The Crown Point and the Belcher accelerated the stock frenzy when they declared fifteen-dollar-per-share dividends for March. The Belcher kept upping production despite problems with the mule that had been sent down to help Mary Jane Simpson and Old Pete. The animal became increasingly obstinate and lazy until she refused work altogether. She had “made a strike, as it were, all by herself,” joked the Gold Hill Daily News. In early March, a foreman hauled her out and lowered a replacement, also a female. Likely reflecting his views on the contentious topic of women’s suffrage, a foreman named her “Susan B. Anthony.”
Further complicating the relationship between the Belcher and Crown Point interests, both William Sharon and John Percival Jones declared their intention to campaign for Nevada’s senatorial seat against James Nye, the former territorial governor who’d served in the U.S. Senate for the past eight years. Since the only voters for the United States Senate were members of the Nevada State Legislature, Nye’s years of honorable service couldn’t compete with the deep pockets of the mining magnates. He stepped aside. The campaign became a contest between two of the three richest men in Nevada for admittance to the world’s most exclusive club—and Adolph Sutro, who also declared for the seat.
Political yowlings didn’t check the booming market. Virginia City reflected the excitements in both mining and stocks, with thronged streets and sidewalks, crammed hotels, and boardinghouses full to overflowing. “Even in its palmiest days Virginia never presented a more lively appearance than at the present time,” crowed the Enterprise.
The Savage peaked on April 25 on the release of information that the ore body it shared with the Hale & Norcross was “next in magnitude” to that found in the Crown Point and the Belcher. Those two regal mines sold for around $1,500 per share that day, which valued the Crown Point at a gobsmacking $30,000 per foot. Eighteen months before, nobody had wanted anything to do with either mine.
In its “Local Mining Summary for the Week Ending April 27, 1872,” the Gold Hill Daily News declared: “The fact is this; the leading mines are not priced at all above their merits.” Hundreds of miners, laborers, boardinghouse keepers, and even servant girls who’d had the courage to wager their small earnings early in the year discovered themselves financially independent. The most savvy had “realized the hard cash.” The Crown Point declared a forty-dollar-per-share dividend for May, $800 per foot, “the largest dividend ever paid by any mine in the world.” Recent developments in the lower levels of the Savage and Hale & Norcross seemed to promise a Virginia City counterpart to Gold Hill’s deep bonanza. The fountains of optimism boiling up from the Comstock mines gave the Gold Hill Daily News the confidence to assure readers of its “Local Mining Summary” for the week ending Saturday, May 4, that there was “no particular danger of any sudden crash or panic in stocks.”
The News would soon regret that statement.
“A sort of panic” hit San Francisco’s Stock & Exchange Board on Tuesday morning, May 7. Prices plummeted. The Gould & Curry, the Yellow Jacket, and the Chollar-Potosi led the declines. Wild, sensational reports that gouged right to the core of the Comstock Lode’s most festering wound broke after the Tuesday close: They claimed proof that the 1869 fire in the Crown Point, Kentuck, and Yellow Jacket had been deliberately set. The most volatile rumors called the fire a stock-bearing operation orchestrated by John Percival Jones to drive down the price of the stock. Jones had been the Crown Point’s superintendent at the time of the fire.
According to Jones, it was a framing operation cooked up by William Sharon and some shady associates. Sharon’s version told how he’d been approached four or five months before by a man claiming to have proof that Jones had started the fire. He repudiated “all other motives” besides “a desire to sift to the bottom” of what, “if true, was a great crime and to do no more than was his duty to do in justice to the public.” The Chronicle’s issue sold so widely the newspaper had to print a second edition of five thousand extra copies, which were also “eagerly bought up.”
Roiled by the “sensational account,” the Wednesday stock market again “showed an appearance of panic,” which ruined hundreds of men—and not a small number of “mud hens,” too, as female plungers were known. To the San Francisco Chronicle, “the pallid faces, quivering lips, and muttered curses” on California and Montgomery streets “told the tale more plainly than words.”
Some scorched speculators believed the mine-fire accusations were “a put-up job between Sharon and Jones to bear the stock market.” The Chronicle’s same Wednesday article that aired the scandalous accusations blamed the stock market drop on the Sharon-Jones feud and the explosive rumors, either deliberately sensationalizing or not being careful enough to notice that the precipitous drop had started at the beginning of the Tuesday session, many hours before the rumors hit the public at 5:00 p.m., and that the value of Savage, Hale & Norcross, and Chollar-Potosi stock had leaked away about 20 percent of their value since April 25, a clear indication of faltering confidence.
“Above,” in Gold Hill, the panic dominated conversation. In the eyes of the Gold Hill News, the crash was “dead set” against “one heavy operator, who has obtained control of several of the leading mines”—implying that Alvinza Hayward was being bear-attacked by William Sharon. If Sharon did attempt such a maneuver, it was one singularly damaging to his own interests, for mines controlled by William Sharon suffered the largest percentage declines on “Bomber Tuesday” and “Black Wednesday.”
Cursory investigations exposed the spurious nature of the mine fire accusations. The man who’d made them had been fired by the very foreman he accused of helping Jones set the fire. Jones scraped through without damage. William Sharon wasn’t so fortunate. Every observer and commentator with the notable exception of the Gold Hill News believed Sharon had encouraged the aspersions against Jones in the hope of political advantage. The Territorial Enterprise latched on to that belief like a bulldog onto a bear. “The devilish story is a fabrication from end to end,” it bellowed, predicting that it would “recoil upon the head of him who gave it shape and utterance.”
Through the subsequent fortnight, a day or two of hopeful stability alternated with painful market “earthquakes,” “heavy falls,” “market slaughters,” and “steep declines.” The Chronicle thought stock prices had dropped to “hell” in the morning session of Wednesday, May 15, “hell-er” during the afternoon session, and “the lowermost depths of the infernal region” after yet another agonizing fall on Thursday, May 16. They hadn’t. The market’s Culloden, its final massacre, came after the weekend, on Monday, May 20, when it “lost bottom altogether.” The fall dropped many lesser mines out of the market entirely. In the Chronicle’s florid description, the wrecks of ruined speculators were “strewn along the strand of California and Montgomery streets,” their hulks “dismasted, dismantled, shattered” by the “hurricane of low prices and vanished margins.” Fortunes had been annihilated. A funereal gloom hung over San Francisco’s financial district. People trudged about with pale, haggard faces. Speculators didn’t know it, but stocks had finally hit bedrock. From their April highs, most Comstock mines lost between 65 and 80 percent of their value. The Chronicle called the decline “the heaviest ever known in the San Francisco Stock Market.” John Mackay’s Consolidated Virginia holdings shriveled along with the rest. The mine fell from $120 to $30. An even 75 percent of its value evaporated.
The San Francisco Chronicle was obsessed with uncovering the machinations, manipulations, and backstage conspiracies that had supposedly provoked the market’s rise and fall and congratulated itself for “discovering hidden motives and in tracing up cause and effect.” The paper credited the “wild furore” to the Savage more than any other mine and characterized Jones and Hayward as “the Great Bulls” who’d sparked the boom, and labeled William Sharon “the Great Bear” trying to tear them down. The Chronicle took Sharon to task for refusing to “support” the values of “his” mines, implying that Sha
ron had somehow done wrong by refusing to buy shares of “his” mines offered for sale at inflated prices, and for throwing blocs of stock on the market at high prices. In essence, the newspaper blamed William Sharon for being a savvy speculator.
The Chronicle reporter who interviewed Sharon noted his modest black suit and perfectly coifed brown hair and asked him why the market had collapsed. “Well, sir,” Sharon answered, “it’s all comprised in a nutshell. When you blow up a bubble beyond its capacity, it’s pretty sure to burst, ain’t it? . . . They accuse me of pricking the bubble. That’s not so. The overstrained concern wouldn’t hold any more wind; that’s all.”
Sharon took the blame for destroying the hoped-for fortunes of thousands of hardworking men and women he’d somehow duped into risking their savings on mining shares. The Territorial Enterprise took after Sharon with a hatchet. On the last day of May, Goodman described Sharon’s career in Nevada as one of “merciless rapacity,” and accused him of being fastened “upon the vitals of the State like a hyena,” of robbing stockholders “with an unscrupulousness that would have shamed a highwayman,” and of converting the Bank of California from “an institution that should have been a public aid and blessing into an instrument of tyranny.”
In contrast to Sharon, the evil monopolist feasting on the lifeblood of State, the Enterprise hailed Jones as “the Commoner” sympathetic to the woes of Nevada’s laboring men, a patently ridiculous assertion considering that Jones was the third-richest man in the state, behind only Sharon and Alvinza Hayward. Sharon didn’t possess the easy charisma, bonhomie, rude good humor, or political experience of Jones, however, and the characterizations stuck. Sharon the Monopolist versus Jones the Commoner. In mid-August, Sharon withdrew from the Senate race, citing ill health. The following January, the Nevada State Legislature sent John Percival Jones to the United States Senate, where he would serve for the next thirty years and earn a reputation as the most entertaining storyteller in the Senate. Adolph Sutro didn’t garner a single vote.
He had, however, managed to raise more than $1 million selling tunnel stock through the efforts of a mine promoter in London. The man’s diligent and effective efforts might have had something to do with Sutro’s gifting him one share of tunnel stock for every four he sold. The money rejuvenated progress on the Sutro Tunnel. By the end of 1871, Sutro had three to four hundred men at work on his “big dig.” Six months later, in June 1872, the Tunnel was in 2,933 feet from its entrance in the Carson River Valley. While great events were happening beneath Virginia City and Gold Hill, more than 17,500 feet still separated Sutro’s tunnel face from the Comstock Lode.
• • •
During the great stock excitement, while James Flood and William O’Brien led the effort to clear the title and acquire the small interests near the Con. Virginia ground that remained beyond the Firm’s control, Mackay and Fair considered the various options for prospecting their new mine. The Firm’s fondest hope was finding enough low-grade ore in the upper levels of the Con. Virginia to finance deep-level explorations, much as they’d developed the Hale & Norcross after their 1869 takeover. That was straightforward prospecting, but it wasn’t likely to reveal the sort of bonanza that had motivated their purchase of the mine. The Crown Point’s deep bonanza had been struck lying against the footwall 1,100 feet below the surface. If they were to find something similar, Mackay and Fair judged it most likely they’d find it against the Con. Virginia’s footwall at like depth. They considered sinking the Con. Virginia’s existing shaft below one thousand feet and crosscutting back to the ledge. That was the least complicated option, because they’d control every aspect of the operation, but also the most expensive. North of the Con. Virginia, the Ophir was driving a long crosscut west from their shaft’s 1,100-foot station. If the Firm bore half of the costs of operating the Ophir shaft, they could drift south into Con. Virginia ground from a point on that crosscut. They also weighed the idea of waiting until the Ophir shaft descended another 200 feet and drifting south at even greater depth. Eventually, the two veteran miners decided to attack the deep levels of the Con. Virginia from the south. From the Gould & Curry’s 1,167-foot level, they’d drift across the entire 224-foot width of the Best & Belcher and then explore Con. Virginia ground. (The Best & Belcher should not be confused with the Belcher adjacent to the Crown Point on the Gold Hill end of the lode.)
William Sharon controlled both the Gould & Curry and the Best & Belcher, and he was delighted to grant Mackay and Fair use of the Gould & Curry shaft—provided they paid, of course. “I’ll help those Irishmen lose some of their Hale & Norcross money,” he sneered.
Besides, the Irish drift might find ore in Best & Belcher ground, which Sharon controlled.
With a satisfactory shared-use arrangement secured, Consolidated Virginia work crews started digging north from the end of the Gould & Curry’s 1,167-foot drift around May 1, 1872. They had made an excellent choice. Any of the other options Mackay and Fair mooted would have missed what was, by an immense margin, the Comstock’s most valuable ore body, the one that would decide victory in the struggle to control the Comstock Lode.
* * *
I. The mine paid its last dividend in the spring of 1872.
CHAPTER 14
The Strike
The Consolidated Virginia hoisting works.
* * *
The rise in Consolidated Virginia was the feature of the week; the reports of ore are of the very best character.
—Mining & Scientific Press, March 22, 1873
* * *
Either C. V. is a good mine or a big bilk—with chances favoring the later proposition.
—San Francisco Chronicle, March 23, 1873
Wanting to be on hand for Eva’s operation, Mackay left James Fair in charge of the Consolidated Virginia in the spring of 1872 and went to Paris. Although they’d corresponded by both letter and brutally expensive telegram, Mackay enjoyed discovering firsthand that his family had thrived during the eight or nine months he was in the mines. As planned, Louise had taken everyone to winter on the French Riviera, a marvelous experience. To twenty-eight-year-old Louise, Europe seemed to possess everything coarse Nevada did not—culture, refinement, old world grandeur, and a sophisticated, luxurious existence she’d never experienced. Just five years before, she’d been a widow doing other people’s sewing. Eva survived the operation in Paris and recovered quickly. Unfortunately, the procedure was only a partial success. Although perhaps slightly improved, the poor child still limped, and the doctor said she would forever. He also informed them that any further procedures would only cause needless suffering. That hit John and Louise as a substantial blow, but Mackay reiterated his promise to do everything in his power to fill Eva’s life with happiness. He also warned his wife that prospecting the Consolidated Virginia could easily consume all the money he and his partners had raised from the Hale & Norcross. She asked what they’d do if it did.
“We’ll go broke and start over,” Mackay said.
Considering the penurious years Louise had endured before their marriage, she must have found the prospect terrifying.
• • •
While Mackay was in Europe, James Fair began exploring the Con. Virginia’s 500-foot level and running the 1,167-foot level drift north, aided by Superintendent Sam Curtis, a gold rusher like Mackay and Fair and a veteran of the Comstock’s early days who’d superintended a number of other mines. They pushed the work around the clock on the 1,167-foot level, drifting north in the country rock east of the Comstock’s hanging wall, which experience had taught them was better ground for running a long drift. Making just over four feet of progress per day, it took them about sixty days to dig across the mine’s 224-foot width. To William Sharon’s chagrin, the Irish drift revealed no ore in the Best & Belcher, nor any promising indications. The drift likely crossed the Con. Virginia line in the last week of June. James Flood handled the San Francisco end of the Firm’s affairs. He’d orchestrated a Con. Virginia recapital
ization that increased the number of shares from 11,600 to 23,600.
Once inside Con. Virginia ground, Fair turned the drift northwest, angling to close the distance to the Comstock’s hanging wall. Like Mackay, Fair believed a mine owner’s place was underground. He spent much of his time supervising the slow, hard, tedious work at the sweltering, candlelit face of the 1,167-foot-level drift, among the miners pounding hammers onto handheld chisels, giving a chisel a small twist with each blow, either single-jacking, with one man handling both hammer and chisel, or using the faster but more dangerous double-jacking technique with one man holding the chisel while another swung a heavier sledge. They bored out one- to two-foot-deep holes of sufficient diameter to admit charges of Giant Powder. Through softer rock or after a blast, the men hacked at the drift face with the points of their picks or pried at loose rock with gadding bars, shoveling waste into ore cars that went back to the Bonner Shaft on wooden tracks laid on the drift floor and then up to the surface for disposal. The heat increased and the quality of the air fell. The lack of information released from the mine frustrated the local newshounds. “The management . . . are rather reticent as to actual developments,” lamented the Gold Hill Daily News—a sentiment which it, the San Francisco Chronicle, and other newssheets would express repeatedly through the next year and a half.
While Con. Virginia miners “steadily prosecuted” the drift on the 1,167-foot level, 650 feet closer to the surface and a like distance to the west (farther up Mount Davidson and shallower in the east-dipping vein), other crews systematically prospected the Con. Virginia’s slice of the lode above the 500-foot level, and although local mining news occasionally reported favorable indications, nothing developed into a profitable ore mass. That threw the cost of prospecting the deep levels onto the assessments levied on the stockholders, and since the Firm owned around 75 percent of the stock, the Firm had paid and would pay around three-quarters of all assessment money. Similar futility haunted the 1,167-foot drift, which developed “nothing new.” No special insight was needed to see the truth of what Mackay had told his wife—exploring the Con. Virginia could swallow everything they’d raised from the Hale & Norcross. Despite tremendous quantities of the promotional puffery, no mine had made a truly significant strike since the Crown Point discovery almost two years before. William Sharon thought the four Irishmen were making the cardinal financial error of throwing good money after bad. He’d taken to calling them “the joke of the Comstock.”
The Bonanza King Page 38