FALLACIES RESPECTING MINES. 



litador's price is about eight dollars, refer to a recent 

 period only ; that is, since the price of copper has 

 risen, in consequence of the increased commercial 

 intercourse, which, in the first instance, had been 

 forced upon South America, in spite of all the 

 Spanish regulations to the contrary; and was 

 afterwards, to a certain extent, sanctioned by the 

 government. Antecedent to that period, when 

 the Spanish authority was absolute, and the prices 

 were as stated in the table at page 9, the habili- 

 tadors made bargains, proportionably profitable to 

 themselves and hard upon the miners. 



The liberation of Chili, and the consequent 

 establishment of English and North American 

 mercantile houses, have wrought a great change in 

 the whole system ; as will be seen by stating what 

 actually took place in the instance described above ; 

 •and this example, with various modifications, im- 

 material to the general principle, will serve to 

 explain the manner in which a great majority of 

 all the mines are now managed in Chili. 



An English merchant, who had resided long 

 enough at Coquimbo, and other parts of Chili, to 

 become well acquainted with the mining districts, 

 and with the personal character of most of the 

 miners, happened to hear of the situation to which 

 the farmer above-mentioned had been reduced ; 

 and, knowing him to be an honest and hard-work- 

 ing man, inquired into the details of his case. It 

 appeared that his debt to the habilitador was eight 

 thousand dollars, and that there was ore enough 

 at the surface to smelt into a thousand quintals ; 

 which, at the stipulated rate of eight dollars per 

 quintal, would be just sufficient to redeem the 

 debt. But the miner had no funds to defray the 

 cost of this process, or the current expenses of the 

 mine. 



The English merchant, upon hearing how the 

 matter stood, offered to free him from his embar- 

 rassment, and to conclude a bargain far more 

 advantageous to him. In the first place he offered 

 to lend the miner a thousand quintals of copper, 

 to be delivered at Guasco to the habilitador, whose 

 claim upon the mine would be thus annihilated. 

 He next agreed to purchase the farm which the 

 miner had so long wished for, and at once to put 

 him in possession of it. He then proposed, not to 

 habilitate the mine in the usual way, but to lend 

 money to the miner, that he himself might pay the 

 workmen, and be the purveyor for his mine ; 

 instead of having an account kept against him for 

 these disbursements. Finally he was willing to 

 take the copper off the miner's hands at eleven 

 dollars per quintal, instead of eight. 



The miner was, of course, delighted with these 

 terms, and readily adopted them, as he gained im- 

 mediately several material advantages. He got 

 rid of the oppression of the habilitador ; he accom- 

 plished the great object of his exertions, the 

 possession of the large farm ; he secured a high 

 price for all his copper ; and, what he valued more 

 probably than all the rest, he had the satisfaction 

 of providing the mine himself, and was saved from 

 the mortifying conviction of being cheated at every 

 stage of the transaction. 



The moment the bargain was concluded, the 

 new farm was bought and entered upon : the 

 smelting went on ; the miner soon paid back the 

 thousand quintals he had borrowed ; the miners 

 were set to work, to raise some metal to the sur- 



face ; so that, at the end of five months, enough 

 of copper had been delivered to discharge two- 

 thirds of the original debt, including the purchase- 

 money of the farm. On balancing accounts, how- 

 ever, it appeared that the farmer was still nine 

 thousand dollars in debt to the English merchant, 

 owing to fresh advances made to the mine. At 

 the time I visited the spot, he was still considerably 

 in arrears, but was nevertheless perfectly con- 

 tented ; and so also was the capitalist. The miner 

 received what he considered a fair price for his 

 labour, and the merchant was satisfied with the 

 profit which he realised: for although he pur- 

 chased copper at eleven dollars, and sold it for 

 twelve or thirteen, he felt also certain of having a 

 complete command of all the copper of the mine 

 in question as long as he pleased, since it was 

 highly improbable that the miner could ever clear 

 off his debt. 



There is a fallacy in the reasonings of many 

 people, even on the spot, as to the extent of mining 

 profits, which arises, probably, out of the prevalent 

 misconceptions respecting the nature of money ; 

 or, which is the same thing, the true use of the 

 precious metals, considered as wealth. In conse- 

 quence of great gains being occasionally made by 

 mining, it is erroneously assumed, that the returns 

 from capital so employed are likely to be, upon 

 the whole, greater than from that applied to 

 agriculture, for instance, or to commerce ; and 

 many ruinous speculations have been entered into, 

 solely from omitting to take into account the 

 multiplicity of failures, which balance the casual 

 successes, and necessarily reduce the profits to 

 the ordinary level. Even, however, if this uncer- 

 tainty were not characteristic and inherent in the 

 nature of mining, still, like every other branch of 

 industry, it could not long continue to yield extra- 

 ordinary profits ; since, if capital were more pro- 

 ductively bestowed on mines than in other ways, 

 it would be speedily withdrawn from those other 

 employments, and applied to mining speculations, 

 until competition had lowered the rate of profits 

 to the usual standard. This being inevitably the 

 case, now that all things are left to find their 

 natural place, it follows, whatever view we take, 

 that a miner, who borrows the capital of others to 

 enable him to proceed with his speculations, is 

 situated precisely as a farmer or merchant, who 

 incurs debt to carry on his business. And although 

 there be a sort of imaginary wealth attaching to 

 the idea of a mine, the proprietor will undoubtedly 

 find just as much difficulty in shaking off the incum- 

 brance of debt as either the merchant or the 

 farmer. In practice, however, this leads to no 

 bad effect ; but, on the contrary, as might easily 

 be shown, the present state of the mines in Chili 

 is, perhaps, upon the whole, the most favourable 

 for the production of national wealth. This rea- 

 soning is evidently inapplicable to former times, 

 when everything was regulated by monopolies ; 

 the tendency of which was to bribe, at a great 

 cost, the capital from its natural channel, into 

 directions which, if left to itself, it never could 

 have taken ; and from which, consequently, the 

 returns would inevitably be less, by the amount 

 of the bribe which the community had to pay to 

 a few interested individuals. 



The English capitalist, in the case described, 

 might, of course, have made a bargain apparently 



