A Warning
I HAVE referred in another column to the fact that in spite of the further rise in the price of gold, some of the shares of gold mining companies have experienced a slight reaction during the past week. To some extent, this, no doubt, has been due to a feeling that there must be a limit to the rise in the price of gold, but I think it may also be due to a recognition of the fact that there has been a great deal of indiscriminate speculation in mining shares during recent weeks and more than one daily newspaper, including The Times, has emphasized the need for caution. It has been quite properly pointed out in the City articles both of The Times and the Morning Post that while the rise in gold shares generally, and es- pecially those of well-tried producing companies, has rested on a sound foundation, the shares of many new and untried companies have been rushed up to premiums which seem to discount far too freely the possible results to be achieved. The great rise in the price of gold has led to the reopening of a number of old mines which could not pay when gold was at its former price of 84s. hid. per ounce. Now, however, on the idea that the higher price of gold justifies the reopening of these mines, fresh appeals for capital have been made, and in many cases not only have they been quickly responded to but the shares have risen to high premiums long before it is possible TO gather what may be the result of the ventures. In other instances it has been a case of concessions obtained over gold-producing areas, and even in cases where it is admitted to be impossible for the producing stage to be reached for some considerable time ahead, shares ha ye been rushed up to two and three hundred per cent. premium on their nominal value. It is these indiscriminate dealings which so often cost the investor dearly, and, as I have had to remark on some previous occasions, the fault often lies with the investor himself. In other words, in his inmost heart the investor probably realizes that sooner or later there will be a fall in the value of the shares, but the hope that he may be the one to make money, leaving the loss to a less fortunate individual, causes him to take the plunge into a risky venture. Indeed, it may be doubted - — - --(Continued on page 392.)
• Finance
(Continued from page 340.)
whether the warnings which have been given in the Press during the past few weeks will be greatly heeded and probably a few years hence CityEditors will be receiving requests from A, B. and C to kmiw whether it would be advisable to cut their loss on the so-and-so
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