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Would the Ministry have been alerted to a young child with magical potential and then told Dumbledore?

How did Dumbledore first find out about the existence of young Tom Riddle?

user82081
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The Headmaster of Hogwarts would be privy to the information about Tom Riddle's birth. All children with magical abilities (either upon birth or when they first display magical talent) have their name and birthdate are magically inscribed by the Quill of Acceptance into the Book of Admittance. From Pottermore:

At the precise moment that a child first exhibits signs of magic, the Quill, which is believed to have been taken from an Augurey, floats up out of its inkpot and attempts to inscribe the name of that child upon the pages of the Book (Augurey feathers are known to repel ink and the inkpot is empty; nobody has ever managed to analyse precisely what the silvery fluid flowing from the enchanted Quill is).

The Headmaster or Headmistress has access to the tower where the Book and Quill reside. At the time Harry Potter attends Hogwarts, so does McGonagall (presumably because she's Deputy Headmistress), who has the task of checking the book every year and invite the admitted children. From a webchat with JKR:

How can two Muggles have a kid with magical powers? Also how does the Ministry of Magic find out these kids have powers?
A. It's the same as two black-haired people producing a redheaded child. Sometimes these things just happen, and no one really knows why! The Ministry of Magic doesn't find out which children are magic. In Hogwarts there's a magical quill which detects the birth of a magical child, and writes his or her name down in a large parchment book. Every year Professor McGonagall checks the book, and sends owls to the people who are turning 11.

As this answer also explains, the Ministry is not alerted of young children with magic potential, Hogwarts is alerted directly.

Of course, at the time Tom Riddle's name was inscribed in the book (either upon his birth to a pureblood witch or when he first displayed signs of magic in the orphanage where he grew up), Dumbledore was not Headmaster of Hogwarts; that was Armando Dippet.

The Harry Potter wikia says that Dumbledore served as Deputy Headmaster under Dippet, but does not provide a source:

Professor Dippet's term as headmaster ended between March 1965 and March 1971. His immediate successor in the post was Professor Albus Dumbledore, who had been Dippet's Deputy Headmaster and Transfiguration teacher.

At any rate, it seems as though he did carry out the same office as McGonagall later would do when it came to informing parents and children of Hogwarts admittance. He learned of Riddle's existence at some point between his first signs of magic and when he was eleven years old (either from Dippet or directly from the Book as part of these duties). At that point he only knew his name and birthdate, however.

When Riddle was eleven years old he was visited by Dumbledore at the orphanage and informed of his status as a wizard and of the school's existence. We see this scene as a Pensieve flashback in Harry Potter and the Half-Blood Prince. Dumbledore then properly learned of Riddle's existence, but not the extent of his dark nature (although he always kept the knowledge of Riddle's magical misdeeds at the orphanage at the back of his mind).

Harry Potter: "Did you know, sir? Then?..."
Albus Dumbledore: "Did I know that I had just met the most dangerous Dark wizard of all-time? No."

tobiasvl
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    Brilliant, thank you. I didn't know of the Quill of Acceptance into the Book of Admittance. However, this doesn't explain why Dumbledore went to personally visit Tom, rather than sending an owl like usual? – user82081 Apr 19 '17 at 14:02
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    @user82081 Perhaps similar reason to why Hagrid visited Harry. If the letter never gets there, a personhy did hagrid visit harry – BlueBuddy Apr 19 '17 at 15:12
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    @user82081 I remember reading somewhere (probably here) that for children with muggle parents, a professor is sent to explain everything in person. With Tom being in a muggle orphanage, I assume the protocol was the same. For Harry, I believe since his aunt and uncle already knew about magic, they assumed his family would have told him about it (and, you know, not locked him in a closet). – David K Apr 19 '17 at 16:09
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    @user82081 http://harrypotter.wikia.com/wiki/Special_messenger – tobiasvl Apr 19 '17 at 16:55
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    " It's the same as two black-haired people producing a redheaded child. Sometimes these things just happen, and no one really knows why!" no one...‽ Even a brief glance at Wikipedia already explains that Red hair is a recessive trait, i.e. a single ginger somewhere far up in each parent's ancestry is enough to chance this. Is JKR seriously not aware of genetics? Now that she compares it, magical abilities might as well be a genetic trait, albeit more complicated what with Squibs... – Zommuter Apr 20 '17 at 06:10
  • "the Quill [...] attempts to inscribe the name of that child upon the pages of the Book" why attempts? Are there instances where it failed to do so? – Zommuter Apr 20 '17 at 06:11
  • @Zommuter Yes, as the Pottermore article says, the Quill tries to register all relevant births, while the Book only opens if sufficient magical prowess has been displayed. – tobiasvl Apr 20 '17 at 06:16
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    @Zommuter ...not necessarily more complicated than readheadness. I mean, just like blood type, it could be a single gene deciding if they produce magic midiclorians or not :) – xDaizu Apr 20 '17 at 06:55
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    @Zommuter The seed is strong. – tobiasvl Apr 20 '17 at 07:36
  • @xDaizu Good point - I was going to propose what blood group corresponds to which of Wizard/Witch, Squib and Muggle, but it seems to be a bit more complicated so I asked a new question... – Zommuter Apr 20 '17 at 11:47
  • @tobiasvl I see, so the Quill might even try to write down Squib names, except the book won't let it? – Zommuter Apr 20 '17 at 11:48
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    @Zommuter Yes, that's exactly right and is used as an example in the Pottermore article! "In fact, the Book’s sternness has a purpose: its track record in keeping Squibs out of Hogwarts is perfect. Non-magic children born to witches and wizards occasionally have some small, residual aura of magic about them due to their parents, but once their parents magic has worn off them it becomes clear that they will never have the ability to perform spells. The Quill’s sensitivity, coupled with the Book’s implacability, have never yet made a mistake." – tobiasvl Apr 20 '17 at 11:53
  • I don't understand one thing though - there are multiple schools all over. Does the quill only write names of children who are in Hogwarts area (assuming the schools have divided the areas)? Or some children receive letters from more than one school and then they choose. – Shruti Joshi Jun 07 '17 at 03:32