November 22, 2005
Nevada's Online State News Journal
UNITED STATES GEOLOGICAL SURVEY
CLARENCE KING DIRECTOR
MINING AND MINERS
By ELIOT LORD
GOVERNMENT PRINTING OFFICE
A FORTUNATE DELIVERANCE.
In view of the failure of the known bonanzas, the combination of the miners to maintain high rates of labor, the scarcity of water, and incidental discouragements such as the great mine fire just described, the venture of the Bank of California must be accounted a hazardous one; though its hands were stayed in the task of upholding the sinking interests of the Comstock Mines by the two corporations, its children. To advance money or permit overdrafts for the purpose of prospecting silver mines is opposed to ordinary notions of bank policy, unless the security is ample. As the Comstock Mine owners were not held personally liable for the debts of their respective companies, the only security for loans was mine or mill plant, if ore was not discovered, in which event both mine and mill plant were practically worthless. Large advances were simply gambling ventures, as the bank directors well knew; so that when they suffered their bank to become a mine-supply company they were more liberal to the needs of the Comstock Lode than conservative of their own interests as bank stockholders, for the chances of loss thereby incurred were alarming. In the year 1743 a proposal was made to the royal and supreme council of the Indies that a mine-supply company should be organized, with a capital of $2,000,000, to aid in the development of the mines of New Spain.
The royal viceroy, Count Fuenclara, appointed
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two commissioners of approved experience and competence, both citizens of Mexico, to investigate the desirability of such an establishment. In 1745 these commissioners reported strongly against the scheme as impracticable on various grounds, but chiefly on account of the hazardous character of the investments. Though mine suppliers themselves, yet they accepted less than one out of a hundred of the mines offered to them, "not from the want of enterprise," as they said, "but from the experience we have so dearly purchased in this hazardous pursuit. Out of 100 ships the average loss, even during time of war, is but 8; out of 100 mines the average number of failures is 99." If this could be said truthfully of the rich mines of Mexico it could be asserted with emphasis of the mines of Nevada; not one claim in a hundred of those located within the limits of that State has been worth prospecting, and not one in twenty so-called "promising claims" has made good its promise. In the liberal but venturesome course followed by the Bank of California there was, more-over, an insidious danger. When large advances had been made without returns, the bank was obliged to face the probability of losing all its venture or lend an additional sum. A bold speculator will choose the latter alternative usually, and in this way his fortune may be irretrievably involved. Banks are not always more prudent than individuals. Mr. Sharon has said that the amount invested by the Bank of California at one time in the mines, mills, and towns directly dependent upon the continued productiveness of the Comstock Lode was $3,000,000. The whole capital of the bank in 1870 was $5,000,000, and, though the great moneyed institution of the Pacific Coast, the loss of this investment, or even a popular dread of such a calamity, would have endangered its very existence, and certainly have crippled it for a time. Only the few directly acquainted with the condition of the bank will ever realize the anxieties which beset its management at the close of the year 1870. A number of the mines on the lode were indeed producing considerable quantities of low-grade ore, but few were paying dividends. The Savage Mining Company had paid its last dividend in June, 1879, the Kentuck in March, 1870, and the Gould & Curry a spasmodic and speculative return of $48,000 in
280 HISTORY OF THE COMSTOCK LODE.
October, 1870, after three years of disappointment. The approaching exhaustion of the Hale & Norcross and the Yellow Jacket ore-bodies must have been foreseen, as both companies ceased the payment of dividends before the autumn of the following year (in April, 1871, and August, 1871, respectively). The Chollar-Potosi alone had a rich undeveloped ore-body in sight, which yielded a profit of $1,946,637 in dividends to the stockholders during the year ending May 31, 1871; but later developments were by no means in accord with the flattering prospects in the spring of 1871. No mines on the lode except those named had paid a dividend since the organization of the Virginia and Truckee Railroad Company in the winter of 1868. It was a dismal outlook, therefore, for the bank stockholders, when a chance discovery of rich ore in an unpromising section of the lode lifted them out of all their difficulties. The Crown Point Mining Company held this section, 540 feet in length; but it had paid no dividends since the outbreak of the fire in April, 1869, and the small amount of ore (5,680 tons) discovered in its lowest productive level had been completely extracted in March of the same year. During the fiscal year ending May 1, 1870, $240,000 were levied in assessments from the stockholders, yet the superintendent was obliged to report, with regret, that the expenditure was apparently fruitless. The quoted value of the mine fell to $72,000 during the month of June, 1870, and its stockholders were utterly discouraged.
The only person interested who had not lost heart completely was the superintendent, John P. Jones. His desperate venture at the time of the Yellow Jacket-Crown Point fire was characteristic, and probably no man on the lode was better fitted to lead a forlorn hope. He was born in Herefordshire County, England, near the border line of Wales, in 1829, but is an American by virtue of a life's training and surroundings. His parents crossed the Atlantic and settled in the State of Ohio when he was only two years old, and the boy was educated and employed in Ohio until he sailed from Cleveland (through the Welland Canal) for San Francisco
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September 26, 1849. In California he had been engaged in various mining enterprises and filled several public offices with credit before his nomination as Lieutenant Governor on the Republican State ticket in 1867. Although running considerably ahead of his ticket he was defeated in the election, and crossed the Sierras to Nevada almost penniless, as his limited means had been exhausted by the necessary expenses of the campaign. Upon his arrival on the lode his services were at once engaged by the Kentuck Mining Company, and he showed himself so competent in the discharge of his duties that the Crown Point Mining Company, whose mine adjoined the Kentuck, offered him the post of superintendent in 1868. Since his appointment he had conducted the search for ore with untiring zeal, and his ability was expressly recognized by the directors. The lack of success could not be attributed justly to any short-coming on his part, but no display of skill would compensate for the absence of ore.
In June, 1870, there was no ore in the mine which was worth extracting, and no indication of the existence of any undeveloped body. Explorations on the 1,000 and 1,100-foot levels revealed nothing but porphyry and barren seams of quartz, though on the lowest level a prospecting cross-cut had been driven due east from the shaft for a distance of 800 feet. Further search to the eastward was, therefore, abandoned, and a drift begun at a point 360 feet east of the shaft and extended southward, without any favorable indication for more than 200 feet, thus aggravating the disheartenment of the stockholders, if this were possible.
In November, 1870, shares were offered at $2, with no buyers. The entire mine property was thus appraised at $24,000, though the nominal assets in mine and mill plant alone were $140,000; an exhibit which
282 HISTORY OF THE COMSTOCK LODE.
gives a fair illustration of the market value of a barren mine and the security offered for the allowance of overdrafts. The treasury of the company was empty and further assessments were impossible.
At this crisis a change of importance was noted in the character of the lode rock. For years the workings had been in hard, gray porphyry, but the new drift began to enter a different formation. Streaks of quartz and clay appeared, the porphyry became more decomposed and friable, lighter in color, and seamed with straggling red lines of iron-rust. A well defined clay seam was reached at a point 239 feet from the beginning of the drift, and when this was pierced a body of soft whitish quartz was developed which contained bunches or pockets of ore. This improving prospect so favorably impressed the superintendent that he determined to go to San Francisco and personally present his views of the condition of the mine to its owners. His representations had due weight, and a number of speculators bought in all the shares procurable at low prices. But during his stay in California one of the usual stock reactions occurred. The latest developments in the mine were apparently less promising, and some of the more timorous holders began to lose confidence. The superintendent's faith did not waver; as he says, but he had reasons for exercising more than common prudence, for his daughter was dangerously ill, and he was momently awaiting a telegram which would call him to the Eastern States and constrain him to be absent for some weeks at least from his mine. Several prominent operators were then carrying a large amount of stock on his account, upon his agreement to bear all losses in consideration for one-half of the possible profits. He told these men of the illness of his child and the probability of his own departure, and settled the outstanding account by the disposal of the shares in their hands. Though he assured them of his firm belief in the value of the mine, and he still held a considerable number of shares, his action belied his words in their minds. They regarded the story as a lame pretense to explain his stock sales, and could scarcely refrain from laughing in his face. "Jones' sick child" became a by-word in a privileged circle, and
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when he returned to Virginia City it was the prevalent impression that the real invalid was the Crown Point Mine. The superintendent bore these sneers coolly, and when he ascertained by careful inspection that the developments as a whole, during his absence, were unmistakably favorable, he telegraphed at once to his agents at San Francisco to buy largely in addition to shares which he still held. Meanwhile his former partners in the speculation were selling short to all buyers, and when the value of the mine became evident to all, a few weeks later, their losses in redeeming outstanding obligations were heavy.
One leading stock operator, Mr. Alvinza Hayward, had been more credulous and gained a fortune in consequence. His purchases were made so rapidly and shrewdly that he obtained 5,000 shares, nearly half the entire stock of the company, at prices averaging less than $5 per share, as is alleged. Mr. Charles B. Low, another prominent speculator, secured at the same time 1,000 shares for $4,300, including brokerage charges. As the value of the mine rose, upon the reported developments in the spring of 1871, Mr. Low disposed of 700 shares at from $90 to $120 per share, the greater portion of which were bought in for Mr. Hayward, as was reported. A cross-cut on the 1,200-foot level entered the same body of ore found above in May, 1871; the price of shares bounded upward at once, and Mr. Low then sold the shares remaining in his possession to Mr. Hayward at $180 per share. It was apparent that the latter was determined to obtain control of the mine. Only one man had the power and the will to oppose him. Mr. Sharon had control of 4,100 shares, and would not concede defeat without a struggle, for the value of the prize was too well known, and the independent action of Mr. Hayward was viewed as an attack upon the combination of which he was a member. The fortified monopoly was seriously threatened and the danger was realized. For a time it seemed that a contest over the election of trustees was inevitable, far surpassing in excitement any previous rivalry, but Mr. Sharon coolly weighed the chances of success and the certain cost of the struggle and decided to withdraw from the field. Accordingly he sold all his stock, 4,100 shares, to Mr. Hayward for
284 HISTORY OF THE COMSTOCK LODE.
$1,400,000, on the 7th of June, 1871, thus making the largest private transfer of mining stock on record. It is probable, however, that this virtual defeat rankled sorely in his mind, and that he has never forgotten the concerted action of Alvinza Hayward and John P. Jones in wresting the control of the mine from his hands. To thus outwit the head of the combination either prior and more accurate information must have been obtained by Mr. Hayward, or he must have been the more daring speculator of the two. Mr. Sharon attributed his defeat to the first cause assigned. It matters little whether he was right or wrong in his surmise, and the public had no reason to concern itself greatly about his disappointment. It was apparently a case of diamond cut diamond and was regarded as a personal matter strictly. As a stockholder in the Union Mill and Mining Company he suffered a further loss in their failure to secure contracts for the reduction of ore from the new bonanza. Some of this ore was crushed in the mill of the Crown Point Company, but the larger portion was reduced in the mills of a new corporation, the Nevada Mill and Mining Company, which was organized and controlled chiefly by Mr. Hayward and Mr. Jones. Yet, though disappointed in his plans for personal enrichment, Mr. Sharon had reason to congratulate himself, as agent of the. Bank of California, upon the results of the new discovery. It is a curious fact in the history of mining that the opening up of a bonanza in any part of a district generally causes a rise in the market value of all mines in that district. If the mines were on sections of the same vein this advance might be less singular, but often mines on distinct and distant veins are likewise benefited. In the case of a lode like the Comstock there was no reason why the development of an ore-body in the section owned by the Crown Point Company should cause the section of the Ophir Company to become more valuable, except that the bonanza in the Crown Point was a convincing proof of the possible occurrence of rich ore-bodies at a deep level, which had been openly doubted. There was no likelihood that the Crown Point ore-body would extend more than a few hundred feet north of the boundary line of the mine, yet it was such an encouraging indication of the probable richness
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of the unexplored fissure that the quoted value of nearly all the mines on the lode bounded upward as soon as the importance of the new development was generally realized.
This extraordinary increase in the market value of the mines was a certain though indirect benefit to the Bank of California, for stockholders responded willingly to the call for contributions to continue the work of prospecting. The depleted treasuries of the mining companies were refilled, outstanding liabilities were paid promptly, and the Bank of California, the principal creditor, received back its advances with interest. Moreover, the whole district was benefited by the improved condition of the stock market. Mill property advanced at once in value, the price of improved real estate rose sharply, and all branches of business felt the quickening stimulus of the influx of capital and the increase of confidence. Thus any mortgages held by the bank as security for advances were made negotiable, while before the discovery they would not have realized at a forced sale one-third of their face value. The bank was therefore lifted above the fear of loss, the towns on the lode were made prosperous, and a few stockholders greatly enriched by the new development.
The only men who did not join in the general exultation were those stockholders who had sold their shares in the Crown Point Mine before the rise. If they were not fully apprised of the extent and richness of the bonanza as rapidly as the developments were made they had cause for grave complaint; if they knew the condition of the mine as thoroughly as the principal stockholders and trustees, but were not equally daring gamblers, they had only themselves to blame for their mistake.
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It is certain that the stockholders of limited means were not as venturesome as Mr. Hayward, nor as able to purchase; but it can scarcely be doubted that their knowledge of the true condition of the mine was less complete and accurate. It had not been the custom to furnish full and prompt bulletins of progress for the use of stockholders, and the directors of the Crown Point Mine had no apparent wish to figure as reformers. A stockholder who relied simply on the meagre official publications for information would have leaned upon a broken reed. If the majority of stockholders had held their shares as an investment strictly there would often have been a passion stirred among them which would have swept away unfaithful boards of directors and compelled halting superintendents to do their duty; but it was notorious that shares were held for speculative purposes usually, and that a well-managed stock "deal" was as acceptable to most holders as an actual development of ore. Stock deals were naturally easier to produce than ore-bodies, so that the gambling public was commonly given chaff instead of wheat. If buyers and sellers were willing to deal in counterfeit coin they had only themselves to blame when their riches turned to ashes in their hands, as in the well-known fable. Inefficient complaints were heard occasionally from one quarter or another, but protests against stock deals were never loud and emphatic. Now, the very essence or possibility of a stock deal lies in the ignorance of the great body of buyers and sellers of the true value of their stock, or in their belief that only a few leading manipulators know its true value. If the public at large were permitted to know the actual condition of a mine stock deals would become impossible. Stock-gambling might indeed continue, based on various estimates as to the extent of the ore-body; but an empty stock-bubble would be a thing of the past. To insist, therefore, on the faithful performance of duty by mine trustees and superintendents would be the death-knell to stock deals, and it is fair to assume that the majority of shareholders in the Comstock mines did not wish this conclusion. If they did wish it why was their demand not made effectual? The responsibility for their inaction cannot be thrown justly upon the shoulders of a few leading speculators. Excuses can always be found for stupidity and avarice. If the public was tempted and deceived at first by a dazzling bait, artfully displayed by a few designing
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men, years of experience should have opened its eyes. All feasible tricks and devices were stale in 1870. If the plea of powerlessness is urged it falls to the ground. Union and cooperation of honest investors gives power, and this course was always feasible; for when a mine could not be purchased and controlled by such an organization why should a scrupulous investor hold a share of its stock? Honest men might incur losses occasionally, it is true, from the unworthiness of trusted agents; but if agents were sharply supervised such losses would be rare and inconsiderable. If a man has neither time nor inclination to watch his own interests or investments, he should rarely buy shares in a mine. His carelessness, of course, does not palliate the crimes or faults of his agents, though it places temptation in their way; and such easy-natured indifference as this has proved most harmful in its effects. The officers of any mining company who failed to report to its stockholders the true condition and prospects of their mine, to the best of their knowledge and belief, when-ever such information was due, were clearly derelict. To enforce this requisition in all companies holding mines on the Comstock Lode might have been a Utopian plan, for the justice of a measure has not always made it practicable; yet such cooperation of honest investors as has been outlined was clearly possible and the control of any mine secured at will. If this course was not followed, it is apparent that there was no general or effective desire for reform; and if stock purchasers were content with their acquisitions why should uninterested spectators complain?
It is true that a committee was appointed by the San Francisco Board of Brokers in January, 1870, to devise a method, as the Territorial Enterprise pithily stated, "of dissipating the fog which hung over the management of the Comstock Mines." Majority and minority reports were accordingly submitted, the latter "by a gentleman who is evidently willing to be befogged;" the former recommending action to procure the passage of a law compelling the trustees, superintendent, and secretary of every incorporated mining company to file in the offices of designated county clerks sworn statements quarterly, showing amount of work done, money received and expended, by itemized 'accounts, and condition of the mine
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as clearly as possible. It was further recommended that such companies should be required by law to award contracts for crushing their ore to the lowest responsible bidder when mills were not owned by the corporations, and to limit all contracts so awarded to a period not exceeding three months. Meetings of the stockholders were to be called by the trustees whenever demanded by persons unitedly representing one-quarter of the capital stock of any company, under penalty of fines upon conviction for non-compliance. These provisions were apparently just in the main and practicable. They were not sufficient, and might be evaded, but were commendable as the first step toward reform. Yet the report died still-born, for the board took no earnest action to present the subject to the attention of the legislature, and neglected even to take the simply effective measure of refusing to buy or sell the shares of any mine whose officers refused to comply with reasonable regulations guaranteeing protection to stockholders. The brokers would not act, and it is certain that stock-holders generally accepted the existing condition of mine management without strong protest. If they hoped for reform without exertion on their own part they were assuredly optimistic; if they wished for no change they merited no sympathy when their speculations were disastrous. Hence it was that the stockholders of the Crown Point Mine, who had sold their shares at low prices to Mr. Hayward and others, did not grumble loudly when the bonanza was fully made known, for they had, in a measure, forfeited their right to complain when they allowed the Crown Point Mine to be managed like most of the other mines on the lode. Under existing customs in the district the neglect to furnish clear and full bulletins was not so directly contemptuous of the rights of stockholders as another practice, which endured for a long time unchecked.
When miners were beginning to explore a new level in the lode by cutting a gallery from the shaft toward the ledge, and were on the point of piercing the east or hanging wall, the custom grew up of confining the men at work for days below the surface. The object of this confinement was evident. It was believed that ore-bodies existed most commonly close to the east or boundary wall, and the directors of mine companies desired to hold any information gained by piercing the ledge for their
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exclusive use. To imprison the miners was the best guarantee that they would not make premature disclosures; so the trustees became jailors for the time being. The miners so held did not usually grumble, as they were fed and cared for with particular attention, and their wages were often temporarily increased. If all stockholders in a mine had been apprised daily of the developments thus made the practice might not have been objectionable, but as a matter of fact many were kept ignorant of the progress made and the results of the exploration by the wilful neglect or refusal of the trustees to accord the information desired.
The credit of this invention probably belongs to the controllers of the Gould & Curry Mine in 1863. Five years later it was termed a common practice,  and few objected loudly when, in January, 1868, the superintendent of the Hale & Norcross Mine confined twenty-five miners within the hoisting-works of his mine for three days while piercing the partition selvage of clay on the 930-foot level. The men were paid $12 per day and were willing prisoners. On their release, January 10, 1868, it was reported that some rich ore had been found. The stock of the mine, which was quoted at $1,300 per foot on January 8th, rose to $2,200 per foot January 11th, and a contest for the control of the mine at once ensued which raised the price of shares far above their true value. In this instance it was possible that the report was well founded, though the product of the Hale & Norcross Mine during the year and the suspension of dividends did not strongly confirm it, but the advantage of ascertaining the facts of the case, as a guide in the purchase or sale of stock, was evident. A reported strike might be nearly as profitable as a genuine discovery.
Unfortunately for these speculators, confidence in all reports was so greatly shaken before the close of 1868 that when the same plan was tried by the superintendent of the Imperial Empire Mine in February, 1869, while cutting through the east clay wall on two levels, the stock of the mine began to fall in value at once. The eighteen miners at work on these levels were confined in the mine for seven days (February 12th to
290 HISTORY OF THE COMSTOCK LODE.
19th,) during which time the quoted value of the mine decreased nearly one-third - a result not anticipated by their jailors. The Gold Hill News, in commenting on the absurd failure of the plan, hoped "that this old dodge had been played for the last time," but the hope was not realized; for it was not until February, 1872, that the scheme was effectually exploded.
The Savage Mining Company had resorted to this device with success in the first week of February, 1872, cutting into a small body of rich ore, and thereby raising the quoted value of their mine fourfold. So the Ophir Mining Company, in opening up the 1,100-foot level of their mine, confined four miners, without anticipating the spirited protest which ensued. For some reason a rumor arose that the imprisoned men were held by force within the mine, and this report was widely circulated by discontented stockholders. The miners on the lode have always been jealous of encroachments which threatened their personal independence and privileges, and in this case their disgust at the action of the Ophir managers was heightened by sympathy for their friends. Notice was publicly given that writs of habeas corpus would be served on the superintendent of the Ophir Mine, and that suits for damages on the score of illegal detention would be instituted on the release of the four prisoners. Mining stocks have always been peculiarly sensitive to depressing rumors, groundless or well founded, resembling flimsy towers reared high in air, whose walls will crumble in ruin should a slight earthquake displace one stone of the edifice. So the threat made by the friends of the prisoners awakened a slumbering disgust at the "shutting-down process," as the plan was termed, which completely foiled the plans of the mine managers. Disgust produced distrust, as in the case of the Imperial Mine stock sale three years before. Shares of the Ophir Mining Company were thrown on the market at any sacrifice, and the stock which was quoted at $105 per share on February 23d fell to 0 on February 28th. The Ophir Mine managers did all in their power to check this fall, but their efforts were fruitless. A card was published in the Territorial Enterprise, February
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29, 1872, signed by the four imprisoned miners, certifying that they remained under ground by their own consent; but this prop was inserted too late. The shock to the reputed value of the mine was so great that its effects were lasting, and the lesson was a serviceable one; for Comstock Mine controllers then realized that the shutting-down process was a dangerous experiment; and that to be hoisted in their own petard was unpleasant. So far as is known the device was not again used.
Besides the immediate ill effects occasioned by such short-sighted management a most serious and lasting injury to the general welfare of the district was wrought in the prevailing distrust which acts like these excited. How deep-seated and far-reaching was this distrust appeared unmistakably in May, 1872, when a scandalous accusation, which otherwise would not have gained credence for a moment, was potent to horrify the public, reduce the market value of a mine one-half, and precipitate a general fall in mining stocks. The cause of the terrible mine fire in 1869 had never been absolutely determined. The careless placing of a lighted candle near the dry timbers of a drift was the probable explanation, but in the unreasoning excitement of the scene which followed, a rumor was muttered about that the fire was purposely kindled as a device to bear the market in San Francisco and enable certain speculators to buy in the stock at a low valuation. It was said that the originators of this plot intended to extinguish the fire in a few hours, as soon as the telegraphic report of its outbreak should have depressed the value of the mine sufficiently for their purpose, but that in the execution of their design some one had fatally blundered. The grave absurdity of this charge was manifest. The perils of fire in mines were clearly known, and stocks could be depressed at the will of mine managers by methods far less bungling and dangerous; but granting, for the sake of the argument, that scoundrels who would form such a plot lived in the district, it was morally certain that they would have shown some trifling foresight and care, at least, in its conduct. It was clearly kindled at an unsuitable hour, for if the fire was intended merely as a scare it could have been controlled or extinguished before the opening of the stock-boards in San Francisco, and an unchecked conflagration would injure the mine too seriously for any
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speculative purposes. No stock speculator would have allowed a fire which he had been instrumental in kindling to burn so long unwatched and unchecked before the alarm was given, and even the vilest gambler would have contrived to save the lives of the innocent men who died beyond the reach of help. These facts are so patent that to attribute this fire to the hand of a trained miner appears preposterous, and it was so regarded on the Comstock Lode when the maddening excitement of the first days of the fire subsided. The wretched rumor was apparently forgotten, when it was revived three years later in the form of a published denunciation of George F. Kellogg, foreman of the Crown Point Mine in 1869, as the incendiary, and the insinuation that the superintendent of this mine was privy to the design. The principal accuser was Isaac S. Hubbell, under-ground foreman of the Yellow Jacket Mine at the time of the fire, but serving as a guard at the Nevada State Prison in 1872. His evidence, when carefully sifted by a grand jury a few months later, at the request of those directly and indirectly accused, was found to be worthless; for, after examining Hubbell and others closely in regard to the breaking out of the fire, the jury reported unanimously that Hubbell's statements were "without foundation and seemingly the result of personal malice." As this jury was composed of citizens of high character their report must be accepted as conclusive, in default of any evidence to the contrary; yet the unsupported declaration of Hubbell produced a panic among the stock-holders of the Crown Point Mine which reduced the market price of their shares to one-eighteenth of their former value and hurried on a general fall in mining stocks.
A depression so extraordinary was not, of course, due to this rumor alone. A development in the Savage Mine, which at the time was thought most promising, proved to be of small importance when the extent of the ore-body was more fully determined, and the inflated stock began at once to sink in spite of the frantic efforts of the bulls in the San Francisco
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Exchange to stay the tide. Mr. Hayward and Mr. Jones were known to have control of a majority of the stock and to have been most sanguine as to its ultimate value, but when the truth in regard to the ore-deposit was learned, they could no longer venture to maintain the price of the stock or prevent its swift decline. In April, 1872, the stock had sold at $725 per share, or $12,600,000 for the entire mine, more than the Crown Point was worth, the most productive on the lode. Such preposterous inflation proved disastrous to many speculators, for when the bubble was pricked the stock dropped to $175 per share, and, as usual, dragged down the whole market in its fall. Mr. Sharon and other large operators did not see fit to bolster up the sinking stocks, and it was currently reported that heavy sales were made on their account. Whether this is true or not, it is certain that no custom of the Stock Exchange or precedent among speculators prevents any one from disposing of his stock or purchasing whenever he finds it profitable to do so. It is absurd to suppose that men who gamble in stocks will consult the interests of others before their own, though they may be foolishly berated for not doing so. The financial editor of the San Francisco Alta, a shrewd and careful observer, wrote, May 19, 1872, that the decline was occasioned mainly "by sales `for account' and sales of brokers where the call for margins was not responded to. These were on country accounts to a considerable extent. A large amount of the shrinkage has not been actual loss, but its nominal gains." This last statement was undoubtedly true, though it did not console the stockholders who had failed to sell out before the fall. These unlucky speculators realized two things keenly, that the decline was the most rapid and great which the San Francisco stock-market had ever known, and that their paper fortunes had melted into thin air.
Still, though the effects of this panic were deeply felt by unsuccessful stock gamblers, the general confidence in the probable existence of ore-bodies below the working levels was unimpaired. The discovery of the
294 HISTORY OF THE COMSTOCK LODE.
Crown Point ore-body was made known to capitalists in this country and abroad, and a stimulus to investment was thereby given which probably secured the prosecution of the great mining enterprise of Adolf Sutro. Some of the mining companies who had expected to find the lode nearly dry at the depth of 1,000 feet began to realize how far water could percolate through the seamy and decomposed rocks of the basin at the foot of Mount Davidson, and how extensive was the area of drainage. Still, in spite of the existence of large pockets of water, so-called, in all parts of the lode, and the continuous fight carried on by a few mining companies against its inroads, the total amount encountered annually throughout the length and breadth of the lode was much less than in 1866. The evidence attesting the diminution of the water-plague is conclusive to an unprejudiced observer. The affirmations of the superintendents, the testimony of working miners, and the expense accounts of the mines are incontrovertible witnesses to this fact when united, as they are, in its confirmation. It is equally idle to allege that no mining companies on the lode were seriously inconvenienced by the presence of water, as was affirmed in the heat of the opposition to the Sutro Tunnel project.
In some mines the fight went on year after year against an enemy which seemed to lie in wait for their advances and dispute the ground with them inch by inch. Foiled at one point, it would apparently withdraw to break in upon them again when they were off their guard and working in fancied security; and when its hydra heads were lopped off at one place new ones would spring up elsewhere with inextinguishable vigor. To chronicle such a contest is to write down an unvaried record of flooded shafts and levels, of temporary drainage, and of new inbursts of water; or, more discouraging still, of broken pumps and of delusive gains, when the battle was really a drawn one and the pumps could only hold the rising water in check. So in April, 1868, an observer noted regretfully that the new shaft of the Imperial Empire would not be so readily drained as was hoped, and at the end of the following month the inflowing water was still the great drawback to any knowledge of the ledge. In June an injury to the guides in the shaft put a stop to bailing with the hoisting-tanks for
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several hours, during which time the water rose four feet above the floor of the lower level. The fight was soon renewed, but the water was indomitable, and when the tank-cable broke under the ceaseless strain, in March, 1869, the rising flood filled the shaft to the depth of 100 feet before a new cable could be procured and adjusted.
In the Gould & Curry Mine work in the lower levels had been suspended in 1866 owing to the water encountered, and during 1867 the new pumping-engine was at work continuously in order to keep the water in check. Even in the spring of 1868 the influx was still so great that it was necessary to put in additional pumps, and when four pumps began to drain the mine in April the water had risen in the shaft to the depth of nearly 500 feet. In June of the same year, when the shaft had reached the depth of 964 feet, it was reported that the pumps were still in constant operation, and they so continued until a breakage occurred in March, 1869, when the water rose to the height of 320 feet in the shaft while the pumps were undergoing repair. Foot by foot, however, the water was driven back, though every inch was won and held by a never-ceasing contest, so that even in May, 1873, when the shaft had reached a depth where it was predicted that little water would be found - the 1,700-foot level - the main incline was progressing slowly owing to the inpouring water, which could scarcely be held in check by the pumps.
Most instructive of all is the record of the Ophir Mine, as full official reports are here accessible and comparatively exact estimates can be made in regard to the amount of water raised. Exploration in this mine had been practically abandoned since 1865, owing to the entering floods of water more than to the exhaustion of its surface ore-body. During the autumn of 1867 the company decided to sink a new shaft east of their old works, and cut the lode at a lower point, where it was hoped that the water would not be so troublesome and the quartz would be less barren. Water was encountered in this shaft in October, 1867, when less than
296 HISTORY OF THE COMSTOCK LODE.
fifty feet from the surface, and it was soon found necessary to put up a pumping-engine which, in conjunction with the hoisting-tank, could raise 300 gallons per minute. The pump was of 10-inch diameter with 6 feet stroke, giving an estimated capacity of 24 gallons per stroke. On the 10th of April, 1868, sinking was begun anew, all work having been suspended for three months owing to the water influx, and for a month, with the pump making from 6 to 8 1/2 strokes per minute, it was possible to continue work. On June 10th, the shaft being then 287 feet deep, two 12-inch plunge-pumps were substituted for the two 10-inch pumps then in use, which enabled the superintendent to cope with the incoming streams, having an average flow of 16 miner's inches, as he estimated June 21, 1868. If this estimate was correct, the pumps were raising 1,000 tons of water in round numbers every 24 hours. This influx continued with little change until December, 1868, when a considerable diminution in the flow was noted, the shaft being then 537 feet deep. In October, 1869, in drifting a short distance from the shaft a water-chamber was cut, from which a flood poured so violently that it rose irresistibly in the shaft, though the pumps were worked at their full capacity and discharged 20,000 gallons hourly. On the 6th of November the water was 270 feet deep in the shaft, covering the lower plunge-pump, which soon ceased to work and was submerged to a depth of 200 feet. The superintendent was aghast. His own mine did not furnish facts to support his theory of the marked decrease of water with progress in depth. There was only one recourse. A new engine was set up to raise two bailing-tanks holding 800 gallons, and early in December, with pumps and tanks in full operation, the fight was renewed more vigorously and kept up without intermission, except for the necessary repairs, until April 11, 1870, when the drift was drained through which the flood had first poured six months before. The water had proved a "monster elephant," as the superintendent
A FORTUNATE DELIVERANCE. 297
was compelled to admit, and the consumption of wood by the engines was "perfectly frightful," but he still was blind professedly to the advantages of a drainage tunnel. The powerful pumps held the water in check, but the strain on the machinery was so great that rods and gearing began to break frequently, and valuable time was lost in repairs and in pumping out water which would fill the lower levels whenever a pump was stopped for any cause. On January 2, 1872, when the new superintendent, Philip Deidesheimer, assumed charge of the mine, three 12-inch plunger-pumps and one of 10-inch diameter were in service, and 146,000 gallons of water were raised daily from a depth of over 1,200 feet. (Depth of shaft January 1, 1872, 1,255 feet.)
If the majority of the mines on the lode had been as troubled by water as the Ophir, Mr. Sutro might have used this record with more effect. The direct and indirect costs to the Ophir Company occasioned by the presence of water in their mine were estimated by their new superintendent at $6,000 monthly, or $72,000 per year. Their ore product for several years past had been practically nothing, so that a clear saving to the stockholders would have been effected of at least $60,000 yearly if a tunnel had drained their mine. Still the Ophir Mine was notoriously the wettest on the lode in 1871, and as the tunnel, if begun in August, 1867, in accordance with the terms of the original contract, could not have reached the lode as early as 1871, the cost of pumping prior to that time was unavoidable. What would be the condition of the lode when the tunnel was completed, and how considerable a service would then be rendered, were clearly undeterminable questions in 1871.
Since 1867 Mr. Sutro had been endeavoring with tireless energy to raise money for the prosecution of his scheme and to make head against the quiet but formidable opposition of the corporations controlling the lode. He submitted the memorial of the Nevada Legislature to the House Committee on Mines and Mining in the winter of 1867-68, and set forth
298 HISTORY OF THE COMSTOCK LODE.
the claims of his enterprise to the recognition and assistance of the nation so earnestly and urgently that the committee became warmly interested in the enterprise, and at length reported to the House, recommending a loan of $5,000,000, with a mortgage to the Government on all the property of the Tunnel Company. The impeachment of the President was a matter of such engrossing interest that no action was taken by Congress upon this report, and Mr. Sutro was naturally disheartened, though never flinching from his undertaking. In the summer of 1869 the Ways and Means Committee of the House visited the Comstock Lode, and went away strongly impressed with the advantages of the tunnel. A few months after their visit, as Mr. Sutro had succeeded in obtaining a little capital by subscriptions in Nevada and California, work was begun on a small scale at the mouth of the proposed tunnel on the 19th of October, 1869. When once begun Mr. Sutro was determined that it should never cease until the tunnel was completed, and his struggle to raise funds for its prosecution is one of the most extraordinary financial exploits on record. The outbreak of the Franco-Prussian war was fatal to his plans for raising money in Europe at the moment when they seemed most promising (July, 1870-'71), and, foiled in this endeavor, he applied again to Congress, in the spring of 1871, for a commission of engineer officers to make an examination of the condition of the lode and the utility of the projected tunnel, hoping to secure an appropriation in aid of his scheme if the report of the commission was favorable. His application was granted, and in accordance with a vote of Congress, approved April 4, 1871, H. G. Wright and J. G. Foster, Lieutenant-Colonels of Engineers and Brevet Major Generals, U. S. A., in conjunction with Professor Wesley Newcomb, C. E., were appointed as the board of commissioners. In December, 1871, this commission reported favorably upon the geological and practical value of the tunnel as an exploring work to determine the ore-bearing character of the Comstock and other ledges lying to the east, at great depths; but its utility as a
A FORTUNATE DELIVERANCE. 299
drainway and as affording ventilation to the mines was judged to be small in comparison with its cost. Whether reduction-works could be profitably erected at the mouth of the tunnel for the concentration of low-grade ores - a most important question - was left undetermined; but unless a more complete examination should establish this point beyond doubt the commission did not consider that the extension of the tunnel would prove an economical method of operating the Comstock Mines. As it was not probable that Congress would vote a large subsidy to explore a ledge or ledges which private enterprise was rapidly developing, the report of the commission was practically a serious blow to Mr. Sutro's hopes of aid from the National Government in his project. He must have perceived this, but doughtily refused to confess it, and made a strong plea for his losing cause, ably combating the conclusions of the commission before the Congressional Committee on Mines and Mining, and questioning their premises fairly on the ground that they were derived in great measure from ex parte affidavits made by the opponents of his scheme, the superintendents of the Comstock Mines. So ingenious and persuasive an advocate was he that, after an examination of the commissioners and other witnesses, the Committee on Mines and Mining, in face of a plainly unfavorable report by the commission, reversed or ignored their principal conclusions and reported in favor of a loan by the United States of a sum not to exceed $2,000,000 in aid of the enterprise. The bill was not passed by Congress, but Mr. Sutro could not provide against this failure. It is simple justice to recognize his able presentation of the tunnel project and his unflinching contest with discouragements of every kind. Such uncommon energy is certain to gain its end at length, unless the scheme in view is absurd and unprofitable. Mr. Sutro's plan was practicable and promised rich returns to investors. In September, 1871, he succeeded, at last, in obtaining a subscription of $650,000 to the stock of the company, increased shortly afterwards to $1,450,000, from English and European capitalists whom he had persuaded of the advantages of the investment.
300 HISTORY OF THE COMSTOCK LODE.
Work at the tunnel was immediately pushed on an enlarged scale. As many laborers as could be employed to advantage were engaged; the necessary machinery was bought, and the adit in the hills, which had been called, contemptuously, "Sutro's coyote hole," became the greatest mining enterprise in America.
 Gamboa's Commentaries, Heathfield's Translation, vol. 1, pp. 203-209.
 William Sharon, 1880.
 Annual Report Crown Point Mining Company, 1869, p. 13.
 Ibid., 1870, p. 13.
 Ibid., p. 9.
 Vide Tables in San Francisco Stock Report, December 23, 1879.
 Gold Hill News, August 29, 1873; Authorized Biographical Sketch.
 Virginia City Territorial Enterprise, December 1, 1867.
 Annual Report of the Crown Point Gold and Silver Mining Company, 1869, p.5.
 Ibid., 1873; Superintendent's Report, p. 7.
 Ibid., p. 8.
 San Francisco Stock Report, December 22, 1879.
 Annual Report of the Crown Point Gold and Silver Mining Company; Statement of Assets, p. 17.
 John P. Jones.
 Superintendent's Report; Annual Report of Crown Point Mining Company, May, 1873, p. 8.
 John P. Jones.
 San Francisco Morning Call, June 10, 1871.
 William Sharon.
 San Francisco Stock Report, December 22, 1879.
November, 1870, June, 1871,
Highest Selling Price Highest Selling Price.
Crown $7 00 $340 00 In May,
Belcher 8 00 245 00
Yellow Jacket 87 00 77 00
Savage 40 00 50 50
Hale & Norcross 118 00 72 00*
Gould & Curry 94 00 178 00
Ophir 4 00 10 75
* The exceptional decline in the Hale & Norcross mine shares was due to the discontinuance of the monthly dividends in May, 1871, though the quoted value of the stock was blown up in July, 1871, to $145 per share, thus confirming the general statement made.
 Territorial Enterprise, February 5, 1870.
 Territorial Enterprise, January 19, 1871.
 Gold Hill News, February 16, 1869.
 Gold Hill News, January 11, 1868; Territorial Enterprise, January 11, 1868.
 Gold Hill News, February 15,1869.
 Gold Hill News, February 18, 1869.
 Gold Hill News, February 19, 1869.
 Ibid., February 6, 8, 1872.
 Ibid., February 27, 1872.
 Ibid., February 28, 1872.
 Ibid., February 28, 29,1872.
 San Francisco Daily Chronicle, May 8, 1872; Statements of James O'Donnell and Isaac S. Hubbell.
 Report of Grand Jury, August 8, 1872; Gold Hill News, August 10, 1872.
 San Francisco Stock Report Tables, December 22, 1879:
CROWN POINT MINE SHARES.
Highest price, May, 1872, $1,825.
Lowest price, May, 1872, 100.
 San Francisco Chronicle. May 19, 1872; Editorial.
 San Francisco Stock Report, December 22, 1879.
 San Francisco Call, May 16, 1872.
 Mining stocks have declined over $50,000,000 in value within a fortnight, the decline in a dozen leading stocks alone being nearly half that amount in the last week ;" San Francisco Evening Bulletin, May 17, 1872.
 Territorial Enterprise, April 30, 1868.
 Ibid., May 23, 1868.
 Territorial Enterprise, June 27, 1868.
 Ibid., March 28, 1869.
 Mining and Scientific Press, December 8, 1866.
 Gold Hill News, April 30, 1868.
 Virginia City Trespass, June 6, 1868.
 Territorial Enterprise, March 28, 1869.
 Mining and Scientific Press, April 3, 1869.
 Mining and Scientific Press, May 31, 1873.
 The Sutro Tunnel, p. 791; Extracts from Official Letters of Superintendent P. S. Buckminster, Nov. 8, 1867.
 P. S. Buckminster, April 2, 1868.
 Ibid., April 10, 1868.
 The Sutro Tunnel, pp.794-796; Letters of H. H. Day, June 10, 1868.
 H. H. Day, December 2, 1868.
 Ibid., October 16, 1869.
 Ibid., November 16, 1869.
 Ibid., November 6,1869.
 Ibid., November 10, 1869.
 The Sutro Tunnel, pp. 796-802; Letters of H. H. Day, November 10, 1869, April 11, 1870, February 14, 1870.
 The Sutro Tunnel, pp. 802-808; Letters of H. H. Day, May 13, 1870, June 3, 1870, June 9, 1870, May 5,1871.
 The Sutro Tunnel, pp. 807, 808; Letter of Philip Deidesheimer, January 2, 1872; Official Report, March 13, 1872.
 The Sutro Tunnel, p. 809; Letter of Philip Deidesheimer, March 13, 1872.
 The Sutro Tunnel, p. 884.
 Report H. R., No. 50, Second Session, Fortieth Congress.
 The Sutro Tunnel, pp. 886, 887.
 Ibid., p. 889; Virginia City Territorial Enterprise, October 20, 1869.
 Ibid., p. 891.
 Ibid., p. 893.
 Forty-Second Congress, Second Session, Ex. Doc. No. 15; The Sutro Tunnel, pp. 6-13, Report of Commission.
 Report of the Committee on Mines and Mining; The Sutro Tunnel, pp. 956-965.
 The Sutro Tunnel, p. 895.
 Gold Hill News, October 13, 1860; Editorial.