MINING: Chosen Gold

In the 504th Year 2nd 5th Moon, 10th Day (July 2. 1895), harassed King Li-Hsi of Chosen (Korea) signed away the mineral rights to 600 square miles of the Uhn San district of his sparse North Peng-Yang Province to a brilliant, Columbia City, Ind. promoter named Leigh S. J. Hunt. Three months later Li-Hsi was imprisoned, his wife assassinated by a Japanese-Korean junta. But by 1897 he was back, despotic as ever, under the advanced title of Emperor.

By that time, too, Promoter Hunt, a former president of Iowa State Agricultural College, had formed Oriental Consolidated Mining Co. with the aid of British capital and U. S. engineers, was mining gold. His British bankers, however, believing their own engineers’ reports that the enterprise was worthless, unloaded their Oriental holdings on the English public. Six years later they found they had made a tactical error. Since 1903 Oriental has grossed an average $3,000,000 worth of gold a year, paid $14,379,395 in dividends.

When Japan stopped fooling in 1910, annexed Chosen and gave Li-Hsi’s successor his walking papers. Oriental Consolidated was the oldest, biggest, richest, gold mining company in the Orient. Japan wryly observed the provisions of Oriental’s charter: for payment of Y25,000 (about $8,500) annually to the Chosen Government, the mining company was free from all taxes, import-export duties. Eight years ago Japan got tough, embargoed gold exports, forced Oriental to sell gold to her at prices below the world market, paid off in unsteady Yen. Last week Oriental, last big U. S. concession in Korea, got out while the going was still passable.

For $8,174.500, paunchy, grey-haired Oriental President Lewis Henry, of Elmira, N. Y., sold his company to Nihon Kogyo Kabushiki Kaisha (Nippon Mining Co., Ltd.). The deal: $756,700 cash; two payments of $756,700 within 30 and 60 days respectively; $4,542,000 payable by Aug. 31, 1942; $1,362,500 payable by Aug. 31, 1943. All deferred payments were guaranteed by the Yokohama Specie Bank, Ltd., New York City, with interest at 4%.To President Henry—whose late client Jacob Sloat Fassett (onetime Congressman and Republican leader of New York’s Senate) was a backer of Promoter Hunt —this deal seemed fair enough. It looked timely to most of Oriental Consolidated’s 829 stockholders (350 English, 224 American, 149 French, 106 scattered). On the London Stock Exchange news of the negotiations jumped the price of shares from 12½ shillings ($2.87) to 35 shillings ($8.05) in three weeks. Accustomed to an average dollar annual dividend on their 429,300 shares, stockholders will now have to trust that Yokohama Specie Bank will repay their capital in the next four years. But with Japan intent on squeezing all Occidental enterprises out of Asia, and particularly keen to get gold for her nearly empty war chest, this looked like a far better risk than a gold mine in Korea.