m.mv people, toi the deticience-j of the defaulting Ijioknamount to upwaid-J of L' 30,000 The -late of affairs in th.c stock and .-liai 0 ma! i ct 11 wor.-c than cvci,and the failuie- now 10ported may turn out to lie meicly the beginning of a teniblu ,-iiia-h. Wheie such gigantic o})ei.ition-> have been conducted and so fhm-y a foundation thj-io-sult could only bo expected, and p<. ihapthe public have a'-ceinci le— on still m i-toie for them.

Tin-, Sydney "Telegiaph of June 2nd publithci the following. — '"It is no new i to .say that during the month of which has ju.st closed, the decline in sil\er shares has been it will, ho\ve\er, be into eating to note it> exact extent al^a 1^ logaid- the stools which have engiossed most attention. Lt may l>t piemised that in tlie middle of the month the fall was ancsted to a eon.-ideiable extent, but the rallying foice^ were b-'oken down by the constant j»e-siuc to le.tli-o, and the inaiket j/eneially clo^e-, weakei than atany time tluiinsr themonth. A~~ co)n\>;\iul with the iirst Friday in .May I'ioprietaiy sho\v a decline of t'23 j>cr 16,000t]i slime. Biiti.sh of 34s per 240,000 th, South of C 4 per j 100,000 th, Block 14 of C 3 5s pur 100,000 th, •Junction of 36» per 100,000 th and Coidilleia of 54b per 100,000 th. These are the bigciesl figures, and if capitalised those alone show a , shrinkage of £2,031,100 in capital \aluc for the month. Of coui.se if the figures are gauged against the highest which Save been obtained the results are veiy much more sensational. Propiielary hare touched £412; Biitish, £8 13s ; .South, £22 ; Block 14, €16 ; Junctions, £9 ; and Central, £14. The difference between the valuesatwhichthey were assessed then and the values placed upon them now amoun.stto over seven millions, andthisnotwithstanding 1 the fact that most of them look much more promising than they did then."