History of Nevada, Colorado, and Wyoming, 1540-1888, Part 14

Author: Bancroft, Hubert Howe, 1832-1918; Victor, Frances Fuller, Mrs., 1826-1902
Publication date: 1890
Publisher: San Francisco : The History company
Number of Pages: 872

USA > Colorado > History of Nevada, Colorado, and Wyoming, 1540-1888 > Part 14
USA > Nevada > History of Nevada, Colorado, and Wyoming, 1540-1888 > Part 14
USA > Wyoming > History of Nevada, Colorado, and Wyoming, 1540-1888 > Part 14

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CHAPTER VI. FURTHER DEVELOPMENTS ON THE COMSTOCK.

1860-1888.

SPECULATION AND LITIGATION-FIGHT BETWEEN THE OPHIR AND BURNING MOSCOW-VIOLENT FLUCTUATIONS OF SUPPOSED VALUES-MINING LAWS -STATE OF SOCIETY-WILD EXTRAVAGANCE-SAN FRANCISCO STOCK- BOARD-FORTUNES MADE AND LOST-MINER'S LIFE-ASSOCIATION AND OBLIGATIONS-YIELDS AND DIVIDENDS-THE BONANZA FIRM, MACKAY, FAIR', FLOOD, AND O'BRIEN-MANIPULATIONS-THE SUTRO TUNNEL- GEOLOGY OF THE COMSTOCK LODE.

THE first result of the opening of the Comstock mines was wild speculation, and the second almost endless litigation. Men from San Francisco, Sacra- mento, and other California towns hastened to get possession of all the ground possible, which they held at extraordinary prices. Out of their operations grew a mining vocabulary new and peculiar. Bonanza, signifying good fortune, became not inaptly the sobriquet of the discovery mines on the Comstock lode. It is a noteworthy fact that almost all the great discoveries were made at the heart of the region dis- covered, and not on the outskirts;1 thus Ophir and Mexican, and the mines into which they were subdi- vided, being more productive than the groups farther south which participated in their fame, were bonanza to everything on the lode. Unproductive mines were in borrasca, or a squall, signifying bad fortune. As-

1 1 find after making this observation that Wright, in his Big Bonanza, 490, remarks that the Consolidated Virginia, to which he applies the title of Big Bonanza, was found 'near where the first silver ore was turned up to the light of day.'

(121

122

. FURTHER DEVELOPMENTS ON THE COMSTOCK.

sessing the small shareholders of a mine until they were forced to part with their interests was a "freez- ing-out" process. "Kiting " a mine was giving it a fic- titious value in the market. These latter two practices were very frequent, even as early as April 1860, and getting rich by swapping jackets was carried on with zeal on the Virginia bourse. The "bulls" of the mining towns, or of San Francisco, who performed the kiting, sometimes saw their favorite mine pulled down by the "bears," as became the custom after the formation of a stock board. During the winter of 1859 Ophir was selling for $1,000 and $1,200 a foot. In April following it was offered on the street for $600 or $700. The cause of the decline was pros- pective litigation. A company calling themselves the Lucky company of the Burning Moscow ledge, but afterward the Burning Moscow company, located on ground first claimed by the Ophir.2

It was asserted by them that the ledge they were on was entirely distinct from the Ophir, was twenty- three feet wide, and as rich as the Comstock. The shares were eagerly bought up at from $40 to $275, according to the market. The Madison company first sued them for infringing on their rights; and the Ophir also brought suit to recover possession of the ground in dispute. To establish their case, cross cuts were made by the Ophir company opening into the works of the Burning Moscow, and on application to Judge Gordon N. Mott, an order was obtained re- straining that company from further work until the arguments in the application for a permanent injunc- tion had been decided upon.

The question involved in these suits, and which divided the mining community, was whether there was one great lode or many smaller ones. Mott was a believer in the one-lode theory, and while he held the office of judge the Ophir was triumphant, and Burning Moscow shares were at a minimum. There

2 Virginia Mining District Records, Book E, 101,

123

LITIGATION.

came a reversal when Mott was succeeded in office by James A. North, who believed in divers lodes, and the Burning Moscow shares went up again, while the Ophir's dropped.

To check the rise of their enemy, the Ophir made an assault on the Moscow's works October 23, 1863, and skirmishing underground was carried on for sev- eral days; until Philip Deidesheimer, superintendent of the latter mine, procured the arrest of the super- intendent of the Ophir, with eighteen of his men, for riotous conduct. The prisoners were released on bail, but their wrath was not in the least cooled by the experience, nor by a temporary injunction restrain- ing them from working within the limits fixed by the rival company, followed by the dismissal of their suit against it, which brought their stock down from $1,750 to $1,150.

A new suit was begun in another district, and soon after a discovery of exceedingly rich ore in the north- ern end of the Ophir carried the stock up $500 a foot. In an effort to possess themselves of a controlling in- terest on the Comstock, the rivals had further com- plicated their affairs. The Ophir, in September, 1860, purchased of James Fennimore and John H. Berry 205 feet of their location on the Virginia ledge dis- covered by Fennimore in 1858, this being named in the deed as their " entire remaining interest in the ledge." 3 It was, however, over a hundred feet more than they possessed, for they had already sold all but 95 feet 9 inches of their original 600 feet.

By the Moscow company and many persons it was contended that the Virginia ledge was the main or mother lode, of which the Comstock was a spur. The Ophir, instead of following up their plan of buying out possible rivals in toto, found themselves fore- stalled by William H. Garrison, who secretly bought up all the other interests in the Virginia ledge, and notified them, in October 1862, that he was prepared

3 Storey County Records, Book D, 626.

124

FURTHER DEVELOPMENTS ON THE COMSTOCK.

to contest their title to the Comstock. This threat occasioned another rapid fall in the Ophir stock from $3,000 to $1,800 per foot, and forced the company to compromise by paying $60,000 or $100,000 for Gar- rison's title, which was obtained, together with an- other claim, described as located by Jacob Whitbeck on the " Virginia lead of the Virginia company," in February 1862.4 Another, or middle lead, had al- ready been purchased from McCall and others by the Ophir company, which now had possession of no less than four so-called ledges within a distance of 1,400 feet.

Four others were alleged to exist within less than half that distance,' and one of these was the Moscow, which was being harried by the Madison and adjacent companies in much the same manner as that by which the owners of the Middle and Virginia ledges had been worried into compromise purchases. On the 19th of November, 1863, the Burning Moscow rid itself of its minor enemies by consolidating with them, and uniting the strength of the whole against the Ophir. Its capital stock was increased from less than half a million to three millions.

As I have said, the Ophir company began a new suit in October, soon after which they struck a body of rich ore in their mine. The consolidation of the Moscow companies immediately followed, and a suit for the ejectment of the Ophir was begun. The legal conflict was continued, the best talent of California and Nevada being employed on this and other mining suits of equal importance for several years, during which questions of law, of geology, and of veracity were about equally contested. The question of geol-

4 Some name one amount and some another; but it does not signify in this plane whether it was $60,000 or $100,000. The Garrison claim was merely speculative from the outset. Claims were purchased that never existed, sim- ply to avoid litigation, which, after all, could not be avoided. The wealth of the Ophir was wasted in suits at law as well as in other ways.

5 Ledge of La Crosse company, located December 9, 1859; Geller ledge (Harrison company), located June 17, 1860, ledge of Madison Gold and Silver Mining company, located July 3, 1862; and ledge of the Burning Moscow company.

125

LITIGATION.

ogy was of all the most perplexing, because it could be settled by nothing but actual exploration of the ledges in dispute, which proceeded slowly as the dif- ferent companies developed in a partial degree their several claims ; and even the testimony of scientific experts was not permitted to have much influence on one side or the other.

By February 1864 it began to appear that the Burning Moscow was intrinsically valueless as com- pared with its rival, and while it still held on to its pretensions, the stock went down to $12 a foot, to rise again, by the kiting process, to $82 before the end of October. When the "new vein" which had brought it up was assayed it receded to $20; but in November skilful management gave it another toss, when every share in the company changed hands three times during the month. This was the last " deal " of the Moscow company, and was made pre- paratory to the trial of their suit for ejectment, which was set for the 21st of June, 1865. When the trial came on, which lasted for two weeks, the jury disa- greed, and a new trial was ordered in July, which re- sulted in an equal division of the jury and no verdict.

The people and the press were about this time weary of litigation, which retarded the prosperity of the mining industry,6 while the companies themselves were compelled to stare ruin in the face. The stock of the Moscow had fallen to five dollars per foot, with few buyers. At this juncture the Ophir cautiously bought up the stock of its enemy until it secured nearly 3,000 shares, which gave it a controlling inter- est. But they found themselves confronted with an assessment of $15 a foot, which they hesitated to pay, when the board of directors advertised the stock for sale upon the 18th of October. On the afternoon preceding the day of sale the stockholders made an application to have the shares on the books of the Moscow company, which had its office in San Fran-

6 Virginia City Territorial Enterprise, July 14, 1865,

126

FURTHER DEVELOPMENTS ON THE COMSTOCK.

cisco, transferred to a single person, but the secretary refused to permit the transfer before the assessment was paid. The holders then wished to restrain the company from selllng their stock, and applied to Judge Sawyer for an injunction ; but no injunction could be granted, because, by the California law, this was a day for the election of the judiciary, and no sheriff could serve the writ. The sale consequently went on, and the Moscow company bought in the stock at a low price, there being few bidders. On the succeeding day an injunction was obtained restraining the trans- fer of the stock to other purchasers until the courts should determine the legality of the assessment sale under the circumstances.

The long and disheartening contest ended a few days later by the Ophir surrendering the stock of the Moscow, and giving besides $7,500 in money for the possession of that part of the Moscow claim which had been in dispute, and which was of no value except to establish a boundary. There had been expended in this contest $1,070,000, and it was only one of many similar ones selected as an example because it was the first important mining suit, and involved the first discovered silver mine.7

7 The following table shows the drift of litigation in regard to the leading mines:

NAME OF MINE.

Suits in which Suits in which Company was Company was Plaintiff. Defendant.

Total.

Ophir.

Yellow Jacket

Savage. .

Gould & Curry

Overman. .

Chollar

Potosi.

Crown Point

Bullion.

Belcher

Sierra Nevada.

Hale & Norcross

168

245

One of the most protracted and expensive contests was that between the

127

INEFFICIENCY OF MINING LAWS.

The troubles which beset quartz mining companies on the Comstock came from the looseness and ineffi- ciency of the mining laws prevailing when quartz was discovered. The first locations were taken as placer claims under the regulations of mining districts as they had been in California in early mining times, and very inadequately described. When it was known that the richest claims were on top of a ledge they were again located and recorded as quartz, the locators claiming all the " dips, spurs, angles, and variations" of their discovery. It was this going after dips and spurs which made the war between the contestants. The first Nevada legislature passed an act providing that action for the recovery of mining claims should not be maintained unless it was shown that the plain- tiff or his assigns had been in possession of the ground for two years before the suit was brought,8 or since 1859, when the Comstock claims were taken, the in- tention of the act being to confirm those titles. But it was easy to evade this law by bringing suit in Cali- fornia, where most of the corporations had been or-

Chollar and Potosí companies, in which the former brought suit to reeover possession of a surface elaim of 400 by 1,400 feet, ineluding theComstock ledge, with all its dips, angles, spurs, ete. Proceedings were begun in 1861 and continued til 1865. After $1,300,000 had been expended the suits were setttled by a compromise uniting the 2 companies in the Chollar-Potosí. Another famous suit was that brought by the Groseh Consolidated against the Gould and Curry and Ophir, in the 12th dist. court of Cal. This suit was brought by persons in El Dorado county, in 1863, who had been men- bers of the companies formed hy the Grosch brothers, whose unhappy fate changed so materially the prospective fortunes of these companies. These men had furnished means to the Grosehes during their explorations. In the spring of 1860 they formed the Washoe Gold and Silver Mining company and employed an agent to go to the states to contraet with the father of the young men for his elaim as heir, and the elaims of the Western Utah Enter- prise company, which they seeured, after which they began suit as above. Sac. Union, Ang. 17, 1863. The actions were dismissed at the cost of the plaintiff, Mareh 9, 1865. S. F. Bulletin, March 9, 1865. This suit cost the Gould and Curry company $12,993.30. Mining property valued at $50,000, - 000 was in litigation in 1863. It was estimated by S. H. Marlette, sur .- gen. of Nevada, that there was expended in lawsuits during 1860-5, $9,00,000,000, which was one fifth of the produet of the Comstoek lode. Browne's Min Res, ed. 1867, 32. William M. Stewart, who received annually as much as $200,- 000 in fees as the principal attorney of several Comstock companies, esti- mated the entire cost of litigation up to January 1866, at $10,000,000. Liti- gation did not cease with the settlement of these great suits.

6 Nev. Laws, 1861, 27. This law was amended in 1869 by changing 2 to 5 years,

FURTHER DEVELOPMENTS ON THE COMSTOCK.

ganized, and where most of the mining cases were decided or compromised.

Another act in 1862 required transfers of mining property to be conducted with all the formalities of a transfer of city lots,' and made it impossible to trump up a story of a sale which had been made for an old blind horse, and yet involving millions in gold and silver. Had these laws existed before the discovery of the Comstock lode the history of silver mining in Nevada would have been different, but as it was, the legislature had no power to interfere with the title to mineral lands,10 and no mining laws affecting these titles was passed by congress before 1866. In July of that year congress confirmed the titles already ac- quired under district laws, and permitted the owners to take out patents ;11 but it still left the disposition of the mineral lands as they were before, subject to the rules and regulations of mining districts, it being assumed that the miners knew best what was for their own good, and that if they were agreed in re- gard to following dips and spurs, and sustaining law- suits, there was no occasion to interfere. A subsequent act made some amendments to the first, and enabled the legislature to regulate the recording of claims, together with other minor matters, but left the great cause of legal warfare where it had been from the first.12

The first period of quartz mining was distinguished by every species of extravagance. It began while yet California retained in a great measure the reck- less habits of its first decade. Most of the operators were Californians. Everything cost a great deal in that state, and to its first cost there was added the expense of transporting it over the Sierra Nevada at a heavy expense. The richness of the mines encour-

9 Nev. Laws, 1862, 12 -- 13.

10 Stewart's Speech on Courts in Nevada, 1865, 10.

11 U. S. Stat., iv. 221, S. F. Alta, April 14, 1865. 12 U. S. Stat., xvii. 91.

129

STOCK BOARD.

aged prodigality. While money was being so freely spent wages were high, and the working miner shared in the general prosperity. But in 1864 the tide began to turn. The rich deposits near the top of the Comstock mines were evidently exhausted, while the cost of mining increased with the depth below the surface. Millions had been expended in costly works and costlier litigation, and the older companies were being brought face to face with the disagreeable fact that they had seen the end of their bonanza. While endeavoring to dispose of their shares, the public became alarmed, and stocks dropped until " feet " fell from thousands to hundreds, from dollars to cents.

On the 1st of September, 1862, was organized the San Francisco Stock and Exchange Board," the first of the boards of this kind on the Pacific coast. It was formed by thirty-seven brokers, who sold mining shares on commission, and issued printed certificates of the same, which were transferable without the trouble and expense of a deed. Through this board mining shares were bought and sold over and over, the shares of a mine equivalent to its whole stock

sometimes changing hands twice a week. When stock went up there was a lively time in the board. Morning and afternoon sessions were held, and the reports of sales telegraphed to Virginia City, Gold Hill, and other mining centres, as fast as they were made, the prices ruling being marked on a bulletin- board, and placed in the windows of the Nevada brokers for all to see. In times of excitement dense crowds were always to be seen around these bulletin- boards ; and in San Francisco it was difficult to get within a block of the exchange. But whether the broker bought or sold for his customers he made a fee by the transaction ; and could he have refrained

13 Cal. Annual Mining Rev., 6-18. The California Stock Board was organ- ized in January 1872. The Pacific Stock-exchange was organized in April 1875.

HIST. NEV., 9

130

FURTHER DEVELOPMENTS ON THE COMSTOCK.

from speculating for himself, or carrying the stock of others " on a margin," might have reaped a harvest from the misfortunes of his clients. The stock ex- change in 1864 was a scene of melancholy interest to the simple observer, and of painful anxiety to the owner of mining shares.

The working miners were not infrequently owners of some stock ; therefore, when it fell rapidly in the market they had lost as much of their wages as the shares represented. And when in addition to this the mine-owners or superintendents set about re- trenchment by cutting down their pay, they became stubbornly rebellious. Deep mining is severe and dangerous work ; and four dollars a day had not been considered too much for the labor. Even before they were asked to take less they had decided not to do it, by organizing, in May 1863, a Miners' Protective Association, consisting of between three and four hundred members.

A sturdy and peculiar class, delving in the dark and sweltering1+ bowels of the earth, as naked nearly

14 The temperatures of the Comstock mines, as tested from September 1878 to August 1881, at the Forman Combination shaft of the Overman, Caledonia, Belcher, Crown Point, and Segregated Belcher companies, were as follows:

Depth.

Temperature.

Depth.

Temperature.

Feet.

Degrees

Feet.

Degrees.

100

50%

1,200

894

200

1,300

91₺

300

1,400

964

400

1,500

101

500

1,600

103

600

713

1,700

1044

700

743

1,800

1052

800

76毫

1,900

106

900

2,000

111

1,000

813

2,100

119}

1,100

In some mines, and some parts of mines, owing to defective ventilation, and sometimes to unascertained causes, the heat was actually insupportable, taken in conjunction with the bad air in the mines even the best ventilated, and men not infrequently fell dead in consequence. In the 900-feet level of the Belcher in 1866 the men could work but a few minutes at a time, and sweat filled their loose shoes 'until it ran over the tops,' while in the

131

IN THE DEPTHS.

as when they came from their mother's womb, real- izing that a terrible fate might at any unlooked-for moment overtake them, yet with wives and children above ground depending upon them for support, their circumstances seemed to warrant their establishing a minimum price for their labor. In March 1864 a re- duction to $3.50 a day was made by the superintend- ent of the Uncle Sam. But the miners made an example of him. 15 Other owners began to cast about for cheaper labor, seeing which, on the last day of July the Miners' Protective Association began to act. They paraded the streets of Virginia City and Gold Hill shouting, " Four dollars a day!" in intervals of music by the band at their head. Halting in front of the International hotel, they called upon Frank Til- ford to address them, which he did in a flowery and sympathetic speech. All was done in an orderly manner, and the crowd dispersed to meet again the next day and demand of the several mining superin- tendents uniform wages at $4 a day. The mill-men not being prepared to resist the demand made the concession without an exception, and a week later was

Julia mine the water was scalding hot. Although the revolving fans which were put in use in 1868 modified this suffering to some extent, it continued to be great. Some of it was due to the presence of the hot water springs, which were in time pumped dry, when the temperature was lowered. The thermometer registered 130 ° and 140° in a drift in the Imperial shaft at a depth of 1,700 feet, but fell to 100° when air-currents were established. In spite of the best devices for cooling the mines-and it was computed by John A. Church that there was yearly abstracted from the rocks as much heat as would be produced by 55,472 tons of anthracite coal-the miners could only work by consuming tons of ice daily. In 1877 a hot spring was uncovered in the Savage mine, and the vapor from water at a temperature of 157° was let into the incline. Picks could only be handled with gloves, and cloths wet in ice-water were wrapped around drills. Men were attacked with cramps and lost their consciousness. Thomas Brown, a ininer in the Gould and Curry in 1878, after breathing an atmosphere heated to 128° for some time, fainted and was carried to the surface, but did not recover his recollection when aroused, and behaved like an infant. He was gradually restored. Water and heat troubled the miners as early as 1871. S. F. Examiner, Jan. 26, 1871. Peculiar diseases caused by the inhalation of poisonous gases also troubled the miners at an early period, a remedy for which was coal tar used as a disinfectant. S. F. Herald, Jan. 19, 1869.

" His name was John Trembath, a Cornishman. He was taken, bound,

. and lashed to the main hoisting cable, with a label fastened to him, 'Dump this pile of waste-dirt from Cornwall.' He was hoisted and lowered and hoisted again, and finally ' dumped,' glad to be freed from the coils in which he was wound up. Virginia City Territorial Enterprise, May 31, 1863.

132

FURTHER DEVELOPMENTS ON THE COMSTOCK.

organized the Miners' League of Storey county, by the laws of which each member was required to pledge himself not to work in Storey county for less than $4 a day in coin. Upon information that any member had broken his pledge, the president of the leage was required to call a special meeting to remonstrate with the offending member ; should the remonstrance be disregarded, then the president must "call out the entire force of the league."

This threat did not deter miners who were not members of the league from covertly accepting lower wages, and gradually crowding out the four-dollar men, who finally withdrew from some of their least tenable positions, and the league was finally dissolved. But the mine-owners had never been able to estab- lish a uniform price lower than $4, while the miners formed "unions " to maintain that rate, in which effort they were never defeated.16

During the first four years of working, the Ophir bonanza yielded fifteen millions in gold and silver, less than a million and half being paid out in dividends. During the same time other mines on the lode to the south had been taking out their millions,17 and ex-

16 There were 3 miners' unions, one at Virginia City, one at Gold Hill and one at Silver City, the object of which was the keeping up of wages to the standard of four dollars per day of 8 hours.

17 Gould and Curry, organized in 1860, owned 921 feet, about half of which was productive. The rich ore in this mine lay within 400 feet in length. 500 feet in height, and a width of about 100 feet. Total amount of assessments to Nov. 1875, $1,640,000; total amount of dividends, $3,826,800, divided among 108,000 shares. Savage, the next mine south of Gould and Curry, with 112,000 shares in 800 feet, assessed $2,186,000, and paid out in divi- dends $4,460,000, in the same time. Hale and Norcross, with a claim cover-

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History of Nevada, Colorado, and Wyoming, 1540-1888, Part 14

Author: Bancroft, Hubert Howe, 1832-1918; Victor, Frances Fuller, Mrs., 1826-1902 Publication date: 1890 Publisher: San Francisco : The History company Number of Pages: 872

Author: Bancroft, Hubert Howe, 1832-1918; Victor, Frances Fuller, Mrs., 1826-1902
Publication date: 1890
Publisher: San Francisco : The History company
Number of Pages: 872