The Bonanza King

by Gregory Crouch

  “No, thank you,” Mackay said. “Not a thing. That’s the trouble.” Mackay told Drury that he’d been playing poker at the Washoe Club the night before and playing well, backed by a run of luck. He opened on three aces with the man to his left “betting like a cyclone” and others behind him raising hard and fast. Mackay stayed with the flurry of heavy betting and drew his fourth ace. He had a “lock,” a certain winner.

  Instead of the thrill of impending victory, a chilling thought hit Mackay—“What of it?” It wouldn’t make a shred of difference if he won “every cent in sight.”

  Mackay showed down his aces and stood up. “Leave me out, boys,” he said. “I’m through.” He walked away without collecting his winnings.

  “I’ve lost the taste for poker entirely,” he told another friend later, “and candidly,” he added, “I miss it.”

  When a consortium of other mine owners suggested that the surplus of laboring men coming west to escape the eastern depression gave them an opportunity to push miners’ wages down to $3.50 per day, Mackay opposed them. “I always got $4 a day when I worked in these mines,” he said, “and when I can’t pay that I’ll go out of business.”

  One of the other owners complained that the men weren’t worth four dollars per day.

  “Worth it!” Mackay exploded. “Worth it? Why, man, it’s worth $4 a day to ride up and down on that wire string!” Unsaid, but surely obvious to every man present was the fact that Mackay had taken that ride many hundreds of times more than anyone else in the room. Beyond a thousand feet, the long steel cables had developed a gentle springing action, which only added to the terrors of the descent.

  Wages stayed at four dollars a day.

  In the Comstock lexicon, the idea that an event, item, or person was of high quality was contained in the expression, “It’s a John Mackay!”

  • • •

  By the end of 1876, the Firm had doubled the paid-in capital of the Nevada Bank, making it the best-capitalized bank in the country. As well as things were going, with each bonanza mine paying more than a million dollars of dividends a month, Mackay and the Firm faced constant criticism, much of it fueled by the alliance of Charles de Young, owner and editor of the San Francisco Chronicle, and Squire Dewey, a stockbroker and speculator who’d fronted the bear raids on the two bonanza mines in the first half of 1876. Charles de Young had bought high-priced bonanza stocks during the winter boom of 1874–75 and watched his speculation dwindle in the aftermath. De Young asked the Bonanza Firm to make his losses good. They refused, and De Young started slashing with his pen. Dewey’s antagonism sprang from a similar cause. He’d made money in San Francisco real estate during the Gold Rush decade and been among the original incorporators of the Ophir in April 1860 (and had slyly used his insider knowledge to sell when he learned that the Ophir’s original bonanza showed evidence of pinching out). In the middle 1870s, he was a stock speculator who felt entitled to insider information.

  In the aftermath of the great fire, Dewey had inquired after the amount of money in the Con. Virginia treasury and been given the answer in cash terms—the exact answer he’d sought. Dewey decided the mine didn’t have enough money to both replace the hoisting works and continue paying dividends, so he sold his stock. Dewey, however, had not asked after the amount of bullion in the treasury. The mint stamped that large quantity into coin, which provided a sum more than adequate to replace the works and continue the dividends. The stock price recovered quickly. Dewey lost $50,000, $52,000, or $70,000 on the speculation, depending on which of his own statements a person wanted to believe. Dewey thought Flood had intentionally deceived him, and like De Young, he wanted the Firm to make good his losses. They refused. Dewey had hounded the Firm for dishonest and incompetent management ever since. Dewey gained the ear of an English stockholder who many San Franciscans believed was also a member of the British Parliament. The two attended the Con. Virginia’s annual meeting in January 1877 intent on stirring up trouble.

  Dewey, noted for his “self-importance” and “pompous manner,” demanded a more accurate prognostication of future events from the mine managers.

  Which Mackay refused to give. “It is simply impossible . . . to tell two or three days or a week ahead what the mine may develop,” he said. “Events are constantly happening to upset our calculations.” Caves, bad air, rock quality, and a host of other factors were simply unknowable in advance.

  Dewey and the Englishman kept up their attacks.

  Mackay and Flood lost their Irish tempers.

  Mackay told the Englishman that he knew nothing about running an American mine. If they could run the Con. Virginia any better than he was doing, Mackay “wished to the Lord” they would come up to Virginia City and try.

  The Englishman called the mine management “outrageous and infamous” and accused management of working the mine in their own interests.

  Mackay thought his honesty was being impugned.

  Heated discussions continued. Dewey proposed an alternative slate of trustees. Two of the proposed men immediately asked that their names be withdrawn, saying they’d been put forward without their knowledge. One of them “did not think the interest of the stockholders could be in more competent hands than at present.” The Firm’s ticket won reelection in a landslide of the shares present, 483,000 to 32,500. (The mine had 540,000 shares at that time, and 515,500 of them voted.)

  The Mackay-Dewey dispute continued as the meeting broke up. Mackay invited Dewey to come up and examine the mine, coupling his invitation to what the Chronicle described as “some insinuation that the knowledge of the Comstock at present in possession of Dewey was of a rather thin and unsubstantial character.” (One would be justified in supposing Mackay used plainer and stronger language.)

  Dewey countered that Mackay had worked for him when he’d been running the Ophir in 1860, and back then, Mackay hadn’t been “worth a red cent.”

  The Chronicle’s account gave the impression that the two men had to be physically separated, and it savaged Mackay personally, calling him a “bulldozer”—a grievous insult in the context of the middle 1870s that referred to white southern reactionaries who rigged elections by terrorizing blacks who dared to exercise their franchise with lynching, church and cross burning, flogging, rape, and murder (the piece of construction machinery familiar to moderns wouldn’t be invented for decades). The paper called Mackay a “scrub . . . raised from nothing” who had attained nothing but “dirty purse pride.”

  The Daily Alta California sprang to Mackay’s defense: “We believe that no other of the great millionaires of our time is so noted as Mr. Mackay for conduct so inconsistent with purse-pride.”

  Dewey had his revenge. He published pamphlets and filed lawsuits that haunted the Firm for the next five years. Several months later, the Englishman accepted Mackay’s invitation and brought his own expert to examine the Con. Virginia. They left satisfied. “So explodes another Chronicle canard,” said the Stock Report.

  The Chronicle’s abuse would worsen with the publication of many articles along the lines of the one headlined “The Bonanza Kings. Their Splendor Throned on Human Misery. Rolling in Wealth Wrung from Ruined Thousands. California and Nevada Impoverished to Enrich Four Men. Plain History of Swindling Perpetrated on a Gigantic Scale. Colossal Money Power That Menaces Pacific Coast Prosperity.”

  The relentless criticism wore on Mackay. He grew even more reticent. The correspondent of a St. Louis newspaper noted his “great disinclination to any notoriety, never appearing in the newspapers when he can avoid it.”

  In March 1877, Mackay opened the Con. Virginia’s 1,650-foot level. The first crosscuts went through phenomenal ore. Comstockers and San Franciscans rejoiced. Unbeknownst to everybody, mere accident had sent those crosscuts through the richest and widest parts of the whole level. Further explorations revealed the ore body shrinking in all dimensions. They also discovered why they’d found the Big Bonanza in such a strange place—it had formed in a subfis
sure bubbling up vertically from the Comstock’s east-dipping hanging wall. Enormous quantities of valuable ore remained in the two bonanza mines, enough to keep them producing for years, but the bottom of the great bonanza had come into view. For the Comstock Lode, the great question became: Was there another?

  Mackay left Virginia City for France in May. Three months later, Mackay wrote a letter from Trouville, a fishing village on the Normandy coast, where he was relaxing with his family. He returned on October 3, after an absence of five months. In November, a strike on the nineteen-hundred-foot level of the Ophir caused a flutter. Prospecting the strike involved Mackay, but he missed out on a much greater excitement his wife generated in Paris.

  Former president Grant spent most of November in Paris, having recently begun a much-publicized world tour. Louise got the general’s permission to throw him a party, likely because of her husband’s staunch Republican sentiments, ability to deliver a state, and because General Grant held stock in the Consolidated Virginia Mine. The dividends were financing his world tour.

  Louise Mackay threw herself into a whirlwind of preparations, recognizing that desire to attend an opulent party honoring the world’s most famous American would allow European aristocrats to overcome the malodor of American wealth and accept Louise’s invitation. Louise spared no extravagance. She asked Parisian authorities if she could decorate and light the Arc de Triomphe for the party. They refused her request. Disappointed, Louise joked that she’d just “buy their old arch.” Americans admired her panache. Frenchmen didn’t find the comment so amusing.

  Under Louise’s direction, workmen swarmed over 9 Rue de Tilsitt making preparations. The party dominated nonpolitical conversations in the French capital, promising a spectacle the likes of which Parisian society had seldom seen. The evening began quietly, with an intimate dinner for twenty-four that included General and Mrs. Grant, the Mackay and Hungerford families, and officials of the American legation and their families. Louise presented each guest with the menu engraved on small silver tablettes, presumably on metal mined from the Consolidated Virginia.

  The true pageant started after dinner, around 11:00 p.m., when Louise’s three hundred guests began arriving for her “grand reception and ball.” Louise had festooned 9 Rue de Tilsitt with national flags and set “thousands of gas jets” to brilliantly illuminate the facade, garden, and temporary dance pavilion into a “fairyland.” Music played by an orchestra of thirty-six musicians wafted from the pavilion. Light from inside the house streamed out through colored curtains. Two enormous eagles stood beside the entry outlined in burning gas jets, one symbolizing France, the other the United States, with E Pluribus Unum written in fire across the breasts of both birds.

  Crowds of idlers gathered outside, pushing and surging to catch a glimpse of the arrivals. The exclamations of swells competed with the voices of policemen diverting and directing traffic. The hooves of splendid teams pulling gorgeous carriages clip-clopped on the cobblestones of the causeway in front, as Paris coachmen not quite as profane as Comstock teamsters nosed their animals through the ranks of onlookers to the entryway, where a dozen footmen in crimson and gold livery holding halberds and rapiers waited on their arrivals. In unison, the footmen cracked the butts of their halberds on the stones as each new guest stepped down from the carriages.

  Just inside, Louise Mackay, now age thirty-two, all “dark hair,” charm, and “youthful appearance,” wore blue satin decorated with silver flowers and introduced her guests to General and Mrs. Grant, putting everybody at ease switching between four languages, having added facility with Italian to her repertoire. Beyond the receiving line, Louise had decorated every vestibule, staircase, bedroom, bathroom, and all of her hallways with an astonishing profusion of flowers. The wines, champagnes, and liquors everywhere at hand were the best that the largest monthly income in the world could procure. In the smoking rooms, opalescent abalone shells from the California coast held top-quality cigars. Outside, in the pavilion, “an abundance of jewels” sparkled on a sea of dancers. A New York Herald correspondent described Louise’s ornamentation of her magnificent home as “everything that money could supply and elegant taste select.”

  Among Louise’s honored guests were the Marquis and Marquise de Lafayette, at least three dukes and duchesses, five counts and countesses, three barons and baronesses, and a pair of viscounts, along with many pillars of European political, aristocratic, and intellectual society. Dancing continued until four o’clock in the morning, although General Grant had the good sense to quietly sound his retreat many hours before. The Herald’s reporter remarked on the “extraordinary taste, elegance, and richness” of the costumes worn by the “beautiful women” who represented the American colony.

  The transatlantic telegraph cable conveyed the story to the other side of the Atlantic, and the Herald published an exquisite account of the “great sensational event” the next day. The New York World’s reporter—also on scene—described it as “a social aurora borealis” under the headline, “Paris Astonished.” The Chicago Daily-Tribune told of Louise Mackay “playing hostess to ‘the American hero,’ ” and sitting “cheek by jowl with the bluest blood in France.” Newspapers all over the country ran with the story of “widely ambitious and delightfully extravagant” Louise Mackay. History doesn’t record the reactions of New York’s upper-crust Yankee Protestant ladies outshone by the Comstock’s little Catholic seamstress.

  • • •

  The General Grant fete gave Louise entrée into the upper echelons of European society, the first rich American woman to gain such access. Although most subsequent historians and commentators enamored of the whisky and gunsmoke glories of the Old West would “blame” Louise’s social ambitions for the family’s Parisian residence, the long separations from his family it forced Mackay to endure, and the long absences of John Mackay suffered by the Comstock, Mackay likely supported the arrangement entirely. It could well have been his idea, and it was certainly a decision he and his wife made together. With the exception of one five-month visit to France in the summer of 1878 around the Paris Exposition, John Mackay seems to have spent the entirety of next three years in the American West, focused on extracting the Big Bonanza and prospecting the deep levels of the Comstock. (Mackay received much acclaim for funding the Pacific Coast mineral display at the Paris Exposition out of his own pocket, the “pièce de résistance” of the presentation being the Mackay family’s fifteen-hundred-piece silver service made from half a ton of Con. Virginia silver reduced from ore that Mackay had supposedly mined himself. Even more astonishing was Parisian jeweler Boucheron’s debut of the necklace they’d fashioned from a flawless 1591/8-carat sapphire the size of a pigeon’s egg. Mackay had bought the stone for his wife two years before. The profusion of “lesser” diamonds and sapphires encrusted into the necklace perfectly set off the center stone; it’s one of the two most spectacular pieces of jewelry ever made.)

  Billy O’Brien had died in May 1878, just before Mackay’s departure, it being “one of the laws of our glorious climate that a man cannot have at once an immense fortune and a sound liver,” according to the San Francisco correspondent of the Chicago Tribune. (Mackay being the exception that proved the rule, apparently.) O’Brien’s money divided among his sisters, nieces, nephews, and a long-lost brother who appeared from nowhere to claim a share of the fortune.

  In August, Adolph Sutro personally hacked into the 1,658-foot level of the Savage mine 20,498 feet from his tunnel entrance. He’d arrived too late. The Comstock mines were already prospecting levels hundreds of feet below his long drain tunnel. Although the tunnel allowed the mines to reduce their pumping expenses by draining water into the tunnel instead of having to raise it to the surface, not a ton of ore ever traveled out through his tunnel. Nobody ever built a mill at the tunnel entrance in the platted town of Sutro. The tunnel company earned some money from the drainage arrangements, but Sutro unloaded his stock on an unsuspecting public pumped up for profits
by a dozen years of his hype. He invested his proceeds in San Francisco real estate, speculations that made him rich. The value of tunnel stock gradually sank toward zero.

  In October, reports of an important strike below the two-thousand-foot level of the Sierra Nevada mine, the northernmost of the important Comstock mines, brought Mackay hustling back from Europe. The stock market went ballistic. By the time Mackay arrived from Paris, Fair had already bought control of the mine for a million of the Firm’s dollars. Mackay inspected the strike and telegraphed Flood: “Fair is crazy.”

  The whole deal proved to be a put-up job by one of the Comstock’s sharp operators. The stock market plummeted as developments revealed the small dimensions of the ore body. The collapse of “the Sierra Nevada Deal” crushed the Comstock’s exuberance and put an end to “the bonanza times.” Mackay and his partners pushed deep-level prospecting below two thousand feet all along the lode, but since prospecting operations didn’t require the large workforces needed to extract an ore body, surplus men began drifting away, drawn to burgeoning opportunities elsewhere. New discoveries propelled Leadville, in Colorado, past the Comstock in total production. In the Black Hills of the Dakota Territory, the Homestake mine surged under the control of George Hearst and Lloyd Tevis, both longtime players in San Francisco financial and mining circles. Mines boomed at Bodie, just over the California line near the old camp at Aurora. The Comstock lost the position as the “boss camp” of the mining West it had held since 1860.

  Undone by labor and relentless appetites, Fair had resigned as superintendent of the Firm’s mines in the summer of 1878. Although he seemed to have been in San Francisco or Virginia City for much of the time he wasn’t traveling, Fair’s poor health left Mackay to direct most of the Firm’s Comstock operations from late 1878 through November 1880. (A December 1879 article in the New York Times said Colonel Fair had been “ailing” for the last eighteen months, and that “for much of that time Mr. Mackay [had] been forced to do the Colonel’s work.”) If Mackay managed to visit his family during that two-year stretch, it was only a short whirlwind trip that left little trace in period newspapers.