An incompetent board can do an incalculable and a lasting amount of damage, which is not confined to narrow limits, but which is spread over a wide area. Therefore it is essential that a speculator in mining shares, if he wishes to minimize his risks, should feel assured that the administration of a company is in capable hands, for such men inspire confidence, no matter even though the mine may be disappointing; and there is nothing like confidence to give solid strength to a market. The mine, as I have said, may be a poor one, and may be giving disappointing results, but the holders of shares know that, if it can possibly be made a success, the directors are the men to make it, that they have the ability and the energy, that they have at their service the best expert advice, and, therefore, they back up their confidence by holding tightly to their shares. They may have to wait for years for results, as they have had to do in numerous instances - as in the case of the Mysore, to take a good example - but eventually they find their patience amply rewarded. It is not always, therefore, those mines that make a sensation at the start, as the famous Londonderry and many other West Australian mines did, that are the best for our speculative purposes, and still less for investment. It takes years thoroughly to open up and develop a mine and equip it with the most appropriate machinery. But this is precisely what few directors understand, and what they refuse to learn, their sole desire being to force results in order to make a good market for the shares.

Only the other day one of the leading experts in England had a doleful tale to tell me of directorial nonchalance and indifference. He had been managing for some years a well-known mine in Australia - a mine that had been paying good dividends almost from its inception. Nevertheless, the mine was of a patchy nature, and he saw at once that the rich ore on which they were working when he went out to the mine would soon become exhausted. He therefore saw the necessity of making provision for this, and wrote home certain instructions to the directors. His fetish was also economical working, and he made the minutest calculations of the costs of everything, down to a box of matches, and sent these figures home to be studied by the directors, with advice, of course, as to the directions in which retrenchments could be made for the benefit of the mine. But time and years went on, and the board never so much as acknowledged the receipt of these communications, their sole wish being that he should keep up the returns at any cost, and even force them, if necessary.

He was so disgusted with them that he resolved to resign as soon as his agreement with them terminated. When he came back to England to talk matters over with them, he was amazed to find that all his elaborate calculations had not even been looked at, let alone considered, but were lying pigeon-holed and covered with dust. This only strengthened his determination to resign. Shortly afterwards the rich ore gave out, and the mine is now let on tribute, and the English shareholders have probably received the last of their dividends.

This is the dilatory way in which the vast majority of boards of directors do their work, the chief desire being to keep up returns, to maintain profits and dividends, to pocket their high fees, and to go to no unnecessary labour in calculating how economies can be introduced, and thus how the profits and dividends might be increased. Neither do they trouble their heads much in considering the suggestions and recommendations of their mine managers, the labour being not only too great for them, but, in 98 per cent. of the cases, beyond their comprehensions, and hence the incalculable losses they bring upon shareholders, and the great harm they do to the mining industry generally. This ineptitude of administration is responsible for the numberless reconstructions to which we are getting so accustomed, and the abandonment of promising mines before they have been adequately developed. Mine managers, especially if they are not known and have no reputation, are merely the tools of these directorates, and have to obey orders or else lose their posts, probably with a stigma upon their characters, for directors of this kind do not scruple to ruin a man by laying the blame upon him, especially if by so doing they can shield themselves. A mine manager's life, therefore, like a policeman's, is not in many cases a happy one, and, unfortunately, the precarious position in which he is placed does not add to the comfort of an ordinary shareholder's life.

But the necessity of having a competent and honest board of directors to manage a mining company is so self-evident that it is incomprehensible, looking at it with the eye of reason, how shareholders are so indifferent to it. They are indifferent to it, however, in spite of the serious consequences this indifference brings upon them, and I feel that it is almost a futile labour to impress the vital importance of it upon such people. The bitter experiences of the past seem to have taught them no lesson. The press, as well as numerous books, have preached to them from this text time out of number, and though they have listened with some attention, they have speedily forgotten the counsel, and have gone along in their old blind, groping fashion, falling into pitfall after pitfall, and knocking themselves against all kinds of hurtful obstacles, which to me seems an extraordinarily unpleasant experience to choose.