[The Blunders in Washoe Mining, Alta California, October 24, 1865]

 

THE BLUNDERS IN WASHOE MINING.

            Common as blunders are in all occupations, it would be difficult to find any branch of business in which so much money has been squandered and so many mistakes committed, with good intentions, in a short period, as in Washoe mining. The public character of the mining companies, the vast quantities of silver which some of them obtained, and the importance of the labors of all to the prosperity of the Coast, threw a strong light on their transactions, and called general attention to matters that would have remained unknown or without interest, under other circumstances. When we consider that the Gould and Carry mine has yielded $14,000,000, and the Ophir about $7,000,000, we cannot be astonished if people look with curiosity at the management of the corporations which own them.

            With the trustees of most of the companies, the main object was not to develop the mine, but to make money out of the stock. The affairs of the companies were kept secret, the Superintendent was instructed to take out poor ore, or rich ore, as bulling or bearing was the policy; he was told to write little in his official reports, and much in his private letters ; assessments were levied, or dividends promised, not with regard to the wants or capabilities of the mine, but to the interest of the trustees -- and so on. All this was sharp practice, confessedly in violation of the good faith that the trustee should bear to the stockholder. And yet, pernicious as it was, it probably did far less evil than the bad management which was well meant.

            The owners of the claims on the Comstock lode were, almost with exception, men who had no experience in silver mining. They dug their shafts and tunnels in the wrong places; they sent their rock to the mills without assorting it; they worked ore when they were not getting half its assay value; they allowed tailings worth $70 per ton to go to waste; they spent vast sums in useless ornament; they built expensive buildings before they had any ore in sight; they spent money as though they had a net revenue of millions, and as though their honor required them to lavish their dollars on every side. And yet, even these blunders were not the worst.

            The greatest mistakes were committed in working for the moment. The mines were treated as if the chief object were to reduce all the ore in sight within the briefest possible time, and as if it were not necessary to open tunnels, shafts or drifts for obtaining supplies of ore in the future. In the hurry to get silver, the ore was sent to all the custom mills that would take it. Extravagant prices were paid, and the work was often not half done. For a time, the mill-owners were making fortunes, while the mine-owners made nothing. Thousands upon thousands of tons that would now net $50 per ton were worked two years ago at a net profit of less than $10. Although many of the evils of early inexperience had been corrected previous to 1864, we find that during that year the cost of reduction in the Gould and Curry mill was reduced from $50 to $12 per ton. The system which sacrifices 50 per cent for the sake of an immediate return, rather than wait a year, must prove ruinous in any ordinary business, and yet that system prevailed in Washoe mining. If the Gould and Curry mine had been managed in '62, '63 and '64 as economically as at present, its stock would have been worth three times as much as it now is, but it would not have risen to $5,600 per foot in July, '63. It was by exhausting the mine to pay dividends of $125 per month that that high figure was reached, and now the stockholders must suffer for it. We speak of the Gould and Curry, not because it was the worst managed, for it was not, but because it was the leading mine of Washoe, and, for that matter, of the world.

            And while the silver was coming out at the rate of two tons per week, and when it was plain that the ore in sight could not last long at the terrific speed with which they were working, nothing was done to open up the mine. The officers acted as though they presumed that their ore would never come to end, and all could be taken out through the old shafts and tunnels. The result was that the mine is now scarcely able to pay for the cost of opening new levels, and there is a great doubt whether the stock of ore will not be entirely exhausted before other bodies can be received and made available. If proper works had been constructed two years ago the burthen would not have been felt, and the mine would now have been well opened.

            The fundamental principles in silver mining must be the same as those which govern other permanent and extensive branches of business. Nothing must be wasted in show; everything must be done under the supervision of an experienced and competent man, and regard must always be had to permanent and future, rather than to immediate and transient, profits. Capitalists do not demand dividends this year or next, but they want to know that there will be an ultimate reward sufficient to justify the investment. The Comstock ledge is permanent in its character, and will yield such rewards to those who know how to handle a mine properly.

            While many of the bad blunders will not be repeated, there is still abundant room for improvement in the management of the Washoe mines. Not enough attention it paid to the future; too much to the present. It looks as though there was no faith in the richness of the lode at great depths. Then are no sufficient preparations for draining and ventilating the mines and hauling out the ore. There is a lack of cooperation among those whose interests require that all should work together. The longer these blunders continue the more severe the loss will be. The sooner they are remedied the better for all concerned in the permanent success of the mines. Let nobody assert that confidence in the Comstock is lost ; geology vouches for it, and will command millions of capital. All that is wanting is confidence in the management.