The Bonanza King

by Gregory Crouch

  In the meantime, Comstock had invested the proceeds of his mine sales in a Carson City general store and a branch in Silver City, the Gold Cañon camp sprung up around Devil’s Gate. Naturally profligate, always with an open hand, Comstock extended credit to many unworthies and soon went out of business. Alone after his short season in the sun, in the winter of 1861–62, Comstock took what remained of his “raise” and went north. Reports from Oregon described him doing well on a placer claim, but Comstock was again shoveling gravel, a terrible fall for a man who’d given his name to the most famous ledge in the world. The same week that the Comstock-in-Oregon story broke in the Sacramento Daily Union, the Ophir Mill shipped nine hundred pounds of bullion, and the feet Comstock had once owned in Virginia City and Gold Hill held an aggregate value of around $500,000. The men who possessed them in his stead aroused considerable jealousy and resentment peacocking around Virginia City and San Francisco as the most celebrated nabobs on the coast. Those can’t have been easy facts to bear for a man working long, backbreaking days on a placer claim in the wilds of northeastern Oregon. Nor had Comstock given up the hope of quartz. He exhibited specimens around a camp called Auburn and pronounced a silver lead in the Burnt River Basin “as rich as anything in Washoe.”

  • • •

  While Henry Comstock’s exploits in the Powder River country made minor news during the summer of 1862, major Union setbacks commanded headlines. Swelled by success, General Robert E. Lee and his Confederate Army of Northern Virginia invaded the North. California’s “Dixie-ite” newspapers crowed at such volume that to quiet their “treasonous sentiments,” the military governor of California barred them from using the U.S. Mail. Later that week, confused reports of a great battle on the banks of Maryland’s Antietam Creek broke in California. As the story came into clear focus, it became apparent that the U.S. Army had won a bloody victory. The feat of Union arms gave President Lincoln the political confidence to “invoke the considerate judgment of mankind, and the gracious favor of Almighty God” and issue a proclamation declaring that as of the coming New Year, slaves in locations still in rebellion against the U.S. government would be “then, thenceforth, and forever free.” Although Lincoln’s Emancipation Proclamation’s immediate effect freed few slaves, the nation immediately foretold its consequences. As the editor of the Washoe City Times wrote, “The effect of it, if the Lincoln government succeed [sic] in crushing the rebellion, will be the eventual utter eradication of negro slavery.” Lincoln’s announcement committed the U.S. government and its armies not only to restoring the Union, but also to ending slavery. “The thunder in it . . . shakes the very earth,” opined the Territorial Enterprise. “No word has ever before spoken liberty to four millions of human beings so completely manacled in soul and body.”

  The war and wholesale slaughter loose upon the eastern portion of the nation never stained California and the Nevada Territory, so far removed from the bloodshed that the editors of the Sacramento Daily Union felt compelled to remind their fellow Pacific Coasters not “to forget the fearful struggle of our patriotic brethren in the East for our glorious Union.” Despite many sectional “excitements,” only occasional barroom donnybrooks and small-scale street riots incited by overt displays of southern sympathy marred the peace of the Pacific Coast. Those that did occur mostly served as rallying points for the population’s overwhelmingly “patriotic and union-loving” sentiments. In the Nevada Territory, gangs of loyal men quickly offered secessionists who had the audacity—usually “whisky-begotten”—to hurrah for Jeff Davis, Stonewall Jackson, or Robert Lee or heap foul abuse on President Lincoln and the Union the choice of taking the oath of allegiance or accepting the opportunity to “meditate upon Republican tyranny” from within the confines of the army’s prison at Fort Churchill. Most leaped at the opportunity to make “the big swear.” Quite frankly, most of those in Nevada Territory had too much money to be made and work to be done to bother with sedition.

  Washoe riches did make national news that year, although generally not in leading headlines. In October, a small item at the bottom of the second page of the Cleveland Tri-Weekly Leader reported the Ophir Company shipping “not less” than $60,000 and sometimes $100,000 in bullion per week. The article claimed the Ophir’s annual yield would probably reach “three hundred millions of dollars,” and said that hundreds of Nevada mines were “equally as good.” A more mathematically competent report published the same day in California estimated Washoe’s annual yield at a still-impressive $18 million.

  Whether or not Washoe had the world’s attention in the fall of 1862, it certainly had San Francisco’s, where the principal topics of conversation were the weather, the war, and the soaring values of Washoe mining stocks. A man observed that a few dozen San Francisco buildings could cover all the productive mining ground of Virginia City and Gold Hill, from which emerged “a sum equal to one-sixth” of that produced by the entire state of California. “There is not in the world so many rich mines in the same scope of territory as we have in Washoe,” bragged the Territorial Enterprise. Pushed skyward by the “handsome dividends declared by the principal Washoe mining associations,” Ophir stock soared past $2,000 per foot. Then it passed $3,000. In one year, Ophir stock had risen from $600 to $3,400 per foot, 450 percent. Gould & Curry feet did even better, rising from $350 to $2,450, a sevenfold increase. The value of many lesser mines described even more fantastic parabolas, jumping from a few dollars to hundreds of dollars per foot. The old California desire for sudden fortune gripped the city. To corral and profit from the city’s “fever, not to say mania,” for speculative mining investment, forty stockbrokers opened the San Francisco Stock & Exchange Board in the Montgomery Block at 600 Montgomery Street, consolidating operations previously scattered throughout the district and giving rise to a generation of joking references to Ali Baba of The Arabian Nights. Several other stock boards collected together to accomplish the same end. A stock-trading frenzy seized the San Francisco population. “Time sales” and “stock lending” for delivery in thirty, sixty, or ninety days made possible short sales and all manner of other speculation based on whether a person expected the price of a mine to rise or fall. “Are all [you] folks at the Bay stock mad?” the author of a “Letter from Nevada Territory” asked the Daily Alta California’s readership in mid-October. “Have [you] people become insane?”

  Washoe stock prices fluctuated wildly, but any fool could discern the principal direction—UP! Nobody wanted to miss out on the easiest-made wealth in California history. The most successful speculators kept their noses attuned to mining developments, but not all advantage arrived from underground. Opportunity hit a ring of aggressive San Franciscans who learned the findings of a geologist hired by the Ophir trustees to expand knowledge of their holding. The “scientific cuss” spent several days investigating the Ophir and its neighbors, paying particular attention to the Virginia Ledge, the quartz ledge above the Ophir croppings located by “Old Virginia” James Fenimore in 1858. The geologist noted the Ophir’s rich Comstock Lead and the barren quartz of the long-neglected Virginia Ledge dipping toward each other. If they joined at depth, their merger would pose a “perplexing question as to who held the true vein.” Miners generally considered the Virginia Ledge “forfeited for non-compliance with the mining laws,” but its claim antedated the Ophir’s by well over a year. Worse, the geologist gave it as his opinion that the Virginia Ledge was the “true lead,” and the Ophir “but a spur.” The veta madre, “the mother vein,” couldn’t belong to both companies. He advised the Ophir ownership to eliminate a weapon that could be used against them by acquiring the Virginia Ledge “at all hazards.” (This was not new advice: two and a half years before, Adolph Sutro, the man who’d encountered the first run of the Pony Express in the Sierra snowstorm, had advised the Ophir’s ownership to buy the Virginia Lead in an article he wrote for the Daily Alta California—for exactly the same reason.) Being “a little on the old fogie order,” the Ophir direct
ors moved slowly. While they dithered, “a few sharp ones” in San Francisco caught wind of the mine’s vulnerability, raced “above” to Virginia City, and bought the old title from whomever had acquired it from Fenimore. Back in San Francisco, they laid it before the Ophir directors and demanded $500,000, “a cool half-million.”

  The San Francisco stock market panicked. The “filibustering arrangement” tumbled the price of Ophir stock from $3,800 to $1,800. The Gould & Curry fell along with it. Other stocks followed the leaders down. Fortunes that had been considered certain evaporated.

  After several anxious days, arbitration brokered by banker and Ophir treasurer William Ralston, his wealth and influence rising in California and Washoe financial circles, settled the purchase price at $100,000—for what the Ophir trustees could have bought for $25,000 a few weeks before. The Virginia Ledge sharps “made a great row” about accepting that “trifle,” but their charade didn’t garner much sympathy—two-thirds of the sum represented clear profits.

  Podgers of the New York Times felt the Ophir directors had enjoyed “a narrow escape from being stupid.” If the sharps were truly on their game, they’d have shorted Ophir stock before buying the Virginia Ledge, realized short-sale profits on the market panic, and used the proceeds to buy Ophir stock on the dip. Next, with a fistful of depressed Ophir stock in hand, they could have removed fears of a clouded title by selling the Virginia Ledge to the Ophir (at massive profit to themselves) and watched the Ophir’s value soar back to its former heights. “Stock job” complete, they could have settled in to enjoy a tidy sum of cash in hand, the immense rise in value of their Ophir stock, and the mine’s continuing dividend of seventy-two dollars per foot, 4 percent of the mine’s capital value, per month.VI

  Genuine mining developments sustained the market. Gould & Curry management allowed few visitors to examine their underground workings, but everybody on the surface could see phenomenal activity manifest around the D Street entrance of their “old Tunnel,” the Middle Adit. Teamsters spewing steady invective reined up eight and ten mule teams in front of the mine entrance at all hours of the day and night. Bells tied to the mule tails clanked. Roiling dust clouds rose from dozens of hooves, clogging the nostrils of men and animals with “pasty conglomerate.” Gangs of men offloaded timber and other supplies and dumped tons of ore into the large freight wagons. At the mouth of the adit, the mine built a “mammoth” shop to shelter the sixteen carpenters the mine kept constantly employed shaping the one-foot-square framing timbers used to shore the underground workings. Finished shoring timbers covered the earth thereabouts, including some sill timbers sixteen feet long. Inside the mine, workers had noted the ore body changing dip to the east, opposite its previous westward dip, and “pitching” (leaning) south, toward the mine’s southern boundary.

  Other Comstock mines also did well. Both the Potosi and the Chollar produced significant quantities of gold and silver despite the bitter litigation raging between them, and the Yellow Jacket made a strike and started developing an ore body. On Gold Hill, the mines were again producing much valuable rock. The year before, only one or two of the Gold Hill mines employed steam-hoisting machinery and only three or four had bothered to roof over their shaft and tunnel entrances. Now, they’d all roofed their workings and more than a dozen had installed first-class steam machinery for pumping and hoisting. Smoke trailed from smokestacks rising from the boiler rooms and puffs of steam escaped from the hoisting houses that sheltered the engines. Every mill in Virginia City and Gold Hill ran at capacity, an interminable clatter. Only during a few Sunday hours did quiet settle over the lode while the mills cleaned and repaired machinery.

  John Mackay played his part in the action, superintending construction of the Caledonia Tunnel, which was five feet wide and six feet high, and penetrated fifteen hundred feet into the side of Mount Davidson. In early October, Caledonia miners encountered a layer of thick, tough clay at the face of the drift. Excitement soared—Comstock miners had learned that clay walls often encased ore bodies. One of Mackay’s crews cut through the wall. The clay dammed an underground reservoir. Breaking it unleashed a powerful flood. The torrent swept away wheelbarrows, tools, and five square-sets of timbers. Miners at the drift face hung on for their lives. One of the workmen washed a considerable distance among the debris. The flow subsided from 2,250 gallons per minute to about 850 over the course of the next few days. Mackay and his men forced their way back to the face of the drift, eager to examine the rock beyond the clay wall. The rock contained metal, like most Washoe quartz. Selected specimens were quite rich, but in aggregate, the rock couldn’t cover milling costs. A few days later, the Caledonia levied another modest assessment, fifteen cents per share, in line with its assessments of the last year and a half. Mackay pressed forward with mine development. The water gushing from the shattered rock beyond the clay wall presented a substantial obstacle to mining progress, but did prove a boon to the mine—the Caledonia Tunnel Company profited $450 per month selling it to thirsty quartz mills farther down Gold Cañon.

  An 1870 cross-section of the Comstock through the Virginia City portion of the lode showing the mine boundaries, the shafts, stations, and most important adits, drifts, and winzes, and the location of the ore bodies. Although it wasn’t apparent in the frenzy of the early years, the Gould & Curry’s bonanza can be seen pitching south into the Savage and perhaps relating to the discovery made by Mackay and his partners in the deep levels of the Hale & Norcross. Ordinary numbers represent depths below the surface; numbers in parentheses show the distance below the datum point (A) on the Gould & Curry croppings.

  An 1870 cross-section of the Comstock through the Gold Hill portion of the lode. The workings of the Overman mine to the left with its well-organized shafts and drifts—and minuscule ore bodies—stands in stark contrast to the Gold Hill mines to the right, where the small original claims perforated their wonderful bonanza with a chaotic profusion of shafts and drifts. Mackay made his first great strike in the slice of the “C. P. West Bonanza” that belonged to the Kentuck mine.

  Six weeks later, Mackay finally completed his extracurricular contract with the Buck Ledge, relocated and incorporated as the Milton earlier in the year. In exchange for the “full satisfaction” of the terms of the contract he’d signed in March 1860, the one that required him to work on the tunnel five days in every week, Mackay received 225 of the Milton’s 1,000 feet. The mountain of hard work he’d endured running the tunnel while working in other mines beggared description, but the ground he’d earned held substantial value, even after he deeded away thirty feet of the mine (likely to men who’d helped him run the tunnel). Three months later, the Milton mine traded at $100 per foot, giving Mackay’s share a paper value of $19,500, a respectable fortune by the standards of the day. Miners and speculators considered its prospects good. With the adjacent Chollar extracting large quantities of millable ore, and its owners holding their stock at $530 to $560 per foot, the potential value of Mackay’s Milton ground was even more impressive. Mackay was making something of himself. He owned part of at least two other claims, the Caledonia and the Union. The Union was crushing rock, which “although not rich,” was good enough to encourage “further prospecting, the mine apparently improving with depth.” The same stock report that noted the $100 value of the Milton registered the Union at $13 per foot and the Caledonia at $10. Mackay might not have commanded much cash, but he owned mining ground with the potential to disgorge real wealth. John William Mackay would not have been alone in regarding that as a very real possibility—interested populations in Washoe and San Francisco held high hopes for all three mines, and for the Caledonia, they soared when Mackay’s men struck a “formidable ledge” and “exceedingly good rock” at the face of the adit. Caledonia Tunnel items in the Mining & Scientific Press noted the mine being prosecuted with “industry” and “utmost vigor.”

  Elsewhere, Comstock miners did even better. The Ophir, the Mexican, the Central, the California, the G
ould & Curry, the Chollar, the Potosi, the Yellow Jacket, and the Gold Hill mines all stoped out large volumes of profitable ore. Miners and speculators held high hopes for dozens of other Washoe mines. The Sacramento Daily Union estimated Washoe’s bullion product at about $1 million per month, and the Gould & Curry’s gargantuan mill hadn’t yet gone into operation. In San Francisco, almost nightly, a huge wagon backed up to the express office of the Wells, Fargo & Company and disgorged heavy bars of Washoe bullion into the express company’s vaults.

  Despite outrageous expenditures, Ophir stockholders shared $470,000 in dividends in the last seven months of 1862. Adding to the euphoria, the Gould & Curry declared a $24-per-foot dividend two days before Christmas, its first. The Gould & Curry’s grand mill finally began crushing ore in late December, and at the end of January 1863, the mine upped its dividend to $100 per foot, per month. Gould & Curry stock vaulted to $3,230, “an enormous advance on rates sixty days ago.”

  “Mining operations in and about Virginia City never presented a more favorable aspect than at the present time,” opined the Mining & Scientific Press. A less staid commentator considered it “impossible to portray the brilliant future without being accused of ‘Munchausenism’ ”—a winking reference to fabled Teutonic cavalry officer Baron von Münchhausen, teller of preposterous tales about his own adventures.