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le^EIPOI^T 
 
 OF THE 
 
 ATTORNEY GENERAL 
 
 TO THE 
 
 mim ASSEMBLE OF SOUTH CAROLINA, 
 
 CONCERNING THE 
 
 PHiTE iisis II m m 
 
 UNDER 
 
 JOINT RESOLUTION APPROV'ED JUNE 9, 1877. 
 
 1 
 
 '^ 
 
 42 
 
12.78/512- 
 
 >"> . '!■ i _ 
 
ItEFOU^T 
 
 EXECUTIVE DEPARTMENT, 
 Office of the Attorney General, 
 Columbia, 8. C.JDecember 1, 1877. 
 
 By Joint Resolution of the General Assembly, approved June 9th, 
 1877, it was referred to the Attorney General " to inquire into the matter 
 of the several charters heretofore granted to the phosphate companies 
 in the State, with a view to define and protect the rights and interests of 
 the State therein," and "to consider and determine the necessity, if such 
 exist, of repealing the charters of some or all of the said companies," 
 and " to ascertain what amount is due to the State for royalty by any of 
 the companies or individuals authorized to dig, mine and remove phos- 
 phate rock," and " to institute proceedings to recover the same for the 
 use of the State." 
 
 In pursuing the investigation ordered by the above resolution, it be- 
 came necessary to ascertain what were the interests of the State, and 
 how they were affected by the rights and privileges granted to the 
 several companies, and the manner in which said rights and privileges 
 were exercised by the companies. 
 
 Unfortunately, there are scarcely any reliable data to enable us to 
 determine accurately the extent and value of the phosphate interest of 
 the State. 
 
 There has been no accurate survey determining the existence, location 
 or value of the phosphatic beds. The investigations hitherto made have 
 been mainly by private individuals, coniSning their examination tp a few 
 localities and with a view to immediate profit. Naturally these examin- 
 ations have been made in comparatively shallow water where the deposit 
 could be most easily mined. That the phosphatic deposits exist in large 
 quantities in the navigable waters of the State, over an area extending, 
 as at present known, from Broad River to the Little Pee Dee, is well 
 established. 
 
 The existence of equally valuable deposits in other localities is believed 
 but not known. It is thought, by those best informed upon the subject, 
 that proper surveys, made with diving bells or other appliances by ^yhich 
 the beds of deep rivers could be examined, would establish the existence 
 of valuable phosphatic deposits hitherto unknown. 
 
 The location and quantity of the phosphatic deposits are not, however, 
 
518 
 
 the only matters to be ascertained — the quality of them is material; There 
 are, even now, large deposits which are comparatively valueless, because 
 the rock does not contain sufficient phosphate of lime to be marketable. 
 
 A survey such as is above indicated would be expensive, but, without 
 the information thus to be obtained, the State will be in the future, as it 
 has been in the past, entirely ignorant of the value of the rights it grants 
 away. 
 
 If the present system of granting licenses is to continue, a survey will 
 be needless, for the State has parted with all its rights everywhere. 
 
 The grant to each company is to mine in all the navigable waters of 
 the State. The State has nothing more to grant, and in chartering new 
 companies it only admits additional parties to a participation in rights 
 already granted. 
 
 II.— THE EIGHTS AND PRIVILEGES OF THE SEVERAL 
 
 COMPANIES. 
 
 The companies to whom the right to dig and mine phosphates in the 
 navigable waters of the State has been directly or indirectly granted are 
 the following: 
 
 1. The Marine and River Phosphate Mining and Manufacturing Com- 
 pany of South Carolina. 
 
 2. The Coosaw Mining Company. 
 
 3. The South Carolina Phosphate Company, limited, otherwise known 
 as the Oak Point Mines. 
 
 4. The South Carolina Phosphate and Phosphatic River Mining Com- 
 pany. 
 
 5. The Boatmen's Phoshphate River Mining Company. 
 
 6. The Ladies' Island and Coosaw Company. 
 
 7. The Palmetto Phosphate River Mining Company. 
 
 I propose to state as briefly as possible the source and extent of the 
 legal rights acquired or claimed by these several companies : 
 
 1. — THE MARINE AND EIVER PHOSPHATE MINING AND MANUFAC- 
 TURING COMPANY OF SOUTH CAROLINA. 
 
 By Act of the General Assembly, which became a law on the first of 
 March, 1870, tjbe veto of the Governor notwithstanding, (14 Statutes, 
 381,) there was granted to certain persous therein named, "and such 
 other persons as they may associate with them, the right to dig, mine 
 and remove, for the full term of twenty-one years, from the beds of the 
 navigable streams and waters within the jurisdiction of the State, the 
 phosphate rocks and phosphatic deposits," the free navigation of the 
 streams and the rights of the riparian proprietors being preserved. 
 
519 
 
 The Act further provides that " the grantees aud their associates " 
 should give bond to the State in 150,000 to make true returns and pay 
 the royalty of $1 per ton. 
 
 On the 15th day" of March, 1870, the parties named in the above Act 
 and th6ir associates were duly incorporated under the name of the 
 Marine and River Phosphate Mining and Manufacturing Company, by 
 the Clerk of the Court for Charleston County, under the general incor- 
 poration Act of the State. The capital stock under the charter was 
 $500,000, and of this amount $250,000 has been paid in. 
 
 The Marine and River Company did claim, and perhaps still claims, 
 that under the above Act it possessed the exclusive right to dig and mine 
 phosphates in all the navigable waters of the State, and that it was the 
 grantee of all the rights which the State possessed over the phosphatic 
 deposits n such streams and waters. 
 
 The Journal of the Senate shows that the Act, as originally drawn, 
 did contain the words " exclusive right," and that, on motion, the word 
 " exclusive" was stricken out. ' 
 
 This action of the General Assembly in striking out the word " ex- 
 clusive" and the subsequent grant of equal and similar privileges and 
 rights to other companies indicate the legislative interpretation of the 
 character of the grant. 
 
 The question whether the grant was exclusive or not" was the subject 
 also of judicial decision in the case of Bradley vs. The South Carolina 
 Phosphate and Phosphatic River Mining Company in the Circuit Court 
 of the United States for this District. The case was elaborately argued^ 
 and the decision of the Court was that the grant was not exclusive. 
 No appeal was taken, and it may be presumed that the River and Marine 
 Company acquiesced in this construction of its rights. 
 
 Prior to this decision, or to any other grants by the Legislature, and 
 at the outset of its career, the Marine and River Company, by articles 
 of agreement, gave to the Coosaw Mining Company the exclusive right 
 to dig and mine in Coosaw River, and in like manner gave to the Oak 
 Point Mines the exclusive right to dig and mine in North and South 
 Wimbee Preeks, affluents of Bull River. 
 
 Whether it was competent for the Marine and River Company to give 
 an exclusive right, which it did not itself possess, or to give any rights 
 whatever, may well be doubted; but the question is not of practical 
 importance, for, as will hereafter be seen, the rights of these comjpanies 
 to dig and mine has been, to some extent at least, otherwise assured to 
 them by the State. 
 
 The Marine and River Company has invested a large amount of 
 capital in mining plant and machinery and has been steadily engaged 
 
in the business of mining. The amount, of rock dug and royalty paid 
 will be shown in another portion of this report. 
 
 2. — THE COOSAW MINING COMPANY. 
 
 This is a joint stock and not an iricorporated company. Its capital is 
 1275,000, all of which has been paid in. In 1870, it purchased or leased 
 a part of Chisolm's Island, on Coosaw River, and there located its works 
 and machinery, and commenced mining operations in Coosaw River, by 
 virtue of an agreement with the Marine and River Company, under the 
 license or right granted by the State to that company. During the 
 earlier portion of its career, it made its returns and paid the royalty to 
 the Marine and''- River Company. Subsequently it executed its own bond 
 to the State, in the sum of $50,000, and made its returns and paid 
 royalty directly to the State. 
 
 In 1876, by an Act purporting to settle the periods at which returns 
 should be made and royalty paid; very valuable privileges were granted 
 to this company. Its right to dig and mine in the navigable waters of the 
 State was recognized, and it was granted " the exclusive right to occupy, 
 dig, mine and remove phosphate rock and phosphatie deposits" ''from all 
 that part of Coosaw River lying opposite to and South of Chisolm's 
 Island, whereon their works are located, and ta the marshes thereof." 
 (16 Statutes, p. 198.) The Coosaw Company has accepted the Act and 
 complied with its provisions. ' 
 
 The same exclusive right where they have "respectively occupied and 
 established themselves for mining purposes " was, by the fourth Section 
 of said Act, granted to "all other companies and persons engaged in 
 digging, mining and removing phosphate rock and phosphatie deposits 
 as aforesaid, under the gift and grant of the State of South Carolina, or 
 by authority thereof, who shall accept the terms of this Act within ten 
 days from the passage thereof." 
 
 3.— THE SOUTH CAROLINA PHOSPHATE COMPANY, (LIMITED,) OTHERWISE 
 KNOWN AS OAK POINT MINES. 
 
 This ia an English corporation. 
 
 Its capital is four hundred thousand ($400,000) dollars, all of which 
 has been paid in. 
 
 In 1870 it purchased for one hundred thousand ($100,000) dollars a 
 tract of land on North Wimbee Creek, known as Kean's Neck, and sup- 
 posed to contain valuable phosphatie , deposits. It also obtained from 
 the Marine and River Company the privilege to dig and mine within 
 "certain boundary lines, that is to say, within the line drawn through the 
 centre of North and South Wimbee Creeks to low water mark at their 
 
521 
 
 confluence, and the higli watermark around their_ lands, saving to them- 
 selves all their proprietary and riparian rights as the owner of the plan- 
 tation called Kean's Neck." 
 
 The company located its works and machinery at that point and dug 
 and miaed phosphates on land, and in the waters of North Wimbee 
 Creek. 
 
 In 1874 the State instituted proceedings to enjoin the mining opera- 
 tions of this company in North Wimbee Creek, on the ground that it 
 was a navigable stream, and that the rock therein was the property of 
 the State, and that no license or authority to mine therein had been 
 granted to that company by the State. 
 
 The Oak Point Mines, by its answer, claimed that North Wimbee 
 Creek was not a navigable stream and that the State had no interest in the 
 phosphate therein. Virtually the defendants claimed that their rights 
 as riparian proprietors extended to the middle line of the stream. , 
 
 The case was heard by Judge) Maher, whose very able and elaborate 
 decree settled the rights of the State and of the riparian proprietor, decid- 
 ing that the stream was navigable ; that the rights of the riparian proprie- 
 tor extended to low water mark ; and that all phosphates below that line 
 were the property of the State. 
 
 In applying the principles of the decree to the facts of the case, a 
 practical difficulty arose as to the line of low water mark, the creek 
 being at certain stages of the tide almost dry ; and it being referxed to 
 a Referee, he reported, " that it is practically impossible to locate, with 
 certainty and permanency, low water mark, or to designate the same 
 with anything like mathematical precision ;" and he recommended "that 
 one-half of all the rock dug and removed since the 1st day of October, 
 1875, and that shall hereafter be dug and removed by the defendant, be 
 adjudged to be the property of the defendant, and that the claim of the 
 State be defined and limited to the other half thereof, and that the pre- 
 scribed royalty be only paid by the defendant on said last mentioned 
 half" [Report of Asher D. Cohen, Esq., Referee.] This report was 
 confirmed and ordered to "stand as the judgment of the Court." , [See 
 order of Judge Maher, December 17, 1875.] On the passage of the Act 
 of March, 1876, and within the time liniited, the Oak Point Mines 
 accepted the benefit of that Act and claimed exclusive rights over the 
 territory within which they had occupied and established themselves. 
 
 The difficulties which existed in determining the respective rights of 
 this company and of the State, and which compelled an equal division of 
 the rock, indicate the propriety of requiring careful provisions to guard 
 and secure the rights of the State, before granting a license to dig and 
 mine in the waters of the State to any company which is engaged in 
 mining on adjacent land. Where the proprietor of the land has the right 
 
522 
 
 to miae in the water courses also, the difficulty of separating that 
 which is subject to royalty from that which is not are increased, while 
 the means of detecting false returns are diminished. I have no reason 
 to believe that the returns of the Oak Point Mines have not been per- 
 fectly just and accurate. But the system is open to grave objections, 
 and if continued may result in loss, unless care is taken to properly 
 guard the interests of the State. 
 
 4.— THE SODTH CAROLINA PHOSPHATE AND PHOSPHATIC RIVER MINING 
 
 COMPANY. 
 
 This company was chartered by Act of the Legislature, approved 
 March 9, 1871, (14 Stat., 688.) Its capital was fixed at $2,000,000, 
 with the privilege of increasing it to $5,000,000, and to organize and go 
 into operation when $300,000 shall have been subscribed. 
 
 The right to dig and mine was granted "for the full term of thirty 
 years," and it was required to give bond in the sum of $50,000. 
 
 The rights, powers and privileges of the charter are substantially the 
 same as those contained in the Act of 1870 in regard to the Marine and 
 River Company. 
 
 The amount of capital stock subscribed was $200,000. The amount 
 paid in up to this time is $2,000. 
 
 No portion of the capital of ^he company is invested in works, ma- 
 chinery, boats or appliances for mining; nor has it located or established 
 itself anywhere with a " mining plant." Its operations are limited to 
 granting permits to others to dig under its license, and purchasing from 
 them the products of their labor. 
 
 This company filed their acceptance of the Act of 1876 granting to 
 all companies exclusive right " where they have respectively occupied 
 and established themselves for mining purposes," and in their acceptance 
 claimed exclusive rights in the following rivers: Stono, Cooper, Edisto, 
 Ashepoo and Wando. In all these rivers exclusive rights are also 
 claimed by the Boatmen's Company. 
 
 The evident intent and object of the Act was to grant exclusive 
 privileges in certain localities as a bonus and protection to those compa- 
 nies which had expended money and obtained a quasi vested interest iu 
 such localities, and to insure to them the advantages of the capital thus 
 invested. The basis of the exclusive grant to the Coosaw Company is 
 that they had "occupied so much of the Coosaw River as lies opposite to 
 and South of Chisolm's Island," had " located " themselves -there, and 
 had "expended large sums of money in establishing themselves thereon 
 with sufficient mining plant;" and, "therefore, in consideration thereof," 
 the Act goes on and grants the exclusive right. 
 
If the investment of capital in a location and "establishing them- 
 selves thereon with a sufficient mining plant for raining and preparing 
 for market the phosphate rock" is the consideration of the grant of 
 exclusive right, then it follows that where the consideration does not 
 exist the grant does not take effect. 
 
 The South Ca'rolina Phosphate and Phosphatic River Company have not 
 "occupied and established themselves for mining purposes" within the 
 meaning of the Act, or in any sense, upon any of the rivers which they 
 specify in their acpeptance. To concede to them the exclusive right they 
 claim over five rivers is to grant to them' a monopoly of the most val- 
 uable phosphatic region of the State. It would exclude from those 
 rivers, and virtually destroy, nearly every licensed company in the State, 
 and preclude the State itself from hereafter granting any license to 
 other companies, as there would be no territory within which such new 
 companies could mine. The entire phosphate interests of the State, with 
 one or two exceptions, would be vested in a company which had not ex- 
 pended a dollar in mining operations and was under no obligation either 
 to invest capital in, or'to work the territory over which, it had such ex- 
 clusive right. Had this company claimed a single river or a defined 
 territory, and there occupied and established itself for mining purposes, the 
 Act would have entitled it to claim defined exclusive rights. It has not 
 done so, and I cannot regard the South Carolina Phosphate and Phos- 
 phatic River Mining Company as having complied with the Act of 
 1876, or as entitled to any benefits under it. 
 
 6. — THE boatmen's COMPANY. 
 
 This company was incorporated by Act approved January 29, 1874, 
 (15 Statutes, p. 531,) with the right to dig and mine for the full term of 
 30 years. Its capital was fixed at $30,000, with the privilege of 
 increasing it to $100,000, and was authorized to go into operation when 
 $3,000 of the stock should be subscribed. It was ^required to pay a 
 license fee of $100 and give a bond in $5,000 to make true returns. On 
 the passage of the Coosa w Act, in March, 1876, this company signified 
 their acceptance of the Act, and claimed exclusive right to dig and mine 
 phosphates in the following rivers, viz.: Wando, Cooper, Back, Asbley, 
 Stono, Edisto, Ashepoo, Bull, Beaufort, Combahee, Fillburn Creek, 
 Rantowle's preek, Schooner Creek and North and South Wimbee Creeks. 
 
 As the company had not invested a dollar in " mining plant" and 
 had not "occupied or established themselves" on any one of the rivers 
 claimed by them, all that, is said above as to the claim of the South 
 Carolina Phosphate and Phosphatic River Mining Company equally 
 applies to the Boatmen's Company, and I cannot regard it as having 
 complied with the Act of 1876, or entitled to any benefits under it. 
 
0Z4 
 6. — THE ladies' island AND COOSAW .BIVEE MINING COMPANY. 
 
 This company was incorporated by Act approved March 3, 1876, (16 
 Statutes, page 95,) with a capital of 630,000, and privilege of increasing 
 it to $100,000, and the right to organize and go into operation when 
 $3,000 of stock should be subscribed. It was required to pay a license 
 fee of $100 and give bond in $5,000 to make true returns. The icom- 
 pany has never organized or complied with the Act. It is for the Legis- 
 lature under these circumstances to determine whether it will continue or 
 repeal the charter. 
 
 7i — THE PALMETTO PHOSPHATE EIVEE MINING COMPANY, OF 
 CHARLESTON, S. C. 
 
 This company was incorporated January 27, 1877, by the Clerk of 
 the Court for Charleston County, under the general incorporation Act. 
 It had no legal authority to dig and mine in the waters of the State. It 
 had no capital invested in mining plant or machinery, and although the 
 Legislature, abits last session, by resolution, postponed all Bills relative 
 to phosphate companies, it subsequently, by a concurrent resolution, 
 which recited that it would be a "peculiar hardship" to this company to 
 stop its operations, authorized the Comptroller General to issue a permit 
 to it to dig and mine until the next session of the General Assembly. 
 
 The Comptroller General has, under this concurrent resolution, granted 
 a permit or license to this company until the next (the present) session of 
 the Legislature. Although this company was digging phosphates without 
 any legal authority, and was really a trespasser, the Legislature accorded 
 to it privileges which were withheld from all other companies applying at 
 that session for licenses or charters. 
 
 There are a number of other companies, incorporated and joint stock, 
 some of them with large capitals, which are engaged in the business of 
 digging and mining phosphates ; but as their operations are carried on 
 on land or in innavigable streams, they require no license from the State 
 and do not fall within the scope of this investigation. 
 
 Before leaving the subject of the legal rights of the several companies, 
 it is necessary to call attention to some of the provisions of the Act of 
 1876. 
 
 As the State, by this Act, gav^, to all the companies who should com- 
 ply with it, an exclusive right, in lieu of the right previously held in 
 common, and received no consideration therefor, it is for the interest of 
 the State that the privileges granted should not be extended beyond 
 their legal limits. The exclusive right granted to the Coosaw Company 
 " to occupy and dig and mine and remove phosphate rock and phos- 
 
525 
 
 phatic deposit from Cooosaw River" is "so long as, and uo longer than, 
 they shall make true and faithful returns," and punctually /pay the 
 royalty thereon, as provided in the first Section o'f the Act. 
 
 The exclusive right granted to all other companies which accept the 
 Act is "on the same limitations.'' 
 
 Do these words grant to these companies a perpetual license, con- 
 ditional only on their making the return and payment of the royalty ? 
 I do not so think. 
 
 The right of the Coosaw Company to dig and mine was derived from 
 the grantees in the Act of 1870. Those persons had license to dig and 
 mine only for the term of t7;enty-one years, and of course could not 
 grant to the Coosaw Company any greater rights than they possessed 
 themselves. 
 
 When the Coosaw Company applied for the passage of the Act of 
 1876, it had already established itself in the Coosaw River, and was 
 digging and mining and making its returns and paying its royalty, and 
 was under bonds to the State. It required no further or greater rights 
 or license to dig and mine in that locality, and the Actjjf 1876 gives no 
 such right or license. It recognizes the right of the Coosaw Company 
 as already existing, and converts it from a right which might be shared 
 in by others into an exclusive right enjoyable only by the Coosaw 
 Company. It changes the quality of the right and makes it exclusive 
 "sO;long as, and no longer than," the conditions on which the exclusive 
 character depends are performed, but it is silent as to the quantity or 
 duration of the right. That depends upon the terms of the original 
 grant. 
 
 ' It does not seem to me that the Act goes beyond this. In the title it 
 is described as "An Act to settle definitely the periods at which returns 
 shall be made of phosphate rocks and phosphatic deposits dug and 
 rained in the beds of the navigable streams and waters of the State of 
 South Carolina and the royalty shall be paid thereon, and also to fix the 
 terms on which this Act may be accepted by the parties named therein," 
 no allusion being made, however indirectly, to the granting of any rights. 
 And in the preamble it is stated that " Whereas differences have arisen 
 between the Coosaw Mining Company and the Comptroller General as 
 to the times and manner in which the returns shall be made and the 
 royalty paid ; therefore, for remedy thereof, Be it enacted, &c." 
 
 By the title and the preamble the object of the Act is limited to the 
 time and manner of paying royalty, and for remedying thereof the Act 
 is enacted. Had anything further been contemplated, especially any- 
 thing so important as a perpetual license, it should have been expressed 
 in, the title in accordance with the constitutional provision that every Act 
 
" shall relate to but one subject and that shall be expressed in the title." 
 (Art. II, § 20.) 
 
 The purpose of such constitutional provision, as said by Mr. Cooley in 
 his treatise on Constitutional Limitations, p. 143, 1st edition, is : First, " to 
 prevent log-rolling legislation ;" second, " to prevent surprise or fraud 
 upon the Legislature by means of provisions in Bills of which the titles 
 gave no intimation, and which might therefore be overlooked and 
 carelessly and unintentionally adopted ;" and, third, " to fairly apprise 
 the people, through such publication of legislative proceedings as is 
 usually made, of the subjects of legislation that are being considered, in 
 order that they may have opportunity of being heard thereon by 
 petition or otherwise if they shall so desire.'' And the Supreme Court in 
 Michigan in construing a similar constitutional provision in People vs. 
 Mahoney, (13 Mich., 494,) says that the intention of it was to remedy a 
 practice by which, through dexterous management, clauses were inserted 
 in Bills of which the titles gave no intimation, and their passage secured 
 through legislative bodies whose members were generally not aware of 
 tiheir intention or effect. 
 
 1 To hold that the substitution of an exclusive for a general right ex- 
 tends the duration of the right from a term of years to perpetuity violates 
 the settled rule of construction applicable to statutes containing public 
 grants. The rule is uniform that " nothing passes but what is contained 
 in clear and explicit language," (DttfiMgwe jR. R. Co. vs. Litchfield, 23 
 How., 66.) " The reason of the rule is obvious. Parties seeking grants for 
 private purposes usually draw the Bills making them. If they do not 
 make the language sufficiently ciear and explicit to pass everything 
 ■ that is intended to be passed, it is their own fault. While, on the other 
 hand, such a construction has a tendency to prevent parties from insert- 
 ,ing ambiguous language for the purpose of taking, by ingenious interpret- 
 ation and insinuation, that which cannot be obtained by plain and express 
 terms." Or, as said by Chief Justice Marshall in Providence Bank case, 
 4 Peters, 561 : " When it is alleged that the State has surrendered for 
 all time- a valuable privilege or power, the community has aright to 
 insist that its abandonment ought not to be presumed in a case in which 
 the deliberate purpose of the State to abandon it does not appear." "Nor 
 is the doctrine limited to the taxing power. Whenever any power of the 
 State is said to be surrendered or terminated, whether it be the taxing 
 power or any other affecting the public interest, the same princple applies 
 and the rule of construction must be the same." 
 
 According to the views which I entertain and have expressed above, 
 only the Coosaw and the Oak Point Mines Companies have complied 
 with the provisions of the Act of 1876, but the Boatmen's and the 
 South Carolina Phosphate and Phosphatic River Mining Companies 
 
527 
 
 equally claim the benefits of the Act. If their claim should be decided 
 to be valid and the Act is to operate as a perpetual license, it must also, 
 as to these two last named companies, operate as a repeal of the Acts 
 granting to them licenses for the term of thirty years. But repeals by 
 implication are not favored, and the construction which leads to such a 
 result is to be avoided. 
 
 Whether any or all of the companies claim such perpetual license, I 
 am not advised, nor have I felt myself authorized to inquire, as the 
 Legislature alone is competent to deal with the subject. My duty is 
 performed in calling attention to the terms of the Act and the ques- 
 tions which may arise under it. There is enough in the very skillful 
 wording, of the Act to raise the doubt, and indicate the probability, if 
 not certainty, of such claim being made hereafter,, when the terms for . 
 which the licenses were granted shall have expired. 
 
 It is scarcely prudent to leave the question an open one until then ; and 
 unless the State acquiesces in the doctrine that a perpetual license is 
 granted to all companies which comply with the Act of'1876, it will be 
 for the Legislature to adopt such measures as in its judgment may be 
 necessary for the protection of the rights and interests of the State. 
 
 III.— THE MANNER IN WHICH THE RIGHTS AND PRIVI- 
 LEGES OF THE SEVERAL COMPANIES ARE EXERCISED. 
 
 Passing from the legal rights of the several companies to their mode 
 of exercising them, it will, be observed that the companies are divided 
 into two classes; — those which have capital invested in a mining plant 
 and work with the aid of machinery, such as the Marine and River, the 
 Coosaw and the Oak Point Companies; and, second, those which have 
 no mining plant or facilities and do not themselves work under their 
 license, but grant permits to others to use their license and sell to 
 them at a stipulated price the product of their labor, which they in turn 
 sell to the home factories or the foreign shipper. Under this latter class 
 are the South Carolina Phosphate and Phosphatic River Mining Com- 
 pany, the Boatmen's and the Palmetto. 
 
 The difference in value to the State of these two modes of exercising 
 the charter privileges will appear hereafter. 
 
 The phosphate deposits in the navigable waters of the State lie at vary- 
 ing depths. In some localities they are esfposed by the receding of the 
 tide, in others they are only a few feet, and in others again are at depths of 
 twenty, thirty and forty feet below the surface of the water. The rock 
 itself is sometimes in loose nodules, easily gathered by hand or tongs, 
 and sometimes the nodules are firmly impacted into a solid mass, desig- 
 nated by some as strata rock, and only to be broken and gathered by the 
 
528 
 
 aid of powerful machinery. In some localities the rock lies on the bed 
 of the river, in others it is covered by sand or mud of varying thickness, 
 which must be dug through in order to reach the deposits. 
 
 That portion of the deposits which lies on the bed of the river and in 
 shallow water can be gathered by hand or tongs ; the residue can only be 
 obtained by the aid of machinery. The estimates vary as to the relative 
 proportion of the rock which has been gathered by hand and that which 
 has been obtained by machinery. Of course that which was most easily 
 obtained has been the first gathered, and the weight of opinion seems to 
 be that the larger portion of the phosphatic deposits now remaining lies 
 in deep water and is attainable only by machinery. But all of the ex- 
 perts who have been examined by me unite in the opinion that both sys- 
 tems of working are essential; that a river or stream cannot be 
 thoroughly worked and the phosphatic deposit exhausted except by the 
 aid of both systems— the dredge or other machinery for that portion 
 which lies in deep water, and " hand picking " in shallow water where 
 the dredge cannot so well operate. The companies of the first class 
 unite both systems ; the companies of the second class use no machinery, 
 and their labors, therefore, never exhaust a river of its deposits, but are 
 confined to gathering the loose rock, leaving untouched the larger de- 
 posits in deep water. In a word, they gather that which is attainable at 
 little expense and leave the more costly mining to the companies who 
 have invested capital in proper mining machinery. 
 
 This mode of exercising chartered privileges is injurious alike to the 
 State and to the companies who have invested money in machinery and 
 appliances necessary to prosecute the work. The latter complain, and 
 with justice, that the State neither protepts its own interests nor theirs ; 
 but the evil is a necessary consequence of the defective legislation. 
 
 The right originally granted to each company extended to all the 
 navigable waters of the State, and consequently when any company dis- 
 covered the existence of phosphates in any given locality and proceeded 
 to mine them, other companies swarmed in upon it and reaped the fruits 
 of its surveys. No company had any right to the phosphates until dug 
 and removed, and the right to dig and remove was common to all. In- 
 stances have been brought to my notice in which the dredges of one com- 
 pany have been followed by boats of another company, which gathered 
 the rock as it was broken and dislodged by the dredge. It is a matter 
 of wonder that serious collisions have not occurred from such conflicts of 
 interests, and it is hardly wise for the State to continue legislation which 
 naturally tends to a breach of the peace. 
 
 The copipanies which exercise their privileges by means of permits 
 complain in their turn of the defective legislation. Parties frequently 
 obtained permits from two or more companies at the same time, and sold 
 
529 
 
 the rock dug under the permit to neither, but disposed of it to some third 
 party, and the company granting the permit was thus deprived of its 
 profits and the State of the royalty. Only the licensed company paid 
 the royalty, and the practical operation of the permit system has been to 
 offer a premium to the miner or laborer not to sell to the licensed com- 
 pany, for the outsider paying no royalty could afford to add that to the 
 price of the rock. 
 
 The Act passed at the last session of the Legislature, which prohibits, 
 under penalties, any one from purchasing rock from, or selling rock to, 
 an unlicensed person or company, may prove a protection to the com- 
 panies and the State, but it has not been in force sufficiently long to 
 enable us to judge of its effect. 
 
 The different modes of working practiced by these two classes of 
 companies has a material bearing upo^n the phosphate interests of the 
 State. 
 
 Deposits of phosphate rock are not confined exclusively to this State. 
 They are found in several places in Europe, and the rock of this State 
 has to come into competition in the European markets with the rock there 
 produced. 
 
 The' value of the rock is regulated commercially by its analysis. Fifty- 
 five per cent, of phosphate of lime is the standard, and unless it analyzes 
 that it is unmerchantable. 
 
 The rock of this State is not designated in the European markets by 
 the name of the mining company from which it comes, but is all em- 
 braced under the general name of Carolina river rock, and unless the 
 standard is maintained, there is a depreciation in value which affects not 
 merely th'e particular shipment or company, but extends to the entire 
 class known as Carolina river rock. 
 
 If the loss arising from careless or unskillful preparation fell exclu- 
 sively on those who were responsible, the evil might simply be left to 
 work its own cure; but as the injury results to all, itcan only be corrected 
 by a power sufficiently strong to govern all. If the demand regulates 
 the supply, and the preparation regulates the demand, it is of impor- 
 tance to the Stat6 that there should be the most skillful preparation. 
 
 The testimony taken is very full and clear that the marketable value 
 of the rock, its conformity to standard, depends, in considerable degree, 
 upon its preparation 'for market, and this requires railways, drying 
 houses, engines and machinery adapted to the purpose, and these in turn 
 demand a fixed location and capital for their erection and employment. 
 
 There is also an advantage to the State in the fixed locality of the 
 companies. Where their works are erected their wharves are con- 
 structed, as the loading is direct from the works to the ships. The facili- 
 
530 
 
 ties for inspecting the operation of the companies and ascertaining tlieir 
 products are greater, and the bills of lading of the vessels and the 
 clearances at the custom house furnish the means of checking and veri- 
 fying the returns of the companies, as these are based upon the ship- 
 ments. 
 
 Where the companies have not fixed works, but sell to others, there is 
 no mode of verifying the returns, and the State is dependent entirely 
 upon the good faith of the company making the return. 
 
 Whether regard is had to the proper working of the phosphatic 
 deposits of the navigable waters, so as to realize the largest yield, or to 
 the proper preparations of the product for the market, so as to ensure 
 the greatest demand and the largest price, or to the security to the State 
 for the collection of its revenue, the conclusion has been forced upon my 
 mind that these objects can best be accomplished by companies possess- 
 ing capital and having fixed location and adequate mining plant and 
 machinery for digging and preparing the rock. 
 
 That I may not seem to attach undue importance to the necessity of 
 the employment of capital in the raining operations, and to the advan- 
 tage of fixed works in securing the largest revenue to the State, I refer 
 to the returns of production on which royalty is payable, made by the 
 several companies : 
 
 Coosa w. 
 
 Marine and 
 River. 
 
 Oak 
 Point. 
 
 P. &P. 
 
 Company 
 
 Boatman. 
 
 Total. 
 
 1870 
 
 
 1,989.50 
 17,655.40 
 22,502.90 
 22,416.58 
 14,136.50 
 21,690.80 
 28,507 
 
 
 
 
 , 1,989.50 
 17,655.40 
 
 1871 
 
 
 
 
 
 1872 
 
 9,964 
 23,310 
 25,751 
 33,579 
 
 
 
 
 22,502.90 
 
 1873 
 
 11,926 
 18,156 
 18,580 
 18,895 
 
 1,471.18 
 2,114 
 1,948 
 913 
 
 
 45,777 
 
 1874 
 
 
 67,716.50 
 
 1875 
 
 
 67 969 80 
 
 1876 
 
 18 
 
 81,912 
 
 
 92,604 
 
 128,895 
 
 67,557 
 
 6,446 
 
 18 
 
 295,523 
 
531 
 
 Taking the returns of the three companies with capital and mining 
 pla.nt, and the two companies with small capital and ho mining facilities, 
 and they stand as follows : 
 
 TONS. 
 
 Coosaw 92,604 
 
 Marine and River 128,895 
 
 Oak Point (37,557 
 
 289,056 
 
 South Carolina Phosphate and Phosphatic Company 6,446 
 
 Boatman's Company 18 
 
 6,464 
 
 It thus appears that the royalty on the production of the companies 
 operating without capital or mining plant was, up to October 1, 1876, 
 only a little over two per cent, of the entire royalty for that period. 
 But the South Carolina Phosphate and Phosphatic Mining Company 
 commenced work in 1873 and the Boatman's Company in 1875, so that 
 the above aggregate does not fairly represent the relative work of the 
 two classes of companies; but the return for the year ending September 
 1, 1877, does, and that is as follows: 
 
 
 
 
 § " 
 
 
 
 
 
 a 
 
 a 
 
 '■za - 
 
 m 
 
 d 1 
 
 ' 
 
 o 
 
 
 c 
 O 
 
 South Car 
 Phospha 
 and 
 Phospha 
 
 a 
 
 e 
 ■^ 
 
 53 
 O 
 
 pq 
 
 -4^ 
 
 3 
 
 Total. 
 
 73,202 
 
 24,278 
 
 24,744 
 
 1,688 
 
 2,254 ^ 
 
 378 
 
 126,569 
 
 Aggregate of Coosaw 73,202 
 
 . , Marine and River 24,273 
 
 Oak Point 24,774 
 
 Total 122,249 
 
 Aggregate of South Carolina Phosphate and Phosphatic Min- 
 ing Company 1,688 
 
 Boatman's 2,254 
 
 Palmetto ' 378 
 
 Total 4,320 
 
 Or about three and one-half per cent. 
 
 43 
 
532 
 
 The managing officers of the several companies, however much they 
 differ on other points, all concur in condemning the present system as 
 injurious to them and to the State. 
 
 1st., It affords no protection to the capital invested in mining or to 
 skill or energy employed in it. 
 
 2d. It does not secure to a company the benefits of any deposits of 
 phosphates which it may discover by its surveys, but leaves the dis- 
 coveries so made free to all. 
 
 3d. It gives to companies without capital the same privileges which it 
 accords to large investments. 
 
 4th. It makes no provision for a careful and exhaustive working of 
 the deposits, but allows the companies to take that which is most valu- 
 able, or most easily gathered from one locality, and then pass to another. 
 
 6th. It contains no provision for an accurate return of the product 
 or payment of the royalty on it to the State, and exacts from some com- 
 panies a bond of $50,000, while from others it requires a bond of only 
 $5,000. 
 
 IV.— THE REMEDY. 
 
 I am not unaware of the difficulty of suggesting the appropriate 
 remedy for the existing evils, but having conferred with those who have 
 directed their attention to the development of this branch of industry^ 
 and finding that the representatives of all the companies, those with 
 capital as well as those without, united in recommending the same 
 remedy, I am led to the conclusion that it is possibly the safest which 
 the Legislature can adopt. 
 
 The remedy suggested is for the State to grant for a specified period 
 the exclusive right to dig and mine phosphate rock and phosphatic de- 
 posits from its navigable waters, within certain well-defined limits, to 
 such incorporated companies as shall, after due notice of the plan 
 adopted, apply for the privilege and indicate the territory within which 
 they desire to work ; arid to require from every company to which such 
 grant is made not only security for just returns and prompt payment of 
 the royalty, but also that they will, within prescribed periods, establish 
 themselves within the territory granted with mining plant and machinery 
 sufficient for the systematic and exhaustive working of the phosphatic 
 deposits within such territory, and with sufficient actual capital to insure 
 the thorough performance of the work. 
 
 These provisions are similar to those of the Act of 1876, but in the 
 application of them there are important points of difference between 
 that Act and the plan suggested. 
 
 The Act of 1876 is objectionable, not because of its provisions, which 
 are to a great extent wise, but because it was discriminating and partial 
 
533 
 
 legislation in the interest of a particular company and to the injury of 
 other companies and the State. 
 
 Under that Act the only actual grant of territory was to a single com- 
 pany, and was made "previous to the adoption of any plan or system of 
 granting exclusive rights applicable to all companiesj.and thus operated 
 partially; whereas, under the plan suggested, the system is adopted be- 
 fore any grant is made — all are advised of their rights and placed upon 
 an equal footing. The opportunity is thus afforded of settling any con- 
 flicts of right to territory before a grant is made of the same, which is 
 not afforded by the Act of 1876. 
 
 It fixes the periods for which the rights are granted and avoids the 
 ambiguity of the Act of 1876. 
 
 It extends to all companies which may apply, whether existing or to /■ 
 be created; whereas the Act of 1876 was limited to companies already 
 existing, and only gave to them ten days within which to learn of the, 
 Act and accept its provisions. 
 
 And above all it reserves to the State the power of control by granting 
 the privileges only to incorporated companies. 
 
 The effect of such legislation will probably be to substitute a few large 
 companies, with adequate capital and mining facilities, for the many 
 small ones which exist or desire to be incorporated. 
 
 But if the experience thus far obtained is to be any guide, the 
 advantage to the State of large companies is too important to be neg- 
 lected. It is from them, as has already been shown, that the royalty of 
 the State is almost entirely derived. 
 
 It may be said that there would be greater competition between several 
 small companies than between a few large ones, who could more easily 
 combine, but it must be remembered that as the royalty is a fixed price 
 per ton, and that the State is unaffected by either competition pr combi- 
 nation regulating the price of the article, the main question of interest 
 to the State is under which system the largest and most continuous 
 revenue can be obtained. 
 
 v.— THE POWER OF THE STATE OVER THE LICENSES 
 ALREADY GRANTED, 
 
 If the phosphate interest of the State was wholly within its control, 
 unembarrassed by previous legislation,- there is little doubt but that a 
 system of granting licenses could be devised, either on the plan above 
 suggested o? some other, which would secure a greater development of 
 the phosphate industry, greater and better protection to the companies 
 and increased revenue to the State. Unfortunately, the power of the 
 State over the subject is partially restricted by the previous legislation, 
 
5B1 
 
 wihich seems to have been confined to enacting into laws the wishes of 
 the phosphate companies, the interests of the State alone being unpro- 
 tected.. It was doubtless under this impression that the Legislature 
 referred itto me "to consider and determine the necessity, if such exist, 
 of repealing the charters of some or all of the said companies." 
 
 It is useless, however, to consider the necessity or policy of a repeal 
 unless the power to repeal exists. 
 
 Where the license or right to dig is part of the charter or franchise of 
 a company incorporated by the State, then, under the 1st Section of 
 Article XII of the Constitution and the 41st Section of the Act of 1841, 
 which provides that "it shall become a part of the charter of any corpo- 
 ration," that " such charter shall at all times remain subject to amendment, 
 alterations or repeal by the legislative authority," the license to such 
 companies may be altered or revoked. 
 
 This Section of the Act of 1841 and the power of the State under it 
 was construed by the Supreme Court of the United States in the case of 
 Thomlinson vs. Jessup, 15 Wall., which said : " The power reserved to the 
 State by the law of 184i authorized any change in the contract.'' * * 
 " The object of the reservation is to prevent a grant of corporate rights 
 and privileges in a form which will preclude legislative interference with 
 iheir exercise if the public interest should at any time require such in- 
 terference. It is a provision intended to preserve to the State control 
 over its contracts with the corporators, which without that provision 
 would, be irreparable and protected from any measures affecting its obli- 
 gation." 
 
 But neither the Constitution nor the Act of 1841 apply to joi,nt stock 
 companies or other associations not incorporated by the State. The 
 revocation of their powers depends upon the general law. 
 
 What, under that law, are the respective rights of the companies and 
 of the State? 
 
 It has been earnestly argued that by the Act of 1870 the State granted 
 to the persons named therein, and who subsequently became the Marine 
 and River Mining Company, the phosphates in situ; that the Act was 
 a grant of chattels, real, or corporeal hereditaments, and not the grant of 
 a license or mere incorporeal right. I have carefully considered the 
 authorities and argument, but am unable to concur in the view that there 
 was any grant by the State of the phosphate or phosphatic deposits 
 in situ. 
 
 Whether the Act is to be interpreted by the ordinary rules of con- 
 struction or by the more stringent rule which in the cases of public 
 grants raises every intendment against the grantee and in favor of the 
 State, there is. not in either case anything in the Act which vests in the 
 grantees, the phosphates Or phosphatic deposits in the beds of the rivers. 
 
535 
 
 The only grant of the phoshhates is when dug and removed, as of the 
 deer when killed, in the case put by C. J. Vaughn. — (Vaughn's Reports, 
 page 351.) There are no words granting an estate or property in the soil 
 or in the deposits. " If (as said by C. J. Woodward,) the grantees ac- 
 quired no estate in lands or minerals, what is their right to be denomi- 
 nated ? I answer, a license to work the land for minerals." — Funk vs. 
 Halderman, 53 Penn. Rep., 243. And Mr. Bainbridge, in his treatise on 
 the Law of Mines, says (page 300) : "There is a great distinction between 
 a lease of mines and a license to work mines. The former is a distinct 
 conveyance of au actual interest or estate in lands, while the latter is 
 only a mere incorporeal right to be exercised in the lands of others. * * * 
 In order to ascertain whether an instrument must be considered as a 
 lease or a license, it is only necessary to determine whether the grantee, 
 has acquired by it an estate in the land in respect of which he might 
 bring an action of ejectment. If the land is still to be considered in 
 possession of the grantor, the instrument will only amount to a license ; 
 and though the grantee of the license will certainly be entitled to search 
 and dig for mines according to the terms of his grant, and appropriate 
 the produce to his own use on payment of the stipulated rent, yet he will 
 acquire no property in the minerals till they are severed from the land 
 and have thus become liable in an action of trover." 
 
 Is the grant in the present case a grant of an " actual interest," " an 
 estate in the land," in the beds of all the navigable waters of the State, 
 or the grant of an incorporeal right, to be exercised on the lands of the 
 State? Are the beds of the rivers in the possession of the grantees or in 
 possession of the State ? If still in the possession of the State, then, on 
 the authority just cited, the grant is only of a license. 
 
 The express words of the Act seem to me to put this beyond question, 
 for not only are there no words passing any interest or estate inland, but 
 the express words used grant the right to " dig, mine and remove," and 
 designate the fee to be paid before the right can be exercised as a 
 " license fee." 
 
 But the conclusion that it is a license does not end the difficulty. The 
 perplexing question still remains, is the license revocable? Does it 
 so partake of the nature of a contract that no legislation can impair it, 
 or is it only a vested right which may. be annulled by express legislation ? 
 
 These are intricate questions, and, although I have given to them all 
 the attention I am capable of, I express with diffidence the conclusion I 
 have reached. It may well be that a Court, enlightened and advised by 
 elaborate argument, would announce a different and wiser judgment. 
 
 But the question has been referred to me and I must report upon it. 
 I do not propose^ however, to enter into an extended argument or citation 
 
536 
 
 of authorities, but to state as briefly as is consistent with clearness the 
 reasons and authorities which have influenced my judgment. 
 
 It is true that "a license is in its nature revocable," but this is appli- 
 cable only to that which is a mere license. The power of revocation 
 may be limited or qualified by the terms of the grant, as when " the 
 grant is for a specific period " or when the license " is coupled with an 
 interest which depends upon and cannot be enjoyed without the continua- 
 tion of the license." (See Wood vs. Leadbitter, 13 Meeson & Welsby, 
 846.) 
 
 It is not essential that the interest should be in the thing to which the 
 right given by the license relates or upon which it is to be exercised. 
 "All that is necessary to deprive the licensor of the power of revocation 
 is that he should have given, or that the licensee should possess, some 
 estate or interest which depends on the continuance of the license and 
 which cannot be enjoyed if it be withdrawn or amended." (2 American 
 Leading Cases, p. 738.) 
 
 In the case of Webb vs. Paternoster, Popham Reports, cited by Baron 
 - Alderson, in the leading case of Wood vs. Leadbitter, 13 Meeson & 
 Welsby, p. 846, it is said " a license for profit for a term certain is not 
 revocable," and, adds Baron Alderson, "a proposition to which, with the 
 qualification we have already pointed out, we entirely accede "—the 
 qualification referred to being the distinction between a license which 
 will justify what would otherwise be a trespass and a license coupled 
 with an interest, or, as said by Mr. Bainbridge, (Law of Mines, p. 306,) a 
 I license which "gives some usufruct of the land itself" 
 
 The license to " dig " and " mine " in the cases before us is for the full 
 term of twenty-one years. 
 
 What is said by Chief Justice Marshall, in Hunt vs. Rousamanier, 8 
 Wheaton, 174, in regard to a power of attorney seems to me applicable to 
 the license here. After laying down the general rule that "the power de- 
 pends on the will or license of the party granting" and ceases when the 
 will or permission is withdrawn, he adds : " But the general rule has sus- 
 tained some qualification. Although the letter of attorney depends 
 from its nature on the will of the person making it, and may in general 
 be recalled at his will, yet if he binds himself for a consideration, or in 
 terms or by the nature of the contract, not to change his permit, the law 
 will not allow him to change." 
 
 Has the State in terms, or by the nature of the contract, precluded 
 itself from revoking the license ? 
 
 The agreement on the part of the State was to grant for the specified 
 period the license to dig, and the phosphates dug and removed. 
 
 The agreement on the part of the grantees was to pay the license fee, 
 give the bond and pay the royalty. When the grantees of the license 
 
537 
 
 accepted and acted under it, it became an executed agreement or con- 
 tract, and the rights acquired under it protected, — not because they are 
 vested rights, for these can be revoked by express enactments of the 
 Legislature, (see Charles River Bridge case, 11 Peters, 540; Milne ws. 
 King, 5 Rich., 150,) but because they are rights acquired under con- 
 tract, and there is a constitutional inhibition of laws impairing the 
 obligation of contracts. 
 
 It must be remembered that I am now speaking of that class of cases 
 to which the 41st Section of the Act of 1841 does not apply. 
 
 The equitable grounds which preclude a revocation are equally strong. 
 
 What is said by Chief Justice Gibson in the leading case of Reriek vs. 
 Kern, 14 Sergt. and Rawl., 267, is directly in point : " But a license may 
 become an agreement on valuable consideration, as where the enjoyment 
 of it must necessarily be preceded by the expenditure of money ; and 
 ■when the grantee has made improvements or invested capital in conse- 
 quence of it, he has become a purchaser for valuable consideration. 
 Such a grant is a direct encouragement to expend money, and it would 
 be against all conscience to annul it as soon as the profits expected 
 from the expenditure is beginning to be received." 
 
 This case and those which follow and support the doctrine are, it is 
 true, cases between individuals ; but the inability of a State or an indi- 
 vidual to revoke a license granted, rests upon the same principle, as 
 sound in morals as in law, that a party making a promise with the view 
 of inducing others to act, cannot, after they have acted, withdraw it to 
 their injury, unless the right to do so is reserved at the time the promise 
 is made. 
 
 If I am Correct in these views, the result reached is this : That the 
 license to the Marine and River Mining Company, to the South Carolina 
 Phosphate and Phpsphatic Mining Company, and to the Boatmen's 
 Company, are within the control of the Legislature and can be amended 
 or revoked. The license to the Palmetto Mining Company expires by 
 its own limitation at this session of the Legislature, and is consequently 
 entirely within its control. 
 
 - The license to the Oak Point Mines, and to the Coosa w, are beyond the 
 control of the Legislature until the term of twenty-one years from 
 March 1st, 1870, has expired. 
 
 It does seem an anomaly that the State can revoke the license granted 
 to an incorporated company but cannot revoke it when granted to an 
 unincorporated company. 
 
 The distinction, already adverted to, is this: When the State grants a 
 license as part of the charter privileges of a company, it reserves to 
 itself, by the 41st Section of the Act of 1841, the absolute power to 
 amend, alter or repeal all or any portion of the rights and privileges 
 
538 
 
 granted, and the company accepts the grant with this reservation. The 
 State can thus at any time, by virtue of this reserved right, control and 
 regulate the corporation as the interests of the State may require. 
 
 In the grant of privileges to individuals or unincorporated companies 
 no such right is reserved. 
 
 It is to be regretted that the Legislature should have improvidently 
 parted with valuable privileges and interests without reserving the right 
 to control or modify them as the interests of the State might require. 
 But it has done so, and I am called upon to report what, in my opinion, 
 'is,the legal effect of such action. 
 
 But while the charters and privileges of the three first named compa- 
 nies are within the control of the Legislature, there is, I respectfully sub- 
 mit, an equity in these companies which entitles them to a preference 
 over any new companies which may be created. 
 
 They are already in existence under authority of the State, and the 
 Marine and River Company has expended capital in improvements and 
 machinery, and the South Carolina Phosphate and Phosphatic Company, 
 and perhaps the Boatmen's also, have had heavy expenditures in assert- 
 ing and establishing their rights by legal proceedings; all to a greater or 
 less extent with capital embarked in the business, and if they can com- 
 ply with the new requirements they have a just claim to the considera- 
 tion of the Legislature. 
 
 If the remedy suggested (page 18) meets the approval of the Legisla- 
 ture, the object of new legislation will be to establish a permanent and 
 general plan or system of granting licenses under which the powers, 
 duties, obligations of the companies shall be specifically defined, the 
 amount of paid up capital fixed, the mode of applying for and obtaining 
 specific territory prescribed and proper provisions made for the protec- 
 tion of the companies in the enjoyment of the rights and territory 
 granted to them, and to insure to the State the proper exercise by the 
 companies of the rights granted, and the payment of the royalty on the 
 entire product. 
 
 A uniform system, applying as far as possible to all the companies, is 
 unquestionably the safest and best, and I would respectfully suggest that 
 all the needed provisions be embodied in a single Act, under which the 
 companies can from time to time apply for licenses. We have on the 
 statute book a general Act regulating the formation, powers, &c., of cor- 
 porations. A similar Act could be passed providing for the creation and 
 government of phosphate companies, and to none but incorporated com- 
 panies, subject to the Act of 1841, should licenses be granted. 
 
 Whether the selection and allotment of territory to the respective com- 
 panies shall be made by the Legislature, or whether each company shall 
 be permitted to select the territory within which it will operate, are mat- 
 
539 
 
 ters of legislative discretion and not within the scope of this report ; but 
 whichever course be adopted, some provision must be made for determin- 
 ing the respective rights in case two companies should specify and apply, 
 for the same territory. 
 
 THE EOYALTY DUE THE STATE. 
 
 It has also been referred to me to ascertain what amount, if any, is 
 due to the State for royalty by any of the companies. 
 
 In order to ascertain whether the amounts returned by the several 
 companies to the State were correct, I obtained returns from the United 
 States Custom House at Beaufort and at Charleston, of all shipments of 
 phosphate made from either port since 1870, and have had each ship- 
 ment traced and verified, and these carefully compared with full state- 
 ments of the shipments taken from the shippers' books — a work of great 
 labor, but absolutely necessary in order to ascertain if the royalty bad 
 been fully paid. , 
 
 The same facilities for obtaining a record of the phosphates shipped 
 coastwise do not exist, as coastwise vessels are not required to clear at 
 the custom house; but as nearly the entire bulk of the river phosphates 
 is shipped to foreign ports, and almost all the land phosphates are used 
 at home or shipped coastwise, the custom house returns furnish for all 
 practical purposes a reliable statement of the product of the rivers. 
 
 Withoutencumbering this report with the details, either of the custom 
 house returns or of the shippers' statements, the following tables will 
 show, it is hoped, with sufficient fullness, the product of each company 
 for each year of its existence and the movement of the phosphates. 
 
 The last of these tables contains a general tabular statement of the 
 annual product of all the companies and the royalty paid. 
 
 From 17,6.55 tons in 1871 the product had reached 125,667 tons- in 
 1877, and it will be noted that the product of the last year exceeded that 
 of 1876 by 43,110 tons, a gain of over fifty percent.; and as each ton rep- 
 resents a dollar paid to the State, the importance of such legislation as 
 , will develop and protect this industry will be appreciated by all. 
 
540 
 
 I. — The Marine and Eivee Phosphate Mining and Manupac- 
 
 TUEiNG Company. 
 
 Shipments of Phosphate Bock, 1870, to October I, 1877. 
 
 Yeae 
 Ending 
 Oct. 1. 
 
 Foreign 
 Shipments. 
 
 Coastwise 
 
 and 
 Interior. 
 
 Total Tons. 
 
 EOYALTY 
 
 Paid. 
 
 1870. 
 . 1871. 
 1872. 
 1873. 
 1874. 
 1875. 
 1876. 
 1877 
 
 1,325 
 
 13,735.64 
 
 17,653.1398 
 1,989.1060 
 8,475.1904 
 
 19,797.271 
 
 22,542 
 
 24,273 
 
 664.904 
 3,919.1600 
 4,849.403 
 20,426 
 5,660.1254 
 1,893.1353 
 5,964 
 
 1,989.904 
 17,655.240 
 22,502.1801 
 22,416 
 14,136.918 
 21,690.1624 
 28,507 
 24,273 
 
 $ 1,989 40 
 17,655 00 
 30,267 49 
 14,651 58 
 14,137 00 
 21,690 72 
 3,539 35 
 
 
 
 
 Tptal 
 
 109,792 
 
 43,379 
 
 153,171 
 
 $103,930 54 
 
 II. — The South Caeolina Phosphate Company, (Limited,) Oak 
 
 Point Mines. 
 
 Shipments of Phosphate Rock, 1872, to September 1, 1877. 
 
 Year 
 Ending 
 Sept. 1. 
 
 Foreign . 
 Shipments. 
 
 Coastwise 
 
 AND 
 
 Interior. 
 
 Total Tons. 
 
 EoYALTY 
 
 Paid. 
 
 1873. 
 1874. 
 1875. 
 
 8,955 
 11,137 
 18,580 
 18,895 
 23,611 
 
 2,971 , 
 7,019 
 
 11,926 
 18,156 
 18,580 
 18,895 
 24,774 
 
 $28,000 00 
 
 1876. 
 
 
 6,251 60 
 
 1877. 
 
 1,163 
 
 11,914 00 
 
 Total 
 
 81,178, 
 
 11,153 
 
 92,331 
 
 $46,165 50 
 
 
 N. B. — By decree of Court, company pays royalty on one-half pro- 
 duction. 
 
541 
 
 III. — The Coosaw Mining Company. 
 
 Shipments of Phosphate Rock, 1872, to September 1, 1877. 
 
 Yeae 
 
 Ending 
 Sept. 1. 
 
 Foreign. 
 
 Coastwise 
 
 and 
 Interior. 
 
 Total Tons. 
 
 Royalty 
 Paid. 
 
 1873. 
 
 9,964 
 23,310 
 25,751 
 33,579 
 73,202 
 
 
 9,964 
 23,310 
 25,751 
 33,579 
 73,202 
 
 $ 9 964 00 
 
 1874. 
 
 
 23 310 00 
 
 1875. 
 
 
 25 751 00 
 
 1876. 
 
 
 33 579 00 
 
 1877. 
 
 
 73,202 00 
 
 
 
 Total 
 
 165,806 
 
 
 165,806 
 
 $165,806 00 
 
 IV. — South Carolina Phosphate and Phosphatic Mining 
 
 Company. 
 
 Shipments of Phosphate Rock, 1873, to October 1, 1877. 
 
 Year 
 Ending 
 Oct. 1. 
 
 Foreign 
 
 AND 
 
 Coastwise. 
 
 Interior. 
 
 Total Tons. 
 
 Eoyalty 
 Paid. 
 
 1873. 
 
 1,471 
 2,114 
 1,948 
 913 
 1,688 
 
 
 1,471 
 2,114 
 1,948 
 913 
 1,688 
 
 $1,398 18 
 
 1874. 
 
 
 2,198 20 
 
 1875. 
 
 
 2,007 45 
 
 1876 
 
 
 193 63 
 
 1877 
 
 
 ■ 2,837 00 
 
 
 
 
 Total 
 
 8,134 
 
 
 8,134 
 
 $8,134 46 
 
 
 
 
 
 
542 
 
 .'V. — Boatmen's Phosphate Eiver Mining Company. 
 
 Shipments of Phosphate Boch, March, 1876, to August 31, 1877. 
 
 Year 
 Ending 
 Sept. 1. 
 
 Foreign 
 Shipments. 
 
 Coastwise 
 
 AND 
 
 Interior. 
 
 Total Tons. 
 
 Royalty 
 Paid. 
 
 1876. 
 
 18 
 1,996 
 
 
 18 
 2,254 
 
 f 18 60 
 
 1877. 
 
 258 
 
 2,253 50 
 
 Total 
 
 2,014 
 
 258 
 
 2,272 
 
 $2,272 10 
 
 
 
 VI. — Palmetto Phosphate River Mining Company. 
 Shipments of Phosphate Bock, 1877. 
 
 Year 
 Ending 
 Sept. 1. 
 
 . Foreign. 
 
 Coastwise 
 
 AND 
 
 Interior. 
 
 Total Tons. 
 
 Royalty 
 Paid. 
 
 1877. 
 
 378 
 
 
 378 
 
 $378 16 
 
 
 
 
VII. — General Table of Annual Phosphate Shipments and Royaltv Paid Thereon, &c'. 
 
 FISCAL YEA.R ENDING SEPTEMBER 1. 
 
 1870. 
 
 1871. 
 
 1872. 
 
 1873. 
 
 1874. 
 
 1875. 
 
 187G. 
 
 1877. 
 
 TOTA h 
 
 Shipment. 
 
 Coosaw Mining Co m pa ny , 
 
 South Carolina Phosphate and Phosphatic Mining Company 
 
 Marine and River Phosphate Mining and Manufacturing Company, 
 
 South Carolina Phosphate Company, (limited,) Oak Point Mines. 
 
 1,989 
 
 Boatmen's Phosphate River Mining Company. 
 
 Palmetto Phosphate River Mining Company... 
 
 Total 
 
 1,989 
 
 17,655 
 
 22,502 
 
 17,055 
 
 22,502 
 
 9,964 
 1,471 
 
 22,4 IG 
 
 11,926 
 
 45,777 
 
 23,810 
 2,114 
 
 14,136 
 
 18,156 
 
 57,716 
 
 25,751 
 1,948 
 
 18,580 
 
 07,969 
 
 33,579 
 913 
 
 21 ,690 28,507 
 
 18,895 
 
 18 
 
 81,912 
 
 73,202 
 1,088 
 
 24,273 
 
 24,774 
 
 2,254 
 
 378 
 
 126,569 
 
 165,806 
 8,134 
 
 153,171 
 
 92,331 
 
 2,272 
 
 378 
 
 422,092 
 
 Royalty 
 Paid. 
 
 Balance 
 
 R o Y A L T Y 
 
 Due. 
 
 REMARKS. 
 
 $165,806 oo;! 
 
 8,134 GO 
 
 103,930 54 
 
 46,105 50 
 
 2,272 10 
 378 16 
 
 1326,080 30 
 
 Royalty paid in full to State Treasurer. 
 
 Royalty paid to State Treasurer $7,485 
 
 Royalty collected by Attorney General 
 
 Conner 649 
 
 $49,241 4(5! 
 
 $8,134 
 
 Company claims that $24,967 of royalty due is 
 not due, because rock mined was not stan- 
 dard phosphate rock. 
 
 Under order of Court, Company pays royalty 
 
 on one-half of its production. 
 
 Royalty paid State Treasurer $18,165 50 
 
 Royalty paid Messrs. Corbin & 
 
 Stone 28,000 00 
 
 $49,241 40: 
 
 - $46,165 50 
 
 Royalty paid in full to State Treasurer. 
 
 Royalty paid in full to State Treasurer. 
 
 The difference between $422,092 
 
 and 326,686 
 
 $95,406 
 
 is made up of royalty due 849,241 
 
 and one-half the product of 
 the Oak Point Mines, not sub- 
 ject to royalty 46,165 
 
 $95,406 
 
543 
 
 All of the companies have paid the royalty due except the Marine 
 and River Company. 
 
 From an examination of the returns it was ascertained that this com- 
 pany was indebted to the State for the year ending October 1, 1876, 
 in the sum of $24,967.65. 
 
 In the Spring or early in the Summer of this year, the company 
 virtually changed hands, the largest corporators selling their shares, and 
 new officers were elected. Under the instructions of the Legislature,:^ ' 
 •I pressed for the collection of the amount due to the State, and the 
 officers of the company expected to raise the necessary funds to meet this 
 and other obligations by additioaal assessment ppon the stockholders, 
 and a meeting of the stockholders was called for that purpose in October 
 but failed to adopt the proper measures. 
 
 The company has failed to pay royalty for the year ending Oqtober, 
 1877, the amount of which is $24,273, making a total due by that com- 
 pany of $49,241. The bond of $50,000, given for payment of royalty, 
 is worthless, and the assets of the Company are not sufficient to 
 liquidate the debt ; but the debt due to the State for royalty is, I think, 
 due by those to whom the State granted the license and with whom the 
 contract for royalty was made by the Act of 1870. As among the 
 . grantees are gentlemen of undoubted responsibility, I recommend that 
 proceedings be instituted to recover the debt. 
 
 As the license to the grantees named in the Act, and their associates, 
 was upon the express condition of the payment of royalty, and the con- 
 dition has been broken by them, I recommend that the license be re- 
 voked by repeal of the Act of 1870. 
 
 There was an ainount of $649 due by the South Carolina Phosphate , 
 and Phosphatic Mining Company, which had not been paid to the 
 Treasurer at the time it became due. Its payment had been withheld by 
 the company owing to the unsettled condition of public affiiirs at the 
 time and uncertainty as to the proper parties to whom it should be 
 paid. On bringing the matter to the attention of the company it was 
 promptly paid. 
 
 One of the important questions connected with "the rights iand inter- 
 ests of the State," is whether the amount fixed as royalty is sufficient. 
 At the rates at which the rock is now sold the royalty is ahout i of the 
 value of the ton, or about 16 per cent. There are so "few standards of 
 comparison that it is difficult to speak positively on the subject. From ' 
 the information I have obtained, I am of opinion that the present royalty 
 is fair both to the State and to the companies. But if the price of the 
 rock should materially advance, so that what is now worth $6 or $7 per 
 ton should sell for $10 or $12, the present royalty of $1 per ton would 
 not be just to the State. 
 
But here, again, the improvident character of the previous legislation 
 embarrasses, if it does not defeat, all measures for the protection of the 
 State. Unless the same royalty is exacted from all there will be dis- 
 crimination by the State in favor of soHie as against other companies ; 
 and whether the State can alter the terras of the license granted to the 
 unincorporated companiies, is, as I have already indicated, a matter of 
 great doubt. 
 
 The 3d Section of the Joint Resolution, referring the subject to me, 
 provided that "all necessary expenses incurred by the Attorney General 
 should be paid out of the commissions upon the amounts recovered;" 
 and "if such commissions should be insufficient, then from the contin- 
 gent fund of the Attorney Genej-al or from the phosphate royalty unap- 
 propriated." 
 
 The expenses incurred for clerical assistance in tabulating the returns 
 of the Custom Houses at Charleston and Beaufort, the expense of obtain- 
 ing copies of the returns from -Beaufort, and the expense of a steno- 
 grapher in taking the testimony of the several witnesses examined 
 amounted to $256.68. 
 
 As the only amount recovered by me for the State was §649, it will 
 be readily perceived that the ''commissions" would not defray the ex- 
 penses. Under the authority of the Resolution, the expenses were 
 defrayed out of the amount recovered, and the net balance has been 
 paid over to the Treasurer. His receipt and the vouchers for the 
 expenses are on file in this office. 
 
 Respectfully submitted. 
 
 JAMES CONNER, 
 Attorney General. 
 
JL r^ '^^ "^ ' ■^^vZ^nr^ JL - 
 
TESTIIMZOn^:^-. 
 
 TESTIMONY OV DE. KAVENEL. 
 
 Q. ^Vill you give me an estimate of the phosphate territory of the 
 State ? 
 
 A. I know of no phosphate deposits in workable quantity North of 
 Cooper River or South of Broad River. I have seen small pieces of 
 phosphate rock said to have been found in the streams further North, but 
 have no personal knowledge of them. The water is so deep in Broad 
 River that the existence of phosphate rock could only be ascertained by 
 examining small pieces brought up by a hook attached to a line. The 
 extent and thickness of the deposit there is unknown. Some of the 
 creeks about Beaufort contain rock, but I do not know how much. A 
 large deposit is found in Coosaw River, and from Coosaw Island to 
 Chisolm's Landing. This locality is worked by the Coosaw Mining Com- 
 pany, and has furnished a large proportion of the river rock exported. 
 A thick and fine deposit is found on Chisolm's Island. Bull River con- 
 tains rock, but the quality is not very good. I know of none in the 
 Corabahee River and of none in the Ashapoo, nor in the Edisto below 
 the Savannah Railroad bridge. Prom this point to Parker's Ferry 
 there is a good deposit -of very fine rock. I do not know that rock has 
 been found in Dawhoo River or the North Edisto. Stono River, from 
 John's Island Ferry to Wappoo Cut, contains rock and has been 
 much worked. There is also rock in the river below this point which has 
 not been worked. The Ashley River does not seem to have much rock 
 in it. Cooper River, from Pilbean's Creek to Goose Creek, contains rock, 
 but little is known of its extent or quality. The Eastern branch of 
 Cooper River contains some rock as high as Huger's Bridge. The 
 Wando River about Cainhoy has also afibrded some. I do not know of 
 any deposit further North. 
 
 Q. Has there been any investigation along the coast in the rivers that 
 come down — Santee, Bull's River, etc. ? 
 
 A. There has been no thorough and systematic examination of the 
 waters of the State. Phosphate rock is known to exist in certain locali- 
 ties, but we do not know where else it may be. 
 
 Q. How long would it take, and what would be the probable cost of a 
 proper and accurate survey of the waters of the State, to discover the 
 amount of phosphate existing ? 
 
547 
 
 A. I cannot state the time or cost necessary. In order that the State 
 may know the extent of her phosphate property, all the rivers must be 
 thoroughly examined. This examination would require a steamer pro- 
 vided with boring or dredging machinery capable of removing the super- 
 ficial deposit of sand or shells, -between which and the solid marl the 
 phosphate nodules sometimes lie. Until this marl is reached there is no 
 certainty that there may not be phosphate in the stream. 
 
 Q. Has there been any perceptible exhaustion of the phosphate ? 
 
 A. The deposit in Stono River, from John's Island Ferry to Wappoo 
 Cut, has been worked for several years with dredges and tongs, and a 
 large quantity of rock removed. The result is, that though both dredges 
 and tongs can still obtain it, the quantity collected in a day's work in 
 this locality is much diminished. 
 
 Q. Has the present system of mining done anything more than 
 remove the surface rock ? 
 
 A. In my opinion it is all surface rock. In some places the nodules 
 are separated from each other by sand or marl; in other places they are 
 packed and cemented together in masses of large size, .sometimes called 
 strata rock. 
 
 Q. At what depth do these deposits lie under the water? 
 
 A. We find them at all depths, from low water mark to forty or sixty 
 feet deep. 
 
 Q. If the gathering of the phosphates was confined to what can be 
 . picked up in shallow water and by touging, what proportion could' be 
 recovered ? 
 
 A. But a small part of it. 
 
 Q. Then capital, skill and machinery must be employed to secure the 
 larger part of the river deposit ?- 
 
 A. I think so. 
 
 Q. Is the quantity of rock in the land greater than that in the water ? 
 ,A. I think so. 
 
 Q. Which is the best ?- 
 
 A. There is high grade rock both in the land and in the rivers. 
 
 Q. How much phosphate of lime does the South Carolina phosphate 
 nodule contain ? 
 
 A. When clean and dry the best quantity contains about 60 per cent.; 
 55 per cent, is considered, however, the. standard rock. But there is 
 much rock in both land and river which contains less, and which, there- 
 fore, is not brought to market. 
 
 Q. Is the demand for phosphate increasing ? 
 
 A. It is and rapidly. New land soon becomes old land. Every crop 
 removed from the soil takes from it a portion of itsphosphatic acid. 
 
 44 
 
The larger the crop the greater the loss, and the sooner the time comes 
 when it must be restored to keep up fertility. 
 
 Q. The State is then rapidly exporting at a low price an article which 
 she may have to buy back at a high one ? 
 
 A. It is not impossible. The application of one hundred pounds of 
 phosphate rock to the acre is not heavy manuring, and to supply the 
 .worn lands of this and the neighboring States which require it with that 
 amount annually would take immense quantities. 
 
 TESTIMONY OF ROBERT ADGER. 
 
 Q. Mr. Adger, are you the President of the Coosaw Mining Com- 
 pany? 
 
 A. The affairs of the Coosaw Mining Company are administered by a 
 Board of Managers, and I am Chief Manager. 
 
 Q. Does your company pay its own royalty ? 
 
 A. Since 1872 we have done so. In 1871 we paid royalty on 1,220 
 tons of rock, and in 1872 on 5,140 tons, both through the River and 
 Marine Conjpany. 
 
 Q. What is the capital of your company ? 
 
 A. The original capital is $125,000, all paid in cash. By the terms 
 of our articles of agreement no increase of the capital is allowable. 
 Very soon after commencing, however, it was found this capital would 
 be entirely inadequate for conducting the operations of the company, 
 and after twelve months of experience we saw, without large additional 
 means, there was no possibility of maintaining ourselves, or making re- 
 turns of dividends to our stockholders, and my own firm, who are agents 
 of the company, were obliged to make them very heavy advances. I 
 cannot state at all accurately from memory the exact amount which the 
 company found it necessary to expend, but the whole cost of their plant 
 certainly exceeds $275,000, exclusive of the amount of cash funds 
 requisite for carrying on their business. 
 
 Q. How is that amount invested ? 
 
 A. In steam tug boats, dredges, washing boats and other appliances 
 and machinery, afloat and on shore, in wharves, sheds, railroads, cars, 
 engines, workshops, furnaces, &c., for receiving, storing, drying and ship- 
 ment of our production, involving also a large outlay of capital. 
 
 Q. Where are you located ? 
 
 A. On Chisolm's Island and Coosaw River. 
 
 Q.\Do yoii own that island? 
 
 A. No. The part of it occupied by us is leased from the owner. 
 
 Q. How does your company operate? 
 
 A. They both dredge and hand-pick, principally by dredging. 
 
549 
 
 . Q. That is in deep water? 
 A. Yes. The dredging is done in deep water. 
 
 Q. Those dredges are costly, are they not? 
 
 A. Yes; fully furnished and equipped they cost about $30,000 each, 
 and it is impossible to work in deep water without them. 
 
 Q. -Does not a large portion of the phosphatic deposit lie in deep 
 water ? 
 
 A. Yes,"very much the largest portion of it. 
 
 Q. In addition to the prime cost the expenses in operating are con- 
 siderable, are they not ? v 
 
 A. Yes, very large, though I cannot state from memory what the run- 
 ning expenses are. They are, however, necessarily very heavy, as, besides 
 the regular officers, we are obliged to employ competent engineers arid 
 skilled operatives in addition to our clerks and a very large number of 
 laborers. The amount expended for fuel, which is entirely of pine wood 
 purchased in the neighborhood, is also quite large, giving employment to 
 large numbers of idle laborers and teams in the neighborhood, also to 
 mills on the Port Royal Railroad and the road itself, thus paying out ' 
 large sums of money which would otherwise have been sent to Northern 
 ports for coal. 
 
 Q. Do you operate at all in tongs work ? 
 
 A. Very little. In preference, we hand-pick. 
 
 Q. Are the laborers drawn from the neighboring plantations? 
 
 A. No; there are no neighboring plantations which we draw labor 
 from; on the contrary,it is obtained from the islands on the South side of 
 the Coosaw, where planting (except by negroes in patches) has long since 
 been abandoned. But for ihis employment for the past four years the 
 negroes on those islands would either have starved or been thrown on the 
 County for support, or lived by pillaging and robbery. Indeed the per- 
 manent location of our works at that and present time has thus been 
 riiost providential in that respect. It offered to the idle labor constant 
 employment at full and remunerative prices, and being reliable for the 
 whole year, owing to oiir fixed locality, they have abandoned their system 
 of patch culture of the soil and rely wholly on the employment we give 
 them. It is gratifying to see the improvement in the healthful appear- 
 ance, moral character and stability, since we have been established on 
 the Coosaw, of those laborers we employ. Our Superintendent, whose 
 life has been spent in the management of labor, reports to us that he con- 
 siders we have at our command and in our employment a class of 
 laborers equal to any in the world. They appear happy and contented, 
 and during our seven years' operations we have had no single case of 
 disorder or insubordination, and the desire for constant and remunera- 
 
live employtoent, such as we are able to offer, is so appreciated by them 
 he could easily double his present labor roll if needed. 
 
 Q. Do you operate at all on the system of giving permits? 
 
 A. No, and I entirely disapprove of it, and am satisfied it is much 
 better not only for the interest of the company themselves, but for the 
 State in securing the payment of the royalty, and most certainly for the 
 benefit of the laborers themselves, that we should employ them at full 
 and often very large wages to work under our direction and control. 
 
 Q. Are you troubled at all by unlicensed persons encroaching upon 
 your territory? 
 
 A. Yes, in one instance, by a neighboring company operating on their 
 own territory without license, at which time part of the rock rained from 
 our river (the Coosaw) was taken ashore by them to their landing, and 
 they refused to deliver same to us when demanded. I believe they have 
 made no return to State and paid no royalty on it, and we have com- 
 menced action for the recovery of the value of the rock in our Courts. 
 Part we took forcible possession of, and they have not since encroached 
 on us. In another instance, a sloop folding a permit from a licensed 
 company operating near Charleston entered upon our territory and be- 
 fore we were aware of their presence had mined fifteen to twenty tons. 
 ■ They were ordered off, and after much trouble, while we were taking 
 steps to arrest them, they left in the night and landed what they had 
 illegally taken in the city. We were not able to trace the rock after it 
 was landed and thrown with other rock or otherwise disposed of. We 
 have no knowledge that any rdyalty was paid on the rock ; certainly if 
 it had not been removed from our territory the State would have re- 
 ceived it. 
 
 Q. Are there any definite lines separating your territory froni that of 
 the other companies? Buoys for instance? 
 
 A. Our boundaries are marked and defined by the grant of the Legis- 
 lature, dated 28th March, 1876, and there are no phosphate deposits in 
 any other part of the river. 
 
 Q. Your company has been at work since 1870? 
 
 A. Yes, sir. < 
 
 Q. As you are familiar with the legislation under which the phosphate 
 works are now operated, will you please state what in your opinion are 
 the principal defects in that system ? 
 
 A. In my judgment, it is chiefly in granting licenses, almost indis- 
 criminately, to persons who applied, without requiring a guarantee that 
 they intended investing sufficient capital to work efficiently, and in not 
 confining them to a particular territory and giving them a local habita- 
 tion. 
 
551 
 
 Q. Will you state how that system operates against the interest of 
 the State ? 
 
 A. First, frota the fact that it is very difficult, if not im- 
 possible, for the State to have any check on the returns for 
 royalty of parties who have the right to roam about as they please 
 in gathering the rock, and who may sell it in small quantities 
 without keeping any record or any regular books. Companies with, 
 large capitals, operating largely, are necessarily compelled to make large 
 contracts with third parties, and in writing; and in case any suspicion 
 of withholding royalty is entertained by the State, these cpntracts, and 
 the eyidence of the third parties and the books of the company, which, 
 they would necessarily be obliged to keep, could always be demanded. 
 Again, where parties are allowed to dig the rock wherever they please, 
 they will naturally gather it where it can be had most plentifully, and 
 with tlie least labor, and this generally would be the rock upon the sur- 
 face of the large deposits. The surface rock is usually in nodules and is - 
 usually the richest and most valuable of the deposit. This skimming 
 of the cream, as it were, of the deposits, of course leaves less inducement 
 to capitalists to go into the business. I will exemplify my meaning by a- 
 striking example. The Marine and River Company commenced operations 
 in the Stono River with dredges, wash-boats, &c. Soon after the State 
 licensed several companies without capital, which commenced operations in i 
 the same river themselves, and by permits, in swarms. The result has been 
 that these companies have taken a large portion or nearly all of the loose 
 nodules, together with the stratified rock which was broken up by the , 
 dredges of the Marine and River Company, leaving for them only that 
 which lies embedded in the river. Their present appliances are not of a 
 character to obtain that in sufficient quantity to pay the cost of pro- 
 duction. Hence, after the franchise passed into the hands of second 
 parties, the working of the river has been discontinued by them, and 
 their dredges, &c., are now laid up alongside of their wharves in this city. 
 This brings the question before us, how shall this deposit remaining be 
 dug so that the State shall be benefited by a royalty upon it, or will 
 they ever receive any? If not, ^11 that is so abandoned will be lost to 
 the State. I hazard the opinion that no capitalists can be found who 
 will invest sufficient capital to construct new machinery, to obtain alone 
 the uncertain quantity lying under the bed of the river after it has been 
 denuded of the most reliable and valuable portion by these small 
 licensed conapanies. Again, parties holding licenses without sufficient 
 capital cannot prepare the rock properly for market, and thus not only 
 afiect its value but depreciates and injures the general reputation of the 
 rock, and of course thus the interest of the State in the river deposits. 
 
552 
 
 Q. What is, from your judgment and knowledge of the business, the 
 least amount of capital with which a company can conduct the phos- 
 phate business with advantage to itself and to the State? 
 
 A. With the experience we have had, I should not think with less 
 than $250,000 to $300,000, while a larger sum would do better. 
 
 Q. Does not a great proportion of the marketable value of the rock 
 depend upon the preparation before it is shipped ? 
 
 A. Beyond doubt. Before our company began operations, two com- 
 panies Were making shipments of rock to domestic and foreign ports. 
 It was sent in a crude and discreditable condition, and I have understood 
 that in almost every instance reclamations were made upon the shippers. 
 In some cases it is said to have brought only $4 per ton. Satisfying 
 ourselves of that fact, we delayed our shipments until we could put our 
 production upon the market in as good a shape as possible. The object 
 in thus thoroughly preparing the rock for sale is to increase the per- 
 centage of phosphate of lime, which is the most valuable ingredient it 
 contains. The price of phosphate rock in Europe, and throughout the 
 world, is dependent upon and graduated by the percentage of phosphate 
 of lime it contains, its value increasing as this percentage advances. 
 In Europe it is always sold at a price per unit. Of course, therefore, 
 careless preparations depreciates the marketable value of the rock and 
 injures its general reputation. 
 
 Q. What would be the effect on the phosphate interests of the State 
 if the bulk of the rock shipped abroad was improperly prepared? 
 
 A. It would seriously affect the prices paid for it, and indeed render it 
 almost unsaleable, and thus not only leave a loss to the shipper, but 
 materially injure the general character of the phosphate deposits of the 
 State by lowering the standard of Carolina phosphates. 
 
 Q. Therefore, that preparation being essential to keep the standard up, 
 it would be advisable to put the phosphate interests in the hands oi 
 capitalists ? 
 
 A. Evidence that this is certainly the true policy of the State is 
 found in the fact that rook properly prepared sells for one to two dollars 
 per ton more than that not so prepared, while, unquestionably, if capital 
 is employed in developing the business, regular and remunerative em- 
 ployment is given to a much larger number of laborers and other em- 
 ployees, and thus more general prosperity is diffused. 
 
 Q. Now, to go to another point, how can these evils best be removed ? 
 
 A. In my judgment, the remedy is to give licenses only to those who 
 will invest a sufficient amount of capital for conducting the business, 
 locating them in a particular territory with exclusive rights over it, 
 making these rights perpetual so long as they work in good faith, and 
 also by having such laws passed as will give to them perfect protection 
 
553 
 
 against trespassers. This, I feel convinced, is the true policy of the 
 State, and, if adopted, I, believe it would not only increase the quantity of 
 rock dug annually, but would insure its proper handling and prepara- 
 tion, and thus add to the security of the State for the payment of its 
 royalt}'. Without these special privileges and laws fully protecting 
 them in their rights, I doubt if in the future you can induce any other 
 parties to invest capital in the business. I feel very confident that the 
 amount of rock dug by those who are not specially located is much less 
 than is generally supposed. Excluding the Coosaw and the Oak Point 
 Mines Companies, who both hand-pick and dredge, I am very certain 
 the proportion of hand-picked, as against dredged, is not more than one- 
 eighth. My conviction is that it is not to the best interest of the State 
 to encourage parties with only a few flats as their capital, or with no 
 capital, to go and dig where they please, and that every inducement 
 should be held out to capitalists to enter into the business largely, by* 
 giving them permanent and exclusive location and ample protection in 
 their rights. If small companies are to be licensed at all, then, unques- 
 tionably, they should be confined to a particular locality. 
 
 Q. I understand that with the exceptions of the Coosaw and the Oak 
 Point Mines, there is not a company in the State that has made a dollar. 
 Now, what inducement is there for capitalists to go into the' business with 
 this exhibit staring them in the face? 
 
 A. The very fact of the success of the two companies you ha-<re named. 
 I think there are other localities in the rivers which with proper 
 management would pay capitalists to work, and that they would prob- 
 ably do so if the special privileges to which I have referred were given 
 to them and suitable laws enacted guarding them against trespassers 
 upon their privileges. The passage of such laws I deem of the utmost 
 importance. Capitalists are naturally timid, and would certainly be 
 deterred from investing money in any enterprise where they feel they 
 would probably be harassed with perpetual law suits or even annoyed 
 ^by the constant threat of them. I repeat it as my judgment, that what 
 is wanted is fixed location — exclusive and permanent right to mine in a 
 certain tferritory, with legislation so framed as to prevent intruders and 
 trespassers. 
 
 Q. Would that plan afford equal facilities to labor as the present plan ? 
 
 A. I have no doubt it would afford greater facilities. The investment 
 of capital would necessarily require the employment of a much larger 
 number of laborers, and would secure to them regular, permanent and 
 full wages. While roaming about, digging where they please, as they 
 now do, the compensation to the laborers must be uncertain and 
 irregular, and only during a short period of the year, and at times very 
 small. That the facilities to the laborers would be greater, is, I think, 
 
004 
 
 clearly shown by the large numbers employed by the companies with 
 lai'ge capitals. The whole number of employees of the Coosaw Com- 
 pany alone, at times during the Summer months, when the hand picking 
 is alt its height, runs up to five hundred, and is large during the entire 
 year. Their compensation is paid to them weekly in cash, and is not 
 only fair but liberal, enabling them to earn more than they could 
 possibly do at any other occupation. I believe the number of laborers 
 in the employ of the Coosaw Company alone is much larger than that of 
 all the small companies put together, and that their earnings are also 
 much larger, besides being constant and reliable, while it secures to the 
 State the certain payment of the royalty. 
 
 Q. Is it not absolutely necessary that hand picking should accompany 
 the dredging? 
 
 A. I do not know that it is absolutely essential. 
 
 Q. Is there not a large portion of your territory where the dredges 
 cannot work? 
 
 A. Yes, but the rock is not unobtainable by machinery. As soon as 
 our dredges have taken up all they are able to dig, the machines will be 
 altered to work in the shallowest, part of the river, and the State can 
 rely with perfect security upon receiving royalty upon every ton of rock 
 lying in any and every part of Coosaw Eiver. 
 
 Q. One of the superintendents says that the employment of boatmen 
 in handling phosphate rock increases the amount of rock so dug. What 
 is your experience? 
 
 A. I do not think so. If boatmen do not follow the dredges of the 
 companies who use them and gather the rock loosened by the dredges, 
 the companies themselves would, return and take it up, so that the 
 quiintity would not be increased by the diggings of the boatmen, and the 
 only effect of their work is to deprive those who are legitimately entitled 
 'to it of a portion of their earnings. 
 
 Q. Including the Coosaw and Oak Point Mines, what do you think is 
 the proportion between the dredged and the hand-picked rock? 
 
 A. I do not think the hand-picked is over thirty per cent, of the whole. 
 
 Q. Is not the price of phosphate higher now than when yon started 
 the business? 
 
 A. No; it is, I think, about the same. In fact, we are not getting 
 quite as much for our rock now as we did three years ago. 
 
 Q. Are you paid in gold? 
 
 A. No, in currency. 
 
 Q. The only companies that are located are the Coosaw and the Oak 
 Point Mines? 
 
555 
 
 A. Yes, unless you add ,the River aud Marine Company, which, I 
 believe, dredges in particular places, but especially in Stono River, and 
 have their wharf in the city. 
 
 Q. The Coosaw and the Okk Point Mines are the only two companies 
 who are really prosperous? 
 
 A. I am not acquainted with the condition of the Oak Point Mines; 
 can speak of the Coosaw ; any success we have attained is due entirely 
 to the sufficiency of our capital and the close and unremitting attention 
 paid to the preparation and shipment of our rock. 
 
 Q. Do you pay your royalty on the amount dug and mined, or do you 
 pay when you ship it? 
 
 A. We make our returns on the basis of our shipments, in accordance 
 ■with pur contract with the State, which is the only possible way of 
 arriving at a correct report of the actual weight of the rock. Another 
 advantage of this mode is that it furnishes to the State a complete checl? 
 upon the correctness of the returns for royalty of the Coosaw Company) 
 as every shipment has to be cleared at the custom house. Will you 
 allow me to say, in this connection, that, in my judgment, the revenue 
 derived by the State from the imposition of the present royalty furnishes 
 her a larger annual income than she could derive from the phosphate 
 deposits in the rivers in any other way ? Under the mining laws of 
 almost all countries where royalty is exacted, the miners have the right 
 to pay it in kind. If this was allowed here, it would cost the State all 
 the rock is worth to prepare it for sale. Now, estimating the value of 
 the rock at six dollars per ton, which is a fair average price, then the , 
 State receives one-sixth of its value after it is dug and prepared ; but if 
 you deduct the expenses of cleaning and preparation, the State receives 
 fully one-fourth in royalty. It is, in my opinion, a very excessive charge. 
 
 Q. You make monthly returns? 
 
 A. Yes, to the Phosphate Inspector at Charleston. 
 
 Q. Do your monthly returns report the amount dug or the amount 
 shipped ? 
 
 A. ,The amount shipped. We can form no reliable or accurate esti- 
 mate of the true weight until it is regularly and properly weighed for 
 shipment. As information, let me say that for the year ending October 
 1, 1876, we loaded at Coosaw eighty ships and barks, and for the corres- 
 ponding period this year will load about one hundred and eight. So 
 that Coosaw is becoming a place of considerable commercial importance. 
 
 Q. Is the demand for phosphates increasing? 
 
 A. I do not know that it is for phosphates generally, but it certainly 
 is the case for our own, which has largely taken the place of the phos- 
 phates from other countries. 
 
 Q. What are our phosphates compared with? 
 
556 
 
 A. With the French, some of which is of better quality, and others 
 inferior to ours, and with the English coprolites, which are nearly the 
 same quality as ours properly prepared. The Canada and Spanish are 
 of much higher grade, but the difficulties attending the trartsportatiou of 
 the rock in Spain render the supply from that country at present very 
 limited. 
 
 Q. Is it practicable, in a business point of view, to make the monthly 
 returns of work — that is, the amount of phosphates dug each month? 
 
 A. It is impossible to form a correct estimate of the quantity until the 
 rock is weighed when being loaded into the vessels for shipment; any 
 estimate' made in any other way would be totally unreliable. 
 
 Q. That, then, postpones the payment of the royalty for about six 
 months after the rock has been dug, does it not? 
 
 A. It certainly does not postpone it generally for so long a time as ■ 
 that. In the case of the Coosaw Company, we have accumulated a con- 
 siderable surplus, owing to the rather sudden and large increase in our 
 production, which was unexpected by the parties with whom we had 
 contracted for its sale, and who had not reserved, therefore, a sufficient 
 number of vessels for its transportation. In our recent contracts, how- 
 ever, we have obligated ourselves to deliver to the purchasers six 
 thousand tons of rock a month, provided we have it on hand ; and as our 
 shipments now go on all the year round, they will at that rate of delivery 
 soon absorb our surplus, and after that is done the royalty will be paid 
 almost as fast as the rock is dug. 
 
 > TESTIMONY OF MAJOR E. WILLIS. 
 
 Q. Are you Superintendent of the Kiver and Marine Phosphate Com- 
 pany? 
 
 A. Yes, sir ; prior to that I was Superintendent of the South Carolina 
 Phosphate Company. 
 
 Q. How long have you been associated with phosphate companies? 
 
 A. I suppose ever since they started, in 1870. The River and Marine 
 Company originated with me, and I was instrumental in getting the 
 first Bill through the Legislature relative to the system of river digging. 
 
 Q. What is the capital of Mr. Canale's company? 
 
 A. The actual cash capital is $6,000 to $7,500. 
 
 Q. How long has that company been operating? 
 
 A. I think about four years. 
 
 Q. What is the annual product of that company? 
 
 A. Variable; cannot tell from memory; but small and depending upon 
 sales. 
 
 Q. How is that capital invested? 
 
 A. In rock. 
 
557 
 
 Q. Don't they own boats? 
 
 A. It owns no property at all. 
 
 Q. How do they work ? 
 
 A. They work with other people's boats ; they buy the rock from 
 them; they give permits to parties owning boats, and they go and dig 
 and then sell the rock to the company. 
 
 Q. What guarantee have the companies that he brings what he digs 
 to sell to the company ? 
 
 A. None whatever — no guarantee whatsoever. 
 
 Q. Is there, or was there, until the recent Act of the Legislature, any- 
 thing to prevent the party holding their permit from digging and selling 
 the phosphates to anybody he pleased, whether licensed or not? 
 
 A. None whatever. 
 
 Q. Therefore, the system upon which that company works allows any 
 number of persons to dig with permits for rock and sell it improperly. 
 
 A. They can, and it has been done. 
 
 Q. What other defects are there, in your opinion, in the phosphate 
 system as it has been hitherto worked? 
 
 A. It seems to me that the defects in the organization of the com- 
 panies is very great; some having privileges from Comptroller Gen- 
 eral ; some give large bonus, some small. 
 
 Q. How has the present system worked ? 
 
 A. It has worked badly. It gives no protection to the 'licensed and 
 chartered companies and less protection to the State. The companies 
 that give $5,000 bond have the same rights with the companies that 
 give 150,000 bond. Again, the companies having exclusive rights have 
 never been protected in them. 
 
 Q. From your experience and knowledge of the phosphate business 
 and phosphate interests of the State, what legislation do you think 
 would remedy the existing evils? 
 
 A. I would suggest that each company should have a certain territory 
 given them, which they could use, and be protected in by the State, or 
 that the companies should have a portion of that territory, and be so 
 located that one could not encroach one upon the other. For instance, 
 if a part of Coosaw River staked out for me, and somebody else 
 had had another part staked out for him, we would both be protected. 
 The great difficulty of the phosphate business as it is — there are so 
 many conflicting interests; some who give nomina,! bonds and have the 
 same privileges that companies have that, give heavy bonds and represent 
 a large capital. 
 
 Q. Supposing that plan should be adopted and territorial limits 
 assigned to the several companies, would it be possible for any company 
 to exhaust its territory or utilize it properly without machinery? 
 
658 
 
 A. No, sir. The State's interest would be slurred over ; the best dig- 
 gings would be used and moderate diggings would be skipped. 
 
 Q. What is the relation and ratio between dredged and hand-picked 
 rock ? 
 
 ! A.. The mere working for the rock with tongs or hand-picking only 
 takes oflf the surface deposit ; that which underlies the mud, sand or shell 
 i? left. No strata rock can be moved with tongs unless broken, and the 
 largest and richest deposit is the strata rock. The hand-picking only 
 removes that which lies loose in the streams ; it is impossible to break 
 through the strata without some kind of machinery. This strata rock 
 underlies the mud and sand at a variable depth of from four inches to 
 four feet. The deepest rock is the best. 
 
 Q. The plan you suggest as the best is that which requires an outlay 
 of capital for machinery ? 
 , A. Yes, sir; they must have capital to get machinery. 
 
 Q. What would you estimate the amount of capital required for a 
 company to work a territory in the manner you described ? 
 
 A. That would depend upon the number of dredges they used. I 
 suppose one dredge and a wash boat would cost from $25,000 to $40,000, 
 when you would have to have in addition a steamboat and lighters and 
 wharf Fifty or sixty thousand dollars, I think, would be the minimum 
 capital that would be required to run one dredge and one washer success- 
 fully. That capital would be increased as they get the rock. $150,000 
 would be better. 
 
 Q. Then upon that system of exclusive territorial limits you would 
 have to have a depot? 
 
 A. Yes; either at the diggings or in the city, or both. 
 
 Q. At present, I believe, there are only two or three companies that 
 are territorially located ? 
 
 A. I can't answer positively. 
 
 Q. I mean permanently fixed. 
 
 A. I think the Coosaw, Oak Point Mines, and River and Marine 
 Companies are the only ones that are actually fixed in a location. 
 
 Q. Are there, except those three, any companies that are so located 
 and fixed? 
 
 A. They are the only three companies so located, I think. 
 
 Q. Did I understand you to say that the River and Marine Company 
 was so fixed. 
 
 A. Yes, sir ; they have four works on Ashley River. Lately we have 
 had approximating ten thousand tons of rock there. 
 
 Q. Have the companies engaged in digging phosphates from the rivers 
 been successful or profitable? 
 
'559 
 
 A. My impression is that the only company that has made anything 
 and has something to show for it is the Coosaw Company. I have con- 
 cluded that to work the phosphatic interest properly you must have 
 credit, cash capital and machinery — both requisite. 
 
 Q. Suppose that plan was adopted and the State should say we will 
 grant ^0 charters except to companies with capital and machinery, — is it 
 probable that capital would be invested in the business ? 
 
 A. If the companies now chartered were properly protected in the 
 grants, capitalists would go largely into the business. Tliey never have 
 been properly protected. All the capitalist wants is the guarantee from 
 the present State officials that he will be properly protected under theii' 
 charters. For the last ten months I consider that the river companies 
 have been doing fairly, both as to mini/ig and the chances of making 
 money, until the right to mine until meeting of Legislature was given to 
 the Palmetto Company. They went into the market, and are now 
 paying more money than our company can. The result of it is that we 
 have retired from buying tonged rock,' there being no money in it. 
 They pay from $4.45 to 14.60, and royalty $1, handling thirty to forty- 
 cents. And more of the river companies have also quit buying tonged 
 and hand-picked rock ; for this company has not only been buying rock 
 here, but have agents at Port Royal, Beaufort and Parrott Creek. 
 
 Q. You say that hitherto there has been a failure to. protect the 
 licensed companies? 
 
 A. I do not consider that they have had any protection at all from 
 the State or State officials up to this new administration of the State 
 affairs, and the allowing the Palmetto Company to mine without a char- 
 ter put them at a greater disadvantage than ever. 
 
 Q. What has been your experience with parties following your dredge 
 in small boats and taking up the, loose rock? 
 
 A. The practice with them has been to come alongside and take away 
 the rock that we have loosened and sell it in the city. They come 
 around the dredges in swarms. 
 
 Q. Tell me what superior advantages, if any, that the State would 
 have in securing her royalty from companies territorially located ? 
 
 A. I think the State would then be dealing with. parties of known re- 
 sponsibility, who would have property on their part to meet any de- 
 mands made upon them by the State or anybody else. 
 
 Q. Leaving out the Coosaw Company, in your judgment what would 
 be your estimate of the proportion of hand-picked rock to the rock that 
 is dredged ? 
 
 ■ A. I should suppose that about 30 per cent, of the rock is dug with 
 tongs or is hand-picked. This 30 per cent, of hand-picked rock has been 
 mainly gathered by outsiders, and is sold in the city to licensed com- 
 
panies or to unlicensed parties. That is where the trouble comes in. 
 If they would dig the rock and sell it to licensed companies they would 
 not complain so much. Those parties pay no royalty, and, of course, can 
 undersell us to that extent. 
 
 Q. Have you any means of estimating the amount that the State has 
 lost from that source ? . 
 
 A. No, sir, unless I should say that the State had been defrauded 
 out of a portion of that brought to this city. 
 
 Q. You think that the bulk of this 30 per cent, of the rock that is 
 hand-picked or dug with tongs has paid no royalty ? 
 
 A. I do think a part of it paid no royalty. 
 
 Q. You have given a great deal of attention to the statistics in regard 
 to the amount of phosphates shipped and consumed, have you not? 
 
 A. Yes, sir, probably as much as anybody else. 
 
 Q. Are not foreign exports almost entirely from the river rock ? 
 
 A. YeSj sir, almost entirely ; the amount of the other has been so 
 small as t6 amount to but little. My impression is that fifteen-sixteenths 
 of the foreign shipments are of river rock. 
 
 Q.' Do you return your royalty at the time of its shipment? 
 
 A. I don't know how they make the returns for the Kiver and Marine 
 Company ; Treasurer makes it, and under impression made only once a 
 year — 1st October. 
 
 Q. How about the South Carolina Phosphate and Phosphatic River 
 Company? 
 
 A. They just return receipts for what they pay for. They have a de- 
 pot at Hunter's wharf. I think for the successful working of the phos- 
 phate interests the companies should all be put on one footing. Give 
 them the privileges guaranteed to them by their charters — make their 
 bonds alike. Then make their payment of royalty alike and protect 
 them in whatever territory they may have apportioned them to work in. 
 
 Q. On that plan, what would you suggest as the proper territorial limits 
 of a company ? 
 
 A. That would be governed entirely by the amount of machinery 
 owned and used by the different companies. In other words, the terri- 
 tory should be in proportion to the machinery and working capital in- 
 vested. 
 
 Q. Take, for instance, the size of the River and Marine Company. 
 What territorial limits would you say would be proper for such a com- 
 pany? 
 
 A. We have dug during the last three years about five miles of the 
 Stono River, and it is about the widest stream in the State. It has beeu 
 however, very badly worked — in little pockets, wherever they found a 
 good deposit. That river has good digging in it yet. It seems to me 
 
661 
 
 that it would be very much better if each" company could have it? own 
 stream and tributary or tributaries as the case maybe. And I think 
 the company should be protected in getting the whole product of that 
 river by dredging, tongsiug and every other way, making them, as it 
 were, power in that river. This is, in my judgment, the only way by 
 which the business can be worked to the interest of the company and to 
 the State. 
 
 Q. These phosphates are known in Europe as South Carolina phos- 
 phates, are they not? 
 
 A. They are known as Coosaw, Stono and Bull River rpck — mainly 
 as river rock. 
 
 Q. Does not the standard and reputation of the rock depend princi- 
 pally upon its preparation and analysis? 
 
 A. Very much so; and the proper preparation of the rock requires 
 time, machinery, money and experience. 
 
 Q. Is that preparation made except by companies of capital and ex- 
 perience? 
 
 A. I think not to the extent it should be. The small companies, 
 without machinery and capital, sell the rock as they buy it and injure 
 the trade and undermine the business. 
 
 Q, Does that rock go abroad in the condition they sell it? 
 
 A. Yes, sir. 
 
 Q. What is the effect of putting rock in that condition on the Euro- 
 pean market? 
 
 A. It lowers the standard of all river rock. In my opinion, it is 
 necessary foi" the protection of the State's interest and the interests of the 
 company that the business should be placed in the hands of persons 
 capable of preparing the rock properly. This granting of charters right 
 and left is utterly ruinous, both to the State and to the companies with 
 capital who are prosecuting the business with good faith and with view 
 of making money out of it. This deposit is valuable to more people 
 than the river companies. Any man in the State a taxpayer has a direct 
 interest in it, for it's valuable State property, and if well handled will 
 pay into the State Treasury annually for many years royalty to a con- 
 siderable extent. But grant licenses to innumerable companies without 
 means, you find them mining here and there, where a day's work can be 
 made, then move to some other place, following the sai;ne slovenly mari- 
 ner of mining, and day by day injuring the State's interest by using the 
 available rock now; and in after years, when all is needed, available 
 and unavailable, investigation will prove that it is difiicultto find a place 
 to mine that will yield a paying day's work unless it covers immense ter- 
 ritory, from the fact that the mining has been conducted by people who 
 have dug holes irregularly all over the territory, from Wando toParrott 
 
562 
 
 Creek, without any regard to any future operations, or without any 
 thought that that valuable franchise of the State should be treated just 
 as well as if it was private property. The phosphates at present wanted 
 is easily supplied, but undermining fast a source'of revenue to the State. 
 These, by judicious handling, will last a Ipng time and furnish rock 
 when most needed. But if the present system is continued, the revenue 
 will appreciably dimiuish and the supply of rock fail to be remunera- 
 tive, and a business that could have beeu made to pay a large part 
 annually of the State's expenses fail, and. then the only way to renew it 
 would be for the State to make surveys and find new deposits, if they 
 exist, and I think they do; but to find them is an expensive undertaking, 
 and one involving time and scientific ability. 
 
 TESTIMONY OP DAVID EGBERTS, AGENT OP THE SOUTH CAROLINA 
 PHOSPHATE COMPANY, LIMITED, OTHERWISE CALLED THE OAK 
 POINT MINES. 
 
 Q. Mr. Roberts, you are the agent of the Oak Point Mines ? 
 ^ A. Yes, sir. 
 
 Q. When did that company commence operations? 
 
 A. They commenced working about 1872. The company owns a 
 plantatiop, situated between North and South Wimbee Creeks, or Kean's 
 Neck. They have not mined much land rock to the present time, their 
 operations being mainly confined to river rock — that is rock lying 
 between high water mark and the center of Wimbee Creeks. 
 
 Q. Your mining of the river rock was under the authority of the 
 Marine and River Company ? 
 
 A. After the passage of the Marine Company's Act an agreement was 
 made between the Marine Company and the owners of Kean's Neck 
 enabling the latter to dig under the authority of the Marine Company 
 to the center of the streams, so that for a portion of the creeks they 
 stood in the same relation to the Marine Cpmpaijy as the Coosaw. Com- 
 pany in Coosaw River, and our rights were further confirmed by our 
 acceptance of the Coosaw Act. 
 
 Q. At the time you. accepted that Act the company was located 
 where ? 
 
 A. The fixed property of the company was located at Kean's Neck, 
 and its operations were conducted there and in North and South Wimbee 
 Creeks. Generally speaking, for the purpose of shipping, &c., we call 
 our location Bull River, as North Wimbee Creek runs into Bull River, 
 and our mill is situated at the confluence of North and South Wimbee 
 Creeks. 
 
563 
 
 Q. What was your location when you applied for an extension of 
 your rights ? 
 
 A. The same location as formerly. Our digging has been done in the 
 creeks, but the shipping anchor in Bull River, where the water is deep. 
 
 Q. What is the amount of your capital? 
 
 A. Eighty thousand pounds, (£80,000,) or about $400,000, the whole 
 of which is invested in the company and used for the purchase of the 
 land, erection of buildings, plant, machinery, &c. 
 
 Q. What does your capital consist of? 
 
 A. We have a drying shefd that holds 4,000 tons of rock, with all the 
 drying apparatus complete; another shed capable, of holding the same 
 quantity of rock, but which we have had no occasion yet to use for the 
 purpose; a mill with all the necessary machinery for dryings washing, 
 crushing and hoisting rock;, we have the largest and strongest dredge in 
 the State, a floating washer, over one hundred flats, thirteen lighters, two 
 tug boats, wharves, house for the white employees, quarters for about 
 three hundred negroes, besides a variety of movable plant and tools, such 
 as tongs, picks, shovels, barrows and other matters too numerous to men- 
 tion. The cost of keeping the plant in repair is a heavy item ; our bills 
 for wear and tear last year was about $30,000, which is about the ' 
 average expense of keeping the plant in good order. 
 
 Q. Are you or have you been interfered with by parties without 
 license ? 
 
 A. Parties have mined in our river without license; since we applied 
 for the extension of our rights we have been persecuted by individual 
 parties with permits. These permits, unless regulated, are extremely 
 prejudicial to companies with a settled location. They have not taken 
 anything in the shape of rock to affect us, but the presence of a party 
 of irresponsible individuals in the midst of ours upsets all discipline, 
 and the fear of further invasions of the same kind is very discouraging, 
 and makes us endeavor to circumscribe rather than extend our work. 
 While our men are under our control we are able to protect our flats and 
 tools, but if a lot of such parties are allowed to corae alongside we cannot 
 prevent them from exchanging old tools for our new, using our, flats, 
 &c., besides getting all the benefit of the expense borne by us of break- 
 ing up the rock. 
 
 Q. How much of your mining is done with dredges, and how much 
 by hand-picking and tongs? 
 
 A. Owing to the small area of North Wimbee Creek, and the fact 
 that it runs nearly dry every day, our dredge is not able to get half of 
 what it could in a more favorable location. Last year we raised about 
 10,000 tons by our dredge, and about 11,000 tons by hand-picking and 
 
 45 
 
tongs. The rock in the creek, however, is getting very scarce, and it is 
 difficult to get, the tongs to work there. 
 
 Q. Is this hand-picked rock raised by your own employees? 
 
 A. Entirely. We have never given a permit. 
 
 Q. Do you ship your rock from Port Royal ? 
 
 A. We ship it from Bull River. Our shipments are mostly for foreign 
 ports, but sometimes coastwise. 
 
 Q. You have had experience in the phosphate system as it has 
 hitherto worked — what defects are there in the system of legislation 
 according to your judgment ? 
 
 A. It cannot be said that there has been any system hitherto. The 
 Legislature has granted several charters, but up to this time no steps have 
 been taken to protect the interests of the State, or to see that the charters 
 granted are worked and not held merely for speculative purposes. There 
 has also been a feeling of great insecurity as to the action of the Leg- 
 islature, and much litigation between the various companies in regard to 
 their rights, which has operated against the river mining. The State 
 would undoubtedly gain by dividing the rivers into districts and give 
 to each company having plant a locality somewhat proportionate to its 
 capacity for work, where its rights would be exclusive as long as the terms 
 of the grant were complied with. Such companies would then have 
 every inducement to develop their district, and, being jointly interested 
 with the State in the mineral, would do their best to mine so as to get all 
 the deposit instead of working in the easy places and leave most of the 
 rock behind. This plan would exclude companies who have no invest- 
 ments in plant, but they might be allowed a reasonable time to purchase, 
 or be allowed to give permits to unoccupied rivers until they are taken 
 up by a company with plant. In my opinion the State should reserve to 
 itself the right to give exclusive grants in unoccupied rivers where com- 
 panies with capital wish to locate in them, but of course the Legislature 
 should not grant such rights hastily, as it would be an injustice to the 
 companies already at work if an undue competition was invited, and the 
 State would gain nothing by it, as no rock will, in the long run, ba 
 raised that is used. 
 
 Q. Suppose that exclusive territorial rights were granted to the com- 
 panies, do you think that capital would then be invested in the busi- 
 ness ? 
 
 A. I think that capiial would then be invested. I can speak for our- 
 selves; if we had more elbow-room we would increase our facilities, as 
 the cost of the superintendence would be no more if we raised 50,000 
 tons than for our present quantity. Of course the quantity raised, and, 
 therefore, the money invested, will be regulated by the demandl for the 
 rock; but well-prepared Carolina rock, offered at reasonable, ^^fes,,w,i)lL 
 
565 
 
 generally find buyers. I have heard that some parties favor a higher 
 royalty on the rock. If there was only river rock in the State, and only 
 Carolina rock in the world, the higher royalty could be imposed, but the 
 only effect here would be the discouraging, if not stopping, of river 
 mining. The land rock can now be raised as cheaply as river rock, and 
 with a higher royalty ou river rock of course the land mines could 
 undersell the river mines. Another result would be to check the trade 
 with Europe iu rock. The land rock is not much liked there, and if 
 they could not get river rock at reasonable prices they would go back to 
 the phosphates in favor before the introduction of Carolina phosphates 
 into the European market. 
 
 Q. Is it possible for river territory to be properly worked so as to ex- 
 haust the deposit without machinery? 
 
 A. No, sir; you cannot raise the strata rock, (except where the water 
 runs out,) without powerful dredges, and in some places it requires blast- 
 ing.- There are, however, a few localities where there is but a thin layer 
 of loose rock or marl beds, and there the tongs alone can be used with 
 great advantage. Generally speaking, however, powerful dredges are 
 required to raise the rock in the rivers. The dredges loosen more than 
 they take up, and the tongs clean up the loose pieces by following the 
 dredge. 
 
 Q. What effect does the scratching of the surface have upon the ter- 
 ritory ? 
 
 A. I think you may say it takes off the cream of the deposit, and 
 leaves to the organized company that may come after all the hard work 
 to do. I should say, in qualification, that hitherto the promiscuous dig- 
 gers have done but little, and their operations have not as yet made 
 much difference; but the system of promiscuous mining, is bad both for 
 the companies and the State, and if continued much longer will, in a 
 short time, seriously lessen the revenue which should be derived by the 
 State from phosphates\ A river can be spoiled by machinery just as 
 much as iu other ways by jumping from one easy place to another with- 
 out any system. One company has already worked thus in several 
 rivers and abandoned them successively; one of the rivers so abandoned 
 being Bull River, where the rock is very hard and the river narrow and 
 deep. The State could never regulate the mode of digging, but where 
 there is no fear that a competitor will come up to work alongside, the 
 companies have every inducement'to work in the most scientific way in 
 order to make money and make the deposit turn out well. 
 
 Q. Throw out the Coosaw Company entirely, and tell me, if you can, 
 what is the proportion of rock that is dredged to that which is hand' 
 picked or dug with tongs ?• 
 
A. Outside of Coosaw the rock dredged last year was about 28,000 
 tons, and the quantity hand-picked about 22,000 tons by companies pay- 
 ing royalty. 
 
 Q,. Throw out the Oak Point Mines ? 
 
 A. Including rock raised by tongers and sold to chartered companies, 
 about 10,000 tons was raised by hand last year. 
 
 Q. Wliat percentage of rock was raised last year by parties without 
 machinery or territory ? 
 
 A. I think that S.OOOtons would more than cover it. 
 
 Q. Can rivers be cleaned out by the aid of machinery? 
 
 A. We have dug most of North Wimbee Creek out. The area where 
 rock is found there is very small, but we have raised about 90,000. tons 
 out of it and still employ a large force of men there. During the 
 Summer months we employ about 400 men there. From 1st May to 
 11th August this year, I remitted 144,000 to the mine to pay wages, &c. 
 Without the aid of machinery and a settled location, I think that it 
 would not have paid us to take over 30,000 tons. The other side of the 
 creek and Bull River was worked by the Marine Company for about 
 two years, so that their value is much impaired. 
 
 Q. Does the value of the rock depend very much upon its preparation ? 
 
 A. Very much so. With hot air dried rock we consider our expenses 
 only beginning when the rock, is raised from the river. 
 
 Q. What is our rock known as abroad? 
 
 A. It is generally known as Carolina rock. 
 
 Q. Is it not important, in a commercial sense, to keep the standard of 
 our river rock up to the highest mark ? 
 
 A. Undoubtedly, sir. Badly- prepared rock damages the reputation of 
 all Carolina or river rock and enables its foreign competitors to get a 
 foothold. 
 
 Q. You think that if the companies were given exclusive rights and 
 certain territory they would work well? 
 
 A. I think so. 
 
 Q. As to your other connection. You are connected with Wyllie 
 Teacher & Co.? 
 
 A, Yes, sir ; I am their agent here. 
 
 Q. That firm handles a large quantity of phosphates ? 
 
 A. They ship more than any other firm in the Soutii. 
 
 Q. Where is it mostly shipped ? 
 
 A. To Great Britain, where it is manufactured into fertilizers. 
 
 Q. All the companies sell to you here? 
 
 A. We take nearly all the river ph()S])hate and some land rock. 
 
 Q. What proportion of the rock exported abroad is river lock ? 
 
 A. Aout 95 per cent, of it. 
 
567 
 
 Q. You purchase land rock also ? 
 
 A. Yes, sir, for occasional shipment. Land rock is not much liked in 
 England, but it finds a ready sale in the Northern States, where it is pre- 
 ferred to river rock because it is easier to grind. 
 
 Another advantage of getting companies to work with their own plant 
 is that it helps other industries. At Coosaw and Bull Rivers there are 
 about 800 men employed during the Summer months and a large number 
 throughout the year. It takes over 100 ships to carry away the product.. 
 These ships spend considerable amounts for supplies. In order to make 
 it a better cargo, we intend to try to ship rice straw and marsh grass in 
 bales for paper making, and, if the experiment succeeds, what now runs 
 to waste will be made use of. It is only now we are beginning to learn 
 the business of river mining, and if parties who are experienced in the 
 work, with capital behind them, are encouraged and protected, I expect 
 that considerable improvements will be made in the mode of mining and 
 preparation. 
 
 TESTIMONY OF A. J. MOSES, TREASUEEE OF BOATMAN's PHOSPHATE 
 
 COMPANY. 
 
 Capital under charter, $30,000; amount paid in, 12 percent, of $3,000; 
 located everywhere. As the name indicates, this is a company of boat- 
 men ; operates everywhere and anywhere, as we give them permits. At 
 the same time,- we have a location in Parrott Creek, where we have a 
 force mining under our permits. No force engaged by us. All the work 
 in Parrott Creek and other rivers is done under permits granted by us. 
 The company does not own any boats or flats or machinery or plant of 
 any sort; that is not the natuve of the company. When the parties 
 working under permit gath'er the rock they bring it to the city ; we 
 store it or sell it at once. We sell it in the crude state, just as it is 
 brought to us. The bulk of it is for foreign export. Don't remember 
 to have shipped any-coastwise. In our returns to the State we separate 
 exports from coastwise or domestic consumption. Have been operating 
 only one year. Were chartered in 1874. First receipt of rock was 25th 
 March, 1876. Did not commence work until we had accepted the Act 
 of 1876, commonly called the Coosaw Act. The first capital was paid 
 in in 1874. No obligations are entered into by our company except to 
 the State, and no more capital is needed than we have. When we give 
 permits we have no guarantee that the party will bring to us the rock he 
 digs. The rock mined in Parrott Creek is brought to the city — part of 
 it — and the other part delivered at Oak Point Mines, under contract 
 with Wylie Leach & Co. We store our rock at Southern Wharf. Re- 
 cently made contract with Wylie Leach & Co., and sell to them all the 
 
Panot Creek rock. The other rock we mine we store in the city and 
 sell it here. Have no experience in the working of phosphates except 
 in this company. I think that working with these large dredges alone 
 is working at a disadvantage. My reason for saying this is, that the 
 boats which follow the dredges can take up more rock than they could 
 before the dredge passed over it. The boats take advantage of the 
 operation of the dredge. The strata rock cannot be successfully mined 
 except by machinery or blasting. If there were no dredges or blasting, 
 all that could be gathered would be the loose rock. In most of the 
 rivers the tongs are the most usefulappliance, without dredges at all ; I 
 mean in the Wando, Ashley and part of Stono, Edisto and Church 
 Flats. Tongs will gather all the loose rock, and in many instances to 
 better advantages than the dredges ; but the tongs, unaided by machinery 
 or blasting, cannot remove the strata rock. 
 
 The better system of working the phosphate beds for the State and the 
 companies would be by exclusive territorial privileges, with laws to pro- 
 tect the companies in their rights and to exclude all trespassers. Such a 
 system would attract capital and ensure a continuous and regular work- 
 ing of the territory. Define and protect their interests, and the com- 
 panies can acquire all the capital needed. 
 
 Throwing the phosphates open to all parties who choose to take license 
 would result, eventually, in the larger companies driving out all others ; 
 ■while, by defining the limits and giving exclusive rights in them, the 
 interests of each company are protected and employment is given more 
 generally. 
 
 A. J. MOSES. 
 
 TESTIMONY OP A. CANALE, SUPERINTENDENT AND TREASURER OF THE 
 SOUTH CAROLINA PHOSPHATE AND PHOSPHATIC RIVER MININO 
 AND MANUFACTURING COMPANY. 
 
 Capital, nominal, $200,000. Capital, subscribed, 8200,000. Capital, 
 paid in, SI per share, $2,000. That is all the capital ever collected. 
 Own no property, except a few wheelbarrows and shovels. AVork by 
 employing boats to dig; pay them so much per ton on delivery here. 
 We sell it principally to Wylie, Campbell & Co. for export. Do not 
 prepare the rock at all. Have been working about four or five years. 
 
 The present system gives us no protection at all. We give permits 
 and have no guarantee that the parties will bring us their rock. The 
 present system is very faulty. 
 
 A better course is for the State to give to each company a certain 
 territory exclusively — each company responsible for royalty in its terri- 
 tory. Under such a system the companies would require dredges. 
 
569 
 
 They could not exhaust the territory otherwise, for the dredge is essen- 
 tial to breaking up the veins — strata — loosening the rock so that the 
 picks or tongs can gather it. The companies would have to have 
 more capital. But as soon as the companies would be protected in the 
 way I have indicated, capital would, go into them. I suggest, also, 
 heavy securities, and the same for all. 
 
 A. CANALE. 
 
 TESTIMONY OF GEORGE M. WELLS. 
 
 Hon. James Conner, Attorney General oj South Carolina : 
 
 Sir — In reply to inquiries made by you, with reference to the phos- 
 phate interests in this State, permit me to respond as follows : 
 
 The discovery of phosphate rock in 1867 led immediately to the rapid 
 and somewhat indiscretionary investment of a large amount of capital 
 in its development and value. 
 
 Lands were purchased and charters obtained which iu many cases 
 proved almost valueless, after a large amount of money had been ex- 
 pended in experiments and devices for obtaining the phosphatic material. 
 
 The development of the river beds under grants from the State gave a 
 new and more healthy impetus to the enterprise, aud more or less suc- 
 cess was ootained for a number of years. 
 
 The supply of phosphate rock was at first supposed to be almost or 
 quite inexhaustible. A practical working of the beds of the rivers of 
 the State proved that only a portion of the rock was of sufficient value 
 to pay the cost of mining, as the material must contain a certain and 
 well-defined quantity of phosphate of lime to be marketable. Many of 
 the large deposits of phosphate rock will probably never, be utilized on 
 account of the presence of foreign matter, which it is impossible to sepa- 
 rate from it. 
 
 A survey of the rivers, with specimens or samples taken from the de- ' 
 posits and the quantity of such deposits determined, would be of great 
 value to the State as afl^ectiog any system of conducting the business to 
 the best advantage in the future. 
 
 The machines aud implements now in use in the production of the 
 phosphatic material are of the most improved character, and are the' 
 best that an enlarged experience can devise. It has been suggested that 
 the best of the rock may be removed and other poorer or less productive 
 portions left, to the detriment of future operations. This in practice has 
 not been generally the case, as the heavy machinery used in operatipg 
 the mines is not easily moved, and'a large proportion of the rock taken 
 up by laborers with tongs has been in close proximity to the machines 
 or from small patches inaccessible to them. 
 
The beds of phosphate rock do uot lie in contiguous deposit, but are 
 broken or disconnected by marl beds or banks of sand. Some places 
 exhibiting large quantities of the phosphates are in water of such a 
 depth as to preclude practical mining; in other places the currents are 
 swift and the channels tortuous, with obstructions of varying character 
 to the successful development of the deposit, 
 
 A specific statement of the character of each of the many phosphate 
 beds in the State that have been discovered up to the present. time, and 
 of the advantages or disadvantages attending the working of these beds, 
 would require special surveys and more thorough examination than I 
 am able to give at this time. 
 
 The chartered companies that have been engaged in river phosphate 
 mining under the auspices of the State have prosecuted their operations 
 with varied success. One of the first of these has produced a large 
 amount of rock, owing chiefly to the fortunate circumstance of having 
 a large territory exceptionally rich in the phosphatic deposit, to which 
 may , be added the unlimited use of a large amount of capital and the 
 unquestioned ability of its managers. 
 
 Another large company, with an equal investment in the beginning, 
 and no less experience in the management of its affairs, has been less 
 successful, owing principally to the difference in the character of the 
 beds of rock which were accessible to their places of deposit and sale. 
 
 The other companies, with limited investments and an indifferent pros- 
 ecution of their raining operations, have produced but a few thousand 
 tons of rock, and, therefore, done but little toward increasing the 
 revenue to the State. 
 
 The foregoing suggestions lead to the following conclusions : 
 
 Ist. That the granting of chanters to certain responsible parties, with 
 good and sufficient guarantees to protect the interests of the State, is a 
 practicable manner of working the phosphate beds. 
 
 2d. That these grants should be limited to such a number as not to 
 discourage further investments in capital by those already interested in 
 the business. 
 
 3d. The present chartered companies should be protected and en- 
 couraged, in so far as they have made investments in machinery, imple- 
 ments and the employment of labor in the development of the business 
 and have complied with the conditions of their grants. Some of these 
 companies have been pioneers in the business, and have expended, in some 
 instances, large sums of money in experimental attempts to increase 
 the production of rock. 
 
 The investments are, at present, generally well managed, and promise 
 a degree of prosperity and consequent emolument to the State that is 
 not without the hope of realization. 
 
571 
 
 4th. It would seem practicable that corporations who have large invest- 
 ments, and whose raining operations are carried on in close proximity to 
 their places of preparation of the material for market, should, upon proper 
 representation of these facts, be protected under certain guarantees, and 
 within prescribed limits, to mine exclusively the beds of rock so desig- 
 nated. I would instance the Coosaw Mining Company and the corpo- 
 ration known as Oak Point Mines. Each of these companies have a large 
 amount of active capital employed, give employment to a large number 
 of laborers, are operated by persons of responsibility and a superior 
 knowledge of the business. 
 
 The other chartered companies, or such as may be hereafter chartered, 
 would not be seriously affected by the granting of the specific rights 
 above mentioned, and it is believed that the effect would be 'to induce 
 investments of foreign capital to be made to a larger extent by the parties 
 now engaged in mining at their localized points. 
 
 5th. The employment of boatmen with their vessels in mining the 
 phosphate rock under permits given by the chartered companies is not 
 without its advantages : 
 
 First, it gives the means of livelihood to a large number of the work- 
 ing class at a time of the year when they could barely find other employ- 
 ment. 
 
 Second, it increases " largely the amount of rock produced, and, in 
 many instances, is the only means by which the rock beds can be made 
 remunerative. These deposits exist at various points underlaid with the 
 marl beds, which are only valuahble as the tongs or other light imple- 
 ments can be used, the heavy and unwieldy steam apparatus having 
 a tendency to break up and mix the marl with the phosphate rock, 
 thereby greatly deteriorating its value or making it altogether worthless. 
 Probably one-half of the phosphate rock produced at the present time 
 is by the use of tongs or the pick axe in the hands of the la,borer. This 
 is taken in small boats or flats to the depositories of the chartered com- 
 panies. 
 
 6th. It is but just and equitable that the interests of both capitalists 
 and the State should be protected by an impartial and correct com- 
 pliance with the requirements of the law in regard to the payment of 
 royalty. • Every company should be required, under heavy penalties for 
 non-compliance, to make returns to the State for every ton of rock re- 
 moved from the beds of the navigable waters of the State at certain 
 frequent and specified times, as defaulting compa,nies have it in their 
 power to enter into unjust competition with such other companies as 
 desire to deal justly with the State. 
 
 The last suggestion involves the important question, "How shall the 
 royalty be collected ?" 
 46 
 
572 
 
 It is hardly probable that the number of receiving and shipping 
 points for phosphate rock will be increased for some time. The situation 
 of the beds of rock now known to exist, and the location of the most 
 extensive operators, make it necessary that Charleston, Coosaw River 
 and Bull River be the principal depots for the storing and shipment 
 of the rock rained. i 
 
 Without establishing a system of espionage, it is belieyed that a per- 
 son who' should be practically acquainted with mining operations and 
 thegeneral character of the deposits and location of the same would be 
 enabled to collect such facts and gain such general information as to 
 guarantee to the State a full and complete return from ail the chartered 
 companies of all rock mined, as well as detect and prevent any unlawful 
 acts byperssns or corporations not authorized to remove the phosphate 
 rock from the beds of the navigable streams. 
 
 The person so employed should have sufficient authority to enforce a 
 compliance with such regulations as the State may from time to time 
 make for the protection of its interest in the phosphate beds. He should 
 be qualified to make surveys, ascertain the quantity and value of the 
 deposit at various points, and give such general information as would 
 enable the State to obtain the greatest advantage from the working of 
 this increasing and valuable industry. 
 
 Respectfully submitted by your obedient servant, 
 
 ' ' , GEORGE M. WELLS. 
 
 Charleston, S. C, July 31, 1877.