San José State University
& Tornado Alley
|The Economic History of Leadville, Colorado|
Leadville has been the quintessential mining district. It is located in an isolated place at a 10,000 foot altitude at the source of the Arkansas River. It had not only the precious metals of gold and silver but also the industrial metals of lead, zinc, copper, a little iron and finally the exotic metal of molybdenum.
In regions of the Earth's interior where everything is molten different mmaterials form layers based upon their densities. There would be a layer for gold and another for silver and so on. Those layers would be thin as the material spread out through the basin it was in. When something tectonic ocurred, such as a volcanic eruption, the molten materials may flow into the spaces in rock strata.
About sixty seven million years ago the collision between the tectonic plates of North America and the Pacific resulted in the formation of the Rocky Mountains and their ore bodies. Weather eroded the rocks of the ore bodies and washed the metals down into the stream beds. The heavier metals stayed in the stream beds. Such gold was known as placer gold.
The Ute Amerindians knew the high valley of the Arkansas well. They camped and hunted there in the summer but left for lower altitude places like South Park in the winter. The first report of the discovery gold in the vicinity of the high valley of the Arkansas was by a French author who in 1758 mentioned there being a gold mine on the Arkansas River. French fur trappers had explored the region thoroughly. The first American who got anywhere near the high valley was a Kentuckian named James Purcell. He found placer gold in South Park around 1803 when that area was still claimed by Spain. He journeyed west and climbed the Mosquito Mountain Range and viewed the Arkansas Valley beyond but did descend into it. He was later captured by a hostile tribe, but escaped and made his way to the Spanish town of Santa Fe where he spent the rest of his.
A U.S. Army exploratory expedition under the command of Zebulon Pike came into the area in 1806. They made their way up the Arkansas River Valley and got close enough to view the high valley but turned back from there because of the weather.
It wasn't until 1845 that a docummented visit to the high valley was made by Americans. It was by another U.S. Army explorator expedition under the command of John C. Fremont. There was no discovery of gold at time, but a few years later gold was discovered in northern California and a monumental gold rush ensued. A decade later gold seekers came to the eastern Rocky Mountains. A party of assimulated Cherokees found placer gold in Cherry Creek where the city of Denver subsequently grew up. That deposit was soon worked out and the gold seekers who went to the Cherry Creek site started prospecting in the mountains. In 1859 one of these prospectors, Abe Lee, found placer gold in high valley of the Arkansas. The site was in a seven mile gulch that was subsequently named California Gulch. It was not an easy find. Placer gold is found in the material just above bed rock. Abe Lee had to dig down through twelve feet of frozen sand and gravel. Nevertheless soon the rush was on.
By May of 1860 there were a thousand men working in California Gulch. They quickly organized a mining community and elected officers. Abe Lee was made the registrar of mining claims. He used the fees collected to build the first cabin of the community that was subsequently named Oro City. By June of 1860 there were four thousand people in the community working four hundred claims.
The claims were worked using sluice boxes. These were troughs about ten feet long, tow feet high made of boards cut from timber. The bottom of a sluice was lined with small boards, called riffles, fasteneed perpendicular to flow through the sluice. The function of the riffles was to catch the heavy material while allowing the lighter sand to be washed on through the sluice. From time to time the material collected by the riffles was removed and the gold dust extracted by panning or the use of mercury.
The mining operation started with the removal and disposal of the overburden of sand and gravel to get to the material just above bed rock. This material was dumped into the upper end of the sluice box and water allowed to flow over and through it. The crucial problem was water for the sluice boxes. It had to be channeled into sluice box, sometimes from some distance away. The outflow from one sluice box was used for others farther down the gulch.
In the first year of mining of California Gulch about 55 thousand ounces of gold were taken. In today's prices that quantity of gold would be worth almost $91 million. At the price then it was worth about $1 million. There were about 400 claims along the nine miles of California Gulch so the gold take was albout 137 ounces per year per claim. That was only about 3/8 ounce perday. In current prices that would have been over $600 per day. One can understand why there was such a rush to the places where gold was discovered.
One can also image the hectic activity involved in cutting the timber and sawing it into lumber to build the sluices and flumes required to deliver water to those sluices. And there was also the building of houses and other structures of Oro City.
In 1861 and 1862 there were again about fifty thousand ounces of gold taken, but in 1863 and thereafter there was much lower production. It was clear the gold boom was over. There were found some lodes of gold-bearing quartz found but most of these proved too paltry to cover the expense of hard rock mining. There were a few hard rock gold mines that were profitable for awhile and gave the hope that the gold boom was not over.
During the early days of the gold boom a man named H.A.W. (Horace Austin Warner ) Tabor moved to Oro City. He brought his wife and son along. He was to figure prominently in the business and politics of the region. He came from Vermont and was trained as a stone mason. He worked in Maine as a stone mason as a young man but then moved to Kansas as part of a political movement to fill Kansas with anti-slavery voters. He married a woman from Vermont named Augusta and started a family. He was involved in politics and was elected to a local office but the chaotic politics of Kansas resulted in his not taking office. When he heard of the gold strikes of 1859 in what is now Colorado but was then part of Kansas Territory decided to move there with his family. They first journeyed to what is now Denver but soon went on to the mountain valley called South Park. He opened a store in the town of Fairplay, But from there they moved to Oro City where both Tabor and his wife started small businesses serving the mining community. Augusta Tabor was the first respectable woman of the community.
After a year or so the Tabors, believing the gold boom was over, moved back to Fairplay. However after they heard of the successful development of hard rock gold mines near Oro City they moved back. The rest of the story of the Tabors will be told later.
After the first few years any new gold mining operation required considerable capital. Most of this had to come from sources back east. Daniel Guggenheim was one such investor. He later created a company called American Smelting and Refining Company. Marshall Field who was primarily in the retail trade business made successful investments during the Gold Boom of Leadville.
If the area had had only gold the story would have soon ended and no one would remember it. But some of the miners got curious about the heavy black sand that accumulated behind the riffles in their sluices. It was a nuisance that had to be separated from the gfold dust. It took a long time before someone arranged to have it assayed. They found that it was mainly lead carbonate with some silver. The story of the Tabors was one of the stories of the silver-lboom.
The first assay of the black sand showed it to be 40% lead with about 30 ounces of silver per ton. With lead selling for six cents per pound and silver for $1.16 per ounce that meant a ton of ore would bring in $48 for the lead and $35 for silver. A yield $83 per ton in price then and perhaps more than $500 in current prices made the black sand a bonanza. The miners started prospecting for the black sand. People in Oro City, including Horace Tabor, decided to move closer to the new mining operations. Soon an unnamed collection of houses developed. Considering the high yield of lead the miners judged that the future economy was going to largely depend upon lead. They named the developing town Leadville. They underestimated the role silver was going to play in the future of their community.
There was a lot of lead but with silver valued at about 270 times as much per unit weight the large amount of lead could have a smaller value than the smaller amount of silver. The initial assay of 30 ounces of silver was promising but it turned out that it was an unusually low assay for silver. Horace Tabor's experience illustrates this fact.
Tabor was Leadville's major and perhaps only store keeper. He frequently grubstaked prospectors, providing food and equipment they needed to develop a mining claim. In return he got a substantial share of the mine those prospectors developed. This was during the stage in which small mines were created by the miners drilling inch diameter holes by hammering steel rods a couple of feet into rock, filling it with black powder to fracture the rock face of a tunnel. The rock debri was hauled laboriously to the surface. Later the technologies of drilling, blasting and excavating were vastly improved. The capital required for making use of those new technologies meant that the development of a new mine could no longer be financed by a local store keeper; it required larger scale enterprises financed by the capital centers of the East.
But Horace Tabor had some successes but they were slow coming. He had been grubstaking prospectors for many years when he supplied about $64 worth of supplies (perhaps $5000 in current prices) to two prospectors. They sunk a 3 by 5 foot shaft down about 25 feet and hit the black lead ore but the silver content reached as high as 10,000 ounces per ton. This was a bonanza. It was called the Little Pittsburg mine. Tabor was suddenly much richer than he had been. There then occured an episode that gave Tabor the reputation of being a Midas figure.
Aftert the mine that Tabor had grubstaked became known another prospector staked a claim next to it hoping to tap into the same ore body. He drilled a shaft down but without success. The practice of the miners was to carryout a blasting at the end of their day and wait until the next morning after the smoke and dust had cleared to excavate the ore. The miner at the adjacent claim secured some of the high grade ore from the mine of Tabor and his partners and salted his mine with it. He then flooded his mine and let it be known that he wanted to sell his claim. The mine was drained and samples taken for assay. They of course tested high and Tabor bought the mine for $10,000. The mine salter took his money satisfied that he had taken Tabor for $10,000. Tabor then had the mine shaft sunk another ten feet and found the ore body and it tested as high as 11,000 ources per ton. The mine was then worth about $1.5 million and the $10,000 Tabor paid for it was insignificant.
Tabor became the richest man in Colorado. He had built an opera house and a luxury hotel. He then got involved in politics. He was elected mayor of Leadville. Later, after one senator for Colorado died, Tabor was appointed to fill out the remaining few months of his term. Tabor then won the next election for senator and became a notable figure in national politics. He sold out his shares of the mines he held. Then later bought a mine called The Matchless.
Tabor began traveling around the country while his wife and helpmate Augusta remained in Leadville. Later he bought her a large house in Denver. At this time Tabor was in his early fifties. While visiting Wisconsin he met a young woman in her late twenties. She came from an Irish family named McCord and had married a man named Doe. She was a notably beautiful and people started calling her Baby Doe. Horace Tabor fell madly in love with Baby Doe and wanted to marry her. Baby Doe was similarly taken with the very rich man from the fabulous mining town.
The problem was that Augusta did not want to give Horace a divorce. At that time there had to be grounds for a divorce and Horace had no grounds for obtaining a divorce. Horace set Baby Doe up in luxurious living arrangements. At one point Horace in desperation filed for a divorce in Durango, Colorado on spurious grounds. Later having qualms about having unjustly maligned his faithful wife of many years he tried to have the filing removed from the legal record. He could not arrange that so he paid someone to paste the page recording his filing with the adjacent page so that no one could read his filing. Later Augusta agreed to divorce him. Tabor and Baby Doe were married in Washington and the President of the United States attended.
What has been left out of the story so far is that the market and hence price of silver was dominated by the purchases of silver by the U.S. government. When the Federal Government cut back its purchases of silver the price of silver plummeted. Suddenly Horace Tabor who had been one of the richest men in the country was bankrupt. He had no income to live on and friends of his arranged for him to be the postmaster of Denver. Long ago, he had been, as the keeper of the principal store in town, the postmaster of Leadville.
Tabor only lived for a year or so after his decline. He had held on to the ownership of the Matchless mine and he passed it on to Baby Doe and told her to hold on to it because it would eventually become fabulously valuable. She lived in a cabin at the Matchless the rest of her life completely isolated. There were stories of Baby Doe confronting with a shotgun any visitors to the Matchless. It never did become fabulously valuable and she eventually lost ownership but the new owners allowed her to stay in the cabin where she had lived for decades. Her body was found frozen in the cabin in 1935.
The silver boom for Leadville ended with the fall in the price of silver in 1893. There was an economic depression that commensed in 1893 and lasted until 1897. A few mines with very rich silver ores survived.
In 1905 the mining industry of Leadville employing three thousand miners mining 650 thousand tons of ore produced metals worth $11 million. The proportions were as follows
|Share of Value of
Leadville Mining Production
During the Silver Boom of Leadville the prospectors scoured the hillsides aroung the valley for silver deposits but they of course took note of any other minerals. One of these prospectors, Charles Senter, went high up into the area of Fremont Pass where on Bartlett Mountain he found some outcrops of a strange mineral. It was white with streaks of black. The black streaks were almost like graphite. He kept the specimens and showed them around but no one could identify the mineral except to say that it might be graphite. It was not until 1901 that Senter got the mineral identified as molybdenum disulfide.
In Europe mineralogists were aware of a mineral molybdaina, now called molybdenite, which appeared to be possibly some form of graphite or a lead ore. (The name of the mineral was Greek for lead like.) It was not common and seemed to be of no significance. It was not until 1778 that the Swedish chemist, Carl Wilhelm Scheele, demonstrated that it was a compound of sulfur and an unknown metal. Another Swedish chemist in 1782 isolated that unknown metal and named it molybdenum.
Molybdenum is valuable for alloying with iron in steel to increase the strength at high temperature and its corrosion-resistance. The compound molydenum disulfide, which is what the mineral molybdaina consists of, resembles graphite and is used for a lubricant. It was used as the lubricant for transmission that never had to be replenished.
But back in 1901 there was no known market for molybdenum. Charles Senter kept up his claims on Bartlett Mountain despite the fact that there was no obvious value to the molydenum ore. In 1905 another miner, Hugh Leal, staked a claim next to Senters and started driving a tunnel into the mountain. Their tunnel was 400 feet long and they never came to the end of the molybdenite. Obviously there was a virtually a whole mountain of molybdenite at Bartlett Mountain. Lots of molybdenum but no market.
Slowly around the world metallurgists were discovering uses for moybdenum. Molybdenum resembles Tungsten in its chemical and physical properties. Like tungsten molybdenum has a high melting point and retains strength at high temperature. The metallurgists found that small amounts of molybdenum added to steel significantly increases strength and resistance to corrosion. This was particularly important for the armament industries for such things as armor plate and canon barrels.
In 1912 some investors, primarily Wilson H. Pingrey of Iowa, sent Otis Archie King to Leadville to look into the matter of investing in molybdenum mining. King was a manager and engineer of some talent. He bought an option to buy Senter's holdings for $40,000. King's group paid Senter $50 per month to maintain the option. At one point the option was dropped because of the lack of a market for molybdenum and because there was no feasible method of processing the ore. Later the option was renewed after King had a flotation process for concentrating the ore, but it was not until 1918 that King's group exercised their option and paid Senter the $40,000. A lot had happened between 1912 and 1918; mainly World War I.
As the nations of Europe started building up armaments a market started developing for molybdenum. Although Bartlett Mountain was by far the largest deposit of molybdenum in the world, but it was not the only deposit. Germany was able to obtain all the molybdenum it needed from a single mine in Norway. King made contact with the firms which dealt in rare metals but the result was discouraging and furthermore they indicated that all the world needed was three tons of molybdenum concentrate or less. Nevertheless King's group continued to develop the deposit. King through great effort was able to bring out enough molybdenum ore to fill three railroad cars. He had to use mules each carrying three to four hundred pounds of ore. At one point in their journey the mules had to be slid down a slope on their haunches.
For future development the molybdenum mines could rely upon the Denver and South Park Railroad that put a line through Fremont Pass. There was a railroad station at the top of that pass that was appropriately Climax. That station became permanently identified with the molybdenum industry.
King's group was not the only business interested in the molybdenum deposits at Bartlett Mountain. The German company Metalgesellschaft created an American subsidiary called American Metals Company. This company in turn created Climax Molybdenum Company in 1916. This was during World War I but before the United States entered the conflict. When the U.S. saw that it might become involved the war it was intolerable to have a German company controlled the supply of a militarily critical material like molybdenum and so it ordered the divestiture of the German ownership of American Metals Company. There was another company, Molybdenum Products Company that wanted to secure ownership of the molybdenum deposits near Climax.
American Metals Company's financial strength enabled it to outbid its competitors. Finally in 1918 King's group sold its holdings to American Metals for $300,000.
It was probably a wise thing for King's group to sell out at that time. During the war the U.S. government and others were stockpiling molybdenum to be assured of adequate supplies. When the war ended the demand for molybdenum collapsed and the stockpiles were enough to serve the needs for a few years. In March of 1919 the molybdenum operations at Climax closed down.
Leadville had experienced a boom in its metal industries during the war due to the high levels of output and prices.
|Values of Leadville
After the end of the war the demand fell for all of the metals Leadville produced. The was a short term recession for the U.S. economy overall. Leadville was severly depressed. The total value of Leadville metal production fell from $16,000,000 in 1916 to $1,750,000 in 1921.
There was a resurgence of gold mining starting in 1915 using a new technique called dredging. A huge dredge was constructed to work its way through the creek beds in the Leadville area. It processed a million pounds of sand and gravel for every pound of gold it recovered. It was profitable during the first four years of its operation, but by 1920 the good sites had been worked out. There were continued operations during the 1920's because the price of gold was maintained by U.S. government purchases at $21.67 per Troy ounce whereas the prices of the other metals fell due to market conditions. But in 1926 the dredging operations in the Leadville area were shut down and the dredge disassembled and sold for operations in Central America.
When the price of gold was increased to $35 per Troy ounce in 1932 there was a resurgence of the gold industry in Leadville. Some hard rock tunnel mines were opened. In 1932 gold production accounted for 90 percent of the value of metal production other than molybdenum. Molybdenum production had been making a comeback from the 1921 recession levels and was achieving levels far in excess of those of the war years. A company town was built at Climax in 1928.
In 1932 the value of the molybdenum mines was $3.2 million. In 1939 it was $17 million. A mill was built there to process and concentrate the ore produced in the mines. In 1952 Climax Molybdenum mined over 9 million tons of ore which had a value of $22 million. By 1960 the company operations had expanded so much that it needed the land near the mines that had been devoted to the company town and the town was phased out. By 1966 the company produced ore worth $91 million. Most of that was from molybdenum but there were some other metal compounds recovered from the ore in the milling and separation processes. These metal compounds included those of tungsten, tin and iron. Meanwhile the production of the traditional metals of Leadville declined to insignificant amounts. There had been a surge in production during World War II and the Korean War. In 1943 11 million pounds of lead had been produced and in 1952 12 million pounds. During 1952 there were produced in the Leadville area18.4 thousand ounces of gold and 322 thousand ounces of silver. The production of zinc that year was 17 million pounds and of copper 322 thousand pounds.
After that resurgence the mining industry of the Leadville area was primarily the industrial mining and processing of molybdenum ore.
(To be continued.)
Stephen M. Voynick, Leadville: A Miner's Epic, Mountain Press Publishing Co., Missoula, Montana, 1984.
Otis Archie King, Gray Gold, Big Mountain Press, Denver, 1959.