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I. Animals in Los Angeles had “the horse disease” by March 21. By the end of April, the epizootic had swept all of California.
CHAPTER 15
The Big Bonanza
Firefighters pose next to a hand-pumped engine. The high winds that blew through Virginia City could spread flames across the town and doom the mines in a matter of minutes.
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It makes a poor man sick to look at it.
—Unidentified visitor to the Consolidated Virginia Mine, San Francisco Chronicle, December 9, 1874
While in her heart, Louise Mackay hadn’t wanted to be so far from her husband, she hadn’t wanted to leave Europe, either. But John missed his family. Willie was three years old, and while John was in Europe the previous summer, he and Louise had conceived another baby. She was pregnant when she returned to the United States. John knew his wife had no desire to return to Virginia City. Having her and the children in San Francisco seemed a good compromise. She’d be happier in the most civilized city on the Pacific Coast, at some remove from the Comstock’s remembered horrors, and for John, having his family in San Francisco would be an immense improvement on Europe. On January 8, 1874, Mackay paid $31,000 for a three-story house in an upscale but not extravagant part of town at the corner of O’Farrell and Polk streets. Affluent tradesmen, professionals, and their families constituted the majority of the neighborhood. With business affairs likely to bring Mackay down from “above” on a regular basis, and the journey from Virginia City to San Francisco via the Virginia & Truckee and Central Pacific railroads requiring less than a day, the O’Farrell Street house was a solid, conservative purchase in which his family could enjoy the best of San Francisco. It was also by far the biggest house John or Louise Mackay had ever owned or inhabited. She decorated in the ornate French style popular with Americans pressing to expand the footprint of “civilization.”
With the benefit of hindsight, many felt Mackay erred when he bought the house on O’Farrell Street—considering what the future held, Louise wouldn’t find it satisfying—but when John bought it for Louise’s homecoming, it suited the family of a man unsure of the extent of his fortune. Although Con. Virginia developments continued to reveal good ore and good indications, the true dimensions and contents of the ore body remained unplumbed.
Carnage in the national economy rendered the decision to buy a house well within their means even more sensible. In late 1873 and early 1874, banks and railroads were failing across the country. The Mackays had witnessed events firsthand when they passed through New York just a few months before. Trouble had been building among heavily indebted American railroads for a long time. Many lacked the revenue to cover both operating expenses and interest payments. Only new loans kept them afloat. That worked until the ocean of easy credit that had buoyed them up began to evaporate in early 1873. The Coinage Act that returned the United States to a gold standard tightened the money supply. The Bank of England raised interest rates in response to a stock market collapse in Vienna.I Worried European financiers stopped investing in the bonds of rickety American railroads and turned to safer, more stable investments closer to home. Complaints about “tight money” started appearing in the financial columns of American newspapers. Indebted railroads unable to raise money selling bonds turned to short-term bank loans, which rendered them vulnerable to calls. The shoddy railroads also endangered the many banks that had bought their bonds or loaned them money. Among them was Jay Cooke & Company, which staggered under a grotesque load of unsalable Northern Pacific Railroad debt. Cooke & Company’s New York branch failed on September 18, 1873. Panic ensued. Frantic depositors raced to withdraw money from banks all over the city. Treasury actions failed to meaningfully expand the money supply. Stock prices collapsed as pressed banks called loans they’d made to brokers, which forced brokers to toss securities into plummeting markets. On September 20, the New York Stock Exchange halted trading for the first time in its history. A list of thirty-seven failed banking and brokerage firms adorned the front page of the New York Herald the next morning. Markets had calmed and resumed—on much lower prices and smaller volumes—when the Mackays arrived in New York two and a half weeks later, but the Herald still told of “money scared too much by recent events to trust itself [to] another dark hole.” Railroad construction slowed to a crawl. Coal and iron business dwindled. Demand dried up. Output plummeted. Corporate profits evaporated. Bankruptcies and failures swept the land. Real estate values fell. By year’s end, twenty-five major railroads had defaulted. Seventy-one followed suit in 1874. Tens of thousands of America’s new industrial laborers lost their jobs. Many of those who held their jobs had their wages reduced. The crisis dropped the economy of the eastern United States into a depression that would last more than five years and would gradually expand to encompass the Pacific Coast.
The manner in which a new invention derived from mining technology reshaped the desirability of San Francisco real estate also contributed to making the Mackays’ O’Farrell Street home seem like a poor choice. Since the Gold Rush, the city’s most coveted residential real estate had always been in the flat portions of town or on its modest slopes—areas readily accessible by horse-drawn conveyances that women could comfortably perambulate wearing the multilayered, long-hemmed skirts and underskirts Victorian fashion required. Women thus adorned found it almost impossible to negotiate the city’s biggest and steepest hills. In consequence, those held the poor, working-class neighborhoods. Horse-drawn streetcars running on rails provided public transportation through much of the city, but it took four or five horses and copious applications of the lash to get heavy streetcars or wagons up the steep hills, particularly in wet or muddy conditions. If a horse fell, the weight of the streetcars sometimes dragged the whole team backward, including the fallen animal. Horses or mules that broke limbs usually had to be put down, often with a pistol shot administered at the scene of the accident. Watching just such a tragedy unfold on the steep hill on Jackson Street gave engineer Andrew Smith Hallidie an idea. His company made the best wire ropes available. Their use had been standard on Comstock mine hoists for years. A few years before, he’d patented an “endless-wire rope-way,” a long loop of wire rope running over rollers attached to tall poles that transported ores and supplies up, down, or across otherwise inaccessible terrain. (Ski lifts are modern derivatives of the system.) Hallidie thought an adaptation could make San Francisco’s hills more accessible. He tested his idea on Clay Street, which rose 307 feet from the intersection of Clay and Kearney streets to the crest of the hill more than half a mile to the west and then dropped beyond the crest to Leavenworth Street. Hallidie’s workers formed a loop from a 6,600-foot length of wire rope and installed it in a slot beneath two parallel streetcar tracks, one heading west and another coming back east. A thirty-horsepower steam engine in an engine house at Clay and Leavenworth turned the “endless traveling” cable through the loop. Hallidie designed a “grip” that streetcar drivers could clamp onto the underground cable and brakes to slow the car when the driver released the grip. Hallidie tested the system in August 1873 and put his “novel railroad” into regular service in September. A long, detailed article in the Mining & Scientific Press that month described the “peculiar” railroad bringing “a large amount of property that was comparatively worthless on account of the difficulty of access” within an easy and comfortable five- to ten-minute ride of downtown. By mid-1874, the Clay Street Railroad was carrying an average of more than 2,250 passengers per day, and San Francisco’s well-to-do were moving uphill to enjoy the fine views. Nob and Russian hills became the city’s most fashionable residential locations.II
The Mackays missed the change. Nor did they really ever settle into San Francisco. To Louise, the city seemed adolescent and uncouth after Paris, and John wasn’t able to spend as much time in San Francisco as he’d hoped. The demands of the Con. Virginia kept him in Virginia City, underground. That was where he was when the Territorial
Enterprise reported “a new Superintendent” born (not appointed) to the Consolidated Virginia mine. Louise Mackay had delivered their second son in the O’Farrell Street house on April 17, 1874. The Enterprise described her husband as “the happiest man on the Comstock,” going about town trying to find someone “to abuse him, call him names” so that he “might not feel quite so proud of himself.” Louise named the boy Clarence Hungerford Mackay. The Enterprise quoted Mackay as saying that his new son “must not expect to take charge of a mine at once.” Mackay wanted “the young gentleman” to first “serve his time as a pick boy . . . to familiarize himself with the rudiments” before ascending to the superintendency. A month later, the newspaper described John Mackay returning from a visit to his new son, “looking as fresh and fine as though he had breakfasted, dined, and lunched upon roses.”
The most intimate portrait of the Mackay family during the San Francisco years survived through the memory of Alexander O’Grady, whose mother Alice had entered the Mackay family’s service in early 1871 as Willie’s nurse. Alexander was the same age as Willie, but Alice had left Alexander with a friend and made the trip to Europe with Louise, Eva, and Willie, where she’d spent two and half years. Upon return, Alice took up residence with the Mackays on O’Farrell Street, and her son returned to her care. Alexander O’Grady and Willie Mackay became fast friends. Years later, Alexander recalled John Mackay often down from Virginia City, and he remembered several reciprocal visits to the Comstock he and his mother took with Louise, Eva, Willie, and Clarrie—as everyone in the family called Clarence. Alexander O’Grady remembered Louise as a small, charming, and plumpish woman with a gentle voice, dark hair, beautiful dark blue eyes, and a pleasant wit. John Mackay had drier humor and an inclination to playfully tease. During one of his visits to San Francisco, John Mackay was watching Alexander and Willie play croquet in the back garden of the O’Farrell Street house when Willie did something that miffed his father. John lifted Willie over his knee to administer a few gentle swats with the silver-tipped rattan cane he often carried (the only rich man’s affectation John Mackay ever adopted). Appalled, little Alexander rushed to defend his friend. He hit Mackay square in the face with his croquet mallet, blacking the miner’s eye. Mackay caught the boy’s arm in his inescapable grip and dragged him to his mother. “Alice!” he stuttered—Mackay always stuttered when agitated—“If you d-don’t take this d-d-damned brat out for a drive, I’ll kill him!”
Alice O’Grady did as asked. Alexander remembered Mackay’s temper as “quick, but quickly over,” and the incident was soon forgiven. For the rest of his life, Alexander thought he’d risen in Mr. Mackay’s esteem because of how he’d sprung to a friend’s defense when he was four or five years old. On his own way up, John Mackay had often had to ball his fists and fight to hold his place in the world.
Aside from the joy of Clarrie’s birth, John Mackay had other reasons to be happy in 1874, for the tide of Comstock events was running strongly in his favor. Midway through Louise’s pregnancy, in December 1873, Mackay and James Flood had overseen the combination of the 600-foot stretch of ground between the Con. Virginia shaft and the Ophir into the “new” California mine. The reorganization divided the 1,310 feet of the Comstock Lode between the Best & Belcher and the Ophir into the 710-foot Consolidated Virginia and the 600-foot “new” California mine. Every share of the Con. Virginia received seven-twelfths of a share of the “new” mine in compensation for the 350 feet of ground they contributed to it. The Con. Virginia shaft sat just a few feet south of the boundary, and the Firm owned the lion’s share of both mines.
Con. Virginia bullion returns put the mine on a paying basis. One thousand and forty feet east of the existing shaft, the Con. Virginia and the California mines began sinking a joint venture, the “Consolidated & California” shaft (invariably described as the “C&C shaft”). Mackay and Fair envisioned using it to explore the Comstock vein below 2,000 feet, deeper than anyone had ever attempted, without having to resort to the inefficiencies and complications of working through an incline, while also accessing the Con. Virginia ore body from the east, opposite the Con. Virginia’s existing shaft, via connections that would improve ventilation and cool the mine. The C&C shaft was the first of the Comstock’s “third-line shafts,” and they outfitted it with larger, more powerful machinery and a more efficient system than any mine shaft in the country—and probably the world.
While the C&C shaft went down, Mackay and Fair continued prospecting the Con. Virginia through the existing shaft. The ore body revealed itself slowly, at the pace of excavation, about four feet per day. Mackay and Fair’s miners upraising from the 1,167-foot level found the caprock of the ore body just 57 feet above where they’d encountered the cross-fissure. Any shallower than that, and they’d have missed the ore body entirely. Other miners sank the shaft and winze deeper. On the level of the strike, Mackay and Fair had prospected the pay ore as trending from southwest to northeast over a distance of nearly 200 feet and ranging in width from 30 to 50 feet. The ore body 100 feet deeper was almost twice as long and twice as wide. Con. Virginia miners opened a 1,400-foot shaft station before the end of February 1874. What few reports escaped the mine told of drifts and crosscuts at 1,400 feet as “opening out splendidly,” “of a very favorable character,” and looking “better and better.” All the miners noted the ore improving with added depth. The character of the rock had changed, too—normal “bright” and “lively” Comstock ore began replacing the odd-looking dead stuff that had confounded Mackay’s judgment of the shallower levels. By 1,400 feet, the dull, “dead” appearance of the ore vanished entirely. The Comstock’s familiar crystallization ran through the ore and quartz, and occasional bright sulphurets sparkled in the matrix. The ore was also very, very rich. Three weeks into April 1874, Con. Virginia crews started building a shaft station at 1,500 feet. The Firm had all its mills crushing at capacity, and on April 23, 1874, six days after the birth of John Mackay’s son Clarence, the Gold Hill Daily News described the prospects of the Consolidated Virginia as growing brighter every day. Bullion returns for the month of April 1874 footed up to around $400,000.
The Con. Virginia paid its first dividend in May, three dollars per share on its 108,000 shares, distributing a total of $324,000. That sum repaid every penny of the assessment money the mine had absorbed since the Firm’s January 1872 takeover. The June dividend likely covered the entirety of the Firm’s investment. Explorations at 1,400 feet revealed the ore body still widening and compared to 100 feet shallower, the ore body had doubled in length. Those developments made it seem as though John Mackay and his partners might have something to rival the Crown Point and the Belcher. In the last two and a half years, those mines had raised $35 million worth of gold and silver. Even though the Belcher alone was outproducing the entire states of Utah and Colorado, developments on the 1,500-foot level of the Consolidated Virginia would soon throw every other mine in the world into the deepest shade.
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Miners, carpenters, and timbermen finished the Con. Virginia’s 1,500-foot station. To speed and ease the work, Mackay and Fair installed one of Burleigh’s new air compressors on the surface and piped compressed air down the shaft and through the drifts to power four drills and two small hoisting engines. The new pneumatic tools did double duty. Not only did they accelerate the work, but their exhaust of compressed air helped ventilate the mine. (They worked so well that within four months the Con. Virginia had five Burleigh air compressors lined up on the surface and pneumatic drills and hoists employed throughout the mine.) Mackay and Fair also supervised the fabrication and installation of the Comstock’s first triple-decker safety cage in one of the shaft’s hoisting compartments. The advances helped raise output to around three hundred tons per day. They could have raised more, but there was no sense in doing so until they could increase their milling capacity.
To that end, Mackay and Fair had started building a gigantic sixty-stamp steam-powered mill on F Stre
et, just downhill from the Con. Virginia shaft house. They’d bought all the lots in the area and had two hundred men at work on the new mill. Only Virginia City’s new water system made it possible, let alone economically feasible, to operate such an enormous mill within city limits. As an added benefit, the “soft” Sierra water, less impregnated with minerals than the “hard” local variety, required less than a quarter of the boiler maintenance. The Firm would still have to spend a small fortune paying William Sharon’s Virginia & Truckee Railroad to bring fuel uphill to the mill, but they wouldn’t have to pay the railroad the large fortune required to haul tens of thousands of tons of ore to distant mills.
Few pieces of 1,500-foot-level news escaped the mine in the summer and fall of 1874. The first report that the Con. Virginia was into something of an entirely different magnitude came when the Gold Hill News got an opportunity to inspect a 1,550-foot-level drift coming over from the Gould & Curry in the first week of November. Miners had pushed the 1,550-foot drift 110 feet into a mass of rich sulphuret ore beneath the deepest Con. Virginia workings. The reporter emerged shaken. “The sides and face of the drift being one glittering mass of sulphurets mixed with the richest character of chlorides,” it seemed “almost useless” to attempt a fair description of the ore, he wrote. He’d watched the miners charge half a dozen bore holes in the drift face with dynamite. The show of precious metals in the drift face after each blast was enough to cause “a miser to weep with joy.” The best specimens were “almost solid masses of silver.”
The Bonanza King Page 41