Eliot Lord, Comstock Mining and Miners (1883). available online at https://archive.org/details/comstockminingmi00lord
Rodman Wilson Paul, Mining Frontiers of the Far West 1848-1880 (1963; 2nd ed., 1980).
William H. Goetzmann, Exploration and Empire: The Explorer and the Scientist in the Winning of the American West (1966).
Thurman Wilkins, Clarence King: A Biography (1958; revised and enlarged edition, 1998).
Bruce A. Woodard, Diamonds in the Salt (1967).
Let's pick up where we left off at the end of last lecture: talking about another great gold or silver rush, the Comstock Lode in Nevada.
Look at these stock certificates of companies put together to capitalize and profit from mines in the California gold fields. The point I want to make about these, a point that will run through all of these lectures, is that the narrative of individual prospecting miners ("forty-niners") is misleading. It wasn't just individuals who went out to mine, but also investors who picked up their capital—their cash—and invested it in massive mining enterprise. Today I want to follow the capital, individuals whose investments made possible the mining lectures that are the subject this lecture and last lecture.
There are several narrative arcs running through this and last lecture that I need to carry to the next stage from last lecture. One arc was the movement from an initial discovery of gold (e.g. James Marshall's discovery at Sutter's Mill in 1848) to an initial wave of prospectors, to the movement of additional people into areas beyond the place where gold was originally found. Another arc was from low-capital and low-volumes of labor to higher capital and larger waged workforces needed to mine these areas. We can also track a technological arc from simple technologies costing small amounts of money (a pan or a washer) to larger enterprises involving more miners and more equipment (flumes, hydraulic mining), to much larger enterprises involving hundreds of thousands, eventually millions of dollars.
Remember that the geology of mining deposits partially drove this difference in costs: placer deposits washed into streams are generally much easier to mine (with simpler tools, fewer workers, lower investments) than mining mineral veins from the matrix rocks surrounding them. Mining ore bodies was often called "quartz mining" (because gold was deposited in fissures in rock otherwise filled with quartz) and "hard rock mining" because of the extreme hardness of the rocks in which minerals occurred.
Extracting gold from veins of quartz in granite or other very hard metamorphic rocks--as was often the case in Sierra Nevada and other parts of the West--was enormously difficult, requiring lots of workers and elaborate machinery ... and hence was very expensive.
The more expensive the technologies involved in mining became, the more money was needed to purchase those technologies and the labor needed to operate them. That's where investors came in: they put their capital at risk to buy stakes in promising mining claims, buy equipment, and hire workers. Such investors came from all over the world--especially places like New York, Boston, and Philadephia on the East Coast, and London in Great Britain ... but it was San Francisco that became the metropolis channeling such global capital flows toward the mining areas, with its own investors growing wealthy in the process. This is highly speculative investment, very risky—but if you struck it rich, you could really strike it rich. Such stories fueled the mania for both prospecting and investing.
Part of what I want to look at today are these "capital rushes" of large amounts of money headed toward mining landscapes. I'll tell the story of one of the most famous of those, then step back to reflect on a number of other themes relating to mining and other broader themes of this course as a whole.
Southern mines were poorer and more racially diverse; the northern mines in California were larger and more wealthy. San Francisco functioned as the center for moving capital to the mining camps. The story I'm going to tell you now is in Nevada, near Lake Tahoe. It was on the route of the Overland Trail and the Central Pacific Railroad—but notice that what I'm about to narrate happened 10 years before there was a railroad, in the extraordinarily mountainous environment of the Sierra Nevadas).
The story is about Mt. Davidson and the city that grew up on the flank of Mount Davidson, Virginia City. It was site to one of the greatest gold and silver strikes in all of American history — the Comstock Lode.
In 1859, prospectors living in the shanty town called Johnstown on the south flank of Mt. Davidson included:
O'Riley and McLaughlin staked their claim on Gold Hill, joined by Old Pancake. They began finding gold in veins of blue sand and blue-grey quartz. They threw out the blue stuff until some of it went to a local assay office and was found to be very rich in silver, rather than the gold that they prospectors were looking for. This was the first time that silver had been found in large quantities in the American west.
A rush began at once, and a community named for Old Virginia – Virginia City – quickly sprung up. The Lode itself was named for Old Pancake, the Comstock Lode. Note that the second largest city in Nevada, the Town of Reno, wouldn't come into being until 1868, when it was chosen as the railroad station on the Central Pacific that would connect Virginia City with the transcontinental railroad. Here's one of the points of the trancontinental railroads that I want you to keep track of: the railroads opened up mining.
17,000 claims were located in an orgy of speculation, stocks were floated in San Francisco—and most came to nothing. Half of the total production, and 4/5 of dividends paid to all investors, came from only two pairs of adjacent mines – Crown Point & Belcher, and Consolidated Virginia & California.
Note the complexity of the ore bodies that the shafts were trying to reach. Hard-rock claims began to develop new legal concept of mining right which has bedevilled American land law ever since – claims are not orthogonal, but following a vein. So whereas Anglo legal tradition says that if you own a plot of land, you own whatever minerals are underneath, in this emerging legal tradition, whatever vein you found was yours to follow to wherever it surfaced. The whole body of law governing mining in the U.S.—particularly state laws—have created a messy legal situation.
One other complication: silver mining is very different from gold because silver is much more reactive than gold. Silver joins chemically with any acid, so doesn’t occur in placer deposits like gold. Normally it has to be broken from ore and smelted out in very expensive process. In Eastern Sierra, there were no base metals associated with process, so CA techniques of crushing and amalgamating could be used – very lucky, and also lucky that gold and silver were equally present.
One of the first to arrive at Comstock was George Hearst, father of Los Angeles newspaper publisher William Randolph Hearst, who had been unsuccessful placer miner and storekeeper. He was working a quartz claim when he heard of the blue stuff at a place called the Ophir Mine, bought a 1/6 interest, hauled 38 tons of the blue material out of the Ophir Mine on oxen and horsedrawn wages via Sacramento to San Francisco—a load that netted him $91,000. (Multiple by 20 to get the approximate value in today's dollars, $1.8 million out of one shipment of ore!) Some ore was even smelted in England because the mining techniques did not yet exist in the U.S.
Hearst recruited mining engineer Almarin B. Paul to solve the challenge of how best to process Comstock ores in the Comstock itself. By spring of 1860, Paul had erected 24 stamp mills in Virginia City for crushing ore, made contracts with San Francisco foundries to set up processing machines, all hauled over Sierra Mountains by oxen, and the timber had to be brought over 20 miles from the Sierra Nevadas.
The processes once you had the ore borrowed from Mexican experience: pulverize ore in arrastra, boil ore in mercury in a vat because mercury almagamates with gold, then spread that hot material on a patio with salt on a flat tray called patio and have horses trample it. As you can imagine, the horses died quickly and in large numbers. You can also see why these processes were so hard on human laborers, too.
Paul wanted to mechanize and remove horses from this process. He improved the process by using hot steam to speed the process, then had mechanical iron pestles stir the mix in a pan while heating, added iron filings accidentally in process. By 1862, he had perfected Washoe Pan, the name for this increasingly elaborate means of separating gold from surrounding host ore.
Here's the larger point: increasing new technologies, greater scientific expertise brought to bear, and transportation needs all require money. So capital investment was necessary to bringing into being the ore processing at a place like Comstock. Soon the Washoe Pan process was used around the world – a fundamental American innovation in mining technology.
Processing ore cost lots of money, which was where investors came in, forming a link to San Francisco. One of the most important investors was William C. Ralston, the Ohio merchant who went to California as a steamship company partner in 1854. In 1864, he and D.O. Mills and others founded the Bank of California, which became for a time the West’s leading financial institution. The Bank of California made major investments in Comstock and came to coordinate the investments of many San Francisco capitalists. It also funneled money back to San Francisco to support hotels, foundries, and factories.
Working for Ralston as an agent in Virginia City was William Sharon, who came to be virtually the emperor of Washoe for several years. Not only did he dominate the richest mines, but in 1867, he and Ralston set up Union Milling & Mining Co., to handle Comstock mining ore. Union Milling & Mining Co. monopolized the market, processing their own ore so as to siphon off substantial parts of profits. The firm exemplified an interesting feature of capitalism in the 19th and 20th centuries: if you can monopolize a chokepoint in a longer process, you can earn a huge amount of money. It is the same with John D. Rockefeller and petroleum: he bought up not all the oil fields but all the oil refineries.
For a while, the Union Milling & Mining Co. dominated milling in the region, also with the water supply and timber supply. We’ll reencounter portions of their empire in just a moment. For now, let's consider other elements of boomtown mining process & problems encountered along the way.
Virginia City became one of the U.S. west's classic boomtowns, growing from a population of 500 in 1860 to 3284 a year later. By its peak in 1873, nearly 25,000 people lived in the Comstock Lode area.
The town was fundamentally urban in its social organization: dense, crowded housing; urban services; wage work and a merchant presence. Of men in city, 70% could be classed as workers of one kind of another, whether miner, carpenter, machinist or waiter.15% were merchants, 5% were professionals, and less than 1% were elites (capitalists, superintendents, etc.).
At the base of this economy, of course, were miners, who did brutal labor deep underground. A majority immigrants – Irish, Cornish, over 1/2 not US-born. These individuals worked for $3.50/day.
Over time, the workforce of the mines became more ethnically and racial diverse. Much of the investments of the capitalists went to wages, and much more of that money went to equipment. As mining shafts got deeper, machinery was needed to lower men down the adit that they were working in and to bring ore out. As machines bigger, buildings and foundations to support them also grew.
The deeper the mines went, the more water became a problem, along with the constant threat of drowning by hitting a scalding pocket and flooding the mine. In some mine shafts, heat rose to well over 100 degrees. As heat rose to as high as 130 degrees, miners worked naked. Yellow Jacket Mine reached as high as 167 degrees at 300' depth. In 1878, every man in two key mines consumed three gallons of water and 95 pounds of ice in a single eight-hour shift. The strain on men and machines was enormous. This was why the cost of lifting technologies became more and more expensive.
Such deep mining required machinery on a scale such as California mines had never seen. Some of work was done right in Virginia City, but almost always with San Francisco ownership and capital.
Over time, mining shafts went deeper and deeper, finally 2000-3000’ down. Simple systems like bells and level indicators were used to communicate over these thousands of feet, creating a danger of error with little safety equipment. The mining deaths in 1863 at one mine were 80 people: one from overwinding, five from falling cages, and 22 crushed by cages.
Deep underground, miners faced the stope alone. Here, versus in the mine shaft, was a different problem: Comstock mines soon encountered an expansion of ore bodies underground. Crumbling rock faces, with frequent collapses, causes 18 deaths from cave-ins in the period 1863-1880.
The problem of crumbling rock faces caught the attention of a German mining engineer named Philipp Deidesheimer in the early 1860s. He developed a system of erecting timber box frames one atop another that was the major mining innovation of decade. The Deidesheimer Timber System invovled simply errecting a new frame as the rock face being worked on moved outward. The innovation represented an intersection of resource, labor, capital, and technological innovation. Think about the capital problem of this innovation, particularly in a relatively treeless landscape.
Such timber frames did not always work to prevent collapse, and they eventually failed when mines were abandoned. Because they were constructed of wood, they came with other consequences: the greatest hazard of all in a mine were fires: 49 our of 295 deaths between 1863-80 were the consequence of fires caused by so much wood and flame lights.
We can learn much about the overall complexity of the mining process, and eventually the urban-industrial nature of mining, by following out its support materials to their point of origin.
Take wood, for instance. Note how much wood was used not just for buildings and square set timbers, but for fuel. The fire hazard of mining is indicated by buckets on the roof of structures around the mouth of the mine shaft. Where's all that wood coming from? Wood is being shipped down to Virginia City from flumes, or by mining railroad, or horse and oxen hauling lumber to where it will be milled, and then shipped downstream. Notice: all of this owned by Ralston’s Bank of California.
By the late 1860s, Ralston’s control of this empire was being threatened from two directions: On one side, a group of four Irishmen were very successful as California miners – John W. Mackay, James C. Flood, James G, Fair & William S. O’Brien. These men decided to try to break Sharon & Ralston’s milling monopoly, investing in the Hale & Norcross mine and earning enough to set up their own mill. Then they began to buy up Consolidated Mine quietly and do explorations from existing shafts.
Their explorations proved to be the biggest bonanza on the Comstock of all time. The price of Consolidated Virginia stock rose from $1 in 1870 to $15 in 1872 to $700 in 1875. By 1876, the mine was earning $50,000/day, paying out $74 million in dividends between 1874-81. This made these four Irishmen among richest men in world and broke Ralston’s monopoly.
Comstock production, meanwhile, declined precipitously: 1876 -- $38 million 1878 -- $20 million 1879 -- $7.5 million 1881 -- $1.4 million What's the lesson here? For now, simply note that the story of Virginia City in some sense follows a classic pattern of mining country, not just in the American west and not just in North America, but around the world: boom and bust. It served as a forerunner to patterns we’ll see in many other parts of mining west. Here's how the boom-and-bust pattern typically unfolds:
I want to pause for a moment and reflect on the Wikipedia mining entries we've asked you to explore for section this week, along with the readings listed in the syllabus. Here I want to return to some themes I introduced earlier in the course and during the review session for the midterm exam: how historians and geographers go looking for patterns when we explore documents that have come down to us from the past. That's what you're all now starting to do with your place papers.
What historians are confronted with when they look at remnants of past is a near infinitude of information. Their job is to piece this together into patterns. This is a very difficult: since the data is almost literally infinite, and constantly subject to changing interpretation, it would drive anyone crazy who tried to hold it together in their minds all at once.
So historians think in terms of patterns, connections, and contexts. Which contexts we want to make sense of has to do with the questions we are asking.
What we do when we read historical documents might seem like assembling a jigsaw puzzle, pieces with picture on them which need to be realigned with one another, reassembled, though some of the pieces are missing. In reality assembling historical documents is much more complicated, of course; documents are more like having a series of photographs of a city, taken at many different times of day and night and weather, using many different cameras, with different types of film, some filtered, some not: like the story of the blind men and the elephant.
A person trying to reconstruct what a city looks like might lay all the pictures out on a rug, thereby realizing that despite apparent differences, some overlap but capture different aspects of same object, some capture only portions of an object; in others, the existence of an object can only be inferred: the shadow of invisible building, the exterior but not interior of houses, generating stations from electric lines, etc.
That’s what doing history is like, with additional element of trying to do the reconstruction in the 4th dimension of time as well.
Remember, nothing in this course--nothing in history, nothing in life--will make sense if you don’t approach your readings and these lectures with a constant search for patterns in mind. That's I hope you've been doing as you explored this week's Wikipedia entries and read the assigned readings: looking for patterns, seeing connections, placing the the details of a particular event or time or place in their larger contexts. What you go to Wikipedia to find depends on what piques your interest. Say you were interested in the Centralia Mine Fire: approach in a spirit of play and serendipity.
So what I've done today is to take one of the quirkiest oddities from history that I know and tell you about it. I'm going to tell you about something called "The Great Diamond Hoax" and tell you the story as those "taken in" by the hoax understood it. But I want to flag some takeaway patterns from today's lecture before I tell you about the hoax.
We can make this lecture an exercise in looking for the thematics of western mining. We’ve seen already the course of mining in California and Nevada. One possible narrative, or pattern to rushes:
Virginia City nearly ran its course between 1859-79; within 20 years, it rose from nothing to a thriving city of 11,000 (25,000 in region as a whole), and then production dropped to 1/27 its former size in five years. Some mining continued, but the population plummeted, and the city became essentially an occupied ghost town living on tourist trade. Other Great Basin towns had even more precipitous histories. Wikipedia is full of their stories.
We can attach other themes to the overall trajectory, which is the job of this lecture: 1) Opening of other mineral areas of the west ... 2) Increasingly corporate control, and connected to it... 3) Increasingly scientific nature of mining process connected to it ... 4) Rise of base metal mining … 5) Increasing role of government. (USGS, Clarence King, John Wesley Powell, George Wheeler, Ferdinand Hayden)
Most mining areas were opened up as “rushes” of one kind or another.
In February 1871, two poor Kentucky prospectors, Philip Arnold and John Slack, showed up at the office of a prominent San Francisco businessman, George D. Roberts. They showed him a small leather bag that they said contained something very valuable that they intended to deposit in the vault of the Bank of California the next morning. They didn't want to tell Roberts what was in the bag, but when he pressed them, they eventually said that it contained "rough diamonds" that they had found on a mesa somewhere in the West. They wouldn't tell him where the mesa was, but they said it was the richest mineral strike they'd ever seen, filled not just with diamonds but with emeralds, rubies, sapphires, and other precious stones (none of which had yet been found in the American West). Importantly, diamonds had been discovered in South Africa just five years previously, so they were on American investors' minds.
Roberts was doubtful, but when they dumped out the contents of the bag on his desk, it was indeed dozens of uncut diamonds.
The next morning, they showed up at the Bank of California, where again they expressed great reluctance to tell anyone what was in the leather bag they simply wanted to store in the bank's vault...
... but soon they were showing William C. Ralston, the wealthiest and most powerful financier in San Francisco, what they had found. Diamonds had not yet been found in the American West, but they had been discovered in South Africa in 1867, provoking diamond rushes there very much akin to gold and silver rushes in the United States. So Ralston was prepared to believe what he was being told. When he asked to see the contents of the bag, to his great wonder, out spilled emeralds and rubies and diamonds, wealth beyond anything he had ever seen.
Where had they found these stones? "Out there." Would they sell their rights? Definitely not, but they did need some financial help and would be willing to sell partial stake in their find. Slack agreed to sell his share in the diamond field for $100,000 (worth just under $2 million in today's dollars), while Arnold played hard to get. Ralston said he would pay $50,000 to Slack up front, and $50,000 when they brought more gems from their remote site. They agreed, disappeared, and a few weeks later returned with another bag of gems, whereupon Ralston paid Slack the rest of his $100,000.
Ralston still wanted to do his due diligence, so in October Ralston took samples of the rough-cut stones to NYC to confirm the appraisals of San Francisco jewelers, one of whom had offered to buy a 103 carat diamond for $96,000. At Tiffany & Co. in New York, Henry Lewis Tiffany's assistant appraised the value of the samples at $150,000, which, if true, would mean that the gems already in Ralston's possession were worth $1.5 million -- $21 million in today's dollars.
Ralston was now really excited that he was in on the start of another fabulously wealthy rush, perhaps bigger even than the Comstock itself. Investors in San Francisco and NYC were already lining up to participate, including the famous (or infamous) Civil War general George McClellan and newspaper editor Horace Greeley. But Ralston was careful enough to recognize that before the find could truly be declared authentic and real preparations for financing it could begin, the remote mesa where the gems had been found needed to be visited by a competent mining engineer. So he got the prospectors to agree to allow one of California's most experienced mining engineers, Henry Janin, to visit the site.
The prospectors took Janin to the site with a small group of investors in late May 1872, traveling via the Union Pacific from St. Louis to Wyoming, then spending four days on horseback via a circuitous route that was difficult both to describe and to retrace, then finally arriving at a remote spot in northwestern Colorado. Note the role of the Union Pacific in making this trip possible, again demonstration of the ways in which mining was dependent on new transportation technology. At the remote sight, Janin found precious stones scattered by the dozens all over the ground, confirming that find was genuine.
Ralston promptly founded the San Francisco & New York Mining and Commercial Co. capitalized at $10 million. Janin’s report of the authenticity of the diamond site convinced other investors to form at least 25 other companies capitalized at $200 million—note the phenomenon of wild speculation and overcapitalization as a pattern that occurred repeatedly in mining operations, with capitalists as an analogue to the prospector’s migration…perhaps comparable to today's Internet companies? Slack and Arnold were paid $600,000 by Ralston’s company, more by others, for partial rights to the land claim.
Investors began to swarm in large numbers, staking claims to sites on the remote mesa as Arnold took growing numbers there to see it for themselves. Janin believed the site to be so rich that it would likely be able to control the world market for diamonds and other gems. The stones were put on display in windows in prominent San Francisco jewelers, and public excitement grew by the day.
By itself, this is a romantic and colorful tale designed for antiquarians—the U.S. West is full of such stuff. It becomes meaningful only when we as historians can connect it to larger and more important patterns. We’ve already done so a bit – by linking it to the hysteria, speculation, rushes, and transportation systems characteristic of mineral booms.
But serendipity provides an unexpected connection which links this anecdote to another of the major themes I specified for the lecture: government surveying and the figure of Clarence King, the first director of the U.S. Geological Survey, who we've encountered before in this course, and who was included on your Wikipedia assignment.
The Great Diamond Hoax ended oddly. Out in Colorado, a government survey was in-process on the 40th parallel, led by King. King was a fine geologist. He was already becoming known as a writer, having published his classic Mountaineering in the Sierra Nevada in book form 1872, earlier as a series of articles in the Atlantic Monthly. For the previous decade, King had been conducting a semi-private, semi-public (funded by Congress) exploration of the 40th Parallel to map the mineral and other resourecs of the American West. Eventually resulted in a detailed series of maps of mining areas of the West, and some of the first high-quality geological maps of the route along the Union and Central Pacific railroads. King's own volume on Systematic Geology of the route would be a classic.
King was understandably concerned that such a major mineral find had occurred in precisely the area he had been surveying for so long without his having located it as part of his geological reconnaissance efforts, so he set out to determine the location of the mesa where the diamonds had been found to investigate it for himself. He was able to figure out the location of Slack & Arnold’s diamond mesa from their sketchy reports. He found the spot, which was in fact covered with quite genuine diamonds and other gemstones. He even found anthills with gems inside them. Being a scientific geologist rather than an engineer, however, he began to work out the geology of bedrock to see what strata the diamonds were located in, and discovered a curious thing: diamonds were all located right on the surface, none in the bedrock. The ones in anthills were only in locations where there were human footprints nearby. And at least one diamond had jewellers' marks on it
It was all a hoax! The jewels had been salted, i.e. placed fraudulently to make the area look rich in ore. A report came from London that Arnold and Slack had repeatedly purchased inferior South African gems there over the preceding year or two.
Arnold retired to Kentucky a wealthy man after a minimal settlement, and Ralston ate his losses. Ralston's bank never recovered, and Ralston himself would go swimming several years later only to have his body wash up on shore several hours after he'd set out—leading to questions about the nature of his death.
Perhaps this story has carried us too far afield, but let’s track down the connections and big themes that it exemplifies:
It’s like the photographs on the rug – we’ve looked at a single incident, but it contains multiple images depending on how we view it – jigsaw with more than one picture, almost like a hologram. We as historians give the “fact” of the diamond hoax its significance. The pattern we’re interested in determines how we’ll use it.
This is how I want you to use Wikipedia, our assigned readings, these lectures ... and your own place paper research.
I hope this rather digressive lecture hasn’t knotted you up. I designed it to maximize connections, show you how confusion is really just a sign of multiple patterns. Lots of knots here because the central lesson, however tangled, is very simple: in history, you can almost always start at any point and connect it to any other. Doing history means discovering relationships without getting frustrated, even when things at first seem obscure and disconnected. Learn to trust serendipity. Start with the Diamond Hoax and work around it to figure out all the interesting connections you can make to it. Spread your photographs out on the rug, and begin exploring them in a spirit of play. Learn to relax, enjoy the not knowing, the figuring out, the discovery, the play. And never forget E. M. Forster's wonderful line from Howards End: "Only connect...."