CO882-(2-3) — Page 78

PUBLIC RECORD OFFICE

Reference :-

LTC.O.882

2 PUBLIC RECORD OFFICE. LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO

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issue, which every company has followed, of working the surface coal to the total or comparative exclusion of deep workings.

6. The presence of surface coal in some abundance, and the comparative facility of working it, have offered a fatal temptation to companies and their managers.

The prospect of obtaining a ready output with comparative little delay and expen- diture to what would be entailed at the commencement by deep workings is peculiarly attractive to the directors and shareholders of a company; and the better judgment of the manager on the spot either falls in with the temptation or becomes subservient to the expressed anxiety of Directors, to obtain a speedy return for the enterprise in which they have embarked.

Trifling as the supply of coal thus obtained may be, it is to some extent a reimburse- ment of the expenses which are being incurred, and the Company are flattered with the belief that, if in so short a time there has been such a result as an actual output of coal, the more mature results will be correspondingly and progressively satisfactory.

The returns, they cannot but perceive, are small, but they scarcely expected any return at so early a period, and they are willing to take for granted that before long the proceeds will become larger and larger.

6. Yet, no practice could be well more delusory in itself, or more fatal to the real interests of the Company and of the mines.

7. I pass by the injury, though this is often most extensive, that surface workings inflict on the coal-fields that lie beneath the surface, and consider only the more immediate consequences.

In the first place, the coal obtained from surface workings is seldom equal in quality to coal obtained from deep workings.

The coal therefore sent to market is of inferior quality to that which the coal-fields are capable of producing, and thus the inferior quality only being introduced into the market, the reputation of the coal is established according to its visible qualities, to the prejudice of the interests of the Company for the time being, and of the more lasting interests of the mines.

Again, the supply to be obtained from any given surface-workings will at the best be but a limited supply. It may last for a year, or for two, three, or four years, with a limited annual output, but it soon becomes exhausted, and the Company are as far off at the end of that time from the main object of their commercial enterprise as they were at the commencement. They must then either begin the deep working which they should have begun at the outset, or, as is too often the case, driven by necessity and by the impatience of shareholders to maintain appearances by keeping up a certain supply of coal, they again resort to the same expedient of working some fresh surface outcrop, to be attended with the same result. The supply yielded being from the very nature of such workings limited in quantity, the output in the fourth or fifth year of the enterprise is very much the same limited output that it was in the first year. It hardly suffices even with good management to meet current local expenses, much less to meet the outlay on machinery and other items of expenditure, often imprudent, incurred by the Directors at home. Year after year the chances of satisfying the expectations of shareholders become more remote, and unless the Directors have the courage to face boldly the difficulties and delays, hitherto shirked, of undertaking operations on a sound and permanent basis, the upshot is not difficult to discern. The shareholders become discontented; the Directors lay the blame on the manager, on the mines, on anything but the true cause; the situation becomes untenable, and the enterprise is confessed a failure.

8. What I have said here may, I believe, more or less completely be applied to the several undertakings that have hopefully engaged and hopelessly terminated in the coal mines of this island.

9. That this has been to a greater or less extent the fault of every Company which has held these mines is undeniable; and that the Directors of the present Company are not unaware of this fault in their predecessors, is evident from the observations that occur in their letter to Mr. Walcott of the 22nd June, 1871,* and equally so that they are aware of one of the consequences of this fault.

10. It is, however, to one of the managers of the late Company that the credit is Jue of having initiated a system of operations upon sounder principles than any that had previously been adopted, and had it been carried out according to his intentions there is little question that the results would have proved eminently satisfactory.

11. The manager to whom I refer, Mr. Sinclair, came out in 1862 in that capacity under the Labuan Coal Company. Although he did not abandon the system of surface workings, but, on the contrary, in deference, it is said, to the urgent demands upon him

• Inclosure in No. 1.

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by the Company to increase the output of coal, pushed it with such vigour that in 1863 and 1864 be procured from surface workings a far larger yield than any preceding year had witnessed, he yet appears to have resolved at the same time upon the establishment of a sounder system,

12. With this view he commenced, within a few weeks of his arrival, to sink a pit which is known as the A or No. 1 Pit. It was not what would be called by any one accustomed to mines "deep working," for it did not reach a greater depth than 44 or 45 fathoms; but, using the term relatively, it was deep working in comparison with the usual mode of working pursued at the Labuan mines. The shaft was finished, and the coal won in April 1864, after something more than two years' labour. The source that was opened out was of some extent and importance, and Mr. Sinclair contemplated an extensive plan of working it-one that he estimated, assuming sufficiency of labour, would yield an annual output of from 100,000 to 150,000 tons. His engagement how- ever terminating in January 1865, he left the Colony, and when he afterwards returned in May 1866, as Manager for the Labuan Coal and China Steam-ship Company, he found, as he alleged, the mine almost ruined by injudicious workings. Whether he was correct or not in this conclusion, he appears to have determined that, though he might still be enabled to raise a considerable quantity of coal from this pit, he must no longer depend upon it as a permanent source of supply. Without, therefore, losing any time he commenced to sink a new pit to a proposed depth of 100 fathoms. The pit which he then begun is known as "B," or "No. 3 Pit," and is the pit which the present Company is now engaged in sinking.

18. There were two other works to which he turned his attention at the same time. One was a pit which he had sunk simultaneously with, and in proximity to the A pit, and which was intended to serve as an air pit to the A pit.

It had accordingly been called the air or No. 2 pit, and connected as its purpose was with the more important pit (the A pit), the two may be taken together as forming one working.

The other work was the opening out of an outcrop of coal which had been found in an adjoining valley, and which has since been known as the Gowrie mines. This was purely surface coal, workable by day levels, and without the necessity of shaft sinking.

14. There were thus three works in which Mr. Sinclair was engaged at the latter end of 1866:-

1st. A, or No. 1 pit (deep working), with its air (or No. 2) pit. 2nd. B, or No. 3 pit (deep working).

3rd. The Gowrie mines (surface working.)

15. It has been seen that Mr. Sinclair, determined upon the importance of opening out a permanent source of supply of coal, first engaged in and carried out the sinking of A or No. 1 pit, by which was won an important and extensive scam of coal; but that this having been, as he considered, ruined by an injudicious system of working pursued during his absence, he without loss of time engaged in the task of sinking a second deep pit-B, or No. S pit; and the outline of his intended operations appears to have been this:—

1st. Keeping steadily in view the prime importance of winning a permanent source, to devote his chief efforts to the sinking of the "B pit."

2nd. In the meantime, to maintain a supply of coal from the A pit and the air pit attached to the A pit; and,

3rd. Opening out the Gowrie mines, but not working them, to hold them as a reserve against accidents and emergencies.

16. The prudence of these intentions cannot I think be questioned.

It is clear that, in order to satisfy the calls upon him by his Directors, he felt it necessary to raise immediately as much coal as he could obtain, and this he proposed to do by working the A and the air pits; but it is equally clear that he regarded the speedy winning of a permanent source as the only sound and safe guarantee for the ultimate success of the mines, and consequently he devoted such resources as were at his disposal to sinking the B pit.

It is also evident that, though he had discovered an extensive outerpp of surface coal, in what was afterwards called the Gowrie mines, he saw the prudence of keeping it as a reserve to be used only in case of urgent necessity.

17. This, as I have been informed, was Mr. Sinclair's scheme, in which he was actively engaged, at the latter end of 1866. He never carried it out, because in the early part of the following year the Company appear to have fallen into such difficulties. that no means, or means very insufficient, were provided to prosecute the undertaking. For weeks and months the manager was left without money to meet the current

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