The Bonanza King

by Gregory Crouch

  After several rounds of increasingly warm letters, the Mackays paid Meissonier’s extortionate fee through a third party, who returned with the offensive painting. “While it might be of some value as a picture,” Mackay said, “it [doesn’t have] the slightest value as a portrait.”

  In one set of stories, Louise hosted a party and burned the picture. In another, she’d destroyed it with a poker. In a third, she’d tossed it in a privy. (She hadn’t destroyed the painting. Years later, after she’d aged into the portrait, Louise mischievously retrieved the Meissonier from the attic where she’d hidden it and gave the portrait prominent display.) According to the Daily Alta California, the portrait measured sixteen by eleven inches.

  Mackay said that he’d always been an admirer of Meissonier and had “always felt well toward him,” but had been disappointed by the entire episode. “I wanted a Meissonier,” Mackay complained, “not Meissonier painting a slovenly imitation of a Cabanel.”

  Mackay’s was cogent criticism. Art circles adopted the witticism.

  The imbroglio divided Paris newspapers into two camps. Some were “very severe,” roundly criticizing interloping Mrs. Mackay for the disrespect shown to the national treasure, Meissonier. Others supported “the amiable Yankee” who did so much to support French charities, arts, and commerce and acknowledged that much of the trouble lay in Meissonier’s character, “which [was] not as gentle as that of the lamb.”

  When the Mackays relocated to London, newspapers supposed the “vile abuse” heaped on her by the Parisian “boulevard sheets” had caused her to “[shake] the Parisian dust from her skirts and [carry] her household gods to London.” More likely, she and John made the move because one end of John’s transatlantic cable ended in the English capital and because teenage John William, Jr., and his younger brother Clarence had reached an age to benefit from an English public school education before entering university. They entered Beaumont College in Old Windsor, said to be “the Catholic Eton.”

  • • •

  To manage his ocean cable business, Mackay hired George G. Ward, a man with more than a decade of experience in transoceanic telegraphy. With George G. Ward riding herd, the Commercial Cable Company spent the rest of 1884 constructing and laying two transatlantic cables.

  While that was happening, Jay Gould launched his first counterattack, dropping Western Union’s domestic rates in the hopes of eliminating its budding domestic rivals, and sparking a telegraph war that would last three years. Stock market carnage in May and June prevented Gould from moving more aggressively. Many banks and brokers failed, including A. W. Dimock & Company, which held the Bankers and Merchants’ Telegraph Company and a Bankers subsidiary called American Rapid, two of the companies Mackay was trying to organize into an alliance against Western Union.

  The alliance of Mackay’s Postal Telegraph, the Baltimore & Ohio railroad’s telegraph business, and the Bankers and Merchants’ telegraph systems went into effect on August 1, 1884. The Herald called it “the most formidable opposition to the Western Union telegraph monopoly which has ever been organized.” Western Union stock fell. The weak point in the alliance was Bankers and Merchants’, which was insolvent. Mackay considered advancing money to the company to keep it in the fight—until he understood the size of its debts. The coalition lasted just six weeks. The Baltimore & Ohio withdrew, citing Bankers and Merchants’ failure to pull its weight in the group’s expansion plans. Bankers and Merchants’ fell into receivership a week later—where its subsidiary American Rapid Telegraph soon followed. The situation decayed even further when John W. Garrett, president of the Baltimore & Ohio, died on September 26. Control of the B&O devolved into the hands of his son, Robert Garrett, a much less formidable individual.

  Mackay and his erstwhile allies had squandered a significant opportunity to exploit a moment of Western Union weakness. Western Union’s earnings had dropped about 15 percent, forcing the company to shave its dividend, and Gould’s railroad empire barely survived the chaotic summer.

  In the West, Mackay and Fair had a serious falling out. The exact particulars never leaked, but Fair withdrew from the Nevada Bank, leaving Flood and Mackay to go it alone. Up on the Comstock, Mackay and Flood continued to finance deep-level explorations of the middle and north-end mines. On the north end, miners grid-worked the lode to below 3,000 feet. Miners working in hellish conditions found nodules of high-grade quartz interspersed with large quantities of mineral quartz, never in sufficient volume to constitute a bonanza. Miners reached the 3,360-foot level in the Ophir-Mexican winze. When Mackay learned that they’d found no ore, he ordered the pumps turned off. The north-end mines flooded to the level of the Sutro Tunnel, leaving only the middle mines pumping. Working beneath the gargantuan machinery of what was called the Combination Shaft, the middle mines constituted the Comstock’s last great hope.

  The affairs of the transatlantic Commercial Cable Company progressed much more satisfactorily in 1884. Commercial Cable had landed its first cable in July, and its second in October. Like the first, the second Mackay-Bennett cable linked London to Ireland to Nova Scotia, but from thence it went direct to Long Island. The cable came ashore at Rockaway Beach, connected to Brooklyn, crossed the East River Bridge to Manhattan, and to the great relief of New Yorkers, the company buried its line under Water and Wall streets all the way to the company offices at 21 Wall Street. The epic mess of telegraphic ganglia tangled over the New York streets had become a significant public annoyance. A New York Times editorial thanked the company for “declining to add to the manifold nuisances entailed by wires strung in the air.”

  The Gould transatlantic pool made “strenuous efforts to induce the Commercial [Cable] Company” to join their pool and raise rates to sixty cents per word. Mackay steadfastly refused. Commercial Cable went into active service at midnight on Christmas Eve—five o’clock on Christmas morning in London. Commercial Cable set rates for standard commercial traffic at forty cents per word, 20 percent less than was charged by the companies of the Gould pool. Commercial charged twenty cents per word for press traffic and ten cents per word for low-priority press dispatches that could be sent when the lines were otherwise unoccupied. Experts reckoned the Mackay-Bennett cables could carry traffic at half the cost of the Gould pool, and the New York Times reported “the Mackay-Bennett managers” as “highly elated at their present outlook.”

  The Gould pool cables dropped their regular rates to match. They also lowered their press rates, but left them a few cents per word above Commercial’s in both the high- and low-priority categories, hoping to overwhelm the Mackay-Bennett cables with low-quality newspaper business.

  Pool company earnings plummeted as Commercial Cable gave cheerful, timely service and proved equal to the demand. Commercial Cable began operating from inside the stock exchange in mid-January. Pleased traders discovered that Commercial Cable messages passed back and forth between the New York and London stock exchanges in just six minutes. Too long associated with a sluggish cartel, the chairman of one of the pool companies complained that the Mackay-Bennett cables had resorted to unfair means “to obtain a greater share of the traffic than the possession of two cables fairly entitled them to.”

  • • •

  In Paris, Mackay’s twenty-three-year-old daughter, Eva, married a twenty-seven-year-old Italian nobleman, Don Fernando Julien Colonna, prince of Galatro, at a religious ceremony presided over by the papal nuncio. Louise hovered on the edge of tears through much of the ceremony. Afterward, Louise gave “a grand bridal reception” at the Rue de Tilsitt that the newspapers thought “must rank with the most magnificent festivals of French history.” All “the flower of European and American society” attended, and Louise somehow managed to pull off a party stamped with “quiet splendor, grace, refinement, and family intimacy.” A reporter of London’s Pall Mall Gazette was fascinated to find “The Big Bonanza . . . perfectly at home among the princes representing the oldest houses of Italy,” and he paid John Mackay wh
at must surely be the best compliment a British newspaper gave an Irishman in the nineteenth century when he added, “Anyone who knew how to read a face would say that he was a man to whom they should all take off their hats.”

  Asked about her daughter’s wedding, Louise raved about the quality of Italian husbands. Speaking of her sister, Louise gushed, “Ada’s married life has been without a cloud.” And so it had been and so it would continue. Eva wouldn’t be so fortunate.

  • • •

  The Commercial Cable Company worked wonders from its inception. The weakness of Mackay’s young telegraph network still lurked in the American distribution network he hoped to work up into a bona-fide competitor of Western Union. In that fight, his allies did as much damage as his foes. Robert Garrett slashed Baltimore & Ohio telegraph rates in early January. The cuts inflicted more damage on Postal Telegraph than they did on Western Union. Postal defaulted on its bond payments ten days before Eva’s wedding. Mackay relieved Postal Telegraph’s embarrassment in May by giving the company an infusion of capital.

  To limit Mackay’s ability to organize a system against Western Union, Jay Gould exploited the Achilles’ heel that lurked in the separate receiverships of Bankers and Merchants’ and American Rapid. The contract between Bankers and Merchants’ and American Rapid allowed each company to string wires on the other company’s poles. They’d operated together for so long that deciding who owned what had become problematic. The American Rapid receiver asked the court to rule on which company owned which lines. Not long thereafter, Jay Gould invited the American Rapid receiver aboard his yacht and convinced him to sign a secret contract granting Western Union permission to act as American Rapid’s agent and operate the American Rapid telegraph lines. In a surprise move, Gould’s lawyers presented that contract to the court along with an inventory of what lines belonged to which company and asked the court to hand over American Rapid’s property to its new agent, Western Union. Even more surprising, the judge granted Western Union’s request without taking time to investigate the inventory.

  The sudden court decision caught Western Union in a curious state of readiness. Western Union goon squads marched across Wall Street into the Bankers and Merchants’ operational headquarters, demanded American Rapid’s property, and began cutting wires. They dragged the cut ends across the street to the Western Union building, and began operating them on behalf of the omnivore. The Bankers and Merchants’ receiver rushed off to obtain an injunction, but couldn’t locate the judge. By the time he did, many Bankers and Merchants’ wires had “accidentally” been cut and confiscated in the mayhem. That same day, Western Union raiders attacked Bankers and Merchants’ and American Rapid facilities in Baltimore, Troy, Rochester, Buffalo, and Albany. Many suspected that sub-rosa payoffs had found their way into the hands of American Rapid’s receiver and the judge. Offended parties filed lawsuits that dragged on for several years, the results of which mattered little to Jay Gould, for he’d already accomplished his end—with one stroke he’d crushed one of the legs of Western Union’s competition and kneecapped Mackay’s efforts to organize effective opposition to Western Union.

  Mackay settled into a long war of attrition, hemorrhaging money in his domestic network. Rumors in the Postal offices whispered that Mackay was trying to get out of the telegraph business. One day, during an inspection of one of his operating rooms, Mackay asked one of his telegraphers if he was married.

  The man said that he wasn’t, although he wished to be.

  “Does the girl want to get married?” Mackay asked.

  “Yes, sir,” said the operator, confessing that he didn’t feel financially secure enough to do so in light of the rumors that Mackay was going to leave the telegraph business.

  “Go ahead and get married,” Mackay said. “I am not getting out of the business.”

  Mackay’s resolute public facade never cracked, but his private contemporary correspondence revealed his frustrations with the telegraphic ventures and his wish that he could wiggle out of his obligations.

  • • •

  Mackay visited the Pacific Coast in October to tend to his Western business interests. “Manhood was at its best west of the Rocky Mountains,” Mackay always said. Soon after he arrived, a blood clot formed in the main artery just below William Sharon’s right knee. Sharon’s lower leg went cold. Terrible waves of pain washed through the afflicted region. Sharon took to bed in his suite in the Palace Hotel. His stomach rejected his attempts to eat. The following afternoon, a Thursday, gangrene attacked his right toes. The cold skin of the afflicted area turned splotchy red, then black. Sharon knew he was dying, but he bore the pain like a stoic. His doctor sustained him with injections of “morphia.” On Friday, the gangrene reached his ankle. By Saturday, the rot had climbed to his calf. On Sunday, when John Mackay came down from Virginia City to pay his last respects, the gangrene had reached Sharon’s knee. No report of what passed between the two old rivals escaped the sickroom.

  In what his doctor described as “a marvelous exhibition of vitality,” Sharon survived five more days. His weight dropped to eighty pounds and sharpened his features, making his “usually prominent forehead” appear “abnormally large.” Sharon’s son and son-in-law, his sister, a cousin, a niece and two nephews, his old friend Colonel J. D. Fry, and his faithful Chinese servant, forty-nine-year-old Ah Ki, surrounded Sharon’s sickbed. Sharon briefly opened his eyes. Ah Ki asked to know his wants. Sharon must have seemed like a skull moving in bed when he smiled faintly and whispered, “Well, Ki . . .”

  Sharon’s tone unmistakably communicated to everyone present that he would want for nothing more in this world. William Sharon closed his eyes and breathed his last a few minutes thereafter. Long obituary columns and retrospectives filled the California and Nevada newspapers, not all of them flattering. All acknowledged the ’49er’s remarkable life. Sharon’s last years had been embittered by the lawsuits of Sarah Althea Hill, a woman he’d paid $500 per month and “kept” at the Grand Hotel in 1880. In 1883, some two years after he’d cast her aside, Hill had Sharon arrested for adultery, claiming he’d secretly married her three years before. Hill sued Sharon for divorce, alimony, and a share of community property. Sharon denied everything and claimed she’d produced a forged marriage contract. William Sharon had enjoyed at least nine separate mistresses during the first three years of the 1880s and fathered one child. The lawsuits and their glorious attendant scandals eclipsed those that had attended the Fair divorce.

  A few days after Sharon’s death, a Daily Alta California reporter hunted up “keen eyed” Ah Ki in a small, dim apartment among a “wilderness of rooms” atop a stairwell leading up from a street corner in the heart of San Francisco’s Chinatown. Pictures of Sharon, John Mackay, and the other bonanza kings adorned Ah Ki’s walls, along with images of Washington, D.C., New York, and other places Ah Ki had accompanied ex-senator Sharon during his travels. The reporter discovered Ah Ki had a wife and twelve- and four-year-old sons, testament to the spectacular success Ah Ki had enjoyed in the United States. The family was preparing their return to China. Ah Ki dodged the question of whether he’d been left any money by the ex-senator, but the reporter noted a “merry twinkle” in Ah Ki’s eyes as he said, “I guess I get along nice enough in China, yes.”

  Tragedy tempered Ah Ki’s good fortune less than a fortnight later when his youngest son died. Ah Ki, his wife, and his surviving son sailed for China on December 9, 1885—bearing the remains of Ah Ki’s relations and the $5,000 in gold coin William Sharon had left him in his will. Cared for wisely, that represented a sum large enough to support Ah Ki and his family in China for the rest of their lives. Ah Ki made off with his just reward before Sarah Althea Hill tangled Sharon’s will into dizzying rounds of litigation that dragged on for years.

  John Mackay never shared his feelings at the passing of his old nemesis, although the bitterness of their earlier Comstock battles seemed to have matured in the 1880s into something that passed mutual r
espect into a form of cordiality.

  • • •

  Louise Mackay rented a house in London in March 1886, Number 7 Buckingham gate, directly across the street from Buckingham Palace. The London Truth considered her appearance in the capital “joyful news” for the “Lord Outatelbows” and “Lady Nothing Nowheres” class of aristocrats who “sponge so assiduously upon wealthy Americans.” Louise achieved the social distinction of a lifetime when she was presented among a small group of American ladies in Queen Victoria’s drawing room on March 23.

  John Mackay was with her in London when news of a “secret” meeting of the companies in the Gould transatlantic cable pool leaked in mid-April. The Commercial Cable Company had diverted more than $1 million worth of pool company business in 1885. (The company had done so well that Mackay gave every Commercial employee a bonus of a fortnight’s salary at Christmas.) To rid themselves of the upstart or force it to join their cartel, the pool companies slashed their transatlantic rate from forty to twelve cents per word for commercial traffic and to six cents a word for press service—prices far below the actual cost of transmission. John Mackay and his general manager, George G. Ward, discussed possible responses to “this aggressive action by the united companies” in messages that clicked back and forth across the Atlantic.

  “The war of cables rates is now fairly opened,” the New York Times announced, “and will doubtless be carried on sturdily until one party or the other finds its courage or its strength too severely tried.”

  Meeting Gould’s attack with matching price cuts struck Mackay as the path to ruination. Instead, he ordered Commercial Cable’s rate cut to twenty-five cents per word and had Ward unleash a barrage of publicity from the company’s executive offices at 40 Wall Street. Commercial Cable had been established “for the purpose of affording a competing and efficient service to the public at such tariff as would yield a moderate interest upon the capital actually invested,” Ward’s statement read. Commercial had “resisted the repeated importunity of the competing companies to join them in a largely advanced rate of sixty cents per word.” The pool companies’ new prices were far below actual costs, Ward explained. They intended to destroy Commercial, then regain their losses from the public through greatly increased rates. “The existence of an independent and competitive Atlantic cable service” was at stake, “and our patrons must now pronounce for or against its maintenance.