European metallurgists unlocked value from rebellious ores with technical and finicky smelting and roasting techniques performed with the advantages of adjacent industry, cheap fuel, and inexpensive transportation. Taming large quantities of refractory silver ore wasn’t so easily accomplished in the wilds of southwestern Idaho. Undaunted, Mackay and his Rising Star partners attacked the problem by hiring famed metallurgist Guido Kustel, the man who had smelted the very first load of ore Judge Walsh brought down from the Comstock to San Francisco in 1859. Kustel had recently taken out patents and would soon publish a book claiming to solve the very problem experienced at the Rising Star. The Rising Star invested large sums erecting a mill on the lines of Kustel’s designs. When Kustel’s complicated, difficult, expensive, and toxic process went into service, the ugly, base-metal-impregnated amalgam that emerged from the pans resembled nothing the Washoe miners recognized. They recovered less than half of the large quantities of the silver that “fire assays” proved the ore contained. On the whole, Mackay, Hearst, and the other co-owners found the process “so injurious that a continuation of operations with such results [was] found quite inadmissible.”
The Rising Star proved an expensive failure.IV Most of the work ceased in February 1869. Long after, Mackay told a friend that the Idaho mining adventure had cost him $300,000, and that at the time, he’d really felt the pinch. Assuming the truth of that anecdote, the Rising Star probably cost Mackay half of the fortune he’d raised from the Kentuck. By the time the four Irishmen lost interest in the Rising Star in early 1869, they had without question entered into partnership, turned their attention back to the Comstock Lode, and pulled off a staggering coup.
• • •
In 1868, Virginia City and Gold Hill had high hopes for nine-hundred-foot-level explorations in the Savage, Hale & Norcross, Yellow Jacket, Crown Point, Kentuck, and Imperial-Empire (another consolidation of the small original Gold Hill claims). None met expectations. The first shares of the Hale & Norcross’s new stock went on sale in May 1868 at $110 per share (a price equal to $2,200 per foot). In mid-June, unsatisfactory developments in the lower levels of the mine sparked a mini-panic that dropped the mine’s value by 40 percent. Sharon sold his depressed shares, intending to repurchase them at the first hint of bonanza—notification of which he would receive before anybody else. He and his Bank Ring cohorts took an immense beating, but divested of any obligation to pony up cash to finance underground development, Sharon had his trustees levy an assessment on the stockholders. Through the summer and fall, the value of Hale & Norcross stock fluctuated as “shorts” and “holders” cited competing experts to claim the existence or absence of ore in the mine’s lower levels. July and September excitements proved “considerable quartz, but no ore.” Hale & Norcross bullion receipts totaled a disappointing $51,000 in July, August, and September 1868. During the same three months of the previous year, they had been $330,000. Hale & Norcross stockholders suffered another assessment in October and a third in December. “Latterly, all information concerning this mine has been kept very quiet,” lamented the Mining & Scientific Press.
Then, a few days before Christmas, the Hale & Norcross again confined its miners. They’d struck a clay seam. Investors and speculators had had enough of Hale & Norcross confinements, however. The mine’s stock dropped 45 percent. The miners spent Christmas Day underground, “still shut up, far down in the bowels of the earth.” To brighten their subterranean holiday, Hale & Norcross management sent one of the best meals ever cooked in Virginia City down the Fair Shaft. Eight hundred feet below the surface, at the Shaft’s 1,030-foot station, the imprisoned men feasted on roast turkey bathed in the light of miners’ candles. They popped corks from an army of champagne bottles and “had a high old time.” The Territorial Enterprise ventured to claim that, “nowhere in the world was there eaten on that day so strange a Christmas dinner.”
The men were still “camping underground” on New Year’s Eve. The mine had sent beds and other conveniences down the shaft, and a mine official informed the Enterprise that the confinement would likely continue “for some days to come.” The newspaper predicted “a strange sight” when the men emerged from the shaft “covered with a rank growth of fungi.”
The Hale & Norcross didn’t release its confined miners until the second week of January, by which time the men had spent well over a fortnight underground. Virginia City newspapers pronounced the whole business “a farce,” whose results summed to “uneasy holidays” for the confined miners, “a barren vein beyond the clay,” and “a loss of confidence by the public.”
That loss of confidence kept downward pressure on the mine’s stock price, allowing it only modest rises as moderately good news about the mine trickled out during the first six weeks of 1869. That downward pressure also made William Sharon vulnerable—it camouflaged the fact that he was under attack.
James Fair had learned enough working at the Hale & Norcross to think the mine wasn’t being developed properly. Vociferous exposition of that opinion may have been what cost him his job. Considering how much milling costs had dropped in recent years, Fair felt sure that the tens of thousands of tons of low-grade ore—previously unprofitable—held in the upper levels of the Hale & Norcross could be raised at enough profit to finance the mine’s deep-level explorations.
Comstock superintendents generally extended the reciprocal privilege of inspecting each other’s workings. Since John Mackay superintended the Bullion, he likely availed himself of the opportunity to examine the Hale & Norcross. If so, his investigations led him to concur with Fair’s assessment. No mining venture was a sure thing, but Mackay and Fair liked the mine’s potential, especially with its stock price at low tide. They decided to try to sneak it from Sharon’s clutches. Between them, Mackay and Fair possessed a wealth of mining knowledge and experience. They didn’t know nearly as much about stock market machinations. To pull off a raid, they needed the help of experienced stock operators. If the four men hadn’t already formed a partnership for their Rising Star operations, Mackay and Fair’s desire to seize the Hale & Norcross led them to join forces with James Flood and William O’Brien.
Handshakes sealed the partnership. No papers and no signatures ever formalized an alliance that would eventually control tens of millions of dollars and command the lives of thousands. Mackay was the only member of the quartet able to front his full share of the capital. He bought the first three-eighths of the partnership. With their own stake and the help of a borrowed $50,000 (possibly from Mackay), O’Brien and Flood anted up to jointly fund the second three-eighths. Mackay, Flood, and O’Brien together loaned Fair enough money to allow him to finance the final quarter.
However, even with significant cash capital at their command (perhaps somewhere between $150,000 and $350,000), the Bank Ring’s resources dwarfed those held by the four Irishmen. To have any chance of success, the Irish raid had to be conducted in absolute secrecy—Sharon could easily defend his position if he cottoned to their intentions.
Flood and O’Brien quietly began acquiring Hale & Norcross shares on the San Francisco Stock & Exchange Board. Large volumes of Hale & Norcross stock changed hands in early 1869, and since it was much harder to keep track of eight thousand shares than it had been to monitor eight hundred, nobody found anything untoward in the large volumes of Hale & Norcross stock flowing in and out of the hands of James Flood and William O’Brien. Nobody noticed their buying much more than they sold.
Only tiny clues that someone might be bidding for control of the Hale & Norcross surfaced in the San Francisco newspapers. In its “Financial and Commercial” column, the Daily Alta California mentioned one broker’s “extensive” Hale & Norcross purchases on the morning of Thursday, January 7, that ran the price up from forty-six to sixty dollars per share. With the miners still confined amid rumors of a strike in the mine, the newspaper didn’t think it important to mention the broker’s name. The stock fell to fifty-five dollars in afternoon trading.
Five hundred and fifty shares of the mine changed hands that day, almost 14 percent of the total needed for control. The Gold Hill News blamed the rise on the discovery of good ore on the 1,030-foot level of the mine—without crediting a source.
Rumors of that sort coincided with almost every burst of Hale & Norcross trading activity through January and February. Conceivably, up in Virginia City and Gold Hill, Mackay and Fair floated rumors from behind their whiskers, Comstock gossips latched on to them as leaks of exciting information from well-respected, well-connected, and reliable mining men, and the exciting stories provided cover for the flurries of large stock purchases Flood and O’Brien made in San Francisco.
By early February, Hale & Norcross stock had risen to around eighty-five dollars per share and around three hundred to four hundred shares changed hands most days. “The approaching election influences the stock,” the Daily Alta California intoned on February 8. The price fell back the next week, then rose again. The Territorial Enterprise said that although many attributed the ascent “to the approach of the annual election of officers,” several bodies of good ore recently discovered near the south line of the Savage pitching toward the Hale & Norcross actually drove the price rise.
Those quickly buried items may have been the closest William Sharon came to discovering the raid. Word of the coup didn’t leak until it was already a fait accompli, on February 21, 1869, when the Daily Alta California printed a dispatch from “Virginia, Nevada,” that said, “J. G. Fair and Wm. Mackay [sic], of this city, own the controlling interest in the Hale & Norcross mine.” To William Sharon and the members of the Bank Ring, the announcement must have come as a terrible shock. They hadn’t known they were under attack. The Enterprise didn’t confirm the takeover for nearly a week, although it managed to get Mackay’s name correct when it did. “The mine is looking exceedingly well,” it added, “and the gentlemen named will doubtless shortly become millionaires.”
Compounding the pain the hostile Irish takeover inflicted on the Bank Ring, in the days between the takeover announcements and the election that installed the new leadership, Hale & Norcross miners struck an eleven-foot-wide vein of “high grade ore” in the lower level of the mine. Not until the Hale & Norcross election ten days later did people realize the new combination included James Flood and William O’Brien. (Flood nearly blew the whole scheme. Only the day before the election did he learn that he couldn’t vote the shares unless he reregistered their ownership in the company record books. He’d hidden them in a safe and barely made the deadline. His partners teased him about the near disaster for years.) The four Irishmen voted their shares as a bloc and deposed Sharon’s leadership. The stockholders elected Mackay a trustee, Flood president, and James Fair superintendent. Before the meeting adjourned, the new leadership rescinded the mine’s most recent assessment, certain they could finance mine development with the bullion product of the low-grade quartz in the upper levels of the mine. They even refunded that portion of the assessment already paid into the company treasury. The two assessments Mackay had rescinded at the Kentuck were the only other times in Comstock history such a thing had been done. Within a fortnight, James Fair had the old hoisting works back in operation, and a dispatch writer couldn’t help but notice the “energy” at the mine.
• • •
With the sting of the coup still fresh, William Sharon clashed with John Mackay in the Bank of California’s Virginia City branch. The small banker stood behind the rail that divided the bank staff from the public. Mackay was a much more physically impressive man. In the description by one person who recalled the scene, Mackay stood outside the rail like a “wary tiger.” Sharon fixed his frigid gray eyes on the Irish upstart and didn’t invite Mackay to his office beyond the rail. Sharon suggested that since Mackay and his partners didn’t have much experience, it would be best if they let the Union mills keep reducing Hale & Norcross ore.
“No. We’ve made other arrangements,” Mackay replied.
Sharon’s anger flared, an indulgence he seldom allowed. Sharon jabbed his finger toward the north flank of Mount Davidson, where the Geiger Grade passed out of town. “I’ll make you pack your blankets out of this camp yet,” he said.
Mackay flushed red. He mastered his temper and considered the small banker. “You will? W-well, I can do it,” he stammered. “I packed ’em in.”
Everybody who witnessed the scene understood the insult. Mackay had been mining in Washoe since the season of the first discovery. William Sharon was a “kid-gloved miner” of the first water who’d spent the early years buying and selling real estate in San Francisco. He’d come to the Comstock in a stagecoach.
Mackay and his partners cut the Bank Ring’s mills and other associated companies from the ancillary operations of the Hale & Norcross. The Irish coup inflicted the first significant setback on William Sharon that he’d suffered since arriving on the Comstock in 1864. There would be more battles to come.
* * *
I. The San Francisco Stock & Exchange Board opened on the site now occupied by the Transamerica Pyramid.
II. Contemporary Mining & Scientific Press articles mention polybasite, miargyrite, and fahlerz as being among the ore types found at the Rising Star.
III. Only the silver had value in 1868. None of the base metals would bear the cost of transportation from such a remote region.
IV. Rising Star ores required smelting, a process similar to the one used in the tiny fire assays that proved its value, but smelting systems, techniques, and technology in the remote regions of the western United States hadn’t evolved to the point where they could handle the ore at bearable cost. The most successful mining in the Rising Star’s district was done in the first decades of the twentieth century.
CHAPTER 11
The Lode’s Worst Day
A crew of Gould & Curry miners—“the rats of the lower galleries,” as Comstock miners styled themselves.
* * *
There is nothing so much dreaded by the miner as fire.
—Dan de Quille, The History of the Big Bonanza
Even before the driving of “the last spike,”I Americans considered the construction of the Central Pacific Railroad over the Sierras one of the great engineering accomplishments of the age. And rightly so. No other railroad on earth had surmounted such colossal obstacles. The successful breaching of the mountain barrier greatly lessened the cost of transporting California’s industrial manufactures and agricultural produce to the Nevada mining camps. Unfortunately, the railroad proved equally adept at spreading disease. That was a matter of no small importance, for what a famed medical researcher described as “the most dreadful scourge of the human species”—smallpox—had broken loose in California.
Not even cholera provoked such terror. Thought to have originated in India or Egypt, smallpox had become a truly global menace by the middle of the nineteenth century. The disease’s twelve- to fourteen-day incubation period and the prevalence of inter- and intracontinental travel and commerce made it almost impossible to contain. In a region served by a thriving port like San Francisco, its periodic appearance was little short of inevitable. Although California hadn’t suffered a large-scale outbreak since the early 1860s, the disease provoked “considerable excitement” when it arrived in 1867, brought to San Francisco by steamship passengers who’d been exposed in Central America and the Caribbean and then carried the plague from San Francisco to other parts of the state. To the great relief of Pacific Coasters, the 1867 outbreak didn’t blossom into a major epidemic. They didn’t get so lucky when “the speckled monster” took hold in Petaluma and San Francisco in July 1868.
The epidemic spread: Angels Camp, Nevada City, San Juan, Napa, Sonoma, Benicia, Stockton, Oakland, Yreka, Folsom, Weaverville, Verdi, North San Juan, Marysville, and Portland, Oregon, all reported cases. From Sacramento, the pestilence spread into Nevada along the stations of the Central Pacific Railroad. In October, the Territorial Enterprise reported one or two cases in a
Virginia City house on the east side of A Street, between Taylor and Union streets, just around the corner from the Mackay household at Howard and Taylor. Within eight weeks, Virginia City and Gold Hill had about eighty cases. Yellow plague flags dotted the streets. Two to three people died of the disease every day. The Comstock newspapers dutifully reported the number of deaths and new cases through the last months of 1868 and into 1869.
The fear Marie Louise Mackay suffered on behalf of her family can only be imagined. Children died of the disease at a greater rate than adults. She’d lost a younger brother to smallpox in the early 1850s. She’d already lost a child of her own to a much less lethal infection. She must have been terrified for her seven-year-old daughter, Eva.
• • •
Fatalistic Comstockers sought distraction playing billiards, poker, and faro, and indulging the “mania” for “velocipedes” imported from France that had swept the Pacific Coast “with almost as great rapidity as the prevailing epidemic.” Mounted on a seat above and behind the front wheel of the strange, two-wheeled contraptions held together by wooden frames and holding tight to a crossbar that steered the front wheel, velocipedists propelled their contrivances forward using their feet to turn a crank that rotated the front wheel. Seven adepts racing up and down C Street amused onlookers with their “rapid and easy movement” and “grace of evolution.” Someone started giving lessons at the Athletic Hall.
Not until the velocipede enthusiasm had been raging for six months did people abandon the awkward term and start referring to them as bicycles.
• • •
“The Firm” of Mackay, Fair, Flood, and O’Brien took charge of the Hale & Norcross in the spring of 1869. Flood and O’Brien handled the San Francisco end of business. Mackay and Fair kept their noses underground, which experience had taught them both was the only way to run a successful mine. Frugal, economical, disciplined, the mine’s new Irish management insisted on a dollar’s value for every dollar spent. Mackay and Fair were two of the best miners on the lode. Operating in tandem, they formed a powerful combination.
The Bonanza King Page 31