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Chapter 4Statistical Profile of Mining Industry:

First Stage 1860-1870

In the preceding section on the Comstock mining structure I focused on the decade and a half after the enactment of the 1871 tax because the official public record allow broad trends and patterns to be identified and studied. In the decade prior to 1871 the Comstock had important discoveries that led to the earliest bonanza mines. The quantity and quality of the documentation, however, is less consistent and complete, and this presents some complications in the effort to link the two decades and to develop a long-term analysis of Comstock mining from 1860 to 1885. There is a fairly large body of private and public data on mining operations and finances from 1860 to 1870, but it has survived in a form that does not lend itself to the creation of a profile such as discussed above. Numeric data are more scant for the first half of the 1860s than the second half. During the territorial period government generated few documents on mining operations, and except for judicial records as the result of hundreds of lawsuits concerning property disputes public documentation is sparse. On the private end prospectors with their picks, pans and packs seldom keep records on ores extracted from outcroppings or streams that they worked. Even when some of the outcroppings led to bonanzas, the record keeping was spotty. Over time, as entrepreneurs replaced prospectors and as the scale of mining grew to unprecedented levels, the paper trail became more conspicuous and pertinent. In the wake of the organization of state government the official public record began to grow. In addition mining companies as stock-issuing corporations had to issue periodically financial reports for stockholders and investors, and these reports plus the business accounts upon which they were based came to constitute private-company archives, some of which have survived in part because they were considered to be collectibles. The well of documentation for the first decade of Comstock mining is not dry by any means, and it can be drawn from to develop a profile of the mining industry during the first decade that can be linked to a far more detailed profile for the second and third decades.

Early Comstock history is subject to frequent rewriting. Who made the first discoveries and how events evolved from there are based as much on lore as on documentation. When the Surveyor-General wrote his first legislative report in 1865 (submitted to the 3rd Legislative Session, 1867), his version of the Comstock earliest history offered a reasonably accurate rendition of how events unfolded. The Grosch brothers were the first (certainly among the first) to find silver while panning in the area of Silver City around 1857. One brother died from a pick-in-the-foot accident, and shortly thereafter the other brother headed for California. Whether or not the Grosch brothers deserve to be credited with the founding of the Lode (since their discovery was modest and their presence brief), reports of their discoveries circulated through western Nevada and eastern California and attracted others. During the next two years panners and prospectors continued to work on the Lode’s southern edge around Silver City and northward into the vicinity of Gold Hill and Virginia City. Surface conditions certainly made prospecting attractive, and while a major discovery remained elusive, it had become a probability rather than just a possibility for those working the valleys and hillsides. Perhaps the most important figure during these first two years was James

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Finney, known as “Old Virginia” (being a native Virginian). His fellow miners regarded him as a first-rate placer miner and so honored him by naming Virginia City for him in 1859. The Surveyor-General actually credited Finney with discovering the Comstock, even though the Lode was named for another prospector, Harry Comstock, a naming that the Surveyor-General considered a fraud. He based that on a quartz claim that Finney filed in February, 1858. This claim was for an outcropping, known as “Virginia Croppings”, at the head of Six Mile Canyon, and in the view of the Surveyor-General it was the “western portion” of the Comstock Lode. Finney had actually abandoned his diggings there, and some months later in the summer of 1859 others while “gold washing” discovered a large silver deposit that Finney had missed. So the founding of the Comstock will remain shrouded in controversy, perhaps as it should, because prospecting by its very nature resists being documented. Less controversial is the fact that the prospectors’ activities had by 1860 drawn those individuals who would lay the foundation for the Comstock mining industry.1

In those early months and years no one knew how much ore lay below the surface or how it was configured. It was imagined, as one editor quoted by Smith said, that “Every hill and canon around seems to be literally made of silver—there is no end to it.”2

The scattered nature of the underground deposits as well as their great depth was not yet understood. But a rush was underway, and as a result little of the Comstock escaped being staked for claims. Even ten years later when the topography and geology of the Comstock was better understood, surveyors’ maps (many of extraordinarily high quality) still showed virtually every plot of ground along and beyond the Comstock under a claim, although many had fallen into desuetude.3 Only a few rich outcroppings led to large underground deposits that could be tunneled into with little or no risk. The majority of the claims contained vein matter – streaks of ore not usually profitable – or turned out to be absolutely barren. But enough ore was found or was rumored to have been found to launch a frenzy of building. The depth of the shafts and the length of the tunnels, the horsepower of the hoists and the capacity of the

1 “Annual Report of the Surveyor-General...1865” in Senate Journal and Appendix, 3rd Legislative Session (1867), 19-20. Also see Smith, The Comstock Lode, 4-16. For a lively and modern rendering of the early years see James, The Roar and the Silence, Chaps 1-3.2 Smith, The Comstock Lode, quote on p. 32 with no source cited.3 See J. B. Treadwell, compiler, “Graphic Chart of the Comstock Mines, State of Nevada, 1876,” issued with the San Francisco News Letter, 3 June 1876, on file, G4352 C6 1876 T7, at Special Collections, Library, University of Nevada, Reno.

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Illustration 1: Map of Comstock Claims

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mills were frequently commented upon in local newspapers and published in state reports to illustrate how immense this undertaking had become. Placer mining offered little precedent for what lode miners confronted on the Sierra’s eastern slopes. It was accomplished in large measure through a combination of experimentation, innovation, money and luck. Some new, important technologies from framing the underground workings to accelerating the amalgamation operations – were quickly developed and widely adapted.4 The Comstock benefited from the fact that America was in the midst of a manufacturing revolution, which meant that many industrial-grade products – cables, motors and drills to name a few – could be enlisted in the conquest of the Comstock. In addition it benefited from the fact that the American West and California in particular attracted inventors, engineers and scientists who could be called upon to address the challenges posed by the Comstock. What the first prospectors thought that they had found evolved into a mining business that they would not have recognized. Indeed the Comstock both captured and reflected the inventive and entrepreneurial spirit of America in the second half of the nineteenth century.

FIGURE 1SOUTHERN SECTION, COMSTOCK LODE, BECKER ATLAS SHEET XI[BRACKETED FIGURES FROM SURVEYOR'S POINT (GOULD & CURRY), OVERMAN

(COMBINED) MINES EXHAUSTED AT 600', BELCEHR, CROWN POINT AT 2,000', KENTUCK AT 1,400', YELLOW JACKET AT 1,500', CHALLENGE, CONFIDENCE,

IIMPERIAL AT 1,000']

Notes: Depths from surface above mines may be several hundred feet shallower than surveyor's depths.

Official mining statistics from the territorial period are minimal. A few public documents such as judicial proceedings over disputed claims and company accounts provide a scattering of mining and milling data. Much of the economic, financial and technological information for the territorial period has been drawn from newspapers and periodicals. As word spread about the wealth of the Comstock so too did coverage. Besides the local press there were journalists from San Francisco as well as eastern cities

4 “Annual Report of the Surveyor-General...1865” in Senate Journal and Appendix, 3rd Legislative Session (1867), 22.

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like New York. News reports as historical sources always raise the issue of accuracy, and in the case of the Comstock the press has served as an important historical repository for the reminiscences, chronicles and histories written about the Comstock. Not surprisingly the two most famous chroniclers, Grant Smith and Eliot Lord, made extensive use of journalistic sources. Almost everyone who has written about the Comstock in the earliest years portrayed it as rife with speculation that resulted in too many mines and mills being built. Lord, relying on data published a decade later (3 March 1877) in a periodical known as the Mining and Scientific Press, averred that in 1861 that 86 mining companies had been organized “with an aggregate capital stock” of $61.5 million. That averaged out to be about three-quarters of a million dollars per company. These were large numbers by any measure. If we accept the numbers as generally accurate and then compare them to the Surveyor-General’s 1866 report, we observe that the Comstock industry had slimmed down considerably. The Surveyor-General’s list had half the number of mines cited by Lord, and only half of those actually registered any production. Lord’s retrospective view of such frenzy in mining on the Comstock, a view shared by Smith and others, accepted this for what it was – fantasy. “In the unknown there is an almost infinite range of possibility, and who could then oppose the confident faith of the optimists, except with unsupported doubts,…[as] every stroke of the pick revealed new treasures.”5 Smith calculated that between 1859 through 1862 output probably rose from several hundred thousand dollars to several million dollars. Impressive but not spectacular, and yet enough to clog the trails from California with would-be fortune seekers. But, as would happen more than once in the first quarter century of Comstock mining, new discoveries sent production skyrocketing. Output jumped to $6 million in 1862, $12 million in 1863 and to $15 million dollars in 1864 and 1865. From 1859 to 1866 the Comstock had yielded up about 1.7 million tons of ore worth about $50 million dollars (near $1 billion today).6

A quantum leap had occurred, and this was not lost on those who followed Comstock mining. By far the largest operation by ore produced in the first half of the 1860s was Gould & Curry with $14,000,000 worth of ore or nearly a third of the total.7

Even though Comstock production had more than doubled between 1862 and 1864 its overall financial health was called into question. The San Francisco Stock and Exchange Board (created in November 1862) had helped to push stocks prices up after major discoveries in 1862, but, as output appeared to stall in 1864, the Exchange then drove them down. Investors and speculators had thrown a lot of money at the Comstock without, as the Surveyor-General’s report insinuated, much serious scrutiny of the Lode’s financial potential. Too many mines and too many mills and too few profitable ores precipitated a crash. Bankruptcy, tight money, unemployment and out-migration spoiled the party. Now Virginia City had become to those who remained “dull” after several

5 Lord, Comstock Mining and Miners, 126.6 Smith, The Comstock Lode, 32, no source cited for quote. Other materials on pp 28-37, 58-62. Surveyor-General estimated that $45 million worth of ore for a shorter period of five years from 1861-1865. See “Annual Report of the Surveyor-General…1865” in Senate Journal and Appendix, 3rd Legislative Session (1867), 22-23.7 “Annual Report of the Surveyor-General…1865” in Senate Journal and Appendix, 3rd Legislative Session (1867), 23; Smith, The Comstock Lode, 25-26; Lord cited figures for 1863-1865 that exceeded $11 million in Comstock Mining and Miners, 128.

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“splendid” years. But the Comstock was not yet to be declared dead. The downturn in the mid-1860s simply served as an invitation to another group of investors and speculators to buy in. As Smith wrote: “The mines were worth far more than [their] bedrock prices.”8

FIGURE 2MIDDLE SECTION, COMSTOCK LODE, BECKER ATLAS SHEET X

[BRACKETED FIGURES FROM SURVEYOR'S POINT AT A (GOULD & CURRY), CHOLLAR POTOSI EXHAUSTED AT 700', HALE & NORCROSS AT 1,600', SAVAGE AT 1,000',

GOULD & CURRY AT 600', BEST & BELCHER BARREN]

Notes: Depths from surface above mines may be several hundred feet shallower than surveyor's depths.

Comstock statistics become more ample after 1865 in large part because government had a vested interest in knowing how much ore was being produced on the Comstock and in other mining districts. More data did not mean, however, that there was always agreement about how much ore was produced or how many claims were active on the Comstock. Nevada’s Surveyor-General stated the obvious: “It is impossible to give a total yield of ores from the various claims upon the Comstock Lode since its discovery, as but few companies have kept records of the amount raised.”9 But, as Comstock mining assumed a more corporate, industrial character, record keeping expanded and improved, even a few years after the initial discoveries. In particular the State in need of financing for public services had a direct interest in gathering more information. Initially the 8 Smith, The Comstock Lode, 99.9 “Annual Report of the Surveyor-General…1865” in Senate Journal and Appendix, 3rd Legislative Session (1867), 22.

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Surveyor-General assembled what financial data he could in his role as monitor of the State’s mineral resources and mining operations. With the establishment of the Office of the Controller, the State’s chief auditing and accounting officer, data on revenues (in which mining taxes came to play a major role) and expenditures were collected regularly and published annually. Finally, by the late 1860s the State appointed (and then elected) a Mineralogist, who having assumed most of the oversight responsibilities assigned originally to the Surveyor-General broadened the statistical database by requesting more detailed financial information from mining companies and then publishing long annual reports. Scattered company accounts combined with numerous legislative reports prior to the 1871 enactment of the net-proceeds tax provide a fairly solid basis for estimating the performance of the mining industry.

The Surveyor-General’s reports, submitted to the biennial legislative session in 1867, contained inventories of Comstock mines (1865) and mills (1866).10 [See Special Appendix at end of chapter for sample pages from two tables.] The 1865 compilation contained names of 46 mines with statistics on the length of the claims (explored and unexplored), the depth of the mines, and the number of engines employed in each mine. According to his findings the 46 mines had claimed about 23,000 feet of the Comstock, and they had explored about half of the Lode thus far claimed. But he warned that some claims included in this inventory were largely unexplored and could be excluded once the actual dimensions of the Lode were fully documented. The average depth of the mines exceeded 400 feet. The shallowest mine – Union - was 80 feet and the deepest – Best & Belcher – was 821 feet.11 He estimated that underground excavations (tunnels, drifts, adits, etc.) had reached 67.5 miles [350,000 feet]. Underground excavations were defined at times as ore-paying and non-ore-paying. The latter was also known as “dead work”. Even though such works were necessary in order to reach the ores, they could prove to be so expensive and unprofitable that many companies failed to cover those costs even after they found ores of moderate yields. The longest tunnel up to this point, according to the Surveyor-General, was Latrobe. It may have been started as early as 1861 and may have reached 3,200 feet by 1865. It was built to drain several small mining properties known as Sides and White & Murphy and perhaps one or two others. It ran from the Lode along the footwall next to Mt Davidson at about 700 feet toward the hanging wall where it surfaced. Little else is known about the tunnel’s early history, although Smith declared 10 “Annual Report of the Surveyor-General…1865” in Senate Journal and Appendix, 3rd Legislative Session (1867), 21; “Annual Report of the Surveyor-General…Year 1866” in Senate Journal and Appendix, 3rd

Legislative Session (1867). The Surveyor-General compiled two tables: “Mines on the Comstock Lode” with more than two-dozen columns of data and “Tabular List of Mills Crushing Ore from the Comstock Lode During the Year 1866” with mills listed by county and more than two dozen columns of data. The tables appear in the 1866 Report following p. 26. Sources for mine table were not precise, although the Surveyor-General admitted that he had not visited the mines themselves since 1863 (1865 Report, p. 22). He also noted that since some mine owners were reluctant to share information, the list and the data were incomplete. Sources for the 1866 mill table were described in the 1866 Report, p. 19. The two annual reports, 1865 and 1866, by the Surveyor-General were bound together in a volume containing the business of the 1867 Legislative Session. It is not clear if the mine table was originally a part of the 1865 Report or a part of the 1866 Report where it was found.11 “Annual Report of the Surveyor-General…1865” in Senate Journal and Appendix, 3rd Legislative Session (1867), 21. Eliot Lord cited some of the above figures from the Surveyor-General’s 1865 report in his Comstock Mining and Miners, although he claimed the year incorrectly to be 1866 instead of 1865. See p. 227 and footnote 3.

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that the mines that it was supposed to drain eventually abandoned it.12 Between $13 and $16 million worth of ore was extracted and processed in 1865.13 Even through the bullion was many times greater in value than a half-dozen years earlier, the enormity of the task to locate and recover the ore both in financial and technological terms was becoming more worrisome. The Lode was not a solid, uninterrupted wedge of profitable ore but rather pockets of ore separated by large, barren spaces that had to be explored and maintained at costs that could exceed the value of the output of any given claim along the Lode. A massive, expensive and complex structure was taking shape underground at the same time that an equally impressive city was being built above ground. Worrisome was the risk and uncertainty arising from the cost to build both of these networks. Not enough profit-yielding ores were being found to maintain the profligate ways of the initial organizers of the Comstock industry.

For 1866 Surveyor-General’s statistics on Comstock mining activity were far more detailed than for the previous year. Not only is it possible to establish quarterly figures for ore production and yields, but it also possible to analyze these data on a company-by-company basis. The backdrop for 1866 is the so-called “Panic of 1865”, when mining stocks sold off sharply at the San Francisco Exchange because mining companies were alleged to have squandered opportunities and fortunes through mismanagement, needless lawsuits and unproductive explorations.14 Under these circumstances output can be expected to fall. Unfortunately a single, clean number does not exist. The Surveyor-General reported several different numbers. One number was the quarterly “ore product” of each mine. It was calculated from tons extracted times the per-ton value to equal the “bullion product” of the mine. The total was $11.9 million. But in this only ores yielding $20 or more per ton were counted. Owners of ores yielding less than $20 per ton simply did not report their tonnage or sold the ores on the open market. This amounted to slightly more than $82,000, and the total of the two categories of ores was $12 million. The Surveyor-General offered a third set of numbers - $11.3 million - from Hillyears & Co.’s Stock Circular. All three figures fall between $11 and $12 million, and since some ores yielding less than $20 per ton may not have been included, the total product of all ores could have been $12 million or higher.15 Grant Smith published a figure of $12 million, but Eliot Lord published an even higher figure of more than $14 million.16 The Surveyor-General’s 1866 estimate represented an decline of 8 12 “Annual Report of the Surveyor-General…1865” in Senate Journal and Appendix, 3rd Legislative Session (1867), 22; Smith The Comstock Lode, 46, 146-147. Smith reported that the tunnel had only reached a length of 2,800 feet.13 “Annual Report of the Surveyor-General…1865” in Senate Journal and Appendix, 3rd Legislative Session (1867), 22, reported $13.5 million while Smith in The Comstock Lode, 58, published a figure of $16 million without any specific citation.14 Smith, The Comstock Lode, 58-59. Despite the production of about $16 million in bullion in 1865, speculators and investors alike began to sell off their holdings. The market value of Comstock mining companies fell from near $50 million in 1863 to $12 million in the summer of 1865 and $4 million in December of 1865. Some correction was to be expected in light of much-inflated stock prices plus expensive lawsuits, extravagant outlays for mills and offices, poor management and no new bonanzas.15 “Annual Report of the Surveyor-General…1866” in Senate Journal and Appendix, 3rd Legislative Session (1867), Table following p. 26 and p. 29.16 In The Comstock Lode (p. 99) Smith actually rounded the total up from the $11.7 million, the figure that appeared in his Notebooks. He attributed the information in his Notebook to a report on the Comstock by James G. Hague. See: “Tabular Statements of Assessments, Products and Dividends During 1866, 1867,

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percent from his 1865 total, and Smith’s 1866 estimate represented a 25 percent decline from his 1865 figure.17

FIGURE 3OUTPUT ($) BY COMPANY, VARIOUS SOURCES, 1866

Company Output $ Output $ Output $ Output $ % %Smith SG 1 SG 2 SG 3 (SG 2) (Smith)

Yellow Jacket $2,297,233 $2,397,792 $2,397,792 $2,310,000 20.1 18.2Savage 1,814,879 1,721,869 1,722,273 1,805,800 14.4 14.4Gould & Curry 1,624,781 1,583,378 1,583,378 1,605,228 13.3 12.9Crown Point 1,312,471 1,317,248 1,320,926 1,313,057 11.1 10.4Hale & Norcross 1,186,543 1,133,089 1,133,089 1,199,768 9.5 9.4Chollar Potosi 848,751 847,307 856,433 848,750 7.2 6.7Imperial 910,387 699,525 699,525 910,187 5.9 7.2Kentuck 571,507 568,400 568,400 4.8 4.5Empire 422,291 285,578 299,898 486,778 2.5 3.3Ophir 417,472 262,187 262,187 450,000 2.2 3.3Consolidated (21 Feet) 233,700 233,693 240,132 2.0 1.9Eclipse 206,499 206,386 231,374 1.9 1.6Gold Hill Quartz 115,484 115,491 119,839 1.0 0.9Winters, J. D. & Co 95,537 95,554 106,182 0.9 0.8Confidence 304,932 79,715 87,941 303,920 0.7 2.4Piute 84,077 84,082 84,082 0.7 0.7Plato 51,921 51,975 51,975 0.4 0.4Trench 41,019 41,019 41,019 0.3 0.3Bacon 34,606 34,606 34,606 0.3 0.3Segmented Belcher 30,305 30,305 0.3Mexican 28,567 28,667 0.2Bowers 28,555 28,555 28,555 0.2 0.2Challenge 23,299 23,299 0.2Overman 27,953 27,953 0.0 0.2AllenAlphaApple & BatesBaltimore-American

1868 and 1869 of the Leading Claims on the Comstock Lode,” (Copied from James G. Hague’s Report on the Comstock, p. 191), Binder 1, Typescript with revisions in pen or pencil, NC229, Special Collections, Library, University of Nevada, Reno; also “Recorded Production of Little Gold Hill Mines, as far as known, for years 1866 to 1869,” Binder 1, typescript with revisions in pen or pencil, NC229, Special Collections, Library, University of Nevada, Reno. Eliot cited the 1866 “Report of the United States Commissioner of Mines and Mining” in Comstock Mining and Miners, 226, footnote 2. Couch and Carpenter in their publication entitled “Nevada’s Metal and Mineral Production” in University of Nevada Bulletin, 37:4, 132-138, provide production figures for Story County with data for the early years being drawn from figures published in Smith.17 “Annual Report of the Surveyor-General…1865” in Senate Journal and Appendix, 3rd Legislative Session (1867), 23; Smith, The Comstock Lode, 58.

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BelcherBest & BelcherBullionBurke, Hamilton & CoCaliforniaCentralCentral #2Consolidated VirginiaExchequerKinneyLady BryantNorth AmericanSidesSierra NevadaUnionUtahWhite & MurphyTotal $12,630,598 $11,869,620 $11,951,877 $11,261,441 100.0 100.0Sources: Grant Smith, Tabular Statements…, 1866, Binder 1, NC229, Special Collections, University of Nevada, Reno; “Annual Report of the Surveyor-General of the State of Nevada for the Year 1866,” in State Journal and Appendix, 3rd Legislative Session (1867), Table following p. 26. Company names in red appear only in Smith and in blue only in Surveyor-General. The Surveyor-General’s Report had three different totals, as explained in text. Percentage rankings for Survey-General’s data from SG 2 or “Total Yielding over $20 per ton, and ores sold”. Blank spaces indicate no production recorded for the company. Since it is not known for certain if companies were active with no production or inactive with no production, those with blank spaces were not included in the rankings. If all the companies with blank spaces were active with no production, then that would change the rankings in a significant fashion. The companies are ranked on the basis of the data from the Surveyor-General. In the adjacent column rankings based on Smith’s data are given. For the top five companies the rankings are the same but the percentages differ slightly.

The early structure of the Comstock mining industry can be laid out in modest detail based on financial statistics for companies with claims on the Lode in 1866 assembled by the Surveyor-General and Smith.18 A total of 45 mining companies appeared on the two lists, as shown in the preceding Table. Of the total 24 or 53 percent reported ore production. Of the remainder it is impossible to determine if they were operating but had no ore production to report for that year or if they had no ore production because they were shut down. In a few cases among the non-producing companies both the Surveyor-General and Smith reported that the companies had raised money through assessments, but that in and of itself did not prove that the companies were actually in operation. What the data suggest, as early as the mid-1860s, is that in any given year only a handful of companies accounted for the bulk of the ore extracted

18 “Annual Report of the Surveyor-General…1866” in Senate Journal and Appendix, 3rd Legislative Session (1867), Table following p. 26, Notes p. 29; Smith, “Tabular Statements”, Binder 1, NC229, Special Collections, Library, University of Nevada, Reno; also “Recorded Production,” Binder 1, NC229, Special Collections, Library, University of Nevada, Reno.

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from the Comstock. On this matter both lists agree. The Surveyor-General had 43 operations and Smith had 36. The former included nine operations that did not appear on Smith’s list, and latter included two not on the Surveyor-General’s list. Of the nine on the Surveyor-General’s list only two recorded ore production for a total of 0.5 percent, an insignificant amount. The two companies in Smith’s list but not on the Surveyor-General’s list reported no ore production. According to the Surveyor-General’s data the total output in 1866 was between $11.2 million and $12.0 million (numbers rounded up). Smith, on the other hand, came up with a total output of $12.6 million. Since their sources were different, their totals should not be expected to agree.19 A figure between $12 and $13 million is reasonable in light of the available evidence.

Although the figures from the Surveyor-General and Smith on total production as well as company-by-company production (based on the value of the bullion in dollars) differed, the rankings of the companies were quite similar. In comparing the two datasets I have used the Surveyor-General’s figures for all ores. He divided the ores into two classes: bullion from ores that yielded more than $20 per ton and bullion from ores that “sold” because they yielded $20 per ton or less (Product SG 2 in Figure 12).20 Thus the totals being compared are $11,951,877 from the Surveyor-General and $12,630,598 from Smith. (The totals being used will affect the respective rankings.) The Yellow Jacket mine on the southern end of the Comstock near the Virginia City border accounted for one fifth of the total output: $2.4 million for 20 percent of the total on the Surveyor-General’s list versus $2.3 million or 18 percent on Smith’s list. Behind Yellow Jacket was Savage with $1.7-1.8 million or 14 percent, Gould & Curry with $1.6 million or 13 percent, Crown Point with $1.3 million or 11 percent and Hale & Norcross with $1.1-1.2 million or 9 percent. Taken together these five accounted for $8.2 million or two-thirds of the total ore. Another eight mines produced 27-28 percent of the total, and the remainder accounted for less than 1 percent each of the total. To recapitulate both lists contains 15 to 20 mines with no reported production at all. The rankings will undergo numerous changes over the next 20 years. Some of the high producers will remain active players and others will cease operations. Among non-producing mines several will arise like Phoenix to enjoy great bonanzas. The number of producing mines in any given year was 19 Smith’s data were taken from US Mint records in San Francisco, some of which appeared in a report written by James D. Hague for Clarence King. The Surveyor-General’s data were taken from the records of Story County’s assessor, who levied a tax of 0.75 percent against two classes of ores: those worth more than $20 or more per ton and those worth $20 or less. The Table (“Annual Report of the Surveyor-General …1866” in Senate Journal and Appendix, 3rd Legislative Session, 1867, Table followed p. 26, under Notes p. 29, involved some elaborate calculations, not all of which were correct or consistent. In paying their taxes producers reported to the assessor the tons of the ores that they had processed and the per-ton values each quarter. The per-ton values multiplied times the tons processed equaled the so-called “bullion product”. In checking the results some errors were found in multiplying the tons by the per-ton averages. Thus, the total “bullion product” was probably off by thousands and perhaps tens of thousands of dollars. That would mean that the value of the bullion for each producer and the total value for the Comstock should be higher than reported in the Surveyor-General’s Table. Even after this correction the Surveyor-General’s total was lower than Smith’s total. This would be the case even if the “bullion product” consisting of ores worth more than $20 per ton were added to “Ores Sold” consisting of ores worth $20 or less per ton. A third total on the surveyor-General’s Table was from Hillyears & Co.’s Stock Circular. It was even lower - $11.3 million versus $11.9 and $12.0 million – because it did not include production from a dozen medium-size and small operations.20 See the above footnote.

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always small compared to the alleged number of active mining operations, and the concentration of production became more pronounced, especially as mergers and acquisitions of mining properties accelerated.

FIGURE 4COPY OF UPPER SECTION OF SAVAGE, GOULD & CURRY AND BEST &

BELCHER MINES, BECKER'S ATLAS, XVI[Purpose to illustrate how shallow ore bodies were in early years. Two depths: without parentheses, from mine surface; with parentheses from Gould & Curry survey point. Tiered colors=depths: green on top of red, on top of brown, on top of yellow, approx 100 to 900 feet. Colors repeat at lower depths. View: looking down from surface. Savage's ore bodies from 200 to 900 feet; Gould & Curry from 0 to 500 feet; Best & Belcher barren. Slanted dark line (west to east) claim borders. Tunneling – drifts, winzes, upraises – at various levels show extent of underground exploring.]

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FIGURE 5QUARTERLY TONNAGE AND YIELDS IN EXCESS

OF $20 PER-TON BY COMPANY, 1866.[Surveyor-General Data]

Sources: See footnote 19.

The Surveyor-General’s report from 1866 contained other useful information on how the industry was developing. For tax purposes companies had to report the tons of ore that they had processed or sold at the end of each quarter, and from these data quarterly production figures can be assembled for the entire Comstock and for individual companies.21 In the wake of the “Panic of 1865” Comstock ore tonnage was lower at the beginning of the year than at the end; 1866 turned out to be a year of recovery. This was evidenced in the quarterly production figures: tonnage of ore processed or sold advanced 5 percent from 82,000 tons in the first quarter to 86,000 in the second, 25 percent to

21 The rate of taxation on the proceeds was three-quarters of 1 percent.

12

Companies 1st Q Per Ton 2nd Q Per Ton 3rd Q Per Ton 4th Q Per Ton Total Per Ton

2,658.0 $26.17 5,796.0 $38.34 7,974.0 $49.16 8,457.1 $53.12 24,885.1 $45.53Savage 7,224.0 $50.23 6,042.0 $45.84 9,197.0 $46.61 16,038.0 $40.67 38,501.0 $44.69Crown Point 8,133.0 $44.06 8,368.3 $40.23 6,956.0 $33.65 10,737.0 $36.15 34,194.3 $38.52Mexican 100.0 $30.00 676.0 $37.79 776.0 $36.83Kentuck 1,043.0 $42.50 2,526.2 $31.50 6,350.6 $37.56 7,656.0 $26.89 17,575.8 $32.34Ophir 1,596.0 $44.91 4,562.5 $28.28 1,878.0 $27.10 430.0 $26.94 8,466.5 $30.96Yellow Jacket 10,045.0 $29.41 17,681.3 $28.70 26,859.0 $35.28 23,985.5 $27.07 78,570.8 $30.52

13,547.0 $32.64 11,897.0 $37.60 15,100.0 $25.00 13,883.0 $23.00 54,427.0 $29.09Challenge 854.7 $27.26 854.7 $27.26Imperial 6,597.0 $23.54 4,173.0 $31.55 7,216.0 $23.15 8,353.0 $29.39 26,339.0 $26.56

3,598.0 $26.55 3,598.0 $26.55

712.0 $28.25 1,849.0 $21.55 1,079.0 $31.16 734.0 $29.84 4,374.0 $26.40Trench 1,624.5 $25.25 1,624.5 $25.25Bacon 1,370.0 $25.26 1,370.0 $25.22

1,262.5 $24.00 1,262.5 $24.00Chollar-Potosi 8,144.0 $24.66 10,553.8 $23.87 7,811.5 $21.09 9,164.5 $22.51 35,673.8 $23.76Confidence 1,362.0 $22.27 2,126.0 $26.23 3,488.0 $22.85

1,797.0 $21.87 2,660.0 $23.88 3,100.0 $22.13 2,848.0 $21.88 10,405.0 $22.46Empire 4,023.0 $23.00 4,768.0 $21.33 4,228.0 $21.50 13,019.0 $21.93Eclipse 1,617.5 $24.67 960.0 $21.17 2,830.0 $20.85 4,180.0 $20.87 9,587.5 $21.53Plato 767.0 $24.50 1,653.0 $20.06 2,420.0 $21.47Piute 920.5 $21.82 3,056.0 $20.94 3,976.5 $21.14Bowers 1,415.0 $20.18 1,415.0 $20.18Totals 75,858.0 83,205.5 107,046.1 110,694.1 376,803.8Average $31.59 $31.88 $31.93 $30.62 16,382.8 $31.72Median $24.96 $28.49 $26.83 $26.94 8,466.5 $26.40

Hale & Norcross

Gould & Curry

Winters, J. D. & CoGold Hill Quartz

Segmented Belcher

Consolidated (21 Feet)

THE COMSTOCK [D]

108,000 tons in the third and finally 4 percent to 112,000 in the fourth Even though the annual production for 1866 was off by 25 percent compared to 1865 the quarterly upward trend, spurred by new discoveries, could only have been heartening to both the mining and the investing community. Twenty-three companies reported taxable ore production of 388,000 tons for an average of 17,000 tons per company. Ninety-seven percent or 377,000 tons belonged to the class of processed ores ($20 per ton and above) and 3 percent to the class of sold ores. For both classes the yield-per ton by which Comstock productivity was measured was $31.72.22 This is a rough estimate because the data in the Surveyor-General’s report from which this average has been computed contained some arithmetic errors.

New ore discoveries, of course, were the most powerful force to revive interest in the Comstock among miners and investors. Discoveries at Hale & Norcross and Crown Point played that role in 1866. In the case of Crown Point its discovery spilled over into Yellow Jacket so that both mines were working the same deposit, although at different depths. These discoveries added to the knowledge of the configuration of the Lode. The picture that was emerging from the underground was more complex and quixotic than the original rendition. Miners were learning that the Lode had vast stretches of barren ground that almost at random contained concentrated pockets of rich ores that upon discovery could pay for the costs that had accrued in searching for them. In other words, money had to be spent on explorations without any guarantee of eventual returns. On top of that they were learning that as their explorations reached the range of 500 to 1,000 feet they were better served by angling away from the head wall at the foot of Mt Davidson toward the hanging wall at the outer edge. The Comstock was not a solid, inexhaustible, perpendicular mineral formation. The riches were in pockets spread along several miles from the northern to the southern tip and across a width of several thousand feet. Most importantly, while several ore pockets may lie at approximately the same depth, they were seldom connected. Hopes rested on the discoveries of the pockets, but they also had to embrace with a cyclical regimen that deposits would be mined out before new ones turned up. A cycle of bonanzas and borrascas ruled the Comstock until the Lode had given up its riches. Hence, in 1866 after the “panic of 1865” and the hand-ringing over the future of the Comstock that it induced the new discoveries ignited a new enthusiasm. Stock prices had plummeted in 1865, and gloom dominated the forecasts at the outset of 1866. Three large companies - Ophir, Gould & Curry and Chollar Potosi – with mines under Virginia City found little or no profitable ores as they opened explorations below 500 feet. On the other hand another Virginia City mine, Savage, was able to report that an ore deposit, which it shared with Gould & Curry, continued in a southerly direction away from Gould & Curry for another 500 feet to almost the 1,000-foot level. In addition Savage shared with Hale & Norcross on its southern border an ore deposit that was situated between 500 and 1,500 feet. Except for a small patch of ore above 500 feet near the surface, Hale & Norcross owned mainly barren ground until just below the 500-foot level where like Savage it struck a bonanza. Gold Hill was about 400 22 Lord reported an average of $29.50 for 1866. His total tonnage was 480,239 (extracted and milled) with a value of $14.2 million. His total bullion from information published by the U. S. Commissioner of the Mint was higher than the totals from the Surveyor-General and from Smith. His total tonnage was extrapolated from “Official Reports of ten mining companies, representing more than two-thirds of the total yield”. The average was calculated by dividing the total bullion by the total tonnage.

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THE COMSTOCK [D]

feet lower in elevation than Virginia City, the high point of the Lode. Its mining companies between Alpha on the north and Belcher on the south including many of the small claims discussed above were also probing more deeply and discovered ores between 400 and 900 feet. (800 to 1,300 feet from the Virginia City survey point). While the northern Gold Hill mines will find little of value below 900 feet the southern mines (Yellow Jacket, Crown Point, Kentuck and Belcher) will find great riches. The year 1866 would be a bridge to a brighter future even though the pitfalls made that far from obvious. Of the 23 companies with taxable bullion five had per-ton averages above $31.77, the producing-mine average, and 18 had averages below. In other words these were the best performers by a measure often used to determine profitability. They were Hale & Norcross, Savage, Crown Point, Mexican and Kentuck. Combined they produced slightly more than 126,000 tons or a third of the total, and their bullion upon which taxes were paid was worth more than $5 million or 42 percent of the total. Some contrasts among the five are worth noting: Hale & Norcross ranked first in per-ton output at $45.53 and seventh in tonnage with less than 25,000 tons (6.6 percent of total); Mexican had the lowest tonnage at 776 (a fraction of 1 percent) but the fourth highest yield at $36.94.23

Turning from per-ton values to total tonnage a different line-up of companies emerges. Some heavy producers had markedly lower per-ton values. In total tonnage eight companies exceeded the group average of 16,383 tons. The highest producer was Yellow Jacket at nearly 79,000 tons with a per-ton value about one dollar below the average for the 23 companies. The next highest was Gould & Curry at nearly 55,000 tons and a per-ton value more than $2.50 below. Chollar-Potosí was third in total tonnage but sixteenth in per-ton value. Hale & Norcross with the highest per-ton value ranked seventh in total tonnage. All 23 companies, however, could have made money since the list included only operations with yields greater than $20 per ton, the dollar value that miners were using as the break-even point.

Quarterly figures from the Surveyor General’s 1866 data add a small bit more of color. There are differences between the mean and median in each quarter: first quarter was $31.59 versus $24.96 respectively; the second $31.88 and $28.49; the third $31.93 and $26.83; and the fourth $30.62 and $26.94. The bonanzas mines post-1871 will have such high per-ton yields compared to the rest of the mines with the result of a greater differential in the mean and median computations. The differential also existed in 1866 but to a lesser degree. The most productive mines were Savage in quarters one and two and Hale & Norcross in quarters three and four. Four different mines occupied the lowest rung. Savage reported yields of $50.23 per ton in the first quarter and $45.58 in the second while Bowers and Piute reported yields of $20.18 and $20.94 respectively. In the third and fourth quarters Hale & Norcross achieved yields of $49.16 and $53.12 and Plato and Eclipse came in at $20.06 and $20.87. In its youth the Comstock had a narrower spread between the highest yielding mines and the lowest yielding ones.

The ultimate question was how much per ton was necessary to realize profitability? Obviously that figure depended on many factors that would change over time. In his 1866 report the Surveyor-General followed the format of the county assessor:

23 Mexican shared a fairly rich deposit with Ophir, but its share was exceedingly small and soon exhausted. See Smith, The Comstock Lode, 83.

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THE COMSTOCK [D]

ores were classified as those that yielded more than $20 per ton and those that were sold. It was assumed that ores had to yield more than $20 per ton in order to realize a profit. (There was no guarantee, of course, but generally higher yields ensured greater profits.) What about ores at $20 per ton and less? Were they ever profitable? In his notes the Surveyor-General suggested that the break-even point for Comstock ore might have been closer to $15 per ton than $20 per ton. It should be pointed out that the ores classified as “sold” (3 percent of the total) had a range of $2.50 per ton to $10 per ton. Even though the sales of the ores were taxable at the same rate as the ores at $20 and above, they may have been sold because they could have cost the companies more to mill than they could return in bullion. Their sale price was not their per-ton value. It is worth noting that none of the ore sales were between $10 and $20 per ton. Perhaps some if not all these ores had per-ton values of between $10 and $20, and yet in the face of such uncertainty it may have been compelling to get rid of questionable ores at some price than to risk the cost of refining them. The Surveyor-General himself raised the possibility that not all ores under $20 were actually sold. Rather they were refined, especially if they had the potential to yield $15 to $20 per ton, but not necessarily reported since the assessor (and the Surveyor-General) distinguished between ores above and below $20 per ton. (Remember, this was pre-1871 when a more stringent net-proceeds tax was enacted.) If it was held that ores needed to reach the threshold of $20 per ton to represent profitability, then collecting taxes on ores under $20 was probably not of the highest priority. Even though the Surveyor-General was seemingly interested in the fate of ores under $20 per ton, he did not initiate any policy recommendations to crack down on whatever fraud was being practiced. How much of the lesser ores was refined but escaped taxation will never be known, and even if it could be recovered, it would probably not alter the summaries that can now be compiled. For better or worse, $20-per-ton remained the generally-accepted break-even point for mining operations, although the actual figure probably varied from time to time and could be several dollars higher or lower.24

A second set of figures was often invoked in any consideration of mining profits: the return in bullion per foot of the length of the claim. In the earliest years the size of a claim was limited, but by the middle of the 1860s as lode mining replaced panning claims were merged and consolidated. Basically the length was a north-south measurement along the Lode while the width was an east-west measurement from the footwall to the hanging wall. In accord with the findings of the Surveyor-General in 1866 the 43 mining companies with and without recorded production claimed more than 30,000 feet of Comstock Lode from a point north of Virginia City to a point south of Gold Hill. Exactly how long the Lode was remained a matter of dispute, but a length of four to six miles was generally agreed upon. The northern and southern ends the Lode split before petering out, and much of the debate over the length of the Lode concerned where the end points were. By 1866 the heart of the Lode was known to be under Virginia City southward into Gold Hill. Virtually all the Lode from north to south was claimed, and the boundaries of the claims were still being litigated. Based on the information provided to the Surveyor-General claims averaged about 700 feet. Of the 23 companies with recorded production 24 Accompanying the Surveyor-General’s tables were revenue and cost data for several mines. “Annual Report of the Surveyor-General…1866” in Senate Journal and Appendix, 3rd Legislative Session (1867), 33-36. He indicated that he lacked the resources to try to track data for all the companies. That made any crack down on evasive tax-payers even less likely.

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THE COMSTOCK [D]

their claims amounted to only 7,700 feet or a quarter of the total. They averaged 335 feet in length, and they yielded on average $3,255 worth of bullion per foot. Variations in the lengths of the claims were significant. The longest claim among all 43 mines was Baltimore American, but it reported no (taxable) bullion and in addition the Surveyor-General did not believe that Baltimore American’s claim was valid. The shortest claim of 10 feet belonged to Plato, a mine with bullion production. Among the 23 companies with bullion production Chollar Potosi had the greatest length at 1,434 feet with a yield of $579 per foot and the aforementioned Plato the shortest length with a yield of $5,198 per foot. The mining company known as Consolidated With 21 Feet had highest yield based on length at $11,435 for each foot, while Ophir had the lowest with $186 for each of its 1,400 feet. The mine with the greatest total yield was Yellow Jacket at $2.4 million with a length of 943 feet and a yield per foot of $2,542. The mine with the lowest total yield was Challenger at $23,299 with a length of 50 feet and a yield per foot of $466. Some of ground claimed by the 43 mining companies was still in dispute as late as 1866. Gould & Curry, for example, claimed 1,200 feet but only 921 feet was undisputed.25

Trying to make investment decisions on the basis of the length of the claim was risky. The obvious risk for companies owning little ground was the rapid depletion of their underground holdings. The unpredictable distribution of the ore along the Lode led companies to try to acquire as much ground as possible. Since the Lode was not a continuous and solid wedge of profitable ore, the future for companies with small claims, no matter how impressive their yields per foot, was dubious. In fact most of the companies with modest-sized claims in 1866 ceased operations or merged with adjoining companies because their underground assets were soon exhausted. Another consideration was that high yields per foot did not necessary translate into high yields per ton. In the case of Consolidated With 21 Feet its 11,000 tons of ore yielded bullion worth more than $240,000 or $22.50 per ton almost ten dollars below the average of the producing mines. Its yield per ton peaked in the second quarter at $23.88, and by the end of the year its yield was no higher than it had been at the beginning of the year at $21.87. All but one company (Kentuck) with yields per ton above the Comstock average of $31.72 had yields per foot below the Comstock average of $3,255. Hale & Norcross with a yield of over $45 per ton but only a yield of $2,800 per foot was probably a more profitable investment than Consolidated With 21 Feet. Although information of dividend payments may not be totally accurate for 1866, what has survived indicates that Hale & Norcross paid dividends of nearly $300,000 and Consolidated With 21 Feet paid no dividends. As problematic as the yield-per-foot was as a measure of productivity, it continued to be used among stock traders and speculators. Companies often allotted shares by footage. In some cases companies issued one share per foot, and in others they issued as much as 20 shares or more per foot. Bullion per foot became convenient shorthand for gauging and comparing stock values.26

25 “Annual Report of the Surveyor-General…1866” in Senate Journal and Appendix, 3rd Legislative Session (1867), Table following p. 26 and Notes p. 29.26 All of the calculations made from Table after p. 26, “Annual Report of the Surveyor-General…1866” in Senate Journal and Appendix, 3rd Legislative Session (1867). Consolidated With 21 Feet was part of a group of small claims along the so-called Red Ledge in Gold Hill. Their owners resisted consolidation and remained independent and profitable during the first half of the 1860s, but as their underground assets were depleted, they began to lose money as well as their independence. In the second half of the 1860s many of

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THE COMSTOCK [D]

For 1866 the Surveyor-General cited seven dividend-paying companies with a total outlay of $1.8 million, and Grant Smith cited eight with a total of $1.9 million. (Missing from the former’s list was Kentuck.) Despite the differences in the two sources they were in agreement that about 15 percent of the total bullion product was paid out in dividends. Yellow Jacket paid out $390,000 in dividends or 17 percent of its total bullion product. Following Yellow Jacket were Savage and Hale & Norcross with $360,000 ($320,000 in Smith) and $350,000 respectively. Savage’s dividend distribution was 21 percent (only 17 percent in Smith) of the total bullion product and Hale & Norcross’s was 30 percent. Hale & Norcross, it will be recalled, had the highest per-ton yield of all the ore-reporting companies, and this may well explain why shareholders earned as much as they did. Empire, one of the cluster of small mines in Gold Hill, paid out the least amount – 11 percent if the total product of the Surveyor-General is used versus 8 percent if Smith’s is used. The remaining companies - Gould & Curry, Imperial, Crown Point and Kentuck from Smith’s database – had dividend distribution that fell between 15 and 25 percent. Chollar Potosi, which had bullion worth between $800,000 and $900,000, paid no dividends. Ophir, one of the original bonanza mines, on bullion valued at between $300,000 and $400,000 paid no dividends either. Most of the Gold Hill small claims reported bullion but paid no dividends. By contemporary standards these were generous if not excessive returns. The average payout among seven dividend-paying companies for which the Surveyor-General listed shares issued was over $600 per share. The highest was Savage, which paid nearly $2,200 per share of its 800 total. The lowest was Imperial, which had 4,000 shares and paid $175. Hale & Norcross with the highest per-ton figure distributed more than $1,400 per share, and Yellow Jacket with the highest bullion value distributed nearly $2,000 per share. At one level paying huge dividends could drain companies of monies that should have been set aside as capital reserves for future explorations or rehabilitations. Given the risks, investors and in particular the principals who often owned most of the stock may well have preferred to be rewarded immediately when the money was available instead of plowing any surplus back into the operation in hopes that such reinvestment might lead to an income and dividend stream that flowed steadily and consistently for many years. Experience taught investors that bonanzas could seldom be predicted or sustained. It was very much a business of now, not later. Excessive dividend payments may also have served as enticements not only to assuage stockholders’ fear about the viability of the company but also to attract new investors.27

If dividends were rewards, assessments were penalties. Companies used assessments to raise working capital. Companies replaced prospectors and panners largely because they had the capacity and authority to raise capital through the issuance and sale of stock. The stockholder owned a stake in the company, and that entitled him to share the profits and also obligated him to assume the debts. And debts began to

these small claims were merged into several large companies. Smith, The Comstock Lode, 94-98. Also Adolph Sutro’s map in connection with his proposal to build a tunnel to drain the Comstock in Smith, The Comstock Lode, 100. Map in Special Collections, Library, University of Nevada, Reno.27 “Annual Report of the Surveyor-General…1866” in Senate Journal and Appendix, 3rd Legislative Session (1867), Table following p. 26; Smith, “Tabular Statements”, Binder 1, NC229, Special Collections, Library, University of Nevada, Reno. The percentages differ not so much because the two sources have different dividend figures but rather because they have different bullion figures.

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THE COMSTOCK [D]

accumulate almost immediately. Some companies faced the horrifying prospect of having bought up claims with barren ground, but since the character of the Lode and the location of its ore was barely understood, companies had little choice or incentive to change course so long as people were willing to put up the capital. In addition there was the matter of wasteful spending in anticipation of striking it rich. The Surveyor-General noted in his 1865 report that few companies were keeping or had kept records that allowed them to accurately measure the state of their financial health.28 Eliot Lord was even harsher in his criticism of how company officers spent money. The lavishness in the construction of works and offices, he wrote, “was in part natural and in accord with the prodigal temper of the time, and partly exaggerated…in order to assure the minds of stockholders of the unprecedented value of their stock and to dazzle and impress possible investors, for a plausible outward show of prosperity is worth as much as to a mine as to an insurance office.”29 The result was that assessments against stockholders grew in size and frequency. In 1866 the Surveyor-General found that 11 of the 43 companies assessed their stockholders for a total of $1.2 million, an average of $120,000 per company. Ophir’s assessment at $185,000 was the highest and Baltimore-American the lowest at $13,000. Of the ten companies only four – Bacon, Confidence, Ophir and Yellow Jacket – actually reported ore production. Even the critics of companies’ financial shenanigans recognized that assessments could be legitimate and ultimately produce good results. Assessments in one year without any reportable ores could simply mean that a company was undertaking repairs or explorations that would lead to production in the following years. Suspicions were aroused when stockholders continued to be assessed and the company produced little or no profitable ores. Ophir, for example, had been one of the bonanza companies in the early 1860s based upon a large ore deposit from the surface to about 500 feet. By the middle 1860s the bonanza was fading. Except for a small stretch of ore between 500 and 650 feet Ophir owned mostly barren ground below 500 feet. Not only had Ophir run out of ore, it had also run into water that was expensive to pump and virtually endless. The assessments in 1866 equaled from 40 to 70 percent of the total bullion product (several figures exist), not an encouraging picture. Bacon assessments of $18,000 was more than half of what the mine produced in the first quarter, the only quarter in which it had any reportable ores. Confidence assessed its stockholders an amount that was nearly equal to its output of bullion in first and second quarters after which it had no bullion to report. Finally, Yellow Jacket was more complicated. Its bullion had a value of about $2.4 million against $180,000 in assessments. It also paid dividends of $390,000 that were slightly double its assessments. Hence the stockholders’ return was cut in half if the assessments were taken into account. The remaining seven companies – Union, Bullion, Exchequer, Alpha, Overman, Belcher and Baltimore-American – present a somewhat mixed picture. Union, Bullion, Exchequer and Baltimore-American owned virtually barren ground. Overman may have yielded bullion ($28,000) at less than $20 per ton and therefore escaped the Surveyor-General’s compilation. Belcher was then exploring barren ground, but unbeknownst to the company in 1866 it had much brighter prospects at much greater depths.30

28 “Annual Report of the Surveyor-General…1865” in Senate Journal and Appendix, 3rd Legislative Session (1867), 22-23.29 Lord, Comstock Mining and Miners, 126-127.30 Both the Surveyor-General and Smith show Overman with bullion income of $27,953. The source for the Surveyor-general was not the county assessment rolls but the market circular known as Hillyears & Co.

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The profile of Comstock mining in 1866 was constructed from solid but not perfect reports, one in 1865 followed by another in 1866, submitted by the Surveyor-General to the Nevada Legislature in 1867. It can be used as a base year for analysis of the evolution of the structure of the industry over the next 20 years. What is evident from the reports plus additional information from Eliot Lord, Grant Smith and other contemporary and historical observers mining companies, incorporated in California and largely financed from San Francisco, had assumed control of the Comstock. Only a few of the companies actually owned ore-bearing ground. In the rush that followed the discoveries in 1859 and 1860 all of the Lode and much of the land surrounding it were claimed. By 1865 or 1866, as the geology of the Comstock was being more clearly defined, it was becoming apparent that most claims were worthless. Some of the earliest bonanza claims were in decline, and the discovery of new claims occurred much deeper underground than anyone had anticipated even several years before. Deep lode mining required capital, and while many companies failed to be good stewards of the money that they raised, they were necessary for mining on the Comstock to take the next step. In 1866 five companies owned 70 percent of the bullion reported to the county assessor. These five companies owned about 4,000 linear feet of the Lode or 13 to 14 percent of the Lode that was assumed to be about 30,000 feet in length. Owning the right ground was obviously crucial to the prosperity of any company. But since no company could accurately predict where the next bonanza would occur, they had to extend their control as much as possible across the Comstock. In some cases companies with adjoining claims were merged into a single, large company, and in other cases companies with adjoining or disconnected claims were brought under the control of several stockholders or a group of stockholders much like a holding company. The Comstock’s most productive years lay ahead and only after the structure of mining was revamped..

Lacking data on company operations comparable to the 1865-1866 compilations for the remainder of the decade, we turn to Grant Smith’s aforementioned tabular report that included not only 1866 but also 1867 through 1869. As discussed earlier, his data were assembled from official publications, market newsletters and newspaper reports. The promise of recovery in 1866 was borne out in 1867 as the total bullion reached $13.8 to $14.6 million, surely the highest yet for the Comstock.31 Of the three-dozen mining

Where the Surveyor-General cited data from Hillyears & Co. along side of the county data the figures from the former were generally higher, an indication that Hillyears & Co. included ores not sold but valued at less than $20 per ton. Overman was the only instance where county data on bullion product was totally lacking. Smith may well have used the same source – Hillyears & Co. - or a similar source. His assessment data generally agreed with the Surveyor-General’s, the notable exception being Overman. “Annual Report of the Surveyor-General…1866,” in Senate Journal and Appendix, 3rd Legislative Session (1867), Table following p. 26 and Notes p. 29; Smith, “Tabular Statements”, Binder 1, NC229, Special Collections, Library, University of Nevada, Reno.31 Since the State of Nevada received part of the revenue from mining taxes, the Controller’s annual report now included quarterly production data county by county. His 1867 data showed that Story County recorded 448,000 tons worth about $13.8 million or $30.52 per ton. “Biennial Report of the Controller of the State of Nevada for the Third and Fourth Fiscal Years 1867 and 1868,” in Senate Journal and Appendix, 4th Legislative Session, 1869, 121-123 for 1867. Eliot Lord claimed to have used the same database except he reported about 451,000 tons that also yielded about $13.8 million or $30.60 per ton, nearly the same as the year before. Lord, Comstock Mining and Miners, 416.

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companies on Smith’s list more than half reported bullion production. Savage and Chollar Potosi led the way with bullion worth $3.7 million (26 percent) and $2.7 million (18 percent) respectively. These figures represented a doubling in bullion for Savage and a tripling for Chollar Potosi over the previous year. Savage’s ore holdings between 500 and 1,000 feet on both its north and south boundaries proved to be substantial with veins ranging from 10 to 80 feet in width. In its annual report (for fiscal year 1867-68) the company also reported that the richness of the ores fluctuated and was beginning to decline at the lower levels.32 Chollar Potosi’s 1867 record output was a flash in the pan because the ore came from an area near the surface that had been missed in earlier explorations. Below the 500- to 600-foot levels where the major explorations were then taking place, Chollar Potosi had only barren ground. This will show up in later tabulations.33 The previous leader, Yellow Jacket, was third with $1.7 million worth of bullion or about 12 percent of the total bullion. This was a decline of 25 percent from 1866. The so-called “old works” up to 700 feet had been largely exhausted and abandoned, and while good ores were being extracted from 800 to 900 feet and the vein matter below 900 feet was promising. Yellow Jacket’s next bonanza was still several hundred feet deeper.34 Fourth on the list was Kentuck, a small claim of about 100 feet in length between Yellow Jacket and Crown Point. Its 1867 production in bullion was 100 percent higher than 1866 when it ranked eighth. It shared rich deposit of ore with Yellow Jacket and Crown Point between 600 and 900 feet. Smith called this one of the “surest venture ever known on the Comstock” because of its location.35 The fifth highest producer in 1867 was Imperial, the largest of the cluster of small Gold Hill mines north of Yellow Jacket. It registered slightly less than Kentuck and slightly more than Hale & Norcross, which was sixth, and boasted a 22 percent increase over 1866. As the State Mineralogist’s report underscored, the future was not bright for Imperial and the associated mines. Its shaft, jointly built with Empire, had reached 900 to 1,000 feet but had also encountered water at 900-foot level. Below that virtually no millable or profitable ores were found. Imperial did well in 1867 because it had more recoverable ores between 500 and 700 feet than the surrounding mines. When those ores were exhausted, Imperial and the related companies had nothing but barren ground. Other large operations from 1866 and before suffered declines in 1867. Hale & Norcross dropped 8 percent, Crown Point 30 percent. Gould & Curry 62 percent and by far the most significant Ophir 100 percent ($417,000 to $4,100 in bullion). Crown Point and Hale & Norcross will recover, but Gould & Curry and Ophir were virtually finished as ore producers. In his 1867 annual report the President of Gould & Curry, Alpheus Bull, painted a glum future:

Explorations extensively and vigorously prosecuted in various parts of the mine, in search of new bodies of mineral, have led to the absorption of the entire receipts of the past year.

32 “Biennial Report of the State Mineralogist of the State of Nevada for the Years 1867 and 1868” in Senate Journal and Appendix, 4th Legislative Session, 1869, 30.33 “Biennial Report of the State Mineralogist...1867 and 1868” in Senate Journal and Appendix, 4th

Legislative Session, 1869, 25-26.34 “Biennial Report of the State Mineralogist...1867 and 1868” in Senate Journal and Appendix, 4th

Legislative Session, 1869, 31.35 Smith, The Comstock Lode, 105.

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The result of these costly explorations has not, I regret to say, been of a very encouraging character, no important deposits of ore having been discovered through these developments, not were any very interesting flattering indications met with of the existence of such.36

The other measures – assessments and dividends – shed further light on 1867. Nineteen companies authorized assessments totaling $1.2 million. Both the number and the total were slightly higher than in 1866. Nine companies distributed dividends in the amount of nearly $4 million. Both the number and the total were slightly higher than in

more company announced dividends than in 1866, but the total outlay was nearly twice as great. Nor surprisingly Savage had no assessments and paid out $1.6 million in dividends, a five-fold increase. Chollar Potosi assessed its stockholders $42,000 and then distributed dividends of $420,000 after authorizing neither assessments nor dividends in 1866. Yellow Jacket again imposed large (in fact the largest) assessments of $240,000 and allotted slightly higher dividends of $300,000 than assessments. Finally, as in 1866, Kentuck and Imperial made no assessments but issued dividends two to three times higher than the previous year. The troubled mines of Gould & Curry and Ophir assessed their stockholders $120,000 and $184,800 respectively but experienced sharp declines in output and had no surplus to

distribute. For the second year Bullion had assessments exceeding $100,000 and no production. In terms of bullion yields and assessment-dividend rations 1867 was better than 1866. The concentration of production among the top five companies also grew from 52 percent to 72 percent. The obvious loss of several established companies had to be unsettling within the mining and investing communities. Expectations had to be more muted than before.

There is considerable disparity in the extant figures for the total bullion product in 1868, but there is no doubt that output of the Comstock mines declined from 1867. The question that cannot be precisely answered is by how much did the Comstock decline? Smith’s bullion totals, which more than likely came from U. S. Mint data, were about $9 million or a 38 percent drop from his 1867 figure.37 Lord, citing data gathered by the State Controller, came up with a total of $12.4 million for a drop of 11 percent.38 The Controller’s total, however, was not what Lord cited, but at $9.4 million was nearly identical to Smith’s.39 Even though it is not possible to resolve the conflicting data, it would appear that the Comstock suffered a rather severe and sudden contraction in 1868. 36 “Biennial Report of the State Mineralogist...1867 and 1868” in Senate Journal and Appendix, 4th

Legislative Session, 1869, 29, 31.37 Smith, “Tabular Statements” and “Recorded Production of Little Gold Hill Mines”, Binder 1, NC229, Special Collections, Library, University of Nevada, Reno. To repeat, Smith drew his data from a report on the Comstock by Hague (p. 191) with supplemental information from the U. S. Mint. He made it clear that these data did not always agree with data from annual company reports because calendar years and fiscal years did not always coincide.38 Lord, Comstock Mining and Miners, 416.

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Illustration 2: Chollar Interior

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With the reversal came a change in the rankings. Savage was still the top producer with an even higher proportion (28 percent) of the total. But Savage’s output was 33 percent lower in 1868 than in 1867. That amounted to more than $1.2 million and represented a substantial portion of the loss in output between 1867 and 1868. But Savage was not the only casualty in 1868. Chollar Potosi and Yellow Jacket fell from second and third place respectively in 1867 to fourth and fifth place in the following year. Chollar Potosi’s output fell by 67 percent or about $1.8 million and Yellow Jacket’s by 54 percent or nearly $1 million. With these three large producers one can account for nearly all the difference between 1867 and 1868. The two bright spots were Kentuck, which ranked second with 14 percent, and Crown Point, which ranked third with 12 percent. But their totals were only slightly higher than what they were the year before. Other companies that experienced sharp downturns were Imperial (-38 percent), Hale & Norcross (-64 percent) and Gould & Curry (-95 percent). Several companies had significant increases: Bacon (737 percent), Bowers (107 percent) and Overman (83 percent), but their production combined only equaled $700,000, hardly large enough to make up for the losses noted above. Ophir, Trench and J. D. Winter & Co. fell off the list of producing companies, and although Sierra Nevada and Segmented Belcher now joined the list, they accounted for a trifling 0.3 percent of the total. It was a heavy year for assessments and a moderate year for dividends. For each dollar of assessment the Comstock recorded $5 in bullion in 1868 compared to $1 in $10 from the previous two years. Hale & Norcross witnessed a three-fold increase in assessments, from $60,000 to $200,000 as production fell from $1.1 million to $400,000 and dividends from $60,000 to zero. Yellow Jacket continued to authorize large assessments - $150,000 in 1868 on top of $420,000 in the two previous years – but also equally large dividends - $360,000 on top of $700,000. Savage paid the highest dividends ($1.2 million) followed by Kentuck ($480,000) and Crown Point ($360,000). Crown Point assessed its stockholder $90,000; neither Savage nor Kentuck posted assessments. Not much in the 1868 figures was especially encouraging. Was this further proof of the cycle of bonanzas and borrascas, observed in 1865, 1866 and 1867, or were the bonanzas so brief and paltry that the borrascas were actually pointing to an unmistakable pattern of diminishing resources? In retrospect we can observe from the geological maps that between 500 and 1,200 feet only a half-dozen Comstock companies possessed ground that had moderately profitable ores. Based on the pre-ton yields, however, those ores appeared to be of declining grades.40

In 1869 the contraction continued, more so the result of an exogenous event rather than worsening economic fundamentals. All the known sources put the dollar value at between $6.7 million and $7.8 million. Smith’s data indicated a 13 percent drop from 1868 to 1869, while the Controller’s data showed a 29 percent decrease. The downturn

39 “Biennial Report of the Controller…1867 and 1868” in Senate Journal and Appendix, 4th Legislative Session, 1869, 49-50 for 1868. Lord claimed that his 1868 figures were taken from the Controller’s annual report. In fact they do not agree with the figures published by the Controller, as discussed in the text. It appears that Lord took the total tonnage for Story County from the Controller’s annual report and multiplied that by an average yield per ton of $36.78 to get $12.4 million. His per-ton yield does not agree with the Controller’s calculation, which was $28.26 per ton. At the lower yield the total bullion product would be $9.4 million, a figure that was just slightly higher than Smith’s figure.40 Company data found in Smith, “Tabular Statements” and “Recorded Production of Little Gold Hill Mines”, Binder 1, NC229, Special Collections, Library, University of Nevada, Reno.

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was confirmed in other data: tonnage fell from about 338,000 to about 280,000, and per-ton yields from $28 to $23. What is not manifest in the statistics is the tragedy that struck the Comstock. An April fire at the 800-foot level in Yellow Jacket cost the lives of at least 37 workers, and not only closed down Yellow Jacket’s operation on its southern boundary but also those of Crown Point and Kentuck, which worked the same vein as Yellow Jacket.41 Of the three mines Crown Point suffered the most with a 90 percent decline in output for the year in large part because its performance prior to the fire was hardly stellar. Kentuck, by contrast, experienced a smaller 33 percent decline because of a stronger first quarter. Yellow Jacket fared the best of all three by doubling its output because it made a discovery north of the fire that allowed its underground operations to be maintained. The year turned out to be less disastrous than it might have been because Hale & Norcross found a large deposit between 500 and 1,000 feet. Overall about the same number of companies (15 versus 14) reported bullion in 1869 as in 1868. The leader turned out to be Yellow Jacket with nearly 20 percent of the total in 1869 and a rise of 88 percent over 1868, although its 1869 figure of $1.5 million in bullion was by Smith’s own reckoning a rough estimate. It was followed by Chollar Potosi with 18 percent and an increase of 54 percent from 1868 to 1869 as it continued to expand its old, shallow works under 500 feet. Savage came in with 15 percent of the total but registered a sharp 50 percent drop from the previous year. Hale & Norcross with 13 percent saw its output increase by 162 percent. Finally, the fire-ravaged Kentuck had 11 percent but in fact produced a third less bullion. Other notable changes were Gould & Curry whose output skyrocketed by almost a 1,100 percent from $30,000 to $350,000, the last gasp of a company that had run out of exploitable ores. Sierra Nevada too had an impressive upswing from $23,000 to $152,000 for more than 550 percent change. Two new ore-producing mines – Occidental with 2.7 percent of total and Belcher with 0.2 percent – appeared on the list in 1869. The remainder of the list continued to see their output slide or turned from positive in 1868 to negative in 1869. Smith’s assessment and dividend tabulations showed that 20 companies assessed their stockholders for $1.4 million, just slightly below 1868, and of this number 10 produced bullion. Yellow Jacket had the highest assessment at $360,000 or a quarter of the total. Belcher, Crown Point, Imperial, Ophir and Overman had assessments that exceeded $100,000, and all but Ophir produced some ore. Companies with production but no assessments were Chollar Potosi, Gould & Curry, Hale & Norcross, Savage and Sierra Nevada. On the dividend side, seven companies (of the 15 ore-producing mines) paid dividends totaling about $1.2 million. Yellow Jacket had the largest dividend of $360,000 (that equaled its assessment) followed by Chollar Potosi and Savage. Four of the companies paying dividends had no assessments; the remaining three did. Although the fire contributed to the lowest production since 1862, the underlying trend all along the Comstock was even more disturbing. As mines reached 1,000 feet and lower, new bonanzas were few and far between.42

41 Smith, Lord and DeQuille all covered the fire. Smith, The Comstock Lode, 122-123, Lord, Comstock Mining and Miners, 269-277, and DeQuille, The Big Bonanza, 176-183. Also James, The Roar and the Silence, 84-90, who cites aforementioned sources but also various newspaper reports.42 Company data again from Smith, “Tabular Statements” and “Recorded Production of Little Gold Hill Mines”, Binder 1, NC229, Special Collections, Library, University of Nevada, Reno.

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FIGURE 6BULLION PRODUCT BY COMPANY

1866-1869[From Grant Smith's Notebooks]

Mines 1866 ($) % Total 1867 ($) % Total % Chg 1868 ($) % Total % ChgSavage 1,814,879 14.4% 3,737,100 25.7% 105.9% 2,534,868 28.2% -32.2%

Yellow Jacket 2,297,233 18.2% 1,729,277 11.9% -24.7% 800,000 8.9% -53.7%Chollar Potosi 848,751 6.7% 2,668,885 18.3% 214.4% 885,076 9.9% -66.8%

Kentuck 571,507 4.5% 1,140,742 7.8% 99.6% 1,259,707 14.0% 10.4%Hale & Norcross 1,186,543 9.4% 1,097,297 7.5% -7.5% 392,400 4.4% -64.2%

Crown Point 1,312,471 10.4% 920,718 6.3% -29.8% 1,086,230 12.1% 18.0%Imperial 910,387 7.2% 1,106,496 7.6% 21.5% 684,040 7.6% -38.2%

Gould & Curry 1,624,781 12.9% 614,621 4.2% -62.2% 29,557 0.3% -95.2%Empire 422,291 3.3% 278,607 1.9% -34.0% 213,771 2.4% -23.3%

Overman 27,953 0.2% 192,318 1.3% 588.0% 352,590 3.9% 83.3%Consolidated (21

Feet) 233,700 1.9% 440,790 3.0% 88.6% 56,970 0.6% -87.1%

Bacon 34,606 0.3% 34,250 0.2% -1.0% 286,800 3.2% 737.4%Confidence 304,932 2.4% 142,049 1.0% -53.4% 110,668 1.2% -22.1%

Ophir 417,472 3.3% 4,108 0.0% -99.0%Gold Hill Quartz 115,484 0.9% 106,399 0.7% -7.9% 103,686 1.2% -2.5%

Eclipse 206,499 1.6% 101,327 0.7% -50.9% 81,431 0.9% -19.6%Occidental

Winters, J. D. & Co 95,537 0.8% 89,950 0.6% -5.8%

Sierra Nevada 22,805 0.3%Plato 51,921 0.4% 75,350 0.5% 45.1% 15,728 0.2% -79.1%

Bowers 28,555 0.2% 28,300 0.2% -0.9% 58,676 0.7% 107.3%Piute 84,077 0.7% 0.0%

Trench 41,019 0.3% 40,600 0.3% -1.0% 0.0%Belcher 18,312 0.0%

Segmented Belcher 4,371 0.05%

AlphaBaltimore-American

Best & BelcherBullion

CaliforniaCentral

Consolidated Virginia

ExchequerLady Bryant

North AmericanSides

White & MurphyTOTALS 12,630,598 100.0% 14,549,184 100.0% 15.2% 8,979,374 100.0% -38.3

Mines 1869 ($) % Total % Chg Total % TotalSavage 1,162,803 14.8% -54.1% 9,249,650 21.0%

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Yellow Jacket 1,560,000 19.8% 95.0% 6,386,510 14.5%Chollar Potosi 1,366,385 17.4% 54.4% 5,769,097 13.1%Kentuck 828,834 10.5% -34.2% 3,800,790 8.6%Hale & Norcross 1,029,812 13.1% 162.4% 3,706,052 8.4%Crown Point 105,718 1.3% -90.3% 3,425,137 7.8%Imperial 273,727 3.5% -60.0% 2,974,650 6.8%Gould & Curry 350,000 4.4% 1084.2% 2,618,959 5.9%Empire 138,046 1.8% -35.4% 1,052,715 2.4%Overman 336,485 4.3% -4.6% 909,346 2.1%Consolidated (21 Feet) 731,460 1.7%Bacon 250,000 3.2% -12.8% 605,656 1.4%Confidence 18,889 0.2% -82.9% 576,538 1.3%Ophir 421,580 1.0%Gold Hill Quartz 65,207 0.8% -37.1% 390,776 0.9%Eclipse 389,257 0.9%Occidental 210,000 2.7% 210,000 0.5%Winters, J. D. & Co 185,487 0.4%Sierra Nevada 151,360 1.9% 563.7% 174,165 0.4%Plato 142,999 0.3%Bowers 115,531 0.3%Piute 84,077 0.2%Trench 81,619 0.2%Belcher 18,312 0.2% 36,624 0.1%Segmented Belcher 4,371 0.0%AlphaBaltimore-AmericanBest & BelcherBullionCaliforniaCentralConsolidated VirginiaExchequerLady BryantNorth AmericanSidesWhite & MurphyTOTALS 7,865,578 100.0% -12.4% 44,024,734 100.0%Sources: Smith, “Tabular Statements” and “Recorded Production of Little Gold Hill Mines”, Binder 1, NC229, Special Collections, Library, University of Nevada, Reno. The list of mines from report by Surveyor-General (1866), see footnote 30. His 1866 figures and Smith's do not agree. Smith's figures from James Hague. I have not tried to reconcile the differences. Smith's figures appear in different sections of his Notebooks. Because of how I have arranged the yearly numbers and because I have corrected for arithmetical errors, my totals will not agree with other published versions. For these years company data can best be described as a rough measure of company production.

The Comstock’s second decade did not begin auspiciously. During the last half of the 1860s bullion product had fallen by a third. The two top producers – Savage and Yellow Jacket – had seen a decline of more than a third in bullion. The fifth-ranking company - Hale & Norcross - had suffered a smaller decline of 13 percent decline. Other operations (at least based upon estimates) from the first half of the 1860s like Gould & Curry, Imperial, Ophir and the Gold Hill small claims had ceased to be major players.

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Several had for the most part ceased operations. Not all was negative, however. Two companies – Chollar Potosi and Kentuck – had experienced significant increases of 61 percent and 45 percent respectively between 1866 and 1869. Perhaps some encouragement could be drawn from the gains in percentage terms at Overman and Bacon, although they were and would remain marginal operations. Certainly the fire played a role when figures from 1869 are compared to those from 1866 (Crown Point was down 92 percent), but far more telling was the failure to uncover new rich deposits, especially on the northern end of the Comstock Lode as companies began to push their explorations to 1,000 feet and below. Although companies continued to find vein matter and in a few cases notable ore concentrations these were often of such low grade (heavy with base metals) and spread so broadly and thinly across the Lode that they could be processed only at great cost and little profit. The scarcity of rich ores was becoming a serious problem. Mining on the Comstock was clearly an episodic venture. Mines opened and closed with regularity, and only a handful had long productive periods before giving out completely. Smith portrayed 1870 as the “darkest” year in the history of the Comstock. Certainly it was the darkest year to date. (Some very dark years lay ahead.) According to the State Controller tonnage fell again by 15 percent to 239,000, and bullion reported to the county assessor was worth about $6.9 million or $28.38 a ton. The total dollar return was about the same as 1869, although if anything positive could be said about 1870 it would be that the yield per ton had recovered from the low of 1869 back into the high $20’s. Smith had a total bullion figure of $8.3 million, an increase over 1869 and comparable to 1868, without citing any source. Smith probably was quoting Lord or the report of the U. S. Commissioner of the Mint. Lord included two sets of figures: $6.8 million from the State Controller and $8.3 million (identical to Smith) from the Mint.43

Lord repeatedly accused mining companies and their principals of hoodwinking investors and the public at large with adverse consequences for all. As Lord himself recognized, the investors probably encouraged shady mining practices since they paid little heed to how much it cost to extract and refine a ton of ore. He cited the example of Gould & Curry, one of the pre-eminent Comstock companies in 1863 and 1864. No matter how marginal the quality of ore the instructions from Gold & Curry’s president was “snake it out”, a metaphor for extracting, hoisting and delivering as much ore as possible without any regard to quality or cost. The paradox was that the processed ore came in at $70 to 80 per ton, twice the average Comstock yield, and even though costs were high and margins were thin, the company paid out dividends of nearly $3 million. Lord calculated that had the officers and stockholders followed a more prudent course, the company would have made even more money. But prudence would have required a longer perspective that neither the officers nor stockholders shared. It turned out that Gould & Curry was sitting on barren soil below the 500-foot level. No matter how prudent that company had tried to be it would have run out of ore. Lord did not detail what a more prudent course would have entailed except in general terms he believed that had the officers made the cost of extracting and processing the ore the benchmark for 43 “Biennial Report of the Controller…1869 and 1870” in Senate Journal and Appendix, 5th Legislative Session, 1871, 56-57 (1870) and “Report of the Controller…1872 and 1873” in Appendix to Senate Journal, 6th Legislative Session, 1873, 204 (1870); Lord, Comstock Mining and Miners, 416; and Smith The Comstock Lode, 126.

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how they operated the mine the outcome might have been different. How many mines engaged in “snaking it out” is unknown. It is unlikely that Gould & Curry’s president, Alpheus Bull, was the only Comstock entrepreneur who understood that paying dividends whatever the cost was a given. Mining on the Comstock proved to be an episodic affair– a dozen pockets of ores, moderately rich to rich in grade surrounded by barren or much less rich matter – that left the majority of the mining companies without a natural product that could sustain viable operation.44

Perhaps the most revealing information on the Comstock’s gloomy prospects concerned the market for stocks and in particular the Lode’s two largest investors. Smith wrote that the total value of all the stocks of the leading mining companies was $4 million instead of tens of millions, as was the case in the previous decade. Stocks in some longstanding mining companies sold for as little as $1 or $2 per share. Stockholders were exercising the option of selling their shares in lieu of paying assessments, usually to the principals, and this practice put financial pressure on the principals who may have ended up with more (depreciating) stock but no capital to repair, maintain and expand the mines. William Sharon and William Ralston controlled more mining (and milling) properties than anyone on the Comstock. Ralston, as the head of the Bank of California, was the banker, and Sharon was the miner. Mines under their control at various times from the middle 1860s through the early 1870s included Belcher, Crown Point, Yellow Jacket, Kentuck, Chollar Potosi, Gould & Curry and Consolidated Virginia. In 1870, however, these properties had become the playground of the devil. Belcher, Gould & Curry and Consolidated Virginia were exploring barren ground; Crown Point was virtually shut down because of the 1869 fire; Yellow Jacket lost much of its underground workings on its southern border to the fire but enjoyed a reprieve with new workings on its northern border; Kentuck was also a victim of the fire but even worse had exhausted its ore holdings; only Chollar Potosi, continuing to find descent ores in rather shallow ground, made any money. “Panic-stricken” was how Smith described their demeanor in 1870. Lord too weighed in on the plight of Ralston and Sharon in 1870 (some of which appeared in Smith). The Bank of California had invested about $3 million of its $5 million in capital in Comstock properties, and without income from their mining properties in particular the survival of the bank was in question.45 An additional risk for Ralston and Sharon was that while they owned enough stock to control a property, they did not always own a majority of the stock. Under these circumstances they could lose control of a property if outsiders began to buy up the stock. In short, as leveraged as they were, any downturn could leave them vulnerable to the same strategies that they had used to gain control of so many mining properties. They needed a bonanza, but as it turned out in 1870 the important finds were in two mines that they did not own – Hale & Norcross and Savage.

44 Lord, Comstock Mining and Miners, 121-129.45 Smith The Comstock Lode, 127, and Lord, Comstock Mining and Miners, 283-284.

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Special Appendix:Below are samples from Surveyor-General's Tables of “Mines on the Comstock Lode” (1865-1866) and of “Tabular List of Mills Crushing Ore from Mines on the Comstock Lode During the Year 1866. For Spources, see footnote 11.

MINES

MILLS

28