The Bonanza King

by Gregory Crouch

  Getting the mules into the mine presented another challenge. The dimensions of a standing adult mule didn’t conform to those of a mine cage. No mule could be trusted to hold still during the descent, and Smith couldn’t find anybody fool enough to share a small space over a 1,000-foot drop with a mule who might lose its temper.

  Hank Smith concocted a plan to lower the mules into the mine dangling from one of the Yellow Jacket cages, and he decided to send Old Pete down first. After full darkness on September 28—a time selected to ease the animal’s transition to sunless existence—miners lashed Old Pete’s forelegs together and did the same with his hind legs, drew his legs against his body, and confined him in a strong canvas cover that held his legs tight.

  The engineer eased the cage up close to the sheaves, drew tension into the ropes supporting Old Pete, and swung the mule out over the abyss. Trussed up in canvas and dangling from the cage, Old Pete resembled “a bed-tick stuffed with straw.” When excess motion quieted, the engineer slowly lowered the cage. Much to everyone’s astonishment, Old Pete stayed quiet and docile through the entire descent. One thousand feet below, miners took him by the tail and hauled him onto the station landing. They untied him with trepidation. Freed, Old Pete staggered to his feet, got his bearings, and ambled to a big pile of barley and hay laid out on the landing. He buried his snout in the feed without making the slightest fuss.

  The miners soon put him to work, and Hank Smith’s plan worked to perfection. Old Pete proved capable of hauling a train of four loaded ore cars up the incline. Old Pete learned the routine to such an extent that he did the work without halter or bridle, turning around of his own accord at both ends of the route. To house Old Pete in what the Enterprise called “the regions of darkness,” Smith rigged a comfortable stable on the Belcher’s “eleven hundred” complete with stalls, hay racks, and other “upper-world” accoutrements. All went smoothly, and Smith lowered the female mule a few nights later. The “jolly miners” greeted her arrival with applause and comic congratulations and christened her “Mary Jane Simpson” in cruel homage to the San Francisco Chronicle’s Comstock correspondent who’d expended so many column inches disparaging the ore strike the mule would work.

  There had been “horses” of worthless porphyry in the Comstock mines since their original location, but mules were something entirely new, and the jokes flowed. Wags accounted for a minor downturn in Belcher stock by claiming Mary Jane Simpson “had kicked the ore so far into the east country rock” that the Belcher had to sink a new shaft in order to reach it. The Territorial Enterprise imagined “many long powwows” between Old Pete and Mary Jane Simpson “in regard to the nature of the place in which they find themselves,” and since both mules had been lowered into the mine at night, coming “to the conclusion that it is a confounded long time until sunrise.” In less frivolous news, the Enterprise also supposed both animals would “end their days” in the mine.

  • • •

  Belcher output leaped with Old Pete and Mary Jane Simpson delivering ore cars to the Yellow Jacket’s South Shaft. The mine returned $310,000 in October and expected the November number to exceed $400,000. As if to repay William Sharon for John Percival Jones’s treachery, Belcher ore proved “singularly rich in gold,” and although the two mines shared about equally in the volume of the ore body, Belcher ore proved more valuable per ton.

  The Belcher raised 5,853 tons of ore in December 1871, which was about all the rock Old Pete and Mary Jane Simpson could move. Hank Smith sent a third mule down to join them in mid-January. The Crown Point/Belcher bonanza catapulted Sharon, Jones, and Hayward into a realm of Comstock wealth and power hitherto unknown and shifted the lode’s center of gravity away from the Chollar-Potosi and the Hale & Norcross, where Mackay, Fair, Flood, and O’Brien still controlled what had been one of the Comstock’s leading mines since early 1869. A series of underground floods in the lower levels of the Hale & Norcross stalled work and increased costs. The ore at the bottom of the mine grew baser and less valuable. Thousands of tons of millable ore remained in the mine, but the end of the bonanza was in sight.I

  • • •

  Not all of the Firm’s problems were subterranean, however. They also had a problem with water—or lack of it—that commanded Mackay’s attention when he returned from Europe.

  Water had always been a problem on the Comstock. Water flowing from the mouths of drainage adits had provided the bulk of the local water supply since the early days. As the towns grew, the local water company bought water from mining companies and drove adits into Mount Davidson over a distance of a few miles north and south of town for the express purpose of finding water. They flumed the seepage to storage tanks and piped it to the local mines, mills, businesses, and residents—all of whom paid handsomely for the service. Since the industrial demands of the mines and mills trumped the thirst of the towns, the water company could only provide the populace with about six hours of running water per day. (Private vendors also peddled water door to door.) The local water sufficed until Washoe suffered two dry winters in a row. The Comstock received less than average rainfall in 1869–70, and the winter of 1870–71 was one of the driest since 1850. That was a problem for Mackay and his partners, because they’d bought control of the Virginia and Gold Hill Water Company from William Sharon and the Bank Ring. Sharon had controlled the water company to assure the supply of water to those of his Union Company mills distant from the Carson River. (Mills consumed large quantities of water in their boilers, wet-crushing ore, and in the slurries that filled their amalgamating pans.) The Virginia & Truckee Railroad and consolidation of the Union Company’s milling interests onto the banks of the Carson River around Empire City changed Sharon’s equation. The water company became less critical to his operations. To rid himself of a headache, he sold the water company to Mackay, Flood, Fair, and O’Brien sometime in the year before July 12, 1870. Most of the Firm’s mills were in Gold Cañon and Silver City, still dependent on the water company. The larger engines and boilers brought to the mines and mills in recent years consumed correspondingly larger quantities of water. The local supply had just sufficed until the drought winter of 1870–71.

  In the summer of 1871, Mount Davidson ran dry above the level of the towns. Water shortages idled many Comstock mills, forcing mines to scale back ore production and leading the water company to reduce the supply of water to the town to three hours a day—at such a trickle that it took twenty minutes to fill a quart pitcher of water. Mary Jane Simpson blamed the shortage on the water company monopoly. (Holding the water company responsible for the drought seemed a trifle ungenerous, even for the Chronicle.) Mackay, Fair, Flood, and O’Brien pondered the situation that fall and decided to solve the problem for all time.

  The nearest practicable and plentiful supply of water at higher elevation than Virginia City was in the eastern Sierras, in the peaks of the Carson Range between Lake Tahoe and Carson City. Getting that water to Virginia City meant building a pipeline in the form of a U-shaped inverted siphon that would drop the water from the Carson Range, push it across the seven-mile-wide Washoe Valley, and force it up to the crest of the Virginia Range. To do it, the pipeline would have to be capable of withstanding a 1,720-foot head of pressure. At that time, the greatest drop sustained anywhere in the world was at a hydraulic mine in California that fell 930 feet. When someone asked James Flood if such a feat were even possible, Flood shrugged. “Anything can be done nowadays,” he said. “The only question is—will it pay?”

  The four Irishmen decided that it would. To study and survey the problem and design a solution, they hired the best hydraulic engineer on the Pacific Slope—Hermann Schussler, who had built the Spring Valley Water Works that supplied San Francisco.

  • • •

  But water was small beer compared to ore. Nothing to do with water had the power to boost the four Irishmen into the sphere of Sharon, Hayward, and Jones, and they surely knew it.

  John Mackay could easily have l
ived for the rest of his life on what he and his partners had raised from the Hale & Norcross and earned reducing ores in their mills. If they went “all in” on another mine and found no ore, they risked losing everything they’d worked so hard to gain. But the West was no place for pikers. Taking big risks was what a man did on the Pacific Coast. If risks didn’t pan out, he went bankrupt. Pacific Coast culture took pride in being “game.” If Mackay went broke, he’d work his way back. He was forty-one years old, in the prime of his life. The thought of giving himself over to idleness and retirement seemed repugnant, an utter waste.

  No one knew for sure whether the Comstock held other deep bonanzas, but if it did, Mackay judged that he knew a likely place to find one.

  He and his partners turned their attention to a neglected 1,310-foot stretch of ground at the north end of the lode between the Best & Belcher and the Ophir that hadn’t yielded any ore since the early 1860s, but nor had it ever been explored more than 500 feet below the surface. Most of that ground belonged to the Consolidated Virginia Mining Corporation, or simply, the Con. Virginia.

  • • •

  One of the largest quartz masses on the Comstock choked the upper levels of that ground. Back in the early days, six small mines had divided that stretch of the Comstock Lode, and it had been considered one of the most promising sections. Two of the mines, the Central (No. 1) and the California, had yielded pockets of ore in the first years. After those played out, the mines honeycombed the quartz mass in their upper levels in furious, expensive, and ultimately futile searches for ore. Disappointed, the owners of those six mines slogged along for the next three years, too poor to develop their mines, loath to sell out for less than top-dollar prices, and afraid to sell stock to raise capital for fear of losing control. Murky ownership chains and poorly defined boundaries left over from the chaos of the early days further sapped development energy.

  A January 1867 letter to the Daily Alta California lamented the lack of energy expended in that portion of the lode. “Why is it [that those mines] are today lying idle for want of energy and capital, when there is every indication of untold wealth existing in deeper levels than those thus far obtained? If those Companies . . . would all work in a comprehensive and systematic manner, and sink a large shaft [there is a good chance] that this part of the Comstock would swell the annual shipments of bullion [five] million dollars.” Many Comstockers accused the owners of playing “dog in the manger” with potentially valuable assets they couldn’t or wouldn’t use themselves. A stirring raised expectations in June 1867, when William Sharon and the Bank Ring organized the merger and incorporation of three of those mines—the California, the White & Murphy, and the Dick Sides—into “The Consolidated Virginia Mining Company,” with 1,010 feet and 1,160 shares. The dust settled, and the new corporation did nothing. “Why do [they] not sink a prospecting shaft to the eastward on a line with the new works of the other leading companies?” wondered the frustrated Territorial Enterprise. The mine owned more than a thousand feet “in the heart of the great lead, yet [made] not the slightest move toward its development.”

  The Con. Virginia bestirred itself again to recapitalize a year after its incorporation, raising the number of shares by a factor of ten, to 11,600. The new stock appeared on the market in the last days of May 1868, trading at around ten dollars per share. “Wonder when they will begin sinking a shaft?” asked the Territorial Enterprise.

  Not for nearly another year would the Consolidated Virginia start digging. Starting from a point more than 1,000 feet east of the croppings around the time of the Irish takeover of the Hale & Norcross and the terrible mine fire, the shaft went down roughly on a line with the other second-line shafts—the Ophir’s, the Bonner Shaft of the Gould & Curry, the Savage’s E Street Shaft, and the Fair Shaft at the Hale & Norcross. The Con. Virginia kept sinking, and its stock price kept falling, dipping to two dollars per share in September 1869. The mine suspended work in mid-January 1870 with the shaft 500 feet deep. The owners spent a month debating whether to keep sinking or drift back to the ledge and prospect for ore. They opted to drift for the ledge.

  The Con. Virginia spent the rest of 1870 and all of 1871 searching for ore above 500 feet. Like clockwork, Con. Virginia management released optimistic reports about the progress of their drifts and crosscuts. The mine’s trustees levied assessments every three months, also like clockwork. Con. Virginia’s stock price dipped to $15/8 in early 1871, which valued the entire mine at $18,500. The price crept up from that low, but for much of the year, while the development of the Crown Point/Belcher bonanza vaulted the value of those mines to many millions of dollars, the Con. Virginia was worth less than $100,000. The Consolidated Virginia had expended the better part of two years and well over $150,000 gouging around in the Comstock vein above its 500-foot station without finding anything of value.

  In much the same manner as that in which they’d been attracted to the Hale & Norcross in 1869, Mackay and Fair thought the Con. Virginia wasn’t being properly developed. There was only one way to know for sure, as every miner recognized—dig the mine to the deep levels and find out. As Mackay once told a friend, “There is no law in mining but the point of the pick.”

  Such deep prospecting would swallow immense quantities of expensive and unremunerative dead work, but even though the Consolidated Virginia had never returned a penny of dividends, to John Mackay and James Fair, the mine just seemed like a good mining gamble. When James Flood quietly began scooping up Con. Virginia stock on behalf of the Firm in late 1871, likely after Mackay’s return from Europe and concurrent with the inception of their great water project, the price of Con. Virginia stock fluctuated between $8 and $12.50. It stayed in that range until late December, after which it steadily climbed to $20 on January 10, 1872. The next day, at the Consolidated Mining Company’s annual election, the Firm owned about 75 percent of the company’s stock, and the new slate of officers and trustees reflected their control—James Flood and William O’Brien joined the trustees and James Fair became the mine’s superintendent. Behind them stood John Mackay, who never felt compelled to vest his authority in a formal title. Mackay was always content to let those pass to other men. When all the pieces had fallen into place, the Firm controlled all but 250 feet of the 1,310 feet of the Comstock Lode between the Best & Belcher and the Ophir, and all told, the acquisitions probably cost them just over $100,000.

  The Territorial Enterprise thought the Irishmen had made a good investment. The obstacles were the astronomical cost of deep-level explorations and the high probability of failure. The Firm’s new trustees levied a three-dollar-per-share assessment to finance development. They paid the assessments on the shares they owned from their own pockets, which cost them about another $26,000, but rather than immediately begin mining, Mackay, Fair, Flood, and O’Brien turned their attention to acquiring “all outstanding claims to ground within the company’s lines” and “quieting” the murky title of their new mine. With the help of their lawyers, the Firm worked through the list of original locators and former owners to secure signatures on a comprehensive chain of quitclaim deeds. Mackay knew all the men from the early days. “Clearing title” was an expensive process—everybody had to be paid for their ink, even if years had passed since they’d sold their interests.

  While Mackay, Flood, Fair, and O’Brien attended to that legal grunt work, developments in the Crown Point/Belcher bonanza and what it might portend for the deep levels of the other mines triggered the wildest mining stock excitement since the distant summer of 1863.

  Late in the afternoon of Friday, February 2, 1872, a rumor hit San Francisco’s Montgomery Street that the Savage had made a strike on the fourteen-hundred-foot level—exactly the sort of deep-level development the stock market had been primed to hear. Savage stock skyrocketed from the opening bell of the Saturday morning session amidst scenes of “the wildest confusion.” The booming mine pulled all the other Washoe stocks up behind it. Before Saturday’s closing bell
rang at 3:15 p.m., “heavy buyers” had driven the price of the Savage from around $65 to $165. On Monday, the mine touched $235. Savage had nearly quadrupled in four days. The spectacular rise whipped San Francisco into a lather. All over the city, merchants forgot their wares. Lawyers cast aside clients. Doctors abandoned patients. Women ignored their children and lovers. Everyone frantically chased mining stocks. “Everything goes up and nothing goes down,” said the San Francisco Chronicle in an article titled “Bubble of the Day”—“The mania pervades all classes of society.” Ladies in hotel elevators asked after the Savage. Attempts to console mourners returning from a funeral ended in an inquiry about the closing price of Overman. “Bubble of the Day” joked that the first wail of a newborn babe was for “Succor,” a mine near Silver City, and it included the Consolidated Virginia among its list of mines that had risen dramatically despite “no developments” of note. The “perceived future prospects” of the mines had driven the entire gain. All over the city, the question on everybody’s lips was, “How are stocks?”

  The Mining & Scientific Press and the Territorial Enterprise urged caution. Savage management had resorted to the old dodge of confining the miners who’d made the strike, and no outsiders had been permitted to inspect the new development.

  Dan de Quille of the Territorial Enterprise inspected the Savage discovery on February 7 and thought it looked promising, although he also took care to remind his readers, “What may be ten feet ahead in any direction no man can tell.” A few days later, “The Crown Point interest”—Alvinza Hayward and John Percival Jones—bought between eight thousand and nine thousand shares of Savage, more than half of the mine. Attempting to steer the public clear of mining investments, the San Francisco Chronicle ran a series of exposés detailing the “hogging game” played by the Bank Ring and other mine manipulators. The warnings went unheeded. Unheard, really, amidst the classic Pacific Coast furor for easy-made wealth.